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EXHIBIT 10.40
AMENDED EMPLOYMENT AGREEMENT
THIS AMENDED EMPLOYMENT AGREEMENT ("Amended Agreement") is entered into
this 24th day of November, 1999, by and between FLOWSERVE CORPORATION
("Company") and Xxxxxxx X. Xxxxxxx ("Executive").
BACKGROUND
A. The Executive currently serves as Chief Executive Officer of the
Company and as Chairman of the Company's Board of Directors pursuant to an
Employment Agreement entered into August 1, 1997, effective July 22, 1997
("Agreement").
B. The Executive and the Company wish to modify the Agreement as
provided herein.
In consideration of the premises and other valuable consideration, the
receipt of which is hereby acknowledged, the Company and the Executive agree
that the Agreement shall be amended and restated as provided herein, effective
with the execution of this Amended Agreement.
AMENDED AGREEMENT
1. General Agreement. The Company agrees to continue to employ the
Executive, and the Executive agrees to continue employment with the Company, as
provided in this Amended Agreement, for the period beginning on the date of
execution of this Amended Agreement and ending July 21, 2003.
2. Definitions. For purposes of this Amended 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) "Average Percentage Adjustment" has the meaning specified
in Paragraph 6(b).
(c) "Board" means the Company's Board of Directors.
(d) "Board Chairman" means Chairman of the Company's Board of
Directors
(e) "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
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illness) after a written demand is delivered to the Executive by the
Board; (ii) the 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 or non-competition
provisions of this Amended Agreement. "Cause" shall be determined as
provided in Paragraph 7(d).
(f) "Contract Year" means the period beginning August 1, 2000,
and ending July 21, 2001, and the 12 consecutive month periods
beginning July 22, 2001, and July 22, 2002.
(g) "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.
(h) "Effective Date" means July 22, 1997, the effective date
of the original Agreement.
(i) "Employment Term" means the period beginning on the
Effective Date and ending on July 21, 2003.
(j) "Fiscal Year" means the Company's Fiscal Year.
(k) "First Employment Period" means the period beginning on
the Effective Date and ending on July 31, 2000.
(l) "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 other than as set forth in
Paragraph 3 hereof, (ii) the Company's assignment of duties to the
Executive that are materially inconsistent with his position as Board
Chairman or Chief Executive Officer, or (iii) the Company's material
failure to comply with any provision of this Amended Agreement.
(m) "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.
(n) "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 sixth 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.
(o) "Second Employment Period" means the period beginning on
August 1, 2000, and ending on July 21, 2003.
(p) "Welfare Benefit Plan" has the meaning given to such term
by 29 U.S.C. Section 1002(1).
(q) "Wilful" 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.
3. Executive's Position and Duties During First Employment Period.
During the First Employment Period, the Executive's position and duties shall be
those set out in this Paragraph. From the date of execution of this Amended
Agreement through December 31, 1999, the Executive shall continue to serve as
the Company's Chief Executive Officer and Board Chairman on the same terms and
conditions as set forth in Paragraph 3 of the Agreement, which terms and
conditions are incorporated by reference as if fully set out herein. Effective
January 1, 2000, the Executive shall resign as Chief Executive Officer. From
January 1, 2000, through July 31, 2000, the Executive shall serve as
non-executive Board Chairman and shall be expected to perform services for the
Company up to 10 days a month. He shall continue to be paid $2,500 per month for
the costs associated with temporary living and commuting to and from his
permanent residence in Arizona and the Company's headquarters. Effective August
1, 2000, the Executive shall resign as non-Executive Board Chairman, at which
time he shall be given the honorary title of Board Chairman Emeritus.
4. Executive's Position and Duties During Second Employment Period.
During the Second Employment Period, the Executive shall serve as a 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 Executive,
provided
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that the Executive shall not be required to perform services at the Company's
headquarters or to perform services on more than 20 days per Contract Year.
5. Executive's Compensation During First Employment Period. During the
First Employment Period, the Executive shall continue to be entitled to
compensation as set out in Paragraph 5 of the Agreement, which Paragraph is
incorporated by reference as if fully set out herein. In addition, the Executive
shall be entitled to his reasonable legal fees in negotiating this Amended
Agreement.
6. Executive's Compensation During Second Employment Period. 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 as of July 31, 2000, subject to annual increase by the
current fiscal year's Average Percentage Adjustment.
(b) AVERAGE PERCENTAGE ADJUSTMENT. The Average Percentage
Adjustment is calculated by: (i) measuring the increase in base salary
awarded to each of the Company's senior officers,
(ii) expressing the increase in base salary as a
percentage of the prior year's base salary, and
(iii) finding the average of the percentage increases
awarded to all of the Company's senior officers.
(c) BONUS. For each fiscal year, the Executive shall have an
annual bonus opportunity with a minimum target bonus of no less than 75%
of his base salary payable pursuant to Subparagraph (a) during such
fiscal year.
(d) 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 Employment Term shall be taken into account in
determining the Executive's vested interest in stock-based awards
granted on or before July 31, 2000.
(e) INCENTIVE, SAVINGS, RETIREMENT, AND WELFARE BENEFIT PLANS.
Except as provided in Subparagraph (d), the Executive shall be entitled
to participate in all incentive compensation, savings, retirement, and
Welfare Benefit Plans in which he was a participant on July 31, 2000, on
a basis at least as favorable as provided to other senior executives. If
the Executive is no longer eligible to participate in a benefit plan of
the Company because
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of his reduced hours of employment, the Company shall provide a benefit
equivalent to the benefit to which Executive would have been entitled
under such plan if he had remained a full-time 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.
(f) 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 on July 31,
2000.
(g) 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.
(h) 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 plan 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 was attached as Appendix A
to the Agreement, had such agreement remained in effect throughout the
Employment Term, taking into account, among other things, the double
service crediting provided thereunder.
(i) Allowance for Office Expenses. In August, 2000, and in the
first month of each Contract Year beginning thereafter, the Company
shall pay Executive $36,000 as an allowance for the Executive's
expenses in maintaining an office.
7. Termination of Employment.
(a) DEATH. The Executive's employment shall terminate
automatically upon his death during the Employment Tenn.
(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.
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(c) EXECUTIVE'S TERMINATION. If the Executive terminates his
employment, 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 and identify his termination date. The Executive's
termination date shall be the date specified in the notice provided
pursuant to the preceding sentence.
(d) 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.
(e) 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.
8. 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 Amended Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Amended 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 Amended
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
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employment, and any stock options or other exercisable awards shall
remain exercisable as if the Executive's employment had terminated on
the sixth anniversary of the Effective Date.
(c) COMPANY'S TERMINATION FOR CAUSE. If the Executive's
employment is terminated for Cause, the Executive terminates his
employment without Good Reason during the First Employment Term, or the
Executive terminates his employment during the Second Employment Term,
this Amended 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. If the Company terminates the Executive's employment for
a reason other than Cause, death, or Disability, or the Executive
terminates his employment for Good Reason during the First Employment
Term, the Company shall continue to compensate the Executive hereunder
as if he had not terminated employment throughout the Employment Term.
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. Except as expressly provided
herein, this Amended 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. 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 Amended Agreement.
9. Additional Payments by the Company. If it is determined that any
payment hereunder other than a payment pursuant to this Paragraph or Paragraph
10, 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.
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10. Termination following Change of Control. If the Executive's
employment terminates during the Employment Term while a signed change of
control agreement between the Company and Executive ("Change of Control
Agreement") is in effect and following a change of control (as defined in the
Change of Control Agreement) 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.
11. 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 Amended Agreement). After termination of the
Executive's employment with the Company, the Executive shall not,
without the prior written consent of the Board or as may otherwise be
required by law or legal process or in order to enforce his rights
under this Amended 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 Amended 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.
12. Noncompetition. The Company's obligations hereunder are contingent
on the Executive signing the Noncompetition Agreement attached hereto as
Appendix A.
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
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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:
If to the Executive:
Xxxxxxx X. Xxxxxxx
0000 X. Xxxxxxxx Xxxx
Xxxxxxxx Xxxxxx, XX 00000
If to the Company or Board:
Flowserve, Inc.
000 Xxxx Xxx Xxxxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Vice President, Secretary and General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
15. Severability. Each provision of this Amended 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 Amended 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 Amended Agreement may not be assigned by the
Executive, because it is personal in nature. The Company may assign, delegate,
or transfer this Amended 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 Amended
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 Amended 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. Waiver of Claims. The Company shall provide the Executive with a
Release of Claims in the form as attached hereto as Appendix B. The Executive
agrees that the obligations of Company hereunder for periods after 1999 are
contingent on the Executive signing such Release not later than 21 days after
the receipt thereof and such Release becoming effective.
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18. Governing Law and Waiver. The laws of the State of New York shall
govern the construction, enforceability, and interpretation of this Amended
Agreement. The parties intend this Amended 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 Amended 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.
19. No Party Deemed Drafter. Neither the Company nor the Executive
shall be deemed to be the drafter of this Amended Agreement, including the
Appendices hereto, and, if this Amended Agreement or any provision thereof is
construed in any court or other proceeding, said court or other adjudicator
shall not construe this Amended Agreement or any provision thereof against
either party as the drafter thereof
20. No Oral Modifications. This Amended Agreement may not be modified
orally. Any change of this Amended Agreement must be made in writing and signed
by Executive and an officer of Company.
21. Counterparts. This Amended 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 Amended Agreement.
IN WITNESS WHEREOF, the parties have executed this Amended Agreement on
the date and year first above written.
ATTEST: FLOWSERVE CORPORATION
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxx
----------------------- -----------------------
Signature
Title: Chairman-Executive Committee
----------------------------
Vice President
-----------------------
Title
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxx
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APPENDIX A
NONCOMPETITION AGREEMENT
This Noncompetition Agreement is entered into by and between Flowserve
Corporation ("Company") and Xxxxxxx X. Xxxxxxx ("Executive"), effective as of
November 24, 1999.
BACKGROUND
The Executive has served as the Company's Board Chairman and Chief
Executive Officer. Contemporaneously herewith, Executive and the Company have
entered into an Amended Employment Agreement.
Because of the Executive's unique position with the Company and his
knowledge of the Company's business, he could cause the Company considerable
harm by providing his expertise to a competitor of the Company.
To protect the legitimate interests of the Company, the Company and the
Executive have agreed to enter into this Noncompetition Agreement in connection
with Company's employment of the Executive.
Therefore, the Executive agrees to be bound and restricted as provided
for in this Agreement:
1. The restrictions of this Agreement shall apply while the Executive
is employed by the Company and for a period of twenty-four months after the
termination of his employment.
2. While the restrictions of this Agreement apply, the Executive is
prohibited from engaging in any Competitive Activities. For purposes of this
Agreement, "Competitive Activities" means:
(a) Directly or indirectly accepting employment with,
consulting with, or assisting any business that is involved with the
sale, design, development, manufacture, or production of products
competitive with those sold (or anticipated to be sold) by the Company.
This prohibition shall apply to any employment with, involvement in, or
control of another business, whether as an employee, owner, manager,
sole proprietor, joint venturer, partner, shareholder, independent
contractor, or in any other capacity. This prohibition shall not
prevent the ownership of stock that is publicly traded, provided that
(i) the investment is passive, (ii) the Employee has no other
involvement with the corporation, (iii) the Employee's ownership
interest is less than one percent, and (iv) the Employee makes full
disclosure to the Company of the stock ownership at the time the
Employee acquires it.
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(b) Directly or indirectly diverting or influencing or
attempting to divert or influence any business of the Company to a
competitor.
(c) Directly or indirectly seeking to influence, facilitate,
or encourage any Company employee to leave its employ other than in the
course of performing his duties hereunder.
3. The restrictions outlined above shall be applicable and enforceable
throughout the entire world.
4. The Executive acknowledges that his breach of this Agreement would
cause immediate and irreparable harm to the Company. The Company shall be
entitled to obtain immediate injunctive relief in the form of a temporary
restraining order without notice, preliminary injunction, or permanent
injunction against the Executive to enforce the terms of this Agreement. The
Company shall not be required to post any bond or other security and shall not
be required to demonstrate any actual injury or damage to obtain such injunctive
relief from the courts.
5. Any recovery of damages by the Company shall be in addition to and
not in lieu of the injunctive relief to which the Company is entitled. In no
event shall a damage recovery be considered a penalty or liquidated damages, but
it shall be considered as measurable compensatory damages for the Executive's
breach of this Agreement.
6. If the Executive materially breaches this Agreement, his right to
any future payments pursuant to his employment agreement shall be forfeited as
of the date of the breach, except to the extent that such forfeiture applies to
benefits payable pursuant to a plan of the Company, if the forfeiture would
violate the terms of such plan.
7. If the Executive breaches this Agreement, the Company shall also be
entitled to recover all costs of enforcement, including reasonable attorneys'
fees, all expenses of litigation, and court costs.
8. This Agreement shall survive the termination of the Executive's
employment relationship with the Company and shall not be construed as limiting
the Company's right to terminate his employment at any time, subject to the
terms of any written employment agreement in effect at the time of termination.
9. No claim or cause of action that the Executive may have against the
Company, whether for breach of contract or otherwise, shall be a defense to the
enforcement of this Agreement against the Executive.
10. The Executive acknowledges that all of the restrictions contained
in this Agreement are reasonable and necessary to protect the Company's
legitimate interests. If a court determines that any provision of this Agreement
is too broad to be enforceable at law or in equity, the remaining
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terms shall remain unimpaired, and the unenforceable provision shall be deemed
replaced by a provision that is valid and enforceable and that most clearly
approximates the intention of the parties with respect to the enforceable
provision, as evidenced by the remaining valid enforceable provisions.
11. This Agreement shall be enforceable by the Company or any successor
in interest.
12. This Agreement may not be modified orally. Any modification of this
Agreement must reflected in a written agreement approved by the Company's Board
and signed by the Executive and the members of the Board's Executive Committee.
13. The Executive agrees to inform any prospective competing employer
about the existence of this Agreement before accepting new employment and shall
not agree, as a term of any new employment, that the new employer will defend
the Executive or pay his attorneys' fees in the event of a lawsuit brought by
the Company to enforce the terms of this Agreement.
14. This Agreement shall be construed to fulfill the purposes of the
Agreement and shall not be construed in favor of or against either party.
Subject to the preceding sentence, this Agreement shall be governed in all
respects by the laws of the State of New York.
15. This Agreement may be enforced in the applicable courts of Dallas
County, Texas or in any court where the Executive has breached or is alleged to
have breached this Agreement. The Executive agrees to submit to the exclusive
jurisdiction and venue of the applicable courts of Dallas County, Texas. Any
action filed by the Executive shall not affect the enforceability of this
provision, which shall govern.
FLOWSERVE CORPORATION
By /s/ Xxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxxx
-------------------------------- -----------------------------------
(Signature) Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxx 24 November 1999
-------------------------------- -----------------------------------
(Printed) Date
Chairman - Executive Committee
--------------------------------
(Office)
24 November 1999
--------------------------------
(Date)
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XXXXXXXX X
RELEASE OF CLAIMS
This Release of Claims is hereby granted by Xxxxxxx X. Xxxxxxx.
BACKGROUND
Xxxxxxx X. Xxxxxxx ("Executive") and Flowserve Corporation
("Company") are parties to an Amended Employment Agreement ("Amended
Agreement"), dated November 24, 1999. Pursuant to Paragraph 15 of the Amended
Agreement, the Company's obligations after 1999 are contingent on this Release
of Claims becoming effective.
In consideration of the amounts payable to him under the Amended
Agreement after 1999, the Executive agrees to the following release of claims:
RELEASE
In consideration of the Company's agreement to continue the Executive's
employment after 1999 pursuant to the terms of the Amended Agreement, the
Executive releases and discharges the Company, its divisions, subsidiaries,
predecessors and successors, and the officers, directors, agents, insurers, and
employees of any of the foregoing (all together, "Released Persons") from any
and all claims or actions of any kind directly or indirectly related to or in
any way connected with his employment with Company or his retirement therefrom
("Released Claims"); provided, however, the Released Claims shall not include
the Executive's rights to retirement or retiree benefits under any employee
benefit plan or his rights under the Amended Agreement, including, without
limitation, his right to indemnification or his right to obtain contribution in
the event of an entry of judgment against him as a result of any act or failure
to act for which he and the Company are jointly responsible. The Executive gives
this release regardless of whether the Released Claims are known or unknown. The
Executive further agrees that he will not initiate or participate as a party in
any lawsuit or claim against a Released Person based on or relating to any of
the Released Claims. The Released Claims include, but are not limited to, those
based on allegations of wrongful discharge and/or breach of contract and those
alleging discrimination on the basis of race, color, sex, religion, national
origin, age, handicap, or disability under Title VII of the Civil Rights Act of
1964, the Age Discrimination in Employment Act of 1967, the Rehabilitation Act
of 1973, the Equal Pay Act of 1963, the Americans with Disabilities Act of 1990,
the Civil Rights Act of 1991, or any other federal, state or local law, rule, or
regulation. The Released Claims do not include claims that arise after the date
on which Executive signs this Release of Claims.
THE EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN GIVEN A PERIOD OF
TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS RELEASE OF CLAIMS AND THAT HE
HAS BEEN ADVISED TO CONSULT WITH
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AN ATTORNEY BEFORE SIGNING IT. THE EXECUTIVE UNDERSTANDS THAT HE MAY REVOKE THIS
RELEASE OF CLAIMS BY PROVIDING NOTICE OF REVOCATION TO THE CHAIRMAN OF THE
COMPENSATION COMMITTEE OF THE COMPANY'S BOARD OF DIRECTORS WITHIN SEVEN (7) DAYS
AFTER THE DATE HE SIGNS THIS RELEASE OF CLAIMS AND THAT THE RELEASE OF CLAIMS
WILL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE SEVEN (7) DAY REVOCATION
PERIOD HAS EXPIRED. IF THE EXECUTIVE DOES NOT NOTIFY THE CHAIRMAN OF THE
COMPENSATION COMMITTEE OF HIS REVOCATION WITHIN SUCH SEVEN (7) DAY REVOCATION
PERIOD, THIS RELEASE OF CLAIMS SHALL BECOME EFFECTIVE.
/s/ Xxxxxxx X. Xxxxxxx 24 November 1999
------------------------------ -----------------------------
Xxxxxxx X. Xxxxxxx Date
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