Exhibit 10.2


 


 


 


 


 


 


 


 


 


FLUOR 409A


EXCUTIVE DEFERRED COMPENSATION PROGRAM


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


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PREAMBLE


 


This Plan has been established to provide certain
eligible Executives with deferred compensation that complies with Code section
409A.  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.


 


ARTICLE I

THE PLAN


 


1.1.                              NAME.  This Plan shall be known as the “Fluor
Executive 409A Deferred Compensation Program”.


 


1.2                               PURPOSE.  This Plan is adopted for the purpose of
providing eligible Executives with a means to satisfy future financial needs
and also for the purpose of providing such Executives with retirement and other
benefits which, because of various contribution and benefit accrual
limitations, cannot be provided for them under the tax qualified retirement,
profit sharing and savings plans in which such Executive is a participant.  The Company intends that the Plan constitute
an unfunded “top hat” plan maintained for the purpose of providing deferred
compensation to a select group of management or highly compensated employees
under applicable provisions of ERISA. 
The Company also intends that the Plan comply with the applicable
provisions of Code section 409A.


 


1.3                                 PLAN ADMINISTRATION.  The Plan shall be administered by the
Committee in accordance with the following:


 


(a)                               The Committee,
on behalf of the Participants and their Beneficiaries, shall enforce the Plan
in accordance with its terms, shall be charged with the general administration
of the Plan, and shall have all powers necessary to accomplish its purposes,
including, but not by way of limitation, the following:


 


(i)                                     To determine
all questions relating to the eligibility of employees to participate;


 


(ii)                                  To construe and
interpret the terms and provisions of this Plan;


 


(iii)                               To compute and
certify to the amount and kind of benefits payable to Participants or their
Beneficiaries;


 


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


 


(v)                                    To provide for
the disclosure of all information and the filing or provision of all reports
and statements to Participants, Beneficiaries or governmental agencies as the
Committee may determine or as shall be required by law;


 


(vi)                                 To make and
publish such rules for the regulation of the Plan and procedures for the
administration of the Plan as are not inconsistent with the terms hereof; and


 


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(vii)                         To appoint a Plan
administrator or any other agent, and to delegate to such person such powers
and duties in connection with the administration of the Plan as the Committee
may from time to time prescribe.


 


(b)                                 The Committee
shall have sole and full discretion to make factual determinations as may be
necessary and to construe and interpret the terms and provisions of this Plan,
which interpretation or construction shall be final and binding on all parties,
including but not limited to the Company and any Participant or Beneficiary.  The Committee shall administer such terms and
provisions in a uniform manner and in full accordance with any and all laws
applicable to the Plan.


 


(c)                                  To enable the
Committee to perform its functions, the Company shall supply full and timely information
to the Committee on all Plan matters relating to the Participants, their death
or other cause of termination, and such other pertinent facts as the Committee
may require.


 


ARTICLE II

DEFINITIONS


 


2.1           DEFINITIONS.


 


Account(s) — shall mean (i) the
Deferral Accounts (including, without limitation, the Deferred Incentive Award
Deferral Account and the Deferred Salary Account), and the (ii) Excess
Benefit Accrual Account, collectively, maintained for each Participant, except
that where reference to a specific Account is intended, there will be a
reference to the specific Account.


 


Adjustment — shall have the meaning
set forth in Section 6.3 hereof.


 


Basic Compensation — shall mean “Basic
Compensation” as defined in and provided under the Savings Plan.


 


Beneficiary — The beneficiary
designated on a form provided by the Company, or, if no such designation has
been made, the beneficiary designated by the Participant under the Retirement
Plan, or, in the absence of any designation, the Participant’s estate.


 


Board — shall mean the Board of
Directors of Fluor Corporation.


 


Change of Control — “Change of Control” of
the Company shall be deemed to have occurred if an event described in Treasury
Regulation 1.409A-3(i)(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 (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 


 


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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).


 


Code — shall mean the Internal
Revenue Code of 1986, as amended.


 


Committee — shall mean the Executive
Compensation Committee of the Company.


 


Company — shall mean Fluor
Corporation and (a) any company which is a member of a controlled group of
corporations, as defined in section 414(b) of the Code, which controlled
group includes Fluor Corporation; (b) any trade or business under common
control as defined in section 414(c) of the Code with Fluor Corporation; (c) any
organization (whether or not incorporated) which is a member of an affiliated
service group that includes Fluor Corporation or any entity described in (a) and
(b) above; and (d) any other entity required to be aggregated with
Fluor Corporation or any other entity described in (a), (b) and (c) above
pursuant to regulations under section 414(o) of the Code; provided,
however, that any reference to the Company with respect to matters relating to
the administration, design or termination of the Plan refers only to Fluor
Corporation.


 


Crediting Options — shall mean the crediting
options established by the Committee, as modified from time to time and shall
have the meaning set forth in Section 7.1 hereof.


 


Deferral Account — shall mean collectively,
a Participant’s Deferred Incentive Award Account and Deferred Salary Account.


 


Deferred Incentive Award Account — shall have
the meaning set forth in Section 6.1 hereof.


 


Deferred Salary Account — shall have
the meaning set forth in Section 6.1 hereof.


 


Deferral Matching Contribution — shall mean
the Company contributions credited to each Participant’s Excess Benefit Accrual
Account with respect to each Plan Year in accordance with Section 5.3
hereof; and which consists of (i) Discretionary Deferral Matching
Contributions, (ii) Supplemental Nonqualified Matching Contributions, and (iii) Regular
Nonqualified Matching Contributions.


 


Discretionary Deferral Matching Contributions — shall mean,
with respect to an Eligible Employee for a Plan Year, the amount, if anything,
that is credited to such Eligible Employee’s Excess Benefit Accrual Account in
order to insure that such Eligible Employee receives what the Committee
determines to be the appropriate total Deferral Matching Contributions,
provided, further, that such amount may not exceed an amount equal to the
excess (if any) of (i) over (ii), where:


 


(i)                                     equals such
Eligible Employee’s Maximum Nonqualified Matching Contribution for such Plan
Year; and


 


(ii)                                  equals the sum
of (a) such Eligible Employee’s Supplemental Nonqualified Matching
Contributions, plus (b) such Eligible Employee’s 


 


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Regular Nonqualified
Matching Contributions; plus (c) such Eligible Employee’s Maximum
Qualified Matching Contribution.


 


Designated Filing Person- shall mean
the person (which may be designated by position or title rather than an
individual) designated by the Committee to receive, review and record Election
Forms.


 


Effective Date — shall mean January 1,
2005 except that where reference to a specific date is intended, there will be
a reference to the specific date.


 


Election Form — shall mean the form or
forms filed by an Eligible Employee on or before whichever of the Salary
Election Date or the Incentive Award Election Date apply, and which complies
with the requirements of Section 4.2, provided, however, that such form
shall contain such terms and be in such form as determined by the Committee.


 


Eligible Employee — shall mean, unless
otherwise expressly provided herein, an employee of the Company who is (a) eligible
to participate in the Retirement Plan or has been specifically designated as
eligible for participation in this Plan by the Committee and (b) an
Executive.


 


ERISA — shall mean the Employee
Retirement Income Security Act of 1974, as amended.


 


Excess Benefit Accrual Account — shall have
the meaning set forth in Section 6.2 hereof.


 


Excess Benefit Accrual(s) — shall have
the meaning set forth in Section 5.1 and 5.2 hereof.


 


Executive shall mean any employee who
has been determined to be eligible to participate in the Fluor Corporation and
Subsidiaries Executive Incentive Compensation Program, or any other person
which the Committee determines to be eligible for participation in the Plan.


 


Initial Deferral Election Date — shall mean
the 30th day following the day on which a person first becomes an
Eligible Employee; provided, however, that the Initial Deferral Election Date
shall not apply to any individual who is a participant in a plan that is
aggregated with the Plan for purposes of Code section 409A except to the extent
permitted by Code section 409A.


 


Incentive Award — shall mean awards made
pursuant to the terms of the Fluor Corporation 2003 Executive Performance
Incentive Plan, and any other incentive program for Executives or other highly
compensated employees whose participants the Committee determines to be
eligible for participation in this Plan.


 


Initial Election — shall have the meaning
set forth in Section 3.1 hereof.


 


Incentive Award Election Date shall mean the
last day of the Plan Year preceding the Plan Year in which the initial
performance period of such Incentive Award commences.  However, if such Incentive Award qualifies as
“performance-based compensation” under section 409A of the Code and the
applicable performance period is at least one year, the Incentive Award
Election Date shall be the date that is six (6) months before the end of
the performance period (or, if earlier, when the amount of the Incentive Award
has become ascertainable within the meaning of section 409A of the Code).


 


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Maximum Qualified Matching Contribution. — shall mean,
for each Eligible Employee for a Plan Year, the amount which would have been
contributed to the Savings Plan as a Savings Plan Matching Contribution for
such Eligible Employee if such Eligible Employee had contributed at least the
maximum percentage of Basic Compensation that would have received a matching
contribution from the beginning of the applicable Plan Year (or, if later, when
the Eligible Employee became eligible to participate in the Savings Plan) until
such Eligible Employee’s Statutory Limitation Payroll Date.


 


Maximum Nonqualified Matching Amount — shall mean,
for each Plan Year, the sum of the amounts determined, for each payroll period
during which a person was an Eligible Employee, by multiplying the Salary paid
to such Eligible Employee for each such payroll period by the Savings Plan
Matching Contribution Rate for such payroll period.


 


Net Asset Value — shall mean a fund’s share value,
calculated once a day, based on the closing market price for each security in
the fund’s portfolio.  It is computed
either by reference to a commercial exchange (NYSE, AMEX, Nasdaq, etc.) or by
deducting the fund’s liabilities from the portfolio’s total assets and dividing
this amount by the number of shares outstanding.


 


Participant — shall mean any Eligible
Employee who has one or more Deferral Accounts and/or an Accrual Account under
this Plan.


 


Performance Plan Contributions — shall mean
the contributions set forth in Section 6.2 of the Fluor Corporation
Salaried Employees’ Savings Investment Plan.


 


Plan — shall mean the Fluor
Executive 409A Deferred Compensation Program, the terms of which are set forth
herein.


 


Plan Year — shall mean the
twelve-month period ending on December 31 of each year.


 


Pre-Tax Contributions — shall mean “Pre-Tax
Contributions” as defined in and provided under the Savings Plan.


 


Regular Nonqualified Matching Contribution — shall have
the meaning specified in Section 5.3.


 


Retirement Plan — shall mean the Fluor
Corporation Employees’ Defined Benefit Retirement Plan.


 


Salary — shall mean the compensation
regularly paid to an Eligible Employee by the Company per payroll period in the
form of base salary (including amounts contributed by the Company on behalf of
the Eligible Employee as Pre-Tax Contributions under the Savings Plan and
amounts contributed under the Fluor Section 125 Plan), but excluding
bonuses, commissions, incentives, site adders, overtime and other irregular
payments including severance pay, lump sum vacation payments and merit
increases paid in a lump sum, and before deductions authorized by such Eligible
Employee or required by law to be withheld from such Eligible Employee.


 


Salary Election Date — shall mean the last day
of the Plan Year preceding the Plan Year in which the Salary to be deferred is
paid.


 


Savings Plan — shall mean the Fluor
Corporation Salaried Employees’ Savings Investment Plan, as amended.


 


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Savings Plan Matching Contributions — shall mean
the amounts contributed to a Participant under Article VI of the Savings
Plan as matching contributions with respect to Pre-Tax Contributions under the
Savings Plan.


 


Specified Employee — shall mean, effective January 1,
2008, a Participant classified by the Company as an Officer for the year in
which the Participant’s Termination of Service occurs, as determined in a
manner consistent with Code section 409A. 
For Plan Years ending prior to January 1, 2008, Specified Employee
shall mean a key employee (as defined in Code section 416(i) (without
regard to Code section 416(i)(5)) and Code section 409A, and regulations
thereunder) of the Company. 
Notwithstanding the foregoing, the Company may make such elections by
appropriate corporate action as permitted under the applicable regulations and
other guidance issued under Code section 409A with respect to determining
Specified Employees, and any such election shall be incorporated into and
binding upon the Plan and all Participants as if fully set forth herein.


 


Supplemental Nonqualified Matching Contributions — shall have
the meaning set forth in Section 5.3 hereof.


 


Statutory Limitation Payroll Date — shall mean
the final payroll date during the Plan Year on which an Eligible Employee can
receive a Savings Plan Matching Contribution resulting solely from the
limitations imposed by either section 402(g) or 401(a)(17) of the Code;
provided, further, that for purposes of this Plan, the reference shall be
construed as referring only to the portion of the Eligible Employee’s Basic
Compensation paid on such final payroll date which is subject to such
limitations.


 


Termination
of Service — shall mean a separation from service from the
Company for any reason, within the meaning of Code section 409A. Termination of
the employee/ employer relationship between a Participant and the Company by
reason of retirement, death, resignation, involuntary termination, or permanent
total disability as these terms are defined for purposes of the Retirement
Plan.  To the extent permitted by Code
section 409A, a Participant shall be deemed to have incurred a Termination of
Service when it is reasonably anticipated that a permanent reduction in the
level of services with respect to such Participant equals forty-nine percent
(49%) or less of the average level of services she or he provided in the
immediately preceding three (3) years.


 


Unforseeable Emergency — shall have
the meaning set forth in Section 9.2 hereof.


 


Valuation Date — shall have the meaning set
forth in Section 7.6 hereof.


 


ARTICLE III

PARTICIPATION


 


3.1                                 SALARY DEFERRALS.  A person who is an Eligible Employee on a
Salary Election Date (or on such Eligible Employee’s Initial Election Date, if
applicable) will be entitled to elect to defer amounts of Salary
hereunder.  Without limiting the
generality of the preceding sentence, if an Eligible Employee is removed as an
Executive, such Eligible Employee will, notwithstanding such removal, continue
to defer Salary through the end of the calendar year in which such removal
occurred.  An election shall become irrevocable
on the Salary Election Date (or the Initial Election Date, if applicable) with
respect to the calendar year to which it applies, except to the extent
permitted by Code section 409A if the Participant experiences an Unforeseeable
Emergency.


 


 


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3.2                                 INCENTIVE AWARD
DEFERRALS.  A person who is an Eligible
Employee on the Incentive Award Election Date will be entitled to elect to
defer amounts of Incentive Award hereunder.


 


3.3                                 EXCESS BENEFIT
ACCRUALS.   As of the various dates
provided in Section 5.1, each Eligible Employee shall be entitled to
receive an Excess Benefit Accrual if and to the extent earned in accordance
with the provisions of Section 5.1 hereof.


 


3.4                                 STATUS AS PARTICIPANT.  Once an Eligible Employee defers an amount hereunder,
or is allocated an amount under Section 5.1(a), such person will become a
Participant, and shall remain a Participant until all amounts credited to such
person hereunder are distributed to such person.


 


ARTICLE IV

DEFERRALS


 


4.1                                 AMOUNTS SUBJECT TO
DEFERRAL.  Subject to the provisions of
this Plan and the effect of any previously authorized or required deductions,
reductions, income or employment tax withholdings applicable to such
compensation, an Eligible Employee may elect to defer all or any portion of her
or his Salary or any Incentive Award.


 


4.2                                 TIMING AND
MECHANICS OF ELECTION.


 


(a)                                  Salary — In
order to be effective with respect to Salary paid during a Plan Year, an
Election Form must be filed with the Designated Filing Person by the
Salary Election Date for such Plan Year, or, where applicable, by the Initial
Deferral Election Date, and only the last Election Form filed on or before
that date will be considered a properly filed Election Form with respect
to such Plan Year (or portion of Plan Year). 
The Election Form must specify (i) the percentage of Salary to
be deferred for each pay period, (ii) the pay period on which such
deferrals will commence, (iii) date on which payment of such deferrals
will be made or commenced, and (iv) the form in which payments of such
deferrals will be made.  Only one
Election Form will be filed for each Plan Year and a new Election Form is
required to be filed for each Plan Year. 
Deferred amounts withheld from an Eligible Employee’s Salary shall be
credited to such Eligible Employee’s Deferred Salary Account as of the payroll
date in which such amounts are withheld.


 


(b)                                 Incentive
Awards — In order to be effective with respect to an Incentive Award, an
Election Form must be filed with the Designated Filing Person by the
Incentive Award Election Date with respect to such Incentive Award, and only
the last Election Form filed on or before such date will be considered a
properly filed Election Form with respect to such Incentive Award.  The Election Form must
specify (i) either the percentage of the Incentive Award, or a fixed
dollar amount, to be deferred, (ii) date on which payment of such deferral
will be made or commenced, and (iii) the form in which payments of such
deferrals will be made.  A new Election Form is
required to be filed with respect to each Incentive Award.  Deferred amounts withheld from an Eligible
Employee’s Incentive Award shall be credited to such Eligible Employee’s
Deferred Incentive Award Account as of the payroll date in which such amounts are
withheld.


 


 


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ARTICLE V

OTHER ACCRUALS


 


5.1                                 EXCESS BENEFIT
ACCRUALS.  Excess Benefit Accruals will
include the sum of:


 


(a)                                  As of each
payroll date, the Company shall credit the Excess Benefit Accrual Account of
each Eligible Employee with a pro-rata amount equal to the excess of the
Company Contribution Credit which would have been allocated to such Eligible
Employee’s account under the Retirement Plan for the calendar year but for the
limitations imposed by sections 401(a)(17) and 415 of the Code over the actual
Company Contribution Credit to the Eligible Employee’s account under the
Retirement Plan for the calendar year. 
Such amount shall be determined by the Committee using actuarial assumptions
selected by the Committee in its discretion.


 


(b)                                 On or before a
reasonable period of time following the earlier of (i) an Eligible
Employee’s Termination of Service, or (ii) the last business day of the
Plan Year, the Company shall credit the Excess Benefit Accrual Account of each
Eligible Employee with all of such Eligible Employee’s Deferral Matching
Contributions, if any, for such Plan Year. 
Nothing herein shall require, or prohibit, the Company from crediting
some of the Deferral Matching Contributions for a Plan Year at the end of any
month or payroll period during such Plan Year.


 


(c)                                  As of the last
business day of each calendar year, the Company shall credit the Excess Benefit
Accrual Account of each Eligible Employee with a pro-rata amount equal to the
excess of the amount of Company contributions which would have been allocated
to such Eligible Employee’s account as Performance Plan Contributions for the
calendar year but for the limitations imposed by sections 401(a)(17) and 415 of
the Code over the actual amount of Company contributions allocated to her or
his accounts under such plan for the calendar year.


 


5.2                                 COMPENSATING ACCRUALS.  Each Eligible Employee who elects to defer
all or a portion of her or his Salary pursuant to Section 4.2(a) hereof
will also be credited with additional accruals to her or his Deferred Salary
Account to compensate for reductions in Retirement Plan accruals, Savings Plan
contributions, and Performance Plan Contributions that result from such Salary
deferral.  Such accruals shall be
calculated as follows:


 


(a)                                  As of the end
of each month, there shall be credited to the Deferred Salary Account of each
Eligible Employee, an additional amount that is equal to the Company
Contributions Credit that would have been credited to the Eligible Employee’s
Company Contributions Account in the Retirement Plan for such month but for
Salary deferrals made under this Plan.


 


(b)                                 As of the last
business day of each calendar year, there shall be credited to the Deferred
Salary Account of each Eligible Employee, an additional amount that is equal to
the amount by which Company contributions to the Eligible Employee’s account as
Performance Plan Contributions were reduced by reason of Salary deferrals made
under this Plan.


 


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5.3                                  DEFERRAL MATCHING CONTRIBUTIONS.  Effective on January 1, 2008, for each
Plan Year, the Company shall credit an Eligible Employee with Deferral Matching
Contributions determined as follows:


 


(a)                                  An Eligible Employee’s Supplemental Nonqualified
Matching Contributions shall equal five percent (5%) of the Eligible Employee’s
Salary deferred (in accordance with Section 3.1 hereof) during each
payroll period ending on or before such Eligible Employee’s Statutory
Limitation Payroll Date.


 


(b)                                 An Eligible Employee’s Regular Nonqualified Matching
Contribution shall be made with respect to each payroll period occurring on or
after such Eligible Employee’s Statutory Limitation Payroll Date, and shall be
equal to the lesser of (i) the amount of Salary which such Eligible
Employee defers (in accordance with Section 3.1 hereof) with respect to
such payroll period, or (ii) five percent (5%) of such Eligible
Participant’s Salary paid with respect to such payroll period.


 


(c)                                  The Company may, but shall not be required, to
credit an Eligible Employee with a Discretionary Deferral Matching Contribution
based upon any criteria determined by the Company.  Such Discretionary Deferral Matching
Contribution may be credited as of the end of any payroll period or month, or
at the end of calendar year, as selected by the Company.


 


ARTICLE VI

MAINTENANCE OF ACCOUNTS


 


6.1                                          DEFERRAL
ACCOUNTS.  The Company shall maintain one
or more of the following Deferral Accounts, as applicable, for Eligible
Employees: (1) a Deferred Incentive Award Account to which shall be
credited all amounts of Incentive Awards which have been deferred by such
Eligible Employee pursuant to the provisions of Section 4.2(b) hereof;
and (2) a Deferred Salary Account to which shall be credited all amounts
of Salary deferred on and after the Effective Date and all amounts credited
such Eligible Employee pursuant to Sections 4.2(a) and 5.2 hereof.


 


6.2                                         EXCESS BENEFIT
ACCRUAL ACCOUNTS.  The Company shall
maintain an Excess Benefit Accrual Account for each Eligible Employee to which
shall be credited all amounts accruing for the benefit of such Eligible
Employee pursuant to Sections 5.1 and 5.3 hereof.


 


6.3                                         ADJUSTMENTS.  Each Account shall be adjusted daily (prior
to January 1, 2008, at least monthly) to reflect any gains and/or losses
thereon (deemed or actual) (the “Adjustment”) in accordance with the provisions
of Section 7.1 hereof.


 


ARTICLE VII

CREDITING OPTIONS


 


7.1                                         CREDITING
OPTIONS.  The Company has selected
certain crediting options for determining gains and/or losses to Participant
Accounts, any of which may be changed, modified or deleted, or additional
investment options may be added, by the Committee in its discretion (the
“Crediting Options”).  At the time that
an Eligible Employee first becomes a Participant, the Participant shall
allocate deferrals among the Crediting Options set forth in the Initial
Investment Election Form.  The Crediting
Options will be 


 


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used as a measure of the deemed investment performance of the balances
of each of her or his Accounts by the Committee.


 


Notwithstanding the preceding paragraph, all stock
units (or equivalents) that are deferred into a Participant Account shall not
be subject to adjustment under the provisions of this Section 7.1.  Any investment adjustment with respect to
stock units (or equivalents) shall instead be governed by the terms of the
Incentive Plan granting the stock units (or equivalents), and such stock units
(or equivalents) shall be deemed to have been granted under such Incentive
Plan.


 


7.2                                 INITIAL
DESIGNATIONS. In making the initial Crediting Options designation, the
Participant may specify that all or any percentage (expressed in 1% multiples)
of her or his Accounts be deemed to be invested in one or more of the Crediting
Options.


 


7.3                              SUBSEQUENT
DESIGNATIONS.  Each Participant will also
be able to reallocate the Crediting Options to be used in the future for each
of her or his Accounts, for current Account balances and future contributions,
on any business day (prior to January 1, 2008, once every month) on a form
provided by the Company (all elections to be expressed in 1% multiples).  Any reallocation among the Crediting Options
will be effective on the business day following the day on which the form is
received by the Company (prior to January 1, 2008, the first day of the
month following the month in which the form is received by the Company, unless
the form is received after the monthly deadline set by the Company for receipt
of reallocation forms for the month, in which case the reallocation will be
effective as of the first day of the next subsequent month).  Until a Participant delivers a new Crediting
Options form to the Company, her or his prior Crediting Options election shall
control.


 


7.4                                 MISSING OR
INVALID DESIGNATIONS.  If a Participant
fails to designate any Crediting Option for the Accounts, she or he shall be
deemed to have designated the Money Market Option (or its equivalent) until a
Crediting Options designation is received by the Company.   Similarly, if a Participant has designated a
Crediting Option which is removed or no longer available, the Participant will
be deemed to have designated the Money Market Option (or its equivalent) as its
replacement until such time a new Crediting Options designation is received by
the Company.


 


7.5                                 EFFECT OF
CHANGE IN DESIGNATION.  The Company shall
use the Participant’s Crediting Option designations as the basis for
calculating the Adjustment component of each Account.  If a Participant changes her or his Crediting
Option designations, then such change shall supersede the previous designation
effective the next business day after the change is received by the Company
(prior to January 1, 2008, the first business day of the month following
the month the change is received by the Company (unless received after the
deadline established by the Company)).


 


7.6                                 CALCULATION OF
ADJUSTMENT.  The Adjustment shall be
determined for every Account each day that the investment associated with the
particular Crediting Option is actively traded. 
The daily Adjustment for each Crediting Option shall be determined as
follows:


 


(a)                                  As of each
trading day of the associated investment of the Crediting Option in which a
Participant has a beginning balance for the day in any Account, the amount of
each Account deemed invested in a particular Crediting Option shall either be
credited or debited with an amount equal to that determined by multiplying the
amount of such Account (as measured by the beginning balance 


 


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number of shares) deemed invested in a particular
Crediting Option by the change in the Net Asset Value reported for that day for
the associated investment.


 


(b)                                 As to the any
amounts distributed, the Company shall cease crediting or debiting Adjustments
to the Accounts on the last day of the month (or such other date determined by
the Committee on a uniform and nondiscriminatory basis) prior to the applicable
distribution event set forth in Articles VIII and IX (the “Valuation Date”).


 


(c)                                  Distribution
amounts determined under Articles VIII and IX shall include the cumulative
Adjustments made to the Accounts of the Participant in accordance with this Article VII.


 


7.7                                 LIMITATIONS.  Allocation shall be made solely among the
Crediting Options selected by the Company. 
A Participant shall have absolutely no ownership interest in any
Crediting Option or any underlying investment. 
The Company shall be the sole owner of any funds invested in any such
investment, as well as all amounts accounted for in the Accounts, all of which
shall at all times be subject to the claims of the Company’s creditors.  A Participant shall have a contractual right
to payment of an amount equal to the balance in each of her or his Accounts in
accordance with this Article and Articles VIII and IX hereof.


 


ARTICLE VIII

ACCOUNT DISTRIBUTIONS


 


8.1                                 NO DEFERRAL PERIOD
SPECIFIED.  With respect to the Excess
Benefit Accrual Account and those portions of any Deferral Account (including,
any Adjustments related thereto) as to which no specific deferral period has
been selected by the Participant prior to the time of deferral:


 


(a)                                  The lump sum
payment or the first installment payment will be paid in the month following
Termination of Service.


 


(b)                                 In the case of
installment payments, the second installment will be paid in January following
the calendar year in which the first installment was paid and all remaining
installments will be paid annually in January.


 


(c)                                  Other
provisions notwithstanding, a Participant determined to be a Specified Employee
who is entitled to a distribution as a result of a Termination of Service shall
receive the applicable lump sum or initial payment six months after the
Termination of Service or, if earlier, upon death.


 


8.2                                 SPECIFIED DEFERRAL
PERIOD.  With respect to the Excess
Benefit Accrual Account and those portions of any Deferral Account (including
any Adjustments related thereto) as to which a specified deferral period has
been selected by a Participant at the time of deferral:


 


(a)                                  The lump sum
payment or the first installment will be paid in the month following the
earlier of the (i) Participant’s Termination of Service or (ii) upon
expiration of the specific deferral period.


 


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(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)                                  Notwithstanding
any specified deferral period election by a Participant, if the Participant has
a Termination of 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 Termination of
Service instead shall become effective.


 


(d)                                 Other
provisions notwithstanding, a Participant determined to be a Specified Employee
who is entitled to a distribution as a result of a Termination of Service shall
receive the initial payment six months after the Termination of Service or, if
earlier, upon death.


 


8.3                                 NO FORM OF DISTRIBUTION
IS SPECIFIED.  With respect to any
Account (including, any Adjustments thereto) as to which no specific form of
distribution has been selected by the Participant at the time of deferral, the
distribution will be in the form of a single lump sum payment.


 


8.4                                 FORM OF DISTRIBUTION IS
SPECIFIED.  All payments will be made in
a single lump sum unless the Participant designates at the time of deferral
that the deferred amount be paid in a specified number (not to exceed ten) of
annual installments.


 


8.5                                 ELECTION CHANGES.  A Participant may change the time and method
of payment by making a subsequent distribution election.  A subsequent distribution election will
become effective twelve (12) months after the election has been received by the
Company.  The subsequent distribution
election must defer payment to a date at least five (5) years later than
originally scheduled.


 


8.6                                 DEATH BENEFITS.  Unless otherwise elected in the time and
manner specified in Section 4.2, in the event of the death of a
Participant, the Participant’s benefits will be distributed to the
Participant’s Beneficiary in a single lump sum payment as soon as
administratively feasible following the Participant’s death, but no later than
the January following death.


 


8.7                                 RELEASE OF
CLAIM.  Acceptance of payment of the
distributions required hereunder by a Participant or her or his Beneficiary (as
applicable) shall constitute a release by such Participant or Beneficiary (as
applicable) of all claims against the Company by the Participant or Beneficiary
(as applicable).


 


ARTICLE IX

OTHER DISTRIBUTION EVENTS


 


9.1                                 CHANGE OF
CONTROL.


 


Notwithstanding any other Section hereof, if a Participant’s
employment with the Company has a Termination of Service for any reason other
than death, within the two-year period beginning on the date that a Change of
Control occurs, then the Company shall pay to the Participant by the end of the
month following the month of termination (six months (6) after the date of
the Termination of Service if the Participant is a Specified Employee) a lump
sum distribution of all of her or his Accounts (including any
Adjustments).  If a Participant dies
after Termination of Service, but before payment of 


 


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any amount payable under this Section, then such amount shall be paid
to the Participant’s Beneficiary within the first fifteen (15) days of the
month following the month of the Participant’s death.


 


 9.2          UNFORESEEABLE EMERGENCY.


 


(a)                                  A distribution
of a portion of a Participant’s Accounts 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 in its
reasonable discretion.  Distributions in
the event of an Unforeseeable Emergency may be made by and with the approval of
the Committee upon written request by a Participant.


 


(b)                                 An
“Unforeseeable Emergency” is defined as a severe financial hardship to the
Participant caused by sudden and unexpected illness or accident of the
Participant, 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 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.  In all events,
a distribution shall be made in connection with an Unforeseeable Emergency only
to the extent permitted by Code section 409A.


 


9.3                                 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
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 her or his
court-awarded portion of the Participant’s Accounts pursuant and subject to the
terms of Section 8.1.


 


ARTICLE X

MISCELLANEOUS PROVISIONS


 


10.1                           PARTICIPANT RIGHTS IN THE
UNFUNDED PLAN.  Any liability of the
Company to any Participant with respect to any benefit shall be based solely
upon the contractual obligations created by the Plan; no such obligation shall
be deemed to be secured by any pledge or any encumbrance on any property of the
Company.  The Company’s obligations under
this agreement shall be an unfunded and unsecured promise to pay.  No Participant or her or his Beneficiaries
shall have any rights under the Plan other than those of an unsecured creditor
of the Company.  Assets segregated or
identified by the Company for the purpose of paying benefits pursuant to the
Plan remain general corporate assets subject to the claims of the Company’s
creditors.


 


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10.2                           NON-ASSIGNABILITY.  Subject to the provisions of Section 10.3,
neither the Participant nor her or his Beneficiary shall have any power or
rights to transfer, assign, anticipate, hypothecate or otherwise encumber any
part or all of the amounts payable hereunder, which are expressly declared to
be un-assignable and non-transferable. 
Any such attempted assignment or transfer shall be void and the Company
shall thereupon have no further liability to such Participant or such
Beneficiary hereunder.  No amount payable
hereunder shall, prior to actual payment thereof, be subject to seizure by any
creditor of any Participant or Beneficiary for the payment of debt, judgment or
other obligation, by a proceeding at law or in equity, nor transferable by
operation of law in the event of the bankruptcy, insolvency or death of the
Participant, her or his designated Beneficiary or any other beneficiary
hereunder.


 


10.3                           TERMINATION OR AMENDMENT OF
PLAN.  The Company retains the right, at
any time and in its sole discretion, to amend or terminate the Plan, in whole
or in part.   Any amendment of the Plan
shall be approved by the Board, shall be in writing, and shall be communicated
to the Participants.  Notwithstanding the
above, the Committee shall have the discretionary authority to change the
requirements of eligibility or to modify the Crediting Options hereunder
without Board approval.  No amendment of
the Plan shall materially impair or curtail the Company’s contractual
obligations arising from deferral elections previously made or for benefits
accrued prior to such amendment without Participant consent.  In the event of Plan termination, payment of
Deferral and Accrual Accounts shall occur in accordance with existing
Participant distribution elections.


 


10.4                           CONTINUATION OF
EMPLOYMENT.  This Plan shall not be
deemed to constitute a contract of employment between the Company and a Participant.  Nothing in the Plan or in any instrument
executed pursuant to the Plan will confer upon any Participant any right to
continue in the employ of the Company or affect the right of the Company to
terminate the employment of any Participant at any time with or without
cause.  Nothing in the Plan will
otherwise affect any Participant’s employment relationship with the Company.


 


10.5                           RESPONSIBILITY FOR LEGAL
EFFECT.  Neither the Committee nor the
Company make any representations or warranties, express or implied, or assumes
any responsibility concerning the legal, tax or other implications or effects
of this Plan.


 


10.6                           WITHHOLDING.  The Company shall
withhold from or offset against any payment or accrual made under the Plan any
taxes the Company determines it is required to withhold by applicable federal,
state, local or foreign laws.


 


10.7                           OTHER COMPENSATION
PLANS.  The adoption of the Plan shall
not affect any other incentive or other compensation plans in effect for the
Company or any subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of incentive or other compensation for employees
of the Company or any subsidiary.


 


10.8                           PLAN BINDING ON
SUCCESSORS.  The Plan shall be binding
upon the successors and assigns of the Company.


 


10.9                           SINGULAR, PLURAL.  Wherever appropriate in this Plan, nouns in
the singular shall include the plural.


 


10.10                     CONTROLLING LAW.  The Plan shall be governed by and construed
in accordance with the internal law, without regard to conflict of law principles,
of the State of Delaware to the extent not pre-empted by the laws of the United
States of America.


 


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10.11                     NO DUPLICATION.  In no event shall the benefit provided under
the Plan duplicate any benefits accrued and/or payable under the Fluor
Corporation Deferred Compensation Program (frozen effective December 31,
2004).


 


 


 


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