Exhibit 10.20
2007 FLOWSERVE CORPORATION
LONG-TERM INCENTIVE PLAN
As Amended and Restated Effective January 1, 2010

I.   PURPOSE       The purpose of the 2007 Flowserve Corporation Long-Term Stock
Incentive Plan (hereinafter referred to as he “LTI Plan”) is (i) to help the
Company attract, retain, motivate and reward employees needed to plan,
implement, and direct the Company’s strategy and operations; (ii) to motivate
participants to achieve the corporate, divisional and subsidiary long-term goals
and objectives; and (iii) to align the interests of Participants directly with
those of the Company’s shareholders. These purposes will be accomplished through
the granting of Restricted Stock and/or Restricted Stock Units, in accordance
with and pursuant to the terms of the Flowserve Corporation Equity and Incentive
Compensation Plan (the “Stock Plan”), as it may be amended from time to time.  
II.   DEFINITIONS

  A.   “Award” — Restricted Stock and/or Restricted Stock Units awarded under
the LTI Plan.     B.   “Board” — The Company’s Board of Directors.     C.  
“Code” — The Internal Revenue Code of 1986, as amended.     D.   “Committee” —
The Organization & Compensation Committee of the Board.     E.   “Company” —
Flowserve Corporation, a New York Corporation, and its successors in interest.  
  F.   “Disability” – A Participant is qualified for long term disability
benefits under the Company’s disability plan or insurance policy or a disability
plan or insurance policy of a parent or Subsidiary of the Company (as
applicable); or, if no such plan or policy is then in existence or if the
Participant is not eligible to participate in such plan or policy, the
Participant, because of a physical or mental condition resulting from bodily
injury, disease, or mental disorder which prevents the Participant from
performing his or her duties of employment for a period of six (6) continuous
months, as determined in good faith by the Committee, based upon medical reports
or other evidence satisfactory to the Committee.     G.   “Division” — An
unincorporated business unit of the Company.     H.   “Executive Officer” — An
officer of the Company or its Subsidiaries who is a “covered employee”, as
defined in Section 162(m) of the Code, as determined in accordance with
Section 6.7(e) of the Stock Plan.     I.   “Fiscal Year” — The Company’s fiscal
year ending December 31.

 

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  J.   “LTI Plan” — This 2007 Flowserve Corporation Long-Term Stock Incentive
Plan.     K.   “Participant” — An employee who is selected by the Committee to
receive an Award under the LTI Plan.     L.   “Performance Cycle” or “Cycle” —
The period (not to exceed ten years) during which the performance of the Company
and its Divisions and Subsidiaries is measured for the purpose of determining
the extent to which an award has been earned.     M.   “Performance Goals” — Any
of the objectives for the Company and its Divisions and Subsidiaries established
by the Committee in accordance with the provisions of Section V.B. below for the
purpose of determining the extent to which Performance Shares which have been
contingently awarded for a Cycle become earned by the Participant.     N.  
“Performance Shares” — An award of Restricted Stock Units payable in Shares or
cash upon the achievement of certain pre-established Performance Goals for a
Cycle, and subject to total or partial forfeiture in the event such Performance
Goals are not achieved. Performance Shares become earned by the Participant upon
the Company’s satisfaction of the established Performance Goals.     O.   “Plan
Year” — The calendar year.     P.   “Required Service Period” — The time period
during which a Participant must remain employed by the Company, its Divisions
and/or Subsidiaries in order to earn a nonforfeitable right to an Award of
Service Units.     Q.   “Restricted Stock” — Restricted Stock as defined in the
Stock Plan.     R.   “Restricted Stock Unit” — Restricted Stock Unit as defined
in the Stock Plan.     S.   “Retirement” or “Retires” — The termination of a
Participant’s employment for any reason other than for cause, 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); (ii) retirement set by local law
or the Participant’s employment agreement; or (iii) the Participant attaining
sixty-five (65) years of age.     T.   “Service Units” — An Award in the form of
Restricted Stock and/or Restricted Stock Units that becomes nonforfeitable upon
the Participant’s satisfaction of the Required Service Period.     U.   “Shares”
— Shares of common stock of the Company.     V.   “Stock Plan” — The Flowserve
Corporation Equity and Incentive Compensation Plan, as amended from time to
time.

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  W.   “Subsidiary” — Any entity of which more than 50 percent of the voting
control is owned, directly or indirectly, by the Company.

III.   ADMINISTRATION       The LTI Plan will be administered by the Committee
or its delegate in accordance with the provisions of Article III of the Stock
Plan. Membership on the Committee shall be limited to those members of the Board
who are “outside directors” under Section 162(m) of the Code and shall be
composed entirely of independent directors as required by the New York Stock
Exchange “NYSE” rules. No member of the Committee will be eligible to be granted
an Award (i) while he is a member of the Committee, or (ii) with respect to any
Fiscal Year during which a Performance Cycle was established and he was a member
of the Committee. No amendment shall retroactively affect the benefit rights or
other entitlement of any Award granted to or earned by a Participant.   IV.  
ELIGIBILITY AND ELECTION TO PARTICIPATE       Employees eligible to participate
under the LTI Plan are those employees of the Company and its Subsidiaries who
are in a position to contribute, in a substantial measure, to the long-term
strategies, performance and profitability of the Company and its Subsidiaries.
Generally, only employees who are at the Executive Officer, Officer, Vice
President, or Director level will be eligible for participation, although the
Committee in its discretion may admit other employees as Participants.   V.  
OPERATION OF THE LTI PLAN

  A.   Authority of the Committee. The Committee will have the sole authority to
determine (i) the eligible employees who will become Participants, (ii) the
number of Performance Shares and/or Service Units each Participant will receive,
(iii) the duration of the Required Service Period, and (v) the form of the
Award. Notwithstanding the foregoing, Awards to Participants working in certain
countries outside the United States shall take the form of Restricted Stock
Units in order to defer taxation to the Participant, as determined by the
Committee in its discretion. There may be more than one Performance Cycle and/or
Required Service Period in existence at any one time, and the duration of
Performance Cycles and/or Required Service Periods may differ from each other.
Each Award of Performance Shares will be confirmed by a Performance Shares offer
executed by the Company and sent to the Participant, which shall be deemed to
have been accepted by the Participant and thus have become a binding agreement,
unless the Participant declines in writing within seven (7) days after receipt
or unless provided otherwise in the offer. In addition, each Award of Service
Units will be confirmed by a Service Unit offer (which may or may not be
included with the Performance Shares offer) executed by the Company and sent to
the Participant, which shall be deemed to have been accepted by the Participant
and thus have become a binding agreement, unless the Participant objects in
writing within seven (7) days after receipt or unless provided otherwise in the
offer.

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  B.   Performance Goals. Awards of Restricted Stock, Restricted Stock Units or
Performance Shares may be made subject to the attainment of Performance Goals
relating to one or more business criteria, which, where applicable, shall be
within the meaning of Section 162(m) of the Code, and consist of one or more or
any combination of the following: (i) gross profit, (ii) operating income,
(iii) income before taxes, (iv) income after taxes, (v) economic profit,
(vi) earnings per share, (vii) return on assets, (viii) return on investment,
(ix) return on equity, (x) return on sales, (xi) total return to shareholders,
(xii) operating cash flow, (xiii) free cash flow, (xiv) cash flow return on
investments, (xv) debt to equity measures, (xvi) ratio of debt to debt plus
equity, (xvii) ratio of operating earnings to capital spending, (xviii) sales,
(xix) sales growth, (xx) market share, (xxi) economic value added (xxii) stock
price, (xxiii) growth measures, (xxiv) total shareholder return, (xxv) inventory
turnover (xxvi) on-time delivery measures, (xxvii) increase in revenues,
(xxviii) increase in cash flow, (xxix) increase in cash flow return,
(xxx) return on net assets, (xxxi) return on capital, (xxxii) operating margin,
(xxxiii) contribution margin, (xxxiv) net income, (xxxv) pretax earnings,
(xxxvi) pretax earnings before interest, depreciation, and amortization,
(xxxvii) pretax operating earnings after interest expense and before incentives,
service fees, and extraordinary or special items, (xxxviii) debt reduction,
(xxxix) general and administrative expenses, (xl) net asset value,
(xli) operating costs, (xlii) profit before tax, (xliii) earnings before
interest and taxes, (xliv) operating earnings, (xlv) net profit, (xlvi) net
sales, (xlvii) return on shareholders’ equity, and (xlviii) any of the above
goals determined on an absolute or relative basis or as compared to the
performance of a published or special index deemed applicable by the Committee
including but not limited to, the Standard & Poor’s 500 Stock Index or a group
of comparable companies (“Performance Criteria”). Prior to the beginning of each
Performance Cycle, or as soon as practicable thereafter (and no later than
90 days after the commencement of the Performance Cycle, or if the Performance
Cycle is less than twelve (12) months, no later than before 25% of the
Performance Cycle has been completed), the Committee will establish Performance
Goals for such Cycle. (See Attachment A for the Performance Goals for each
applicable Cycle.) With respect to an Award of Performance Shares intended to
satisfy the requirements of Section 162(m) of the Code, during any Cycle, the
Committee may reduce the Performance Goals for such Cycle to take into account
the negative effect on the attained levels of the Performance Goals which result
from specified corporate transactions, extraordinary events, accounting changes
and other similar occurrences, so long as those transactions, events, changes
and occurrences were not certain at the time the Performance Goal was initially
established, and the number of Performance Shares is not increased, unless the
reduction in the Performance Goals would reduce or eliminate the number of
Performance Shares, and the Committee determines not to make such reduction.
Additionally, in establishing the Performance Goals, the Committee may provide
for the manner in which the Performance Goals will be measured in light of
specified corporate transactions, extraordinary events, accounting changes and
other similar occurrences, to the extent those transactions, events, changes and
occurrences have a positive effect on the attained levels of the Performance
Goals, so long as the Committee’s actions do not increase the

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      number of Performance Shares for any Participant. With respect to an Award
of Performance Shares that is not intended to satisfy the requirements of
Section 162(m) of the Code, if the Committee determines, in its sole discretion,
that the established performance measures or objectives are no longer suitable
because of a change in the Company’s business, operations, corporate structure,
or for other reasons that the Committee deems satisfactory, the Committee may
modify the performance measures or objectives and/or the performance period.
Notwithstanding the foregoing provisions of this Section, with respect to any
Performance Shares granted to the Executive Officer that are intended to satisfy
the requirements of Section 162(m) of the Code, the Committee may not in any
event increase the amount of compensation payable to the individual upon the
attainment of the Performance Goals. The extent to which any applicable
Performance Goals have been achieved shall be conclusively determined by the
Committee prior to payment of any Shares.

  C.   Required Service Periods. The Committee will establish Required Service
Periods on the basis of such criteria and to accomplish such objectives as the
Committee may from time to time select. The Required Service Period shall be
specified in the applicable Service Unit offer accompanying an Award of Service
Units.     D.   Computation of Performance Share Awards Earned. The Committee
will determine the number of Performance Shares which have been earned at the
end of each Performance Cycle, based upon the Company’s performance in relation
to the established Performance Goals. A Participant’s earned Award for any
Performance Cycle shall be contingent upon the Company’s achieving such
percentage of the Performance Goals for that Cycle as may be specified by the
Committee. If the Company’s performance falls short of or exceeds such goals,
the actual Award may be less than or exceed the target Award by such amount as
may be specified by the Committee, but the actual Award shall in no event exceed
200% of the target Award.     E.   Payment of Performance Shares. Payment of
Performance Shares will be in the form of Shares or cash (the amount of which
shall be determined based upon the Current Market Value of the Shares vested
upon achievement of the Performance Goals), provided, however, the number of
Shares or cash actually received by a Participant will be solely contingent upon
the Company’s achievement of the pre-established Performance Goal for such
Performance Cycle. Performance Shares shall be valued by reference to a Share’s
“Current Market Value” on the February 1 following the end of the applicable
Performance Cycle, or such other date selected by the Committee, in its sole
discretion. When payable in cash, “Current Market Value” shall mean the average
of the last sale price of a Share during the period beginning 31 days prior to
and ending on the date that the value of the Share is to be determined, as
reported by the National Association of Securities Dealers, Inc. through the
NYSE or, in the event that the Shares are listed on an exchange, the average of
the last sale prices of a Share on such exchange during such period. Payment of
Performance Shares will be made as

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      soon as practicable after the determination of the value of a Share, where
applicable, and the completion of the Performance Cycle during which the Awards
were earned, and in no event later than the date that is 21/2 months following
the close of the taxable year in which such Performance Shares vest in
accordance with the terms of the applicable award agreement.

  F.   Compliance with Securities Law and Regulations. The issuance or delivery
of Shares pursuant to the LTI Plan shall be subject to, and shall comply with,
any applicable requirements of federal and state securities laws, rules and
regulations (including, without limitation, the provisions of the Securities Act
of 1933, the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder), any securities exchange upon which the Shares may be
listed and any other law or regulation applicable thereto. The Company shall not
be obligated to issue or deliver any Shares pursuant to the LTI Plan if such
issuance or delivery would, in the opinion of the Committee, violate any such
requirements. The foregoing shall not, however, be deemed to require the Company
to issue Shares pursuant to an Award if a necessary listing or quotation of the
Shares on a stock exchange or inter-dealer quotation system or any registration
under state or federal securities laws required under the circumstances has not
been accomplished.     G.   Number of Shares Available for Awards. All Awards
granted pursuant to this LTI Plan shall be subject to the limitations on grants
set forth in the Stock Plan, including the provision of the Stock Plan that
provides that no one individual may receive a grant in any calendar year of
Restricted Stock or Restricted Stock Units that are subject to the attainment of
Performance Goals relating to more than 200,000 Shares.

VI.   TERMINATION OF EMPLOYMENT

  A.   Performance Shares.

1. Termination Generally. Except as provided in Section VI.A.2 below, all Awards
of Performance Shares not yet earned upon a Participant’s termination of
employment for any reason will be forfeited, unless specified otherwise in the
offer or other agreement evidencing the Performance Shares. The Committee may,
but is not obligated to, make whole or partial payments of Performance Shares to
a terminated Participant at its discretion if it deems such action to be in the
best interest of the Company.
2. Termination Due to Death, Disability or Retirement. Notwithstanding
Section VI.A.1 above, in the event a Participant’s employment with the Company
or a Subsidiary is terminated due to the Participant’s death, Disability or
Retirement, and such termination occurs in the Plan Year in which the
Performance Cycle applicable to an Award of Performance Shares ends, the
Participant shall be eligible to receive a number of Performance Shares subject
to such Award, which shall be the total number of Performance Shares granted to
the Participant pursuant to such Award, provided that the Performance Shares

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actually paid to the Participant will be contingent upon the Company’s actual
performance for the Performance Cycle as determined by the Committee in
accordance with Section V.D. hereof. Any amounts that become payable pursuant to
this Section VI.A.2 will be paid at the same time as provided in Section V.E. In
the event of a Participant’s death, any amount payable with respect to his
Performance Shares shall be paid to his beneficiary(ies). Should a beneficiary
die after the Participant dies, but before the benefit is disbursed, the benefit
will be paid to the beneficiary’s estate.
3. Other Termination Provisions. Notwithstanding Section VI.A.1 above, in the
event a Participant’s employment with the Company or a Subsidiary is terminated
due to the Participant’s reduction-in-force (as determined in the sole
discretion of the Committee), termination triggering payment under the Officer
Severance Plan, or in the event a Participant is reassigned to a
non-participating position, and such termination or reassignment occurs in the
Plan Year in which the Performance Cycle applicable to an Award of Performance
Shares ends, the Participant shall be eligible to receive a number of
Performance Shares subject to such Award equal to the product of (i) the total
number of Performance Shares granted to the Participant pursuant to such Award
times (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), beginning with the first month in the Performance Cycle,
during which the Participant was employed by the Company or a Subsidiary, and
the denominator of which is the total number of months in the Performance Cycle,
provided that the Performance Shares actually paid to the Participant will be
contingent upon the Company’s actual performance for the Performance Cycle as
determined by the Committee in accordance with Section V.D. hereof. Any amounts
that become payable pursuant to this Section VI.A.2 will be paid at the same
time as provided in Section V.E.

  B.   Service Units. Except as otherwise provided in the offer or other
agreement evidencing Service Units, all Service Units not yet vested upon a
Participant’s termination of employment for any reason will be forfeited.
Notwithstanding the foregoing, the Committee may, but is not obligated to, make
whole or partial payments of Service Units to a terminated Participant at its
discretion if it deems such action to be in the best interest of Company.

VII.   DESIGNATION OF THE BENEFICIARY       Upon the grant of an Award pursuant
to this LTI Plan, each Participant shall designate one or more beneficiaries to
whom the Company will make any distribution payable after the Participant’s
death. This designation will be made in writing on a form filed with the
Company’s Vice President, Secretary, and General Counsel (or other individual
designated by the Vice President, Secretary and General Counsel). If a
Participant does not designate a beneficiary, or if the beneficiary predeceases
the Participant, the distribution shall be made to the Participant’s estate.
Should a beneficiary die after the Participant but before distribution is made,
the distribution shall be made to the

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    beneficiary’s estate. A Participant may change his designated
beneficiary(ies) at any time.

VIII.   AMENDMENT, SUSPENSION OR TERMINATION OF LTI PLAN       In addition to
the Committee’s power to amend the LTI Plan as described in Article III of this
LTI Plan, the Committee may at any time amend, suspend or terminate this LTI
Plan; provided, however, that no amendment, suspension or termination will
affect the rights of Participants to receive distribution of Awards already
vested but not paid nor retroactively eliminate or reduce any Award granted to
or earned by any Participant, without the consent of the affected Participant.
For purposes of the foregoing, an Award of Performance Shares shall be
considered to have been vested upon the certification of accomplishment of
Performance Goals, and an Award of Service Units shall be considered to have
been vested upon the Participant’s satisfaction of the Required Service Period.
  IX.   GENERAL

  A.   All expenses of administering the LTI Plan, including reasonable
compensation to the members of the Committee, will be borne by the Company and
its Subsidiaries.     B.   No rights under the LTI Plan, contingent or
otherwise, will be transferable, assignable or subject to any encumbrance,
pledge or charge of any nature.     C.   Neither the adoption of the LTI Plan
nor its operation will in any way affect the right and power of the Company to
dismiss or discharge any employee at any time.     D.   The Board, the Committee
and the Chief Executive Officer may rely upon any information supplied to them
by an officer of the Company or by the Company’s independent public accountants
and may rely upon the advice of such accountants or of counsel in connection
with the administration of the LTI Plan and will be fully protected in relying
upon such information or advice.

          IN WITNESS WHEREOF, the Company has caused this LTI Plan to be
executed on February 22, 2010 and effective as of January 1, 2010, except as
otherwise stated herein.

            FLOWSERVE CORPORATION
      By:   /s/ Ronald F. Shuff         Ronald F. Shuff        Senior Vice
President, Secretary and General Counsel     

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