<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
FLUOR CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------------------
<PAGE> 2
[Fluor Logo]
Fluor Corporation
3333 Michelson Drive
Irvine, California 92730
January 30, 1995
Dear Stockholder:
You are cordially invited to attend the 1995 Annual Meeting of Stockholders
which will be held on Tuesday, March 14, 1995, beginning at 9:00 a.m. at the
Hyatt Regency Irvine, 17900 Jamboree Boulevard, Irvine, California.
Information about the meeting and the various matters on which the
stockholders will act is included in the Notice of Meeting and Proxy Statement
which follow. Also included is a Proxy/Voting Instruction Card and postage paid
return envelope.
It is important that your shares be represented at the meeting. Whether or
not you plan to attend, we hope that you will complete and return your
Proxy/Voting Instruction Card in the enclosed envelope as promptly as possible.
Sincerely,
/s/ L. G. McCraw
L. G. McCRAW
Chairman and Chief Executive Officer
<PAGE> 3
[Fluor Logo]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 14, 1995
The annual meeting of stockholders of Fluor Corporation will be held at the
Hyatt Regency Irvine, 17900 Jamboree Boulevard, Irvine, California, on Tuesday,
March 14, 1995, at 9:00 a.m. Pacific Standard Time, for the following purposes:
1. To elect four Class II directors to hold office for three years
and until their respective successors are elected and qualified.
The Board of Directors intends to nominate as directors the four
persons identified in the accompanying proxy statement.
2. To consider and act upon a proposal to ratify the appointment of
Ernst & Young LLP as auditors for the fiscal year ending October
31, 1995.
3. To consider and act upon a proposal to approve the Stock Plan for
Non-Employee Directors.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed January 18, 1995 as the record date for
determining the stockholders entitled to receive notice of and to vote at the
meeting.
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. A MAP
SHOWING THE LOCATION OF THE MEETING IS INCLUDED FOLLOWING THE PROXY STATEMENT.
PLEASE COMPLETE, SIGN, AND DATE THE ACCOMPANYING PROXY/VOTING INSTRUCTION
CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
/s/ P.J. Trimble
P.J. TRIMBLE
Senior Vice President-Law and
Secretary
January 30, 1995
Irvine, California
<PAGE> 4
[Fluor Logo]
------------------------
PROXY STATEMENT
JANUARY 30, 1995
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of Fluor Corporation, 3333 Michelson Drive, Irvine,
California 92730 (the "Company" or "Fluor"), of your proxy for use at the annual
meeting of stockholders to be held March 14, 1995 or at any adjournment thereof.
This proxy statement and the accompanying proxy/voting instruction card are
being mailed to all stockholders on or about February 2, 1995. The expense of
the solicitation will be paid by the Company. Some officers and regular
employees may solicit proxies personally and by telephone. Georgeson & Company
Inc. has been engaged to assist in the solicitation for which it will receive
approximately $14,000 from the Company. Your proxy is revocable by written
notice to the Secretary of the Company at any time prior to exercise, and it
shall be suspended if you are present at the meeting and elect to vote in
person.
On January 18, 1995, the record date fixed by the Board of Directors, the
Company had outstanding 82,729,129 shares of Common Stock. A majority of the
outstanding shares of Common Stock will constitute a quorum at the Annual
Meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
Abstentions are counted in tabulations of the votes cast on proposals presented
to stockholders, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved. Stockholders have one vote for
each share on all business of the meeting, except that stockholders have
cumulative voting rights with respect to the election at the meeting of four
directors. Cumulative voting rights entitle a stockholder to give one nominee as
many votes as is equal to the number of directors to be elected multiplied by
the number of shares owned by him, or to distribute his votes on the same
principle among two or more nominees as he sees fit. The four nominees for
director receiving the highest number of votes at the meeting will be elected.
With respect to the other proposals, the affirmative vote of the majority of
shares represented in person or by proxy at the annual meeting and entitled to
vote is required for approval.
Unless otherwise directed in the accompanying proxy, the persons named
therein will vote FOR the election of the four director nominees listed below,
FOR the proposal to ratify the appointment of Ernst & Young LLP as auditors for
the fiscal year ending October 31, 1995, and FOR the proposal to approve the
Stock Plan for Non-Employee Directors. As to any other business which may
properly come before the meeting, they will vote in accordance with their best
judgment, although the Company does not presently know of any other business.
<PAGE> 5
ELECTION OF DIRECTORS
PROPOSAL 1
Under the Company's Certificate of Incorporation and Bylaws, which provide
for a "classified" Board, four directors have been nominated for election at the
annual meeting to serve a three year term expiring at the annual meeting in 1998
and until their respective successors are elected and qualified. The Bylaws
presently provide for eleven directors, four each serving as Class I and Class
II directors and three serving as Class III directors.
Each of the four nominees listed below presently serves as a Class II
director of the Company. If any of the nominees should decline or be unable to
act as a director, the persons named in the proxy will vote in accordance with
their best judgment. The Company knows of no reason why the nominees would not
be available for election or, if elected, would not be able to serve.
In the event anyone other than the four nominees listed below should be
nominated for election as a director, the persons named in the proxy may vote
cumulatively for less than all the nominees.
BIOGRAPHICAL
The following biographical information is furnished with respect to each of
the four nominees for election at the annual meeting as Class II directors and
each of the other Class I and Class III directors whose terms will continue
after the annual meeting.
Class II Director Nominees(1):
- --------------
CARROLL A. CAMPBELL, JR., age 54.
Director since January 19, 1995.
PHOTO President and Chief Executive Officer of the American Council of
Life Insurance, Washington, D.C.; formerly two-term Governor of
South Carolina from 1986; formerly four-term member of the U.S.
House of Representatives from 1978.
- --------------
- --------------
ROBERT V. LINDSAY, age 69.
Director since 1982; Chairman of Audit Committee and member of
Executive and Organization and Compensation Committees.
PHOTO Retired President of J. P. Morgan & Co. Incorporated, a bank
holding company, and its wholly owned subsidiary, Morgan
Guaranty Trust Company of New York, New York.
- -------------- Mr. Lindsay also is a director of The Chubb Corporation, New
York, New York; Hudson Chartered Bancorp, Inc., La Grange, New
York; Lomas Financial Corp., Dallas, Texas; J. P. Morgan
(Suisse) S.A., Geneva, Switzerland; Russell Reynolds
Associates, Inc., New York, New York; United Meridian Corp.,
Dallas, Texas; and is senior advisor to Unibank Denmark A/S,
Copenhagen, Denmark.
2
<PAGE> 6
- --------------
LESLIE G. McCRAW, age 60.
Director since 1984; Chairman of Executive Committee and member
of Governance Committee. Chairman of the Board since 1991;
PHOTO Chief Executive Officer since 1990; formerly Vice Chairman of
the Board from 1990; formerly President from 1988; joined the
Company in 1975.
Mr. McCraw also is a director of Allergan, Inc., Irvine,
- -------------- California; and Multimedia, Inc., Greenville, South Carolina.
- --------------
MARTHA R. SEGER, age 62.
Director since 1991; member of Audit and Governance Committees.
PHOTO Distinguished Visiting Professor of Finance, American Graduate
School of International Management, Glendale, Arizona; formerly
John M. Olin Distinguished Fellow, University of Arizona from
1991; formerly Member, Board of Governors of the Federal
Reserve System from 1984.
- --------------
Dr. Seger also is a director of Amoco, Chicago, Illinois;
Providian Corp., Louisville, Kentucky; Johnson Controls,
Milwaukee, Wisconsin; Kroger Company, Cincinnati, Ohio;
Tucson Electric Power Company, Tucson, Arizona; and Xerox
Corporation, Stamford, Connecticut.
Class III Directors -- Term Expires 1996(1):
PETER J. FLUOR, age 47.
Director since 1984; member of Audit and Organization and Compensation
Committees.
President and CEO of Texas Crude Energy, Inc., Houston, Texas since 1980; joined
that company in 1972.
Mr. Fluor also is a director of Seagull Energy Corporation, Houston, Texas; and
a member of the advisory board of Texas Commerce Bank National Association,
Houston, Texas.
BOBBY R. INMAN, age 63.
Director since 1985; Chairman of Governance Committee and member of Executive
and Organization and Compensation Committees.
Admiral, U.S. Navy (Retired).
Admiral Inman also is a director of Science Applications International
Corporation, La Jolla, California; SBC Communications Inc. (formerly
Southwestern Bell Corporation), San Antonio, Texas; Temple-Inland Inc.,
Diboll, Texas; and Xerox Corporation, Stamford, Connecticut.
BUCK MICKEL, age 69.
Director since 1977.
Retired 1987 as Vice Chairman of the Board; formerly President from 1984.
Mr. Mickel also is a director of Delta Woodside Industries, Greenville, South
Carolina; Duke Power Company, Charlotte, North Carolina; Emergent Group, Inc.,
Greenville, South Carolina; Insignia Financial Corporation, Greenville, South
Carolina; Liberty Corporation, Greenville, South Carolina; Monsanto Company,
St. Louis, Missouri; Nations Bank Corporation, Atlanta, Georgia; and RSI
Holdings, Inc., Greenville, South Carolina.
3
<PAGE> 7
Class I Directors -- Term Expires 1997(1):
HUGH K. COBLE, age 60.
Director since 1984.
Vice Chairman since April, 1994; formerly Group President of Fluor Daniel,
Inc.(2) from 1986; joined the Company in 1966.
Mr. Coble is also a director of The Duriron Company, Inc., Dayton, Ohio.
DAVID P. GARDNER, age 61.
Director since 1988; member of Governance and Organization and Compensation
Committees.
President of the William and Flora Hewlett Foundation since 1993; formerly
President of the University of California from 1983; and formerly President of
the University of Utah from 1973.
Dr. Gardner also is a director of the John Alden Financial Corporation, Miami,
Florida; and the First Security Corporation, Salt Lake City, Utah.
WILLIAM R. GRANT, age 70.
Director since 1982; Chairman of Organization and Compensation Committee and
member of Executive and Audit Committees.
Chairman of the Board of Galen Associates, Inc., New York, New York, since 1989;
formerly Chairman of the Board of New York Life International Investment Inc.
from 1987.
Mr. Grant also is a director of Allergan, Inc., Irvine, California; New York
Life Insurance Company, New York, New York; Seagull Energy Corporation,
Houston, Texas; SmithKline Beecham PLC, London, England; and Witco
Corporation, New York, New York.
VILMA S. MARTINEZ, age 51.
Director since 1993; member of Audit and Governance Committees.
Partner in Munger, Tolles & Olson, Los Angeles, California since 1982.
Ms. Martinez also is a director of Anheuser-Busch Companies, Inc., St. Louis,
Missouri; and Sanwa Bank California, Los Angeles, California.
- ---------------
(1) Except as otherwise indicated, all positions are with the Company.
(2) Fluor Daniel, Inc. is a wholly owned subsidiary of the Company which
provides design, engineering, procurement, construction management,
maintenance and technical services to a wide range of industrial,
commercial, utility, natural resources, energy and governmental clients.
4
<PAGE> 8
STOCK OWNERSHIP
The following information is furnished with respect to each of the four
director nominees, each of the other seven current directors and the Named
Executive Officers and all current directors and executive officers of the
Company as a group as to ownership of shares of Common Stock of the Company as
of January 18, 1995.
<TABLE>
<CAPTION>
CONSISTING IN PART OF SHARES
UNDER/WITH
--------------------------------
VOTING AND
SHARES EXERCISABLE INVESTMENT POWER
BENEFICIALLY STOCK -----------------
OWNED (1)(2)(4) OPTIONS SOLE SHARED
---------------- ------------ ------- -------
<S> <C> <C> <C> <C>
Class II Director Nominees:
Carroll A. Campbell, Jr. ................
Robert V. Lindsay........................ 1,000 1,000
Leslie G. McCraw(3)...................... 226,632 117,802 108,830
Martha R. Seger.......................... 100 100
Class III Directors:
Peter J. Fluor........................ 18,622 18,622
Bobby R. Inman........................ 1,000 1,000
Buck Mickel........................... 5,000 5,000
Class I Directors:
Hugh K. Coble(3)...................... 78,285 32,377 45,908
David P. Gardner...................... 600 600
William R. Grant...................... 480 480
Vilma S. Martinez..................... 100 100
Other Named Executive Officers:
Donald L. Blankenship.................... 30,432 6,792 23,640
James O. Rollans......................... 56,333 22,200 34,133
P. Joseph Trimble........................ 22,157 7,890 14,267
All directors and executive officers (27)
including the above...................... 790,520 316,389 470,480 3,991
</TABLE>
- ---------------
(1) Each individual owns less than .3% and the group owns approximately 1.0% of
the outstanding shares of Common Stock of the Company.
(2) In addition to the foregoing beneficial ownership amounts, the Directors
listed below have elected the Common Stock valuation method for valuing all
or a portion of their deferred directors' fees (see section entitled
"Directors' Fees" at page 14 hereof) and, as of January 18, 1995, such
amounts constitute the economic equivalent of the following numbers of
shares of Common Stock:
<TABLE>
<CAPTION>
ECONOMIC EQUIVALENT
NUMBER OF SHARES
-------------------
<S> <C>
Peter J. Fluor....................................... 11,331
David P. Gardner..................................... 492
William R. Grant..................................... 16,964
Robert V. Lindsay.................................... 11,761
Vilma S. Martinez.................................... 1,639
</TABLE>
(3) This individual is also a Named Executive Officer as defined in the section
entitled "Summary of Cash and Certain Other Compensation" on page 10 below.
(4) In addition, each non-employee director will be awarded 1,000 shares of
restricted stock under the Stock Plan for Non-Employee Directors, subject to
stockholder approval (see Proposal 3 herein).
COMMITTEES OF THE BOARD
The standing committees of the Board consist of an Executive Committee, an
Audit Committee, an Organization and Compensation Committee and a Governance
Committee.
5
<PAGE> 9
Executive Committee
When the Board is not in session, the Executive Committee has all of the
power and authority of the Board except with respect to amending the Restated
Certificate of Incorporation; adopting an agreement of merger or consolidation;
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Company's property and assets; recommending to the
stockholders a dissolution of the Company or a revocation of the dissolution;
amending the Bylaws; the declaration of a dividend; or the issuance of stock.
The members of the Executive Committee are Leslie G. McCraw (Chairman), William
R. Grant, Bobby R. Inman and Robert V. Lindsay. The Executive Committee held
five meetings during fiscal year 1994.
Audit Committee
The principal duties of the Audit Committee are to nominate the firm of
independent auditors for appointment by the Board; to meet with the independent
auditors to review and approve the scope of their audit engagement and the fees
related to such work; to meet with the Company's financial management, internal
audit management and independent auditors to review matters relating to internal
accounting controls, the internal audit program, the Company's accounting
practices and procedures and other matters relating to the financial condition
of the Company and its subsidiaries; and to report to the Board periodically any
conclusions or recommendations the Audit Committee may have with respect to such
matters. The members of the Audit Committee are Robert V. Lindsay (Chairman),
Peter J. Fluor, William R. Grant, Vilma S. Martinez and Martha R. Seger, none of
whom is a current or former officer or employee of the Company or any of its
subsidiaries. The Audit Committee held five meetings during fiscal year 1994,
four regular meetings and a special meeting to review and approve the Company's
1993 Annual Report, Form 10-K and proxy materials. At the end of each of the
regular meetings, the members met privately with the Company's independent
auditors without any Company officers or other personnel present.
Organization and Compensation Committee
The principal duties of the Organization and Compensation Committee are to
review corporate organizational structures; to review key employee compensation
policies, plans and programs; to monitor performance and compensation of
employee-directors and officers of the Company and other key employees; to
prepare recommendations and periodic reports to the Board concerning such
matters; and to function as the Committee which administers the long-term
incentive programs referred to in the Executive Compensation section hereof. The
members of the Organization and Compensation Committee are William R. Grant
(Chairman), Peter J. Fluor, David P. Gardner, Bobby R. Inman and Robert V.
Lindsay, none of whom is a current or former officer or employee of the Company
or any subsidiary. The Organization and Compensation Committee held five
meetings, and took action by unanimous written consent on one occasion during
fiscal year 1994.
Governance Committee
The function of the Governance Committee is to seek out, evaluate and
recommend to the Board qualified nominees for election as directors of the
Company; to recommend directors of the Company for election as members of
Committees of the Board; to recommend new Committees to the Board; and to
consider other matters including the size and composition of the Board and
Committees and other issues of corporate governance. The members of the
Governance Committee are Bobby R. Inman (Chairman), David P. Gardner, Vilma S.
Martinez, Leslie G. McCraw and Martha R. Seger. During fiscal year 1994, the
Governance Committee held four meetings. The Governance Committee will give
appropriate consideration to qualified persons recommended by stockholders for
nomination as directors of the Company provided that such recommendations are
accompanied by information sufficient to enable the Governance Committee to
evaluate the qualifications of the nominee.
NOTICE OF DIRECTOR NOMINATIONS
The Company's Bylaws also require that the Secretary must receive written
notice of all persons to be nominated as a director at an annual meeting, other
than nominations made at the direction of the Board of Directors, not less than
30 nor more than 60 days prior to the annual meeting at which the election will
take
6
<PAGE> 10
place (or not later than 10 days after public disclosure of such meeting if such
disclosure occurs less than 40 days prior to the date of such meeting). The
notice must set forth (a) the stockholder's name and address, and the number of
shares of Common Stock beneficially owned by such stockholder, (b) such
information with respect to the nominee as would have to be included in the
Proxy Statement if such person were a nominee included in that Statement and (c)
a consent to serve as director signed by such nominee.
BOARD AND COMMITTEE ATTENDANCE
During fiscal year 1994, the Board held six meetings, including four
regular meetings, one of which was followed by an extensive strategic planning
session, and two special meetings. The Board took action by unanimous written
consent on one occasion. Each of the directors attended at least 75% of the
aggregate number of meetings of the Board and of the Board Committees on which
they served.
OTHER MATTERS
Vilma S. Martinez, a director of the Company, is a partner in the law firm
of Munger, Tolles and Olson. Certain subsidiaries of the Company retained the
law firm during fiscal year 1994 and have continued to retain the firm in fiscal
1995. The amount of fees paid to the firm in fiscal 1994 did not exceed five
percent of the law firm's gross revenues for the firm's last full fiscal year.
In fiscal 1994, the Company made an interest-free loan in the amount of
$200,000 to Charles R. Cox, an executive officer of the Company, to be used to
defray expenses associated with Mr. Cox's relocation to Fluor Daniel's
Greenville, South Carolina office. As of October 31, 1994, $200,000 was
outstanding. The loan is due in four equal annual installments beginning
February 1, 1995.
In December 1994, the Company made an interest-free loan in the amount of
$321,553 to Richard M. Teater, an executive officer of the Company, to defray
expenses associated with Mr. Teater's relocation to Fluor Daniel's Irvine,
California headquarters. The loan is due in five equal annual installments
beginning January 31, 1996.
ORGANIZATION AND COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
During fiscal 1994, as part of its ongoing reengineering effort, the
Company made substantial changes in its management and organizational structure.
Two senior levels of management structure were eliminated. The Executive
Committee of the Board was restructured to include only the CEO and the other
non-employee Board committee chairmen. More authority and responsibility, with
attendant accountability, were delegated to the operating levels of the
organization. A Leadership Team, which consists of all of the Company's
executive officers, is focused on overall Company performance and monitors the
progress of the operating units in relation to their strategic and operating
objectives.
The Company's compensation programs are designed to attract, motivate and
retain key employees with incentives that are linked to various performance
measures and to enhance shareholder value. The Company's executive compensation
program consists of three main components: 1) base salary; 2) potential for an
annual bonus based on overall Company performance as well as individual
performance; and 3) the opportunity to earn long-term cash and stock-based
incentives which are intended to encourage the achievement of superior results
over time and to align executive officer and shareholder interests. The second
and third elements constitute the "at-risk" portion of the compensation program
with the CEO's "at risk" compensation targeted at 73%. For fiscal year 1994, the
percentage of total compensation earned by the Named Executive Officers which
was of the "at risk" type was approximately 66%. The overall percentage of "at
risk" compensation earned was 12% lower than the previous year due primarily to
a reduced level of option exercises during the year. The nature of the long-term
programs as well as the extended vesting and exercise periods for stock options
mean that executives may realize their incentive awards at a substantially later
time than when the shareholders benefit from stock price appreciation. To
further align management's interests with those of the shareholders, the
Company, on the recommendation of this Committee, has adopted stock ownership
targets for its officers. These target guidelines are intended to encourage
stock ownership by the company's management group. In the case of the CEO, the
targeted stock ownership guideline is 700% of base salary.
7
<PAGE> 11
The philosophy for establishing specific compensation levels for members of
the Leadership Team and other key employees is to link total compensation to
achievement of the Company's business goals and to measure total compensation
against that of a broad group of general industry companies of similar size.(1)
For this purpose, this Committee uses the surveys of two of the major
compensation consulting firms, Hewitt and Associates and Towers Perrin, as
reference points. The general policy of the Committee is to position executive
base salaries, including that of the CEO, at approximately the 50th percentile
of the general industry group, with salary plus bonus at the 50th to 60th
percentile when targeted performance is attained. Total compensation is
positioned at the 75th percentile range based upon stock price appreciation and
achievement of earnings exceeding target levels, with the potential for
additional compensation up to the 90th percentile in total compensation for
extraordinary performance as measured by the achievement of specific earnings
growth and/or stock price objectives set by this Committee.
Under the Company's bonus plan, a minimum rate of return on average
stockholders' equity must be achieved before bonuses can be paid and further
limits are placed on the maximum amount of earnings that can be paid out as
bonuses. Bonuses may not be paid unless net earnings, excluding extraordinary,
unusual or infrequently occurring items, exceed a 6% return on average
stockholders' equity. Further, the total amount of bonuses paid may not exceed
either (a) 20% of pre-tax earnings (excluding extraordinary, unusual or
infrequently occurring items and the award fund itself) or (b) 10% of average
stockholders' equity. The plan covers approximately 675 management employees,
including all Named Executive Officers other than Mr. Blankenship(2). The target
amount payable out of the fund to each executive is based on the executive's
bonus grade, with the actual amount paid based upon a combination of various
company performance criteria, and upon individual performance. The bonus award
for the CEO is determined by this Committee and the bonus award of each other
executive officer is reviewed and approved by this Committee. For fiscal 1994,
bonus awards to the Named Executive Officers as a group placed salary plus bonus
above the 50th to 60th percentile range based upon our appraisal of their and
the Company's outstanding performance. The salary level and bonus award for Mr.
McCraw was determined by reference to the target levels for the general industry
group discussed above, and were above the target percentiles on the basis of
achievement of superior operating results by both Fluor Daniel and Massey and on
our subjective evaluation of his achievement of objectives in the following key
results areas: strategic planning, overall leadership, quality of external
relations, internal teamwork, ethics and management succession.
All Leadership Team members participate in the Company's long-term
incentive program. This program's primary purpose is to offer an incentive for
the achievement of superior operating results, to align executive officer and
stockholder interests, and to foster the retention of key management personnel.
It is the Committee's intent that all amounts to be awarded under this program
qualify as performance-based compensation under IRS definitions.
Under the long-term incentive program, the Committee each year may make
grants of the following: (a) cash incentive awards which are based upon meeting
three-year earnings targets established by the Committee; (b) stock options
which become exercisable over a four year period and which have value only if
shareholder value is increased and (c) restricted stock which may be awarded
only if return on equity targets are achieved. The weighting of awards between
the earnings-based cash portion and the stock portion is primarily a function of
responsibility with the more senior executives having a greater portion of their
awards dependent on stock performance. The 1994 awards to Mr. McCraw and other
Leadership Team members were based on placing each of their total compensation
levels in the mid-range of the general industry group if target performance was
achieved. To achieve higher than mid-range compensation up to the 75th
percentile range would require performance in excess of the established targets.
Also for 1994, participating Leadership
- ---------------
(1) This group covers a broad range of industries and is not limited to
companies in the Dow Jones Heavy Construction Group that is used for the
Performance Graph set forth on page 14 hereof.
(2) Mr. Blankenship participates in the A.T. Massey Bonus Plan which covers
management employees of A.T. Massey and provides annual bonus awards based
on individual and company performance. Mr. Blankenship's awards under the
A.T. Massey Bonus Plan are reviewed and approved by this Committee.
8
<PAGE> 12
Team members received a payout of a previously granted cash incentive award
which was based upon achieving 104% of the target amount for fiscal 1992 through
1994 earnings performance.
After the end of the fiscal year, a new Directors Achievement Award Program
was recommended by this Committee and approved by the Board. The purpose of this
program is to focus the Leadership Team members on maximizing overall Company
financial performance and achieving substantial increases in shareholder value.
The program provides for performance-contingent cash and stock-based awards for
members of the Leadership Team which become payable only if the very aggressive
earnings growth and stock price performance goals established by this Committee
are achieved within a limited time frame. The Committee intends that all awards
under this program will qualify as performance-based pay under IRS definitions.
All amounts paid or accrued during fiscal year 1994 under the above
described plans and programs are included in the tables which follow. No member
of this Committee is a former or current officer or employee of the Company or
any of its subsidiaries.
ORGANIZATION AND COMPENSATION COMMITTEE
William R. Grant David P. Gardner Robert V. Lindsay
Peter J. Fluor Bobby R. Inman
January 30, 1995
9
<PAGE> 13
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended October 31, 1992,
1993 and 1994, the cash compensation paid by the Company and its subsidiaries,
as well as certain other compensation paid or accrued for those years, to each
of the five most highly compensated executive officers of the Company (the
"Named Executive Officers") in all capacities in which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS
------------------------------------- ----------------------- PAYOUTS
OTHER RESTRICTED SECURITIES --------
ANNUAL STOCK UNDERLYING LTIP ALL OTHER
SALARY ($) BONUS ($) COMPENSATION AWARD(S) OPTIONS/ PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR (A) (A) ($)(B) ($)(C) SARS(#) ($) ($)(D)
- ----------------------------- ------ ---------- --------- ------------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
L. G. McCraw -- Chairman and FY1994 $710,061 $700,000 $106,252 $488,019 57,940 $239,000 $272,279
Chief Executive Officer FY1993 $680,040 $610,000 $ 63,431 $492,963 57,940 $185,604 $142,416
FY1992 $647,323 $525,000 $ 39,631 $575,802 37,630 $189,328 $121,894
H. K. Coble -- Vice Chairman FY1994 $400,020 $290,000 $ 49,793 $209,028 24,810 $111,135 $148,275
FY1993 $377,580 $290,000 $ 30,887 $211,145 24,810 $100,943 $237,373
FY1992 $359,573 $265,000 $ 19,795 $267,142 17,450 $ 94,672 $ 89,783
D. L. Blankenship -- Chairman FY1994 $308,340 $270,000 $ 34,269 $337,993 8,770 $ 0 $163,948
and Chief Executive FY1993 $275,032 $230,000 $ 13,310 $ 74,599 8,770 $ 0 $ 94,646
Officer, A. T. Massey Coal FY1992 $237,216 $200,000 $ 6,844 $150,136 4,340 $ 0 $ 68,552
Company, Inc.
J. O. Rollans -- Senior Vice FY1994 $322,707 $250,000 $ 25,856 $136,904 16,260 $ 51,146 $ 88,594
President/Chief FY1993 $250,020 $200,000 $ 14,396 $138,291 16,260 $ 46,456 $ 37,691
Administrative Officer FY1992 $219,350 $150,000 $ 9,226 $122,877 8,060 $ 94,672 $ 24,593
P. J. Trimble -- Senior Vice FY1994 $300,000 $200,000 $ 10,908 $ 59,599 7,100 $ 99,185 $117,728
President, Law & Secretary FY1993 $285,000 $165,000 $ 9,423 $ 0 0 $ 90,089 $118,283
FY1992 $273,898 $145,000 $ 6,039 $ 80,100 2,630 $118,328 $100,329
</TABLE>
- ---------------
(A) Amounts shown include cash compensation earned and received by executive
officers as well as amounts earned but deferred at the election of those
officers.
(B) Amounts shown as Other Annual Compensation represent restricted unit
payments for the benefit of each Named Executive Officer to compensate for
federal and state withholding taxes arising from the lapse of restrictions
on restricted stock held by such Named Executive Officer.
(C) The amount reported in the table represents the market value at the date of
grant, without giving effect to the diminution in value attributable to the
restrictions on such stock. In fiscal years 1992, 1993, and 1994, the
Company awarded 39,580, 30,110 and 46,480 shares to all Named Executive
Officers as a group vesting at the rate of 10% per year. As of the end of
the 1994 fiscal year, the restricted stock holdings for the above consisted
of the following: (i) Mr. McCraw: 60,427 shares with a value of $2,979,039;
(ii) Mr. Coble: 36,973 shares with a value of $1,821,931; (iii) Mr.
Blankenship: 14,165 shares with a value of $698,512; (iv) Mr. Rollans:
15,441 shares with a value of $761,434; and (v) Mr. Trimble: 10,983 shares
with a value of $540,932. As of the end of fiscal year 1994, aggregate
restricted stock holdings for the Company consisted of 653,810 shares with a
value of $32,241,005 at the then current market value, without giving effect
to the diminution of value attributable to the restrictions on such stock.
Quarterly dividends of $.15 are currently paid to all shareholders of
record.
(D) The total amounts shown in this column for the last fiscal year consist of
the following: (i) Mr. McCraw: $104,200 -- Company contributions and other
allocations to defined contribution plans and related excess benefit plans;
$168,079 -- Benefit attributable to Company-owned life insurance policy;
(ii) Mr. Coble: $50,002 -- Company contributions and other allocations to
defined contribution plans and related excess benefit plans;
$98,273 -- Benefit attributable to Company-owned life insurance policy;
(iii) Mr. Blankenship: $38,484 -- Benefit attributable to company-owned life
insurance policy; $20,464 -- Miscellaneous relocation expenses;
$105,000 -- Replacement amount for former A. T. Massey Retention Plan; (iv)
Mr. Rollans: $50,836 -- Company contributions and other allocations to
defined contribution plans and related excess benefit plans;
$37,758 -- Benefit attributable to Company-owned life insurance policy; and
(v) Mr. Trimble: $42,162 -- Company contributions and other allocations to
defined contribution plans and related excess benefit plans;
$75,566 -- Benefit attributable to Company-owned life insurance policy.
10
<PAGE> 14
STOCK OPTIONS
The following table contains information concerning the grant of stock
options made during fiscal 1994 under the Company's long-term incentive program
to the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR (A)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANT
UNDERLYING GRANTED TO DATE
OPTIONS EMPLOYEES EXERCISE PRESENT
GRANTED IN FISCAL PRICE EXPIRATION VALUE
NAME (B)(C) YEAR ($/SH) (D) DATE ($)(E)
---- ---------- ---------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
L. G. McCraw.................... 57,940 7.5% $43.1875 12/06/2004 $804,787
H. K. Coble..................... 24,810 3.2% $43.1875 12/06/2004 $344,611
D. L. Blankenship............... 8,770 1.1% $50.6875 09/12/2004 $143,039
J. O. Rollans................... 16,260 2.1% $43.1875 12/06/2004 $225,851
P. J. Trimble................... 7,100 0.9% $43.1875 12/06/2004 $ 98,619
</TABLE>
- ---------------
(A) As a matter of policy, no SARs were granted to any of the Named Executive
Officers.
(B) Options granted in fiscal year 1994 are exercisable starting 12 months after
the grant date, with 25% of the shares covered thereby becoming exercisable
at that time and with an additional 25% of the option shares becoming
exercisable on each successive anniversary date, with full vesting occurring
on the fourth anniversary date.
(C) The options were granted for a term of 10 years, subject to earlier
termination in certain events related to termination of employment.
(D) The exercise price and tax withholding obligations related to exercise may
be paid by delivery of already owned shares or by offset of the underlying
shares, subject to certain conditions.
(E) Present values were calculated using the Black-Scholes option pricing model
which has been adjusted to take dividends into account. Use of this model
should not be viewed in any way as a forecast of the future performance of
the Company's stock. The estimated present value of each stock option is
$13.89 based on the following inputs:
<TABLE>
<S> <C>
Stock Price (Fair Market Value) at Grant (12/06/94)............... $43.1875
Exercise Price.................................................... $43.1875
Expected Option Term.............................................. 6 Years
Risk-Free Interest Rate........................................... 7.50%
Stock Price Volatility............................................ 23.8%
Dividend Yield.................................................... 1.2%
</TABLE>
For Mr. Blankenship's option grant present value, a stock/exercise price
assumption of $50.6875 (fair market value at 9/12/94 grant date) was used
in the calculation. This resulted in a present value of $16.31 per option.
The model assumes: (a) an Expected Option Term of 6 years which reflects a
reduction of the actual 10-year life of the option based on historical data
regarding the average length of time an executive holds an option before
exercising; (b) a Risk-Free Interest Rate that represents the interest rate
on a U.S. Treasury Note with a maturity date corresponding to that of the
Expected Option Term; (c) Stock Price Volatility is calculated using daily
stock prices over a one-year period from December 6, 1993 to December 6,
1994; and (d) Dividend Yield is calculated using the annual dividend rate
in effect at date of grant ($.52 per share). Notwithstanding the fact that
these options are non-transferable, no discount for lack of marketability
was taken.
11
<PAGE> 15
OPTION/SAR EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Named
Executive Officers, concerning the exercise of options during the last fiscal
year and unexercised options and SARs held as of the end of the fiscal year:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
ACQUIRED ON VALUE AT FISCAL YEAR END (#) AT FISCAL YEAR END ($)(C)
EXERCISE REALIZED ----------------------------- -----------------------------
NAME (#)(A) ($)(B) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
L. G. McCraw...... 5,033 $102,862 117,802 129,618 $1,455,856 $752,920
H. K. Coble....... 24,087 $412,732 32,377 56,506 $ 206,621 $327,669
D. L. Blankenship. 0 $ 0 6,792 18,328 $ 36,754 $ 53,469
J. O. Rollans..... 2,606 $ 52,625 22,200 34,500 $ 180,544 $201,450
P. J. Trimble..... 7,593 $155,640 7,890 11,045 $ 51,532 $ 64,199
</TABLE>
- ---------------
(A) Includes, with respect to the exercise of free-standing (cash-only) SARs,
the number of shares with respect to which the SARs were exercised.
(B) Market value of underlying securities on date of exercise, minus the grant
price.
(C) Market value of underlying securities at fiscal year-end, minus the grant
price.
LONG-TERM INCENTIVE AWARDS
The following table provides information concerning cash-incentive awards
made during fiscal 1994 under the Company's long-term incentive program. Each
award represents the right to receive an amount in cash if, and only if,
consolidated earnings before interest and taxes ("EBIT") of the Company's
principal operating subsidiary, Fluor Daniel, Inc. for the three year period
ending October 31, 1997 achieves certain levels which have been set by the
Organization and Compensation Committee.(1) If EBIT falls below the threshold
amount, no award is payable. If EBIT falls between the threshold amount and the
target amount or between the target amount and the maximum amount then the
amount of the award is prorated accordingly. If EBIT is above the maximum
amount, no additional award is payable. Payments made under the long-term
incentive program are reported in the Summary Compensation Table in the year of
payout.
LONG-TERM INCENTIVE PROGRAM-AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
PERFORMANCE OR UNDER NON-STOCK PRICE BASED PLANS
OTHER PERIOD -----------------------------------
UNTIL MATURATION MIDDLE
NAME OR PAYOUT THRESHOLD TARGET MAXIMUM
---- ------------------ --------- -------- --------
<S> <C> <C> <C> <C>
L. G. McCraw........................ 3 years $60,000 $240,000 $480,000
H. K. Coble......................... 3 years $25,700 $102,800 $205,500
D. L. Blankenship................... 3 years $22,100 $ 88,200 $176,400
J. O. Rollans....................... 3 years $16,900 $ 67,400 $134,700
P. J. Trimble....................... 3 years $17,900 $ 71,400 $142,800
</TABLE>
- ---------------
(1) Mr. Blankenship's award is payable if certain thresholds are met based on
consolidated earnings before interest, taxes, depreciation and amortization
("EBITDA") of A. T. Massey rather than Fluor Daniel EBIT.
12
<PAGE> 16
PENSION PLANS
PENSION PLAN TABLE
YEARS OF SERVICE
<TABLE>
<CAPTION>
RENUMERATION 10 15 20 25 30 35 OR MORE
- ------------ ------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
$125,000 $18,750 $ 28,125 $ 37,500 $ 46,875 $ 56,250 $ 65,625
$150,000 $22,500 $ 33,750 $ 45,000 $ 56,250 $ 67,500 $ 78,750
$175,000 $26,250 $ 39,375 $ 52,500 $ 65,625 $ 78,750 $ 91,875
$200,000 $30,000 $ 45,000 $ 60,000 $ 75,000 $ 90,000 $105,000
$225,000 $33,750 $ 50,625 $ 67,500 $ 84,375 $101,250 $118,125
$250,000 $37,500 $ 56,250 $ 75,000 $ 93,750 $112,500 $131,250
$300,000 $45,000 $ 67,500 $ 90,000 $112,500 $135,000 $157,500
$400,000 $60,000 $ 90,000 $120,000 $150,000 $180,000 $210,000
$450,000 $67,500 $101,250 $135,000 $168,750 $202,500 $236,250
$500,000 $75,000 $112,500 $150,000 $187,500 $225,000 $262,500
</TABLE>
The foregoing table shows the estimated annual pension benefits payable to
a covered participant at normal retirement age under the A.T. Massey Coal
Company, Inc. Defined Benefit Pension Plan (the "A.T. Massey Pension Plan"), as
well as a non-qualified supplemental pension that provides benefits that would
otherwise be denied participants by reason of certain Internal Revenue Code
limitations on qualified plan benefits, based on remuneration that is covered
under the plans and years of service with A.T. Massey and its subsidiaries. Mr.
Blankenship is the only Named Executive Officer participating in the A.T. Massey
Pension Plan.
A participant's remuneration covered by the A.T. Massey Pension Plan is
their average base salary and bonus (as reported in the Summary Compensation
Table) for the five of the last ten calendar plan years of the participant's
career for which such average is the highest or, in the case of a participant
who has been employed for less than five full calendar years, the period of
their employment with A.T. Massey and its subsidiaries. As of the end of the
last calendar year, Mr. Blankenship's covered compensation under the A.T. Massey
Pension Plan was $150,000 and he has been credited with eleven years of service.
Benefits shown are computed as a straight line annuity beginning at age 65 with
no deduction for Social Security or other offset amounts.
13
<PAGE> 17
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
DJ HEAVY
MEASUREMENT PERIOD FLUOR CONSTRUCTION
(FISCAL YEAR COVERED) CORPORATION S&P 500 GROUP
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 113.30 92.52 95.31
1991 160.85 123.51 127.51
1992 158.85 135.81 133.60
1993 146.74 156.10 134.14
1994 180.21 162.14 148.18
</TABLE>
(1) The above graph compares the performance of Fluor Corporation with that of
the S&P 500 Composite Index and the Dow Jones Heavy Construction Industry
Group Index, which is a published industry index.
(2) The comparison of total return on investment (change in year end stock price
plus reinvested dividends) for each of the periods assumes that $100 was
invested on October 31, 1989 in each of Fluor Corporation, the S&P 500
Composite Group and the Dow Jones Heavy Construction Industry Group, with
investment weighted on the basis of market capitalization.
CHANGE OF CONTROL PROVISIONS IN CERTAIN PLANS
Under the Company's "Stock Plans," which provide for stock options,
restricted stock and SARs, restrictions on exercisability and transferability
which are premised on continued service with the Company or its subsidiaries
lapse if the holder's employment is terminated for any reason within two years
following a change of control of the Company. A change of control of the Company
shall be deemed to have occurred if (1) 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 twenty-five percent or more of the total number of
votes that may be cast for the election of directors of the Company or (2) as a
result of any cash tender or exchange offer, merger or other business
combination, or any combination of the foregoing transactions (a "Transaction"),
the persons who were directors of the Company before the Transaction shall cease
to constitute a majority of the Board of Directors of the Company or any
successor to the Company.
DIRECTORS' FEES
Nine of the eleven present directors are not salaried employees of the
Company or its subsidiaries. For their services, those directors are paid a
retainer at the annual rate of $30,000 or, in the case of Chairmen of
14
<PAGE> 18
Board Committees, $34,000, plus a fee of $2,000 per day for each day upon which
one or more Board or Board Committee meetings are attended. Each such director
also receives a $2,000 annual California tax allowance. Salaried employees
receive no additional compensation for their services as directors. Directors
are permitted to defer receipt of directors' fees until their retirement or
other termination of status as a director. Deferred amounts (at the election of
the director) either accrue interest at rates fixed from time to time by the
Executive Committee or are valued as if having been invested in Common Stock of
the Company according to fluctuations in the market price of the Common Stock.
In calendar 1994, Peter J. Fluor, William R. Grant, Robert V. Lindsay and Vilma
S. Martinez chose to defer all of their directors' fees and each elected the
Common Stock valuation method. David P. Gardner chose to defer all of his
retainer fees and elected the Common Stock valuation method for 75% of those
fees. Martha R. Seger chose to defer 50% of her retainer fees.
Under the Company's Retirement Plan for Outside Directors, those directors
who have not previously served in the management of the Company or a subsidiary
and who have served as a director for at least six years are entitled to annual
retirement payments in an amount equal to their retainer at retirement. Payments
continue for the life of the director but not to exceed the number of years of
the director's prior board service.
RATIFICATION OF APPOINTMENT OF AUDITORS
PROPOSAL 2
The Board has appointed the firm of Ernst & Young LLP, which firm was
engaged as independent auditors for the fiscal year ended October 31, 1994, to
audit the financial statements of the Company for the fiscal year ending October
31, 1995. A proposal to ratify this appointment is being presented to the
stockholders at the annual meeting. A representative of Ernst & Young LLP is
expected to be present at the meeting and available to respond to appropriate
questions and, although that firm has indicated that no statement will be made,
an opportunity for a statement will be provided.
APPROVAL OF THE STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
PROPOSAL 3
The Board has adopted, subject to approval by the stockholders of the
Company, a stock incentive plan entitled the Stock Plan for Non-Employee
Directors (the "Plan," the full text of which is set forth in Exhibit A hereto).
The Plan will become effective upon its approval by the stockholders. The
purpose of the Plan is to provide non-employee directors of the Company with
increased levels of stock ownership and incentive for enhancing shareholder
value. The Plan will also enhance the attractiveness of the Company's
non-employee director compensation package for recruitment purposes. A recent
survey by Executive Compensation Reports, Inc. shows that nearly 60% of the
country's 1000 largest companies provide stock to directors as part or all of
their compensation.
The Plan contemplates a one time grant of 1000 restricted shares to
non-employee directors of the Company. Subject to the usual antidilution
provisions for stock splits, stock dividends, etc., the total number of shares
of Common Stock which may be issued under the Plan may not exceed 25,000.
ELIGIBILITY
Directors of the Company who are not and have never been employees of the
Company or its subsidiaries are eligible to participate in the Plan.
AWARD OF RESTRICTED SHARES
The Plan provides for a one time award of 1,000 restricted shares along
with related restricted units payable in cash to assist in satisfying income tax
liabilities. Restricted stock consists of the transfer by the Company to an
eligible director of shares of Common Stock which are subject to restrictions on
their sale or other transfer by the director. Subject to the specified
restrictions and the other requirements of the Plan, a participant receiving
restricted stock shall have all of the rights of a stockholder as to those
shares. The award will be made to each current non-employee director upon
shareholder approval of the Plan. As to any non-
15
<PAGE> 19
employee director appointed in the future, the award will be made on a date
determined by the Committee following such appointment to the Board.
LAPSE OF RESTRICTIONS
The restrictions on the shares will lapse as follows. The restrictions on
the initial award to current non-employee directors will lapse on 20% of the
shares on the date of the award. Thereafter, restrictions will lapse in four
equal increments on each of the four succeeding anniversary dates following the
date of the award. For awards made to non-employee directors appointed in the
future, restrictions will lapse on 20% of the shares on the March 14 next
following the date of the initial award. Restrictions will lapse on the balance
of the shares in four equal increments on each succeeding March 14. Shares on
which restrictions have lapsed may be sold by the director, subject to
Securities and Exchange Commission and other applicable laws and regulations.
TERM OF PLAN
Awards of restricted stock under the Plan must be made within ten years
from the effective date of the Plan.
RESIGNATION, REMOVAL, DEATH OR RETIREMENT OF DIRECTOR
In the case of the removal or resignation of a director, all shares with
restrictions in effect will be forfeited. In the case of a Company change of
control, death or retirement of a director, all restrictions on any shares held
will immediately lapse. "Change of control" is defined as set forth in the
section entitled "Change of Control Provisions in Certain Plans," above.
TAX CONSEQUENCES
A director who receives stock subject to restrictions which create a
substantial risk of forfeiture (within the meaning of section 83 of the Internal
Revenue Code) will be deemed to have income for Federal income tax purposes,
absent a contrary election, when the shares are no longer subject to a
substantial risk of forfeiture, when they become transferable (and the rights of
the transferee would not be subject to a substantial risk of forfeiture) or when
they are disposed of, whichever occurs first. The amount of such income will be
equal to the fair market value of the shares as of the date on which the
director is deemed to have income. A director may elect, however, to include in
income in the year of grant the fair market value of the shares (determined
without regard to any restrictions thereon) on the date of grant. The Company
will be entitled to a deduction in the amount of the income that is deemed to be
received by the director. Directors will receive restricted units to assist in
satisfying the directors' income tax liability with respect to the shares.
ADMINISTRATION, AMENDMENT AND TERMINATION
The Plan will be administered by and may be amended from time to time or
terminated at any time by the members of the Board of Directors who are not
eligible to participate in the Plan. No action may be taken, however, to
materially increase the total number of shares of stock subject to the Plan, to
materially increase the benefits accruing to participants under the Plan, to
withdraw administration of the Plan from the Board members who are not eligible
to participate in the Plan or permit any such Board member to receive grants or
awards, without approval of the stockholders of the Company.
The foregoing summary of the Plan is qualified in its entirety by reference
to the full text of the Plan set forth in Exhibit A.
The following table summarizes certain information with respect to
restricted stock awards under the Plan:
NEW PLAN BENEFITS
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
<TABLE>
<CAPTION>
DOLLAR
VALUE NUMBER OF UNITS
AT 10/31/94 (SHARES)
----------- ----------------
<S> <C> <C>
Non-employee directors scheduled to receive
awards in 1995............................... $394,500 8,000
</TABLE>
16
<PAGE> 20
OTHER BUSINESS
The Company does not intend to present any other business for action at the
meeting and does not know of any other business intended to be presented by
others.
The Company's Bylaws require that, for other business to be properly
brought before an annual meeting by a stockholder, the Company must have
received written notice thereof not less than 30 nor more than 60 days prior to
the annual meeting (or not later than 10 days after public disclosure of the
annual meeting). The Notice must set forth (a) a brief description of the
business proposed to be brought before the annual meeting and the reasons for
conducting such business, (b) the stockholder's name and address, and the number
of shares of Common Stock beneficially owned by the stockholder, and (c) any
material interest of the stockholder in such business.
STOCKHOLDERS' PROPOSALS FOR 1996 ANNUAL MEETING
Any proposal of a stockholder intended to be presented at the Company's
1996 annual meeting of stockholders must be received by the Company for
inclusion in the proxy statement and form of proxy for that meeting no later
than October 2, 1995.
/s/ P.J. Trimble
P.J. TRIMBLE
Senior Vice President-Law and
Secretary
January 30, 1995
Irvine, California
17
<PAGE> 21
EXHIBIT A
FLUOR CORPORATION
STOCK PLAN FOR
NON-EMPLOYEE DIRECTORS
<PAGE> 22
ARTICLE I
DEFINITIONS
SEC. 1.1 DEFINITIONS
As used herein, the following terms shall have the meanings hereinafter set
forth unless the context clearly indicates to the contrary:
(a) "Age for Board Retirement" shall mean the age for mandatory
retirement of members of the Board as specified in the Bylaws of the
Company, as applied to Eligible Directors on the date of such Eligible
Directors' retirement from the Board.
(b) "Award" shall mean an award of Restricted Stock pursuant to the
provisions of Article V hereof.
(c) "Awardee" shall mean an Eligible Director to whom Restricted Stock
has been awarded hereunder.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Change of Control" of the Company shall be deemed to have
occurred if, (i) 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 twenty-five percent or more of the total number of votes
that may be cast for the election of directors of the Company; or (ii) as
the result of any cash tender or exchange offer, merger or other business
combination, or any combination of the foregoing transactions (a
"Transaction"), the persons who were directors of the Company before the
Transaction shall cease to constitute a majority of the Board of the
Company or any successor to the Company.
(f) "Committee" shall mean members of the Board who are not eligible
to participate in the Plan.
(g) "Company" shall mean Fluor Corporation.
(h) "Eligible Director" shall mean a director of the Company who is
not and never has been an employee of the Company or any of its
Subsidiaries.
(i) "Fair Market Value" shall mean the average of the highest price
and the lowest price per share at which the Stock is sold in the regular
way on the New York Stock Exchange on the day such value is to be
determined hereunder or, in the absence of any reported sales on such day,
the first preceding day on which there were such sales.
(j) "Plan" shall mean the Stock Plan for Non-Employee Directors, the
current terms of which are set forth herein.
(k) "Restricted Stock" shall mean Stock that may be awarded to an
Eligible Director by the Committee pursuant to Article V hereof, which is
nontransferable and subject to a substantial risk of forfeiture until
specific conditions are met.
(l) "Restricted Stock Agreement" and "Restricted Unit Agreement" shall
mean the agreement between the Company and the Awardee with respect to
Restricted Stock and Restricted Units, respectively, awarded hereunder.
(m) "Restricted Unit Award" shall mean amounts awarded pursuant to
Article VI hereof.
(n) "Stock" shall mean the Common Stock of the Company or, in the
event that the outstanding shares of Stock are hereafter changed into or
exchanged for shares of a different stock or securities of the Company or
some other corporation, such other stock or securities.
(o) "Subsidiary" shall mean any corporation, the majority of the
outstanding capital stock of which is owned, directly or indirectly, by the
Company or any partnership or joint venture in which either the Company or
such a corporation is at least a twenty percent (20%) equity participant.
A-1
<PAGE> 23
ARTICLE II
GENERAL
SEC. 2.1 NAME
This Plan shall be known as the "Stock Plan for Non-Employee Directors".
SEC. 2.2 PURPOSE
The purpose of the Plan is to advance the interests of the Company and its
stockholders by affording to Eligible Directors of the Company an opportunity to
acquire or increase their proprietary interest in the Company by the grant to
such directors of Awards under the terms set forth herein. By encouraging non-
employee directors to become owners of Company shares, the Company seeks to
increase their incentive for enhancing shareholder value and to motivate, retain
and attract those highly competent individuals upon whose judgment, initiative,
leadership and continued efforts the success of the Company in large measure
depends.
SEC. 2.3 EFFECTIVE DATE
The Plan shall become effective upon its approval by the holders of a
majority of the shares of Stock of the Company represented at an annual or
special meeting of the stockholders of the Company.
SEC. 2.4 LIMITATIONS
Subject to adjustment pursuant to the provisions of Section 9.1 hereof, the
aggregate number of shares of Stock which may be issued as Awards shall not
exceed 25,000. Any such shares may be either authorized and unissued shares or
shares issued and thereafter acquired by the Company.
SEC. 2.5 AWARDS GRANTED UNDER PLAN
Shares of Stock received pursuant to a Restricted Stock Agreement executed
hereunder with respect to which the restrictions provided for in Section 5.3
hereof have lapsed shall not again be available for Award grant hereunder. If
Restricted Stock is acquired by the Company pursuant to the provisions of
paragraph (c) of Section 5.3 hereof, new Awards may be granted hereunder
covering the number of shares to which such Restricted Stock acquisition
relates.
ARTICLE III
PARTICIPANTS
SEC. 3.1 ELIGIBILITY
Any Eligible Director shall be eligible to participate in the Plan.
ARTICLE IV
ADMINISTRATION
SEC. 4.1 DUTIES AND POWERS OF COMMITTEE
The Plan shall be administered by the Committee. Subject to the express
provisions of the Plan, the Committee shall also have complete authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the details and provisions of each Restricted Stock
and Restricted Unit Agreement, and to make all other determinations necessary or
advisable in the administration of the Plan.
SEC. 4.2 MAJORITY RULE
A majority of the members of the Committee shall constitute a quorum, and
any action taken by a majority present at a meeting at which a quorum is present
or any action taken without a meeting evidenced by a writing executed by a
majority of the whole Committee shall constitute the action of the Committee.
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SEC. 4.3 COMPANY ASSISTANCE
The Company shall supply full and timely information to the Committee on
all matters relating to Eligible Directors, their death, retirement, removal or
resignation from the Board and such other pertinent facts as the Committee may
require. The Company shall furnish the Committee with such clerical and other
assistance as is necessary in the performance of its duties.
ARTICLE V
AWARDS
SEC. 5.1 AWARD GRANT AND RESTRICTED STOCK AGREEMENT
The Committee shall grant a one time Award of 1000 shares of Restricted
Stock to Eligible Directors. Such Awards shall be made to each current Eligible
Director upon shareholder approval of the Plan and to any subsequently appointed
Eligible Director on a date determined by the Committee, in its sole discretion,
following such appointment to the Board. Each Award granted hereunder must be
granted within ten years from the effective date of the Plan. The Awardee shall
be entitled to receive the Stock subject to such Award only if the Company and
the Awardee, within 60 days after the date of the Award, enter into a written
Restricted Stock Agreement dated as of the date of the Award, which Agreement
shall set forth such terms and conditions as may be determined by the Committee
consistent with the Plan.
SEC. 5.2 CONSIDERATION FOR ISSUANCE
No shares of Restricted Stock shall be issued to an Awardee hereunder
unless and until the Committee shall have determined that consideration has been
received by the Company, in the form of services actually rendered to the
Company by the Awardee, having a fair value of not less than the then fair
market value of a like number of shares of Stock subject to all of the herein
provided conditions and restrictions applicable to Restricted Stock, but in no
event less than the par value of such shares.
SEC. 5.3 RESTRICTIONS ON SALE OR OTHER TRANSFER
Each share of Stock received pursuant to each Restricted Stock Agreement
shall be subject to acquisition by Fluor Corporation, and may not be sold or
otherwise transferred except pursuant to the following provisions:
(a) The shares of Stock represented by the Restricted Stock Agreement
shall be held in book entry form with the Company's transfer agent until
the restrictions lapse in accordance with the conditions established by the
Committee pursuant to Section 5.4 hereof, or until the shares of stock are
forfeited pursuant to paragraph (c) of this Section 5.3. Notwithstanding
the foregoing, the Awardee may request that, prior to the lapse of the
restrictions or forfeiture of the shares, certificates evidencing such
shares be issued in his name and delivered to him, and each such
certificate shall bear the following legend:
"The shares of Fluor Corporation common stock evidenced by
this certificate are subject to acquisition by Fluor Corporation,
and such shares may not be sold or otherwise transferred except
pursuant to the provisions of the Restricted Stock Agreement by and
between Fluor Corporation and the registered owner of such shares."
(b) No such shares may be sold, transferred or otherwise alienated or
hypothecated so long as such shares are subject to the restriction provided
for in this Section 5.3.
(c) Upon an Awardee's removal or resignation from the Board for any
reason, all of the Awardee's Restricted Stock remaining subject to
restriction shall be acquired by the Company effective as of the date of
such removal or resignation. Upon the occurrence or non-occurrence of such
other events as shall be determined by the Committee and specified in the
Awardee's Restricted Stock Agreement relating to any such Restricted Stock,
all of such Restricted Stock remaining subject to restriction shall be
acquired by the Company upon the occurrence or non-occurrence of such
event.
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<PAGE> 25
SEC. 5.4 LAPSE OF RESTRICTIONS
As to current Eligible Directors, the restrictions on 20% of each Award
will lapse upon the date of the Award. Thereafter, the restrictions will lapse
in four equal increments on each of the four succeeding anniversary dates
following the date of the Award. As to subsequently appointed Eligible
Directors, the restrictions on 20% of each Award will lapse on March 14 next
following the date of Award. Thereafter, the restrictions will lapse in four
equal increments on the succeeding anniversary dates following the date of
lapsing of restrictions on the first 20% of the shares. In the case of a Company
Change of Control, death, attainment of the Age for Board Retirement or approved
early retirement in accordance with Section 5.5 below of an Awardee, all
restrictions on all Restricted Stock held by the Awardee will lapse.
SEC. 5.5 EARLY RETIREMENT.
An Eligible Director who leaves the Board prior to the Age for Board
Retirement, may, upon application to and in the sole discretion of the
Committee, be granted early retirement status.
SEC. 5.6 RIGHTS AS STOCKHOLDER
Subject to the provisions of Section 5.3 hereof, upon the issuance to the
Awardee of Restricted Stock hereunder, the Awardee shall have all the rights of
a stockholder with respect to such Stock, including the right to vote the shares
and receive all dividends and other distributions paid or made with respect
thereto.
ARTICLE VI
RESTRICTED UNIT AWARDS
SEC. 6.1 RESTRICTED UNIT AWARD GRANT AND AGREEMENT
Each Restricted Unit Award granted hereunder shall be evidenced by minutes
of a meeting or the written consent of the Committee and by a written Restricted
Unit Agreement dated as of the date of grant and executed by the Company and the
Awardee, which Agreement shall set forth such terms and conditions as may be
determined by the Committee consistent with the Plan. A Restricted Unit Award
may be made only in connection with an Award made hereunder.
SEC. 6.2 AWARD TERMS AND CONDITIONS
Each Restricted Unit Award shall have a value equal to the Fair Market
Value on the date that such award, or portion thereof, becomes earned and
payable. Each Restricted Unit Award shall become earned and payable in five
equal increments on each of the five dates upon which a portion of the
restrictions lapse on the underlying Award, or upon such other terms and
conditions as may be determined by the Committee. The proceeds of each
Restricted Unit Award shall be applied in payment of applicable federal and
state withholding taxes arising from the lapse of restrictions on the related
Restricted Stock and from such award (or portion thereof) becoming earned and
payable, with the balance, if any, to be remitted to the Awardee. If the
outstanding shares of Stock of the Company are increased, decreased, or
exchanged for a different number or kind of shares or other securities, or if
additional shares or new or different shares or other securities are distributed
with respect to such shares of Stock or other securities, through merger,
consolidation, sale of all or substantially all of the property of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other distribution with respect to such shares of Stock
or other securities, an appropriate and proportionate adjustment may be made in
the number of Restricted Units subject to outstanding Restricted Stock Awards.
Such adjustments will be made by the Committee, whose determination as to what
adjustments will be made and the extent thereof will be final, binding, and
conclusive.
SEC. 6.3 EFFECT OF RESIGNATION, REMOVAL, DEATH OR RETIREMENT
If, prior to the date on which the Restricted Units, or any portion thereof
becomes earned and payable, the Awardee is removed or resigns from the Board for
any reason, then the Awardee's rights with respect to that portion of the
Restricted Units which have not been earned as of the date of such termination
shall immediately terminate and all rights thereunder shall cease; provided,
however, in the case of a Company
A-4
<PAGE> 26
Change of Control, death, attainment of the Age for Board Retirement, or
approved early retirement in accordance with Section 5.5, the Restricted Units
will become earned and payable on the date upon which all restrictions on the
Award lapse.
ARTICLE VII
STOCK CERTIFICATES
SEC. 7.1 STOCK CERTIFICATES
The Company shall not be required to issue or deliver any certificate for
shares of Stock received as Restricted Stock pursuant to a Restricted Stock
Agreement executed hereunder, prior to fulfillment of all of the following
conditions:
(a) the admission of such shares to listing on all stock exchanges on
which the Stock is then listed;
(b) the completion of any registration or other qualification of such
shares under any federal or state law or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental
regulatory body, which the Committee shall in its sole discretion deem
necessary or advisable;
(c) the obtaining of any approval or other clearance from any federal
or state governmental agency which the Committee shall in its sole
discretion determine to be necessary or advisable; and
(d) the lapse of such reasonable period of time following the
execution of the Restricted Stock Agreement as the Committee from time to
time may establish for reasons of administrative convenience.
ARTICLE VIII
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
SEC. 8.1 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Committee may at any time terminate, and may at any time and from time
to time and in any respect amend or modify, the Plan, provided, however, that no
such action of the Committee without approval of the stockholders of the Company
may:
(a) increase the total number of shares of Stock subject to the Plan
except as contemplated in Section 9.1 hereof;
(b) materially increase the benefits accruing to participants under
the Plan;
(c) withdraw the administration of the Plan from the Committee; or
(d) permit any person while a member of the Committee to be eligible
to receive Restricted Stock under the Plan; and provided further, that no
termination, amendment or modification of the Plan shall in any manner
affect a Restricted Stock Agreement theretofore executed pursuant to the
Plan without the consent of Awardee.
ARTICLE IX
MISCELLANEOUS
SEC. 9.1 ADJUSTMENT PROVISIONS
(a) Subject to Section 9.1(b) below, if the outstanding shares of Stock of
the Company are increased, decreased, or exchanged for a different number or
kind of shares or other securities, or if additional shares or new or different
shares or other securities are distributed with respect to such shares of Stock
or other securities, through merger, consolidation, sale of all or substantially
all of the property of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
distribution with respect to such shares of Stock or other securities, an
appropriate and proportionate
A-5
<PAGE> 27
adjustment may be made in (i) the maximum number and kind of shares provided in
Section 2.4 and (ii) the number and kind of shares or other securities subject
to the outstanding Awards.
(b) Adjustments under Section 9.1(a) will be made by the Committee, whose
determination as to what adjustments will be made and the extent thereof will be
final, binding, and conclusive. No fractional interests will be issued under the
Plan resulting from any such adjustments.
SEC. 9.2 CONTINUATION OF BOARD SERVICE
Nothing in the Plan or in any instrument executed pursuant to the Plan will
confer upon any Eligible Director any right to continue to serve on the Board.
SEC. 9.3 COMPLIANCE WITH GOVERNMENT REGULATIONS
No shares of Stock will be issued hereunder unless and until all applicable
requirements imposed by federal and state securities and other laws, rules, and
regulations and by any regulatory agencies having jurisdiction and by any stock
exchanges upon which the Stock may be listed have been fully met. As a condition
precedent to the issuance of shares of Stock pursuant hereto, the Company may
require the director to take any reasonable action to comply with such
requirements.
SEC. 9.4 PRIVILEGES OF STOCK OWNERSHIP
No director and no beneficiary or other person claiming under or through
such director will have any right, title, or interest in or to any shares of
Stock allocated or reserved under the Plan or subject to any Award except as to
such shares of Stock, if any, that have been issued to such director.
SEC. 9.5 WITHHOLDING
The Company may make such provisions as it deems appropriate to withhold
any taxes the Company determines it is required to withhold in connection with
any Award. The Company may require the director to satisfy any relevant tax
requirements before authorizing any issuance of Stock to the director. Such
settlement may be made in cash or Stock.
SEC. 9.6 NONTRANSFERABILITY
An Award may be exercised during the life of the director solely by the
director or the director's duly appointed guardian or personal representative.
No Award and no other right under the Plan, contingent or otherwise, will be
assignable or subject to any encumbrance, pledge, or charge of any nature.
SEC. 9.7 OTHER COMPENSATION PLANS
The adoption of the Plan shall not affect any other stock option or
incentive or other compensation plans in effect for the Company or any
Subsidiary, nor shall the Plan preclude the Company from establishing any other
forms of incentive or other compensation for employees or directors of the
Company or any Subsidiary.
SEC. 9.8 PLAN BINDING ON SUCCESSORS
The Plan shall be binding upon the successors and assigns of the Company.
SEC. 9.9 SINGULAR, PLURAL; GENDER
Whenever used herein, nouns in the singular shall include the plural, and
the masculine pronoun shall include the feminine gender.
SEC. 9.10 HEADINGS, ETC., NO PART OF PLAN
Headings of Articles and Sections hereof are inserted for convenience and
reference; they constitute no part of the Plan.
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<PAGE> 28
[MAP OF DIRECTIONS TO ANNUAL STOCKHOLDERS' MEETING]
STOCKHOLDERS' MEETING - FLUOR CORPORATION
9:00 a.m., Tuesday, March 14, 1995
Hyatt Regency Irvine
17900 Jamboree Boulevard
Irvine, California 92714
<PAGE> 29
________________________________________________________________________________
[LOGO] FLUOR CORPORATION
PROXY/VOTING INSTRUCTION CARD SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF THE COMPANY FOR THE ANNUAL MEETING MARCH 14, 1995
The undersigned, a stockholder of FLUOR CORPORATION, a Delaware
corporation, acknowledges receipt of a Notice of Annual Meeting of
Stockholders, the accompanying Proxy Statement and the Annual Report to
Stockholders for the year ended October 31, 1994; and, revoking any proxy
previously given, hereby constitutes and appoints L. G. McCraw, H. K. Coble and
P. J. Trimble, and each of them, the true and lawful agents and proxies of the
undersigned with full power of substitution in each, to vote the shares of
Common Stock of FLUOR CORPORATION standing in the name of the undersigned at
the Annual Meeting of Stockholders of FLUOR CORPORATION, on Tuesday, March 14,
1995 at 9:00 A.M., and at any adjournment or postponement thereof with respect
to the proposals listed on the reverse side.
THIS PROXY/VOTING INSTRUCTION CARD WHEN PROPERLY EXECUTED WILL BE VOTED
IN THE MANNER DIRECTED HEREBY BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
IS MADE, THIS PROXY/VOTING INSTRUCTION CARD WILL BE VOTED FOR THE NOMINEES
LISTED ON THE REVERSE, FOR PROPOSAL 2 AND FOR PROPOSAL 3.
________________________________________________________________________
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
(continued and to be signed on reverse side)
- --------------------------------------------------------------------------------
(FOLD AND DETACH HERE)
<PAGE> 30
THIS PROXY/VOTING INSTRUCTION CARD WILL BE VOTED AS DIRECTED. UNLESS OTHERWISE
DIRECTED, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF THE FOUR NOMINEES AND FOR PROPOSALS 2 AND 3
Please mark
/ / your vote
as this
------------ ------------ ------------ ------------
COMMON D.R.P. RESTRICTED SAVINGS PLAN
The Board of Directors recommends that you vote FOR the nominees on Proposal 1
and FOR Proposals 2 and 3.
1. Election of Class II Directors:
Carroll A. Campbell, Jr., Robert V. Lindsay, Leslie G. McCraw,
Martha R. Seger
WITHHOLD INSTRUCTIONS: To withhold authority to vote
FOR AUTHORITY for any individual nominee, strike a line
all nominees to vote through the nominee's name in the list
listed (except for all above.
as marked to nominees
the contrary) listed
/ / / /
2. Ratification of the appointment of Ernst & Young as auditors for 1995.
FOR AGAINST ABSTAIN
/ / / / / /
3. Approval of Stock Plan for Non-Employee Directors.
FOR AGAINST ABSTAIN
/ / / / / /
4. In their discretion the Proxies are authorized to vote upon such other
business as may properly come before the meeting and any and all
postponements or adjournments thereof.
I Plan to Attend Meeting / /
COMMENTS/ADDRESS CHANGE: / /
Please mark this box if you have written comments/address change on the reverse
side.
Please sign exactly as shown at left. Joint owners should each sign. Executors,
administrators, trustees, guardians and attorneys should so indicate when
signing. Corporations and partnerships should sign in full corporate or
partnership name by an authorized officer.
Date:__________________________________________, 1995
_____________________________________________________
Signature of Stockholder
_____________________________________________________
Signature of Stockholder
- ------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT TO THE COMPANY. PLEASE COMPLETE, SIGN AND DATE YOUR
PROXY/VOTING INSTRUCTION CARD, DETACH IT, AND RETURN IT PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
