Exhibit 10.1

 

 

FLUOR CORPORATION

 

409A DEFERRED DIRECTORS’ FEES PROGRAM

 

(Effective as of January 1, 2005)

 

THIS INSTRUMENT, executed and made effective as of January 1, 2005 by Fluor
Corporation, a Delaware corporation, evidences the establishment of the Fluor
Corporation 409A Deferred Directors’ Fees Program adopted for the benefit of its
non-employee directors.  For periods prior to January 1, 2008, the Plan shall be
administered in reasonable, good faith compliance with the requirements of Code
section 409A.  Effective January 1, 2008, the Plan shall be interpreted in a
manner consistent with Code section 409A, the final regulations issued
thereunder, and any other applicable guidance from the Internal Revenue Service.

 

WITNESSETH:

 

WHEREAS, the Company has previously established the Fluor Corporation Deferred
Directors’ Fees Program; and

 

WHEREAS, the Company desires to establish a plan that complies with the
requirements of Section 409A:

 

NOW, THEREFORE, the Company hereby declares the current terms and conditions of
the Fluor Corporation 409A Deferred Directors’ Fees Program to be, as of
January 1, 2005, as follows:

 

ARTICLE 1
PURPOSE

 

The primary purpose of the Plan is to provide certain of the Company’s
non-employee directors with an opportunity to defer receipt of fees for services
rendered to the Company on a pre-tax basis that complies with Section 409A of
the Code.

 

ARTICLE 2
DEFINITIONS

 

Whenever used herein, the following terms shall have the meanings set forth
below, and, when the defined meaning is intended, the term is capitalized:

 

(a)          “Board” or “Board of Directors” means the Board of Directors of the
Company.

 

(b)         “Change in Control” shall be deemed to have occurred if an event
described in Treasury Regulation 1.409A-3(a)(5) occurs, including, without
limitation:

 

(i)                                     a change in ownership of the Company as
a result of a person, or more than one person acting as a group acquiring
ownership that in the aggregate constitutes more than 50 percent (50%) of the
total fair market value of the Company (this provision does not apply to a
person or group already possessing more than 50 percent (50%) of the total fair
market value of the Company); or

 

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(ii)                                  a change in effective control of the
Company as a result of a person or more than one person acting as a group
acquiring (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or group) ownership of stock of the
Company possessing more than thirty percent (30%) of the total voting power of
the stock of the Company; or

 

(iii)                               a change in effective control of the Company
as a result of the majority of members of the Company’s board of directors being
replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the members of the Company’s board of directors
before the date of the appointment or election, or

 

(iv)                              a change in ownership of a substantial portion
of the Company’s assets as a result of a person or more than one person acting
as a group acquiring (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or persons) assets from the
Company that have a total gross fair market value equal to more than 40 percent
(40%) of the total gross fair market value of all of the assets of the Company
immediately before such acquisition or acquisitions.

 

(c)          “Code” means the Internal Revenue Code of 1986, as amended from
time to time.

 

(d)         “Committee” means the Executive Compensation Committee of the
Company as appointed by the Board to administer the Plan.

 

(e)          “Company” means Fluor Corporation, a Delaware corporation.

 

(f)            “Deferral Account” means the accounting entry made with respect
to each Participant for the purpose of maintaining a record of each
Participant’s entitlement under the Plan.

 

(g)         “Director Contributions” means those contributions credited to a
Participant’s Deferral Account in accordance with the Participant’s deferral
election pursuant to Section 5.1.

 

(h)         “Director’s Fees” means cash amounts payable to a director for the
Plan Year for the director’s service on the Board for the Plan Year including,
without limitation, annual retainer fees, meeting fees and annual California tax
allowances, if any.

 

(i)             “Disability” means a physical or mental medical condition such
that the Participant is unable to engage in any substantial gainful employment
and the condition is reasonably expected to result in death or to last
continuously for at least 12 months.  The Committee shall make the determination
of Disability in its sole discretion based on available medical information.

 

(j)             “Eligible Director” means a director who is eligible to
participate in the Plan pursuant to Section 4.1.

 

(k)          “Fair Market Value” means the closing sales price of the Company’s
common stock for such day, as reported on the New York Stock Exchange.

 

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(l)             “Matching Contributions” means those contributions made by the
Company to the Participant’s Deferral Account in accordance with Section 5.2 of
the Plan.  In addition, Matching Contributions under the Plan shall also include
any such contributions made under the Fluor Corporation Deferred Directors’ Fees
Program.

 

(m)       “Participant” means an Eligible Director who is participating in the
Plan pursuant to Section 4.2.

 

(n)         “Plan” means the Fluor Corporation 409A Deferred Compensation
Directors’ Fees Program, as set forth herein, and as it may be amended from time
to time.

 

(o)         “Plan Year” means January 1 to December 31 of each calendar year.

 

(p)         “Stock Equivalent Fund” means the fund established pursuant to
Section 7.3.

 

(q)         “Stock Equivalents” means a measure of value equal to one share of
the Company’s common stock.

 

ARTICLE 3
ADMINISTRATION

 

3.1                               Authority of the Committee.  The Committee
shall administer the Plan.  The members of the Committee shall be appointed by
and shall serve at the discretion of the Board.

 

Subject to the provisions herein, the Committee shall have full power and
discretion to:

 

(a)          determine a director’s eligibility to participate in the Plan;

 

(b)         determine the terms and conditions of each director’s participation
in the Plan;

 

(c)          construe and interpret the Plan and any agreement or instrument
entered into under the Plan;

 

(d)         compute and certify to the amount and kind of benefits payable to
Participants or their beneficiaries;

 

(e)          maintain all records that may be necessary for the administration
of the Plan;

 

(f)            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;

 

(g)         establish, amend, or waive rules and regulations for the Plan’s
administration;

 

(h)         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; and

 

(i)             make other determinations which may be necessary or advisable
for the administration of the Plan

 

3.2                               Decisions Binding.  All determinations and
decisions of the Committee as to any disputed question arising under the Plan,
including questions of construction and

 

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interpretation, shall be final, conclusive, and binding on all parties and shall
be given the maximum possible deference allowed by law.

 

3.3                               Claim Procedures.  The Committee shall
establish and maintain procedures for the filing of claims for benefits under
this Plan and for the review of the denial of any such claims.  The Committee is
designated as the fiduciary of this Plan to which appeals of claim denials shall
be submitted for review.

 

ARTICLE 4
ELIGIBILITY AND PARTICIPATION

 

4.1                               Eligibility.  The Committee shall determine,
in its sole and absolute discretion, which such directors shall be eligible to
participate in the Plan, and may modify such determinations at any time,
provided that at all times the Plan shall continue to qualify as an unfunded
deferred compensation plan.  To be eligible to participate in the Plan, a
director must be a non-employee director serving on the Board and entitled to
Director’s Fees.

 

4.2                               Participation and Deferral Election.  Each
Eligible Director shall become a Participant in the Plan upon his election to
defer Director’s Fees hereunder.  Eligible Directors and Participants shall make
their elections to defer all or a portion of their Director’s Fees for the Plan
Year by completing a “Deferral Election Form,” during the applicable enrollment
period (as determined by the Committee) in the Plan Year prior to the Plan Year
the Director Fees are earned and otherwise payable.  Except as provided in
Section 6.3, an election under this Section 4.2 shall be irrevocable after
December 31 of the Plan Year prior to the Plan Year the Director Fees are earned
and otherwise payable.  A separate Deferral Election Form is required for each
Plan Year.

 

Each year’s Deferral Election Form will specify the form of distribution (i.e.
lump sum or installment payments) and time of distribution (upon separation of
Board service or a specified year).

 

If a Participant wishes to modify the distribution date or form of distribution
for a particular Plan Year, the Participant must submit a distribution election
change form for such change.  The form must be submitted at least twelve (12)
months prior to the first scheduled payment, will not take effect until 12
months after the date on which the election is made, and must provide that the
payment be deferred at least five years from the date such payment would
otherwise have been made.

 

In the event a Participant ceases to be eligible to participate in the Plan,
such Participant shall become an inactive Participant, retaining all the rights
described under the Plan, except the right to make any further deferrals, until
such time that the Participant again becomes an active Participant.

 

4.3                               Initial Year Eligibility.  In the event that
an director first becomes eligible to participate in the Plan after the
beginning of a Plan Year, the Company shall notify the director of his
eligibility to participate, and the Company shall provide the Eligible Director
with a Deferral Election Form; provided, however, that such Participant must
make his deferral election within 30 days of the determination that the director
is an Eligible Director and may elect only to defer Director’s Fees for such
Plan Year which are to be earned after the filing of the Deferral Election
Form.  Except as provided in Section 6.3, an election

 

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under this Section 4.2 shall be irrevocable with respect to the Plan Year for
which the election is made.

 

4.4                               Notice.  The Company shall notify a director
within a reasonable time of such director’s gaining or losing eligibility for
active participation in the Plan.

 

ARTICLE 5
DIRECTOR AND MATCHING CONTRIBUTIONS TO DEFERRAL ACCOUNTS

 

5.1                               Director Contributions.  Subject to
Section 4.2 and 4.3, a Participant may elect to defer and have credited to his
Deferral Account for any Plan Year up to one hundred percent (100%) of his
Director’s Fees.  Director Contributions shall be credited to the Participant’s
Deferral Account pursuant to Section 7.1.

 

5.2                               Matching Contributions.  The Company shall
credit matching contributions to the Participant’s Deferral Account in an amount
equal to 25% of Director Contributions deferred under the Plan and initially
deemed invested by the Participant in the Stock Equivalent Fund.  Director
Contributions not initially deemed invested in the Stock Equivalent Fund will
not receive Matching Contributions.  Matching Contributions shall be credited to
the Participant’s Deferral Account pursuant to Section 7.1.

 

ARTICLE 6
DISTRIBUTIONS

 

6.1                               Specified Distribution Year.  A Participant
may elect to receive all or a portion of that year’s Director Fees and Matching
Contributions (and any deemed earnings) as of a specified distribution year in
cash in either: (i) a single lump sum payment, or (ii) annual installment
payments over a period of two (2) to ten (10) years.

 

With respect to the portion of the Participant’s vested Deferral Account as to
which a specified distribution year has been selected by a Participant at the
time of deferral:

 

(a)                                  Distributions under this Section 6.1 shall
commence in January of the year specified in the Participant’s election.

 

(b)                                 In the case 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
each succeeding January.

 

(c)                                  If a Participant elects to receive
installment payments, the amount of each installment payment shall be equal to
the balance remaining in the portion of the Participant’s vested Deferral
Account that is subject to such installment election (as determined immediately
prior to each such payment), multiplied by a fraction, the numerator of which is
one (1), and the denominator of which is the total number of remaining
installment payments.  The installment amount shall be adjusted annually to
reflect gains and losses, if any, allocated to such Participant’s vested
Deferral Account pursuant to ARTICLE 7.

 

(d)                                 Notwithstanding any specified distribution
year election by a Participant, if a Participant’s Board service with the
Company terminates for any reason prior to receiving full payment of the
Participant’s vested Deferral Account or while the Participant is receiving
scheduled installment payments pursuant to this Section 

 

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6.1, the unpaid portion of the Participant’s Deferred Account shall be paid in
accordance with Section 6.2 below.

 

6.2                               Distributions upon Separation from Board
Service, Disability, or Death.  A Participant may elect to receive all or a
portion of each year’s Director Fees and Matching Contributions (and any deemed
earnings) as of separation of Board service in cash in either: (i) a single lump
sum payment, or (ii) annual installment payments over a period of two (2) to ten
(10) years.

 

With respect to the Participant’s vested Deferral Account:

 

(a)                                  Distributions under this Section 6.2 shall
commence in the month following separation of Board service (including if due to
Disability or Death).

 

(b)                                 In the case 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)                                  If a Participant elects to receive
installment payments, the amount of each installment payment shall be equal to
the balance remaining in the portion of the Participant’s vested Deferral
Account that is subject to such installment election (as determined immediately
prior to each such payment), multiplied by a fraction, the numerator of which is
one (1), and the denominator of which is the total number of remaining
installment payments.  The installment amount shall be adjusted annually to
reflect gains and losses, if any, allocated to such Participant’s vested
Deferral Account pursuant to ARTICLE 7.

 

(d)                                 Notwithstanding any election made pursuant
to Section 6.1, if the Participant has a separation of Board service before all
distributions are made pursuant thereto, such election shall no longer apply and
the deferral election applicable to distributions to be made in connection with
the Participant’s separation of Board service (including if due to Disability or
Death) pursuant to this Section 6.2 instead shall become effective.

 

(e)                                  Unless otherwise elected pursuant to this
Section 6.2, a Participant’s vested Deferral Account will be paid as a single
lump sum thirty days following the occurrence of a Participant’s separation of
Board service, Disability, or death.

 

6.3                               Unforeseeable Emergency.  A cash distribution
of a portion of a Participant’s vested Deferral Accounts a because of an
Unforeseeable Emergency will be permitted only to the extent required by the
Participant to satisfy the emergency.  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.  In all events, a distribution
shall be made in connection with an Unforeseeable Emergency only to the extent
permitted by section 409A of the Code.

 

An “Unforeseeable Emergency” is defined as a severe financial hardship to the
Participant caused by sudden and unexpected illness or accident of the
Participant, the Participant’s spouse, the Participant’s beneficiary, or of a
dependent of the Participant (as defined in Code section 152, without regard to
Code section 152(b)(1), (b)(2), and (d)(1)(B)), loss of the Participant’s
property due to casualty, or other extraordinary and

 

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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 specific 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.  Examples of what are
not considered to be severe financial hardships include the need to send a
Participant’s child to college or the desire to purchase a home.

 

The Participant’s Deferral Account will be credited with earnings in accordance
with the Plan up to the date of distribution.

 

The Committee’s decisions with respect to the Unforeseeable Emergency shall be
final, conclusive, and not subject to appeal to the extent it is not arbitrary
and capricious.

 

In the event a Participant receives a distribution under this Section 6.3, then
the Participant will be ineligible to participate in the Plan for the remainder
of the Plan Year in which the distribution was received.

 

6.4                               Transition Distribution Election.  To the
extent permitted by the Committee in a manner consistent with IRS Notice
2006-79, a Participant may elect to modify the distribution election applicable
to his or her Deferral Account no later than December 31, 2007, provided that no
such election shall cause any amounts payable in 2007 to be paid in a later year
or any amounts payable in a later year to be paid in 2007.

 

6.5                               Incompetence of Distributee.  In the event
that it shall be found that a person entitled to receive payment under the Plan
(including a designated beneficiary) is a minor or is physically or mentally
incapable of personally receiving and giving a valid receipt for any payment due
(unless prior claim therefor shall have been made by a duly qualified committee
or other legal representative), such payment may be made to any person whom the
Committee in its sole discretion determines is entitled to receive it, and any
such payment shall fully discharge the Company, the Committee and the Plan from
any further liability to the person otherwise entitled to payment hereunder, to
the extent of such payment.

 

6.6                               Distribution in the Event of Divorce.  In the
event of the divorce or legal separation of a Participant, and the awarding of
all or a portion of the Deferral Accounts to the spouse of the Participant by
court order, such spouse may elect, by filing with the Committee a form
specified by the Committee and by providing such other information as the
Committee may in its discretion reasonably request in order to confirm that the
applicable facts and circumstances are present, to receive a distribution of his
or her court-awarded portion of the Participant’s Deferral Accounts in cash
pursuant and subject to the terms of Section 6.1 as to available forms of
distribution and timing.

 

ARTICLE 7
DEFERRAL ACCOUNTS

 

7.1                               Participants’ Accounts.  The Company shall
establish and maintain an individual bookkeeping Deferral Account for Director
Contributions and Matching Contributions made on Participant’s behalf.  For
Director Contributions and Matching Contributions deferred and deemed invested
into the Stock Equivalent Fund, such Participant’s

 

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Deferral Account shall be credited with Director Contributions and Matching
Contributions, if any, on the date such fees would have been paid to the
Participant had Participant not deferred the Director’s Fees to the Plan, and as
provided in Section 7.2. For Director Contributions deferred and deemed invested
into any other investment option, such Participant’s Deferral Account shall be
credited with Director Contributions on the first day of the month following the
date the Director’s Fees would have been paid to the Participant had the
Participant not deferred the Director’s Fees to the Plan, and as provided in
Section 7.2.  A Participant’s Deferral Account shall also be credited with any
deemed earnings credit to such amounts as provided in Section 7.2.

 

7.2                               Earnings on Deferred Amounts.  A Participant’s
Deferral Account shall be credited with earnings (or losses) based on the deemed
investments of the Participant’s Deferral Account, as directed by each
Participant on the Deferral Enrollment Form or such other manner as the
Committee may prescribe.  The deemed investment shall be in one or more
investment options selected by the Committee, such options to include the Stock
Equivalent Fund described in Section 7.3.  Except with respect to deemed
investments in the Stock Equivalent Fund, deemed earnings (and losses) on a
Participant’s Deferral Account shall be based upon the daily unit valuation of
the funds (as determined by the Committee) selected by the Participant, and
shall be credited to a Participant’s Deferral Account on a monthly basis. 
Deemed earnings (or losses) shall be paid out to a Participant in accordance
with the applicable Deferral Election Form.  Any portion of a Participant’s
Deferral Account which is subject to distribution in installments shall continue
to be credited with deemed earnings (or losses) until fully paid out to the
Participant.

 

The Committee reserves the right to change the investment options available for
deemed investments under the Plan at any time, or to eliminate any option at any
time.  A Participant may specify a separate investment allocation with respect
to each Plan Year’s Deferral Election Form.  Participants may modify their
deemed investment instructions once a month (daily beginning January 1, 2008)
with respect to any portion (whole percentages only) of their Deferral Account;
provided they notify the Committee or its designee within the time and in the
manner specified by the Committee.  Modifications to investment in the Stock
Equivalent fund may subject the Participant’s account to forfeiture of Matching
Contributions in accordance with Section 7.4.

 

The Committee or its designee may provide additional limitations on the ability
of Participants to change their deemed investment instructions regarding deemed
investments in the Stock Equivalent Fund to prevent violations of
Section 16(b) of the Securities Exchange Act of 1934, as amended, as determined
by the Committee or its designee in its sole discretion.

 

The Committee reserves the right to credit earnings (or losses) on a basis
different from that elected by the Participants.

 

7.3                               Stock Equivalent Fund.  One of the deemed
investment options shall be the Stock Equivalent Fund which is a deemed
investment in the Company’s common stock.  Directors Contributions directly
allocated to the Stock Equivalent Fund are eligible for Matching Contributions
in accordance with Section 5.2 subject to the limitations of Section 7.4.

 

The number of Stock Equivalents, or fractions thereof, that will be credited to
a Participant’s Deferral Account is determined by dividing the dollar amount of
Director

 

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Contributions and Matching Contributions to be credited to the Stock Equivalent
Fund, by the Fair Market Value of the Company common stock on the date of
crediting in accordance with Section 7.1. To the extent dividends or other
distributions on the Company’s common stock are paid or made, dividend
equivalents and fractions thereof shall be calculated and credited with respect
to the Share Equivalent balances (by dividing the value of the dividend
equivalents by the Fair Market Value) as an increase in Share Equivalents as of
the dividend payment dates.  Upon the occurrence of any stock split, stock
dividend, combination or reclassification with respect to any outstanding class
of stock of the Company, the number of Stock Equivalents deemed invested in the
Stock Equivalent Fund shall, to the extent deemed necessary by the Board of
Directors, be adjusted accordingly.

 

7.4                               Vesting and Forfeiture.  The Director
Contributions held in each Participant’s Deferral Account shall be fully vested
at all times.  A Participant’s Matching Contributions (and any related deemed
earnings) shall become vested on January 1st, of the calendar year that is five
years after the date the Matching Contribution are credited to Participant’s
Deferral Account.  Notwithstanding the immediately preceding sentence, if prior
to the occurrence of such vesting (a) the Participant dies, (b) the
Participant’s Board service is terminated due to Disability or (c) a Change in
Control occurs, such Participant’s Matching Contributions shall become fully
vested as of the date of death, the date of Disability or the date of the Change
in Control, as applicable.  If a Participant receives distributions from, or
transfers amounts deemed invested in the Stock Equivalent Fund before the
Matching Contributions are fully vested, such unvested accrued balance in such
Participant’s Deferral Account shall be forfeited by such Participant to the
extent attributable to the Director Contributions distributed or transferred.

 

7.5                               Designation of Beneficiary.  Each Participant
may designate a beneficiary or beneficiaries who, upon the Participant’s death,
or physical or mental incapacity will receive the distributions that otherwise
would have been paid to the Participant under the Plan.  All beneficiary
designations shall be signed by the Participant, and shall be in the form
prescribed by the Committee.  Each beneficiary designation shall be effective as
of the date delivered to the Committee or its designee by the Participant.

 

Participants may change their beneficiary designations on such form as
prescribed by the Committee.  The payment of distributions payable under the
Plan shall be in accordance with the last unrevoked written beneficiary
designation that has been signed by the Participant and delivered to the
Committee or its designee prior to the Participant’s death.  Notwithstanding the
foregoing, a Participant who is married may not designate a beneficiary other
than the Participant’s spouse, unless the spouse consents in writing to such
alternate beneficiary designation.

 

In the event that all the beneficiaries named by a Participant pursuant to this
Section 7.5 predecease the Participant, the distributions payable to the
Participant or the Participant’s beneficiaries shall be paid to the
Participant’s estate.

 

In the event a Participant does not designate a beneficiary, or for any reason
such designation is ineffective, in whole or in part, the amounts that otherwise
would have been paid to the Participant or the Participant’s beneficiaries under
the Plan shall be paid to the Participant’s estate.

 

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ARTICLE 8
TRUST

 

Nothing contained in this Plan shall create a trust of any kind or a fiduciary
relationship between the Company and any Participant.  Nevertheless, the Company
may establish one or more trusts, with such trustee(s) as the Committee may
approve, for the purpose of providing for the payment of deferred amounts and
earnings thereon.  Such trust or trusts may be irrevocable, but the assets
thereof shall be subject to the claims of the Company’s general creditors upon
the bankruptcy or insolvency of the Company.

 

ARTICLE 9
CHANGE IN CONTROL

 

9.1                               Trust and Trustees.  Upon the occurrence of a
Change in Control, the trust or trusts that may be established by the Company
pursuant to ARTICLE 8 shall become irrevocable and the Company shall not
thereafter be permitted to remove, terminate, or change the trustee(s) for a
period of three years.

 

9.2                               Advanced Funding.  No later than 30 days after
a Change in Control occurs, to the extent permitted by Code section 409A, the
Company shall make a contribution to the trust or trust(s) established pursuant
to ARTICLE 8 to the extent required to fully fund all benefits that are or may
become payable under the Plan, assuming for purposes of this calculation that
all Participants retire with 100% vesting, and to fund in advance all
administrative, legal, and other costs of maintaining the Plan, in an additional
amount of no less than $150,000.  From time to time in the Company’s discretion,
Company shall make such additional contributions to the trust or trusts to fully
fund the additional benefits that may become payable to Participants or
beneficiaries under the Plan and the additional administrative, legal, and other
Plan expenses.

 

9.3                               Amendment and Termination.  After the
occurrence of a Change in Control, the Company may not amend the Plan without
the prior approval of a majority of the Participants.  After a Change in
Control, the Company may not terminate the Plan until either (i) all benefits
have been paid in full, or (ii) the majority of the Participants approve the
same.  For purposes of this Section 9.3, Participants’ votes shall be weighted
based on their relative Deferral Account balances.

 

ARTICLE 10
RIGHTS OF PARTICIPANTS

 

10.1                        Contractual Obligation.  The Plan shall create an
unfunded, unsecured contractual obligation on the part of the Company to make
payments from the Participants’ Deferral Accounts when due.  Payment of Deferral
Account balances shall be made out of the general assets of the Company or from
the trust or trusts referred to in ARTICLE 8 above.

 

10.2                        Unsecured Interest.  No Participant or party
claiming an interest in deferred amounts of a Participant shall have any
interest whatsoever in any specific asset of the Company.  To the extent that
any party acquires a right to receive payments under the Plan, such right shall
be equivalent to that of an unsecured general creditor of the Company.  Each
Participant, by participating hereunder, agrees to waive any priority creditor
status for wage payments with respect to any amounts due hereunder.  The Company
shall have no duty to set aside or invest any amounts credited to Participants’
Deferral Accounts

 

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under this Plan.  Deferral Accounts established hereunder are solely for
bookkeeping purposes and the Company shall not be required to segregate any
funds based on such Deferral Accounts.

 

ARTICLE 11
WITHHOLDING OF TAXES

 

The Company shall have the right to require Participants to remit to the Company
an amount sufficient to satisfy Federal, state, and local withholding tax
requirements, or to deduct from all payments made pursuant to the Plan (or from
a Participant’s other Director’s Fees) amounts sufficient to satisfy withholding
tax requirements.  The Company makes no representations, warranties, or
assurances and assumes no responsibility as to the tax consequences of this Plan
or participation herein.

 

ARTICLE 12
AMENDMENT AND TERMINATION

 

Subject to ARTICLE 9, the Company reserves the right to amend, modify, or
terminate the Plan (in whole or in part) at any time by action of the Board,
with or without prior notice.  Except as described below in this ARTICLE 12, no
such amendment or termination shall in any material manner adversely affect any
Participant’s rights to any amounts already deferred or credited hereunder or
deemed earnings thereon, up to the date of amendment or termination, without the
consent of the Participant.  Any amounts accumulated in Deferral Accounts prior
to the Plan’s termination will continue to be subject to the provisions of the
Plan until distributed under the terms of the Plan.

 

ARTICLE 13
MISCELLANEOUS

 

13.1                        Notice.  Any notice or filing required or permitted
to be given to the Company under the Plan shall be sufficient if in writing and
hand delivered, or sent by registered or certified mail to the Fluor Corporation
Deferred Directors’ Fees Program c/o the Committee, and if mailed, shall be
addressed to the principal executive offices of the Company.  Notice mailed to a
Participant shall be at such address as is given in the records of the Company. 
Notices to the Company shall be deemed given as of the date of delivery.  Notice
to a Participant or beneficiary shall be deemed given as of the date of hand
delivery, or if delivery is made by mail, three (3) days following the postmark
date.

 

13.2                        Nontransferability.  Except as provided in
Section 7.5 and this Section 13.2, Participants’ rights to deferred amounts and
deemed earnings credited thereon under the Plan may not be sold, transferred,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution, or pursuant to a domestic relations order, nor
shall the Company make any payment under the Plan to any assignee or creditor of
a Participant.

 

13.3                        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.

 

13.4                        Severability.  In the event any provision of the
Plan shall be held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of the Plan, and the

 

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Plan shall be construed and enforced as if the illegal or invalid provision had
not been included.

 

13.5                         Gender and Number.  Except where otherwise
indicated by the context, any masculine term used herein also shall include the
feminine; the plural shall include the singular, and the singular shall include
the plural.

 

13.6                        Costs of the Plan.  All costs of implementing and
administering the Plan shall be borne by the Company.

 

13.7                        Successors.  All obligations of the Company under
the Plan shall be binding on any successor to the Company, whether the existence
of such successor is the result of a direct or indirect purchase, merger,
consolidation, or otherwise, of all or substantially all of the business and/or
assets of the Company.

 

13.8                        Applicable Law.  Except to the extent preempted by
applicable Federal law, the Plan shall be governed by and construed in
accordance with the laws of the state of Delaware.

 

13.9                        No Duplication.  In no event shall the benefit
provided under the Plan duplicate any benefits accrued and/or payable under the
Fluor Corporation Deferred Directors’ Fees Program (frozen effective
December 31, 2004).

 

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