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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1995
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
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
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
3333 MICHELSON DRIVE IRVINE, CALIFORNIA 92730
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 975-2000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
REGISTERED
New York Stock Exchange
Common Stock, $0.625 par value Chicago Stock Exchange
Pacific Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None
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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K. X
---
The aggregate market value of the registrant's voting stock held by non-
affiliates was $5,161,720,169 on January 16, 1996, based upon the average
between the highest and lowest sales prices of the registrant's Common Stock
as reported in the consolidated transactions reporting system.
Common Stock outstanding as of January 16, 1996 -- 83,448,167 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I, II and IV incorporate certain information by reference from the
registrant's Annual Report to stockholders for the fiscal year ended October
31, 1995.
Part III incorporates certain information by reference from the registrant's
definitive proxy statement for the annual meeting of stockholders to be held
on March 12, 1996, which proxy statement will be filed no later than 120 days
after the close of the registrant's fiscal year ended October 31, 1995.
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PART I
ITEM 1. BUSINESS.
Fluor Corporation ("Fluor" or the "Company") was incorporated in Delaware in
1978 as a successor in interest to a California corporation of the same name
that was originally incorporated in 1924. Its executive offices are located at
3333 Michelson Drive, Irvine, California 92730, telephone number (714) 975-
2000.
Through Fluor Daniel, Inc. and other domestic and foreign subsidiaries, the
Company provides engineering, procurement, construction, maintenance and other
diversified services on a worldwide basis to an extensive range of industrial,
commercial, utility, natural resources, energy and governmental clients.
The Company maintains investments in coal-related businesses through its
ownership of A. T. Massey Coal Company, Inc. ("Massey").
A summary of the Company's operations and activities by business segment and
geographic area is set forth below.
ENGINEERING AND CONSTRUCTION
The Fluor Daniel group of domestic and foreign companies ("Fluor Daniel")
provides a full range of engineering, procurement, construction, maintenance
and other diversified services to clients in a broad range of industrial and
geographic markets on a worldwide basis. The types of services provided by
Fluor Daniel, directly or through companies or partnerships jointly owned or
affiliations with other companies, include: feasibility studies, conceptual
design, detail engineering, procurement, project and construction management,
construction, maintenance, plant operations, technical, project finance,
quality assurance/quality control, start-up assistance, site evaluation,
licensing, consulting, construction equipment sales and leasing, temporary
technical and non-technical staffing and environmental services.
Fluor Constructors International, Inc. ("Fluor Constructors") is organized
and operated separately from Fluor Daniel. Fluor Constructors provides
construction management, construction and maintenance services in the United
States and Canada. Fluor Constructors is the Company's union construction arm.
The engineering and construction business is conducted under various types
of contractual arrangements, including cost reimbursable (plus fixed or
percentage fee), all-inclusive rate, unit price, fixed or maximum price and
incentive fee contracts. Contracts are either competitively bid and awarded or
individually negotiated. While, in terms of dollar amount, the majority of
contracts are of the cost reimbursable type, there has been an increase in the
volume of cost-reimbursable contracts with incentive-fee arrangements and in
the volume of fixed or unit price contracts. In certain instances, the Company
has guaranteed facility completion by a scheduled acceptance date and/or
achievement of certain acceptance and performance testing levels. Failure to
meet any such schedule or performance requirements could result in additional
costs and the amount of such additional costs could exceed project profit
margins.
The markets served by the business are highly competitive and for the most
part require substantial resources, particularly highly skilled and
experienced technical personnel. A large number of companies are competing in
the markets served by the business. Competition is primarily centered on
performance and the ability to provide the engineering, planning, management
and project execution skills required to complete complex projects in a safe,
timely and cost efficient manner. The engineering and construction business
derives its competitive strength from its diversity, reputation for quality,
cost-effectiveness, worldwide procurement capability, project management
expertise, geographic coverage, ability to meet client requirements by
performing construction on either a union or open shop basis, ability to
execute projects of varying sizes, strong safety record and lengthy experience
with a wide range of services and technologies.
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Design and engineering services provided by the engineering and construction
business involve the continual development of new and improved versions of
existing processes, materials or techniques, some of which are patented.
However, none of the existing or pending patents held or licensed by the
business are considered essential to operations. Generally, the development
and improvement of processes, materials and techniques are performed as part
of design and engineering services in connection with the projects undertaken
for various clients.
FLUOR DANIEL
Fluor Daniel's operations are organized into geographical, industry and
specialized groups responsible for identifying and capitalizing on
opportunities in their market segments. Geographical groups include Asia
Pacific, the Americas, and Europe, Africa and the Middle East which provide
geographic expertise and capability. Industry groups include Process,
Industrial, and Power and Government. Specialized groups include Diversified
Services and Sales and Marketing. The Sales and Marketing Group includes
strategic planning and project finance and provides sales and marketing
support and assistance to all of the other groups. The Industry and
Diversified Services groups are described in further detail below.
Individual operating companies within the groups focus on specific clients,
industries and markets. The operating companies rely on a network of globally
located engineering offices to provide resources and expertise in support of
project execution worldwide.
While the United States will remain an important market for Fluor Daniel's
services, increasingly the largest share of opportunities are located outside
the United States. Demand for higher living standards is driving strong
economic growth in developing economies, particularly in the Asia Pacific and
Latin American regions. Expansion of basic industries is increasing
fundamental energy requirements and infrastructure needs. Globalization of
markets and geopolitical change is also stimulating strategic investments in
new production facilities in these emerging markets.
The operations of Fluor Daniel are detailed below by industry group:
Process
Services provided by the Process Group support clients through the following
operating companies: Petroleum and Petrochemicals; Production and Pipelines;
and Chemicals, Plastic and Fibers.
During the fiscal year 1995, the Process Group contract awards
included: engineering, procurement and construction management for a single
point mooring and submarine pipeline in Korea, a 90 kilometer, contract crude
oil import/export pipeline, tanks, pump stations and a single point mooring
buoy in Lithuania, a hydrotreater unit in Canada, an increase in capacity of
two hydro desulfurization units and associated pipeline in Venezuela,
modifications of a gasoline reformulation refinery in California, a fatty
acids plant in the Philippines, a vinyl acetate monomer plant in Singapore, a
polymer plant in England, a new film machine at an existing plant in New York
and a silanes plant in Germany; engineering, procurement and construction for
a cat feed hydrotreater unit in Louisiana, a 354 kilometer pipeline [with
laterals] from Mariquita to Cali in Colombia, a hydrogen peroxide plant in
Canada, a polypropylene plant expansion in Pennsylvania, a hydrogen peroxide
plant in Texas and a chemical plant debottlenecking project in North Carolina;
engineering and construction management for China's first fully refrigerated
propane terminal and modification of an existing offshore dock in China;
engineering and procurement for revamping of two paraxylene units in Alabama,
modifications of a petroleum loading marine terminal in Alaska, a propylene
splitter unit in Pennsylvania, an upgrade and expansion of a parex unit in
Puerto Rico and a polystyrene plant expansion in Louisiana; program management
for a nylon tire cord plant in India; construction management for an expansion
and renovation of a paint pigments plant in Delaware; engineering for a
polyethylene plant in Texas, three geothermal power generation facilities in
Indonesia, a metaxylene unit in Texas, a petroleum refinery expansion in Abu
Dhabi, a receiving terminal, pump stations, meter stations, pipelines and
export terminal in Azerbaijan, a revamp and modernization of a natural
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gas plant in Hungary, numerous small capital projects at various locations in
the USA, a phosphorus plant in Germany and several small capital projects at
various locations in Europe; construction of a chemical processing line
conversion and a waste water treatment plant, both in South Carolina;
consulting for the evaluation of existing oil pipelines and the review for an
early oil export line in Azerbaijan; project management for a 200,000 barrels
per day production facility with infrastructure, power generation and an 800
mile pipeline and single point mooring loading terminal in Cameroon and Chad;
and inspection services for an existing pipeline from Midland to Houston,
Texas and existing pipelines in Oklahoma, Kansas and Missouri.
Ongoing projects include: engineering, procurement and construction
management for a hydrochlorofluorocarbon plant in Kentucky, gas injection and
underground gas storage in the Netherlands, a refinery in Thailand, a
cogeneration project in Kansas, a gas oil hydrotreater in California, a
methanol plant in Norway and a flue gas desulfurization, a synthetic oil
abatement project in Canada, a polymer expansion facility in Virginia, a
polymer plant in Mexico, a polymer plant capacity increase in Mexico, a
chemical intermediates plant in Spain, a reformulated gasoline and a clean
fuels program, both in California, a refinery upgrade in the Netherlands and a
flue gas desulphurization, synthetic oil abatement project in Alberta, Canada;
engineering, procurement and construction for a polymer plant in North
Carolina, a fluid catalytic cracking unit in Korea; program management and
procurement for a petrochemical complex in Kuwait; engineering and procurement
for an oil production facility in Gabon, reformer unit revamp in Texas, filter
products engineering in Tennessee, an expansion and renovation of a paint
pigments plant in Delaware, a reformulated fuels project at a refinery in
California and a chlor-alkali/ethylene expansion of a petrochemical plant in
Saudi Arabia; construction and maintenance for evergreen small capital
construction services in Tennessee and in South Carolina; evergreen capital
construction and maintenance services for various chemical and fiber plants
throughout the USA; engineering for a pipeline and pump stations in Alaska, an
early production system equipment and an oil field production facility in
Colombia, a refinery upgrade and expansion in Kansas, a cat feed hydrotreater
in Louisiana, an organic acid plant expansion in Texas, a services alliance in
Texas, a Kingston evergreen support in Canada, a debottlenecking project in
Indonesia and a polyethylene plant in Singapore; procurement and construction
management for a general facilities and utilities of a petrochemical complex
in Kuwait; and construction for an oxo alcohol and a chemical plant, both in
Louisiana.
Projects completed in fiscal year 1995 included: engineering, procurement
and construction management for a herbacide plant in Louisiana, a pipeline
from Argentina to Chile, a polymer plant in Singapore, a plastics stretch
project in Indiana and a fibers line plant in Luxembourg; engineering,
procurement and construction for a fibers facility in North Carolina;
engineering and procurement for an inter-refinery pipeline in Pennsylvania, a
sour gas plant and a sweetening and sulfur recovery facility, both in Canada;
engineering for pipeline development and oil field expansion in Colombia, a
liquid petroleum gas plant expansion in Saudi Arabia and oil terminals in
Lithuania; construction of an ethoxylation plant in Texas, a restart of a
methanol plant in Texas and a spherilene and ethylene purification facility in
Texas; and inspection services for a gas pipeline and facilities in Florida
and a refinery aromatics project in Pennsylvania. In addition, seven projects
were cancelled during fiscal 1995; a fragrance plant in Georgia, an ethylene
debottlenecking project for a refinery in Texas, a fluid catalytic cracking
unit revamp in Illinois, a refinery upgrade in the Netherlands, a delayed
coker in Venezuela and off-site engineering support for installation of a gas-
turbine generator in Great Britain.
Industrial
Services provided by the Industrial Group include a broad range of services
provided to support clients through the following operating companies: Mining
and Metals; Automotive and General Manufacturing; Pharmaceuticals and
Biotechnology; Food and Beverage; Commercial and Institutional Facilities;
Electronics; Infrastructure; Telecommunications; Jaakko Poyry/Fluor Daniel
which serves the pulp and paper industry and PACE, the operating company
dedicated to serving Fluor Daniel's alliance with Procter & Gamble.
During fiscal year 1995, Industrial sector contract awards
included: engineering, procurement and construction for gold mines in Chile
and Papau, New Guinea, expansion of a dry conversion process facility in
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North Carolina, rebuilding a carpet manufacturing facility in Georgia, a
gelcaps facility in North Carolina, a contract manufacturing facility and
corporate headquarters in North Carolina, a packaging and distribution center
in Florida, expansion of various snack food plants in various locations
through the United States, and a paper machine expansion in Georgia;
engineering, procurement and construction management for an automotive
assembly plant in Argentina, a beltway around Denver, Colorado, a copper and
gold mine in Argentina, a metal aperture screen manufacturing facility
expansion in New York, a silicon wafer facility in Texas and a utilities
upgrade and building expansion in California; engineering and construction
management for a hotel renovation in Indonesia, an expansion of a spice
manufacturing facility in Australia; construction management for a nickel mine
expansion in Indonesia, a train station terminal building in Kyoto, Japan and
a sports facility in South Carolina; and engineering for a washing machine
plant in China, an iron mine in Australia, a copper smelter and refinery in
Indonesia, a paper machine rebuild in Georgia, and a paper machine addition in
Wisconsin.
Ongoing projects include: engineering, procurement and construction for a
blast furnace coal injection facility in Indiana and an emergency 911 response
system for the City of Chicago, Illinois; engineering, procurement and
construction management for an iron ore pelletizing processing facility in
Brazil, a copper mine expansion in Indonesia, a copper concentrator expansion
in Chile, a sodium cromoglycate facility in the United Kingdom, a paper
products plant in Korea, two de-inking facilities and a paper recycle
facility, all in the United Kingdom, a copper expansion and pipeline project
in Chile, apparel distribution centers at various locations throughout the
United States, a dextrose expansion project in Illinois and a fine chemicals
manufacturing plant in Arkansas; engineering and construction for a corn
processing plant in Illinois and several consumer products plants in Ohio;
construction for a personal care product plant in Puerto Rico, a paper mill
environmental upgrade in Florida and an engine plant expansion in Ohio;
construction management for a multi-product personal care facility in the
Philippines, a renovation of a turbine facility in South Carolina, prison
projects in Texas and California, a tobacco processing plant expansion in
North Carolina, and an automotive assembly plant in Alabama; engineering for a
shampoo facility in China and a wafer fabrication facility in Utah;
maintenance services for automotive facilities in Hungary, Tennessee and
Germany; engineering and construction management for a tobacco facility in the
Netherlands, an engine removal facility in New Jersey and a vaccine
manufacturing plant in North Carolina; condition assessment for facilities at
twelve military installations at various locations throughout the United
States; an engineering study for an automobile manufacturer to determine the
feasibility of disassembling and relocating two North American automobile
manufacturing facilities to China; and project management for rail stations
for the Federal Transportation Administration in New York City, rail transit
for the Los Angeles County Metropolitan Transportation Authority in
California, highway construction in Orange County, California, and a
court/detention center in Texas.
Projects completed in fiscal year 1995 included: engineering, procurement
and construction for a gold mine in Chile, a food processing plant in Utah, a
personal care manufacturing facility in Ohio and a laundry detergent
manufacturing facility in Ohio; engineering, procurement and construction
management for a zinc, lead and silver mine in Australia, a silicon wafer
manufacturing plant in Taiwan, a paint shop in Kentucky, a chocolate plant in
China, a gold heap expansion in Peru, and a copper smelter modernization in
Utah; construction management for a laundry detergent facility expansion in
China, a chemical plant in Puerto Rico, a disk storage plant in Malaysia, an
emergency prison program in Texas and a pilot plant for pharmaceutical
manufacturing in New Jersey; engineering and construction management for a
laundry detergent facility expansion in China; engineering for three products
plant expansions in China and a synthetic growth hormone facility in Puerto
Rico; construction for an automobile assembly plant in South Carolina and a
pulp mill modernization in Ohio; and project management for a convention
center in North Carolina.
Power and Government
The Power and Government Group provides services to clients through the
Power Generation, Duke/Fluor Daniel, and Power Services operating companies
which serve public utilities and private power companies throughout the world.
The Government Services and FERMCO operating companies serve the United States
government.
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During the fiscal year 1995, Power and Government Group contract awards
included: engineering, procurement, construction management and start up for a
2 x 600 megawatt coal fired power plant in Indonesia; operations and
maintenance for a 175 megawatt diesel power plant in Indonesia; maintenance
and support for a rebuild of a power plant in Texas; engineering, procurement,
and construction management of a 650 megawatt combined cycle facility in
Virginia; engineering and construction management for a 1200 megawatt phased
combined cycle gas facility in Saudi Arabia; and engineering, procurement and
construction of a 48 megawatt combined cycle plant in California, a 160
megawatt cogeneration plant in Indiana, a 240 megawatt combined cycle
cogeneration plant in Louisiana and a 75 megawatt bottoming cycle and 69
kilovolt transmission line in Illinois.
On-going projects include: engineering, procurement, construction management
and start-up assistance for coal switching modifications to a coal-fired
facility in Indiana; engineering, procurement, construction and construction
management for a waste to energy facility in New York; engineering,
procurement and construction management for a fuel cell pilot plant in
California; environmental remediation management for the United States
Department of Energy ("DOE") former uranium processing plant in Ohio (the
"Fernald Project"); engineering, design and procurement for a 385 megawatt
pulverized coal plant in South Carolina; engineering and construction for
emission monitoring equipment for various power generation sites of utilities
in Arkansas, Louisiana, Mississippi, and Texas; engineering and construction
management for various radar and weather stations located throughout the
United States for the National Oceanic and Atmospheric Administration;
engineering for a laboratory facility upgrade in Illinois, a nuclear utility
in Illinois, a DOE waste vitrification plant in Washington, the DOE nuclear
waste repository program, the reconfiguration of the DOE nuclear weapons
program, the DOE National Engineering Laboratories in Idaho, and a waste
handling facility for the DOE, in Washington; operations and maintenance for a
new 130 megawatt cogeneration facility in Virginia; management and operation
services for the Naval Petroleum and Oil Shale Reserves program for the DOE in
Colorado, Utah and Wyoming; maintenance for a 3x1,270 megawatt nuclear plant
in Arizona, fossil and gas generation plants in Texas, Georgia, Louisiana,
Arkansas, Mississippi, Australia, Florida, and Tennessee, and nuclear plants
in South Carolina, Kansas, Missouri, Virginia, Alabama, and Texas.
Projects completed in fiscal year 1995 included: a maintenance and outage
support project at various sites for a southeastern power generator in
Tennessee and Kentucky.
Diversified Services
The Diversified Services Group was created in fiscal 1994 to extend the
offering of services representing the core competencies of Fluor Daniel.
Typically these services have been provided within the boundaries of the
traditional engineering and construction project cycle in support of Fluor
Daniel. They are now offered on a stand alone basis into new and expanded
areas of business outside of Fluor Daniel.
Established businesses in the group which have become more focused on
external markets include the following operating companies: Facility & Plant
Services, which provides plant maintenance and efficiency services; TRS
Staffing Solutions, which provides temporary personnel; American Equipment
Company, which sells, leases, and outsources equipment for construction and
industrial needs; and Environmental Services, which provides environmental
engineering and remediation services. Operating companies focused on creating
new businesses by expanding core competencies include Consulting, which uses
Fluor Daniel resources to provide solutions to client needs that do not
typically fall under traditional engineering and construction services; Fluor
Daniel Technologies, which uses Fluor Daniel's extensive technical expertise
to evaluate new technologies for investment; and Acquion, a provider of
procurement outsourcing services and electronic catalog and ordering services.
During fiscal year 1995, Diversified Services Group new awards included: a
large equipment outsourcing contract at a petrochemical plant in Texas;
management services for computer manufacturing plants in Arizona, Colorado and
California; environmental investigation and evaluation at U.S. military
facilities in Hawaii, Guam and Puerto Rico; and site remediation at a plant in
Illinois.
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Ongoing projects include: maintenance for a tire manufacturing facility in
Tennessee, a petrochemical plant in Texas, computer manufacturing plants in
Florida, Texas and North Carolina, and a refinery in Mississippi;
environmental investigation and remediation plan services for a toxic waste
site in New York; environmental investigation, remediation design, and
implementation services for a chemical waste site in Ohio; environmental
investigation, feasibility studies, and remediation for the United States Army
Environmental Center, the United States Army Corps of Engineers, and the
United States Environmental Protection Agency; and engineering, procurement
and construction management for an environmental remediation program for a
toxic waste site in Indiana.
Projects completed in fiscal year 1995 included: design and installation of
a computerized maintenance system for a petroleum company in Indonesia; and
training services for pre-start up of an automotive assembly plant in Alabama.
Shortly before the end of the fiscal year, the Company acquired Management
Resources Group PLC, a London based permanent and temporary placement services
company. In addition, on December 12, 1995, the Company announced plans to
acquire a majority stake in Groundwater Technology, Inc. ("GTI"), a
Massachusetts based environmental remediation company. The acquisition is
subject to GTI's shareholders' approval as well as other customary conditions.
FLUOR CONSTRUCTORS
Fluor Constructors is organized and operated separately from Fluor Daniel.
Fluor Constructors provides unionized construction management, construction
and maintenance services in the United States and Canada, both independently
and as a subcontractor to Fluor Daniel, and global support to all Fluor Daniel
industry and regional groups.
During fiscal year 1995, Fluor Constructors awards included: construction
and construction management services for a steam turbine project in Indiana, a
polypropylene plant expansion in Pennsylvania and a hydrogen peroxide project
in Canada.
Ongoing projects include: construction and construction management for a
reformulated gasoline project at a refinery in California, a blast furnace
coal injection facility in Indiana, a hydrocracker revamp for a refinery in
Delaware, a refrigerant production facility in Kentucky and a sulfur dioxide
unit in Canada; construction management of a potable water supply system in
Nevada, an Emergency 911 response system in Illinois and a waste to energy
boiler replacement in New York; and maintenance and outage support at various
plant sites for a nuclear power plant in Missouri and for fossil power plants
in Louisiana, Mississippi and Arkansas.
Projects completed in fiscal 1995 included: construction and construction
management for expansion of an ethylene glycol plant and a coker shutdown in
Canada; construction management for an aromatics project for a refinery and an
inter-refinery pipeline, both in Pennsylvania; and maintenance and outage
support at various plant sites for a southeastern power generator in Tennessee
and Kentucky and at a nuclear power plant in Alabama.
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BACKLOG
Fluor Daniel's operating companies are organized into four major industry
groups, Process, Industrial, Power and Government, and Diversified Services.
The following table sets forth the consolidated backlog of Fluor's
engineering and construction segment at October 31, 1995 and 1994 by business
group:
<TABLE>
<CAPTION>
1995 1994
------------ ------------
(IN MILLIONS OF DOLLARS)
<S> <C> <C>
Process......................................... $ 6,671 $ 7,668
Industrial...................................... 4,516 3,564
Power and Government............................ 3,275 2,369
Diversified Services............................ 263 421
------------ ------------
$ 14,725 $ 14,022
============ ============
</TABLE>
The following table sets forth the consolidated backlog of Fluor's
engineering and construction segment at October 31, 1995 and 1994 by region:
<TABLE>
<CAPTION>
1995 1994
------------ ------------
(IN MILLIONS OF DOLLARS)
<S> <C> <C>
United States................................. $ 6,666 $ 6,802
Europe, Africa and Middle East................ 3,088 4,387
Asia Pacific.................................. 3,303 1,662
The Americas.................................. 1,668 1,171
------------ ------------
$ 14,725 $ 14,022
============ ============
Estimated portion not to be performed during
fiscal 1996: 44%
============
</TABLE>
The dollar amount of the backlog is not necessarily indicative of the future
earnings of Fluor related to the performance of such work. Although backlog
represents only business which is considered to be firm, there can be no
assurance that cancellations or scope adjustments will not occur. Due to
additional factors outside of Fluor's control, such as changes in project
schedules, Fluor cannot predict with certainty the portion of its October 31,
1995, backlog to be performed subsequent to fiscal 1996.
Approximately $1.3 billion of the Power and Government backlog at October
31, 1995, is attributable to the DOE Fernald Project and subject to government
funding on an annual basis, and another $1.2 billion of the Power and
Government backlog is attributable to the Paiton private power project. At
October 31, 1995, approximately $1.4 billion of the Process Group backlog is
attributable to a project with a company affiliated with Union Carbide (the
Kuwait Petrochemical Refinery).
COAL INVESTMENT
A. T. Massey Coal Company, Inc., which is headquartered in Richmond,
Virginia, and its subsidiaries conduct Massey's coal-related businesses and
are collectively referred to herein as the "Massey Companies."
The Massey Companies produce, process and sell bituminous, low sulfur coal
of steam and metallurgical grades from 17 mining complexes (14 of which
include preparation plants) located in West Virginia, Kentucky and Tennessee.
At October 31, 1995, two of the mining complexes were still in development and
not yet producing coal. A third mining complex is idle.
Operations at certain of the facilities are conducted in part through the
use of independent contract miners. The Massey Companies also purchase and
resell coal produced by unrelated companies. Steam coal is used
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primarily by utilities as fuel for power plants. Metallurgical coal is used
primarily to make coke for use in the manufacture of steel.
For each of the three years in the period ended October 31, 1995, the Massey
Companies' production (expressed in thousands of short tons) of steam coal and
metallurgical coal, respectively, was 15,756 and 11,607 for fiscal 1995,
17,120 and 7,333 for fiscal 1994, and 16,048 and 5,163 for fiscal 1993. Sales
(expressed in thousands of short tons) of coal produced by the Massey
Companies were 27,410 for fiscal year 1995, 23,835 for fiscal 1994 and 21,192
for fiscal 1993.
A large portion of the steam coal produced by the Massey Companies is sold
to domestic utilities under long-term contracts. Metallurgical coal is sold to
both foreign and domestic steel producers. Approximately 66% of the Massey
Companies' fiscal 1995 coal production was sold under long-term contracts, 60%
of which was steam coal and 40% of which was metallurgical coal. Approximately
9% of the coal tonnage sold by the Massey Companies in fiscal 1995 was sold
outside of North America.
Massey is among the five largest marketers of coal in the United States. The
coal market is a mature market with many strong competitors. Competition is
primarily dependent upon coal price, transportation cost, producer reliability
and characteristics of coal available for sale. The management of Massey
considers Massey to be generally well-positioned with respect to these factors
in comparison to its principal competitors.
Recently passed acid rain legislation is generally anticipated to benefit
prices for low sulfur coal. Massey intends to continue to evaluate and pursue,
in appropriate circumstances, the acquisition of additional low sulfur coal
reserves.
The Coal Industry Retiree Health Benefits Act of 1992 (the "Act") provides
that certain retired coal miners who were members of the United Mine Workers
of America, along with their spouses, are guaranteed health care benefits. The
Massey Companies' obligation under the Act is currently estimated to aggregate
$46.8 million which will be recognized as expense as payments are assessed.
The amount expensed during fiscal 1995 approximated $2.3 million.
The management of the Massey Companies estimates that, as of October 31,
1995, the Massey Companies had total recoverable reserves (expressed in
thousands of short tons) of 1,499,248; 580,886 of which are assigned
recoverable reserves and 918,362 of which are unassigned recoverable reserves;
and 1,105,793 of which are proven recoverable reserves and 393,455 of which
are probable recoverable reserves.
The management of the Massey Companies estimates that approximately 37% of
the total reserves listed above consist of reserves that would be considered
primarily metallurgical grade coal. They also estimate that approximately 66%
of all reserves contain less than 1% sulfur. A portion of the steam coal
reserves could be beneficiated to metallurgical grade by coal preparation
plants, and substantially all of the metallurgical coal reserves could be sold
as high quality steam coal, if market conditions warrant.
"Reserves" means that part of a coal deposit which could be economically and
legally extracted or produced at the time of the reserve determination.
"Recoverable reserves" means coal which is recoverable by the use of existing
equipment and methods under federal and state laws now in effect. "Assigned
recoverable reserves" means reserves which can reasonably be expected to be
mined from existing or planned mines and processed in existing or planned
plants. "Unassigned recoverable reserves" means reserves for which there are
no specific plans for mining and which will require for their recovery
substantial capital expenditures for mining and processing facilities. "Proven
recoverable reserves" refers to deposits of coal which are substantiated by
adequate information, including that derived from exploration, current and
previous mining operations, outcrop data and knowledge of mining conditions.
"Probable recoverable reserves" refers to deposits of coal which are based on
information of a more preliminary or limited extent or character, but which
are considered likely.
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OTHER MATTERS
ENVIRONMENTAL, SAFETY AND HEALTH MATTERS
The Massey Companies are affected by and comply with federal, state and
local laws and regulations relating to environmental protection and plant and
mine safety and health, including but not limited to the federal Surface
Mining Control and Reclamation Act of 1977; Occupational Safety and Health
Act; Mine Safety and Health Act of 1977; Water Pollution Control Act, as
amended by the Clean Water Act of 1977; Black Lung Benefits Revenue Act of
1977; and Black Lung Benefits Reform Act of 1977. It is impossible to predict
the full impact of future legislative or regulatory developments on such
operations, because the standards to be met, as well as the technology and
length of time available to meet those standards, continue to develop and
change.
In fiscal 1995, Fluor expended approximately $8.9 million to comply with
environmental, health and safety laws and regulations in connection with its
coal investment, none of which were capital expenditures. Fluor anticipates
making $8.5 million and $5.3 million in such non-capital expenditures in
fiscal 1996 and 1997, respectively. Of these expenditures, $8.1 million, $6.0
million and $2.9 million for fiscal 1995, 1996 and 1997, respectively, are (in
the case of fiscal 1995) or are anticipated to be (in the case of fiscal 1996
and 1997) for surface reclamation. Existing reserves are believed to be
adequate to cover actual and anticipated surface reclamation expenditures.
Other expenditures will be expensed as incurred.
Other
In 1986, the California North Coast Regional Water Quality Control Board for
the State of California requested that the Company perform a site
investigation of a property in Northern California designated as a hazardous
waste site under the California Hazardous Waste Control Act. The Company
formerly owned the property. The California Environmental Protection Agency
has assumed lead agency status for any required remedial action at the site.
The Company signed a Consent Order to perform a remedial
investigation/feasibility study that will determine the extent of
contamination for purposes of determining the remedial action required to
remedy and/or remove the contamination.
The sale by Fluor of its lead business included St. Joe Minerals Corporation
("St. Joe") and its environmental liabilities for several different lead
mining, smelting and other lead related environmental sites. As a condition of
the St. Joe sale, however, Fluor retained responsibility for certain non-lead
related environmental liabilities arising out of St. Joe's former zinc mining
and smelting division, but only to the extent that such liabilities are not
covered by St. Joe's comprehensive general liability insurance. These
liabilities arise out of three zinc facilities located in Bartlesville,
Oklahoma, Monaca, Pennsylvania and Balmat, New York (the " Zinc Facilities").
In 1987, St. Joe sold its zinc mining and smelting division to Zinc
Corporation of America ("ZCA"). As part of the sale agreement, St. Joe and
Fluor agreed to indemnify ZCA for certain environmental liabilities arising
from operations conducted at the Zinc Facilities prior to the sale. During
fiscal year 1993, ZCA made claims under this indemnity as well as under the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") against St. Joe for past and future environmental expenditures at
the Zinc Facilities. In fiscal year 1994, ZCA filed suit against St. Joe and
Fluor, among others, seeking compensation for environmental expenditures at
the Zinc Facilities. In fiscal year 1994, Fluor and St. Joe, among others,
executed a settlement agreement with ZCA which, among other things, cancels
the indemnity previously provided to ZCA and limits environmental expenditures
at the Zinc Facilities for which St. Joe would be responsible to no more than
approximately $10 million. Expenses incurred and payments made under the
settlement agreement would be made over the span of at least five years, if
not longer.
Fluor and St. Joe, among others, are currently prosecuting cost recovery
actions under CERCLA against other potentially responsible parties for the
Bartlesville facility. In addition, St. Joe has initiated legal proceedings
against certain of its insurance carriers alleging that the investigative and
remediation costs, for which St. Joe is or may be responsible, including costs
incurred prior to the sale of St. Joe and costs related to the Zinc
Facilities,
9
<PAGE>
are covered by insurance. A portion of any recoveries received from the
insurance carriers would be, pursuant to the St. Joe sale agreement, for the
benefit of Fluor. In January 1995, St. Joe executed a settlement agreement
with one of its primary insurance carriers that provided coverage for a minor
portion of the applicable coverage periods. In May 1995, St. Joe received a
favorable ruling from the Orange County Superior Court which ordered St. Joe's
other insurer to defend St. Joe in certain environmental sites, including the
Zinc Facilities. The insurer has appealed the court's order. St. Joe continues
to pursue its other primary insurance carrier for additional payments. Because
the insurance, as well as the cost recovery, proceedings remain in the early
stages of litigation, no credit or offset (other than for amounts actually
received in settlement), has been taken into account by Fluor in establishing
its reserves for future environmental costs.
The Company believes, based upon present information available to it, that
its reserves with respect to future environmental costs are adequate, and that
such future costs will not have a material effect on the Company's
consolidated financial condition, results of operations or liquidity. However,
the imposition of more stringent requirements under environmental laws or
regulations, new developments or changes regarding site cleanup costs or the
allocation of such costs among potentially responsible parties, or a
determination that the Company is potentially responsible for the release of
hazardous substances at sites other than those currently identified, could
result in additional expenditures, or the provision of additional reserves in
expectation of such expenditures.
NUMBER OF EMPLOYEES
The following table sets forth the number of salaried and craft/hourly
employees of Fluor and its subsidiaries engaged in Fluor's business segments
as of October 31, 1995:
<TABLE>
<CAPTION>
SALARIED CRAFT/HOURLY TOTAL
-------- ------------ ------
<S> <C> <C> <C>
Engineering and construction.................... 18,090 21,109 39,199
Coal............................................ 790 1,689 2,479
------ ------ ------
18,880 22,798 41,678
====== ====== ======
</TABLE>
OPERATIONS BY BUSINESS SEGMENT AND GEOGRAPHIC AREA
The financial information for business segments and geographic areas is
included in the Operations by Business Segment and Geographic Area section of
the Notes to Consolidated Financial Statements in Fluor's 1995 Annual Report
to stockholders, which section is incorporated herein by reference.
10
<PAGE>
ITEM 2. PROPERTIES.
Major Facilities
Operations of Fluor and its subsidiaries are conducted in both owned and
leased properties. In addition, certain owned or leased properties of Fluor
and its subsidiaries are leased or subleased to third party tenants. The
following table describes the general character of the major existing
facilities, exclusive of mines, coal preparation plants and their adjoining
offices:
<TABLE>
<CAPTION>
LOCATION INTEREST
-------- --------
<S> <C>
Corporate Headquarters
Irvine, California......................................... Leased
Engineering and Construction Offices
Al Khobar, Saudi Arabia (Dhahran area)..................... Owned
Anchorage, Alaska.......................................... Leased
Appleton, Wisconsin........................................ Leased
Asturias, Spain............................................ Leased
Bakersfield, California.................................... Leased
Bangkok, Thailand.......................................... Leased
Beijing, People's Republic of China........................ Leased
Bergen op Zoom, Netherlands................................ Leased
Calgary, Canada............................................ Leased
Camberley, England......................................... Leased
Caracas, Venezuela......................................... Leased
Charlotte, North Carolina.................................. Leased
Chicago, Illinois.......................................... Leased
Cincinnati, Ohio........................................... Leased
Corpus Christi, Texas...................................... Leased
Dallas, Texas.............................................. Leased
Dubai, United Arab Emirates................................ Leased
Dusseldorf, Germany........................................ Leased
Golden, Colorado........................................... Leased
Greenville, South Carolina................................. Owned and leased
Haarlem, Netherlands....................................... Owned and leased
Hanoi, Vietnam............................................. Leased
Ho Chi Minh City, Vietnam.................................. Leased
Hong Kong.................................................. Leased
Houston (Sugar Land office), Texas......................... Owned
Irvine, California......................................... Leased
Jakarta, Indonesia......................................... Leased
Kansas City, Missouri...................................... Leased
Kuala Lumpur, Malaysia..................................... Leased
Leduc, Alberta, Canada..................................... Leased
Leipzig, Germany........................................... Leased
Lima, Peru................................................. Leased
London (Uxbridge), England................................. Leased
Madrid, Spain.............................................. Leased
Manchester, England........................................ Leased
Manila, Philippines........................................ Leased
Melbourne, Australia....................................... Leased
Nashville, Tennessee....................................... Leased
New Delhi, India........................................... Leased
Perth, Australia........................................... Leased
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
LOCATION INTEREST
-------- --------
<S> <C>
Philadelphia, Pennsylvania (Marlton, New Jersey office)............ Leased
Richmond, Virginia................................................. Leased
San Juan, Puerto Rico.............................................. Leased
Santiago, Chile.................................................... Leased
Seoul, Korea....................................................... Leased
Singapore.......................................................... Leased
Tokyo, Japan....................................................... Leased
Tulsa, Oklahoma.................................................... Leased
Vancouver, Canada.................................................. Leased
Wiesbaden, Germany................................................. Leased
Washington, D.C.................................................... Leased
Coal Offices
(Kentucky, Tennessee, Virginia, West Virginia)..................... Owned
</TABLE>
Coal Properties
See Item 1, Business, of this report for additional information regarding
the coal operations and properties of Fluor.
ITEM 3. LEGAL PROCEEDINGS.
Fluor and its subsidiaries, incident to their business activities, are
parties to a number of legal proceedings in various stages of development,
including but not limited to those described below. The majority of these
proceedings, other than environmental proceedings, involve matters as to which
liability, if any, of Fluor or its subsidiaries would be adequately covered by
insurance. With respect to litigation outside the scope of applicable
insurance coverage and to the extent insured claims may exceed liability
limits, it is the opinion of the management of Fluor, based on reports of
counsel, that these matters individually and in the aggregate will not have a
material adverse effect upon the consolidated financial position or results of
operations of Fluor.
In July 1987, four lawsuits were filed against R. T. Vanderbilt Company,
Inc., Gouverneur Talc Company, Inc., St. Joe and Fluor for personal injury and
wrongful death allegedly due to asbestos, talc and silicon exposure in certain
New York mines. Subsequent to July 1987, 16 additional lawsuits have been
filed. All of these suits (representing a total of 213 plaintiffs) have been
filed with the New York Supreme Court, St. Lawrence County, New York. The
total damages claimed in these cases, referred to as Bailey, Baker, Beane, et
al. v. R. T. Vanderbilt Company, Inc., et al. (the claims have not been
consolidated), are $287 million against all defendants. Plaintiffs also seek
an unspecified amount of punitive damages against all defendants.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT(1)
Leslie G. McCraw, age 61
Director since 1984; Chairman of Executive Committee and member of
Governance Committee; Chairman of the Board since 1991; Chief Executive
Officer since 1990; formerly Vice Chairman of the Board from 1990; formerly
President from 1988; joined the Company in 1975.
Dennis W. Benner, age 54
Vice President and Chief Information Officer since November, 1994; formerly
Vice President and General Manager, Information, and Vice President and
General Manager, Target Marketing Services, for TRW from 1992 and 1986,
respectively.
12
<PAGE>
Charles J. Bradley, Jr., age 60
Vice President, Human Resources and Administration since 1986; joined the
Company in 1958.
J. Michal Conaway, age 47
Vice President and Chief Financial Officer since May, 1994; formerly Vice
President, Finance, from 1993; formerly Vice President and Chief Financial
Officer of National Gypsum Company and its parent, Aancor Holdings, Inc., from
1988.
James O. Rollans, age 53
Chief Administrative Officer since May, 1994; Senior Vice President since
1992; formerly Chief Financial Officer from 1992; formerly Vice President,
Corporate Communications from 1982; joined the Company in 1982.
P. Joseph Trimble, age 65
Corporate Secretary since 1992; Senior Vice President, Law, since 1984;
joined the Company in 1972.
EXECUTIVE OPERATING OFFICERS(1)
Hugh K. Coble, age 61
Director since 1984; Vice Chairman since April, 1994; formerly Group
President of Fluor Daniel, Inc.(2) from 1986; joined the Company in 1966.
Dennis G. Bernhart, age 50
Group President, The Americas, of Fluor Daniel, Inc.(2) since May, 1994;
formerly President, Latin America, Middle East and Africa, of that company
from 1993; formerly Vice President, Sales, from 1982; joined the Company in
1968.
Don L. Blankenship, age 45
Chairman of the Board and Chief Executive Officer of A.T. Massey Coal
Company, Inc.(3) since January, 1992; formerly President and Chief Operating
Officer of that subsidiary from 1990; formerly President of Massey Coal
Services, Inc.(4) from 1989; joined Rawl Sales & Processing Co.(5) in 1982.
Alan L. Boeckmann, age 47
Group President, Chemical Processes and Industrial, of Fluor Daniel, Inc.(2)
since January, 1996; formerly Vice President of Chemicals, Plastics & Fibers
of that company from June, 1994; formerly Vice President and General Manager
of that company from 1992; formerly Vice President-Engineering Services, of
that company from 1989; joined the Company in 1974.
Richard D. Carano, age 56
Group President, Asia/Pacific, of Fluor Daniel, Inc.(2) since May, 1994;
formerly President, Asia/Pacific, of that company from 1993; formerly Vice
President, Sales, of that company from 1987; joined the Company in 1970.
E. David Cole, Jr., age 58
Group President, Process, of Fluor Daniel, Inc.(2) since May, 1994; formerly
Vice President, Petroleum and Petrochemicals, of that company from 1987;
joined the Company in 1965.
Charles R. Cox, age 53
Group President, Industrial, of Fluor Daniel, Inc.(2) since May, 1994;
formerly President, Operations Centers, of that company from 1989; joined the
Company in 1969.
13
<PAGE>
Richard A. Flinton, age 65
Chairman of the Board of Fluor Constructors International, Inc.(6) since
1989; joined the Company in 1960.
Thomas P. Merrick, age 58
Vice President, Strategic Planning, of Fluor Daniel, Inc.(2) since May,
1994; formerly Vice President, Technology, of that company from 1993; formerly
Vice President, Government Sales, of that company from 1989; joined the
Company in 1984.
Charles R. Oliver, Jr., age 52
Group President, Sales, Marketing and Strategic Planning of Fluor Daniel,
Inc.(2) since May, 1994; formerly President, Business Units, of that company
from 1993; formerly President, Hydrocarbon Sector, from 1986; joined the
Company in 1970.
Carel J.C. Smeets, age 56
Group President, Europe, Africa and Middle East, of Fluor Daniel, Inc.(2)
since May, 1994; formerly Vice President, European Operations, of that company
from 1991; formerly Vice President and Managing Director, the Netherlands,
from 1985; joined the Company in 1969.
James C. Stein, age 52
Group President, Diversified Services, of Fluor Daniel, Inc.(2) since May,
1994; formerly President, Business Units, of that company from 1993; formerly
President, Industrial Sector, of that company from 1986; joined the Company in
1964.
Richard M. Teater, age 47
Group President, Power and Government, of Fluor Daniel, Inc.(2) since May,
1994; formerly President, Power, of that company from 1993; formerly Vice
President, Power Marketing, of that company from 1990; formerly Vice
President, Industrial Marketing, of that company from 1988; joined the Company
in 1980.
- --------
(1) Except where otherwise indicated, all references are to positions held
with Fluor.
(2) Fluor Daniel, Inc. is a wholly owned subsidiary of Fluor which provides
design, engineering, procurement, construction management and technical
services to a wide range of industrial, commercial, utility, natural
resources, energy and governmental clients.
(3) A. T. Massey Coal Company, Inc. is an indirectly wholly-owned subsidiary
of Fluor which, along with its subsidiaries, conducts Fluor's coal-related
investment.
(4) Massey Coal Services, Inc. is a wholly owned subsidiary of A. T. Massey
Coal Company, Inc.
(5) Rawl Sales & Processing Co. is a wholly owned subsidiary of A. T. Massey
Coal Company, Inc.
(6) Fluor Constructors International, Inc., a wholly owned subsidiary of
Fluor, provides construction and maintenance services to a variety of
clients.
14
<PAGE>
PART II
Information for Items 5, 6 and 7 is contained in Fluor's 1995 Annual Report
to stockholders, which information is incorporated herein by reference (and
except for these sections, and sections incorporated herein by reference in
Items 1 and 8 of this report, Fluor's 1995 Annual Report to stockholders is
not to be deemed filed as part of this report):
<TABLE>
<CAPTION>
ANNUAL REPORT TO
STOCKHOLDERS
ITEM NO. TITLE SECTION
- -------- ----- ----------------
<S> <C> <C>
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters................................. Stockholders' Reference
Item 6. Selected Financial Data............................. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations................. Management's Discussion
and Analysis
Item 8. Financial Statements and Supplementary Data
</TABLE>
Information for Item 8 is included in Fluor's consolidated financial
statements as of October 31, 1995 and 1994, and for each of the three years in
the period ended October 31, 1995, and Fluor's unaudited quarterly financial
data for the two year period ended October 31, 1995, in the Consolidated
Financial Statements (including the Consolidated Balance Sheet, Consolidated
Statement of Earnings, Consolidated Statement of Cash Flows, Consolidated
Statement of Shareholders' Equity and Notes to Consolidated Financial
Statements) and Quarterly Financial Data sections of Fluor's 1995 Annual
Report to stockholders, which are incorporated herein by reference. The report
of independent auditors on Fluor's consolidated financial statements is in the
Reports of Management and Independent Auditors section of Fluor's 1995 Annual
Report to stockholders, also incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not Applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information concerning Fluor's executive officers is included under the
caption "Executive Officers of the Registrant" following Part I, Item 4. Other
information required by this item is included in the Biographical section of
the Election of Directors portion of the definitive proxy statement pursuant
to Regulation 14A, involving the election of directors, which is incorporated
herein by reference and will be filed with the Securities and Exchange
Commission (the "Commission") not later than 120 days after the close of
Fluor's fiscal year ended October 31, 1995.
ITEM 11. EXECUTIVE COMPENSATION.
Fluor maintains certain employee benefit plans and programs in which its
executive officers and directors are participants. Copies of these plans and
programs are set forth or incorporated by reference as Exhibits 10.1 through
10.19 inclusive to this report. Certain of these plans and programs provide
for payment of benefits or for acceleration of vesting of benefits upon the
occurrence of a change of control of Fluor as that term is defined in such
plans and programs. The amounts payable thereunder would represent an
increased cost to be paid by Fluor (and indirectly by its stockholders) in the
event of a change in control of Fluor. This increased cost would be a factor
to be taken into account by a prospective purchaser in determining whether,
and at what price, it would seek control of the Company and whether it would
seek the removal of then existing management.
15
<PAGE>
If a change of control were to have occurred on October 31, 1995, the
additional amounts payable by Fluor, either in cash or in stock, if each of
the five most highly compensated executive officers and all executive officers
as a group were thereupon involuntarily terminated without cause would be as
follows:
<TABLE>
<CAPTION>
RESTRICTED SUPPLEMENTAL
STOCK BENEFIT
INDIVIDUAL OR GROUP PLANS(1) PLAN(2)
------------------- ----------- ------------
<S> <C> <C>
Leslie G. McCraw................................... $ 3,273,069 $1,052,401
Hugh K. Coble...................................... 2,401,306 657,751
Don L. Blankenship................................. 1,169,833 227,491
James O. Rollans................................... 1,335,547 170,618
P. Joseph Trimble.................................. 746,037 460,164
All Executive Officers (18) including the above.... $18,192,538 $3,268,607
</TABLE>
- --------
(1) Value at October 31, 1995 of previously awarded restricted stock which
would vest upon change of control.
(2) Lump sum entitlement of previously awarded benefits which would vest upon
change of control.
Further disclosure required by this item is included in the Organization and
Compensation Committee Report on Executive Compensation and Executive
Compensation and Other Information sections of the definitive proxy statement
pursuant to Regulation 14A, involving the election of directors, which is
incorporated herein by reference and will be filed not later than 120 days
after the close of Fluor's fiscal year ended October 31, 1995.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information required by this item is included in the Stock Ownership section
of the Election of Directors portion of the definitive proxy statement
pursuant to Regulation 14A, involving the election of directors, which is
incorporated herein by reference and will be filed not later than 120 days
after the close of Fluor's fiscal year ended October 31, 1995.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required by this item is included in the Other Matters section
of the Election of Directors portion of the definitive proxy statement
pursuant to Regulation 14A, involving the election of directors, which is
incorporated herein by reference and will be filed not later than 120 days
after the close of Fluor's fiscal year ended October 31, 1995.
16
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
<TABLE>
<C> <S>
(a) 1. Financial Statements: The financial statements required to be filed
hereunder are listed on page 21 hereof. See Part II, Item 8 of this
report for information regarding the incorporation by reference
herein of such financial statements.
2. Financial Statement Schedules: All schedules have been omitted since
the required information is not present or not present in amounts
sufficient to require submission of the schedule, or because the
information required is included in the consolidated financial
statements and notes thereto.
3. Exhibits:
3.1 Restated Certificate of Incorporation of Fluor Corporation [filed as
Exhibit 3.1 to Fluor's annual report on Form 10-K for the fiscal year
ended October 31, 1987 and incorporated herein by reference]
3.2 Restated Bylaws (as amended effective January 19, 1995) of Fluor
Corporation [filed as Exhibit 3.2 to Fluor's annual report on Form
10-K for the fiscal year ended October 31, 1994 and incorporated
herein by reference]
4.1 Indenture dated July 1, 1986 between Fluor Corporation and Irving
Trust Company, trustee [filed as Exhibit 4 to Registration No. 33-
6960 for the issuance of up to $250 million of debt securities and
incorporated herein by reference]
4.2 Fluor Corporation Dividend Reinvestment Plan (as amended and restated
June 30, 1995)
EXECUTIVE COMPENSATION PLANS/PROGRAMS
10.1 Fluor Corporation and Subsidiaries Executive Incentive Compensation
Plan (as amended and restated through September 15, 1988) [filed as
Exhibit 10.1 to Fluor's annual report on 10-K for the fiscal year
ended October 31, 1992 and incorporated herein by reference]
10.2 Fluor Executive Deferred Compensation Program (as amended and
restated effective May 1, 1995)
10.3 Fluor Corporation Deferred Directors' Fees Program (as amended
through November 15, 1983) [filed as Exhibit 10.4 to Fluor's
quarterly report on Form 10-Q for the quarterly period ended April
30, 1995 and incorporated herein by reference]
10.4 1977 Fluor Executive Stock Plan (as amended by Amendment No. 4
effective December 9, 1986) [filed as Exhibit 10.6 to Fluor's annual
report on Form 10-K for the fiscal year ended October 31, 1986 and
incorporated herein by reference]
10.5 1981 Fluor Executive Stock Plan (as amended by Amendment No. 3
effective December 9, 1986) [filed as Exhibit 10.9 to Fluor's annual
report on Form 10-K for the fiscal year ended October 31, 1986 and
incorporated herein by reference]
10.6 1982 Fluor Executive Stock Option Plan (as amended by Amendment No. 2
effective December 9, 1986) [filed as Exhibit 10.10 to Fluor's annual
report on Form 10-K for the fiscal year ended October 31, 1986 and
incorporated herein by reference]
10.7 Fluor Executives' Health Plan Summary [filed as Exhibit 10.11 to
Fluor's annual report on Form 10-K for the fiscal year ended October
31, 1985 and incorporated herein by reference]
10.8 Directors' Life Insurance Summary [filed as Exhibit 10(i) to Fluor's
annual report on Form 10-K for the fiscal year ended October 31, 1980
and incorporated herein by reference]
10.9 Executive Tax Services Plan (as amended and effective as of November
1, 1993) [filed as Exhibit 10.10 to Fluor's annual report on Form 10-
K for the fiscal year ended October 31, 1993 and incorporated herein
by reference]
10.10 Executive Personal Financial Counseling Plan (as amended and
effective as of November 1, 1993) [filed as Exhibit 10.11 to Fluor's
annual report on Form 10-K for the fiscal year ended October 31, 1993
and incorporated herein by reference]
</TABLE>
17
<PAGE>
<TABLE>
<C> <S>
10.11 Company Automobile Policy Summary [filed as Exhibit 10.15 to Fluor's
annual report on Form 10-K for the fiscal year ended October 31,
1989 and incorporated herein by reference]
10.12 Fluor Executives' Supplemental Benefit Plan (as amended by First
Amendment effective November 15, 1983) [filed as Exhibit 10.16 to
Fluor's annual report on Form 10-K for the fiscal year ended October
31, 1983 and incorporated herein by reference]
10.13 1988 Fluor Executive Stock Plan (as amended and restated effective
December 6, 1994)
10.14 Fluor Corporation Change of Control Compensation Plan (as amended
and restated by Second Amendment effective October 1, 1989) [filed
as Exhibit 10.19 to Fluor's annual report on Form 10-K for the
fiscal year ended October 31, 1989 and incorporated herein by
reference]
10.15 Fluor Special Executive Incentive Plan (as amended effective
December 6, 1994)
10.16 Retirement Plan for Outside Directors (effective as of May 1, 1992)
[filed as Exhibit 10.18 to Fluor's annual report on Form 10-K for
the fiscal year ended October 31, 1992 and incorporated herein by
reference]
10.17 Officer Severance Plan (effective as of March 7, 1994) [filed as
Exhibit 10.19 to Fluor's annual report on Form 10-K for the fiscal
year ended October 31, 1994 and incorporated herein by reference]
10.18 Directors' Achievement Award Program (effective as of December 6,
1994)
10.19 Fluor Corporation Stock Plan for Non-Employee Directors (adopted
effective March 14, 1995) [filed as Exhibit 10.21 to Fluor's
quarterly report on Form 10-Q for the quarterly period ended April
30, 1995 and incorporated herein by reference]
OTHER CONTRACTS
10.20 Concourse Lease dated as of July 26, 1985 between Fluor Corporation
and Fluor Engineers, Inc. (an entity now having the corporate name
of Fluor Daniel, Inc.) with respect to a portion of the
International Headquarters facility located in Irvine, California,
formerly owned by Fluor (the "Irvine facility"); Schedule of
substantially identical Building Pod Lease and Corporate Tower
Lease; and Assignment of Master Leases dated July 26, 1985,
assigning Fluor's lessor interest to Crow Winthrop Operating
Partnership ("CWOP") [filed as Exhibit 10.21 to Fluor's annual
report on Form 10-K for the fiscal year ended October 31, 1985 and
incorporated herein by reference]
10.21 Amendment to Master Leases by and between CWOP, Fluor Daniel, Inc.
and Fluor Corporation dated as of November 1, 1989 with respect to
the Irvine facility [filed as Exhibit 10.19 to Fluor's annual report
on Form 10-K for the fiscal year ended October 31, 1991 and
incorporated here in by reference]
13 1995 Annual Report to stockholders (with the exception of the
information incorporated by reference into Items 1, 5, 6, 7 and 8 of
this report, Fluor's 1995 Annual Report to stockholders is not
deemed to be filed as part of this report)
21 Fluor Corporation Subsidiaries
23 Consent of Independent Auditors--Ernst & Young LLP
24.1 Manually signed Power of Attorney executed by certain Fluor
directors and officers
24.2 Manually signed Powers of Attorney executed by certain Fluor
directors
</TABLE>
(b) Reports on Form 8-K:
None were filed during the last quarter of the period covered by this
report.
18
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
J. M. CONAWAY
January 26, 1996 By __________________________________
J. M. Conaway, Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICER
AND DIRECTOR:
L. G. MCCRAW Director, Chairman January 26, 1996
- ------------------------------------- of the Board and
L. G. McCraw Chief Executive
Officer
PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER:
J. M. CONAWAY Vice President and January 26, 1996
- ------------------------------------- Chief Financial
J. M. Conaway Officer
OTHER DIRECTORS:
* Director January 26, 1996
- -------------------------------------
C. A. Campbell, Jr.
* Director January 26, 1996
- -------------------------------------
H. K. Coble
* Director January 26, 1996
- -------------------------------------
P. J. Fluor
* Director January 26, 1996
- -------------------------------------
D. P. Gardner
* Director January 26, 1996
- -------------------------------------
W. R. Grant
* Director January 26, 1996
- -------------------------------------
B. R. Inman
* Director January 26, 1996
- -------------------------------------
R. V. Lindsay
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
* Director January 26, 1996
- -------------------------------------
V. S. Martinez
* Director January 26, 1996
- -------------------------------------
B. Mickel
* Director January 26, 1996
- -------------------------------------
M. R. Seger
*By__________________________________
R. M. Bukaty,
Attorney-in-fact
</TABLE>
Manually signed Powers of Attorney authorizing L. N. Fisher, R. M. Bukaty
and P. J. Trimble and each of them, to sign the annual report on Form 10-K for
the fiscal year ended October 31, 1995 and any amendments thereto as
attorneys-in-fact for certain directors and officers of the registrant are
included herein as Exhibits 24.1 and 24.2.
20
<PAGE>
FLUOR CORPORATION
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
ITEM 14(A)
1. FINANCIAL STATEMENTS
The following financial statements are contained in Fluor's 1995 Annual
Report to stockholders:
Consolidated Balance Sheet at October 31, 1995 and 1994
Consolidated Statement of Earnings for the years ended October 31, 1995,
1994 and 1993
Consolidated Statement of Cash Flows for the years ended October 31,
1995, 1994 and 1993
Consolidated Statement of Shareholders' Equity for the years ended
October 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
2. FINANCIAL STATEMENT SCHEDULES
All schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the consolidated
financial statements and notes thereto.
21
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
3.1 Restated Certificate of Incorporation of Fluor
Corporation [filed as Exhibit 3.1 to Fluor's annual
report on Form 10-K for the fiscal year ended October
31, 1987 and incorporated herein by reference]
3.2 Restated Bylaws (as amended effective January 19,
1995) of Fluor Corporation [filed as Exhibit 3.2 to
Fluor's annual report on Form 10-K for the fiscal year
ended October 31, 1994 and incorporated herein by
reference]
4.1 Indenture dated July 1, 1986 between Fluor Corporation
and Irving Trust Company, trustee [filed as Exhibit 4
to Registration No. 33-6960 for the issuance of up to
$250 million of debt securities and incorporated
herein by reference]
4.2 Fluor Corporation Dividend Reinvestment Plan (as
amended and restated June 30, 1995)
EXECUTIVE COMPENSATION PLANS/PROGRAMS
10.1 Fluor Corporation and Subsidiaries Executive Incentive
Compensation Plan (as amended and restated through
September 15, 1988) [filed as Exhibit 10.1 to Fluor's
annual report on Form 10-K for the fiscal year ended
October 31, 1992 and incorporated herein by reference]
10.2 Fluor Executive Deferred Compensation Program (as
amended and restated effective May 1, 1995)
10.3 Fluor Corporation Deferred Directors' Fees Program (as
amended through November 15, 1983) [filed as Exhibit
10.4 to Fluor's quarterly report on Form 10-Q for the
quarterly period ended April 30, 1995 and incorporated
herein by reference]
10.4 1977 Fluor Executive Stock Plan (as amended by
Amendment No. 4 effective December 9, 1986) [filed as
Exhibit 10.6 to Fluor's annual report on Form 10-K for
the fiscal year ended October 31, 1986 and
incorporated herein by reference]
10.5 1981 Fluor Executive Stock Plan (as amended by
Amendment No. 3 effective December 9, 1986) [filed as
Exhibit 10.9 to Fluor's annual report on Form 10-K for
the fiscal year ended October 31, 1986 and
incorporated herein by reference]
10.6 1982 Fluor Executive Stock Option Plan (as amended by
Amendment No. 2 effective December 9, 1986) [filed as
Exhibit 10.10 to Fluor's annual report on Form 10-K
for the fiscal year ended October 31, 1986 and
incorporated herein by reference]
10.7 Fluor Executives' Health Plan Summary [filed as
Exhibit 10.11 to Fluor's annual report on Form 10-K
for the fiscal year ended October 31, 1985 and
incorporated herein by reference]
10.8 Directors' Life Insurance Summary [filed as Exhibit
10(i) to Fluor's annual report on Form 10-K for the
fiscal year ended October 31, 1980 and incorporated
herein by reference]
10.9 Executive Tax Services Plan (as amended and effective
as of November 1, 1993) [filed as Exhibit 10.10 to
Fluor's annual report on Form 10-K for the fiscal year
ended October 31, 1993 and incorporated herein by
reference]
10.10 Executive Personal Financial Counseling Plan (as
amended and effective as of November 1, 1993) [filed
as Exhibit 10.11 to Fluor's annual report on Form 10-K
for the fiscal year ended October 31, 1993 and
incorporated herein by reference]
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
10.11 Company Automobile Policy Summary [filed as Exhibit
10.15 to Fluor's annual report on Form 10-K for the
fiscal year ended October 31, 1989 and incorporated
herein by reference]
10.12 Fluor Executives' Supplemental Benefit Plan (as
amended by First Amendment effective November 15,
1983) [filed as Exhibit 10.16 to Fluor's annual report
on Form 10-K for the fiscal year ended October 31,
1983 and incorporated herein by reference]
10.13 1988 Fluor Executive Stock Plan (as amended and
restated effective December 6, 1994)
10.14 Fluor Corporation Change of Control Compensation Plan
(as amended and restated by Second Amendment effective
October 1, 1989) [filed as Exhibit 10.19 to Fluor's
annual report on Form 10-K for the fiscal year ended
October 31, 1989 and incorporated herein by reference]
10.15 Fluor Special Executive Incentive Plan (as amended
effective December 6, 1994)
10.16 Retirement Plan for Outside Directors (effective as of
May 1, 1992) [filed as Exhibit 10.18 to Fluor's annual
report on Form 10-K for the fiscal year ended October
31, 1992 and incorporated herein by reference]
10.17 Officer Severance Plan (effective as of March 7, 1994)
[filed as Exhibit 10.19 to Fluor's annual report on
Form 10-K for the fiscal year ended October 31, 1994
and incorporated herein by reference]
10.18 Directors' Achievement Award Program (effective as of
December 6, 1994)
10.19 Fluor Corporation Stock Plan for Non-Employee
Directors (adopted effective March 14, 1995) [filed as
Exhibit 10.21 to Fluor's quarterly report on Form 10-Q
for the quarterly period ended April 30, 1995 and
incorporated herein by reference]
OTHER CONTRACTS
10.20 Concourse Lease dated as of July 26, 1985 between
Fluor Corporation and Fluor Engineers, Inc. (an entity
now having the corporate name of Fluor Daniel, Inc.)
with respect to a portion of the International
Headquarters facility located in Irvine, California,
formerly owned by Fluor (the "Irvine facility");
Schedule of substantially identical Building Pod Lease
and Corporate Tower Lease; and Assignment of Master
Leases dated July 26, 1985, assigning Fluor's lessor
interest to Crow Winthrop Operating Partnership
("CWOP") [filed as Exhibit 10.21 to Fluor's annual
report on Form 10-K for the fiscal year ended October
31, 1985 and incorporated herein by reference]
10.21 Amendment to Master Leases by and between CWOP, Fluor
Daniel, Inc. and Fluor Corporation dated as of
November 1, 1989 with respect to the Irvine facility
[filed as Exhibit 10.19 to Fluor's annual report on
Form 10-K for the fiscal year ended October 31, 1991
and incorporated herein by reference]
13 1995 Annual Report to stockholders (with the exception
of the information incorporated by reference into
Items 1, 5, 6, 7 and 8 of this report, Fluor's 1995
Annual Report to stockholders is not deemed to be
filed as part of this report)
21 Fluor Corporation Subsidiaries
23 Consent of Independent Auditors--Ernst & Young LLP
24.1 Manually signed Power of Attorney executed by certain
Fluor directors and officers
24.2 Manually signed Powers of Attorney executed by certain
Fluor directors
</TABLE>
<PAGE>
Exhibit 4.2
Dividend
Reinvestment
Plan
Fluor Corporation
Amended
June 30, 1995
<PAGE>
KEY PLAN FEATURES
The Plan
The Plan offers Fluor shareholders the opportunity to conveniently reinvest
their dividends in shares of Fluor Common Stock without payment of a service fee
or brokerage commission.
Dividend Reinvestment
Dividends paid by Fluor to you as a participating shareholder in the Plan
are automatically applied toward the purchase of additional Fluor Common Stock.
All fees and brokerage commissions are paid by Fluor. The Bank (Chemical Bank)
purchases both full and fractional shares for your Account which means the
entire amount of your dividend is utilized.
In order to participate in the Plan, all shares registered in your name
must be enrolled in the Plan and you must enroll with and maintain a minimum
balance of not less than 50 shares in your Account. If your Account does not
maintain a minimum balance of at least 50 shares, your Account will be
terminated without further notice. In such event, your Account shares will be
sold and a check for the net proceeds will be mailed to you.
Optional Cash Investments
In addition to reinvesting your dividends, you may elect to purchase
additional shares of Fluor Common Stock for cash in any amount from a minimum of
$100 per monthly investment to a maximum of $10,000 per quarter (Optional Cash
Investments). You must participate in the Dividend Reinvestment portion of the
Plan to make Optional Cash Investments. A three dollar ($3) service fee is
charged for each check or money order processed by the Bank. Payment of this fee
will be split equally between you and Fluor ($1.50 each). You are also
responsible for a brokerage commission of seven cents ($0.07) per share
multiplied by the number of shares of Fluor Common Stock purchased for your
Account. Shares purchased with Optional Cash Investments will be credited to
your Account less fees and commissions required to be paid by you.
1
<PAGE>
To make an Optional Cash Investment, mail a check or money order payable to
Chemical Bank, together with the remittance slip which is part of your Account
statement, to the address indicated on the statement. Optional Cash Investments
may be made monthly, and must be received at least two business days prior to
either (i) the 15th day of any month during which dividends are not paid (or if
that is not a business day, then on the first business day thereafter), or (ii)
the quarterly dividend payment date during any month dividends are paid.
Although the actual dividend payment dates vary, these dates have historically
occurred between the 10th and 21st days of January, April, July and October of
each year. Optional Cash Investments not received within this time period will
be held until and invested at the next purchase date.
Plan Purchases of Fluor Common Stock
The purchase of shares of Fluor Common Stock will generally occur on either
(i) the 15th day of any month dividends are not paid, or (ii) the dividend
payment date mentioned above, as applicable. The price of shares acquired for
each Account will be equal to the average price for all shares purchased by the
Bank as agent for all Participants in the Plan during the month that such shares
are purchased.
Plan Account Statements
After the quarterly dividends and Optional Cash Investments are reinvested
in shares of Fluor Common Stock, the Bank will send you a detailed year-to-date
statement of your Account. The statement includes all amounts invested on your
behalf, the number of shares and fractional shares credited to your Account, the
purchase price of those shares and the total number of shares you hold in your
Account.
Tax Information
Reinvested dividends are treated by the IRS in the same manner as cash
dividends and are taxable. The payment of service fees and brokerage commissions
by Fluor on your behalf is considered income to you and reported as such to the
IRS. If you are subject to backup withholding tax on dividends under the Plan,
or you are a foreign stockholder whose dividends are subject to United States
income tax withholding, the amount of the tax to be withheld is deducted from
the amount of the dividends and only the reduced amount is reinvested in Fluor
Common Stock.
2
<PAGE>
At year end, the Bank provides you with summary information for tax purposes.
Custody of Shares
All shares purchased under the Plan are held for you in your Account by the
Bank. Upon written request, the Bank will send you a certificate for any full
shares credited to your Account and a check for any fractional share. You must
pay a service fee of five dollars ($5) per certificate requested by sending a
check or money order payable to Chemical Bank.
You may also elect to have the Bank provide custodial service for the
shares of Fluor Common Stock that you already own by sending your share
certificates to Chemical Bank at the address indicated below, either by
registered or certified mail, return receipt requested.
Voting Rights
Before each shareholder meeting, the Bank will mail a proxy card to you for
the shares held in your Account. Your shares will be voted as you direct. If you
properly sign and return the proxy card but otherwise provide no instruction,
your Account shares will be voted as recommended by Fluor's Board of Directors.
If you do not return your proxy, the shares in your Account will not be voted.
Sale of Plan Account Shares
You may sell shares of Fluor Common Stock directly from your Account at any
time through a written request directing the Bank to sell a specified number of
shares of stock from your Account. Sales of shares generally occur within seven
calendar days of receipt by Chemical Bank of your instruction to sell shares.
The Bank will remit the proceeds to you as soon as practicable, less a fifteen
dollar ($15) service fee and applicable brokerage commissions.
Participation in the Plan
Subject to the minimum holding requirements, all holders of record of Fluor
Common Stock may join the Plan at any time. To begin participating, complete an
authorization card and mail it to the Bank in the postage-paid envelope provided
for your convenience. If you are a shareholder of record and you have not
received an authorization card, contact the Bank at the address below.
3
<PAGE>
If your shares are registered in the name of someone holding the shares on
your behalf (e.g., in the name of a broker, bank or other nominee) and you want
to participate in the Plan, you must either make appropriate arrangements with
your broker, bank or other registered holder to participate in the Plan, or you
must become the holder of record by having the shares transferred to your own
name.
Your authorization card must be received by the Bank prior to a dividend
record date for participation in the plan to begin effective with that quarterly
dividend payment. Although the actual record dates for Fluor dividends vary,
historically these dates have occurred between the 20th and 30th days of
December, March, June and September of each year.
Withdrawal from the Plan
You may withdraw from the Plan at any time by notifying the Bank in writing
and mailing a check or money order of five dollars ($5) per certificate
requested. Upon withdrawal, the Bank will send you a certificate for the full
number of shares held in your Account and a check for any fractional share.
Alternatively, you may direct the Bank to sell your shares, upon which the Bank
will remit to you the cash proceeds less the fifteen dollar ($15) service fee
and brokerage commissions applicable to the sale of Account shares.
Additional Plan Information
If you have questions regarding the Plan please contact:
Chemical Bank
Fluor Dividend Reinvestment Plan
J.A.F. Building
P.O. Box 3069
New York, New York 10116-3069
Telephone: (800) 813-2847
4
<PAGE>
Dividend Reinvestment Plan Terms and Conditions
1. As agent for each participating shareholder ("Participant") of Fluor
Corporation ("Fluor"), Chemical Bank (the "Bank") will carry out the Terms and
Conditions of the Fluor Corporation Dividend Reinvestment Plan (the "Plan") set
forth below.
2. To elect to participate in the Plan, a shareholder must submit to the
Bank a completed and signed authorization card ("Authorization"). The
Authorization must include the name (or names in the case of a joint tenancy or
trust, etc.) of the Participant exactly as the name or names are registered and
appear on the certificate. Pursuant to receiving such Authorization, the Bank
will establish an account under the Plan ("Account") for each Participant and
will credit to the Account of each Participant cash received by the Bank from
either of the following sources: (i) cash dividends payable to the Participant
on all shares of Fluor Common Stock registered in the Participant's name,
pursuant to paragraph 3 below; and (ii) Optional Cash Investments delivered to
the Bank by the Participant, pursuant to paragraph 4 below.
3. All cash dividends payable to the Participant on shares of Fluor
Common Stock registered in the Participant's name are applied toward the
purchase of additional Fluor Common Stock. Stock purchases are made by the Bank
and the newly acquired shares credited to the Participant's Account. All fees
and brokerage commissions are paid by Fluor. The Plan does not permit partial
reinvestment, nor does the Plan permit the Participant to designate a portion or
percentage of the cash dividend to be applied toward reinvestment. Under the
Plan, the Bank reinvests all cash dividends on all shares registered in the
Participant's name except where it is clearly established to the Bank that the
Participant is holding Fluor shares for several beneficial owners. An
Authorization for dividend reinvestment must be received by the Bank prior to a
quarter's dividend record date for participation in the Plan to begin effective
with that quarterly dividend payment. Although the actual record dates for Fluor
dividends vary, historically these dates have occurred between the 20th and 30th
days of December, March, June and September.
5
<PAGE>
In order to participate in the Plan, all shares registered in a
Participant's name must be enrolled in the Plan, and all Participants must
enroll with and maintain a balance of not less than 50 shares in their Account.
If a Participant's Account does not maintain a minimum balance of at least 50
shares, the Participant's Account will be terminated without further notice. In
such event, Participant's Account shares will be sold and a check for the net
proceeds (less applicable fees pursuant to paragraphs 14 and 15 below), will be
mailed to the Participant.
4. The Participant may elect to purchase additional shares of Fluor
Common Stock for cash in any amount from a minimum amount of one hundred dollars
($100) per monthly investment to an aggregate maximum amount of ten thousand
dollars ($10,000) per quarter ("Optional Cash Investments"). The Participant
must be participating in the Dividend Reinvestment portion of the Plan to make
Optional Cash Investments. A service fee in the amount of three dollars ($3) is
charged by the Bank for each check or money order processed. Payment of this fee
will be split equally between the Participant and Fluor ($1.50 each). A
brokerage commission of seven cents ($0.07) per share multiplied by the number
of shares purchased is also payable by the Participant. Shares purchased with
Optional Cash Investments will be credited to the Participant's Account less the
fees and commissions required to be paid by the Participant. Optional Cash
Investments must be received by the Bank at least two business days prior to
either (i) the 15th day of any month during which dividends are not paid (or if
that day is not a business day, then on the first business day after such date),
or (ii) the quarterly dividend payment date during any month dividends are paid.
The dividend payment dates have historically occurred between the 10th and 21st
days of January, April, July and October. Optional Cash Investments not received
within the time period will be held until and invested at the next purchase
date. No interest will be paid on Optional Cash Investments received by the
Bank. If Fluor does not pay a dividend on its regular date, Cash Investments
sent by the Participant to the Bank will be invested as though such dividend had
been paid.
Optional Cash Investments should be made payable to Chemical Bank, drawn
against United States banks and in United States dollars, and mailed directly,
together with the remittance slip which is part of the Participant's Account
statement, to the address
6
<PAGE>
indicated on the statement. Checks drawn against non-United States banks must
have the United States currency imprinted on the check. Optional Cash
Investments sent to any other address will not be considered validly delivered.
If any check is returned unpaid for any reason, the Bank will consider the
request for investment of such money null and void and shall immediately remove
from the Participant's Account any shares purchased upon the prior credit of
such money. The Bank shall thereupon be entitled to sell these shares to satisfy
any uncollected amounts. If the net proceeds of the sale of such shares are
insufficient to satisfy the balance of such uncollected amounts, the Bank shall
be entitled to sell such additional shares from the Participant's Account to
satisfy the uncollected balance.
5. The Bank will invest all cash credited to the Participant's Account
for the purchase of full and fractional shares of Fluor Common Stock. Dividends
received from Account shares and Optional Cash Investments may be aggregated and
commingled with the funds credited to all other Accounts of all other
Participants. No interest will be payable on such funds.
6. The Bank will generally reinvest the cash credited to the
Participant's Account on either (i) the 15th day of any month dividends are not
paid, or (ii) the dividend payment date, as applicable, except where necessary
to comply with applicable provisions of the federal securities laws or the rules
and regulations of the Securities and Exchange Commission. If any suspension of
trading of shares of Fluor Common Stock by any agency or governmental body
remains effective for 30 consecutive days, the Bank shall return all cash in the
Participant's Account to the Participant after such thirtieth day. Optional Cash
Investments received during any 30 day suspension period will be returned as
soon as practicable.
7. The Bank will purchase shares for the Participant's Account on any
securities exchange or national market system where shares of Fluor Common Stock
are traded, in the over-the-counter market or in negotiated transactions.
Purchases may be made on such terms as to price, delivery and otherwise, and may
be executed through such brokers or dealers, as the Bank may determine. The
price at which the Bank shall be deemed to have acquired shares for the
7
<PAGE>
Participant's Account shall be the average price, excluding brokerage
commissions and any other costs of purchase, of all shares purchased by it as
agent for all Participants in the Plan during the month that such shares are
purchased. No Participant shall have any authority or power to direct the time
or price at which said shares may be purchased and the Bank shall have no
responsibility as to the value of the Fluor shares acquired or held for the
Participant's Account.
8. Following each purchase, the Bank will mail a statement to each
Participant summarizing the year-to-date transactions in the Participant's
Account, indicating, among other things, the cash dividends and Optional Cash
Investments received, the amounts reinvested, the number of shares and
fractional shares credited to the Participant's Account, the average cost per
share and the total number of shares in the Account. Current year Account
statements are provided at no charge to the Participant; however, a Participant
must pay a fee of twenty dollars ($20) if requesting copies of statements from a
prior calendar year.
9. It is understood that the reinvestment of dividends does not relieve
the Participant of any income tax which may be payable on such dividends. It is
understood that the payment by Fluor of service fees and brokerage commissions
is considered income to the Participant and reported as such to the IRS. If a
Participant is subject to United States backup withholding tax on dividends, or
is a foreign shareholder whose dividends are subject to United States income tax
withholding, the amount of the tax to be withheld will be deducted from the
amount of the dividends and only the reduced amount will be reinvested in Fluor
Common Stock. Statements of account for said participants indicate the amount
withheld. At year end, the Bank provides each Participant with summary
information for tax purposes at no charge to the Participant.
10. Certificates will ordinarily not be issued for shares acquired under
the Plan unless the Bank is so requested by the Participant in writing or until
such Account is terminated as provided in Paragraph 15 below. Upon written
request, the Bank will send certificates for any full shares credited to the
Participant's Account. No certificates for fractional shares will be issued. A
service fee of five dollars ($5) per certificate requested must be paid by the
Participant
8
<PAGE>
by mailing a check or money order payable to Chemical Bank.
11. The Participant may elect, at no additional cost, to deposit
certificates for shares of Fluor Common Stock with the Bank for safekeeping. The
Bank will credit the Participant's Account with the number of shares deposited
and will treat them in all respects in the same manner as shares purchased for
the Participant's Account. All certificates should be sent to the Bank by either
registered or certified mail, return receipt requested. The Participant bears
the risk of loss in transit.
12. Shares of Fluor Common Stock held in a Participant's Account may not
be pledged or assigned. The Participant must request that the shares be
withdrawn and a certificate be delivered to the Participant for these purposes.
13. All proxy solicitation materials will be sent by the Bank to
Participants. The Bank will vote Account shares as the Participant directs. If
no instructions are indicated on a properly signed and returned proxy card, the
Participant's Account shares will be voted in accordance with the
recommendations of the Company's Board of Directors to the extent permitted by
applicable laws and regulations thereunder. If the proxy card is not returned,
the Participant's Account shares will not be voted.
14. If requested in writing, the Bank will sell a Participant's Account
shares generally within seven calendar days of receipt of the request and
promptly remit the proceeds to the Participant, less a fifteen dollar ($15)
service fee and applicable brokerage commissions. Requests to sell Account
shares must indicate the number of shares to be sold and not the dollar amount
to be attained. The Participant selling shares should be aware that prices may
fluctuate during the period between a request for sale, receipt by the bank of
the request and ultimate sale in the open market. The Participant bears the risk
of any price change.
15. A Participant may terminate participation in the Plan at any time by
giving written notice to the Bank. Such notice shall be effective upon receipt
by the Bank; however, if notice of termination is received by the Bank after a
dividend record date, such notice will not be effective until dividends paid for
9
<PAGE>
that record date have been credited to the Participant's Account. Fluor may, in
its sole judgment, direct the Bank to terminate a Participant from the Plan at
any time if Fluor deems the practices of the Participant are not consistent with
the intent of the Plan. Upon termination, the Bank will promptly send the
Participant a certificate for the full shares in the Participant's Account and a
check in an amount equal to the value of any fractional shares based upon the
then current market price of a full share. A service fee of five dollars ($5)
per certificate requested must be paid by the Participant by mailing a check or
money order to Chemical Bank. The Bank may, at its discretion and without
notice, terminate any Account having a balance of less than fifty shares by
payment in cash.
16. The Board of Directors of Fluor or any designated committee thereof,
reserves the right to amend, suspend, modify or terminate the Plan at any time,
but such action shall have no retroactive effect that would prejudice the
interest of the Participants. Notice of such action will be sent to the last
address of record for all Participants.
17. Any election, notice, request, instruction, or withdrawal which by any
provision of the Plan is required or permitted to be given or made by the
Participant to the Bank, shall be written and shall be deemed to be given or
made when received by the Bank. Such direction shall be mailed postage prepaid
to:
Chemical Bank
Fluor Dividend Reinvestment Plan
J.A.F. Building
P.O. Box 3069
New York, New York 10116-3069
Telephone: (800) 813-2847
10
<PAGE>
18. Fluor and/or Chemical Bank shall not be liable hereunder for any
action taken, suffered or omitted in good faith including without limitation,
any claim of liability arising under the following: (i) failure to terminate the
Participant's Account upon the Participant's death or otherwise prior to the
receipt of written notice of such death; (ii) termination accompanied by
documentation deemed satisfactory by the Bank; (iii) prices at which shares are
purchased or sold for the Participant's Account; (iv) timing and terms on which
such purchases and sales are made; or (v) market value or any fluctuation in the
market value after purchase of shares or sale of shares for the Participant's
Account.
19. These Terms and Conditions and the provisions of the Authorization
shall be governed by the laws of the State of New York.
11
<PAGE>
EXHIBIT 10.2
FLUOR EXECUTIVE
DEFERRED COMPENSATION PROGRAM
<PAGE>
FLUOR EXECUTIVE
DEFERRED COMPENSATION PROGRAM
THIS INSTRUMENT, executed and made effective as of May 1, 1995 by FLUOR
CORPORATION, a Delaware corporation, evidences an amendment and restatement of
the terms of the Fluor Executive Deferred Compensation Program (formerly known
as the Fluor Corporation and Subsidiaries Executive Deferred Compensation
Program) adopted for the benefit of certain key employees of Fluor Corporation
and its subsidiaries.
WITNESSETH:
WHEREAS, the Company has heretofore maintained three separate deferred
compensation programs for its key employees, this Plan which covered deferrals
of incentive compensation, the Fluor Corporation and Subsidiaries Executive
Deferred Salary Program (the "Deferred Salary Program") which covered the
deferral of salary and other related amounts and the Fluor Excess Benefit Plan
("Excess Benefit Plan") which provides deferrals to compensate for benefits
which would otherwise be lost to highly compensated employees as a result of the
contribution and benefit limitations imposed by ERISA; and
WHEREAS, the Company now desires to combine all of the three foregoing
unfunded deferred compensation programs for its key employees into a single
program by (a) combining the Deferred Salary Program (including, without
limitation, the excess 401(k) accounts previously maintained as a part of this
program) with and into this Plan thereby merging all the accounts
<PAGE>
previously maintained under that Deferred Salary Program with and into this Plan
and (b) by transferring the key employee accruals previously maintained under
the Excess Benefit Plan from the Excess Benefit Plan into this Plan; and
WHEREAS, the Company now desires, in addition to consolidating all of the
key employee deferred compensation programs into this Plan to amend and restate
the terms and conditions of the Plan;
NOW, THEREFORE, the Company hereby declares the current terms and
conditions of the Fluor Executive Deferred Compensation Program (formerly known
as the Fluor Corporation and Subsidiaries Executive Deferred Compensation
Program) to be, as of May 1, 1995, as follows:
ARTICLE I
THE PLAN
1.1. NAME. This Plan shall be known as the "Fluor Executive Deferred
Compensation Program".
1.2 PURPOSE. This Plan is adopted for the purpose of providing eligible
executive employees with a means to satisfy future financial needs and also
for the purpose of providing such employees with retirement and other
benefits which, because of various
2
<PAGE>
contribution and benefit accrual limitations, cannot be provided for them
under the tax qualified retirement, profit sharing and savings plans in
which such employee is a participant. The Company intends that the Plan
constitute an unfunded "top hat" plan maintained for the purpose of
providing deferred compensation to a select group of management or highly
compensated employees under applicable provisions of ERISA.
1.3 PLAN ADMINISTRATION. The Plan shall be administered by the Committee in
accordance with the following:
(a). The Committee, on behalf of the Participants and their Beneficiaries,
shall enforce the Plan in accordance with its terms, shall be charged
with the general administration of the Plan, and shall have all powers
necessary to accomplish its purposes, including, but not by way of
limitation, the following:
(i) To determine all questions relating to the eligibility of
employees to participate;
(ii) To construe and interpret the terms and provisions of this Plan;
(iii) To compute and certify to the amount and kind of benefits payable
to Participants or their Beneficiaries;
(iv) To maintain all records that may be necessary for the
administration of the Plan;
3
<PAGE>
(v) To provide for the disclosure of all information and the filing
or provision of all reports and statements to Participants,
Beneficiaries or governmental agencies as the Committee may
determine or as shall be required by law;
(vi) To make and publish such rules for the regulation of the Plan and
procedures for the administration of the Plan as are not
inconsistent with the terms hereof; and
(vii) To appoint a plan administrator or any other agent, and to
delegate to such person such powers and duties in connection with
the administration of the Plan as the Committee may from time to
time prescribe.
(b) The Committee shall have full discretion to make factual
determinations as may be necessary and to construe and interpret the
terms and provisions of this Plan, which interpretation or
construction shall be final and binding on all parties, including but
not limited to the Company and any Participant or Beneficiary. The
Committee shall administer such terms and provisions in a uniform
manner and in full accordance with any and all laws applicable to the
Plan.
(c) To enable the Committee to perform its functions, the Company shall
supply full and timely information to the Committee on all Plan
matters relating to the Participants, their death or other cause of
termination, and such other pertinent facts as the Committee may
require.
4
<PAGE>
ARTICLE II
DEFINITIONS
2.1 DEFINITIONS.
Accrual Accounts - shall mean a Participant's Excess Benefit Accrual Account and
- ----------------
Pre-Effective Date Excess Benefit Accrual Accounts, if any.
Beneficiary - The beneficiary designated by the Participant under the Fluor
- -----------
Employees' Retirement Plan or, if no such designation has been made, then as
designated on a form provided by the Participant's corporate employer, or, in
the absence of any designation, the personal representative of the Participant's
estate.
Board - shall mean the Board of Directors of Fluor Corporation.
- -----
Change of Control - "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.
5
<PAGE>
Code - shall mean the Internal Revenue Code of 1986, as amended.
- ----
Committee - shall mean the Executive Compensation Committee of the Company.
- ---------
Company - shall mean Fluor Corporation.
- -------
Crediting Options - shall mean the crediting options shown on Schedule A, as
- ------------------
modified from time to time.
Crediting Rate - shall mean for each Crediting Option, an amount equal to the
- ------------------------------------------------------- ----------------------
rate, expressed as a percent, of gain or loss on the assets of such Crediting
- -----------------------------------------------------------------------------
Option during a month as determined in accordance with Schedule A.
- ------------------------------------------------------------------
Deferral Account - shall mean collectively, a Participant's Deferred Incentive
- ----------------
Award Account, Deferred Salary Account, Pre-Effective Date Deferral Account, the
Pre-Effective Date Deferred Salary Accounts and the Pre-1986 Deferral Accounts.
Deferred Incentive Award Account - shall have the meaning set forth in Section
- --------------------------------
6.1 hereof.
Deferred Salary Account - shall have the meaning set forth in Section 6.1
- -----------------------
hereof.
Effective Date - shall mean May 1, 1995.
- --------------
6
<PAGE>
Eligible Employee - shall mean any employee of the Company or its subsidiaries
- -----------------
who (a) is eligible to participate in the Retirement Plan or has been
specifically designated as eligible for participation in this Plan by the
Committee and (b) is a member of the Executive Management Team.
ERISA - shall mean the Employee Retirement Income Security Act of 1974, as
- -----
amended.
Excess Benefit Accrual Account - shall have the meaning set forth in Section 6.2
- ------------------------------
hereof.
Excess 401(k) Account - shall mean the accounts maintained pursuant to the Prior
- ---------------------
Plan to compensate for lost benefits under the Savings Plan that were
attributable to the annual contribution limitations of section 401(k) of the
Code.
Executive Management Team - shall mean those employees who have been determined
- -------------------------
to have been 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 any of its subsidiaries.
Fiscal Year - shall mean the twelve month period ending on October 31 of each
- -----------
year.
Incentive Award - shall mean awards made pursuant to the terms of the Fluor
- ---------------
Corporation and Subsidiaries Executive Incentive Compensation Program, the Fluor
Special Executive Incentive
7
<PAGE>
Plan, the Directors' Achievement Award Program and any other incentive
compensation program for management and other highly compensated employees which
the Committee determines to be eligible for participation in this Plan.
Normal Retirement Age - shall mean 65 years of age.
- ---------------------
Participant - shall mean any Eligible Employee who has one or more Deferral
- -----------
Accounts and/or one or more Accrual Accounts under this Plan.
Plan - shall mean the Fluor Executive Deferred Compensation Program the terms of
- ----
which are set forth herein.
Pre-1986 Deferral Account - shall have the meaning set forth in Section 6.1
- -------------------------
hereof.
Pre-Effective Date Deferral Account - shall have the meaning set forth in
- -----------------------------------
Section 6.1 hereof.
Pre-Effective Date Deferred Salary Account - shall have the meaning set forth in
- ------------------------------------------
Section 6.1 hereof.
Pre-Effective Date Excess Benefit Accrual Account - shall have the meaning set
- -------------------------------------------------
forth in Section 6.2 hereof.
8
<PAGE>
Prior Plan - shall mean the Fluor Corporation and Subsidiaries Executive
- ----------
Deferred Salary Program.
Retirement Plan - shall mean the Fluor Corporation Employees' Retirement Plan.
- ---------------
Salary - shall mean the base salary regularly paid to an employee including the
- ------
employee's deferrals under Sections 401(k) and 125 of the Code.
Savings Plan - shall mean the Fluor Corporation Salaried Employees' Savings
- ------------
Investment Plan.
Termination of Service - Termination of the full-time employee/employer
- ----------------------
relationship between a Participant and Fluor Corporation or any of its
subsidiaries by reason of retirement, death, resignation, involuntary
termination, permanent total disability or change in status to a part-time
employee, as these terms are defined for purposes of the Retirement Plan.
ARTICLE III
PARTICIPATION
3.1 SALARY DEFERRALS. Any Eligible Employee who is a member of the Executive
Management Team will, for the period of such membership, be entitled to
defer all or a
9
<PAGE>
portion of Salary pursuant to the provisions of Section
4.2(a) hereof for so long as he remains an Eligible Employee.
3.2 INCENTIVE AWARD DEFERRALS. Any Eligible Employee who earns an Incentive
Award which becomes payable after the Effective Date will be entitled to
defer such Incentive Award or portion thereof pursuant to the provisions of
Section 4.2(b) hereof.
3.3 EXISTING ACCOUNTS. All undistributed account balances in the Prior Plan as
of the Effective Date are hereby transferred to and made a part of this
Plan. The Prior Plan is hereby merged into this Plan as of the Effective
Date and all benefits previously payable under the Prior Plan shall be paid
solely from this Plan. Any such account balances will be subject to
Adjustment pursuant to the terms of Section 7.1 hereof and, subject to the
deferral period or periods previously elected by the Employee, will be
maintained, determined and distributed in accordance with the terms hereof.
All undistributed account balances of Eligible Employees under the Fluor
Excess Benefit Plan as of the Effective Date are hereby transferred to and
made a part of this Plan and such account balances will be subject to
Adjustment pursuant to the terms of Section 7.1 hereof. On and after the
Effective Date all benefits previously payable to Eligible Employees under
the Fluor Excess Benefit Plan shall be paid solely under this Plan.
10
<PAGE>
3.4 EXCESS BENEFIT ACCRUALS. As of the last day of each calendar year each
Eligible Employee shall be entitled to receive an Excess Benefit Accrual if
and to the extent earned in accordance with the provisions of Section 5.1
hereof.
ARTICLE IV
DEFERRALS
4.1 AMOUNTS SUBJECT TO DEFERRAL. Subject to the effect of any previously
authorized or required deductions, reductions or income or employment tax
withholdings applicable to such compensation, an Eligible Employee may
elect to defer all or any portion of his Salary or any Incentive Award.
4.2 TIMING AND MECHANICS OF ELECTION.
(a). Salary - The amount of Salary to be deferred for future payroll
------
periods must be specified by the Eligible Employee in writing to his
corporate employer as a fixed percentage of Salary. Such deferral
election shall be effective with the first payroll period beginning
after receipt of the election by the Company and will continue in
effect (excluding the two payroll periods where no reductions or
deductions are taken) until a subsequent election or termination of
the election is received by the Company, which change or termination
shall also be effective as of the first payroll
11
<PAGE>
period beginning after receipt of such election or termination. The
deferral percentage so specified may not be changed, terminated or re-
initiated more often than once every six months.
(b). Incentive Awards - The amount of any Incentive Award to be deferred
----------------
must be specified by the Eligible Employee in writing to his corporate
employer no later than the end of the fiscal period(s) for which
performance is measured in determining the amount of the Incentive
Award. The amount to be deferred may be specified either as a fixed
dollar amount or as a percentage of the Incentive Award. Such amount
or percentage, once specified, is irrevocable as to such Incentive
Award.
4.3 DEFERRAL PERIODS. Unless otherwise specified by the Eligible Employee at
the time of his deferral election, payment of such amounts shall be
deferred until such Eligible Employee's Termination of Service. The
Eligible Employee may specify a deferral period which may not extend beyond
the date upon which such Eligible Employee reaches age 70 1/2. If a
specific deferral period has been selected, the deferral period shall end
upon the earlier to occur of (a) the Eligible Employee's Termination of
Service or (b) expiration of the specified deferral period.
12
<PAGE>
ARTICLE V
OTHER ACCRUALS
5.1 EXCESS BENEFIT ACCRUALS. As of each December 31 the Company shall credit
the Excess Benefit Accrual Account of each Eligible Employee with an amount
equal to the excess of the amount of company contributions which would have
been allocated to such Eligible Employee's account under the Retirement
Plan for the calendar year but for the limitations imposed by Sections 401
and 415 of the Code over the actual amount of company contributions
allocated to his accounts under such plans for the calendar year. At the
end of each calendar month, the Company shall credit the Excess Benefit
Accrual Account of each Eligible Employee with an amount equal to the
excess of (a) the amount of Company contributions which would have been
made to the account of such Eligible Employee for such month under Section
5.1 and Article IV of the Savings Plan, but for the limitations imposed by
Sections 401 and 415 of the Code over (b) the actual amount of Company
contributions allocated to his accounts for such month pursuant to such
Article VI; provided however, that such amounts will be so credited only if
such Eligible Employee elects, prior to beginning of any such month to
defer an additional portion of his Salary which is equal to the amount by
which the amounts contributed on behalf of such Eligible Employee pursuant
to Section 5.1 of the Savings Plan for such month were reduced by reason of
the limitations imposed by Sections 401 and 415 of the Code.
13
<PAGE>
5.2 COMPENSATING ACCRUALS. Each Eligible Employee who elects to defer all or a
portion of his Salary pursuant to Section 4.2(a) hereof will also be
credited with additional accruals to his Deferred Salary Account to
compensate for reductions in Company Retirement Plan and Savings Plan
contributions that result from such Salary deferral. Such accruals shall
be calculated as follows:
(a). As of the end of each calendar year there shall be credited to the
account of each Eligible Employee, an additional amount that is equal
to the amount by which Company contributions to such Eligible
Employee's accounts in the Retirement Plan were reduced by reason of
Salary deferrals made under this Plan.
(b). At the end of each calendar month there shall be credited to the
account of each Eligible Employee an additional amount that is equal
to the amount by which Company contributions made under Article VI of
the Savings Plan for such month to the account of such Eligible
Employee are reduced by reason of Salary deferrals made under this
Plan.
ARTICLE VI
MAINTENANCE OF ACCOUNTS
6.1 DEFERRAL ACCOUNTS. The Company shall maintain one or more of the following
separate deferral accounts, as applicable, for Eligible Employees: (1). a
Deferred
14
<PAGE>
Incentive Award Account to which shall be credited all amounts of Incentive
Awards which have been deferred by such Eligible Employee pursuant to the
provisions of Section 4.2(b) hereof; (2) a Pre-Effective Date Deferral
Account which shall include all undistributed amounts relating to Incentive
Awards as to which a deferral election had been made prior to the Effective
Date, but not including deferred amounts of Incentive Awards for Fiscal
Years ending on or before October 31, 1985; and (3) a Pre-1986 Deferral
Account which shall include all undistributed amounts relating to Incentive
Awards for Fiscal Years ending on or before October 31, 1985; (4) a Pre-
Effective Date Deferred Salary Account to which shall be credited the
balance as of the Effective Date of the amount standing to the credit of
such Eligible Employee under the Prior Plan, reduced by the amount
attributable to the Excess 401(k) Account maintained under such Prior Plan;
and (5) a Deferred Salary Account to which shall be credited all amounts of
Salary deferred on and after the Effective Date and all amounts credited
such Eligible Employee pursuant to Section 5.2 hereof.
6.2 EXCESS BENEFIT ACCRUAL ACCOUNTS. The Company shall maintain the following
separate accrual accounts, as applicable, for Eligible Employees: (1) a
Pre-Effective Date Excess Benefit Accrual Account to which shall be
credited as of the Effective Date all amounts then standing to the credit
of such Eligible Employees in the Fluor Excess Benefit Plan, and in the
Excess 401(k) Account of the Prior Plan; and (2) an Excess Benefit Accrual
Account to which shall be credited all amounts accruing for the benefit of
such Eligible Employee pursuant to Section 5.1 hereof.
15
<PAGE>
6.3 ADJUSTMENTS. Each account of a Participant established pursuant to
Sections 6.1 and 6.2 hereof shall be adjusted monthly to reflect any gains
and/or losses thereon (the "Adjustment") in accordance with the provisions
of Section 7.1 hereof.
ARTICLE VII
CREDITING OPTIONS
7.1 CREDITING OPTIONS. The Company has selected the crediting options
described in Schedule A any of which may be changed, modified or deleted,
or additional investment options may be added, from time to time by the
Committee (the "Crediting Options"), provided however, that (a) the Five
Year T-Bill Option will remain available for Pre-Effective Date Deferral
Accounts, Pre-Effective Date Deferred Salary Accounts and Pre-Effective
Date Excess Benefit Accrual Accounts and, until the end of the 1995 fiscal
year, for Salary Deferrals put into place prior to the Effective Date; and
(b) the Fluor Average Interest Factor option shall always remain available
for Pre-1986 Deferral Accounts. At the time that an Eligible Employee
first becomes a Participant, the Participant shall allocate deferrals among
the Crediting Options that will be used as a measure of the investment
performance of the contents of each of his Deferral and Accrual Accounts on
a form provided by the Committee. In making this designation, the
Participant may specify that all or any 10% multiple of each of his
Deferral and Accrual Accounts be deemed to be invested in one or more of
the Crediting Options. Each
16
<PAGE>
Participant will be able to reallocate the Crediting Options for each of
his Deferral and Accrual Accounts once every six months in 10% multiples on
a form provided by the Committee. Said reallocation will be effective as of
the first day of the month following the month in which the form is
received by the Committee. Until a Participant delivers a new Crediting
Options form to the Committee, his prior Crediting Options shall control.
If a Participant fails to select a Crediting Option for deferrals or
accruals made after the Effective Date he shall be deemed to have elected
the Money Market Option. The Company shall use the Participant's Crediting
Option designations as the basis for calculating the Adjustment component
of each Deferral and Accrual Account. If a Participant changes his or her
Crediting Option designations, then such change shall supersede the
previous designation effective the first business day of the month
following the month the change is made. The Company shall begin crediting
the Participant's Deferral Accounts with the amount deferred by the
Participant on the last day of the month in which the Salary or Incentive
Award would have otherwise been paid. The monthly Adjustment shall be
determined as follows: As of the last day of each month in which any amount
remains credited to any Deferral Account or Accrual Account of a
Participant, each portion of such accounts deemed invested in a particular
crediting option shall either be credited or debited with an amount equal
to that determined by multiplying the balance of such portion of such
account as of the last day of the preceding month by the Return Rate for
that month for the applicable Investment Option. As to the applicable
amount distributed, the Company shall cease crediting or debiting
Adjustments to the
17
<PAGE>
Participant's Deferral and/or Accrual Accounts on the last day of the month
of the applicable distribution event set forth in Articles VIII and IX (the
"Valuation Date").
Allocation of investment selections shall be made among the Crediting
Options. A Participant shall have absolutely no ownership interest in any
Crediting Option. The Company shall be the sole owner of (if any) funds
invested in any such Investment Option, as well as all amounts accounted
for in the Deferral and Accrual Accounts, all of which shall at all times
be subject to the claims of the Company's creditors.
A Participant shall be entitled to payment of an amount equal to the amount
in each of his Deferral and Accrual Accounts in accordance with Articles
VIII and IX hereof.
ARTICLE VIII
ACCOUNT DISTRIBUTIONS
8.1 NO DEFERRAL PERIOD SPECIFIED. With respect to any Accrual Account and
those portions of any Deferral Account (including, any Adjustments related
thereto) as to which no specific deferral period has been selected by the
Participant at the time of deferral:
(a). The lump sum payment or the first installment will be paid on or
before December 31 of the year of termination; provided however, that
the Company may in its sole discretion elect to defer payment thereof
until January of the succeeding year.
18
<PAGE>
(b). In the event of installment payments, the second installment will be
paid in January following the year in which the first installment was
paid and all remaining installments will be paid annually in January.
(c). Payment in cash in one lump sum or in annual installments will be at
the sole discretion of the Participant's corporate employer. The
number of installment payments will not exceed twenty.
(d). 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 a 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
installments at the discretion of the Participant's corporate
employer. In the event installments continue to the Beneficiary, they
will continue to be subject to Adjustment under Section 7.1 hereof.
8.2 SPECIFIED DEFERRAL PERIOD. With respect to those portions of any Deferral
Account (including any Adjustments related thereto) as to which a specified
deferral period has been selected by a Participant at the time of deferral:
19
<PAGE>
(a). Entitlement to payment will occur upon the earlier of the (i)
Participant's Termination of Service or (ii) upon expiration of the
specific deferral period.
(b). All payments will be made in a lump sum in cash unless the
Participant, at the time of deferral, designates that the deferred
amount be paid in a specified number (not to exceed twenty) of annual
installments.
(c). The lump sum payment or the first installment payment will be paid on
or before December 31 of the year of entitlement; provided however,
that the Company may in its sole discretion elect to defer payment
thereof until January of the succeeding year.
(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 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 a 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
20
<PAGE>
continuation of the installments all at the discretion of the
Participant's corporate employer. If a Participant has received his
entire entitlement under one or more, but less than all of his
deferral elections, and dies prior to commencement of payments under
one or more unpaid deferral elections he shall be considered to have
died prior to the commencement of any payments hereunder. In the event
installments continue to the Beneficiary, they will continue to be
subject to Adjustment pursuant to Section 7.1 hereof until
distributed.
ARTICLE IX
OTHER DISTRIBUTION EVENTS
9.1 CHANGE OF CONTROL. Notwithstanding any other Section hereof, if a
Participant's employment with the Company or its subsidiaries terminates
for any reason other than death, within the two-year period beginning on
the date that a Change of Control of the Company occurs, then the Company
shall pay to the Participant within the first fifteen (15) days of the
month following such termination a lump sum distribution of all of his
Deferral Accounts and Accrual Accounts. If the Participant dies after
termination of employment but before payment of any amount under this
Section, then such amount shall be paid to the Beneficiary within the first
fifteen (15) days of the month following the Participant's death.
21
<PAGE>
9.2 UNFORESEEABLE EMERGENCY.
(a). A distribution of a portion of a Participant's Deferral Accounts and
Accrual Accounts because of an Unforeseeable Emergency will be
permitted only to the extent required by the Participant to satisfy
the emergency need. Whether an Unforeseeable Emergency has occurred
will be determined solely by the Committee. Distributions in the
event of an Unforeseeable Emergency may be made by and with the
approval of the Committee upon written request by a Participant.
(b). An "Unforeseeable Emergency" is defined as a severe financial hardship
to the Participant caused by sudden and unexpected illness or accident
of the Participant or of a dependent of the Participant (as defined in
Code Section 152(a)), loss of the Participant's property due to
casualty, or other extraordinary and unforeseeable circumstances
caused by a result of events beyond the Participant's control. The
circumstances that will constitute an unforeseeable emergency will
depend upon the facts of each case, but, in any event, any
distribution under this Section shall not exceed the amount required
by the Participant to resolve the hardship after (i) reimbursement or
compensation through insurance or otherwise, (ii) obtaining
liquidation of the Participant's assets, to the extent such
liquidation would not itself cause a severe financial hardship, or
(iii) suspension of deferrals under the Plan.
22
<PAGE>
9.3 WITHDRAWALS. A Participant may elect by filing with the Company a form
specified by the Committee, to receive an amount equal to ninety percent of
his Deferral Accounts and Accrual Accounts at any time prior to his
Termination of Service. If a Participant makes an election described in
this Section 9.3 the balance of the Participant's Deferral Accounts not
distributed to the Participant shall be forfeited to the Company; the
amount to which he is entitled under this Section 9.3 shall be distributed
to the Participant in a single lump sum as soon as administratively
practical following such election; the Participant shall be prohibited from
participating in deferral portions of the Plan for the balance of the
Fiscal Year in which this distribution is made and the following Fiscal
Year; any elections previously made pursuant to Section 4.2 of this Plan
shall cease to be effective.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 PARTICIPANT RIGHTS IN THE UNFUNDED PLAN. Any liability of the Company to
any Participant with respect to any benefit shall be based solely upon the
contractual obligations created by the Plan; no such obligation shall be
deemed to be secured by any pledge or any encumbrance on any property of
the Company. The Company's obligations under this agreement shall be an
unfunded and unsecured promise to pay. No Participant or his designated
beneficiaries shall have any rights under the Plan other than those of a
23
<PAGE>
creditor of the Company. Assets segregated or identified by the Company
for the purpose of paying benefits pursuant to the Plan remain general
corporate assets subject to the claims of the Company's creditors.
10.2 NON-ASSIGNABILITY. Neither the Participant nor his Beneficiary shall have
any power or right to transfer, assign, anticipate, hypothecate or
otherwise encumber any part or all of the amounts payable hereunder, which
are expressly declared to be unassignable and non-transferable. Any such
attempted assignment or transfer shall be void and the Company shall
thereupon have no further liability to such Participant or such Beneficiary
hereunder. No amount payable hereunder shall, prior to actual payment
thereof, be subject to seizure by any creditor of any Participant or
Beneficiary for the payment of debt, judgment or other obligation, by a
proceeding at law or in equity, nor transferable by operation of law in the
event of the bankruptcy, insolvency or death of the Participant, his
designated Beneficiary or any other beneficiary hereunder.
10.3 TERMINATION OR AMENDMENT OF PLAN. The Company retains the right, at any
time and in its sole discretion, to amend or terminate the Plan, in whole
or in part. Any amendment of the Plan shall be approved by the Board,
shall be in writing, and shall be communicated to the Participants.
Notwithstanding the above, the Committee shall have the authority to change
the requirements of eligibility or to modify the Crediting Options
hereunder. No amendment of the Plan shall materially impair or curtail the
Company's contractual obligations arising from deferral elections
previously made or for benefits
24
<PAGE>
accrued prior to such amendment. Notwithstanding any other provision herein
to the contrary, in the event of Plan termination, payment of Deferral and
Accrual Accounts shall occur not later than the last business day of the
month following the month in which the termination is made effective.
10.4 CONTINUATION OF EMPLOYMENT. This Plan shall not be deemed to constitute a
contract of employment between the Company and a Participant. Nothing in
the Plan or in any instrument executed pursuant to the Plan will confer
upon any Participant 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 Participant at any time with or without
cause.
10.5 RESPONSIBILITY FOR LEGAL EFFECT. Neither the Committee nor the Company
makes any representations or warranties, express or implied, or assumes any
responsibility concerning the legal, tax or other implications or effects
of this Plan.
10.6 WITHHOLDING. The Company shall withhold from or offset against any payment
or accrual made under the Plan any taxes the Company determines it is
required to withhold by applicable federal, state or local laws.
10.7 OTHER COMPENSATION PLANS. The adoption of the Plan shall not affect any
other incentive or other compensation plans in effect for the Company or
any subsidiary, nor
25
<PAGE>
shall the Plan preclude the Company from establishing any other forms of
incentive or other compensation for employees of the Company or any
subsidiary.
10.8 PLAN BINDING ON SUCCESSORS. The Plan shall be binding upon the successors
and assigns of the Company.
10.9 SINGULAR, PLURAL; GENDER. Wherever appropriate in this Plan, nouns in the
singular shall include the plural, and the masculine pronoun shall
include the feminine gender.
10.10 CONTROLLING LAW. The Plan shall be governed by and construed in
accordance with the internal law, without regard to conflict of law
principles, of the State of California to the extent not pre-empted by
the laws of the United States of America.
26
<PAGE>
EXHIBIT 10.13
FLUOR CORPORATION
1988 FLUOR EXECUTIVE STOCK PLAN
AS AMENDED AND RESTATED
EFFECTIVE DECEMBER 6, 1994
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I......................................................... 1
Sec. 1.1 DEFINITIONS......................................... 1
ARTICLE II........................................................ 3
Sec. 2.1 NAME................................................ 3
Sec. 2.2 PURPOSE............................................. 3
Sec. 2.3 EFFECTIVE DATE...................................... 4
Sec. 2.4 LIMITATIONS......................................... 4
Sec. 2.5 OPTIONS, AWARDS AND RIGHTS GRANTED UNDER PLAN....... 4
ARTICLE III....................................................... 5
Sec. 3.1 ELIGIBILITY......................................... 5
ARTICLE IV........................................................ 5
Sec. 4.1 DUTIES AND POWERS OF COMMITTEE...................... 5
Sec. 4.2 MAJORITY RULE....................................... 5
Sec. 4.3 COMPANY ASSISTANCE.................................. 5
ARTICLE V......................................................... 6
Sec. 5.1 OPTION GRANT AND AGREEMENT.......................... 6
Sec. 5.2 PARTICIPATION LIMITATION............................ 6
Sec. 5.3 OPTION PRICE........................................ 6
Sec. 5.4 OPTION PERIOD....................................... 6
Sec. 5.5 OPTION EXERCISE..................................... 6
Sec. 5.6 NONTRANSFERABILITY OF OPTION........................ 7
Sec. 5.7 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT.. 7
Sec. 5.8 RIGHTS AS STOCKHOLDER............................... 9
ARTICLE VI........................................................ 9
Sec. 6.1 AWARD GRANT AND RESTRICTED STOCK AGREEMENT.......... 9
Sec. 6.2 CONSIDERATION FOR ISSUANCE.......................... 9
Sec. 6.3 RESTRICTIONS ON SALE OR OTHER TRANSFER.............. 10
Sec. 6.4 LAPSE OF RESTRICTIONS............................... 10
Sec. 6.5 RIGHTS AS STOCKHOLDER............................... 10
ARTICLE VII....................................................... 11
Sec. 7.1 STOCK CERTIFICATES.................................. 11
ARTICLE VIII...................................................... 11
Sec. 8.1 RIGHTS GRANTS AND AGREEMENTS........................ 11
Sec. 8.2 RIGHTS PERIOD....................................... 13
Sec. 8.3 RIGHTS EXERCISE..................................... 13
Sec. 8.4 NONTRANSFERABILITY OF RIGHTS........................ 13
</TABLE>
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Sec. 8.5 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT.. 13
Sec. 8.6 NO RIGHTS AS STOCKHOLDER............................ 15
ARTICLE IX........................................................ 15
Sec. 9.1 STOCK PAYMENT....................................... 15
ARTICLE X......................................................... 15
Sec. 10.1 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN..... 15
ARTICLE XI........................................................ 16
Sec. 11.1 ADJUSTMENT PROVISIONS............................... 16
Sec. 11.2 CONTINUATION OF EMPLOYMENT.......................... 16
Sec. 11.3 COMPLIANCE WITH GOVERNMENT REGULATIONS.............. 16
Sec. 11.4 PRIVILEGES OF STOCK OWNERSHIP....................... 17
Sec. 11.5 WITHHOLDING......................................... 17
Sec. 11.6 NONTRANSFERABILITY.................................. 17
Sec. 11.7 OTHER COMPENSATION PLANS............................ 17
Sec. 11.8 PLAN BINDING ON SUCCESSORS.......................... 17
Sec. 11.9 SINGULAR, PLURAL; GENDER............................ 17
Sec. 11.10 HEADINGS, ETC., NO PART OF PLAN..................... 18
</TABLE>
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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
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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.
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(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
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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.
4
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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.
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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.
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<PAGE>
(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
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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.
8
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(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.
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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
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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
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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
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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
13
<PAGE>
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.
14
<PAGE>
(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
15
<PAGE>
(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
16
<PAGE>
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.
17
<PAGE>
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.
18
<PAGE>
EXHIBIT 10.15
FLUOR SPECIAL
EXECUTIVE INCENTIVE PLAN
As Amended and Restated
Effective December 6, 1994
<PAGE>
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.
1
<PAGE>
(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
2
<PAGE>
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.
3
<PAGE>
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.
4
<PAGE>
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.
5
<PAGE>
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
6
<PAGE>
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,
7
<PAGE>
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.
8
<PAGE>
EXHIBIT 10.18
DIRECTORS' ACHIEVEMENT AWARD PROGRAM
Adopted as of December 6, 1994
<PAGE>
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.
1
<PAGE>
(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.
2
<PAGE>
(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.
3
<PAGE>
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
4
<PAGE>
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:
5
<PAGE>
(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.
6
<PAGE>
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.
7
<PAGE>
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.
8
<PAGE>
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.
9
<PAGE>
EXHIBIT 13
OPERATIONS BY BUSINESS SEGMENT AND GEOGRAPHIC AREA
The Engineering and Construction segment includes subsidiaries engaged in the
design, engineering, procurement, construction, technical services and
maintenance of facilities for process, industrial, power/government and
diversified services clients. Coal segment amounts include the operations of
Massey Coal Company.
In 1995, revenues included $1.5 billion from subsidiaries of Shell Oil Company
related primarily to two projects that were awarded in 1993.
Identifiable assets are those tangible and intangible assets used in the
operation of each of the business segments and geographic areas, except for
discontinued operations in 1993 which is net of related liabilities. Corporate
assets are principally cash and cash equivalents, marketable securities,
nontrade receivables and in 1993 include $172.8 million related to discontinued
operations.
Engineering services for international projects are often performed within the
United States or country other than where the project is located. Revenues
associated with these services have been classified within the geographic area
where the work was performed.
OPERATIONS BY BUSINESS SEGMENT
<TABLE>
<CAPTION>
Revenues Operating Profit
$ in millions 1995 1994 1993 1995 1994 1993
- ------------------------------------------------------------------------------------------------- ------------------------------
<S> <C> <C> <C> <C> <C> <C>
Engineering and Construction $ 8,451.6 $ 7,717.6 $ 7,133.6 $ 286.0 $ 259.1 $ 220.6
Coal 849.8 767.7 716.6 111.0 95.2 70.7
------------------------------- ------------------------------
$ 9,301.4 $ 8,485.3 $ 7,850.2 $ 397.0 $ 354.3 $ 291.3
=============================== ==============================
</TABLE>
<TABLE>
<CAPTION>
Depreciation, Depletion
Identifiable Assets Capital Expenditures and Amortization
$ in millions 1995 1994 1993 1995 1994 1993 1995 1994 1993
- -------------------------------------------------------- -------------------------------- --------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Engineering and
Construction $ 1,572.6 $ 1,288.5 $ 1,144.7 $ 137.1 $ 72.5 $ 60.6 $ 62.9 $ 47.1 $ 52.5
Coal 1,191.2 1,076.5 926.3 181.8 228.8 110.9 83.7 66.8 58.8
Corporate 465.1 459.8 517.9 - - - 0.4 0.4 0.5
-------------------------------- -------------------------------- --------------------------------
$ 3,228.9 $ 2,824.8 $ 2,588.9 $ 318.9 $ 301.3 $ 171.5 $ 147.0 $ 114.3 $ 111.8
================================ ================================ ================================
</TABLE>
OPERATIONS BY GEOGRAPHIC AREA
<TABLE>
<CAPTION>
Revenues Operating Profit Identifiable Assets
$ in millions 1995 1994 1993 1995 1994 1993 1995 1994 1993
- -------------------------------------------------------- -------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
United States $ 5,814.5 $ 6,100.3 $ 5,628.1 $ 297.4 $ 284.9 $ 237.8 $ 2,764.2 $ 2,463.1 $ 2,262.2
Europe 1,637.2 1,166.4 994.2 27.7 23.5 15.6 204.3 147.5 127.6
Central and South
America 801.2 197.8 144.4 9.6 14.9 6.2 92.3 41.9 31.1
Asia Pacific 780.0 673.2 422.4 49.4 12.8 13.8 84.2 107.5 69.7
Canada 238.0 258.0 225.8 5.7 12.1 9.2 62.5 44.6 65.5
Middle East 29.6 89.1 434.5 5.0 2.4 2.1 21.1 20.1 32.7
Other 0.9 0.5 0.8 2.2 3.7 6.6 0.3 0.1 0.1
-------------------------------- -------------------------------- ---------------------------------
$ 9,301.4 $ 8,485.3 $ 7,850.2 $ 397.0 $ 354.3 $ 291.3 $ 3,228.9 $ 2,824.8 $ 2,588.9
================================ ================================ =================================
</TABLE>
- ---------------
Included in United States revenues are export sales to unaffiliated customers
of $679.6 million in 1995, $857.1 million in 1994 and $1,090.3 million in 1993.
The following table reconciles business segment operating profit with the
earnings before taxes:
<TABLE>
<CAPTION>
$ in millions 1995 1994 1993
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Operating profit $ 397.0 $ 354.3 $ 291.3
Interest income, net 19.5 4.7 0.1
Corporate administrative and
general expense (48.6) (47.9) (43.7)
Other items, net (5.7) (7.8) (5.5)
----------------------------------------
Earnings before taxes $ 362.2 $ 303.3 $ 242.2
========================================
</TABLE>
Fluor 49
<PAGE>
STOCKHOLDERS' REFERENCE
FORM 10-K
A copy of the Form 10-K, which is filed with the Securities and
Exchange Commission, is available upon request. Write to:
Corporate Secretary
Fluor Corporation
3333 Michelson Drive
Irvine, California 92730
(714) 975-2000
REGISTRAR AND TRANSFER AGENT
Chemical Mellon Shareholder Services, L.L.C.
300 S. Grand Avenue 4th Floor
Los Angeles, California 90071
and
Chemical Mellon Shareholder Services, L.L.C.
85 Challenger Road
Overpeck Centre
Ridgefield Park, New Jersey 07660
For change of address, lost dividends, or lost stock certificates, write or
telephone:
Chemical Mellon Shareholder Services, L.L.C.
P. O. Box 590
Ridgefield Park, New Jersey 07660
Attn: Securityholder Relations
(800) 813-2847
INDEPENDENT AUDITORS
Ernst & Young LLP
18400 Von Karman Avenue
Suite 800
Irvine, California 92715
ANNUAL STOCKHOLDERS' MEETING
Annual report and proxy statement are mailed about February 1. Fluor's annual
meeting of stockholders will be held at 9:00 a.m. on March 12, 1996, at the
Fluor Daniel offices, 100 Fluor Daniel Drive, Greenville, South Carolina.
STOCK TRADING
Fluor's stock is traded on the New York, Midwest, Pacific, Amsterdam, London
and Swiss Stock Exchanges. Common stock domestic trading symbol: FLR.
COMMON STOCK INFORMATION
At December 31, 1995, there were 83,395,916 shares outstanding and
approximately 15,000 stockholders of record of Fluor's common stock.
The following table sets forth for the periods indicated the cash dividends
paid per share of common stock and the high and low sales prices of such common
stock as reported in the Consolidated Transactions Report System.
COMMON STOCK AND DIVIDEND INFORMATION
<TABLE>
<CAPTION>
Dividends Price Range
per Share High Low
- ----------------------------------------------------------
<S> <C> <C> <C>
Fiscal 1995
First Quarter $ 0.15 $ 50 3/4 $ 41 1/4
Second Quarter 0.15 52 1/4 45 1/2
Third Quarter 0.15 59 1/2 49 1/8
Fourth Quarter 0.15 59 1/2 54 3/8
------
$ 0.60
Fiscal 1994
First Quarter $ 0.13 $ 45 7/8 $ 38 5/8
Second Quarter 0.13 56 1/4 43 3/4
Third Quarter 0.13 55 5/8 47 5/8
Fourth Quarter 0.13 55 1/8 46 3/8
------
$ 0.52
</TABLE>
DIVIDEND REINVESTMENT PLAN
Fluor's Dividend Reinvestment Plan provides stockholders of record with the
opportunity to conveniently and economically increase their ownership in Fluor.
Through the Plan, stockholders can automatically reinvest their cash dividends
in shares of Fluor common stock. Optional cash investments also may be made in
additional Fluor shares ranging from a minimum of $100 per month to a maximum
of $10,000 per quarter. For details on the Plan, contact Fluor's agent,
Chemical Mellon Shareholder Services, L.L.C. (800) 813-2847.
DUPLICATE MAILINGS
Shares owned by one person but held in different forms of the same name result
in duplicate mailing of stockholder information at added expense to the
company. Such duplication can be eliminated only at the direction of the
stockholder. Please notify Chemical Mellon Shareholder Services, L.L.C. in
order to eliminate duplication.
HISTORY OF STOCK DIVIDENDS AND SPLITS SINCE GOING PUBLIC IN 1950
08/23/57 20% Stock Dividend
12/15/61 5% Stock Dividend
03/11/63 5% Stock Dividend
03/09/64 5% Stock Dividend
03/08/65 5% Stock Dividend
02/14/66 5% Stock Dividend
03/24/66 2 for 1 Stock Split
03/27/67 5% Stock Dividend
02/09/68 5% Stock Dividend
03/22/68 2 for 1 Stock Split
05/16/69 5% Stock Dividend
03/06/70 5% Stock Dividend
03/05/71 5% Stock Dividend
03/10/72 5% Stock Dividend
03/12/73 5% Stock Dividend
03/11/74 3 for 2 Stock Split
08/13/79 3 for 2 Stock Split
07/18/80 2 for 1 Stock Split
COMPANY CONTACTS
Shareholders may call
(800)854-0441
Stockholder Services:
Lawrence N. Fisher
(714)975-6961
Investor Relations:
Lila J. Churney
(714)975-3909
Fluor's investor relations activities are dedicated to providing investors with
complete and timely information. All investor questions are welcome.
[PHOTO OF LILA J. CHURNEY]
Design: Dula Gerrie Design
Photography: Walter Urie
Illustrations: Kevin Sprouls, Mark McIntosh
Lithography: Lithographics, Inc.
[RECYCLE LOGO] This Annual Report was printed on recycled paper.
<PAGE>
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
In millions, except
per share amounts 1995 1994 1993 1992 1991 1990 1989 1988
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED OPERATING RESULTS
Revenues $ 9,301.4 $ 8,485.3 $ 7,850.2 $ 6,600.7 $ 6,572.0 $ 7,248.9 $ 6,127.2 $ 5,008.9
Earnings from continuing
operations before taxes 362.2 303.3 242.2 215.4 228.4 153.6 135.6 62.0
Earnings from continuing
operations, net 231.8 192.4 166.8 135.3 153.1 119.4 84.1 38.6
Earnings (loss) from
discontinued operations, net - - - (96.6) 11.0 35.2 28.6 21.6
Cumulative effect of change in
accounting principle, net - - - (32.9) - - - -
Net earnings 231.8 192.4 166.8 5.8 164.1 154.6 112.7 60.2
Earnings per share
Continuing operations 2.78 2.32 2.03 1.65 1.87 1.47 1.04 0.48
Discontinued operations - - - (1.18) 0.14 0.43 0.36 0.27
Cumulative effect of change
in accounting principle - - - (0.40) - - - -
---------------------------------------------------------------------------------------------
Net earnings per share $ 2.78 $ 2.32 $ 2.03 $ 0.07 $ 2.01 $ 1.90 $ 1.40 $ 0.75
Return on average
shareholders' equity 17.6% 17.1% 17.4% 0.6% 20.2% 23.3% 21.5% 14.2%
Cash dividends per
common share $ 0.60 $ 0.52 $ 0.48 $ 0.40 $ 0.32 $ 0.24 $ 0.14 $ 0.02
CONSOLIDATED FINANCIAL
POSITION
Current assets $ 1,411.6 $ 1,258.4 $ 1,309.1 $ 1,138.6 $ 1,159.5 $ 1,222.8 $ 1,036.4 $ 1,001.0
Current liabilities 1,238.6 1,021.3 930.9 845.4 848.2 984.0 797.7 786.1
---------------------------------------------------------------------------------------------
Working capital 173.0 237.1 378.2 293.2 311.3 238.8 238.7 214.9
Property, plant and
equipment, net 1,435.8 1,274.4 1,100.9 1,046.9 1,092.7 925.3 775.3 729.8
Total assets 3,228.9 2,824.8 2,588.9 2,365.5 2,421.4 2,475.8 2,154.3 2,075.7
Capitalization
Long-term debt 2.9 24.4 59.6 61.3 75.7 57.6 62.5 95.0
Shareholders' equity 1,430.8 1,220.5 1,044.1 880.8 900.6 741.3 589.9 467.1
---------------------------------------------------------------------------------------------
Total capitalization $ 1,433.7 $ 1,244.9 $ 1,103.7 $ 942.1 $ 976.3 $ 798.9 $ 652.4 $ 562.1
Percent of total
capitalization
Long-term debt 0.2% 2.0% 5.4% 6.5% 7.8% 7.2% 9.6% 16.9%
Shareholders' equity 99.8% 98.0% 94.6% 93.5% 92.2% 92.8% 90.4% 83.1%
Shareholders' equity per
common share $ 17.20 $ 14.79 $ 12.72 $ 10.81 $ 11.10 $ 9.22 $ 7.39 $ 5.91
Common shares outstanding
at October 31 83.2 82.5 82.1 81.5 81.1 80.4 79.8 79.1
OTHER DATA
New awards $10,257.1 $ 8,071.5 $ 8,000.9 $10,867.7 $ 8,531.6 $ 7,632.3 $ 7,135.3 $ 5,955.2
Backlog at year end 14,724.9 14,021.9 14,753.5 14,706.0 11,181.3 9,557.8 8,360.9 6,658.6
Capital expenditures 318.9 301.3 171.5 287.0 159.7 155.7 139.2 86.3
Cash provided by
operating activities $ 369.1 $ 458.6 $ 188.7 $ 306.1 $ 219.0 $ 353.1 $ 265.1 $ 17.7
</TABLE>
- ---------------
See Management's Discussion and Analysis on pages 30 to 33 and Notes to
Consolidated Financial Statements on pages 39 to 49 for information relating to
significant items affecting the results of operations.
The quarterly dividend was increased from $.02 per share to $.04 per share in
the second quarter of 1989, to $.06 per share in the first quarter of 1990, to
$.08 per share in the first quarter of 1991, to $.10 per share in the first
quarter of 1992, to $.12 per share in the first quarter of 1993, to $.13 per
share in the first quarter of 1994, to $.15 per share in the first quarter of
1995 and to $.17 per share in the first quarter of 1996.
Fluor 29
<PAGE>
FINANCIAL TABLE OF CONTENTS
30 Management Discussion and Analysis
34 Consolidated Balance Sheet
36 Consolidated Statement of Earnings
37 Consolidated Statement of Cash Flows
38 Consolidated Statement of Shareholders' Equity
39 Notes to Consolidated Financial Statements
49 Segment Information
50 Reports of Management and Independent Auditors
51 Quarterly Financial Data
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis is provided to increase understanding
of, and should be read in conjunction with, the consolidated financial
statements and accompanying notes.
RESULTS OF OPERATIONS
Net earnings were $232 million in 1995 compared with $192 million in 1994 and
$167 million in 1993. The related earnings per share were $2.78 in 1995
compared with $2.32 in 1994 and $2.03 in 1993. Earnings from continuing
operations in 1993 included a nonrecurring after-tax charge of $6.1 million
related to the settlement of a dispute with the pension and benefits funds of
the United Mine Workers of America/Bituminous Coal Operators of America. This
charge was more than offset by the 1993 reversal of $12.6 million of income
tax liabilities no longer required due to the favorable conclusion of a
federal income tax audit in the second quarter of 1993 for the years 1984
through 1986.
ENGINEERING AND CONSTRUCTION SEGMENT
Total new awards were $10.3 billion in 1995 compared with $8.1 billion in 1994
and $8.0 billion in 1993. Consistent with the company's continuing long-term
goal of broad geographic diversity, 56 percent of 1995 new awards came from
projects located outside the United States, compared with 61 percent in 1994
and 54 percent in 1993. The following table sets forth new awards for each of
the company's business groups:
<TABLE>
<CAPTION>
$ in millions / Year ended
October 31, 1995 1994 1993
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Process $ 3,859 38% $ 4,432 55% $ 5,439 68%
Industrial 4,313 42 2,948 37 1,828 23
Power/Government 1,873 18 516 6 527 6
Diversified Services 212 2 176 2 207 3
----------------------------------------------
Total new awards $ 10,257 100% $ 8,072 100% $ 8,001 100%
==============================================
U.S. $ 4,495 44% $ 3,165 39% $ 3,686 46%
Outside U.S. 5,762 56 4,907 61 4,315 54
----------------------------------------------
Total new awards $ 10,257 100% $ 8,072 100% $ 8,001 100%
==============================================
</TABLE>
The company's future award prospects include several large-scale international
projects. The large size and uncertain timing of these projects can create
variability in the company's award pattern; consequently, future award trends
are difficult to predict with certainty. Process Group new awards have declined
in both 1995 and 1994 compared with 1993 reflecting the uneven impact on new
award trends created by large project awards in 1993 and 1994. Growth in the
Industrial Group's backlog the past two years is due primarily to significant
activity in the automotive, and mining and metals operating sectors, along with
continued growth in demand for consumer products, particularly in developing
countries. The recent growth in the Power/Government Group in 1995 is due
primarily to an award totaling over $1.0 billion relating to a power plant to
be constructed in Paiton, Indonesia. This follows a two-year decline in the
Power/Government Group's backlog that reflected a major slowdown in the award
and funding of new U.S. government programs and the continued low demand for
power generation projects in the U.S.
The company continues to enhance its growth potential by diversifying and
entering new industrial and geographic markets. The Diversified Services Group
is expanding by developing services to be marketed directly to clients that
previously have been provided as support for engineering and construction
projects while also capitalizing on emerging international markets. In most
cases, the businesses in Diversified Services carry profit margins higher than
traditional engineering and construction projects. Additionally, because of
the more purely service nature of these businesses, they generally do not
generate significant backlog.
30 Fluor
<PAGE>
Backlog at October 31, 1995, 1994 and 1993 was $14.7 billion, $14.0 billion and
$14.8 billion, respectively. Although backlog reflects business which is
considered to be firm, cancellations or scope adjustments do occur. Backlog
has been adjusted to reflect project cancellations, deferrals, and revised
project scope and cost, both upwards and downwards. The net reduction in
backlog from project adjustments and cancellations for the year ended October
31, 1995 was $1,176 million, compared with $1,130 million and $844 million for
the years ended October 31, 1994 and 1993, respectively.
Engineering and Construction revenues increased to $8.5 billion in 1995
compared with $7.7 billion in 1994 and $7.1 billion in 1993 due primarily to
increases in the volume of work performed. Domestic revenues declined slightly
in 1995, reflecting both the company's geographic diversification and a
continued slow down in domestic growth. Export revenues declined in 1995
compared with 1994 and 1993 as the result of a planned shift to providing a
higher percentage of engineering services in the company's international
offices. In 1995, revenues included $1.5 billion from subsidiaries of Shell
Oil Company related primarily to two projects that were awarded in 1993.
Engineering and Construction operating profits increased 10 percent to $286
million in 1995, compared with $259 million in 1994 and $221 million in 1993
due primarily to an increase in the volume of work performed, partially offset
by higher levels of investment spending for strategic business development.
Margins improved slightly in 1995 over 1994 and 1993 and are affected by
competitive market conditions and the mix of engineering and construction
projects. The company continues to focus on improving operating margins by
lowering the cost of delivering services through its global network of
offices, allowing greater use of high-value engineering centers located in
lower cost areas of the world. Additionally, the establishment of new work
processes and on-site engineering and procurement has contributed to increased
cost efficiencies.
In 1995, the company intensified its acquisition efforts. Consistent with the
company's goals for strategic long-term growth, in 1995 several acquisitions
and investment arrangements were completed that provide the company with
long-term earnings growth potential together with near-term profitability. In
December 1995, the company announced an agreement with Groundwater Technology,
Inc. ("GTI") wherein the company will acquire an approximate 55 percent
ownership interest in GTI. The acquisition, subject to GTI shareholder
approval, will broaden the company's level of environmental services. All
acquisitions have been accounted for under the purchase method of accounting
and results of operations have been included in the company's consolidated
financial statements from the respective acquisition dates. If these
acquisitions had been made at the beginning of 1995 or 1994, pro forma results
of operations would not have differed materially from actual results.
COAL SEGMENT
Revenues and operating profit from Coal operations in 1995 were $850 million
and $111 million, respectively, compared with $768 million and $95 million in
1994. Revenues and operating profit in 1993 were $717 million and $71 million.
Revenues increased in 1995 due primarily to increased sales volume of produced
metallurgical coal, which more than offset lower demand for steam coal due to
last year's mild winter weather conditions. Metallurgical coal sales have
increased due to strong demand by steel producers and the capturing of a larger
market share. The Coal segment provides a high quality metallurgical coal that
is attractive to steel producers. Purchased coal sales and margins in 1995 were
immaterial as purchased coal volume has been replaced with produced coal from
reserves acquired in recent years. Accordingly, purchased coal sales are
netted with related cost of revenues in 1995. Prior periods have not been
restated. Operating profit increased 17 percent in 1995 due primarily to the
increased sales volume of metallurgical coal which has a higher gross margin
than steam coal.
The increase in revenues in 1994 compared with 1993 is due primarily to
increased sales volume of produced coal sales together with a slight increase
in sales price. Sales volume increased due to strong demand for metallurgical
coal by the steel industry more than offsetting a decline in steam coal due to
mild weather conditions. Sales of purchased coal declined as the result of a
planned shift to produced coal which carries a higher profit margin. Operating
profit increased 18 percent in 1994 compared with 1993, excluding the 1993
nonrecurring pretax charge of $10 million to settle the dispute with the
pension and benefit funds of the United Mine Workers of America/Bituminous
Coal Operators of America. Operating profit increased 12 percent due to
increased gross margin from higher produced coal sales volume and 6 percent
primarily from a gain on the sale of excess land. Although produced coal sales
prices showed slight improvement in 1994 compared with 1993, they were offset
by slightly higher costs associated with the start-up of production facilities
and the development of new reserves.
Fluor 31
<PAGE>
OTHER
Net interest income increased in 1995 compared with 1994 due largely to higher
rates of return on short-term investments and the prepayment of a 13.5 percent
$34.7 million note in the first quarter of 1995. Interest income increased in
1994 compared with 1993 due primarily to higher average investable funds and
interest rates, whereas the lower interest expense was attributable to reduced
debt.
Corporate administrative and general expense increased slightly in 1995
compared with 1994 due primarily to higher performance-driven compensation
plan expense partially offset by lower corporate overhead. Corporate
administrative and general expense increased in 1994 compared with 1993 due
primarily to higher stock price and performance-driven compensation plans
expense partially offset by an increase in net periodic pension income.
The effective tax rate on earnings from continuing operations for 1995 is
essentially unchanged compared with 1994 and 1993, after excluding the reversal
of $12.6 million of income tax liabilities in 1993.
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 the company's consolidated results of operations or financial
position.
In October 1995, the company adopted Statement of Financial Accounting
Standards No. 119, "Disclosure about Derivative Financial Instruments and Fair
Value of Financial Instruments" (SFAS No. 119) which requires various
disclosures about financial instruments and related transactions. These
disclosures have been incorporated in the Notes to Consolidated Financial
Statements where appropriate. Management of financial risk is centralized to
facilitate the use and control of derivative instruments by providing support
to management and operating units in developing, executing, tracking and
controlling hedging programs. All programs are reviewed and approved by senior
management before implementation. The company has only minimal exposure to
foreign currency fluctuations as it is generally able to negotiate neutral
positions by matching the foreign currency revenues and costs in its
engineering and construction activities. From time to time, the company enters
into foreign exchange contracts to hedge specific foreign currency
commitments. The company does not have substantial net assets or liabilities
denominated in foreign currencies and, therefore, does not have significant
risk to currency fluctuations. On December 20, 1994 the Mexican government
announced a major devaluation to the peso. Although the peso has experienced
continued volatility in recent months, 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.
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" (SFAS No. 121).
Although adoption of SFAS No. 121 is not required until 1997, the company will
implement the new accounting standard in the first quarter of 1996. Such
implementation will not have a material effect on the company's consolidated
results of operations or financial position.
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS No. 123). SFAS No. 123 establishes financial accounting
and reporting standards for stock-based compensation plans and to transactions
in which an entity issues its equity instruments to acquire goods and services
from nonemployees. The new accounting standards prescribed by SFAS No. 123 are
optional, and the company may continue to account for its plans under previous
accounting standards. The company does not expect to adopt the new accounting
standards, consequently, SFAS 123 will not have a material impact on the
company's consolidated results of operations or financial position. However,
pro forma disclosures of net earnings and earnings per share must be made as
if the SFAS No. 123 accounting standards had been adopted. Adoption of SFAS
No. 123 is not required by the company until 1997.
DISCONTINUED OPERATIONS
In 1994, the company completed the sale of its Lead business for consideration
consisting of both cash and deferred payments. Proceeds included $52 million
cash on the date of the closing and deferred amounts to be paid in installments
over periods ranging from five to eight years.
The sale by the company of its Lead business included St. Joe Minerals
Corporation ("St. Joe") and its environmental liabilities for several different
lead mining, smelting and other lead related environmental sites. As a
condition of the St. Joe sale, however, the company retained responsibility
for certain non-lead related environmental liabilities, but only to the extent
that such liabilities are not covered by St. Joe's comprehensive general
liability insurance.
32 Fluor
<PAGE>
In 1987, St. Joe sold its zinc mining and smelting division to Zinc Corporation
of America ("ZCA"). As part of the sale agreement, St. Joe and the company
agreed to indemnify ZCA in the event that certain environmental liabilities
arise from three Zinc facilities (the "Zinc facilities"). During 1993, ZCA
made claims under this indemnity as well as under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") against St.
Joe. In 1994, ZCA filed suit against St. Joe and the company, among others,
seeking compensation. In 1994, the company and St. Joe, among others, executed
a settlement agreement with ZCA which, among other things, cancels the
indemnity previously provided to ZCA and limits environmental expenditures at
the Zinc facilities for which St. Joe would be responsible to no more than
approximately $10 million. This amount had been previously reserved by the
company. Expenses incurred and payments made under the settlement agreement
are expected to be made over a period of at least five years.
FINANCIAL POSITION AND LIQUIDITY
The decrease in cash flows from operating activities in 1995 is due primarily
to increases in operating assets and liabilities. However, over the three
years ended in 1995, increases in receivables and contract work in progress
were more than offset by increases in certain project related short-term
liabilities, primarily advance billings on contracts. These changes in
operating assets and liabilities from year to year are affected by the mix,
stage of completion and commercial terms of engineering and construction
projects. The increase in cash utilized by investing activities in 1995
compared with 1994 and 1993 is primarily attributable to increased capital
expenditures, acquisitions by Engineering and Construction operations and the
establishment of a deferred compensation trust totaling approximately $22
million in 1995. Massey's capital expenditures and business acquisitions have
been directed toward the acquisition of high-quality, low-sulfur coal to
benefit from increased demand due to the Clean Air Act. Investing activity in
1994 included the initial pretax proceeds from the sale of the Lead business.
Cash utilized by financing activities consisted primarily of dividend payments
and the prepayment of certain long-term debt.
The long-term debt to capitalization ratio at October 31, 1995 was less than
1.0 percent, compared with 2.0 percent and 5.4 percent at October 31, 1994 and
1993, respectively. The 1995 ratio decreased due to the classification of a
$23.6 million note due in September 1996 as a current maturity and the increase
in shareholders' equity from earnings, net of dividends.
The company has on hand and access to sufficient sources of funds to meet its
anticipated operating, expansion and capital needs. Significant short- and
long-term lines of credit are maintained with banks which, along with cash on
hand and marketable securities, provide adequate operating liquidity.
Additional liquidity is provided by the company's commercial paper program
under which there was $30 million and $20 million, respectively, outstanding
at October 31, 1995 and 1994.
Cash dividends increased to $49.7 million ($.60 per share) in 1995 from $42.8
million ($.52 per share) in 1994 and $39.3 million ($.48 per share) in 1993.
Quarterly dividends have been increased in each of the past two years to the
current level of $.17 per share.
Although the company is affected by inflation and the cyclical nature of the
industry, its Engineering and Construction operations are generally protected
by the ability to recover cost increases through price escalation provisions
in most contracts. Coal operations produce a commodity which is internationally
traded at prices established by market factors outside the control of the
company. However, commodity prices generally tend over the long-term to
correlate with inflationary trends, and the company's substantial coal reserves
provide a hedge against the long-term effects on inflation. Although the
company has taken actions to reduce its dependence on external economic
conditions, management is unable to predict with certainty the amount and mix
of future business.
Fluor 33
<PAGE>
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
$ in thousands / At October 31, 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 292,934 $ 374,468
Marketable securities 137,758 117,618
Accounts and notes receivable 470,104 318,672
Contract work in progress 362,910 308,877
Inventories 63,284 52,703
Deferred taxes 55,088 56,967
Other current assets 29,593 29,158
---------------------------
Total current assets 1,411,671 1,258,463
---------------------------
PROPERTY, PLANT AND EQUIPMENT
Land 62,309 59,779
Buildings and improvements 312,981 313,512
Machinery and equipment 1,063,547 763,992
Mining properties and mineral
rights 590,145 561,574
Construction in progress 37,402 89,725
---------------------------
2,066,384 1,788,582
Less accumulated depreciation,
depletion and amortization 630,573 514,145
---------------------------
Net property, plant and equipment 1,435,811 1,274,437
---------------------------
OTHER ASSETS
Goodwill, net of accumulated
amortization of $11,778 and $8,885,
respectively 33,303 18,009
Investments 88,488 53,587
Other 259,633 220,272
---------------------------
Total other assets 381,424 291,868
---------------------------
$ 3,228,906 $ 2,824,768
===========================
</TABLE>
34 Fluor
<PAGE>
<TABLE>
<CAPTION>
$ in thousands / At October 31, 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts and notes payable $ 372,301 $ 333,244
Commercial paper 29,937 19,957
Advance billings on contracts 393,438 220,101
Accrued salaries, wages and
benefit plan liabilities 232,863 199,506
Other accrued liabilities 185,731 210,511
Current portion of long-term debt 24,375 38,001
---------------------------
Total current liabilities 1,238,645 1,021,320
---------------------------
LONG-TERM DEBT DUE AFTER ONE YEAR 2,873 24,366
NONCURRENT LIABILITIES
Deferred taxes 44,211 45,199
Other 512,363 513,427
---------------------------
Total noncurrent liabilities 556,574 558,626
---------------------------
CONTINGENCIES AND COMMITMENTS
SHAREHOLDERS' EQUITY
Capital stock
Preferred - authorized 20,000,000 shares
without par value, none issued
Common - authorized 150,000,000 shares of
$.625 par value; issued and outstanding
in 1995 - 83,164,866 shares and in 1994 -
82,507,568 shares 51,978 51,567
Additional capital 538,503 498,804
Retained earnings (since October 31, 1987) 866,305 684,249
Unamortized executive stock plan expense (26,865) (14,472)
Cumulative translation adjustment 893 308
---------------------------
Total shareholders' equity 1,430,814 1,220,456
---------------------------
$ 3,228,906 $ 2,824,768
===========================
</TABLE>
See Notes to Consolidated Financial Statement.
Fluor 35
<PAGE>
CONSOLIDATED STATEMENT OF EARNINGS
<TABLE>
<CAPTION>
In thousands, except per share
amounts / Year ended October 31, 1995 1994 1993
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Engineering and construction
services $ 8,451,626 $ 7,717,542 $ 7,133,578
Coal 849,758 767,725 716,591
----------------------------------------
Total revenues 9,301,384 8,485,267 7,850,169
----------------------------------------
COST OF REVENUES
Engineering and construction
services 8,171,351 7,466,274 6,918,464
Coal 738,725 672,527 645,911
----------------------------------------
Total cost of revenues 8,910,076 8,138,801 7,564,375
OTHER (INCOME) AND EXPENSE
Corporate administrative and
general expense 48,636 47,855 43,682
Interest expense 13,385 16,861 19,982
Interest income (32,927) (21,549) (20,070)
----------------------------------------
Total cost and expenses 8,939,170 8,181,968 7,607,969
----------------------------------------
EARNINGS BEFORE TAXES 362,214 303,299 242,200
INCOME TAX EXPENSE 130,446 110,900 75,400
========================================
NET EARNINGS $ 231,768 $ 192,399 $ 166,800
========================================
EARNINGS PER SHARE $ 2.78 $ 2.32 $ 2.03
========================================
SHARES USED TO CALCULATE
EARNINGS PER SHARE 83,428 82,796 82,282
========================================
</TABLE>
See Notes to Consolidated Financial Statements.
36 Fluor
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
In thousands / Year ended October 31, 1995 1994 1993
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 231,768 $ 192,399 $ 166,800
Adjustments to reconcile net earnings
to cash provided by operating
activities:
Depreciation, depletion and amortization 146,957 114,258 111,793
Discontinued operations - (4,287) (34,184)
Deferred taxes 1,709 2,801 (6,082)
Changes in operating assets and
liabilities 9,408 141,723 (61,430)
Other, net (20,732) 11,715 11,812
------------------------------------
Cash provided by operating activities 369,110 458,609 188,709
------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (318,942) (236,623) (158,822)
Payments for purchase of coal companies - (38,164) (10,700)
(Purchase) sale of marketable
securities, net (20,140) (20,283) 50,249
Investments (16,667) 214 (13,561)
Acquisitions (16,230) - -
Proceeds from sale of property,
plant and equipment 17,406 18,271 9,841
Initial pretax cash proceeds from
sale of discontinued operations - 51,869 -
Other, net (29,221) (1,172) 8,626
------------------------------------
Cash utilized by investing activities (383,794) (225,888) (114,367)
------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid (49,712) (42,828) (39,340)
Payments on long-term debt (35,604) (1,994) (45,689)
Increase (decrease) in short-term
borrowings 9,980 (10,096) 96
Stock options exercised 9,757 11,946 8,709
(Decrease) increase in note payable
to affiliate - (30,000) 30,000
Other, net (1,271) (125) (8,620)
------------------------------------
Cash utilized by financing activities (66,850) (73,097) (54,844)
------------------------------------
(Decrease) increase in cash and cash
equivalents (81,534) 159,624 19,498
Cash and cash equivalents at beginning
of year 374,468 214,844 195,346
------------------------------------
Cash and cash equivalents at end of
year $ 292,934 $ 374,468 $ 214,844
====================================
</TABLE>
See Notes to Consolidated Financial Statements.
Fluor 37
<PAGE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION> Unamortized
In thousands, except per share amounts Common Stock Executive Cumulative
Year ended October 31, 1993, 1994 and -------------------- Additional Retained Stock Plan Translation
1995 Shares Amount Capital Earnings Expense Adjustment Total
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT OCTOBER 31, 1992 81,480 $ 50,925 $ 436,063 $ 407,218 $ (14,610) $ 1,206 $ 880,802
------------------------------------------------------------------------------------------
Net earnings 166,800 166,800
Cash dividends ($.48 per share) (39,340) (39,340)
Exercise of stock options, net 520 326 8,383 8,709
Stock option tax benefit 5,839 5,839
Amortization of
executive stock plan expense 1,889 1,889
Issuance of restricted stock, net 93 57 3,858 (4,107) (192)
Tax benefit from reduction of valuation
allowance for deferred tax assets 24,061 24,061
Translation adjustment
(net of deferred taxes of $2,694) (4,446) (4,446)
------------------------------------------------------------------------------------------
BALANCE AT OCTOBER 31, 1993 82,093 51,308 478,204 534,678 (16,828) (3,240) 1,044,122
------------------------------------------------------------------------------------------
Net earnings 192,399 192,399
Cash dividends ($.52 per share) (42,828) (42,828)
Exercise of stock options, net 396 248 11,698 11,946
Stock option tax benefit 4,046 4,046
Amortization of
executive stock plan expense 3,837 3,837
Issuance of restricted stock, net 19 11 1,128 (1,481) (342)
Tax benefit from reduction of valuation
allowance for deferred tax assets 3,728 3,728
Translation adjustment
(net of deferred taxes of $2,268) 3,548 3,548
-------------------------------------------------------------------------------------------
BALANCE AT OCTOBER 31, 1994 82,508 51,567 498,804 684,249 (14,472) 308 1,220,456
-------------------------------------------------------------------------------------------
Net earnings 231,768 231,768
Cash dividends ($.60 per share) (49,712) (49,712)
Exercise of stock options, net 264 165 9,592 9,757
Stock option tax benefit 2,460 2,460
Amortization of
executive stock plan expense 3,684 3,684
Issuance of restricted stock, net 393 246 20,320 (16,077) 4,489
Tax benefit from reduction of valuation
allowance for deferred tax assets 7,327 7,327
Translation adjustment
(net of deferred taxes of $374) 585 585
-------------------------------------------------------------------------------------------
BALANCE AT OCTOBER 31, 1995 83,165 $ 51,978 $ 538,503 $ 866,305 $ (26,865) $ 893 $1,430,814
===========================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
38 Fluor
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAJOR ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The financial statements include the accounts of the company and its
subsidiaries. The equity method of accounting is used for investment ownership
ranging from 20 percent to 50 percent. Investment ownership of less than 20
percent is accounted for on the cost method. All significant intercompany
transactions of consolidated subsidiaries are eliminated. Certain 1994 and
1993 amounts have been reclassified to conform with the 1995 presentation.
ENGINEERING AND CONSTRUCTION CONTRACTS
The company recognizes engineering and construction contract revenues using the
percentage-of-completion method, based primarily on contract costs incurred to
date compared with total estimated contract costs. Customer-furnished
materials, labor and equipment, and in certain cases subcontractor materials,
labor and equipment, are included in revenue and cost of revenue when
management believes that the company is responsible for the ultimate
acceptability of the project. Contracts are segmented between types of
services, such as engineering and construction, and accordingly, gross margin
related to each activity is recognized as those separate services are rendered.
Changes to total estimated contract costs or losses, if any, are recognized in
the period in which they are determined. Revenues recognized in excess of
amounts billed are classified as current assets under contract work in
progress. Amounts received from clients in excess of revenues recognized to
date are classified as current liabilities under advance billings on contracts.
The company anticipates that substantially all incurred costs associated with
contract work in progress at October 31, 1995 will be billed and collected in
1996.
DEPRECIATION, DEPLETION AND AMORTIZATION
Additions to property, plant and equipment are recorded at cost. Assets other
than mining properties and mineral rights are depreciated principally using the
straight-line method over their estimated useful lives. Mining properties and
mineral rights are depleted on the units-of-production method. Leasehold
improvements are amortized over the lives of the respective leases. Goodwill is
amortized on the straight-line method over periods not longer than 40 years.
EXPLORATION, DEVELOPMENT AND RECLAMATION
Coal exploration costs are expensed as incurred. Development and acquisition
costs of coal properties, when expected to be significant, are capitalized in
mining properties and depleted. The company accrues for post-mining reclamation
costs as coal is mined. Reclamation of disturbed acreage is performed as a
normal part of the mining process.
INCOME TAXES
Deferred tax assets and liabilities are recognized for the expected future tax
consequences of events that have been recognized in the company's financial
statements or tax returns.
EARNINGS PER SHARE
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, primarily stock options, are included when the effect of
exercise would be dilutive.
MARKETABLE SECURITIES
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. All investment
securities are considered to be available-for-sale and carried at fair value.
As of October 31, 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 year ended October 31, 1995 were not material. The cost of securities
sold is based on the specific identification method. As of October 31, 1995
approximately $69.2 million of securities mature within the year, $61.8 million
mature in the next one to three years and approximately $6.8 million mature
after three years.
Fluor 39
<PAGE>
INVENTORIES
Coal inventories are stated at the lower of cost, using the last-in, first-out
(LIFO) method, or net realizable value. Supplies and other are valued on the
average cost method. Inventories comprise:
<TABLE>
<CAPTION>
$ in thousands / At October 31, 1995 1994
- --------------------------------------------------------------------------
<S> <C> <C>
Coal $ 28,874 $ 24,289
Supplies and other 34,410 28,414
------------------------
$ 63,284 $ 52,703
========================
</TABLE>
LONG-LIVED ASSETS
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" (SFAS No. 121).
Although adoption of SFAS No. 121 is not required until 1997, the company will
implement the new accounting standard in the first quarter of 1996. Such
implementation will not have a material effect on the company's consolidated
results of operations or financial position.
DERIVATIVE FINANCIAL INSTRUMENTS
In 1995, the company adopted Statement of Financial Accounting Standards
No. 119, "Disclosure about Derivative Financial Instruments and Fair Value of
Financial Instruments" (SFAS No. 119) which requires various disclosures about
financial instruments and related transactions. These disclosures have been
incorporated in the Notes to Consolidated Financial Statements where
appropriate.
The company's utilization of derivative financial instruments is substantially
limited to the use of forward exchange contracts to hedge foreign currency
transactions. The unrealized gains and losses are deferred and included in the
measurement of the related foreign currency transaction. The amount of any gain
or loss on these contracts in 1995 was immaterial. The contracts are of varying
duration, none of which extend beyond December 1, 1999.
FOREIGN CURRENCY
The company enters into forward exchange contracts to hedge foreign currency
transactions and not to engage in currency speculation. The company's forward
exchange contracts do not subject the company to risk from exchange rate
movements because gains and losses on such contracts offset losses and gains,
respectively, on the assets, liabilities or transactions being hedged. At
October 31, 1995, the company had $82.4 million of foreign exchange contracts
outstanding relating to foreign currency denominated long-term debt and
interest, lease commitments and contract obligations. The forward exchange
contracts generally require the company to exchange U.S. dollars for foreign
currencies at maturity, at rates agreed to at inception of the contracts. If
the counterparties to the exchange contracts (primarily AA rated international
banks) do not fulfill their obligations to deliver the contracted currencies,
the company could be at risk for any currency related fluctuations. The company
limits exposure to foreign currency fluctuations in most of its engineering and
construction contracts through provisions that require client payments in U.S.
dollars or other currencies corresponding to the currency in which costs are
incurred. As a result, the company generally has no need to hedge foreign
currency cash flows for contract work performed. The functional currency of all
significant foreign operations is the local currency.
CONCENTRATIONS OF CREDIT RISK
The company provides a variety of financing arrangements for its engineering
and construction clients. The majority of accounts receivable and all contract
work in progress are from engineering and construction clients in various
industries and locations throughout the world. Most contracts require payments
as the projects progress or in certain cases advance payments. The company
generally does not require collateral, but in most cases can place liens
against the property, plant or equipment constructed if a default occurs.
Accounts receivable from customers of the company's Coal operations are
primarily concentrated in the steel and utility industries. The company
maintains adequate reserves for potential credit losses and such losses have
been minimal and within management's estimates.
40 Fluor
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
Securities with maturities of ninety days or less at the date of purchase are
classified as cash equivalents. Securities with maturities beyond ninety days
are classified as marketable securities and are carried at fair market value
and the related cash flows are reported on a net basis. The changes in
operating assets and liabilities as shown in the Consolidated Statement of Cash
Flows comprise:
<TABLE>
<CAPTION>
$ in thousands / Year ended October 31, 1995 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Decrease (increase) in:
Accounts and notes receivable $ (141,505) $ 73,905 $ (80,223)
Contract work in progress (52,488) (2,626) (87,143)
Inventories (10,581) (18,042) (1,529)
Other current assets 6,292 (8,493) 8,136
Increase (decrease) in:
Accounts payable 35,334 43,523 90,720
Advance billings on contracts 172,062 25,406 20,286
Accrued liabilities 294 28,050 (11,677)
--------------------------------------
Change in operating assets
and liabilities $ 9,408 $ 141,723 $ (61,430)
======================================
Cash paid during the year for:
Interest expense $ 7,672 $ 12,830 $ 20,152
Income tax payments, net $ 121,508 $ 81,306 $ 89,469
--------------------------------------
</TABLE>
ACQUISITIONS AND DISPOSITIONS
In December 1995, the company announced an agreement with Groundwater
Technology, Inc. ("GTI") wherein the company will acquire an approximate 55
percent ownership interest in GTI. The acquisition, subject to shareholder
approval, will broaden the company's level of environmental services.
During 1995, the company completed certain acquisitions in connection with its
goals for strategic long-term growth. All acquisitions have been accounted for
under the purchase method of accounting and results of operations have been
included in the company's consolidated financial statements from the respective
acquisition dates. If these acquisitions had been made at the beginning of 1995
or 1994, pro forma results of operations would not have differed materially from
actual results. The following summarizes 1995 acquisitions:
- -Management Resources Group, plc, a privately held company headquartered in
London, England that provides permanent and temporary placement services for
accounting, information technology and office personnel.
- -Anderson DeBartolo Pan, Inc., a privately held U.S. company providing
professional services in engineering, architectural and construction
management to the microelectronics market and the health care, hospitality and
sports facilities industries.
- -A majority interest in Prosynchem S.A., a privately held company headquartered
in Gliwice, Poland that provides engineering and construction services to
clients in the petroleum, petrochemicals, chemicals and environmental
industries in Poland and other Eastern European countries.
From time to time, the company enters into investment arrangements that are
related to its Engineering and Construction business. During 1995, the company
invested approximately $13 million in such arrangements, the majority of which
related to ongoing investments in an equity fund that focuses on energy related
projects and a company formed for the development and operation of a gas
transmission pipeline system in Cali, Colombia.
In 1994, the company invested approximately $4 million in joint venture
arrangements, the majority of which related to the acquisition of a minority
interest in Prochem S.A., one of Poland's largest engineering and construction
companies. In 1993, the company formed an exclusive association with ICA
Industrial of Mexico and acquired a 49 percent interest in that entity, now
known as ICA Fluor Daniel. The company has currently invested approximately $22
million in this joint venture.
Massey Coal purchased three coal mining companies in 1994, for consideration
totaling $68 million, consisting of $65 million of property, plant and
equipment and mining property and mineral rights and $3 million of working
capital and other assets. In 1993, Massey Coal purchased a coal mining company
for consideration totaling $14 million, consisting of $13 million of property,
plant and equipment and mining property and mineral rights and $1 million of
working capital and other assets.
On April 7, 1994, the company completed the sale of its Lead business for
consideration consisting of both cash and deferred payments. Proceeds included
$52 million cash on the date of the closing and deferred amounts to be paid in
installments over periods ranging from five to eight years. The closing of the
sale had no impact on the company's earnings beyond what was originally
recognized when the Lead business was discontinued in 1992. Revenues from the
Lead business were $71 million for the five month period through the date of
sale in 1994 and $121 million for the year ended October 31, 1993.
Fluor 41
<PAGE>
INCOME TAXES
The income tax expense (benefit) included in the Consolidated Statement of
Earnings is as follows:
<TABLE>
<CAPTION>
$ in thousands / Year ended October 31, 1995 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $ 88,762 $ 58,420 $ 58,489
Foreign 26,803 37,151 23,490
State and local 13,172 12,528 12,124
-----------------------------------
Total current 128,737 108,099 94,103
-----------------------------------
Tax liability reversal - - (12,621)
-----------------------------------
Deferred:
Federal (10,776) (2,145) (1,634)
Foreign 11,953 4,673 (3,939)
State and local 532 273 (509)
-----------------------------------
Total deferred 1,709 2,801 (6,082)
-----------------------------------
Total income tax expense $ 130,446 $ 110,900 $ 75,400
===================================
</TABLE>
The income tax expense (benefit) applicable to continuing operations and
discontinued operations is as follows:
<TABLE>
<CAPTION>
$ in thousands / Year ended October 31, 1995 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Provision for continuing operations:
Current $ 128,737 $ 133,870 $ 110,917
Tax liability reversal - - (12,621)
Deferred 1,709 (22,970) (22,896)
-----------------------------------
Total provision for continuing operations 130,446 110,900 75,400
-----------------------------------
Provision for discontinued operations:
Current - (25,771) (16,814)
Deferred - 25,771 16,814
-----------------------------------
Total provision for discontinued operations - - -
-----------------------------------
Total income tax expense $ 130,446 $ 110,900 $ 75,400
===================================
</TABLE>
The discontinued operation tax provision activity for 1994 and 1993 results
from the recognition of income tax return benefits associated with the
operations and disposal of the company's Lead business.
A reconciliation of U.S. statutory federal income tax to the income tax expense
on the earnings from continuing operations is as follows:
<TABLE>
<CAPTION>
$ in thousands / Year ended October 31, 1995 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. statutory federal income tax expense $ 126,775 $ 106,155 $ 84,358
Increases (decreases) in taxes
resulting from:
State and local income taxes 9,288 8,498 5,205
Effect of non-U.S. tax rates 5,682 7,412 6,173
Depletion (10,497) (9,560) (5,256)
Tax liability reversal - - (12,621)
Other, net (802) (1,605) (2,459)
-----------------------------------
Total income tax expense - continuing
operations $ 130,446 $ 110,900 $ 75,400
===================================
</TABLE>
42 Fluor
<PAGE>
Deferred taxes reflect the tax effects of differences between the amounts
recorded as assets and liabilities for financial reporting purposes and the
amounts recorded for income tax purposes. The tax effects of significant
temporary differences giving rise to deferred tax assets and liabilities are as
follows:
<TABLE>
<CAPTION>
$ in thousands / At October 31, 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Accrued liabilities not currently deductible $ 156,925 $ 169,899
Tax basis of building in excess of book basis 23,149 24,260
Other 79,120 52,272
--------------------------
Total deferred tax assets 259,194 246,431
Valuation allowance for deferred tax assets (44,397) (51,724)
--------------------------
Deferred tax assets, net 214,797 194,707
--------------------------
Deferred tax liabilities:
Coal mining property book basis
in excess of tax basis (93,633) (95,818)
Tax on unremitted non-U.S. earnings (34,688) (28,685)
Other (75,599) (58,436)
--------------------------
Total deferred tax liabilities (203,920) (182,939)
--------------------------
Net deferred tax assets $ 10,877 $ 11,768
==========================
</TABLE>
The company established a valuation allowance to reduce certain deferred tax
assets to amounts that are more likely than not to be realized. Some of this
allowance relates to deferred tax assets existing at the date of the company's
1987 quasi-reorganization. Reductions in the valuation allowance relating to
these 1987 deferred tax assets are credited to additional capital. In 1995 and
1994, reductions in the valuation allowance resulted in an increase to
additional capital of $7.3 million and $3.7 million, respectively.
Residual income taxes of approximately $12 million have not been provided on
approximately $30 million of undistributed earnings of certain foreign
subsidiaries at October 31, 1995, because the company intends to keep those
earnings reinvested indefinitely.
United States and foreign earnings from continuing operations before taxes are
as follows:
<TABLE>
<CAPTION>
$ in thousands / Year ended October 31, 1995 1994 1993
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
United States $ 249,776 $ 196,397 $ 175,835
Foreign 112,438 106,902 66,365
-----------------------------------
Total $ 362,214 $ 303,299 $ 242,200
===================================
</TABLE>
Net earnings for 1993 include $12.6 million related to the favorable conclusion
of a federal income tax audit for the years 1984 through 1986. As a result of
the conclusion of that audit, $12.6 million in income tax liabilities were no
longer deemed necessary and were reversed.
The Internal Revenue Service is currently examining the company's returns for
fiscal years 1987 through 1992. Management does not expect the resolution of
any tax issues raised by the IRS for these years or subsequent periods to have
a material adverse effect on the company's consolidated financial position or
results of operations.
Fluor 43
<PAGE>
RETIREMENT BENEFITS
The company sponsors contributory and non-contributory defined contribution
retirement and defined benefit pension plans for eligible employees.
Contributions to defined contribution retirement plans are based on a
percentage of the employee's compensation. Expense recognized for these plans
of $69 million in 1995 and $67 million in both 1994 and 1993, is primarily
related to domestic engineering and construction operations. Contributions to
defined benefit pension plans are generally at the minimum annual amount
required by applicable regulations. Payments to retired employees under these
plans are generally based upon length of service and/or a percentage of
qualifying compensation. The defined benefit pension plans are primarily
related to international engineering and construction operations, U.S. craft
employees and coal operations. Net periodic pension income for defined benefit
pension plans includes the following components:
<TABLE>
<CAPTION>
$ in thousands / Year ended October 31, 1995 1994 1993
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost incurred during the period $ 12,385 $ 14,310 $ 11,528
Interest cost on projected benefit
obligation 21,578 20,275 18,494
Income and gains on assets invested (50,776) (7,907) (74,228)
Net amortization and deferral 11,198 (34,255) 39,295
----------------------------------
Net periodic pension income $ (5,615) $ (7,577) $ (4,911)
==================================
</TABLE>
The following assumptions were used in the determination of net periodic cost:
<TABLE>
<CAPTION>
Year ended October 31, 1995 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Discount rates 7.75-9.25% 7.0-8.0% 8.5-9.5%
Rates of increase in
compensation levels 4.0-6.25% 3.5-5.0% 5.0-6.0%
Expected long-term rates of
return on assets 6.75-10.25% 6.0-10.0% 7.5-10.0%
</TABLE>
The following table sets forth the funded status of the defined benefit pension
plans:
<TABLE>
<CAPTION>
$ in thousands / At October 31, 1995 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation $ 253,444 $ 212,011
Nonvested benefit obligation 9,708 10,433
--------------------------
Accumulated benefit obligation $ 263,152 $ 222,444
==========================
Plan assets at fair value (primarily
listed stocks and bonds) $ 427,145 $ 392,129
Projected benefit obligation (307,759) (263,038)
--------------------------
Plan assets in excess of projected
benefit obligation 119,386 129,091
Unrecognized net loss (gain) 1,962 (13,682)
Unrecognized net asset at implementation (18,590) (20,640)
--------------------------
Pension asset recognized in the
Consolidated Balance Sheet $ 102,758 $ 94,769
==========================
</TABLE>
- --------------
Amounts shown above at October 31, 1995 and 1994 exclude the projected benefit
obligation of $117 million and $109 million, respectively, and an equal amount
of associated plan assets relating to discontinued operations.
In recognition of the current interest rate environment, as of October 31, 1995
the company adjusted the discount rates used in the determination of its
benefit obligations to 6.75-8.5 percent, the expected long-term rates of
return to 5.75-9.5 percent and the rates of salary increases to 3.25-5.5
percent.
Massey Coal Company ("Massey") participates in multiemployer defined benefit
pension plans for its union employees. Pension expense related to these plans
approximated $.5 million in each of the years ended October 31, 1995, 1994 and
1993. Under the Coal Industry Retiree Health Benefits Act of 1992, Massey is
required to fund medical and death benefits of certain beneficiaries. Massey's
obligation under the Act is estimated to aggregate $47 million at October 31,
1995, which will be recognized as expense as payments are assessed. The expense
recorded for such benefits approximated $2 million for the year ended October
31, 1995, and $4 million in each of the years ended October 31, 1994 and 1993.
44 Fluor
<PAGE>
In addition to the company's defined benefit pension plans, the company and
certain of its subsidiaries provide health care and life insurance benefits for
certain retired employees. The health care and life insurance plans are
generally contributory, with retiree contributions adjusted annually. Service
costs are accrued currently.
The accumulated postretirement benefit obligation at October 31, 1995 and 1994
was determined in accordance with the current terms of the company's health
care plans, together with relevant actuarial assumptions and health care cost
trend rates projected at annual rates ranging from 11.3 percent in 1996 down to
5 percent in 2005 and beyond. The effect of a one-percent annual increase in
these assumed cost trend rates would increase the accumulated postretirement
benefit obligation and the aggregate of the annual service and interest costs
by approximately 11 percent.
Net periodic postretirement benefit cost includes the following components:
<TABLE>
<CAPTION>
$ in thousands / Year ended October 31, 1995 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost incurred during the period $ 1,172 $ 1,352 $ 1,017
Interest cost on accumulated
postretirement benefit obligation 4,899 4,153 4,633
----------------------------------
Net periodic postretirement benefit cost $ 6,071 $ 5,505 $ 5,650
==================================
</TABLE>
The following table sets forth the plans' funded status and accumulated
postretirement benefit obligation which has been fully accrued in the company's
Consolidated Balance Sheet:
<TABLE>
<CAPTION>
$ in thousands / At October 31, 1995 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $ 51,787 $ 44,517
Fully eligible active participants 4,821 4,853
Other active plan participants 14,705 10,713
Unrecognized gain (loss) (6,426) 3,667
------------------------
Accrued postretirement benefit obligation $ 64,887 $ 63,750
========================
</TABLE>
The discount rate used in determining the accumulated postretirement benefit
obligation was 7.5 percent and 8.5 percent at October 31, 1995 and 1994,
respectively.
The above information does not include amounts related to benefit plans
applicable to employees associated with certain contracts with the U.S.
Department of Energy because the company is not responsible for the current or
future funded status of these plans.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair value of the company's financial instruments are as follows:
<TABLE>
<CAPTION>
1995 1994
$ in thousands / At October 31, Carrying Amount Fair Value Carrying Amount Fair Value
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Cash and cash equivalents $ 292,934 $ 292,934 $ 374,468 $ 374,468
Marketable securities 137,758 137,758 117,618 119,555
Notes receivable including
noncurrent portion 83,515 86,769 104,117 105,088
Long-term investments 30,990 32,127 15,811 16,616
Liabilities:
Commercial paper and notes payable 29,937 29,937 19,957 19,957
Long-term debt including
current portion 27,248 28,420 62,367 64,405
Other noncurrent financial liabilities 2,572 2,572 2,691 2,691
Off-balance sheet financial instruments:
Foreign currency contract obligations - (2,146) - 219
Letters of credit - 572 - 740
Line of credit - 997 - 1,384
</TABLE>
Fluor 45
<PAGE>
Fair values were determined as follows:
The carrying amounts of cash and cash equivalents, short-term notes receivable,
commercial paper and notes payable approximates fair value because of the
short-term maturity of these instruments.
Marketable securities and long-term investments are based on quoted market
prices for these or similar instruments.
Long-term notes receivable are estimated by discounting future cash flows using
the current rates at which similar loans would be made to borrowers with similar
credit ratings.
The fair value of long-term debt, including current portion, is estimated based
on quoted market prices for the same or similar issues or on the current rates
offered to the company for debt of the same maturities.
Other noncurrent financial liabilities consist primarily of deferred payments,
for which cost approximates fair value.
Foreign currency contract obligations are estimated by obtaining quotes from
brokers.
Letters of credit and line of credit amounts are based on fees currently
charged for similar agreements or on the estimated cost to terminate or settle
the obligations.
LONG-TERM DEBT
Long-term debt comprises:
<TABLE>
<CAPTION>
$ in thousands / At October 31, 1995 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Deutsche mark financing, with a currency exchange
agreement fixing the repayments in U.S. dollars
at an effective interest rate of 9.5%, due in 1996 $ 23,644 $ 23,644
13.50% first mortgage note, prepaid in 1995 - 34,701
Other notes 3,604 4,022
-----------------------
27,248 62,367
Less: Current portion 24,375 38,001
-----------------------
Long-term debt due after one year $ 2,873 $ 24,366
=======================
</TABLE>
Long-term debt maturities are as follows: 1997, $2.7 million; 1998, 1999 and
2000, no maturities; and $.2 million thereafter. All long-term debt (including
current portion) outstanding at October 31, 1995, bears interest at fixed
rates.
The company has unsecured committed revolving long-term lines of credit with
banks from which it may borrow for general corporate purposes up to a maximum
of $250 million. Commitment and facility fees are paid on these lines. In
addition, the company has $974 million in short-term uncommitted lines of
credit. Borrowings under lines of credit and revolving credit agreements bear
interest at prime or rates based on the London Interbank Offered Rate
("LIBOR"), domestic certificates of deposit or other rates which are mutually
acceptable to the banks and the company. At October 31, 1995, no amounts were
outstanding under the committed lines of credit. As of that date, $213 million
of the short-term uncommitted lines of credit were used to support undrawn
letters of credit issued in the ordinary course of business.
The company had unsecured commercial paper outstanding in the amount of $30
million and $20 million at October 31, 1995 and 1994, respectively. The
commercial paper was issued at a discount with an effective interest rate of
5.8 percent and 5.0 percent in 1995 and 1994, respectively. Maturities ranged
from 14 to 90 days in 1995 and 9 to 90 days in 1994. The weighted average
maturities were 14 and 16 days at October 31, 1995 and 1994, respectively. The
maximum and average balances outstanding for the years ended October 31, 1995
and 1994 were $75 million and $21 million, respectively, and $53 million and
$24 million, respectively, with weighted average interest rates of 5.9 percent
and 3.6 percent, respectively.
OTHER NONCURRENT LIABILITIES
The company maintains appropriate levels of insurance for business risks.
Insurance coverages contain various deductible amounts for which the company
provides accruals based on the aggregate of the liability for reported claims
and an actuarially determined estimated liability for claims incurred but not
reported. Other noncurrent liabilities include $108.1 million and $112.1
million at October 31, 1995 and 1994, respectively, relating to these
liabilities.
46 Fluor
<PAGE>
STOCK PLANS
The company's executive stock plans, approved by the shareholders, provide for
grants of nonqualified or incentive stock options, restricted stock awards and
stock appreciation rights ("SARs"). All plans are administered by the
Organization and Compensation Committee of the Board of Directors ("Committee")
comprised of outside directors, none of whom are eligible to participate in the
plans. Stock options may be granted with or without SARs. Grant prices are
determined by the Committee and are established at the fair market value of the
company's common stock at the date of grant. Options and SARs normally extend
for 10 years and under committee policy become exercisable in installments of
25 percent per year commencing one year from the date of grant or over a
vesting period determined by the Committee. In 1995, the company issued 561,000
options that will vest only if certain performance related conditions are met.
Restricted stock awards issued under the plans provide that shares awarded may
not be sold or otherwise transferred until restrictions as established by the
Committee have lapsed. Upon termination of employment, shares upon which
restrictions have not lapsed must be returned to the company. Restricted stock
issued under the plans totaled 405,089 and 52,560 shares in 1995 and 1994,
respectively.
The following table summarizes stock option activity:
<TABLE>
<CAPTION>
Price Per
Stock Options Share
- ----------------------------------------------------------------------------
<S> <C> <C>
OUTSTANDING AT OCTOBER 31, 1993 2,490,444 $ 12-44
Granted 59,480 51
Expired or cancelled (82,374) 36-44
Exercised (396,044) 12-44
---------------------------
OUTSTANDING AT OCTOBER 31, 1994 2,071,506 12-51
Granted 2,034,270 43-59
Expired or cancelled (23,834) 35-51
Exercised (266,336) 12-51
---------------------------
OUTSTANDING AT OCTOBER 31, 1995 3,815,606 $ 12-59
===========================
Exercisable at:
October 31, 1994 1,358,986 $ 12-44
October 31, 1995 1,406,583 $ 12-51
---------------------------
Available for grant at:
October 31, 1994 2,610,047*
October 31, 1995 230,992*
--------------
</TABLE>
* Available for grant includes shares which may be granted as either stock
options or restricted stock, as determined by the Committee under the 1988
Fluor Executive Stock Plan.
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS No. 123). SFAS No. 123 establishes financial accounting and
reporting standards for stock-based compensation plans and to transactions in
which an entity issues its equity instruments to acquire goods and services
from nonemployees. The new accounting standards prescribed by SFAS No. 123 are
optional, and the company may continue to account for its plans under previous
accounting standards. The company does not expect to adopt the new accounting
standards, consequently, SFAS No. 123 will not have a material impact on the
company's consolidated results of operations or financial position. However,
pro forma disclosures of net earnings and earnings per share must be made as
if the SFAS No. 123 accounting standards had been adopted. Adoption of SFAS
No. 123 is not required by the company until 1997.
LEASE OBLIGATIONS
Net rental expense amounted to $67 million, $60 million, and $69 million in
1995, 1994, and 1993, respectively. The company's lease obligations relate
primarily to office facilities, equipment used in connection with long-term
construction contracts and other personal property. The company's obligations
for minimum rentals under noncancelable leases are as follows:
<TABLE>
<CAPTION>
$ in thousands / October 31, 1995
- ---------------------------------------------------------------------------
<S> <C>
1996 $ 26,685
1997 26,835
1998 24,247
1999 15,841
2000 6,278
Thereafter 34,682
</TABLE>
At October 31, 1995 and 1994, obligations under capital leases of approximately
$5 million and $6 million, respectively, are included in other noncurrent
liabilities.
Fluor 47
<PAGE>
CONTINGENCIES AND COMMITMENTS
The company and certain of its subsidiaries are involved in litigation in the
ordinary course of business. The company and certain of its engineering and
construction subsidiaries are contingently liable for commitments and
performance guarantees arising in the ordinary course of business. Claims
arising from engineering and construction contracts have been made against the
company by clients, and the company has made certain claims against clients for
costs incurred in excess of the current contract provisions. The company does
not expect that the foregoing matters will have a material adverse effect on
its consolidated financial position or results of operations.
Financial guarantees, made in the ordinary course of business on behalf of
clients and others in certain limited circumstances, are entered into with
financial institutions and other credit grantors and generally obligate the
company to make payment in the event of a default by the borrower. Most
arrangements require the borrower to pledge collateral in the form of property,
plant and equipment which is deemed adequate to recover amounts the company
might be required to pay. As of October 31, 1995, the company had extended
financial guarantees on behalf of certain clients and other unrelated third
parties totaling $47.1 million.
The company's operations are subject to and affected by federal, state and
local laws and regulations regarding the protection of the environment. The
company maintains reserves for potential future environmental costs where such
obligations are either known or considered probable, and can be reasonably
estimated.
The sale by the company of its Lead business included St. Joe Minerals
Corporation ("St. Joe") and its environmental liabilities for several
different lead mining, smelting and other lead-related environmental sites. As
a condition of the St. Joe sale, however, the company retained responsibility
for certain non-lead-related environmental liabilities arising out of St. Joe's
former zinc mining and smelting division, but only to the extent that such
liabilities are not covered by St. Joe's comprehensive general liability
insurance. These liabilities arise out of three zinc facilities located in
Bartlesville, Oklahoma; Monaca, Pennsylvania; and Balmat, New York
(the "Zinc Facilities").
In 1987 St. Joe sold its zinc mining and smelting division to Zinc Corporation
of America ("ZCA"). As part of the sale agreement, St. Joe and the company
agreed to indemnify ZCA for certain environmental liabilities arising from
operations conducted at the Zinc Facilities prior to the sale. During 1993 ZCA
made claims under this indemnity as well as under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") against St.
Joe for past and future environmental expenditures at the Zinc Facilities. In
1994 ZCA filed suit against St. Joe and the company among others, seeking
compensation for environmental expenditures at the Zinc Facilities. In 1994 the
company and St. Joe, among others, executed a settlement agreement with ZCA
which, among other things, cancels the indemnity previously provided to ZCA and
limits environmental expenditures at the Zinc Facilities for which St. Joe would
be responsible to no more than approximately $10 million, which was previously
fully reserved by the company. Expenses incurred and payments made under the
settlement agreement would be made over the span of at least five years.
The company and St. Joe, among others, are currently prosecuting cost recovery
actions under CERCLA against other potentially responsible parties for the
Bartlesville facility. In addition, St. Joe has initiated legal proceedings
against certain of its insurance carriers alleging that the investigative and
remediation costs for which St. Joe is or may be responsible, including costs
incurred prior to the sale of St. Joe and costs related to the Zinc Facilities,
are covered by insurance. A portion of any recoveries received from the
insurance carriers would be, pursuant to the St. Joe sale agreement, for the
benefit of the company. In January 1995 St. Joe consummated a settlement with
one of its primary insurance carriers that provided coverage for a minor
portion of the applicable coverage periods. In May 1995, St. Joe received a
favorable ruling from the Orange County Superior Court which ordered St. Joe's
other primary insurance carrier to provide a defense to St. Joe for certain
environmental liabilities, including the Zinc facilities. This insurer has
appealed the Superior Court's order. In-as-much as the insurance as well as the
cost recovery proceedings remain in the early stages of litigation, no credit
or offset (other than for amounts actually received in settlement) has been
taken into account by the company in establishing its reserves for future
environmental costs.
The company believes, based upon present information available to it, that its
reserves with respect to future environmental costs are adequate and such
future costs will not have a material effect on the company's consolidated
financial position, results of operations or liquidity. However, the imposition
of more stringent requirements under environmental laws or regulations, new
developments or changes regarding site cleanup costs or the allocation of such
costs among potentially responsible parties, or a determination that the
company is potentially responsible for the release of hazardous substances at
sites other than those currently identified, could result in additional
expenditures, or the provision of additional reserves in expectation of such
expenditures.
48 Fluor
<PAGE>
REPORTS OF MANAGEMENT AND INDEPENDENT AUDITORS
MANAGEMENT
The company is responsible for preparation of the accompanying consolidated
balance sheet and the related consolidated statements of earnings, cash flows
and shareholders' equity. These statements have been prepared in conformity
with generally accepted accounting principles and management believes that
they present fairly the company's consolidated financial position and results
of operation. The integrity of the information presented in the financial
statements, including estimates and judgments relating to matters not
concluded by fiscal year end, is the responsibility of management. To fulfill
this responsibility, an internal control structure designed to protect the
company's assets and properly record transactions and events as they occur has
been developed, placed in operation and maintained. The internal control
structure is supported by an extensive program of internal audits and is
tested and evaluated by the independent auditors in connection with their
annual audit. The Board of Directors pursues its responsibility for financial
information through an Audit Committee of Directors who are not employees.
The internal auditors and the independent auditors have full and free access
to the Committee. Periodically, the Committee meets with the independent
auditors without management present to discuss the results of their audits,
the adequacy of the internal control structure and the quality of financial
reporting.
/s/ Les McCraw /s/ J. Michal Conaway
Chairman of the Board and Vice President and
Chief Executive Officer Chief Financial Officer
INDEPENDENT AUDITORS
Board of Directors and Shareholders
Fluor Corporation
We have audited the accompanying consolidated balance sheet of Fluor
Corporation as of October 31, 1995 and 1994, and the related consolidated
statements of earnings, cash flows, and shareholders' equity for each of the
three years in the period ended October 31, 1995. These financial statements
are the responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Fluor Corporation
at October 31, 1995 and 1994, and the consolidated results of its operations
and its cash flows for each of the three years in the period ended October 31,
1995, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Orange County, California
November 28, 1995
Fluor 50
<PAGE>
QUARTERLY FINANCIAl DATA
(Unaudited)
The following is a summary of the quarterly results of operations:
<TABLE>
<CAPTION>
First Second Third Fourth
$ in thousands, except per share amounts Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995
Revenues $ 2,059,626 $ 2,229,313 $ 2,436,831 $ 2,575,614
Gross margin 84,931 95,342 100,946 110,089
Earnings before taxes 79,124 86,984 94,579 101,527
Net earnings 50,323 55,322 60,152 65,971
Earnings per share $ 0.61 $ 0.66 $ 0.72 $ 0.79
============================================================
1994
Revenues $ 2,057,665 $ 2,079,593 $ 1,963,052 $ 2,384,957
Gross margin 81,039 88,270 89,377 87,780
Earnings before taxes 70,998 75,139 76,008 81,154
Net earnings 43,998 47,739 48,308 52,354
Earnings per share $ 0.53 $ 0.58 $ 0.58 $ 0.63
============================================================
</TABLE>
Fluor 51
<PAGE>
EXHIBIT 21
FLUOR CORPORATION SUBSIDIARIES
Organized
Name of Company Under Laws of
=============== =============
FLUOR CORPORATION (Subsidiaries 1) Delaware
American Equipment Company, Inc. S. Carolina
A & E Acquisition Corporation Ohio
AMECO Services Inc. Delaware
Apex Coal Company Virginia
Claiborne Fuels, Inc. California
Coral Drilling, C.A. Venezuela
Daniel International Corporation S. Carolina
Daniel Navarra, S.A. Spain
Fluor Daniel Engineering, Inc. Ohio
Materiales y Equipos Auxiliares para la
Construccion, S.A. Spain
Daniel Realty Investment Corporation - Daniel
Centre, II Virginia
FD Services, Inc. California
Norfolk Maintenance Corporation California
Fluor Abadan Limited Bermuda
Fluor Atlantic Limited Bermuda
Fluor Continental Limited Bermuda
FD Engineers & Constructors, Inc. California
Acquion, Inc. California
E & C Professionals Unlimited, Inc. Texas
Fluor Constructors International, Inc. California
Fluor Constructors Canada Ltd. Canada
Fluor Constructors Indonesia, Inc. California
Fluor Management and Technical
Services, Inc. California
Fluor Daniel America, Ltda. California
Fluor Daniel, Inc. California
ADP Fluor Daniel, Inc. Arizona
Anderson DeBartolo Pan, Inc. Delaware
ADP/Marshall, LLC (2) Delaware
Efdee Connecticut Architects, Inc. Connecticut
Efdee Engineering Corporation N. Carolina
Efdee Mississippi Architects,
A Professional Association Mississippi
Efdee New York Engineers &
Architects P.C. New York
Encee Architecture Services, P.C. N. Carolina
FD Mexico, Inc. Delaware
FDAE Corporation New Jersey
Fernald Environmental Restoration
Management Corporation California
Fluor Environmental Resources
Management Services, Inc. Ohio
1
<PAGE>
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
FD Engineers & Constructors, Inc.
Fluor Daniel, Inc. (continued)
Fluor Chile, Inc. California
Fluor Daniel Chile Ingenieria y
Construccion S.A. Chile
Ingenieria y Construcciones Fluor
Daniel Chile Limitada Chile
Fluor Colombia Limited Delaware
Fluor Cyprus Limited Cyprus
Fluor Daniel, a Professional
Architectural Corporation Louisiana
Fluor Daniel/AG&P, Inc. (3) Philippines
Fluor Daniel A&E Services, Inc. California
Fluor Daniel Alaska, Inc. Alaska
Fluor Daniel B.V. Netherlands
Acquion B.V. Netherlands
Fluor Daniel Consultants B.V. Netherlands
Fluor Daniel Engineering and
Construction Services Limited Turkey
International Refinery Contractors
C.V.(4) Netherlands
International Refinery Contractors
B.V.(5) Netherlands
Prochem S.A.(6) Poland
Prosynchem Sp.z o.o. Poland
Surplus International Management
Services (SIMS) B.V. Netherlands
Technical Resource Services B.V. Netherlands
Fluor Daniel Belgium, N.V. Belgium
Fluor Daniel Canada, Inc. Canada
Soana Holdings Ltd. Canada
Fluor Daniel Wright Ltd. Canada
Compania Minera Explowel Ecuador
Lynx Geosystems Inc. Canada
Saskwright Engineers Limited Canada
Wright Engineers (Chile)
Limitada Chile
Wright Engineers Limitada Peru Peru
Wright Engineers Pty. Limited Australia
TRS Recruiting Services Canada, Inc. Canada
Wright Engineers (International)
Limited Bermuda
Fluor Daniel Caribbean, Inc. Delaware
Daniel Construction Company, Inc. Tennessee
Daniel Internacional, S.A. Delaware
Daniel/McCarthy Limited Ireland
Daniel/McCarthy International
Limited Ireland
DMIS, Inc. S. Carolina
Facility & Plant Services, Inc. S. Carolina
Fluor Daniel Export Services, Inc. Delaware
Fluor Daniel International (Malaysia)
Sdn. Bhd. Malaysia
2
<PAGE>
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
FD Engineers & Constructors, Inc.
Fluor Daniel, Inc.
Fluor Daniel Caribbean, Inc.(continued)
Fluor Daniel Maintenance Services,
Inc. Delaware
Fluor Daniel Services Corporation Delaware
Fluor Daniel China, Inc. California
Fluor Daniel China Services, Inc. California
Fluor Daniel China Technology, Inc. California
Fluor Daniel Coal Services
International, Inc. Delaware
Fluor Daniel Construction Company California
Fluor Daniel Development Corporation California
Crown Energy Company New Jersey
Fluor Daniel Modesto, Inc. California
Gloucester Limited, Inc. California
Gloucester Limited II, Inc. California
Tarrant Energy, Inc. California
Fluor Daniel Eastern, Inc. California
P.T. Fluor Daniel Indonesia Indonesia
Fluor Daniel Energy Investments, Inc. Delaware
Fluor Daniel Engineers & Constructors,
Inc. Delaware
Fluor Daniel Project Consultants
(Shenzhen) Co., Ltd. P.R.C.
Fluor Daniel Engineers & Consultants
Ltd. Mauritius
Fluor Daniel Engineers & Constructors,
Ltd. California
AEC International, Ltd. (3) Korea
Project Administrative Services,
Limited(5) Hong Kong
Fluor Daniel Environmental Services, Inc. California
Fluor Daniel Espana, S.A. California
Daniel International (Saudi Arabia)
Ltd. Saudi Arabia
Fluor Arabia Limited (5) Saudi Arabia
Fluor Daniel Eurasia, Inc. California
Fluor Daniel Florida Rail, Inc. Delaware
Fluor Daniel GmbH West Germany
Fluor Daniel Group, Inc. Delaware
Fluor Daniel Hanford Project (FDHP),
Inc. Washington
Fluor Daniel Hanford Project FHP California
Fluor Daniel India, Inc. California
Fluor Daniel Inspection Services, Inc. California
Fluor Daniel International Limited U.K.
Fluor Daniel Limited U.K.
Fluor Ocean Services Limited U.K.
Technical Resource Services Limited U.K.
Fluor Daniel (Japan) Inc. Japan
Fluor Daniel Kft. Hungary
Fluor Daniel Latin America, Inc. California
Fluor-Daniel (Malaysia) Sdn. Bhd. Malaysia
Western Offshore Drilling &
Exploration Company Sdn. Bhd. Malaysia
3
<PAGE>
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
FD Engineers & Constructors, Inc.
Fluor Daniel, Inc. (continued)
Fluor Daniel Mexico S.A. California
Ameco Services, S. de R.L. de C.V. Mexico
ICA-Fluor Daniel, S. de R.L.
de C.V. (7) Mexico
TRS International Group, S. de
R.L. de C.V Mexico
Fluor Daniel Mining & Metals, Ltd. California
Fluor Daniel Pty. Ltd. Australia
Civil and Mechanical Maintenance
Pty. Ltd. Australia
Fluor Daniel Constructors Pty. Ltd. Australia
Fluor Daniel Power & Maintenance
Services Pty. Ltd. Australia
Fluor Daniel (Qld) Pty. Ltd. Australia
TRS International Services Pty. Ltd. Australia
Fluor Daniel New Zealand Limited California
Fluor Daniel (NPOSR), Inc. Delaware
Fluor Daniel Overland Express, Inc. Delaware
Fluor Daniel Overseas, Inc. California
Fluor Daniel P.R.C., Ltd. California
Fluor Daniel Pacific, Inc. California
Fluor Daniel Properties Limited U.K.
Fluor Daniel Pulp & Paper, Inc. California
Fluor Daniel Resources, Inc. California
Fluor Daniel S.A. France
Fluor Daniel, S.A. Spain
Fluor Daniel Sales Corporation West Indies
Fluor Daniel South America Limited California
Fluor Daniel South East Asia, Ltd. California
Fluor Daniel Technical Services, Inc. Texas
Fluor Daniel Thailand, Ltd. California
Fluor-Doris, Inc. Texas
Fluor Engineers, Inc. Delaware
Tecnofluor, C.A. (8) Venezuela
Tecnoconsult Ingenieros Consultores,
S.A. (8) Venezuela
Fluor Egypt Egypt
Fluor Engineering Corporation Michigan
Fluor Hong Kong Limited Hong Kong
Fluor Indonesia, Inc. California
P.T. Panca Perintis Indonesia Indonesia
Fluor International, Inc. California
Fluor International Limited Bermuda
Fluor Iran Iran
Fluor Italia S.r.l. Italy
Fluor-Korea Corporation, Ltd. (The) Korea
Fluor Mideast Limited Bermuda
Fluor Ocean Services International, Inc. California
Fluor Plant Services International, Inc. California
Fluor Plant Services International Ltd. Bermuda
Fluor International Nigeria Limited Nigeria
4
<PAGE>
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
FD Engineers & Constructors, Inc.
Fluor Daniel, Inc. (continued)
Fluor Technical Services Limited California
Fluor Texas, Inc. Texas
Fluor Venezuela, S.A. Venezuela
Fluorven Limited California
Knightsford Limited Guernsey
Nutmeg Valley Resources, Inc. California
Ranhill-Fluor Daniel Sdn. Bhd. Malaysia
Red Tower Limited Guernsey
Rippleshell Limited Guernsey
SPB Corporation Delaware
Stanhope Management Services Limited U.K.
TDF, Inc. California
Trident Maintenance Services, Inc. Texas
Venezco, Inc. California
Whidbey Services Co. Nevada
Williams Brothers Engineering Company Delaware
Fluor Daniel Argentina, Inc. Delaware
Williams Brothers Engineering
Limited U.K.
Williams Brothers Engineering
Pty. Ltd. Australia
Williams Brothers International
Limited Guernsey
Williams Brothers Process
Services, Inc. Delaware
Wilmore/Fluor Modesto LLC (5) California
Wireless Engineering Services Group,
LLC (5) Delaware
Wright Engineers, Inc. Nevada
Fluor Daniel Telecommunications Corporation California
Fluor Real Estate Services, Inc. Delaware
Indo-Mauritian Affiliates Limited Mauritius
Strategic Organizational Systems
Enterprises, Inc. California
Strategic Organizational Systems
Construction Division, Inc. California
Strategic Organizational Systems
Environmental Division, Inc. Oklahoma
Strategic Organizational Systems
Environmental Division, Inc. Louisiana
Strategic Organizational Systems
Environmental Engineering Division, Inc. Texas
SOS International, Inc. Alabama
Strategic Organizational Systems
Environmental Engineering California
Division, Inc. California
Strategic Organizational Systems Southern
California Division Inc. California
TRS Staffing Solutions, Inc. S. Carolina
TRS International Group, Inc. Delaware
TRS International Group Asia
Pacific, Inc. California
Fluor Daniel Illinois, Inc. Delaware
Fluor Daniel Intercontinental, Inc. California
Fluor Daniel Nigeria Limited (9) Nigeria
5
<PAGE>
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation (continued)
Fluor Daniel Venture Group, Inc. California
Fluor Carson, Inc. California
Fluor Daniel Asia, Inc. California
P.T. Nusantara Power Services (2) Indonesia
Fluor Gulf Communications, Inc. California
Micogen Inc. California
Micogen Limited I, Inc. California
Micogen Limited II, Inc. California
Palmetto Energy, Inc. Florida
Soli.Flo LLC (5) Delaware
Springfield Resource Recovery, Inc. Mass.
Fluor Distribution Companies, Inc. California
Fluor Mideast Limited California
Fluor (Nigeria) Limited Nigeria
Fluor Oil and Gas Corporation California
Coquina Petroleum Inc. Delaware
Fluor Reinsurance Investments, Inc. Delaware
FRES, Inc. Delaware
Micogen Limited III, Inc. California
Middle East Fluor California
Pinnacle Insurance Co., Inc. Hawaii
St. Joe American Corporation Delaware
St. Joe Carbon Fuels Corporation Delaware
SJM Holding Corporation Delaware
Allegheny Coal Corporation Delaware
Massey Coal Company (partnership) Delaware
A. T. Massey Coal Company, Inc. Virginia
Aracoma Coal Company, Inc. W. Virginia
Barnabus Land Company W. Virginia
Ben Creek Coal Company W. Virginia
Big Bear Mining Company W. Virginia
Black Knight Mine Development Co. W. Virginia
Boone East Development Co. W. Virginia
Boone West Development Co. W. Virginia
Cabinawa Mining Company W. Virginia
Central Penn Energy Company, Inc. Pennsylvania
Central West Virginia Energy
Company W. Virginia
Ceres Land Company W. Virginia
Cline & Chambers Coal Company, Inc. Kentucky
Dehue Coal Company W. Virginia
Douglas Pocahontas Coal Corporation W. Virginia
DRIH Corporation Delaware
Duchess Coal Company W. Virginia
Federal Development Corporation W. Virginia
Green Valley Coal Company W. Virginia
Goals Coal Company W. Virginia
Haden Farms, Inc. Virginia
Hazy Ridge Coal Company W. Virginia
Hopkins Creek Coal Company Kentucky
6
<PAGE>
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
SJM Holding Corporation
Allegheny Coal Corporation
Massey Coal Company (partnership)
A. T. Massey Coal Company, Inc.
Imec, Inc. Kentucky
Jacks Branch Coal Company W. Virginia
Joboner Coal Company Kentucky
Lauren Land Company Kentucky
Lewco Development Company W. Virginia
Lick Branch Coal Company W. Virginia
Long Fork Coal Company Kentucky
Elk Run Coal Company, Inc. W. Virginia
Bishop Mine Development Co. W. Virginia
Black Castle Mine Development Co. W. Virginia
Black King Mine Development Co. W. Virginia
Chess Processing Company W. Virginia
Continuity Venture Capital Corp. W. Virginia
Independence Coal Company, Inc. W. Virginia
Marfork Coal Company, Inc. W. Virginia
Massey Capital Management Corp. W. Virginia
Massey New Era Capital Corp. W. Virginia
New Massey Capital Corp. W. Virginia
Preferred Management Capital
Corp. W. Virginia
Rawl Sales Venture Capital Corp. W. Virginia
Sprouse Creek Venture Capital
Corp. W. Virginia
Support Mining Company W. Virginia
Martin County Coal Corporation Kentucky
Pilgrim Mining Company, Inc. Kentucky
Massey Coal Sales Company, Inc. Virginia
Massey Coal Services, Inc. W. Virginia
Massey Fuels Corporation Virginia
Menefee Land Company, Inc. Colorado
New Ridge Mining Company Kentucky
Nicco Corporation W. Virginia
Majestic Mining, Inc. Texas
Omar Mining Company W. Virginia
Peerless Eagle Coal Co. W. Virginia
Pennsylvania Mine Services, Inc. Pennsylvania
Mine Maintenance, Inc. Pennsylvania
Performance Coal Company W. Virginia
Rawl Sales & Processing Co. W. Virginia
Capstan Mining Company Colorado
Lynn Branch Coal Company, Inc. W. Virginia
Massey Coal Capital Corp. W. Virginia
Sun Coal Company, Inc. Colorado
Sycamore Fuels, Inc. W. Virginia
Crystal Fuels Company W. Virginia
7
<PAGE>
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
SJM Holding Corporation
Allegheny Coal Corporation
Massey Coal Company (partnership)
A. T. Massey Coal Company, Inc. (continued)
Road Fork Development Company, Inc. Kentucky
Robinson-Phillips Coal Company W. Virginia
Rockridge Coal Company W. Virginia
Rum Creek Coal Sales, Inc. W. Virginia
Vantage Mining Company Kentucky
Russell Fork Coal Company W. Virginia
SC Coal Corporation Delaware
SC Ventures Inc. Delaware
Shannon-Pocahontas Coal Corporation W. Virginia
Sidney Coal Company, Inc. Kentucky
Stirrat Coal Company W. Virginia
Stone Mining Company Kentucky
T.C.H. Coal Co. Kentucky
Tennessee Consolidated Coal Company Tennessee
Chestnut Coal Company, Inc. Tennessee
Tennessee Energy Corp. Tennessee
Town Creek Coal Company W. Virginia
Tug Valley Land Company, Inc. W. Virginia
Vesta Mining Company Pennsylvania
White Buck Coal Company W. Virginia
Williams Mountain Coal Company W. Virginia
Wyomac Coal Company, Inc. W. Virginia
Compania Minera San Jose del Peru S.A. Peru
Mineral Resource Development Corporation Delaware
Robil International Corporation Delaware
St. Joe Erzbergbaugesellschaft m.b.H. Austria
St. Joe Exploracion Minera Inc. Delaware
St. Joe Exploracion Minera Inc. y
Cia., S.R.C. Spain
St. Joe Exploration Inc. Delaware
St. Joe Luisito de Oro Inc. Delaware
St. Joe Luisito de Oro Inc. y
Cia. S.R.C. Spain
St. Joe Minera de Espana, S.A. Spain
St. Joe South Pacific Pty. Limited Australia
St. Joe Bonaparte Pty. Limited Australia
St. Joe International Petroleum Corporation Delaware
St. Joe Petroleum Corporation Delaware
St. Joe Egypt Exploration Corporation Delaware
St. Joe Petroleum Egypt Corporation Delaware
St. Joe Petroleum-Holland, Inc. Delaware
St. Joe Petroleum (Netherlands)
Corporation Delaware
St. Joe Petroleum (Papua New Guinea)
Corporation Delaware
St. Joe Petroleum (U.K.) Corporation Delaware
8
<PAGE>
Organized
Name of Company Under Laws of
=============== =============
Fluor Corporation
SJM Holding Corporation (continued)
St. Joe Minerals Corporation & Cia. Brazil
Coral Empreendimentos e Participacoes Ltda. Brazil
Comercial de Minerios do Sul do
Para Ltda. - COMIPA Brazil
Mineracao Alabastro Ltda. Brazil
Mineracao Sao Felix Ltda. Brazil
The Seventeenth Daniel Realty Investment
Corporation Virginia
United Plant Services, Inc. Delaware
WODECO Nigeria Limited Nigeria
Zenith Coal Company, Inc. S. Carolina
- ------------------
(1) Does not include certain subsidiaries which if considered in
the aggregate as a single subsidiary, would not constitute a
significant subsidiary
(2) 40% ownership
(3) 51% ownership
(4) 49.50% ownership
(5) 50% ownership
(6) 30% ownership
(7) 49% ownership
(8) 19.99% ownership
(9) 60% ownership
9
<PAGE>
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report on Form 10-K
of Fluor Corporation of our report dated November 28, 1995, included in the 1995
Annual Report to stockholders of Fluor Corporation.
We also consent to the incorporation by reference in the Registration Statements
and related Prospectuses pertaining to: Form S-8 No. 33-31440 for the 1988
Fluor Executive Stock Plan; Form S-8 No. 2-77532 for the 1982 Fluor Incentive
Stock Option Plan, 1981 Fluor Executive Stock Plan, 1977 Fluor Executive Stock
Plan and 1971 Fluor Stock Option Plan; and Form S-8 No. 2-72712 for the Fluor
Corporation Salaried Employees' Savings Investment Plan of our report dated
November 28, 1995, with respect to the consolidated financial statements of
Fluor Corporation incorporated by reference in the Annual Report on Form 10-K
for the year ended October 31, 1995.
Orange County, California
January 25, 1996
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does
hereby constitute and appoint L. N. FISHER, R. M. BUKATY, and P. J. TRIMBLE and
each of them, with full power to act without the other, as his true and lawful
attorneys-in-fact and agents, for him and in his name, place and stead, in any
and all capacities, to sign the annual report on Form 10-K for the fiscal year
ended October 31, 1995, and any and all amendments thereto, to be filed by Fluor
with the Securities and Exchange Commission and to file such annual report and
any amendments, with any and all exhibits thereto, and any and all other
information and documents in connection therewith, with the Securities and
Exchange Commission; and each of the undersigned does hereby ratify and confirm
as his own act and deed all that such attorneys-in-fact and agents, and each of
them shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto subscribed their
signatures as of the 18th day of January, 1996.
Principal Executive Officer and Director:
___________________________ Director, Chairman of the Board
L. G. McCraw and Chief Executive Officer
Principal Financial and Accounting Officer:
___________________________ Vice President and
J. M. Conaway Chief Financial Officer
<PAGE>
EXHIBIT 24.2
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR
CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and
appoint L. N. FISHER, R. M. BUKATY, and P. J. TRIMBLE, and each of them, with
full power to act without the other, as his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities,
to sign the annual report on Form 10-K for the fiscal year ended October 31,
1995, and any and all amendments thereto, to be filed by Fluor with the
Securities and Exchange Commission and to file such annual report and any
amendments, with any and all exhibits thereto, and any and all other information
and documents in connection therewith, with the Securities and Exchange
Commission; and the undersigned does hereby ratify and confirm as his own act
and deed all that such attorneys-in-fact and agents, and each of them shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature
as of the 18th day of January, 1996.
_________________________
C. A. Campbell, Jr.
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR
CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and
appoint L. N. FISHER, R. M. BUKATY, and P. J. TRIMBLE, and each of them, with
full power to act without the other, as his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities,
to sign the annual report on Form 10-K for the fiscal year ended October 31,
1995, and any and all amendments thereto, to be filed by Fluor with the
Securities and Exchange Commission and to file such annual report and any
amendments, with any and all exhibits thereto, and any and all other information
and documents in connection therewith, with the Securities and Exchange
Commission; and the undersigned does hereby ratify and confirm as his own act
and deed all that such attorneys-in-fact and agents, and each of them shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature
as of the 18th day of January, 1996.
_________________________
H. K. Coble
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR
CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and
appoint L. N. FISHER, R. M. BUKATY, and P. J. TRIMBLE, and each of them, with
full power to act without the other, as his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities,
to sign the annual report on Form 10-K for the fiscal year ended October 31,
1995, and any and all amendments thereto, to be filed by Fluor with the
Securities and Exchange Commission and to file such annual report and any
amendments, with any and all exhibits thereto, and any and all other information
and documents in connection therewith, with the Securities and Exchange
Commission; and the undersigned does hereby ratify and confirm as his own act
and deed all that such attorneys-in-fact and agents, and each of them shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature
as of the 18th day of January, 1996.
_________________________
P. J. Fluor
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR
CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and
appoint L. N. FISHER, R. M. BUKATY, and P. J. TRIMBLE, and each of them, with
full power to act without the other, as his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities,
to sign the annual report on Form 10-K for the fiscal year ended October 31,
1995, and any and all amendments thereto, to be filed by Fluor with the
Securities and Exchange Commission and to file such annual report and any
amendments, with any and all exhibits thereto, and any and all other information
and documents in connection therewith, with the Securities and Exchange
Commission; and the undersigned does hereby ratify and confirm as his own act
and deed all that such attorneys-in-fact and agents, and each of them shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature
as of the 18th day of January, 1996.
_________________________
D. P. Gardner
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR
CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and
appoint L. N. FISHER, R. M. BUKATY, and P. J. TRIMBLE, and each of them, with
full power to act without the other, as his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities,
to sign the annual report on Form 10-K for the fiscal year ended October 31,
1995, and any and all amendments thereto, to be filed by Fluor with the
Securities and Exchange Commission and to file such annual report and any
amendments, with any and all exhibits thereto, and any and all other information
and documents in connection therewith, with the Securities and Exchange
Commission; and the undersigned does hereby ratify and confirm as his own act
and deed all that such attorneys-in-fact and agents, and each of them shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature
as of the 18th day of January, 1996.
_________________________
W. R. Grant
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR
CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and
appoint L. N. FISHER, R. M. BUKATY, and P. J. TRIMBLE, and each of them, with
full power to act without the other, as his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities,
to sign the annual report on Form 10-K for the fiscal year ended October 31,
1995, and any and all amendments thereto, to be filed by Fluor with the
Securities and Exchange Commission and to file such annual report and any
amendments, with any and all exhibits thereto, and any and all other information
and documents in connection therewith, with the Securities and Exchange
Commission; and the undersigned does hereby ratify and confirm as his own act
and deed all that such attorneys-in-fact and agents, and each of them shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature
as of the 18th day of January, 1996.
_________________________
B. R. Inman
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR
CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and
appoint L. N. FISHER, R. M. BUKATY, and P. J. TRIMBLE, and each of them, with
full power to act without the other, as his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities,
to sign the annual report on Form 10-K for the fiscal year ended October 31,
1995, and any and all amendments thereto, to be filed by Fluor with the
Securities and Exchange Commission and to file such annual report and any
amendments, with any and all exhibits thereto, and any and all other information
and documents in connection therewith, with the Securities and Exchange
Commission; and the undersigned does hereby ratify and confirm as his own act
and deed all that such attorneys-in-fact and agents, and each of them shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature
as of the 18th day of January, 1996.
_________________________
R. V. Lindsay
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR
CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and
appoint L. N. FISHER, R. M. BUKATY, and P. J. TRIMBLE, and each of them, with
full power to act without the other, as his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities,
to sign the annual report on Form 10-K for the fiscal year ended October 31,
1995, and any and all amendments thereto, to be filed by Fluor with the
Securities and Exchange Commission and to file such annual report and any
amendments, with any and all exhibits thereto, and any and all other information
and documents in connection therewith, with the Securities and Exchange
Commission; and the undersigned does hereby ratify and confirm as his own act
and deed all that such attorneys-in-fact and agents, and each of them shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature
as of the 18th day of January, 1996.
_________________________
V. S. Martinez
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR
CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and
appoint L. N. FISHER, R. M. BUKATY, and P. J. TRIMBLE, and each of them, with
full power to act without the other, as his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities,
to sign the annual report on Form 10-K for the fiscal year ended October 31,
1995, and any and all amendments thereto, to be filed by Fluor with the
Securities and Exchange Commission and to file such annual report and any
amendments, with any and all exhibits thereto, and any and all other information
and documents in connection therewith, with the Securities and Exchange
Commission; and the undersigned does hereby ratify and confirm as his own act
and deed all that such attorneys-in-fact and agents, and each of them shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature
as of the 18th day of January, 1996.
_________________________
B. Mickel
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR
CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and
appoint L. N. FISHER, R. M. BUKATY, and P. J. TRIMBLE, and each of them, with
full power to act without the other, as his true and lawful attorneys-in-fact
and agents, for him and in his name, place and stead, in any and all capacities,
to sign the annual report on Form 10-K for the fiscal year ended October 31,
1995, and any and all amendments thereto, to be filed by Fluor with the
Securities and Exchange Commission and to file such annual report and any
amendments, with any and all exhibits thereto, and any and all other information
and documents in connection therewith, with the Securities and Exchange
Commission; and the undersigned does hereby ratify and confirm as his own act
and deed all that such attorneys-in-fact and agents, and each of them shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature
as of the 18th day of January, 1996.
_________________________
M. R. Seger
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
Consolidated Balance Sheet at October 31, 1995 and the Consolidated Statement of
Earnings for the twelve months ended October 31, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<CASH> 292,934
<SECURITIES> 137,758
<RECEIVABLES> 470,104
<ALLOWANCES> 0
<INVENTORY> 63,284
<CURRENT-ASSETS> 1,411,671
<PP&E> 2,066,384
<DEPRECIATION> 630,573
<TOTAL-ASSETS> 3,228,906
<CURRENT-LIABILITIES> 1,238,645
<BONDS> 2,873
0
0
<COMMON> 51,978
<OTHER-SE> 1,378,836
<TOTAL-LIABILITY-AND-EQUITY> 3,228,906
<SALES> 0
<TOTAL-REVENUES> 9,301,384
<CGS> 0
<TOTAL-COSTS> 8,910,076
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,385
<INCOME-PRETAX> 362,214
<INCOME-TAX> 130,446
<INCOME-CONTINUING> 231,768
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 231,768
<EPS-PRIMARY> 2.78
<EPS-DILUTED> 2.78
</TABLE>
