Flowserve Posts Stein Litigation Settlement Notice and Documentation - Seite 2

The Action and Settlement involve derivative claims alleging that:  (1) statements made in Flowserve's proxy statement for the May 21, 2015 Annual Meeting of Shareholders (the "2015 Proxy Statement") regarding Flowserve's cash-based and equity-based incentive compensation plans were materially false or omitted material information in violation of § 14(a) of the Securities Exchange Act, 15 U.S.C. § 78n(a) and the applicable rules and regulations promulgated thereunder; and (2) that Flowserve's directors breached their fiduciary duties and/or violated § 14(a) by granting awards to directors and certain executive officers in 2015 and 2016 under Flowserve's equity-based compensation plans and its Annual Incentive Plan because those plans had expired or were never effective.

Flowserve denies each and all claims and contentions of wrongdoing asserted directly against it in this Action.  The Individual Defendants each deny each and all claims and contentions of wrongdoing with respect to the specific claims asserted against him or her  in this Action.  

Pursuant to the Settlement, the Defendants have agreed to take the following steps:  (1) the Individual Defendants, acting as Flowserve's board of directors, will pass resolutions regarding the Flowserve 2007 Annual Incentive Plan (the "AIP"), the Flowserve 2007 Long-Term Incentive Plan (the "LTIP"), and the Flowserve Equity and Incentive Compensation Plan (the "EICP") to approve, clarify, confirm, and ratify that the AIP and the LTIP are two compensation plans that are adopted under, and have the same expiration date as, the EICP, but which are maintained separate from the EICP and pursuant to which Annual Incentive Awards and Long-Term Incentive Awards (as each such term is defined in the EICP) may be made under and pursuant to the terms of the EICP; (2)  include in Flowserve's 2017, 2018, and 2019 annual meeting proxy statements the compensation discussion and analysis will contain certain  disclosures within the "Elements of the Executive Compensation Program – Overview" subsection of the CD&A and within the "Tax and Accounting Implications of Executive Compensation" subsection of the CD&A; and (3) that all proxy statements – whether annual or special – issued prior to December 31, 2019 proposing to reapprove or amend the EICP or approve a substantially similar substitute plan, the proposal shall make certain disclosures, to the extent such disclosures, in the reasonable view of management, remain relevant to such plan.