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Exhibit 10.31
EMPLOYMENT AGREEMENT
[Executed by X.X. Xxxxxxxxx, X.X. XxXxxx, G.A. Xxxxxxxxxx, X.X. Xxxxx,
M.E. Xxxxxx, X.X. Xxxxxx, and H.D. Xxxx.]
EMPLOYMENT AGREEMENT, dated August 1, 1997 by and between Flowserve
Corporation (the "Company") and , (the "Executive").
This Agreement summarizes the terms and conditions of employment
between the Company and the Executive and cancels and supersedes all other
employment related agreements between the parties (including any such agreements
by and between the Executive and BW/IP, Inc.).
1. Term. This Agreement is effective as of August 1, 1997 and
terminates on July 31, 2001 (the "Term").
2. Position and Primary Place of Employment. During the Term, the
Executive shall serve as , or such other position assigned by the
Company. Beginning January 1, 1998 (or such later date set by the Company), you
will perform your services for the Company at its headquarters in Dallas, Texas.
3. Base Salary. During the Term, your base salary shall be determined
by the Company but shall in any event be no less than that in effect on August
1, 1997 ("Base Salary"). The Company shall review your Base Salary annually and
make such adjustments as it, in its discretion, determines.
4. Bonus. During the Term, your annual bonus opportunity shall be an
amount or percentage of your Base Salary equal to that provided to other peer
executives of the Company but shall in any event be no less than your annual
bonus opportunity in effect on August 1, 1997 ("Annual Bonus Opportunity").
5. Other Benefits. You shall be eligible for long term incentive
opportunities, equity-based compensation and retirement, welfare and fringe
benefits equal to those provided to other peer executives of the Company.
6. Termination Benefits. If (i) the Company terminates you without
Cause or (ii) you terminate with Good Reason (together, a "Qualifying
Termination"), you shall be eligible for the benefits described in Section 7(a).
If your employment with the Company is terminated for any other reason
(including Disability), you shall be entitled to the benefits described in
Section 7(b).
(a) For purposes of this Agreement, "Cause" means your (i)
willful and continued failure to perform your duties after you have
been requested to do so by the Chief Executive Officer of the Company
or (ii) engaging in illegal conduct or gross misconduct that is
materially injurious to the Company.
(b) For purposes of this Agreement, "Good Reason" means (i) a
substantial, detrimental change in your position, duties or status that
the
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Company fails to promptly remedy after you provided written notice to
the Company's Chief Executive Officer, (ii) a decrease in Base Salary
that is not part of a general reduction applied to other peer officers
of the Company, (iii) the Company's material failure to comply with
its obligations under this Agreement or (iv) the Company terminates
your employment without Cause.
(c) Your employment with the Company shall be terminated due
to Disability if you are unable to perform the primary duties of your
position for 180 days due to a physical or mental impairment.
7. Termination Benefits.
(a) If your employment with the Company is terminated in a
Qualifying Termination you shall receive the following benefits: (i)
accrued but unpaid Base Salary to the date of your termination, (ii)
any earned but unpaid bonus, (iii) any benefits for which you are
eligible under the terms of any Company benefit plan or arrangement,
(iv) a pro rata portion of your Annual Bonus Opportunity for the year
of termination and (v) Severance Benefits. For purposes of this
Agreement, "Severance Benefits" means the product of (X) the sum of
your Annual Base Salary as of the date of your termination and the
average of the annual bonus actually paid to you during the last two
calendar years and (Y) a multiple, which shall be three (3) if your
termination occurs before August 1,1998, two (2) if your termination
occurs after July 31, 1998 and before August 1, 1999 or one (1) if
your termination occurs on or after August 1, 1999 and on or before
July 31, 2001. Subject to Section 8, Severance Benefits shall be paid
in equal monthly payments over the number of years equal to the
applicable multiple (i.e., 3,2, or 1 depending on the date of your
termination) used to calculate the amount of your Severance Benefits.
Subject to Section 8, Severance Benefits shall not be offset or
reduced by compensation received from any other source after your
Qualifying Termination.
(b) If your employment is terminated before August 1, 2001 in
other than a Qualifying Termination, you shall only receive the
benefits described in Clauses (i), (ii) and (iii) of Section 7 (a).
(c) By executing this Agreement you acknowledge your
ineligibility for, and waive any other right you may have to receive,
any other severance or termination benefits provided by the Company or
its subsidiaries, except for such benefits as are provided under your
contract with the Company which provides severance benefits to you
subsequent to and contingent upon a change of control of the Company
(the "CIC Benefits"). In the event that you receive any CIC benefits,
then you shall be eligible to receive no benefits hereunder.
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8. Non-Competition and Non-Solicitation. During the period in which
Severance Benefits are payable, in the case of any Qualifying Termination, or
during the one year period following your termination for any other reason, you
agree not to (i) engage, anywhere in the world, in any business activity or
render any services or advice to any business, activity, person or entity that
competes in any material manner with the Company or its subsidiaries or (ii)
solicit or otherwise encourage employees of the Company or its subsidiaries to
accept employment with or provide services to any other business or entity. If
you violate this Section 8, all Severance Benefits shall immediately cease and
shall be irrevocably forfeited. In addition, you (i) acknowledge that the
Company and its subsidiaries will not have any adequate remedy at law and would
be irreparably harmed if you violate this Section 8 and (ii) agree that the
Company and its subsidiaries will be entitled to injunctive or equitable relief
in the event of any actual or threatened breach of this Section 8. The
provisions of this Section 8 will survive the termination of this Agreement.
9. Mandatory Release. In order to receive the severance benefits
hereunder, you must execute a general release of all claims against the Company,
its officers, its directors, its affiliates and its employees in a form
satisfactory to the Company, immediately prior to the receipt of your first
payment of any such benefits. If you fail to execute such release within thirty
(30) days of your termination from the Company, you will forfeit the right to
such benefits.
10. Choice of Law. This Agreement shall be governed by the law of New
York, without regard to its choice of law provisions.
IN WITNESS WHEREOF, the Executive and the Company have entered into
this Agreement as of the date first written above.
EXECUTIVE FLOWSERVE CORPORATION
By:
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Xxxxxxx X. Xxxxxxx
Chairman and CEO
