Document:

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                                                                   EXHIBIT 10.27

                              CONSULTING AGREEMENT

         This Consulting Agreement is entered into as of August 27, 2003, by and
between Craig T. Davenport ("Consultant") and Endocare, Inc., a Delaware
corporation ("Company") (collectively, the "Parties").

1.       CONSULTANT'S SERVICES

         a.       Consultant agrees to perform the services ("Services") as
described in Exhibit A attached to this Agreement, as it may be amended in
writing from time to time by the Parties, provided that any amendment is signed
by Consultant and a duly authorized representative of Company.

         b.       Consultant may, at Consultant's own expense, use his own
employees or other subcontractors to perform the Services under this Agreement.

         c.       Consultant agrees to devote a minimum of 24 hours per week to
performing the Services. Consistent with this requirement, Consultant may
represent, perform services for, or be employed by such additional persons or
companies as Consultant sees fit, except to the extent doing so causes
Consultant to breach Consultant's obligations under this Agreement or creates a
conflict of interest.

         d.       Consultant will have no power or authority to legally bind the
Company.

         e.       Consultant will not have any direct authority over any
employee of the Company and will not have any employee of the Company reporting
to him. Consultant will report directly to the Company's Board of Directors or a
designated member thereof.

2.       COMPENSATION

         The Company agrees to pay Consultant fees of $3,000 per 8-hour
equivalent work day.

         Consultant will provide the Company with a monthly invoice providing an
accounting reconciliation of the actual equivalent days of service provided. The
Company will make an advance retainer payment of $36,000 on September 2, 2003
for Services to be performed during the month of September, and will make
subsequent retainer payments of $36,000 on the last day of each month as an
advance retainer for the following month (i.e., September 30, 2003 for October
2003, October 31, 2003 for November 2003, etc.). The Consultant will provide the
Company with an accounting of the actual hours worked within 15 days of the
close of each month he provides Services. Fees in excess of any retainer will be
paid by the Company within 15 days of the submission of the detailed accounting
and accompanying invoice submitted by Consultant. A final accounting will be
completed within 15 days of termination of this Agreement. Fees for the period
from the Effective Date (as defined below) through August 31, 2003, will be paid
within 15 days of the submission of a detailed invoice by Consultant.

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3.       CHANGE IN CONTROL

Should the Company enter into a definitive agreement contemplating an
Extraordinary Event (as defined in Sections 14(a)(ii), (iii) and (iv) of the
Company's 1995 Stock Plan as amended (the "Stock Plan")) prior to February 29,
2004 (regardless of whether this Agreement had been earlier terminated by the
Company pursuant to Paragraph 5b.) or should Consultant terminate this Agreement
for "good reason" (as defined in any of the three cases below) prior to February
29, 2004 (each a "Triggering Event"), then, the Company shall pay Consultant
additional compensation according to the following schedule:

<TABLE>
<S>                                        <C>
Occurrence of Triggering Event:

On or before September 15, 2003            $  216,000.00
September 16 through September 30, 2003       198,000.00
October 1 through 15, 2003                    180,000.00
October 16 through 31, 2003                   162,000.00
November 1 through 15, 2003                   144,000.00
November 16 through 30, 2003                  126,000.00
December 1 through 15, 2003                   108,000.00
December 16 through 31, 2003                   90,000.00
January 1 through 15, 2004                     72,000.00
January 16 through 31, 2004                    54,000.00
February 1 through February 15, 2004           36,000.00
</TABLE>

Any amounts payable to Consultant under the schedule above will be subject to
reduction on a dollar-for-dollar basis by amounts actually paid or due and
payable to Consultant pursuant to Section 2 above with respect to actual hours
or days worked by Consultant through the date of the Triggering Event. Payment
of amounts due as a result of the Company's execution of the definitive
agreement regarding contemplating an Extraordinary Event will be due and payable
in a lump sum concurrently with and conditioned upon the closing of the
transaction resulted in the Extraordinary Event. Payments of amounts due under
the schedule above after termination of this Agreement by Consultant for "good
reason" (as defined below) shall be due in accordance with the retainer schedule
outlined in Section 2 above. The foregoing payment obligation shall not be
applicable should (a) the Parties terminate this Agreement through mutual
written agreement or (b) the Parties shall have entered into an additional
agreement prior to that time addressing such an Extraordinary Event. For
purposes of this Section 3, "good reason" shall mean Consultant terminates his
relationship with the Company due to (i) any criminal conduct, malfeasance or
dishonesty on the part of the Company or any of its officers or directors that
is likely to be materially injurious to Consultant's reputation (excluding
circumstances which are expressly known by Consultant as of the Effective Date),
(ii) majority of the Company's executive officers (as defined in Section 16 of
the Exchange Act of 1934 as amended) shall resign in a 30-day period with the
result that the Company can no longer be managed in an orderly manner, or (iii)
members of the Board of Directors tender their resignations in sufficient number
such that a quorum no longer exists under the Company's Bylaws with a result
that the Company's business can no longer be conducted appropriately. For
purposes of the foregoing, the term "good reason" shall not include Consultant
terminating his relationship with the

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Company voluntarily for personal reasons or due to adverse circumstances
occurring at the Company that are reasonably foreseeable or a consequence of the
Company's operations generally.

4.       EXPENSES

         All reasonable, documented expenses incurred as necessary to perform
the Services will be reimbursed to Consultant within 15 days of receipts and
documentation in accordance with the Company's reimbursement policies. Such
expenses to include travel, entertainment, hotel accommodations, meals, car
rental, gas, etc., any specific expense item in excess of $3,000 will require
the prior approval of the Board. Consultant shall have a period of 30 days
following termination of this Agreement to submit any final expense requests to
the Company and the Company shall pay reimburse Consultant for such expenses
within 15 days thereafter.

5.       TERM OF AGREEMENT

         a.       This Agreement will become effective on August 27, 2003 or
such later date as the Parties shall mutually agree (the "Effective Date").

         b.       Either party may terminate this Agreement at any time by
giving five (5) days' written notice to the other party in accordance with the
notice provisions set forth below.

         c.       Upon termination of this Agreement for any reason, including
any of the provisions set forth in Section 6b below, Consultant shall be
entitled to payment for Services completed prior to the termination date and
reimbursement for expenses incurred prior to the termination date. Thereafter,
Company shall owe Consultant no further amounts or obligations.

6.       DEFAULT

         a.       If either party defaults in the performance of this Agreement
or materially breaches any of its provisions, the non-breaching party may
terminate this Agreement by giving written notification to the breaching party.
Termination shall be effective immediately on receipt of the written
notification by the breaching party, or five (5) days after mailing of the
notice to the address set forth in the notice provisions below, whichever occurs
first. For purposes of this Section 6, material breach of this Agreement shall
include but not be limited to the following:

                  i.       The Company's failure to pay for Consultant's
Services and/or to reimburse Consultant for expenses as agreed within 15 days
after receipt of Consultant's written demand for payment in accordance with
Sections 2 or 4 above.

                  ii.      Failure of Consultant to provide the Services in a
professional manner.

         b.       This Agreement shall terminate automatically on the occurrence
of any of the following events:

                  i.       (a) Appointment of a receiver, liquidator, or trustee
for either Party by decree of competent authority in connection with any
adjudication or determination by such authority that either Party is bankrupt or
insolvent; (b) the filing by either Party of a petition in

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voluntary bankruptcy, the making of an assignment for the benefit of its
creditors, or the entering into of a composition with its creditors; or (c) any
formal action of the Board to terminate Company's existence or otherwise to wind
up Company's affairs;

                  ii.      Execution of a definitive agreement contemplating an
Extraordinary Event (as defined in the Stock Plan);or

                  iii.     Death or disability of Consultant.

7.       NOTICES

         Any notice under this Agreement must be in writing and shall be
effective upon delivery by hand or facsimile, one (1) day following the day when
deposited with a reputable, established overnight courier service for delivery
to the intended addressee, or five (5) business days after deposit in the United
States mail, postage prepaid, certified or registered, and addressed to Company
or to Consultant at the corresponding address below. Consultant shall be
obligated to notify Company in writing of any change in Consultant's address.
Notice of change of address shall be effective only when done in accordance with
this Paragraph.

Company's Notice Address and Facsimile:

                  Attn:  President
                  201 Technology Drive
                  Irvine, CA  92618
                  Facsimile:  (949) 450-5302

Consultant's Notice Address and Facsimile:

                  D. W. Group
                  63895 Johnson Road
                  Bend, Oregon 97701
                  Facsimile:(541) 388-0924

8.       RELATIONSHIP OF THE PARTIES

         a.       Consultant enters into this Agreement as, and shall continue
to be, an independent contractor. In no circumstance shall Consultant look to
Company as Consultant's employer, partner, agent, or principal. Neither
Consultant nor any employee of Consultant (which for purposes of this Paragraph
shall be included in the term "Consultant") shall be entitled to any benefits
accorded to Company's employees except as set forth in this Agreement, including
workers' compensation, disability insurance, retirement plans, or vacation or
sick pay. Consultant's exclusion from benefit programs maintained by Company is
a material component of the terms of compensation negotiated by the Parties, and
is not premised on Consultant's status as a non-employee with respect to
Company. To the extent that Consultant may become eligible for any benefit
programs maintained by Company (regardless of the timing of or reason for
eligibility), Consultant hereby waives Consultant's right to participate in the
programs. Consultant's waiver is not conditioned on any representation or
assumption concerning Consultant's status under the common law test. Consultant
also agrees that, consistent with

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Consultant's independent Consultant status, Consultant will not apply for any
government-sponsored benefits that are intended to apply to employees,
including, but not limited to, unemployment benefits.

         b.       Consultant shall be responsible for providing, at Consultant's
expense and in Consultant's name, disability, workers' compensation, or other
insurance as well as licenses and permits usual or necessary for performing the
Services. Consultant shall pay, when and as due, any and all taxes incurred as a
result of Consultant's compensation, including estimated taxes and payroll
taxes, and shall provide Company with proof of payment on demand. Consultant
indemnifies Company for any claims, losses, costs, fees, liabilities, damages,
or injuries suffered by Company arising from Consultant's breach of the
provisions of this Paragraph 8.

         c.       Consultant and Company shall provide to each other upon
request any information reasonably necessary to determine their obligations
under this Agreement, to fulfill the purposes of the Services, or to maintain
accurate records.

9.       PLACE OF WORK

         Consultant is generally free to perform Consultant's Services at a
location of Consultant's choosing. Consultant understands that the Services must
coordinate with the Company's established protocols and security requirements
and may from time to time need to be performed at Company's premises. Consultant
may also be required to present periodic updates to the Company's Board of
Directors.

10.      CONSULTANT'S REPRESENTATIONS

         Consultant represents that Consultant has the qualifications and
ability to perform the Services in a workmanlike and professional manner,
without the advice, control, or supervision of the Company. Consultant shall
have sole discretion and control of Consultant's services and the manner in
which they are to be performed.

11.      OWNERSHIP OF INTELLECTUAL PROPERTY

         a.       Consultant agrees that all designs, plans, reports,
specifications, drawings, schematics, prototypes, models, inventions, and all
other information and items, if any, made during the course of this Agreement
and arising from the Services ("New Developments") shall be and are assigned to
Company as its sole and exclusive property. On Company's request, Consultant
agrees to assist Company, at Company's expense, to obtain patents or copyrights
for such New Developments, including the disclosure of all pertinent information
and data, the execution of all applications, specifications, oaths, and
assignments, and all other instruments and papers that Company shall deem
necessary to apply for and to assign or convey to Company, its successors, and
assigns or nominees, the sole and exclusive right, title, and interest in such
New Developments.

         b.       Consultant agrees to obtain or has obtained written assurances
from Consultant's employees and subcontractors of their agreement to these terms
regarding Proprietary Information and New Developments.

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         c.       Consultant further agrees not to disclose to the Company, or
bring onto the Company's premises, or induce the Company to use any confidential
information that belongs to anyone other than the Company or Consultant.
Consultant agrees to indemnify the Company from any and all loss or liability
incurred by reason of the alleged breach by Consultant of any confidentiality or
services agreement with anyone other than the Company.

         d.       The representations and warranties contained herein and
Consultant's obligations under Sections 11 and 12 of this Agreement shall
survive termination of the Agreement.

12.      PROPRIETARY INFORMATION

         a.       "Proprietary Information" means all information pertaining in
any manner to the business of Company, unless: (i) the information is or becomes
publicly known through lawful means; (ii) the information was part of
Consultant's general knowledge prior to Consultant's relationship with Company;
or (iii) the information is disclosed to Consultant without restriction by a
third party who rightfully possesses the information and did not learn of it
from the Company. This definition includes, but is not limited to: (A)
techniques, development tools, processes, formulas and improvements; (B)
information about costs, profits, markets, sales, customers, and bids; (C) plans
for business, marketing, future development and new product concepts; and (D)
information on the Company's employees, agents, or divisions. The written,
printed, graphic, or electronically recorded materials furnished by the Company
for use by Consultant are Proprietary Information and are the property of the
Company.

         b.       Consultant shall maintain in confidence and shall not,
directly or indirectly, disclose or use, either during or after the term of this
Agreement, any Proprietary Information, confidential information, or know-how
belonging to the Company, whether or not it is in written or permanent form,
except to the extent necessary to perform the Services. On termination of
Consultant's services to the Company, or at the request of the Company before
termination, Consultant shall deliver to the Company all material in
Consultant's possession, custody or control relating to the Company's business,
including Proprietary Information. The obligations on Proprietary Information
extend to information belonging to customers and suppliers of the Company about
whom Consultant may have gained knowledge as a result of performing the
Services.

         c.       Consultant shall not, during the term of this Agreement and
for a period of one (1) year immediately after the termination of this
Agreement, or any extension of it, for any reason, either directly or indirectly
(a) call on, solicit, or take away any of the Company's customers (including but
not limited to Customers as described in Exhibit A) or potential customers about
whom Consultant became aware as a result of Consultant's Services to the
Company, either for Consultant or for any other person or entity; or (b) solicit
or take away or attempt to solicit or take away any of the Company's employees
or Consultants either for Consultant or for any other person or entity.

         d.       Nothing in this Paragraph 12 is intended to limit any remedy
of the Company under the California Uniform Trade Secrets Act (California Civil
Code Section 3426), or otherwise available under law.

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13.      INDEMNIFICATION

         The Company will indemnify Consultant to the maximum extent provided
for in its Certificate of Incorporation and Bylaws and to the extent permitted
by applicable law for any and all costs and expenses incurred in any actions,
suits or controversies that arise related to Consultant's provision of Services
hereunder. The Company and Consultant will promptly execute the Company's
standard form of Indemnification Agreement.

14.      ARBITRATION

         a.       All disputes between Consultant, including any employees of
Consultant, and the Company relating in any way to this Agreement or the
Services to be performed under this Agreement (including, but not limited to,
claims for breach of contract, tort, discrimination, harassment, and any
violation of federal or state law) ("Arbitrable Claims") shall be resolved by
arbitration before a neutral arbitrator.

         b.       The arbitrator shall be selected and the arbitration hearing
conducted pursuant to the Commercial Arbitration Rules of the American
Arbitration Association and shall take place in Irvine, California, unless
otherwise agreed by the Parties. Arbitration shall be final and binding upon the
Parties and shall be the exclusive remedy for all claims covered by this
arbitration provision. Either party may bring an action in court to compel
arbitration under this Agreement, to enforce an arbitration award or to obtain
temporary injunctive relief pending a judgment based on the arbitration award.
Otherwise, neither party shall initiate or prosecute any lawsuit or
administrative action in any way related to any Arbitrable Claim.

         c.       The Federal Arbitration Act shall govern the interpretation
and enforcement of this agreement on Arbitration, except if any court finds that
the Federal Arbitration Act does not apply, the California Arbitration Act shall
govern the interpretation and enforcement of this agreement. If any court or
arbitrator finds that any term makes this Arbitration agreement unenforceable
for any reason, the court or arbitrator shall have the power to modify such term
(or if necessary delete such term) to the minimum extent necessary to make this
Arbitration agreement enforceable to the fullest extent permitted by law.

         THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN
REGARD TO ARBITRABLE CLAIMS, INCLUDING WITHOUT LIMITATION, ANY RIGHT TO TRIAL BY
JURY AS TO THE MAKING, EXISTENCE, VALIDITY, OR ENFORCEABILITY OF THE AGREEMENT
TO ARBITRATE.

15.      MISCELLANEOUS PROVISIONS

         a.       ASSIGNMENT; SUCCESSORS AND ASSIGNS. Consultant agrees that
Consultant will not assign, delegate, or otherwise transfer his obligations for
performing the Services without the written consent of the Company. Nothing in
this Agreement shall prevent the consolidation of either party with, or their
merger into, any other corporation, or the sale by either party of all or
substantially all of its properties or assets, or the assignment by either party
of this Agreement and the performance of its obligations hereunder to any
successor in interest or any affiliated Company. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the

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benefit of the Parties and their respective heirs, legal representatives,
successors, and permitted assigns, and shall not benefit any person or entity
other than those enumerated above.

         b.       ENTIRE AGREEMENT. The terms of this Agreement are intended by
the Parties to be the final expression of their agreement with respect to the
subject matter of this Agreement and may not be contradicted by evidence of any
prior or contemporaneous agreement, except as expressly set forth in this
Agreement. The Parties further intend that this Agreement shall constitute the
complete and exclusive statement of its terms and that no extrinsic evidence
whatsoever may be introduced in any judicial, administrative, or other legal
proceeding involving this Agreement.

         c.       AMENDMENTS; WAIVERS. This Agreement shall not be varied,
altered, modified, changed or in any way amended except by an instrument in
writing executed by Consultant and a duly authorized representative of Company.

         d.       SEVERABILITY; ENFORCEMENT. If any provision of this Agreement,
or the application thereof to any person, place, or circumstance, shall be held
by an arbitrator or a court of competent jurisdiction to be invalid,
unenforceable, or void, the remainder of this Agreement and such provisions as
applied to other persons, places, and circumstances shall remain in full force
and effect, and such provision shall be enforced to fullest extent consistent
with applicable law.

         e.       GOVERNING LAW. Except as otherwise provided, the validity,
interpretation, enforceability, and performance of this Agreement shall be
governed by and construed in accordance with the laws of the State of California
without regard to principles of conflicts of law.

         f.       INTERPRETATION. This Agreement shall be construed as a whole,
according to its fair meaning, and not in favor of or against any party. By way
of example and not in limitation, this Agreement shall not be construed in favor
of the party receiving a benefit nor against the party responsible for any
particular language in this Agreement. Captions are used for reference purposes
only and should be ignored in the interpretation of this Agreement.

16.      ACKNOWLEDGEMENT

         The Parties acknowledge that: (i) they have each had the opportunity to
consult with independent counsel of their own choice concerning this Agreement
and have done so to the extent they deem necessary, and (ii) they each have read
and understand the Agreement, are fully aware of its legal effect, and have
entered into it voluntarily and freely based on their own judgment and not on
any promises or representations other than those contained in the Agreement.

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         The Parties have duly executed this Agreement as of the date first
written above.

ENDOCARE, INC.                             CONSULTANT

By: /s/ Robert F. Byrnes                   /s/ Craig T. Davenport
    -----------------------                ------------------------
Name:Robert F. Byrnes                      CRAIG T. DAVENPORT
Title:  Director

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<PAGE>

                                    EXHIBIT A

I.       SERVICES TO BE PERFORMED BY CONSULTANT ("SERVICES")

         Consultant will provide Services on a wide range of subjects as
directed by the Company's Board of Directors, to initially include the
following:

     -   Review and revise marketing plans, strategies and tactics.

     -   Review and make recommendations regarding customer service and support
         strategies.

     -   Review and make recommendations regarding product pricing and
         positioning.

     -   Review and make recommendations regarding sales plans, strategies,
         programs and tactics.

     -   Recommend potential modifications to the Company's management team and
         ideas for further organization development.

     -   Assist and develop a "contingency model" that addresses various
         scenarios.

     -   Establish and develop a public relations campaign, the objective of
         which will be to reestablish a positive image and reputation for the
         Company.

     -   Interview new candidates for positions the Company currently has open.

     -   Recruit qualified director candidates to be presented to the
         Nominating Committee of the Board of Directors.

     -   Perform operational analysis, interact with Company personnel and
         perform tasks as directed by the Company's Board of Directors.

         Consultant agrees to deliver his recommendations in writing to the
Company's Board of Directors to the extent requested.

         In no event shall Consultant have any material involvement where the
oversight of, preparation or auditing of the Company's financial statements or
the Company's disclosure controls and procedures is involved. Consultant shall
not provide any input on the Company's periodic reports with the Securities and
Exchange Commission. Consultant shall in no event have any authority, obligation
or right to assess the Company's internal accounting controls.

                                   Exhibit A<PAGE>

                                                                   Exhibit 10.12

                       FLUOR CORPORATION AND SUBSIDIARIES
                                MANAGEMENT MANUAL

Section:          Human Resources             Directive:            460
                                                                    Page 1 of 8
Subject:          EXECUTIVE SEVERANCE PLAN    Effective:            10/27/03

Applies To:       Fluor Corporation           Supersedes:           12/31/02

OBJECTIVE

To provide severance compensation to eligible executives of Fluor Corporation
and designated subsidiaries collectively, the "company", who leave the company,
depending on the circumstances and conditions leading to termination.

ELIGIBILITY

Executives of Fluor Corporation and designated subsidiaries actively at work who
are participants in the Fluor Corporation and Subsidiaries Executive Incentive
Compensation Plan and who execute the required settlement and release agreement
in exchange for the severance.

DEFINITIONS

For the purpose of the Plan, the following definitions apply:

         A.       VOLUNTARY SEPARATION

                  Action taken by an executive for personal reasons, to seek
                  other employment, to accept another position, for failure to
                  return at conclusion of leave, or to voluntarily retire.

         B.       INVOLUNTARY SEPARATION

                  1.       Action taken by the company due to reduction in force
                           resulting from reorganization or reduced workload or
                           other similar circumstances whereby the executive's
                           services are no longer required on the job.
                           Executives involuntarily separated who meet the
                           retirement criteria may elect retirement.

                  2.       Action taken by the company when an executive has a
                           qualifying disability under the Americans with
                           Disabilities Act, or a similar disability statute,
                           and is unable to perform his/her essential job
                           functions with or without reasonable accommodation.

-------------------
This Fluor Corporation policy is subject to modification or revision in part or
in its entirety to reflect changes in conditions subsequent to the effective
date of this policy.

<PAGE>

                                                                   Exhibit 10.12

                       FLUOR CORPORATION AND SUBSIDIARIES
                                MANAGEMENT MANUAL

Section:          Human Resources             Directive:            460
                                                                    Page 2 of 8
Subject:          EXECUTIVE SEVERANCE PLAN    Effective:            10/27/03

Applies To:       Fluor Corporation           Supersedes:           12/31/02

         C.       INVOLUNTARY DISCHARGE

                  Action taken by the company for reasons other than stated in
                  Paragraph B. above including but not limited to absenteeism,
                  misconduct, insubordination, appearing at work under the
                  influence of a controlled substance or alcohol, unethical
                  behavior, disclosure of confidential information, sexual
                  harassment, employment discrimination, unsatisfactory
                  performance, or violation of any company policy.

         D.       OFFICER

                  An executive who is a vice president or above of Fluor
                  Corporation, Fluor Enterprises Inc., or Fluor Constructors,
                  Inc., who participates in the Fluor Corporation and
                  subsidiaries Executive Incentive Compensation Plan.

         E.       COMPLETED YEARS OF ACCUMULATED SERVICE

                  A period of accumulated service with the company, subject to
                  the limitation set forth under Procedure, A.4.c.

         F.       BENEFICIARY

                  The beneficiary designated by the executive under the Fluor
                  Corporation Employee's Retirement Plan, or, if no such
                  designation has been made, then as designated under the Group
                  Life/Health Insurance Plan unless the executive otherwise
                  makes a beneficiary designation on the form provided by the
                  executive's corporate employer, or, in the absence of any
                  designation, the administrator or executor of the executive's
                  estate.

PROCEDURE

         A.       SEVERANCE PAY

                  1.       Voluntary Separation

-------------------
This Fluor Corporation policy is subject to modification or revision in part or
in its entirety to reflect changes in conditions subsequent to the effective
date of this policy.

<PAGE>

                                                                   Exhibit 10.12

                       FLUOR CORPORATION AND SUBSIDIARIES
                                MANAGEMENT MANUAL

               The company will not provide severance pay nor prorated Incentive
               Compensation (Paragraph A under "Definitions").

Section:          Human Resources             Directive:            460
                                                                    Page 3 of 8
Subject:          EXECUTIVE SEVERANCE PLAN    Effective:            10/27/03

Applies To:       Fluor Corporation           Supersedes:           12/31/02

                  2.       Involuntary Separation

                           Severance pay will be based on current base salary
                           and total completed years of accumulated service as
                           follows:

                           a.       Officers

                                    1.       Two weeks' severance pay for each
                                             completed year of accumulated
                                             service up to 52 weeks.

                                    2.       Minimum eight weeks' severance.

                           b.       Non-Officer Executives

                                    1.       Two weeks' severance pay for each
                                             completed year of accumulated
                                             service up to 26 weeks.

                                    2.       Minimum four weeks' severance.

                  3.       Involuntary Discharge

                           a.       The company will not provide severance pay
                                    nor consider proration of Incentive
                                    Compensation (Paragraph C, Definitions).

                  4.       Limitations

                           a.       Maximum severance pay will be 52 weeks for
                                    officers, 26 weeks for non-officer
                                    executives.

                           b.       Minimum severance pay will be eight weeks
                                    for officers, four weeks for non-officer
                                    executives.

                           c.       The total completed years of accumulated
                                    service calculated for a severance payment
                                    may only be used one time in severance
                                    calculations.

                           d.       For executives involuntarily separated and
                                    placed on Leave of Absence in Lieu of
                                    Layoff, severance pay will be based on
                                    completed years of accumulated service up to
                                    the effective date of the Leave of Absence.

                           e.       Officers in policy making positions who meet
                                    retirement criteria will receive severance
                                    pay as follows:

-------------------
This Fluor Corporation policy is subject to modification or revision in part or
in its entirety to reflect changes in conditions subsequent to the effective
date of this policy.

<PAGE>

                                                                   Exhibit 10.12

                       FLUOR CORPORATION AND SUBSIDIARIES
                                MANAGEMENT MANUAL

Section:          Human Resources             Directive:            460
                                                                    Page 4 of 8
Subject:          EXECUTIVE SEVERANCE PLAN    Effective:            10/27/03

Applies To:       Fluor Corporation           Supersedes:           12/31/02

                                    1.       Officers who meet the minimum
                                             retirement income requirement set
                                             forth by federal law, excluding any
                                             amount payable under this Plan,
                                             will receive severance pay for only
                                             the period from the date of
                                             termination until January 2
                                             following the officer's 65th
                                             birthday subject to the limitation
                                             set forth under Procedure, A.2.a.

                                    2.       Officers who do not meet the
                                             minimum retirement income
                                             requirement set forth by federal
                                             law, computed excluding any amount
                                             payable under this Plan, will
                                             receive severance pay as determined
                                             under Procedure, A.2.a.

                           f.       In the case of involuntary separation due to
                                    an executive's inability to perform his/her
                                    essential job functions with reasonable
                                    accommodation, the executive's severance pay
                                    amount will be reduced by the expected
                                    entitlements under Fluor's short-term and
                                    long-term disability for the number of weeks
                                    determined under Procedure A.2.a and b. If
                                    the actual entitlements received by the
                                    employee are less than that deducted from
                                    severance pay, the employee will be paid the
                                    difference for the period of weeks for which
                                    the employee received severance. This
                                    provision is not intended to affect any
                                    state or federal benefits to which the
                                    executive may be entitled.

                           g.       In cases where the executive is entitled to
                                    legislated severance pay in non-U.S.
                                    countries, executive's severance pay amount
                                    will be reduced by any legislated severance
                                    payments required of the company that are
                                    calculated with reference to the number of
                                    weeks determined under Procedure A.2.a and
                                    b.

                  5.       Severance pay will be paid in a lump sum, or at the
                           discretion of the company, annual installments over a
                           period not to exceed the total number of weeks
                           determined under Paragraph A.2.a. and b. above.

                  6.       In event of an executive's death prior to payment of
                           the entire entitlement, payment may be made to the
                           designated beneficiary in one lump sum or by
                           continuation of installments at the discretion of the
                           executive's corporate employer.

-------------------
This Fluor Corporation policy is subject to modification or revision in part or
in its entirety to reflect changes in conditions subsequent to the effective
date of this policy.

<PAGE>
                                                                   Exhibit 10.12

                       FLUOR CORPORATION AND SUBSIDIARIES
                               MANAGEMENT MANUAL

Section:          Human Resources             Directive:            460
                                                                    Page 5 of 8
Subject:          EXECUTIVE SEVERANCE PLAN    Effective:            10/27/03

Applies To:       Fluor Corporation           Supersedes:           12/31/02

         B.       INCENTIVE COMPENSATION

                  (As defined in the Executive Incentive Compensation Plan,
                  Fluor Corporation and Subsidiaries Management Manual)

                  1.       Voluntary Separation

                           The company will not provide a prorated incentive
                           award.

                  2.       Involuntary Separation

                           Incentive Compensation may be considered based on the
                           number of completed months of service during the
                           current fiscal year prior to termination and
                           consistent with the administration of the Plan during
                           the year of termination.

                3.    Involuntary Discharge

                      The company will not provide a prorated incentive award.

         C.       COMPANY AUTOMOBILES

                      In company locations where officers/directors may be
                      assigned company-owned automobiles, the following will
                      apply:

                  a.       Voluntary Separation

                           Officers/directors who voluntarily retire will be
                           presented with the automobile that is currently
                           assigned as a gift.

                  b.       Involuntary Separation

                           Officers/directors who are requested to take early
                           retirement will be presented with the automobile
                           which is currently assigned as a gift.

-------------------
This Fluor Corporation policy is subject to modification or revision in part or
in its entirety to reflect changes in conditions subsequent to the effective
date of this policy.

<PAGE>

                                                                   Exhibit 10.12

                       FLUOR CORPORATION AND SUBSIDIARIES
                                MANAGEMENT MANUAL

Section:          Human Resources             Directive:            460
                                                                    Page 6 of 8
Subject:          EXECUTIVE SEVERANCE PLAN    Effective:            10/27/03

Applies To:       Fluor Corporation           Supersedes:           12/31/02

                  c.       Involuntary Discharge

                           Officers/directors will not be given an automobile,
                           and it will not be available for purchase.

         D.       CLUB MEMBERSHIP

                  Company memberships will not be awarded to an executive
                  regardless of reason for termination.

         E.       AUTOMOBILE ALLOWANCE

                  1.       In locations where executives receive a car
                           allowance/insurance, the following will apply:

                           a.       Voluntary Separation

                                    The company will not provide a car
                                    allowance/insurance.

                           b.       Involuntary Separation

                                    The company will not provide a car
                                    allowance/insurance.

                           c.       Involuntary Discharge

                                    The company will not provide a car
                                    allowance/insurance.

         F.       INSURANCE COVERAGE

                  Applicable insurance coverage, i.e., group health, long-term
                  disability, executive health, etc., will cease on date of
                  termination. Where applicable, departing executive may elect
                  continued coverage through the Consolidated Omnibus Budget
                  Reconciliation Act (COBRA).

-------------------
This Fluor Corporation policy is subject to modification or revision in part or
in its entirety to reflect changes in conditions subsequent to the effective
date of this policy.

<PAGE>

                                                                   Exhibit 10.12

                       FLUOR CORPORATION AND SUBSIDIARIES
                                MANAGEMENT MANUAL

Section:          Human Resources             Directive:            460
                                                                    Page 7 of 8
Subject:          EXECUTIVE SEVERANCE PLAN    Effective:            10/27/03

Applies To:       Fluor Corporation           Supersedes:           12/31/02

         G.       TIME OFF WITH PAY (TOWP) PROGRAM

                  Balance will be paid at time of termination.

         H.       STOCK BASED AWARDS

                  1.       Voluntary Separation

                           Upon qualified retirement, awards may become 100
                           percent vested.

                  2.       Involuntary Separation

                           Upon qualified retirement, awards may become 100
                           percent vested.

                  3.       Involuntary Discharge

                           Vested portion may be exercised.

         I.       LONG TERM INCENTIVE (LTI) PROGRAM

                  Applicable cash awards under the long-term incentive program
                  will not be prorated for any reason, except death or total and
                  permanent disability.

         J.       WAIVERS

                  A settlement agreement and release form must be obtained from
                  employees in exchange for severance benefits. No severance
                  benefit will be due employees unless a settlement and release
                  agreement provided by the company has been properly and timely
                  executed.

         K.       OUTPLACEMENT

                  In-house outplacement services are available.

-------------------
This Fluor Corporation policy is subject to modification or revision in part or
in its entirety to reflect changes in conditions subsequent to the effective
date of this policy.

<PAGE>

                                                                   Exhibit 10.12

                       FLUOR CORPORATION AND SUBSIDIARIES
                                MANAGEMENT MANUAL

Section:          Human Resources             Directive:            460
                                                                    Page 8 of 8
Subject:          EXECUTIVE SEVERANCE PLAN    Effective:            10/27/03

Applies To:       Fluor Corporation           Supersedes:           12/31/02

         L.       PLAN TERMINATION

                  This Plan will expire December 31, 2006. Any executive whose
                  employment terminates after the Plan expires, will not be
                  eligible for participation in the Plan. Further, no benefits
                  will accrue or be payable under the Plan after Plan
                  Termination.

         M.       EXCEPTION

                  Approved by the Chief Executive Officer of Fluor Corporation.

-------------------
This Fluor Corporation policy is subject to modification or revision in part or
in its entirety to reflect changes in conditions subsequent to the effective
date of this policy.

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