Document:

exv10w8

Exhibit 10.8

TRUST FOR NON-QUALIFIED DEFERRED

COMPENSATION BENEFIT PLANS

TRUST AGREEMENT

BETWEEN

FLOWSERVE CORPORATION

AND

JPMORGAN CHASE BANK, N.A.

Grantor Trust Agreement

 

 

TABLE OF CONTENTS

	 	 	 	 	 

	AGREEMENT
	 	 	4	 
	1. Continuation of Trust
	 	 	4	 
	2. Payments to Plan Participants and their Beneficiaries
	 	 	5	 
	3. Trustee Responsibility Regarding Payments to Trust Beneficiary
When Company Is Insolvent
	 	 	6	 
	4. Payments to the Company
	 	 	7	 
	5. Investment Authority
	 	 	10	 
	6. Disposition of Income
	 	 	13	 
	7. Records; Annual Account
	 	 	13	 
	8. Responsibility of Trustee
	 	 	14	 
	8A. Indemnification
	 	 	15	 
	9. Compensation and Expenses of the Trustee
	 	 	16	 
	10. Resignation and Removal of Trustee
	 	 	17	 
	11. Appointment of Successor
	 	 	18	 
	12. Amendment or Termination
	 	 	18	 
	13. Miscellaneous
	 	 	18	 
	14. Effective Date
	 	 	21	 

Grantor Trust Agreement

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TRUST FOR NON-QUALIFIED DEFERRED COMPENSATION BENEFIT PLANS OF

FLOWSERVE CORPORATION

	     This amended and restated trust agreement (this “Agreement”) is made this _____ day of
_______________, 20__ by and between Flowserve Corporation (the “Company”) and JPMorgan
Chase Bank, N.A. (“Trustee”);

RECITALS

	 	(A)	 	The Company has adopted the nonqualified deferred compensation Plan(s) as
listed in Schedule A.
	 
	 	(B)	 	The Company has incurred or expects to incur liability under
the terms of such Plan(s) with respect to the individuals participating in such
Plan(s);
	 
	 	(C)	 	On October 1, 1987, The Duriron Company, Inc., now known as
Flowserve Corporation, established two grantor trusts, the Duriron Company,
Inc. First Master Benefit Trust and the Duriron Company, Inc. Second Master
Benefit Trust (hereinafter collectively called the “Trust”) to which it has
contributed assets to be held therein, subject to the claims of the Company’s
creditors in the event of the Company’s Insolvency, as herein defined, until
paid to Plan participants and their beneficiaries in such manner and at such
times as specified in the Plan(s);
	 
	 	(D)	 	The Company now wishes to consolidate the Duriron Company, Inc.
First Master Benefit Trust and the Duriron Company, Inc. Second Master Benefit
Trust into a single trust arrangement pursuant to which the assets of both such
trusts will be merged, consolidated and held under, and pursuant to, this
Agreement, as of the effective date listed in Section 16;
	 
	 	(E)	 	It is the intention of the parties that this Trust shall
continue to constitute an unfunded arrangement and shall not affect the status
of the Plan(s) as an unfunded plan maintained for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees for purposes of Title I of the Employee Retirement Income Security
Act of 1974;
	 
	 	(F)	 	It is the intention of the Company to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of
its liabilities under the Plan(s);
	 
	 	(G)	 	The parties desire to amend and restate the Trust upon the
terms and conditions hereinafter set forth;
	 
	 	(H)	 	Section 13.2 of each of the Duriron Company, Inc. First Master
Benefit Trust and the Duriron Company, Inc. Second Master Benefit Trust
respectively permit the amendment of such trusts by the Company, as successor
to the Duriron Company, Inc., and the Trustee;
	 
	 	(I)	 	Nothing herein is intended to constitute a material
modification of any deferred compensation arrangement under which all deferred
amounts were earned and

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	 	 	 	vested as of December 31, 2004 and which the Board of Directors of the
Company (the “Board”) has or shall have designated as not subject to Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”) pursuant
to Treasury Regulation section 1.409A-6, and this Agreement shall be
interpreted accordingly;
	 
	 	(J)	 	The parties agree to continue the Trust and agree that from the
date of this Agreement the Trust shall be comprised, held and disposed of as
follows.

AGREEMENT

	1.	 	Continuation of Trust

	 	(a)	 	The Company and the Trustee hereby continue the Trust previously
established, which shall be held, administered and disposed of by the Trustee
as provided in this Agreement. This amendment of the previously established
Trust is not intended to adversely affect the rights of participants
thereunder.
	 
	 	(b)	 	The Trust hereby established shall be irrevocable.
	 
	 	(c)	 	The Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and
shall be construed accordingly.
	 
	 	(d)	 	The principal of the Trust, and any earnings thereon, shall be
held separate and apart from other funds of the Company and shall be used
exclusively for the uses and purposes of Plan participants and general
creditors as herein set forth. Plan participants and their beneficiaries shall
have no preferred claim on, or any beneficial ownership interest in, any assets
of the Trust. Any rights created under the Plan(s) and this Agreement shall be
mere unsecured contractual rights of Plan participants and their beneficiaries
against the Company. Any assets held by the Trust will be subject to the
claims of the Company’s general creditors under federal and state law in the
event of Insolvency, as defined in Section 3(a) herein.
	 
	 	(e)	 	The Company, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other property acceptable to
the Trustee in trust with the Trustee to augment the principal to be held,
administered and disposed of by the Trustee as provided in this Agreement.
Neither the Trustee nor any Plan participant or beneficiary shall have any
right to compel such additional deposits.
	 
	 	(f)	 	It is the intent of the Company that all benefits payable under
the Plans that were earned and vested as of December 31, 2004 (the
“Grandfathered Benefits”) not be subject to Section 409A of the Code.
Accordingly, except as explicitly provided therein, no amendment to any Plan or
the Trust shall be effective with respect to the Grandfathered Benefits if such
amendment would constitute a material modification for purposes of Section 409A
of the Code and the regulations and other guidance issued thereunder.

 Grantor Trust Agreement

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	2.	 	Payments to Plan Participants and their Beneficiaries

	 	(a)	 	The Company shall deliver to the Trustee a schedule (the “Payment
Schedule”) that indicates the amounts payable in respect of each Plan
participant (and his or her beneficiaries) or that provides other instructions
acceptable to the Trustee for determining the amounts so payable, the form in
which such amount is to be paid (as provided for or available under the Plan),
and the time of commencement for payment of such amounts. Except as otherwise
provided herein, the Trustee shall make payments to the Plan participants and
their beneficiaries in accordance with such Payment Schedule. The Company
shall provide the Trustee with written instructions as to the aggregate amount
of any federal, state and local taxes that may be required to be withheld with
respect to the payment of benefits from the Trust, and the Trustee shall remit
such amounts to the Company for payment and reporting to the appropriate taxing
authorities by the Company.
	 
	 	(b)	 	The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plan(s) shall be determined by the Company
or such party as it shall designate under the Plan(s) (which party shall not be
the Trustee), and any claim for such benefits shall be considered and reviewed
under the procedures set out in the Plan(s).
	 
	 	(c)	 	The Company shall be responsible for providing the Trustee
complete and accurate information required or otherwise requested by the
Trustee, within the time frame and in the manner prescribed or agreed to by the
Trustee, in order to make such payments or transfers, including, without
limitation, a payee’s name and address.
	 
	 	(d)	 	The Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under the terms of the
Plan(s). In such event, the Company may direct the Trustee to reimburse the
Company for its payment of Plan benefits or other expenses paid by the Company
upon the Company’s written certification that it has made such payment and the
amount to be reimbursed. In addition, if the principal of the Trust, and any
earnings thereon, are not sufficient to make payments of benefits in accordance
with the Payment Schedule provided to the Trustee by the Company, the Company
shall make the balance of each such payment as it falls due. The Trustee shall
notify the Company where principal and earnings are not sufficient to comply
with the Company’s specific payment instructions.
	 
	 	(e)	 	The Trustee shall have no duty to question the propriety of any
direction of the Company to make payments, reimbursements or transfers, to
account for funds retained in or disbursed from any accounts to which payments
or transfers are made, to see to the application of payments, reimbursements or
transfers, or to ascertain whether the Company’s directions to make payments,
reimbursements or transfers comply with the terms of the Plan(s). The Trustee
shall have no liability hereunder and shall be fully protected by the Company
against any claims, damages, liabilities, losses, costs and expenses, including
reasonable attorneys fees, resulting from its making payments, reimbursements
or transfers pursuant to the Company’s direction or failure to make any
payments, reimbursements or transfers in the absence of directions.

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	 	(f)	 	After payment of all benefits pursuant to each Plan made
hereunder, any remaining assets shall be paid in a lump sum to the Company (and
not to any affiliate of the Company) at the direction of the Company’s Board,
which shall certify to the Trustee that all Plan obligations have been
satisfied. Additionally, the Company shall have the right annually, by
written notice to the Trustee within one hundred twenty (120) days after the
end of each calendar year, to request a distribution to the Company from the
Trust of the amount, if any, by which the fair market value of Plan assets at
the end of the most recently completed calendar year is more than 110% of the
aggregate present value of all applicable Plan liabilities; provided, however,
that this withdrawal right may not be exercised by the Company on or after a
Change of Control (as defined in Section 5 below). For purposes of this
Section 2(f), the present value of amounts to be paid under the Plans shall,
if withdrawal is to be made, be certified to the Trustee by an independent
firm of accredited actuarial consultants, such independent firm of accredited
actuarial consultants which shall be selected by the Company,and which is
acceptable to the Trustee.

	3.	 	Trustee Responsibility Regarding Payments to Trust Beneficiary When Company Is
Insolvent

	 	(a)	 	The Trustee shall cease payment of benefits to Plan participants and their
beneficiaries if the Company is Insolvent. The Company shall be considered
“Insolvent” for purposes of this Agreement if (i) the Company is unable to pay
its debts as they become due, or (ii) the Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
	 
	 	(b)	 	At all times during the continuance of this Trust, as provided
in Section 1(d) hereof, the principal and income of the Trust shall be subject
to claims of general creditors of the Company under federal and state law as
set forth below.

	 	(1)	 	The Board and the Chief Executive Officer of
the Company shall have the duty to inform the Trustee in writing of the
Company’s Insolvency. If a person claiming to be a creditor of the
Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall determine whether the Company is Insolvent
and, pending such determination, the Trustee shall discontinue payment
of benefits to Plan participants or their beneficiaries.
	 
	 	(2)	 	Unless the Trustee has actual knowledge of the
Company’s Insolvency, or has received notice from the Company or a
person claiming to be a creditor alleging that the Company is
Insolvent, the Trustee shall have no duty to inquire whether the
Company is Insolvent. The Trustee may in all events rely on such
evidence concerning the Company’s solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for
making a determination concerning the Company’s solvency. The Trustee
shall not be considered to have knowledge or received notice of the
Company’s Insolvency unless and until the knowledge or notice is
actually received by:

	 	(i)	 	The individual, or his successor,
last identified in writing by the Trustee as the proper party to
receive notices; or

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	 	(ii)	 	The individuals held out to the
Company as being responsible for the day to day administration
of this Agreement; or
	 
	 	(iii)	 	The manager of the department in
which the individuals described in sub-section (ii) above
perform their duties with respect to this Agreement.

	 	(3)	 	If at any time the Trustee has determined that
the Company is Insolvent, the Trustee shall discontinue payments to
Plan participants or their beneficiaries and shall hold the assets of
the Trust for the benefit of the Company’s general creditors. Nothing
in this Agreement shall in any way diminish any rights of Plan
participants or their beneficiaries to pursue their rights as general
creditors of the Company with respect to benefits due under the Plan(s)
or otherwise.
	 
	 	(4)	 	The Trustee shall resume the payment of
benefits to Plan participants or their beneficiaries in accordance with
Section 2 of this Agreement only after the Trustee has determined that
the Company is not Insolvent (or is no longer Insolvent).

	 	(c)	 	Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b)
hereof and subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the Payment Schedule for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by the Company in lieu of the payments
provided for hereunder during any such period of discontinuance.

	4.	 	Change of Control
	 
	 	 	A Change of Control, for purposes of this Agreement, is defined as the
occurrence of any of the following:

	 	(a)	 	On the date any “Person” (as defined in subparagraph 4(e)
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 Subsidiary (as defined in
subparagraph 4(e) below); (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 4(c)(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 of 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

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	 	 	 	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 of Control shall then be
deemed to have occurred; or
	 
	 	(b)	 	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
	 
	 	(c)	 	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.
	 
	 	(d)	 	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, (1) 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

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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; (2) 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 (3) 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 of 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.

	 	(e)	 	For purposes of (a), (b), (c) and (d) 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 Treasury Regulations
issued under Section 409A of the Code. “Subsidiary” means any corporation
which is a member of a controlled group of corporations (determined in
accordance with Section 414(b) of the Code) of which the Company is a member
and any other trade or business (whether or not incorporated) which is
controlled by, or under common control (determined in accordance with Section
414(c) of the Code) with the Company.
	 
	 	(f)	 	The Board and the Chief Executive Officer of the Company shall
have the duty to inform the Trustee in writing of a Change in Control. Unless
the Trustee has received notice from the Board or the Chief Executive Officer
of the Company of the occurrence of a Change of Control, the Trustee shall have
no duty to inquire whether a Change of Control has occurred.

	5.	 	Payments to the Company
	 
	 	 	Except as provided in (i) Section 2(a) with respect to remittance to the
Company of withheld taxes, (ii) Section 2(d) with respect to reimbursement to the
Company of benefits paid directly to the Plan participant or his or her beneficiary
and expenses paid by the Company, (iii) Section 2(f) with respect to payment of
Trust assets to the Company as a result of overfunding of the Trust, and (iv)
Section 3 hereof, after the Trust

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	 	 	has become irrevocable, the Company shall have no right or power to direct the
Trustee to return to the Company or to divert to others any of the Trust assets
before all payment of benefits have been made to Plan participants and their
beneficiaries pursuant to the terms of the Plan(s). The Trustee shall not be
required to independently determine whether all benefit payments have been made to
Plan participants and beneficiaries pursuant to the terms of the Plan(s) and may
rely upon written notification to such effect as provided by the Company or its
accountants, legal counsel or Plan consultants.
	 
	6.	 	Investment Authority

	 	(a)	 	The Trustee shall have no discretion or authority with respect to the
investment of Trust assets, but shall act solely as a directed Trustee, and
shall invest and reinvest the principal and income of the Trust and keep the
Trust invested in such investments as directed by the Company or one or more
investment managers appointed by the Company in accordance with Section 6(b).
Upon and after a Change of Control, in the event that the persons serving as of
the date of the Change of Control will cease to serve as a majority of the
Board, then immediately prior to the Change of Control, such members of the
Board shall appoint an independent institutional Investment Manager, which
shall not be the Trustee, for purposes of directing investment of the Trust
assets upon and after a Change of Control, and such manager may only be removed
by the written consent of a sixty-five percent (65%) of the then plan
participants, including former plan participants whose benefits have not been
fully distributed. The Trustee shall have no duty to question any action or
direction or failure to give directions of the Company or any duly appointed
Investment Manager as to the investment, reinvestment, management, disposition
or distribution of Trust assets. To the extent necessary to carry out the
directions of the Company or any duly appointed Investment Manager, the Trustee
is authorized and empowered, but not by way of limitation, with the following
powers, rights and duties:

	 	(1)	 	to invest any part or all of the Trust without
distinction between principal and income and in such securities or any
kind of property, real or personal, wherever situated, including, but
not limited to, common or preferred stocks, warrants, rights,
securities of any open-end or closed-end management type investment
company or investment trust registered under the Investment Company Act
of 1940, as amended (including any such investment company or
investment trust to which the Trustee or an affiliate provides services
and/or from which it receives fees as investment advisor, custodian,
transfer agent or sub-transfer agent, registrar, administrator or
sub-administrator, or in any other capacity), exchange funds, real
estate investment trusts, limited partnerships, venture capital funds,
private equity investments, real estate, farms and ranches, oil and gas
rights, closely held companies, family limited partnerships, and
corporate or government bonds, notes, debentures and other evidence of
indebtedness or ownership.
	 
	 	(2)	 	to invest and reinvest or otherwise deposit the
Trust assets in savings accounts, time deposit accounts, certificates
of deposit, money market funds, or other evidences of deposit issued by
the Trustee and/or any other national bank, savings and loan
institution, state member bank,

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	 	 	 	state non-member bank, or other depository institution, including any
such entity which now or in the future is an affiliate of the
Trustee.
	 
	 	(3)	 	to retain in cash or cash equivalents so much
of the Trust as may be required for liquidity needs of the Plan(s) and
to deposit any such cash held in the Trust with any bank or savings
institution, including its own banking department, without liability
for interest on such cash deposits.
	 
	 	(4)	 	to exercise any exchange privileges, conversion
privileges and conversion rights available under any security or other
property held in the Trust; consent to or dissent from the
reorganization, consolidation, merger or the readjustment of the
finances of, or the sale, mortgage, pledge, or lease of the property of
any entity that has issued any security held in the Trust; deposit any
securities or other property held in the Trust with any protective,
reorganization, or similar committee and delegate discretionary power
to that committee; do any other act in connection with matters
described in this Section, including exercising options, making
agreements or subscriptions, or paying expenses, assessments, or
subscriptions which the Trustee believes is necessary or advisable.
	 
	 	(5)	 	to vote any stock or other security and
exercise any right appurtenant to any stock, security or other property
held in the Trust, either in person or by general or limited proxy,
power of attorney or other instrument.
	 
	 	(6)	 	to settle, compromise, or submit to arbitration
any claims, debts or damages due to or owing from the Trust, commence
and defend suits or legal proceedings and represent the Trust in all
suits or legal proceedings, except that the Trustee may not exercise
any of the powers referred to in this subsection without the consent of
the Company if the matter relates solely to the rights or status under
the Plan(s) of a participant or beneficiary or any other person.
	 
	 	(7)	 	to manage, operate, repair, or improve and
collect the income from any real or personal property held in the
Trust.
	 
	 	(8)	 	to renew or extend, or participate in the
renewal or extension of, any debt owing to the Trust and agree to a
reduction in the rate of interest on any such debt or to any other
modifications or changes to the terms of any mortgage or of any
guarantee pertaining thereto; waive any default whether in the
performance of any covenant or condition of any evidence of any debt or
mortgage or in the performance of any guarantee or to enforce any
rights available to the Trustee because of any default; exercise and
enforce any and all rights of foreclosure, bid in property on
foreclosure, take a deed in lieu of foreclosure, with or without
consideration, and release the obligation on any note or other evidence
of debt secured by that mortgage; and exercise and enforce in any
action, suit or other proceeding at law and in equity any rights or
remedies in respect to any such debt, mortgage or guarantee.

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	 	(9)	 	to hold securities in bulk or bearer form, or
deposit them with any central depository authorized under applicable
law, in its own name or in the name of a nominee without the addition
of words indicating that the property is held in a fiduciary capacity.
	 
	 	(10)	 	to join in or oppose the reorganization,
recapitalization, consolidation, sale or merger of corporations or
properties, including those in which it is interested as Trustee.
	 
	 	(11)	 	to make, execute and deliver, as Trustee, with
or without providing for no individual liability on its part, any and
all conveyances, mortgages, contracts, waivers, releases, leases,
assignments, powers of attorney or other written instruments considered
necessary and appropriate in the administration of the Trust.
	 
	 	(12)	 	to lend securities to banks and broker-dealers
approved by the Company, consistent with regulations issued by
applicable regulatory authorities, and under the terms of a written
agreement between the Company and the Trustee.
	 
	 	(13)	 	except as otherwise provided in this Agreement
or under applicable law, execute all instruments, engage in all
proceedings and exercise all rights, powers and privileges considered
necessary and appropriate to discharge the purposes of this Agreement.

	 	(b)	 	The Company may appoint one or more investment managers
(“Investment Managers”), pursuant to a written investment management agreement
describing the powers and duties of the Investment Manager, to direct the
investment and reinvestment of all or a portion of the Trust. The Trustee shall
be fully protected in relying upon the effectiveness of such appointment and
the Investment Manager’s continuing satisfaction of the requirements set forth
above until it receives written notice from the Company to the contrary.
	 
	 	(c)	 	The Trustee will not be responsible to invest or otherwise
manage any portion of the Trust that is subject to the investment direction of
the Company or an Investment Manager and will not be liable, in any respect for
any investment decision made by the Company or Investment Manager. The Company
or Investment Manager, as the case may be, shall provide directions to the
Trustee as to the exercise of voting and other discretionary rights with
respect to any securities that are subject to the Company’s or Investment
Manager’s investment direction. The Trustee shall not be required to implement
any investment or other direction which is not given to the Trustee in writing
or otherwise in accordance with the Trustee’s prescribed form and format. Any
instructions received from the Company or an Investment Manager under this
Section will remain in effect and will be binding until they are revoked or
amended in writing or otherwise in accordance with the Trustee’s prescribed
procedures and delivered to the Trustee. The Trustee is not responsible for
the propriety of any directed investment, will not be required to consult with
or advise the Company or Investment Manager regarding the investment quality of
any directed investment, and shall have no obligation to review or make
recommendations with respect to any investment made at the direction of the
Company or

Grantor Trust Agreement

12

 

	 	 	 	Investment Manager. The Trustee will retain custody of any securities or
other property acquired as a result of any investment directions received
from the Company or Investment Manager until the Company or Investment
Manager, as the case may be, directs the Trustee, in writing or otherwise in
accordance with prescribed procedures, to dispose of them.
	 
	 	(d)	 	In no event may the Trustee invest in securities (including
stock or rights to acquire stock) or obligations issued by the Company, other
than a de minimis amount held in common investment vehicles in which the
Trustee invests. All rights associated with assets of the Trust shall be
exercised by the Trustee or the person designated by the Trustee, and shall in
no event be exercisable by or rest with Plan participants.
	 
	 	(e)	 	The Trustee is not authorized and shall not disclose the name,
address, or security positions of the beneficial owners of the Trust in
response to requests concerning shareholder communications under Section 14 of
the Securities Exchange Act of 1934, the rules and regulations thereunder, or
any similar statute, regulation, or rule in effect from time to time.

	7.	 	Disposition of Income
	 
	 	 	During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
	 
	8.	 	Records; Annual Account
	 
	 	 	The Trustee shall maintain appropriate records pertaining to administration of
the Trust and the Trust fund and any other records that the Company requests and
which the Trustee agrees to maintain. At any time during the Trustee’s normal
business hours, the Company or any person designated by the Company may audit and
inspect the accounts, books and records of the Trustee maintained in connection with
the Trust fund. Within 90 days following the close of each fiscal year of the Trust
and within 90 days following the effective date of the removal or resignation of the
Trustee or termination of the Trust, the Trustee shall file with the Company a
written accounting of all Trust fund transactions since the most recent report was
filed. The Company may approve this accounting by giving written notice of approval
to the Trustee. The Company will be deemed to have approved any accounting to which
it has not objected by giving the Trustee written notice of its objection within 60
days after receiving the accounting. If the Company approves the accounting in
writing (or fails to object, in writing, within 60 days after receiving the
accounting), the Trustee shall be released and discharged as to all items, matters
and things included in that accounting (except as to any item, matter or thing that
(i) is attributable to the Trustee’s fraud, criminal violation, or willful
misconduct, or (ii) could not have been discovered by a reasonably diligent review
of the accounting). The Trustee also may have its accounts settled by judicial
proceedings. In such event, only the Trustee and the Company shall be necessary
parties although the Trustee, in its discretion, may join as defendants any other
person or persons who may have or claim an interest in the Trust Fund. Except as
otherwise provided by applicable law, only the Company may require the Trustee to
prepare an accounting under this Section or may institute an action or proceeding
against the Trustee with respect to any accounting delivered under this Section.

Grantor Trust Agreement

13

 

	9.	 	Responsibility of Trustee

	 	(a)	 	The Trustee shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims; provided, however, that the Trustee shall
incur no liability to any person for any action taken pursuant to a direction,
request or approval given by the Company which is contemplated by, and in
conformity with, the terms of this Trust and is given in writing by the
Company.
	 
	 	(b)	 	The Trustee shall not be required to defend any suit or other
action against the Trust Fund unless it holds assets in the Trust Fund
sufficient for, or has been indemnified to its satisfaction for, its reasonable
counsel fees, costs, disbursements and all other reasonable associated expenses
and liabilities to which it may, in its judgment, be subjected on account of
that suit or other action. The Trustee may seek reimbursement for such
expenses from the Company as described in Section 9(a) or may apply any asset
of the Trust Fund to meet those expenses and liabilities.
	 
	 	(c)	 	The Trustee has the right, but not the obligation, to consult
with counsel of its own choosing, who also may be counsel for the Trustee or
the Company, and to act or decline to act in accordance with such counsel’s
advice. The Trustee may also act or decline to act in accordance with the
opinion or determination of the Company’s auditor with respect to matters
within the authority of the auditor. To the extent permitted by law, the
Trustee shall have no liability in any respect for any action taken, suffered
or omitted in good faith by the Trustee either in accordance with the advice of
counsel chosen by the Trustee, or in accordance with any opinion of counsel to
the Company addressed and delivered to the Trustee, or in accordance with the
opinion or determination of the Company’s auditor.
	 
	 	(d)	 	The Trustee, may hire agents, accountants, actuaries,
investment advisors, financial consultants or other professionals to assist it
in performing any of its duties or obligations hereunder. The Trustee shall
not be liable for any acts or omissions of any such person provided that the
Trustee selects and supervises that person in accordance with the standard of
care set forth in Section 8(a) of this Agreement.
	 
	 	(e)	 	Subject to the terms of this Agreement, the Trustee shall have,
without exclusion, all powers conferred on trustees by applicable law, unless
expressly provided otherwise herein, provided, however, that if an insurance
policy is held as an asset of the Trust, the Trustee shall have no
responsibility to review the policy or the creditworthiness of the issuer
thereof at any time or from time to time or to determine the amount of premium
to be paid, and no power to name a beneficiary of the policy other than the
Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy. The Company may make premium
payments directly to the insurance carrier with respect to any insurance policy
held as an asset of the Trust.

Grantor Trust Agreement

14

 

	 	(f)	 	Each direction, notice, request, or approval by the Company
(whether or not certified to the Trustee in writing) shall constitute a
certification by the Company to the Trustee that such direction conforms with
the Plan(s) and applicable law.
	 
	 	(g)	 	The Trustee shall not be under any duty to require payment of
any contributions to the Trust, or to see that any payment made to it is
computed in accordance with the provisions of the Plan(s), or otherwise be
responsible for the adequacy of the Trust to meet and discharge any liabilities
under the Plan(s).
	 
	 	(h)	 	Notwithstanding any powers granted to the Trustee pursuant to
this Agreement or to applicable law, the Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
	 
	 	(i)	 	Unless otherwise specifically required by this Agreement,
directives, instructions and other communications under this Agreement or
relating to the Trust Fund (including, without limitation, instructions
regarding the investments of the Trust Fund and directions to make benefit
payments and other disbursements) must be provided in writing or by telex, fax
or facsimile transmission, bank wire or other teleprocess or electronic or
trade information system acceptable to the Trustee.
	 
	 	(j)	 	The duties and obligations of the Trustee shall be limited to
those expressly imposed upon it by this Agreement or subsequently agreed upon
by the parties in writing, notwithstanding any reference herein to the Plan(s),
or to the provisions thereof, it being expressly agreed that the Trustee is not
a party to the Plan(s). The Trustee has no responsibility for the application
of the terms or administration of the Plan(s), including, without limitation,
the determination of matters relating to the eligibility of any employee to
become a participant or remain a participant, the amount of benefit which a
participant or beneficiary is entitled to receive, whether a distribution to a
participant or beneficiary is appropriate, or the size and type of any
insurance policy to be purchased from any insurer for any participant; the
Company has these responsibilities under the Plan(s).
	 
	 	(k)	 	Following a Change in Control, the Trustee shall be authorized
to interpret the terms and conditions of the Plan(s) insofar as they relate
directly or indirectly to the rights and responsibilities of the Trustee.

	10.	 	Indemnification

	 	(a)	 	To the maximum extent permitted by law, the Trustee shall be indemnified
and held harmless by the Company from and against any and all liability to
which the Trustee may be subjected as a result of this Agreement or its
performance of services hereunder, including, but not limited to, any Liability
arising from (i) any action or failure to act resulting from compliance with
proper instructions of the Company or any other person authorized by the
Company to give directions to the Trustee except to the extent that the Trustee
was grossly negligent in implementing any such instruction or direction, or
(ii) by reason of any breach of any statutory or other duty owed to the Plan(s)
or Plan participants by the Company, or any of its officers, directors,
employees, or agents, whether or not

Grantor Trust Agreement

15

 

	 	 	 	the Trustee may also be considered liable for that other person’s breach
under the provisions of applicable law; provided, however, that except as
described in (i) and with respect to (ii), Trustee shall not be entitled to
indemnification to the extent that such Liability is directly attributable
to the Trustee’s gross negligence or willful misconduct. Furthermore, under
no circumstances shall the Trustee incur liability to any person for any
indirect, consequential or special damages (including, without limitation,
lost profits) of any form, whether or not foreseeable and regardless of the
form of the action in which such a claim may be brought, with respect to the
Trust or its role as the Trustee.
	 
	 	(b)	 	The Trustee, its affiliates, and their officers, agents and
employees may bring action against the Company to contribute to the
satisfaction of any Liability to the extent that the Liability (i) is not
subject to indemnification under Sub-section (a) and (ii) is caused by the
culpable conduct of the Company or any of its affiliates or agents, including
but not limited to, any Investment Manager.
	 
	 	(c)	 	The foregoing rights of indemnification and contribution shall
not supersede any common law or equitable rights or remedies which may be
available.
	 
	 	(d)	 	For purposes of this Agreement, “Liability” means any
liability, loss, cost, damage, penalty, fine, obligation or expense of any kind
whatsoever (including, without limitation, reasonable attorneys’, accountants’,
consultants’ or experts’ fees and disbursements).
	 
	 	(e)	 	The provisions of this Section 10 shall survive the termination
of this Agreement.

	11.	 	Compensation and Expenses of the Trustee

	 	(a)	 	The Trustee shall be entitled to compensation for its services as set forth
in the fee schedule attached hereto as Schedule B, for reimbursement of its out
of pocket expenses as provided in this Agreement, and for all other necessary
and proper disbursements made or incurred by the Trustee in the performance of
its duties and obligations under this Agreement. The Company shall promptly
pay or reimburse the Trustee for the payment of any expense or liability named
by the Trustee, including (but not limited to) the following payments on the
account of the Company: delivery charges, insurance, interest, taxes,
management, accountant and legal fees, and other operating expenses of the
Trustee incurred in the administration of the Trust. If the Company does not
pay the Trustee’s fees, costs, expenses and liabilities within thirty (30)
days of being billed, the Trustee may obtain payment from the Trust, and is
hereby granted a lien on the assets of the Trust for such payment. The Trustee
shall be entitled, as an additional part of its compensation under this
Agreement, to the earnings derived from use of funds (“float”) that may be held
(i) as uninvested trust cash or (ii) in demand deposit or other non-interest
bearing accounts established for the payment of benefits or disbursements or
that are otherwise maintained for similar purposes in administering the Trust
Fund. Float is earned at the federal funds rate. The float period for
disbursements commences one to five business days after a check for the payment
of such benefits or Plan disbursements is mailed and ends on the date the check
is presented to the Trustee for payment.
	 
	 	(b)	 	The Trustee is authorized to advance cash or securities to
effect the orderly processing and settlement of securities and other financial
market transactions in

Grantor Trust Agreement

16

 

	 	 	 	accordance with the Trustee’s established settlement policies and procedures
for overdraft protection services. The Trustee shall promptly notify the
Company of any overdraft and shall request immediate steps be taken to
correct such overdraft. The Trustee shall be entitled to immediate
repayment of any such advanced funds plus the Trustee’s customary overdraft
charges determined as follows: (i) with respect to domestic assets, an
amount equal to what would have been earned on the sums advanced (an amount
approximating the “federal funds” interest rate) or (ii) with respect to
non-domestic assets, the rate applicable to the appropriate foreign market.

	12.	 	Resignation and Removal of Trustee

	 	(a)	 	The Trustee may resign at any time by giving written notice to the Company
at least 60 days before its effective date unless the Company and the Trustee
agree to reduce this period.
	 
	 	(b)	 	Prior to a Change of Control, the Company may remove the
Trustee at any time by giving written notice to the Trustee at least 60 days
before its effective date unless the Company and the Trustee agree to reduce
this period. Upon and after a Change of Control, the Trustee may not be
removed by the Company or any successor thereto, without the written consent of
sixty-five percent (65%) of the then plan participant, including former plan
participants whose benefits have not been fully distributed.
	 
	 	(c)	 	Upon resignation or removal of the Trustee and appointment of a
successor Trustee, the resigning or removed Trustee shall transfer and deliver
all assets to the successor Trustee after reserving such reasonable amount as
it shall deem necessary to provide for any expenses and payments then
chargeable against the Trust Fund for which the Trust Fund may be liable, or
for payment of the retiring Trustee’s fees and expenses in connection with the
settlement of its account or otherwise. If the assets so withheld shall be
insufficient or excessive for such purposes, the retiring Trustee shall be
entitled to reimbursement for any deficiency out of the Trust Fund from the
successor the Trustee, or shall deliver the excess to the successor the
Trustee, as the case may be.
	 
	 	(d)	 	If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 13 hereof, by the effective date of
resignation or removal under paragraphs (a) or (b) of this section. If no such
appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses
of the Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust.

	13.	 	Appointment of Successor

	 	(a)	 	If the Trustee resigns or is removed in accordance with Section 12(a) or
(b) hereof, the Company may appoint as successor any third party, such as a
bank trust department or other party that may be granted corporate trustee
powers. The appointment of a successor shall be effective when accepted in
writing by the new trustee, who shall have all of the rights and powers of the
former Trustee, including ownership rights in the Trust assets. The former
Trustee shall execute any instrument necessary or reasonably requested by the
Company or the

Grantor Trust Agreement

17

 

	 	 	 	successor Trustee to evidence the transfer. The Trustee and any successor
thereof appointed hereunder shall be a commercial bank which is not an
affiliate of Flowserve, but which is a national banking association or is
established under the laws of one of the states of the United States.
	 
	 	(b)	 	The successor Trustee need not examine the records and acts of
any prior Trustee, and may retain or dispose of existing Trust assets, subject
to Sections 8 and 9 hereof. The successor Trustee shall not be responsible
for, and the Company shall indemnify and defend the successor Trustee from, any
claim or liability resulting from any action or inaction of any prior Trustee
or from any other past event or any condition existing at the time it becomes
successor Trustee.
	 
	 	(c)	 	Any corporation into which the Trustee or any successor
corporate trustee hereunder may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Trustee or any successor trustee may be a party, or any corporation to which
all or substantially all the trust business of the Trustee or any successor
trustee may be transferred, shall thereupon become and be the Trustee of the
Trust with the same effect as though specifically so named and without the
filing of any instrument or performance of any further act.

	14.	 	Amendment or Termination

	 	(a)	 	This Agreement may be amended by a written instrument executed by the
Trustee and the Company.
	 
	 	(b)	 	The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits
pursuant to the terms of the Plan(s). Upon termination of the Trust any assets
remaining in the Trust shall be returned to the Company.

	15.	 	Miscellaneous

	 	(a)	 	Any provision of this Agreement prohibited by law shall be ineffective to
the extent of any such prohibition, without invalidating the remaining
provisions hereof.
	 
	 	(b)	 	Benefits payable to Plan participants and their beneficiaries
under this Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable process.
	 
	 	(c)	 	This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio without regard to its choice of law rules,
except that the foregoing shall not reduce any statutory right to choose Ohio
law or forum.
	 
	 	(d)	 	The Company shall certify to the Trustee the names and specimen
signatures of those persons entitled to act on behalf of the Company or any
Employer. Such certificates will be conclusive proof of the authority of those
named until the Trustee is provided with a subsequent certificate stating that
such authority is withdrawn. The Trustee may rely upon any instrument,
certificate or document it

Grantor Trust Agreement

18

 

	 	 	 	reasonably believes to be genuine and to have been signed or presented by an
authorized person. The Trustee shall not be required to inquire into or to
determine the validity of the Plan(s), this Agreement or any other document,
instruction or authorization which it believes to be genuine, or their
proper execution or adoption by the Company.
	 
	 	(e)	 	The Company, or its designated agent are responsible for the
timely and accurate provision of any necessary information to the Trustee to
enable the Trustee to perform its duties hereunder, including, but not limited
to information relating to distributions to participants. The Trustee shall
not be responsible for the completeness and accuracy of the material and
information provided to it under this Agreement.
	 
	 	(f)	 	The terms and conditions, procedures, and rights and
obligations of the parties with respect to the Trustee’s provision of benefit
payment, record keeping, funds transfer, depository, banking, and other
services for or on behalf of the Plan(s) or Trust may from time to time be
described in and/or subject to separate written procedures, agreements, user
guides, service terms or other instruments (“Services Documents”), which are
hereby incorporated by reference and made a part hereof. In the event of a
conflict between this Agreement and any Services Documents, the provisions of
the Services Documents shall control with respect to the subject matter
thereof, subject at all times to the provisions of applicable law.
	 
	 	(g)	 	If circumstances beyond the Trustee’s reasonable control,
including, but not limited to, natural disasters, acts of war or terrorism,
civil or military disturbances, work stoppages, power outages or other
interruptions, loss or malfunctions of utilities or communications services,
computer viruses, acts of civil or military authority or other governmental
action, suspension or restriction of trading on or the closure of any
securities markets, or other similar acts, events or conditions, make it
impossible for the Trustee to fully perform its duties under this Agreement,
then the principles of force majeure will apply and the obligations of the
Trustee will be temporarily suspended during the force majeure period to the
extent performance is reasonably affected thereby and the Trustee shall not be
responsible or liable for any failure or delay in the performance of its
obligations.
	 
	 	(h)	 	The Company and the Trustee waive any right to have a jury
participate in resolving any controversy, claim, misunderstanding or dispute,
whether sounding in contract, tort or otherwise, between or among them arising
out of, connected with, related to or incidental to this Agreement or any
breach hereof. Instead, the parties hereby agree that any controversies,
claims, misunderstandings or disputes to be resolved in court will be resolved
in a bench trial without a jury. Notwithstanding anything herein to the
contrary, either party may proceed to a court of competent jurisdiction to
obtain injunctive relief at any time.
	 
	 	(i)	 	Only the Company and the Trustee are necessary parties to any
action arising under or in connection with this Agreement and notice of any
action need not be given to any participant, beneficiary or other person
claiming an interest in the Trust Fund. However, the Trustee or the Company
may join as a defendant any participant, beneficiary or other person claiming
an interest in the Trust Fund.

Grantor Trust Agreement

19

 

	 	 	 	Any judgment entered or settlement reached on any matter affecting the Trust
Fund will be conclusive upon all persons claiming an interest in the Trust
Fund, whether or not they were notified of or joined as a party to the
action.
	 
	 	(j)	 	Security Holding Disclosure. With respect to Securities and
Exchange Commission Rule 14b-2 under The U.S. Shareholder Communications Act,
regarding disclosure of beneficial owners to issuers of Securities, Trustee is
instructed not to disclose the name, address or Security positions of the Trust
in response to shareholder communications requests regarding the Account.
	 
	 	(k)	 	Any notices given under this Agreement must be given in writing
and sent to the other party’s last known address. Such notices shall be deemed
given if delivered personally, if mailed (by registered or certified mail,
return receipt requested and postage prepaid), if sent by overnight courier
service for next business day delivery, by facsimile transmission, or by
electronic transmittal with return receipt, to the appropriate address for each
party. Such communications shall be effective immediately (if delivered in
person or by confirmed facsimile), upon the date acknowledged to have been
received in return receipt, or upon the next business day (if sent by overnight
courier service). Each party to this Agreement shall notify all other parties
of any change in its address in the manner provided in this Section.
	 
	 	(l)	 	Section 326 of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (“USA PATRIOT Act”) requires Trustee to implement reasonable procedures to
verify the identity of any person that opens a new Account with it.
Accordingly, Company acknowledges that Section 326 of the USA PATRIOT Act and
Trustee’s identity verification procedures require Trustee to obtain
information which may be used to confirm Company’s identity including without
limitation Company’s name, address and organizational documents (“identifying
information”). Company may also be asked to provide information about its
financial status such as its current audited and unaudited financial
statements. Company agrees to provide Trustee with and consents to Trustee
obtaining from third parties any such identifying and financial information
required as a condition of opening an account with or using any service
provided by Trustee.

	16.	 	Effective Date
	 
	 	 	The effective date of this Agreement shall be February 11, 2011.

Grantor Trust Agreement

20

 

	 	 	 	 	 	 	 
	FLOWSERVE
CORPORATION	 	JPMORGAN CHASE BANK, N.A.
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 

Grantor Trust Agreement

21

 

Schedule A -Plans Covered by this Agreement

The Duriron Company, Inc. Deferred Compensation Plan for Directors

The Duriron Company, Inc. Supplemental Pension Plan

The Duriron Company, Inc. Retirement Compensation Plan for Directors effective January 1, 1989

The Duriron Company, Inc. 1989 Restricted Stock Plan

Flowserve Corporation Annual Incentive Compensation Plan for Senior Executives

Flowserve Corporation Annual Stock Incentive Compensation Plan for Senior Executives

Flowserve Corporation Deferred Compensation Plan

Flowserve Corporation Director Stock Deferral Plan

Flowserve Corporation Director Cash Deferral Plan

Grantor Trust Agreement

22exv10w21

Exhibit 10.21

FIRST AMENDMENT TO THE

FLOWSERVE CORPORATION EXECUTIVE OFFICER

CHANGE IN CONTROL SEVERANCE PLAN

     THIS FIRST AMENDMENT TO THE FLOWSERVE CORPORATION EXECUTIVE OFFICER CHANGE IN CONTROL
SEVERANCE PLAN (this “Amendment”), dated as of January 1, 2011 is made and entered into by
Flowserve Corporation (the “Company”). Terms used in this Amendment with initial capital letters
that are not otherwise defined herein shall have the meanings ascribed to such terms in the
Flowserve Corporation Executive Officer Change in Control Severance Plan, as amended and restated
effective November 12, 2007 (the “Plan”) as amended from time to time.

RECITALS

     WHEREAS, pursuant to Section 9.03 of the Plan, the Company may amend the Plan at any time on a
prospective basis;

     WHEREAS, the Company desires to amend the Plan’s provisions relating to parachute payments
following a change in control of the Company.

     NOW, THEREFORE, in accordance with Article 9.03 of the Plan, the Company hereby amends the
Plan as follows, effective as of January 1, 2011:

1. Section 6.01 of the Plan is hereby amended by deleting from the second sentence
thereof the phrase “To the extent” and inserting in its place the phrase “Except as
provided in Section 6.06, to the extent.”

2. Sections 6.02 and 6.03 of the Plan are each hereby amended by inserting at the beginning
thereof the phrase “Except as provided in Section 6.06,”.

3. Article 6 of the Plan is hereby amended by inserting the following new Section 6.06:

          6.06 Notwithstanding anything to the contrary contained in this Article
6, no individual who becomes a Participant in the Plan on or after January
1, 2011 shall be eligible for any Gross-Up Payment or any additional payment
pursuant to Section 6.03. Accordingly, with respect to an individual who
becomes a Participant in the Plan on or after January 1, 2011, the amount of
any Gross-Up Payment for purposes of this Article 6 shall be zero.

     4. Except as expressly amended by this Amendment, the Plan shall continue in full force and
effect in accordance with the provisions thereof.

* * * * * * * * *

[Remainder of Page Intentionally Left Blank

Signature Page Follows]

 

 

     IN WITNESS WHEREOF, the Company has caused this Amendment to be duly executed as of the date
first written above, effective as of the date referred to herein.

	 	 	 	 	 	 	 
	 	 	FLOWSERVE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Ronald F. Shuff
 

	 	 
	 

	 	Its:
	 	Senior Vice President, Secretary and General Counsel	 	 

Signature Page to First Amendment

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