Exhibit 10.43
FLOWSERVE CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Amended and Restated Effective as of November 12, 2007
The Flowserve Corporation Supplemental Executive Retirement Plan, as amended and
restated effective as of November 12, 2007, (the “Plan”) is set forth below. The
Plan is sponsored by Flowserve Corporation for certain eligible officers and is
exempt from the participation, vesting, funding and fiduciary requirements of
Title I of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).
ARTICLE I
PURPOSE
1.1 Purpose of the Plan. The primary purpose of the Company in establishing this
Plan is to provide additional retirement benefits to Eligible Officers.
1.2 Effective Date. The Plan, which is effective November 12, 2007, is an
amendment and restatement of the Flowserve Corporation Senior Supplemental
Executive Retirement Plan, which was originally effective July 1, 1999 (the
“Prior Plan”). The Plan shall apply generally to any Participant who did not
terminate employment prior to November 12, 2007. Except as otherwise provided
herein, any Eligible Officer who is a Participant and who terminated employment
prior to November 12, 2007, shall be entitled to those benefits, if any,
provided by the Prior Plan, as modified, where appropriate, to comply with the
requirements of Section 409A of the Code and the guidance issued thereunder as
then in effect.
ARTICLE II
DEFINITIONS
2.1 Definitions. Whenever used in the Plan, the following terms shall have the
respective meanings set forth below:

(a)   “Beneficiary” means one or more persons, trusts, estates or other
entities, designated in accordance with the procedures established by the
Committee, that are entitled to receive benefits under this Plan upon the death
of a Participant.   (b)   “Board” or “Board of Directors” means the Board of
Directors of the Company.   (c)   “Change in Control” shall mean the occurrence
of any of the following:

  (i)   On the date any “Person” (as defined in subparagraph (v) below) acquires
(or has acquired during the 12-month period ending on the date of the most
recent acquisition by such Person) ownership of stock of the Company possessing
thirty percent (30%) or more of the total voting power of the stock of the
Company (the “Voting Stock”); other than an acquisition (1) directly from the
Company; (2) by the Company or any corporation, partnership, trust or other
entity controlled by the Company (a “Subsidiary”); (3) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Subsidiary; (4) any acquisition by any corporation pursuant to a
reorganization, merger or

 

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      consolidation, if, following such reorganization, merger or consolidation,
the conditions described in subparagraph (iii)(1) and (2) are satisfied; or
(5) by any Person who is considered to own stock of the Company constituting
thirty percent (30%) or more of the Voting Stock immediately prior to such
additional acquisition. Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur solely because any Person (the “Subject Person”) acquired
ownership of stock of the Company possessing thirty percent (30%) or more of the
Voting Stock as a result of the acquisition of the Voting Stock, which, by
reducing the number of shares of Voting Stock, increases the proportional number
of shares owned by the Subject Person; provided, however, that if following such
acquisition of shares of Voting Stock by the Company, the Subject Person
acquires additional Voting Stock which increases the percentage ownership of the
Subject Person to an amount that would constitute thirty percent (30%) of the
then outstanding Voting Stock (excluding any shares of Voting Stock previously
acquired by the Company), then a Change in Control shall then be deemed to have
occurred; or     (ii)   On the date a majority of members of the Board is
replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the Board before the date of the appointment or
election; provided, however, that any such director shall not be considered to
be endorsed by the Board if his or her initial assumption of office occurs as a
result of either an actual or threatened election contest or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board, including by reason of agreement intended to avoid or settle any
such actual or threatened contest or solicitation; or     (iii)   On the date of
consummation of a reorganization, merger, or consolidation, in each case,
immediately following which a Person owns stock of the Company that, together
with stock held by such Person prior to such reorganization, merger or
consolidation, constitutes more than fifty percent (50%) of the total fair
market value of the Company; unless, following such reorganization, merger or
consolidation: (1) more than fifty percent (50%) of the then outstanding Voting
Stock is owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the owners of the Voting Stock immediately
prior to such reorganization, merger or consolidation, in substantially the same
proportions as their ownership immediately prior to such reorganization, merger
or consolidation; or (2) (A) officers of the Company as of the effective date of
such reorganization, merger or consolidation constitute at least three-quarters
(3/4) of the officers of the ultimate parent company of the corporation
resulting from such reorganization, merger or consolidation; (B) elected members
of the Board as of the effective date of such reorganization, merger or
consolidation constitute at least three quarters (3/4) of the board of directors
of the ultimate parent company of the corporation resulting from such
reorganization, merger or consolidation; and (C) the positions of Chairman of
the board of directors, the Chief Executive Officer and the President of the
corporation resulting from such reorganization, merger or consolidation are held
by individuals with the same positions at the Company as of the effective date
of such reorganization, merger or consolidation.

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  (iv)   On the date any Person acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such Person) assets
from the Company that have a total gross fair market value equal to or more than
50% of the total gross fair market value of all of the assets of the Company
immediately before such acquisition or acquisitions, unless such assets have
been acquired by a corporation with respect to which, following such
acquisition, (a) more than fifty percent (50%) of, respectively, the then
outstanding shares of stock of such corporation and the combined voting power of
the then outstanding voting stock of such corporation (or any parent thereof)
entitled to vote generally in the election of directors is then owned, directly
or indirectly, by all or substantially all of the individuals and entities who
were the owners, respectively, of outstanding stock of the Company and the
Voting Stock immediate prior to such acquisition, in substantially the same
proportions as their ownership immediately prior to such acquisition; (b) no
Person (excluding the Company and any employee benefit plan (or related trust)
of the Company or a Subsidiary or any Person owning immediately prior to such
acquisition, directly or indirectly, twenty percent (20%) or more of all of the
outstanding shares of stock of the Company or the Voting Stock, owns, directly
or indirectly, twenty percent (20%) or more of all of the then outstanding stock
of such corporation or the combined voting power of the then outstanding voting
stock of such corporation (or any parent thereof) entitled to vote generally in
the election of directors and (c) at least two-thirds (2/3) of the members of
the board of directors of such corporation (or any parent thereof) were members
of the Company’s Board at the time of the execution of the initial agreement or
action of the Board providing for such acquisition of the Company’s assets. For
purposes of this subparagraph (iv), gross fair market value means the value of
the assets of the Company or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.
Notwithstanding the foregoing, no Change in Control shall be deemed to occur
when there is such a sale or transfer to (1) a shareholder of the Company
(immediately before the asset transfer) in exchange for or with respect to the
Company’s then outstanding stock; (2) an entity, at least fifty percent (50%) of
the total value or voting power of the stock of which is owned, directly or
indirectly, by the Company; (3) a Person that owns directly or indirectly, at
least 50% of the total value or voting power of the outstanding stock of the
Company; or (4) an entity, at least fifty percent (50%) of the total value or
voting power of the stock of which is owned, directly or indirectly, by a Person
that owns, directly or indirectly, at least fifty percent (50%) of the total
value or voting power of the outstanding stock of the Company. For purposes of
the foregoing, a Person’s status is determined immediately after the asset
transfer.     (v)   For purposes of subparagraphs (i), (ii), (iii) and
(iv) above, “Person” shall have the meaning given in Section 7701(a)(1) of the
Code. Person shall include more than one Person acting as a group as defined by
the Final Treasury Regulations issued under Section 409A of the Code.

(d)   “Code” means the Internal Revenue Code of 1986, as amended, and any
successor provision thereto.

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(e)   “Committee” means the Organization & Compensation Committee of the Board
of Directors of the Company.   (f)   “Company” means Flowserve Corporation and
any subsidiary participating in the Qualified Plan.   (g)   “Compensation” means
base salary plus annual incentive pay.   (h)   “Effective Date” means
November 12, 2007, the effective date of the Plan as amended and restated.   (i)
  “Eligible Officer” means any person who is (i) a Participant in the Qualified
Plan; (ii) an officer of the Company; and (iii) designated by the Committee to
participate in the Plan.   (j)   “Participant” means any Eligible Officer who is
designed by the Committee as a Participant in this Plan.   (k)   “Predecessor
Plan” means either the Flowserve Corporation Benefit Equalization Pension Plan
(Flowserve Equalization Plan) or the BW/IP International Supplemental Executive
Retirement Plan (BW/IP SERP).   (l)   “Qualified Plan” means the Flowserve
Corporation Pension Plan, as amended from time to time, or any successor to this
Plan, and any other qualified pension plan that may be designated by the
Committee.   (m)   “Separation from Service” means a Participant dies, retires,
or otherwise suffers a termination of employment, as determined in accordance
with the requirements of Section 409A of the Code and the final regulations
issued thereunder. For purposes of the Plan, a Participant shall not be
considered to have separated from service while the Participant is on military
leave, sick leave or other bona fide leave of absence if the period of such
leave of absence does not exceed six months, or, if longer, so long as the
Participant retains the right to reemployment with the Company or its
subsidiaries under an applicable statute or by contract. A leave of absence
constitutes a bona fide leave of absence only if there is a reasonable
expectation that the Participant will return to perform services for the Company
or any of its subsidiaries. If the period of leave exceeds six months and the
Participant does not retain a right to reemployment under an applicable statute
or by contract, the employment relationship is deemed to terminate on the first
date immediately following such six-month period. Notwithstanding the foregoing,
where a leave of absence is due to any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than six months, where such impairment
causes the Participant to be unable to perform the duties of his or her position
of employment or any substantially similar position of employment, a 29-month
period of absence shall be substituted for the six-month period in the
immediately preceding sentence.

Any other term used in this Plan which is defined in the Qualified Plan shall
have the meaning set forth therein.

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ARTICLE III
PARTICIPATION
3.1 Participation. An employee shall become a Participant as of the first day of
the calendar month coincident with or next following the date he or she first
becomes an Eligible Officer (the “Entry Date”), provided that he or she remains
a member of the select group of officers for whom this Plan is designed through
his or her Entry Date.
ARTICLE IV
BENEFITS FOR PARTICIPANTS
4.1 Eligibility. A Participant or the Beneficiary of a Participant shall be
eligible to receive benefits under this Plan; provided, however, the Company may
in its discretion restrict on a prospective basis the classification of persons
who are eligible to receive benefits under this Plan.
4.2 Amount of Benefits. Each Eligible Officer shall have a cash balance account.
The cash balance account is a bookkeeping account that the Company uses to
record an Eligible Officer’s opening cash balance account, contribution credits
and interest credits earned under the Plan and is not in an actual account
having Plan assets allocated to it.

(a)   Contribution Credits. The Company adds annual contribution credits equal
to 5% of Compensation.   (b)   Interest Credits. The Company adds interest
credits based upon the Eligible Officer’s beginning of quarter cash balance
account plus 50% of Company contribution credits (other than any discretionary
company contribution credits made pursuant to Section 4.3) for the quarter at
the interest rate for interest credits under the Qualified Plan.

4.3 Discretionary Company Contribution. In addition to the company contribution
credits made pursuant to Section 4.2(a) above, the Company, in its sole and
absolute discretion, may, but is not required to, credit any additional amount
it desires to any Participant’s account under this Plan. The amount so credited
to a Participant may be smaller or larger than the amount credited to any other
Participant for a plan year, and the amount credited to any Participant for a
plan year may be zero, even though one or more other Participants may receive a
contribution from the Company for that plan year; provided, however, the Company
shall determine the amount credited to each Participant in a manner that does
not violate any applicable nondiscrimination law. Any discretionary contribution
made in accordance with this Section 4.3, if any, shall be credited on a date or
dates to be determined by the Committee, in its sole discretion.
4.4 Transitional Benefit. For each Eligible Officer who was in employment and
eligible to participate in the Plan on July 1, 1999 but before May 16, 2007, his
or her opening cash balance account was determined as follows:

(a)   Eligible Officers with at least eighty (80) “age and credited service”
points (as defined under the Qualified Plan), who were participating in a
Predecessor Plan on July 1, 1999, have an opening cash balance account
structured to provide a total projected age sixty-

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    two (62) benefit approximately equal to the benefit from the Predecessor
Plan, assuming actual bonus is 100% of target.   (b)   Eligible Officers who
were not in a defined benefit plan on July 1, 1999, have an opening cash balance
account equal to 5% of 1998 compensation times years of service with the Company
(including BW/IP, Inc. and Durco International, Inc.) for each year as an
executive officer of the Company.   (c)   Eligible Officers who commenced
participation in the Plan after July 1, 1999 and prior to May 16, 2007, have an
opening cash balance account equal to 5% of current Compensation times years of
service with the Company (including BW/IP, Inc. and Durco International, Inc.).

4.5 Commencement and Form. Subject to the provisions of this Article IV, a
Participant will receive benefits under the Plan in the form of a lump sum
payment on the date of his or her Separation from Service or as soon as
administratively practicable thereafter. Notwithstanding the foregoing or any
other provision of this Plan to the contrary, if a Participant who is entitled
to payments under this Plan is a “specified employee”, as defined in
Section 1.409A-1(i) of the final regulations issued under Section 409A of the
Code, any payment under this Plan shall be made in a lump sum on the date which
is six (6) months following the date of the Participant’s Separation from
Service, or if earlier, on the date of the Participant’s death. All payments
that are delayed for six (6) months as provided in this Section 4.5 shall
continue to accrue interest credits under Section 4.2 for the period from the
Participant’s Separation from Service until the date such payment is actually
made.
ARTICLE V
VESTING
5.1 Vesting Schedule. A Participant shall be vested in one-third of his or her
accrued benefits under this Plan for each full year of participation in this
Plan for his or her first three (3) years of participation. After three (3) full
years of participation in the Plan, a Participant shall be 100% vested in all
future benefits accrued under this Plan. If a Participant ceases to be eligible
for this Plan prior to his or her third (3rd) full year of participation, he or
she shall not receive vesting credit for purposes of this Plan for any period of
ineligibility. If a Participant becomes eligible to participate in this Plan
again following a period of ineligibility, he or she will receive credit for his
or her prior full years of participation in the Plan. No vesting credit shall be
given for partial years of participation.
5.2 Change in Control Vesting. In the event of a Change in Control, the Eligible
Officer shall immediately be fully vested in his or her benefit under the Plan.
ARTICLE VI
ADMINISTRATION
6.1 Administration. The Committee shall be responsible for the general
administration of the Plan and the carrying out of the provisions thereof, and
shall have all rights and powers required in connection therewith, including the
right to establish rules for the administration of the Plan and the methods to
be used in calculating benefits. The Committee shall have the discretionary

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power and authority to interpret and administer the Plan according to its terms,
including the power to construe and interpret the Plan, to supply any omissions
therein, to reconcile and correct any errors or inconsistencies, to decide any
questions in the administration and application of the Plan, and to make
equitable adjustments for any mistakes or errors in the administration and
application of the Plan. The Committee shall have such additional powers as may
be necessary to discharge its duties and responsibilities hereunder.
6.2 Application for Benefits. The Committee shall determine a Participant’s or
Beneficiary’s eligibility for benefits. Each Participant or Beneficiary claiming
a benefit under the Plan shall complete an application form and file it with the
Committee or an administrator designated by the Committee. The Committee shall
take action on all applications for benefits within ninety (90) days of receipt.
If an application is approved, the Committee shall determine, or cause to be
determined, the applicant’s benefits under the Plan.
6.3 Claims Procedure. If an application for benefits is denied or benefits are
forfeited, in whole or in part, the following claims procedure shall be
applicable:

(a)   The Committee will provide the claimant with a written notice of denial,
setting forth (i) an explanation as to why the claim was denied or benefit
forfeited, (ii) the provisions of the Plan upon which the denial or forfeiture
was based, and (iii) an explanation of the Plan’s claims procedure. If the
Committee does not deny a claim on its merits, but rejects the application for
failure to furnish certain necessary material or information, the written notice
to the claimant will explain what additional material is needed and why, and
advise the claimant that he or she may refile a proper application.   (b)  
Within sixty (60) days after the receipt of the Committee’s notice of denial or
forfeiture, the claimant must file a written notice of appeal of the denial or
forfeiture of benefits with the Committee. In addition, within such appeal
period, the claimant may review pertinent documents at such reasonable times and
places as the Committee may specify and may submit any additional written
material pertinent to the appeal, and the claimant shall be entitled to appear
before the Committee to present his or her claim.   (c)   The Committee will
make a written decision on the appeal not later than sixty (60) days after its
receipt of the notice of appeal, unless special circumstances require an
extension of time, in which case a decision will be given as soon as possible,
but not later than one hundred-twenty (120) days after receipt of the notice of
appeal. The decision on the appeal will be in writing and shall include specific
reasons for the decision, making specific reference to the provisions of the
Plan upon which the decision was based.

In the event the Committee fails to take any action on the claimant’s initial
application for benefits within ninety (90) days after receipt, the application
will be deemed denied, and the applicant’s appeal rights under this Section 6.3
will be in effect as of the end of such period.
ARTICLE VII
FINANCING
7.1 Financing of Benefits. No Participant shall be required or permitted to make
any contribution under the Plan. The Company may provide security for payment of
benefits using

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any method approved by the Committee for this purpose that is subject to the
claims of the Company’s general unsecured creditors. As an alternative to and
notwithstanding the above, the Company may elect to directly pay such benefits
to a Participant, subject to the approval of the Committee. For a Participant
terminating employment as a result of a Change in Control, vested benefits shall
be funded in such manner as shall be determined by the Committee, provided that
at all times such funding method shall be subject to the claims of the Company’s
general unsecured creditors.
7.2 Unsecured General Creditor. Notwithstanding anything to the contrary
contained herein, no Participant or Beneficiary (or any of their heirs,
successors, or assigns) shall have any legal or equitable rights, interests or
claims in any property or assets of the Company or its subsidiaries. For
purposes of the payment of benefits under this Plan, any and all assets of the
Company and its subsidiaries shall be, and shall remain, the general, unpledged,
unrestricted assets of the Company and its subsidiaries, as applicable. The
Company and its subsidiaries obligations under this Plan shall be merely that of
an unfunded and unsecured promise to pay money in the future.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Non-Alienation of Benefits. No benefit which shall be payable under this
Plan shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, garnishment, encumbrance, or charge by a Participant,
Beneficiary or survivor or anyone claiming under any of them except pursuant to
a “Qualified Domestic Relations Order”, as such term is defined under ERISA. If
a Participant, Beneficiary or survivor or anyone claiming under any of them
shall attempt to or shall subject in any manner any benefit which shall be
payable under this Plan to anticipation, alienation, sale, transfer, assignment,
pledge, garnishment, encumbrance, or charge, his or her interest in any such
benefit shall terminate and the Committee shall hold or apply it to or for the
benefit of such person, his or her spouse, children or other dependents, or any
of them as the Committee may decide.
8.2 Incompetency. Every person receiving or claiming benefits under the Plan
shall be conclusively presumed to be mentally competent and of age until the
Committee receives written notice, in a form and manner acceptable to it, that
such person is incompetent, and that a guardian, conservator, statutory
committee, or other person legally vested with the care of his or her estate has
been appointed. In the event that the Committee finds that any person to whom a
benefit is payable under the Plan is unable to properly care for his or her
affairs, then any payment due (unless a prior claim therefore shall have been
made by a duly appointed legal representative) may be paid to the spouse, a
child, a parent, or a brother or sister, or to any person deemed by the
Committee to have incurred expense for such person otherwise entitled to
payment. In the event a guardian or conservator or statutory committee of the
estate of any person receiving or claiming benefits under the Plan shall be
appointed by a court of competent jurisdiction, payment shall be made to such
guardian or conservator or statutory committee, provided that proper proof of
appointment is furnished in a form and manner suitable to the Committee. Any
payment made under the provision of this Section 8.2 shall be a complete
discharge of liability therefore under the Plan.

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8.3 Employment Rights. The establishment of the Plan shall not be construed as
conferring any legal rights upon any Eligible Officer or any other person for a
continuation of employment, nor shall it interfere with the rights of the
Company to discharge any person or to treat him or her without regard to the
effect which such treatment might have upon him or her as a person covered by
this Plan.
8.4 Notices. Any notice required or permitted to be given hereunder to an
Eligible Officer, a Participant or Beneficiary will be properly given if
delivered or mailed, postage prepaid, to the Eligible Officer or Beneficiary at
the last post office address as shown on the Company’s records. Any notice to
the Company shall be properly given or filed if delivered or mailed, postage
prepaid, to the Corporate Secretary of the Company at its principal place of
business.
8.5 Waiver of Notice. Any notice required hereunder may be waived by the person
entitled thereto.
8.6 Action by Company. Any action required or permitted to be taken hereunder by
the Company shall be taken by the Committee, or by any person or persons or
committee otherwise authorized by its Board of Directors.
8.7 Uniform Rules. In administrating the Plan, the Committee will apply uniform
rules to all Eligible Officers similarly situated.
8.8 Notice of Address. Any payment to a Participant, or in case of his or her
death to his or her Beneficiary or survivor, at the last known post office
address of the distributee on file with the Company, shall constitute a complete
acquittance and discharge to the Company with respect thereto unless the Company
shall have received prior written notice of any change in the condition, status
or location of the distributee. The Company shall have no duty or obligation to
search for or ascertain the whereabouts of any Eligible Officer or Beneficiary.
8.9 Record. The records of the Company with respect to the Plan shall be
conclusive on all Eligible Officers, beneficiaries and survivors, and all other
persons whomsoever.
8.10 No Individual Liability. It is declared to be the express purpose and
intention of the Plan that no liability whatever shall attach to or be incurred
by the shareholders, officers, or directors of the Company, or any
representatives appointed hereunder by the Company, under or by reason of any of
the terms or conditions of the Plan.
8.11 Illegality of Particular Provision. If any particular provision of this
Plan shall be found to be illegal or unenforceable, such provision shall not
affect the other provisions thereof, but the Plan shall be construed in all
respects as if such invalid provision were omitted.
8.12 Status of Plan. The Plan is intended to be a plan that is not qualified
within the meaning of Section 401(a) of the Code and that “is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees”
within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1), and as
such it is intended that the Plan be exempt from the participation, vesting,
funding, and fiduciary responsibility requirements of Title I of ERISA. This
Plan is also intended to qualify for simplified reporting under U.S. Department
of Labor Regulation Section

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2530.104-23, which provides for an alternative method of compliance for plans
described in such regulation. The Plan shall be administered and interpreted to
the extent possible in a manner consistent with that intent.
8.13 Tax Withholding. The Company and its subsidiaries shall have the right to
deduct from all amounts paid in cash or other form under this Plan any Federal,
state, local or other taxes required by law to be withheld.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 Amendment and Termination. The Company expects the Plan to be permanent, but
since future conditions affecting the Company cannot be anticipated or foreseen,
the Company must necessarily and does hereby reserve the right to amend or
terminate the Plan at any time by action of its Board of Directors, provided,
however, that no amendment or termination may change the time and form of
payment to be made under the provisions of the Plan as in effect before such
amendment or termination, except as otherwise permitted under Section 409A of
the Code and the regulations issued thereunder. Notwithstanding any of the
foregoing provisions of this Section 9.1 or any other terms and conditions of
the Plan to the contrary, the Committee reserves the right, in its sole
discretion, to amend the Plan in any manner it deems necessary or desirable in
order to comply with or otherwise address issues resulting from Section 409A of
the Code.
9.2 Contingencies Affecting the Company. In the event of a merger or
consolidation of the Company, or the transfer of substantially all of the assets
of the Company to another corporation, such successor corporation shall be
substituted for the Company under the terms and provisions of the Plan.
9.3 Protected Benefits. If the Plan is amended or terminated, the full benefits
payable to each retired Eligible Officer, Beneficiary or survivor shall not be
reduced. A Participant who is in active service at the time of Plan amendment or
termination shall be entitled to no less than the benefits he or she has accrued
under the Plan to the date of such amendment or termination. The time and manner
of payment of benefits subsequent to such date shall remain subject to the terms
and conditions of the Plan, as they may have been amended. Subject to the
foregoing provision, the Eligible Officer shall have a contractual right to all
benefits applicable to him or her under the Plan.
9.4 Reimbursement of Legal Fees and Expenses. In the event that a Participant
brings a legal action after a “Change in Control” as defined in Section 2.l(c)
to enforce any of his or her rights hereunder, the Company shall reimburse the
Eligible Officer for his or her actual documented legal fees and expenses in
bringing such action, provided that (i) such action is based upon an actual bona
fide claim for damages under applicable law, as determined by the Committee
based on the facts and circumstances and in accordance with the requirements of
Section 409A of the Code (and the regulations issued thereunder); (ii) the
Participant provides written documentation to the Company of such legal fees and
expenses no later than one hundred eight (180) days following the close of the
taxable year in which such expenses were incurred; and (iii) it is judicially
determined that such action was not frivolous or brought in bad faith. Any

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reimbursement of legal fees and expenses made pursuant to the immediately
preceding sentence in one taxable year shall not affect the legal fees and
expenses eligible for reimbursement pursuant to this Section 9.4 in any other
taxable year. Reimbursement of legal fees and expenses pursuant to this
Section 9.4 shall be made by the Company no later than the last day of the
Participant’s taxable year following the taxable year in which the fees or
expenses were incurred.
ARTICLE X
APPLICABLE LAW
10.1 Applicable Law. The Plan shall be governed by and construed according to
the law of the State of Texas, except to the extent otherwise preempted by
ERISA, or any other Federal law.
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IN WITNESS WHEREOF, Flowserve Corporation has caused this instrument to be
executed by its duly authorized officer, this 27th day of November, 2007.

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

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