-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, mrGQtcoarepwMPQMgPi5gufiOmIS9BSvlFJkkT/En4pH9BDrpz26YAkb5Bko6ftu MrxErPJEiD9UJVvxeHZXdQ== 0000898430-94-000058.txt : 19940131 0000898430-94-000058.hdr.sgml : 19940131 ACCESSION NUMBER: 0000898430-94-000058 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19931031 FILED AS OF DATE: 19940128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLUOR CORP/DE/ CENTRAL INDEX KEY: 0000037748 STANDARD INDUSTRIAL CLASSIFICATION: 1600 IRS NUMBER: 950740960 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-07775 FILM NUMBER: 94503568 BUSINESS ADDRESS: STREET 1: 3333 MICHELSON DR CITY: IRVINE STATE: CA ZIP: 92730 BUSINESS PHONE: 7149752000 FORMER COMPANY: FORMER CONFORMED NAME: FLUOR CORP LTD DATE OF NAME CHANGE: 19710624 10-K 1 FORM 10-K - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (MARK ONE) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] FOR THE FISCAL YEAR ENDED OCTOBER 31, 1993 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM ______________________ TO _______________________ COMMISSION FILE NO. 1-7775 FLUOR CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 95-0740960 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 3333 MICHELSON DRIVE IRVINE, CALIFORNIA 92730 (ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE) OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 975-2000 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH Common Stock, $0.625 par value REGISTERED New York Stock Exchange Chicago Stock Exchange Pacific Stock Exchange SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K. X --- The aggregate market value of the registrant's voting stock held by non- affiliates was $3,306,756,021 on January 12, 1994, based upon the average between the highest and lowest sales prices of the registrant's Common Stock as reported in the consolidated transactions reporting system. Common Stock outstanding as of January 12, 1994--82,104,868 shares. DOCUMENTS INCORPORATED BY REFERENCE Parts I, II and IV incorporate certain information by reference from the registrant's Annual Report to stockholders for the fiscal year ended October 31, 1993. Part III incorporates certain information by reference from the registrant's definitive proxy statement for the annual meeting of stockholders to be held on March 8, 1994, which proxy statement will be filed no later than 120 days after the close of the registrant's fiscal year ended October 31, 1993. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART I ITEM 1. BUSINESS. Fluor Corporation ("Fluor" or the "Company") was incorporated in Delaware in 1978 as a successor in interest to a California corporation of the same name that was originally incorporated in 1924. Its executive offices are located at 3333 Michelson Drive, Irvine, California 92730, telephone number (714) 975- 2000. Through Fluor Daniel, Inc. and other domestic and foreign subsidiaries, the Company provides engineering, procurement, construction, maintenance and related technical services on a worldwide basis to an extensive range of industrial, commercial, utility, natural resources, energy and governmental clients. The Company maintains investments in coal-related businesses through its ownership of Massey Coal Company ("Massey"). In November of 1992, the Company announced its decision to exit its lead business and classified the business as a discontinued operation in the Company's consolidated financial statements. A summary of the Company's operations and activities by business segment and geographic area is set forth below. ENGINEERING AND CONSTRUCTION The Fluor Daniel group of domestic and foreign companies ("Fluor Daniel") provides a full range of engineering, construction and related services on a worldwide basis to clients in five broad market sectors: Hydrocarbon, Industrial, Government, Process and Power. The types of services provided by Fluor Daniel, directly or through companies or partnerships jointly owned or affiliations with other companies, include: feasibility studies, conceptual design, engineering, procurement, project and construction management, construction, maintenance, plant operations, technical, project financing, quality assurance/quality control, start-up assistance, site evaluation, licensing, consulting and environmental services. Fluor Constructors International, Inc. ("Fluor Constructors") is organized and operated separately from Fluor Daniel. Fluor Constructors provides construction management, construction and maintenance services in the United States and Canada. Fluor Constructors is the Company's union construction arm. American Equipment Company, a wholly owned Fluor subsidiary, provides construction equipment, tools and related asset management services to Fluor Daniel, Fluor Constructors and the construction/maintenance industry at large through strategically located support centers. The engineering and construction business is conducted under various types of contractual arrangements, including cost reimbursable (plus fixed or percentage fee), all-inclusive rate, unit price, fixed or maximum price and incentive fee contracts. Contracts are either competitively bid and awarded or individually negotiated. In terms of dollar amount, the majority of contracts are of the cost reimbursable type. In certain instances, the Company has guaranteed facility completion by a scheduled acceptance date and/or achievement of certain acceptance and performance testing levels. Failure to meet any such schedule or performance requirements could result in costs that exceed project profit margins. The markets served by the business are highly competitive and for the most part require substantial resources, particularly highly skilled and experienced technical personnel. There are a large number of companies competing in the markets served by the business. Competition is primarily centered on performance and the ability to provide the engineering, planning and management skills required to complete complex projects in a timely and cost efficient manner. The business derives its competitive strength from its diversity, reputation for quality, worldwide procurement capability, project management expertise, geographic coverage, ability to meet client requirements by performing construction on either a union or non- 1 union basis, ability to execute projects of varying sizes, strong safety record and lengthy experience with a wide range of services and technologies. Design and engineering services provided by the business involve the continual development of new and improved versions of existing processes, materials or techniques, some of which are patented. However, none of the existing or pending patents held or licensed by the business are considered essential to operations. Generally, the development and improvement of processes, materials and techniques are performed as part of design and engineering services in connection with the projects undertaken for various clients. FLUOR DANIEL Fluor Daniel serves five broad market sectors: Hydrocarbon, Industrial, Government, Process and Power. Services are provided through 12 global business units that focus on specific markets within each sector. The business units rely on a network of operations centers and regional offices to provide resources and expertise in support of project execution worldwide. In the United States, services are provided primarily through Fluor Daniel, Inc. Principal offices are located in Irvine, California; Greenville, South Carolina; Houston (Sugar Land office), Texas; Chicago, Illinois; Anchorage, Alaska; Tulsa, Oklahoma; and Philadelphia, Pennsylvania (Marlton, New Jersey office). Additional North American operations are conducted through Fluor Daniel Canada, Inc. in Canada and Fluor Daniel Caribbean, Inc. in Puerto Rico. The international operations of the group are divided into regional areas. The Asia Pacific region includes the following operating subsidiaries: Fluor Daniel Australia Limited; Fluor Daniel China, Inc.; Fluor Daniel Eastern, Inc. (Indonesia); Fluor Daniel Engineers & Constructors, Ltd. (Hong Kong); Fluor Daniel (Japan) Inc.; Fluor Daniel (Malaysia) Sdn. Bhd.; Fluor Daniel Pacific, Inc. (the Philippines); and Fluor Daniel Thailand, Ltd. Operating subsidiaries for the Europe region include: Fluor Daniel B.V. (the Netherlands); Fluor Daniel Espana, S.A. (Spain); Fluor Daniel GmbH (Germany); and Fluor Daniel Limited (England). Operating subsidiaries for the Middle East region include Fluor Daniel Arabia Limited. Latin American operations are conducted in Venezuela through Tecnofluor C.A. (a company which is jointly owned with Tecnoconsult S.A., a Venezuelan engineering company), in Mexico through ICA Fluor Daniel (a joint equity company with Grupo ICA) and through Fluor Daniel Chile S.A. While the United States will remain an important market for Fluor Daniel's services, increasingly the largest share of opportunities are located outside the United States. Demand for higher living standards is driving strong economic growth in developing economies, particularly in the Asia Pacific and Latin American regions. Expansion of basic industries is increasing fundamental energy requirements and infrastructure needs. Globalization of markets and geopolitical change is also stimulating strategic investments in new production facilities in these emerging markets. Due largely to weak economies and capital spending within certain United States, European and Middle Eastern markets, the Government, Process, Industrial and Power sectors experienced declines in new awards in fiscal 1993 that were only partially offset by an increase in the Hydrocarbon sector. There continue to be a number of megaproject opportunities, particularly outside the United States. These projects develop slowly and, therefore, could create variability in the Company's incoming order and backlog pattern. The operations of Fluor Daniel are detailed below by market sector. Hydrocarbon Services provided to the Hydrocarbon sector include services for refining and processing plants, production facilities, oil and gas transmission systems and related facilities for petroleum, petrochemical and natural gas clients. These services are provided through the Petroleum and Petrochemicals, and Production and Pipelines business units. 2 During fiscal 1993, Hydrocarbon sector domestic contract awards included: pipeline inspection and right of way services in New York; engineering for an aromatics project for a refinery in Pennsylvania and pipeline and pump stations in Alaska; engineering and procurement for a reformulated fuels program in California and an inter-refinery pipeline in Pennsylvania; engineering, procurement and construction for an ethylene debottlenecking project for a refinery in Texas and fire rehabilitation of a refinery in Mississippi; and engineering, procurement and construction management for a reformulated gasoline and a clean fuels program, both in California, and a fluid catalytic cracking unit ("FCCU") revamp in Illinois. International contract awards included: engineering for a debottlenecking project in Indonesia, a natural gas liquids recovery facility in Nigeria, fire rehabilitation of a gas plant in the United Arab Emirates and early production system equipment, oil field production facilities, pipeline development and oil field expansion, all in Colombia; engineering and procurement for a chlor- alkali/ethylene expansion of a petrochemical plant in Saudi Arabia, an effluent quality upgrade for a refinery in the United Kingdom and a liquid petroleum gas plant upgrade in the United Arab Emirates; and engineering, procurement and construction management for a refinery upgrading project in the Netherlands, a grass roots refinery in Thailand, a hydrotreater upgrade in Canada and a field gathering and oil production system in Gabon. Ongoing projects include: engineering for a tertiary-amyl methyl ether ("TAME") unit in Texas; construction in Louisiana of gas reinjection modules for erection in Alaska; engineering and procurement for a hydrocracker revamp in California and oil production facilities in Gabon; engineering, procurement and construction for modifications to a refinery in California; engineering, procurement and construction assistance for a reformulated gasoline project in California; and engineering, procurement and construction management for a refinery upgrading project in the Netherlands, a refinery revamp in Belgium, a refinery expansion in the Philippines, a pipeline from Argentina to Chile, a delayed coker in Venezuela and expansion of crude oil production facilities in Saudi Arabia. Projects completed in fiscal 1993 included: engineering studies for an oil pipeline in the Caspian Sea region and various refinery projects in Mexico; engineering for an alkylation plant revamp and propylene splitter, both in the United Kingdom, a butane upgrading project and a low sulfur diesel facility, both in Texas, and a gas injection project in the Netherlands; engineering and procurement for an offshore oil/gas production facility in the Netherlands and two naphtha hydrotreaters, one in Minnesota and one in Kentucky; engineering, procurement and construction for a vinyl acetate plant and a MTBE plant, both in Texas, a polystyrene plant in China and a diesel hydrotreater in Utah; engineering, procurement and construction assistance for fire rehabilitation of a refinery in California; and engineering, procurement and construction management for a continuous catalytic reformer ("CCR") in Kentucky and a hydrocracker and catalytic reformer in Texas. Industrial Services provided to the Industrial sector include facility maintenance and operations services as well as a broad range of services to the telecommunications, transportation, commercial and criminal justice, asbestos abatement, defense and aerospace, electronics, automotive, general manufacturing, mining, metals and pulp and paper industries. These services are provided through the Facility and Plant Services, Pulp and Paper, Mining and Metals and Industrial business units. As of January, 1993, Fluor Daniel established a partnership with the United States operations of Jaakko Poyry of Finland, a pulp and paper engineering and design firm, in an effort to improve the Pulp and Paper business unit's strategic position when this market recovers. During fiscal 1993, Industrial sector domestic contract awards included: condition assessment for facilities at 12 military installations at various locations throughout the United States; maintenance for an automotive manufacturing facility in Tennessee; construction for the modernization of a pulp mill in Ohio; construction management for a correctional facility expansion in California, a county jail expansion in Texas and renovation of a turbine facility and a weave room addition, both in South Carolina; engineering and 3 procurement for a copper electrorefinery in Arizona; engineering and construction management for an automotive manufacturing plant expansion in Ohio; engineering, procurement and construction for a blast furnace coal injection facility in Indiana; and engineering, procurement and construction management for a grass roots paint shop in Kentucky. International contract awards during fiscal 1993 included: engineering for a nickel reverts handling project in Canada; and engineering, procurement and construction management for a building and garage upgrade in Germany. Ongoing projects include: construction for an automotive assembly plant in South Carolina and a newsprint mill in Tennessee; construction management for a newsprint recycling plant in Australia and airport expansions in Georgia and Japan; project management for rail transit for the Los Angeles County Metropolitan Transportation Authority, rail stations for the Federal Transportation Administration in New York City, a telecommunications upgrade project for the United States Agency for International Development in Egypt, a convention center in North Carolina and highway construction in Orange County, California; maintenance services for a refinery in Mississippi, a tire manufacturing facility in Tennessee, computer manufacturing plants in Florida, Texas and North Carolina and automotive facilities in Germany and Hungary; design and construction management for six embassies in Eastern Europe for the United States Department of State; engineering, procurement and construction for an emergency 911 response system for the City of Chicago, Illinois; and engineering, procurement and construction management for a paper products plant in Korea, a copper smelter modernization in Utah, a copper mine expansion in Indonesia and a copper concentrator expansion and solvent extraction electrowinning copper processing facility, both in Chile. Projects completed in fiscal 1993 included: operations and maintenance for the National Aeronautics and Space Administration ("NASA") Johnson Space Center in Texas; facility maintenance and support services for Lawrence Livermore National Laboratory in California; project management for highway construction in California Department of Transportation District 12; engineering and construction management for a pulp and paper mill in the United Kingdom and a research and development facility in Arizona; engineering, procurement and construction for an automobile air bag propellant plant in Arizona; and engineering, procurement and construction management for a zinc plant and a copper smelter in Canada, an aluminum cold rolling mill expansion in Kentucky and an aluminum smelter in Australia (a joint venture with SNC Lavalin Inc. of Canada and Crooks, Mitchell, Peacock, Stewart, Pty Limited (CMPS) of Australia). Government Services provided to the Government sector include services for projects involving nuclear and other fuel cycles, nuclear waste disposal and hazardous waste cleanup, treatment, abatement and removal. Clients include federal, state and local agencies, quasi-governmental entities and organizations in private industry and other government prime contractors. These services are provided through the Advanced Technology and Environmental Services business units. During fiscal 1993, Government sector contract awards included: environmental investigation at various military installations for the United States Army Corps of Engineers. Ongoing projects include: environmental remediation management for the United States Department of Energy ("DOE") former uranium processing plant in Ohio (the "Fernald Project"); engineering for a DOE waste vitrification plant in Washington, the DOE nuclear waste repository program and the reconfiguration of the DOE nuclear weapons program; engineering and construction management for the DOE Strategic Petroleum Reserve in Louisiana and for various radar and weather stations located throughout the United States for the National Oceanic and Atmospheric Administration; environmental investigation and remediation plan services for a toxic waste site for a private client in New York; remedial investigation and feasibility studies for the United States Army Corps of Engineers Hazardous and Toxic Waste Agency's 4 environmental program; management and operation services for the Naval Petroleum and Oil Shale Reserves program for the DOE in Colorado, Utah and Wyoming; environmental investigation, remediation design and implementation services for a chemical waste site for a private client in Ohio; and engineering, procurement, construction management and program management for an environmental remediation program for a toxic waste site for a group of private clients in Indiana. Process Services provided to the Process sector include services to the food, beverages, consumer products, synthetic fiber, film, plastics, pharmaceutical, biotechnology and chemicals industries. These services are provided through the Chemicals and Plastics, Process and Delta business units. Delta provides work services worldwide to E.I. du Pont de Nemours and Company under an alliance agreement. During fiscal 1993, Process sector domestic contract awards (excluding Delta) included: engineering for a process and enzyme system in Missouri; construction of a chemical plant in Louisiana; construction management for a polyester fiber facility in South Carolina; engineering and procurement for a ethoxylation project in Texas; engineering, procurement and construction of a hydrochlorofluorocarbon plant in Kentucky, a plastics stretch project in Alabama and a food processing plant in Georgia; and engineering, procurement and construction management of a plastics stretch project in Indiana, a dextrose expansion project in Illinois and a growth factor fermentation plant in California. International contract awards included: construction of a grass roots wastewater facility in Puerto Rico; construction management for a dairy plant in Germany and a grass roots chemical facility in Puerto Rico; engineering, procurement and construction for a grass roots polyethylene facility in Mexico; and engineering, procurement and construction management for a sodium cromoglycate facility in the United Kingdom and a regional headquarters building in Venezuela. Ongoing projects include: construction of a spherilene and ethylene purification facility in Texas and a chemical fibers plant in North Carolina; engineering and procurement for an ethylene glycol plant in Canada; construction management for a pilot plant for pharmaceutical manufacturing in New Jersey, a tobacco processing plant expansion in North Carolina and a biotechnology clinical manufacturing facility in Colorado; engineering and construction for several consumer products facilities in Ohio and a corn processing plant in Illinois; engineering, procurement and validation for a synthetic hemoglobin manufacturing facility in Colorado; engineering and construction management for two tobacco facilities, one in Turkey and one in the Netherlands; engineering, procurement and construction for an aspartame facility expansion in the Netherlands, a filter tow facility expansion in the United Kingdom, an edible food casing facility in South Carolina, personal care and laundry detergent manufacturing facilities in Ohio and food processing plants in Texas, Wisconsin, Florida and Georgia; and engineering, procurement, and construction management for a pharmaceutical plant in Canada and an MTBE chemical complex in Saudi Arabia. Projects completed in fiscal 1993 included: engineering for two biotechnology fermentation facilities, one in Pennsylvania and one in Puerto Rico; construction of a grass roots additives facility in Alabama; construction management for a veterinary vaccines manufacturing facility in Nebraska; engineering and construction for a parenteral and solid dosage facility in Puerto Rico; engineering and construction management for laundry and dishwashing detergent manufacturing facilities in Ohio and a boiler in Illinois; engineering and construction management for a liquid chemical facility in Ohio; engineering, procurement and construction for the remodel of an existing acetone recovery facility in the United Kingdom, a cellulose acetate plant in Tennessee, a chemical plant expansion in the United Kingdom, a grass roots food additive facility in Iowa, a food processing plant in Kentucky and an ibuprofen plant in Texas; and engineering, procurement and construction management for a grass roots biochemical manufacturing facility in Washington and various cleaning solution manufacturing plants in the United States. 5 Delta contract awards for 1993 included: engineering and procurement for a fibers expansion plant in Holland; engineering, procurement and construction for a bi-component fibers facility in North Carolina and a turbine generator in South Carolina; and engineering, procurement and construction management for a fibers line plant in Luxembourg. Delta ongoing projects include: evergreen construction and supplemental maintenance for various chemical and fibers facilities in the United States; technical services for various chemical and fibers plants in Canada; construction for a grass roots film facility in Ohio; engineering and construction management for a grass roots nylon facility in Spain, a bulk fibers facility expansion in Canada and a grass roots polymer facility in Singapore; and engineering, procurement and construction for expansion of a fibers facility in North Carolina. Delta projects completed in fiscal 1993 included: technical services for several petrochemical plant expansions in Texas; engineering, procurement and construction management for a specialty chemicals facility in France; engineering, procurement and construction for an X-ray film line facility expansion in North Carolina; and engineering, procurement and construction management for a grass roots flame retardant fiber facility in Spain. Power Services provided to the Power sector include comprehensive services for utility and non-utility clients in the power generation industry utilizing nuclear, fossil, hydroelectric, geothermal, waste and bio-fuel generating technologies. These services are provided through the Power business unit which includes the Duke/Fluor Daniel partnership concentrating on coal-fired plants. During fiscal year 1993, Power sector contract awards included: detailed engineering for a molten carbonate fuel cell demonstration project in California and a substation retrofit in Illinois; a five year general services agreement for an Ohio utility; and engineering, procurement and construction for a diesel power plant in the Philippines. In addition, a significant number of existing maintenance and plant modification contracts were renewed in fiscal 1993. Ongoing projects include: maintenance and outage support at various plant sites for a southeastern power generator in Tennessee and Kentucky; maintenance for nuclear plants in Virginia, South Carolina and Kansas; maintenance for fossil and gas generation plants in Texas, Louisiana, South Carolina, Georgia and Australia; operation and maintenance for a 130 megawatt cogeneration facility in Virginia; engineering and procurement for a 600 megawatt fossil plant repowering in New Jersey; engineering for a laboratory facility upgrade and nuclear engineering services for a utility, both in Illinois; engineering for emission monitoring equipment for various power generating sites of utilities in Texas, Louisiana, Mississippi and Arkansas; engineering, design and procurement for a 385 megawatt pulverized coal plant in South Carolina; nuclear, substation and engineering support services contract for an Illinois utility; and engineering and construction management for a transmission and distribution system for an Ohio utility. Projects completed in fiscal 1993 included: nuclear maintenance services for a utility in North Carolina; nuclear engineering services for a Minnesota utility; engineering for replacement of steam generators for a nuclear plant in Connecticut; and engineering, procurement and construction for a 105 megawatt diesel-powered facility in the Philippines. FLUOR CONSTRUCTORS Fluor Constructors is organized and operated separately from Fluor Daniel. Fluor Constructors provides unionized construction management, construction and maintenance services in the United States and Canada, both independently and as a subcontractor to Fluor Daniel. During fiscal 1993, Fluor Constructors contract awards included: construction management for an aromatics project for a refinery and an inter- refinery pipeline, both in Pennsylvania, and a blast furnace coal 6 injection facility in Indiana; and construction and construction management for a reformulated gasoline project in California. Ongoing projects include: maintenance and outage support at various plant sites for a southeastern power generator in Tennessee and Kentucky; maintenance for nuclear power plants in Missouri, Florida and Alabama; construction management for a potable water supply system facility in Nevada, an Emergency 911 response system in Illinois and a copper smelter in Canada; and construction and construction management for an ethylene glycol plant expansion in Canada and fossil power plants in Louisiana, Mississippi and Arkansas. Projects completed in fiscal 1993 included: construction and construction management for replacement of steam generators for a nuclear plant in Connecticut and two naphtha hydrotreaters, one in Minnesota and one in Kentucky; construction management for a component test facility for the NASA Stennis Space Center in Mississippi and environmental improvements to a zinc plant in Canada; and maintenance for a nuclear power plant in Illinois. BACKLOG The following table sets forth the consolidated backlog of Fluor's engineering and construction segment at October 31, 1993 and 1992 (grouped by business sector):
1993 1992 ------- ------- (IN MILLIONS OF DOLLARS) Hydrocarbon............. $ 6,198 $ 4,087 Industrial.............. 2,706 2,889 Government.............. 2,520 2,948 Process................. 2,441 3,648 Power................... 889 1,134 ------- ------- $14,754 $14,706 ======= ======= Estimated portion not to be performed in fiscal 1994: 55% ===
The dollar amount of the backlog is not necessarily indicative of the future earnings of Fluor related to the performance of such work. Although backlog represents only business which is considered to be firm, there can be no assurance that cancellations or scope adjustments will not occur. Due to additional factors outside of Fluor's control, such as changes in project schedules, Fluor cannot predict with certainty the portion of backlog not to be performed in fiscal 1994. Approximately $2.5 billion of the Hydrocarbon sector backlog is attributable to two projects for companies affiliated with Royal Dutch Shell (the Rayong Refinery project in Thailand and the Pernis Refinery in the Netherlands). Approximately $2 billion of the Government sector backlog is attributable to the DOE Fernald Project and subject to government funding determined on an annual basis. During fiscal 1993, the backlog of certain business units was reclassified to reflect an internal realignment of these units between the five market sectors. This resulted in reclassifying approximately $1 billion of business in the food and beverage products area from the Industrial sector to the Process sector. Balances at October 31, 1992 and 1993 have been restated to conform with the current business unit alignment. COAL INVESTMENT A. T. Massey Coal Company, Inc., which is headquartered in Richmond, Virginia, and its subsidiaries conduct Massey's coal-related businesses and are collectively referred to herein as the "Massey Companies." The Massey Companies produce, process and sell bituminous, low sulfur coal of steam and metallurgical grades from 15 mining complexes (11 of which include preparation plants) located in West Virginia, 7 Kentucky and Tennessee. At October 31, 1993, two of the mining complexes were still in development and not yet producing coal. A third mining complex is idle pending negotiation of a labor agreement. Operations at certain of the facilities are conducted in part through the use of independent contract miners. The Massey Companies also purchase and resell coal produced by unrelated companies. Steam coal is used primarily by utilities as fuel for power plants. Metallurgical coal is used primarily to make coke for use in the manufacture of steel. For each of the three years in the period ended October 31, 1993, the Massey Companies' (a) production (expressed in thousands of short tons) of steam coal and metallurgical coal, respectively, was 16,048 and 5,163 for fiscal 1993, 13,832 and 3,867 for fiscal 1992, and 13,472 and 3,421 for fiscal 1991, and (b) sales (expressed in thousands of short tons) of coal produced by it and others, respectively, were 21,192 and 2,302 for fiscal 1993, 17,538 and 4,402 for fiscal 1992, and 16,982 and 6,578 for fiscal 1991. A large portion of the steam coal produced by the Massey Companies is sold to domestic utilities under long-term contracts. Metallurgical coal is sold to both foreign and domestic steel producers. Approximately 41% of the Massey Companies' fiscal 1993 coal production was sold under long-term contracts, 88% of which was steam coal and 12% of which was metallurgical coal. Approximately 11% of the coal tonnage sold by the Massey Companies in fiscal 1993 was sold on the export market. Massey is among the five largest marketers of coal in the United States. The coal market is a mature market with many strong competitors. Competition is primarily dependent upon coal price, transportation cost, producer reliability and characteristics of coal available for sale. The management of Massey considers Massey to be generally well-positioned with respect to these factors in comparison to its principal competitors. On February 22, 1993, the Massey Companies acquired certain assets in Pike County, Kentucky, from Pittston Coal Company, including an estimated 32 million tons of undeveloped coal reserves and three million tons of developed coal reserves with related preparation plant and mining facilities. Since the undeveloped coal reserves are strategically located near existing mining and coal processing facilities of the Massey Companies, development capital requirements will be modest. The economic life of the existing Massey operations in the vicinity will be significantly extended by this acquisition. On November 15, 1993, the Massey Companies acquired the assets of W-P Coal Company located in Logan County, West Virginia. Major components of the W-P Coal acquisition include approximately 40 million tons of reserves and a modern preparation plant. Simultaneously with the acquisition, the Massey Companies entered into a long-term coal supply agreement with Wheeling Pittsburgh Steel Corporation, a W-P Coal Company affiliate. Recently passed acid rain legislation is generally anticipated to benefit prices for low sulfur coal. Massey intends to continue to evaluate and pursue, in appropriate circumstances, the acquisition of additional low sulfur coal reserves. The Coal Industry Retiree Health Benefits Act of 1992 (the "Act") provides that certain retired coal miners who were members of the United Mine Workers of America, along with their spouses, are guaranteed health care benefits. The Massey Companies' obligation under the Act is currently estimated to aggregate $64 million which will be recognized as expense as payments are assessed. The management of the Massey Companies estimates that, as of October 31, 1993, the Massey Companies had total recoverable reserves (expressed in thousands of short tons) of 1,088,601; 456,810 of which are assigned recoverable reserves and 631,791 of which are unassigned recoverable reserves; and 799,287 of which are proven recoverable reserves and 289,314 of which are probable recoverable reserves. The management of the Massey Companies estimates that approximately 29% of the total reserves listed above consist of reserves that would be considered primarily metallurgical grade coal. They also estimate 8 that approximately 63% of all reserves contain less than 1% sulfur. A portion of the steam coal reserves could be beneficiated to metallurgical grade by coal preparation plants, and a portion of the metallurgical coal reserves could be sold as high quality steam coal, if market conditions warrant. "Reserves" means that part of a coal deposit which could be economically and legally extracted or produced at the time of the reserve determination. "Recoverable reserves" means coal which is recoverable by the use of existing equipment and methods under federal and state laws now in effect. "Assigned recoverable reserves" means reserves which can reasonably be expected to be mined from existing or planned mines and processed in existing or planned plants. "Unassigned recoverable reserves" means reserves for which there are no specific plans for mining and which will require for their recovery substantial capital expenditures for mining and processing facilities. "Proven recoverable reserves" refers to deposits of coal which are substantiated by adequate information, including that derived from exploration, current and previous mining operations, outcrop data and knowledge of mining conditions. "Probable recoverable reserves" refers to deposits of coal which are based on information of a more preliminary or limited extent or character, but which are considered likely. DISCONTINUED LEAD OPERATION In November 1992, the Company announced its decision to exit its lead business, conducted primarily through The Doe Run Company ("Doe Run"). As a result, the Company's lead segment has been classified as a discontinued operation in the Company's consolidated financial statements. During 1993, the Company made substantial progress toward the disposition of the lead business. While the outcome of such disposition cannot be determined with certainty at this time, management's intent to dispose of the lead business remains unaltered and management believes that a disposal will be accomplished during fiscal 1994. OTHER MATTERS ENVIRONMENTAL, SAFETY AND HEALTH MATTERS The Company's natural resource operations are affected by federal, state and local laws and regulations regarding environmental protection and plant and mine safety and health. It is impossible to predict the full impact of future legislative or regulatory developments on such operations, because the standards to be met, as well as the technology and length of time available to meet those standards, continue to develop and change. Under the federal Clean Air Act, as amended, which is applicable to Doe Run's lead smelters, the Environmental Protection Agency ("EPA") is authorized to promulgate ambient air quality standards for certain identified pollutants. Each state is required to develop an implementation plan that is designed to achieve such ambient air quality standards through emission limitations and related requirements. Upon approval by the EPA, these state implementation plans become federally enforceable. The State of Missouri is required to develop implementation plans to control lead emissions from the two Doe Run lead smelters. An implementation plan was approved by the State for the Buick smelter on June 24, 1993, and has been submitted to EPA for approval. The Buick plan requires installation of various projects, but only if the primary smelter portion of the facility is to be operated. A supplemental implementation plan was approved for the Herculaneum smelter on June 24, 1993, and has also been submitted to EPA for approval. The Herculaneum plan requires the installation of $2.5 million in additional capital projects, with a final completion date of October, 1994. In September 1988, the EPA listed primary lead smelter surface impoundment solids as a hazardous waste under the federal Resource Conservation and Recovery Act. In anticipation of the final issuance of EPA regulations, the Company is in the process of eliminating surface impoundments (all of which are located at its Buick smelter). This corrective action was substantially completed by the end of fiscal 1993. 9 The Company believes that with completion of this corrective action, the Company will be in compliance with final EPA regulations when issued. The Company is affected by and complies with other federal, state and local laws relating to environmental protection, safety and health applicable to all or part of its natural resource operations, including but not limited to the federal Surface Mining Control and Reclamation Act of 1977; Occupational Safety and Health Act; Mine Safety and Health Act of 1977; Water Pollution Control Act, as amended by the Clean Water Act of 1977; Toxic Substances Control Act; Black Lung Benefits Revenue Act of 1977; and Black Lung Benefits Reform Act of 1977. In fiscal 1993, Fluor made approximately $5.4 million in expenditures to comply with environmental, health and safety laws and regulations in connection with its coal investment, none of which were capital expenditures. Fluor anticipates making $11.3 million and $8.9 million in such non-capital expenditures in fiscal 1994 and 1995, respectively. Of these expenditures, $3.7 million, $9.6 million and $7.2 million for fiscal 1993, 1994 and 1995, respectively, are (in the case of fiscal 1993) or are anticipated to be (in the case of fiscal 1994 and 1995) for surface reclamation. Existing reserves are believed to be adequate to cover actual and anticipated surface reclamation expenditures. Other expenditures will be expensed as incurred. In fiscal 1993, Fluor made approximately $4.3 million in capital expenditures and $3.2 million in other expenditures to comply with environmental, health and safety laws and regulations in connection with its discontinued lead business. Other In 1986, the California North Coast Regional Water Quality Control Board for the State of California requested that the Company perform a site investigation of a property in Northern California designated as a hazardous waste site under the California Hazardous Waste Control Act. The Company formerly owned the property. The California Environmental Protection Agency has assumed lead agency status for any required remedial action at the site. The Company signed a Consent Order to perform a remedial investigation/feasibility study that will determine the extent of contamination for purposes of determining the remedial action required to remedy and/or remove the contamination. St. Joe Minerals Corporation ("St. Joe"), a wholly owned subsidiary of Fluor, is participating as a potentially responsible party at several different sites pursuant to proceedings under the Comprehensive Environmental Response, Compensation and Liability Act ("Superfund"). Other parties have also been identified as potentially responsible parties at all but one of these sites, and many of these parties have shared in the costs associated with the sites. Investigative and/or remedial activities are ongoing at each site. In 1987, St. Joe sold its zinc mining and smelting division to Zinc Corporation of America ("ZCA"). As part of the agreement, St. Joe and Fluor agreed to indemnify ZCA for certain environmental liabilities arising from operations conducted prior to the sale. During the 1993 fiscal year, ZCA has made claims under this indemnity against St. Joe for anticipated environmental expenditures at three of its major operating facilities. These claims are the subject of ongoing discussions between St. Joe, ZCA and other potentially responsible parties, including parties who have given similar contractual indemnities to St. Joe. St. Joe has initiated a proceeding against certain of its insurance carriers alleging that the investigative and remediation costs incurred by St. Joe in connection with its environmental proceedings are covered by insurance. This proceeding is in its early stages and no credit or offset for any such coverage has been taken into account by Fluor in establishing its reserves for future environmental costs. The Company does not believe that the claims or proceedings identified in the two preceding paragraphs, either individually or in the aggregate, will have a material adverse impact upon its operations or financial condition. 10 NUMBER OF EMPLOYEES The following table sets forth the number of salaried and craft/hourly employees of Fluor and its subsidiaries engaged in Fluor's business segments as of October 31, 1993:
SALARIED CRAFT/HOURLY TOTAL -------- ------------ ------ Engineering and construction................ 17,215 19,886 37,101 Coal........................................ 544 887 1,431 ------ ------ ------ 17,759 20,773 38,532 ====== ====== ======
OPERATIONS BY BUSINESS SEGMENT AND GEOGRAPHIC AREA The financial information for business segments and geographic areas is included in the Operations by Business Segment and Geographic Area section of the Notes to Consolidated Financial Statements in Fluor's 1993 Annual Report to stockholders, which section is incorporated herein by reference. ITEM 2. PROPERTIES. Major Facilities Operations of Fluor and its subsidiaries are conducted in both owned and leased properties. In addition, certain owned or leased properties of Fluor and its subsidiaries are leased or subleased to third party tenants. The following table describes the general character of the major existing facilities, exclusive of mines, coal preparation plants and their adjoining offices:
LOCATION INTEREST -------- -------- UNITED STATES Corporate Headquarters Irvine, California Leased Engineering and Construction Offices Anchorage, Alaska Leased Appleton, Wisconsin Leased Bakersfield, California Leased Charlotte, North Carolina Leased Chicago, Illinois Leased Cincinnati, Ohio Leased Corpus Christi, Texas Leased Dallas, Texas Leased Dayton, Ohio Leased Denver, Colorado Leased Greenville, South Carolina Owned and leased Houston (Sugar Land office), Texas Owned Irvine, California Leased Kansas City, Missouri Leased Philadelphia, Pennsylvania (Marlton, New Jersey office) Leased Richmond, Virginia Leased Tulsa, Oklahoma Leased Washington, D.C. Leased Coal Offices (Kentucky, Tennessee, Virginia, West Virginia) Owned
11
LOCATION INTEREST -------- -------- FOREIGN Engineering and Construction Offices Al Khobar, Saudi Arabia (Dhahran area) Owned Asturias, Spain Leased Bangkok, Thailand Leased Beijing, People's Republic of China Leased Bergen op Zoom, Netherlands Leased Calgary, Canada Leased Camberley, England Leased Dubai, United Arab Emirates Leased Dusseldorf, Germany Leased Haarlem, Netherlands Owned and leased Hong Kong Leased Jakarta, Indonesia Leased Jeddah, Saudi Arabia Leased Kuala Lumpur, Malaysia Leased Leipzig, Germany Leased London (Uxbridge), England Leased Madrid, Spain Leased Manchester, England Leased Manila, Philippines Leased Melbourne, Australia Leased Perth, Australia Leased San Juan, Puerto Rico Leased Santiago, Chile Leased Seoul, Korea Leased Singapore Leased Tokyo, Japan Leased Vancouver, Canada Leased Wiesbaden, Germany Leased
Coal Properties See Item 1, Business, of this report for additional information regarding the coal operations and properties of Fluor. ITEM 3. LEGAL PROCEEDINGS. Fluor and its subsidiaries, incident to their business activities, are parties to a number of legal proceedings in various stages of development, including but not limited to those described below. The majority of these proceedings, other than environmental proceedings, involve matters as to which liability, if any, of Fluor or its subsidiaries would be adequately covered by insurance. With respect to litigation outside the scope of applicable insurance coverage and to the extent insured claims may exceed liability limits, it is the opinion of the management of Fluor, based on reports of counsel, that these matters individually and in the aggregate will not have a material adverse effect upon the consolidated financial position or results of operations of Fluor. In July 1987, four lawsuits were filed against R. T. Vanderbilt Company, Inc., Gouverneur Talc Company, Inc., St. Joe and Fluor for personal injury and wrongful death allegedly due to asbestos, talc and silicon exposure in certain New York mines. Subsequent to July 1987, 16 additional lawsuits have been filed. All of these suits (representing a total of 213 plaintiffs) have been filed with the New York Supreme Court, St. Lawrence County, New York. The total damages claimed in these cases, referred to as Bailey, Baker, Beane, et al. v. R. T. Vanderbilt Company, Inc., et al. (the claims have not been consolidated), are $287 million against all defendants. Plaintiffs also seek an unspecified amount of punitive damages against all defendants. 12 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. Executive Officers of the Registrant(1) Leslie G. McCraw, age 59 Director since 1984; Chairman of Executive Committee and member of Nominating Committee. Chairman of the Board since 1991; Chief Executive Officer since 1990; formerly Vice Chairman of the Board from 1990; formerly President from 1988; joined the Company in 1975. Vincent L. Kontny, age 56 Director since 1988; member of Executive Committee. Chief Operating Officer since 1991; President since 1990; President of Fluor Daniel, Inc.(2) since 1988; joined the Company in 1965. Charles J. Bradley, Jr., age 58 Vice President, Human Resources and Administration since 1986; joined the Company in 1958. J. Michal Conaway, age 45 Vice President-Finance since January 4, 1993; formerly Vice President and Chief Financial Officer of National Gypsum Company and its parent, Aancor Holdings, Inc., from 1988. James O. Rollans, age 51 Senior Vice President and Chief Financial Officer since June, 1992; formerly Vice President, Corporate Communications from 1982; joined the Company in 1982. P. Joseph Trimble, age 63 Corporate Secretary since December, 1992; Senior Vice President-Law since 1984; joined the Company in 1972. Executive Operating Officers(1) Hugh K. Coble, age 59 Director since 1984; member of Executive Committee. Group President of Fluor Daniel, Inc.(2) since 1986; joined the Company in 1966. Gerald M. Glenn, age 51 Director since 1989; member of Executive Committee. Group President of Fluor Daniel, Inc.(2) since 1986; joined the Company in 1964. Don L. Blankenship, age 43 Chairman of the Board and Chief Executive Officer of A. T. Massey Coal Company, Inc.(3) since January, 1992; President of that subsidiary since 1990; formerly Chief Operating Officer of that subsidiary from 1990; formerly President of Massey Coal Services, Inc.(4) from 1989; formerly Executive Vice President of that subsidiary from 1988; joined Rawl Sales & Processing Co.(5) in 1982. 13 Richard A. Flinton, age 63 Chairman of the Board of Fluor Constructors, Inc.(6) since 1989; formerly President of that subsidiary from 1988; joined the Company in 1957. Jeffrey L. Zelms, age 49 Chief Executive Officer of The Doe Run Company(7) since August, 1992; President of that company since 1986; joined St. Joe Minerals Corporation in 1970. - -------- (1) Except where otherwise indicated, all references are to positions held with Fluor. (2) Fluor Daniel, Inc. is a wholly owned subsidiary of Fluor which provides design, engineering, procurement, construction management and technical services to a wide range of industrial, commercial, utility, natural resources, energy and governmental clients. (3) A. T. Massey Coal Company, Inc. is an indirectly wholly-owned subsidiary of Fluor which, along with its subsidiaries, conducts Fluor's coal-related investment. (4) Massey Coal Services, Inc. is a wholly owned subsidiary of A. T. Massey Coal Company, Inc. (5) Rawl Sales & Processing Co. is a wholly owned subsidiary of A. T. Massey Coal Company, Inc. (6) Fluor Constructors, Inc., a wholly owned subsidiary of Fluor, provides construction and maintenance services to a variety of clients. (7) In November 1992, Fluor announced its decision to exit its lead business, conducted primarily through The Doe Run Company, and classified it as a discontinued operation in its consolidated financial statements. PART II Information for Items 5, 6 and 7 is contained in Fluor's 1993 Annual Report to stockholders, which information is incorporated herein by reference (and except for these sections, and sections incorporated herein by reference in Items 1 and 8 of this report, Fluor's 1993 Annual Report to stockholders is not to be deemed filed as part of this report):
ANNUAL REPORT TO ITEM NO. TITLE STOCKHOLDERS SECTION -------- ----- -------------------- ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters................ Stockholders' Reference ITEM 6. Selected Financial Data..................... Selected Financial Data ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Management's Discussion Operations................................. and Analysis ITEM 8. Financial Statements and Supplementary Data
Information for Item 8 is included in Fluor's consolidated financial statements as of October 31, 1993 and 1992, and for each of the three years in the period ended October 31, 1993, and Fluor's unaudited quarterly financial data for the two year period ended October 31, 1993, in the Consolidated Financial Statements (including the Consolidated Balance Sheet, Consolidated Statement of Earnings, Consolidated Statement of Cash Flows, Consolidated Statement of Shareholders' Equity and Notes to Consolidated Financial Statements) and Quarterly Financial Data sections of Fluor's 1993 Annual Report to stockholders, which are incorporated herein by reference. The report of management and independent auditors on Fluor's consolidated financial statements is in the Reports of Management and Independent Auditors section of Fluor's 1993 Annual Report to stockholders, also incorporated herein by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Not Applicable. 14 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. Information concerning Fluor's executive officers is included under the caption "Executive Officers of the Registrant" following Part I, Item 4. Other information required by this item has been omitted because Fluor will file with the Securities and Exchange Commission (the "Commission") a definitive proxy statement pursuant to Regulation 14A, involving the election of directors, not later than 120 days after the close of Fluor's fiscal year ended October 31, 1993. ITEM 11. EXECUTIVE COMPENSATION. Fluor maintains certain employee benefit plans and programs in which its executive officers and directors are participants. Copies of these plans and programs are set forth or incorporated by reference as Exhibits 10.1 through 10.18 inclusive to this report. Certain of these plans and programs provide for payment of benefits or for acceleration of vesting of benefits upon the occurrence of a change of control of Fluor as that term is defined in such plans and programs. The amounts payable thereunder would represent an increased cost to be paid by Fluor (and indirectly by its stockholders) in the event of a change in control of Fluor. This increased cost would be a factor to be taken into account by a prospective purchaser in determining whether, and at what price, it would seek control of the Company and whether it would seek the removal of then existing management. If a change of control were to have occurred on October 31, 1993, the additional amounts payable by Fluor, either in cash or in stock, if each of the five most highly compensated executive officers and all executive officers as a group were thereupon involuntarily terminated without cause would be as follows:
FLUOR CORPORATION RESTRICTED SUPPLEMENTAL CHANGE OF CONTROL STOCK BENEFIT INDIVIDUAL OR GROUP COMPENSATION PLAN(1) PLANS(2) PLAN(3) ------------------- -------------------- ---------- ------------ Don L. Blankenship............. $ 1,143,450 $ 370,173 $ 227,491 Hugh K. Coble.................. 2,534,527 1,405,716 397,883 Gerald M. Glenn................ 2,534,527 972,562 227,491 Vincent L. Kontny.............. 3,217,757 1,666,972 392,422 Leslie G. McCraw............... 4,709,696 2,207,068 795,766 All Executive Officers (11) including the above........... $19,356,917 $8,289,084 $2,702,990
-------- (1) Payable in cash. (2) Value at October 31, 1993 of previously awarded restricted stock which would vest upon change of control. (3) Lump sum entitlement of previously awarded benefits which would vest upon change of control. Further disclosure regarding this item has been omitted because Fluor will file with the Commission a definitive proxy statement pursuant to Regulation 14A, involving the election of directors, not later than 120 days after the close of Fluor's fiscal year ended October 31, 1993. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. This item has been omitted because Fluor will file with the Commission a definitive proxy statement pursuant to Regulation 14A, involving the election of directors, not later than 120 days after the close of Fluor's fiscal year ended October 31, 1993. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. This item has been omitted because Fluor will file with the Commission a definitive proxy statement pursuant to Regulation 14A, involving the election of directors, not later than 120 days after the close of Fluor's fiscal year ended October 31, 1993. 15 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a) 1. Financial Statements: The financial statements required to be filed hereunder are listed on page 20 hereof. See Part II, Item 8 of this report for information regarding the incorporation by reference herein of such financial statements. 2. Financial Statement Schedules: The financial statement schedules required to be filed hereunder are listed on page 20 hereof. 3. Exhibits: 3.1 Restated Certificate of Incorporation of Fluor Corporation [filed as Exhibit 3.1 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1987 and incorporated herein by reference] 3.2 Restated Bylaws (as amended effective September 13, 1993) of Fluor Corporation 4.1 Indenture dated July 1, 1986 between Fluor Corporation and Irving Trust Company, trustee [filed as Exhibit 4 to Registration No. 33-6960 for the issuance of up to $250 million of debt securities and incorporated herein by reference] 4.2 Fluor Corporation Dividend Reinvestment Plan (effective as of January 1, 1994) EXECUTIVE COMPENSATION PLANS/PROGRAMS 10.1 Fluor Corporation and Subsidiaries Executive Incentive Compensation Plan (as amended through September 15, 1988) [filed as Exhibit 10.1 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1992 and incorporated herein by reference] 10.2 Fluor Corporation and Subsidiaries Executive Deferred Compensation Program (as amended through November 15, 1982) [filed as Exhibit 10.2 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1982 and incorporated herein by reference] 10.3 Fluor Corporation and Subsidiaries Executive Deferred Salary Program (as amended through July 8, 1986) [filed as Exhibit 10.3 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1986 and incorporated herein by reference] 10.4 Fluor Corporation Deferred Directors' Fees Program (as amended through November 15, 1983) [filed as Exhibit 10.3 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1983 and incorporated herein by reference] 10.5 1977 Fluor Executive Stock Plan (as amended by Amendment No. 4 effective December 9, 1986) [filed as Exhibit 10.6 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1986 and incorporated herein by reference] 10.6 1981 Fluor Executive Stock Plan (as amended by Amendment No. 3 effective December 9, 1986) [filed as Exhibit 10.9 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1986 and incorporated herein by reference] 10.7 1982 Fluor Executive Stock Option Plan (as amended by Amendment No. 2 effective December 9, 1986) [filed as Exhibit 10.10 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1986 and incorporated herein by reference] 10.8 Fluor Executives' Health Plan Summary [filed as Exhibit 10.11 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1985 and incorporated herein by reference] 10.9 Directors' Life Insurance Summary [filed as Exhibit 10(i) to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1980 and incorporated herein by reference] 10.10 Executive Tax Services Plan (as amended and effective as of November 1, 1993)
16 10.11 Executive Personal Financial Counseling Plan (as amended and effective as of November 1, 1993) 10.12 Company Automobile Policy Summary [filed as Exhibit 10.15 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1989 and incorporated herein by reference] 10.13 Fluor Excess Benefit Plan (as amended by Second Amendment effective December 9, 1986) [filed as Exhibit 10.16 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1986 and incorporated herein by reference] 10.14 Fluor Executives' Supplemental Benefit Plan (as amended by First Amendment effective November 15, 1983) [filed as Exhibit 10.16 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1983 and incorporated herein by reference] 10.15 1988 Fluor Executive Stock Plan (as amended and restated effective March 9, 1993) 10.16 Fluor Corporation Change of Control Compensation Plan (as amended and restated by Second Amendment effective October 1, 1989) [filed as Exhibit 10.19 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1989 and incorporated herein by reference] 10.17 Fluor Special Executive Incentive Plan (effective as of April 27, 1987) [filed as Exhibit 10.27 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1987 and incorporated herein by reference] 10.18 Retirement Plan for Outside Directors (effective as of May 1, 1992) [filed as Exhibit 10.18 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1992 and incorporated herein by reference] OTHER CONTRACTS 10.19 Concourse Lease dated as of July 26, 1985 between Fluor Corporation and Fluor Engineers, Inc. (an entity now having the corporate name of Fluor Daniel, Inc.) with respect to a portion of the International Headquarters facility located in Irvine, California, formerly owned by Fluor (the "Irvine facility"); Schedule of substantially identical Building Pod Lease and Corporate Tower Lease; and Assignment of Master Leases dated July 26, 1985, assigning Fluor's lessor interest to Crow Winthrop Operating Partnership ("CWOP") [filed as Exhibit 10.21 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1985 and incorporated herein by reference] 10.20 Amendment to Master Leases by and between CWOP, Fluor Daniel, Inc. and Fluor Corporation dated as of November 1, 1989 with respect to the Irvine facility [filed as Exhibit 10.19 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1991 and incorporated here in by reference] 13 1993 Annual Report to stockholders (with the exception of the information incorporated by reference into Items 1, 5, 6, 7 and 8 of this report, Fluor's 1993 Annual Report to stockholders is not deemed to be filed as part of this report) 21 Fluor Corporation Subsidiaries 23 Consent of Independent Auditors -- Ernst & Young 24.1 Manually signed Power of Attorney executed by certain Fluor directors and officers Manually signed Powers of Attorney executed by 24.2 certain Fluor directors (b) Reports on Form 8-K: None were filed during the last quarter of the period covered by this report; however, on December 23, 1993, the Company filed a Form 8-K reporting action by the Board of Directors to accelerate the expiration of the Preferred Share Purchase Rights from November 30, 1997 to November 30, 1993.
17 SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED. FLUOR CORPORATION January 27, 1994 By J.O. Rollans ___________________________________ J.O. Rollans Senior Vice President and Chief Financial Officer PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE --------- ----- ---- PRINCIPAL EXECUTIVE OFFICER AND DIRECTOR: * Director, Chairman of the January 27, 1994 - ----------------------------- Board and Chief Executive L. G. McCraw Officer PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER: J. O. Rollans Senior Vice President and January 27, 1994 - ----------------------------- Chief Financial Officer J. O. Rollans OTHER DIRECTORS: * Director January 27, 1994 - ----------------------------- H. K. Coble * Director January 27, 1994 - ----------------------------- P. J. Fluor * Director January 27, 1994 - ----------------------------- D. P. Gardner * Director January 27, 1994 - ----------------------------- G. M. Glenn * Director January 27, 1994 - ----------------------------- W. R. Grant * Director January 27, 1994 - ----------------------------- B. R. Inman
18
SIGNATURE TITLE DATE --------- ----- ---- * Director January 27, 1994 - ----------------------------- V. L. Kontny * Director January 27, 1994 - ----------------------------- R. V. Lindsay * Director January 27, 1994 - ----------------------------- V. S. Martinez * Director January 27, 1994 - ----------------------------- E. M. Massey * Director January 27, 1994 - ----------------------------- B. Mickel * Director January 27, 1994 - ----------------------------- M. R. Seger * Director January 27, 1994 - ----------------------------- D. S. Tappan, Jr.
L. N. Fisher *By ___________________________ L. N. Fisher, Attorney-in-fact Manually signed Powers of Attorney authorizing L. N. Fisher, A. M. Oldham and P. J. Trimble and each of them, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993 and any amendments thereto as attorneys-in- fact for certain directors and officers of the registrant are included herein as Exhibits 24.1 and 24.2. 19 FLUOR CORPORATION INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES ITEM 14(A) 1.Financial Statements The following financial statements are contained in Fluor's 1993 Annual Report to stockholders: Consolidated Balance Sheet at October 31, 1993 and 1992 Consolidated Statement of Earnings for year ended October 31, 1993, 1992 and 1991 Consolidated Statement of Cash Flows for year ended October 31, 1993, 1992 and 1991 Consolidated Statement of Shareholders' Equity for year ended October 31, 1993, 1992 and 1991 Notes to Consolidated Financial Statements 2.Financial Statement Schedules Form 10-K Page II Consolidated amounts receivable from related parties and underwriters, promoters and employees other than related parties--year ended October 31, 1993 and 1992...................................... 21 V Consolidated property, plant and equipment--year ended October 31, 1993, 1992 and 1991.............. 22 VI Consolidated accumulated depreciation, depletion and amortization of property, plant and equipment--year ended October 31, 1993, 1992 and 1991............................................... 23 VII Consolidated guarantees of securities of other issuers as of October 31, 1993..................... 24 All other schedules have been omitted since the required information is not present or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto. 20 FLUOR CORPORATION SCHEDULE II--CONSOLIDATED AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES YEAR ENDED OCTOBER 31, 1993 AND 1992
BALANCE AT END OF PERIOD BALANCE AT ---------------- BEGINNING NOT NAME OF DEBTOR OF PERIOD ADDITIONS DEDUCTIONS CURRENT CURRENT -------------- ---------- --------- ---------- ------- -------- Year ended October 31, 1993 Don L. Blankenship (1)......... $300,000 $ -- $-- $20,000 $280,000 ======== ======== ==== ======= ======== Year ended October 31, 1992 Don L. Blankenship (1)......... $ -- $300,000 $-- $ -- $300,000 ======== ======== ==== ======= ========
- -------- (1) As of October 31, 1993, Fluor held a non-interest bearing note, payable in five annual installments and secured by a second deed of trust on a residence. On January 11, 1994, the balance of the note was fully repaid. 21 FLUOR CORPORATION SCHEDULE V--CONSOLIDATED PROPERTY, PLANT AND EQUIPMENT YEAR ENDED OCTOBER 31, 1993, 1992 AND 1991 (IN THOUSANDS)
BALANCE AT BALANCE AT BEGINNING ADDITIONS RETIREMENTS TRANSFERS END OF OF PERIOD AT COST OR SALES AND OTHER (1) PERIOD ---------- --------- ----------- ------------- ---------- Year ended October 31, 1993 Land.................. $ 61,581 $ 622 $ (56) $ (3,280) $ 58,867 Buildings and improve- ments................ 294,944 17,477 (1,011) (6,844) 304,566 Machinery and equip- ment................. 569,349 99,021 (36,521) 11,969 643,818 Mining properties and mineral rights....... 449,966 48,379 (43) 1,157 499,459 Construction in pro- gress................ 40,091 6,038 (10,254) 35,875 ---------- -------- -------- --------- ---------- Total............... $1,415,931 $171,537 $(37,631) $ (7,252) $1,542,585 ========== ======== ======== ========= ========== Year ended October 31, 1992 Land.................. $ 67,873 $ 1,248 $ (187) $ (7,353) $ 61,581 Buildings and improve- ments................ 273,840 12,795 (415) 8,724 294,944 Machinery and equip- ment................. 554,584 159,719 (30,999) (113,955) 569,349 Mining properties and mineral rights....... 488,732 85,009 (123,775) 449,966 Construction in pro- gress................ 89,720 28,275 (77,904) 40,091 ---------- -------- -------- --------- ---------- Total............... $1,474,749 $287,046 $(31,601) $(314,263) $1,415,931 ========== ======== ======== ========= ========== Year ended October 31, 1991 Land.................. $ 66,101 $ 1,699 $ (39) $ 112 $ 67,873 Buildings and improve- ments................ 130,030 6,208 (2,328) 139,930 273,840 Machinery and equip- ment................. 472,770 67,633 (23,525) 37,706 554,584 Mining properties and mineral rights....... 485,407 3,160 (66) 231 488,732 Construction in pro- gress................ 53,634 81,018 (949) (43,983) 89,720 ---------- -------- -------- --------- ---------- Total............... $1,207,942 $159,718 $(26,907) $ 133,996 $1,474,749 ========== ======== ======== ========= ==========
- -------- (1) Amounts in 1992 primarily include the reclassification of the lead business to net assets of discontinued operations and the purchase of certain partnership interests which owned the Company's Greenville, South Carolina engineering office. Amounts in 1991 include the purchase of certain partnership interests which owned the the Company's Sugar Land, Texas engineering office. Transfers of construction in progress were: zero, zero and $.1 million to land; $2.5 million, $37.6 million and $3.1 million to buildings and improvements; $7.7 million, $33.7 million and $40.6 million to machinery and equipment; zero, zero and $.2 million to mining properties and mineral rights in 1993, 1992 and 1991, respectively. Maintenance and repairs expense for continuing operations totaled $62.1 million in 1993, $51.7 million in 1992 and $52.9 million in 1991. 22 FLUOR CORPORATION SCHEDULE VI--CONSOLIDATED ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT YEAR ENDED OCTOBER 31, 1993, 1992 AND 1991 (IN THOUSANDS)
ADDITIONS BALANCE AT CHARGED TO BALANCE AT BEGINNING COSTS AND RETIREMENTS END OF OF PERIOD EXPENSES OR SALES OTHER (1) PERIOD ---------- ---------- ----------- --------- ---------- Year ended October 31, 1993 Buildings and improve- ments................ $ 27,927 $ 10,634 $ (732) $ (709) $ 37,120 Machinery and equip- ment................. 287,539 79,204 (27,058) (2,608) 337,077 Mining properties and mineral rights....... 53,580 13,653 246 67,479 -------- -------- -------- --------- -------- Total............... $369,046 $103,491 $(27,790) $ (3,071) $441,676 ======== ======== ======== ========= ======== Year ended October 31, 1992 Buildings and improve- ments................ $ 34,866 $ 15,674 $ (121) $ (22,492) $ 27,927 Machinery and equip- ment................. 280,413 92,609 (20,014) (65,469) 287,539 Mining properties and mineral rights....... 66,741 18,803 27 (31,991) 53,580 -------- -------- -------- --------- -------- Total............... $382,020 $127,086 $(20,108) $(119,952) $369,046 ======== ======== ======== ========= ======== Year ended October 31, 1991 Buildings and improve- ments................ $ 27,081 $ 10,422 $ (1,814) $ (823) $ 34,866 Machinery and equip- ment................. 208,202 83,830 (10,394) (1,225) 280,413 Mining properties and mineral rights....... 47,329 19,389 -- 23 66,741 -------- -------- -------- --------- -------- Total............... $282,612 $113,641 $(12,208) $ (2,025) $382,020 ======== ======== ======== ========= ========
- -------- (1) See footnote (1) on Schedule V, Consolidated Property, Plant and Equipment on page 22 of this Form 10-K for a discussion of items included in this caption. Depreciation is provided principally using the straight line method over the following estimated useful lives: buildings and improvements 3 to 50 years; machinery and equipment 2 to 20 years. Amortization is provided principally using the units of production method for mining properties and mineral rights. 23 FLUOR CORPORATION SCHEDULE VII--CONSOLIDATED GUARANTEES OF SECURITIES OF OTHER ISSUERS AS OF OCTOBER 31, 1993 (IN THOUSANDS)
NATURE OF ANY DEFAULT BY ISSUER OF SECURITIES GUARANTEED AMOUNT OWED IN NAME OF ISSUER BY PERSON OR AMOUNT PRINCIPAL, INTEREST, OF SECURITIES TITLE OF ISSUE OF PERSONS IN TREASURY SINKING FUND OR GUARANTEED BY PERSON EACH CLASS OF TOTAL AMOUNT FOR WHICH OF ISSUER REDEMPTION PROVISION, FOR WHICH SECURITIES GUARANTEED AND STATEMENT OF SECURITIES NATURE OF OR PAYMENT OF STATEMENT IS FILED GUARANTEED OUTSTANDING IS FILED GUARANTEED GUARANTEE DIVIDENDS -------------------- ----------------- -------------- ------------ ------------- --------- --------------------- Kilsby-Roberts Lease obligations/ $14,553 None None Lease payments/ None Company Industrial Revenue Principal & Bonds Interest Equibank N.A. (Trustee) Pollution Control $28,670 None None Principal & None St. Joe Minerals Corp. Bonds Series 1972 Interest and 1977 Hartlepet Construction $29,012 None None Principal & None Investments Limited Contract Loan Interest SPB Limited Partnership Construction $40,245 None None Principal & None Contract Loan Interest DSF Corporation Construction $9,295 None None Principal & None Contract Loan Interest Various Lease obligations/ $4,526 None None Lease payments/ None customers Notes and Principal & and employees Mortgages Interest
24 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION ------- ----------- 3.1 Restated Certificate of Incorporation of Fluor Corporation [filed as Exhibit 3.1 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1987 and incorporated herein by reference] 3.2 Restated Bylaws (as amended effective September 13, 1993) of Fluor Corporation 4.1 Indenture dated July 1, 1986 between Fluor Corporation and Irving Trust Company, trustee [filed as Exhibit 4 to Registration No. 33-6960 for the issuance of up to $250 million of debt securities and incorporated herein by reference] 4.2 Fluor Corporation Dividend Reinvestment Plan (effective as of January 1, 1994) EXECUTIVE COMPENSATION PLANS/PROGRAMS 10.1 Fluor Corporation and Subsidiaries Executive Incentive Compensation Plan (as amended through September 15, 1988) [filed as Exhibit 10.1 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1992 and incorporated herein by reference] 10.2 Fluor Corporation and Subsidiaries Executive Deferred Compensation Program (as amended through November 15, 1982) [filed as Exhibit 10.2 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1982 and incorporated herein by reference] 10.3 Fluor Corporation and Subsidiaries Executive Deferred Salary Program (as amended through July 8, 1986) [filed as Exhibit 10.3 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1986 and incorporated herein by reference] 10.4 Fluor Corporation Deferred Directors' Fees Program (as amended through November 15, 1983) [filed as Exhibit 10.3 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1983 and incorporated herein by reference] 10.5 1977 Fluor Executive Stock Plan (as amended by Amendment No. 4 effective December 9, 1986) [filed as Exhibit 10.6 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1986 and incorporated herein by reference] 10.6 1981 Fluor Executive Stock Plan (as amended by Amendment No. 3 effective December 9, 1986) [filed as Exhibit 10.9 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1986 and incorporated herein by reference] 10.7 1982 Fluor Executive Stock Option Plan (as amended by Amendment No. 2 effective December 9, 1986) [filed as Exhibit 10.10 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1986 and incorporated herein by reference] 10.8 Fluor Executives' Health Plan Summary [filed as Exhibit 10.11 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1985 and incorporated herein by reference] 10.9 Directors' Life Insurance Summary [filed as Exhibit 10(i) to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1980 and incorporated herein by reference] 10.10 Executive Tax Services Plan (as amended and effective as of November 1, 1993) 10.11 Executive Personal Financial Counseling Plan (as amended and effective as of November 1, 1993) 10.12 Company Automobile Policy Summary [filed as Exhibit 10.15 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1989 and incorporated herein by reference] 10.13 Fluor Excess Benefit Plan (as amended by Second Amendment effective December 9, 1986) [filed as Exhibit 10.16 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1986 and incorporated herein by reference]
EXHIBIT NO. DESCRIPTION ------- ----------- 10.14 Fluor Executives' Supplemental Benefit Plan (as amended by First Amendment effective November 15, 1983) [filed as Exhibit 10.16 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1983 and incorporated herein by reference] 10.15 1988 Fluor Executive Stock Plan (as amended and restated effective March 9, 1993) 10.16 Fluor Corporation Change of Control Compensation Plan (as amended and restated by Second Amendment effective October 1, 1989) [filed as Exhibit 10.19 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1989 and incorporated herein by reference] 10.17 Fluor Special Executive Incentive Plan (effective as of April 27, 1987) [filed as Exhibit 10.27 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1987 and incorporated herein by reference] 10.18 Retirement Plan for Outside Directors (effective as of May 1, 1992) [filed as Exhibit 10.18 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1992 and incorporated herein by reference] OTHER CONTRACTS 10.19 Concourse Lease dated as of July 26, 1985 between Fluor Corporation and Fluor Engineers, Inc. (an entity now having the corporate name of Fluor Daniel, Inc.) with respect to a portion of the International Headquarters facility located in Irvine, California, formerly owned by Fluor (the "Irvine facility"); Schedule of substantially identical Building Pod Lease and Corporate Tower Lease; and Assignment of Master Leases dated July 26, 1985, assigning Fluor's lessor interest to Crow Winthrop Operating Partnership ("CWOP") [filed as Exhibit 10.21 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1985 and incorporated herein by reference] 10.20 Amendment to Master Leases by and between CWOP, Fluor Daniel, Inc. and Fluor Corporation dated as of November 1, 1989 with respect to the Irvine facility [filed as Exhibit 10.19 to Fluor's annual report on Form 10-K for the fiscal year ended October 31, 1991 and incorporated here in by reference] 13 1993 Annual Report to stockholders (with the exception of the information incorporated by reference into Items 1, 5, 6, 7 and 8 of this report, Fluor's 1993 Annual Report to stockholders is not deemed to be filed as part of this report) 21 Fluor Corporation Subsidiaries 23 Consent of Independent Auditors -- Ernst & Young 24.1 Manually signed Power of Attorney executed by certain Fluor directors and officers 24.2 Manually signed Powers of Attorney executed by certain Fluor directors
EX-3.2 2 BY-LAWS [TYPE] EX-3.(ii) EXHIBIT 3.2 =========== RESTATED BYLAWS (as amended September 13, 1993) OF FLUOR CORPORATION (a Delaware corporation) ARTICLE I OFFICES Section 1.01 Registered Office. The registered office of FLUOR CORPORATION (hereinafter called the "Corporation") in the State of Delaware shall be at 32 Loockerman Square, Suite L-100, City of Dover, County of Kent, and the name of the registered agent at that address shall be The Prentice-Hall Corporation System, Inc. Section 1.02 Principal Office. The principal office for the transaction of the business of the Corporation shall be at 3333 Michelson Drive, Irvine, California 92730. The Board of Directors (hereinafter called the "Board") is hereby granted full power and authority to change said principal office from one location to another. Section 1.03 Other Offices. The Corporation may also have an office or offices at such other place or places, either within or without the State of Delaware, as the Board may from time to time determine or as the business of the Corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 2.01 Annual Meetings. Annual meetings of the stockholders of the Corporation for the purpose of electing directors and for the transaction of such other proper business as may come before such meetings may be held at such time, date and place as the Board shall determine by resolution. Section 2.02 Special Meetings. Special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time by the Board, or by a committee of the Board which has been duly designated by the Board and whose powers and authority, as provided in a resolution of the Board or in the Bylaws, include the power to call such meeting, but such special meetings may not be called by any other person or per- sons; provided, however, that if and to the extent that any special meetings of stockholders may be called by any other per- son or persons specified in any provisions of the Certificate of Incorporation or any amendment thereto or any certificate filed under Section 151(g) of the Delaware General Corporation Law (or its successor statute as in effect from time to time hereafter), then such special meeting may also be called by the person or persons, in the manner, at the times and for the purposes so specified. Section 2.03 Place of Meetings. All meetings of the stockholders shall be held at such places, within or without the State of Delaware, as may from time to time be designated by the person or persons calling the respective meeting and specified in the respective notices or waivers of notice thereof. Section 2.04 Notice of Stockholder Business. At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder of the Corporation who complies with the notice procedures set forth in this Section 2.04. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the princi- pal office of the Corporation, not less than 30 days nor more than 60 days prior to the meeting; provided, however, that in the event that less than 40 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief des- cription of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the books of the Corporation, of the stockholder proposing such business, (c) the class and number of shares of the Corporation which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. Notwith- standing anything in the Bylaws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 2.04. The Chairman of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Sec- tion 2.04, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Section 2.05 Notice of Meetings. Except as otherwise required by law, notice of each meeting of the stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days before the date of the meeting to each stock-holder of record entitled to vote at such meeting by delivering a typewritten or printed notice thereof to him or her personally, or by depositing such notice in the United States mail, in a postage prepaid envelope, directed to him or her at his or her postoffice address furnished by him or her to the Secretary of the Corporation for such purpose or, if he or she shall not have furnished to the Secretary his or her address for such purposes, then at his or her postoffice address last known to the Secretary, or by transmitting a notice thereof to him or her at such address by telegraph, cable or wireless. Except as otherwise expressly required by law, no publication of any notice of a meeting of the stockholders shall be required. Every notice of a meeting of the stockholders shall state the place, date and hour of the meeting, and, in the case of a special meeting, shall also state the purpose or purposes for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall have waived such notice and such notice shall be deemed waived by any stockholder who shall attend such meeting in person or by proxy, except a stockholder who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not law- fully called or convened. Except as otherwise expressly required by law, notice of any adjourned meeting of the stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken. Section 2.06 Quorum. Except in the case of any meeting for the election of directors summarily ordered as provided by law, the holders of record of a majority in voting interest of the shares of stock of the Corporation entitled to be voted thereat, present in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the stock-holders of the Corporation or any adjournment thereof. In the absence of a quorum at any meeting or any adjournment thereof, a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat or, in the absence therefrom of all the stockholders, any officer entitled to preside at, or to act as secretary of, such meeting may adjourn such meeting from time to time. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called. Section 2.07 Voting. (a) Each stockholder shall, at each meeting of the stockholders, be entitled to vote in person or by proxy each share or fractional share of the stock of the Corporation having voting rights on the matter in question and which shall have been held by him or her and registered in his or her name on the books of the Corporation: (i) on the date fixed pursuant to Section 6.05 of the Bylaws as the record date for the determination of stockholders entitled to notice of and to vote at such meeting, or (ii) if no such record date shall have been so fixed, then (a) at the close of business on the day next preceding the day on which notice of the meeting shall be given or (b) if notice of the meeting shall be waived, at the close of business on the day next preceding the day on which meeting shall be held. (b) Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors in such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Persons holding stock of the Corporation in a fiduciary capacity shall be entitled to vote such stock. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation he or she shall have expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his or her proxy, may represent such stock and vote thereon. Stock having voting power standing of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or with respect to which two or more persons have the same fiduciary relationship, shall be voted in accordance with the provisions of the General Corporation Law of the State of Delaware. (c) Any such voting rights may be exercised by the stockholder entitled thereto in person or by his or her proxy appointed by an instrument in writing, subscribed by such stockholder or by his or her attorney thereunto authorized and delivered to the secretary of the meeting; provided, however, that no proxy shall be voted or acted upon after three years from its date unless said proxy shall provide for a longer period. The attendance at any meeting of a stockholder who may theretofore have given a proxy shall not have the effect of revoking the same unless he or she shall in writing so notify the secretary of the meeting prior to the voting of the proxy. At any meeting of the stockholders all matters, except as otherwise provided in the Certificate of Incorporation, in the Bylaws or by law, shall be decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat and thereon, a quorum being present. The vote at any meeting of the stockholders on any question need not be by ballot, unless so directed by the chairman of the meet- ing. On a vote by ballot each ballot shall be signed by the stockholder voting, or by his or her proxy, if there be such proxy, and it shall state the number of shares voted. Section 2.08 List of Stockholders. The Secretary of the Corporation shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the entire duration thereof, and may be inspected by any stockholder who is present. Section 2.09 Judges. If at any meeting of the stockholders a vote by written ballot shall be taken on any question, the chairman of such meeting may appoint a judge or judges to act with respect to such vote. Each judge so appointed shall first subscribe an oath faithfully to execute the duties of a judge at such meeting with strict impartiality and according to the best of his or her ability. Such judges shall decide upon the qualification of the voters and shall report the number of shares represented at the meeting and entitled to vote on such question, shall conduct and accept the votes, and, when the voting is completed shall ascertain and report the number of shares voted respectively for and against the question. Reports of the judges shall be in writing and subscribed and delivered by them to the Secretary of the Corporation. The judges need not be stockholders of the Corporation, and any officer of the Corporation may be a judge on any question other than a vote for or against a proposal in which he or she shall have a material interest. ARTICLE III BOARD OF DIRECTORS Section 3.01 General Powers. The property, business and affairs of the Corporation shall be managed by the Board. Section 3.02 Number. The authorized number of directors of the Corporation shall be fourteen and such authorized number shall not be changed except by a Bylaw or amendment thereof duly adopted by the stockholders in accordance with the Certificate of Incorporation or by the Board amending this Section 3.02. Section 3.03 Election of Directors. The directors shall be elected by the stockholders of the Corporation, and at each election the persons receiving the greatest number of votes, up to the number of directors then to be elected, shall be the persons then elected. The election of directors is subject to any provisions contained in the Certificate of Incorporation relating thereto, including any provisions for a classified board and for cumulative voting. Section 3.04 Notice of Stockholder Nominees. Only persons who are nominated in accordance with the procedures set forth in the Bylaws shall be eligible for election as directors. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders (a) by or at the direction of the Board of Directors or (b) by any stockholder of the Corporation entitled to vote for the election of directors at the meeting who complies with the notice pro- cedures set forth in this Section 3.04. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secre- tary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal office of the Corporation not less than 30 days nor more than 60 days prior to the meeting; provided, however, that in the event that less than 40 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including with- out limitation such person's written consent to be named in the proxy statement as a nominee and to serve as a director if elected); and (b) as to the stockholder proposing such nomination (i) the name and address, as they appear on the books of the Corporation, of such stockholder, and (ii) the class and number of shares of the Corporation which are beneficially owned by such stockholder. At the request of the Board of Directors any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that infor- mation required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in the Bylaws. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the Bylaws, and if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded. Section 3.05 Mandatory Retirement. The Chairman of the Board and the President and any former Chairman of the Board and any former President, if serving as a director of the Corporation at age 72, shall retire from the Board at the end of the calendar year in which his or her 72nd birthday occurs. Each other employee or former employee of the Corporation or its subsidiaries serving as a director of the Corporation at age 65 shall retire from the Board at the end of the calendar year in which his or her 65th birthday occurs unless the Chairman of the Board recommends and the Board approves his or her continued service as a non-employee director. Each other employee of the Corporation or its subsidiaries under age 65 serving as a director of the Corporation who elects to take early retirement or who for any other reason is no longer an officer of the Corporation or its subsidiaries shall retire from the Board as of the date he or she ceases to be an officer unless the Chairman of the Board recommends and the Board approves his or her continued directorship. Each non-employee director of the Corporation serving at age 72 shall retire from the Board at the end of the calendar year in which his or her 72nd birthday occurs. For purposes of this Section, "end of the calendar year" shall include the period ending with the seventh day of January next following. Section 3.06 Resignations. Any director of the Corporation may resign at any time by giving written notice to the Board or to the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time be not specified, it shall take effect immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 3.07 Vacancies. Except as otherwise provided in the Certificate of Incorporation, any vacancy in the Board, whether because of death, resignation, disqualification, an increase in the number of directors, or any other cause, may be filled by vote of the majority of the remaining directors, although less than a quorum. Each director so chosen to fill a vacancy shall hold office until his or her successor shall have been elected and shall qualify or until he or she shall resign or shall have been removed. Section 3.08 Place of Meeting, etc. The Board may hold any of its meetings at such place or places within or without the State of Delaware as the Board may from time to time by resolution designate or as shall be designated by the person or persons calling the meeting or in the notice or a waiver of notice of any such meeting. Directors may participate in any regular or special meeting of the Board by means of conference telephone or similar communications equipment pursuant to which all persons participating in the meeting of the Board can hear each other, and such participation shall constitute presence in person at such meeting. Section 3.09 First Meeting. The Board shall meet as soon as practicable after each annual election of directors and notice of such first meeting shall not be required. Section 3.10 Regular Meetings. Regular meetings of the Board may be held at such times as the Board shall from time to time by resolution determine. If any day fixed for a meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting shall be held at the same hour and place on the next succeeding business day not a legal holiday. Except as provided by law, notice of regular meetings need not be given. Section 3.11 Special Meetings. Special meetings of the Board may be called at any time by the Chairman of the Board or the President or by any two directors, to be held at the principal office of the Corporation, or at such other place or places, within or without the State of Delaware, as the person or persons calling the meeting may designate. Notice of all special meetings of the Board shall be given to each director by two days' service of the same by telegram, by letter, or personally. Such notice may be waived by any director and any meeting shall be a legal meeting without notice having been given if all the directors shall be present thereat or if those not present shall, either before or after the meeting, sign a written waiver of notice of, or a consent to, such meeting or shall after the meeting sign the approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or be made a part of the minutes of the meeting. Section 3.12 Quorum and Manner of Acting. Except as otherwise provided in the Bylaws or by law, the presence of a majority of the authorized number of directors shall be required to constitute a quorum for the transaction of business at any meeting of the Board, and all matters shall be decided at any such meeting, a quorum being present, by the affirmative votes of a majority of the directors present. In the absence of a quorum, a majority of directors present at any meeting may adjourn the same from time to time until a quorum shall be present. Notice of any adjourned meeting need not be given. The directors shall act only as a Board, and the individual directors shall have no power as such. Section 3.13 Action by Consent. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or such committee. Section 3.14 Compensation. No stated salary need be paid directors, as such, for their services, but, by resolution of the Board, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board or an annual directors' fee may be paid; provided that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefore. Members of special or standing committees may be allowed like compensation for attending com- mittee meetings. Section 3.15 Committees. The Board may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Former employees of the Corporation or its subsidiaries who are no longer officers of the Corporation or its subsidiaries, if serving as a director of the Corporation, shall not be eligible to serve as a member of any committee of the Board. Except as otherwise provided in the Board resolution designating a committee, the presence of a majority of the authorized number of members of such committee shall be required to constitute a quorum for the transaction of business at any meeting of such committee. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have any power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of the dissolution, or amending the Bylaws of the Corporation; and unless the resolution of the Board expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Any such committee shall keep written minutes of its meetings and report the same to the Board at the next regular meeting of the Board. Section 3.16 Officers of the Board. The Board shall have a Chairman of the Board and may, at the discretion of the Board, have a Vice Chairman and other officers. The Chairman of the Board and the Vice Chairman shall be appointed from time to time by the Board, unless such positions are elected offices of the Corporation, currently filled, and shall have such powers and duties as shall be designated by the Board. ARTICLE IV OFFICERS Section 4.01 Officers. The officers of the Corporation shall be a Chairman of the Board, a Chief Executive Officer, a Secretary, a Treasurer and such other officers as may be appointed by the Board as the business of the Corporation may require. Officers shall have such powers and duties as are permitted or required by law or as may be specified by or in accordance with resolutions of the Board. Any number of offices may be held by the same person. Unless the Board shall otherwise determine, the Chairman of the Board shall be the Chief Executive Officer of the Corporation. In the absence of any contrary determination by the Board, the Chief Executive Officer shall, subject to the power and authority of the Board, have general supervision, direction and control of the officers, employees, business and affairs of the Corporation. Section 4.02 Election and Term. The officers of the Corporation shall be elected annually by the Board. The Board may at any time and from time to time elect such additional officers as the business of the Corporation may require. Each officer shall hold his or her office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Section 4.03 Removal and Resignation. Any officer may be removed, either with or without cause, by a majority of the directors at the time in office, at any regular or special meeting of the Board. Any officer may resign at any time by giving notice to the Board. Such resignation shall take effect at the time specified in such notice or, in the absence of such specification, at the date of the receipt by the Board of such notice. Unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective. Section 4.04 Vacancies. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, shall be filled in the manner prescribed in these Bylaws for the regular appointment to such office. ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC. Section 5.01 Execution of Contracts. The Board, except as in the Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name and on behalf of the Corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board or by the Bylaws, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount. Section 5.02 Checks, Drafts, etc. All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board. Each such person shall give such bond, if any, as the Board may require. Section 5.03 Deposit. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select, or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. For the purpose of deposit and for the purpose of collection for the account of the Corporation, the Chief Executive Officer, the President or the Treasurer (or any other officer or officers, assistant or assis- tants, agent or agents, or attorney or attorneys of the Corpora- tion who shall from time to time be determined by the Board) may endorse, assign and deliver checks, drafts and other orders for the payment of money which are payable to the order of the Corpo- ration. Section 5.04 General and Special Bank Accounts. The Board may from time to time authorize the opening and keeping of general and special bank accounts with such banks, trust com- panies or other depositories as the Board may select or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of the Bylaws, as it may deem expedient. ARTICLE VI SHARES AND THEIR TRANSFER Section 6.01 Certificates for Stock. Every owner of stock of the Corporation shall be entitled to have a certificate or certificates, to be in such form as the Board shall prescribe, certifying the number and class of shares of the stock of the Corporation owned by him or her. The certificates representing shares of such stock shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the President and by the Secretary. Any or all of the signatures on the certificates may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon any such certificate shall thereafter have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the Corporation with the same effect as though the person who signed such certificate, or whose facsimile signature shall have been placed thereupon, were such officer, transfer agent or registrar at the date of issue. A record shall be kept of the respective names of the persons, firms or corporations owning the stock represented by such certificates, the number and class of shares represented by such certificates, respectively, and the respective dates thereof, and in case of cancellation the respective dates of cancellation. Every certificate surrendered to the Corporation for exchange or transfer shall be cancelled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled, except in cases provided for in Section 6.04 of the Bylaws. Section 6.02 Transfers of Stock. Transfers of shares of stock of the Corporation shall be made only on the books of the Corporation by the registered holder thereof, or by his or her attorney thereunto authorized by power of attorney duly executed and filed with the Secretary, or with a transfer clerk or a transfer agent appointed as provided in Section 6.03 of the Bylaws, and upon surrender of the certificate or certificates for such shares properly endorsed and the payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. Whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact shall be stated expressly in the entry of transfer if, when the certificate or certificates shall be presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so. Section 6.03 Regulations. The Board may make such rules and regulations as it may deem expedient, not inconsistent with the Bylaws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. It may appoint, or authorize any officer or officers to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them. Section 6.04 Lost, Stolen, Destroyed, And Mutilated Certificates. In any case of loss, theft, destruction, or muti- lation of any certificate of stock, another may be issued in its place upon proof of such loss, theft, destruction, or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sum as the Board may direct; provided, how- ever, that a new certificate may be issued without requiring any bond when, in the judgment of the Board, it is proper so to do. Section 6.05 Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any other change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action. If, in any case involving the determination of stockholders for any purpose other than notice of or voting at a meeting of stockholders, the Board shall not fix such a record date, the record date for determining stockholders for such purpose shall be the close of business on the day on which the Board shall adopt the resolution relating thereto. A determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board may fix a new record date for the adjourned meeting. ARTICLE VII MISCELLANEOUS Section 7.01 Seal. The Board shall provide a corporate seal, which shall be in the form of a circle and shall bear the name of the Corporation and words and figures showing that the Corporation was incorporated in the State of Delaware and the year of incorporation. Section 7.02 Waiver of Notices. Whenever notice is required to be given by the Bylaws or the Certificate of Incorp- oration or by law, the person entitled to said notice may waive such notice in writing, either before or after the time stated therein, and such waiver shall be deemed equivalent to notice. Section 7.03 Fiscal Year. The fiscal year of the Corporation shall end on the 31st day of October of each year. Section 7.04 Amendments. The Bylaws, or any of them, may be rescinded, altered, amended or repealed, and new Bylaws may be made, (i) by the Board, by vote of a majority of the number of directors then in office as directors, acting at any meeting of the Board, or (ii) by the vote of the holders of not less than 80% of the total voting power of all outstanding shares of voting stock of the Corporation, at any annual meeting of stockholders, without previous notice, or at any special meeting of stockholders, provided that notice of such proposed amendment, modification, repeal or adoption is given in the notice of special meeting. Any Bylaws made or altered by the stockholders may be altered or repealed by the Board or may be altered or repealed by the stockholders. EX-4.2 3 DIVIDEND PLAN [TYPE] EX-4.2 EXHIBIT 4.2 Dear Shareholder: Fluor Corporation is pleased to offer a Dividend Reinvestment Plan. Participation is optional. The Plan provides shareholders of record the opportunity to conveniently and economically increase their ownership in Fluor. If you elect to participate, your quarterly dividend payment will automatically be reinvested in shares of Fluor Common Stock at no cost to you. You may also make optional cash investments to acquire additional shares at costs substantially below normal brokerage fees. The Plan is being offered through our agent, Chemical Bank. Please be sure to review this brochure carefully for all the features and details of the Plan. Then, if you wish to participate, complete and forward the enclosed authorization card in the postage-paid envelope provided for your convenience. We are pleased to be offering you this program, and hope that many of you will want to participate. Sincerely, L.G. McCRAW ------------------------- L.G. McCraw Chairman and Chief Executive Officer KEY PLAN FEATURES THE PLAN The Plan offers Fluor shareholders the opportunity to conveniently reinvest their dividends in shares of Fluor Common Stock without payment of a service fee or brokerage commission. DIVIDEND REINVESTMENT Dividends paid by Fluor to you as a participating shareholder in the Plan are automatically applied toward the purchase of additional Fluor Common Stock. All fees and brokerage commissions are paid by Fluor. The Bank (Chemical Bank) purchases both full and fractional shares for your Account which means the entire amount of your dividend is utilized. In order to participate in the Plan, all shares registered in your name must be enrolled in the Plan. Until June 30, 1995, if you are the holder of record of at least one full share of Fluor Common Stock, you may participate in the Plan. You will have until June 30, 1995 to achieve a balance of 50 shares of Fluor Common Stock in your Plan Account. After June 30, 1995, if your Account does not have a minimum balance of at least 50 shares, your Account will be terminated without further notice. In such event, the Account shares will be sold and a check for the net proceeds will be mailed to you. After June 30, 1995, in order to participate in the Plan, all Participants must enroll with and maintain a balance of not less than 50 shares in his or her Account. OPTIONAL CASH INVESTMENTS In addition to reinvesting your dividends, you may elect to purchase additional shares of Fluor Common Stock for cash in any amount from a minimum of $100 to a maximum of $10,000 per quarter (Optional Cash Investments). You must participate in the Dividend Reinvestment portion of the Plan to make Optional Cash Investments. A three dollar ($3) service fee is charged for each check or money order processed by the Bank. Payment of this fee will be split equally between you and Fluor ($1.50 each). You are also responsible for a brokerage commission of seven cents ($0.07) per share multiplied by the number of shares of Fluor Common Stock purchased for your Account. Shares purchased with Optional Cash Investments will be credited to your Account less fees and commissions required to be paid by you. To make a Cash Investment, mail a check or money order payable to Chemical Bank, together with the remittance slip which is part of your Account statement, to the address indicated on the statement. Optional Cash Investments must be received at least two business days prior to, but no earlier than 30 calendar days preceding, the quarterly dividend payment date. Although the actual dividend payment dates vary, these dates have historically occurred between the 10th and 21st days of January, April, July and October of each year. PLAN PURCHASES OF FLUOR COMMON STOCK The purchase of shares of Fluor Common Stock will generally occur on the dividend payment date mentioned above but in no event later than 30 days thereafter. The price of shares acquired for each Account will be equal to the average price for all shares purchased by the Bank as agent for all Participants in the Plan for that quarter. PLAN ACCOUNT STATEMENTS After the quarterly dividends and Optional Cash Investments are reinvested in shares of Fluor Common Stock, the Bank will send you a detailed year-to-date statement of your Account. The statement includes all amounts invested on your behalf, the number of shares and fractional shares credited to your Account, the purchase price of those shares and the total number of shares you hold in your Account. TAX INFORMATION Reinvested dividends are treated by the IRS in the same manner as cash dividends and are taxable. The payment of service fees and brokerage commissions by Fluor on your behalf is considered income to you and reported as such to the IRS. If you are subject to backup withholding tax on dividends under the Plan, or if you are a foreign stockholder whose dividends are subject to United States income tax withholding, the amount of the tax to be withheld is deducted from the amount of the dividends and only the reduced amount is reinvested in Fluor Common Stock. At 2 year end, the Bank provides you with summary information for tax purposes. CUSTODY OF SHARES All shares purchased under the Plan are held for you in your Account by the Bank. Upon written request, the Bank will send you a certificate for any full shares credited to your Account. You must pay a service fee of five dollars ($5) per certificate requested by sending a check or money order payable to Chemical Bank. You may also elect to have the Bank provide custodial service for the shares of Fluor Common Stock that you already own by sending your share certificates to the Bank at the address indicated below, either by registered or certified mail, return receipt requested. VOTING RIGHTS Before each shareholder meeting, the Bank will mail a proxy card to you for the shares held in your Account. Your shares will be voted as you direct. If you properly sign and return the proxy card but otherwise provide no instruction, your Account shares will be voted as recommended by Fluor's Board of Directors. If you do not return your proxy, the shares in your Account will not be voted. SALE OF PLAN ACCOUNT SHARES You may sell shares of Fluor Common Stock directly from your Account at any time through a written request directing the Bank to sell a specified number of shares of stock from your Account. Sales of shares generally occur within seven calendar days of receipt by Chemical Bank of your instruction to sell shares. The Bank will remit the proceeds to you as soon as practicable, less a fifteen dollar ($15) service fee and applicable brokerage commissions. PARTICIPATION IN THE PLAN Subject to the minimum holding requirements, all holders of record of Fluor Common Stock may join the Plan at any time. To begin participating, complete an authorization card and mail it to the Bank in the postage-paid envelope provided for your convenience. If you are a shareholder of record and you have not received an 3 authorization card, contact the Bank at the address below. If your shares are registered in the name of someone holding the shares on your behalf (e.g., in the name of a broker, bank or other nominee) and you want to participate in the Plan, you must either make appropriate arrangements with your broker, bank or other registered holder to participate in the Plan, or you must become the holder of record by having the shares transferred to your own name. Your authorization card must be received by the Bank prior to a dividend record date for participation in the plan to begin effective with that quarterly dividend payment. Although the actual record dates for Fluor dividends vary, historically these dates have occurred between the 20th and 30th days of December, March, June and September of each year. WITHDRAWAL FROM THE PLAN You may withdraw from the Plan at any time by notifying the Bank in writing and mailing a check or money order of five dollars ($5) per certificate requested. Upon withdrawal, the Bank will send you a certificate for the full number of shares held in your Account and a check for any fractional share. Alternatively, you may direct the Bank to sell your shares, upon which the Bank will remit to you the cash proceeds less the fifteen dollar ($15) service fee and brokerage commissions applicable to the sale of Account shares. ADDITIONAL PLAN INFORMATION If you have questions regarding the Plan please contact: Chemical Bank Fluor Dividend Reinvestment Plan J.A.F. Building P.O. Box 3069 New York, New York 10116-3069 Telephone: (800) 356-2017 4 DIVIDEND REINVESTMENT PLAN TERMS AND CONDITIONS 1. As agent for each participating shareholder ("Participant") of Fluor Corporation ("Fluor"), Chemical Bank (the "Bank") will carry out the Terms and Conditions of the Fluor Corporation Dividend Reinvestment Plan (the "Plan") set forth below. 2. To elect to participate in the Plan, a shareholder must submit to the Bank a completed and signed authorization card ("Authorization"). The Authorization must include the name (or names in the case of a joint tenancy or trust, etc.) of the Participant exactly as the name or names are registered and appear on the certificate. Pursuant to receiving such Authorization, the Bank will establish an account under the Plan ("Account") for each Participant and will credit to the Account of each Participant cash received by the Bank from either of the following sources: (i) cash dividends payable to the Participant on all shares of Fluor Common Stock registered in the Participant's name, pursuant to paragraph 3 below; and (ii) Optional Cash Investments delivered to the Bank by the Participant, pursuant to paragraph 4 below. 3. All cash dividends payable to the Participant on shares of Fluor Common Stock registered in the Participant's name are applied toward the purchase of additional Fluor Common Stock. Stock purchases are made by the Bank and the newly acquired shares credited to the Participant's Account. All fees and brokerage commissions are paid by Fluor. All shares registered in the Participant's name must be enrolled in the Plan. The Plan does not permit partial reinvestment, nor does the Plan permit the Participant to designate a portion or percentage of the cash dividend to be applied toward reinvestment. Under the Plan, the Bank reinvests all cash dividends on all shares registered in the Participant's name except where it is clearly established to the Bank that the Participant is holding Fluor shares for several beneficial owners. An Authorization for dividend reinvestment must be received by the Bank prior to a quarter's dividend record date for participation in the Plan to begin effective with that quarterly dividend payment. Although the actual record dates for Fluor dividends vary, historically these dates have occurred between the 20th and 30th days of December, March, June and September of each year. Until June 30, 1995, any holder of record of at least one full share of Fluor Common Stock may participate in the Plan. After June 30, 1995, all Accounts with a balance of less than 50 shares of Fluor Common Stock will be terminated without further notice. In such event, the Account shares will be sold and a check for the net proceeds, (proceeds less applicable fees pursuant to paragraph 14 below) will be sent to the Participant. After June 30, 1995, in order to participate in the Plan, all Participants must enroll with and maintain a balance of not less than 50 shares in their Account. 4. The Participant may elect to purchase additional shares of Fluor Common Stock for cash in any amount from a minimum amount of one hundred dollars ($100) per investment to an aggregate maximum amount of ten thousand 5 dollars ($10,000) per quarter ("Optional Cash Investments"). The Participant must be participating in the Dividend Reinvestment portion of the Plan to make Optional Cash Investments. A service fee in the amount of three dollars ($3) is charged by the Bank for each check or money order processed. Payment of this fee will be split equally between the Participant and Fluor ($1.50 each). A brokerage commission of seven cents ($0.07) per share multiplied by the number of shares purchased is also payable by the Participant. Shares purchased with Optional Cash Investments will be credited to the Participant's Account less the fees and commissions required to be paid by the Participant. Optional Cash Investments must be received by the Bank at least two business days prior to, but no earlier than 30 calendar days preceding, the quarterly dividend payment date. Optional Cash Investments not received within this time period will be returned to the Participant as soon as practicable. No interest will be paid on Optional Cash Investments received by the Bank. Although the actual dividend payment dates vary, these dates have historically occurred between the 10th and 21st days of January, April, July and October. If Fluor does not pay a dividend in any quarter, Optional Cash Investments sent by the Participant to the Bank will be invested as though such dividend had been paid. Optional Cash Investments should be made payable to Chemical Bank, drawn against United States banks and in United States dollars, and mailed directly, together with the remittance slip which is part of the Participant's Account statement, to the address indicated on the statement. Checks drawn against non-United States banks must have the United States currency imprinted on the check. Optional Cash Investments sent to any other address will not be considered validly delivered. If any check is returned unpaid for any reason, the Bank will consider the request for investment of such money null and void and shall immediately remove from the Participant's Account any shares purchased upon the prior credit of such money. The Bank shall thereupon be entitled to sell these shares to satisfy any uncollected amounts. If the net proceeds of the sale of such shares are insufficient to satisfy the balance of such uncollected amounts, the Bank shall be entitled to sell such additional shares from the Participant's Account to satisfy the uncollected balance. 5. The Bank will invest all cash credited to the Participant's Account for the purchase of full and fractional shares of Fluor Common Stock. Dividends received from Account shares and Optional Cash Investments may be aggregated and commingled with the funds credited to all other Accounts of all other Participants. No interest will be payable on such funds. 6. The Bank will generally invest the cash credited to the Participant's Account on the dividend payment date but in no event later than 30 days from said date, except where necessary to comply with applicable provisions of the federal securities laws or the rules and regulations of the Securities and Exchange Commission. If any suspension of trading of shares 6 of Fluor Common Stock by any agency or governmental body remains effective for 30 consecutive days, the Bank shall return all cash in the Participant's Account to the Participant after such thirtieth day. Optional Cash Investments received during any 30 day suspension period will be returned as soon as practicable. 7. The Bank will purchase shares for the Participant's Account on any securities exchange or national market system where shares of Fluor Common Stock are traded, in the over-the-counter market or in negotiated transactions. Purchases may be made on such terms as to price, delivery and otherwise, and may be executed through such brokers or dealers, as the Bank may determine. The price at which the Bank shall be deemed to have acquired shares for the Participant's Account shall be the average price, excluding brokerage commissions and any other costs of purchase, of all shares purchased by it as agent for all Participants in the Plan on the applicable dividend payment date and within 30 days thereafter. No Participant shall have any authority or power to direct the time or price at which said shares may be purchased and the Bank shall have no responsibility as to the value of the Fluor shares acquired or held for the Participant's Account. 8. Following each purchase, the Bank will mail a statement to each Participant summarizing the year-to-date transactions in the Participant's Account, indicating, among other things, the cash dividends and Optional Cash Investments received, the amounts reinvested, the number of shares and fractional shares credited to the Participant's Account, the average cost per share and the total number of shares in the Account. Current year Account statements are provided at no charge to the Participant; however, a Participant must pay a fee of twenty dollars ($20) if requesting copies of statements from a prior calendar year. 9. It is understood that the reinvestment of dividends does not relieve the Participant of any income tax which may be payable on such dividends. It is understood that the payment by Fluor of service fees and brokerage commissions is considered income to the Participant and reported as such to the IRS. If a Participant is subject to United States backup withholding tax on dividends, or is a foreign shareholder whose dividends are subject to United States income tax withholding, the amount of the tax to be withheld will be deducted from the amount of the dividends and only the reduced amount will be reinvested in Fluor Common Stock. Statements of account for said participants indicate the amount withheld. At year end, the Bank provides each Participant with summary information for tax purposes at no charge to the Participant. 10. Certificates will ordinarily not be issued for shares acquired under the Plan unless the Bank is so requested by the Participant in writing or until such Account is terminated as provided in Paragraph 15 below. Upon written request, the Bank will send certificates for any full shares credited to the Participant's Account. No certificates for fractional shares will be issued. A service fee of five dollars ($5) per certificate 7 requested must be paid by the Participant by mailing a check or money order payable to Chemical Bank. 11. The Participant may elect, at no additional cost, to deposit certificates for shares of Fluor Common Stock with the Bank for safekeeping. The Bank will credit the Participant's Account with the number of shares deposited and will treat them in all respects in the same manner as shares purchased for the Participant's Account. All certificates should be sent to the Bank by either registered or certified mail, return receipt requested. The Participant bears the risk of loss in transit. 12. Shares of Fluor Common Stock held in a Participant's Account may not be pledged or assigned. The Participant must request that the shares be withdrawn and a certificate be delivered to the Participant for these purposes. 13. All proxy solicitation materials will be sent by the Bank to Participants. The Bank will vote Account shares as the Participant directs. If no instructions are indicated on a properly signed and returned proxy card, the Participant's Account shares will be voted in accordance with the recommendations of Fluor's Board of Directors to the extent permitted by applicable laws and regulations thereunder. If the proxy card is not returned, the Participant's Account shares will not be voted. 14. If requested in writing, the Bank will sell a Participant's Account shares generally within seven calendar days of receipt of the request and promptly remit the proceeds to the Participant, less a fifteen dollar ($15) service fee and applicable brokerage commissions. Requests to sell Account shares must indicate the number of shares to be sold and not the dollar amount to be attained. The Participant selling shares should be aware that prices may fluctuate during the period between a request for sale, receipt by the bank of the request and ultimate sale in the open market. The Participant bears the risk of any price change. 15. A Participant may terminate participation in the Plan at any time by giving written notice to the Bank. Such notice shall be effective upon receipt by the Bank; however, if notice of termination is received by the Bank after a dividend record date, such notice will not be effective until dividends paid for that record date have been credited to the Participant's Account. Fluor may, in its sole judgment, direct the Bank to terminate a Participant from the Plan at any time if Fluor deems the practices of the Participant are not consistent with the intent of the Plan. Upon termination, the Bank will promptly send the Participant a certificate for the full shares in the Participant's Account and a check in an amount equal to the value of any fractional shares based upon the then current market price of a full share. A service fee of five dollars ($5) per certificate requested must be paid by the Participant by mailing a check or money order to Chemical Bank. The Bank may, at its discretion and without notice, terminate any Account having a balance of less than one full share by payment in cash. 8 16. The Board of Directors of Fluor or any designated committee thereof, reserves the right to amend, suspend, modify or terminate the Plan at any time, but such action shall have no retroactive effect that would prejudice the interest of the Participants. Notice of such action will be sent to the last address of record for all Participants. 17. Any election, notice, request, instruction, or withdrawal which by any provision of the Plan is required or permitted to be given or made by the Participant to the Bank, shall be written and shall be deemed to be given or made when received by the Bank. Such direction shall be mailed postage prepaid to: Chemical Bank Fluor Dividend Reinvestment Plan J.A.F. Building P.O. Box 3069 New York, New York 10116-3069 Telephone: (800) 356-2017 18. Fluor and/or the Bank shall not be liable hereunder for any action taken, suffered or omitted in good faith including without limitation, any claim of liability arising under the following: (i) failure to terminate the Participant's Account upon the Participant's death or otherwise prior to the receipt of written notice of such death; (ii) termination accompanied by documentation deemed satisfactory by the Bank; (iii) prices at which shares are purchased or sold for the Participant's Account; (iv) timing and terms on which such purchases and sales are made; or (v) market value or any fluctuation in the market value after purchase of shares or sale of shares for the Participant's Account. 19. These Terms and Conditions and the provisions of the Authorization shall be governed by the laws of the State of New York. 9 EX-10.10 4 TAX PLAN EXHIBIT 10.10 ============= FLUOR CORPORATION AND SUBSIDIARIES Management Manual Section: Compensation Page: 114 Subject: TAX SERVICES PLAN Effective: 11-1-93 Supersedes: 6-1-89 Applies To: Fluor Corporation and its Subsidiaries PURPOSE The purpose of this Plan is to provide eligible executives of Fluor Corporation and its subsidiaries with assistance in personal tax compliance and planning. ELIGIBILITY Officers of Fluor Corporation and its designated subsidiaries in Salary Grade 32 or above are authorized to participate in this Plan. Officers in Salary Grades 29-31 may be approved for participation at the $1,500 level by the Executive Committee or the Office of the President, Fluor Daniel, Inc. PROCEDURES Charges for services rendered under this Plan for executives of Fluor Corporation, Fluor Daniel, Inc., Fluor Constructors International, Inc., and all divisions of those companies, should be forwarded to the vice president, Human Resources and Administration, Fluor Corporation, for approval and payment. All other subsidiaries will be responsible for maintaining and administering this Plan under the general provisions established herein. Total costs incurred by each executive covered by this Plan may not exceed the Maximum Assistance Amount for a calendar year as indicated below. These amounts are calendar year limitations, which will be applied without regard to the particular tax returns prepared or consulting services rendered. Costs in excess of the maximum established for the executive will be charged to the individual's personal account. Charges, up to the Maximum Assistance Amount, paid by Fluor will be included in each participant's total compensation as reported to federal and state taxing authorities. FLUOR CORPORATION AND SUBSIDIARIES Management Manual Section: Compensation Page: 115 Subject: TAX SERVICES PLAN Effective: 11-1-93 (Continued) Supersedes: 6-1-89 Applies To: Fluor Corporation and its Subsidiaries SCHEDULE OF MAXIMUM ASSISTANCE AMOUNTS Maximum Assistance Salary Grade Amount 41 - 43 $8,000 38 - 40 6,000 35 - 37 4,000 32 - 34 2,000 In the event of the death of an eligible executive, this Plan will continue in force for expenses resulting from the calendar year in which the death occurred. Services provided by this Plan will be made available to the executive's designated beneficiary up to the applicable Maximum Assistance Amount, less any payments previously made during that year. All benefits under this Plan will immediately cease for those executives who are terminated from the company for any reason other than death, retirement or permanent and total disability. EX-10.11 5 COUNSELING PLAN EXHIBIT 10.11 ============= FLUOR CORPORATION AND SUBSIDIARIES Management Manual Section: Compensation Page: 116 Subject: PERSONAL FINANCIAL Effective: 11-1-93 COUNSELING PLAN Supersedes: 6-1-89 Applies To: Fluor Corporation and its Subsidiaries PURPOSE The purpose of this Plan is to encourage executives of Fluor Corporation and its designated subsidiaries to meet their overall financial objectives through personal financial counseling services. ELIGIBILITY Those officers of Fluor Corporation and its subsidiaries in Salary Grade 32 or above are authorized to participate in this Plan. Officers in Salary Grades 29-31 may be approved for participation by the Executive Committee or Office of the President, Fluor Daniel, Inc. SCOPE OF SERVICES Expenses incurred and fees charged by qualified financial consultants of the executive's choice for personal financial profiles, forecasts, investment plan development and estate planning are included. REIMBURSEMENT The cost of such services up to $2,000 each of the first two years the executive is eligible to participate in the Plan, plus an additional $2,000 during the year of the executive's retirement are eligible for reimbursement. In the event of the death of an eligible executive prior to retirement, services provided by this Plan will be made available to the executive's designated beneficiary up to a maximum of $2,000. In the event of the death of an eligible executive during the year of retirement, services provided by this Plan will be made available to the executive's designated beneficiary up to a maximum of $2,000 less any payments previously made during that year. FLUOR CORPORATION AND SUBSIDIARIES Management Manual Section: Compensation Page: 117 Subject: PERSONAL FINANCIAL Effective: 11-1-93 COUNSELING PLAN (Continued) Supersedes: 6-1-89 Applies To: Fluor Corporation and its Subsidiaries All benefits under this Plan will immediately cease for those executives who are terminated from the company for any reason other than death, retirement or permanent and total disability. PROCEDURES The Corporate Human Resources group is responsible for the administration of this Plan for those executives of Fluor Corporation, Fluor Daniel, Inc., Fluor Constructors International, Inc., and all divisions of those companies. Bills or receipts should be submitted to the vice president, Human Resources and Administration, in Irvine for approval and final forwarding to the appropriate accounting department for payment. Total charges paid by Fluor will be included in each participant's total compensation as reported to federal and state taxing authorities. All other subsidiaries will be responsible for maintaining and administering this Plan under the general provisions established above for their eligible executives. EX-10.15 6 STOCK PLAN EXHIBIT 10.15 ============= FLUOR CORPORATION 1988 FLUOR EXECUTIVE STOCK PLAN AS AMENDED AND RESTATED EFFECTIVE MARCH 9, 1993 TABLE OF CONTENTS ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . 1 Sec. 1.1 Definitions. . . . . . . . . . . . . . . . . . . 1 ARTICLE II GENERAL. . . . . . . . . . . . . . . . . . . . . 3 Sec. 2.1 Name . . . . . . . . . . . . . . . . . . . . . . 3 Sec. 2.2 Purpose. . . . . . . . . . . . . . . . . . . . . . 3 Sec. 2.3 Effective Date . . . . . . . . . . . . . . . . . . 3 Sec. 2.4 Limitations. . . . . . . . . . . . . . . . . . . . 4 Sec. 2.5 Options, Awards and Rights Granted Under Plan. . . 4 ARTICLE III PARTICIPANTS . . . . . . . . . . . . . . . . .. . 4 Sec. 3.1 Eligibility. . . . . . . . . . . . . . . . . . . . 4 ARTICLE IV ADMINISTRATION . . . . . . . . . . . . . . . . . . 4 Sec. 4.1 Duties and Powers of Committee . . . . . . . . . . 4 Sec. 4.2 Majority Rule. . . . . . . . . . . . . . . . . . . 5 Sec. 4.3 Company Assistance . . . . . . . . . . . . . . . . 5 ARTICLE V OPTIONS. . . . . . . . . . . . . . . . . . . . . . 5 Sec. 5.1 Option Grant and Agreement . . . . . . . . . . . . 5 Sec. 5.2 Participation Limitation . . . . . . . . . . . . . 5 Sec. 5.3 Option Price . . . . . . . . . . . . . . . . . . . 6 Sec. 5.4 Option Period. . . . . . . . . . . . . . . . . . . 6 Sec. 5.5 Option Exercise. . . . . . . . . . . . . . . . . . 6 Sec. 5.6 Nontransferability of Option . . . . . . . . . . . 7 Sec. 5.7 Effect of Death or Other Termination of Employment. . . . . . . . . . . . . 7 Sec. 5.8 Rights as Stockholder. . . . . . . . . . . . . . . 9 ARTICLE VI AWARDS . . . . . . . . . . . . . . . . . . . . . . 9 Sec. 6.1 Award Grant and Restricted Stock Agreement . . . . 9 Sec. 6.2 Consideration for Issuance . . . . . . . . . . . . 9 Sec. 6.3 Restrictions on Sale or Other Transfer . . . . . . 9 Sec. 6.4 Lapse of Restrictions. . . . . . . . . . . . . . . 10 Sec. 6.5 Rights as Stockholder. . . . . . . . . . . . . . . 10 ARTICLE VII STOCK CERTIFICATES . . . . . . . . . . . . . . . 10 Sec. 7.1 Stock Certificates . . . . . . . . . . . . . . . . 10 ARTICLE VIII GRANT AND EXERCISE OF RIGHTS . . . . . . . . . . 11 Sec. 8.1 Rights Grants and Agreements . . . . . . . . . . . 11 Sec. 8.2 Rights Period. . . . . . . . . . . . . . . . . . . 12 Sec. 8.3 Rights Exercise. . . . . . . . . . . . . . . . . . 12 Sec. 8.4 Nontransferability of Rights . . . . . . . . . . . 13 Sec. 8.5 Effect of Death or Other Termination of Employment. . . . . . . . . . . . . 13 Sec. 8.6 No Rights as Stockholder . . . . . . . . . . . . . 14 ARTICLE IX STOCK PAYMENT. . . . . . . . . . . . . . . . . . 15 Sec. 9.1 Stock Payment. . . . . . . . . . . . . . . . . . . 15 ARTICLE X TERMINATION, AMENDMENT AND MODIFICATION OF PLAN . 15 Sec. 10.1 Termination, Amendment and Modification of Plan. . 15 ARTICLE XI MISCELLANEOUS. . . . . . . . . . . . . . . . . . . 15 Sec. 11.1 Adjustment Provisions. . . . . . . . . . . . . . . 15 Sec. 11.2 Continuation of Employment . . . . . . . . . . . . 16 Sec. 11.3 Compliance with Government Regulations . . . . . . 16 Sec. 11.4 Privileges of Stock Ownership. . . . . . . . . . . 16 Sec. 11.5 Withholding. . . . . . . . . . . . . . . . . . . . 17 Sec. 11.6 Nontransferability . . . . . . . . . . . . . . . . 17 Sec. 11.7 Other Compensation Plans . . . . . . . . . . . . . 17 Sec. 11.8 Plan Binding on Successors . . . . . . . . . . . . 17 Sec. 11.9 Singular, Plural; Gender . . . . . . . . . . . . . 17 Sec. 11.10 Headings, Etc., No Part of Plan. . . . . . . . . 17 ARTICLE I DEFINITIONS Sec. 1.1 DEFINITIONS As used herein, the following terms shall have the meanings hereinafter set forth unless the context clearly indicates to the contrary: (a) "Award" shall mean an award of Restricted Stock pursuant to the provisions of Article VI hereof. (b) "Awardee" shall mean an employee to whom Restricted Stock has been awarded hereunder. (c) "Board" shall mean the Board of Directors of the Company. (d) "Change of Control" of the Company shall be deemed to have occurred if, (i) a third person, including a 'group' as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, acquires shares of the Company having twenty-five percent or more of the total number of votes that may be cast for the election of directors of the Company; or (ii) as the result of any cash tender or exchange offer, merger or other business combination, or any 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. (e) "Code" shall mean the Internal Revenue Code of 1986, as amended. (f) "Committee" shall mean the Organization and Compensation Committee of the Board. (g) "Company" shall mean Fluor Corporation. (h) "Fair Market Value" shall mean the average of the highest price and the lowest price per share at which the Stock is sold in the regular way on the New York Stock Exchange on the day an Option is granted hereunder or, in the absence of any reported sales on such day, the first preceding day on which there were such sales. (i) "Grantee" shall mean an employee to whom Rights have been granted hereunder. 1 (j) "Incentive Stock Option" shall mean an incentive stock option, as defined under Section 422A of the Code and the regulations thereunder to purchase Stock. (k) "Nonqualified Stock Option" shall mean a stock option other than an Incentive Stock Option to purchase Stock. (l) "Option" shall mean an option to purchase Stock granted pursuant to the provisions of Article V hereof and refers to both Incentive Stock Options and Nonqualified Stock Options. (m) "Optionee" shall mean an employee to whom an Option has been granted hereunder. (n) "Plan" shall mean the 1988 Fluor Executive Stock Plan, the terms of which are set forth herein. (o) "Prior Plans" shall mean the 1971 Fluor Stock Option Plan, the 1977 Fluor Executive Stock Plan, the 1981 Fluor Executive Stock Plan and the 1982 Fluor Executive Stock Option Plan. (p) "Restricted Stock" shall mean Stock that may be awarded to an employee by the Committee pursuant to Article VI hereof, which is nontransferable and subject to a substantial risk of forfeiture until specific conditions are met. Conditions may be based on continuing employment or achievement of preestablished performance objectives. (q) "Restricted Stock Agreement" shall mean the agreement between the Company and the Awardee with respect to Restricted Stock awarded hereunder. (r) "Rights" shall mean Stock Appreciation Rights granted as provided herein. (s) "Stock" shall mean the Common Stock of the Company or, in the event that the outstanding shares of Stock are hereafter changed into or exchanged for shares of a different stock or securities of the Company or some other corporation, such other stock or securities. (t) "Stock Appreciation Right" or "Right" shall mean a right granted pursuant to Article VIII hereof to receive a number of shares of Stock or, in the discretion of the Committee, an amount of cash or a combination of shares and cash, based on the increase in the Fair Market Value of the shares subject to the Right. 2 (u) "Stock Appreciation Rights Agreement" shall mean the agreement between the Company and the Grantee evidencing the grant of Rights as provided herein. (v) "Stock Option Agreement" shall mean the agreement between the Company and the Optionee under which the Optionee may purchase Stock hereunder. (w) "Stock Payment" shall mean a payment in shares of Stock to replace all or any portion of the compensation (other than base salary) that would otherwise become payable to any employee of the Company. (x) "Subsidiary" shall mean any corporation, the majority of the outstanding capital stock of which is owned, directly or indirectly, by the Company or any partnership or joint venture in which either the Company or such a corporation is at least a twenty percent (20%) equity participant. ARTICLE II GENERAL Sec. 2.1 NAME This Plan shall be known as the "1988 Fluor Executive Stock Plan." Sec. 2.2 PURPOSE The purpose of the Plan is to advance the interests of the Company and its stockholders by affording to key management employees of the Company and its Subsidiaries an opportunity to acquire or increase their proprietary interest in the Company by the grant to such employees of Options, Awards or Rights under the terms set forth herein. By thus encouraging such employees to become owners of Company shares and by granting such employees with a form of cash incentive compensation which is measured by the increase in market value of Company shares, the Company seeks to motivate, retain and attract those highly competent individuals upon whose judgment, initiative, leadership and continued efforts the success of the Company in large measure depends. Sec. 2.3 EFFECTIVE DATE The Plan shall become effective upon its approval by the holders of a majority of the shares of Stock of the Company represented at an annual or special meeting of the stockholders of the Company. 3 Sec. 2.4 LIMITATIONS Subject to adjustment pursuant to the provisions of Section ll.1 hereof, the aggregate number of shares of Stock which may be issued and sold hereunder pursuant to Options or Awards which may be granted hereunder shall not exceed the sum of (a) 5,500,000 plus (b) that number of shares currently outstanding as options or awards under Prior Plans (2,686,214 shares) which subsequently expire or are otherwise terminated. Any such shares may be either authorized and unissued shares or shares issued and thereafter acquired by the Company. Sec. 2.5 OPTIONS, AWARDS AND RIGHTS GRANTED UNDER PLAN Shares of Stock with respect to which an Option granted hereunder shall have been exercised and shares of Stock received pursuant to a Restricted Stock Agreement executed hereunder with respect to which the restrictions provided for in Section 6.3 hereof shall have lapsed shall not again be available for Option or Award grant hereunder. If Options granted hereunder shall expire or terminate for any reason without being wholly exercised, or if Restricted Stock is acquired by the Company pursuant to the provisions of paragraph (c) of Section 6.3 hereof, new Options or Awards may be granted hereunder covering the number of shares to which such Option expiration or termination or Restricted Stock acquisition relates. ARTICLE III PARTICIPANTS Sec. 3.1 ELIGIBILITY Any officer or other key management employee of the Company or its Subsidiaries shall be eligible to participate in the Plan; provided, however, that no member of the Committee shall be eligible to participate. The Committee may grant Options, Awards or Rights to any eligible employee in accordance with such determinations as the Committee from time to time in its sole discretion shall make. ARTICLE IV ADMINISTRATION Sec. 4.1 DUTIES AND POWERS OF COMMITTEE The Plan shall be administered by the Committee. Subject to the express provisions of the Plan, the Committee shall have sole discretion and authority to determine from among eligible employees those to whom and the time or times at which Options, Rights or Awards may be granted, the number of shares of Stock to be subject to each Option or Award, the number of Rights to be 4 awarded and the period for the exercise of such Option or Rights which need not be the same for each grant hereunder. Subject to the express provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine the details and provisions of each Stock Option Agreement, Stock Appreciation Rights Agreement and Restricted Stock Agreement, and to make all other determinations necessary or advisable in the administration of the Plan. Sec. 4.2 MAJORITY RULE A majority of the members of the Committee shall constitute a quorum, and any action taken by a majority present at a meeting at which a quorum is present or any action taken without a meeting evidenced by a writing executed by a majority of the whole Committee shall constitute the action of the Committee. Sec. 4.3 COMPANY ASSISTANCE The Company shall supply full and timely information to the Committee on all matters relating to eligible employees, their employment, death, retirement, disability or other termination of employment, and such other pertinent facts as the Committee may require. The Company shall furnish the Committee with such clerical and other assistance as is necessary in the performance of its duties. ARTICLE V OPTIONS Sec. 5.1 OPTION GRANT AND AGREEMENT Each Option granted hereunder shall be evidenced by minutes of a meeting or the written consent of the Committee and by a written Stock Option Agreement dated as of the date of grant and executed by the Company and the Optionee, which Agreement shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. Sec. 5.2 PARTICIPATION LIMITATION The Committee shall not grant an Incentive Stock Option to any employee for such number of shares of Stock that, immediately after the grant, the total number of shares of Stock owned or subject to Options exercisable by and/or Awards outstanding in the hands of such employee (or by such persons whose shares such employee is considered as owning pursuant to the provisions of the second succeeding sentence) exceed ten percent of the total combined voting power of all classes of stock of the Company. This restriction does not apply if, at the time such Incentive 5 Stock Option is granted, the Incentive Stock Option purchase price is at least 110% of the Fair Market Value on the date of grant and the Incentive Stock Option by its terms is not exercisable after the expiration of five (5) years from the date of grant. For purposes of this Section 5.2, an employee shall be considered as owning the stock owned, directly or indirectly, by or for his brothers and sisters (whether by the whole or half blood), spouse, ancestors and lineal descendants; and the stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be considered as being owned proportionately by or for its shareholders, partners or beneficiaries. Sec. 5.3 OPTION PRICE The purchase price of Stock under each Option will be determined by the Committee but may not be less than the Fair Market Value on the date of grant. Sec. 5.4 OPTION PERIOD Each Option granted hereunder must be granted within ten years from the effective date of the Plan. The period for the exercise of each Option shall be determined by the Committee, but in no instance shall such period exceed ten years from the date of grant of the Option. Sec. 5.5 OPTION EXERCISE (a) Options granted hereunder may not be exercised unless and until the Optionee shall have been or remained in the employ of the Company or its Subsidiaries for one year from and after the date such Option was granted, except as otherwise provided in Section 5.7 hereof. (b) Options may be exercised with respect to whole shares only, for such shares of Stock and within the period permitted for the exercise thereof as determined by the Committee, and shall be exercised by written notice of intent to exercise the Option with respect to a specified number of shares delivered to the Company at its principal office in the State of California, and payment in full to the Company at said office of the amount of the Option price for the number of shares of Stock with respect to which the Option is then being exercised. The purchase price may be paid by the assignment and delivery to the Company of shares of Stock or a combination of cash and shares of Stock equal in value to the exercise price. Any shares assigned and delivered to the Company in payment or partial payment of the purchase price will be valued at their Fair Market Value on the exercise date. 6 (c) The Fair Market Value of the Stock at the date of grant for which any employee may exercise Incentive Stock Options in any calendar year under the Plan (or any other stock option plan of the Company adopted after December 31, 1986) may not exceed $100,000. Sec. 5.6 NONTRANSFERABILITY OF OPTION No Option shall be transferred by an Optionee otherwise than by a will or the laws of descent and distribution. During the lifetime of an Optionee, the Option shall be exercisable only by him. Sec. 5.7 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT (a) If, prior to a date one year from the date on which an Option shall have been granted, the Optionee's employment with the Company or its Subsidiaries shall be terminated by the Company or Subsidiary with or without cause, or by the act of the Optionee, the Optionee's right to exercise such Option shall terminate and all rights thereunder shall cease; provided, however, that if the Optionee shall die, retire or become permanently and totally disabled, as determined in accordance with applicable Company personnel policies, or if the Optionee's employment with the Company or its Subsidiaries shall be terminated within two years after a Change of Control of the Company and such termination occurs prior to a date one year from the date on which an Option shall have been granted, such Option shall become exercisable in full on the date of such death, retirement, disability or termination of employment. (b) If, on or after one year from the date on which an Option shall have been granted, an Optionee's employment with the Company or its Subsidiaries shall be terminated for any reason other than death, retirement or permanent total disability, or within two years following a Change of Control of the Company, the Optionee shall have the right, during the period ending three months after such termination, to exercise such Option to the extent that it was exercisable at the date of such termination and shall not have been exercised, subject, however, to the provisions of Section 5.4 hereof. (c) Upon termination of an Optionee's employment with the Company or its Subsidiaries by reason of retirement or permanent total disability, as determined in accordance with applicable Company personnel policies, or within two years following a Change of Control of the Company, such Optionee shall have the right, during the period ending 7 three years after such termination, to exercise his Option in full, without regard to any installment exercise provisions, to the extent that it shall not have been exercised, subject, however, to the provisions of Section 5.4 hereof. (d) If an Optionee shall die (i) while in the employ of the Company or its Subsidiaries, or (ii) within three months after termination of employment where such termination did not occur either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, or (iii) within three years after termination of employment where such termination occurred either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, the executor or administrator of the estate of the decedent or the person or persons to whom an Option granted hereunder shall have been validly transferred by the executor or the administrator pursuant to a will or the laws of descent and distribution shall have the right, during the period ending three years after the date of the Optionee's death, to exercise the Optionee's Option (A) in full, without regard to any installment exercise provisions, to the extent that it shall not have been exercised, if the Optionee shall have died while in the employ of the Company or its Subsidiaries or within three years after termination of employment where such termination occurred either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, or (B), to the extent that it was exercisable at the date of the Optionee's death and shall not have been exercised, if the Optionee shall have died within three months after termination of employment where such termination did not occur by reason of either retirement or permanent total disability or within two years following a Change of Control of the Company, subject, however, to the provisions of Section 5.4 hereof. (e) No transfer of an Option by the Optionee by a will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions of such Option. 8 Sec. 5.8 RIGHTS AS STOCKHOLDER An Optionee or a transferee of an Option shall have no rights as a stockholder with respect to any shares subject to such Option prior to the purchase of such shares by exercise of such Option as provided herein. ARTICLE VI AWARDS Sec. 6.1 AWARD GRANT AND RESTRICTED STOCK AGREEMENT The Committee may grant Awards of Restricted Stock to Awardees. The Committee shall determine the restrictions upon the Restricted Stock, and when such restrictions shall lapse. Each Award granted hereunder must be granted within ten years from the effective date of the Plan and shall be evidenced by minutes of a meeting or the written consent of the Committee. The Awardee shall be entitled to receive the Stock subject to such Award only if the Company and the Awardee, within 30 days after the date of the Award, enter into a written Restricted Stock Agreement dated as of the date of the Award, which Agreement shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. Sec. 6.2 CONSIDERATION FOR ISSUANCE No shares of Restricted Stock shall be issued to an Awardee hereunder unless and until the Committee shall have determined that consideration has been received by the Company, in the form of labor performed for or services actually rendered to the Company by the Awardee, having a fair value of not less than the then fair market value of a like number of shares of Stock subject to all of the herein provided conditions and restrictions applicable to Restricted Stock, but in no event less than the par value of such shares. Sec. 6.3 RESTRICTIONS ON SALE OR OTHER TRANSFER Each share of Stock received pursuant to each Restricted Stock Agreement shall be subject to the following restrictions: (a) Stock certificates evidencing such shares shall be issued in the sole name of the Awardee and delivered to him, and each such certificate shall bear the following legend: "The shares of Fluor Corporation common stock evidenced by this certificate are subject to acquisition by Fluor Corporation, and such shares may not be sold or otherwise transferred except pursuant to the provisions 9 of the Restricted Stock Agreement by and between Fluor Corporation and the registered owner of such shares." (b) No such shares may be sold, transferred or otherwise alienated or hypothecated so long as the certificate evidencing such shares bears the legend provided for in paragraph (a) of this Section 6.3. (c) Unless the Committee in its discretion determines otherwise, upon an Awardee's termination of employment for any reason, all of the Awardee's Restricted Stock remaining subject to restriction shall be acquired by the Company effective as of the date of such termination of employment. Sec. 6.4 LAPSE OF RESTRICTIONS The restrictions imposed upon Restricted Stock under Section 6.3 above will lapse in accordance with such conditions as are determined by the Committee and set forth in the Restricted Stock Agreement. Sec. 6.5 RIGHTS AS STOCKHOLDER Subject to the provisions of Section 6.3 hereof, upon the issuance to the Awardee of Restricted Stock hereunder, the Awardee shall have all the rights of a stockholder with respect to such Stock, including the right to vote the shares and receive all dividends and other distributions paid or made with respect thereto. ARTICLE VII STOCK CERTIFICATES Sec. 7.1 STOCK CERTIFICATES The Company shall not be required to issue or deliver any certificate for shares of Stock purchased upon the exercise of any Option granted hereunder or any portion thereof, or received as Restricted Stock pursuant to a Restricted Stock Agreement executed hereunder, prior to fulfillment of all of the following conditions: (a) the admission of such shares to listing on all stock exchanges on which the Stock is then listed; (b) the completion of any registration or other qualification of such shares under any federal or state law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, which the Committee shall in its sole discretion deem necessary or advisable; 10 (c) the obtaining of any approval or other clearance from any federal or state governmental agency which the Committee shall in its sole discretion determine to be necessary or advisable; and (d) the lapse of such reasonable period of time following the exercise of the Option or the execution of the Restricted Stock Agreement as the Committee from time to time may establish for reasons of administrative convenience. ARTICLE VIII GRANT AND EXERCISE OF RIGHTS Sec. 8.1 RIGHTS GRANTS AND AGREEMENTS The Committee may approve the grant of Rights related or unrelated to Options, subject to the following terms and conditions: (a) A Stock Appreciation Right may be granted: (i) at any time if unrelated to an Option; (ii) only at the time of grant if related to an Option. (b) A Stock Appreciation Right grant in connection with an Option will entitle the holder of the related Option, upon exercise of the Stock Appreciation Right, to surrender such Option, or any portion thereof to the extent unexercised, with respect to the number of shares as to which such Stock Appreciation Right is exercised, and to receive payment of an amount computed pursuant to Sec. 8.1(d). Such Option will, to the extent surrendered, then cease to be exercisable. (c) Subject to Section 8.1(g), a Stock Appreciation Right granted in connection with an Option hereunder will be exercisable at such time or times, and only to the extent that a related Option is exercisable, and will not be transferable except to the extent that such related Option may be transferable. (d) Upon the exercise of a Stock Appreciation Right related to an Option, the holder will be entitled to receive payment of an amount determined by multiplying: (i) The difference obtained by subtracting the purchase price of a share of Stock specified in the related Option from the Fair Market Value of a share of Stock on the date of exercise of such Stock Appreciation Right, by 11 (ii) The number of shares as to which such Stock Appreciation Right has been exercised. (e) The Committee may grant Stock Appreciation Rights unrelated to Options. Section 8.1(d) shall be used to determine the amount payable at exercise under such Stock Appreciation Right except that, in lieu of the price specified in the related option, the initial share value specified in the award, which may not be less than the Fair Market Value on the date of the award, shall be used. (f) Payment of the amount determined under Section 8.1(d) or (e) may be made solely in cash. (g) The Committee may, at the time a Stock Appreciation Right is granted, impose such conditions on the exercise of the Stock Appreciation Right as may be required to satisfy the requirements of Rule 16b-3 under the Securities Exchange Act of 1934 (the "Exchange Act") (or any other comparable provisions in effect at the time or times in question). Without limiting the generality of the foregoing, the Committee may determine that a Stock Appreciation Right may be exercised only during the period beginning on the third business day and ending on the twelfth business day following the publication of the Company's quarterly and annual summarized financial data. (h) The date of the grant shall be the date of such Committee action. Each grant shall be evidenced by minutes of a meeting or the written consent of the Committee and by a written Stock Appreciation Rights Agreement dated as of the date of the grant and executed by the Grantee and the Company, which Agreement shall set forth such terms and conditions as may be determined by the Committee consistent with the Plan. Sec. 8.2 RIGHTS PERIOD The period for the exercise of each Right granted hereunder shall be determined by the Committee, but in no instance shall such period exceed ten years from the date of grant. Sec. 8.3 RIGHTS EXERCISE (a) Rights granted hereunder may not be exercised unless and until the Grantee shall have been or remained in the employ of the Company or its Subsidiaries for one year from and after the date of grant of such Rights, except as otherwise provided in Section 8.5 hereof. (b) Rights granted hereunder may be exercised with respect to whole Rights only, in such number as determined 12 by the Committee, and shall be exercised by written notice of intent to exercise with respect to a specified number of Rights delivered to the Company at its principal office in the State of California. Sec. 8.4 NONTRANSFERABILITY OF RIGHTS No Rights granted hereunder shall be transferred by a Grantee otherwise than by a will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security Act, or the rules thereunder. During the lifetime of a Grantee, such Rights shall be exercisable only by him. Sec. 8.5 EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYMENT (a) If, prior to a date one year from the date on which Rights shall have been granted, the Grantee's employment with the Company or its Subsidiaries shall be terminated by the Company or Subsidiary with or without cause, or by the act of the Grantee, the Grantee's right to exercise such Rights shall terminate and all rights thereunder shall cease; provided, however, that if the Grantee shall die, retire, or become permanently and totally disabled, as determined in accordance with applicable Company personnel policies, or if the Grantee's employment with the Company or its Subsidiaries shall be terminated within two years after a Change of Control of the Company and such termination occurs prior to a date one year from the date on which such Rights shall have been granted, such Rights shall become exercisable in full on the date of such death or disability. (b) If, on or after one year from the date on which Rights shall have been granted, a Grantee's employment with the Company or its Subsidiaries shall be terminated for any reason other than death, retirement or permanent total disability, or within two years following a Change of Control of the Company, the Grantee shall have the right, during the period ending three months after such termination, to exercise such Rights to the extent that they were exercisable at the date of such termination and shall not have been exercised, subject, however, to the provisions of Section 8.2 hereof. (c) Upon termination of a Grantee's employment with the Company or its Subsidiaries by reason of retirement or per- manent total disability, as determined in accordance with applicable Company personnel policies, or within two years following a Change of Control of the Company, such Grantee 13 shall have the right, during the period ending three years after such termination, to exercise his Rights in full, without regard to any installment exercise provisions, to the extent that they shall not have been exercised, subject, however, to the provisions of Section 8.2 hereof. (d) If a Grantee shall die (i) while in the employ of the Company or its Subsidiaries, or (ii) within three months after termination of employment where such termination did not occur either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, or (iii) within three years after termination of employment where such termination occurred either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, the executor or administrator of the estate of the decedent or the person or persons to whom Rights granted hereunder shall have been validly transferred by the executor or the administrator pursuant to a will or the laws of descent and distribution shall have the right, during the period ending three years after the date of the Grantee's death, to exercise the Grantee's Rights (A) in full, without regard to any installment exercise provisions, to the extent that they shall not have been exercised, if the Grantee shall have died while in the employ of the Company or its Subsidiaries or within three years after termination of employment where such termination occurred either by reason of retirement or permanent total disability or within two years following a Change of Control of the Company, or (B) to the extent that they were exercisable at the date of the Grantee's death and shall not have been exercised, if the Grantee shall have died within three months after termination of employment where such termination did not occur by reason of either retirement or permanent total disability or within two years following a Change of Control of the Company, subject, however, to the provisions of Section 8.2 hereof. (e) No transfer of Rights by a Grantee by a will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions of such Rights. Sec. 8.6 NO RIGHTS AS STOCKHOLDER Nothing herein contained shall be deemed to give any Grantee any rights as a stockholder of the Company. 14 ARTICLE IX STOCK PAYMENT Sec. 9.1 STOCK PAYMENT The Committee may approve payments of Stock to any employee of the Company for all or any portion of the compensation (other than base salary) that would otherwise become payable to such employee in cash. ARTICLE X TERMINATION, AMENDMENT AND MODIFICATION OF PLAN Sec. 10.1 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN The Board may at any time, upon recommendation of the Committee, terminate, and may at any time and from time to time and in any respect amend or modify, the Plan, provided, however, that no such action of the Board without approval of the stockholders of the Company may: (a) increase the total number of shares of Stock subject to the Plan except as contemplated in Section 11.1 hereof; (b) materially increase the benefits accruing to participants under the Plan; (c) withdraw the administration of the Plan from the Committee; or (d) permit any person while a member of the Committee to be eligible to receive an Option, Right or Restricted Stock under the Plan; and provided further, that no termination, amendment or modification of the Plan shall in any manner affect any Stock Option Agreement, Restricted Stock Agreement or Stock Appreciation Rights Agreement theretofore executed pursuant to the Plan without the consent of such Optionee, Awardee or Grantee. ARTICLE XI MISCELLANEOUS Sec. 11.1 ADJUSTMENT PROVISIONS (a) Subject to Section 11.1(b) below, if the outstanding shares of Stock of the Company are increased, decreased, or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to such shares of Stock or other 15 securities, through merger, consolidation, sale of all or substantially all of the property of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other distribution with respect to such shares of Stock or other securities, an appropriate and proportionate adjustment may be made in (i) the maximum number and kind of shares provided in Section 2.4, (ii) the number and kind of shares or other securities subject to the outstanding Options, Awards and Grants, and (iii) the price for each share or other unit of any other securities subject to outstanding Options or Grants without change in the aggregate purchase price or value as to which such Options or Grants remain exercisable. (b) Adjustments under Section 11.1(a) will be made by the Committee, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. No fractional interests will be issued under the Plan resulting from any such adjustments. Sec. 11.2 CONTINUATION OF EMPLOYMENT Nothing in the Plan or in any instrument executed pursuant to the Plan will confer upon any employee any right to continue in the employ of the Company or any Subsidiary or affect the right of the Company or any Subsidiary to terminate the employment of any employee at any time with or without cause. Sec. 11.3 COMPLIANCE WITH GOVERNMENT REGULATIONS No shares of Stock will be issued hereunder unless and until all applicable requirements imposed by federal and state securities and other laws, rules, and regulations and by any regulatory agencies having jurisdiction and by any stock exchanges upon which the Stock may be listed have been fully met. As a condition precedent to the issuance of shares of Stock pursuant hereto, the Company may require the employee to take any reasonable action to comply with such requirements. Sec. 11.4 PRIVILEGES OF STOCK OWNERSHIP No employee and no beneficiary or other person claiming under or through such employee will have any right, title, or interest in or to any shares of Stock allocated or reserved under the Plan or subject to any Option, Right or Award except as to such shares of Stock, if any, that have been issued to such employee. 16 Sec. 11.5 WITHHOLDING The Company may make such provisions as it deems appropriate to withhold any taxes the Company determines it is required to withhold in connection with any Option, Award or Right. The Company may require the employee to satisfy any relevant tax requirements before authorizing any issuance of Stock to the employee. Such settlement may be made in cash or Stock. Sec. 11.6 NONTRANSFERABILITY An Option, Award or Right may be exercised during the life of the employee solely by the employee or the employee's duly appointed guardian or personal representative. No Option, Award or Right and no other right under the Plan, contingent or otherwise, will be assignable or subject to any encumbrance, pledge, or charge of any nature. Sec. 11.7 OTHER COMPENSATION PLANS The adoption of the Plan shall not affect any other stock option or incentive or other compensation plans in effect for the Company or any Subsidiary, nor shall the Plan preclude the Company from establishing any other forms of incentive or other compensation for employees of the Company or any Subsidiary. Sec. 11.8 PLAN BINDING ON SUCCESSORS The Plan shall be binding upon the successors and assigns of the Company. Sec. 11.9 SINGULAR, PLURAL; GENDER Whenever used herein, nouns in the singular shall include the plural, and the masculine pronoun shall include the feminine gender. Sec. 11.10 HEADINGS, ETC., NO PART OF PLAN Headings of Articles and Sections hereof are inserted for convenience and reference; they constitute no part of the Plan. 17 EX-13 7 ANNUAL REPORT EXHIBIT 13 ========== SELECTED FINANCIAL DATA
In millions, except per share amounts 1993 1992 1991 1990 1989 1988 OPERATING RESULTS Revenues from continuing operations $ 7,850.2 $ 6,600.7 $ 6,572.0 $7,248.9 $6,127.2 $5,008.9 Earnings from continuing operations before taxes 242.2 215.4 228.4 153.6 135.6 62.0 Earnings from continuing operations, net 166.8 135.3 153.1 119.4 84.1 38.6 Earnings (loss) from discontinued operations, net -- (96.6) 11.0 35.2 28.6 21.6 Cumulative effect of change in accounting principle, net -- (32.9) -- -- -- -- Net earnings 166.8 5.8 164.1 154.6 112.7 60.2 Earnings per share Continuing operations 2.03 1.65 1.87 1.47 1.04 0.48 Discontinued operations -- (1.18) 0.14 0.43 0.36 0.27 Cumulative effect of change in accounting principle -- (0.40) -- -- -- -- Net earnings per share $ 2.03 $ 0.07 $ 2.01 $ 1.90 $ 1.40 $ 0.75 Return on average shareholders' equity 17.4% 0.6% 20.2% 23.3% 21.5% 14.2% Cash dividends per common share $ 0.48 $ 0.40 $ 0.32 $ 0.24 $ 0.14 $ 0.02 FINANCIAL POSITION Current assets $ 1,309.1 $ 1,138.6 $ 1,159.5 $1,222.8 $1,036.4 $1,001.0 Current liabilities 930.9 845.4 848.2 984.0 797.7 786.1 Working capital 378.2 293.2 311.3 238.8 238.7 214.9 Property, plant and equipment, net 1,100.9 1,046.9 1,092.7 925.3 775.3 729.8 Total assets 2,588.9 2,365.5 2,421.4 2,475.8 2,154.3 2,075.7 Capitalization Long-term debt 59.6 61.3 75.7 57.6 62.5 95.0 Shareholders' equity 1,044.1 880.8 900.6 741.3 589.9 467.1 Total capitalization $ 1,103.7 $ 942.1 $ 976.3 $ 798.9 $ 652.4 $ 562.1 Percent of total capitalization Long-term debt 5.4 6.5 7.8 7.2 9.6 16.9 Shareholders' equity 94.6 93.5 92.2 92.8 90.4 83.1 Shareholders' equity per common share $ 12.72 $ 10.81 $ 11.10 $ 9.22 $ 7.39 $ 5.91 Common shares outstanding at October 31 82.1 81.5 81.1 80.4 79.8 79.1 OTHER DATA New awards $ 8,000.9 $10,867.7 $ 8,531.6 $7,632.3 $7,135.3 $5,955.2 Backlog at year end 14,753.5 14,706.0 11,181.3 9,557.8 8,360.9 6,658.6 Capital expenditures 171.5 287.0 159.7 155.7 139.2 86.3 Cash provided by operating activities $ 192.0 $ 306.0 $ 219.0 $ 353.1 $ 265.1 $ 17.7 See Management's Discussion and Analysis on pages 23 to 25, Consolidated Statement of Earnings on page 28, Notes to Consolidated Financial Statements on pages 31 to 41 and Quarterly Financial Data on page 43 for information relating to significant items affecting the results of operations. The quarterly dividend was increased from $.02 per share to $.04 per share in the second quarter of 1989, to $.06 per share in the first quarter of 1990, to $.08 per share in the first quarter of 1991, to $.10 per share in the first quarter of 1992, to $.12 per share in the first quarter of 1993 and to $.13 per share in the first quarter of 1994. MANAGEMENT'S DISCUSSION AND ANALYSIS The following discussion and analysis is provided to increase understanding of, and should be read in conjunction with, the consolidated financial statements and accompanying notes. RESULTS OF OPERATIONS Earnings from continuing operations were $167 million in 1993 compared with $135 million in 1992 and $153 million in 1991. The related earnings per share were $2.03 in 1993 compared with $1.65 in 1992 and $1.87 in 1991. Earnings from continuing operations in 1993 and 1991 include net nonrecurring gains of approximately $6 million and $22 million, respectively, while there were no comparable items in 1992. Revenues increased 19 percent in 1993 following a slight increase in 1992. ENGINEERING AND CONSTRUCTION Due largely to weak economies and capital spending within certain United States, European and Middle Eastern markets, the Government, Process, Industrial and Power sectors experienced declines in awards during 1993 that were only partially offset by an increase in the Hydrocarbon sector. Total new awards decreased 26 percent to $8.0 billion in 1993, compared with $10.9 billion in 1992 and $8.5 billion in 1991. At the same time, there continue to be a number of megaproject opportunities, particularly outside the United States. These projects develop slowly and, therefore could create variability in the company's incoming order and backlog pattern. Accordingly, it is difficult to predict future award trends with any degree of certainty. Consistent with the company's long-term goal of broad geographic diversity, over 50 percent of 1993 new awards came from projects located outside the United States, compared with approximately 30 percent in 1992 and 35 percent in 1991. The following table sets forth new awards for each of the company's business sectors: $ in millions/Year ended October 31, 1993 1992 1991 Hydrocarbon $ 4,540 57 % $ 3,534 33 % $ 3,216 38 % Industrial 1,612 20 2,300 21 943 11 Government 123 2 2,278 21 535 6 Process 1,288 16 2,012 18 3,127 37 Power 438 5 744 7 711 8 Total new awards $ 8,001 100 % $10,868 100 % $ 8,532 100 % United States $ 3,686 46 % $ 7,348 68 % $ 5,586 65 % Outside United States 4,315 54 3,520 32 2,946 35 Total new awards $ 8,001 100 % $10,868 100 % $ 8,532 100 % Total backlog at October 31, 1993, 1992 and 1991 was $14.8 billion, $14.7 billion and $11.2 billion, respectively. The ratio of work outside the United States at October 31, 1993 increased to 39 percent of total backlog, compared with 28 percent at October 31, 1992. This increase is largely attributable to the company's selection by Shell Nederland Rafinaderij B.V. to execute the first phase on the renovation of one of Shell's European refineries and the award of a lump-sum project to a joint venture, in which the company is a 50 percent owner, to build a new oil refinery in Thailand for Rayong Refinery Company. These contracts added approximately $3.0 billion to the company's backlog for the year ended October 31, 1993. Together with a 1992 award from the Department of Energy to manage the environmental cleanup of its uranium production facilities in Fernald, Ohio, these three contracts represent approximately $4.4 billion, or 30 percent of total backlog at October 31, 1993. Engineering and Construction operating profits increased 16 percent to $221 million in 1993 compared with $191 million in 1992 and $166 million in 1991 primarily as the result of the increased volume of work performed. Overall margins in 1993 are approximately level with the prior year. Margins are affected by competitive market conditions and the mix of engineering and construction projects, making it difficult to predict a trend over time. COAL Revenues and operating profit from Coal operations in 1993 were $717 million and $71 million, respectively, compared with revenues of $697 million and operating profit of $80 million in 1992. Revenues and operating profit in 1991 were $758 million and $61 million. The increase in revenues in 1993 is due primarily to a 21 percent increase in sales volume of produced coal that more than offset the effects of decreases in the sales price per ton of produced coal and the sales volume of purchased coal. Gross margin improved in 1993 due primarily to overall increased sales volume and a continued emphasis on produced coal sales, which generated a 20 percent margin in 1993, rather than sales of purchased coal which had a 6 percent margin. Revenues and margin in 1993 also benefited from the initial production from new coal reserves acquired during the past two years. Operating profits declined in 1993 compared with 1992 due primarily to a $10 million nonrecurring charge in 1993 related to the settlement of a dispute with the pension and benefits funds of the United Mine Workers of America/Bituminous Coal Operators of America. During 1993, a major strike against many coal producers, other than Massey, caused higher coal prices in the latter part of the year. The long-term impact of the strike on coal prices is uncertain. The decrease in revenues in 1992 compared with 1991 was due primarily to lower sales volume of purchased coal that more than offset a 2 percent increase in produced coal revenues. Overall sales volume was down due to decreased demand resulting from mild weather together with continued recessionary market conditions. However, margins improved in 1992 compared with 1991 due to a greater emphasis on produced coal sales, which had a 23 percent margin in 1992, compared with purchased coal which had a 4 percent margin. The effect of emphasizing produced coal sales from existing and newly acquired mines resulted in an increase in overall gross margin percentage to 20 percent in 1992 from 17 percent in 1991, which accounted for slightly more than half of the increase in total operating profit in 1992. The remainder of the increase in operating profit is due primarily to a gain on the sale of a coal processing plant. OTHER Net interest income improved slightly in 1993 due largely to the repayment during 1993 and 1992 of approximately $46 million and $18 million, respectively, of long-term debt. The decrease in interest expense resulting from the debt repayment was, however, almost entirely offset by lower interest income as the result of lower interest rates and lower interest earning assets. The significant decline in 1992 compared with 1991 is primarily attributable to the elimination of the company's high-interest-earning bond portfolio in connection with the repurchase of its Sugar Land facility in 1991, lower 1992 levels of short-term interest-earning assets resulting from capital expenditures at Massey Coal, the prepayment of long-term notes in the third quarter of 1992 and lower interest rates. Although corporate overhead expense remained level in 1993 compared with 1992, corporate administrative and general expense increased in 1993 compared to 1992 primarily due to higher net periodic pension income in 1992. Corporate administrative and general expense decreased in 1992 compared with 1991 due to lower stock price driven compensation plan expenses, an increase in net periodic pension income and lower corporate overhead costs. Net earnings for the year ended October 31, 1993 benefited from the reversal of $12.6 million of income tax liabilities. This reversal was made in connection with the conclusion of a federal income tax audit in the second quarter of 1993 for the years 1984 through 1986. This reduction in liabilities did not affect the company's cash flows. After excluding the 1993 and 1991 reversals of income tax liabilities, there is no significant difference in 1993, 1992 or 1991 between the effective federal income tax rate on earnings from continuing operations and the statutory rate. The Revenue Reconciliation Act of 1993 did not have a material effect on the consolidated financial position or results of operations of the company. In November 1992, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits" (SFAS No. 112). The statement requires accrual of the estimated cost of benefits provided by the employer to former or inactive employees after employment but before retirement. Adoption of SFAS No. 112 by the company is not required until fiscal year 1995. Although the precise method and impact of implementation is not known at this time, management believes the effect, based on the company's current benefit programs, will not be material. The company's operations, including its discontinued Lead operations, are subject to and affected by federal, state and local laws and regulations regarding the protection of the environment. The company maintains reserves for potential future environmental costs where such obligations are either known or considered probable and can be reasonably estimated. St. Joe Minerals Corporation ("St. Joe"), a wholly owned subsidiary of the company, is participating as a potentially responsible party at several different sites pursuant to proceedings under the Comprehensive Environmental Response, Compensation and Liability Act ("Superfund"). Other parties have also been identified as potentially responsible parties at all but one of these sites, and many of these parties have shared in the costs associated with the sites. Investigative and/or remedial activities are ongoing at each site. The company believes, based upon present information available to it, that its reserves in respect to future environmental costs are adequate, and that such future costs will not have a material effect on the company's consolidated financial position, results of operations or liquidity. However, the imposition of more stringent requirements under environmental laws or regulations, new developments or changes regarding site cleanup costs or the allocation of such costs among potentially responsible parties, or a determination that the company is potentially responsible for the release of hazardous substances at sites other than those currently identified, could result in additional expenditures, or additional reserves in expectation of such expenditures. Effective November 1, 1992, the company adopted Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." The company elected immediate recognition of the transition obligation in 1992 which resulted in a one time net charge to earnings of $33 million, or $.40 per share. In July 1991, the company purchased certain partnership interests which owned the company's Sugar Land, Texas engineering office buildings and leasehold on the land for $64.3 million in cash and the assumption of $32.4 million of notes. The company had previously acquired approximately $93 million of related notes that were effectively extinguished as a result of the transaction. As a result of the partnership interest purchase, lease cost reserves and other items were no longer required and were reversed, thereby reducing the cost basis of the property by $51.7 million and increasing pretax earnings by $19.6 million, after a $5 million provision for certain foreign lease reserves. The company also sold its minority interest in Centre Reinsurance Holdings Ltd., a Bermuda-based insurer, resulting in a 1991 pretax gain of $16.4 million. DISCONTINUED OPERATIONS In November 1992, the company announced its decision to exit its Lead business. As of October 31, 1992 the Lead business was classified as a discontinued operation and adjusted to estimated net realizable value. The estimated after-tax loss on disposal in 1992 of $78.9 million includes an after-tax provision of $6 million for estimated losses through the date of disposition. Largely as the result of historically low lead prices, in addition to a temporary disruption due to flood conditions at its smelter in Missouri, the Lead business's after-tax loss for fiscal year 1993 was $30 million. The smelter was returned to full production and lead prices began to improve in late 1993. The company continues to believe that its reserves for loss on disposal are adequate at October 31, 1993 in relation to its consolidated financial statements taken as a whole. During 1993, the company made substantial progress toward the disposition of its Lead business. While the outcome of such disposition cannot be determined with certainty at this time, management's intent to dispose of the Lead business remains unaltered and management believes that a disposal will be accomplished during fiscal 1994. FINANCIAL POSITION AND LIQUIDITY Working capital at October 31, 1993 was $378 million compared with $293 million at October 31, 1992. Working capital increased 29 percent primarily due to significant increases in current receivables and contract work in process. Capital expenditures for 1993 were $172 million compared with $287 million in 1992 and $160 million in 1991. Capital expenditures at Massey Coal in 1993 and 1992 were $111 million and $214 million, respectively, which included approximately $13 million and $115 million, respectively, related to new coal reserve and facility acquisition costs, with the remainder attributable to ongoing operations. The long-term debt to capitalization ratio at October 31, 1993 was 5.4 percent compared with 6.5 percent and 7.8 percent at October 31, 1992 and 1991, respectively. The 1993 ratio decreased primarily due to the increase in shareholders' equity from earnings, net of dividends. At October 31, 1993, all long-term debt bears interest at fixed rates. The company has on hand and access to sufficient sources of funds to meet its anticipated operating, expansion and capital needs. Significant short and long-term lines of credit are maintained with banks which, along with cash on hand and marketable securities, provide adequate operating liquidity. Additional liquidity is provided by the company's commercial paper program under which there was $30 million outstanding at both October 31, 1993 and 1992. Quarterly cash dividends of $.08 per share declared in December 1990 were raised to $.10 per share in December 1991, to $.12 per share in December 1992 and to $.13 per share in December 1993. Although the company is affected by inflation and the cyclical nature of the industry, its Engineering and Construction operations are generally protected by the ability to recover cost increases through price escalation provisions in most contracts. Coal operations produce a commodity which is internationally traded at prices established by market factors outside the control of the company. However, commodity prices generally tend over the long term to reflect a correlation to inflationary trends and the company's substantial coal reserves provide a hedge against the adverse long-term effects of inflation. Although the company has taken actions to reduce its dependence on external economic conditions, management is unable to predict with certainty the amount and mix of future business. CONSOLIDATED BALANCE SHEET $ in thousands/At October 31, 1993 1992 ASSETS CURRENT ASSETS Cash and cash equivalents $ 214,844 $ 195,346 Marketable securities 97,335 147,584 Accounts and notes receivable 392,577 312,354 Contract work in progress 306,251 219,108 Inventories 32,834 31,188 Net assets of discontinued operations 172,822 138,638 Deferred taxes 76,364 70,204 Other current assets 15,997 24,133 Total current assets 1,309,024 1,138,555 PROPERTY, PLANT AND EQUIPMENT Land 58,867 61,581 Buildings and improvements 304,566 294,944 Machinery and equipment 643,818 569,349 Mining properties and mineral rights 499,459 449,966 Construction in progress 35,875 40,091 1,542,585 1,415,931 Less accumulated depreciation, depletion and amortization 441,676 369,046 Net property, plant and equipment 1,100,909 1,046,885 OTHER ASSETS Investments and goodwill, net of accumulated amortization of $44,490 and $36,388, respectively 52,383 56,761 Other 126,568 123,295 Total other assets 178,951 180,056 $2,588,884 $2,365,496 1993 1992 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 289,721 $ 199,001 Note payable to affilate 30,000 -- Commercial paper 30,053 29,957 Advance billings on contracts 194,695 174,409 Accrued salaries, wages and benefit plan liabilities 194,270 191,895 Other accrued liabilities 190,447 204,449 Current portion of long-term debt 1,687 45,693 Total current liabilities 930,873 845,404 LONG-TERM DEBT DUE AFTER ONE YEAR 59,637 61,262 NONCURRENT LIABILITIES Deferred taxes 51,642 63,109 Other 502,610 514,919 Total noncurrent liabilities 554,252 578,028 CONTINGENCIES AND COMMITMENTS SHAREHOLDERS' EQUITY Capital stock Preferred - authorized 20,000,000 shares without par value, none issued Common - authorized 150,000,000 shares of $.625 par value; issued and outstanding in 1993 - 82,093,207 shares and in 1992 - 81,480,008 shares 51,308 50,925 Additional capital 478,204 436,063 Retained earnings (since October 31, 1987) 534,678 407,218 Unamortized executive stock plan expense (16,828) (14,610) Cumulative translation adjustment (3,240) 1,206 Total shareholders' equity 1,044,122 880,802 $2,588,884 $2,365,496 See Notes to Consolidated Financial Statements. CONSOLIDATED STATEMENT OF EARNINGS In thousands, except per share amounts Year ended October 31, 1993 1992 1991 REVENUES Engineering and construction services $7,133,578 $5,903,975 $5,813,477 Coal 716,591 696,721 758,481 Total revenues 7,850,169 6,600,696 6,571,958 COST OF REVENUES Engineering and construction services 6,918,464 5,729,148 5,655,793 Coal 645,911 616,671 697,985 Total cost of revenues 7,564,375 6,345,819 6,353,778 OTHER (INCOME) AND EXPENSE Corporate administrative and general expense 43,682 39,270 57,032 Reduction in accrued lease cost, net -- -- (19,649) Gain on sale of investment -- -- (16,426) Interest expense 19,982 23,580 16,466 Interest income (20,070) (23,323) (47,644) Total cost and expenses 7,607,969 6,385,346 6,343,557 EARNINGS FROM CONTINUING OPERATIONS BEFORE TAXES 242,200 215,350 228,401 INCOME TAX EXPENSE 75,400 80,100 75,312 EARNINGS FROM CONTINUING OPERATIONS 166,800 135,250 153,089 EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS, NET -- (96,566) 11,059 EARNINGS BEFORE CHANGE IN ACCOUNTING PRINCIPLE 166,800 38,684 164,148 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET -- (32,866) -- NET EARNINGS $ 166,800 $ 5,818 $ 164,148 EARNINGS PER SHARE Continuing operations $ 2.03 $ 1.65 $ 1.87 Discontinued operations -- (1.18) 0.14 Cumulative effect of change in accounting principle -- (0.40) -- NET EARNINGS PER SHARE $ 2.03 $ 0.07 $ 2.01 SHARES USED TO CALCULATE EARNINGS PER SHARE 82,282 81,558 81,807 See Notes to Consolidated Financial Statements. CONSOLIDATED STATEMENT OF CASH FLOWS In thousands Year ended October 31, 1993 1992 1991 CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 166,800 $ 5,818 $ 164,148 Adjustments to reconcile net earnings to cash provided by operating activities: Depreciation, depletion and amortization 111,793 135,259 121,482 Discontinued operations (34,184) 127,275 -- Change in accounting principle -- 53,008 -- Deferred taxes (6,082) (55,674) (18,248) Changes in operating assets and liabilities (61,497) 37,021 (24,964) Other, net 15,136 3,336 (23,468) Cash provided by operating activities 191,966 306,043 218,950 CASH FLOW FROM INVESTING ACTIVITIES Capital expenditures (171,537) (287,046) (159,718) Sale (purchase) of marketable securities, net 50,249 38,458 (105,756) Purchase of Sugar Land real estate partnership interests -- -- (64,311) Proceeds from sale of (additions to) investments (20,081) -- 31,426 Proceeds from sale of property, plant and equipment 9,841 11,493 14,699 Other, net 13,904 (1,169) 10,869 Cash utilized by investing activities (117,624) (238,264) (272,791) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of short-term debt to affiliate 30,000 -- -- Payments on long-term debt (45,689) (17,969) (483) Issuance of commercial paper, net 96 29 29,928 Cash dividends paid (39,340) (32,486) (25,825) Common stock issuance, net 8,709 2,540 10,758 Other, net (8,620) (8,569) (6,404) Cash provided (utilized) by financing activities (54,844) (56,455) 7,974 Increase (decrease) in cash and cash equivalents 19,498 11,324 (45,867) Cash and cash equivalents at beginning of year 195,346 184,022 229,889 Cash and cash equivalents at end of year $ 214,844 $ 195,346 $ 184,022 See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
In thousands, Unamortized except per share amounts Executive Cumulative Year ended October 31, Common Stock Additional Retained Stock Plan Translation 1991, 1992 and 1993 Shares Amount Capital Earnings Expense Adjustment Total BALANCE AT OCTOBER 31, 1990 80,390 $50,244 $ 398,844 $ 295,563 $ (6,805) $ 3,410 $ 741,256 Net earnings 164,148 164,148 Cash dividends ($.32 per share) (25,825) (25,825) Exercise of stock options, net 631 394 10,364 10,758 Stock option tax benefit 8,463 8,463 Amortization of executive stock plan expense 839 839 Issuance of restricted stock, net 91 57 4,646 (4,831) (128) Tax benefit of net operating loss 2,299 2,299 Translation adjustment net of deferred taxes of $600) (1,165) (1,165) BALANCE AT OCTOBER 31, 1991 81,112 50,695 424,616 433,886 (10,797) 2,245 900,645 Net earnings 5,818 5,818 Cash dividends ($.40 per share) (32,486) (32,486) Exercise of stock options, net 346 217 5,996 6,213 Stock option tax benefit 4,024 4,024 Amortization of executive stock plan expense 1,425 1,425 Issuance of restricted stock, net 33 20 5,093 (5,238) (125) Common stock repurchase (11) (7) (3,666) (3,673) Translation adjustment (net of deferred taxes of $535) (1,039) (1,039) BALANCE AT OCTOBER 31, 1992 81,480 50,925 436,063 407,218 (14,610) 1,206 880,802 Net earnings 166,800 166,800 Cash dividends ($.48 per share) (39,340) (39,340) Exercise of stock options, net 520 326 8,383 8,709 Stock option tax benefit 5,839 5,839 Amortization of executive stock plan expense 1,889 1,889 Issuance of restricted stock, net 93 57 3,858 (4,107) (192) Tax benefit from reduction of valuation allowance for deferred tax assets 24,061 24,061 Translation adjustment (net of deferred taxes of $2,694) (4,446) (4,446) BALANCE AT OCTOBER 31, 1993 82,093 $51,308 $ 478,204 $ 534,678 $ (16,828) $ (3,240) $1,044,122 See Notes to Consolidated Financial Statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MAJOR ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The financial statements include the accounts of the company and its subsidiaries. The equity method of accounting is used for investment ownership ranging from 20 percent to 50 percent. Investment ownership of less than 20 percent is accounted for on the cost method. All significant intercompany transactions of consolidated subsidiaries are eliminated. Certain 1992 and 1991 amounts have been reclassified to conform with the 1993 presentation. In November 1992 the company announced its decision to exit its Lead business and, accordingly, the assets and liabilities of the Lead business as of October 31, 1993 and 1992 are shown as net assets of discontinued operations. Discontinued operations for fiscal years 1992 and 1991 include the results of operations for the Lead business. ENGINEERING AND CONSTRUCTION CONTRACTS The company recognizes engineering and construction contract revenues using the percentage-of-completion method, primarily based on contract costs incurred to date compared with total estimated contract costs. Customer furnished materials, labor and equipment and in certain cases subcontractor materials, labor and equipment are included in revenue and cost of revenue when management believes that the company is responsible for the ultimate acceptability of the project. Contracts are generally segmented between types of services, such as engineering and construction, and, accordingly, gross margin related to each activity is recognized as those separate services are rendered. Changes to total estimated contract costs or losses, if any, are recognized in the period they are determined. Revenues recognized in excess of amounts billed are classified as current assets under contract work in progress. Amounts received from clients in excess of revenues recognized to date are classified as current liabilities under advance billings on contracts. The company anticipates that substantially all of incurred costs associated with contract work in progress at October 31, 1993 will be billed and collected in 1994. DEPRECIATION, DEPLETION AND AMORTIZATION Additions to property, plant and equipment are recorded at cost. Assets other than mining properties and mineral rights are depreciated principally using the straight-line method over their estimated useful lives. Mining properties and mineral rights are depleted on the units-of-production method. Leasehold improvements are amortized over the lives of the respective leases. Goodwill is amortized on the straight-line method over periods not longer than 40 years. EXPLORATION AND DEVELOPMENT Coal exploration costs are expensed as incurred. Development and acquisition costs of coal properties, when expected to be significant, are capitalized in mining properties and depleted over the expected economic life of the mine on the units-of-production method. The company accrues for post-mining reclamation costs as coal is mined. Reclamation of disturbed acreage is performed as a normal part of the mining process; such costs are expensed as incurred. INCOME TAXES In 1992, the company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS No. 109) retroactive to the year ended October 31, 1987. SFAS No. 109 requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the company's financial statements or tax returns. EARNINGS PER SHARE Earnings per share is based on the weighted average number of common and, when appropriate, common equivalent shares outstanding in each period. Common equivalent shares, primarily stock options, are included when the effect of exercise would be dilutive. INVENTORIES Coal inventories are stated at the lower of cost, using the last-in, first-out (LIFO) method, or net realizable value. Supplies and other are valued on the average cost method. Inventories comprise: $ in thousands/At October 31, 1993 1992 Coal $ 15,375 $ 10,485 Supplies and other 17,459 20,703 $ 32,834 $ 31,188 FOREIGN CURRENCY The company enters into forward exchange contracts to hedge foreign currency transactions, and not to engage in currency speculation. The company's forward exchange contracts do not subject the company to risk from exchange rate movements because gains and losses on such contracts offset losses and gains, respectively, on the assets, liabilities or transactions being hedged. At October 31, 1993, the company had $75.6 million of foreign exchange contracts outstanding relating to foreign currency denominated long-term debt and interest, lease commitments and contract obligations. If the counterparties to the exchange contracts (AA rated international banks) do not fulfill their obligations to deliver the contracted for foreign currencies, the company could be at risk for fluctuations, if any, required to settle the obligations. The forward exchange contracts generally require the company to exchange U.S. dollars for foreign currencies at maturity, at rates agreed to at inception of the contracts. CONCENTRATIONS OF CREDIT RISK The company provides a variety of financing arrangements for its Engineering and Construction clients. The majority of accounts receivable and all contract work in process are from Engineering and Construction clients in various industries and locations throughout the world. Most contracts require payments as the projects progress or in certain cases advance payments. Accounts and notes receivable at October 31, 1993 include $47.5 million in notes receivable related to engineering and construction contracts. The company generally does not require collateral but, in most cases can place liens against the property, plant or equipment constructed if a default occurs. Accounts receivable from customers of the company's Coal operations are primarily concentrated in the steel and utility industries. The company maintains adequate reserves for potential credit losses and such losses, which have been minimal, have been within management's estimates. CONSOLIDATED STATEMENT OF CASH FLOWS The company invests in short-term, highly liquid investment grade securities which are usually sold before their maturity. Securities with maturities of ninety days or less at the date of purchase are classified as cash equivalents. Securities with maturities beyond ninety days are classified as marketable securities and are carried at cost which approximates market. Due to the high dollar volume and turnover of these securities, the related cash flows are reported on a net basis. The change in operating assets and liabilities as shown in the Consolidated Statement of Cash Flows comprises: $ in thousands Year ended October 31, 1993 1992 1991 Decrease (increase) in: Accounts and notes receivable $ (80,223) $ 50,758 $ 107,880 Contract work in progress (87,143) 37,456 72,264 Inventories (1,646) (9,222) 9,270 Other current assets 8,136 (1,241) (31,203) Increase (decrease) in: Accounts payable 90,720 (58,310) (118,595) Advance billings on contracts 20,286 18,783 (115,518) Accrued liabilities (11,627) 31,533 50,938 Other noncurrent liabilities -- (32,736) -- Changes in operating assets and liabilities $ (61,497) $ 37,021 $ (24,964) Cash paid during the year for: Interest expense $ 20,152 $ 18,650 $ 9,988 Income tax payments, net $ 89,469 $ 53,713 $ 93,677 ACQUISITIONS AND DISPOSITIONS From time to time the company enters into joint venture arrangements with other engineering and construction firms. During 1993, the company formed an exclusive association with ICA Industrial of Mexico, and acquired a 49 percent interest in that entity, now known as ICA Fluor Daniel. In 1992, the company entered into a joint venture agreement with the Jaakko Poyry Group of Finland. Together, the company invested approximately $20 million in these ventures. In November 1992, the company announced its decision to exit its Lead business. As of October 31, 1992 the Lead business was classified as a discontinued operation and adjusted to estimated net realizable value, including estimated operating losses through the date of disposal. During 1993, the company made substantial progress toward the disposition of its Lead business. While the outcome of such disposition cannot be determined with certainty at this time, the company's intent to dispose of the Lead business remains unaltered and management believes that a disposal will be accomplished during fiscal 1994. The company continues to believe that its reserves for loss on disposal are adequate at October 31, 1993 in relation to its consolidated financial statements taken as a whole. Net assets of discontinued operations in the accompanying Consolidated Balance Sheet is composed of $64 million and $63 million of net current assets and $109 million and $76 million of net noncurrent assets as of October 31, 1993 and 1992, respectively. These amounts consist primarily of accounts receivable, inventories, plant and equipment, accounts payable and accrued liabilities. Revenues applicable to discontinued operations were $121 million, $143 million and $170 million in 1993, 1992 and 1991, respectively. The 1992 estimated loss on disposal shown below included an after-tax provision of approximately $6 million for estimated operating losses through the date of disposition. Largely as a result of historically low lead prices, in addition to a temporary disruption due to flood conditions at its smelter in Missouri, the Lead business's after tax loss for fiscal year 1993 was $30 million. The smelter was returned to full production and lead prices began to improve in late 1993. Discontinued operations, net in the accompanying Consolidated Statement of Earnings is composed of the following: $ in thousands Year ended October 31, 1992 1991 Loss from operations, net of income tax expense (benefit) of $(10,795) in 1992 and $28 in 1991 $ (17,656) $ (617) Gain (loss) from disposal, net of income tax expense (benefit) of $(48,635) in 1992 and $(5,198) in 1991 (78,910) 11,676 $ (96,566) $ 11,059 In September 1991, the company sold its minority interest in Centre Reinsurance Holdings, Ltd., a Bermuda-based insurer, resulting in a pretax gain of $16.4 million. In July 1991, the company purchased certain partnership interests which owned the company's Sugar Land, Texas, engineering office, including the leasehold on the land as well as the buildings, for $64.3 million in cash and the assumption of $32.4 million of notes. The company had previously acquired approximately $93 million of notes related to the property that have been effectively extinguished. As a result of the purchase certain lease cost reserves and other items, which were no longer required, were reversed thereby reducing the cost basis of the property by $51.7 million and increasing pretax earnings by $19.6 million net of a $5 million provision for foreign lease reserves. INCOME TAXES The income tax expense (benefit) included in the Consolidated Statement of Earnings is as follows: $ in thousands Year ended October 31, 1993 1992 1991 Current: Federal (includes a charge in lieu of taxes of $2,299 for 1991) $ 58,489 $ 23,716 $ 60,482 Foreign 23,490 20,476 20,984 State and local 12,124 12,280 13,024 Total current 94,103 56,472 94,490 Tax liability reversal (12,621) -- (6,100) Deferred: Federal (1,634) (54,818) (13,126) Foreign (3,939) 6,773 (198) State and local (509) (7,629) (4,924) Total deferred (6,082) (55,674) (18,248) Total income tax expense $ 75,400 $ 798 $ 70,142 The income tax expense (benefit) applicable to continuing operations, discontinued operations and the cumulative effect of change in accounting principle is as follows: $ in thousands Year ended October 31, 1993 1992 1991 Provision for continuing operations: Current $ 110,917 $ 64,920 $ 100,370 Tax liability reversal (12,621) -- (6,100) Deferred (22,896) 15,180 (18,958) Total provision for continuing operations 75,400 80,100 75,312 Provision for discontinued operations: Current (16,814) (8,448) (5,880) Deferred 16,814 (50,712) 710 Total provision for discontinued operations -- (59,160) (5,170) Provision for cumulative effect of change in accounting principle: Deferred -- (20,142) -- Total income tax expense $ 75,400 $ 798 $ 70,142 A reconciliation of statutory federal income tax to the income tax expense on the earnings from continuing operations is as follows: $ in thousands Year ended October 31, 1993 1992 1991 Statutory federal income tax expense $ 84,358 $ 73,219 $ 77,656 Increases (reductions) in taxes resulting from: Effect of foreign tax rates 6,173 5,959 7,080 State and local income taxes 5,205 8,487 6,709 Items without tax effect, net 2,137 3,741 (1,324) Depletion (5,256) (7,488) (8,040) Tax liability reversal (12,621) -- (6,100) Other, net (4,596) (3,818) (669) Total income tax expense - continuing operations $ 75,400 $ 80,100 $ 75,312 Deferred taxes reflect the tax effects of differences between the amounts recorded as assets and liabilities for financial reporting purposes and the amounts recorded for income tax purposes. The tax effects of significant temporary differences giving rise to deferred tax assets and liabilities are as follows: $ in thousands/At October 31, 1993 1992 Deferred tax assets: Accrued liabilities not currently deductible $ 169,248 $ 134,402 Expected tax benefits on disposition of Lead business 25,771 42,585 Building tax basis in excess of book basis 25,980 27,160 Other 57,916 50,298 Total deferred tax assets 278,915 254,445 Valuation allowance for deferred tax assets (55,452) (79,513) Net deferred tax assets 223,463 174,932 Deferred tax liabilities: Coal mining property book basis in excess of tax basis (98,516) (98,369) Tax on unremitted foreign earnings (36,324) (27,155) Other (63,901) (42,313) Total deferred tax liabilities (198,741) (167,837) Net deferred tax assets $ 24,722 $ 7,095 The company established a valuation allowance to reduce certain deferred tax assets to amounts that are more likely than not to be realized. Substantially all of this allowance relates to deferred tax assets existing at the date of the company's 1987 quasi reorganization. Future reductions in the valuation allowance relating to these 1987 deferred tax assets will be credited to additional capital. In 1993, reductions in the valuation allowance resulted in an increase to additional capital of $24.1 million. Residual income taxes of approximately $16 million have not been provided on approximately $42 million of undistributed earnings of certain foreign subsidiaries at October 31, 1993 because the company intends to keep those earnings reinvested indefinitely. United States and foreign earnings from continuing operations before taxes are as follows: $ in thousands Year ended October 31, 1993 1992 1991 United States $ 162,201 $ 139,241 $ 163,643 Foreign 79,999 76,109 64,758 Total $ 242,200 $ 215,350 $ 228,401 Net earnings for 1993 include $12.6 million related to the favorable conclusion in the second quarter of a federal income tax audit for the years 1984 through 1986. As a result of the conclusion of that audit, $12.6 million in income tax liabilities were no longer deemed necessary and were reversed. During 1991 the company received cash proceeds of $20 million resulting from a settlement with the Internal Revenue Service relating to St. Joe Minerals for the tax years 1975 through 1981. The tax refund and interest components of this amount were $7.7 million and $12.3 million, respectively. The tax refund and $4 million of interest, net of tax, were reported as discontinued operations. The $5.8 million pretax balance of interest income was reported in continuing operations. As a result of the settlement with the IRS and the resolution of other issues, certain income tax liabilities, no longer deemed necessary, were reversed. This reduced the company's income tax expense by $6.1 million in 1991. The Internal Revenue Service is currently examining the company's returns for fiscal years 1987 through 1989. Management does not expect the resolution of any tax issues raised by the IRS for these years or subsequent periods to have a material adverse effect on the company's consolidated financial position or results of operations. RETIREMENT BENEFITS The company sponsors contributory and noncontributory defined contribution retirement and defined benefit pension plans for eligible employees. Contributions to defined contribution retirement plans are based on a percentage of the employee's compensation. Expense recognized for these plans is primarily related to domestic engineering and construction operations and totaled $67 million in 1993, $65 million in 1992, and $60 million in 1991. Contributions to defined benefit pension plans are generally at the minimum annual amount required by applicable regulations. Payments to retired employees under these plans are generally based upon length of service and/or a percentage of qualifying compensation. The plans are primarily related to international engineering and construction operations, U.S. craft employees and domestic coal operations. Net periodic pension income for continuing operations defined benefit pension plans includes the following components: $ in thousands Year ended October 31, 1993 1992 1991 Service costs incurred during the period $ 11,528 $ 12,439 $ 10,550 Interest cost on projected benefit obligation 18,494 17,556 16,317 Income and gains on assets invested (74,228) (24,282) (61,491) Net amortization and deferral 39,295 (12,477) 31,650 Net periodic pension income $ (4,911) $ (6,764) $ (2,974) The following assumptions were used in the determination of net periodic cost: Year ended October 31, 1993 1992 1991 Discount rates 8.5-9.5% 8.5-9.5% 9.0-10.5% Rates of increase in compensation levels 5.0-6.0% 5.0-6.0% 5.0-8.0% Expected long-term rates of return on assets 7.5-10.0% 7.5-10.0% 9.0-10.5% In recognition of the current interest and inflation rate environment, as of October 31, 1993 the company adjusted the discount rates used in the determination of its benefit obligations to 7.0-8.0 percent, the expected long-term rates of return to 7.5-9.0 percent and the rates of salary increases to 3.5-5.0 percent. The following table sets forth the funded status of the defined benefit plans: $ in thousands/At October 31, 1993 1992 Actuarial present value of benefit obligations: Vested benefit obligation $ 211,182 $ 158,058 Nonvested benefit obligation 10,774 12,541 Accumulated benefit obligation $ 221,956 $ 170,599 Plan assets at fair values (primarily listed stocks and bonds) $ 373,421 $ 345,076 Projected benefit obligation (256,709) (211,834) Plan assets in excess of projected benefit obligation 116,712 133,242 Unrecognized net gain (14,048) (30,876) Unrecognized net asset at implementation (20,723) (25,084) Pension asset recognized in the Consolidated Balance Sheet $ 81,941 $ 77,282 Amounts shown above at October 31, 1993 and 1992 exclude the projected benefit obligation of $166 million and $128 million, respectively, and associated plan assets relating to present and former employees of discontinued operations of $156 million and $122 million, respectively. Massey Coal Company (Massey) participates in multiemployer defined benefit pension plans for its union employees. Pension expense related to these plans approximated $.4 million, $.6 million and $.5 million in the years ended October 31, 1993, 1992 and 1991, respectively. Under the Coal Industry Retiree Health Benefits Act of 1992, Massey is required to fund medical and death benefits of certain beneficiaries. Massey's obligation under the Act is estimated to aggregate $64 million at October 31, 1993 which will be recognized as expense as payments are assessed. For the year ended October 31, 1993 the expense recorded for such benefits approximated $3.8 million. In addition to the company's defined benefit pension plans, the company and certain of its subsidiaries provide health care and life insurance benefits for certain retired employees. The health care and life insurance plans are generally contributory, with retiree contributions adjusted annually. Service costs are accrued currently. Cash basis accounting was used prior to the November 1, 1991 adoption of Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" (SFAS No. 106). The accumulated postretirement benefit obligation at October 31, 1993 was determined in accordance with the current terms of the company's health care plans, together with relevant actuarial assumptions and health care cost trend rates projected at annual rates ranging from 12 percent in 1993 down to 5 percent in 2002 and beyond. The effect of a one percent annual increase in these assumed cost trend rates would increase the accumulated postretirement benefit obligation and the aggregate of the annual service and interest costs by approximately 11 percent. At October 31, 1992 the health care cost trend rates were projected at annual rates ranging from 9.5 to 12 percent in 1992 down to 6 to 9.5 percent in 2002 and beyond. The discount rates used in determining the accumulated postretirement benefit obligation were 7 percent and 9 percent at October 31, 1993 and October 31, 1992, respectively. The following table sets forth the plans' funded status and accumulated postretirement benefit obligation for continuing operations which has been fully accrued in the company's Consolidated Balance Sheet: $ in thousands/At October 31, 1993 1992 Accumulated postretirement benefit obligation: Retirees $ 49,546 $ 46,875 Fully eligible active participants 2,550 1,730 Other active plan participants 9,150 6,866 Unrecognized loss (4,536) -- Accrued postretirement benefit obligation $ 56,710 $ 55,471 Net periodic postretirement benefit cost for continuing operations includes the following components: $ in thousands/Year ended October 31, 1993 1992 Service cost incurred during the period $ 1,017 $ 1,056 Interest cost on accumulated postretirement benefit obligation 4,633 4,821 Net periodic postretirement benefit cost $ 5,650 $ 5,877 Prior to 1992 the company accounted for health care and life insurance benefits on the cash basis. The cost of such benefits for continuing operations approximated $6 million in 1991. In November 1992, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits" (SFAS No. 112). The statement requires accrual of the estimated cost of benefits provided by the employer to former or inactive employees after employment but before retirement. Adoption of SFAS No. 112 is not required by the company until fiscal year 1995. Although the precise method and impact of implementation is not known at this time, management believes the effect based on the company's current benefit programs, will not be material. FAIR VALUE OF FINANCIAL INSTRUMENTS The company adopted Statement of Financial Accounting Standards No. 107, "Disclosures About Fair Value of Financial Instruments" (SFAS No. 107) as of October 31, 1993. SFAS No. 107 requires that companies disclose the fair value of financial instruments for which it is practicable to estimate such value. The estimated fair values of the company's financial instruments are as follows: Carrying Fair $ in thousands/At October 31, 1993 Amount Value Assets: Cash and cash equivalents $ 214,844 $ 214,844 Marketable securities 97,335 102,366 Notes receivable including noncurrent portion 65,417 65,995 Long-term investments 21,615 21,907 Liabilities: Commercial paper and notes payable 60,053 60,053 Long-term debt including current portion 61,324 69,211 Other noncurrent financial liabilities 46,099 46,099 Off-balance sheet financial instruments: Foreign currency contract obligations -- 2,381 Letters of credit -- 1,332 Methods and assumptions used to value financial instruments: The carrying amounts of cash and cash equivalents, short-term notes receivable, commercial paper and notes payable approximates fair value because of the short-term maturity of these instruments. The fair value of marketable securities and long-term investments are based on quoted market prices for these or similar instruments. The fair value of long-term notes receivable are estimated by discounting future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings. The fair value of long-term debt, including current portion, is estimated based on quoted market prices for the same or similar issues or on the current rates offered to the company for debt of the same maturities. Other noncurrent liabilities consist primarily of deferred compensation, for which cost approximates fair value. The fair value of foreign currency contract obligations is estimated by obtaining quotes from brokers. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate or settle the obligations. LONG-TERM DEBT Long-term debt comprises: $ in thousands/At October 31, 1993 1992 Deutsche mark financing, with a currency exchange agreement fixing the repayments in U.S. dollars at an effective interest rate of 9.5%, due in 1996 $ 23,644 $ 23,644 13.50% first mortgage note, due in 2000, prepayable at par in 1995 35,000 35,000 Swiss franc financing, with a currency exchange agreement fixing the repayments in U.S. dollars at an effective interest rate of 9.3%, paid in 1993 -- 15,039 12.875% collateral trust notes, due in 2000, prepaid in December, 1992 -- 16,050 Notes at an effective interest rate of 9.7%, paid in 1993 -- 12,838 Other notes and mortgages 2,680 4,384 61,324 106,955 Less: Current portion 1,687 45,693 Long-term debt due after one year $ 59,637 $ 61,262 Long-term debt maturities are as follows: 1995, $.5 million; 1996, $24.1 million; 1997, no maturities; 1998, no maturities; and $35 million thereafter. All long-term debt (including current portion) outstanding at October 31, 1993, bears interest at fixed rates. The company assumed the 13.50 percent $35 million first mortgage note in 1992 when it acquired an engineering building located in Greenville, South Carolina. The company has unsecured committed revolving long-term lines of credit with banks from which it may borrow for general corporate purposes up to a maximum of $250 million. Commitment and facility fees are paid on these lines. In addition, the company has $642 million in short-term uncommitted lines of credit. Borrowings under lines of credit and revolving credit agreements bear interest at prime or rates based on the London Interbank Offered Rate (LIBOR), domestic certificates of deposit or other rates which are mutually acceptable to the banks and the company. At October 31, 1993, no amounts were outstanding under the committed lines of credit. As of that date, $126 million of the short-term uncommitted lines of credit were used to support undrawn letters of credit issued in the ordinary course of business. The company has unsecured commercial paper outstanding in the amount of $30 million at both October 31, 1993 and 1992. The commercial paper was issued at a discount with an effective interest rate of 3.2 percent and 3.3 percent in 1993 and 1992, respectively. Maturities range from 18 to 90 days in 1993 and 26 to 37 days in 1992. The weighted average maturities at October 31, 1993 and 1992 were 16 days and 18 days, respectively. The maximum and average balances outstanding for the years ended October 31, 1993 and 1992 were $92 million and $44.9 million, respectively, and $84.5 million and $38.4 million, respectively, with weighted average interest rates of 3.2 percent and 4.1 percent, respectively. OTHER NONCURRENT LIABILITIES The company maintains appropriate levels of insurance for business risks. Insurance coverages contain various deductible amounts for which the company provides accruals based on the aggregate of the liability for reported claims and an actuarially determined estimated liability for claims incurred but not reported. Other noncurrent liabilities include $118.1 million and $116.5 million at October 31, 1993 and 1992, respectively, relating to these liabilities. STOCK PLANS The company's executive stock plans, approved by the shareholders, provide for grants of nonqualified or incentive stock options, restricted stock awards and stock appreciation rights (SARs). All plans are administered by the Organization and Compensation Committee of the Board of Directors ("Committee") comprised of outside directors, none of whom are eligible to participate in the plans. Stock options may be granted with or without SARs. Grant prices are determined by the Committee and are established at the fair market value of the company's common stock at the date of grant. Options and SARs normally extend for 10 years and under committee policy become exercisable in installments of 25 percent per year commencing one year from the date of grant or over a vesting period determined by the Committee. Restricted stock awards issued under the plans provide that shares awarded may not be sold or otherwise transferred until restrictions as established by the Committee have lapsed. Upon termination of employment, shares upon which restrictions have not lapsed must be returned to the company. Restricted stock issued under the plans totaled 101,540 and 132,580 shares in 1993 and 1992, respectively. The following table summarizes stock option activity for the two years ended October 31, 1993: Stock Price Options Per Share Outstanding at October 31, 1991 2,366,759 $12-44 Granted 438,410 44 Expired or cancelled (23,539) 20-44 Exercised (346,401) 12-44 Outstanding at October 31, 1992 2,435,229 12-44 Granted 601,820 41-44 Expired or cancelled (26,468) 17-44 Exercised (520,137) 12-44 Outstanding at October 31, 1993 2,490,444 $12-44 Exercisable at: October 31, 1992 1,452,174 $12-44 October 31, 1993 1,271,330 $12-44 Available for grant at: October 31, 1992 780,854 * October 31, 1993 2,610,490 * * Available for grant includes shares which may be granted as either stock options or restricted stock, as determined by the Committee under the 1988 Fluor Executive Stock Plan (the Plan). In March 1993 the Plan was amended and restated to include an additional 2.5 million shares available for grant. LEASE OBLIGATIONS Net rental expense for continuing operations amounted to $69 million, $80 million, and $92 million, in 1993, 1992, and 1991, respectively. The company's lease obligations relate primarily to office facilities, equipment used in connection with long-term construction contracts and other personal property. The company's obligations for minimum rentals under noncancellable leases are as follows: $ in thousands/At October 31, 1993 1994 $ 29,593 1995 29,094 1996 21,809 1997 21,573 1998 20,806 Thereafter 47,452 At October 31, 1993 and 1992, obligations under capital leases of approximately $7 million and $11 million, respectively, are included in other noncurrent liabilities. CONTINGENCIES AND COMMITMENTS The company and certain of its subsidiaries are involved in litigation in the ordinary course of business. The company and certain of its engineering and construction subsidiaries are contingently liable for commitments and performance guarantees arising in the ordinary course of business. Claims arising from engineering and construction contracts have been made against the company by clients, and the company has made certain claims against clients for costs incurred in excess of the current contract provisions. The company does not expect that the foregoing matters will have a material adverse effect on its consolidated financial position or results of operations. The company's operations, including its discontinued Lead operations, are subject to and affected by federal, state and local laws and regulations regarding the protection of the environment. The company maintains reserves for potential future environmental costs where such obligations are either known or considered probable and can be reasonable estimated. St. Joe Minerals Corporation ("St. Joe"), a wholly owned subsidiary of the company, is participating as a potentially responsible party at several different sites pursuant to proceedings under the Comprehensive Environmental Response, Compensation and Liability Act ("Superfund"). Other parties have also been identified as potentially responsible parties at all but one of these sites, and many of these parties have shared in the costs associated with the sites. Investigative and/or remedial activities are ongoing at each site. In 1987, St. Joe sold its zinc mining and smelting division to Zinc Corporation of America ("ZCA"). As part of the agreement, St. Joe and the company agreed to indemnify ZCA for certain environmental liabilities arising from operations conducted prior to the sale. During this fiscal year, ZCA has made claims under this indemnity against St. Joe for anticipated environmental expenditures at three of its major operating facilities. These claims are the subject of ongoing discussions between St. Joe, ZCA and other potentially responsible parties, including parties who have given similar contractual indemnities to St. Joe. St. Joe has initiated a proceeding against certain of its insurance carriers alleging that the investigative and remediation costs incurred by St. Joe in connection with its environmental proceedings are covered by insurance. This proceedings is in its early stages and no credit or offset for any such coverage has been taken into account by the company in establishing its reserves for future environmental costs. The company believes, based upon present information available to it, that its reserves in respect to future environmental costs are adequate, and that such future costs will not have a material effect on the company's consolidated financial condition, results of operations or liquidity. However, the imposition of more stringent requirements under environmental laws or regulations, new developments or changes regarding site cleanup costs or the allocation of such costs among potentially responsible parties, or a determination that the company is potentially responsible for the release of hazardous substances at sites other than those currently identified, could result in additional expenditures, or additional reserves in expectation of such expenditures. Financial guarantees, made in the ordinary course of business on behalf of clients and others in certain limited circumstances, are entered into with financial institutions and other credit grantors and generally obligate the company to make payment in the event of a default by the borrower. Most arrangements require the borrower to pledge collateral in the form of property, plant and equipment which is deemed adequate to recover amounts the company might be required to pay. As of October 31, 1993, the company had extended financial guarantees on behalf of certain clients and other unrelated third parties totaling $126.3 million. OPERATIONS BY BUSINESS SEGMENT AND GEOGRAPHIC AREA The Engineering and Construction segment includes subsidiaries engaged in the design, engineering, procurement, construction, technical services and maintenance of facilities for industrial, hydrocarbon, process, government and power clients. Coal segment amounts include the operations of Massey Coal Company. Identifiable assets are those tangible and intangible assets used in the operation of each of the business segments and geographic areas, except for discontinued operations in 1993 and 1992 which is net of related liabilities. Corporate assets are principally cash and cash equivalents, marketable securities and nontrade receivables. OPERATIONS BY BUSINESS SEGMENT
Revenues Operating Profit $ in millions 1993 1992 1991 1993 1992 1991 Engineering and Construction $7,133.6 $5,904.0 $5,813.5 $ 220.6 $ 190.7 $ 166.2 Coal 716.6 696.7 758.5 70.7 80.2 60.7 Continuing Operations $7,850.2 $6,600.7 $6,572.0 $ 291.3 $ 270.9 $ 226.9
Identifiable Assets Capital Expenditures and Amortization
$ in millions 1993 1992 1991 1993 1992 1991 1993 1992 1991 Engineering & Construction $1,144.7 $1,018.6 $1,003.9 $ 60.6 $ 58.7 $ 38.9 $ 52.5 $ 52.5 $ 48.0 Coal 926.3 864.0 696.7 110.9 214.0 67.6 58.8 54.0 49.5 Corporate 345.1 344.3 393.3 -- -- -- 0.5 0.5 0.7 Continuing Operations 2,416.1 2,226.9 2,093.9 171.5 272.7 106.5 111.8 107.0 98.2 Discontinued Operations 172.8 138.6 327.5 -- 14.3 53.2 -- 28.2 23.3 $2,588.9 $2,365.5 $2,421.4 $ 171.5 $ 287.0 $ 159.7 $ 111.8 $ 135.2 $ 121.5
OPERATIONS BY GEOGRAPHIC AREA Revenues Operating Profit Identifiable Assets
$ in millions 1993 1992 1991 1993 1992 1991 1993 1992 1991 United States $5,628.1 $4,790.6 $5,102.7 $ 224.5 $ 221.6 $ 177.3 $2,262.2 $2,097.8 $2,131.0 Canada 225.8 391.3 555.8 9.2 11.4 11.9 65.5 46.6 71.9 Middle East 434.5 317.8 76.1 2.1 4.5 4.6 32.7 41.9 43.1 Europe 994.2 714.9 495.2 15.6 21.1 21.8 127.6 112.7 105.5 Other 567.6 386.1 342.2 39.9 12.3 11.3 100.9 66.5 69.9 $7,850.2 $6,600.7 $6,572.0 $ 291.3 $ 270.9 $ 226.9 $2,588.9 $2,365.5 $2,421.4
The following table reconciles business segment operating profit with the earnings from continuing operations before taxes.
$ in millions/Year ended October 31, 1993 1992 1991 Operating profit from continuing operations $ 291.3 $ 270.9 $ 226.9 Interest income (expense), net 0.1 (0.2) 31.2 Corporate administrative and general expense (43.7) (39.3) (57.0) Reduction in accrued lease cost, net - - 19.6 Gain on sale of investment - - 16.4 Other items, net (5.5) (16.0) (8.7) Earnings from continuing operations before taxes $ 242.2 $ 215.4 $ 228.4 REPORTS OF MANAGEMENT AND INDEPENDENT AUDITORS MANAGEMENT The company is responsible for preparation of the accompanying consolidated balance sheet and the related consolidated statements of earnings, cash flows and shareholders' equity. These statements have been prepared in conformity with generally accepted accounting principles and management believes that they present fairly the company's consolidated financial position and results of operations. The integrity of the information presented in the financial statements, including estimates and judgments relating to matters not concluded by fiscal year end, is the responsibility of management. To fulfill this responsibility, an internal control structure designed to protect the company's assets and properly record transactions and events as they occur has been developed, placed in operation and maintained. The internal control structure is supported by an extensive program of internal audits and is tested and evaluated by the independent auditors in connection with their annual audit. The Board of Directors pursues its responsibility for financial information through an Audit Committee of Directors who are not employees. The internal auditors and the independent auditors have full and free access to the Committee. Periodically, the Committee meets with the independent auditors without management present to discuss the results of their audits, the adequacy of the internal control structure and the quality of financial reporting. /s/ Leslie G. McCraw /s/ James O. Rollans Leslie G. McCraw James O. Rollans Chairman of the Board and Senior Vice President and Chief Executive Officer Chief Financial Officer INDEPENDENT AUDITORS Board of Directors and Shareholders Fluor Corporation We have audited the accompanying consolidated balance sheet of Fluor Corporation as of October 31, 1993 and 1992, and the related consolidated statements of earnings, cash flows, and shareholders' equity for each of the three years in the period ended October 31, 1993. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Fluor Corporation at October 31, 1993 and 1992, and the consolidated results of its operations and its cash flows for each of the three years in the period ended October 31, 1993, in conformity with generally accepted accounting principles. /s/ Ernst & Young Orange County, California December 6, 1993 QUARTERLY FINANCIAL DATA (unaudited) The following is a summary of the quarterly results of operations: $ in thousands, except per share First Second Third Fourth amounts Quarter Quarter (a) Quarter Quarter 1993 Revenues $1,806,939 $2,006,054 $1,844,112 $2,193,064 Gross margin 66,071 58,407 74,035 87,281 Earnings before taxes 56,881 46,553 64,935 73,831 Net earnings 35,681 41,953 40,835 48,331 Earnings per share $ 0.43 $ 0.51 $ 0.50 $ 0.59 1992 Revenues $1,560,835 $1,544,325 $1,662,748 $1,832,788 Gross margin 58,929 63,593 70,012 62,343 Earnings from continuing operations before taxes 50,888 56,294 62,186 45,982 (b) Loss from discontinued operations, net (3,386) (3,170) (2,482) (87,528) Cumulative effect of change in accounting principle, net (32,866) -- -- -- Net earnings (loss) (4,040) 32,381 36,823 (59,346) Earnings per share Continuing operations 0.39 0.44 0.48 0.35 Discontinued operations (0.04) (0.04) (0.03) (1.08) Cumulative effect of change in accounting principle (0.40) -- -- -- Net earnings (loss) $ (0.05) $ 0.40 $ 0.45 $ (0.73) (a) Second quarter 1993 earnings includes a reversal of income taxes no longer required of $12.6 million and an after tax charge of $9.2 million to recognize possible settlement of disputed obligations relating to pension funds associated with the company's coal segment. (b) Fourth quarter 1992 earnings from continuing operations includes a pretax charge of $6.2 million related to the cancellation of a lease. STOCKHOLDERS' REFERENCE FORM 10-K A copy of the Form 10-K, which is filed with the Securities and Exchange Commission, is available upon request. Write to : Vice President - Corporate Law, Fluor Corporation, 3333 Michelson Drive, Irvine, California 92730, (714) 975-2000. REGISTRAR AND TRANSFER AGENT Chemical Trust Company of California, 300 S. Grand Avenue, Los Angeles CA 90071 and Chemical Bank, 450 W. 33rd Street, New York, NY 10001. For change of address, lost dividends, or lost stock certificates, write or telephone: Chemical Bank, J.A.F. Building, P.O. Box 3068, New York, NY 10116-3068, Attn: Securityholder Relations (800) 356-2017 INDEPENDENT AUDITORS Ernst & Young, 18400 Von Karman Avenue, Irvine, California 92715 ANNUAL STOCKHOLDERS' MEETING Annual report and proxy statement are mailed in early February. Fluor's annual meeting of stockholders will be held at 9:00 a.m. on March 8, 1994 at the Hyatt Regency Irvine, 17900 Jamboree Boulevard, Irvine, California. STOCK TRADING Fluor's stock is traded on the New York, Chicago, Pacific, Amsterdam, London and Swiss Stock Exchanges. Common stock domestic trading symbol: FLR. COMPANY CONTACTS Stockholders may call collect. Stockholder information: Lawrence N. Fisher (714)975-6961 Investor Relations: Lila J. Churney (714) 975-3909 COMMON STOCK INFORMATION At December 31, 1993, there were 82,105,564 shares outstanding and approximately 15,600 stockholders of record of Fluor's common stock. The following table sets forth for the periods indicated the cash dividends paid per share of common stock and the high and low sales prices of such common stock as reported in the Consolidated Transactions Reporting System. COMMON STOCK AND DIVIDEND INFORMATION Dividends Price Range Per Share High Low FISCAL 1993 First Quarter $ 0.12 $ 46 7/8 $ 39 1/2 Second Quarter 0.12 46 38 Third Quarter 0.12 43 7/8 38 1/8 Fourth Quarter 0.12 46 1/8 38 3/8 $ 0.48 FISCAL 1992 First Quarter $ 0.10 $ 48 1/8 $ 35 1/4 Second Quarter 0.10 46 1/8 36 7/8 Third Quarter 0.10 44 7/8 36 5/8 Fourth Quarter 0.10 47 1/4 37 7/8 $ 0.40 HISTORY OF STOCK DIVIDENDS AND SPLITS SINCE GOING PUBLIC IN 1950 08/23/57 20% Stock Dividend 12/15/61 5% Stock Dividend 03/11/63 5% Stock Dividend 03/09/64 5% Stock Dividend 03/08/65 5% Stock Dividend 02/14/66 5% Stock Dividend 03/24/66 2 for 1 Stock Split 03/27/67 5% Stock Dividend 02/09/68 5% Stock Dividend 03/22/68 2 for 1 Stock Split 05/16/69 5% Stock Dividend 03/06/70 5% Stock Dividend 03/05/71 5% Stock Dividend 03/10/72 5% Stock Dividend 03/12/73 5% Stock Dividend 03/11/74 3 for 2 Stock Split 08/13/79 3 for 2 Stock Split 07/18/80 2 for 1 Stock Split
EX-21 8 SUBSIDIARIES EXHIBIT 21 ========== FLUOR CORPORATION SUBSIDIARIES Organized Name of Company Under Laws of =============== ============= Fluor Corporation Delaware Subsidiaries (1) American Equipment Company, Inc. South Carolina AMECO Services Inc. Delaware Apex Coal Company Virginia Claiborne Fuels, Inc. California Coral Drilling, C.A. Venezuela Daniel International Corporation South Carolina Daniel Navarra, S.A. Spain Fluor Daniel Engineering, Inc. Ohio Materiales y Equipos Auxiliares para la Construccion, S.A. Spain Daniel Realty Investment Corporation - Daniel Centre, II Virginia Efdee New York Engineers & Architects P.C. New York FD Services, Inc. California Norfolk Maintenance Corporation California Fluor Abadan Limited Bermuda Fluor Atlantic Limited Bermuda Fluor Continental Limited Bermuda FD Engineers & Constructors, Inc. California FibroConstruction, Inc. California Fluor Constructors International, Inc. California Fluor Constructors Canada Ltd. Canada Fluor Constructors Indonesia, Inc. California Fluor Constructors (South East Asia), Ltd. California Fluor Management and Technical Services, Inc. California Fluor Daniel, Inc. California Efdee Engineering Corporation North Carolina Encee Architecture Services, P.C. North Carolina FDAE Corporation New Jersey Fernald Environmental Restoration Management Corporation California Fluor Chile, Inc. California Fluor Daniel Chile Ingenieria y Construccion S.A. Chile Ingenieria y Construcciones Fluor Daniel Chile Limitada Chile Fluor Colombia Limited Delaware Fluor Cyprus Limited Cyprus Fluor Daniel, a Professional Architectural Corporation Louisiana 1 Organized Name of Company Under Laws of =============== ============= Fluor Corporation FD Engineers & Constructors, Inc. Fluor Daniel, Inc. (continued) Fluor Daniel/AG&P, Inc. (2) Philippines Fluor Daniel A&E Services, Inc. California Fluor Daniel Alaska, Inc. Alaska Fluor Daniel Australia Limited Australia Civil and Mechanical Maintenance Pty. Ltd. Australia Fluor Daniel Constructors Pty. Ltd. Australia Fluor Daniel Power Services Pty. Ltd. Australia Total Recruiting Services Pty. Ltd. Australia Fluor Daniel (Qld) Pty. Ltd. Australia Fluor Daniel B.V. The Netherlands Fluor Daniel Consultants B.V. The Netherlands Fluor Daniel Engineering and Construction Services Limited Turkey Fluor Daniel Services B.V. The Netherlands Fluor Daniel Belgium N.V. Belgium Fluor Daniel Canada, Inc. Canada Soana Holdings Ltd. Canada Wright Engineers Limited Canada Compania Minera Explowel Ecuador Fluor Daniel, S.A. Spain Lynx Geosystems Inc. Canada Saskwright Engineers Limited Canada Wright Engineers (Chile) Limitada Chile Wright Engineers (International) Limited Bermuda Wright Engineers Limitada Peru Peru Wright Engineers Pty. Limited Australia TRS Recruiting Services Canada, Inc. Canada Fluor Daniel Caribbean, Inc. Delaware Daniel Construction Company, Inc. Tennessee Daniel Internacional, S.A. Delaware Daniel/McCarthy Limited Ireland Daniel/McCarthy International Limited Ireland DMIS, Inc. South Carolina Fluor Daniel Export Services, Inc. Delaware Fluor Daniel Facility Services Corporation South Carolina Fluor Daniel International (Malaysia) Sdn. Bhd. Malaysia Fluor Daniel Maintenance Services, Inc. Delaware Fluor Daniel Services Corporation Delaware Total Recruiting Services, Inc. South Carolina 2 Organized Name of Company Under Laws of =============== ============= Fluor Corporation FD Engineers & Constructors, Inc. Fluor Daniel, Inc. (continued) Fluor Daniel China, Inc. California Fluor Daniel China Services, Inc. California Fluor Daniel China Technology, Inc. California Fluor Daniel Construction Company California Fluor Daniel Development Corporation California Crown Energy Company New Jersey Gloucester Limited, Inc. California Gloucester Limited II, Inc. California Tarrant Energy, Inc. California Trinity Cogeneration Company California Fluor Daniel Eastern, Inc. California Fluor Daniel Engineers & Constructors, Inc. Delaware Fluor Daniel Engineers & Constructors, Ltd. California AEC International, Ltd. (3) Korea Project Administrative Services, Limited Hong Kong Fluor Daniel Environmental Services, Inc. California Fluor Daniel Espana, S.A. California Daniel International (Saudi Arabia) Ltd. Saudi Arabia Fluor Arabia Limited (4) Saudi Arabia Fluor Daniel Eurasia, Inc. California Fluor Daniel GmbH West Germany Fluor Daniel Group, Inc. Delaware Fluor Daniel Inspection Services, Inc. California Fluor Daniel International Limited U.K. Fluor Daniel Limited U.K. Fluor Norge A/S Norway Fluor Ocean Services Limited U.K. Technical Resource Services Limited U.K. Fluor Daniel (Japan) Inc. Japan Fluor Daniel Kft. Hungary Fluor Daniel Latin America, Inc. California Fluor-Daniel (Malaysia) Sdn. Bhd. Malaysia Western Offshore Drilling & Exploration Company Sdn. Bhd. Malaysia Electrical Power Services (Malaysia) Sdn. Bhd. (5) Malaysia Fluor Daniel Mexico S.A. California ICA-Fluor Daniel S. de R.L. de C.V. (3) Mexico Fluor Daniel Mining & Metals, Ltd. California Fluor Daniel New Zealand Limited California 3 Organized Name of Company Under Laws of =============== ============= Fluor Corporation FD Engineers & Constructors, Inc. Fluor Daniel, Inc. (continued) Fluor Daniel (NPOSR), Inc. Delaware Fluor Daniel P.R.C., Ltd. California Fluor Daniel Pacific, Inc. California Fluor Daniel Properties Limited U.K. Fluor Daniel Pulp & Paper, Inc. California Fluor Daniel Resources, Inc. California Fluor Daniel S.A. France Fluor Daniel Sales Corporation West Indies Fluor Daniel Technical Services, Inc. Texas Fluor Daniel Thailand, Ltd. California Fluor-Doris, Inc. Texas Fluor Ecuador Limited California Fluor Engineers, Inc. Delaware Tecnofluor, C.A. (6) Venezuela Tecnoconsult Ingenieros Consultores, S.A. (6) Venezuela Fluor Egypt Egypt Fluor Engineering Corporation Michigan Fluor Hong Kong Limited Hong Kong Fluor Indonesia, Inc. California P.T. Panca Perintis Indonesia Indonesia Fluor International, Inc. California Fluor International Limited Bermuda Fluor Iran Iran Fluor Italia S.r.l. Italy Fluor-Korea Corporation, Ltd. (The) Korea Fluor Mideast Limited Bermuda Fluor Northwest, Inc. California Fluor Ocean Services International, Inc. California Fluor Plant Services International, Inc. California Fluor Plant Services International Ltd. Bermuda Fluor International Nigeria Limited Nigeria Fluor Technical Services Limited California Fluor Texas, Inc. Texas Fluor Venezuela, S.A. Venezuela Fluorven Limited California Nutmeg Valley Resources, Inc. California Ranhill-Fluor Sdn. Bhd. Malaysia SPB Corporation Delaware Stanhope Management Services Limited U.K. TDF, Inc. California Trident Maintenance Services, Inc. Texas Venezco, Inc. California Whidbey Services Co. Nevada 4 Organized Name of Company Under Laws of =============== ============= Fluor Corporation FD Engineers & Constructors, Inc. Fluor Daniel, Inc. (continued) Williams Brothers Engineering Company Delaware Williams Brothers Ingenieria Chile Limitada Chile Williams Brothers Engineering Limited U.K. Williams Brothers Engineering Pty. Ltd. Australia WB-CMPS Sdn. Bhd. Malaysia Williams Brothers International Limited Guernsey Islands Williams Brothers Petroleum Services, Inc. Delaware Williams Brothers Process Services, Inc. Delaware Wright Engineers, Inc. Nevada Fluor Daniel Telecommunications Corporation California Strategic Organizational Systems Enterprises, Inc. California Strategic Organizational Systems Environmental Division, Inc. Oklahoma Strategic Organizational Systems Environmental Division, Inc. Louisiana Strategic Organizational Systems Environmental Engineering Division, Inc. Texas Strategic Organizational Systems Environmental Engineering California Division, Inc. California SOS International, Inc. Alabama Strategic Organizational Systems Southern California Division Inc. California Strategic Organizational Systems Construction Division, Inc. California Fluor Daniel Illinois, Inc. Delaware Fluor Daniel Intercontinental, Inc. California Fluor Daniel Nigeria Limited (7) Nigeria Fluor Daniel Mideast Limited California Fluor Daniel Venture Group, Inc. California Fluor Carson, Inc. California Fluor Gulf Communications, Inc. California Gulf Fibercom, Inc. California Micogen Inc. California Micogen Limited I, Inc. California Micogen Limited II, Inc. California Palmetto Energy, Inc. Florida Springfield Resource Recovery, Inc. Massachusetts Fluor Distribution Companies, Inc. California 5 Organized Name of Company Under Laws of =============== ============= Fluor Corporation (continued) Fluor (Nigeria) Limited Nigeria Fluor Oil and Gas Corporation California Cal Oil Limited England Coquina Petroleum Inc. Delaware Fluor Real Estate Services, Inc. Delaware Fluor Reinsurance Investments, Inc. Delaware FRES, Inc. Delaware Micogen Limited III, Inc. California Middle East Fluor California St. Joe Minerals Corporation New York Allegheny Coal Corporation Delaware Massey Coal Company (partnership) Delaware A. T. Massey Coal Company, Inc. Virginia Aracoma Coal Company, Inc. West Virginia B. C. Coal Company Kentucky Barnabus Land Company West Virginia Ben Creek Coal Company West Virginia Big Bear Mining Company West Virginia Big Creek Land Company Kentucky Black Knight Mine Development Co. West Virginia Boone East Development Co. West Virginia Boone West Development Co. West Virginia Cabinawa Mining Company West Virginia Central Penn Energy Company, Inc. Pennsylvania Central West Virginia Energy Company West Virginia Cline & Chambers Coal Company, Inc. Kentucky Dehue Coal Company West Virginia Doe Run Investment Holding Corporation Delaware Douglas Pocahontas Coal Corporation West Virginia Elk Run Coal Company, Inc. West Virginia Bishop Mine Development Co. West Virginia Black Castle Mine Development Co. West Virginia Black King Mine Development Co. West Virginia Chess Processing Company West Virginia Independence Coal Company, Inc. West Virginia Massey Capital Management Corp. West Virginia Rawl Sales Venture Capital Corp.(4) West Virginia Sprouse Creek Venture Capital Corp.(4) West Virginia 6 Organized Name of Company Under Laws of =============== ============= Fluor Corporation St. Joe Minerals Corporation Allegheny Coal Corporation Massey Coal Company (partnership) A. T. Massey Coal Company, Inc. (continued) Federal Development Corporation West Virginia Haden Farms, Inc. Virginia Hopkins Creek Coal Company Kentucky Imec, Inc. Kentucky Joboner Coal Company Kentucky Lauren Land Company West Virginia Lewco Development Company West Virginia Long Fork Coal Company Kentucky Marfork Coal Company, Inc. West Virginia Martin County Coal Corporation Kentucky Pilgrim Mining Company, Inc. Kentucky Massey Coal International, Inc. Virginia Massey Coal Sales Company, Inc. Virginia Massey Coal Services, Inc. West Virginia Massey Fuels Corporation Virginia Menefee Land Company, Inc. Colorado New Ridge Mining Company Kentucky Nicco Corporation West Virginia Majestic Mining, Inc. Texas Omar Mining Company West Virginia Peerless Eagle Coal Co. West Virginia Pennsylvania Mine Services, Inc. Pennsylvania Mine Maintenance, Inc. Pennsylvania Rawl Sales & Processing Co. West Virginia Capstan Mining Company Colorado Ferrell's Branch Coal Company, Inc. West Virginia Lynn Branch Coal Company, Inc. West Virginia Massey Coal Capital Corp. West Virginia Sun Coal Company, Inc. Colorado Sycamore Fuels, Inc. West Virginia Rawl Sales Venture Capital Corp.(4) West Virginia Sprouse Creek Venture Capital Corp.(4) West Virginia Road Fork Development Company, Inc.Kentucky Robinson-Phillips Coal Company West Virginia Rockridge Coal Company West Virginia Rum Creek Coal Sales, Inc. West Virginia Vantage Mining Company Kentucky Russell Fork Coal Company West Virginia SC Coal Corporation Delaware SC Ventures Inc. Delaware 7 Organized Name of Company Under Laws of =============== ============= Fluor Corporation St. Joe Minerals Corporation Allegheny Coal Corporation Massey Coal Company (partnership) A. T. Massey Coal Company, Inc. (continued) Shannon-Pocahontas Coal Corporation West Virginia Sidney Coal Company, Inc. Kentucky Stirrat Coal Company West Virginia Stone Mining Company Kentucky T.C.H. Coal Co. Kentucky Tennessee Consolidated Coal Company Tennessee Chestnut Coal Company, Inc. Tennessee Tennessee Energy Corp. Tennessee Town Creek Coal Company West Virginia Tug Valley Land Company, Inc. West Virginia Vesta Mining Company Pennsylvania Wyomac Coal Company, Inc. West Virginia St. Joe American Corporation Delaware St. Joe Carbon Fuels Corporation Delaware St. Joe International Holding Corporation Delaware Compania Minera San Jose del Peru S.A. Peru Mineral Resource Development Corporation Delaware Robil International Corporation Delaware St. Joe Erzbergbaugesellschaft m.b.H. Austria St. Joe Exploracion Minera Inc. Delaware St. Joe Exploracion Minera Inc. y Cia., S.R.C. Spain St. Joe Exploration Inc. Delaware St. Joe Luisito de Oro Inc. Delaware St. Joe Luisito de Oro Inc. y Cia. S.R.C. Spain St. Joe Minera de Espana, S.A. Spain St. Joe South Pacific Pty. Limited Australia St. Joe Bonaparte Pty. Limited Australia St. Joe International Petroleum Corporation Delaware St. Joe Petroleum Corporation Delaware St. Joe Egypt Exploration Corporation Delaware St. Joe Petroleum Egypt Corporation Delaware St. Joe Petroleum-Holland, Inc. Delaware St. Joe Petroleum (Netherlands) Corporation Delaware St. Joe Petroleum (Papua New Guinea) Corporation Delaware St. Joe Petroleum (U.K.) Corporation Delaware 8 Organized Name of Company Under Laws of =============== ============= Fluor Corporation St. Joe Minerals Corporation (continued) St. Joe Land Management Company Delaware St. Joe Lead Company, Inc. Delaware St. Joe Minerals Corporation & Cia. Brazil Coral Empreendimentos e Participacoes S.A. Brazil Comercial de Minerios do Sul do Para Ltda. - COMIPA Brazil Mineracao Alabastro Ltda. Brazil Mineracao Sao Felix Ltda. Brazil The Seventeenth Daniel Realty Investment Corporation Virginia United Plant Services, Inc. Delaware WODECO Nigeria Limited Nigeria Zenith Coal Company, Inc. South Carolina ___________________________________________ (1) Does not include certain subsidiaries which if considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary (2) 51% ownership (3) 49% ownership (4) 50% ownership (5) 49.9% ownership (6) 19.99% ownership (7) 60% ownership 9 EX-23 9 CONSENT EXHIBIT 23 ========== CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in this Annual Report on Form 10-K of Fluor Corporation of our report dated December 6, 1993, included in the 1993 Annual Report to stockholders of Fluor Corporation. Our audits also included the financial statement schedules listed in Item 14(a). These schedules are the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedules, referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. We also consent to the incorporation by reference in the Registration Statements and related Prospectuses pertaining to: Form S-8 No. 33-31440 for the 1988 Fluor Executive Stock Plan; Form S-8 No. 2-77532 for the 1982 Fluor Incentive Stock Option Plan, 1981 Fluor Executive Stock Plan, 1977 Fluor Executive Stock Plan and 1971 Fluor Stock Option Plan; and Form S-8 No. 2-72712 for the Fluor Corporation Salaried Employees' Savings Investment Plan of our report dated December 6, 1993, with respect to the consolidated financial statements and schedules of Fluor Corporation incorporated by reference and included in the Annual Report on Form 10-K for the year ended October 31, 1993. ERNST & YOUNG Orange County, California January 27, 1994 EX-24.1 10 POWER OF ATTORNEY EXHIBIT 24.1 ============ POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors and/or officers of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as his true and lawful attorneys-in-fact and agents, for him and in his name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and each of the undersigned does hereby ratify and confirm as his own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned have hereunto subscribed their signatures as of the 7th day of December, 1993. Principal Executive Officer and Director: L. G. McCRAW =================== Director, Chairman of the Board L. G. McCraw and Chief Executive Officer Principal Financial and Accounting Officer: J. O. ROLLANS =================== Senior Vice President and J. O. Rollans Chief Financial Officer EX-24.2 11 POWER OF ATTORNEY EXHIBIT 24.2 ============ POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as his true and lawful attorneys-in-fact and agents, for him and in his name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm as his own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature as of the 7th day of December, 1993. H. K. COBLE ================== H. K. Coble POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as his true and lawful attorneys-in-fact and agents, for him and in his name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm as his own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature as of the 7th day of December, 1993. P. J. FLUOR =================== P. J. Fluor POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as his true and lawful attorneys-in-fact and agents, for him and in his name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm as his own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature as of the 7th day of December, 1993. D. P. GARDNER ================== D. P. Gardner POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as his true and lawful attorneys-in-fact and agents, for him and in his name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm as his own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature as of the 7th day of December, 1993. G. M. GLENN ================= G. M. Glenn POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as his true and lawful attorneys-in-fact and agents, for him and in his name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm as his own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature as of the 7th day of December, 1993. W. R. GRANT =============== W. R. Grant POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as his true and lawful attorneys-in-fact and agents, for him and in his name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm as his own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature as of the 7th day of December, 1993. B. R. INMAN ================ B. R. Inman POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as his true and lawful attorneys-in-fact and agents, for him and in his name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm as his own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature as of the 7th day of December, 1993. V. L. KONTNY ================== V. L. Kontny POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as his true and lawful attorneys-in-fact and agents, for him and in his name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm as his own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature as of the 7th day of December, 1993. R. V. LINDSAY =================== R. V. Lindsay POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as her true and lawful attorneys-in-fact and agents, for her and in her name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm as her own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed her signature as of the 7th day of December, 1993. V. S. MARTINEZ ==================== V. S. Martinez POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as his true and lawful attorneys-in-fact and agents, for him and in his name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm as his own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature as of the 7th day of December, 1993. E. M. MASSEY ================= E. M. Massey POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as his true and lawful attorneys-in-fact and agents, for him and in his name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm as his own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature as of the 7th day of December, 1993. B. MICKEL =============== B. Mickel POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as her true and lawful attorneys-in-fact and agents, for her and in her name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm as her own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed her signature as of the 7th day of December, 1993. M. R. SEGER ================ M. R. Seger POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of FLUOR CORPORATION, a Delaware corporation ("Fluor"), does hereby constitute and appoint L. N. FISHER, A. M. OLDHAM and P. J. TRIMBLE, and each of them, with full power to act without the other, as his true and lawful attorneys-in-fact and agents, for him and in his name, place and stead, in any and all capacities, to sign the annual report on Form 10-K for the fiscal year ended October 31, 1993, and any and all amendments thereto, to be filed by Fluor with the Securities and Exchange Commission and to file such annual report and any amendments, with any and all exhibits thereto, and any and all other information and documents in connection therewith, with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm as his own act and deed all that such attorneys-in-fact and agents, and each of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto subscribed his signature as of the 7th day of December, 1993. D. S. TAPPAN, JR. ===================== D. S. Tappan, Jr. -----END PRIVACY-ENHANCED MESSAGE-----