Amendment No. 3 To 1998 Restricted Stock Plan

AMENDMENT NO. 3 TO
FLOWSERVE CORPORATION
1998 RESTRICTED STOCK PLAN


Effective October 1, 2000, the Flowserve Corporation 1998 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 1998 Restricted Stock Dividend Plan.


1. Paragraph (d) of Section 2 of Article V "Accounts for Deferred
Shares" is amended to read 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 1998 Restricted
Stock Dividend Plan.


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


(e) Any Deferred Shares of a Participant and any amount
credited to the Deferred Shares Trust accounts of a
Participant will represent only an unsecured promise
of the Company to pay or 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 in kind
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