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                                                                   Exhibit 10.1

                             GARDNER DENVER, INC.
                           LONG-TERM INCENTIVE PLAN
(As amended May 7, 1996, May 4, 1998, November 2, 1998, May 4, 1999, March 6,
    2000 and January 1, 2001)(Adjusted to reflect two-for-one stock split
      January 15, 1997 and three-for-two stock split December 29, 1997)

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.

                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

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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 a change in control of the
Company (other than the initial distribution of Common Stock by Cooper
Industries, Inc.) of a nature that would be required to be reported (assuming
such event has not been "previously reported") in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act; provided
that, without limitation, a Change of Control shall be deemed to have
occurred at such time as (i) any "person" within the meaning of Section 14(d)
of the Exchange Act, is or becomes the beneficial owner, directly or
indirectly, 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.

                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.

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                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 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

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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.

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 2001 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.

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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 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.

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                7.5 Additional Terms and Conditions. The Committee may, by
way of the Award Agreement or Administrative Policies, 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 ("SARs"). 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 SARs"), or may be
granted separately ("Freestanding SARs"); provided, however, that
Freestanding SARs shall be granted only to Participants who are foreign
nationals or are employed outside of the 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.

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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.

                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.

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                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.

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 3,000 shares of Common Stock. 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. No option shall be transferable by a
nonemployee director except by will or the laws of descent and distribution,
and during the director's life time 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 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

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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.

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

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descent and distribution. Notwithstanding the foregoing, the Committee may,
in its discretion, grant stock options to one or more executive officers of
the Company on terms that permit the stock options to be transferred by any
such executive officer, for estate planning purposes, to (a) the executive
officer'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
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 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.

                                    -11-

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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 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.

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.

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.

                                    -12-

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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, 2005. 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 shall be determined in accordance with the laws of the
State of Delaware and applicable Federal law.

                                    -13-<PAGE>
                                                                  Exhibit 10.11
                             GARDNER DENVER, INC.
                       MANAGEMENT ANNUAL INCENTIVE PLAN

                               JANUARY 1, 2001

                            I. PURPOSE OF THE PLAN

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

                               II. DEFINITIONS

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

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

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

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

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

                (c)  There is a report filed on Schedule 13D or Schedule
         14D-1 (or any successor schedule, form or report), each as
         promulgated pursuant to the Exchange Act, disclosing that any person
         (as the term "person" is used in Section 13(d)(3) or Section
         14(d)(2) of the Exchange Act) has become the beneficial owner (as
         the term "beneficial owner" is defined under Rule 13(d)(3) or any
         successor rule or regulation promulgated under the Exchange Act) of
         securities representing 20% or more of the Voting Stock;

                                    -1-

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

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

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

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

         2.5    "Commission" means the Securities and Exchange Commission.

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

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

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

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

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

                                    -2-

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

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

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

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

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

                             III. ADMINISTRATION

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

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

                               IV. ELIGIBILITY

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

                      V. PERFORMANCE GOALS AND MEASURES

         5.1. Performance Goals shall be established by the Committee not
later than 90 days after commencement of the Performance Period relating to a
specific Award. The Performance Goals may be identical for all Participants
or, at the discretion of the Committee, may be different to reflect more
appropriate measures of individual performance. The criterion or criteria
used in establishing Performance Goals may, at the discretion of the
Committee, include one or any combination of the following: (i) the Company's
return on equity, assets, capital or investment; (ii) pre-tax or after-tax
profit levels expressed in absolute dollars or earnings per

                                    -3-

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<PAGE>

share of the Company; or (iii) cash flow or similar measure. The Performance
Goals established by the Committee shall include a threshold level of
performance below which no Award will be payable and a maximum Award
opportunity for each Senior Executive Officer. The determination of
attainment of the Performance Goals shall be determined in accordance with
generally accepted accounting principles and certified in writing by the
Committee.

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

                                  VI. AWARDS

         6.1    Awards under the Plan shall be paid in cash.

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

                        VII. DEFERRALS AND SETTLEMENTS

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

                           VIII. WITHHOLDING TAXES

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

                IX. NO RIGHT TO CONTINUED EMPLOYMENT OR AWARDS

         No person shall have any claim or right to be granted an Award, and
the granting of an Award shall not be construed as giving a Participant the
right to be retained in the employ of the Company or any of its subsidiaries.
Further, the Company and its subsidiaries expressly reserve the right at any
time to terminate the employment of any Participant free from any liability
under
                                    -4-

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<PAGE>

the Plan; except that a Participant who was actively employed as of the last
day of the applicable Performance Period shall be eligible to receive
payment of his Award, as determined pursuant to Section 6.2 hereof, even
though the Participant is no longer an active employee of the Company at the
time the Committee actually pays Awards under the Plan for the applicable
Performance Period. The Committee shall also have the discretion to grant
eligibility to a Participant to receive payment of an Award, notwithstanding
the fact that the Participant is not employed by the Company at the end of
the Performance Period.

                             X. CHANGE IN CONTROL

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

            XI. AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION

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

                              XII. GOVERNING LAW

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

                XIII. OTHER BENEFIT AND COMPENSATION PROGRAMS

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

                                    -5-

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                         XIV. SUCCESSORS AND ASSIGNS

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

                              XV. EFFECTIVE DATE

         This Plan shall be effective as of January 1, 2001. Notwithstanding
the foregoing, the adoption of this Plan is expressly conditioned upon the
approval by the Company's shareholders at the annual meeting of the Company's
shareholders held in 2001. If the shareholders of the Company shall fail to
approve this Plan prior to such date, this Plan shall terminate and cease to
be of any further force or effect. Subject to earlier termination pursuant to
Section XI, the Plan shall terminate effective December 31, 2005. After
termination of the Plan, no future awards may be granted under the Plan.

                             XVI. INTERPRETATION

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

                                    -6-

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