Document:

Exhibit 10.14

 

FORM OF RESTRICTED STOCK UNIT AGREEMENT

 

This Restricted Stock Unit Agreement (“Agreement”) entered into as of February [__], 2017 (the “Grant Date”), by and between Fluor Corporation, a Delaware corporation (the “Company”), and you (“Grantee” or “you”) evidences the grant to Grantee of a Stock Unit Award (“RSU Award”) under the Fluor Corporation Amended & Restated 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

 

This RSU 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.                                  RESTRICTED STOCK UNIT AWARD

 

The Company hereby awards Grantee restricted stock units (“RSUs”), subject to the terms and conditions set forth herein.  Each RSU represents the right to receive one share of Company common stock, par value $.01 per share (“Shares”), pursuant to this RSU Award, subject to the terms and conditions set forth herein.  Subject to the provisions of Section 3 and Section 4 hereof, upon the issuance to Grantee of Shares hereunder, Grantee shall also receive cash in an amount equivalent to any dividends or distributions paid or made by the Company from the date of this RSU Award to the date of the issuance of the Shares with respect to an equivalent number of Shares so issued.

 

Section 3.                                  RESTRICTIONS ON SALE OR OTHER TRANSFER

 

Each RSU awarded to Grantee pursuant to this Agreement shall be subject to forfeiture to the Company and each RSU may not be sold or otherwise transferred except pursuant to the following provisions:

 

(a)                                 The RSUs shall be held in book entry form by the Company until (1) the restrictions set forth herein lapse in accordance with the provisions of Section 4, at which time the RSUs will be converted to Shares, or (2) the RSUs are forfeited pursuant to Section 4 hereof.

 

(b)                                No such RSUs may be sold, transferred or otherwise alienated or hypothecated so long as such RSUs are subject to the restrictions provided for in this Agreement.

 

(c)                                 [Grantee may not sell or otherwise transfer the Shares issued pursuant to this RSU Award until three (3) years after the vesting of the underlying RSUs (“Post-Vest Holding Period”).  During the Post-Vest Holding Period, Grantee will be able to vote the Shares and receive any dividends issued, if any, with respect to the Shares; and the Shares must remain with the Company designated broker until the end of the Post-Vest Holding Period. Notwithstanding the foregoing, these restrictions shall immediately lapse upon Grantee’s death, Disability or Qualifying Termination within two years of a Change of Control].1

 

(d)                                The Company may impose such other restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any re-sales by the Grantee or other subsequent transfers by the Grantee of any Shares of common stock issued as a result of the vesting of the RSUs, including without limitation (i) restrictions under an insider trading policy, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by Grantee and other Share holders and (iii) restrictions as to the use of a specified brokerage firm for such re-sales or other transfers.

 

Section 4.                                  LAPSE OF RESTRICTIONS2

 

The RSUs subject to this RSU Award shall vest and restrictions thereon shall lapse at a rate of one third of such number per year on [VESTING DATE] of each year, commencing with [VESTING DATE], 2018 and annually thereafter ending with [VESTING DATE], 20203, provided that Grantee’s employment has not terminated on or before such date or one of the exceptions set forth below in this Section 4 are met.

 

 

 

1 To be included for the Senior Management Team.

2 Additional criteria which are solely applicable to Section 16 officers are included in Appendix C.

3 Vesting periods and restrictions may be altered for special grants.

 

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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, each as determined by the Committee in accordance with the Plan, then as of the date of such termination any RSUs which have yet to vest shall be forfeited by you.  If prior to the RSUs becoming vested in full pursuant to the preceding paragraph, 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, each as determined by the Committee in accordance with the Plan, then any portion of this RSU Award which has yet to become vested shall become immediately vested.  If prior to the RSUs becoming vested in full pursuant to the preceding paragraph, 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 RSU Award which has yet to become vested shall continue to vest as set forth in the preceding paragraph.  Notwithstanding the foregoing and regardless of reason for termination, under all circumstances other than your Qualifying Termination within two (2) years following a Change of Control, any RSUs held less than one year from the Grant Date will be forfeited[; provided, however, in the event of your Retirement, this one-year holding requirement may be waived by the Committee, in its sole and absolute discretion, and any portion of this RSU Award which has yet to become vested shall continue to vest as set forth in the preceding paragraph]4.  Nothing in the Plan or this Agreement confers any right of continuing employment with the Company or its subsidiaries.  Notwithstanding the foregoing, if in the event of a Change of Control the successor to the Company does not assume this RSU Award, then any portion of this RSU Award which has yet to become vested and which has not otherwise been forfeited pursuant to the provisions of this Section 4 shall become immediately vested.  Notwithstanding anything to the contrary herein, in the event your employment is terminated for Cause (as defined herein), regardless of whether you are retirement eligible, you will forfeit your right to receive any unvested RSUs, unless otherwise prohibited by law.

 

For purposes of this Agreement, “Retirement” shall mean your retirement as determined in accordance with applicable Company personnel policies and the Plan.  “Disability” and “Change of Control” shall have the meanings given to them in Appendix B to this Agreement.  In connection with a Change of 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 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; provided, however, that no later than sixty (60) days after learning of the action (or inaction) described herein as the basis for a termination of employment for Good Reason, you must advise the Company in writing that the action (or inaction) constitutes grounds for a termination of your employment for Good Reason, in which event the Company will have thirty (30) days to correct such action (or inaction) (the “Cure Period”) and if such action (or inaction) is timely corrected within the Cure Period, then you will not be entitled to terminate your employment for Good Reason as a result of such action (or inaction). If such action or inaction is not timely corrected within the Cure Period, then you will be entitled to terminate your employment for Good Reason at any time within the one-hundred and twenty (120) day period following expiration of the Cure Period.

 

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 RSUs, including the grant and vesting of RSUs, subsequent delivery of Shares and/or cash related to such RSUs or the subsequent sale of any Shares acquired pursuant to such RSUs and receipt of any dividend equivalent payments (if any) and (ii) do not commit to structure the terms or any aspect of this grant of RSUs 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 RSUs or of Shares pursuant to RSUs 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 Shares if the Grantee fails to comply with the Grantee’s obligations in connection with the Tax-Related Items.

 

 

 

4 Additional provision that may be added for some officers.

 

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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 a number of Shares otherwise deliverable equal to the Retained Share Amount (as defined below), (2) withholding from the Grantee’s wages or other cash compensation paid by the Company and/or Employer; and/or (3) withholding from proceeds of the sale of Shares acquired upon settlement of the RSUs, either through a voluntary sale or through a sale arranged by the Company (on the Grantee’s behalf pursuant to this authorization), to the extent permitted by the Administrator.  The “Retained Share Amount” shall mean a number of Shares equal to the quotient of the minimum statutory tax withholding obligation of the Company triggered by the RSUs on the relevant date, divided by the fair market value of one Share on the relevant date or as otherwise provided in the Plan.  If the obligation for Tax-Related Items is satisfied by withholding a number of Shares as described herein, the Grantee understands that he or she will be deemed to have been issued the full number of Shares subject to the settled RSUs, notwithstanding that a number of Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of the settlement of the RSUs.

 

Grantee acknowledges and understands that Grantee should consult a tax advisor 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 are invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will 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 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 ANY SHARES 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

 

By accepting this grant of RSUs, 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 RSUs is voluntary and occasional and does not create any contractual or other right to receive future grants of Shares or RSUs, or benefits in lieu of Shares or RSUs, even if Shares or RSUs 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;

 

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(d)                                the Grantee’s participation in the Plan will not create a right to further employment with Employer and will 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)                                   RSU 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)                                RSU 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 award of RSUs will not be interpreted to form an employment contract or relationship with the Company, and furthermore, this award of RSUs will not be interpreted to form an employment contract with the Employer or any subsidiary of the Company;

 

(i)                                     the future value of the Shares is unknown, may increase or decrease from the date of award or vesting of the RSU and cannot be predicted with certainty; and

 

(j)                                     in consideration of this grant of RSUs, no claim or entitlement to compensation or damages shall arise from termination of this grant of RSUs or diminution in value of this grant of RSUs 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.                                  CONFIDENTIALITY; NO RIGHT TO CONTINUING EMPLOYMENT

 

This Agreement and the receipt of any RSUs hereunder are conditioned upon Grantee not disclosing this Agreement or said receipt to anyone other than Grantee’s spouse, financial advisor, senior management of the Company or members of the Company’s Law, Tax, and Human Resources departments. If unauthorized disclosure is made to any other person, the RSUs received hereunder will be forfeited.

 

Section 10.                           GRANT-SPECIFIC TERMS

 

Appendix A contains additional terms and conditions of the Agreement applicable to Grantees residing outside the United States.  In addition, Appendix A also contains information and notices regarding exchange control and certain other issues of which the Grantee should be aware that may arise as a result of participation in the Plan.  Appendix B contains additional terms in compliance with Section 409A of the United States Internal Revenue Code.  Appendix C contains additional terms applicable to Section 16 officers.

 

Section 11.                           ENFORCEMENT

 

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

 

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Section 12.                           EXECUTION OF AWARD AGREEMENT

 

Please acknowledge your acceptance of the terms of this Agreement by electronically signing this Agreement. If you have not electronically signed this Agreement within two (2) months, the Company is not obligated to provide you any benefit hereunder and may refuse to issue Shares to you under this Agreement.  In addition, by accepting the terms of this Agreement, you acknowledge and agree that your prior RSU grants, if any, are amended to include the 409A provisions that are part of this Agreement in Appendix B.

 

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

 

	
 
    	
FLUOR   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
David   T. Seaton
    	
 
    
	
 
    	
 
    	
Chairman   and Chief Executive Officer
    

 

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APPENDIX A

 

FLUOR CORPORATION
 RESTRICTED STOCK UNIT AWARD

UNDER THE AMENDED & RESTATED 2008 EXECUTIVE PERFORMANCE INCENTIVE PLAN

TERMS FOR NON-U.S. GRANTEES

 

TERMS AND CONDITIONS

 

This Appendix A, which is part of the Agreement, includes additional terms and conditions of the Agreement that will apply to you if you are a resident in one of the countries listed below.  Capitalized terms used but not defined herein shall have the same meanings assigned to them in the Plan and the Agreement.

 

NOTIFICATIONS

 

This Appendix A also includes information regarding exchange control and certain other issues of which you should be aware with respect to your participation in the Plan.  The information is based on the securities, exchange control and other laws in effect in the respective countries as of January 2017.  Such laws are often complex and change frequently.  As a result, the Company strongly recommends that you not rely on the information in this Appendix A as the only source of information relating to the consequences of your participation in the Plan because such information may be out-of-date when your RSUs vest and/or you sell any Shares acquired under the Plan.

 

In addition, the information contained herein is general in nature and may not apply to your particular situation.  As a result, the Company is not in a position to assure you of any particular result.  You are therefore advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.

 

Finally, if you are a citizen or resident of a country other than that in which you are currently working, the information contained herein may not apply to you.

 

GRANT-SPECIFIC TERMS

 

Below please find country specific language that applies to Australia, Canada, Chile, Germany, the Netherlands, Russia, South Africa, Spain and the United Kingdom.

 

AUSTRALIA

 

Terms and Conditions

 

Prospectus Information.  The “Offer Document” and “Australian Rules” contain additional terms and conditions that govern the RSU.  Grantees should review those documents carefully.  In addition, the written or other materials provided to Grantees in connection with the RSUs have been prepared for the purpose of complying with the relevant United States securities regulations and applicable stock exchange requirements.  The information disclosed may not be the same as that which must be disclosed in a prospectus prepared under Australian law.

 

RSUs Settled in Shares Only.  Notwithstanding anything to the contrary in the Plan and/or the Agreement, Grantee understands that RSUs granted to Grantee shall be paid in Shares only and do not provide any right for Grantee to receive a cash payment.

 

Notifications

 

Securities Law Information.  If Grantee acquires Shares pursuant to the RSU and offers the Shares for sale to a person or entity resident in Australia, the offer may be subject to disclosure requirements under Australian law.  Grantees should obtain legal advice on disclosure obligations prior to making any such offer.

 

Exchange Control Information.  Exchange control reporting is required for cash transactions exceeding A$10,000 and international fund transfers.  The Australian bank assisting with the transaction will file the report.  If there is no Australian bank involved in the transfer, Grantee will be required to file the report.

 

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CANADA

 

Terms and Conditions

 

Form of Payment.  Due to legal restrictions in Canada, and notwithstanding any language to the contrary in the Plan, Grantees are prohibited from surrendering previously owned Shares, or from attesting to the ownership of previously owned Shares, to pay any tax liability in connection with the RSUs.  For the avoidance of ambiguity, withholding in Shares for this RSU Award is permissible.

 

RSUs Settled in Shares Only.  Notwithstanding anything to the contrary in the Plan and/or the Agreement, Grantee understands that RSUs granted to Grantee shall be paid in Shares only and do not provide any right for Grantee to receive a cash payment.

 

Language Consent

 

The following provision applies to residents of Quebec:

 

The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices, and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

 

Les parties reconnaissent avoir exigé la rédaction en anglais de cette convention, ainsi que de tous documents, avis et procédures judiciaires, exécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à la présente convention.

 

Notifications

 

There are no country-specific notifications.

 

CHILE

Terms and Conditions

 

There are no country-specific provisions.

 

Notifications

 

Securities Law Information.  Neither the Company, the award, nor any Company shares acquired under the Plan are registered with the Chilean Registry of Securities or are under the control of the Chilean Superintendence of Securities.

Exchange Control Information.  If exchange control reporting is required , you will be responsible for filing the report with the Central Bank of Chile.  In addition, you must also file a report with the Central Bank if, in a given year, you have kept investments, deposits, or credits abroad in an amount that exceeds US$5,000,000.

Tax Information.  Registration of your investment in Company shares with the Chilean Internal Revenue Service may result in more favorable tax treatment.  Please consult your tax advisor for additional details.

 

GERMANY

 

Terms and Conditions

 

There are no country-specific provisions.

 

Notifications

 

Exchange Control Information.  Cross-border payments in excess of EUR12,500 must be reported monthly to the German Federal Bank.  If Grantee uses a German bank to transfer a cross-border payment in excess of EUR12,500 in connection with the sale of Shares acquired under the Plan, the bank will file the report for you.

 

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THE NETHERLANDS

 

Terms and Conditions

 

There are no country-specific provisions.

 

Notifications

 

Insider-Trading Notification.  Grantees should be aware of the Dutch insider-trading rules, which may impact the sale of Shares acquired upon vesting of the RSU.  In particular, Grantees may be prohibited from effectuating certain transactions involving Shares if they have inside information about the Company.  Grantees should consult their personal legal advisor if they are uncertain whether the insider-trading rules apply to them.  By accepting the Agreement and participating in the Plan, Grantee acknowledges having read and understood this notification and acknowledges that it is his or her responsibility to comply with the Dutch insider-trading rules.

 

RUSSIA

 

Terms and Conditions

 

Securities Law Information.  Grantee acknowledges that the Agreement, the grant of RSUs, the Plan and all other materials Grantee may receive regarding participation in the Plan do not constitute advertising or an offering of securities in Russia.  The issuance of securities pursuant to the Plan has not and will not be registered in Russia and therefore, the securities described in any Plan-related documents may not be used for offering or public circulation in Russia.

 

Grantee further acknowledges that in no event will Shares acquired upon vesting of the RSUs be delivered to Grantee in Russia; all Shares acquired upon vesting of the RSUs will be maintained on Grantee’s behalf in the United States.

 

Grantee  acknowledges that Grantee is not permitted to sell Shares directly to a Russian legal entity or resident.

 

Notifications

 

Grantee understands that Grantee is solely liable for all applicable Russian exchange control requirements (including repatriation requirements applicable to the proceeds from the sale of Shares).

 

SOUTH AFRICA

 

Terms and Conditions

 

There are no country-specific provisions.

 

Notifications

 

Exchange Control Information.  To participate in the Plan, Grantee understands that Grantee must comply with exchange control regulations and rulings (the “Exchange Control Regulations”) in South Africa.

 

For RSUs, because no transfer of funds from South Africa is required, no filing or reporting requirements should apply when the RSUs, if any, are granted or when shares are issued upon vesting and settlement of the RSUs.

 

Because the Exchange Control Regulations change frequently and without notice, Grantee understands that Grantee should consult a legal advisor prior to the purchase or sale of shares under the Plan to ensure compliance with current regulations.  Grantee understands that it is Grantee’s responsibility to comply with South African exchange control laws, and neither the Company nor Grantee’s Employer will be liable for any fines or penalties resulting from failure to comply with applicable laws.

 

SPAIN

 

Terms and Conditions

 

There are no country-specific provisions.

 

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Notifications

 

No Special Employment or Similar Rights.  Grantee understands that the Company has unilaterally, gratuitously, and discretionally decided to distribute awards under the Plan to individuals who may be employees of the Company or its subsidiaries throughout the world.  The decision is a temporary decision that is entered into upon the express assumption and condition that any grant will not economically or otherwise bind the Company or any of its subsidiaries presently or in the future, other than as specifically set forth in the Plan and the terms and conditions of Grantee’s RSU grant.  Consequently, Grantee understands that any grant is given on the assumption and condition that it shall not become a part of any employment contract (either with the Company or any of its subsidiaries) and shall not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever.  Further, Grantee understands and freely accepts that there is no guarantee that any benefit whatsoever shall arise from any gratuitous and discretionary grant since the future value of the awards and underlying shares is unknown and unpredictable.  In addition, Grantee understands that this grant would not be made but for the assumptions and conditions referred to above; thus, Grantee acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then any grant of awards shall be null and void and the Plan shall not have any effect whatsoever.

 

Further, the RSU Award provides a conditional right to Shares and may be forfeited or affected by Grantee’s termination of employment, as set forth in the Agreement.  For avoidance of doubt, Grantee’s rights, if any, to the RSUs upon termination of employment shall be determined as set forth in the Agreement, including, without limitation, where (i) Grantee is considered to be unfairly dismissed without good cause; (ii) Grantee is dismissed for disciplinary or objective reasons or due to a collective dismissal; (iii) Grantee terminates service due to a change location, duties or any other employment or contractual condition; or (iv) Grantee terminates service due to the Company’s or any of its subsidiaries’ unilateral breach of contract.

 

Securities Law Notice.  The RSUs granted under the Plan do not qualify as securities under Spanish regulations.  By the grant of RSUs, no “offer of securities to the public”, as defined under Spanish law, has taken place or will take place in Spanish territory.  The present document and any other document relating to the offer of RSUs under the Plan has not been nor will it be registered with the Comisión Nacional del Mercado de Valores (Spanish Securities Exchange Commission), and it does not constitute a public offering prospectus.

 

Reporting Requirements.  Grantee is responsible for complying with all reporting requirements applicable to holding the RSUs and the underlying Shares.

 

UNITED KINGDOM

 

Terms and Conditions

 

UK Rules. The RSU Award is granted under the “UK Rules,” which contain additional terms and conditions that govern the RSU Award.  Grantees should review the UK Rules carefully.

 

Notifications

 

There are no country-specific notifications.

 

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APPENDIX B

 

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 (“Section 409A”), and all provisions of this Agreement shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or 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 4 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 anything to the contrary contained herein, for the purpose of this Agreement, (i) if the RSUs have not previously been forfeited, the RSUs shall vest on a Disability, which shall mean that the Grantee is considered disabled in accordance with U.S. Treasury Regulations section 1.409A-3(i)(4), determined as if all permissible provisions of such regulation were in effect, and (ii) a Change of Control of the Company is considered to have occurred with respect to the Grantee upon the occurrence with respect to the Grantee of a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company, as determined in accordance with U.S. Treasury Regulations section 1.409A-3(i)(5).

 

(e)                                 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.

 

- 10 -

 

APPENDIX C

 

SECTION 16 OFFICERS

 

 

 

The following provision is added to the end of Section 4 of the Agreement for Grantees who are Section 16 officers of the Company:

 

None of the restrictions upon the RSUs subject to this RSU Award shall lapse unless and until the Company meets the performance goal of $XXX net earnings for the fiscal year ending December 31, 2017, which automatically excludes the following items, if and to the extent any such item (or portion of such item) would increase or decrease net earnings (as calculated for accounting purposes):  [INSERT COMMITTEE APPROVED EXCLUSIONS]

 

- 11 -Exhibit 10.22

 

FLUOR CORPORATION
 409A DIRECTOR DEFERRED COMPENSATION PROGRAM
 (As Amended and Restated Effective as of November 2, 2016)

 

THIS INSTRUMENT, made effective as of November 2, 2016 (the “Effective Date”) by Fluor Corporation, a Delaware corporation (the “Company”), evidences the continuation of the Fluor Corporation 409A Director Deferred Compensation Program, formerly named the Fluor Corporation 409A Deferred Directors’ Fees Program (the “Plan”), adopted for the benefit of its non-employee directors.  The Plan will 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 Plan; and

 

WHEREAS, the Company amended and restated the Plan effective January 1, 2015 to permit directors to defer all or a portion of their restricted stock units and associated dividends awarded under the Fluor Corporation 2014 Restricted Stock Plan for Non-Employee Directors (as amended, modified, or supplemented from time to time) and to change the name of the Plan to the Fluor Corporation 409A Director Deferred Compensation Program; and

 

WHEREAS, the Company desires to amend the Plan so that all cash dividends paid with respect to restricted stock units deferred under the Plan are automatically deemed invested in the stock equivalent fund established under this Plan.

 

NOW, THEREFORE, the Company hereby declares the current terms and conditions of the Plan to be, as of November 2, 2016, 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 and/or settlement of restricted stock units awarded to them for services rendered to the Company in a manner that complies with Section 409A of the Code.

 

ARTICLE 2
 DEFINITIONS

 

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

 

(a)        “Administrative Committee” means the Administrative Committee appointed by the Organization and Compensation Committee to administer the Plan.

 

(b)        “Beneficiary” means the individual designated pursuant to Section 6.5.

 

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

 

Page 1 of 16

 

(d)        “Change in Control” means an event described in Treasury Regulation 1.409A-3(a)(5), 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 fifty 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 fifty percent (50%) of the total fair market value of the Company); or

 

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

 

(iii)       a change in effective control of the Company as a result of the majority of members of the Company’s board of directors being replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the 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 forty percent (40%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions.

 

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

 

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

 

(g)        “Controlled Group” means (i) any company which is a member of a controlled group of corporations, as defined in section 414(b) of the Code, which controlled group includes the Company; (ii) any trade or business under common control as defined in section 414(c) of the Code with the Company; (iii) any organization (whether or not incorporated) which is a member of an affiliated service group that includes the Company or any entity described in (i) or (ii) above; and (iv) any other entity required to be aggregated with the Company or any other entity described in (i), (ii) or (iii) above pursuant to regulations under section 414(o) of the Code.

 

(h)        “Crediting Options” means the investment options selected by the Administrative Committee for the purpose of determining gains and/or losses to Participant Fee Deferral Accounts, as modified from time to time as described in Section 6.2.

 

Page 2 of 16

 

(i)         “Deferral Accounts” means the Fee Deferral Account, the RSU Deferral Account and the RSU Dividend Deferral Account.

 

(j)         “Director’s Fees” means cash amounts payable to a director for the Plan Year for the director’s service on the Board for such Plan Year including, without limitation, annual retainer fees, committee chair retainer fees and meeting fees.

 

(k)        “Directors Restricted Stock Plan” means the Fluor Corporation 2014 Restricted Stock Plan for Non-Employee Directors, as amended, modified, supplemented or replaced from time to time.

 

(l)         “Director’s RSUs” means the restricted stock units awarded to a director for the Plan Year for the director’s service on the Board for such Plan Year under the Directors Restricted Stock Plan, the provisions of which permit deferral under this Plan.

 

(m)      “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 Administrative Committee will make the determination of Disability in its sole discretion based on available medical information.

 

(n)        “Election Form” means the form filed by an Eligible Director pursuant to which he or she consents to participation in the Plan and elects to defer Director’s Fees and/or Director’s RSUs under the Plan.  Each Election Form will specify the form of distribution (i.e., lump sum or installment payments) and with respect to Fee Deferrals will specify the time of distribution (upon Termination of Service or a specified year). The Election Form may be completed either in writing or on-line through an electronic signature.

 

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

 

(p)        “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.

 

(q)        “Fee Deferral Account” means the separate bookkeeping account maintained with respect to a Participant’s Fee Deferrals.  The Plan Administrator may maintain separate bookkeeping accounts with respect to Fee Deferrals for each Plan Year and/or may combine such accounts as it deems appropriate.

 

(r)        “Fee Deferrals” means the deferral of Director’s Fees made by a Participant under the Plan.

 

(s)        “Matching Contributions” means those contributions made by the Company prior to January 1, 2013 to the Participant’s Fee Deferral Account in accordance with Section 5.2 of the Fluor Corporation 409A Deferred Directors’ Fees Program effective as of January 1, 2005.  In addition, Matching Contributions under the Plan will also include any such contributions made under the Fluor Corporation Deferred Directors’ Fees Program.  Matching Contributions were discontinued effective January 1, 2013.

 

Page 3 of 16

 

(t)         “Organization and Compensation Committee” means the Organization and Compensation Committee of the Board.

 

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

 

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

 

(w)       “Plan Administrator” means the individual appointed by the Administrative Committee to handle the day-to-day administration of the Plan.

 

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

 

(y)        “Post-2016 RSU Dividend Deferral Account” means the separate bookkeeping account maintained with respect to a Participant’s Post-2016 RSU Dividend Deferrals.  The Plan Administrator may maintain separate bookkeeping accounts with respect to Post-2016 RSU Dividend Deferrals for each Plan Year and/or may combine such accounts as it deems appropriate.

 

(z)        “Post-2016 RSU Dividend Deferrals” means the automatic deferral of cash dividends with respect to Director RSUs that are deferred by a Participant under the Plan during and after the enrollment period in 2016.

 

(aa)      “Pre-2017 RSU Dividend Deferral Account” means the separate bookkeeping account maintained with respect to a Participant’s Pre-2017 RSU Dividend Deferrals.  The Plan Administrator may maintain separate bookkeeping accounts with respect to Pre-2017 RSU Dividend Deferrals for each Plan Year and/or may combine such accounts as it deems appropriate.

 

(bb)      “Pre-2017 RSU Dividend Deferrals” means the automatic deferral of cash dividends with respect to Director RSUs that were deferred by a Participant before the enrollment period in 2016.

 

(cc)      “RSU Deferral Account” means the separate bookkeeping account maintained with respect to a Participant’s RSU Deferrals.  The Plan Administrator may maintain separate bookkeeping accounts with respect to RSU Deferrals for each Plan Year and/or may combine such accounts as it deems appropriate.

 

(dd)      “RSU Deferrals” means the deferral of Director’s RSUs made by a Participant under the Plan.

 

(ee)      “RSU Dividend Deferral Account” means the Pre-2017 RSU Dividend Deferral Account and the Post-2016 Dividend Deferral Account.

 

(ff)       “RSU Dividend Deferrals” means the automatic deferral of cash dividends paid with respect to Director’s RSUs deferred by a Participant under the Plan.

 

(gg)      “Stock Equivalent Fund” means the fund established pursuant to Section 6.3.

 

Page 4 of 16

 

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

 

(ii)        “Termination of Service” means the date an Eligible Director (i) ceases to provide services to the Company as a member of the Board, and (ii) does not provide any services to the Company and its Controlled Group Members in any other capacity such as an independent contractor or employee.

 

ARTICLE 3
 ADMINISTRATION

 

3.1       Authority of the Administrative Committee.  The Administrative Committee will administer the Plan.  The members of the Administrative Committee will be appointed by and will serve at the discretion of the Organization and Compensation Committee.

 

Subject to the provisions herein, the Administrative Committee will 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 Administrative Committee may determine or as required by law;

 

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

 

(h)        appoint the 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 Administrative 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 Administrative Committee as to any disputed question arising under the Plan, including questions of construction and interpretation, will be final, conclusive, and binding on all parties and will be given the maximum possible deference allowed by law.

 

Page 5 of 16

 

ARTICLE 4
 ELIGIBILITY AND PARTICIPATION

 

4.1       Eligibility.  The Administrative Committee will determine, in its sole and absolute discretion, which such directors will be eligible to participate in the Plan, and may modify such determinations at any time, provided that at all times the Plan will 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 and/or Director’s RSUs.

 

4.2       Participation and Deferral Election.  Each Eligible Director will become a Participant in the Plan upon his or her election to defer Director’s Fees and/or Director’s RSUs hereunder.  A Director who elects to defer Director’s RSUs will automatically be deemed to have elected to defer any dividends paid on such Director’s RSUs as RSU Dividend Deferrals.  Eligible Directors and Participants will make their elections to defer all or a portion of their Director’s Fees and/or Director’s RSUs for the Plan Year by completing an Election Form during the applicable enrollment period (as determined by the Plan Administrator) in the Plan Year prior to the Plan Year the Director’s Fees are earned and otherwise payable and/or Director’s RSUs are awarded.  Except as provided in Section 5.3, an election under this Section 4.2 will be irrevocable after December 31 of the Plan Year prior to the Plan Year the Director’s Fees are earned and otherwise payable and/or Director’s RSUs are awarded.  A separate Election Form is required for each Plan Year.

 

In the event a Participant ceases to be eligible to participate in the Plan, such Participant will 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 a director first becomes eligible to participate in the Plan after the beginning of a Plan Year, the Company will notify the director of his or her eligibility to participate, and the Company will provide the Eligible Director with an Election Form; provided, however, that such director must make his or her deferral election within 30 days of the determination that he or she is an Eligible Director and may elect only to defer Director’s Fees and/or Director’s RSUs for such Plan Year which are to be earned or awarded after the filing of the  Election Form.  Except as provided in Section 5.3, an election under this Section 4.3 will be irrevocable with respect to the Plan Year for which the election is made.

 

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

 

ARTICLE 5
 DEFERRAL AND DISTRIBUTION ELECTIONS

 

5.1       Director Deferral Elections.  Subject to Section 4.2 and 4.3, an Eligible Director may elect to make two types of deferrals under the Plan:

 

(a)        Fee Deferrals, and

 

(b)        RSU Deferrals.

 

Page 6 of 16

 

The Eligible Director may elect to defer for any Plan Year, in percentage increments of one percent (1%), up to one hundred percent (100%) of his or her Director’s Fees and/or Director’s RSUs.  An Eligible Director who elects to defer Director’s RSUs will be deemed to have automatically elected to defer any dividends paid on such Director’s RSUs as RSU Dividend Deferrals.  Fee Deferrals will be credited to the Participant’s Fee Deferral Account, RSU Deferrals will be credited to the Participant’s RSU Deferral Account and RSU Dividend Deferrals will be credited to the Participant’s Pre-2017 or Post-2016 RSU Dividend Deferral Account, as applicable, pursuant to Section 6.1.

 

Director’s RSUs and the associated dividends deferred pursuant to this Section 5.1 will continue to be subject to the underlying grant agreement to the extent the terms of such agreement do not conflict with the terms of the Plan and the Participant’s RSU Deferral election (e.g., the deferral and settlement provisions of this Plan, rather than the grant agreement, will govern the settlement of the Director’s RSUs; however, the vesting schedule in the grant agreement will continue to apply).

 

5.2       Director Initial Distribution Elections.  At the time of deferral, an Eligible Director may elect to defer distribution of his or her Fee Deferrals until the earliest of (a) a date certain or (b) the Eligible Director’s Termination of Service, as applicable.  Conversely, the distribution of RSU Deferrals (and the associated RSU Dividend Deferrals) may only be deferred until the Eligible Director’s Termination of Service.  An Eligible Director may elect to receive his or her Fee Deferrals and RSU Deferrals in either: (i) a single lump sum payment, or (ii) annual installment payments over a period of two to 10 years.  Director’s RSU Dividend Deferrals will be paid in the same form as the RSU Deferrals to which they relate (i.e., if the Director elects installments over five years with respect to his or her 2015 Director’s RSU Deferrals, the associated RSU Dividend Deferrals for such Plan Year will also be paid in five-year installments).  Fee Deferrals and RSU Dividend Deferrals will be paid in cash and RSU Deferrals will be settled in Company common stock.

 

5.3       Director Subsequent Deferral Elections.  If a Participant wishes to modify the distribution date or form of distribution (i.e., lump sum or installments) for his or her Fee Deferrals for a particular Plan Year, the Participant must submit a distribution election change form for such change.  The form must be submitted at least 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.  A Participant may not elect to modify the distribution date or form of distribution for his or her RSU Deferrals or RSU Dividend Deferrals.

 

ARTICLE 6
 DEFERRAL ACCOUNTS AND CREDITING OPTIONS

 

6.1       Participants’ Accounts.  The Company will establish and maintain the following Deferral Accounts:

 

(a)        a Fee Deferral Account,

 

(b)        an RSU Deferral Account,

 

(c)        a Pre-2017 RSU Dividend Deferral Account, and/or

 

(d)        a Post-2016 RSU Dividend Deferral Account.

 

Page 7 of 16

 

The Fee Deferral Account will be deemed invested in the Crediting Options as provided in Section 6.2.

 

The Director’s RSUs deferred by a Participant under this Plan will be granted under the Directors Restricted Stock Plan and the RSU Deferral Account and the RSU Dividend Deferral Account will be governed by the terms of the Directors Restricted Stock Plan until the underlying Director’s RSUs are vested.  The RSU Deferral Account will be deemed invested in the Stock Equivalent Fund under Section 6.3.  The Pre-2017 RSU Dividend Deferral Account will not be deemed invested in the Crediting Options as provided in Section 6.2 or the Stock Equivalent Fund as provided in Section 6.3, but, rather, will be held in cash.  The Post-2016 RSU Dividend Deferral Account will automatically be deemed invested in the Stock Equivalent Fund as provided in Section 6.3.

 

6.2       Crediting Options – Fee Deferral Account.  The Administrative Committee is responsible for selecting the Crediting Options under the Plan, one of which options will include the Stock Equivalent Fund described in Section 6.3.  The Crediting Options may be changed, modified or deleted, or additional investment options may be added, by the Administrative Committee in its discretion.  The Crediting Options will be used as a measure of the deemed investment performance of the balances of the Participant’s Fee Deferral Accounts by the Administrative Committee.

 

At the time that an Eligible Director first becomes a Participant, the Participant will be required to allocate his or her Fee Deferrals among the Crediting Options available at the time.  Fee Deferrals will be credited to the Participant’s Fee Deferral Account on 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.

 

A Participant’s Fee Deferral Account will be credited with earnings (or losses) based on the Crediting Options selected by the Participant on a form or in such other manner as the Plan Administrator may prescribe.  Except with respect to deemed investments in the Stock Equivalent Fund, deemed earnings (and losses) on a Participant’s Fee Deferral Account will be based upon the daily unit valuation of the funds (as determined by the Plan Administrator) selected by the Participant, and will be credited to a Participant’s Fee Deferral Account on a monthly basis.  Deemed earnings (or losses) will be paid out to a Participant in accordance with the applicable Election Form.  Any portion of a Participant’s Fee Deferral Account which is subject to distribution in installments will continue to be credited with deemed earnings (or losses) until fully paid out to the Participant.

 

A Participant may specify a separate investment allocation with respect to each Plan Year’s Fee Deferrals.  Participants may modify their deemed investment instructions daily with respect to any portion (whole percentages only) of their Fee Deferral Account; provided they notify the Plan Administrator within the time and in the manner specified by the Plan Administrator.  Modifications to investment in the Stock Equivalent Fund may subject the Participant’s account to forfeiture of Matching Contributions made prior to January 1, 2013 in accordance with Section 6.4.

 

Page 8 of 16

 

The Administrative Committee or Plan Administrator 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 Administrative Committee or the Plan Administrator in its sole discretion.

 

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

 

6.3                            Stock Equivalent Fund.  One of the Crediting Options will be the Stock Equivalent Fund which is a deemed investment in the Company’s common stock.  RSU Deferrals will automatically be deemed invested in the Stock Equivalent Fund.  Pre-2017 Dividend Deferrals will be held in cash and may not be credited to any Crediting Option, including the Stock Equivalent Fund.  Post-2016 RSU Dividend Deferrals will automatically be deemed invested in the Stock Equivalent Fund.

 

The number of Stock Equivalents, or fractions thereof, that will be credited to a Participant’s Fee Deferral Account and/or Post-2016 RSU Dividend Deferral Account is determined by dividing the dollar amount of Fee Deferrals and/or Post-2016 RSU Dividend Deferrals to be credited to the Stock Equivalent Fund, by the Fair Market Value of the Company common stock on the date of crediting. To the extent dividends or other distributions on the Company’s common stock are paid or made, dividend equivalents and fractions thereof will be calculated and credited with respect to the Stock Equivalent balances (by dividing the value of the dividend equivalents by the Fair Market Value) as an increase in Stock 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 will, to the extent deemed necessary by the Board of Directors, be adjusted accordingly.

 

6.4                            Vesting and Forfeiture.  The Fee Deferrals held in each Participant’s Fee Deferral Account will be fully vested at all times.  A Participant’s Matching Contributions (and any related deemed earnings) will become vested on January 1st, of the calendar year that is five years after the date the Matching Contribution was credited to Participant’s Fee 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 will 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 Fee Deferral Account will be forfeited by such Participant to the extent attributable to the Fee Deferrals distributed or transferred.

 

A Participant will vest in his or her RSU Deferral Account and RSU Dividend Deferral Account pursuant to the grant agreement under which the Director’s RSUs were awarded.

 

6.5                            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.

 

Page 9 of 16

 

All Beneficiary designations will be signed by the Participant, and will be in the form prescribed by the Administrative Committee.  Each Beneficiary designation will be effective as of the date delivered to the Plan Administrator by the Participant.

 

Participants may change their Beneficiary designations on such form as prescribed by the Plan Administrator.  The payment of distributions payable under the Plan will be in accordance with the last unrevoked written Beneficiary designation that has been signed by the Participant and delivered to the Plan Administrator 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 6.5 predecease the Participant, the distributions payable to the Participant or the Participant’s Beneficiaries will 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 will be paid to the Participant’s estate.

 

ARTICLE 7
 DISTRIBUTIONS

 

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

 

(a)                              Distributions under this Section 7.1 will commence in January of the year specified in the Participant’s initial deferral election unless the Participant has made a subsequent deferral election pursuant to Section 5.3.

 

(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 will be equal to the balance remaining in the portion of the Participant’s vested Fee 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, and the denominator of which is the total number of remaining installment payments.  The installment amount will be adjusted annually to reflect gains and losses, if any, allocated to such Participant’s vested Fee Deferral Account pursuant to ARTICLE 6.

 

(d)                              Notwithstanding any specified distribution year election by a Participant, if a Participant incurs a Termination of Service for any reason prior to receiving full payment of the Participant’s Fee Deferral Account or while the Participant is receiving scheduled installment payments pursuant to this Section 7.1, the unpaid portion of the Participant’s Deferred Account will be paid in accordance with Section 7.2 below.

 

Page 10 of 16

 

7.2                            Distributions upon Termination of Service, Disability, or Death.  With respect to the vested portion of the Participant’s Fee Deferral Account as to which a Termination of Service distribution has been selected by the Participant at the time of deferral and with respect to the Participant’s vested RSU Deferral Account and RSU Dividend Deferral Account:

 

(a)                              Distributions under this Section 7.2 will commence in the month following Termination of Service (including if due to Disability or Death), unless the Participant has made a subsequent deferral election pursuant to Section 5.3.

 

(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 with respect to his or her Fee Deferral Account and RSU Deferral Account, the amount of each installment payment will be equal to the sum of:

 

(i)                                   the balance remaining in the portion of the vested Participant’s Fee 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, and the denominator of which is the total number of remaining installment payments.  The installment amount will be adjusted annually to reflect gains and losses, if any, allocated to such Participant’s Fee Deferral Account pursuant to ARTICLE 6;

 

(ii)                                the number of restricted stock units remaining in the vested portion of the Participant’s RSU 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, and the denominator of which is the total number of remaining installment payments; and

 

(iii)                             the amount of dividends remaining in the vested portion of the Participant’s RSU Dividend 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, and the denominator of which is the total number of remaining installment payments.

 

(d)                              Notwithstanding any election made pursuant to Section 7.1, if the Participant has a Termination of Service before all distributions are made pursuant thereto, such election will no longer apply and the deferral election applicable to distributions to be made in connection with the Participant’s Termination of Service (including if due to Disability or Death) for such Plan Year pursuant to this Section 7.2 instead will become effective.

 

(e)                              Unless otherwise elected pursuant to this Section 7.2 or Section 5.2, a Participant’s vested Deferral Accounts will be paid as a single lump sum 30 days following the occurrence of a Participant’s Termination of Service (including if due to Disability or death).

 

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7.3                            Unforeseeable Emergency.  A Participant may elect to receive a cash distribution of all or a portion of his or her Fee Deferral Account because of an Unforeseeable Emergency only to the extent required by the Participant to satisfy the emergency.  No Unforeseeable Emergency Distribution will be available with respect to a Participant’s RSU Deferral Account or RSU Dividend Deferral Account.  Whether an Unforeseeable Emergency has occurred will be determined solely by the Administrative Committee.  Distributions in the event of an Unforeseeable Emergency may be made by and with the approval of the Administrative Committee upon written request by a Participant.  In all events, a distribution will 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 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 7.3 will 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 Fee Deferral Account will be credited with earnings in accordance with the Plan up to the date of distribution.

 

The Administrative Committee’s decisions with respect to the Unforeseeable Emergency will 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 7.3, then the Participant will be ineligible to participate in the Plan on an active basis for the remainder of the Plan Year in which the distribution was received (i.e., Fee Deferrals, RSU Deferrals and RSU Dividend Deferrals will cease for the remainder of the Plan Year).

 

7.4                            Incompetence of Distributee.  In the event that it is 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 has been made by a duly qualified committee or other legal representative), such payment may be made to any person whom the Plan Administrator in its sole discretion determines is entitled to receive it, and any such payment will fully discharge the Company, the Administrative Committee, the Plan Administrator and the Plan from any further liability to the person otherwise entitled to payment hereunder, to the extent of such payment.

 

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7.5                            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 Participant’s Deferral Accounts to the spouse of the Participant by court order, such spouse may elect, by filing with the Plan Administrator a form specified by the Plan Administrator and by providing such other information as the Plan Administrator 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 or stock, as applicable pursuant and subject to the terms of ARTICLE 5 and ARTICLE 7 as to available forms of distribution and timing.

 

ARTICLE 8
 TRUST

 

Nothing contained in this Plan will 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 Administrative 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 will 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 will become irrevocable and the Company will 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 will 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 will 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 will be weighted based on their relative Deferral Account balances.

 

ARTICLE 10
 RIGHTS OF PARTICIPANTS

 

10.1                    Contractual Obligation.  The Plan will 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 will be made out of the general assets of the Company or from the trust or trusts referred to in ARTICLE 8 above.

 

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10.2                    Unsecured Interest.  No Participant or party claiming an interest in deferred amounts of a Participant will 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 will 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 will have no duty to set aside or invest any amounts credited to Participants’ Deferral Accounts under this Plan.  Deferral Accounts established hereunder are solely for bookkeeping purposes and the Company will not be required to segregate any funds based on such Deferral Accounts.

 

ARTICLE 11
 CLAIMS PROCEDURE

 

11.1                    Initial Claim.  If a Participant or Beneficiary is not enrolled in the Plan or does not receive the benefits he or she believes he or she is owed under the Plan, their authorized representative (referred to as a “Claimant”) may file a claim with the Plan Administrator. The Plan Administrator will respond to the claim within ninety (90) days after receipt of the claim or one hundred and eighty (180) days, if special circumstances require an extension of time, and written notice of the extension is provided to the Claimant before the end of the original ninety (90) days.

 

If the claim is denied, the Plan Administrator will send the Claimant a notice that:

 

(a)                              States the specific reasons for the denial,

 

(b)                              Cites the pertinent Plan provisions on which the denial is based,

 

(c)                              Describes any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary,

 

(d)                              Explains the Plan’s claims review procedures, the time limits applicable to such procedures and the appeal rights related to the claim, and

 

(e)                              Advises the Claimant of the right to bring a civil action under section 502 of ERISA.

 

11.2                    Filing an Appeal.  The Claimant may file a written appeal to the Administrative Committee to request a review of the denied claim within sixty (60) days after he receives notice of the denial of the claim pursuant to Section 11.1(a). If an appeal is not filed within this sixty (60) day period, the initial denial pursuant to Section 11.1(a) will become final.

 

In connection with such appeal, the Claimant may request in writing and free of charge, copies of all documents, records and other information relevant to his or her claim.  The Claimant in his or her appeal may discuss all of the reasons for his or her request for review, list any facts that support such request and provide any additional information he or she feels is helpful in reviewing the appeal.

 

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The Administrative Committee will notify the Claimant of its decision in writing within sixty (60) days after receipt of such request, unless special circumstances require an extension of time for processing, in which case the Claimant will be so notified and a decision will be rendered as soon as possible, but not later than one hundred and twenty (120) days after receipt of the request for review.

 

If the request for review is denied, the notice will include:

 

(a)                              Specific reasons for the decision,

 

(b)                              Specific references to the pertinent Plan provisions on which the decision is based,

 

(c)                              information regarding the Claimant’s right to have reasonable access to, and copies of all documents and other information relevant to his or her appeal free of charge, and

 

(d)                              Information regarding the Claimant’s right to file suit under section 502(a) of ERISA.

 

ARTICLE 12
 WITHHOLDING OF TAXES

 

The Company will 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 13
 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 Organization and Compensation Committee, with or without prior notice.  Except as described below in this ARTICLE 13, no such amendment or termination will 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 14
 MISCELLANEOUS

 

14.1                    Notice.  Any notice or filing required or permitted to be given to the Company under the Plan will be sufficient if in writing and hand delivered, or sent by registered or certified mail to the Fluor Corporation 409A Director Deferred Compensation Program c/o the Plan Administrator, and if mailed, will be addressed to the principal executive offices of the Company.  

 

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Notice mailed to a Participant will be at such address as is given in the records of the Company.  Notices to the Company will be deemed given as of the date of delivery.  Notice to a Participant or Beneficiary will be deemed given as of the date of hand delivery, or if delivery is made by mail, three days following the postmark date.

 

14.2                    Nontransferability.  Except as provided in Section 7.5 and this Section 14.2, 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 will the Company make any payment under the Plan to any assignee or creditor of a Participant.

 

14.3                    Responsibility for Legal Effect.  Neither the Administrative Committee nor the Plan Administrator 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.

 

14.4                    Severability.  In the event any provision of the Plan will be held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provision had not been included.

 

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

 

14.6                    Costs of the Plan.  All costs of implementing and administering the Plan will be borne by the Company.

 

14.7                    Successors.  All obligations of the Company under the Plan will 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.

 

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

 

14.9                    No Duplication.  In no event will 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).

 

14.10            Section 409A Compliance.  The provisions of the Plan will be construed and administered in a manner that enables the Plan to comply with the provisions of section 409A of the Code.

 

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