Document:

exv10w16

Exhibit 10.16

AMENDMENT TO

THE DURIRON COMPANY, INC.

FIRST MASTER BENEFIT TRUST

AND

THE DURIRON COMPANY, INC.

SECOND MASTER BENEFIT TRUST

     This AMENDMENT to the DURIRON COMPANY, INC. FIRST MASTER BENEFIT TRUST (the “First Trust”) and
the DURIRON COMPANY, INC. SECOND MASTER BENEFIT TRUST (the “Second Trust” and, with the First
Trust, the “Trusts”), is made and entered into this 22nd day of December, 2008 (the “Effective
Date”), by and between Flowserve Corporation (“Flowserve”), a New York Corporation, and JPMorgan
Chase Bank, N.A., in its capacity as Trustee hereunder (the “Trustee”).

     WHEREAS, The Duriron Company, Inc. (“Duriron”), established the Trusts as grantor trusts to
hold assets to satisfy obligations under various non-qualified employee benefit plans sponsored by
the Duriron Company, Inc., with Bank One, Dayton, N.A., as Trustee thereunder; and

     WHEREAS, Flowserve is the successor in interest to Duriron with respect to each such Trust;

     WHEREAS, the JPMorgan Chase Bank, N.A., in its capacity as Trustee, is the successor in
interest to the original trustee of each such Trust;

     WHEREAS, Section 13.2 of each Trust permits the amendment of such Trust by Flowserve and the
Trustee without obtaining the consent of the participants in the Trust if such amendment or waiver
does not adversely affect the rights of such participants;

     WHEREAS, section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) has been
enacted and has been amended by the Pension Protection Act of 2006, and Flowserve has determined
that it is necessary or advisable to make certain related amendments and clarifications to the
Trusts;

     WHEREAS, Flowserve and the Trustee intend to amend and restate the First Trust in its entirety
within 90 days of the Effective Date; and

     WHEREAS, nothing herein is intended to constitute a material modification of any deferred
compensation arrangement under which all deferred amounts were earned and vested as of December 31,
2004 and which Flowserve has or shall have designated as not subject to section 409A of the Code
pursuant to Treasury Regulation 1.409A-6, and this Amendment shall be interpreted accordingly;

     NOW, THEREFORE, in consideration of the mutual agreements contained herein and for other good
and valuable considerations, the parties hereto agree as follows:

1. Effective as of the Effective Date, the First Trust is recaptioned the “Flowserve Corporation
First Nonqualified Benefits Trust Agreement.”

2. Effective as of the Effective Date, the Second Trust is recaptioned the “Flowserve Corporation
Second Nonqualified Benefits Trust Agreement.”

 

 

3. Effective as of the Effective Date, Paragraph C of Article II of each Trust is amended to
provide in its entirety as follows:

     C. “Company” means Flowserve Corporation and any successor to such entity.

4. Effective as of the Effective Date, Article III of each Trust is amended by inserting the
following new paragraph at the end thereof:

     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.

5. Effective as of the Effective Date, Section 4.1 of each Trust is amended by inserting after the
phrase “(‘Payment Schedules’)” the phrase “in each case determined in accordance with the terms of
the applicable Plan and any valid election by the Executive thereunder.”

6. Effective as of the Effective Date, Section 4.2 of each Trust is amended by deleting the
following text:

In the event that an Executive reasonably believes that the Payment Schedule, as modified,
does not properly reflect the amount payable to such Executive or the time or form of
payment from the Trust assets in respect of any Plan, such Executive shall be entitled to
deliver to the Trustee written notice (the “Executive’s Notice”) setting forth payment
instructions for the amount the Executive believes is payable under the relevant terms of
such Plan. The Executive shall also deliver a copy of the Executive’s Notice to the Company
within three (3) business days of the delivery to the Trustee. Unless the Trustee receives
written objection from the Company within thirty (30) business days after receipt by the
Trustee of such notice, the Trustee shall make the payment in accordance with the payment
instructions set forth in the Executive’s Notice.

and inserting in its place the following new text:

At the direction of the Company, payment under a Payment Schedule may be delayed to the
extent required to comply with the provisions of Section 409A of the Code requiring delay of
distribution to “specified employees” upon a separation from service.

7. Effective as of the Effective Date, Section 4.5 of each Trust is amended to provide in its
entirety as follows:

     4.5 Distributions in the Event of Taxability. Notwithstanding anything
contained in this Trust Agreement to the contrary, if at any time any Plan fails to meet the
requirements of section 409A of the Code and if a tax is finally determined by the Internal
Revenue Service to be payable by one or more Participants or beneficiaries with respect to
any interest in the Plan or the Trust pursuant to section 409A of the Code, a payment to the
affected Participant or beneficiary shall be made under the Trust. Such payment shall not
exceed the amount required to be included in income as a result of the failure to comply
with the requirements of section 409A of the Code. The Trustee shall distribute such
interest in a lump sum to each Participant or beneficiary entitled thereto regardless of
whether such Participant’s employment has terminated and regardless of form and time of
payments specified in or pursuant to the Plan as directed by the Company. In

 

 

addition, the Company may direct that payment of benefits be made from the Trust in
connection with the termination of a Plan or Plans in accordance with Treasury Regulation
section 1.409A-3(j)(4)(ix). Notwithstanding anything to the contrary in this Section 4.5,
no payment to a Participant or beneficiary shall be made if such payment would constitute an
impermissible acceleration of payment under section 409A of the Code that is not subject to
an applicable exception thereunder.

8. Effective as of the Effective Date, Section 14.4 of each Trust is amended by substituting for
the address contained therein for mailings to “the Company” the following new address:

Flowserve Corporation

Attn: Ronald F. Shuff

Vice President, Secretary and General Counsel

5215 North O’Connor Boulevard, Suite 2300

Irving, TX 75039-5418

9. Effective as of the Effective Date, Section 14.4 of each Trust is amended by substituting for
the address contained therein for mailings to “the Trustee” the following new address:

JPMorgan Chase Bank, N.A.

Attn: Theresa Granacher, OH1-0634

1111 Polaris Parkway, Suite 2N

Columbus, OH 43240

 

 

IN WITNESS WHEREOF, Flowserve and the Trustee have signed this Amendment as of the Effective Date.

	 	 	 	 	 
	 	FLOWSERVE CORPORATION

 	 
	 	By:  	/s/ Ronald F. Shuff
 	 
	 	 	Title:  Senior Vice President, Secretary and General Counsel 	 
	 
	 	JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	/s/ Norma Schneiderman
 	 
	 	 	Title:  Assistant Vice Presidentexv10w21

Exhibit 10.21

AMENDMENT NUMBER ONE

TO THE

FLOWSERVE CORPORATION ANNUAL INCENTIVE PLAN

     THIS AMENDMENT NUMBER ONE TO THE FLOWSERVE CORPORATION ANNUAL INCENTIVE PLAN (this
“Amendment”), dated as of December 18, 2008 is made and entered into by Flowserve Corporation, a
New York 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 Annual Incentive Plan (the “Plan”).

RECITALS

     WHEREAS, Section 10 of the Plan provides that the Company may amend the Plan from time to
time; and

     WHEREAS, the Company desires to amend the Plan to modify the definition of “Eligible Earnings”
for purposes of the Plan, change the timing of payment provisions of the Plan, and clarify the
adjustment of Final Awards.

     NOW, THEREFORE, in accordance with Section 10 of the Plan, the Company hereby amends the Plan
as follows:

     1. Effective January 1, 2008, Section 5.3(e) of the Plan is hereby amended by deleting
said Section in its entirety and substituting in lieu thereof the following new Section
5.3(e):

               Section 5.3(d) The Company shall deny payment of calculated Final Awards under the Plan for
any Participant who the Committee or its delegate, in their sole and absolute discretion,
determines has failed to meet expectations as determined through the annual performance management
process for any Performance Period. The Company shall reduce a calculated Final Award under the
Plan by fifty percent (50%) for any Participant who the Committee or its delegate, in their sole
and absolute discretion, determines needs improvement as determined through the annual performance
management process for any Performance Period. Provided, however, the Committee or its delegate,
in its sole and absolute discretion, may elect to waive the application of this Section 5.3(d)
based on the particular facts and circumstances with respect to any Participant for any Performance
Period.

     2. Effective January 1, 2009, Section 2.12 of the Plan is hereby amended by deleting said
Section in its entirety and substituting in lieu thereof the following new Section 2.12:

     Section 2.12 Eligible Earnings means (i) base salary; (ii) overtime pay
for United States and Canadian-based Employees; and (iii) actual premium pay for
United States and Canadian-based Employees. “Eligible Earnings” excludes all
amounts not otherwise enumerated in this Section 2.12, including, without
limitation:

     (A) Annual Incentive Plan awards for prior years,

     (B) Long-Term Incentive Plan awards,

     (C) commissions,

     (D) discretionary and non-discretionary bonuses,

     (E) accrued vacation pay or paid leave,

 

 

     (F) long-term disability pay,

     (G) severance pay,

     (H) expense reimbursements,

     (I) car allowances,

     (J) tax/financial planning reimbursements,

     (K) club dues, and

     (L) foreign service allowances.

     3. Effective January 1, 2009, Section 6.1 of the Plan is hereby amended by deleting said
Section in its entirety and substituting in lieu thereof the following new Section 6.1:

     Section 6.1 Form and Timing of Payment. Each Participant’s Final Award
shall be paid in one lump sum, between the 17th day of the third month and the 1st
day of the fifth month following the end of the Performance Period; provided,
however, that the payment of a Final Award may be reduced or otherwise offset to
satisfy any outstanding debt or obligation owed by the Participant to the Company or
an Affiliate.

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

* * * * * * * * *

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

	 	 	 	 	 
	 	FLOWSERVE CORPORATION

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

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