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                                                                    EXHIBIT 10.3

                   2000 EXECUTIVE PERFORMANCE INCENTIVE PLAN

SECTION 1.  Purpose of Plan

The purpose of this "Fluor Corporation 2000 Executive Performance Incentive
Plan" ("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.  The Plan
also permits Shares to be issuable upon exercise, vesting or satisfaction of
stock-based awards that were assumed by the Company in connection with the
distribution of the Company's common stock (the "Distribution") to the
stockholders of Massey Energy Company, which prior to the distribution was known
as Fluor Corporation ("Old Fluor").

SECTION 2.  Administration of the Plan

2.1  Composition of Committee.  The Plan shall be administered by the
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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.  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 Section 162(m)(4)(C) of the
Internal Revenue Code of 1986, as amended (the "Code"), 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
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     York Stock Exchange or, if no Shares traded on the New York Stock Exchange
     on the date in question, then for the next preceding date for which Shares
     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
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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
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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 12,000,000;
provided that no more than 4,500,000 of such Shares may be issued pursuant to
all Restricted Stock Awards, Incentive Awards, and Stock Units (other than Stock
Units issued upon exercise of Options and any such awards issued as Assumed
Awards) granted under the Plan.  The Shares subject to the Plan may be either
Shares reacquired by the Company, including Shares purchased in the open market,
or authorized but unissued Shares.
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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 or
issuable under any Restricted Stock Awards, Incentive Awards 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 150,000.  Notwithstanding anything to the contrary in the Plan,
the foregoing limitations (i) shall not apply to Assumed Awards, (ii) shall not
include the number of shares subject to Assumed Awards, and (iii) 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
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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 an (i) employee and who also is an officer, key employee or
member of the Executive Management Team ("EMT"), (ii) prospective employee who
is to be an officer, key employee or member of the EMT, (iii) consultant, or
(iv) advisor of the Company (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
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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, Stock Units and Assumed Awards.  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
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     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 Options ("ISOs") pursuant to  Code
     Section 422 and Options which 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.
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     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
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     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 of Common Stock 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").

     Assumed Awards:  An Assumed Award is a stock option, stock appreciation
     --------------
     right, restricted stock grant, restricted stock unit or other equity-based
     arrangement that was granted by Old Fluor and assumed by the Company in
     connection with the Distribution, as adjusted or amended pursuant to the
     terms thereof.  Notwithstanding any provision to the contrary in this Plan
     and except as provided in this sentence, the terms of Assumed Awards shall
     be subject to the terms and conditions set forth in the grant agreement
     and/or other document(s) evidencing such Award and, to the extent provided
     therein, to terms equivalent to the terms of the plan under which such
     Award was originally granted;  provided, however, that all Assumed Awards
     shall be administered by the Committee, which shall have the power and
     authority provided for in Section 2 of this Plan.

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
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(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.
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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 (i) 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 (ii) 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 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
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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, 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.
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     (a) Partial Exercise.  An exercisable Option may be exercised in whole or
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     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
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     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
<PAGE>

     (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,
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     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 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, (v) a promissory note of or other commitment to pay by the
     Participant or of a third party, the terms and conditions of which shall be
     determined by the Committee, or (vi) any combination of (i) through (v).

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
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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 first vest within one
year from its date of grant, other than upon death, disability, 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 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
<PAGE>

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 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 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 Three million dollars
($3,000,000).

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
<PAGE>

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 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 of Common Stock, 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, 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.
<PAGE>

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
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.  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
<PAGE>

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 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.
<PAGE>

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; 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.

10.6  Financing.  The Committee may in its discretion provide financing to a
      ---------
Participant in a principal amount sufficient to pay the purchase price of any
Award and/or to pay the amount of taxes required by law to be withheld with
respect to any Award.  Any such loan shall be subject to all applicable legal
requirements and restrictions pertinent thereto, including Regulation G
promulgated by the Federal Reserve Board.  The grant of an Award shall in no way
obligate the Company or the Committee to provide any financing whatsoever in
connection therewith.

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
<PAGE>

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.

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 which 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 no such amendment shall, without the approval
of the shareholders of the Company:

     (a)  materially increase the maximum number of shares of Common Stock  for
     which Awards may be granted under the Plan;
<PAGE>

     (b)  reduce the price at which Options may be granted below the price
     provided for in Section 6.2;

     (c)  reduce the exercise price of outstanding Options;

     (d)  after the date of a Change of Control, impair the rights of any  Award
     holder, without such holder's consent, under any Award granted prior  to
     the date of any Change of Control;

     (e)  extend the term of the Plan; or

     (f)  change the class of persons eligible to be Participants.

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.
<PAGE>

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 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 and Old Fluor
approves the Plan as sole stockholder of the Company.  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.