exv10w71







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.




 









 












	 	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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