Document:

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                                                                    Exhibit 10.5

                          [ALAN BOECKMANN'S LETTERHEAD]

September 12, 2000

Mark A. Stevens
President
Energy & Chemicals
Fluor Daniel

Dear Mark,

It is my pleasure to inform you that at the September 6, 2000 Organization and
Compensation Committee meeting of the Fluor Board of Directors, Phil Carroll
recommended and they approved your participation in a special
Incentive/Retention Program. The amount of the award is $1,000,000. The award
has been structured as follows:

AWARD AMOUNT:                       $1,000,000

INCENTIVE/RETENTION PERIOD:         September 6, 2000 through December 31, 2004

INCENTIVE/RETENTION AGREEMENT:      The Award Amount is divided between the
                                    following two components:

INCENTIVE AWARD

The Organization and Compensation Committee has made a $500,000 grant of 10,000
shares of restricted stock and 6,700 tandem-restricted units. The earning of
these shares and units will be based on exceeding pre-established annual
performance objectives to be determined annually by the President and CEO Fluor
Daniel. The award will be earned in equal 25% increments if the established
objectives for each of the next four fiscal years (ending December 31, 2001,
2002, 2003 and 2004 respectively) are achieved. Your performance objective for
fiscal year 2001 performance will be established by me within the next 90 days.
These objectives will be communicated to you in a separate memorandum. If the
annual objective is not achieved, 100% of each annual portion of the award is
forfeited. The earned restricted stock and units will then vest on January 1,
2005. The entire Incentive Award, earned and unearned portion, will be forfeited
in the event that prior to December 31, 2004 you voluntarily terminate your
employment with the Company, or your employment with the Company is terminated
for cause. The specific terms and conditions of this award will be set forth in
the agreement to be forwarded to you shortly.
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Mark A. Stevens
September 12, 2000
Page 2

ACCRUAL TO EXECUTIVE DEFERRAL COMPENSATION PROGRAM ("EDCP")

You may earn $500,000, said amount to be adjusted as provided below, if you
remain continuously employed by the Company until on or after December 31, 2004
(the "EDCP Accrual"). During the period from September 6, 2000 to the date upon
which the EDCP Accrual vests (if at all), you will also be entitled to invest
the EDCP Accrual by selecting one or more of the crediting options contained in
the Fluor Executive Deferred Compensation Program. Thereafter, the amount of
your EDCP Accrual, if vested, shall be adjusted based upon the investment return
that you would have otherwise received had the EDCP Accrual been actually earned
as of January 1, 2005 and credited in your Fluor Executive Deferred Compensation
Program account based upon your chosen crediting option through the date of
vesting. If no crediting option is indicated, the EDCP Accrual will be
automatically credited as if you chose the Money Market crediting option under
the Fluor Executive Deferred Compensation Program.

The EDCP Accrual, as adjusted, will vest and be credited to your existing
Company Fluor Executive Deferred Compensation Program account (a) if you remain
continuously employed by the Company until December 31, 2004 or (b) if your
employment terminates prior to that date due to (i) death, (ii) permanent and
total disability, (iii) a Company-initiated termination other than on a
for-cause basis or (iv) a Company initiated termination following a Change of
Control. If in the event your employment terminates prior to any such vesting
date for any other reason (including, without limitation, your voluntary
termination or a termination for cause), then the EDCP Accrual, as adjusted,
will be forfeited.

For purposes hereof, the term "Change of Control" shall be deemed to have
occurred if, (a) a third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, acquires shares of the Company
having 25% or more of the votes that may be cast for the election of directors
of the Company or (b) as a result of any cash tender or exchange offer, merger
or other business combination, or any combination of the preceding (a
"transaction"), the persons who are the directors of the Company before the
transaction shall cease to constitute a majority of the Board of Directors of
the Company or any successor thereto.
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Mark A. Stevens
September 12, 2000
Page 3

Also, would you please indicate below how you want the "EDCP accrual" portion of
you award invested in the space provided below. Crediting options are the same
as currently used for other Executive Deferred Compensation Program accounts.
(Allocations must be in whole percentages and must total 100%.)

                    Money Market                       _____%
                    Interest Income Plus               _____%
                    Global Diversified                 _____%
                    Global Diversified Plus            _____%
                                               Total    100 %

Please indicate your acknowledgment of the terms of the letter by signing in the
space provided and returning the original to me for your employee records. You
should also retain a copy for your file.

If you should have any questions, please give me a call at (949) 349-4148.

Sincerely,

/s/ Alan Boeckmann

Alan Boeckmann

AGREED BY:

/s/ Mark A. Stevens

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MARK A. STEVENS                           DATE

cc:   Mark Krouse
      Lew Smith<PAGE>
                                                                    EXHIBIT 10.9

                                FLUOR CORPORATION

                        DEFERRED DIRECTORS' FEES PROGRAM

             (AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2002)

THIS INSTRUMENT, executed and made effective as of January 1, 2002 by Fluor
Corporation, a Delaware corporation, evidences an amendment and restatement of
the terms of the Fluor Corporation Deferred Directors' Fees Program adopted for
the benefit of its non-employee directors.

                                   WITNESSETH:

WHEREAS, the Company has previously amended and restated the terms and
conditions of the Fluor Corporation Deferred Directors' Fees Program on October
31, 1997; and

WHEREAS, the Company is in the process of updating its administrative process
respecting the Plan, and is changing the crediting options available to
participants in the Plan, and for these and other reasons, now desires to amend
and restate the terms and conditions of the Plan:

NOW, THEREFORE, the Company hereby declares the current terms and conditions of
the Fluor Corporation Deferred Directors' Fees Program to be, as of January 1,
2002, as follows:

                                    ARTICLE 1
                                     PURPOSE

The primary purpose of the Plan is to provide the Company's non-employee
directors with an opportunity to defer receipt of fees for services rendered to
the Company on a pre-tax basis.

                                    ARTICLE 2
                                   DEFINITIONS

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

      (a)   "Board" or "Board of Directors" means the Board of Directors of the
            Company.

      (b)   "Change in Control" means the occurrence of either of the following
            events:

            (i)   a third person, including a "group" as defined in Section
                  13(d)(3) of the Securities and Exchange Act of 1934, as
                  amended (the "Exchange Act"), acquires shares of the Company
                  having twenty-five percent or more of the total number of
                  votes that may be cast for the election of directors of the
                  Company; or

            (ii)  as the result of any cash tender or exchange offer, merger or
                  other business combination, or any combination of the
                  foregoing transactions (a "Transaction"), the persons who were
                  directors of the Company before the Transaction shall cease to
                  constitute a majority of the Board of the Company or any
                  successor to the Company.

      (c)   "Code" means the Internal Revenue Code of 1986, as amended from time
            to time.
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      (d)   "Committee" means the Executive Compensation Committee of the
            Company as appointed by the Board to administer the Plan pursuant to
            ARTICLE 3.

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

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

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

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

      (i)   "Disability" means a condition that meets the definition of a
            disability as contained in the Company's long-term disability plan,
            as determined by the Committee in its sole discretion. If the
            Company discontinues to sponsor such a plan, Disability will be
            determined by the Committee in its sole discretion.

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

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

      (l)   "Matching Contributions" means those contributions made by the
            Company to the Participant's Deferral Account in accordance with
            Section 5.2 of the Plan.

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

      (n)   "Plan" means the Fluor Corporation Deferred Compensation Directors'
            Fees Program, as set forth herein, and as it may be amended from
            time to time.

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

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

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

                                    ARTICLE 3

                                 ADMINISTRATION

3.1   AUTHORITY OF THE COMMITTEE. The Committee shall administer the Plan. The
      members of the Committee shall be appointed by and shall serve at the
      discretion of the Board.

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

      (a)   confirm a director's eligibility to participate in the Plan;

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

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

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

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

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

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

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

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

3.2   DECISIONS BINDING. All determinations and decisions of the Committee as to
      any disputed question arising under the Plan, including questions of
      construction and interpretation, shall be final, conclusive, and binding
      on all parties and shall be given the maximum possible deference allowed
      by law.

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

                                    ARTICLE 4

                          ELIGIBILITY AND PARTICIPATION

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

4.2   PARTICIPATION AND DEFERRAL ELECTION. Each Eligible Director shall become a
      Participant in the Plan upon his deferral of Director's Fees hereunder.
      Eligible directors and participants shall make their elections to defer
      all or a portion of their Director's Fees for the Plan Year by completing
      a "Deferral Election Form," during the applicable enrollment period, as
      determined by the Committee. Any Director's Fees deferral elections must
      be made before the Director Fees are earned and before the amount thereof
      is substantially certain of payment.

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

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4.3   PARTIAL YEAR ELIGIBILITY. In the event that an director first becomes
      eligible to participate in the Plan after the beginning of a Plan Year,
      the Company shall notify the director of his eligibility to participate,
      and the Company shall provide each such Participant with a "Deferral
      Election Form"; provided, however, that such Participant must make his
      election within 30 days thereof and may elect only to defer that portion
      of his Director's Fees for such Plan Year which is to be earned after the
      filing of the deferral election.

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

                                    ARTICLE 5
           CONTRIBUTIONS TO DEFERRAL ACCOUNTS; MATCHING CONTRIBUTIONS

5.1   COMPENSATION DEFERRALS. Subject to Section 4.2 and 4.3, an Eligible
      Director may elect to defer and have credited to his Deferral Account for
      any Plan Year up to one hundred percent (100%) of his Director's Fees.

5.2   MATCHING CONTRIBUTIONS. The Company shall credit matching contributions to
      the Participant's Deferral Account in an amount equal to 25% of Director
      Contributions actually deferred under the Plan directly into the Stock
      Equivalent Fund by the Participant.

                                    ARTICLE 6
                                  DISTRIBUTIONS

6.1   SCHEDULED IN-SERVICE DISTRIBUTIONS. A Participant may elect in the manner
      prescribed by the Committee to receive all or a portion of the vested
      portion of his Deferral Account while he is still a director of the
      Company in (i) a single lump sum payment, or (ii) annual installment
      payments over a period of two (2) to twenty (20) years. If the amount the
      Participant elects to receive is less than $25,000 (for all years
      combined), payment shall be made in a single lump sum. If a Participant
      elects to receive installment payments under (ii) above, the amount of
      each installment payment shall be equal to the balance remaining in the
      portion of the Participant's Deferral Account that is subject to such
      installment election (as determined immediately prior to each such
      payment), multiplied by a fraction, the numerator of which is one (1), and
      the denominator of which is the total number of remaining installment
      payments. The installment amount shall be adjusted annually to reflect
      gains and losses, if any, allocated to such Participant's Deferral Account
      pursuant to ARTICLE 7.

      A Participant's election under this Section 6.1 must specify the future
      year in which the payment of the deferred amounts shall commence. Any
      desired in-service distribution must be separately elected for each year
      fees are deferred. Thus, to elect a scheduled in-service withdrawal for
      future plan years' deferrals, a new distribution election form must be
      submitted during the applicable enrollment period. Once the applicable
      enrollment period has passed, a scheduled in-service distribution cannot
      be elected for that plan year's deferrals. Distributions under this
      Section 6.1 shall commence in January of the year specified in the
      Participant's election. Elections to receive in-service payments shall be
      irrevocable both as to the date of the distribution and the amount of the
      distribution. If a Participant's Board service with the Company terminates
      for any reason prior to receiving full payment of an in-service
      distribution or while he is receiving scheduled installment payments
      pursuant to this Section 6.1, the unpaid portion of the Participant's
      elected distribution shall be paid in accordance with Section 6.2 below.

6.2   DISTRIBUTIONS UPON SEPARATION FROM BOARD SERVICE, DISABILITY, OR DEATH. At
      the sole discretion of the Committee, the Participant may elect to receive
      in the manner specified by the

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      Committee, the vested balance credited to his Deferral Account upon
      separation from Board service, or upon incurring a Disability in (i) a
      single lump sum payment or, (ii) annual installment payments over a period
      of two (2) to twenty (20) years. If a Participant fails to make a
      distribution election relating to his separation from Board Service or if
      the vested balance credited to his Deferral Account is less than $25,000,
      payment shall be made in a single lump sum. The amount of each installment
      payment under (ii) above shall be equal to the balance remaining in the
      portion of the Participant's Deferral Account that is subject to such
      installment election (as determined immediately prior to each such
      payment), multiplied by a fraction, the numerator of which is one (1), and
      the denominator of which is the total number of remaining installment
      payments. The installment amount shall be adjusted annually to reflect
      gains and losses, if any, allocated to such Participant's Deferral Account
      pursuant to ARTICLE 7.

      In the event a Participant dies prior to receipt of all amounts in
      Participant's Deferral Account, all cash distributable hereunder shall be
      distributed in a lump sum to such Participant's beneficiary (as described
      in Section 7.5), in accordance with this Section 6.2, unless Participant
      is receiving or has elected to receive installment payments in accordance
      with Section 6.1 or this Section 6.2, the Company may pay in either
      installments or a lump-sum, in its sole discretion.

      Lump sum payments under this Section 6.2 shall be made in the January of
      the year succeeding separation from Board Service, unless the Committee,
      in its sole discretion, elects to make payment on or before December 31 of
      the year of separation from Board service. The first installment payment
      made under this Section 6.3 will be paid in the January of the second year
      succeeding separation from Board Service. Remaining installments will be
      paid annually in January.

6.3   NONSCHEDULED IN-SERVICE WITHDRAWALS. Notwithstanding any provision of this
      Plan to the contrary, a Participant may at any time request a lump sum
      distribution of all or a portion of his vested Deferral Account. In the
      event a Participant requests a distribution under this Section 6.3, (i)
      such Participant will receive a portion of his Deferral Account equal to
      90% of the requested distribution, and the remaining 10% of the requested
      distribution will be forfeited, and (ii) such Participant will be
      ineligible to participate in the Plan for the remainder of the Plan Year
      in which the distribution is received and for the immediately following
      Plan Year.

6.4   FINANCIAL HARDSHIP. The Committee shall have the authority to alter the
      timing or manner of payment of deferred amounts in the event that the
      Participant establishes, to the satisfaction of the Committee, severe
      financial hardship. In such event, the Committee may, in its sole
      discretion, distribute all or a portion of such Participant's Deferral
      Account to the Participant without penalty.

      For purposes of this Section 6.4, "severe financial hardship" shall mean
      any financial hardship resulting from extraordinary and unforeseeable
      circumstances arising as a result of one or more recent events beyond the
      control of the Participant, including, but not limited to, the illness or
      injury of a Participant or dependent (as determined by the Committee), or
      the casualty loss of a Participant's real or personal property. In any
      event, payment under this Section 6.4 may not be made to the extent such
      emergency is or may be relieved: (i) through reimbursement or compensation
      by insurance or otherwise; (ii) by liquidation of the Participant's
      assets, to the extent the liquidation of such assets would not itself
      cause severe financial hardship; and (iii) by cessation of deferrals under
      the Plan. Withdrawals of amounts because of a severe financial hardship
      may only be permitted to the extent reasonably necessary to satisfy the
      hardship, plus to pay taxes on the withdrawal. 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

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

      The Committee shall judge the severity of the financial hardship. The
      Committee's decision with respect to the severity of financial hardship
      and the manner in which, if at all, the Participant's future deferral
      opportunities shall be ceased, and/or the manner in which, if at all, the
      payment of deferred amounts to the Participant shall be altered or
      modified, shall be final, conclusive, and not subject to appeal.

      In the event a Participant receives a distribution under this Section 6.4,
      then such Participant will be ineligible to participate in the Plan for
      the remainder of the Plan Year in which the distribution was received.

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

                                    ARTICLE 7
                                DEFERRAL ACCOUNTS

7.1   PARTICIPANTS' ACCOUNTS. The Company shall establish and maintain an
      individual bookkeeping Deferral Account for Director Contributions and
      Matching Contributions made on Participant's behalf. For Director
      Contributions and Matching Contributions deferred directly into the Stock
      Equivalent Fund, such Participant's Deferral Account shall be credited
      with Director Contributions and Matching Contributions, if any, on the
      date such fees would have been paid to the Participant had Participant not
      deferred such Director's Fees to the Plan, and as provided in Section 7.2.
      For Director Contributions deferred directly into all other funds, such
      Participant's Deferral Account shall be credited with Director
      Contributions, on the first day of the month following the date such fees
      would have been paid to the Participant had Participant not deferred such
      Director's Fees to the Plan, and as provided in Section 7.2. A
      Participant's Deferral Account shall also be credited with any deemed
      earnings credit to such amounts as provided in Section 7.2.

7.2   EARNINGS ON DEFERRED AMOUNTS. A Participant's Deferral Account shall be
      credited with earnings (or losses) based on a deemed investment of the
      Participant's Deferral Account, as directed by each Participant, which
      deemed investment shall be in one or more funds, among the investment
      options selected by the Committee from time to time, which options
      presently include the Stock Equivalent Fund described in Section 7.3.
      Except with respect to deemed investments in the Stock Equivalent Fund,
      deemed earnings (and losses) on a Participant's Deferral shall be based
      upon the daily unit valuation of the funds selected by such Participant,
      and shall be credited to a Participant's Deferral Account on a monthly
      basis. Deemed earnings (or losses) shall be paid out to a Participant in
      accordance with the applicable Deferral Election Form. Any portion of a
      Participant's Deferral Account which is subject to distribution in
      installments shall continue to be credited with deemed earnings (or
      losses) until fully paid out to the Participant.

      The Committee reserves the right to change the options available for
      deemed investments under the Plan from time to time, or to eliminate any
      such option at any time. A Participant may

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      specify a separate investment allocation with respect to each Deferral
      Election Form or amended Deferral Election Form. Participants may modify
      their deemed investment instructions once a month with respect to any
      portion (whole percentages only) of their Deferral Account; provided they
      notify the Committee or its designee within the time and in the manner
      specified by the Committee. Not limiting the foregoing, the Committee or
      its designee may provide additional limitations on the ability of
      Participants to change their deemed investment instructions regarding
      deemed investments in the Stock Equivalent Fund to prevent violations of
      Section 16(b) of the Securities Exchange Act of 1934, as amended, as
      determined by the Committee or its designee in its sole discretion.
      Elections and amendments thereto pursuant to this Section 7.2 shall be
      made in the manner prescribed by the Committee. The Committee reserves the
      right to credit earnings (or losses) on a basis different from that
      elected by the Participants.

7.3   STOCK EQUIVALENT FUND. One of the deemed investment options is the Stock
      Equivalent Fund which is a deemed investment in the Company's common
      stock. Directors Contributions directly allocated to the Stock Equivalent
      Fund are eligible for Matching Contributions in accordance with Section
      5.2.

      The number of Stock Equivalents, or fractions thereof, will be credited to
      a Participant's Deferral Account in an amount determined by dividing the
      amount of Director Contributions and Matching Contributions to be deferred
      to the Stock Equivalent Fund, by the Fair Market Value on the date of
      crediting in accordance with Section 7.1. To the extent dividends or other
      distributions on the Company's common stock are paid or made, dividend
      equivalents and fractions thereof shall be calculated with respect to
      balances of such Stock Equivalents converted to additional Stock
      Equivalents (by dividing the value of the dividend equivalents by the Fair
      Market Value) and credited to the appropriate accounts as of the dividend
      payment dates. Upon the occurrence of any stock split, stock dividend,
      combination or reclassification with resect to any outstanding class of
      stock of the Company, the number of Stock Equivalents deemed invested in
      the Stock Equivalent Fund shall, to the extent deemed necessary by the
      Board of Directors, be adjusted accordingly.

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

7.5   DESIGNATION OF BENEFICIARY. Each Participant may designate a beneficiary
      or beneficiaries who, upon the Participant's death, or physical or mental
      incapacity will receive the amounts that otherwise would have been paid to
      the Participant under the Plan. All designations shall be signed by the
      Participant, and shall be in such form as prescribed by the Committee.
      Each

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      designation shall be effective as of the date delivered to the Committee
      or its designee by the Participant.

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

      In the event that all the beneficiaries named by a Participant pursuant to
      this Section 7.5 predecease the Participant, the deferred amounts that
      would have been paid to the Participant or the Participant's beneficiaries
      shall be paid to the Participant's estate.

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

                                    ARTICLE 8
                                      TRUST

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

                                    ARTICLE 9
                                CHANGE IN CONTROL

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

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

9.3   AMENDMENT AND TERMINATION. After the occurrence of a Change in Control,
      the Company may not amend the Plan without the prior approval of a
      majority of the Participants. After a Change in Control, the Company may
      not terminate the Plan until either (i) all benefits have been paid in
      full, or (ii) the majority of the Participants approve the same. For
      purposes hereof, Participants' votes shall be weighted based on their
      relative Plan account balances.

                                       8
<PAGE>
                                   ARTICLE 10
                             RIGHTS OF PARTICIPANTS

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

10.2  UNSECURED INTEREST. No Participant or party claiming an interest in
      deferred amounts of a Participant shall have any interest whatsoever in
      any specific asset of the Company. To the extent that any party acquires a
      right to receive payments under the Plan, such right shall be equivalent
      to that of an unsecured general creditor of the Company. Each Participant,
      by participating hereunder, agrees to waive any priority creditor status
      for wage payments with respect to any amounts due hereunder. The Company
      shall have no duty to set aside or invest any amounts credited to
      Participants' Deferral Accounts under this Plan. Deferral Accounts
      established hereunder are solely for bookkeeping purposes and the Company
      shall not be required to segregate any funds based on such Deferral
      Accounts.

                                   ARTICLE 11
                              WITHHOLDING OF TAXES

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

                                   ARTICLE 12
                            AMENDMENT AND TERMINATION

Subject to ARTICLE 9, the Company reserves the right to amend, modify, or
terminate the Plan (in whole or in part) at any time by action of the Board,
with or without prior notice. Except as described below in this ARTICLE 12, no
such amendment or termination shall in any material manner adversely affect any
Participant's rights to any amounts already deferred or credited hereunder or
deemed earnings thereon, up to the point of amendment or termination, without
the consent of the Participant. Notwithstanding an other provision in this Plan
to the contrary, payment of the Deferral Accounts shall occur not later than the
last business day of the month following the month the termination of this Plan
is made effective.

                                   ARTICLE 13
                                  MISCELLANEOUS

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

13.2  NONTRANSFERABILITY. Except as provided in Section 7.5 and this Section
      13.2, Participants' rights to deferred amounts and earnings credited
      thereon under the Plan may not be sold, transferred,

                                       9
<PAGE>
      assigned, or otherwise alienated or hypothecated, other than by will or by
      the laws of descent and distribution, or pursuant to a domestic relations
      order, nor shall the Company make any payment under the Plan to any
      assignee or creditor of a Participant.

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

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

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

13.6  COSTS OF THE PLAN. All costs of implementing and administering the Plan
      shall be borne by the Company.

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

13.8  APPLICABLE LAW. Except to the extent preempted by applicable federal law,
      the Plan shall be governed by and construed in accordance with the laws of
      the state of California.

                                       10

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