Exhibit 10.15



 



Exhibit 10.15


2003 EXECUTIVE PERFORMANCE
INCENTIVE PLAN

(Amended and Restated as of March 30, 2005)



SECTION 1. Purpose of Plan


The purpose of this “Fluor Corporation 2003 Executive Performance Incentive
Plan” (the “Plan”) of Fluor Corporation, a Delaware corporation, is to enable
the Company, as defined in Section 2.2(a)(ii) hereof, to attract, retain and
motivate its officers, management and other key personnel, and to further align
the interests of such persons with those of the shareholders of the Company, by
providing for or increasing their proprietary interest in the Company.


SECTION 2. Administration of the Plan


2.1 Composition of Committee. The Plan shall be administered by the
Organization and Compensation Committee of the Board of Directors, and/or by
the Board of Directors or another committee of the Board of Directors of the
Company, as appointed from time to time by the Board of Directors (any such
administrative body, the “Committee”). The Board of Directors shall fill
vacancies on, and from time to time may remove or add members to, the
Committee. The Committee shall act pursuant to a majority vote or unanimous
written consent. If an award granted under the Plan (an “Award”) is intended
to satisfy the conditions of Section 162(m)(4)(C) of the Internal Revenue Code
of 1986, as amended (the “Code”), then each of the Committee members approving
such grant shall be an “outside director” as described in the Treasury
regulations under Section 162(m). Notwithstanding the foregoing, with respect
to any Award that is not intended to satisfy the conditions of Rule 16b-3 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or Code
Section 162(m)(4)(C), the Committee may appoint one or more separate committees
(any such committee, a “Subcommittee”) composed of one or more directors of the
Company (who may but need not be members of the Committee) and may delegate to
any such Subcommittee(s) the authority to grant Awards, as defined in Section
5.1 hereof, under the Plan to Employees, to determine all terms of such Awards,
and/or to administer the Plan or any aspect of it. Any action by any such
Subcommittee within the scope of such delegation shall be deemed for all
purposes to have been taken by the Committee. The Committee may designate the
Secretary of the Company or other Company employees to assist the Committee in
the administration of the Plan, and may grant authority to such persons to
execute agreements evidencing Awards made under this Plan or other documents
entered into under this Plan on behalf of the Committee or the Company.


2.2 Powers of the Committee. Subject to the express provisions of this Plan,
the Committee shall be authorized and empowered to do all things necessary or
desirable in connection with the administration of this Plan with respect to
the Awards over which such Committee has authority, including, without
limitation, the following:



	 	 	(a) to prescribe, amend and rescind rules and regulations relating to
this Plan and to define terms not otherwise defined herein; provided
that, unless the Committee shall specify otherwise, for purposes of this
Plan: (i) the term “fair market value” shall mean, as of any date, the
average of the highest price and the lowest price per share at which the
Shares (as defined in Section 3.1 hereof) are sold in the regular way on
the New York Stock Exchange or, if no Shares are traded on the New York
Stock Exchange on



 






 





	 	 	the date in question, then for the next preceding date for which Shares
are traded on the New York Stock Exchange; and (ii) the term “Company”
shall mean Fluor Corporation and its subsidiaries and affiliates, unless
the context otherwise requires.
	 
	 	 	(b) to determine which persons are Eligible Employees (as defined in
Section 4 hereof), to which of such Eligible Employees, if any, Awards
shall be granted hereunder, to make Awards under the Plan and to
determine the terms of such Awards and the timing of any such Awards;
	 
	 	 	(c) to determine the number of Shares subject to Awards and the exercise
or purchase price of such Shares;
	 
	 	 	(d) to establish and verify the extent of satisfaction of any
performance goals applicable to Awards;
	 
	 	 	(e) to prescribe and amend the terms of the agreements or other
documents evidencing Awards made under this Plan (which need not be
identical);
	 
	 	 	(f) to determine whether, and the extent to which, adjustments are
required pursuant to Section 11 hereof;
	 
	 	 	(g) to interpret and construe this Plan, any rules and regulations under
the Plan and the terms and conditions of any Award granted hereunder, and
to make exceptions to any such provisions in good faith and for the
benefit of the Company; and
	 
	 	 	(h) to make all other determinations deemed necessary or advisable for
the administration of the Plan.



2.3 Determinations of the
Committee. All decisions, determinations and
interpretations by the Committee or the Board regarding the Plan shall be final
and binding on all Eligible Employees and Participants, as defined in Section 4
hereof. The Committee or the Board, as applicable, shall consider such factors
as it deems relevant, in its sole and absolute discretion, to making such
decisions, determinations and interpretations including, without limitation,
the recommendations or advice of any officer of the Company or Eligible
Employee and such attorneys, consultants and accountants as it may select.


SECTION 3. Stock Subject to Plan


3.1 Aggregate Limits. Subject to adjustment as provided in Section 11, at any
time, the aggregate number of shares of the Company’s common stock, $0.01 par
value (“Shares”), issued pursuant to all Awards (including all ISOs (as defined
in Section 5.1 hereof)) granted under this Plan shall not exceed 4,900,000,
plus the number of Shares subject to awards outstanding as of February 5, 2003
under the Company’s 2000 Executive Performance Incentive Plan or the Company’s
2001 Key Employee Performance Incentive Plan but which are not thereafter
issued upon exercise or settlement of such awards or are returned or delivered
to the Company under such plans; provided that the total number of Shares that
may be issued under this Plan shall be reduced by an additional three-quarters
(3/4) of a Share for each Share issued upon settlement of an Award granted
under the Plan other than a Stock Option. The Shares subject to the Plan may


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be either Shares reacquired by the Company, including Shares purchased in the
open market, or authorized but unissued Shares.


3.2 Code Section 162(m) Limits. The aggregate number of Shares subject to
Options granted under this Plan during any calendar year to any one Eligible
Employee shall not exceed 750,000. The aggregate number of Shares issued,
issuable or underlying any Restricted Stock Awards, Incentive Awards
denominated in shares or Stock Unit Awards (other than Stock Units issued or
issuable upon exercise of Options) granted under this Plan during any calendar
year to any one Eligible Employee shall not exceed 250,000. Notwithstanding
anything to the contrary in the Plan, the foregoing limitations shall be
subject to adjustment under Section 11 only to the extent that such adjustment
will not affect the status of any Award intended to qualify as “performance
based compensation” under Code Section 162(m).


3.3 Issuance of Shares. For purposes of Section 3.1, the aggregate number of
Shares issued under this Plan at any time shall equal only the number of Shares
actually issued upon exercise or settlement of an Award and not returned to the
Company upon cancellation, expiration or forfeiture of an Award or delivered
(either actually or by attestation) in payment or satisfaction of the purchase
price, exercise price or tax obligation of an Award.


SECTION 4. Persons Eligible Under Plan


Any person who is (i) an employee of the Company and who also is an officer,
key employee or member of the Executive Management Team (“EMT”), (ii) a
prospective employee of the Company who is to be an officer, key employee or
member of the EMT, (iii) a consultant to the Company, or (iv) an advisor of the
Company (each, an “Eligible Employee”) shall be eligible to be considered for
the grant of Awards hereunder. For purposes of this Plan, the Chairman of the
Board’s status as an Employee shall be determined by the Board. For purposes
of the administration of Awards, the term “Eligible Employee” shall also
include a former Eligible Employee or any person (including any estate) who is
a beneficiary of a former Eligible Employee. A “Participant” is any Eligible
Employee to whom an Award has been made and any person (including any estate)
to whom an Award has been assigned or transferred pursuant to Section 10.1.


SECTION 5. Plan Awards


5.1 Award Types. The Committee, on behalf of the Company, is authorized under
this Plan to enter into certain types of arrangements with Eligible Employees
and to confer certain benefits on them. The following such arrangements or
benefits are authorized under the Plan if their terms and conditions are not
inconsistent with the provisions of the Plan: Stock Options, Restricted Stock,
Incentive Awards and Stock Units. Such arrangements and benefits are sometimes
referred to herein as “Awards.” The authorized types of arrangements and
benefits for which Awards may be granted are defined as follows:



	 	 	Stock Option Awards: A Stock Option is a right granted under Section 6 to
purchase a number of Shares at such exercise price, at such times, and on
such other terms and conditions as are specified in or determined
pursuant to the document(s) evidencing the Award (the “Option
Agreement”). Options intended to qualify as Incentive Stock



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	 	 	Options (“ISOs”) pursuant to Code Section 422 and Options that are not
intended to qualify as ISOs (“Non-qualified Options”) may be granted
under Section 6 as the Committee in its sole discretion shall determine.
	 
	 	 	Restricted Stock Awards: Restricted Stock is an award of Shares made
under Section 7, the grant, issuance, retention and/or vesting of which
is subject to such performance and other conditions as are expressed in
the document(s) evidencing the Award (the “Restricted Stock Agreement”).
	 
	 	 	Incentive Awards: An Incentive Award is a bonus opportunity awarded under
Section 8 pursuant to which a Participant may become entitled to receive
an amount (which may be payable in cash, Shares or other property) based
on satisfaction of such performance criteria as are specified in the
document(s) evidencing the Award (the “Incentive Bonus Agreement”).
	 
	 	 	Stock Unit Awards: A Stock Unit Award is an award of a right to receive
the fair market value of one Share made under Section 9, the grant,
issuance, retention and/or vesting of which is subject to such
performance and other conditions as are expressed in the document(s)
evidencing the Award (the “Stock Unit Agreement”).




5.2 Grants of Awards. An Award may consist of one such arrangement or benefit
or two or more of them in tandem or in the alternative.


SECTION 6. Stock Option Awards


The Committee may grant an Option or provide for the grant of an Option, either
from time-to-time in the discretion of the Committee or automatically upon the
occurrence of specified events, including, without limitation, the achievement
of performance goals, the satisfaction of an event or condition within the
control of the recipient of the Award, within the control of others or not
within any person’s control.


6.1 Option Agreement. Each Option Agreement shall contain provisions
regarding (a) the number of Shares which may be issued upon exercise of the
Option, (b) the purchase price of the Shares and the means of payment for the
Shares, (c) the term of the Option, (d) such terms and conditions of
exercisability as may be determined from time to time by the Committee, (e)
restrictions on the transfer of the Option and forfeiture provisions, and (f)
such further terms and conditions, in each case not inconsistent with the Plan
as may be determined from time to time by the Committee. Option Agreements
evidencing ISOs shall contain such terms and conditions as may be necessary to
comply with the applicable provisions of Section 422 of the Code.


6.2 Option Price. The purchase price per Share of the Shares subject to each
Option granted under the Plan shall equal or exceed 100% of the fair market
value of such Stock on the date the Option is granted, except that (a) the
Committee may specifically provide that the exercise price of an Option may be
higher or lower in the case of an Option granted to employees of a company
acquired by the Company in assumption and substitution of options held by such
employees at the time such company is acquired, and (b) in the event an
Eligible Employee is required to pay or forego the receipt of any cash amount
in consideration of receipt of an Option, the exercise


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price plus such cash amount shall equal or exceed 100% of the fair market value
of such Stock on the date the Option is granted.


6.3 Option Term. The “term” of each Option granted under the Plan, including
any ISOs, shall not exceed ten (10) years from the date of its grant.


6.4 Option Vesting. Options granted under the Plan shall be exercisable at
such time and in such installments during the period prior to the expiration of
the Option’s Term as determined by the Committee in its sole discretion. The
Committee shall have the right to make the timing of the ability to exercise
any Option granted under the Plan subject to such performance requirements as
deemed appropriate by the Committee. At any time after the grant of an Option
the Committee may, in its sole discretion, reduce or eliminate any restrictions
surrounding any Participant’s right to exercise all or part of the Option,
except that no Option shall first become exercisable within one (1) year from
its date of grant, other than upon death, disability, retirement, a Change of
Control (as defined in Section 12.2 hereof) or upon satisfaction of such
performance requirements as deemed appropriate by the Committee.


6.5 Option Exercise.



	 	 	(a) Partial Exercise. An exercisable Option may be exercised in whole or
in part. However, an Option shall not be exercisable with respect to
fractional Shares and the Committee may require, by the terms of the
Option Agreement, a partial exercise to include a minimum number of
Shares.
	 
	 	 	(b) Manner of Exercise. All or a portion of an exercisable Option shall
be deemed exercised upon delivery to the representative of the Company
designated for such purpose by the Committee all of the following: (i)
notice of exercise in such form as the Committee authorizes specifying
the number of Shares to be purchased by the Participant, (ii) payment or
provision for payment of the exercise price for such number of Shares,
(iii) such representations and documents as the Committee, in its sole
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any
other federal, state or foreign securities laws or regulations, (iv) in
the event that the Option shall be exercised pursuant to Section 10.1 by
any person or persons other than the Eligible Employee, appropriate proof
of the right of such person or persons to exercise the Option, and (v)
such representations and documents as the Committee, in its sole
discretion, deems necessary or advisable to provide for the tax
withholding pursuant to Section 13. Unless provided otherwise by the
Committee, no Participant shall have any right as a shareholder with
respect to any Shares purchased pursuant to any Option until the
registration of Shares in the name of such person, and no adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which
the record date is prior to the date such Shares are so registered.
	 
	 	 	(c) Payment of Exercise Price. To the extent authorized by the
Committee, the exercise price of an Option may be paid in the form of one
of more of the following, either through the terms of the Option
Agreement or at the time of exercise of an Option: (i) cash or certified
or cashiers’ check, (ii) shares of capital stock of the Company that



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	 	 	have been held by the Participant for such period of time as the
Committee may specify, (iii) other property deemed acceptable by the
Committee, (iv) a reduction in the number of Shares or other property
otherwise issuable pursuant to such Option or (v) any
combination of (i) through (iv).



SECTION 7. Restricted Stock Awards


Restricted Stock consists of an award of Shares, the grant, issuance, retention
and/or vesting of which shall be subject to such performance conditions and to
such further terms and conditions as the Committee deems appropriate.


7.1 Restricted Stock Award. Each Restricted Stock Award shall reflect, to the
extent applicable (a) the number of Shares subject to such Award or a formula
for determining such, (b) the time or times at which Shares shall be granted or
issued and/or become retainable or vested, and the conditions or restrictions
on such Shares, (c) the performance criteria and level of achievement versus
these criteria which shall determine the number of Shares granted, issued,
retainable and/or vested, (d) the period as to which performance shall be
measured for determining achievement of performance, (e) forfeiture provisions,
and (f) such further terms and conditions, in each case not inconsistent with
the Plan as may be determined from time to time by the Committee.


7.2 Restrictions and Performance Criteria. The grant, issuance, retention
and/or vesting of each Restricted Stock Award may be subject to such
performance criteria and level of achievement versus these criteria as the
Committee shall determine, which criteria may be based on financial
performance, personal performance evaluations and/or completion of service by
the Participant; provided, however, that no Restricted Stock Award shall fully
vest within three years from its date of grant, other than (a) upon death,
disability, retirement, a Change of Control (as defined in Section 12.2 hereof)
or (b) upon satisfaction of such performance requirements as deemed appropriate
by the Committee, and provided further that no portion of a Restricted
Stock Award shall vest
based upon the satisfaction of performance requirements within one year from its date of grant. Notwithstanding anything to the
contrary herein, the performance criteria for any Restricted Stock Award that
is intended by the Committee to satisfy the requirements for “performance-based
compensation” under Code Section 162(m) shall be a measure based on one or more
Qualifying Performance Criteria (as defined in Section 10.2 hereof) selected by
the Committee.


7.3 Timing and Form of Award. The Committee shall determine the timing of
award of any Restricted Stock Award. The Committee may provide for or, subject
to such terms and conditions as the Committee may specify, may permit a
Participant to elect for the award or vesting of any Restricted Stock to be
deferred to a specified date or event. The Committee may provide for a
Participant to have the option for his or her Restricted Stock, or such portion
thereof as the Committee may specify, to be granted in whole or in part in
Stock Units.


7.4 Discretionary Adjustments. Notwithstanding satisfaction of any completion
of service or performance goals, the number of Shares granted, issued,
retainable and/or vested under a Restricted Stock Award on account of either
financial performance or personal performance


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evaluations may be reduced by the Committee on the basis of such further
considerations as the Committee in its sole discretion shall determine.


SECTION 8. Incentive Awards


Each Incentive Award will confer upon the Eligible Employee the opportunity to
earn a future payment tied to the level of achievement with respect to one or
more performance criteria established for a performance period of not less than
one year.


8.1 Incentive Award. Each Incentive Award shall contain provisions regarding
(a) the target and maximum amount payable to the Participant as an Incentive
Award, (b) the performance criteria and level of achievement versus these
criteria which shall determine the amount of such payment, (c) the period as to
which performance shall be measured for establishing the amount of any payment,
(d) the timing of any payment earned by virtue of performance, (e) restrictions
on the alienation or transfer of the Incentive Award prior to actual payment,
(f) forfeiture provisions, and (g) such further terms and conditions, in each
case not inconsistent with the Plan as may be determined from time to time by
the Committee. In establishing the provisions of Incentive Awards, the
Committee may refer to categories of such Awards as parts of “Programs” or
“Plans”, which names will not affect the applicability of this Plan. The
maximum amount payable as an Incentive Award that is settled for cash may be a
multiple of the target amount payable, but the maximum amount payable pursuant
to that portion of an Incentive Award granted under this Plan for any fiscal
year to any Participant that is intended to satisfy the requirements for
“performance based compensation” under Code Section 162(m) shall not exceed
Five Million Dollars ($5,000,000).


8.2 Performance Criteria. The Committee shall establish the performance
criteria and level of achievement versus these criteria which shall determine
the target and the minimum and maximum amount payable under an Incentive Award,
which criteria may be based on financial performance and/or personal
performance evaluations. The Committee may specify the percentage of the
target Incentive Award that is intended to satisfy the requirements for
“performance-based compensation” under Code Section 162(m). Notwithstanding
anything to the contrary herein, the performance criteria for any portion of an
Incentive Award that is intended by the Committee to satisfy the requirements
for “performance-based compensation” under Code Section 162(m) shall be a
measure based on one or more Qualifying Performance Criteria (as defined in
Section 10.2 hereof) selected by the Committee and specified at the time
required under Code Section 162(m).


8.3 Timing and Form of Payment. The Committee shall determine the timing of
payment of any Incentive Award. The Committee may provide for or, subject to
such terms and conditions as the Committee may specify, may permit a
Participant to elect for the payment of any Incentive Award to be deferred to a
specified date or event. The Committee may specify the form of payment of
Incentive Awards, which may be cash, shares or other property, or may provide
for a Participant to have the option for his or her Incentive Award, or such
portion thereof as the Committee may specify, to be paid in whole or in part in
Shares or Stock Units.


8.4 Discretionary Adjustments. Notwithstanding satisfaction of any
performance goals, the amount paid under an Incentive Award on account of
either financial performance or personal


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performance evaluations may be reduced by the Committee on the basis of such
further considerations as the Committee in its sole discretion shall determine.


SECTION 9. Stock Units


9.1 Stock Units. A “Stock Unit” is a bookkeeping entry representing an amount
equivalent to the fair market value of one Share, also sometimes referred to as
a “restricted unit” or “shadow stock”. Stock Units represent an unfunded and
unsecured obligation of the Company, except as otherwise provided for by the
Committee.


9.2 Stock Unit Awards. Each Stock Unit Award shall reflect, to the extent
applicable (a) the number of Stock Units subject to such Award or a formula for
determining such, (b) the time or times at which Stock Units shall be granted
or issued and/or become retainable or vested, and the conditions or
restrictions on such Stock Units, (c) the performance criteria and level of
achievement versus these criteria which shall determine the number of Stock
Units granted, issued, retainable and/or vested, (d) the period as to which
performance shall be measured for determining achievement of performance, (e)
forfeiture provisions, and (f) such further terms and conditions, in each case
not inconsistent with the Plan as may be determined from time to time by the
Committee. Stock Units may also be issued upon exercise of Options, may be
granted in payment and satisfaction of Incentive Awards and may be issued in
lieu of Restricted Stock or any other Award that the Committee elects to be
paid in the form of Stock Units.


9.3 Performance Criteria. The grant, issuance, retention and or vesting of
each Stock Unit may be subject to such performance criteria and level of
achievement versus these criteria as the Committee shall determine, which
criteria may be based on financial performance, personal performance
evaluations and/or completion of service by the Participant; provided, however,
that no Stock Unit shall first vest within one (1) year from its date of grant,
other than upon death, disability, retirement, a Change of Control (as defined
in Section 12.2 hereof) or upon satisfaction of such performance requirements
as deemed appropriate by the Committee. Notwithstanding anything to the
contrary herein, the performance criteria for any Stock Unit that is intended
by the Committee to satisfy the requirements for “performance-based
compensation” under Code Section 162(m) shall be a measure based on one or more
Qualifying Performance Criteria (as defined in Section 10.2 hereof) selected by
the Committee and specified at the time the Stock Unit is granted.


9.4 Timing and Form of Award. The Committee shall determine the timing of
award of any Stock Unit. The Committee may provide for or, subject to such
terms and conditions as the Committee may specify, may permit a Participant to
elect for the award or vesting of any Stock Unit to be deferred to a specified
date or event. The Committee may provide for a Participant to have the option
for his or her Stock Unit, or such portion thereof as the Committee may
specify, to be granted in whole or in part in Shares.


9.5 Settlement of Stock Units. The Committee may provide for Stock Units to
be settled in cash or Shares (at the election of the Company or the
Participant, as specified by the Committee) and to be made at such other times
as it determines appropriate or as it permits a Participant to choose. The
amount of cash or Shares, or other settlement medium, to be so distributed may
be increased by an interest factor or by dividend equivalents, as the case may
be, which may be


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valued as if reinvested in Shares. Until a Stock Unit is settled, the number
of Shares represented by a Stock Unit shall be subject to adjustment pursuant
to Section 11.


9.6 Discretionary Adjustments. Notwithstanding satisfaction of any completion
of service or performance goals, the number of Stock Units granted, issued,
retainable and/or vested under a Stock Unit Award on account of either
financial performance or personal performance evaluations may be reduced by the
Committee on the basis of such further considerations as the Committee in its
sole discretion shall determine.


SECTION 10. Other Provisions Applicable to Awards


10.1 Transferability. During an Eligible Employee’s lifetime, Options may be
exercised only by the Participant. Unless the agreement evidencing an Award
(or an amendment thereto authorized by the Committee) expressly states that it
is transferable as provided hereunder, no Award granted under the Plan, nor any
interest in such Award, may be sold, assigned, conveyed, gifted, pledged,
hypothecated or otherwise transferred in any manner, other than by will or the
laws of descent and distribution, prior to the vesting or lapse of any and all
restrictions applicable to any Shares issued under an Award. The Committee may
in its sole discretion grant an Award or amend an outstanding Award to provide
that the Award is transferable or assignable to a member or members of the
Eligible Employee’s “immediate family”, as such term is defined under Exchange
Act Rule 16a-1(e), or to a trust for the benefit solely of a member or members
of the Eligible Employee’s immediate family, or to a partnership or other
entity whose only owners are members of the Eligible Employee’s family,
provided that following any such transfer or assignment the Award will remain
subject to substantially the same terms applicable to the Award while held by
the Eligible Employee, as modified as the Committee in its sole discretion
shall determine appropriate, and the Participant shall execute an agreement
agreeing to be bound by such terms.


10.2 Qualifying Performance Criteria. For purposes of this Plan, the term
“Qualifying Performance Criteria” shall mean any one or more of the following
performance criteria, either individually, alternatively or in any combination,
applied to either the Company as a whole or to a business unit, subsidiary or
business segment, either individually, alternatively or in any combination, and
measured either annually or cumulatively over a period of years, on an absolute
basis or relative to a pre-established target, to previous years’ results or to
a designated comparison group, in each case as specified by the Committee in
the Award: (a) cash flow; (b) earnings (including gross margin, earnings
before interest and taxes (“EBIT”), earnings before taxes (“EBT”), and net
earnings); (c) earnings per share; (d) growth in earnings or earnings per
share; (e) stock price; (f) return on equity or average stockholders’ equity;
(g) total stockholder return; (h) return on capital; (i) return on assets or
net assets; (j) return on investment; (k) revenue; (l) income or net income;
(m) operating income or net operating income; (n) operating profit or net
operating profit; (o) operating margin; (p) return on operating revenue; (q)
market share; (r) contract awards or backlog; (s) overhead or other expense
reduction; (t) growth in stockholder value relative to the two-year moving
average of the S&P 500 Index; (u) growth in stockholder value relative to the
two-year moving average of the Dow Jones Heavy Construction Index; (v) credit
rating; (w) strategic plan development and implementation; (x) succession plan
development and implementation; (y) retention of executive talent; (z)
improvement in workforce diversity; (aa) return on average stockholders’ equity


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relative to the Ten Year Treasury Yield (as hereinafter defined); (bb)
improvement in safety records; (cc) capital resource management plan
development and implementation; (dd) improved internal financial controls plan
development and implementation; (ee) corporate tax savings; (ff) corporate cost
of capital reduction; (gg) investor relations program development and
implementation; (hh) corporate relations program development and
implementation; (ii) executive performance plan development and implementation;
and (jj) tax provision rate for financial statement purposes. The Committee
may appropriately adjust any evaluation of performance under a Qualifying
Performance Criteria to exclude any of the following events that occurs during
a performance period: (i) asset write-downs; (ii) litigation or claim
judgments or settlements; (iii) the effect of changes in tax law, accounting
principles or other such laws or provisions affecting reported results; (iv)
accruals for reorganization and restructuring programs; and (v) any
extraordinary non-recurring items as described in Accounting Principles Board
Opinion No. 30 and/or in management’s discussion and analysis of financial
condition and results of operations appearing in the Company’s annual report to
stockholders for the applicable year. The term “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. Prior to
the payment of any compensation under an Award intended to qualify as
“performance-based compensation” under Code Section 162(m) the Committee shall
certify the extent to which any Qualifying Performance Criteria and any other
material terms under such Award have been satisfied (other than in cases where
such relate solely to the increase in the value of the Company’s Common Stock).


10.3 Dividends. Unless otherwise provided by the Committee, no adjustment
shall be made in Shares issuable under Awards on account of cash dividends
which may be paid or other rights which may be issued to the holders of Shares
prior to their issuance under any Award. The Committee shall specify whether
dividends or dividend equivalent amounts shall be paid to any Participant with
respect to the Shares subject to any Award that have not vested or been issued
or that are subject to any restrictions or conditions on the record date for
dividends.


10.4 Agreements Evidencing Awards. The Committee shall, subject to applicable
law, determine the date an Award is deemed to be granted, which for purposes of
this Plan shall not be affected by the fact that an Award is contingent on
subsequent stockholder approval of the Plan. The Committee or, except to the
extent prohibited under applicable law, its delegate(s) may establish the terms
of agreements evidencing Awards under this Plan and may, but need not, require
as a condition to any such agreement’s effectiveness that such agreement be
executed by the Participant and that such Participant agree to such further
terms and conditions as specified in such agreement. The grant of an Award
under this Plan shall not confer any rights upon the Participant holding such
Award other than such terms, and subject to such conditions, as are specified
in this Plan as being applicable to such type of Award (or to all Awards) or as
are expressly set forth in the Agreement evidencing such Award.


10.5 Tandem Stock or Cash Rights. Either at the time an Award is granted or
by subsequent action, the Committee may, but need not, provide that an Award
shall contain as a term thereof, a right, either in tandem with the other
rights under the Award or as an alternative thereto, of the Participant to
receive, without payment to the Company, a number of Shares, cash or a
combination thereof, the amount of which is determined by reference to the
value of the Award;


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provided, however, that the number of such rights granted under any Award shall
not exceed the per Eligible Employee share limitation for such Award as set
forth in Section 3.2.



SECTION 11. Changes in Capital Structure


If the outstanding securities of the class then subject to this Plan are
increased, decreased or exchanged for or converted into cash, property or a
different number or kind of shares or securities, or if cash, property or
shares or securities are distributed in respect of such outstanding securities,
in either case as a result of a reorganization, merger, consolidation,
recapitalization, restructuring, reclassification, dividend (other than a
regular, quarterly cash dividend) or other distribution, stock split, reverse
stock split, spin-off or the like, or if substantially all of the property and
assets of the Company are sold, then, unless the terms of such transaction
shall provide otherwise, the Committee may make appropriate and proportionate
adjustments in (i) the number and type of shares or other securities or cash or
other property that may be acquired pursuant to Awards theretofore granted
under this Plan and the exercise or settlement price of such Awards, provided,
however, that any such adjustment shall be made in such a manner that will not
affect the status of any Award intended to qualify as an ISO under Code Section
422 or as “performance based compensation” under Code Section 162(m), and (ii)
the maximum number and type of shares or other securities that may be issued
pursuant to such Awards thereafter granted under this Plan.


SECTION 12. Change of Control


12.1 Effect of Change of Control. The Committee may through the terms of the
Award or otherwise provide that any or all of the following shall occur, either
immediately upon the Change of Control or a Change of Control Transaction, or
upon termination of the Eligible Employee’s employment within twenty-four (24)
months following a Change of Control or a Change of Control Transaction: (a)
in the case of an Option, the Participant’s ability to exercise any portion of
the Option not previously exercisable; (b) in the case of an Incentive Award,
the right to receive a payment equal to the target amount payable or, if
greater, a payment based on performance through a date determined by the
Committee prior to the Change of Control; and (c) in the case of Shares issued
in payment of any Incentive Award, and/or in the case of Restricted Stock or
Stock Units, the lapse and expiration of any conditions to the grant, issuance,
retention, vesting or transferability of, or any other restrictions applicable
to, such Award. The Committee also may, through the terms of the Award or
otherwise, provide for an absolute or conditional exercise, payment or lapse of
conditions or restrictions on an Award which shall only be effective if, upon
the announcement of a Change of Control Transaction, no provision is made in
such Change of Control Transaction for the exercise, payment or lapse of
conditions or restrictions on the Award, or other procedure whereby the
Participant may realize the full benefit of the Award.


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12.2 Definitions. Unless the Committee or the Board shall provide otherwise,
“Change of Control” shall mean an occurrence of any of the following events:
(a) a third person, including a “group” as defined in Section 13(d)(3) of the
Exchange Act, 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; (b) 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; or (c) such other events as the Committee or the
Board from time to time may specify. “Change of Control Transaction” shall
include any tender offer, offer, exchange offer, solicitation, merger,
consolidation, reorganization or other transaction that is intended to or
reasonably expected to result in a Change of Control.


SECTION 13. Taxes


13.1 Withholding Requirements. The Committee may make such provisions or
impose such conditions as it may deem appropriate for the withholding or
payment by the Employee or Participant, as appropriate, of any taxes which it
determines are required in connection with any Awards granted under this Plan,
and a Participant’s rights in any Award are subject to satisfaction of such
conditions.


13.2 Payment of Withholding Taxes. Notwithstanding the terms of Section 13.1
hereof, the Committee may provide in the agreement evidencing an Award or
otherwise that all or any portion of the taxes required to be withheld by the
Company or, if permitted by the Committee, desired to be paid by the
Participant, in connection with the exercise of a Non-qualified Option or the
exercise, vesting, settlement or transfer of any other Award shall be paid or,
at the election of the Participant, may be paid by the Company withholding
shares of the Company’s capital stock otherwise issuable or subject to such
Award, or by the Participant delivering previously owned shares of the
Company’s capital stock, in each case having a fair market value equal to the
amount required or elected to be withheld or paid. Any such elections are
subject to such conditions or procedures as may be established by the Committee
and may be subject to disapproval by the Committee.


SECTION 14. Amendments or Termination


The Board may amend, alter or discontinue the Plan or any agreement evidencing
an Award made under the Plan, but any such amendment shall be subject to
approval of the shareholders of the Company to the extent required by law or by
any applicable listing standard of the New York Stock Exchange or other
securities exchange or stock market where the Company has listed the Shares.
In addition, unless approved by a majority of the shareholders of the Company
present in person or by proxy and actually voting, no such amendment shall be
made that would:



	 	(a)	 	materially increase the maximum number of Shares for which
Awards may be granted under the Plan, other than an increase
pursuant to Section 11 (“Changes in Capital Structure”);
	 
	 	(b)	 	reduce the price at which Options may be granted, as
described in Section 6.2;



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	 	(c)	 	reduce the exercise price of outstanding Options;
	 
	 	(d)	 	extend the term of the Plan; or
	 
	 	(e)	 	change the class of persons eligible to be Participants.



After the date of a Change of Control, no amendment to the Plan or any
agreement evidencing an Award made under the Plan shall be effected that
impairs the rights of any Award holder, without such holder’s consent, under
any Award granted prior to the date of any Change of Control.


SECTION 15. Compliance With Other Laws and Regulations


The Plan, the grant and exercise of Awards thereunder, and the obligation of
the Company to sell, issue or deliver Shares under such Awards, shall be
subject to all applicable federal, state and foreign laws, rules and
regulations and to such approvals by any governmental or regulatory agency as
may be required. The Company shall not be required to register in a
Participant’s name or deliver any Shares prior to the completion of any
registration or qualification of such Shares under any federal, state or
foreign law or any ruling or regulation of any government body which the
Committee shall, in its sole discretion, determine to be necessary or
advisable. This Plan is intended to constitute an unfunded arrangement for a
select group of management or other key employees.


No Option shall be exercisable unless a registration statement with respect to
the Option is effective or the Company has determined that such registration is
unnecessary. Unless the Awards and Shares covered by this Plan have been
registered under the Securities Act of 1933, as amended, or the Company has
determined that such registration is unnecessary, each person receiving an
Award and/or Shares pursuant to any Award may be required by the Company to
give a representation in writing that such person is acquiring such Shares for
his or her own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof.


SECTION 16. Option Grants by Subsidiaries


In the case of a grant of an Option to any Eligible Employee employed by a
subsidiary or affiliate, such grant may, if the Committee so directs, be
implemented by the Company issuing any subject Shares to the subsidiary or
affiliate, for such lawful consideration as the Committee may determine, upon
the condition or understanding that the subsidiary or affiliate will transfer
the Shares to the optionholder in accordance with the terms of the Option
specified by the Committee pursuant to the provisions of the Plan.
Notwithstanding any other provision hereof, such Option may be issued by and in
the name of the subsidiary or affiliate and shall be deemed granted on such
date as the Committee shall determine.


SECTION 17. No Right to Company Employment


Nothing in this Plan or as a result of any Award granted pursuant to this Plan
shall confer on any individual any right to continue in the employ of the
Company or interfere in any way with the right of the Company to terminate an
individual’s employment at any time. The Award


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agreements may contain such provisions as the Committee may approve with
reference to the effect of approved leaves of absence.


SECTION 18. Effectiveness and Expiration of Plan


The Plan shall be effective on the date the Board adopts the Plan. No Stock
Option Award, Restricted Stock Award or Incentive Award shall be granted
pursuant to the Plan more than ten (10) years after the effective date of the
Plan.


SECTION 19. Non-Exclusivity of the Plan


Neither the adoption of the Plan by the Board nor the submission of the Plan to
the shareholders of the Company for approval shall be construed as creating any
limitations on the power of the Board or the Committee to adopt such other
incentive arrangements as it or they may deem desirable, including without
limitation, the granting of restricted stock or stock options otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.


SECTION 20. Governing Law


This Plan and any agreements hereunder shall be interpreted and construed in
accordance with the laws of the State of Delaware and applicable federal law.
The Committee may provide that any dispute as to any Award shall be presented
and determined in such forum as the Committee may specify, including through
binding arbitration. Any reference in this Plan or in the agreement evidencing
any Award to a provision of law or to a rule or regulation shall be deemed to
include any successor law, rule or regulation of similar effect or
applicability.



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