Document:

exv10w43

 

	 	 	 	 	 

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

 

 

	 	 	 	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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EXHIBIT 10 (ee)

AMENDMENT TO EMPLOYMENT AGREEMENT

     The Employment Agreement, dated ___, (as amended, the “Agreement”) by and between Hasbro,
Inc. (the “Company”) and the undersigned executive of the Company (the “Executive”) be and hereby
is amended, effective as of December 12, 2007, in the manner set forth below (the “Amendment”).

     1. Section 9(a) of the Agreement is amended to read as follows:

     “(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required under this Section 9)
(a “Payment”) would be subject to either the excise tax imposed by Section 4999 of the Code or any
tax imposed by Section 409A of the Code, or any interest or penalties are incurred by the Executive
with respect to such taxes (such taxes, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then the Executive shall be entitled to
receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the
Executive of all taxes imposed upon the Gross-Up Payment, including, without limitation, income
taxes, additional taxes and charges in the nature of interest imposed by Section 409A of the Code,
and other taxes (together with any interest and penalties imposed with respect to such income
taxes, additional taxes and charges in the nature of interest, or other taxes) and Excise Tax, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payment.”

     2. Section 9(b) is amended so that the last two sentences thereof read as follows:

     “As a result of uncertainty in the application of Sections 409A and 4999 of the Code, it is
possible that Gross-Up Payments which should have been made by the Company, consistent with the
calculations required to be made hereunder, will not have been made (an “Underpayment”). In the
event that the Company exhausts its remedies pursuant to Section 9(c) and the Executive thereafter
is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment shall be paid promptly (and in all
events within the time limit set forth in Section 9(e) below) by the Company to or for the benefit
of the Executive.”

     3. A new Section 9(e) is added to the Agreement which Section 9(e) shall read in its entirety
as follows:

     “(e) Notwithstanding anything to the contrary in this Section 9, the Gross-Up Payment and any
Underpayment shall in all events be paid by the Company to the Executive not later than the last
day of the calendar year next following the calendar year

 

 

in which the Executive remits the related taxes, in accordance with the requirements set forth in
Treas. Reg. §1.409A-3(i)(1)(v).”

     4. A new Section 12(g) is added to the Agreement which Section 12(g) shall read in its
entirety as follows:

     “(g) Timing of Payments. Notwithstanding any other provision of this Agreement to
the contrary, if at the time of the Executive’s separation from service with the Company the
Executive is a “specified employee”, as such term is hereinafter defined, any and all amounts
payable under this Agreement in connection with such Executive’s separation from service with the
Company that constitute deferred compensation subject to Section 409A of the Internal Revenue Code
of 1986, as amended, (“Section 409A”), as determined by the Company in its reasonable discretion,
and that would (but for this Section 12(g)) be payable to the Executive within the six months
immediately following the date of such Executive’s separation from service with the Company, shall
instead be paid on the date that follows the date of such Executive’s separation from service by
six months. For purposes of the preceding sentence, “separation from service” shall be determined
in a manner consistent with subsection (a)(2)(A)(i) of Section 409A and the term “specified
employee” shall mean an individual determined by the Company to be a specified employee as defined
in subsection (a)(2)(B)(i) of Section 409A.”

     5. The Executive hereby acknowledges that he or she had the opportunity to consult with his
or her own legal and tax advisors concerning this Amendment.

     The parties have executed this Amendment effective as of the date set forth above.

	 	 	 	 	 	 	 
	 	 	HASBRO, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name

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