EXHIBIT 10.2
EMPLOYMENT AGREEMENT
     This EMPLOYMENT AGREEMENT (this “Agreement”) dated and effective May 7,
2007 (the “Effective Date”), is made and entered into between Flowserve
Corporation (the “Company”) and Mark Blinn (“Executive”).
RECITALS
     A. The Company desires to continue to employ Executive and secure his
services for the period provided in this Agreement upon the terms and conditions
provided herein and Executive desires to be so employed.
     D. As a condition to the Company’s employment of Executive, the Company
desires to receive from Executive certain covenants and agreements.
     E. The Company and Executive desire to set forth in writing the terms and
conditions of their agreement and understandings with respect to the employment
of Executive.
AGREEMENT
     NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Executive
(collectively “Parties”) agree as follows:
1. Employment.
     (a) Position and Duties of the Executive. During Executive’s employment
pursuant to this Agreement, Executive will serve as a Senior Vice President and
the Chief Financial Officer of the Company. As Chief Financial Officer,
Executive is responsible for the overall financial management and operation of
the Company and Affiliated Companies. For purposes of this Agreement,
“Affiliated Companies” means any entity in which the Company, directly or
indirectly, holds a majority of the voting power or profits or capital interest
of such entity. The title, powers, and duties of Executive will be more
specifically determined by the Company and may be modified by the Company from
time to time in its sole discretion. Executive will report to the Chief
Executive Officer (“CEO”).
     (b) Performance. During the Term (as defined below), Executive will use his
best efforts in performing his duties and will devote on a full-time basis all
necessary time, energy and skill in performing his duties. Executive will comply
with all the employee policies and written manuals of the Company and Affiliated
Companies including the Code of Business Conduct and the Flowserve Financial
Management Code of Ethics. Executive will not work for any other business or
enterprise during the Term. Executive further agrees that he will not, directly
or indirectly, engage or participate in any activity during the Term which may
injure the interests of the Company or the Affiliated Companies, whether such
interests are business-related, financial or otherwise. Executive may serve on
corporate, civic, or charitable boards or committees and manage Executive’s
personal investments and affairs, provided that: (1) such activities do not
interfere with the performance of Executive’s duties under this Agreement;
(2) such activities do not cause Executive to breach his obligations in
Section 7 of this Agreement; and (3) Executive keeps the Company informed of
Executive’s commitments. Additionally, Executive must notify and seek permission
from the Company’s Board of Directors before he can serve as a director on a
corporate board of directors. If the Company determines that any of Executive’s

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corporate, civic or charitable activities are interfering with the performance
of Executive’s duties, the Company will notify Executive in writing and provide
him thirty (30) days in which to remedy the issue.
2. Term of Employment and Agreement. Executive’s employment with the Company is
on an at-will basis, meaning that either Executive or the Company may terminate
the employment relationship at any time and for any reason not expressly
prohibited by law and in accordance with the provisions of Sections 4, 5 and 6
of this Agreement. The at-will nature of Executive’s employment cannot be
modified orally, but may only be modified by a written agreement approved by the
Company’s Board of Directors. The actual period of Executive’s employment
hereunder is referred to herein as the “Term.” This Agreement will terminate on
December 14, 2010 regardless of Executive’s employment status with the Company
at the time.
3. Compensation for Employment.
     (a) Salary. During the Term, the Company will pay to Executive a salary to
be agreed upon between Executive and the Company, less applicable payroll taxes
and normal withholdings, (the “Salary”) for all services rendered by Executive
under this Agreement. The payment of the Salary will be made only during the
Term, and any termination of employment pursuant to Section 4, 5 or 6 of this
Agreement will terminate the Company’s obligation to pay the Salary for periods
following the date of such termination of employment. The Company will pay the
Salary to Executive in equal installments every other week on the same days of
the month the Company pays its other employees, subject to applicable deductions
for withholding tax amounts, all in accordance with the normal payroll policies
of the Company.
     (b) Stock. On December 14, 2006, the Company granted Executive 30,000
restricted shares of the Company’s common stock (the “Common Stock”) and an
option to purchase 30,000 shares of Common Stock, with an exercise price equal
to the fair market value of a share of the Common Stock on December 14, 2006
(collectively the grant of restricted shares and the option are referred to
herein as the “Equity Grants”). The Equity Grants are subject to the terms and
conditions of the applicable award agreements and applicable stock plan(s) and
include, without limitation, the following terms: (i) 100% vesting on
December 14, 2009, if Executive is still employed by the Company on such date;
and (ii) immediate vesting of all shares subject to each Equity Grant if, prior
to December 14, 2009, either (x) Executive is not promoted to the Company’s CEO
position immediately following the date the Company’s current President and CEO,
Mr. Lewis M. Kling, terminates his employment with the Company for any reason,
or (y) an individual, other than Executive, is appointed as the Chief Operations
Officer (“COO”) of the Company prior to the date that Mr. Kling’s employment
with the Company terminates for any reason. If Executive is, however, so
promoted to the CEO or COO position, the parties agree that the Equity Grants
will be considered part of any grant the Executive receives as a result of the
promotion.
     (c) Benefits. During the Term, Executive will be entitled to participate in
the employee benefit plans and programs, including paid vacations, generally
available to other similarly situated Company employees, subject to the terms,
conditions and overall administration of such plans, as such plans may be
modified, amended, terminated or replaced from time to time in the sole
discretion of the Company.
4. Termination for Cause.
     Termination by the Company with Cause. The Company may terminate the
employment of Executive at any time without notice for cause. For purposes of
Section 4 of this Agreement, cause means any of the following as determined in
the Company’s sole discretion:(i) the Executive’s continuing

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substantial failure to perform his duties for the Company (other than as a
result of incapacity due to mental or physical illness) after a written demand
is delivered to the Executive by the Company’s Board of Directors; (ii) the
Executive’s willful engaging in illegal conduct or gross misconduct that is
materially and demonstrably injurious to the Company; (iii) the Executive’s
conviction of a felony or his plea of guilty or nolo contendere to a felony,
(iv) the Executive’s willful and material breach of his confidentiality
obligations under Flowserve’s Code of Business Conduct and/or local law.
          (b) The Company Obligations to the Executive. If Executive is
terminated for cause as defined in Section 4, the Company will have no further
liability or obligation to the Executive under this Agreement or in connection
with his employment, except for (i) any unpaid Salary accrued through the date
of termination, (ii) any accrued but unused and unpaid vacation time, (iii) any
unreimbursed expenses properly incurred by Executive prior to his last date of
employment; and (iv) the Company’s obligations under the Consolidated Omnibus
Budget Reconciliation Act (“COBRA”). Additionally, the Executive will retain the
right to exercise any vested stock options in accordance with the terms and
conditions in the Flowserve Corporation 2004 Stock Compensation Plan and any
Incentive Stock Agreements and/or Nonqualified Stock Option Agreements to which
Executive and the Company are parties. Any rights or benefits Executive has
vested under the Flowserve Corporation Retirement Savings Plan (401k Plan), the
Flowserve Corporation Cash Balance Plan and/or any other benefit plan of the
Company which is not specifically addressed in this Agreement will be governed
by the applicable plan documents.
5. Termination Without Cause.
     (a) Termination. The Company may terminate the employment of the Executive
upon thirty (30) days written notice without cause, as defined in Section 4(a),
for any reason whatsoever, including, without limitation, the death or
Disability of the Executive. For purposes hereof, “Disability” means a mental or
physical condition which prevents the Executive from performing the essential
functions of Executive’s position with the Company, even with reasonable
accommodation, for a period of not less than 90 consecutive days.
     (b) The Company’s Obligations to the Executive. Upon termination without
cause, as defined in Section 4(a), the Company will have no further liability or
obligation to Executive under this Agreement or in connection with his
employment, except for (i) any unpaid Salary accrued through the date of
termination, (ii) any accrued but unused and unpaid vacation time, (iii) any
unreimbursed expenses properly incurred prior to the date of termination,
(iv) the Company’s obligations under the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”) and (v) severance benefits under the Officer
Severance Plan in effect at the time this Agreement is executed, subject to the
requirements of the Plan. Additionally, all unvested restricted stock and stock
options granted to Executive from the Company, including the Equity Grants, will
automatically vest upon termination, but any unvested performance shares or
restricted stock units which are contingent upon specified levels of financial
performance by the Company will then expire. Executive’s right to exercise any
vested stock options will be governed by the Flowserve Corporation 2004 Stock
Compensation Plan and any Incentive Stock Agreements and/or Nonqualified Stock
Option Agreements to which Executive and the Company are parties. Any rights or
benefits Executive has vested under the Flowserve Corporation Retirement Savings
Plan (401k Plan), the Flowserve Corporation Cash Balance Plan and/or any other
benefit plan of the Company which is not specifically addressed in this
Agreement will be governed by the applicable plan documents.
     (c) Transition Services. In the event the Company terminates Executive
without cause as defined in Section 4, the Company may request Executive to
perform transitional services from Executive for a period of time, not to exceed
120 days, following notification of his termination without cause,

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provided that the Company will continue to pay compensation and provide benefits
(as described in Section 3(a) and 3(c) above) to Executive during such period.
6. Resignation by Executive.
     (a) Without Good Reason. Executive may resign his employment with the
Company for any reason whatsoever so long as he provides thirty (30) days
written notice of his intent to resign his employment to the Company prior to
his last date of employment. In the event that Executive resigns without good
reason, the Company will have no further liability or obligation to Executive
under this Agreement or in connection with his employment hereunder, except for
(i) any unpaid Salary accrued through Executive’s last date of employment,
(ii) any accrued but unused and unpaid vacation time, and (iii) any unreimbursed
expenses Executive properly incurred prior to his last date of employment; and
(iv) the Company’s obligations under the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”). Additionally, the Executive will retain the right
to exercise any vested stock options in accordance with the terms and conditions
in the Flowserve Corporation 2004 Stock Compensation Plan and any Incentive
Stock Agreements and/or Nonqualified Stock Option Agreements to which Executive
and the Company are parties. . Any rights or benefits Executive has vested under
the Flowserve Corporation Retirement Savings Plan (401k Plan), the Flowserve
Corporation Cash Balance Plan and/or any other benefit plan of the Company which
is not specifically addressed in this Agreement will be governed by the
applicable plan documents.
     (b) With Good Reason. Executive may resign his employment with the Company
with good reason under the following circumstances: (i) if the Company has
materially breached this Agreement and has failed to cure the breach after
Executive has provided the Company at least thirty (30) days written notice of
the alleged breach, (ii) Executive is not promoted to the Company’s CEO position
immediately following the date Mr. Kling terminates his employment with the
Company for any reason, or (iii) an individual, other than Executive, is
appointed as the Chief Operations Officer of the Company prior to the date that
Mr. Kling’s employment with the Company’s terminates for any reason. In order
for Executive’s resignation to be treated as with good reason for purposes of
Section 6(b)(ii) or Section 6(b)(iii) of this Agreement, he must resign his
employment with the Company and its Affiliated Companies within thirty (30) days
following the date he becomes aware of either of these events.
     (c) The Company’s Obligations to the Executive if Executive Resigns With
Good Reason.. If Executive resigns his employment with good reason as defined in
Section 6(b), the Company will have no further liability or obligation to
Executive under this Agreement or in connection with his employment except for
(i) any unpaid Salary accrued through Executive’s last date of employment,
(ii) any accrued but unused and unpaid vacation time, (iii) any unreimbursed
expenses Executive properly incurred prior to Executive’s last date of
employment, (iv) the Company’s obligations under the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”); (v) severance benefits under the Officer Severance
Plan in effect at the time this Agreement is executed, subject to the
requirements of the Plan; and all unvested restricted stock and stock options
granted to Executive from the Company, including the Equity Grants, will
automatically vest upon termination, but any unvested performance shares or
restricted stock units which are contingent upon specified levels of financial
performance by the Company will then expire. The Executive will retain the right
to exercise any vested stock options in accordance with the terms and conditions
in the Flowserve Corporation 2004 Stock Compensation Plan and any Incentive
Stock Agreements and/or Nonqualified Stock Option Agreements to which Executive
and the Company are parties. Any rights or benefits Executive has vested under
the Flowserve Corporation Retirement Savings Plan (401k Plan), the Flowserve
Corporation Cash Balance Plan and/or any other benefit plan of the Company which
is not specifically addressed in this Agreement will be governed by the
applicable plan documents.

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     (d) Transitional Services. If the Executive resigns his employment with
good reason as defined in Section 6(b), the Company may request Executive to
perform transitional services for a period of time, not to exceed 120 days,
following notification of his resignation with good reason, provided that the
Company will continue to pay compensation and provide benefits (as described in
Section 3(a) and 3(c) above) to Executive during such period.
7. Restrictive Covenants. Executive reaffirms his obligations set forth in the
Restrictive Covenants Agreement between the Company and Executive executed by
the Parties in 2006, as may be amended from time to time, and any other
agreements between the Company and Executive which impose restrictions on
Executive’s use of the Company’s confidential information and/or restrictions on
Executive’s ability to work for a competitor of the Company, solicit the
Company’s employees to leave the Company and/or solicit business from the
Company’s customers, as those agreements may be amended from time to time
(“Restrictive Covenants Agreements”). The parties agree that nothing in this
Agreement nullifies Executive’s obligations as set forth in the Restrictive
Covenants Agreements.
8. Delay of Severance Payments. To the extent (i) any post-termination payments
to which Executive becomes entitled under this Agreement or any agreement or
plan referenced herein constitute deferred compensation subject to Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) and (ii) Executive
is deemed at the time of such termination of employment to be a “specified
employee” under Section 409A of the Code, then such payment will not be made or
commence until the earliest of (x) the expiration of the six (6) month period
measured from the date of Executive’s “separation from service” (as such term is
defined in Proposed Treasury Regulations under Section 409A of the Code and any
other guidance issued under Section 409A of the Code) with the Company; (y) the
date Executive becomes “disabled” (as defined in Section 409A of the Code); and
(z) the date of Executive’s death following such separation from service. Upon
the expiration of the applicable deferral period, any payments which would have
otherwise been made during that period (whether in a single sum or in
installments) in the absence of this Section 8 (together with reasonable accrued
interest) will be paid to Executive or Executive’s beneficiary in one lump sum.
9. Severability. Should a court determine that any portion of this Agreement is
invalid, unenforceable, or void, this determination will not have the effect of
invalidating the remainder of the Agreement. Further, the court should construe
this Agreement by limiting and reducing it only to the extent necessary to be
enforceable under applicable law.
10. Controlling Law. Any dispute in the meaning, effect, or validity of this
Agreement will be resolved in accordance with the laws of the State of Texas
without regard to any conflict of laws. This Agreement will be governed by and
construed under the laws of the State of Texas. Venue of any litigation arising
from this Agreement will be in a federal or state court of competent
jurisdiction in Dallas County, Texas.
11. Successors. This Agreement will be binding upon and inure to the benefit of
the Parties and their respective heirs, successors and permitted assigns. The
Company may assign this Agreement to any individual, business, firm, company,
partnership, joint venture, organization or other entity who or which may
acquire substantially all of the Company’s assets or business or with or into
which the Company may be liquidated, consolidated, merged or otherwise combined.
This Agreement is personal to Executive and may not be assigned or delegated by
him, and any such purported assignment or delegation will be null and void.

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12. No Waiver. The failure of either party to insist in any one or more
instances upon performance of any terms or conditions of this Agreement will not
be construed as a waiver of future performance of any such term, covenant or
condition, but the obligations of either party will continue in full force and
effect.
13. Non-Disparagement. Executive agrees that the Company’s goodwill and
reputation are assets of great value to the Company which were obtained through
great costs, time and effort. Therefore, Executive agrees that during his
employment and after the termination of his employment, Executive will not in
any way disparage, libel or defame the Company, its business or business
practices, its products or services, or its current or past employees.
14. Notices. Any notice given hereunder will be in writing and be delivered or
mailed by Registered or Certified Mail, Return Receipt Requested:

             
 
  (a)   to the Company:   General Counsel
 
          Flowserve Corporation
 
          5215 North O’Connor Boulevard, Suite 2300
 
          Irving, Texas 75039
 
           
 
  (b)   to Executive:   Mark Blinn
 
          To Be Sent to the Home Address Most Recently on File With the
 
          Company’s EAS Department for Payroll Purposes

     Any party may, by notice given as provided for above, designate a different
address. Any notice given hereunder will be effective on the date of receipt.
15. Entire Agreement. There are no oral representations, understanding or
agreements with the Company, the Affiliated Companies or any of their officers,
directors or representatives covering the same subject matter as this Agreement.
Except for the Restrictive Covenants Agreement and any restricted stock, stock
option, and/or any restricted stock unit agreements executed by Executive, this
Agreement supersedes all previous employment agreements between Executive and
the Company and contains the final, complete and exclusive understanding and
agreement between the Parties with respect to the subject matter hereof and
cannot be amended, modified or supplemented in any respect except by subsequent
written agreement entered into by both Parties; provided, however, that in the
event the Company determines, in its sole discretion, that an amendment,
modification or supplement is necessary for purposes of compliance with or
exemption from the requirements of Section 409A of the Code and to avoid the
imposition of additional tax on Executive, Executive agrees not to unreasonably
withhold his consent to such amendment, modification or supplement or to
unreasonably condition his consent on the renegotiation by the Company of any
other provision of this Agreement.
16. Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement, and all
of which, when taken together, will be deemed to constitute one and the same
Agreement. The exchange of copies of this Agreement and of signature pages by
facsimile transmission will constitute effective execution and delivery of this
Agreement as to the Parties and may be used in lieu of the original Agreement
for all purposes. Signatures of the Parties transmitted by facsimile will be
deemed to be their original signatures for any purpose whatsoever.
17. Change in Control. If Executive becomes eligible to receive severance
benefits or accelerated vesting of stock option or restricted stock awards under
a Company change in control plan or program,

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Executive will not be entitled, as the case may be, to severance benefits and/or
the acceleration of vesting of stock option or restricted stock awards under
this Agreement.
18. Captions. The captions herein are for the convenience of reference of the
Parties and are not to be construed as part of the terms of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement the day and
year first above written.

              Flowserve Corporation
 
       
 
  By:   /s/ Mark A. Blinn
 
       
 
  Name:   Mark A. Blinn
 
       
 
  Title:   Senior Vice President and Chief Financial Officer
 
       
 
                  May 7, 2007

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