Document:

Exhibit
10.1

 

	
  MEC

  	
  Magna
  Entertainment Corp.

  
	
   

  	
  337 Magna Drive

  
	
   

  	
  Aurora, Ontario,

  
	
   

  	
  Canada L4G 7K1

  
	
   

  	
  Tel:    (905)
  726-7191

  
	
   

  	
  Fax:    (905)
  726-7448

  

 

February 29,
2008

 

PRIVATE AND
CONFIDENTIAL

 

Mr. Ron
Charles

10702 Art Street

Shadow Hills, CA

91040

 

Dear Ron:

 

Re: 
Employment with Magna Entertainment Corp.

 

We wish to
confirm your employment with Magna Entertainment Corp. (the “Corporation”) as
follows:

 

1.                                       Position: As of January 7, 2008
(the “Start Date”), you are appointed Chief Operating Officer of Magna Entertainment
Corp. reporting to the Chairman of the Board or his designee(s).  You will also continue to act as Executive
Director of MEC California.

 

2.                                       Remuneration:  Your Base Salary shall be US $500,000 per
annum (less statutorily required deductions) payable in accordance with the
Corporation’s standard payroll practices. 
Your base Salary will be paid to you retroactive to August 1, 2007,
the date that you were named the Chair of the Corporation’s Executive
Management Committee (less amounts paid to you under your previous employment
arrangements with the Corporation)

 

3.                                       Discretionary Annual Bonus:  In addition
to your Base Salary, you shall be eligible to receive a Discretionary Annual
Bonus (inclusive of all entitlement to vacation pay, whether vacation is taken
or not in any period and less the required withholding taxes and other
statutory deductions) the amount to be determined and payment of which shall
both be in the sole discretion of the Corporation and will be conditional on
your performance and the financial performance of the Corporation.  Your Discretionary Annual Bonus, if any,
shall be paid within three (3) months after December 31 of each year.

 

4.                                       2007 Annual Bonus:  Your 2007 Annual Bonus as set out in the
Letter Agreement between yourself and the Corporation equal to one half of one
per cent (0.5%) of the Earnings Before Interest, Income Tax, Depreciation and
Amortization (“EBITDA” of Santa Anita Park and Golden Gate Fields for the 2007
fiscal year of the Corporation will be paid to you in the usual course.

 

 

5.                                       MEC Stock Options:  Subject to the express approval of the
Compensation Committee of the Board of Directors of MEC and compliance with all
applicable laws, MEC shall grant you as of your start date options to purchase
1,000,000 shares of Class A Subordinate Voting Stock of MEC at an exercise
price per share which is equal to the greater of the closing trading price of
the shares on the trading day immediately preceding the date that the options
are granted and US$1.50.  Subject to the
approval of the Compensation Committee, the options will have a term of ten (10) years
from date of grant and will vest one-fifth on the date of grant and an
additional one-fifth on each of the first four anniversaries of the date of
grant.  The grant of options will be
subject to you entering into a Stock Option Agreement with MEC in the standard
form used by MEC from time to time for employee stock option grants under MEC’s
Long-Term Incentive Plan.  Should your
employment with the Corporation terminate, the term of your options shall be
reduced as provided in the Stock Option Agreement referred to above.  Such options shall be subject to all other
terms and conditions set forth in the Stock Option Agreement referred to above
and/or in MEC’s Long-Term Incentive Plan. 
Upon receipt of an executed copy of this Agreement, we will place this
matter before the Compensation Committee of the Board of Directors of MEC at
the earliest reasonable opportunity.

 

6.                                       Benefits:  During your employment by the Corporation,
you will be entitled to:

 

(a)                                  participate
in all group insurance and benefit programs generally applicable to salaried
employees of the Corporation from time to time;

 

(b)                                 four
(4) weeks vacation in respect of each completed twelve (12) month period
of employment during the term of this agreement, to be taken at such time or
times as are mutually convenient to you and the Corporation, but not payment in
lieu thereof; and

 

(c)                                  reimbursement
for all reasonable and documented business expenses incurred on behalf of the
Corporation in carrying out your duties, in accordance with MEC’s policies from
time to time, but excluding automobile operating costs.

 

7.                                       Conditions for Continued Employment: It
is acknowledged by you that as a condition of your continued employment you
will comply in every respect with MEC’s Capital Expenditure Guidelines, Health,
Safety and Environmental Policy, Code of Business Conduct and the MEC Insider
Reporting and Trading Policy, as amended from time to time, together with such
other policies that may be established by MEC and be in effect from time to
time.

 

8.                                       Termination:  Your employment and this agreement, including
all benefits provided for under this agreement, will terminate on:  (a) the acceptance by the Corporation of
your voluntary resignation; (b) at the Corporation’s option, your
disability for an aggregate of four (4) months or more in any twenty-four
(24) month period, subject to any statutory requirement to accommodate such
disability; (c) your death; or (d) your dismissal for cause or by
reason of your breach of the terms of this agreement.

 

2

 

Otherwise, you or the
Corporation may, at any time for any reason, terminate your employment and this
agreement without cause by providing the other party with twelve (12) months
prior written notice of intention to terminate. 
Alternatively, the Corporation may elect to terminate your employment
and this Agreement immediately by paying you a severance package equivalent to
twelve (12) months’ Base Salary (less statutorily required deductions) in
twelve (12) equal monthly instalments. 
The Corporation may also terminate your employment and this agreement by
providing you a combination of working notice and severance equivalent to the
notice period described above.  If your
employment is terminated pursuant to this paragraph, the Corporation shall
maintain on your behalf the benefits referred to in paragraph 6(a), except for
life and disability insurance benefit coverage, for a period of twelve (12)
months at the same cost as if you were an active employee.  Your life and disability insurance benefit
coverage shall be maintained for a period of not less than the period required
by applicable statute.

 

In the event that
you breach the provisions of paragraph 7, the payment of any further amounts
under this agreement will immediately cease. 
Further, the amount paid in each instalment will be offset by any income
earned by you, during the period you are entitled to receive instalments,
regardless of whether such income is earned from alternate or self-employment.

 

The termination provisions
set forth above are inclusive of any and all statutory, common law and/or
contractual entitlement to severance pay, notice of termination or pay in lieu
thereof, salary, bonuses, vacation and/or vacation pay and other remuneration
and benefits payable or otherwise provided to you in relation to your
employment by the Corporation (including, specifically, any preceding
employment by the Corporation and its affiliated or associated Corporation
and/or their respective predecessors, (all of the foregoing are hereinafter
collectively referred to as the “MEC Group”)), and the termination of your
employment and this agreement.

 

9.                                       Confidentiality:  You shall keep confidential at any time
during or after your employment, any information (including proprietary or
confidential information) about the business and affairs of, or belonging to,
the Corporation or any member of the MEC Group or their respective customers or
suppliers, including information which, though technically not trade secrets,
the dissemination or knowledge whereof might prove prejudicial to any of
them.  In addition, if requested at any
time, you shall execute a separate form of Employee Confidentiality Agreement
as a condition of your continued employment.

 

10.                                 Other Conditions:  You hereby acknowledge as reasonable, in
terms of both scope and duration, and agree that you shall abide by the
following terms and conditions:

 

i)                                         Technology, Know-How, Inventions, Patents:  That all designs, devices, improvements,
inventions and ideas made or conceived by you resulting from your access to the
business of the MEC Group shall be the exclusive property of the MEC Group and
you and your estate agree to take all necessary steps to ensure that such
property rights are protected.

 

ii)                                      Confidentiality:  You shall keep confidential at all times
during and after your employment, all information (including proprietary or
confidential information) 

 

3

 

about the
business and affairs of, or belonging to, the Corporation or any member of the
MEC Group or their respective customers or suppliers, including information
which, though technically not trade secrets, the dissemination or knowledge
whereof might prove prejudicial to any of them. 
In addition, if requested at any time, you shall immediately execute a
separate form of Employee Confidentiality Agreement in the Corporation’s
standard form as a condition of your continued employment.

 

iii)                                   Conflict of Interest:  You shall not engage in any business
activities, either through yourself or through immediate family member(s),
which may place you in an actual or apparent conflict of interest with your
duty to act, at all times, in the best interests of the Corporation.

 

iv)                                  Non-Solicitation:  During the term of your employment with the
Corporation and for a period of twelve (12) months after the termination of
your employment, you shall not, directly or indirectly solicit, attempt to
solicit or call upon any firm, person or company who is or was a customer or
client of the Corporation or any member of the MEC Group or otherwise solicit,
attempt to solicit, or communicate in any way with employees of the Corporation
or any member of the MEC Group for the purpose of having such employees
employed or in any way engaged by another person, firm, corporation, or other
entity.

 

10.                                 Severability: You acknowledge and agree
that should any provision in this agreement be held to be invalid, void or
unenforceable, it shall be declared separate and distinct, and the remaining
provisions shall continue in full force and effect.

 

11.                                 Assignability: This agreement may be
assigned by the Corporation in its sole discretion to any other member of the
MEC Group without your prior consent. 
Upon completion of such assignment, the Corporation shall be
automatically released from any obligation, liability or responsibility under
this agreement.

 

12.                                 Governing Law:  This Agreement and the legal relations hereby
created between you and the Corporation shall be governed by and construed
under the and in accordance with the internal laws of the State of Delaware
without regard to conflicts of law principles.

 

4

 

If the terms as
set out in this agreement are acceptable to you, please sign and date three
copies in the places indicated and return two fully signed copies to the
attention of William Ford by March 7th, 2008, after which, if
not so signed and returned, this agreement shall be withdrawn.  Upon execution by you, this agreement (i) replaces
any prior written or oral employment agreement or other agreement concerning
remuneration between you and the Corporation or any member of the MEC Group and
(ii) will continue to apply to your employment in a similar or other
capacity with the Corporation or any member of the MEC Group.

 

Yours very truly,

 

	
  /s/ Frank
  Stronach

  	
   

  
	
  Frank Stronach

  
	
  Chairman and
  Interim Chief Executive Officer

  

 

I hereby accept
the terms and conditions set out above and acknowledge that this agreement
contains all the terms and conditions of my employment with Magna Entertainment
Corp. (the “Corporation”) and that no other terms, conditions or
representations other than those within this letter form part of this
agreement  and confirm that I am not
subject to any restrictions (contractual or otherwise) arising from my former
employment which would present or impair me in carrying out my duties and functions
with the Corporation.  Furthermore, I
confirm that during the term of my employment I will not offer to the
Corporation any confidential or proprietary information that I have knowledge
of with respect to my former employers, nor will I provide such information to
the Corporation should I be requested to do so, until such time as such
information is no longer confidential, propriety or comes into the public
domain.

 

I understand that in order to
manage the employment relationship, it will be necessary for the Corporation to
collect and use certain personal information about me, as well as my
beneficiaries and dependents.  I grant my
consent to the collection and use of this information, as well as to the
disclosure of relevant personal information to employees, affiliates and agents
of the Corporation where necessary for legitimate business reasons, including
performance and attendance management, and administration of the Corporation’s
compensation, employee benefit, profit sharing and retirement programs.

 

	
  February 29,
  2008

  	
   

  	
  /s/ Ron Charles

  
	
  Date

  	
   

  	
  Ron Charles

  

 

5Exhibit 10.1

 

FLUOR
CORPORATION 2008 EXECUTIVE PERFORMANCE INCENTIVE PLAN

 

SECTION 1. Purpose of Plan

 

The purpose of this “Fluor Corporation 2008
Executive Performance Incentive Plan” (the “Plan”) of Fluor Corporation, a
Delaware corporation, is to enable the Company, as defined in Section 2.2(a)(ii) hereof,
to attract, retain and motivate its officers, executives, management and other
key personnel, and to further align the interests of such persons with those of
the shareholders of the Company, by providing for or increasing their
proprietary interest in the Company.

 

SECTION 2. Administration of the Plan

 

2.1 
Composition of Committee. 
The Plan shall be administered by the Organization and Compensation
Committee of the Board of Directors of the Company and/or by the Board of
Directors of the Company or another committee of the Board of Directors of the
Company, as appointed from time to time by the Board of Directors (any such
administrative body, the “Committee”). The Board of Directors shall fill vacancies
on, and may remove from or add members to, the Committee. The Committee shall
act pursuant to a majority vote or unanimous written consent. If an award
granted under the Plan (an “Award”) is intended to satisfy the conditions of Section 162(m)(4)(C) of
the Internal Revenue Code of 1986, as amended (the “Code”), then approval of
such grant shall be required to be made solely by Committee members who are an “outside
director” as described in the Treasury regulations under Section 162(m).
Notwithstanding the foregoing, with respect to any Award that is not intended
to satisfy the conditions of Rule 16b-3 under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) or Code Section 162(m)(4)(C), the
Committee may appoint one or more separate committees (any such committee, a “Subcommittee”)
composed of one or more directors of the Company (who may but need not be
members of the Committee) or officers of the Company who may but need not be
members of the Board of Directors of the Company and may delegate to any such
Subcommittee(s) the authority to grant Awards, as defined in Section 5.1
hereof, under the Plan to employees, to determine all terms of such Awards,
and/or to administer the Plan or any aspect of it; provided, however, that if
the Subcommittee is composed of one or more officers of the Company who are not
members of the Board of Directors of the Company, the resolution so authorizing
such Subcommittee shall specify the total number of Awards (if any) such
Subcommittee may award pursuant to such delegated authority, and any such Award
shall be subject to the form of award agreement theretofore approved by the
Committee. Any action taken by a Subcommittee within the scope of such
delegation shall be deemed for all purposes to have been taken by the
Committee. The Committee hereby designates the Secretary of the Company and the
head of the Company’s human resource function to assist the Committee in the
administration of the Plan and execute agreements evidencing Awards made under
this Plan or other documents entered into under this Plan on behalf of the
Committee or the Company. In addition, the Committee may designate other
Company employees to assist the Committee in the administration of the Plan,
and may grant authority to such persons to execute agreements evidencing Awards
made under this Plan or other documents entered into under this Plan on behalf
of the Committee or the Company.

 

2.2 
Powers of the Committee. 
Subject to the express provisions of this Plan, the Committee shall be
authorized and empowered to do all things necessary or desirable in connection
with the administration of this Plan with respect to the Awards over which such
Committee has authority, including, without limitation, the following:

 

(a)           to prescribe, amend and rescind rules and regulations
relating to this Plan and to define terms not otherwise defined herein;
provided that, unless the Committee shall specify otherwise, for purposes of
this Plan: (i) the term “fair market value” shall mean, as of any date,
the closing price per share at which the Shares (as defined in Section 3.1
hereof) are sold in the regular way on the New York Stock Exchange or, if no
Shares are traded on the New York Stock Exchange on the date in question, then
for the next preceding date for which Shares are traded on the New York Stock
Exchange; and (ii) the term “Company” shall mean Fluor Corporation and its
subsidiaries and affiliates, unless the context otherwise requires.

 

 

(b)           to determine which persons are Eligible Employees (as defined
in Section 4 hereof), to which of such Eligible Employees, if any, Awards
shall be granted hereunder, to make Awards under the Plan and to determine the
terms of such Awards and the timing of any such Awards;

 

(c)           to determine the number of Shares subject to Awards and
the exercise or purchase price of such Shares;

 

(d)           to establish and verify the extent of satisfaction of any
performance goals applicable to granting Awards;

 

(e)           to prescribe and amend the terms of the agreements or
other documents evidencing Awards made under this Plan (which need not be
identical);

 

(f)            to determine the extent to which adjustments are required
pursuant to Section 12 hereof;

 

(g)           to interpret and construe this Plan, any rules and
regulations under the Plan and the terms and conditions of any Award granted
hereunder, and to make exceptions to any such provisions in good faith and for
the benefit of the Plan, Participants (as defined in Section 4 hereof) and
the Company;

 

(h)           to approve corrections in the documentation or
administration of any Award; and

 

(i)            to make all other determinations deemed necessary or
advisable for the administration of the Plan.

 

2.3 
Determinations of the Committee.  All decisions, determinations and
interpretations by the Committee or the Board of Directors regarding the Plan
shall be final and binding on all Eligible Employees and Participants, as
defined in Section 4 hereof. The Committee or the Board of Directors, as
applicable, shall consider such factors as it deems relevant, in its sole and
absolute discretion, to making such decisions, determinations and
interpretations including, without limitation, the recommendations or advice of
any officer of the Company or Eligible Employee and such attorneys, consultants
and accountants as it may select.

 

SECTION 3. Stock Subject to Plan

 

3.1 
Aggregate Limits. 
Subject to adjustment as provided in Section 12, at any time, the
aggregate number of shares of the Company’s common stock, $0.01 par value (“Shares”),
issued pursuant to all Awards (including all ISOs (as defined in Section 5.1
hereof)) granted under this Plan shall not exceed 5,500,000 (number of shares),
plus the number of Shares subject to awards outstanding as of May 7, 2008
(the date of the Annual Shareholder’s Meeting) under the Company’s 2000
Executive Performance Incentive Plan, the Company’s 2001 Key Employee
Performance Incentive Plan and the Company’s 2003 Executive Performance
Incentive Plan (collectively, the “Prior Plans”) but which shares are not
thereafter issued upon exercise or settlement of such awards; provided that the
aggregate limit of the total number of Shares that may be issued under this
Plan shall be further reduced by an additional three-quarters (3/4) of a Share for each Share
issued upon settlement of an Award granted in terms of Shares under the Plan
other than as a Stock Option or Stock Appreciation Right. The Shares to be
utilized in the Plan may be either Shares reacquired by the Company, including
Shares purchased in the open market, or authorized but unissued Shares.

 

3.2 
Code Section 162(m) Limits.  The aggregate number of Shares subject to
Stock Options or Stock Appreciation Rights granted under this Plan during any
calendar year to any one Eligible Employee shall not exceed 750,000. The
aggregate number of Shares issuable with respect to any Restricted Stock
Awards, 

 

 

Incentive Awards denominated in Shares or Stock Unit Awards (other than
Shares issued or issuable upon exercise of Options or Stock Appreciation
Rights) granted under this Plan during any calendar year to any one Eligible
Employee shall not exceed 250,000. Notwithstanding anything to the contrary in
the Plan, the foregoing limitations shall be subject to adjustment under Section 12
only to the extent that such adjustment will not affect the status of any Award
intended to qualify as “performance based compensation” under Code Section 162(m).

 

3.3 
Issuance of Shares. 
For purposes of Section 3.1, the aggregate number of Shares issued
under this Plan at any time shall equal only the number of Shares actually
issued upon exercise or settlement of an Award. Notwithstanding the foregoing,
Shares subject to an Award under the Plan (or an award under any of the Prior
Plans) may not again be made available for issuance under this Plan if such Shares
are: (i) Shares that were subject to a Stock Option or Stock Appreciation
Right and were not issued upon the net settlement or net exercise of such
Award, (ii) Shares used to pay the exercise price of a Stock Option, (iii) Shares
delivered to or withheld by the Company to pay the withholding taxes related to
an Award, or (iv) Shares repurchased on the open market with the proceeds
of a Stock Option exercise. Shares subject to Awards that have been canceled,
expired, forfeited or otherwise not issued under an Award and Shares subject to
Awards settled in cash shall not count as Shares issued under this Plan.

 

SECTION 4. Persons Eligible Under Plan

 

Any person who is (i) an employee of the
Company (within the meaning of Section 303A.08 of the New York Stock Exchange
Listed Company Manual) and who also is an officer, key employee or member of
the Executive Management Team (“EMT”), (ii) a prospective employee of the
Company who is to be an officer, key employee or member of the EMT, (iii) a
consultant to the Company, or (iv) an advisor of the Company (each, an “Eligible
Employee”) shall be eligible to be considered for the grant of Awards. For
purposes of this Plan, the Chairman of the Board’s status as an employee shall
be determined by the Board of Directors. For purposes of determining
eligibility for Awards, the term “Eligible Employee” shall also include a
former Eligible Employee or any person (including any estate) who is a
beneficiary of a former Eligible Employee. A “Participant” is any Eligible
Employee to whom an Award has been made and any person (including any estate)
to whom an Award has been assigned or transferred pursuant to Section 11.1.

 

SECTION 5. Plan Awards

 

5.1 
Award Types.  The
Committee, on behalf of the Company, is authorized under this Plan to enter
into certain types of arrangements with Eligible Employees and to confer
certain benefits to them (“Awards”). The following types of Awards are
authorized under the Plan if granted according to the terms and conditions of
the Plan: Stock Option (including Incentive Stock Options), Restricted Stock,
Incentive and Stock Unit. These authorized types of Awards are defined as
follows:

 

Stock Option Award:  A Stock Option is a right granted under Section 6
of this Plan to purchase a specified number of Shares at a specified exercise
price, at such times, and on such other terms and conditions as are specified
in or determined pursuant to the document(s) evidencing the Award (the “Option
Agreement”). Stock Options intended to qualify as Incentive Stock Options (“ISOs”)
pursuant to Code Section 422 and Stock Options that are not intended to
qualify as ISOs (“Non-Qualified Stock Options” or “NQSOs”) may be granted.

 

Stock Appreciation Right Award:  A Stock Appreciation Right is a right granted
pursuant to Section 7 of this Plan that entitles the Participant to
receive, in cash or Shares or a combination thereof, as determined by the
Committee, value equal to or otherwise based on the excess of (i) the fair
market value of a specified number of Shares at the time of exercise over (ii) the
exercise price of the right, as established by the Committee on the date of
grant, and on such other terms and conditions as are specified in or determined
pursuant to the document(s) evidencing the Award (the “Stock Appreciation
Right Agreement”).

 

 

Restricted Stock Award:  A Restricted Stock Award is an award of
Shares made under Section 8 of this Plan, the grant, issuance, retention
and/or vesting of which is subject to such performance and other conditions as
are expressed in the document(s) evidencing the Award (the “Restricted
Stock Agreement”).

 

Incentive Award:  An Incentive Award is a bonus opportunity
awarded under Section 9 of this Plan pursuant to which a Participant may
become entitled to receive an amount payable either in cash, Shares or other
property based on satisfaction of such performance criteria as are specified in
the document(s) evidencing the Award (the “Incentive Bonus Agreement”).

 

Stock Unit Award:  A Stock Unit Award is an award of a right to
receive the fair market value of a specified number of Shares made under Section 10
of this Plan, the grant, issuance price, retention and/or vesting of which is
subject to such performance and other conditions as are expressed in the
document(s) evidencing the Award (the “Stock Unit Agreement”).

 

5.2 
Grants of Awards.  An
Award may consist of one or two or more Award types made in any combination or
in the alternative.

 

SECTION 6. Stock Option Awards

 

The Committee may grant a Stock Option or
provide for the grant of a Stock Option, in the discretion of the Committee or
automatically upon the occurrence of specified events previously established by
the Committee including, without limitation, the achievement of performance
goals, the satisfaction of an event or condition within the control of the
recipient of the Award, within the control of others or not within any person’s
control.

 

6.1 
Option Agreement.  Each
Option Agreement shall contain provisions regarding (a) the number of
Shares which may be issued upon exercise of the Stock Option, (b) the
purchase price of the Shares and the means of payment for the Shares, (c) the
term of the Stock Option, (d) such terms and conditions of exercisability
as may be determined by the Committee, (e) any restrictions on the
transfer of the Stock Option, (f) forfeiture provisions, and (g) such
further terms and conditions, consistent with the Plan as may be determined by
the Committee. Option Agreements evidencing ISOs shall contain such terms and
conditions as may be necessary to comply with the applicable provisions of Code
Section 422.

 

6.2 
Stock Option Price. 
The purchase price per Share of the Shares subject to each Stock Option
granted under the Plan shall equal or exceed 100% of the fair market value of
such Stock on the date the Stock Option is granted, except that the Committee
may specifically provide that the exercise price of a Stock Option may be
higher or lower in the case of a Stock Option granted to employees of a company
acquired by the Company in assumption and substitution of options held by such
employees at the time such company is acquired. The assumption and substitution
of options shall not result in discounted options subject to Section 409A.

 

6.3 
Stock Option Term.  The
“term” of each Stock Option granted under the Plan, including any ISOs, shall
be stated in the Option Agreement but may not exceed ten (10) years from
the date of its grant.

 

6.4 
Stock Option Vesting. 
Stock Options granted under the Plan shall be exercisable at such time
and in such manner prior to the expiration of the Stock Option’s term as
determined in the sole discretion of the Committee and evidenced in the terms
of the Option Agreement. The Committee shall have the right to make the timing
of the ability to exercise any Stock Option granted under the Plan subject to
such performance requirements as deemed appropriate by the Committee. At any
time after the grant of a Stock Option, the Committee may, in its sole
discretion, reduce or eliminate any restrictions surrounding any Participant’s
right to exercise all or part of the Stock Option, limited by the fact that a
Stock Option shall first become exercisable upon satisfaction of such
performance requirements as deemed appropriate by the Committee but in no case
shall such Stock Option become fully exercisable prior to the twelfth (12th)
month following its date of grant, other than as a result of the Participant’s
death, disability or termination of employment, or a change of control of the
Company.

 

 

6.5  Option Exercise.

 

(a)  Partial Exercise.  An exercisable Stock Option may be exercised
in whole or in part. However, a Stock Option shall not be exercisable with
respect to fractional Shares and the Committee may require, by the terms of the
Option Agreement, that any partial exercise must be for a minimum number of
whole Shares.

 

(b) 
Manner of Exercise.  An
exercisable Stock Option shall be deemed exercised (in whole or in part) only
upon delivery to the Company representative designated by the Committee all of
the following: (i) a notice of exercise (in such form as the Committee
authorizes) specifying the number of Shares to be purchased by the Participant;
(ii) payment or provision for payment of the exercise price (in compliance
with Section 6.5(c) hereof) for such number of Shares; (iii) such
representations and documents as the Committee, in its sole discretion, deems
necessary or advisable to effect compliance with all applicable provisions of
the Securities Act of 1933, as amended, and any other Federal, state or foreign
securities laws or regulations; (iv) in the event that the Stock Option
shall be exercised pursuant to Section 11.1 by any person or persons other
than the Participant, appropriate proof of the right of such person or persons
to exercise the Option; and (v) such representations and documents as the
Committee, in its sole discretion, deems necessary or advisable to provide for
tax withholding. Unless provided otherwise by the Committee, no Participant
shall have any right as a shareholder with respect to any Shares purchased
pursuant to any Stock Option until the registration of Shares in the name of
the Participant, and no adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions or
other rights for which the record date is prior to the date such Shares are so
registered.

 

(c) 
Payment of Exercise Price.  To
the extent authorized by the Committee, the exercise price of a Stock Option
may be paid at the time established by the terms of the Option Agreement or at
the time of exercise of the Stock Option in one or more of the following
methods: (i) cash or certified or cashiers’ check; (ii) shares of
Company capital stock that have been held by the Participant for such period of
time as the Committee may specify; (iii) other property deemed acceptable
by the Committee; (iv) a reduction in the number of Shares or other
property otherwise issuable pursuant to such Stock Option; or (v) any
combination of (i) through (iv).

 

6.6 
No Repricing without Stockholder Approval.  Other than in connection with a change in the
Company’s capitalization (as described in Section 12) the exercise price
of a Stock Option may not be reduced without stockholder approval (including
canceling previously awarded Stock Options and regranting them with a lower
exercise price).

 

SECTION 7. Stock Appreciation Right
Awards

 

Stock Appreciation Rights may be granted to
Participants from time to time either in tandem with or as a component of other
Awards granted under the Plan (“tandem Stock Appreciation Rights”) or not in
conjunction with other Awards (“freestanding Stock Appreciation Rights”) and
may, but need not, relate to a specific Stock Option granted under Section 6.
The provisions of Stock Appreciation Rights need not be the same with respect
to each grant or each recipient. Any Stock Appreciation Right granted in tandem
with an Award may be granted at the same time such Award is granted or at any
time thereafter before exercise or expiration of such Award. All freestanding
Stock Appreciation Rights shall be granted subject to the same terms and
conditions applicable to Stock Options as set forth in Section 6 and all
tandem Stock Appreciation Rights shall have the same exercise price, vesting,
exercisability, forfeiture and termination provisions as the Award to which
they relate. Subject to the provisions of Section 6 and the immediately
preceding sentence, the Committee may impose such other conditions or
restrictions on any Stock Appreciation Right as it shall deem appropriate.
Stock Appreciation Rights may be settled in Shares, cash or a combination
thereof, as determined by the Committee and set forth in the applicable award
agreement. Other than in connection with a change in the Company’s
capitalization (as described in Section 12) the exercise price of Stock
Appreciation Rights may not be reduced without stockholder approval (including
canceling previously awarded Stock Appreciation Rights and regranting them with
a lower exercise price).

 

 

SECTION 8. Restricted Stock Awards

 

Restricted Stock consists of an award of
Shares, the grant, issuance, retention and/or vesting of which shall be subject
to such performance conditions and to such further terms and conditions as the
Committee deems appropriate.

 

8.1 
Restricted Stock Award. 
Each Restricted Stock Award shall reflect, to the extent applicable (a) the
number of Shares subject to such Award or a formula for determining such, (b) the
time or times at which Shares shall be granted or issued and/or become retainable
or vested, and the conditions or restrictions on such Shares, (c) the
performance criteria and required level of achievement relative to these
criteria which shall determine the number of Shares granted, issued, retainable
and/or vested, (d) the measuring period for determining achievement of
performance, (e) forfeiture provisions, and (f) such further terms
and conditions consistent with the Plan as may be determined from time to time
by the Committee.

 

8.2 
Restrictions and Performance Criteria.  The grant, issuance, retention and/or vesting
of each Restricted Stock Award may be subject to such performance criteria and
required level of achievement relative to these criteria as the Committee shall
determine, which criteria may be based on financial performance, personal
performance evaluations and/or completion of a specified period of service by
the Participant. The grant, issuance, retention, vesting and/or settlement of
any such Restricted Stock Award that is based on performance criteria and level
of achievement relative to such criteria will be subject to a performance
period of not less than one year, and the grant, issuance, retention, vesting
and/or settlement of any such Restricted Stock Award that is based solely upon
continued service and/or the passage of time may not vest or be settled in full
prior to the thirty-sixth month following its date of grant, but may be subject
to pro-rata vesting over such period, in each case, other than as a result of
the Participant’s death, disability or termination of employment, or a change
of control of the Company.

 

Notwithstanding anything to the contrary
herein, the performance criteria for any Restricted Stock Award that is
intended by the Committee to satisfy the requirements for “performance-based
compensation” under Code Section 162(m) shall be a measure based
solely on one or more Qualifying Performance Criteria (as defined in Section 11.2
hereof) selected by the Committee.

 

8.3 
Timing of Award.  The
Committee shall determine all specifics concerning the timing of any Restricted
Stock Award.

 

8.4 
Discretionary Adjustments. 
Notwithstanding satisfaction of any required period of service or
performance goals, the number of Shares granted, issued, retainable and/or
vested under a Restricted Stock Award based on either financial performance or
personal performance evaluations may be reduced by the Committee on the basis
of such further considerations as the Committee in its sole discretion shall
determine.

 

SECTION 9. Incentive Awards

 

Each Incentive Award will confer upon the
Eligible Employee the opportunity to earn a future payment tied to a specified
level of achievement with respect to one or more performance criteria for a
specific performance period of not less than one year.

 

9.1 
Incentive Award.  Each
Incentive Award shall contain provisions regarding (a) the target and
maximum amount payable to the Participant as an Incentive Award, (b) the
performance criteria and required level of achievement relative to these
criteria which shall determine the amount of such payment, (c) the period
as to which performance shall be measured for establishing the amount of any
payment, (d) the vesting of the Incentive Award, (e) restrictions on
the alienation or transfer of the Incentive Award prior to actual payment, (f) forfeiture
provisions, and (g) such further terms and conditions, consistent with the
Plan as may be determined by the Committee. In establishing the provisions of
Incentive Awards, the Committee may refer to categories of such Awards as parts
of “Programs” or “Plans”, which names will not affect the applicability of this
Plan. The maximum amount payable pursuant to that portion of an 

 

 

Incentive Award granted under this Plan for any fiscal year to any
Participant that is intended to satisfy the requirements for “performance based
compensation” under Code Section 162(m) shall not exceed Five Million
Dollars ($5,000,000).

 

9.2 
Performance Criteria. 
The Committee shall establish the performance criteria and required
level of achievement relative to these criteria which shall determine the
target, minimum and maximum amount payable under an Incentive Award, which
criteria may be based on financial performance and/or personal performance
evaluations. The Committee may specify the amount or percentage of the target
Incentive Award that is intended to satisfy the requirements for “performance-based
compensation” under Code Section 162(m). Notwithstanding anything to the
contrary herein, the performance criteria for any portion of an Incentive Award
that is intended by the Committee to satisfy the requirements for “performance-based
compensation” under Code Section 162(m) shall be a measure based
solely on one or more Qualifying Performance Criteria (as defined in Section 11.2
hereof) selected by the Committee and specified at the time required under Code
Section 162(m).

 

9.3 
Timing and Form of Payment.  An Incentive Award will be paid in a single
lump sum payment in the year following vesting, but no later than 21/2 months following the year of vesting. The
Committee may permit a Participant or the Company to elect for the payment of
any Incentive Award to be deferred to a specified date or event in accordance
with an election made pursuant to the Fluor Executive 409A Deferred
Compensation Program. The Committee may specify the form of payment of
Incentive Awards, which may be cash, shares, or other property.

 

9.4 
Discretionary Adjustments. 
Notwithstanding satisfaction of any performance goals, the amount paid
under an Incentive Award based on either financial performance or personal
performance evaluations may be reduced by the Committee on the basis of such
further considerations as the Committee in its sole discretion shall determine.

 

SECTION 10. Stock Units

 

10.1 
Stock Units.  A “Stock
Unit” is a bookkeeping entry representing an amount equivalent to the fair
market value of one Share, also sometimes referred to as a “restricted unit” or
“shadow stock”. Stock Units represent an unfunded and unsecured obligation of
the Company, except as otherwise provided for by the Committee.

 

10.2 
Stock Unit Awards. 
Each Stock Unit Award shall reflect, to the extent applicable (a) the
number of Stock Units subject to such Award or a formula for determining such, (b) the
time or times at which Stock Units shall be granted and/or become vested, and
the conditions or restrictions on such Stock Units, (c) the performance
criteria and required level of achievement relative to these criteria which
shall determine the number of Stock Units granted, issued, retainable and/or
vested, (d) the measuring period for determining achievement of
performance, (e) forfeiture provisions, and (f) such further terms
and conditions, in each case not inconsistent with the Plan as may be
determined by the Committee.

 

10.3 
Performance Criteria. 
The grant, issuance, retention and or vesting of each Stock Unit may be
subject to such performance criteria and required level of achievement relative
to these criteria as the Committee shall determine, which criteria may be based
on financial performance, personal performance evaluations and/or completion of
a specified period of service by the Participant. The grant, issuance,
retention, vesting and/or settlement of any such Stock Unit that is based on
performance criteria and level of achievement relative to such criteria will be
subject to a performance period of not less than one year, and the grant,
issuance, retention, vesting and/or settlement of any such Stock Unit that is
based solely upon continued service and/or the passage of time may not vest or
be settled in full prior to the thirty-sixth month following its date of grant,
but may be subject to pro-rata vesting over such period, in each case, other
than as a result of the Participant’s death, disability or termination of
employment, or a change of control of the Company.

 

Notwithstanding anything to the contrary
herein, the performance criteria for any Stock Unit that is intended by the
Committee to satisfy the requirements for “performance-based compensation”
under 

 

 

Code Section 162(m) shall
be a measure based solely on one or more Qualifying Performance Criteria (as
defined in Section 11.2 hereof) selected by the Committee and specified at
the time the Stock Unit is granted.

 

10.4 
Timing of Award.  The
Committee shall determine all specifics concerning the timing of any Stock Unit
Award.

 

10.5 
Settlement of Stock Units. 
The Committee may provide for Stock Units to be settled in cash and/or
Shares. A Stock Unit Award will be settled in a single lump sum payment of cash
and/or Shares in the calendar year following vesting, but no later than 21/2 months following the end of the calendar year
of vesting. The Committee may permit a Participant or the Company to elect for
the settlement of any Stock Unit Award to be deferred to a specified date or
event in accordance with an election made pursuant to the Fluor Executive 409A
Deferred Compensation Program. The amount of cash or Shares, to be distributed
may, if the Stock Unit Agreement provides, be increased by an interest factor or
by dividend equivalents, as the case may be, which may be valued as if
reinvested in Shares. Until a Stock Unit is settled, the number of Shares
represented by a Stock Unit shall be subject to adjustment pursuant to Section 12.

 

10.6 
Discretionary Adjustments. 
Notwithstanding satisfaction of any required period of service or
performance goals, the number of Stock Units granted, issued, retainable and/or
vested under a Stock Unit Award due to financial performance or personal
performance evaluations may be reduced by the Committee on the basis of such
further considerations as the Committee in its sole discretion shall determine.

 

SECTION 11. Other Provisions Applicable
to Awards

 

11.1 
Transferability. 
Unless the agreement evidencing an Award (or an amendment thereto
authorized by the Committee) expressly states that it is transferable as
provided hereunder, no Award granted under the Plan, nor any interest in such
Award, may be sold, assigned, conveyed, gifted, pledged, hypothecated or
otherwise transferred in any manner, other than by will or the laws of descent
and distribution, prior to the vesting or lapse of any and all restrictions
applicable to an Award or any Shares issued under an Award. During a
Participant’s lifetime, Stock Options and Stock Appreciation Rights may only be
exercised by the Participant.

 

The Committee may in its sole discretion
grant an Award or amend an outstanding Award to provide that the Award is
transferable or assignable to a member or members of the Participant’s “immediate
family”, as such term is defined under Exchange Act Rule 16a-1(e), or to a
trust for the benefit solely of a member or members of the Participant’s
immediate family, or to a partnership or other entity whose only owners are
members of the Participant’s family, provided that following any such transfer
or assignment the Award will remain subject to substantially the same terms
applicable to the Award while held by the Participant, as modified as the
Committee in its sole discretion shall determine appropriate, and the
Participant shall execute an agreement agreeing to be bound by such terms.

 

11.2 
Qualifying Performance Criteria.  For purposes of this Plan, the term “Qualifying
Performance Criteria” shall mean any one or more of the following performance
criteria, either individually, alternatively or in any combination, applied to
either the Company as a whole or to a business unit, subsidiary or business
segment, either individually, alternatively or in any combination, and measured
either annually or cumulatively over a period of years, on an absolute basis or
relative to a pre-established target, to previous years’ results or to a
designated comparison group, in each case as specified by the Committee in the
Award: (a) cash flow; (b) earnings (including gross margin, earnings
before interest and taxes (“EBIT”), earnings before taxes (“EBT”), and net
earnings); (c) earnings per share; (d) growth in earnings or earnings
per share; (e) stock price; (f) return on equity or average
stockholders’ equity; (g) total stockholder return; (h) return on
capital; (i) return on assets or net assets; (j) return on
investment; (k) revenue; (l) income or net income; (m) operating
income or net operating income; (n) operating profit or net operating
profit; (o) operating margin; (p) return on operating revenue; (q) market
share; (r) contract awards or backlog; (s) overhead or other expense
reduction; (t) growth in stockholder value relative to the two-year moving
average of the S&P 500 Index; (u) growth in stockholder value relative
to the two-year 

 

 

moving average of the Dow Jones Heavy Construction Index; (v) credit
rating; (w) strategic plan development and implementation; (x) succession
plan development and implementation; (y) retention of executive talent; (z) improvement
in workforce diversity; (aa) return on average stockholders’ equity relative to
the Ten Year Treasury Yield (as hereinafter defined); (bb) improvement in
safety records; (cc) capital resource management plan development and
implementation; (dd) improved internal financial controls plan development and
implementation; (ee) corporate tax savings; (ff) corporate cost of capital
reduction; (gg) investor relations program development and implementation; (hh)
corporate relations program development and implementation; (ii) executive
performance plan development and implementation; (jj) tax provision rate for
financial statement purposes; (ll) growth in stock price; (mm) return on
invested capital (ROIC); (nn) return on assets employed (ROAE); (oo) project
gross margin (PGM) in earnings and in contract awards; (pp) project gross
margin percentage in earnings and contract awards; (qq) project working
capital; (rr) cost of cash; (ss) overhead leverage; (tt) ratio of earnings to
fixed charges; and (uu) debt as a percentage of total capitalization.

 

To the extent determined by the Committee at
the time an Award is granted, the Committee shall appropriately adjust any
evaluation of performance under a Qualifying Performance Criteria to account
for any of the following events that occurs during a performance period: (a) asset
write-downs; (b) litigation or claim judgments or settlements; (c) the
effect of changes in tax law, accounting principles or other such laws or
provisions affecting reported results; (d) accruals for reorganization and
restructuring programs; and (e) any extraordinary non-recurring items as
described in Accounting Principles Board Opinion No. 30 and/or in
management’s discussion and analysis of financial condition and results of
operations appearing in the Company’s annual report to stockholders for the
applicable year.

 

The term “Ten Year Treasury Yield” shall
mean, for any fiscal period, the daily average percent per annum yield for U.S.
Government Securities—10 year Treasury constant maturities, as published
in the Federal Reserve statistical release or any equivalent publication. Prior
to the payment of any Award intended to qualify as “performance-based
compensation” under Code Section 162(m) the Committee shall certify
the extent to which any Qualifying Performance Criteria and any other material
terms under such Award have been satisfied (other than in cases where the
criteria relate solely to the increase in the value of the Company’s Common
Stock).

 

11.3 
Dividends.  Unless
otherwise provided by the Committee, no adjustment shall be made in Shares
issuable under any Award on account of cash dividends which may be paid or
other rights which may be issued to the holders of Shares prior to their
issuance under the Award. The Committee shall specify whether dividends or
dividend equivalent amounts shall be paid to any Participant with respect to
the Shares subject to an Award that has not vested or been issued or that is
subject to any restrictions or conditions on the record date for dividends.

 

11.4 
Agreements Evidencing Awards. 
The Committee shall, subject to applicable law, determine the date an
Award is deemed to be granted, which for purposes of this Plan shall not be
affected by the fact that an Award is contingent on subsequent stockholder
approval of the Plan. The Committee or its delegate(s), except to the extent
prohibited under applicable law, may establish the terms of agreements
evidencing Awards under this Plan and may, but need not, require as a condition
to any such agreement’s effectiveness that such agreement be executed by the
Participant and that the Participant agree to such further terms and conditions
as specified in the agreement. The grant of an Award under this Plan shall not
confer any rights upon the Participant holding such Award other than such
terms, and subject to such conditions, as are specified in this Plan as being
applicable to such type of Award (or to all Awards) or as are expressly set
forth in the agreement evidencing such Award.

 

11.5 
Tandem Stock or Cash Rights. 
Either at the time an Award is granted or by subsequent action, the
Committee may, but need not, provide that an Award shall contain as a provision
thereof, a right, either in tandem with the other rights under the Award or as
an alternative thereto, of the Participant to receive, without payment to the
Company, a number of Shares, cash or a combination thereof, the amount of which
is determined by reference to the value of the Award; provided, however, that
the number of such rights granted under any Award shall not exceed the per
Eligible Employee share limitation for such Award as set forth in Section 3.2.

 

 

11.6 
Financing.  The
Committee may in its discretion provide financing to a Participant in a
principal amount sufficient to pay the exercise price associated with an Award
and/or to pay any required tax withholding with respect to any Award. Any such
loan shall be subject to all applicable legal requirements and restrictions
pertinent thereto, including Regulation G promulgated by the Federal
Reserve Board. The grant of an Award shall in no way obligate the Company or
the Committee to provide any financing whatsoever in connection with the Award.

 

SECTION 12. Changes in Capital Structure

 

If the outstanding securities of the class
then subject to this Plan are increased, decreased or exchanged for or
converted into cash, property or a different number or kind of shares or
securities, or if cash, property or shares or securities are distributed in
respect of such outstanding securities, in either case as a result of a
reorganization, merger, consolidation, recapitalization, restructuring,
reclassification, dividend (other than a regular, quarterly cash dividend) or
other distribution, stock split, reverse stock split, spin-off or the like, or if
substantially all of the property and assets of the Company are sold, then, the
Committee shall make appropriate and proportionate adjustments in (i) the
number and type of shares or other securities or cash or other property that
may be acquired pursuant to outstanding Awards under this Plan and the exercise
or settlement price of such Awards; provided, however, that any such adjustment
shall be made in such a manner that will not affect the status of any Award
intended to qualify (A) as an ISO under Code Section 422, (B) as
exempt from coverage under Code Section 409A, or (C) as “performance
based compensation” under Code Section 162(m), and (ii) the maximum
number and type of shares or other securities that may be issued pursuant to
such Awards thereafter granted under this Plan.

 

SECTION 13. Change of Control

 

13.1 
Effect of Change of Control. 
The Committee may through the terms of the Award or otherwise provide
that any or all of the following shall occur, either immediately upon the
Change of Control or a Change of Control Transaction, or upon termination of
the Eligible Employee’s employment within twenty-four (24) months
following a Change of Control or a Change of Control Transaction: (a) in
the case of an Option, the Participant’s ability to exercise any portion of the
Option not previously exercisable; (b) in the case of an Incentive Award,
the right to receive a payment equal to the target amount payable or, if
greater, a payment based on performance through a date determined by the
Committee prior to the Change of Control; and (c) in the case of Shares
issued in payment of any Incentive Award, and/or in the case of Restricted
Stock or Stock Units, the lapse and expiration of any conditions to the grant,
issuance, retention, vesting or transferability of, or any other restrictions
applicable to, such Award. The Committee also may, through the terms of the
Award or otherwise, provide for an absolute or conditional exercise, payment or
lapse of conditions or restrictions on an Award which shall only be effective
if, upon the announcement of a Change of Control Transaction, no provision is
made in such Change of Control Transaction for the exercise, payment or lapse
of conditions or restrictions on the Award, or other procedure whereby the
Participant may realize the full benefit of the Award.

 

13.2 
Definitions.  Unless
the Committee or the Board shall provide otherwise, “Change of Control” shall
mean an occurrence of any of the following events: (a) a third person,
including a “group” as defined in Section 13(d)(3) of the Exchange
Act, acquires shares of the Company having twenty-five percent or more of the
total number of votes that may be cast for the election of directors of the
Company; (b) as the result of any cash tender or exchange offer, merger or
other business combination, or any combination of the foregoing transactions (a
“Transaction”), the persons who were directors of the Company before the
Transaction shall cease to constitute a majority of the Board of the Company or
any successor to the Company; or (c) such other events as the Committee or
the Board from time to time may specify. “Change of Control Transaction” shall
include any tender offer, offer, exchange offer, solicitation, merger,
consolidation, reorganization or other transaction that is intended to or
reasonably expected to result in a Change of Control.

 

 

SECTION 14. Taxes

 

14.1 
Withholding Requirements. 
The Committee may make such provisions or impose such conditions as it
may deem appropriate for the withholding or payment by the Eligible Employee or
Participant, as appropriate, for any taxes required as a result of any Awards
granted under this Plan, and a Participant’s rights in any Award are subject to
satisfaction of such requirements.

 

14.2 
Payment of Withholding Taxes. 
Notwithstanding the terms of Section 14.1 hereof, the Committee may
provide in the agreement evidencing an Award or otherwise that all or any
portion of the required withholding for taxes by the Company or, if permitted
by the Committee, desired to be withheld by the Participant, in connection with
the exercise of a Stock Option or Stock Appreciation Right or the exercise,
vesting, settlement or transfer of any other Award shall be paid or, at the
election of the Participant, may be paid by the Company with cash or shares of
the Company’s capital stock otherwise issuable or subject to such Award, or by
the Participant delivering previously owned shares of the Company’s capital
stock, in each case having a fair market value equal to the amount required or
elected to be withheld or paid. Any such elections are subject to such
conditions or procedures as may be established by the Committee and are subject
to Committee approval.

 

SECTION 15. Amendments or Termination

 

The Board of Directors may amend, alter or
discontinue the Plan or any agreement evidencing an Award made under the Plan,
but any such amendment shall be subject to approval of the shareholders of the
Company to the extent required by law or by any applicable listing standard of
the New York Stock Exchange or other securities exchange or stock market where
the Company has listed the Shares. In addition, unless approved by a majority
of the shareholders of the Company present in person or by proxy and actually
voting, no such amendment shall be made that would:

 

(a)           materially increase the maximum number of Shares for which
Awards may be granted under the Plan, other than an increase pursuant to Section 12
(“Changes in Capital Structure”);

 

(b)           reduce the price at which Stock Options or Stock Appreciation
Rights may be granted, as described in Section 6.2;

 

(c)           reduce the exercise price of outstanding Stock Options or
Stock Appreciation Rights;

 

(d)           extend the term of the Plan; or

 

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

 

After the date of a Change of Control, no amendment to the Plan or any
agreement evidencing an Award made under the Plan shall be effected that
impairs the rights of any Award holder, without such holder’s consent, under
any Award granted prior to the date of the Change of Control.

 

SECTION 16. Compliance with Other Laws
and Regulations

 

The Plan, the grant and exercise of Awards
hereunder, and the obligation of the Company to sell, issue or deliver Shares
under such Awards, shall be subject to all applicable Federal, state and
foreign laws, rules and regulations and to such approvals by any
governmental or regulatory agency as may be required. The Company shall not be
required to register in a Participant’s name or deliver any Shares prior to the
completion of any registration or qualification of such Shares under any
Federal, state or foreign law or any ruling or regulation of any government
body which the Committee shall, in its sole discretion, determine to be
necessary or advisable. This Plan is intended to constitute an unfunded
arrangement for a select group of management or other key employees.

 

 

No Stock Option or Stock Appreciation Right
shall be exercisable unless a registration statement with respect to the Stock
Option or Stock Appreciation Right has been made and is in effect or the
Company has determined that such registration is unnecessary. Unless the Awards
and Shares covered by this Plan have been registered under the Securities Act
of 1933, as amended, or the Company has determined that such registration is
unnecessary, each person receiving an Award and/or Shares pursuant to any Award
may be required by the Company to give a representation in writing that such
person is acquiring such Shares for his or her own account for investment.

 

SECTION 17. Award Grants by Subsidiaries

 

In the case of a grant of an Award to any
Participant employed by a subsidiary or affiliate, such grant may, if the
Committee so directs, be implemented by the Company issuing any subject Shares
to the subsidiary or affiliate, for such lawful consideration as the Committee
may determine, upon the condition or understanding that the subsidiary or
affiliate will transfer the Shares to the Participant in accordance with the
terms of the Award specified by the Committee pursuant to the provisions of the
Plan. Notwithstanding any other provision hereof, such Award may be issued by
and in the name of the subsidiary or affiliate and shall be deemed granted on
such date as the Committee shall determine.

 

SECTION 18. No Right to Company
Employment

 

Nothing in this Plan or as a result of any
Award granted pursuant to this Plan shall confer on any individual any right to
continue in the employ of the Company or interfere in any way with the right of
the Company to terminate an individual’s employment at any time. The Award
agreements may contain such provisions as the Committee may approve with
reference to the effect of approved leaves of absence by the Participant
receiving the Award.

 

SECTION 19. Effectiveness and Expiration
of Plan

 

The Plan shall be effective on the date the
Board of Directors adopts the Plan. No Stock Option Award, Stock Appreciation
Right Award, Restricted Stock Award, Incentive Award or Stock Unit Award shall
be granted pursuant to the Plan more than ten (10) years after the
effective date of the Plan.

 

SECTION 20. Non-Exclusivity of the Plan

 

Neither the adoption of the Plan by the Board
of Directors nor the submission of the Plan to the shareholders of the Company
for approval shall be construed as creating any limitations on the power of the
Board of Directors or the Committee to adopt such other incentive arrangements
as it or they may deem desirable, including without limitation, the granting of
restricted stock or stock options otherwise than under the Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.

 

SECTION 21. Governing Law

 

This Plan and any agreements hereunder shall
be interpreted and construed in accordance with the laws of the State of
Delaware and applicable Federal law. The Committee may provide that any dispute
as to any Award shall be presented and determined in such forum as the
Committee may specify, including through binding arbitration. Any reference in
this Plan or in the agreement evidencing any Award to a provision of law or to
a rule or regulation shall be deemed to include any successor law, rule or
regulation of similar effect or applicability.

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