Document:

Exhibit 10.40

 

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

 

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

 

Section 1.                                          AWARD SUBJECT TO PLAN

 

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

 

Section 2.                                          TARGET VALUE OF AWARD AND EARNOUT PERIOD

 

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

 

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

 

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

 

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

 

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

 

Section 3.                                          CONTINUED EMPLOYMENT AND AWARD PAYMENT

 

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

 

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

 

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

 

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

 

Section 4.                                          CONFIDENTIALITY

 

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

 

Section 5.                                          TAX WITHHOLDING

 

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

 

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

 

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

 

Section 6.                                          SEVERABILITY

 

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

 

Section 7.                                          DATA PROTECTION

 

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

 

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

 

Section 8.                                          ACKNOWLEDGMENT AND WAIVER

 

The Grantee acknowledges and agrees that:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 9.                                          GRANT-SPECIFIC TERMS

 

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

 

Section 10.                                   ENFORCEMENT

 

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

 

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Section 11.                                   EXECUTION OF AWARD AGREEMENT

 

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

 

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

 

	
 
    	
FLUOR   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
by
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
David   T. Seaton
    
	
 
    	
 
    	
Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Acknowledged   and Agreed:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

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APPENDIX A

 

Compliance with Section 409A of the Internal Revenue Code

 

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

 

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

 

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

 

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

 

5Exhibit 10.40

 

January 23, 2011

 

The Board of Directors

CVS Caremark Corporation

One CVS Drive

Woonsocket, Rhode Island 02895

 

Ladies and Gentlemen,

 

Over the past year, we have worked together to formulate a plan to effect a seamless transition in the leadership of CVS Caremark Corporation (the “Company”) following my retirement.  In furtherance of this transition plan, effective as of March 1, 2011 (the “Transition Date”), I hereby retire from my position as Chief Executive Officer of the Company, although I will remain a non-executive employee of the Company through May 11, 2011 (the “Transition Period”), at which time I will retire from the Company.  I will continue to serve as non-executive Chairman of the Board of Directors of the Company (the “Board”) through the 2011 Annual Meeting of Shareholders, at which time I will resign my position as a director of the Company.

 

During the Transition Period, I will advise and assist the successor CEO and the Company in determining sales and marketing strategies for key new prospects and important renewals, overall product/services marketing strategies and brand/message to clients, leveraging my experience, status in the benefits consultant community and existing relationships.  My activities will include but not be limited to participation in strategy meetings, attendance at industry and trade association meetings on behalf of the Company, as well as attendance at important finalist and pitch meetings with new or existing clients as requested by the Company.

 

During the Transition Period, I will continue to receive base salary at my existing salary rate for the services rendered as a non-executive.  I will not receive any Board retainer or meeting fees for Board service through the end of my term at the 2011 annual shareholder meeting.  I understand and agree that, notwithstanding anything contained in any agreement between me and the Company, I will not be entitled to receive any award under the CVS Caremark Management Incentive Plan in respect of the 2011 performance year, any award under the CVS Caremark Long-Term Incentive Plan (the “LTIP”) for the 2011-2013 cycle, any new awards under the Company’s RoNA LTIP for 2011 or any additional equity awards, including the April 2011 annual equity grant, and I will not accrue additional credits under the Supplemental Retirement Plan I for Select Senior Management of CVS Caremark Corporation during the Transition Period.  I hereby confirm that following my retirement I will be subject to the previously agreed restrictive covenants, including the ten year non-competition and non-solicitation restrictions.

 

It is intended that the payments described herein comply with Section 409A of the Code or an exemption thereto and that my services during the Transition Period will be performed on a regular and continual basis, at a level sufficient for me not to incur a “separation from service” for purposes of Section 409A.

 

I am delighted to have been able to serve the Company for more than 36 years and to assist in the transition to new leadership.

 

 

	
Sincerely,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Thomas M. Ryan
    	
 
    
	
Thomas M. Ryan
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Acknowledged and Agreed   by the Company as of January 23, 2011
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Lisa G. Bisaccia
    	
 
    
	
By:
    	
Lisa G. Bisaccia
    	
 
    
	
Title:
    	
Senior Vice President   and
    	
 
    
	
 
    	
Chief Human Resources Officer
    	
 
    

 

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