Exhibit 10.16
AMENDMENT TO
THE DURIRON COMPANY, INC.
FIRST MASTER BENEFIT TRUST
AND
THE DURIRON COMPANY, INC.
SECOND MASTER BENEFIT TRUST
     This AMENDMENT to the DURIRON COMPANY, INC. FIRST MASTER BENEFIT TRUST (the
“First Trust”) and the DURIRON COMPANY, INC. SECOND MASTER BENEFIT TRUST (the
“Second Trust” and, with the First Trust, the “Trusts”), is made and entered
into this 22nd day of December, 2008 (the “Effective Date”), by and between
Flowserve Corporation (“Flowserve”), a New York Corporation, and JPMorgan Chase
Bank, N.A., in its capacity as Trustee hereunder (the “Trustee”).
     WHEREAS, The Duriron Company, Inc. (“Duriron”), established the Trusts as
grantor trusts to hold assets to satisfy obligations under various non-qualified
employee benefit plans sponsored by the Duriron Company, Inc., with Bank One,
Dayton, N.A., as Trustee thereunder; and
     WHEREAS, Flowserve is the successor in interest to Duriron with respect to
each such Trust;
     WHEREAS, the JPMorgan Chase Bank, N.A., in its capacity as Trustee, is the
successor in interest to the original trustee of each such Trust;
     WHEREAS, Section 13.2 of each Trust permits the amendment of such Trust by
Flowserve and the Trustee without obtaining the consent of the participants in
the Trust if such amendment or waiver does not adversely affect the rights of
such participants;
     WHEREAS, section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) has been enacted and has been amended by the Pension Protection Act of
2006, and Flowserve has determined that it is necessary or advisable to make
certain related amendments and clarifications to the Trusts;
     WHEREAS, Flowserve and the Trustee intend to amend and restate the First
Trust in its entirety within 90 days of the Effective Date; and
     WHEREAS, nothing herein is intended to constitute a material modification
of any deferred compensation arrangement under which all deferred amounts were
earned and vested as of December 31, 2004 and which Flowserve has or shall have
designated as not subject to section 409A of the Code pursuant to Treasury
Regulation 1.409A-6, and this Amendment shall be interpreted accordingly;
     NOW, THEREFORE, in consideration of the mutual agreements contained herein
and for other good and valuable considerations, the parties hereto agree as
follows:
1. Effective as of the Effective Date, the First Trust is recaptioned the
“Flowserve Corporation First Nonqualified Benefits Trust Agreement.”
2. Effective as of the Effective Date, the Second Trust is recaptioned the
“Flowserve Corporation Second Nonqualified Benefits Trust Agreement.”

 

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3. Effective as of the Effective Date, Paragraph C of Article II of each Trust
is amended to provide in its entirety as follows:
     C. “Company” means Flowserve Corporation and any successor to such entity.
4. Effective as of the Effective Date, Article III of each Trust is amended by
inserting the following new paragraph at the end thereof:
     It is the intent of the Company that all benefits payable under the Plans
that were earned and vested as of December 31, 2004 (the “Grandfathered
Benefits”) not be subject to section 409A of the Code. Accordingly, except as
explicitly provided therein, no amendment to any Plan or the Trust shall be
effective with respect to the Grandfathered Benefits if such amendment would
constitute a material modification for purposes of section 409A of the Code and
the regulations and other guidance issued thereunder.
5. Effective as of the Effective Date, Section 4.1 of each Trust is amended by
inserting after the phrase “(‘Payment Schedules’)” the phrase “in each case
determined in accordance with the terms of the applicable Plan and any valid
election by the Executive thereunder.”
6. Effective as of the Effective Date, Section 4.2 of each Trust is amended by
deleting the following text:
In the event that an Executive reasonably believes that the Payment Schedule, as
modified, does not properly reflect the amount payable to such Executive or the
time or form of payment from the Trust assets in respect of any Plan, such
Executive shall be entitled to deliver to the Trustee written notice (the
“Executive’s Notice”) setting forth payment instructions for the amount the
Executive believes is payable under the relevant terms of such Plan. The
Executive shall also deliver a copy of the Executive’s Notice to the Company
within three (3) business days of the delivery to the Trustee. Unless the
Trustee receives written objection from the Company within thirty (30) business
days after receipt by the Trustee of such notice, the Trustee shall make the
payment in accordance with the payment instructions set forth in the Executive’s
Notice.
and inserting in its place the following new text:
At the direction of the Company, payment under a Payment Schedule may be delayed
to the extent required to comply with the provisions of Section 409A of the Code
requiring delay of distribution to “specified employees” upon a separation from
service.
7. Effective as of the Effective Date, Section 4.5 of each Trust is amended to
provide in its entirety as follows:
     4.5 Distributions in the Event of Taxability. Notwithstanding anything
contained in this Trust Agreement to the contrary, if at any time any Plan fails
to meet the requirements of section 409A of the Code and if a tax is finally
determined by the Internal Revenue Service to be payable by one or more
Participants or beneficiaries with respect to any interest in the Plan or the
Trust pursuant to section 409A of the Code, a payment to the affected
Participant or beneficiary shall be made under the Trust. Such payment shall not
exceed the amount required to be included in income as a result of the failure
to comply with the requirements of section 409A of the Code. The Trustee shall
distribute such interest in a lump sum to each Participant or beneficiary
entitled thereto regardless of whether such Participant’s employment has
terminated and regardless of form and time of payments specified in or pursuant
to the Plan as directed by the Company. In

 

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addition, the Company may direct that payment of benefits be made from the Trust
in connection with the termination of a Plan or Plans in accordance with
Treasury Regulation section 1.409A-3(j)(4)(ix). Notwithstanding anything to the
contrary in this Section 4.5, no payment to a Participant or beneficiary shall
be made if such payment would constitute an impermissible acceleration of
payment under section 409A of the Code that is not subject to an applicable
exception thereunder.
8. Effective as of the Effective Date, Section 14.4 of each Trust is amended by
substituting for the address contained therein for mailings to “the Company” the
following new address:
Flowserve Corporation
Attn: Ronald F. Shuff
Vice President, Secretary and General Counsel
5215 North O’Connor Boulevard, Suite 2300
Irving, TX 75039-5418
9. Effective as of the Effective Date, Section 14.4 of each Trust is amended by
substituting for the address contained therein for mailings to “the Trustee” the
following new address:
JPMorgan Chase Bank, N.A.
Attn: Theresa Granacher, OH1-0634
1111 Polaris Parkway, Suite 2N
Columbus, OH 43240

 

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IN WITNESS WHEREOF, Flowserve and the Trustee have signed this Amendment as of
the Effective Date.

            FLOWSERVE CORPORATION
      By:   /s/ Ronald F. Shuff         Title: Senior Vice President, Secretary
and General Counsel        JPMORGAN CHASE BANK, N.A.
      By:   /s/ Norma Schneiderman         Title: Assistant Vice President