Exhibit 10.40

 

FORM OF NON-U.S. STOCK GROWTH INCENTIVE AWARD AGREEMENT

 

This Non-U.S. Stock Growth Incentive Award Agreement (this “Agreement”) entered
into as of [GRANT DATE] (the “Grant Date”)  by and between Fluor Corporation, a
Delaware corporation (the “Company”), and you (“Grantee” or “you”) evidences and
confirms the following Non-US Stock Growth Incentive Award (the “Award”) under
the Fluor Corporation 2008 Executive Performance Incentive Plan (the “Plan”). 
Capitalized terms used in this Agreement and not defined herein have the meaning
set forth in the Plan.

 

Section 1.                                          AWARD SUBJECT TO PLAN

 

Your Award is made subject to all of the terms and conditions of this Agreement
and the Plan, including any terms, rules or determinations made by the
Committee, pursuant to its administrative authority under the Plan and such
further terms as are set forth in the Plan that are applicable to awards
thereunder, including without limitation provisions on adjustment of awards,
non-transferability, satisfaction of tax requirements and compliance with other
laws.

 

Section 2.                                          TARGET VALUE OF AWARD AND
EARNOUT PERIOD

 

Your Award target amount is [$ AMOUNT OF AWARD], which becomes payable based on
quarterly stock performance over three (3) years at a rate of:

 

·                  One third of the total earned balance as calculated on
December 31, [GRANT YEAR] and paid in March [FOLLOWING YEAR];

 

·                  One half of the total remaining earned balance as calculated
on December 31, [FIRST ANNIVERSARY OF GRANT YEAR] and paid in March [FOLLOWING
YEAR]; and

 

·                  The total remaining earned balance as calculated on
December 31, [SECOND ANNIVERSARY OF GRANT YEAR] and paid in March [FOLLOWING
YEAR].

 

Quarterly stock performance will be measured based on the percentage increase or
decrease from the last New York Stock Exchange (“NYSE”) trading day of each
previous quarter to the last NYSE trading day of each current quarter applied to
the total remaining earned balance each quarter within each fiscal year of the
Award earnout period.  Each payment of the Award, if vested, shall be made as
soon as practicable after each vesting date, but in no event later than
March 15th.

 

Section 3.                                          CONTINUED EMPLOYMENT AND
AWARD PAYMENT

 

Payment of the Award is conditioned upon you remaining in the employment of the
Company or its subsidiaries through the payment dates. If your employment with
the Company or any of its subsidiaries terminates for any reason other than
death, Retirement, Disability or a Qualifying Termination within two (2) years
following a Change of Control of the Company as determined by the Committee in
accordance with the Plan, then as of the date of such termination this Award
shall expire as to any portion which has not then become vested and payable. If
prior to the Award becoming vested and payable in full pursuant to Section 2
above, your employment with the Company or any of its subsidiaries terminates by
reason of your death, Disability or a Qualifying Termination within two
(2) years following a Change of Control of the Company as determined by the
Committee in accordance with the Plan, then any remaining balance of this Award
which has yet to become vested and payable, calculated as of the last NYSE
trading day of the previous quarter, shall be paid to you as soon as practicable
after such termination.  However, if prior to the Award becoming vested and
payable in full pursuant to Section 2 above, you Retire from the Company and you
deliver a signed non-competition agreement to the Company in a form acceptable
to the Company, then any portion of this Award which has yet to become vested
and payable shall continue to vest and become payable as set forth in Section 2
above. However, under all circumstances, any Awards held less than one year from
the Grant Date will be forfeited regardless of the reason for termination. 
Nothing in the Plan or this Agreement confers any right of continuing employment
with the Company or its subsidiaries.

 

For purposes of this Agreement, “Retirement” and “Disability” mean,
respectively, retirement or your disability, all as determined in accordance
with applicable Company personnel policies and the Plan policies.

 

In connection with a Change in Control, the term “Qualifying Termination” means
your involuntary termination of employment by the Company without Cause or your
resignation for Good Reason.  For this purpose, “Cause” means your dishonesty,
fraud, willful misconduct, breach of fiduciary duty, conflict of interest,
commission of a felony, material failure or refusal to perform your job duties
in accordance with Company policies, a material violation of Company policy that
causes harm to the Company or its subsidiaries or other wrongful conduct of a
similar nature and degree; and “Good Reason” means a material diminution of your
compensation (including, without limitation, base compensation, annual bonus
opportunities, and/or equity incentive compensation opportunities), a material

 

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diminution of your authority, duties or responsibilities, a material diminution
in the authority, duties or responsibilities of the supervisor to whom you are
required to report or a material diminution of the budget over which you retain
authority.

 

Section 4.                                          CONFIDENTIALITY

 

This Award is conditioned upon Grantee not disclosing this Agreement or said
Award to anyone other than Grantee’s spouse or financial advisor or senior
management of the Company or senior members of the Company’s Law, Tax, Human
Resources, and Executive Compensation Services departments during the period
prior to the full payment of the Award. If disclosure is made by Grantee to any
other person not authorized by the Company, this Award shall be forfeited.

 

Section 5.                                          TAX WITHHOLDING

 

Regardless of any action the Company or the Grantee’s employer (the “Employer”)
takes with respect to any or all income tax, social insurance, payroll tax,
payment on account or other tax-related withholding (“Tax-Related Items”), the
Grantee acknowledges and agrees that the ultimate liability for all Tax-Related
Items legally due by the Grantee is and remains the Grantee’s responsibility and
that the Company and/or the Employer (i) make no representations nor
undertakings regarding the treatment of any Tax-Related Items in connection with
any aspect of this grant of an Award, including the grant and vesting of the
Award, subsequent delivery of the cash payment and/or (ii) do not commit to
structure the terms or any aspect of this grant of an Award to reduce or
eliminate the Grantee’s liability for Tax-Related Items. The Grantee shall pay
the Company or the Employer any amount of Tax-Related Items that the Company or
the Employer may be required to withhold as a result of the Grantee’s
participation in the Plan or the Grantee’s receipt of an Award that cannot be
satisfied by the means described below. Further, if the Grantee is subject to
tax in more than one jurisdiction, the Grantee acknowledges that the Company
and/or Employer (or former Employer, as applicable) may be required to withhold
or account for Tax-Related Items in more than one jurisdiction. The Company may
refuse to deliver the Award payment if the Grantee fails to comply with the
Grantee’s obligations in connection with the Tax-Related Items.

 

Prior to the taxable or tax withholding event, as applicable, the Grantee shall
pay, or make adequate arrangements satisfactory to the Company or to the
Employer (in their sole discretion) to satisfy all Tax-Related Items.  In this
regard, the Grantee authorizes the Company or Employer to withhold all
applicable Tax-Related Items legally payable by the Grantee by (1) withholding
from the Award payment in cash and/or (2) withholding from the Grantee’s wages
or other cash compensation paid by the Company and/or Employer.

 

Grantee acknowledges and understands that Grantee should consult a tax adviser
regarding Grantee’s tax obligations prior to such settlement or disposition.

 

Section 6.                                          SEVERABILITY

 

In the event that one or more of the provisions of this Agreement shall be
invalidated for any reason by a court of competent jurisdiction, any provision
so invalidated shall be deemed to be separable from the other provisions hereof,
and the remaining provisions hereof shall continue to be valid and fully
enforceable.

 

Section 7.                                          DATA PROTECTION

 

THE GRANTEE HEREBY EXPLICITLY AND UNAMBIGUOUSLY CONSENTS TO THE COLLECTION, USE
AND TRANSFER, IN ELECTRONIC OR OTHER FORM, OF THE GRANTEE’S PERSONAL DATA AS
DESCRIBED IN THIS DOCUMENT BY AND AMONG, AS APPLICABLE, THE EMPLOYER, AND THE
COMPANY AND ITS SUBSIDIARIES FOR THE EXCLUSIVE PURPOSE OF IMPLEMENTING,
ADMINISTERING AND MANAGING THE GRANTEE’S PARTICIPATION IN THE PLAN. THE GRANTEE
UNDERSTANDS THAT THE COMPANY, ITS SUBSIDIARIES AND THE EMPLOYER HOLD CERTAIN
PERSONAL INFORMATION ABOUT THE GRANTEE, INCLUDING, BUT NOT LIMITED TO, NAME,
HOME ADDRESS AND TELEPHONE NUMBER, DATE OF BIRTH, SOCIAL SECURITY OR INSURANCE
NUMBER OR OTHER IDENTIFICATION NUMBER, SALARY, NATIONALITY, JOB TITLE, ANY
SHARES OR DIRECTORSHIPS HELD IN THE COMPANY, DETAILS OF ALL OPTIONS OR ANY OTHER
ENTITLEMENT TO SHARES AWARDED, CANCELED, PURCHASED, EXERCISED, VESTED, UNVESTED
OR OUTSTANDING IN THE GRANTEE’S FAVOR FOR THE PURPOSE OF IMPLEMENTING, MANAGING
AND ADMINISTERING THE PLAN (“DATA”).  THE GRANTEE UNDERSTANDS THAT THE DATA
MAY BE TRANSFERRED TO ANY THIRD PARTIES ASSISTING IN THE IMPLEMENTATION,
ADMINISTRATION AND MANAGEMENT OF THE PLAN, THAT THESE RECIPIENTS MAY BE LOCATED
IN THE GRANTEE’S COUNTRY OR ELSEWHERE, INCLUDING OUTSIDE THE EUROPEAN ECONOMIC
AREA, AND THAT THE RECIPIENT COUNTRY MAY HAVE DIFFERENT DATA PRIVACY LAWS AND
PROTECTIONS THAN THE GRANTEE’S COUNTRY. THE GRANTEE UNDERSTANDS THAT HE/SHE
MAY REQUEST A LIST WITH THE NAMES AND ADDRESSES OF ANY POTENTIAL RECIPIENTS OF
THE DATA BY CONTACTING THE LOCAL HUMAN RESOURCES REPRESENTATIVE. THE GRANTEE
AUTHORIZES THE RECIPIENTS TO RECEIVE, POSSESS, USE, RETAIN AND TRANSFER THE
DATA, IN ELECTRONIC OR OTHER FORM, FOR THE

 

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PURPOSES OF IMPLEMENTING, ADMINISTERING AND MANAGING THE GRANTEE’S PARTICIPATION
IN THE PLAN, INCLUDING ANY REQUISITE TRANSFER OF SUCH DATA, AS MAY BE REQUIRED
TO A BROKER OR OTHER THIRD PARTY WITH WHOM THE GRANTEE MAY ELECT TO DEPOSIT
SHARES, IF ANY, ACQUIRED UNDER THE PLAN. THE GRANTEE UNDERSTANDS THAT DATA WILL
BE HELD ONLY AS LONG AS IS NECESSARY TO IMPLEMENT, ADMINISTER AND MANAGE
PARTICIPATION IN THE PLAN. THE GRANTEE UNDERSTANDS THAT HE/SHE MAY, AT ANY TIME,
VIEW DATA, REQUEST ADDITIONAL INFORMATION ABOUT THE STORAGE AND PROCESSING OF
THE DATA, REQUIRE ANY NECESSARY AMENDMENTS TO THE DATA OR REFUSE OR WITHDRAW THE
CONSENTS HEREIN, IN ANY CASE WITHOUT COST, BY CONTACTING THE LOCAL HUMAN
RESOURCES REPRESENTATIVE IN WRITING. THE GRANTEE UNDERSTANDS THAT REFUSING OR
WITHDRAWING CONSENT MAY AFFECT THE GRANTEE’S ABILITY TO PARTICIPATE IN THE PLAN.
FOR MORE INFORMATION ON THE CONSEQUENCES OF REFUSING TO CONSENT OR WITHDRAWING
CONSENT, THE GRANTEE UNDERSTANDS THAT HE/SHE MAY CONTACT THE STOCK PLAN
ADMINISTRATOR AT THE COMPANY.

 

Section 8.                                          ACKNOWLEDGMENT AND WAIVER

 

The Grantee acknowledges and agrees that:

 

(a)                                    the Plan is established voluntarily by
the Company, it is discretionary in nature and may be modified, amended,
suspended or terminated by the Company at any time unless otherwise provided in
the Plan or this Agreement;

 

(b)                                   the grant of Awards is voluntary and
occasional and does not create any contractual or other right to receive future
grants of Awards, or benefits in lieu of Awards, even if Awards have been
granted repeatedly in the past;

 

(c)                                    all decisions with respect to future
grants, if any, will be at the sole discretion of the Company;

 

(d)                                   the Grantee’s participation in the Plan
shall not create a right to further employment with Employer and shall not
interfere with the ability of Employer to terminate the Grantee’s employment
relationship and it is expressly agreed and understood that employment is
terminable at the will of either party, insofar as permitted by law;

 

(e)                                    the Grantee is participating voluntarily
in the Plan;

 

(f)                                      Awards and resulting benefits are an
extraordinary item that does not constitute compensation of any kind for
services of any kind rendered to the Company or the Employer, and are outside
the scope of the Grantee’s employment contract, if any;

 

(g)                                   Awards and resulting benefits are not part
of normal or expected compensation or salary for any purposes, including, but
not limited to calculating any severance, resignation, termination, redundancy,
end of service payments, bonuses, long-service awards, pension or retirement
benefits or similar payments insofar as permitted by law;

 

(h)                                   in the event that the Grantee is not an
employee of the Company, this grant of Awards will not be interpreted to form an
employment contract or relationship with the Company, and furthermore, this
grant of Awards will not be interpreted to form an employment contract with the
Employer or any subsidiary of the Company; and

 

(i)                                        in consideration of this grant of
Awards, no claim or entitlement to compensation or damages shall arise from
termination of this grant or diminution in value of this grant of Awards
resulting from termination of the Grantee’s employment by the Company or the
Employer (for any reason whatsoever) and the Grantee irrevocably releases the
Company and the Employer from any such claim that may arise; if, notwithstanding
the foregoing, any such claim is found by a court of competent jurisdiction to
have arisen, then, by accepting the terms of this Agreement, the Grantee shall
be deemed irrevocably to have waived any entitlement to pursue such claim.

 

Section 9.                                          GRANT-SPECIFIC TERMS

 

Appendix A contains additional terms in compliance with Section 409A of the US
Internal Revenue Code.

 

Section 10.                                   ENFORCEMENT

 

This Agreement shall be construed, administered and enforced in accordance with
the laws of the State of Delaware.

 

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Section 11.                                   EXECUTION OF AWARD AGREEMENT

 

Please acknowledge your acceptance of the terms of this Agreement by signing the
original of this Agreement and returning it to the Executive Compensation
Services department. If you have not signed this Agreement within two
(2) months, the Company is not obligated to provide you any benefit hereunder
and may refuse to issue any payments to you under this Agreement.  In addition,
by signing this Agreement, you acknowledge and agree that your prior Award
grants, if any, are amended to include the 409A provisions that are part of this
Agreement in Appendix A.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first hereinabove written.

 

 

FLUOR CORPORATION

 

 

 

 

 

by

 

 

 

 

 

 

David T. Seaton

 

 

Chief Executive Officer

 

 

 

 

 

 

Acknowledged and Agreed:

 

 

 

 

 

 

 

 

 

 

 

 

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APPENDIX A

 

Compliance with Section 409A of the Internal Revenue Code

 

(a)                                  It is intended that the provisions of this
Agreement comply with Section 409A of the U.S. Internal Revenue Code and with
the exclusion from Section 409A deferred compensation for so-called short-term
deferrals, and all provisions of this Agreement shall be construed and
interpreted in a manner consistent with the requirements for avoiding taxes and
penalties under Section 409A.

 

(b)                                 Neither Grantee nor any of Grantee’s
creditors or beneficiaries shall have the right to subject any deferred
compensation (within the meaning of Section 409A) payable under this Agreement
to any anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment.  Except as permitted under Section 409A,
any deferred compensation (within the meaning of Section 409A) payable to
Grantee or for Grantee’s benefit under this Agreement may not be reduced by, or
offset against, any amount owing by Grantee to the Company or any of its
subsidiaries.

 

(c)                                  If, at the time of Grantee’s separation
from service (within the meaning of Section 409A), (i) Grantee is a specified
employee (within the meaning of Section 409A and using the identification
methodology selected by the Company from time to time) and (ii) the Company
shall make a good faith determination that an amount payable hereunder
constitutes deferred compensation (within the meaning of Section 409A) the
payment of which is required to be delayed pursuant to the six-month delay
rule set forth in Section 409A in order to avoid taxes or penalties under
Section 409A, then the Company shall not pay such amount on the otherwise
scheduled payment date pursuant to Section 2 of this Agreement but shall instead
pay it, without interest, on the first business day after such six-month period
or, if earlier, upon the Grantee’s death.

 

(d)                                 Notwithstanding any provision of this
Agreement to the contrary, in light of the uncertainty with respect to the
proper application of Section 409A, the Company reserves the right to make
amendments to this Agreement as the Company deems necessary or desirable to
avoid the imposition of taxes or penalties under Section 409A.  In any case,
Grantee shall be solely responsible and liable for the satisfaction of all taxes
and penalties that may be imposed on Grantee or for Grantee’s account in
connection with this Agreement (including, without limitation, any taxes and
penalties under Section 409A), and neither the Company nor any of its
subsidiaries shall have any obligation to indemnify or otherwise hold Grantee
harmless from any or all of such taxes or penalties.

 

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