SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
For the transition period from to
Commission File No. 1-7775
FLUOR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-0740960
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
3333 Michelson Drive, Irvine, CA 92730
(Address of principal executive offices)
Registrant's telephone number including area code: (714)975-2000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the last 90 days.
Yes ( X ) No ( )
As of February 28, 1995 there were 82,736,969 shares of common
stock outstanding.
FLUOR CORPORATION
FORM 10-Q
January 31, 1995
TABLE OF CONTENTS
PAGE
Part I: Financial Information
Condensed Consolidated Statement of Earnings for
the Three Months Ended January 31, 1995 and 1994.. 2
Condensed Consolidated Balance Sheet at January 31,
1995 and October 31, 1994......................... 3
Condensed Consolidated Statement of Cash Flows for
the Three Months Ended January 31, 1995 and 1994.. 5
Notes to Condensed Consolidated Financial
Statements........................................ 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations............... 8
Condensed Consolidated Changes in Backlog.......... 11
Part II: Other Information........................ 12
Signatures........................................... 13
Part I: Financial Information
FLUOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
Three Months Ended January 31, 1995 and 1994
(In Thousands Except Per Share Amounts)
UNAUDITED
1995 1994
REVENUES.............................. $2,059,626 $2,057,665
COSTS AND EXPENSES
Cost of revenues.................... 1,974,695 1,976,626
Corporate administrative and
general expenses................... 9,606 10,680
Interest expense.................... 3,320 4,230
Interest income..................... (7,119) (4,869)
Total Costs and Expenses.............. 1,980,502 1,986,667
EARNINGS BEFORE INCOME TAXES.......... 79,124 70,998
INCOME TAX EXPENSE.................... 28,801 27,000
NET EARNINGS.......................... $ 50,323 $ 43,998
NET EARNINGS PER SHARE................ $ 0.61 $ 0.53
DIVIDENDS PER COMMON SHARE............ $ 0.15 $ 0.13
SHARES USED TO CALCULATE EARNINGS PER
SHARE............................... 82,966 82,415
See Accompanying Notes.
-2-
FLUOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
January 31, 1995 and October 31, 1994
(Dollars in Thousands)
ASSETS
January 31, October 31,
1995 1994 *
(Unaudited)
Current Assets
Cash and cash equivalents........... $ 313,840 $ 374,468
Marketable securities............... 111,893 117,618
Accounts and notes receivable....... 333,163 318,672
Contract work in progress........... 250,002 308,877
Deferred taxes...................... 52,851 56,967
Inventory and other current assets.. 96,138 81,861
Total Current Assets............... 1,157,887 1,258,463
Property, plant and equipment (net
of accumulated depreciation,
depletion and amortization of
$537,626 and $514,145, respectively) 1,319,383 1,274,437
Investments and goodwill, net......... 74,535 71,596
Other................................. 231,649 220,272
$2,783,454 $2,824,768
(Continued On Next Page)
* Amounts at October 31, 1994 have been derived from audited
financial statements.
-3-
FLUOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
January 31, 1995 and October 31, 1994
(Dollars in Thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
January 31, October 31,
1995 1994 *
(Unaudited)
Current Liabilities
Accounts and notes payable.......... $ 254,113 $ 333,244
Commercial paper.................... 19,901 19,957
Advance billings on contracts....... 260,031 220,101
Accrued salaries, wages and
benefit plans...................... 185,418 199,506
Other accrued liabilities........... 221,643 210,511
Current portion of long-term debt... 3,217 38,001
Total Current Liabilities.......... 944,323 1,021,320
Long-term debt due after one year..... 24,098 24,366
Deferred taxes........................ 40,099 45,199
Other noncurrent liabilities.......... 516,100 513,427
Commitments and contingencies
Shareholders' Equity
Capital stock
Preferred - authorized 20,000,000
shares without par value; none
issued
Common - authorized 150,000,000
shares of $0.625 par value;
issued and outstanding -
82,730,575 shares and 82,507,568
shares, respectively............. 51,707 51,567
Additional capital.................. 507,940 498,804
Retained earnings................... 722,163 684,249
Unamortized executive stock plan
expense............................ (22,562) (14,472)
Cumulative translation adjustments.. (414) 308
Total Shareholders' Equity......... 1,258,834 1,220,456
$2,783,454 $2,824,768
See Accompanying Notes.
* Amounts at October 31, 1994 have been derived from audited
financial statements.
-4-
FLUOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Three Months Ended January 31, 1995 and 1994
(Dollars in Thousands)
UNAUDITED
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings........................ $ 50,323 $ 43,998
Adjustments to reconcile net
earnings to cash provided by
operating activities:
Depreciation, depletion and
amortization................... 32,929 27,134
Discontinued operations.......... -- (3,138)
Deferred taxes................... 627 906
Change in operating assets and
liabilities.................... (11,936) 50,353
Other, net....................... (11,452) 3,351
Cash provided by operating activities. 60,491 122,604
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures................ (81,644) (64,644)
Sale of marketable securities, net.. 5,725 9,700
Proceeds from sale of property,
plant and equipment................ 3,706 2,766
Investments......................... (1,377) (264)
Other, net.......................... (136) (204)
Cash utilized by investing activities. (73,726) (52,646)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in note payable to
affiliate.......................... -- (16,350)
Payments on long-term debt.......... (35,052) (72)
Cash dividends paid................. (12,409) (10,672)
Stock options exercised............ 439 1,852
Other, net.......................... (371) (566)
Cash utilized by financing activities. (47,393) (25,808)
Increase (decrease) in cash and cash
equivalents......................... (60,628) 44,150
Cash and cash equivalents at
beginning of period................. 374,468 214,844
Cash and cash equivalents at end of
period.............................. $ 313,840 $ 258,994
See Accompanying Notes.
-5-
FLUOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
(1) The condensed consolidated financial statements do not
include footnotes and certain financial information
normally presented annually under generally accepted
accounting principles and, therefore, should be read in
conjunction with the company's October 31, 1994 annual
report on Form 10-K. Accounting measurements at interim
dates inherently involve greater reliance on estimates
than at year-end. The results of operations for the
three months ended January 31, 1995 are not necessarily
indicative of results that can be expected for the full
year.
The condensed consolidated financial statements included
herein are unaudited; however, they contain all
adjustments (consisting of normal recurring accruals)
which, in the opinion of the company, are necessary to
present fairly its consolidated financial position at
January 31, 1995 and its consolidated results of
operations for the three months ended January 31,
1995 and 1994 and cash flows for the three months ended
January 31, 1995 and 1994.
(2) Earnings per share is based on the weighted average number
of common and, when appropriate, common equivalent shares
outstanding in each period. Common equivalent shares are
included when the effect of the potential exercise of
stock options is dilutive.
(3) Inventories comprise the following:
January 31, October 31,
1995 1994
($ in thousands)
Coal........................... $ 26,394 $ 24,289
Supplies and other............. 33,466 28,414
$ 59,860 $ 52,703
(4) Cash paid for interest was $1.8 million and $3.0 million
for the three month periods ended January 31, 1995 and
1994, respectively. Income tax payments, net of refunds,
were $15 million and $7 million during the three month
periods ended January 31, 1995 and 1994, respectively.
-6-
(5) Effective November 1, 1994, the company adopted Statement
of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities" (SFAS
No. 115), which requires that the carrying value of debt
and equity securities be adjusted according to guidelines
based on their classification as held-to-maturity,
available-for-sale or trading. Management determines
classification at the time of purchase and reevaluates
its appropriateness at each balance sheet date. The
company's investments primarily include short-term, highly
liquid investment grade securities which are usually sold
before their maturity. Accordingly, all investment
securities are considered to be available-for-sale and
carried at fair value. As of January 31, 1995 and October
31, 1994 there were no material gross unrealized gains or
losses as the carrying value of the security portfolio
approximated fair value. Gross realized gains and losses
on sales of securities for the three months ended January
31, 1995 and 1994 were not material. The cost of
securities sold is based on the specific identification
method. As of January 31, 1995 approximately $75 million
of securities mature within the next year, approximately
$20 million mature in the next one to three years and
approximately $17 million mature after three years.
-7-
FLUOR CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis is provided to increase
understanding of, and should be read in conjunction with, the
condensed consolidated financial statements and accompanying
notes.
RESULTS OF OPERATIONS
Revenues for the three month period ended January 31, 1995 were
$2.1 billion, level with the same period in 1994. Net earnings
for the three month period ended January 31, 1995 were $50.3
million compared with $44.0 million for the same period in
1994. The increase in net earnings is due primarily to higher
earnings for the Engineering and Construction segment, higher
interest income and lower corporate general and administrative
expense.
ENGINEERING AND CONSTRUCTION
Revenues for the Engineering and Construction segment for the
three month period ended January 31, 1995 were level with the
same period in 1994. Engineering and Construction operating
profit increased 6 percent in the first quarter of 1995
compared with the first quarter of 1994 due primarily to
improved margins. Reported margins may fluctuate from time to
time as a result of changes in the mix of engineering and
design services and construction related services. New awards
for the three months ended January 31, 1995 and 1994 were both
$2.3 billion. New awards within the Process sector represented
approximately 57 percent of total new awards for the first
quarter. In addition, approximately 51 percent of total new
awards was for projects located outside the United States. The
large size and uncertain timing of new awards can create
variability in the company's award pattern, consequently,
future award trends are difficult to predict with certainty.
-8-
The following table sets forth backlog for each of the
company's business sectors:
January 31, October 31, January 31,
($ in millions) 1995 1994 1994
Process 7,568 7,668 7,981
Industrial 3,969 3,564 3,330
Power/Government 2,253 2,369 2,960
Diversified Services 326 421 544
Total 14,116 14,022 14,815
The ratio of international to total backlog was 51 percent at
January 31, 1995.
COAL
Revenues for the Coal segment increased 11 percent for the three
month period ended January 31, 1995 compared with the same
period in 1994 due primarily to a 20 percent increase in the
sales volume of produced coal. Increased sales volume resulted
from strong sales of metallurgical coal, which more than offset
softer market conditions for steam coal stemming from relatively
mild weather during the quarter. Gross margin increased due to
the higher sales volume partially offset by higher production
costs per ton. Increased production costs resulted from fixed
cost incurred during the temporary shut-down of certain steam
coal mines due to the softer steam coal market. Operating
profit for the three months ended January 31, 1995 increased 2
percent compared with the three months ended January 31, 1994
due primarily to increased gross margin. Brokered coal sales
revenues and related cost of sales are netted and classified as
other operating profit in 1995. Margins contributed from
brokered coal sales have been immaterial as brokered coal
volume has been replaced with produced coal from reserves
acquired in recent years.
OTHER
Corporate administrative and general expenses decreased $1.1
million for the three months ended January 31, 1995, compared
-9-
with the same period of 1994 due primarily to lower corporate
overhead and stock price driven compensation plan expense, partially
offset by higher performance driven compensation plans expense.
Net interest income for the three months ended January 31, 1995
increased $3.2 million compared with 1994 due to higher interest
earning assets, higher interest rates and the prepayment of a
13.5 percent $34.7 million note in the first quarter of 1995.
The effective income tax rate for the three month period ended
January 31, 1995 decreased compared with the same period for
1994 as a result of reductions in foreign taxes within
jurisdictions where the rate exceeds the U.S. statutory rate,
and a decrease in items without tax effect.
The company does not have substantial net assets or liabilities
denominated in foreign currencies and, therefore, does not have
significant risk to currency fluctuations. Although there has
been a continued market devaluation in the Mexican peso since
the official government devaluation on December 20, 1994, the
company believes that its investment in ICA Fluor Daniel has
not been permanently impaired as prospects remain for long-term
engineering and construction work in Mexico.
Effective November 1, 1994, the company adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (SFAS No. 115). The
adoption of SFAS No. 115 had no material impact on results of
operations or financial position.
FINANCIAL POSITION AND LIQUIDITY
The company expects to have adequate resources available from
cash and short-term investments currently on hand, plus
available revolving credit facilities, capital market sources,
and its commercial paper program to provide for its financing
needs for the foreseeable future.
For the three months ended January 31, 1995, capital
expenditures were $81.6 million including $47.4 million related
to coal mine development. Dividends paid in the three months
ended January 31, 1995 were $12.4 million ($.15 per share)
compared with $10.7 million ($.13 per share) for the same
period of 1994.
The long-term debt to total capital ratio decreased to 1.9
percent at January 31, 1995, compared with 2.0 percent at
October 31, 1994, due to the increase in shareholders' equity
primarily from earnings net of dividends.
-10-
FLUOR CORPORATION
CONDENSED CONSOLIDATED CHANGES IN BACKLOG
(Dollars in Millions)
UNAUDITED
For the Three Months Ended January 31, 1995 1994
Backlog - beginning of period....... 14,021.9 14,753.5
New awards.......................... 2,251.9 2,334.2
Adjustments and cancellations, net.. (317.8) (407.3)
Work performed...................... (1,840.3) (1,865.5)
Backlog - end of period............. 14,115.7 14,814.9
-11-
FLUOR CORPORATION
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10.13 Third Amendment to and Restatement of
the Fluor Excess Benefit Plan (adopted
as of December 6, 1994)
10.15 1988 Fluor Executive Stock Plan (as
amended and restated effective
December 6, 1994)
10.17 Fluor Special Executive Incentive Plan
(as amended and restated effective
December 6, 1994)
10.20 Directors' Achievement Award Program
(adopted as of December 6, 1994)
(b) Reports on Form 8-K. None.
-12-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
the registrant has duly caused this report to be signed on its behalf
by the undersigned there unto duly authorized.
FLUOR CORPORATION
(Registrant)
Date: March 16, 1995 /s/ J. Michal Conaway
J. Michal Conaway, Vice President
and Chief Financial Officer
(Principal Accounting Officer)
-13-
THIRD AMENDMENT TO AND RESTATEMENT OF THE
FLUOR EXCESS BENEFIT PLAN
EFFECTIVE AS OF JANUARY 1, 1988
T A B L E O F C O N T E N T S
FLUOR EXCESS BENEFIT PLAN
ARTICLE PAGE
RECITALS 1
I. THE PLAN
Sec. 1.1 Name 1
Sec. 1.2 Purpose 1
II. DEFINITIONS
Sec. 2.1 Definitions 2
III. ACCRUAL ACCOUNTS AND CREDITS THERETO
Sec. 3.1 Accrual Accounts and Credits Thereto 3
Sec. 3.2 Basic Credit 3
Sec. 3.3 Interest Credit 3
Sec. 3.4 Credit on Termination of Service 3
IV. RETIREMENT
Sec. 4.1 Normal and Voluntary Early Retirement 4
Sec. 4.2 Involuntary Early Retirement 4
Sec. 4.3 Retirement Benefits - Lump Sum Cash 4
Sec. 4.4 Cash Installment Payments 5
Sec. 4.5 Death After Retirement 5
V. DEATH OR DISABILITY BEFORE RETIREMENT OR OTHER
TERMINATION OF SERVICE
Sec. 5.1 Death Before Retirement or Other
Termination of Service 5
Sec. 5.2 Permanent Total Disability 5
VI. OTHER TERMINATION OF SERVICE
Sec. 6.1 Termination Benefits 6
Sec. 6.2 Death After Other Termination of Service 6
VII. TERMINATION AND AMENDMENT OF PLAN
Sec. 7.1 Termination of Plan 6
Sec. 7.2 Distribution on Termination 6
Sec. 7.3 Amendment or Discontinuance of Plan 6
VIII. RESTRICTION ON ASSIGNMENT
Sec. 8.1 Effect of Assignment in General 7
Sec. 8.2 Corporation Offset 7
ARTICLE PAGE
X. MISCELLANEOUS PROVISIONS
Sec. 9.1 Limitation on Participant's Rights 7
Sec. 9.2 Unenforceable Provisions 7
Sec. 9.3 California Law Governs 7
Sec. 9.4 Instrument Binding on Successors 7
Sec. 9.5 Singular, Plural; Gender 7
Sec. 9.6 Headings, etc., No Part of Instrument 8
FLUOR EXCESS BENEFIT PLAN
THIS INSTRUMENT, executed as of December 6, 1994 and made
effective as of January 1988, by FLUOR CORPORATION, a Delaware
corporation, evidences an amendment to the terms of the Fluor
Excess Benefit Plan adopted for the benefit of certain
employees of Fluor Corporation and its subsidiaries;
WITNESSETH:
WHEREAS, Fluor Corporation maintains for the benefit of its employees and the
employees of certain of its subsidiary corporations two profit-sharing
retirement plans known as the Fluor Corporation Employees' Retirement Plan and
the Fluor Corporation Salaried Employees' Savings Investment Plan
("the Plans"); and
WHEREAS, under the terms of the Plans, company contributions are allocated to
the accounts of each plan participant for each plan year; and
WHEREAS, certain provisions of the Employee Retirement Income Security Act
("ERISA") place limits on the amount which may be allocated to a
participant's account during any plan year; and
WHEREAS, as a result of these provisions certain employees will suffer a
reduction in the amounts allocated to their accounts under the Plans; and
WHEREAS, the Corporation desires to establish an excess benefit plan to
provide those retirement and other benefits which have been lost as a
result of the aforesaid limitations;
NOW, THEREFORE, Fluor Corporation hereby declares the current terms and
conditions of the Fluor Excess Benefit Plan to be, as of January 1, 1988, as
follows:
ARTICLE I
THE PLAN
Sec. 1.1 Name. This plan shall be known as the "Fluor Excess Benefit
Plan."
Sec. 1.2 Purpose. This plan is adopted for the purpose of enabling
eligible employees of Fluor Corporation and its subsidiaries
to secure retirement and other benefits which cannot be
provided for them under the Fluor Corporation Employees'
Retirement Plan and Fluor Corporation Salaried Employees'
Savings Investment Plan.
1
ARTICLE II
DEFINITIONS
Sec. 2.1 Definitions. As used in this Instrument, the following terms
shall have the meanings hereinafter set forth:
(a) "Accrual Account" shall mean the account established
for each Employee under Sec. 3.1 hereof.
(b) "Corporation" shall mean Fluor Corporation and any
successor thereto and any Subsidiary which, with the
prior written consent of the Board of Directors of
Fluor Corporation, adopts the Plan.
(c) "Employee" shall mean any person employed by the
Corporation or any Subsidiary. In the event of the
employment of any Employee, at the request of his
former Corporation or Subsidiary employer, by any joint
venture to which the Corporation or Subsidiary is a
party, or by any corporation, partnership,
proprietorship, or other entity for which the
Corporation or Subsidiary is acting as agent or with
which the Corporation or Subsidiary is engaged in a
joint venture, such Employee shall, during the period
of such employment, for all purposes of this Plan, be
deemed to be an Employee of his former Corporation or
Subsidiary employer.
(d) "Participant" shall mean any Employee who has an amount
standing to his credit in an Accrual Account.
(e) "Plan" shall mean the Fluor Excess Benefit Plan, the
terms of which are set forth in this Instrument.
(f) "Plan Year" shall mean the twelve-month period ending
December 31, 1988, and each twelve-month period ending
December 31st thereafter.
(g) "Service" shall mean employment as an Employee of the
Corporation or any Subsidiary. The Corporation shall
resolve all questions of what constitutes "Service" in
the case of individual Employees, and its decision
shall be binding upon all Employees and other persons
interested in or affected by the terms of this Plan.
(h) "Subsidiary" shall mean any corporation, the majority
of the outstanding capital stock of which is owned,
directly or indirectly, by Fluor Corporation.
2
ARTICLE III
ACCRUAL ACCOUNTS AND CREDITS THERETO
Sec. 3.1 Accrual Accounts. The Corporation shall maintain a separate
Accrual Account for each Employee entitled to a credit under
Sec. 3.2 hereof, which Accrual Account shall evidence the
Corporation's unsecured obligation to make payment to the
Participant under Articles IV, V, and VI hereof upon the
Participant's termination of Service.
Sec. 3.2 Basic Credit. As of the end of each Plan Year during the
existence of this Plan, the Corporation shall credit the
Accrual Account of each Employee with an amount equal to the
excess of the amount of company contributions which would have
been allocated to the Employee's accounts under the Fluor
Corporation Employees' Retirement Plan and the Fluor
Corporation Salaried Employees' Savings Investment Plan for the
Plan Year but for the limitations imposed by section 415 of the
Internal Revenue Code over the actual amount of company
contributions allocated to the Employee's account under such
plans for the Plan Year.
Sec. 3.3 Interest Credit. As of December 31st of each Plan Year
beginning on or after December 31, 1988 and prior to January 1,
1995, the Corporation shall credit the Accrual Account of each
then Participant with interest on the balance in such Accrual
Account as of December 31st of the prior Plan Year. For that
portion of the Accrual Account which is attributable to basic
credits for Plan Years ending on or before October 31, 1986,
interest shall be calculated at the prime bankers' rate in
effect as of such fiscal year end. For that portion of the
Accrual Account which is attributable to basic credits for Plan
Years beginning on or after November 1, 1986, interest will be
calculated under such method as may be established from time to
time by resolution of the Executive or Organization and
Compensation Committee of the Corporation. For that portion of
the Accrual Account attributable to basic credits made in Plan
Years beginning on or after January 1, 1995, the Corporation
shall credit the Accrual Account of each Participant with
interest at the end of each month at the rate of 5-year
Treasury Notes then in effect.
Sec. 3.4 Credit on Termination of Service. Beginning January 1, 1988
and prior to January 1, 1995, upon the termination of Service
of a Participant, the Corporation shall credit the Accrual
Account of such Participant with interest, at the rate then in
effect, from January 1st of the Plan Year in which such
termination occurs through the date of such termination, on the
balance in such Accrual Account as of December 31st of the
prior year. Beginning January 1, 1995 and thereafter, the
balance of the Participant's Accrual Account with interest as
of the end of the month in which the Participant requests
distribution from his Fluor Corporation Employees' Retirement
Plan account shall be paid to the Participant.
3
ARTICLE IV
RETIREMENT
Sec. 4.1 Normal and Voluntary Early Retirement. A Participant's normal
retirement date shall be the sixty-fifth (65th) anniversary of
his birth. With the Participant's consent his Corporation or
Subsidiary employer may defer his retirement beyond his normal
retirement date and, in such event, the Participant shall
continue as a Participant in this Plan and no disbursements
under this Article VI shall be made to him before his actual
retirement date. An Employee who becomes eligible to
participate in this Plan on or after the date which would
otherwise be his normal retirement date shall be treated in all
respects as a Participant whose retirement was deferred beyond
his normal retirement date.
Voluntary early retirement can be taken based on the following
criteria:
Age Years of Continuous
Service Immediately
Preceding Retirement
60-64 5
59 8
58 11
57 13
56 14
55 15
Upon a voluntary early retirement, the Corporation shall pay to
such Participant his Accrual Account entitlement in such a
manner as if the Participant were retiring on or after his
normal retirement date as provided in this Article IV.
As used herein, "Continuous Service" shall be defined as
provided in employer Corporation's applicable personnel
policies.
Sec. 4.2 Involuntary Early Retirement. In the event that a Participant
retires earlier than his normal retirement date, the
Corporation shall pay to such Participant his Accrual Account
entitlement as if his Service had been terminated under Article
VI hereof but in such a manner as if he were retiring on or
after his normal retirement date under this Article IV;
provided, however, that upon an involuntary early retirement of
a Participant who has attained the years of Service required
for a voluntary early retirement as set forth in Sec. 4.1 , the
Corporation shall pay to such Participant his Accrual Account
entitlement and in such manner as if he were retiring on or
after his normal retirement date under this Article IV.
Sec. 4.3 Retirement Benefits - Lump Sum Cash. Upon the termination of
Service of a Participant on or after his normal retirement
date, the Corporation shall pay to such Participant in cash in
one lump sum, or in such other manner provided for in this
Article IV as the
4
Corporation may determine, one hundred
percent (100%) of the amount then standing to his credit in his
Accrual Account.
Sec. 4.4 Cash Installment Payments. A Participant shall have the right
to request the Corporation, prior to the date of his
retirement, to distribute to such Participant, in substantially
equal installments over a period of up to one hundred twenty
(120) months, all or part of the amount to which he is entitled
under Sec. 4.3 hereof, and the Corporation may, in its sole
discretion, elect to so distribute. Each such installment
payment shall include interest on the unpaid balance in the
Participant's Accrual Account immediately prior to such
installment payment calculated at the rate established pursuant
to Sec. 3.3 hereof; provided, however, beginning on January 1,
1995 and thereafter, the interest rate shall be the 5-year
Treasury Note rate then in effect.
Sec. 4.5 Death After Retirement. In the event of the death of an
Employee after retirement and prior to payment to him of the
full amount to which he is entitled under Sec. 4.3 hereof, the
Corporation shall distribute immediately the then undistributed
amount to the beneficiary of such Employee determined under
Sec. 5.1 hereof.
ARTICLE V
DEATH OR DISABILITY BEFORE RETIREMENT OR
OTHER TERMINATION OF SERVICE
Sec. 5.1 Death Before Retirement or Other Termination of Service. Upon
the death of an Employee before retirement or other termination
of Service, the Corporation shall pay, to the beneficiary last
designated in writing by such Employee in a manner satisfactory
to the Corporation, his Accrual Account entitlement and in such
manner as if such Employee had retired on or after his normal
retirement date under Article IV hereof. If the executor or
administrator of the estate of such Employee has not been
expressly designed as beneficiary by such Employee in writing
to the Corporation, any amounts with respect to which there is
no legally designated beneficiary living at the death of such
Employee shall be payable to the surviving spouse, if any, of
such Employee, or, if none, to the surviving issue of such
Employee by right of representation, including any legally
adopted children, or, if none, then to such Employee's executor
or administrator.
Sec. 5.2 Permanent Total Disability. Upon the permanent total
disability of an Employee which results in such Employee's
inability to perform his normal occupation or any other
occupation which would give such Employee a wage similar to
that of his normal occupation and which, based upon competent
medical evidence, is expected to be of permanent or indefinite
duration, followed by termination of Service as a result
thereof, the Corporation shall pay to such Employee his Accrual
Account entitlement and in such manner as if he were retiring
on or after his normal retirement date under Article IV hereof.
5
ARTICLE VI
OTHER TERMINATION OF SERVICE
Sec. 6.1 Termination Benefits. In the event of the termination of
Service of an Employee for any reason other than retirement,
death, or disability prior to December 31, 1994, the
Corporation shall pay to such Employee in cash in one lump sum
an amount equal to one hundred percent (100%) of the amount
then standing to the Employee's credit in the Employee's
Accrual Account. Thereafter, upon such termination, and
subject to the Corporation's approval, the Corporation shall
pay such lump sum to the Employee at the time benefits are paid
to the Employee under the Fluor Corporation Employees'
Retirement Plan or at such other time as the Corporation in its
sole discretion determines.
The transfer of an Employee to or from the Corporation from
or to a Subsidiary or from one Subsidiary to another
Subsidiary shall not be deemed a termination of the Service
of such Employee.
Sec. 6.2 Death After Other Termination of Service. In the event of the
death of an Employee prior to payment to him of the amount to
which he is entitled under Sec. 6.1 hereof, the Corporation
shall distribute immediately the then undistributed amount to
the beneficiary of such Participant determined under Sec. 5.1
hereof.
ARTICLE VII
TERMINATION AND AMENDMENT OF PLAN
Sec. 7.1 Termination of Plan. The Corporation reserves the right to
terminate this Plan at any time, as to itself, without approval
of Employees.
Sec. 7.2 Distribution on Termination. In the event of the termination
of this Plan by the Corporation, the Corporation shall
distribute to each Employee the amount standing to his credit
in the Employee's Accrual Account at the time and in the manner
provided in Articles IV, V, and VI hereof as if this Plan had
not been terminated by the Corporation.
Sec. 7.3 Amendment of Plan or Discontinuance. Fluor Corporation may
from time to time, by resolution of its Board of Directors,
change, modify, or amend this Plan in any particular or
particulars whatsoever, and all such changes, modifications,
or amendments of this Plan shall be retroactive to the
beginning of the Plan Year in which executed, unless other
provision is specifically made; provided, however, that the
discontinuance of this Plan, or its change, modification, or
amendment, unless such change, modification, or amendment is
necessary in order to meet the requirements of any state or
federal law or regulation, shall not affect adversely the
payment of any amounts accrued by the Corporation prior thereto
nor deprive any Employee of any vested rights in the amount
then standing to the Employee's credit in his Accrual Account.
6
ARTICLE VIII
RESTRICTION ON ASSIGNMENT
Sec. 8.1 Effect of Assignment in General. Except as respects any
indebtedness of an Employee to the Corporation or any
Subsidiary, as to which the provisions of Sec. 8.2 hereof shall
apply, the right of any Employee or his beneficiary in any
benefit or to any payment under this Plan shall not be subject
to alienation or assignment, and if such Employee shall attempt
to assign, transfer, or dispose of such right or should such
right be subjected to attachment, execution, garnishment,
sequestration, or other legal, equitable, or other process, it
shall ipso facto pass to such person or persons as may be
designated by the Corporation from among the beneficiaries of
such Employee determined under Sec. 5.1 hereof and the spouse
and blood relatives of such Employee. Any designation made by
the Corporation hereunder may be revoked by the Corporation in
whole or in part at any time and/or it may make a further
designation.
Sec. 8.2 Corporation Offset. The Corporation shall have a right to
offset against the amounts standing to the credit of an
Employee in his Accrual Account to the extent of any
indebtedness owed by such Employee to the Corporation or any
Subsidiary as may be determined by the Corporation, and before
making any distribution to such Employee under the provisions
of this Plan, the Corporation may deduct from the Accrual
Account of such Employee an amount sufficient to liquidate such
indebtedness.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Sec. 9.1 Limitation on Participant's Rights. Participation in this Plan
shall not give any Employee the right to be retained in the
employ of the Corporation or any Subsidiary, or any rights in
or to his Accrual Account or to any benefits whatsoever except
to the extent specifically set forth in this Instrument.
Acceptance of any payments hereunder from the Corporation
shall obligate the payee to execute such release and/or receipt
as the Corporation may require.
Sec. 9.2 Unenforceable Provisions. If any provision of this Instrument
shall be for any reason invalid or unenforceable, the remaining
provisions shall, nevertheless, be carried into effect.
Sec. 9.3 California Law Governs. This Instrument has been finally
executed and delivered in the State of California, and all
matters affecting its validity and construction shall be
determined by the laws of that State.
Sec. 9.4 Instrument Binding on Successors. This Instrument shall be
binding upon the successors and assigns of the Corporation.
Sec. 9.5 Singular, Plural; Gender. Wherever appropriate in this
Instrument, nouns in the singular shall include the plural, and
the masculine pronoun shall include the feminine gender.
7
Sec. 9.6 Headings, etc., No Part of Instrument. Headings of Articles
and Sections of this Instrument are inserted for convenience
and reference. They constitute no part of this Instrument.
8
FLUOR CORPORATION
1988 FLUOR EXECUTIVE STOCK PLAN
AS AMENDED AND RESTATED
Effective December 6, 1994
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) "Award" shall mean an award of Restricted Stock pursuant to the
provisions of Article VI hereof.
(b) "Awardee" shall mean an Eligible Employee to whom Restricted
Stock has been awarded hereunder.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "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.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Committee" shall mean the Organization and Compensation
Committee of the Board.
(g) "Company" shall mean Fluor Corporation.
(h) "Eligible Employee" shall mean an employee who is an officer of
the Company or any Subsidiary or who is a member of the
Executive Management Team of the Company and its Subsidiaries.
(i) "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
(j) "Executive Management Team" shall mean those employees who have
been determined to be eligible to participate in the Fluor
Corporation and Subsidiaries Executive Incentive Compensation
Program or in other similar management incentive compensation
programs of any Subsidiary.
(k) "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 an
Option is granted hereunder or, in the absence of any reported
sales on such day, the first preceding day on which there were
such sales.
(l) "Grantee" shall mean an Eligible Employee to whom Rights have
been granted hereunder.
(m) "Incentive Stock Option" shall mean an incentive stock option,
as defined under Section 422A of the Code and the regulations
thereunder to purchase Stock.
(n) "Nonqualified Stock Option" shall mean a stock option other
than an Incentive Stock Option to purchase Stock.
(o) "Option" shall mean an option to purchase Stock granted
pursuant to the provisions of Article V hereof and refers to
both Incentive Stock Options and Nonqualified Stock Options.
(p) "Optionee" shall mean an Eligible Employee to whom an Option
has been granted hereunder.
(q) "Plan" shall mean the 1988 Fluor Executive Stock Plan, the
current terms of which are set forth herein.
(r) "Prior Plans" shall mean the 1971 Fluor Stock Option Plan, the
1977 Fluor Executive Stock Plan, the 1981 Fluor Executive Stock
Plan and the 1982 Fluor Executive Stock Option Plan.
(s) "Restricted Stock" shall mean Stock that may be awarded to an
Eligible Employee by the Committee pursuant to Article VI
hereof, which is nontransferable and subject to a substantial
risk of forfeiture until specific conditions are met.
Conditions may be based on continuing employment or achievement
of preestablished performance objectives.
(t) "Return on Average Shareholders' Equity" shall mean, for any
fiscal year, the percentage amount reported as "Return on
Average Shareholders Equity" in the "Highlights" section of
the Company's Annual Report to Stockholders for such fiscal
year.
(u) "Restricted Stock Agreement" shall mean the agreement between
the Company and the Awardee with respect to Restricted Stock
awarded hereunder.
(v) "Rights" shall mean Stock Appreciation Rights granted as
provided herein.
(w) "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.
(x) "Stock Appreciation Right" or "Right" shall mean a right
granted pursuant to Article VIII hereof to receive a number
of shares of Stock or, in the discretion of the Committee, an
amount of cash or a combination of shares and cash, based on
the increase in the Fair Market Value of the shares subject to
the Right.
(y) "Stock Appreciation Rights Agreement" shall mean the agreement
between the Company and the Grantee evidencing the grant of
Rights as provided herein.
(z) "Stock Option Agreement" shall mean the agreement between the
Company and the Optionee under which the Optionee may purchase
Stock hereunder.
(aa) "Stock Payment" shall mean a payment in shares of Stock to
replace all or any portion of the compensation (other than base
salary) that would otherwise become payable to any Eligible
Employee of the Company.
(bb) "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.
(cc) "Ten Year Treasury Yield" shall mean, for any fiscal period,
the daily average percent per annum yield for U. S. Government
Securities - 10 year Treasury constant maturities, as published
in the Federal Reserve statistical release or any successor
publication.
ARTICLE II
GENERAL
Sec. 2.1 NAME
This Plan shall be known as the "1988 Fluor Executive Stock Plan".
Sec. 2.2 PURPOSE
The purpose of the Plan is to advance the interests of the Company and
its stockholders by affording to Eligible Employees of the Company and
its Subsidiaries an opportunity to acquire or increase their
proprietary interest in the Company by the grant to such employees of
Options, Awards or Rights under the terms set forth herein. By thus
encouraging such employees to become owners of Company shares and by
granting such employees with a form of cash incentive compensation
which is measured by the increase in market value of Company shares,
the Company seeks 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 11.1
hereof, the aggregate number of shares of Stock which may either be
issued as Awards, subject to Options or issued pursuant to the
exercise of Options, or reflected in grants of Stock Appreciation
Rights shall not exceed the sum of (a) 5,500,000 plus (b) that number
of shares represented by options, awards or rights under Prior Plans
which expire or are otherwise terminated at any time after the original
effective date of this Plan. Any such shares may be either authorized
and unissued shares or shares issued and thereafter acquired by the
Company. No Eligible Employee may receive more than fifteen percent
(15%) of the aggregate number of shares of Stock which may be issued
as Awards, subject to Options or issued pursuant to the exercise of
Options or reflected in grants of Stock Appreciation Rights.
Sec. 2.5 OPTIONS, AWARDS AND RIGHTS GRANTED UNDER PLAN
Shares of Stock with respect to which an Option granted hereunder
shall have been exercised, and shares of Stock received pursuant to a
Restricted Stock Agreement executed hereunder with respect to which
the restrictions provided for in Section 6.3 hereof shall have lapsed
and shares of Stock reflected in a Stock Appreciation Right, to the
extent that such Right has become exercisable, shall not again be
available for Option, Award or Rights grant hereunder. If Options or
Rights granted hereunder shall expire or terminate for any reason
without being wholly exercised, or if Restricted Stock is acquired by
the Company pursuant to the provisions of paragraph (c) of Section 6.3
hereof, new Options, Awards or Rights may be granted hereunder covering
the number of shares to which such Option or Rights expiration or
termination or Restricted Stock acquisition relates.
ARTICLE III
PARTICIPANTS
Sec. 3.1 ELIGIBILITY
Any Eligible Employee shall be eligible to participate in the Plan;
provided, however, that no member of the Committee shall be eligible
to participate. The Committee may grant Options, Awards or Rights to
any Eligible Employee in accordance with such determinations as the
Committee from time to time in its sole discretion shall make.
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 have sole
discretion and authority to determine from among Eligible Employees
those to whom and the time or times at which Options, Rights or Awards
may be granted, the number of shares of Stock to be subject to each
Option or Award, the number of Rights to be awarded and the period for
the exercise of such Option or Rights which need not be the same for
each grant hereunder. 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 Stock Option
Agreement, Stock Appreciation Rights Agreement and Restricted Stock
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.
Sec. 4.3 COMPANY ASSISTANCE
The Company shall supply full and timely information to the Committee
on all matters relating to eligible employees, their employment,
death, retirement, disability or other termination of employment, 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
OPTIONS
Sec. 5.1 OPTION GRANT AND AGREEMENT
Each Option granted hereunder shall be evidenced by minutes of a
meeting or the written consent of the Committee and by a written Stock
Option Agreement dated as of the date of grant and executed by the
Company and the Optionee, which Agreement shall set forth such terms
and conditions as may be determined by the Committee consistent with
the Plan.
Sec. 5.2 PARTICIPATION LIMITATION
The Committee shall not grant an Incentive Stock Option to any employee
for such number of shares of Stock that, immediately after the grant,
the total number of shares of Stock owned or subject to Options
exercisable by and/or Awards outstanding in the hands of such employee
(or by such persons whose shares such employee is considered as owning
pursuant to the provisions of the second succeeding sentence) exceed
ten percent of the total combined voting power of all classes of stock
of the Company. This restriction does not apply if, at the time such
Incentive Stock Option is granted, the Incentive Stock Option purchase
price is at least 110% of the Fair Market Value on the date of grant
and the Incentive Stock Option by its terms is not exercisable after
the expiration of five (5) years from the date of grant. For purposes
of this Section 5.2, an employee shall be considered as owning the
stock owned, directly or indirectly, by or for his brothers and
sisters (whether by the whole or half blood), spouse, ancestors and
lineal descendants; and the stock owned, directly or indirectly, by or
for a corporation, partnership, estate or trust shall be considered as
being owned proportionately by or for its shareholders, partners or
beneficiaries.
Sec. 5.3 OPTION PRICE
The purchase price of Stock under each Option will be determined by
the Committee but may not be less than the Fair Market Value on the
date of grant.
Sec. 5.4 OPTION PERIOD
Each Option granted hereunder must be granted within ten years from
the effective date of the Plan. The period for the exercise of each
Option shall be determined by the Committee, but in no instance shall
such period exceed ten years from the date of grant of the Option.
Sec. 5.5 OPTION EXERCISE
(a) Options granted hereunder may not be exercised unless and
until the Optionee shall have been or remained in the employ
of the Company or its Subsidiaries for one year from and after
the date such Option was granted, except as otherwise provided
in Section 5.7 hereof.
(b) Options may be exercised with respect to whole shares only,
for such shares of Stock and within the period permitted for
the exercise thereof as determined by the Committee, and shall
be exercised by written notice of intent to exercise the
Option with respect to a specified number of shares delivered
to the Company at its principal office in the State of
California, and payment in full to the Company at said office
of the amount of the Option price for the number of shares of
Stock with respect to which the Option is then being
exercised. The purchase price may be paid by the assignment
and delivery to the Company of shares of Stock or a
combination of cash and shares of Stock equal in value to the
exercise price. Any shares assigned and delivered to the
Company in payment or partial payment of the purchase price
will be valued at their Fair Market Value on the exercise date.
(c) The Fair Market Value of the Stock at the date of grant for
which any employee may exercise Incentive Stock Options in any
calendar year under the Plan (or any other stock option plan
of the Company adopted after December 31, 1986) may not exceed
$100,000.
Sec. 5.6 NONTRANSFERABILITY OF OPTION
No Option shall be transferred by an Optionee otherwise than by a will
or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined in the Code or Title I of ERISA.
During the lifetime of an Optionee, the Option shall be exercisable
only by him.
Sec. 5.7 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT
(a) If, prior to a date one year from the date on which an Option
shall have been granted, the Optionee's employment with the
Company or its Subsidiaries shall be terminated by the Company
or Subsidiary with or without cause, or by the act of the
Optionee, the Optionee's right to exercise such Option shall
terminate and all rights thereunder shall cease; provided,
however, that if the Optionee shall die, retire or become
permanently and totally disabled, as determined in accordance
with applicable Company personnel policies, or if the
Optionee's employment with the Company or its Subsidiaries
shall be terminated within two years after a Change of Control
of the Company and such termination occurs prior to a date one
year from the date on which an Option shall have been granted,
such Option shall become exercisable in full on the date of
such death, retirement, disability or termination of
employment.
(b) If, on or after one year from the date on which an Option
shall have been granted, an Optionee's employment with the
Company or its Subsidiaries shall be terminated for any reason
other than death, retirement or permanent total disability, or
within two years following a Change of Control of the Company,
the Optionee shall have the right, during the period ending
three months after such termination, to exercise such Option
to the extent that it was exercisable at the date of such
termination and shall not have been exercised, subject,
however, to the provisions of Section 5.4 hereof.
(c) Upon termination of an Optionee's employment with the Company
or its Subsidiaries by reason of retirement or permanent total
disability, as determined in accordance with applicable
Company personnel policies, or within two years following a
Change of Control of the Company, such Optionee shall have the
right, during the period ending three years after such
termination, to exercise his Option in full, without regard to
any installment exercise provisions, to the extent that it
shall not have been exercised, subject, however, to the
provisions of Section 5.4 hereof.
(d) If an Optionee shall die (i) while in the employ of the
Company or its Subsidiaries, or (ii) within three months after
termination of employment where such termination did not occur
either by reason of retirement or permanent total disability
or within two years following a Change of Control of the
Company, or (iii) within three years after termination of
employment where such termination occurred either by reason
of retirement or permanent total disability or within two
years following a Change of Control of the Company, the
executor or administrator of the estate of the decedent or
the person or persons to whom an Option granted hereunder
shall have been validly transferred by the executor or the
administrator pursuant to a will or the laws of descent and
distribution shall have the right, during the period ending
three years after the date of the Optionee's death, to
exercise the Optionee's Option (A) in full, without regard
to any installment exercise provisions, to the extent that it
shall not have been exercised, if the Optionee shall have died
while in the employ of the Company or its Subsidiaries or
within three years after termination of employment where such
termination occurred either by reason of retirement or
permanent total disability or within two years following a
Change of Control of the Company, or (B), to the extent that
it was exercisable at the date of the Optionee's death and
shall not have been exercised, if the Optionee shall have died
within three months after termination of employment where such
termination did not occur by reason of either retirement or
permanent total disability or within two years following a
Change of Control of the Company, subject, however, to the
provisions of Section 5.4 hereof.
(e) No transfer of an Option by the Optionee by a will or by the
laws of descent and distribution shall be effective to bind
the Company unless the Company shall have been furnished with
written notice thereof and an authenticated copy of the will
and/or such other evidence as the Committee may deem necessary
to establish the validity of the transfer and the acceptance
by the transferee or transferees of the terms and conditions
of such Option.
(f) The foregoing notwithstanding, the Committee may elect, in its
sole discretion, to make grants of Options which have
provisions regarding the effect of death or other termination
of employment which are different than those set forth in
paragraphs (a) through (d) of this Section 5.7, provided that
such provisions do not materially increase the benefits that
would otherwise accrue to an Optionee under paragraphs
(a) through (d) of Section 5.7.
Sec. 5.8 RIGHTS AS STOCKHOLDER
An Optionee or a transferee of an Option shall have no rights as a
stockholder with respect to any shares subject to such Option prior to
the purchase of such shares by exercise of such Option as provided
herein.
ARTICLE VI
AWARDS
Sec. 6.1 AWARD GRANT AND RESTRICTED STOCK AGREEMENT
The Committee may grant Awards of Restricted Stock to Awardees. No
Awards may be made during any fiscal year unless, for the preceding
fiscal year, Return on Average Shareholders' Equity exceeded the Ten
Year Treasury Yield by more than three percentage points. Each
Award granted hereunder must be granted within ten years from the
effective date of the Plan and shall be evidenced by minutes of a
meeting or the written consent of the Committee. The Committee shall
from time to time establish various Award grade levels which shall set
forth the maximum number of shares which may be awarded annually to
each Eligible Employee in each grade level. The Committee shall have
the sole discretion and authority to make an Award to an Eligible
Employee of less than the maximum number of shares applicable to his
assigned grade level or to make no Award at all to any such Eligible
Employee. In no event shall the total number of shares of Restricted
Stock awarded to an Eligible Employee in any fiscal year exceed
15,000. The Awardee shall be entitled to receive the Stock subject to
such Award only if the Company and the Awardee, within 30 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. 6.2 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 labor
performed for or 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. 6.3 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 6.4 hereof, or until the shares of stock are forfeited
pursuant to paragraph (c) of this Section 6.3. 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 6.3.
(c) Unless the Committee in its discretion determines otherwise,
upon an Awardee's termination of employment 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 termination of employment. Upon the
occurrence or non-occurence 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.
Sec. 6.4 LAPSE OF RESTRICTIONS
The restrictions imposed upon Restricted Stock under Section 6.3 above
will lapse in accordance with such conditions as are determined by the
Committee and set forth in the Restricted Stock Agreement.
Sec. 6.5 RIGHTS AS STOCKHOLDER
Subject to the provisions of Section 6.3 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 VII
STOCK CERTIFICATES
Sec. 7.1 STOCK CERTIFICATES
The Company shall not be required to issue or deliver any certificate
for shares of Stock purchased upon the exercise of any Option granted
hereunder or any portion thereof, or 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
exercise of the Option or the execution of the Restricted Stock
Agreement as the Committee from time to time may establish for
reasons of administrative convenience.
ARTICLE VIII
GRANT AND EXERCISE OF RIGHTS
Sec. 8.1 RIGHTS GRANTS AND AGREEMENTS
The Committee may approve the grant of Rights related or unrelated to
Options, subject to the following terms and conditions:
(a) A Stock Appreciation Right may be granted:
(i) at any time if unrelated to an Option;
(ii) only at the time of grant if related to an Option.
(b) A Stock Appreciation Right grant in connection with an Option
will entitle the holder of the related Option, upon exercise
of the Stock Appreciation Right, to surrender such Option, or
any portion thereof to the extent unexercised, with respect to
the number of shares as to which such Stock Appreciation Right
is exercised, and to receive payment of an amount computed
pursuant to Sec. 8.1(d). Such Option will, to the extent
surrendered, then cease to be exercisable.
(c) Subject to Section 8.1(g), a Stock Appreciation Right granted
in connection with an Option hereunder will be exercisable at
such time or times, and only to the extent that a related
Option is exercisable, and will not be transferable except to
the extent that such related Option may be transferable.
(d) Upon the exercise of a Stock Appreciation Right related to an
Option, the holder will be entitled to receive payment of an
amount determined by multiplying:
(i) The difference obtained by subtracting the purchase
price of a share of Stock specified in the related
Option from the Fair Market Value of a share of Stock
on the date of exercise of such Stock Appreciation
Right, by
(ii) The number of shares as to which such Stock
Appreciation Right has been exercised.
(e) The Committee may grant Stock Appreciation Rights unrelated to
Options. Section 8.1(d) shall be used to determine the amount
payable at exercise under such Stock Appreciation Right except
that, in lieu of the price specified in the related option,
the initial share value specified in the award, which may not
be less than the Fair Market Value on the date of the award,
shall be used.
(f) Payment of the amount determined under Section 8.1(d) or
(e) may be made solely in whole shares of Stock in a number
determined at their Fair Market Value on the date of exercise
of the Stock Appreciation Right or, alternatively, at the sole
discretion of the Committee, solely in cash or in a
combination of cash and shares as the Committee deems
advisable. If the Committee decides to make full payment in
shares of Stock, and the amount payable results in a
fractional share, payment for the fractional share will be
made in cash. Notwithstanding the foregoing, payment of the
amount determined under Section 8.1(d) or (e) shall be made
solely in cash if the Awardee is an "officer" of the Company
for purposes of Section 16(b) of the Securities Exchange Act
of 1934 (the "Exchange Act").
(g) The Committee may, at the time a Stock Appreciation Right is
granted, impose such conditions on the exercise of the Stock
Appreciation Right as may be required to satisfy the
requirements of Rule 16b-3 of the Exchange Act (or any other
comparable provisions in effect at the time or times in
question). Without limiting the generality of the foregoing,
the Committee may determine that a Stock Appreciation Right
may be exercised only during the period beginning on the third
business day and ending on the twelfth business day following
the publication of the Company's quarterly and annual
summarized financial data.
(h) The date of the grant shall be the date of such Committee
action. Each grant shall be evidenced by minutes of a meeting
or the written consent of the Committee and by a written Stock
Appreciation Rights Agreement dated as of the date of the
grant and executed by the Grantee and the Company, which
Agreement shall set forth such terms and conditions as may be
determined by the Committee consistent with the Plan.
Sec. 8.2 RIGHTS PERIOD
The period for the exercise of each Right granted hereunder shall be
determined by the Committee, but in no instance shall such period
exceed ten years from the date of grant.
Sec. 8.3 RIGHTS EXERCISE
(a) Rights granted hereunder may not be exercised unless and
until the Grantee shall have been or remained in the employ
of the Company or its Subsidiaries for one year from and after
the date of grant of such Rights, except as otherwise provided
in Section 8.5 hereof.
(b) Rights granted hereunder may be exercised with respect to
whole Rights only, in such number as determined by the
Committee, and shall be exercised by written notice of intent
to exercise with respect to a specified number of Rights
delivered to the Company at its principal office in the State
of California.
Sec. 8.4 NONTRANSFERABILITY OF RIGHTS
No Rights granted hereunder shall be transferred by a Grantee
otherwise than by a will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined in the
Code or Title I of ERISA. During the lifetime of a Grantee, such
Rights shall be exercisable only by him.
Sec. 8.5 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT
(a) If, prior to a date one year from the date on which Rights
shall have been granted, the Grantee's employment with the
Company or its Subsidiaries shall be terminated by the
Company or Subsidiary with or without cause, or by the act
of the Grantee, the Grantee's right to exercise such Rights
shall terminate and all rights thereunder shall cease;
provided, however, that if the Grantee shall die, retire, or
become permanently and totally disabled, as determined in
accordance with applicable Company personnel policies, or if
the Grantee's employment with the Company or its Subsidiaries
shall be terminated within two years after a Change of Control
of the Company and such termination occurs prior to a date one
year from the date on which such Rights shall have been
granted, such Rights shall become exercisable in full on the
date of such death or disability.
(b) If, on or after one year from the date on which Rights shall
have been granted, a Grantee's employment with the Company or
its Subsidiaries shall be terminated for any reason other than
death, retirement or permanent total disability, or within two
years following a Change of Control of the Company, the
Grantee shall have the right, during the period ending three
months after such termination, to exercise such Rights to the
extent that they were exercisable at the date of such
termination and shall not have been exercised, subject,
however, to the provisions of Section 8.2 hereof.
(c) Upon termination of a Grantee's employment with the Company or
its Subsidiaries by reason of retirement or permanent total
disability, as determined in accordance with applicable Company
personnel policies, or within two years following a Change of
Control of the Company, such Grantee shall have the right,
during the period ending three years after such termination,
to exercise his Rights in full, without regard to any
installment exercise provisions, to the extent that they shall
not have been exercised, subject, however, to the provisions
of Section 8.2 hereof.
(d) If a Grantee shall die (i) while in the employ of the Company
or its Subsidiaries, or (ii) within three months after
termination of employment where such termination did not occur
either by reason of retirement or permanent total disability
or within two years following a Change of Control of the
Company, or (iii) within three years after termination of
employment where such termination occurred either by reason of
retirement or permanent total disability or within two years
following a Change of Control of the Company, the executor or
administrator of the estate of the decedent or the person or
persons to whom Rights granted hereunder shall have been
validly transferred by the executor or the administrator
pursuant to a will or the laws of descent and distribution
shall have the right, during the period ending three years
after the date of the Grantee's death, to exercise the
Grantee's Rights (A) in full, without regard to any
installment exercise provisions, to the extent that they shall
not have been exercised, if the Grantee shall have died while
in the employ of the Company or its Subsidiaries or within
three years after termination of employment where such
termination occurred either by reason of retirement or
permanent total disability or within two years following a
Change of Control of the Company, or (B) to the extent that
they were exercisable at the date of the Grantee's death and
shall not have been exercised, if the Grantee shall have died
within three months after termination of employment where such
termination did not occur by reason of either retirement or
permanent total disability or within two years following a
Change of Control of the Company, subject, however, to the
provisions of Section 8.2 hereof.
(e) No transfer of Rights by a Grantee by a will or by the laws of
descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished with
written notice thereof and an authenticated copy of the will
and/or such other evidence as the Committee may deem necessary
to establish the validity of the transfer and the acceptance
by the transferee or transferees of the terms and conditions
of such Rights.
(f) The foregoing notwithstanding, the Committee may elect, in its
sole discretion, to make grants of Rights which have
provisions regarding the effect of death or other termination
of employment which are different than those set forth in
paragraphs (a) through (d) of this Section 8.5, provided that
such provisions do not materially increase the benefits that
would otherwise accrue to a Grantee under paragraphs (a)
through (d) of Section 8.5.
Sec. 8.6 NO RIGHTS AS STOCKHOLDER
Nothing herein contained shall be deemed to give any Grantee any
rights as a stockholder of the Company.
ARTICLE IX
STOCK PAYMENT
Sec. 9.1 STOCK PAYMENT
The Committee may approve payments of Stock to any Eligible Employee
for all or any portion of the compensation (other than base salary)
that would otherwise become payable to such Eligible Employee in
cash.
ARTICLE X
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
Sec. 10.1 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Board may at any time, upon recommendation of the Committee,
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 Board 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 11.1 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 an Option, Right or Restricted Stock under
the Plan; and provided further, that no termination, amendment
or modification of the Plan shall in any manner affect any
Stock Option Agreement, Restricted Stock Agreement or Stock
Appreciation Rights Agreement theretofore executed pursuant to
the Plan without the consent of such Optionee, Awardee or
Grantee.
ARTICLE XI
MISCELLANEOUS
Sec. 11.1 ADJUSTMENT PROVISIONS
(a) Subject to Section 11.1(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 adjustment may be
made in (i) the maximum number and kind of shares provided in
Section 2.4, (ii) the number and kind of shares or other
securities subject to the outstanding Options, Awards and
Grants, and (iii) the price for each share or other unit of
any other securities subject to outstanding Options or Grants
without change in the aggregate purchase price or value as to
which such Options or Grants remain exercisable.
(b) Adjustments under Section 11.1(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. 11.2 CONTINUATION OF EMPLOYMENT
Nothing in the Plan or in any instrument executed pursuant to the Plan
will confer upon any Eligible Employee any right to continue in the
employ of the Company or any Subsidiary or affect the right of the
Company or any Subsidiary to terminate the employment of any Eligible
Employee at any time with or without cause.
Sec. 11.3 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 employee to take any reasonable action to comply with such
requirements.
Sec. 11.4 PRIVILEGES OF STOCK OWNERSHIP
No employee and no beneficiary or other person claiming under or
through such employee will have any right, title, or interest in or to
any shares of Stock allocated or reserved under the Plan or subject to
any Option, Right or Award except as to such shares of Stock, if any,
that have been issued to such employee.
Sec. 11.5 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 Option, Award or Right. The Company may
require the employee to satisfy any relevant tax requirements before
authorizing any issuance of Stock to the employee. Such settlement
may be made in cash or Stock.
Sec. 11.6 NONTRANSFERABILITY
An Option, Award or Right may be exercised during the life of the
employee solely by the employee or the employee's duly appointed
guardian or personal representative. No Option, Award or Right 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. 11.7 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 of
the Company or any Subsidiary.
Sec. 11.8 PLAN BINDING ON SUCCESSORS
The Plan shall be binding upon the successors and assigns of the
Company.
Sec. 11.9 SINGULAR, PLURAL; GENDER
Whenever used herein, nouns in the singular shall include the plural,
and the masculine pronoun shall include the feminine gender.
Sec. 11.10 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.
FLUOR
SPECIAL EXECUTIVE INCENTIVE PLAN
As Amended and Restated
Effective December 6, 1994
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) "Awards" shall mean Long-Term Incentive Awards, Performance
Incentive Awards and Restricted Unit Awards as provided herein.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "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.
(d) "Committee" shall mean the Organization and Compensation
Committee of the Board.
(e) "Company" shall mean Fluor Corporation.
(f) "Eligible Employee" shall mean an employee who is an officer of
the Company or any Subsidiary or who is a member of the
Executive Management Team of the Company and its Subsidiaries.
(g) "Executive Management Team" shall mean those employees who, at
the time of the making of an Award hereunder, have been
determined to be eligible to participate in the Fluor
Corporation and Subsidiaries Executive Incentive Compensation
Program or in other similar management incentive compensation
programs of the Company or a Subsidiary.
(h) "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.
(i) "Grantee" shall mean an Eligible Employee to whom Awards have
been granted hereunder.
(j) "Long-Term Incentive Award" shall mean amounts awarded pursuant
to Article V hereof.
(k) "Performance Incentive Award" shall mean amounts awarded
pursuant to Article VI hereof.
(l) "Plan" shall mean the Fluor Special Executive Incentive Plan,
the terms of which are set forth herein.
(m) "Restricted Unit Award" shall mean amounts awarded pursuant to
Article VII hereof.
(n) "Return on Average Shareholders' Equity" shall mean, for any
fiscal year, the percentage amount reported as "Return on
Average Shareholders Equity" in the "Highlights" section of the
Company's Annual Report to Stockholders for such fiscal year.
(o) "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.
(p) "Subsidiary" shall mean any corporation, the majority of the
outstanding capital stock of which is owned, directly or
indirectly, by the Company.
(q) "Ten Year Treasury Yield" shall mean, for any fiscal period,
the daily average percent per annum yield for U. S. Government
Securities - 10 year Treasury constant maturities, as published
in the Federal Reserve statistical release or any successor
publication.
ARTICLE II
THE PLAN
Sec. 2.1 NAME
This plan shall be known as the "Fluor Special Executive Incentive
Plan".
Sec. 2.2 PURPOSE
The purpose of the Plan is to advance the interests of the Company and
its shareholders by providing Eligible Employees who can directly and
significantly influence the profits of the Company and therefore the
market value of its Stock with two forms of cash incentive compensation
(Long-Term Incentive Awards and Performance Incentive Awards) which are
based upon the attainment of specified performance objectives and with
another form of cash compensation (Restricted Unit Awards) which is
designed to compensate for the income and employment tax withholding
arising from the lapse of restrictions on shares of restricted stock
granted to such Eligible Employees. Restricted Unit Awards are
intended to encourage executive stock ownership by eliminating the need
to dispose of a portion of any newly vested restricted shares to pay
the withholding amounts.
Sec. 2.3 EFFECTIVE DATE AND DURATION
The Plan shall become effective as of April 27, 1987. The Awards
granted hereunder must be awarded on or before October 31, 1999.
ARTICLE III
PARTICIPANTS
Sec. 3.1 ELIGIBILITY
Any Eligible Employee of the Company or its Subsidiaries shall be
eligible to participate in the Plan; provided, however, that no member
of the Committee shall be eligible to participate.
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 have sole
discretion and authority to determine from among Eligible Employees
those to whom and the time or times at which Awards may be granted,
the amount of such Awards and the terms and conditions upon which such
Awards shall become earned and payable. 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, 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.
Sec. 4.3 COMPANY ASSISTANCE
The Company shall supply full and timely information to the Committee
on all matters relating to eligible employees, their employment, death,
retirement, disability or other termination of employment, 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
LONG-TERM INCENTIVE AWARDS
Sec. 5.1 LONG-TERM INCENTIVE AWARD GRANT AND AGREEMENT
Each Long-Term Incentive Award made hereunder shall be evidenced by
minutes of a meeting or the written consent of the Committee and by a
written Agreement dated as of the date of grant and executed by the
Company and the Grantee which Agreement shall set forth such terms and
conditions as may be determined by the Committee consistent with the
Plan.
Sec. 5.2 DETERMINATION OF LONG-TERM INCENTIVE AWARDS
In advance of the granting each Long-Term Incentive Award hereunder the
Committee shall:
(a) Establish the specific threshold, target and maximum earnings
level (which may be characterized either in terms of net
earnings or earnings excluding certain items such as interest,
taxes, depreciation or amortization) which must be attained
over a three fiscal year period in order for such Award (or
portion thereof) to become earned by the Grantee and payable by
the Company; and
(b) Establish a graded series of Award levels which shall designate
the amount to be paid to Grantees at each such level if either
the threshold, target or maximum earnings level is achieved,
and assign an Award grade level for each Grantee. If the
threshold target is not achieved, no Award will be payable to
the Grantee. If the maximum target or more is achieved, then
the Award shall be the maximum Award amount for the Grantee's
grade level. If an earnings amount between the threshold and
target earnings level is achieved, then the amount of the Award
shall be corresponding prorata amount between the threshold
Award amount and the target Award amount. If an earnings
amount between the target level and maximum earnings level is
achieved, then the amount of the Award shall be the
corresponding prorata amount between the target Award amount
and the maximum Award amount. The maximum amount of any Award
shall be $600,000.00.
Sec. 5.3 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT
If, prior to the date on which any Long-Term Incentive Award becomes
earned and payable, the Grantee's employment with the Company or its
Subsidiaries shall be terminated by the Company or Subsidiary with or
without cause, or by the act of the Grantee, then the Grantee's rights
with respect to that portion of the Long-Term Incentive Award which
has not been earned as of the date of such termination shall
immediately terminate and all rights thereunder shall cease; provided,
however, that if such termination of employment shall occur as a result
of the Grantee's death or permanent and total disability, as determined
in accordance with applicable Company personnel policies, or if the
Grantee's employment with the Company or its Subsidiaries shall be
terminated within two years after a Change of Control of the Company
and such termination occurs prior to a date on which a Long-Term
Incentive Award would have become earned and payable, such Award shall
become earned and payable in accordance with its original terms and
conditions notwithstanding such termination.
ARTICLE VI
PERFORMANCE INCENTIVE AWARDS
Sec. 6.1 PERFORMANCE INCENTIVE AWARD GRANT AND AGREEMENT
Each Award made hereunder shall be evidenced by minutes of a meeting or
the written consent of the Committee and by a written Agreement dated
as of the date of grant and executed by the Company and the Grantee
which Agreement shall set forth such terms and conditions as may be
determined by the Committee consistent with the Plan.
Sec. 6.2 CONDITIONS OF PERFORMANCE INCENTIVE AWARDS
In granting each Performance Incentive Award hereunder the Committee
shall:
(a) Establish minimum, target and maximum amounts which may become
earned by the Grantee and payable by the Company; and
(b) Establish the period over which the performance of the Grantee
and that of his operating unit will be measured, as well as the
period for which the Grantee must remain in the employ of the
Company or its subsidiaries in order for it to subsequently
become earned by the Employee and payable by the Company.
Sec. 6.3 AMOUNT OF AWARD
The amount of the Award shall be determined by the Company in its sole
discretion based upon its evaluation of the Grantee's performance and
that of his operating unit during the performance period established by
the Committee.
Sec. 6.4 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT
If, prior to the date on which any Incentive Award becomes earned and
payable, the Grantee's employment with the Company or its Subsidiaries
shall be terminated by the Company or Subsidiary with or without cause,
or by the act of the Grantee, then the Grantee's rights with respect to
that portion of the Award which has not been earned as of the date of
such termination shall immediately terminate and all rights thereunder
shall cease; provided, however, that if such termination of employment
shall occur as a result of the Grantee's death or permanent and total
disability, as determined in accordance with applicable Company
personnel policies, or if the Grantee's employment with the Company or
its Subsidiaries shall be terminated within two years after a Change of
Control of the Company and such termination occurs prior to a date on
which an Award would have become earned and payable, such Award shall
become earned and payable in accordance with its original terms and
conditions notwithstanding such termination.
ARTICLE VII
RESTRICTED UNIT AWARDS
Sec. 7.1 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 Agreement dated as of the date of grant and executed by the
Company and the Grantee, which Agreement shall set forth such terms and
conditions as may be determined by the Committee consistent with the
Plan. A Restricted Unit Award of Restricted Units may only be made in
connection with an Award of Restricted Stock pursuant to the 1988 Fluor
Executive Stock Plan. No Awards of Restricted Units may be made during
any fiscal year unless, for the preceding fiscal year, Return on
Average Shareholders' Equity exceeded the Ten Year Treasury Yield by
more than three percentage points.
Sec. 7.2 DETERMINATION OF AWARD AMOUNT
In advance of the granting of each Restricted Unit Award hereunder the
Committee shall:
(a) Establish various Award grade levels (which levels shall be the
same as those established by the Committee for concurrent
Awards of Restricted Stock made pursuant to the 1988 Fluor
Executive Stock Plan) that shall designate the maximum number
of Restricted Units which may be awarded annually to a Grantee
in each Award grade level. The number of Restricted Units for
each Award grade level shall be calculated by reference to the
applicable federal and state income and employment withholding
tax rates; and
(b) Assign an Award grade level for each Grantee which shall
correspond to the Award grade level assigned to such Grantee in
connection with the concurrent granting to him of Restricted
Stock pursuant to the 1988 Fluor Executive Stock Plan. The
Committee shall have the sole discretion and authority to make
an Award of less than the maximum number of Units for a
Grantee's assigned grade level or to make no Award at all to
such Eligible Employee. In no event shall the total number of
Restricted Units granted to any Eligible Employee in any fiscal
year exceed 10,000.
Sec. 7.3 AWARD TERMS AND CONDITIONS
Each Restricted Unit shall have a value equal to the Fair Market Value
on the date that such Award, or portion thereof, becomes earned and
payable. Each award shall become earned and payable in ten equal
increments on each of the ten succeeding anniversary dates following
the date of the Award, or upon such other terms and conditions as may
be determined by the Committee. The proceeds of each Award shall be
applied in payment of applicable federal and state income and
employment 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 Grantee. 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 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. 7.4 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT
Except as otherwise established by the Committee in determining the
terms and conditions of a particular Restricted Units Award, if,
prior to the date on which the Restricted Units, or any portion
thereof becomes earned and payable, the Grantee's employment with the
Company or its Subsidiaries shall be terminated by the Company or
Subsidiary with or without cause, or by the act of the Grantee, then
the Grantee's rights with respect to that portion of the Award which
has not been earned as of the date of such termination shall
immediately terminate and all rights thereunder shall cease.
ARTICLE VIII
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
Sec. 8.1 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Board may at any time, upon recommendation of the Committee,
terminate, and may at any time and from time to time and in any
respect amend or modify, the Plan; provided, however, that no
termination, amendment or modification of the Plan shall in any
manner affect any Awards theretofore granted under the Plan without
the consent of the Grantee.
ARTICLE IX
MISCELLANEOUS
Sec. 9.1 NONTRANSFERABILITY OF AWARDS
No Awards granted hereunder shall be transferred by a Grantee otherwise
than by will or the laws of descent and distribution. During the
lifetime of a Grantee, such Awards shall be payable only to the Grantee.
Sec. 9.2 EMPLOYMENT
Nothing in the Plan or in any Awards granted hereunder shall confer
upon any employee the right to continue in the employ of the Company or
any Subsidiary.
Sec. 9.3 OTHER COMPENSATION PLANS
The adoption of the Plan shall not affect any 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 of the
Company or any Subsidiary.
Sec. 9.4 PLAN BINDING ON SUCCESSORS
The Plan shall be binding upon the successors and assigns of the
Company.
Sec. 9.5 SINGULAR, PLURAL GENDER
Whenever used herein, nouns in the singular shall include the plural,
and the masculine pronoun shall include the feminine gender.
Sec. 9.6 HEADINGS, ETC., NOT PART OF PLAN
Headings of Articles and Sections hereof are inserted for convenience
and reference; they constitute no part of the Plan.
DIRECTORS' ACHIEVEMENT AWARD PROGRAM
Adopted as of December 6, 1994
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) "Awards" shall mean amounts awarded pursuant to Article V
hereof.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "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.
(d) "Committee" shall mean the Organization and Compensation
Committee of the Board.
(e) "Company" shall mean Fluor Corporation.
(f) "Eligible Employee" shall mean an employee who is a member of
the Company's leadership team as determined from time to time
by the Chief Executive Officer of the Company.
(g) "Grantee" shall mean an Eligible Employee to whom Awards have
been granted hereunder.
(h) "Incentive Plan" shall mean the Fluor Special Executive
Incentive Plan.
(i) "Plan" shall mean the Directors' Achievement Award Program, the
terms of which are set forth herein.
(j) "Subsidiary" shall mean any corporation, the majority of the
outstanding capital stock of which is owned, directly or
indirectly, by the Company.
(k) "Stock Plan" shall mean the 1988 Executive Stock Plan and any
successor stock plan which is adopted by the Board and approved
by a vote of the shareholders of the Company.
ARTICLE II
THE PLAN
Sec. 2.1 NAME
This plan shall be known as the "Directors' Achievement Award Program".
Sec. 2.2 PURPOSE
The purpose of the Plan is to advance the interests of the Company and
its shareholders by providing Eligible Employees who can directly and
significantly influence the profits of the Company and therefore the
market value of its Stock with a form of cash incentive compensation
("Awards") which becomes payable upon the attainment of specified
performance objectives. As part of the program, Eligible Employees may
also be granted shares of restricted stock under the Stock Plan,
related restricted units under the Incentive Plan, and stock options
under the Stock Plan, all on such terms and conditions as the Committee
shall determine.
Sec. 2.3 EFFECTIVE DATE AND DURATION
The Plan shall become effective as of December 6, 1994. The Awards
granted hereunder must be awarded on or before October 31, 2000.
ARTICLE III
PARTICIPANTS
Sec. 3.1 ELIGIBILITY
Any Eligible Employee of the Company or its Subsidiaries shall be
eligible to participate in the Plan; provided, however, that no member
of the Committee shall be eligible to participate.
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 have sole
discretion and authority to determine from among Eligible Employees
those to whom and the time or times at which Awards may be granted,
the amount of such Awards and the terms and conditions upon which such
Awards shall become earned and payable. 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, 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.
Sec. 4.3 COMPANY ASSISTANCE
The Company shall supply full and timely information to the Committee
on all matters relating to eligible employees, their employment, death,
retirement, disability or other termination of employment, 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 AGREEMENT
Each Award to be made hereunder shall be evidenced by minutes of a
meeting or the written consent of the Committee and by a written
Agreement dated as of the date of grant and executed by the Company
and the Grantee which Agreement shall set forth such terms and
conditions as may be determined by the Committee consistent with the
Plan.
Sec. 5.2 DETERMINATION OF AWARDS
In advance of the granting each Award hereunder the Committee shall:
(a) Establish the specific earnings level or levels (which may be
characterized either in terms of net earnings or earnings
excluding certain items such as interest, taxes, depreciation
or amortization) which must be attained within a specified
period in order for such Award (or portion thereof) to become
earned by the Grantee and payable by the Company; and
(b) Establish a graded series of Award levels which shall designate
the amount to be paid to Grantees at each such level if the
earnings level is achieved during the specified period, and
assign an Award grade level for each Grantee. If the earnings
level is not achieved during the specified period, no Award
will be payable to the Grantee. In the event of a reduction
in a Grantee's responsibilities subsequent to the grant of an
Award, the Committee shall have sole discretion and authority
at any time prior to the earning of the Award to reduce such
Grantee's assigned Award grade level or to discontinue such
Grantee's further participation in such Award. In the event of
any such reduction or discontinuance, the amount of the
Eligible Employee's Award shall be adjusted proportionately
based on the number of months during the specified period that
the Eligible Employee is assigned by the Committee to each of
the various Award Levels, and to reflect the portion of the
specified period that the Grantee's participation in the Award
has been discontinued. The maximum amount of any Award shall
be $2,500,000.
Sec. 5.3 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT
Except as otherwise established by the Committee in determining the
terms and conditions of a particular Award, if, prior to the date on
which an Award (or applicable portion thereof) becomes earned and
payable, the Grantee's employment with the Company or its Subsidiaries
shall be terminated by the Company or Subsidiary with or without cause,
or by the act of the Grantee, then the Grantee's rights with respect to
any Award which has not become earned and payable as of the date of
such termination shall immediately terminate and all rights thereunder
shall cease.
ARTICLE VI
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
Sec. 6.1 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Board may at any time, upon recommendation of the Committee,
terminate, and may at any time and from time to time and in any
respect amend or modify, the Plan; provided, however, that except as
otherwise provided herein, no termination, amendment or modification of
the Plan shall in any manner affect any Awards theretofore granted
under the Plan without the consent of the Grantee.
ARTICLE VII
MISCELLANEOUS
Sec. 7.1 NONTRANSFERABILITY OF AWARDS
No Awards granted hereunder shall be transferred by a Grantee otherwise
than by will or the laws of descent and distribution. During the
lifetime of a Grantee, such Awards shall be payable only to the
Grantee.
Sec. 7.2 EMPLOYMENT
Nothing in the Plan or in any Awards granted hereunder shall confer
upon any employee the right to continue in the employ of the Company or
any Subsidiary.
Sec. 7.3 OTHER COMPENSATION PLANS
The adoption of the Plan shall not affect any 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 of the
Company or any Subsidiary.
Sec. 7.4 PLAN BINDING ON SUCCESSORS
The Plan shall be binding upon the successors and assigns of the
Company.
Sec. 7.5 SINGULAR, PLURAL GENDER
Whenever used herein, nouns in the singular shall include the plural,
and the masculine pronoun shall include the feminine gender.
Sec. 7.6 HEADINGS, ETC., NOT PART OF PLAN
Headings of Articles and Sections hereof are inserted for convenience
and reference; they constitute no part of the Plan.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
Condensed Consolidated Balance Sheet at January 31, 1995 and the Condensed
Consolidated Statement of Earnings for the three months ended January 31,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> JAN-31-1995
<CASH> 313840
<SECURITIES> 111893
<RECEIVABLES> 333163
<ALLOWANCES> 0
<INVENTORY> 59860
<CURRENT-ASSETS> 1157887
<PP&E> 1857009
<DEPRECIATION> 537626
<TOTAL-ASSETS> 2783454
<CURRENT-LIABILITIES> 944323
<BONDS> 24098
<COMMON> 51707
0
0
<OTHER-SE> 1207127
<TOTAL-LIABILITY-AND-EQUITY> 2783454
<SALES> 0
<TOTAL-REVENUES> 2059626
<CGS> 0
<TOTAL-COSTS> 1974695
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3320
<INCOME-PRETAX> 79124
<INCOME-TAX> 28801
<INCOME-CONTINUING> 50323
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 50323
<EPS-PRIMARY> .61
<EPS-DILUTED> .61
</TABLE>
