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Exhibit 10.53
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into this 1st day
of August, 1997, between FLOWSERVE CORPORATION ("Company") and Xxxxxxx X.
Xxxxxxx ("Executive").
BACKGROUND
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A. Executive is currently employed by BW/IP, Inc., as its Chief
Executive Officer.
B. A subsidiary of Company and BW/IP, Inc. are to merge
pursuant to an Agreement and Plan of Merger dated as of May 7, 1997 ("Merger
Agreement").
C. The Company wishes to assure that it will have the
Executive's services and dedication after the Merger.
D. The Executive wishes to serve Company after the Merger as
provided in this Agreement.
AGREEMENT
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In consideration of the premises, and for other valuable
consideration, it is agreed as follows:
1. GENERAL AGREEMENT. The company agrees to employ the
Executive, and the Executive agrees to accept employment with the Company, as
provided in this Agreement for the period beginning on the Effective Date and
ending on the fifth anniversary of the Effective Date.
2. DEFINITIONS. For purposes of this Agreement, the following
terms, when capitalized, shall have the meanings specified below:
(a) "Accrued Compensation" means the sum of (i) the
Executive's annual base salary through the date his employment
terminates to the extent not previously paid and (ii) the Executive's
Historical Bonus multiplied by a fraction, the numerator of which is
the number of complete months in the fiscal year of termination that
precede the Executive's termination and the denominator of which is
twelve.
(b) "Board" means the Company's Board of Directors.
(c) "Board Chairman" means Chairman of the Company's
Board of Directors.
(d) "Cause" means (i) the Executive's continuing
substantial failure to perform his duties for the Company (other than
as a result of incapacity due to mental or physical illness) after a
written demand is delivered to the Executive by the Board; (ii) the
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Executive's wilful engaging in illegal conduct or gross misconduct that
is materially and demonstrably injurious to the Company; (iii) the
Executive's conviction of a felony or his plea of guilty or nolo contendere
to a felony, or (iv) the Executive's wilful and material breach of the
confidentiality portion of this Agreement. "Cause" shall be determined as
provided in Paragraph 8(e).
(e) "Disability" and "Disabled" refer to the Executive's failure to
perform his duties with the Company on a full-time basis for 180
consecutive days, if an independent physician selected by the Company or
its insurers and acceptable to the Executive (or, in the case of
Executive's incapacity, his legal representative) finds that such failure
has resulted from the Executive's inability to perform such duties because
of his physical or mental incapacity.
(f) "Effective Date" means the Effective Time of the Merger (as defined
in the Merger Agreement).
(g) "Employment Term" means the period beginning on the Effective Date
and ending on the fifth anniversary of the Effective Date.
(h) "First Employment Period" means the period beginning on the
Effective Date and ending on the earlier of (i) the Board's acceptance of
the Executive's resignation as Chairman, Chief Executive Officer, and
director in accordance with Paragraph 3 or (ii) the fifth anniversary of
the Effective Date.
(i) "Good Reason" means, during the First Employment Period, (i) the
Company's removal of the Executive from his position as Board Chairman
or Chief Executive Officer, (ii) the Company's (A) assignment of duties to
the Executive that are materially inconsistent with his position as Board
Chairman or Chief Executive Officer, or (B) actions resulting in a
material diminution of the Executive's position or duties, (iii) the
Company's material failure to comply with any provision of this Agreement,
(iv) the Company requiring the Executive to relocate his primary residence
from Phoenix, Arizona or to maintain his principal office more than 35
miles from XXX Xxxxxxx, Xxxxxx, Xxxxx, and (v) the Company's termination
of the Executive's employment, other than as permitted by this Agreement.
"Good Reason" shall be determined as provided in Paragraph 8(c).
(j) "Historical Bonus" means, for the fiscal year in which the
Executive's employment terminates, the Executive's highest annual bonus
for the two fiscal years preceding termination, reduced by any annual
bonus previously paid to him for the fiscal year of termination.
(k) "Other Benefit" means any accrued compensation or benefit of the
Executive other than Accrued Compensation that is payable on or after
termination of employment
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under a plan, policy, or program of the Company. In case of the
Executive's death before the end of the Employment Term, "Other Benefit"
shall include a special death benefit equal to 36 months of the
Executive's base salary at the rate in effect on the date of his death,
which benefit shall be reduced by the death benefit payable with respect
to the Executive under any life insurance program of the Company. In the
case of the Executive's termination of employment on account of
Disability, "Other Benefit" shall include a salary continuation payment
until the fifth anniversary of the Effective Date, equal to 70% of the
Executive's base salary at the time he terminated employment on account of
Disability, reduced by any disability payments made to the Executive for
such period from another disability plan or program of the Company or
Social Security.
(l) "Second Employment Period" means the period beginning with the end
of the First Employment Period and ending on the fifth anniversary of the
Effective Date.
(m) "Willful" means that the Executive has acted, or failed to act, in
bad faith or without reasonable belief that his act or omission was in the
Company's best interest. For purposes of the preceding sentence, any act,
or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done,
by the Executive in good faith and pursuant to his belief that it is in the
best interests of the Company.
(n) "Welfare Benefit Plan" has the meaning given to such term by 29
U.S.C. Section 1002(l).
3. EXECUTIVE'S POSITION AND DUTIES DURING FIRST EMPLOYMENT PERIOD.
During the First Employment Period, the Executive shall serve as the Company's
Chief Executive Officer and Board Chairman with general responsibility for
and control of the Company's business and affairs, all in accordance with the
provisions of this paragraph. The Executive shall have such authority, duties,
and responsibilities as are commensurate with his position and as may be
assigned to him from time to time by the Board. The Executive shall serve the
Company diligently and faithfully, devoting substantially all of his time and
attention during normal business hours to the business and affairs of the
Company and to the faithful performance of his duties. The Executive shall not
perform any other services for remuneration, unless the performance of such
services is approved by the Board as being in the best interests of the
Company; provided, however, the Executive may continue as a board member of
Maytag Corporation and/or Xxxxxx, Inc. The Executive shall not engage in any
activity that substantially interferes with the performance of his
responsibilities to the Company. For purposes of this paragraph, the
Executive's service as a director of Phoenix Country Day School and Thunderbird
Graduate School shall be permitted. The Executive's performance as a director of
any other not-for-profit organization shall be subject to the approval of the
Board, which approval shall not be unreasonably withheld. The Company shall use
its best efforts to cause the Executive to be elected as a director of the
Company and to remain as such throughout the first Employment
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Period. On the third anniversary of the Effective Date, the Executive shall
tender to the Board his resignation as Board Chairman, Chief Executive Officer,
and director. If the Board accepts the Executive's resignation, the First
Employment Period shall end. If the Board does not accept the Executive's
resignation, the first Employment Period shall continue until the earlier of
(i) the Board's acceptance of the Executive's resignation or (ii) the fifth
anniversary of the Effective Date.
4. EXECUTIVE'S POSITION AND DUTIES DURING SECOND EMPLOYMENT PERIOD. During
the Second Employment Period, the Executive shall serve as consultant to the
Board and shall provide such consulting and advisory services as may be
reasonably requested by the Board, to the extent consistent with the
Executive's other obligations. The Executive shall make himself available for
consultation with the Board at times mutually agreeable to the Board and the
Company, provided that the Executive shall not be required to perform services
at the Company's headquarters.
5. EXECUTIVE'S COMPENSATION AS CHAIRMAN AND CEO. During the First
Employment Period, the Executive shall be entitled to the following
compensation:
(a) BASE SALARY. The Executive's initial base salary shall be $550,000
per year. The Executive's base salary may be increased, but not decreased,
throughout the First Employment Period and shall be reviewed at least once
every 12 months.
(b) BONUS. For each fiscal year, the Executive shall have an annual
bonus opportunity, with a minimum target bonus of no less than 50% of his
base salary payable pursuant to Subparagraph (a) during that fiscal year.
(c) LONG-TERM INCENTIVE COMPENSATION PLAN. The Executive shall
participate in the Company's long-term incentive compensation plan.
(d) INCENTIVE, SAVINGS, RETIREMENT, AND WELFARE BENEFIT PLANS. The
Executive shall be eligible to participate in all incentive compensation,
savings, retirement, and Welfare Benefit Plans available to other senior
executives of the Company on a basis at least as favorable as provided to
such other executives.
(e) VACATION. The Executive shall be entitled to paid vacation on terms
at least as favorable as available to other senior executives; provided,
however, the Executive shall be entitled to at least four weeks of paid
vacation per year.
(f) FRINGE BENEFITS. The Executive shall be entitled to reimbursement
of country club initiation fees and dues and automobile expenses and other
fringe benefits on a basis no less favorable than provided to other senior
executives of the Company.
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(g) OFFICE AND SUPPORT STAFF. The Executive shall be entitled to an
office or offices or a size and with furnishings and other appointments
comparable to those of other senior executives of the Company.
(h) REIMBURSEMENT OF EXPENSES. The Executive shall be entitled to
reimbursement of reasonable business expenses on terms and conditions at
least as favorable as provided to other senior executives of the Company.
The Executive shall also be entitled to reimbursement of his reasonable
legal fees incurred in negotiating this Agreement.
(i) SERVICE CREDIT AND POST-EMPLOYMENT BENEFITS. The Executive shall
be given full service credit for his years of service at BW/IP, Inc. for
purposes of eligibility, vesting, and benefit accrual under the employee
benefit plans and programs of the Company in which he participates,
provided that any benefit that the Executive accrued under a defined
benefit pension plan of BW/IP, Inc. before becoming a participant in the
Company defined benefit pension plan shall be offset. To the extent that
the terms of a defined benefit do not permit compliance with the preceding
sentence, the Company shall provide such benefit through a supplemental
retirement benefit. Notwithstanding the foregoing, the Executive shall be
entitled to a supplemental retirement benefit at least as generous as the
supplemental retirement benefit that would have been provided under his
agreement with BW/IP, Inc., a copy of which is attached as Appendix A, had
such agreement remained in effect throughout the Employment Term, taking
into account, among other things, the double service crediting provided
thereunder.
6. EXECUTIVE'S COMPENSATION AS A CONSULTANT. During the Second
Employment Period, the Executive shall be entitled to the following
compensation:
(a) BASE SALARY. The Executive's base salary shall be equal to his
base salary at the time of his resignation as Chairman and Chief Executive
Officer.
(b) BONUS. For each fiscal year, the Executive shall have an annual
bonus opportunity with a minimum target bonus of no less than 50% of his
base salary payable pursuant to Subparagraph (a) during such fiscal year.
(c) LONG-TERM INCENTIVE COMPENSATION PLAN. The Executive shall not be
eligible to participate in any stock-based or long-term incentive
compensation plan of the Company; provided, however, the Executive's
service during the Second Employment Period shall be taken into account in
determining the Executive's vested interest in stock-based awards granted
before the Second Employment Period.
(d) INCENTIVE, SAVINGS, RETIREMENT, AND WELFARE BENEFIT PLANS. Except
as provided in Subparagraph (c), the Executive shall be entitled to
participate in all incentive compensation, savings, retirement, and
Welfare Benefit Plans in which he was a
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participant at the end of the First Employment Period on a basis at least
as favorable as provided to other senior executives.
(e) TREATMENT OF OUTSTANDING STOCK OPTIONS. The Executive shall be
entitled to continue to hold, and be credited with vesting service respect
to, all stock options that were outstanding at the end of the First
Employment Period.
7. LOCATION OF SERVICES. During the First Employment Period, in lieu of
relocating to the Company's headquarters, the Executive shall continue to have
his permanent residence in Phoenix, Arizona, and shall commute to the Company's
headquarters. During this period, the Company shall pay the Executive $2,500
per month to compensate him for costs associated with commuting to and from and
living in the headquarters city. During the Second Employment Period, the
Executive shall not be required to perform services at the Company's
headquarters.
8. TERMINATION OF EMPLOYMENT.
(a) DEATH. The Executive's employment shall terminate automatically
upon his death during the Employment Term.
(b) DISABILITY. If the Executive becomes Disabled during the
Employment Term, the Company may notify the Executive of its intention to
terminate his employment pursuant to this Subparagraph (b). In such event,
the Executive's employment shall terminate on the 30th day after the
Executive receives such notice, unless he returns to substantially
full-time performance of his duties within such 30-day period.
(c) EXECUTIVE'S TERMINATION FOR GOOD REASON. To terminate his
employment for Good Reason, the Executive must notify the Board of his
intent to terminate employment for Good Reason and describe all
circumstances that he believes in good faith to constitute Good Reason. If
the Company corrects all situations identified by the Executive within 30
days after receiving his notice, the Executive shall not be entitled to
terminate for Good Reason. If the Company agrees to the Executive's
termination for Good Reason or fails to correct the conditions identified
by the Executive within 30 days after receipt of the Executive's notice,
the Executive's employment shall terminate on the 30th day after the
Company received his notice or such earlier date agreed to by the Company.
(d) EXECUTIVE'S TERMINATION WITHOUT GOOD REASON. If the Executive
terminates his employment without Good Reason, he shall provide the
Company at least 30 days' notice (which 30-day requirement may be waived
by the Company) of his intent to terminate, state that the termination is
without Good Reason, and identify his termination date. The Executive's
termination date shall be the date specified in the notice provided
pursuant to the preceding sentence.
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(e) COMPANY'S TERMINATION FOR CAUSE. Before the Board terminates the
Executive's employment for Cause, it shall provide the Executive an
opportunity, after reasonable notice, to appear before the Board with
counsel. To terminate the Executive for Cause, the Board must adopt a
resolution terminating the Executive by affirmative vote of at least 75%
of its members, after having given the Executive the opportunity to
present his case to the Board. The Board's resolution must state that the
Board finds in good faith that (i) the Executive is guilty of conduct
constituting Cause, specifying the details of such conduct, and (ii) the
Executive failed to cure such conduct within 30 days after receiving
written notice from the Company detailing such conduct. The effective date
of the Executive's termination for Cause shall be the date on which the
Executive receives a copy of the resolution adopted by the Board or such
later date specified in the resolution.
(f) COMPANY'S TERMINATION WITHOUT CAUSE. If the Company terminates the
Executive's employment without Cause, it shall notify the Executive of its
decision and state that the termination is without Cause. The effective
date of the Executive's termination shall be the date on which he receives
the Company's notice or such later date as specified in the notice.
9. COMPANY'S OBLIGATIONS ON TERMINATION OF EMPLOYMENT.
(a) DEATH. If the Executive's employment is terminated by reason of
his death during the Employment Term, this Agreement shall terminate
without further obligations to the Executive's legal representatives under
this Agreement, other than for payment of Accrued Compensation and the
timely payment or provision of Other Benefits. Accrued Compensation shall
be paid to the Executive's estate or beneficiary, as applicable, in a lump
sum in cash within 30 days after the Executive's death, and Other Benefits
shall be paid pursuant to the applicable plan, program, or policy of the
Company.
(b) DISABILITY. If the Executive's employment is terminated by reason
of his Disability during the Employment Term, this Agreement shall
terminate without further obligations to the Executive, other than for
payment of Accrued Compensation and the timely payment or provision of
Other Benefits. Accrued Compensation shall be paid to the Executive in a
lump sum in cash within 30 days after his employment terminates, and Other
Benefits shall be paid pursuant to the applicable plan, program, or policy
of the Company. Notwithstanding the preceding provisions, all stock-based
awards that would have become vested by the end of the fiscal year in
which the Executive's employment terminates on account of Disability shall
become vested upon the termination of his employment, and any stock
options or other exercisable awards shall remain exercisable as if the
Executive's employment had terminated on the fifth anniversary of the
Effective Date.
(d) COMPANY'S TERMINATION FOR CAUSE. If the Executive's employment is
terminated for Cause, or the Executive terminates his employment without
Good Reason
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during the Employment Term, this Agreement shall terminate without
further obligations to the Executive, other than for payment of Accrued
Compensation, the payment of any compensation previously deferred by the
Executive pursuant to a non-qualified deferred compensation plan and not
previously paid, and the timely payment of Other Benefits. Accrued
Compensation shall be paid to the Executive in a lump sum in cash within
30 days after his employment terminates, and Other Benefits and deferred
compensation referred to in the preceding sentence shall be paid pursuant
to the applicable plan, program, or policy of the Company.
(d) COMPANY'S TERMINATION FOR REASON OTHER THAN CAUSE, DEATH OR
DISABILITY ON EXECUTIVE'S TERMINATION FOR GOOD REASON. If the Company
terminates the Executive's employment for a reason other than Cause or
Disability, or if the Employee terminates his employment for Good Reason,
the Company shall continue to compensate the Executive hereunder as if he
had not terminated employment throughout the Employment Term; provided,
however, the First Employment Period shall terminate on the later of the
Executive's termination of employment or the third anniversary of the
Effective Date. If the Executive is no longer eligible to participate in
a benefit plan of the Company because he is no longer an employee, the
Company shall provide a benefit equivalent to the benefit to which
Executive would have been entitled under such plan if he had remained an
employee; provided however, the Executive shall not be reimbursed for the
loss of his ability to make elective deferrals under any qualified defined
contribution plan of the Company.
(e) NON-EXCLUSIVITY OF RIGHTS. This Agreement shall not prevent the
Executive from continuing or future participation in any plan, program,
policy, or practice of the Company according to its terms or, subject to
Section 17, affect the Executive's rights under any agreement with the
Company. Benefits that are vested or that the Executive is otherwise
entitled to receive under any plan, policy, practice, or program of, or
any agreement with, the Company at or after the termination of his
employment shall be payable in accordance with such plan, policy,
practice, program, or agreement, except as expressly modified by this
Agreement.
10. ADDITIONAL PAYMENTS BY THE COMPANY. If it is determined that any
payment hereunder other than a payment pursuant to this Paragraph or Paragraph
11, is subject to Code Section 4999, or any interest or penalties are incurred
by the Executive with respect to such excise tax on account of such payments,
then the Executive shall be entitled to receive an additional payment
sufficient to compensate him for any such tax, interest, or penalties and any
taxes with respect to payments made pursuant to this Paragraph. The Executive
shall promptly notify the Company of any notice from the Internal Revenue
Service with respect to excise taxes described in this Paragraph.
11. TERMINATION FOLLOWING CHANGE OF CONTROL. If the Executive's
employment terminates during the Employment Term but following a change of
control (as defined in a signed
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change of control agreement between the Company and the Executive) during the
Employment Term, the Executive shall receive compensation upon such termination
pursuant to the change of control agreement and not pursuant to this Agreement.
12. CONFIDENTIALITY.
(a) The Executive shall hold in a fiduciary capacity for the benefit of
the Company all secret or confidential information, knowledge, or data
relating to the Company or any of its affiliated companies, and their
respective businesses, that has been acquired by the Executive during his
employment and that has not become public knowledge (other than by acts by
the Executive or his representatives in violation of this Agreement).
After termination of the Executive's employment with the Company, the
Executive shall not, without the prior written consent of the Company's
Board or as may otherwise be required by law, or legal process or in order
to enforce his rights under this Agreement or as necessary to defend
himself against a claim asserted directly or indirectly by the Company or
its affiliates, communicate or divulge any such information, knowledge, or
data that is not otherwise publicly available to anyone other than the
Company and those designated by it. An asserted violation of this
Paragraph shall not be a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
(b) In the event of a breach or threatened breach of this Paragraph,
the Executive agrees that the Company shall be entitled to seek injunctive
relief in a court of appropriate jurisdiction to remedy such breach or
threatened breach, and the Executive acknowledges that damages would be
inadequate and insufficient.
(c) The Executive's obligations under this Paragraph shall continue
forever.
13. INDEMNIFICATION. The Company agrees that if Executive is made a party,
or is threatened to be made a party, to any action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, by reason of the
fact that he is or was a director, officer, or employee of the Company,
Executive shall be indemnified and held harmless by the Company to the fullest
extent legally permitted or authorized by the Company's certificate of
incorporation or bylaws or resolutions of the Board or, if greater, by the laws
of the State of New York, against all cost, expense, liability, and loss
(including, without limitation, attorneys' fees, judgments, fines, ERISA excise
taxes, or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by Executive in connection therewith. The Company agrees
to continue and maintain a directors' and officers' liability insurance policy
covering Executive to the extent the Company provides such coverage for its
other executive officers.
14. NOTICES. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
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If to the Executive:
Xxxxxxx X. Xxxxxxx
0000 X. Xxxxxxxx Xx.
Xxxxxxxx Xxxxxx, XX 00000
If to the Company or Board:
Miami Valley Research Park
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: Vice President, Secretary and General Counsel
or to such other address as either party shall have furnished to the other in
accordance herewith. Notice and communications shall be effective when actually
received by the addressee.
15. SEVERABILITY. Each provision of this Agreement shall be considered
severable. If a court finds any provision to be invalid or unenforceable, the
validity, enforceability, operation, and effect of the remaining provisions
shall not be affected, and this Agreement shall be construed in all respects as
if the invalid or unenforceable provision had been omitted or limited in
accordance with the court's ruling.
16. ASSIGNABILITY. This Agreement may not be assigned by the Executive,
because it is personal in nature. The Company may assign, delegate, or transfer
this Agreement and all of its rights and obligations hereunder to any successor
in interest, any purchaser of substantially all of the Company's assets, or any
entity to which the Company transfers all or substantially all of its assets
before or after the term of this Agreement. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place.
17. GOVERNING LAW AND WAIVER. The laws of the State of New York shall
govern the construction, enforceability, and interpretation of this Agreement.
The parties intend this Agreement to supplement, but not displace, their
respective rights and responsibilities under the laws of the State of New York,
as amended from time to time. The failure of either party to insist upon
performance of any provision of this Agreement or to pursue his or its rights
hereunder shall not be construed as a waiver of any such provision or the
relinquishment of any such right.
17. PRIOR AGREEMENT. On the Effective Date, this Agreement shall
supersede the Employment Continuation Agreement and Employment Agreement
between the Executive and BW/IP, Inc., dated as of December 14, 1995, and
October 19, 1995, respectively, and the terms and
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conditions of this Agreement shall be controlling during the Employment Period.
The Change of Control Agreement between the Executive and the Company, dated as
of July __, 1997 (the "Severance Agreement"), shall become effective in the
event of any change of control (as defined in the Severance Agreement)
subsequent to the consummation of the Merger. Except for the Change of Control
Agreement referred to above, this Agreement supersedes all prior or
contemporaneous negotiations, commitments, agreements, and writings with respect
to the subject matter hereof, all such other negotiations, commitments,
agreements, and writings will have no further force or effect, and the parties
to any such other negotiation, commitment, agreement or writing will have no
further rights or obligations thereunder.
18. NO PARTY DEEMED DRAFTER. Neither the Company nor the Executive
shall be deemed to be the drafter of this Agreement, and, if this Agreement or
any provision thereof is construed in any court or other proceeding, said court
or other adjudicator shall not construe this Agreement or any provision thereof
against either party as the drafter thereof.
19. NO ORAL MODIFICATIONS. This Agreement may not be modified orally.
Any change of this Agreement must be made in writing and signed by Executive
and an officer of Company.
20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
FLOWSERVE CORPORATION
By: /s/ Xxxx X. Xxxxx
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XXXX X. XXXXX
Title: CHAIRMAN, EXECUTIVE COMMITTEE
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ATTEST:
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxx
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Signature Xxxxxxx X. Xxxxxxx
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Title
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AMENDMENT NO.1 TO EMPLOYMENT AGREEMENT (THE "AGREEMENT")
DATED JULY 22, 1997
BY AND BETWEEN
FLOWSERVE CORPORATION (THE "COMPANY") AND
XXXXXXX X. XXXXXXX ("EXECUTIVE")
The Company and Executive hereby agree to the following amendment to their
Agreement dated July 22, 1997:
Termination Following Change in Control
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1. Paragraph 2 is hereby amended effective immediately by adding the
following sentence which shall become new Section 3(E):
(E) "Notwithstanding anything in this Agreement to the
contrary, if your employment is terminated by the Company
prior to a change in control, where a change in control in
fact occurs, and you reasonably demonstrate that such
termination was at the request of a third party who
effectuates such change in control, or that such termination
was directly related to or in anticipation of such change in
control, then, for all purposes of this Agreement, you shall
be entitled all payments and benefits provided under this
Agreement."
2. All the other provisions of the Agreement shall remain in full force
and effect and unchanged, subject to the specific addition noted above.
FLOWSERVE CORPORATION EXECUTIVE
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
Chairman, Compensation Committee
