Amendment No. 2 To 1989 Restricted Stock Plan

AMENDMENT NO. 2 TO
FLOWSERVE CORPORATION
1989 RESTRICTED STOCK PLAN


Effective October 1, 2000, the Flowserve Corporation 1989 Restricted Stock Plan is amended to provide exclusively for the settlement of account by delivery of a fixed number of shares. The number of shares is fixed at the date of award and equals the number of shares held in the Participant's account for deferred restricted shares. Any cash received from the payment of dividends as of September 30, 2000 shall be deemed held pursuant to the 1989 Restricted Stock Dividend Plan.


1. Paragraph (d) of Section 2 of Article V "Accounts for Deferred
Restricted Shares" are amended to read in its entirety as
follows:


(d) Any dividends paid on the Deferred Shares in a
Participant's account ("Dividends") will be credited
to a Participant's deferred cash account established
pursuant to the Flowserve Corporation 1989 Restricted
Stock Dividend Plan.


2. The first and second sentences of Paragraph (e) of Section 2
of Article V "Accounts for Deferred Restricted Shares" is
amended to read as follows:


(e) Any Deferred Shares of a Participant credited to the
Deferred Shares Trust accounts of a Participant will
represent only an unsecured promise of the Company to
deliver the amount so credited in accordance with the
terms of this Article of the Plan. Neither a
Participant nor any beneficiary of a Participant will
acquire any right, title or interest in any asset of
the Company as a result of any Deferred Shares
credited to a Participant's account or accounts.


3. Paragraph (a) of Section 3 of Article V "Distribution of
Deferred Shares" is amended as follows:


(a) Deferred Shares will be distributed only in
accordance with the following sections, pursuant to
the election for a lump sum or installment
distribution in kind specified by the Participant.


(i) In the event a Participant ceased to be a
...