<PAGE>
EXHIBIT 10.5
September 24, 1999
Mr. Jim Stein
President and Chief Executive Officer
Fluor Global Services
Dear Jim,
It is my pleasure to inform you that at the December 1998 Organization and
Compensation Committee meeting, the Board of Directors of Fluor Corporation (the
"Company") selected you to participate in a Retention Program. The amount of
the retention award was $2,750,000. At your request the award has been
structured as follows:
Award Amount: $2,750,000
Retention Period: October 1, 1998 through October 31, 2001
Retention Agreement: The Award Amount is divided between the following two
components:
Housing
-------
You have previously been provided with a personal loan
of $1,006,841 secured by a deed of trust on your
residence. The loan provides for an interest rate of
4.52%, compounded annually with a balloon payment of
the entire amount due on termination of employment. The
loan presently states that it is subject to
acceleration in the event of your termination of
employment for any reason prior to October 31, 2001.
The Company will forgive the loan including accrued
interest in its entirety (a) if you remain continuously
employed by the Company until October 31, 2001, or (b)
if your employment terminates prior to that date due to
(i) death, (ii) permanent and total disability, (iii) a
Company-initiated termination for any reason other than
for-cause or (iv) following a Change of Control. If
your employment with the Company terminates for
<PAGE>
Jim Stein
September 24, 1999
Page 2
any other reason prior to October 31, 2001 (including,
without limitation, your voluntary termination or a
termination for cause) then this loan shall remain in
effect in accordance with its terms.
For purposes hereof, the term "Change of Control" shall
be deemed to have occurred if, (a) a third person,
including a "group" as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, acquires shares of
the Company having 25% or more of the votes that may be
cast for the election of directors of the Company or
(b) as a result of any cash tender or exchange offer,
merger or other business combination, or any
combination of the preceding (a "transaction"), the
persons who are the directors of the Company before the
transaction shall cease to constitute a majority of the
Board of Directors of the Company or any successor
thereto.
Accrual to Executive Deferral Compensation Program
--------------------------------------------------
("EDCP")
--------
You may earn $1,743,159, said amount to be adjusted as
provided below, if you remain continuously employed by
the Company until on or after October 31, 2001 (the
"EDCP Accrual"). During the period from October 1, 1998
to the date upon which the EDCP Accrual vests (if at
all), you will also be entitled to invest the EDCP
Accrual by selecting one or more of the crediting
options contained in the EDCP. Thereafter, the amount
of your EDCP Accrual, if vested, shall be adjusted
based upon the investment return that you would have
otherwise received had the EDCP Accrual been actually
earned as of October 1, 1998 and credited in your EDCP
account based upon your chosen crediting option through
the date of vesting. If no crediting option is
indicated, the EDCP Accrual will be automatically
credited as if you chose the Money Market crediting
option under the EDCP.
The EDCP Accrual, as adjusted, will vest and be
credited to your existing Company EDCP account (a) if
you remain continuously employed by the Company until
October 31, 2001
<PAGE>
Jim Stein
September 24, 1999
Page 3
or (b) if your employment terminates prior to that date
due to (i) death, (ii) permanent and total disability,
(iii) a Company-initiated termination other than on a
for-cause basis or (iv) following a Change of Control.
If in the event your employment terminates for any
reason prior to any such vesting date for any other
reason (including, without limitation, your voluntary
termination or a termination for cause), then the EDCP
Accrual, as adjusted, will be forfeited.
Please indicate your acknowledgment of the terms of the letter by signing in the
space provided and returning the original to me for your employee records. You
should also retain a copy for your file.
If you should have any questions, please give me a call at (949) 349-2000.
Sincerely,
Philip J. Carroll
Agreed by: Agreed by:
/s/ PHILIP J. CARROLL /s/ JAMES C. STEIN
------------------------------------ ------------------------------------
Philip J. Carroll James C. Stein
