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EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), entered into on
July 21, 1998, but effective as of July 1, 1998, by and between FLUOR
CORPORATION (the "Company"), and XXXXXX X. XXXXXXX, XX. (the "Executive"),
W I T N E S S E T H :
WHEREAS, the Company desires to secure the experience,
abilities and service of the Executive by employing the Executive upon the terms
and conditions specified herein; and
WHEREAS, the Executive is willing to enter into this Agreement
upon the terms and conditions specified herein;
NOW, THEREFORE, in consideration of the premises, the terms
and provisions set forth herein, the mutual benefits to be gained by the
performance thereof and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Employment. The Company hereby employs the
Executive, and the Executive hereby accepts such employment, all upon the terms
and conditions set forth herein.
SECTION 2. Term. Subject to the terms and conditions of this
Agreement, the Executive shall be employed by the Company commencing on July I5,
1998 (the "Effective Date") and terminating on July 14, 2003 (the "Primary
Term") unless sooner terminated pursuant to Section 5 of this Agreement.
SECTION 3. Duties and Responsibilities.
A. Capacity. The Executive shall serve in the capacity of
Chairman of the Board of Directors and Chief Executive Officer of the Company.
The Executive shall perform the duties ordinarily expected of a Chairman and
Chief Executive Officer and shall also perform such other duties consistent
therewith as the Board of Directors of the Company (the "Board") shall, from
time to time, reasonably determine. As of the Effective Date, the Board of
Directors of the Company shall appoint Executive to the Board of Directors of
the Company as a Class I Director.
B. Full-Time Duties. The Executive shall devote his full
business time, attention and energies to the business of the Company.
Notwithstanding anything herein to the contrary, the Executive shall be allowed
to (a) manage the Executive's personal investments and affairs, and (b) (i)
serve on boards or committees of civic or charitable organizations or trade
associations, and (ii) with the permission of the Board of Directors of the
Company, serve on the board of directors of any corporation or as an advisory
director of any corporation; provided that such activities do not materially
interfere with the proper performance of his duties and responsibilities
specified in Section 3(A).
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SECTION 4. Compensation.
A. Base Salary. During the term of this Agreement, the
Executive shall receive a salary (the "Base Salary") of at least $900,000 per
annum, prorated for partial years of employment. The Base Salary shall be
payable by the Company in accordance with the general payroll practices of the
Company in effect from time to time. During the term of this Agreement, the Base
Salary shall be reviewed prior to or just following the beginning of each fiscal
year of the Company for increase at the discretion of the Board provided,
however, that such annual increase shall be not less than the percentage
budgeted for increases for the Management Group.
B. Signing Bonus. On July 1, 1998, the Company shall pay to
the Executive a lump sum cash payment of $750,000 as a signing bonus in
consideration for the Executive's decision to accept employment with the
Company. The parties agree that the payment under this Section 4(B) is in the
nature of a signing bonus payable to the Executive, a Texas resident, prior to
the performance of any services in the State of California, and that the payment
is not subject to California state income tax and shall be reported accordingly
for tax purposes by the Company.
C. Annual Incentive Bonus. The Executive shall be eligible for
an annual bonus at a target level of at least $825,000, payable in the January
following the completion of each fiscal year, commencing in January 1999
prorated for partial years of Employment. The Executive's bonus may range up to
2 times the target level as determined by the Board in a manner consistent with
the Company's established annual bonus program based on Company and individual
performance. In addition, the Executive shall receive a non-discretionary annual
incentive bonus of $100,000, prorated for partial years of employment, which
shall be deferred under the Company's Executive Deferred Compensation Program.
D. Long-Term Incentive Award. The Executive shall be eligible
for a cash long-term incentive award at a target level of at least $240,000,
payable in January 2002 following the completion of a 3-year performance cycle
ending on October 31, 2001. The Executive's cash award may range up to 2 times
the target level as determined by the Board in a manner consistent with the
Company's established long-term incentive program based on Company performance
over the performance cycle.
E. Equity Compensation.
(1) Initial Option Award. As of the Effective Date,
the Executive shall be granted options (the "Initial Option")
to purchase 200,000 shares of the common stock of the Company
("Common Stock") at an exercise price equal to the fair market
value per share of Common Stock on the Effective Date
($45.75). The Initial Option shall be immediately exercisable
with respect to 20% of the shares of Common Stock subject
thereto, and, unless accelerated pursuant to another provision
of this Agreement, the remainder will become exercisable in
20% increments on each successive anniversary of the Effective
Date, such that the Initial
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Option will become 100% exercisable on the fourth anniversary
of the Effective Date. The Initial Option shall be granted
pursuant to the 1996 Fluor Executive Stock Plan (the "ESP")
and for purposes of determining the Executive's rights with
respect to the Initial Option upon termination of employment
due to retirement, any termination of the Executive's
employment by the Company without "Cause" (as hereinafter
defined) or termination by the Executive for "Good Reason" (as
hereinafter defined) would be deemed to constitute an approved
retirement. The Initial Option shall be composed of two types
of options, with 189,075 shares of Common Stock subject to a
non-qualified stock option ("Initial NQSO") and 10,925 shares
subject to an incentive stock option ("ISO"'). The ISO is
intended to be an "incentive stock option" within Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"),
to the maximum extent possible. The Initial NQSO will be
evidenced by a Non-Qualified Stock Option Agreement and the
ISO will be evidenced by an Incentive Stock Option Agreement
between the Company and the Executive.
(2) 1998 Additional Award. Within 180 days of the
Effective Date, pursuant to the Company's ESP, the Executive
will be granted a non-qualified option ("NQSO") to purchase
additional shares of Common Stock at an exercise price equal
to the fair market value on the date of grant. The number of
shares of Common Stock subject to the NQSO will be determined
by the Organization and Compensation Committee of the Board,
but is expected to be approximately 100,000 shares or an
equivalent value of restricted share and tandem units. Unless
accelerated pursuant to another provision of this Agreement,
the NQSOs will become exercisable in 25% annual increments
beginning on the first anniversary of the date of grant, such
that the NQSOs will be 100% exercisable on the fourth
anniversary of the date of grant. The terms of the NQSO will
be evidenced by a Non-Qualified Stock Option Agreement between
the Company and the Executive.
(3) Awards During Term. During the term of this
Agreement, the Executive shall be eligible for grants of stock
options, restricted stock, stock appreciation rights and other
incentive awards under and in accordance with the Company's
ESP or any comparable or successor plans that may be adopted
by the Company. All such incentive awards shall take into
account the Executive's positions, duties and responsibilities
at the Company.
(4) Shadow Stock. As of the Effective Date, the
Executive shall be granted units of shadow stock ("Units")
pursuant to the 1982 Fluor Shadow Stock Plan (the "Shadow
Plan"). The number of units awarded shall be equal to (a) 6.8
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million dollars, divided by (b) the fair market value of the
Common Stock on the Effective Date ($45.75), rounded up to the
next whole Unit (148,634 units). All restrictions on the Units
will expire and the Units will become exercisable in full in
the event (x) the Executive remains continuously employed
through the expiration of the Primary Term, or (y) the
Executive's employment terminates prior to the expiration of
the Primary Term due to death, "Disability," termination by
the Company without "Cause," termination by the Executive for
"Good Reason," or following a "Change of Control" (as such
terms are hereinafter defined). In the event the Executive's
employment terminates prior to the expiration of the Primary
Term for any reason other than those set forth in the
preceding sentence, then the restrictions on the Units shall
lapse as of the date of termination as to a portion of the
Units which equals (i) the number of Units originally awarded
multiplied by (ii) a fraction, the numerator of which is the
number of days that have elapsed from the Effective Date to
the date of termination and the denominator of which is 1,825
(the number of days in the Primary Term). For purposes of
determining the Executive's rights with respect to the Units
under the Shadow Plan upon termination of employment due to
retirement, any termination of the Executive's employment by
the Company without Cause or termination by the Executive for
Good Reason would be deemed to constitute a retirement. The
Units shall have a ten-year term from the Effective Date,
subject to earlier expiration in accordance with the Shadow
Plan, in the event of voluntary resignation prior to
retirement without Good Reason or termination by the Company
for Cause. The Units will be evidenced by a Shadow Stock
Agreement between the Company and the Executive.
F. Secured Loan. The Company will provide the Executive with a
loan with a principal amount of $5,000,000, to facilitate the purchase of a
residence in the Southern California area. The loan is to be secured by a First
Trust Deed on the residence and will be structured as an interest-only loan with
a balloon payment of the entire principal amount and all interest accrued during
the term of the loan due on January 15, 2004. The loan shall accrue interest at
the rate of 5.68%, compounded annually. The loan shall be evidenced by a
promissory note and deed of trust containing the foregoing terms and such other
terms as are customarily used by the Company for relocation loans and are not
inconsistent with the foregoing terms. The loan shall be subject to acceleration
in the event of the Executive's termination of employment prior to expiration of
the Primary Term.
G. Automobile. The Company will provide the Executive with the
use of an automobile of the Executive's choice, in accordance with the Company's
inside director automobile directives. The automobile may have a value of up to
$75,000. The Company may own the automobile and will pay the costs of all
maintenance, repair and insurance, including any applicable deductibles.
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H. Traveling, Moving and Relocation. The Company shall
reimburse the Executive for expenses relating to traveling, moving and
relocating from Houston, Texas, to Irvine, California, according to the
Company's Personnel Policy (HR-121), including the expenses of packing,
unpacking, shipping and storage of personal belongings, normal fees associated
with the buying and/or selling of the Executive's personal residence, and a
payment to cover any additional federal tax liability associated with the
payment of buy/sell expenses.
I. Executive Deferred Compensation. The Executive will be
eligible to participate in all aspects of the Company's Executive Deferred
Compensation Program, including both the deferred salary and deferred incentive
award provisions, on terms at least as favorable as other top executives of the
Company.
J. Retirement Plans. The Executive will be eligible to
participate in the Company's Salaried Employees' Savings Investment Plan and
Employee's Retirement Plan or any similar plan, subject to satisfying the
eligibility requirements of such plans.
K. Health, Life and Disability Coverage.
(1) Group Insurance. The Executive will be covered
under the Company's group health, group life insurance,
accidental death and dismemberment, travel accident, long-term
disability and short-term disability plans under terms
generally applicable to other similarly situated employees of
the Company.
(2) Executive Health Insurance. The Executive will
participate in the Company's executive health care plan, which
will provide reimbursement for health care expenses incurred
by the Executive and his dependents in excess of covered
charges under the Company's group health insurance policy.
Reimbursement under this plan will include deductibles and
co-insurance payable under the group plan, reasonable and
customary charges not covered under the group plan, and
charges for private rooms. The Executive will be provided, and
the Company requires him to obtain, an annual physical
examination at Company expense.
(3) Supplemental Death Benefit. Upon the Executive's
death while in employment, the Company will provide a
$2,000,000 death benefit to the Executive's designated
beneficiary under the Fluor Executive's Supplemental Benefit
Plan (the "SBP") as in effect on the Effective Date. Upon
termination of employment at or after age 65, the Executive
may request his choice of one of the following forms of
payment, subject to the approval of the Organization and
Compensation Committee of the Board: (a) a continuation of
this death benefit, (b) a lump sum cash payment within 30 days
of retirement equal to $920,328, or (c) monthly installment
payments of $14,155.82 beginning with the month in which the
Executive retires and continuing for a period of 10 years. In
the event of an approved early retirement,
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the Executive shall be entitled to a continuation of the death
benefit or to a lump sum or salary continuation benefit
calculated under the terms of the SBP. For purposes of the
SBP, any termination of the Executive's employment by the
Company without Cause or by the Executive for Good Reason
shall constitute an approved early retirement.
L. Time Off With Pay. The Executive shall be immediately
credited with 20 days of accrued paid time off as of the Effective Date. In
addition, the Executive will accrue at least 3.54 hours of paid time off per
week of service, or 23 days of paid time off per year of service. Accrued time
off may be used or exchanged for a cash payment equal to an equivalent amount of
Base Salary by the Executive at any time, and upon termination of employment the
Executive shall be paid the accrued paid time off based upon his then-current
Base Salary.
M. Legal and Accounting Services. Beginning in 1998, the
Executive shall be entitled to reimbursement for up to $25,000 per calendar year
for personal legal and accounting services, including, but not limited to, tax
preparation and estate planning, such services to be provided by the
professional of the Executive's choice.
N. Club Memberships. The Company will pay all dues necessary
to maintain the Executive's memberships at the River Oaks Country Club and the
Coronado Club in Houston, Texas, and will pay all business-related expenses
incurred by the Executive at such clubs. In addition, the Company will pay the
membership initiation fees, monthly dues and business-related expenses incurred
by the Executive at country and dining clubs of the Executive's choice in the
Southern California area; provided that no more than three such clubs may be
selected by the Executive without prior Company approval.
O. Other Benefits.
(1) The Executive shall be entitled to receive prompt
reimbursement by the Company for all reasonable, out-of-pocket
expenses incurred by him in performing services under this
Agreement upon the submission by the Executive of such
accounts and records as may be required under Company policy.
(2) In addition to any other benefits in this Section
4, the Executive shall be entitled to participate in all
employee benefit plans and programs made available to the
Company's senior executives, as such plans or programs may be
in effect from time to time, whether funded or unfunded.
SECTION 5. Termination of Employment.
Notwithstanding the provisions of Section 2, the Executive's
employment hereunder may terminate under any of the following conditions:
A. Death. The Executive's employment under this Agreement
shall terminate automatically upon his death.
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B. Disability. The Executive's employment under this Agreement
may be terminated due to his Disability. "Disability" shall mean the Executive's
complete inability to substantially perform his duties for any period of at
least 120 consecutive days due to physical or mental incapacity. The date of
termination due to Disability shall be the date the Executive elects to
terminate service due to Disability or, if earlier, the date the Board
determines that the Executive has met the definition of Disability.
C. Termination by Company Without Cause. The Company may
terminate the Executive's employment hereunder without Cause (as hereinafter
defined) on 30 days' prior written notice to the Executive.
D. Termination by Company for Cause. The Executive's
employment hereunder may be terminated for Cause by the Company. For purposes of
this Agreement, "Cause" means:
(1) the Executive is charged with commission of a
felony involving moral turpitude excluding any felony
relating, to the operation of a motor vehicle or is convicted
or enters a no contest plea to a felony relating to the
operation of a motor vehicle which, at the time of commission,
the Executive knew had a reasonable probability of causing a
material adverse effect on, the Company; or
(2) the Executive's serious, willful gross misconduct
or gross neglect of duties (which shall include, without
limitation 90 days' absence) which, in either case, has
resulted, or could reasonably be expected to result, in
material economic damage to the Company;
provided, however, that no action or failure to act by the Executive will
constitute "Cause" if the Executive reasonably believed in good faith that such
action or failure to act was in the best interest of the Company.
Any termination of the Executive's employment by the Company
for Cause under this Section 5(D) shall be authorized by a vote of at least a
majority of the non-employee members of the Board. The Executive shall be given
notice by the Board specifying in detail the particular act or failure to act on
which the Board is relying in proposing to terminate him for Cause and offering
the Executive an opportunity, on a date at least 14 days after receipt of such
notice, to have a hearing, with counsel, before a majority of the non-employee
members of the Board, including each of the members of the Board who authorized
the termination for Cause.
E. Termination by Executive for Good Reason. The Executive may
terminate his employment hereunder for "Good Reason." For purposes of this
Section 5(E), "Good Reason" for termination shall exist if, without the consent
of the Executive, any of the following events occur:
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(1) a reduction in the Executive's Base Salary or the
termination or reduction of a benefit under any employee
benefit plan or program of the Company or any subsidiary in
which he participates unless, in the case of a benefit, (x)
there is substituted a comparable benefit that is economically
equivalent to such benefit prior to its termination or
reduction, as the case may be or (y) such termination or
reduction affects the members of the Senior Management of the
Company generally and occurs prior to a Change of Control;
(2) either (A) the failure by the Company to continue
in effect any incentive or other compensation plan or program
in which the Executive is to participate under the terms of
this Agreement or (B) the taking of any action by the Company
that would have a material adverse affect on the Executive's
participation in, or materially reduce his benefits under, any
such plan or program, unless (x), in the case, of either
clause (A) or (B) above, there is substituted a comparable
plan or program that is economically equivalent, in terms of
the benefit offered to the Executive, to the plan or program
being altered, reduced, affected or ended or (y) such failure,
or in the case of clause (B) above, such taking of any action,
affects the members of the senior management of the Company
generally and occurs prior to a Change of Control;
(3) the loss of any of the Executive's titles or
positions as described in Section 3 except where such loss is
due to the Executive's death or disability, or termination of
Executive's Employment;
(4) a significant diminution in the Executive's
duties and responsibilities or the assignment to the Executive
of duties and responsibilities inconsistent with his
positions;
(5) the relocation of the Company's principal office,
or the Executive's own office location as assigned to him by
the Company, to a location more than 50 miles from the present
location of the Company's principal office;
(6) the failure of the Company to obtain the
unconditional assumption in writing or by operation of law of
the Company's obligations to the Executive under this
Agreement by any successor prior to or at the time of a
reorganization, merger, consolidation, disposition of all or
substantially all of the assets of the Company or similar
transaction; or
(7) a material breach by the Company of this
Agreement, which breach continues for more than 30 days
following written notice given by the Executive to the
Company.
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F. Termination by Executive Without Good Reason. The Executive
may terminate his employment hereunder at any time on 30 days' written notice to
the Company.
SECTION 6. Change of Control.
A. Upon the Executive's termination of employment for any
reason following a Change of Control, as defined below, any restrictions on any
stock option, restricted stock, stock appreciation right, Unit or other
equity-based incentive provided under the ESP, the Shadow Plan or any other plan
of the Company (a "Stock Plan") shall lapse immediately
B. A Change of Control shall have the meaning set forth in the
ESP as of the Effective Date, or any definition that is more favorable to the
Executive that is set forth in any subsequent Stock Plan or that is approved by
the Board for the benefit of the Company's senior executives.
SECTION 7. Payments Upon Termination.
A. Upon termination of the Executive's employment for any
reason prior to the expiration of the Primary Term, the Company shall be
obligated to pay, and the Executive shall be entitled to receive:
(1) all accrued and unpaid Base Salary under Section
4 to the date of termination;
(2) any unpaid bonus under Section 4(C) or long-term
incentive award under Section 4(D) for the fiscal year or
performance cycle ending prior to the date of termination;
(3) title to the automobile provided under Section
4(G), provided that the Executive was employed for at least 2
years prior to termination of employment;
(4) all accrued but unused or unpaid time off with
pay under Section 4(L);
(5) all incurred but unreimbursed expenses for which
the Executive is entitled to reimbursement under Section 4;
and
(6) any benefits to which he is entitled under the
terms of the Executive Deferred Compensation Program, the
Employee's Retirement Plan, the Salaried Employees Savings
Investment Plan, the Long-Term Incentive Award Program, and
any other applicable employee pension or benefit plan or
program, or applicable law.
B. Upon termination of the Executive's employment upon the
death of Executive pursuant to Section 5(A), the Company shall be obligated to
pay, and the Executive shall be entitled to receive:
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(1) all of the amounts and benefits described in
Section 7(A); and
(2) the death benefit payable under Section 4(K)(3)
and any other death benefit payable under a plan or policy
provided by the Company.
C. Upon termination of the Executive's employment upon the
Disability of the Executive pursuant to Section 5(B), the Company shall be
obligated to pay, and the Executive shall be entitled to receive:
(1) all of the amounts and benefits described in
7(A);
(2) the Base Salary, at the rate in effect
immediately prior to the date of his termination of employment
due to Disability, for a period of one year following such
termination, offset by any payments the Executive receives
under the Company's long-term disability plan and any
supplements thereto, whether funded or unfunded, which is
adopted by the Company for the Executive's benefit;
(3) a bonus award for the fiscal year in which his
termination due to Disability occurs, in an amount equal to
the target bonus for the fiscal year in which termination
occurs, prorated for the number of days of the year that
elapsed prior to his termination of employment;
(4) a long-term incentive award for each performance
cycle in which termination of employment due to Disability
occurs, in an amount equal to the Target long-term incentive
award for the particular performance cycle, prorated for the
number of days of the particular performance cycle that
elapsed prior to his termination of employment;
(5) the medical benefits payable under Section
4(K)(1), which shall be provided to the Executive and his
spouse for life; and
(6) long-term disability payments, payable at least
monthly, beginning one year after the Executive's termination
of employment due to Disability and continuing until the
earliest to occur of the termination of his Disability, his
death or his attainment of age 65, or Two years from the date
their payment commenced in an amount equal to 60% of his Base
Salary, at the rate in effect immediately prior to the date of
his termination of employment due to Disability, reduced by
(b) any long-term disability payments he receives from any
disability plan or programs contributed to by the Company (but
not by any
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retirement benefits that commence due to his termination of
employment); and
(7) commencing with the first month following the
month in which the Executive is terminated, payments to which
the Executive is entitled under any plans or programs of the
Company providing long-term disability or retirement benefits.
In the event a Change of Control occurs within two years after
the Executive's termination of employment due to Disability, the Executive shall
be entitled to a lump-sum payment of the aggregate amounts specified under
clauses (1), (2), (3), (4) and (6) of this Section 7(C) that have not been paid
to the Executive, payable within 5 days after the Change of Control, and all
other benefits payable pursuant to this Section 7(C) shall continue to be paid
in accordance with the terms hereof.
D. Upon termination of the Executive's employment: (i) by the
Company without Cause pursuant to Section 5(C); or (ii) by the Executive for
Good Reason pursuant to Section 5(E), the Company shall be obligated to pay and
the Executive shall be entitled to receive:
(1) all of the amounts and benefits described in
Section 7(A);
(2) Base Salary for the lesser of (x) three years or
(y) the remaining Primary Term, as if there had been no
termination;
(3) annual bonuses for the lesser of (x) three years
or (y) remainder of the Primary Term (including a pro rated
bonus for any partial year), equal to the target bonus for the
fiscal year in which termination of Employment occurs, such
bonuses to be paid at the same time annual bonuses are
regularly paid by the Company to him;
(4) long-term incentive awards for the lesser of (x)
three years or (y) remainder of the Primary Term (including a
pro rated award for any performance cycle ending after the
Primary Term), for each performance cycle in which termination
of Employment occurs, in an amount equal to the target
long-term incentive award for the particular performance
cycle, such awards to be paid at the same time long-term
incentive awards are regularly paid by the Company to him;
(5) An immediate lump-sum cash payment equal to the
excess (if any) of the "Pro-Rata Loan Amount" over the "Unit
Value," where:
the "Pro-Rata Loan Amount" means the portion of the
residence loan under Section 4(F) that the Executive
earned to the date of termination, which
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is an amount equal to $5,000,000 multiplied by a
fraction, the numerator of which is the number of
days that have elapsed from the Effective Date to the
date of termination of employment, and the
denominator of which is 1,825 (the number of days in
the Primary Term), and
"Unit Value" means the value of the Units awarded
under Section 4(E)(4) as of the date of termination;
and
(6) the medical benefits described in Section
4(K)(1), which shall be provided to the Executive and his
spouse for life.
In addition to the benefits mentioned above, a termination by
the Company without Cause or by the Executive with Good Reason shall be deemed
an approved early retirement for purposes of any Stock Plan, the Shadow Plan and
the SBP. The Executive shall also be entitled to full vesting of his interest
under the Company's Retirement Plans described in section 4(J). Any benefit due
to the Executive as a result of the previous sentence which may not be paid
under the Company's qualified retirement plans is to be paid by the Company.
In the event a Change of Control occurs within two years after
the Executive's termination of employment by the Company without Cause or by the
Executive with Good Reason, the Executive shall be entitled to a lump-sum
payment of the aggregate amounts specified under clauses (1), (2), (3), (4) and
(5) of this Section 7(D) that have not been paid to the Executive, payable
within 5 days after the Change of Control, and all other benefits payable
pursuant to this Section 7(D) shall continue to be paid in accordance with the
terms hereof.
E. In the event of any termination of employment under this
Section 7, the Executive shall be under no obligation to seek other employment,
and there shall be no offset against amounts due the Executive under this
Agreement on account of any remuneration attributable to any subsequent
employment that he may obtain.
SECTION 8. Indemnification.
(a) The Company agrees to indemnify the Executive to the
fullest extent permitted by applicable law consistent with the Company's
Certificate of Incorporation and By-Laws in effect as of the date hereof with
respect to any acts or non-acts he may have committed during the period during
which he was an officer, director and/or employee of the Company or any
subsidiary thereof, or of any other entity of which he served as an officer,
director or employee at the request of the Company.
(b) The Company agrees to obtain a directors' and officers'
liability insurance policy covering the Executive and to continue and maintain
such policy. The amount of coverage shall be reasonable in relation to the
Executive's position and responsibilities during the Primary Term.
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SECTION 9. Amendment; Waiver. The terms and provisions of this
Agreement may be modified or amended only by a written instrument executed by
each of the parties hereto, and compliance with the terms and provisions hereof
may be waived only by a written instrument executed by each Party entitled to
the benefits thereof. No failure or delay on the part of any party in exercising
any right, power or privilege granted hereunder shall constitute a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege granted hereunder.
SECTION 10. Entire Agreement. Except as contemplated herein,
this Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes any and all prior written or oral
agreements, arrangements or understandings between the Company and the
Executive.
SECTION 11. Notices. All notices or communications hereunder
shall be in writing, addressed as follows or to any address subsequently
provided to the other party:
To the Company:
Fluor Corporation
Attention: Chief Legal Officer
0000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
To the Executive:
Xxxxxx X. Xxxxxxx, Xx.
0000 Xxxxxxxx Xxxx., #00X
Xxxxxxx, XX 00000
All such notices shall be conclusively deemed to be received and shall be
effective, (i) if sent by hand delivery or overnight courier, upon receipt, (ii)
if sent by telecopy or facsimile transmission, upon confirmation of receipt by
the sender of such transmission or (iii) if sent by registered or certified
mail, on the fifth day after the day on which such notice is mailed.
SECTION 12. Severability. In the event that any term or
provision of this Agreement is found to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining terms and provisions
hereof shall not be in any way affected or impaired thereby, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained therein.
SECTION 13. Binding Effect; Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
successors and assigns (it being understood and agreed that, except as expressly
provided herein, nothing contained in this Agreement is intended to confer upon
any other person or entity any rights, benefits or remedies of any kind or
character whatsoever). No rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company except that such rights
or obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity, or the sale or
liquidation as described of all or
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14
substantially all of the assets of the Company, provided that the assignee or
transferee is the successor to all or substantially all of the assets of the
Company and such assignee or transferee assumes the liabilities, obligations and
duties of the Company, as contained in this Agreement, either contractually or
as a matter of law. The Company further agrees that, in the event of a sale of
assets or liquidation as described the preceding sentence, it shall take
whatever action it legally can in order to cause such assignee or transferee to
expressly assume the liabilities, obligations and duties of the Company
hereunder.
SECTION 14. Governing Law; Dispute Resolution. This Agreement
shall be governed by and construed in accordance with the laws of the State of
California (except that no effect shall be given to any conflicts of law
principles thereof that would require the application of the laws of another
jurisdiction). Any dispute or misunderstanding arising out of or in connection
with this Agreement shall first be settled, if possible, by the parties
themselves through negotiation and, failing success at negotiation through
mediation and, failing success at mediation, shall be arbitrated at Irvine,
California. Unless otherwise agreed upon by the Company and the Executive, the
arbitration shall be had before three arbitrators, each party designating an
arbitrator and the two designees naming a third arbitrator experienced in
employment related controversies. The procedure shall he in accordance with the
rules and regulations of the American Arbitration Association.
SECTION 15. Headings. The headings of the sections contained
in this Agreement are for convenience only and shall not be deemed to control or
affect the meaning or construction of any provision of this Agreement.
SECTION 16. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement effective as of the date set forth above.
FLUOR CORPORATION
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Admiral Xxxxx X. Xxxxx
EXECUTIVE
/s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------------------
Xxxxxx X. Xxxxxxx, Xx.
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