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EXHIBIT 10.16
FLUOR CORPORATION AND SUBSIDIARIES
Management Manual
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Section: Compensation Page: 129
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
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OBJECTIVE
To provide severance compensation to eligible executives of Fluor
Corporation and designated subsidiaries (the company) who leave the
company, depending on the circumstances and conditions leading to
termination.
ELIGIBILITY
Executives of Fluor Corporation and designated subsidiaries actively at
work who are participants in the Fluor Corporation and Subsidiaries
Executive Incentive Compensation Plan.
DEFINITIONS
For the purpose of the Plan, the following definitions apply:
A. VOLUNTARY SEPARATION
Action taken by an executive for personal reasons, to seek other
employment, to accept another position, for failure to return at
conclusion of leave, or to voluntarily retire.
B. INVOLUNTARY SEPARATION
1. Action taken by the company due to reduction in force
resulting from reorganization or reduced workload or other
similar circumstances whereby the executive's services are no
longer required on the job. Executives involuntarily
separated who meet the retirement criteria may elect
retirement.
2. Action taken by the company when an executive is covered by
the Americans with Disabilities Act and is unable to perform
his/her essential job functions with reasonable
accommodation.
C. INVOLUNTARY DISCHARGE
Action taken by the company for reasons other than stated in
Paragraph B. above including but not limited to absenteeism,
misconduct, insubordination, appearing at work under the
influence of a controlled substance or alcohol, unethical
behavior, disclosure of confidential information, sexual
harassment, employment discrimination, or unsatisfactory
performance.
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FLUOR CORPORATION AND SUBSIDIARIES
Management Manual
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Section: Compensation Page: 130
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
(Continued)
Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
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D. OFFICER
An executive who is a vice president or above of Fluor
Corporation, Fluor Daniel, Inc., Fluor Signature Services,
Fluor Global Services, Inc., or Fluor Constructors, Inc., who
participates in the Fluor Corporation and subsidiaries
Executive Incentive Compensation Plan.
E. COMPLETED YEARS OF ACCUMULATED SERVICE
A period of accumulated service with the company, subject to
the limitation set forth under Procedure, A.4.c.
F. BENEFICIARY
The beneficiary designated by the executive under the Fluor
Corporation Employee's Retirement Plan, or, if no such
designation has been made, then as designated under the Group
Life/Health Insurance Plan unless the executive otherwise
makes a beneficiary designation on the form provided by the
executive's corporate employer, or, in the absence of any
designation, the administrator or executor of the executive's
estate.
PROCEDURE
A. SEVERANCE PAY
1. Voluntary Separation
The company will not provide severance pay nor prorated
Incentive Compensation (Paragraph A under
"Definitions").
2. Involuntary Separation
Severance pay will be based on current base salary and
total completed years of accumulated service as follows:
a. Officers
1. Two weeks' severance pay for each completed
year of accumulated service up to 52 weeks.
2. Minimum eight weeks' severance.
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FLUOR CORPORATION AND SUBSIDIARIES
Management Manual
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Section: Compensation Page: 131
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
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Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
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b. Non-Officer Executives
1. Two weeks' severance pay for each completed year
of accumulated service up to 26 weeks.
2. Minimum four weeks' severance
3. Involuntary Discharge
a. The company will not provide severance pay nor consider
proration of Incentive Compensation (Paragraph C,
Definitions).
4. Limitations
a. Maximum severance pay will be 52 weeks for officers, 26
weeks for non-officer executives.
b. Minimum severance pay will be eight weeks for officers,
four weeks for non-officer executives.
c. The total completed years of accumulated service
calculated for a severance payment may only be used one
time in severance calculations.
d. For executives involuntarily separated and placed on
Leave of Absence in Lieu of Layoff, severance pay will
be based on completed years of accumulated service up
to the effective date of the Leave of Absence.
e. Officers in policy making positions who meet retirement
criteria will receive severance pay as follows:
1. Officers who meet the minimum retirement income
requirement set forth by federal law, excluding
any amount payable under this Plan, will receive
severance pay for only the period from the date of
termination until January 2 following the
officer's 65th birthday subject to the limitation
set forth under Procedure, A.2.a.
2. Officers who do not meet the minimum retirement
income requirement set forth by federal law,
computed excluding any amount payable under this
Plan, will receive severance pay as determined
under Procedure, A.2.a.
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Section: Compensation Page: 132
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
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Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
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f. In the case of involuntary separation due to an executive's
inability to perform his/her essential job functions with
reasonable accommodation, the executive's severance pay
amount will be reduced by the expected entitlements under
Fluor's short-term and long-term disability for the number
of weeks determined under Procedure A.2.a and b. If the
actual entitlements received by the employee are less than
that deducted from severance pay, the employee will be paid
the difference for the period of weeks for which the
employee received severance. This provision is not intended
to affect any state or federal benefits to which the
executive may be entitled.
g. In cases where the executive is entitled to legislated
severance pay in non-U.S. countries, executive's severance
pay amount will be reduced by any legislated severance
payments required of the company that are calculated with
reference to the number of weeks determined under Procedure
A.2.a and b.
5. Severance pay will be paid in a lump sum, or at the discretion
of the company, annual installments over a period not to exceed
the total number of weeks determined under Paragraph A.2.a. and
b. above.
6. In event of an executive's death prior to payment of the entire
entitlement, payment may be made to the designated beneficiary
in one lump sum or by continuation of installments at the
discretion of the executive's corporate employer.
B. INCENTIVE COMPENSATION
(As defined in the Executive Incentive Compensation Plan, Fluor
Corporation and Subsidiaries Management Manual)
1. Voluntary Separation
The company will not provide a prorated incentive award.
2. Involuntary Separation
Incentive Compensation may be considered based on the number of
completed months of service during the current fiscal year prior
to termination and consistent with the administration of the Plan
during the year of termination.
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Management Manual
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Section: Compensation Page: 133
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
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Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
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3. Involuntary Discharge
The company will not provide a prorated incentive award.
C. COMPANY AUTOMOBILES
In company locations where officers/directors may be
assigned company-owned automobiles, the following will
apply:
a. Voluntary Separation
Officers/directors who voluntarily retire will be
presented with the automobile that is currently
assigned as a gift.
b. Involuntary Separation
Officers/directors who are requested to take early
retirement will be presented with the automobile which
is currently assigned as a gift.
c. Involuntary Discharge
Officers/directors will not be given an automobile, and
it will not be available for purchase.
D. CLUB MEMBERSHIP
Company memberships will not be awarded to an executive
regardless of reason for termination.
E. AUTOMOBILE ALLOWANCE
1. In locations where executives receive a car
allowance/insurance, the following will apply:
a. Voluntary Separation
The company will not provide a car allowance/insurance.
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Management Manual
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Section: Compensation Page: 134
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
(Continued)
Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
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b. Involuntary Separation
The company will not provide a car
allowance/insurance.
c. Involuntary Discharge
The company will not provide a car
allowance/insurance.
F. INSURANCE COVERAGE
Applicable insurance coverage, i.e., group health, long-term
disability, executive health, etc., will cease on date of
termination. Where applicable, departing executive may elect
continued coverage through the Consolidated Omnibus Budget
Reconciliation Act (COBRA).
G. TIME OFF WITH PAY (TOWP) PROGRAM
Balance will be paid at time of termination.
H. STOCK BASED AWARDS
1. Voluntary Separation
Upon qualified retirement, awards become
100 percent vested.
2. Involuntary Separation
Upon qualified retirement, awards become 100 percent
vested.
3. Involuntary Discharge
Vested portion may be exercised.
I. LONG TERM INCENTIVE (LTI) PROGRAM
Applicable cash awards under the long-term incentive program
will not be prorated for any reason, except death or total
and permanent disability.
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FLUOR CORPORATION AND SUBSIDIARIES
Management Manual
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Section: Compensation Page: 135
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
(Continued)
Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
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J. WAIVERS
A settlement agreement and release form must be obtained
from employees in exchange for severance benefits. No
severance benefit will be due employees unless a settlement
and release agreement provided by the company has been
properly executed.
K. OUTPLACEMENT
In-house outplacement services are available.
L. PLAN TERMINATION
This Plan will expire December 31st., 2000. Any executive
whose employment terminates after the Plan expires, will not
be eligible for participation in the Plan. Further, no
benefits will accrue or be payable under the Plan after Plan
Termination.
M. EXCEPTION
Approved by the Chief Executive Officer of Fluor
Corporation.
