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 April 30, 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 May 31, 1995 there were 82,766,165 shares of common
stock outstanding.
FLUOR CORPORATION
FORM 10-Q
April 30, 1995
TABLE OF CONTENTS
PAGE
Part I: Financial Information
Condensed Consolidated Statement of Earnings for
the Three Months Ended April 30, 1995 and 1994.... 2
Condensed Consolidated Statement of Earnings for
the Six Months Ended April 30, 1995 and 1994...... 3
Condensed Consolidated Balance Sheet at April 30,
1995 and October 31, 1994......................... 4
Condensed Consolidated Statement of Cash Flows for
the Six Months Ended April 30, 1995 and 1994...... 6
Notes to Condensed Consolidated Financial
Statements........................................ 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations............... 9
Condensed Consolidated Changes in Backlog.......... 12
Part II: Other Information........................ 13
Signatures........................................... 16
Part I: Financial Information
FLUOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
Three Months Ended April 30, 1995 and 1994
(In Thousands Except Per Share Amounts)
UNAUDITED
1995 1994
REVENUES.............................. $2,229,313 $2,079,593
COSTS AND EXPENSES
Cost of revenues.................... 2,133,971 1,991,323
Corporate administrative and
general expenses................... 12,451 13,332
Interest expense.................... 3,241 4,409
Interest income..................... (7,334) (4,610)
Total Costs and Expenses.............. 2,142,329 2,004,454
EARNINGS BEFORE INCOME TAXES.......... 86,984 75,139
INCOME TAX EXPENSE.................... 31,662 27,400
NET EARNINGS.......................... $ 55,322 $ 47,739
NET EARNINGS PER SHARE................ $ 0.66 $ 0.58
DIVIDENDS PER COMMON SHARE............ $ 0.15 $ 0.13
SHARES USED TO CALCULATE EARNINGS PER
SHARE............................... 83,251 82,815
See Accompanying Notes.
-2-
FLUOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
Six Months Ended April 30, 1995 and 1994
(In Thousands Except Per Share Amounts)
UNAUDITED
1995 1994
REVENUES.............................. $4,288,939 $4,137,258
COSTS AND EXPENSES
Cost of revenues.................... 4,108,666 3,967,949
Corporate administrative and
general expenses................... 22,057 24,012
Interest expense.................... 6,561 8,639
Interest income..................... (14,453) (9,479)
Total Costs and Expenses.............. 4,122,831 3,991,121
EARNINGS BEFORE INCOME TAXES.......... 166,108 146,137
INCOME TAX EXPENSE.................... 60,463 54,400
NET EARNINGS.......................... $ 105,645 $ 91,737
NET EARNINGS PER SHARE................ $ 1.27 $ 1.11
DIVIDENDS PER COMMON SHARE............ $ 0.30 $ 0.26
SHARES USED TO CALCULATE EARNINGS PER
SHARE............................... 83,108 82,615
See Accompanying Notes.
-3-
FLUOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
April 30, 1995 and October 31, 1994
(Dollars in Thousands)
ASSETS
April 30, October 31,
1995 1994 *
(Unaudited)
Current Assets
Cash and cash equivalents........... $ 312,487 $ 374,468
Marketable securities............... 98,677 117,618
Accounts and notes receivable....... 369,641 318,672
Contract work in progress........... 303,940 308,877
Deferred taxes...................... 46,251 56,967
Inventory and other current assets.. 105,376 81,861
Total Current Assets............... 1,236,372 1,258,463
Property, plant and equipment (net
of accumulated depreciation,
depletion and amortization of
$563,068 and $514,145, respectively) 1,360,071 1,274,437
Investments and goodwill, net......... 63,235 71,596
Other................................. 227,590 220,272
$2,887,268 $2,824,768
(Continued On Next Page)
* Amounts at October 31, 1994 have been derived from audited
financial statements.
-4-
FLUOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
April 30, 1995 and October 31, 1994
(Dollars in Thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
April 30, October 31,
1995 1994 *
(Unaudited)
Current Liabilities
Accounts and notes payable.......... $ 309,762 $ 333,244
Commercial paper.................... 19,934 19,957
Advance billings on contracts....... 251,025 220,101
Accrued salaries, wages and
benefit plans...................... 212,645 199,506
Other accrued liabilities........... 210,149 210,511
Current portion of long-term debt... 3,143 38,001
Total Current Liabilities.......... 1,006,658 1,021,320
Long-term debt due after one year..... 23,902 24,366
Deferred taxes........................ 40,002 45,199
Other noncurrent liabilities.......... 511,793 513,427
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 -
82,747,938 shares and 82,507,568
shares, respectively............. 51,717 51,567
Additional capital.................. 508,479 498,804
Retained earnings................... 765,073 684,249
Unamortized executive stock plan
expense............................ (21,598) (14,472)
Cumulative translation adjustments.. 1,242 308
Total Shareholders' Equity......... 1,304,913 1,220,456
$2,887,268 $2,824,768
See Accompanying Notes.
* Amounts at October 31, 1994 have been derived from audited
financial statements.
-5-
FLUOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six Months Ended April 30, 1995 and 1994
(Dollars in Thousands)
UNAUDITED
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings........................ $ 105,645 $ 91,737
Adjustments to reconcile net
earnings to cash provided by
operating activities:
Depreciation, depletion and
amortization................... 68,449 55,656
Deferred taxes................... 4,079 (5,393)
Equity earnings, net of
distributions................... 12,781 (3,751)
Change in operating assets and
liabilities.................... (48,495) 99,511
Other, net....................... (9,404) 24,502
Cash provided by operating activities. 133,055 262,262
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures................ (160,253) (108,072)
Sale (purchase) of marketable
securities, net.................... 18,941 (13,589)
Initial cash proceeds from sale of
discontinued operations, excluding
tax benefits....................... -- 51,869
Proceeds from sale of property,
plant and equipment................ 8,158 7,952
Investments......................... (5,435) 1,770
Other, net.......................... 4,226 1,402
Cash utilized by investing activities. (134,363) (58,668)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in note payable to
affiliate.......................... -- (15,092)
Payments on long-term debt.......... (35,528) (490)
Cash dividends paid................. (24,821) (21,381)
Stock options exercised............. 955 10,653
Other, net.......................... (1,279) (1,076)
Cash utilized by financing activities. (60,673) (27,386)
Increase (decrease) in cash and cash
equivalents......................... (61,981) 176,208
Cash and cash equivalents at
beginning of period................. 374,468 214,844
Cash and cash equivalents at end of
period.............................. $ 312,487 $ 391,052
See Accompanying Notes.
-6-
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 and six months ended April 30, 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
April 30, 1995 and its consolidated results of
operations for the three and six months ended April 30,
1995 and 1994 and cash flows for the six months ended
April 30, 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:
April 30, October 31,
1995 1994
($ in thousands)
Coal........................... $ 35,363 $ 24,289
Supplies and other............. 31,291 28,414
$ 66,654 $ 52,703
(4) Cash paid for interest was $3.8 million and $6.2 million
for the six month periods ended April 30, 1995 and
1994, respectively. Income tax payments, net of refunds,
were $60.4 million and $30.8 million during the six month
periods ended April 30, 1995 and 1994, respectively.
-7-
(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 April 30, 1995 and November
1, 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 and six months ended
April 30, 1995 were not material. The cost of
securities sold is based on the specific identification
method. As of April 30, 1995 approximately $54 million
of securities mature within the next year, approximately
$31 million mature in the next one to three years and
approximately $14 million mature after three years.
-8-
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 increased 7 percent and 4 percent, respectively, for the
three and six month periods ended April 30, 1995, compared with
the same periods of 1994. Net earnings for the three and six
months ended April 30, 1995 were $55.3 million and $105.6
million, respectively, compared with net earnings of $47.7
million and $91.7 million, respectively, for the same periods of
1994. The increases in net earnings are due primarily to higher
earnings for both the Engineering and Construction and Coal
segments, higher interest income and lower corporate general
and administrative expense.
ENGINEERING AND CONSTRUCTION
Revenues for the Engineering and Construction segment increased 8
percent and 4 percent, respectively, for the three and six month
periods ended April 30, 1995 compared with the same periods of
1994, primarily due to an increase in work performed. Engineering
and Construction operating profits increased 6 percent for both
the three and six month periods ended April 30, 1995 compared
with the same periods of 1994 primarily due to the increased
volume of work performed, partially offset by higher levels of
investment spending for strategic business development. 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 and six month periods
ended April 30, 1995 were $2.7 billion and $5.0 billion,
respectively, compared with $2.2 billion and $4.5 billion for the
same periods of 1994. Approximately 70 and 62 percent,
respectively, of new awards for the three and six months ended
April 30, 1995 were for projects located outside the United
States. New awards for the three months ended April 30, 1995
included over $1.0 billion relating to work to be performed on
a power project located in Paiton, Indonesia. The large size
and uncertain timing of new awards can create variability in
the company's award pattern, consequently, future award trends
are difficult to predict with certainty.
-9-
The following table sets forth backlog for each of the company's
business sectors:
April 30, October 31, April 30,
($ in millions) 1995 1994 1994
Process $ 7,175 $ 7,668 $ 7,926
Industrial 3,723 3,564 3,560
Power/Government 3,214 2,369 2,869
Diversified Services 292 421 495
Total $ 14,404 $ 14,022 $ 14,850
Approximately 56 percent of backlog at April 30, 1995 relates to
projects located outside of the United States compared with 51
percent at October 31, 1994 and 45 percent at April 30, 1994.
COAL
Revenues from produced coal increased 6 percent and 13 percent,
respectively, for the three and six month periods ended
April 30, 1995 compared with the same periods of 1994. These
increases were primarily due to increased sales volume of
metallurgical coal, which more than offset lower demand
for steam coal stemming from relatively mild winter
weather. Brokered coal sales and margins in the three and six
months ended April 30, 1995 and 1994 were immaterial as
brokered coal volume has been replaced with produced coal from
reserves acquired in recent years. Accordingly, brokered coal
sales are excluded from revenue in 1995 and related gross
margin is classified as other operating profit. Prior periods
have not been restated. Operating profit increased 20 percent
and 11 percent, respectively, for the three and six months
ended April 30, 1995 compared with the same periods of 1994,
due primarily to increased sales volume of metallurgical coal
which has a higher gross margin than steam coal. This was
partially offset by the continuation of fixed costs related to
certain steam coal mines that were temporarily shutdown due to
the soft steam coal market.
OTHER
Corporate administrative and general expenses decreased
approximately $.9 million and $2.0 million, respectively, for the
three and six months ended April 30, 1995 compared with the same
-10-
periods in 1994, primarily due to lower corporate overhead
partially offset by higher stock price and performance driven
compensation plans expense. Net interest income for the three
and six months ended April 30, 1995 increased $3.9 million and
$7.1 million, respectively, due to 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 six month period ended
April 30, 1995 was essentially unchanged from the same period
of 1994.
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 additional 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.
The change in operating assets and liabilities for the six
months ended April 30, 1995 resulted primarily from higher coal
inventory due to lower demand for steam coal stemming from
relatively mild winter weather, and higher coal receivables
from increased metallurgical coal sales.
For the six months ended April 30, 1995, capital expenditures
were $160.3 million including $85.6 million related primarily to
mine development at Massey. Dividends paid in the six months
ended April 30, 1995 were $24.8 million (.30 per share)
compared with $21.4 million ($.26 per share) for the same
period of 1994.
-11-
FLUOR CORPORATION
CONDENSED CONSOLIDATED CHANGES IN BACKLOG
(Dollars in Millions)
UNAUDITED
For the Three Months Ended April 30, 1995 1994
Backlog - beginning of period....... $ 14,115.7 $ 14,814.9
New awards.......................... 2,719.3 2,172.3
Adjustments and cancellations, net.. (422.9) (277.6)
Work performed...................... (2,007.9) (1,859.5)
Backlog - end of period............. $ 14,404.2 $ 14,850.1
For the Six Months Ended April 30, 1995 1994
Backlog - beginning of period....... $ 14,021.9 $ 14,753.5
New awards.......................... 4,971.2 4,506.5
Adjustments and cancellations, net.. (740.7) (684.9)
Work performed...................... (3,848.2) (3,725.0)
Backlog - end of period............. $ 14,404.2 $ 14,850.1
-12-
FLUOR CORPORATION
PART II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders.
(a) Date of meeting. The annual meeting of
stockholders of Fluor Corporation was held on
March 14, 1995 at the Hyatt Regency Hotel
Irvine in Irvine, California.
(b) Election of Directors.
Directors elected -
Carroll A. Campbell
66,599,780 FOR
425,567 VOTED TO WITHHOLD AUTHORITY
Robert V. Lindsay
66,705,529 FOR
319,818 VOTED TO WITHHOLD AUTHORITY
Leslie G. McCraw
66,765,711 FOR
259,636 VOTED TO WITHHOLD AUTHORITY
Dr. Martha R. Seger
66,521,445 FOR
503,902 VOTED TO WITHHOLD AUTHORITY
Other directors continuing in office -
Hugh K. Coble
Peter J. Fluor
Dr. David P. Gardner
William R. Grant
Bobby R. Inman
Vilma S. Martinez
Buck Mickel
-13-
(c) Matters voted upon.
Ratification of the appointment of Ernst &
Young LLP as auditors for the fiscal year
ending October 31, 1995:
66,562,984 FOR
104,801 AGAINST
-0- BROKER NON-VOTE
|Approval of the Stock Plan for Non-Employee
|Directors:
57,496,336 FOR
7,075,819 AGAINST
2,453,192 ABSTAIN
-0- BROKER NON-VOTE
(d) Terms of settlement between registrant and
any other participant. None.
-14-
FLUOR CORPORATION
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10.4 Fluor Corporation Deferred Directors'
Fees Program (as amended through
July 31, 1992)
10.21 Fluor Corporation Stock Plan For
Non-Employee Directors (adopted
effective March 14, 1995)
(b) Reports on Form 8-K. None.
-15-
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 thereunto duly authorized.
FLUOR CORPORATION
(Registrant)
Date: June 14, 1995 /s/ J. Michal Conaway
J. Michal Conaway, Vice President
and Chief Financial Officer
Date: June 14, 1995 /s/ V.L. Prechtl
V.L. Prechtl, Vice President and
Controller
-16-
FLUOR CORPORATION
DEFERRED DIRECTORS' FEES PROGRAM
(as amended through July 31, 1992)
PURPOSE
To provide non-employee directors of Fluor Corporation with a means of
minimizing their current tax burden, while providing funds for
expenses subsequent to retirement.
ELIGIBILITY
Directors of Fluor Corporation entitled to directors' fees.
LIMITATIONS
The amount of directors' fees for meetings in any calendar year to be
deferred must be specified by the director in writing to Fluor
Corporation no later than December 31 of the prior calendar year,
either as a fixed dollar amount or as a percentage of (i) such fees or
of (ii) the retainer portion or (iii) the meeting portion of such
fees. The amount or percentage so specified is irrevocable for that
calendar year, and will be effective for all subsequent calendar years
unless and until a new amount or percentage is similarly specified to
be effective prospectively. The amount so deferred is an offset
against, and in any event cannot exceed the amount of, the directors'
fees, if any, for that calendar year otherwise payable to the
director.
ADJUSTMENT FACTOR
Amounts deferred under this Program will be subject to an Adjustment
Factor in accordance with the
1
provisions of the Deferred Directors' Fees Program Financial Procedure,
a copy of which is attached hereto and made a part hereof.
PAYMENT
Payment of amounts deferred under this Program will be made in
accordance with the provisions of said Deferred Directors' Fees
Program Financial Procedure.
CLAIMS PROCEDURE
The Executive Compensation Committee of Fluor Corporation shall
establish and maintain procedures for the filing of claims for
benefits under this Program and for the review of the denial of any
such claims and said Committee is hereby designated as the fiduciary
of this Program to which appeals of claim denials shall be submitted
for review.
2
DEFERRED DIRECTORS' FEES PROGRAM
FINANCIAL PROCEDURE
PURPOSE
To provide guidelines for accounting for amounts deferred under the
Fluor Corporation Deferred Directors' Fees Program, including the
calculation and recording of applicable Adjustment Factors and
determination of the time and manner of payment of Participant's
Accounts.
DEFINITIONS
1. "Adjustment Factor" - The Interest Factor or the Stock Value
Factor, as applicable.
2. "Interest Factor" - For deferred amounts otherwise payable prior
to January 1, 1986, the higher of either the weighted average
interest rate paid by Fluor Corporation on its average borrowings
or the weighted average interest rate earned by Fluor Corporation
on its investments of excess cash in short term investments. For
deferred amounts otherwise payable on or after January 1, 1986,
the rate to be used in calculating the Interest Factor shall be
established from time to time by resolution of the Executive
Committee of Fluor Corporation. The applicable Interest Factor
will be calculated quarterly and maintained by and will be
available from Corporate Finance.
3. "Beneficiary" - The beneficiary designated by the Participant on
the form provided by Fluor Corporation or, in the absence of any
designation, the administrator or executor of the Participant's
estate. To the extent required by applicable state law, such
beneficiary designation
3
shall require the written consent of the Participant's spouse.
4. "Fiscal Year" - The twelve month period ending October 31.
5. "Participant" - Each Director electing to participate under the
Program.
6. "Participant's Account" - The account to which each amount
originally deferred in a Fiscal Year shall be credited and which
reflects each Participant's aggregate deferred amounts and
Adjustment Factors.
7. "Stock Value Factor" - The Adjustment Factor provided for in
Procedure paragraph 3.
8. "Termination of Service" - Termination of the status of director
of Fluor Corporation for any reason.
PROCEDURE
1. General -
(a) The amount of directors' fees for meetings in any calendar
year to be deferred must be specified by the Participant in
writing to Fluor Corporation no later than December 31 of
the prior calendar year, either as a fixed dollar amount or
as a percentage of (i) such fees or of (ii) the retainer portion
or (iii) the meeting portion of such fees. The amount or
percentage so specified is irrevocable for that calendar year,
and shall be effective for all subsequent calendar years unless
and until a new amount or percentage is similarly
4
specified to be effective prospectively. The amount so deferred
is an offset against, and in any event cannot exceed the amount
of the directors' fees, if any, for that calendar year otherwise
payable to the Participant.
(b) Each Participant shall, at the time of first electing
deferral under the Program, indicate in writing to Fluor
Corporation his election to have his Participant's Account
adjusted either by the Interest Factor or the Stock Value
Factor. A Participant may at any time, but not more than
once during any fiscal quarter, change his election as to
the Adjustment Factor to be applied to all or any portion of
his Participant's Account. Such change in election shall be
effective as of the beginning of the first fiscal quarter
commencing after written notice of such change of election
is received from the Participant.
(c) With respect to a Participant electing the Interest Factor,
his Participant's Account shall be adjusted as set forth in
Procedure paragraph 2.
(d) With respect to a Participant electing the Stock Value
Factor, each amount originally deferred in a Fiscal Year
shall be treated as having been invested in shares of Fluor
common stock, calculated to the nearest one ten-thousandth
of a share, at the per share closing price of Fluor common
stock on the New York Stock Exchange on the day in which
payment in cash otherwise (but for the election to defer)
would have been made, and his Participant's Account shall be
adjusted as set forth in Procedure paragraph 3. Each such
Participant's Account shall be expressed in dollar amounts
and the "shadow" Fluor common shares as calculated above.
5
(e) In January of each year, a statement, expressed in dollar
amounts and in "shadow" shares, if applicable, of the status
of his Participant's Account shall be furnished to each
Participant.
2. With respect to Participants electing the Interest Factor, said
Factor shall be calculated in the following manner:
(a) Interest will be accrued annually at the applicable Interest
Factor. Interest will be calculated on each Participant's
balance of principal and interest as of the preceding Fiscal
Year end. Each amount deferred in a Fiscal Year will begin
to accrue interest from the first day of the month in which
payment of the director's fees otherwise (but for the
election to defer) would have been made. Where the
Participant changes his election of Adjustment Factor from
the Stock Value Factor to the Interest Factor during the
Fiscal Year then the amount of his Participant's Account as
to which such a change in selection has been made shall
begin to accrue interest from the date of such change.
Where the Participant changes his election of Adjustment
Factor from Interest Factor to the Stock Value Factor during
any Fiscal Year, the interest will be accrued at the
applicable Interest Factor up to the effective date of such
change.
(b) In the event of a full or partial payment, the amount paid
will bear interest through the last day of the preceding
month at the applicable Interest Factor as determined on a
year-to-date basis from the prior Fiscal Year end through
the most recent fiscal quarter (i.e., a payment made in
September will include accrued interest through August 31
calculated using the applicable Interest Factor for the
period October 31 through July 31).
6
3. With respect to Participants electing the Stock Value Factor,
said Factor shall be calculated in the following manner:
(a) There shall be credited to each Participant's account an
amount equal, or shares or other property equivalent, as the
case may be, to dividends or other distributions with
respect to Fluor common stock at the time such dividends or
other distributions are paid or made. With respect to cash
amounts so paid, such amounts shall be treated as having
been invested in shares of Fluor common stock in accordance
with the provisions of Procedure paragraph 1 (d).
(b) The aggregate number of "shadow" shares standing to a
Participant's credit shall be valued at each Fiscal Year end
at the per share closing price of Fluor common stock on the
New York Stock Exchange ("Share Price") at such Fiscal Year
end, and the dollar amount of each Participant's Account
shall be adjusted at each Fiscal Year end to reflect such
valuation. Where the Participant changes his Adjustment
Factor from the Interest Factor to the Stock Value Factor
during the Fiscal Year, the aggregate number of "shadow"
shares shall be increased as of the date of such change
based upon the amount of his Participant's Account as to
which such change in election has been made and the per
Share Price as of the effective date of such change. Where
the Participant changes his Adjustment Factor from the Stock
Value Factor to the Interest Factor, the aggregate number of
"shadow" shares to be deducted from his credit and the
corresponding amount to be credited to the Interest Factor
portion of his Participant's Account shall be determined on
the basis of the Share Price on the effective date of the
change.
7
(c) In the event of installment payments as set forth in
Procedure paragraph 4, the Participant's entitlement
remaining after the first installment payment shall be
treated as having been invested in such shares of Fluor
common stock as set forth in Procedure paragraph 1 (d).
Such "shadow" shares shall be valued at the per share
closing price of Fluor common stock on the New York Stock
Exchange on the date of that installment payment. The
remaining entitlement after each succeeding installment
payment shall likewise be treated as having been so invested
and shall be valued in accordance with the foregoing
provisions.
4. Payments under the Program shall be made as follows:
(a) Payment in cash in one lump sum or in annual installments
will be at the sole discretion of Fluor Corporation. The
number of installments will not exceed the lesser of ten or
twice the number of years for which the Participant has
participated in the Program.
(b) If Termination of Service occurs from January 1 through June
30, the lump sum payment or the first installment will be
paid no later than December 31 of the year of termination.
(c) If Termination of Service occurs from July 1 through
December 31, the lump sum payment or the first installment,
may be deferred at the discretion of Fluor Corporation until
the January immediately following termination.
(d) If a Participant's entitlement is paid in installments, the
second installment payment will be paid during January of the
year following the year in which the first installment was
8
paid and all remaining installments will be paid
annually in the month of January.
(e) In the event of the death of a Participant prior to
commencement of any payments hereunder, payments will be
made to his Beneficiary in accordance with the foregoing
provisions. In the event of the death of the Participant
after commencement of benefit payments in installments but
prior to payment of his entire entitlement, payment may be
made to his Beneficiary in one lump sum or by continuation
of the installments at the discretion of Fluor Corporation.
In the event installments continue to the Beneficiary, they
will be subject to the appropriate Adjustment Factor as set
forth in Procedure paragraphs 2 and 3.
5. The Corporate Accounting Department of Fluor Corporation is
responsible for developing adequate internal accounting
procedures for:
(a) Estimating the aggregate directors' fees required for each
Fiscal Year and accruing that amount periodically during the
year by charging directors' fees expense and crediting a
directors' fees liability account.
(b) Transferring the deferred directors' fees (if directors have
made a timely election to defer some or all of the fees)
from the directors' fees expense and liability accounts to
deferred directors' fees expense and liability accounts.
(c) Maintaining individual Participant's Accounts for each
director who has elected deferral under the Program. Each
such account shall reflect amounts deferred, the applicable
9
Adjustment Factor, and payment to each Participant or
Beneficiary and shall thereby provide detail to support the
total deferred directors' fees liability reflected in the
general ledger.
(d) Accounting for the Adjustment Factors by charging or
crediting interest expense and charging or crediting the
appropriate Participant's Account.
(e) Forwarding to each Participant in January of each year a
statement of the status of his Participant's Account.
(f) Ensuring that payments to Participants under the Program are
properly reported to the U.S. Internal Revenue Service (Form
1099-NEC-Statement for Recipients of Nonemployee
Compensation).
NOTES FOR TAX ACCOUNTING
1. The total amount of deferred directors' fees (including the
Adjustment Factors) under the Program is deductible by Fluor
Corporation, for income tax purposes, only upon payment to the
Participant or Beneficiary.
2. Prior to distribution, the total deferred directors' fees are
carried as a prepaid tax item and are netted with deferred
liabilities on the balance sheet.
3. The liability for deferred income tax is developed from information
provided in the quarterly tax
10
kits supplied by Corporate Tax. Tax Form 3 contains an
analysis of the transactions (amounts accrued, Adjustment Factor
and payments) affecting the deferred directors' fees liability
account for the period.
11
FLUOR CORPORATION
STOCK PLAN FOR
NON-EMPLOYEE DIRECTORS
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . 1
Sec. 1.1 Definitions . . . . . . . . . . . . . . . . . . 1
ARTICLE II - GENERAL . . . . . . . . . . . . . . . . . . . . . 2
Sec. 2.1 Name . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 2.2 Purpose . . . . . . . . . . . . . . . . . . . . 2
Sec. 2.3 Effective Date . . . . . . . . . . . . . . . . . 3
Sec. 2.4 Limitations . . . . . . . . . . . . . . . . . . 3
Sec. 2.5 Awards Granted Under Plan . . . . . . . . . . . 3
ARTICLE III - PARTICIPANTS . . . . . . . . . . . . . . . . . . 3
Sec. 3.1 Eligibility . . . . . . . . . . . . . . . . . . 3
ARTICLE IV - ADMINISTRATION . . . . . . . . . . . . . . . . . . 3
Sec. 4.1 Duties and Powers of Committee . . . . . . . . . 3
Sec. 4.2 Majority Rule . . . . . . . . . . . . . . . . . 4
Sec. 4.3 Company Assistance . . . . . . . . . . . . . . . 4
ARTICLE V - AWARDS . . . . . . . . . . . . . . . . . . . . . . 4
Sec. 5.1 Award Grant and Restricted Stock Agreement . . . 4
Sec. 5.2 Consideration for Issuance . . . . . . . . . . . 4
Sec. 5.3 Restrictions on Sale or Other Transfer . . . . . 5
Sec. 5.4 Lapse of Restrictions . . . . . . . . . . . . . 6
Sec. 5.5 Early Retirement . . . . . . . . . . . . . . . . 6
Sec. 5.6 Rights as Stockholder . . . . . . . . . . . . . 6
ARTICLE VI - RESTRICTED UNIT AWARDS . . . . . . . . . . . . . . 6
Sec. 6.1 Restricted Unit Award Grant and Agreement . . . 6
Sec. 6.2 Award Terms and Conditions . . . . . . . . . . . 6
Sec. 6.3 Effect of Resignation, Removal,
Death or Retirement . . . . . . . . . . . . . 7
ARTICLE VII - STOCK CERTIFICATES . . . . . . . . . . . . . . . 7
Sec. 7.1 Stock Certificates . . . . . . . . . . . . . . . 7
i
Page
ARTICLE VIII - Termination, Amendment and
Modification of Plan . . . . . . . . . . . . . 8
Sec. 8.1 Termination, Amendment and
Modification of Plan . . . . . . . . . . . . . 8
ARTICLE IX - MISCELLANEOUS . . . . . . . . . . . . . . . . . . 9
Sec. 9.1 Adjustment Provisions . . . . . . . . . . . . . 9
Sec. 9.2 Continuation of Board Service . . . . . . . . . 9
Sec. 9.3 Compliance with Government Regulations . . . . . 9
Sec. 9.4 Privileges of Stock Ownership . . . . . . . . . 9
Sec. 9.5 Withholding . . . . . . . . . . . . . . . . . 10
Sec. 9.6 Nontransferability . . . . . . . . . . . . . . 10
Sec. 9.7 Other Compensation Plans . . . . . . . . . . . 10
Sec. 9.8 Plan Binding on Successors . . . . . . . . . . 10
Sec. 9.9 Singular, Plural; Gender . . . . . . . . . . . 10
Sec. 9.10 Headings, etc., No Part of Plan . . . . . . . 10
ii
ARTICLE I
DEFINITIONS
Sec. 1.1 DEFINITIONS
As used herein, the following terms shall have the meanings
hereinafter set forth unless the context clearly indicates to the
contrary:
(a) "Age for Board Retirement" shall mean the age for
mandatory retirement of members of the Board as specified in the
Bylaws of the Company, as applied to Eligible Directors on the
date of such Eligible Directors' retirement from the Board.
(b) "Award" shall mean an award of Restricted Stock
pursuant to the provisions of Article V hereof.
(c) "Awardee" shall mean an Eligible Director to whom
Restricted Stock has been awarded hereunder.
(d) "Board" shall mean the Board of Directors of the
Company.
(e) "Change of Control" of the Company shall be deemed
to have occurred if, (i) a third person, including a 'group' as
defined in Section 13(d)(3) of the Securities Exchange Act of
1934, acquires shares of the Company having twenty-five percent
or more of the total number of votes that may be cast for the
election of directors of the Company; or (ii) as the result of
any cash tender or exchange offer, merger or other business
combination, or any combination of the foregoing transactions (a
"Transaction"), the persons who were directors of the Company
before the Transaction shall cease to constitute a majority of
the Board of the Company or any successor to the Company.
(f) "Committee" shall mean members of the Board who are
not eligible to participate in the Plan.
(g) "Company" shall mean Fluor Corporation.
(h) "Eligible Director" shall mean a director of the
Company who is not and never has been an employee of the Company
or any of its Subsidiaries.
(i) "Fair Market Value" shall mean the average of the
highest price and the lowest price per share at which the Stock
is sold in the regular way on the New York Stock Exchange on the
day such value is to be determined hereunder
1
or, in the absence of any reported sales on such day, the first
preceding day on which there were such sales.
(j) "Plan" shall mean the Stock Plan for Non-Employee
Directors, the current terms of which are set forth herein.
(k) "Restricted Stock" shall mean Stock that may be
awarded to an Eligible Director by the Committee pursuant to
Article V hereof, which is nontransferable and subject to a
substantial risk of forfeiture until specific conditions are met.
(l) "Restricted Stock Agreement" and "Restricted Unit
Agreement" shall mean the agreement between the Company and the
Awardee with respect to Restricted Stock and Restricted Units,
respectively, awarded hereunder.
(m) "Restricted Unit Award" shall mean amounts awarded
pursuant to Article VI hereof.
(n) "Stock" shall mean the Common Stock of the Company
or, in the event that the outstanding shares of Stock are
hereafter changed into or exchanged for shares of a different
stock or securities of the Company or some other corporation,
such other stock or securities.
(o) "Subsidiary" shall mean any corporation, the
majority of the outstanding capital stock of which is owned,
directly or indirectly, by the Company or any partnership or
joint venture in which either the Company or such a corporation
is at least a twenty percent (20%) equity participant.
ARTICLE II
GENERAL
Sec. 2.1 NAME
This Plan shall be known as the "Stock Plan for Non-Employee
Directors".
Sec. 2.2 PURPOSE
The purpose of the Plan is to advance the interests of the
Company and its stockholders by affording to Eligible Directors of the
Company an opportunity to acquire or increase their proprietary
interest in the Company by the grant to such directors of Awards under
the terms set forth herein. By encouraging non-employee
2
directors to become owners of Company shares, the Company seeks to
increase their incentive for enhancing shareholder value and to motivate,
retain and attract those highly competent individuals upon whose judgment,
initiative, leadership and continued efforts the success of the
Company in large measure depends.
Sec. 2.3 EFFECTIVE DATE
The Plan shall become effective upon its approval by the holders
of a majority of the shares of Stock of the Company represented at an
annual or special meeting of the stockholders of the Company.
Sec. 2.4 LIMITATIONS
Subject to adjustment pursuant to the provisions of Section 9.1
hereof, the aggregate number of shares of Stock which may be issued as
Awards shall not exceed 25,000. Any such shares may be either
authorized and unissued shares or shares issued and thereafter
acquired by the Company.
Sec. 2.5 AWARDS GRANTED UNDER PLAN
Shares of Stock received pursuant to a Restricted Stock Agreement
executed hereunder with respect to which the restrictions provided for
in Section 5.3 hereof have lapsed shall not again be available for
Award grant hereunder. If Restricted Stock is acquired by the Company
pursuant to the provisions of paragraph (c) of Section 5.3 hereof, new
Awards may be granted hereunder covering the number of shares to which
such Restricted Stock acquisition relates.
ARTICLE III
PARTICIPANTS
Sec. 3.1 ELIGIBILITY
Any Eligible Director shall be eligible to participate in the
Plan.
ARTICLE IV
ADMINISTRATION
Sec. 4.1 DUTIES AND POWERS OF COMMITTEE
The Plan shall be administered by the Committee. Subject to the
express provisions of the Plan, the Committee shall also have
3
complete authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to it, to determine the details
and provisions of each Restricted Stock and Restricted Unit Agreement, and
to make all other determinations necessary or advisable in the
administration of the Plan.
Sec. 4.2 MAJORITY RULE
A majority of the members of the Committee shall constitute a
quorum, and any action taken by a majority present at a meeting at
which a quorum is present or any action taken without a meeting
evidenced by a writing executed by a majority of the whole Committee
shall constitute the action of the Committee.
Sec. 4.3 COMPANY ASSISTANCE
The Company shall supply full and timely information to the
Committee on all matters relating to Eligible Directors, their death,
retirement, removal or resignation from the Board and such other
pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is
necessary in the performance of its duties.
ARTICLE V
AWARDS
Sec. 5.1 AWARD GRANT AND RESTRICTED STOCK AGREEMENT
The Committee shall grant a one time Award of 1000 shares of
Restricted Stock to Eligible Directors. Such Awards shall be made to
each current Eligible Director upon shareholder approval of the Plan
and to any subsequently appointed Eligible Director on a date
determined by the Committee, in its sole discretion, following such
appointment to the Board. Each Award granted hereunder must be granted
within ten years from the effective date of the Plan. The Awardee
shall be entitled to receive the Stock subject to such Award only if
the Company and the Awardee, within 60 days after the date of the
Award, enter into a written Restricted Stock Agreement dated as of the
date of the Award, which Agreement shall set forth such terms and
conditions as may be determined by the Committee consistent with the
Plan.
Sec. 5.2 CONSIDERATION FOR ISSUANCE
No shares of Restricted Stock shall be issued to an Awardee
hereunder unless and until the Committee shall have determined that
consideration has been received by the Company, in the form of
services actually rendered to the Company by the Awardee, having a
fair value of not less than the then fair market value of a like
4
number of shares of Stock subject to all of the herein provided
conditions and restrictions applicable to Restricted Stock, but in no
event less than the par value of such shares.
Sec. 5.3 RESTRICTIONS ON SALE OR OTHER TRANSFER
Each share of Stock received pursuant to each Restricted Stock
Agreement shall be subject to acquisition by Fluor Corporation, and
may not be sold or otherwise transferred except pursuant to the
following provisions:
(a) The shares of Stock represented by the Restricted
Stock Agreement shall be held in book entry form with the
Company's transfer agent until the restrictions lapse in
accordance with the conditions established by the Committee
pursuant to Section 5.4 hereof, or until the shares of stock are
forfeited pursuant to paragraph (c) of this Section 5.3.
Notwithstanding the foregoing, the Awardee may request that,
prior to the lapse of the restrictions or forfeiture of the
shares, certificates evidencing such shares be issued in his name
and delivered to him, and each such certificate shall bear the
following legend:
"The shares of Fluor Corporation common stock
evidenced by this certificate are subject to
acquisition by Fluor Corporation, and such
shares may not be sold or otherwise
transferred except pursuant to the provisions
of the Restricted Stock Agreement by and
between Fluor Corporation and the registered
owner of such shares."
(b) No such shares may be sold, transferred or
otherwise alienated or hypothecated so long as such shares are
subject to the restriction provided for in this Section 5.3.
(c) Upon an Awardee's removal or resignation from the
Board for any reason, all of the Awardee's Restricted Stock
remaining subject to restriction shall be acquired by the Company
effective as of the date of such removal or resignation. Upon the
occurrence or non-occurrence of such other events as shall be
determined by the Committee and specified in the Awardee's
Restricted Stock Agreement relating to any such Restricted Stock,
all of such Restricted Stock remaining subject to restriction
shall be acquired by the Company upon the occurrence or non-
occurrence of such event.
5
Sec. 5.4 LAPSE OF RESTRICTIONS
As to current Eligible Directors, the restrictions on 20% of each
Award will lapse upon the date of the Award. Thereafter, the
restrictions will lapse in four equal increments on each of the four
succeeding anniversary dates following the date of the Award. As to
subsequently appointed Eligible Directors, the restrictions on 20% of
each Award will lapse on March 14 next following the date of Award.
Thereafter, the restrictions will lapse in four equal increments on
the succeeding anniversary dates following the date of lapsing of
restrictions on the first 20% of the shares. In the case of a Company
Change of Control, death, attainment of the Age for Board Retirement
or approved early retirement in accordance with Section 5.5 below of
an Awardee, all restrictions on all Restricted Stock held by the
Awardee will lapse.
Sec. 5.5 EARLY RETIREMENT
An Eligible Director who leaves the Board prior to the Age for
Board Retirement, may, upon application to and in the sole discretion
of the Committee, be granted early retirement status.
Sec. 5.6 RIGHTS AS STOCKHOLDER
Subject to the provisions of Section 5.3 hereof, upon the
issuance to the Awardee of Restricted Stock hereunder, the Awardee
shall have all the rights of a stockholder with respect to such Stock,
including the right to vote the shares and receive all dividends and
other distributions paid or made with respect thereto.
ARTICLE VI
RESTRICTED UNIT AWARDS
Sec. 6.1 RESTRICTED UNIT AWARD GRANT AND AGREEMENT
Each Restricted Unit Award granted hereunder shall be evidenced
by minutes of a meeting or the written consent of the Committee and by
a written Restricted Unit Agreement dated as of the date of grant and
executed by the Company and the Awardee, which Agreement shall set
forth such terms and conditions as may be determined by the Committee
consistent with the Plan. A Restricted Unit Award may be made only in
connection with an Award made hereunder.
Sec. 6.2 AWARD TERMS AND CONDITIONS
Each Restricted Unit Award shall have a value equal to the Fair
Market Value on the date that such award, or portion thereof,
6
becomes earned and payable. Each Restricted Unit Award shall become
earned and payable in five equal increments on each of the five dates
upon which a portion of the restrictions lapse on the underlying Award,
or upon such other terms and conditions as may be determined by the
Committee. The proceeds of each Restricted Unit Award shall be applied
in payment of applicable federal and state withholding taxes arising
from the lapse of restrictions on the related Restricted Stock and from
such award (or portion thereof) becoming earned and payable, with the
balance, if any, to be remitted to the Awardee. If the outstanding
shares of Stock of the Company are increased, decreased, or exchanged
for a different number or kind of shares or other securities, or if
additional shares or new or different shares or other securities are
distributed with respect to such shares of Stock or other securities,
through merger, consolidation, sale of all or substantially all of the
property of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or
other distribution with respect to such shares of Stock or other
securities, an appropriate and proportionate adjustment may be made in
the number of Restricted Units subject to outstanding Restricted Stock
Awards. Such adjustments will be made by the Committee, whose
determination as to what adjustments will be made and the extent
thereof will be final, binding, and conclusive.
Sec. 6.3 EFFECT OF RESIGNATION, REMOVAL, DEATH OR RETIREMENT
If, prior to the date on which the Restricted Units, or any
portion thereof becomes earned and payable, the Awardee is removed or
resigns from the Board for any reason, then the Awardee's rights with
respect to that portion of the Restricted Units which have not been
earned as of the date of such termination shall immediately terminate
and all rights thereunder shall cease; provided, however, in the case
of a Company Change of Control, death, attainment of the Age for Board
Retirement, or approved early retirement in accordance with Section
5.5, the Restricted Units will become earned and payable on the date
upon which all restrictions on the Award lapse.
ARTICLE VII
STOCK CERTIFICATES
Sec. 7.1 STOCK CERTIFICATES
The Company shall not be required to issue or deliver any
certificate for shares of Stock received as Restricted Stock pursuant
to a Restricted Stock Agreement executed hereunder, prior to
fulfillment of all of the following conditions:
7
(a) the admission of such shares to listing on all
stock exchanges on which the Stock is then listed;
(b) the completion of any registration or other
qualification of such shares under any federal or state law or
under the rulings or regulations of the Securities and Exchange
Commission or any other governmental regulatory body, which the
Committee shall in its sole discretion deem necessary or
advisable;
(c) the obtaining of any approval or other clearance
from any federal or state governmental agency which the Committee
shall in its sole discretion determine to be necessary or
advisable; and
(d) the lapse of such reasonable period of time
following the execution of the Restricted Stock Agreement as the
Committee from time to time may establish for reasons of
administrative convenience.
ARTICLE VIII
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
Sec. 8.1 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Committee may at any time terminate, and may at any time and
from time to time and in any respect amend or modify, the Plan,
provided, however, that no such action of the Committee without
approval of the stockholders of the Company may:
(a) increase the total number of shares of Stock
subject to the Plan except as contemplated in Section 9.1 hereof;
(b) materially increase the benefits accruing to
participants under the Plan;
(c) withdraw the administration of the Plan from the
Committee; or
(d) permit any person while a member of the Committee
to be eligible to receive Restricted Stock under the Plan; and
provided further, that no termination, amendment or modification
of the Plan shall in any manner affect a Restricted Stock
Agreement theretofore executed pursuant to the Plan without the
consent of Awardee.
8
ARTICLE IX
MISCELLANEOUS
Sec. 9.1 ADJUSTMENT PROVISIONS
(a) Subject to Section 9.1(b) below, if the outstanding shares of
Stock of the Company are increased, decreased, or exchanged for a
different number or kind of shares or other securities, or if
additional shares or new or different shares or other securities are
distributed with respect to such shares of Stock or other securities,
through merger, consolidation, sale of all or substantially all of the
property of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or
other distribution with respect to such shares of Stock or other
securities, an appropriate and proportionate adjustment may be made in
(i) the maximum number and kind of shares provided in Section 2.4 and
(ii) the number and kind of shares or other securities subject to the
outstanding Awards.
(b) Adjustments under Section 9.1(a) will be made by the
Committee, whose determination as to what adjustments will be made and
the extent thereof will be final, binding, and conclusive. No
fractional interests will be issued under the Plan resulting from any
such adjustments.
Sec. 9.2 CONTINUATION OF BOARD SERVICE
Nothing in the Plan or in any instrument executed pursuant to the
Plan will confer upon any Eligible Director any right to continue to
serve on the Board.
Sec. 9.3 COMPLIANCE WITH GOVERNMENT REGULATIONS
No shares of Stock will be issued hereunder unless and until all
applicable requirements imposed by federal and state securities and
other laws, rules, and regulations and by any regulatory agencies
having jurisdiction and by any stock exchanges upon which the Stock
may be listed have been fully met. As a condition precedent to the
issuance of shares of Stock pursuant hereto, the Company may require
the director to take any reasonable action to comply with such
requirements.
Sec. 9.4 PRIVILEGES OF STOCK OWNERSHIP
No director and no beneficiary or other person claiming under or
through such director will have any right, title, or interest in or to
any shares of Stock allocated or reserved under the Plan or subject to
any Award except as to such shares of Stock, if any, that have been
issued to such director.
9
Sec. 9.5 WITHHOLDING
The Company may make such provisions as it deems appropriate to
withhold any taxes the Company determines it is required to withhold
in connection with any Award. The Company may require the director to
satisfy any relevant tax requirements before authorizing any issuance
of Stock to the director. Such settlement may be made in cash or
Stock.
Sec. 9.6 NONTRANSFERABILITY
An Award may be exercised during the life of the director solely
by the director or the director's duly appointed guardian or personal
representative. No Award and no other right under the Plan, contingent
or otherwise, will be assignable or subject to any encumbrance,
pledge, or charge of any nature.
Sec. 9.7 OTHER COMPENSATION PLANS
The adoption of the Plan shall not affect any other stock option
or incentive or other compensation plans in effect for the Company or
any Subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of incentive or other compensation for
employees or directors of the Company or any Subsidiary.
Sec. 9.8 PLAN BINDING ON SUCCESSORS
The Plan shall be binding upon the successors and assigns of the
Company.
Sec. 9.9 SINGULAR, PLURAL; GENDER
Whenever used herein, nouns in the singular shall include the
plural, and the masculine pronoun shall include the feminine gender.
Sec. 9.10 HEADINGS, ETC., NO PART OF PLAN
Headings of Articles and Sections hereof are inserted for
convenience and reference; they constitute no part of the Plan.
10
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Condensed Consolidated Balance Sheet at April 30, 1995 and the Condensed
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