Restricted Stock Unit Agreement Flowserve Corporation
Exhibit 10.7
Flowserve Corporation
2004 Stock Compensation Plan
This Restricted Stock Unit Agreement (the “Agreement”) is made and entered into by and between
Flowserve Corporation, a New York corporation (the “Company”) and «First_Name» «Last_Name» (the
“Participant”) as of , 2008 (the “Date of Grant”).
W I T N E S S E T H
WHEREAS, the Company has adopted the Flowserve Corporation 2004 Stock Compensation Plan (the
“Plan”) to strengthen the ability of the Company to attract, motivate and retain Employees, Outside
Directors and Consultants who possess superior capabilities and to encourage such persons to have a
proprietary interest in the Company; and
WHEREAS, the Organization and Compensation Committee of the Board of Directors of the Company
believes that the grant of Restricted Stock Units to the Participant as described herein is
consistent with the stated purposes for which the Plan was adopted; and
NOW, THEREFORE, in consideration of the mutual covenants and conditions hereafter set forth
and for other good and valuable consideration, the Company and the Participant agree as follows:
1. Restricted Stock Units
In order to encourage the Participant’s contribution to the successful performance of the
Company, and in consideration of the covenants and promises of the Participant herein contained,
the Company hereby grants to the Participant as of the Date of Grant, an Award of
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of_Shares_Granted» Restricted Stock Units (the “RSUs”), which may be converted into the number
of shares of Common Stock of the Company equal to the number of RSUs, subject to the conditions and
restrictions set forth below and in the Plan.
2. Vesting and Conversion of RSUs into Common Stock
| (a) | Subject to the provisions of Paragraph 3 below, all RSUs will
become vested over the three year period following the Date of Grant in
accordance with the following table; provided, however, that the RSUs shall
cease to vest following the Participant’s termination of employment with the
Company: |
| Aggregate Percentage of Shares of RSUs | ||||
| Date | Granted herein which are Vested | |||
03/07/09 |
331/3 | % | ||
03/07/10 |
662/3 | % | ||
03/07/11 |
100 | % | ||
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| (b) | No later than the date that is two and a half (2 1/2) months
following the close of the calendar year in which the RSUs vest in accordance
with the table set forth in Paragraph 2(a) above, the Company shall convert the
vested RSUs into the number of whole shares of Common Stock equal to the number
of vested RSUs, subject to the provisions of the Plan and the Agreement. |
| (c) | Following conversion of the vested RSUs into shares of Common
Stock, such shares of Common Stock will be transferred of record to the
Participant and a certificate or certificates representing said Common Stock
will be issued in the name of such Participant and delivered to the
Participant. The delivery of any shares of Restricted Stock pursuant to this
Agreement is subject to the provisions of Paragraphs 6 and 8 below. |
| (d) | Each year that this Agreement is in effect, the Committee may,
but shall be under no obligation to, pay the Participant a cash bonus equal to
the dividends that would have been paid on the number of shares of Common Stock
equal to the number of RSUs granted hereunder had the Participant actually held
shares of Common Stock during such year. |
3. Effect of Termination of Employment or Services
| (a) | The RSUs granted pursuant to this Agreement shall vest in
accordance with the vesting schedule reflected in Paragraph 2(a) above, as long
as the Participant remains employed by or continues to provide services to the
Company or a Subsidiary. If, however, either: |
| (i) | the Company and its Subsidiaries terminate the
Participant’s employment (or if the Participant is not an Employee,
determine that the Participant’s services are no longer needed), or |
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| (ii) | the Participant terminates employment (or if
the Participant is not an Employee, ceases to perform services for the
Company and its Subsidiaries), |
then the RSUs that have not previously vested in accordance with the vesting
schedule reflected in Paragraph 2(a) above, as of the date of such
termination of employment (or cessation of services, as applicable), shall
be forfeited by the Participant to the Company.
| (b) | Notwithstanding Paragraphs 2(a) and 3(a) above, upon the
cessation of the Participant’s employment or services (whether voluntary or
involuntary), the Committee may, in its sole and absolute discretion, elect to
accelerate the vesting of some or all of the unvested RSUs. |
4. Limitation of Rights
Nothing in this Agreement or the Plan shall be construed to:
| (a) | give the Participant any right to be awarded any further RSUs
or any other Award in the future, even if RSUs or other Awards are granted on a
regular or
repeated basis, as grants of RSUs and other Awards are completely voluntary
and made solely in the discretion of the Committee; |
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| (b) | give the Participant or any other person any interest in any
fund or in any specified asset or assets of the Company or any Subsidiary; or |
| (c) | confer upon the Participant the right to continue in the
employment or service of the Company or any Subsidiary, or affect the right of
the Company or any Subsidiary to terminate the employment or service of the
Participant at any time or for any reason. |
5. Prerequisites to Benefits
Neither the Participant, nor any person claiming through the Participant, shall have any right
or interest in the RSUs awarded hereunder, unless and until all the terms, conditions and
provisions of this Agreement and the Plan which affect the Participant or such other person shall
have been complied with as specified herein.
6. Data Privacy
By execution of this Agreement, the Participant acknowledges that he/she has read and
understands the Flowserve Corporation Employee Data Protection Policy (the “Policy”). The
participant hereby consents to the collection, processing, transmission, use and electronic and
manual storage of their personal data by the Company, Xxxxxxx Xxxxx & Co., Inc. (“Xxxxxxx Xxxxx”)
and Solium Capital LLC (“Solium”) in order to facilitate Plan administration. The Participant
understands and acknowledges that this consent applies to all personally-identifiable data relevant
to Plan administration, including: name, home address, work email address, job title, GEMS ID,
National Identification Number or Social Security Number, employee status, work location, work
phone number, tax class, previous equity grant transaction data and compensation data.
The Participant understands that for purposes of Plan administration, the Participant’s
personal data will be collected and processed at 0000 X. X’Xxxxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx
(XXX), and transferred to Xxxxxxx Xxxxx at 4 World Financial Center, 000 Xxxxx Xx., Xxx Xxxx, Xxx
Xxxx (XXX) and Solium at 00000 Xxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx (XXX).
7. Delivery of Shares
No shares of Common Stock shall be delivered to the Participant upon conversion of the RSUs
into shares of Common Stock until:
| (a) | all the applicable taxes required to be withheld have been paid or withheld in
full; |
| (b) | the approval of any governmental authority required in
connection with this RSU, or the issuance of shares of Common Stock hereunder
under has been received by the Company; and |
| (c) | if required by the Committee, the Participant has delivered to
the Committee an “Investment Letter” in form and content satisfactory to the
Company as provided in Paragraph 8 hereof. |
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8. Successors and Assigns
This Agreement shall bind and inure to the benefit of and be enforceable by the Participant,
the Company and their respective permitted successors and assigns (including personal
representatives, heirs and legatees), except that the Participant may not assign any rights or
obligations under this Agreement except to the extent and in the manner expressly permitted herein.
9. Securities Act
The Company will not be required to deliver any shares of Common Stock pursuant to this
Agreement if, in the opinion of counsel for the Company, such issuance would violate the Securities
Act of 1933, as amended (the “Securities Act”) or any other applicable federal or state securities
laws or regulations. The Committee may require that the Participant, prior to the issuance of any
such shares, sign and deliver to the Company a written statement, which shall be in a form and
contain content acceptable to the Committee, in its sole discretion (“Investment Letter”):
| (a) | stating that the Participant is acquiring the shares for
investment and not with a view to the sale or distribution thereof; |
| (b) | stating that the Participant will not sell any shares of Common
Stock that the Participant may then own or thereafter acquire except either: |
| (i) | through a broker on a national securities
exchange or |
| (ii) | with the prior written approval of the Company;
and |
| (c) | containing such other terms and conditions as counsel for the
Company may reasonably require to assure compliance with the Securities Act or
other applicable federal or state securities laws and regulations. |
10. Federal and State Taxes
| (a) | Any amount of Common Stock that is payable or transferable to
the Participant hereunder may be subject to the payment of or reduced by any
amount or amounts which the Company is required to withhold under the then
applicable provisions of the laws of the jurisdiction where the Participant is
employed, and, if applicable, the Internal Revenue Code of 1986, as amended
(the “Code”), or its successors, or any other foreign, federal, state or local
tax withholding requirement. When the Company is required to withhold any
amount or amounts under the applicable provisions of any foreign, federal,
state or local requirement or the Code, the Company shall withhold from the
Common Stock to be issued to the Participant a number of shares necessary to
satisfy the Company’s withholding obligations. The number of shares of Common
Stock to be withheld shall be based upon the Fair Market Value of the shares on
the date of withholding. |
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| (b) | Notwithstanding Paragraph 9(a) above, if the Participant
elects, and the Committee agrees, the Company’s withholding obligations may
instead be satisfied as follows: |
| (i) | the Participant may direct the Company to
withhold cash that is otherwise payable to the Participant; |
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| (ii) | the Participant may deliver to the Company a
sufficient number of shares of Common Stock then owned by the
Participant to satisfy the Company’s withholding obligations, based on
the Fair Market Value of the shares as of the date of withholding; |
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| (iii) | the Participant may deliver sufficient cash to
the Company to satisfy its withholding obligations; or |
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| (iv) | any combination of the alternatives described
in Paragraphs 9(b)(i) through 9(b)(iii) above. |
| (c) | Authorization of the Participant to the Company to withhold
taxes pursuant to one or more of the alternatives described in Paragraph 9(b)
above must be in a form and content acceptable to the Committee. The payment
or authorization to withhold taxes by the Participant shall be completed prior
to the delivery of any shares pursuant to this Agreement. An authorization to
withhold taxes pursuant to this provision will be irrevocable unless and until
the tax liability of the Participant has been fully paid. |
11. Definitions; Copy of Plan
Except as specifically provided otherwise herein, all capitalized terms used in this Agreement
shall have the same meanings ascribed to them in the Plan. By the execution of this Agreement, the
Participant acknowledges receipt of a copy of the Plan.
12. Administration
This Agreement is subject to the terms and conditions of the Plan. The Plan will be
administered by the Committee in accordance with its terms. The Committee has sole and complete
discretion with respect to all matters reserved to it by the Plan and the decisions of the majority
of the Committee with respect to the Plan and this Agreement shall be final and binding upon the
Participant and the Company. In the event of any conflict between the terms and conditions of this
Agreement and the Plan, the provisions of the Plan shall control.
13. Adjustment of Number of Shares of RSUs
The number of RSUs granted hereunder shall be subject to adjustment in accordance with
Articles 11 and 12 of the Plan.
14. Non-transferability
The RSUs granted by this Agreement are not transferable by the Participant other than by will
or pursuant to applicable laws of descent and distribution. The RSUs and any rights and privileges
in connection therewith, cannot be transferred, assigned, pledged or hypothecated by operation of
law, or otherwise, and is not otherwise subject to execution, attachment, garnishment or similar
process. In the event of such occurrence, this Agreement will automatically terminate and will
thereafter be null and void.
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15. No Right to Stock
No Participant and no beneficiary or other person claiming under or through such Participant
shall have any right, title or interest in any shares of Common Stock allocated or reserved under
the Plan or subject to this Agreement, except as to such shares of Common Stock, if any, that have
been issued or transferred to such Participant.
16. Notice
Any notice to be given to the Company or the Committee shall be addressed to the Company in
care of its Secretary at its principal office. Any such notice shall be in writing and shall be
delivered personally or shall be sent by first class mail, postage prepaid, to the Company.
17. Amendments
This Agreement may be amended only by a written agreement executed by the Company and the
Participant. Any such amendment shall be made only upon the mutual consent of the parties, which
consent (of either party) may be withheld for any reason.
18. Governing Law
This Agreement shall be governed by, construed and enforced in accordance with the laws of the
State of Texas.
19. Definitions
All capitalized terms in this Agreement shall have the meanings ascribed to them in the Plan
unless otherwise defined in this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its officers
thereunto duly authorized, and the Participant has hereunto set his/her hand as of the day and year
first above written.
| FLOWSERVE CORPORATION |
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| By: | 
|
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| Name: | Xxxxx X. Xxxxx | |||
| Title: | President and Chief Executive Officer | |||
| «First_Name» «Last_Name» | ||||||
| Name: | ||||||
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