Exhibit 10.71
Performance Restricted Stock Unit Agreement
Flowserve Corporation
Equity and Incentive Compensation Plan
     This Performance Restricted Stock Unit Agreement (the “Agreement”) is made
and entered into by and between Flowserve Corporation, a New York corporation
(the “Company”), and «First_Name» «Last_Name» (the “Participant”) as of
                     , 20___(the “Date of Grant”). All capitalized terms used in
this Agreement and not otherwise defined herein have the meanings given to such
terms in the Plan (defined below).
     WHEREAS, the Company has adopted the Flowserve Corporation Equity and
Incentive Compensation Plan (the “Plan”) to strengthen the ability of the
Company to attract, motivate and retain Employees and Outside Directors who
possess superior capabilities and to encourage such persons to have a
proprietary interest in the Company.
     WHEREAS, the Organization and Compensation Committee of the Board of
Directors of the Company believes that the grant of Performance Restricted Stock
Units to the Participant as described herein is consistent with the stated
purposes for which the Plan was adopted.
     NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereafter set forth and for other good and valuable consideration, the Company
and the Participant agree as follows:

  1.   Performance Restricted Stock Units

  (a)   In order to encourage the Participant’s contribution to the successful
performance of the Company, and in consideration of the covenants and promises
of the Participant herein contained, the Company hereby grants to the
Participant as of the Date of Grant, an Award of «M___of_Shares_Granted»
Restricted Stock Units subject to performance conditions (the “Performance
Shares”), which will be converted into a number of shares of Common Stock of the
Company equal to the number of vested Performance Shares or into an equivalent
amount of cash, subject to the conditions and restrictions set forth below and
in the Plan. The Performance Shares granted hereunder shall constitute a
Performance Award within the meaning of the Plan.     (b)   No Shareholder
Rights. The Performance Shares granted pursuant to this Agreement do not and
shall not entitle the Participant to any rights of a stockholder of the Company
prior to the date shares of Common Stock are issued to the Participant in
settlement of the Award. The Participant’s rights with respect to Performance
Shares shall remain forfeitable at all times prior to the date on which rights
become vested and the restrictions with respect to the Performance Shares lapse
in accordance with this Agreement.

 

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  2.   Vesting and Conversion of Performance Shares into Common Stock

  (a)   Prior to March 30, 20___, the Committee shall establish a threshold,
target and maximum Performance Goal with respect to the Award, in accordance
with the requirements of Section 6.7 of the Plan, based the Company’s return on
net assets for the period beginning January 1, 20___and ending December 31,
20___(the “Performance Cycle”). Following the end of the Performance Cycle, the
Committee shall compare the actual performance of the Company with the
Performance Goal and certify, in writing, whether and to what extent the
Performance Goal has been achieved for such Performance Cycle. Subject to the
provisions of Paragraph 3 below, upon written certification by the Committee,
which shall occur no later than March 15 of the year following the year in which
the Performance Cycle ends, whether, and to what extent, the Performance Goal
has been achieved, the Performance Shares will become vested (the “Vesting
Date”) and will be eligible for conversion in accordance with the following
schedule:

  (i)   If the Performance Goal achieved is less than the threshold, the
Performance Shares will not vest and the Performance Shares will not be eligible
for conversion.     (ii)   If the threshold Performance Goal is achieved, then
50% of the Performance Shares will vest and be eligible for conversion.    
(iii)   If the target Performance Goal is achieved, then 100% of the Performance
Shares will vest and be eligible for conversion.     (iv)   If the maximum
Performance Goal is achieved or exceeded, then 200% of the Performance Shares
will vest and be eligible for conversion.

  (b)   Except as otherwise provided in Paragraph 3 below, no later than
March 15 of the year following the year in which the Performance Cycle ends, the
Company shall convert the vested Performance Shares into the number of whole
shares of Common Stock equal to the number of vested Performance Shares, subject
to the provisions of the Plan and the Agreement, or into a cash amount
determined in accordance with Paragraph 2(e) below, and shall deliver such
shares (in accordance with Paragraph 2(c) below) or cash to the Participant. The
value of any fractional Performance Shares shall be paid in cash at the time
Common Stock is issued to the Participant in connection with the Performance
Shares. The value of the fractional Performance Shares shall equal the
percentage of a Performance Share represented by a fractional Performance Share
multiplied by the Fair Market Value of the Common Stock. The value of such
shares of Common Stock shall not bear any interest owing to the passage of time.

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  (c)   Following conversion of the vested Performance Shares into shares of
Common Stock, such shares of Common Stock will be transferred of record to the
Participant and a certificate or certificates representing said Common Stock
will be issued in the name of such Participant and delivered to the Participant.
The delivery of any shares of Common Stock pursuant to this Agreement is subject
to the provisions of Paragraphs 7 and 9 below.     (d)   Each year that this
Agreement is in effect, the Participant may receive credits (“Dividend
Equivalents”) based upon the cash dividends that would have been paid on the
number of shares of Common Stock equal to 100% of the Performance Shares as if
such shares of Common Stock were actually held by the Participant. Dividend
Equivalents shall be deemed to be reinvested in additional shares of Common
Stock (which may thereafter accrue additional Dividend Equivalents). Any such
reinvestment shall be at the Fair Market Value of the Common Stock at the time
thereof. Dividend Equivalents may be settled in cash or shares of Common Stock,
or any combination thereof, as determined by the Committee, in its sole and
absolute discretion. The settlement of Dividend Equivalents in the form of
shares of Common Stock will constitute a Bonus Stock Award for purposes of the
Plan. Following conversion of the vested Performance Shares into shares of
Common Stock, the Participant also shall receive a distribution of the Dividend
Equivalents accrued with respect to such Performance Shares prior to the date of
such conversion. In the event any Performance Shares do not vest, the
Participant shall forfeit his or her right to any Dividend Equivalents accrued
with respect to such unvested Performance Shares.     (e)   Notwithstanding the
foregoing provisions of Paragraphs 2(c) and 2(d), the Committee may, in its sole
and absolute discretion, in lieu of distributing any shares of Common Stock to
the Participant, elect to pay the Participant an amount in cash equal to the
Fair Market Value on the date of conversion of the shares of Common Stock that
the Participant otherwise would be entitled to receive pursuant to this
Agreement.

  3.   Effect of Termination of Employment or Services

  (a)   The Performance Shares granted pursuant to this Agreement shall vest in
accordance with the provisions of Paragraph 2(a) above, on condition that the
Participant remains employed by or continues to provide services to the Company
or a Subsidiary through the end of the Performance Cycle. If, however (i) the
Company and its Subsidiaries terminate the Participant’s employment or service
relationship, or (ii) the Participant terminates his or her employment or
service relationship, then, except as otherwise provided in Paragraphs 3(b) and
3(c) below, the Performance Shares that have not previously vested in accordance
with the vesting schedule reflected in Paragraph 2(a) above, as of the date of
such

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      termination of employment (or cessation of services, as applicable), shall
be forfeited by the Participant to the Company.

  (b)   Termination due to Death, Disability or Retirement. In the event the
Participant’s employment with the Company terminates due to his or her
Retirement, Total and Permanent Disability or death, and such termination occurs
in the final year of the Performance Cycle, then on the Vesting Date the
Participant (or the Participant’s estate) shall be entitled to receive the
number of shares of Common Stock that would have been payable to such
Participant if he or she had continued to provide services through the end of
the Performance Cycle as determined by the Committee in accordance with
Paragraph 2. For purposes of this Agreement, the terms “Retirement” and “Retire”
shall mean the termination of a Participant’s employment with the Company for
any reason other than due to the Participant’s death or Total and Permanent
Disability on or after the earlier of (i) the Participant’s early retirement
date (as such term is defined within the retirement plan in effect and in which
such Participant participates on the date of the Participant’s termination); or
(ii) the Participant attaining the normal retirement date (as such term is
defined within the Company’s retirement plan in effect and in which such
Participant participates on the date of the Participant’s termination, or if no
such plan is in effect, age 65).     (c)   Other Termination Provisions. In the
event a Participant’s employment with the Company is terminated due to the
Participant’s reduction-in-force (as determined in the sole discretion of the
Committee), termination triggering payment under the Flowserve Corporation
Officer Severance Plan, or if a Participant is reassigned to a position not
eligible for Plan participation, and such termination or reassignment occurs in
the final year of the Performance Cycle, then on the Vesting Date the
Participant (or the Participant’s estate) shall be entitled to receive a number
of shares of Common Stock equal to (i) the number of shares of Common Stock that
would have been payable to such Participant if he or she had continued to
provide services through the end of the Performance Cycle as determined by the
Committee in accordance with Paragraph 2, multiplied by (ii) a fraction, the
numerator of which is the number of full months (counting the month in which the
Participant’s termination of employment occurs as a full month) during the
Performance Cycle that the Participant was employed by the Company, and the
denominator of which is the total number of months in the Performance Cycle.

  4.   Limitation of Rights         Nothing in this Agreement or the Plan shall
be construed to:

  (a)   give the Participant any right to be awarded any further Performance
Shares or any other Award in the future, even if Performance Shares or

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      other Awards are granted on a regular or repeated basis, as grants of
Performance Shares and other Awards are completely voluntary and made solely in
the discretion of the Committee;

  (b)   give the Participant or any other person any interest in any fund or in
any specified asset or assets of the Company or any Subsidiary; or     (c)  
confer upon the Participant the right to continue in the employment or service
of the Company or any Subsidiary, or affect the right of the Company or any
Subsidiary to terminate the employment or service of the Participant at any time
or for any reason.

  5.   Data Privacy

               By execution of this Agreement, the Participant acknowledges that
he or she has read and understands the Flowserve Corporation Employee Data
Protection Policy (the “Policy”). The Participant hereby consents to the
collection, processing, transmission, use and electronic and manual storage of
his or her personal data by the Company, Wells Fargo Shareowner Services (“Wells
Fargo”) and Merrill Lynch & Co., Inc. (“Merrill Lynch”) in order to facilitate
Plan administration. The Participant understands and acknowledges that this
consent applies to all personally-identifiable data relevant to Plan
administration, including the Participant’s name, home address, work email
address, job title, GEMS ID, National Identification Number or Social Security
Number, employee status, work location, work phone number, tax class, previous
equity grant transaction data and compensation data. The Participant further
agrees to furnish to the Company any additional information requested by the
Company to enable it to comply with any reporting or other requirement imposed
upon the Company by or under any applicable statute or regulation.
               The Participant understands that for purposes of Plan
administration, the Participant’s personal data will be collected and processed
at 5215 N. O’Connor Blvd, Suite 2300, Irving, Texas (USA), and transferred to
Wells Fargo at 161 North Concord Exchange, South St. Paul, Minnesota (USA) and
Merrill Lynch at 4 World Financial Center, 250 Vesey St., New York, New York
(USA).

  6.   Prerequisites to Benefits

               Neither the Participant, nor any person claiming through the
Participant, shall have any right or interest in the Performance Shares awarded
hereunder, unless and until all the terms, conditions and provisions of this
Agreement and the Plan which affect the Participant or such other person shall
have been complied with as specified herein.

  7.   Delivery of Shares

               No shares of Common Stock shall be delivered to the Participant
upon conversion of the Performance Shares into shares of Common Stock until:

  (a)   all the applicable taxes required to be withheld have been paid or
withheld in full;

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  (b)   the approval of any governmental authority required in connection with
the Performance Shares, or the issuance of shares of Common Stock hereunder
under has been received by the Company; and     (c)   if required by the
Committee, the Participant has delivered to the Committee an “Investment Letter”
in form and content satisfactory to the Company as provided in Paragraph 9
hereof.

  8.   Successors and Assigns

               This Agreement shall bind and inure to the benefit of and be
enforceable by the Participant, the Company and their respective permitted
successors and assigns (including personal representatives, heirs and legatees),
except that the Participant may not assign any rights or obligations under this
Agreement except to the extent and in the manner expressly permitted herein.

  9.   Securities Act

               The Company will not be required to deliver any shares of Common
Stock pursuant to this Agreement if, in the opinion of counsel for the Company,
such issuance would violate the Securities Act of 1933 (the “Securities Act”) or
any other applicable federal or state securities laws or regulations. The
Committee may require that the Participant, prior to the issuance of any such
shares, sign and deliver to the Company a written statement, which shall be in a
form and contain content acceptable to the Committee, in its sole discretion
(“Investment Letter”):

  (a)   stating that the Participant is acquiring the shares for investment and
not with a view to the sale or distribution thereof;     (b)   stating that the
Participant will not sell any shares of Common Stock that the Participant may
then own or thereafter acquire except either:

  (i)   through a broker on a national securities exchange, or     (ii)   with
the prior written approval of the Company; and

  (c)   containing such other terms and conditions as counsel for the Company
may reasonably require to assure compliance with the Securities Act or other
applicable federal or state securities laws and regulations.

  10.   Federal and State Taxes

  (a)   Any amount of Common Stock or cash that is payable or transferable to
the Participant hereunder may be subject to the payment of or reduced by any
amount or amounts which the Company is required to withhold under the then
applicable provisions of the laws of the jurisdiction where the Participant is
employed, and, if applicable, the Internal Revenue Code of 1986, as amended (the
“Code”), or its successors, or any other foreign,

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      federal, state or local tax withholding requirement. When the Company is
required to withhold any amount or amounts under the applicable provisions of
any foreign, federal, state or local requirement or the Code, the Company shall
withhold from the Common Stock to be issued to the Participant a number of
shares necessary to satisfy the Company’s withholding obligations. The number of
shares of Common Stock to be withheld shall be based upon the Fair Market Value
of the shares on the date of withholding.

  (b)   Notwithstanding Paragraph 10(a) above, if the Participant elects, and
the Committee agrees, the Company’s withholding obligations may instead be
satisfied as follows:

  (i)   the Participant may direct the Company to withhold cash that is
otherwise payable to the Participant;     (ii)   the Participant may deliver to
the Company a sufficient number of shares of Common Stock then owned by the
Participant to satisfy the Company’s withholding obligations, based on the Fair
Market Value of the shares as of the date of withholding;     (iii)   the
Participant may deliver sufficient cash to the Company to satisfy its
withholding obligations; or     (iv)   any combination of the alternatives
described in Paragraphs 10(b)(i) through 10(b)(iii) above.

  (c)   Authorization of the Participant to the Company to withhold taxes
pursuant to one or more of the alternatives described in Paragraph 10(b) above
must be in a form and content acceptable to the Committee. The payment or
authorization to withhold taxes by the Participant shall be completed prior to
the delivery of any shares pursuant to this Agreement. An authorization to
withhold taxes pursuant to this provision will be irrevocable unless and until
the tax liability of the Participant has been fully paid.

  11.   Copy of Plan

               By the execution of this Agreement, the Participant acknowledges
receipt of a copy of the Plan.

  12.   Administration

               This Agreement is subject to the terms and conditions of the
Plan. The Plan will be administered by the Committee in accordance with its
terms. The Committee has sole and complete discretion with respect to all
matters reserved to it by the Plan and the decisions of the majority of the
Committee with respect to the Plan and this Agreement shall be final and binding
upon the Participant and the Company. Neither the Company nor the members of the
Board or

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the Committee will be liable for any act, omission or determination taken or
made in good faith with respect to this Agreement or the Performance Shares
granted hereunder. In the event of any conflict between the terms and conditions
of this Agreement and the Plan, the provisions of the Plan shall control.

  13.   Adjustment of Number of Performance Shares

               The number of Performance Shares granted hereunder shall be
subject to adjustment in accordance with Articles 11 and 12 of the Plan.

  14.   Non-transferability

               The Performance Shares granted by this Agreement are not
transferable by the Participant other than by will or pursuant to applicable
laws of descent and distribution. The Performance Shares and any rights and
privileges in connection therewith, cannot be transferred, assigned, pledged or
hypothecated by operation of law, or otherwise, and is not otherwise subject to
execution, attachment, garnishment or similar process. In the event of such
occurrence, this Agreement will automatically terminate and will thereafter be
null and void.

  15.   Remedies

               The Company shall be entitled to recover from the Participant
reasonable attorneys’ fees incurred in connection with the enforcement of the
terms and provisions of this Agreement whether by an action to enforce specific
performance or for damages for its breach or otherwise.

  16.   Information Confidential

               As partial consideration for the granting of the Award hereunder,
the Participant hereby agrees to keep confidential all information and
knowledge, except that which has been disclosed in any public filings required
by law, that the Participant has relating to the terms and conditions of this
Agreement. However, such information may be disclosed as required by law and may
be given in confidence to the Participant’s spouse and tax and financial
advisors. In the event any breach of this promise comes to the attention of the
Company, it shall take into consideration that breach in determining whether to
recommend the grant of any future similar award to the Participant, as a factor
weighing against the advisability of granting any such future award to the
Participant.

  17.   No Right to Stock

               No Participant and no beneficiary or other person claiming under
or through such Participant shall have any right, title or interest in any
shares of Common Stock allocated or reserved under the Plan or subject to this
Agreement, except as to such shares of Common Stock, if any, that have been
issued or transferred to such Participant. The Board and the Company do not
guarantee the Common Stock of the Company from loss or depreciation.

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  18.   Notice

               Any notice to be given to the Company or the Committee shall be
addressed to the Company in care of its Secretary at its principal office. Any
such notice shall be in writing and shall be delivered personally or shall be
sent by first class mail, postage prepaid, to the Company. Any person entitled
to notice hereunder may waive such notice in writing.

  19.   Amendments

               Except as provided otherwise in the Plan, this Agreement may be
amended only by a written agreement executed by the Company and the Participant.
Any such amendment shall be made only upon the mutual consent of the parties,
which consent (of either party) may be withheld for any reason. Notwithstanding
the foregoing, the Board or the Committee may amend this Agreement to the extent
necessary or advisable in light of any addition to or change in any federal or
state, tax or securities law or other law or regulation, which change occurs
after the Date of Grant and by its terms applies to the Award.

  20.   Governing Law

               This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Texas.

  21.   Severability

               If any provision of this Agreement is held to be illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions of this Agreement, but such provision shall be fully
severable and this Agreement shall be construed and enforced as if the illegal
or invalid provision had never been included.

  22.   Headings

               The titles and headings of paragraphs are included for
convenience of reference only and are not to be considered in construction of
the provisions of this Agreement.

  23.   Word Usage

               Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of this Agreement dictates, the plural
shall be read as the singular and the singular as the plural.

  24.   Execution of Receipts and Releases

               Any payment of cash or any issuance or transfer of shares of
Common Stock or other property to the Participant or to the Participant’s legal
representative, heir, legatee or distributee, in accordance with the provisions
of this Agreement, shall, to the extent thereof, be in full satisfaction of all
claims of such persons under this Agreement. The Company may require the
Participant or the Participant’s legal representative, heir, legatee or
distribute, as a

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condition precedent to such payment or issuance, to execute a release and
receipt therefor in such form as it shall determine.
     The Company and the Participant are executing this Agreement effective as
of the Date of Grant set forth in the introductory clause.

                  FLOWSERVE CORPORATION    
 
           
 
  By:        
 
     
 
   
 
  Name:        
 
     
 
   
 
  Title:        
 
     
 
   
 
                «First_Name» «Last_Name»    
 
           
 
  Name:        
 
     
 
   

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