Exhibit 10.1


 


 


FLUOR CORPORATION


 


409A DEFERRED DIRECTORS’ FEES PROGRAM


 


(Effective as of January 1, 2005)


 


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


 


WITNESSETH:


 


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


 


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


 


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


 


ARTICLE 1

PURPOSE


 


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


 


ARTICLE 2

DEFINITIONS


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


ARTICLE 3

ADMINISTRATION


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


ARTICLE 4

ELIGIBILITY AND PARTICIPATION


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


ARTICLE 5

DIRECTOR AND MATCHING CONTRIBUTIONS TO DEFERRAL ACCOUNTS


 


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


 


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


 


ARTICLE 6

DISTRIBUTIONS


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


With
respect to the Participant’s vested Deferral Account:


 


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


 


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


 


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


 


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


 


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


 


6.3                               Unforeseeable
Emergency.  A cash
distribution of a portion of a Participant’s vested Deferral Accounts a because
of an Unforeseeable Emergency will be permitted only to the extent required by
the Participant to satisfy the emergency. 
Whether an Unforeseeable Emergency has occurred will be determined
solely by the Committee.  Distributions
in the event of an Unforeseeable Emergency may be made by and with the approval
of the Committee upon written request by a Participant.  In all events, a distribution shall be made
in connection with an Unforeseeable Emergency only to the extent permitted by
section 409A of the Code.


 


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


 


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unforeseeable circumstances caused by a
result of events beyond the Participant’s control.  The circumstances that will constitute an Unforeseeable
Emergency will depend upon the specific facts of each case, but, in any event,
any distribution under this Section shall not exceed the amount required
by the Participant to resolve the hardship after (i) reimbursement or
compensation through insurance or otherwise, (ii) obtaining liquidation of
the Participant’s assets, to the extent such liquidation would not itself cause
a severe financial hardship, or (iii) suspension of deferrals under the
Plan.  Examples of what are not
considered to be severe financial hardships include the need to send a
Participant’s child to college or the desire to purchase a home.


 


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


 


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


 


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


 


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


 


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


 


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


 


ARTICLE 7

DEFERRAL ACCOUNTS


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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ARTICLE 8

TRUST


 


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


 


ARTICLE 9

CHANGE IN CONTROL


 


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


 


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


 


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


 


ARTICLE 10

RIGHTS OF PARTICIPANTS


 


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


 


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


 


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


 


ARTICLE 11

WITHHOLDING OF TAXES


 


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


 


ARTICLE 12

AMENDMENT AND TERMINATION


 


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


 


ARTICLE 13

MISCELLANEOUS


 


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


 


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


 


13.3                        Responsibility
for Legal Effect.  Neither the
Committee nor the Company makes any representations or warranties, express or
implied, or assumes any responsibility concerning the legal, tax or other
implications or effects of this Plan.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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