Exhibit 10.17
May 7, 2001
Mr. D. Michael Steuert
2956 Morvale Drive
Thousand Oaks, CA 91361
Dear Michael,
We are pleased to extend to you an offer of employment as Senior Vice President
and Chief Financial Officer of Fluor Corporation. All of us that have had the
opportunity to visit with you are confident that we will benefit from your years
of experience and are sure that you will find Fluor Corporation a challenging
and enjoyable environment in which to work. We will work with you to determine a
mutually agreeable start date.
SALARY
Your starting salary will be $500,000 annually.
ANNUAL INCENTIVE
As a member of the Executive Management Team you will be in a "must review"
category for annual incentive consideration each year based upon your
individual performance as well as the performance of the Corporation. Your
target incentive amount is 65% of your base salary or $325,000, and you
will have the potential to earn from zero to twice this amount based on
your individual performance and the overall results of the corporation. Our
fiscal year is January 1st through December 31st, with incentives paid the
following March. Your first year bonus will be prorated based on actual
months worked.
NEW HIRE AWARD
We will recommend to the Organization and Compensation Committee of Fluor
Corporation that we provide you the following awards:
LTI CASH 2001 - 2003 PROGRAM
You will be recommended for participation in the current LTI cash program
covering FY 2001-2003 with a three-year targeted cash award of $300,000.
Performance objectives for the cash portion of this three-year program will
be established each fiscal year. At the end of each fiscal year, the
Organization and Compensation Committee will evaluate the performance
results of Fluor Corporation. If the objectives are achieved a payout with
a performance rating of 0 to 2 times will be paid to you based on one-third
of your target cash award ($100,000) each year.
Initialed__________
Mr. D. Michael Steuert
May 7, 2001
Page 2
RESTRICTED STOCK
A restricted stock grant of 3,600 shares vesting 25% (900 shares) per year
beginning one year from date of hire. You will receive dividends and voting
rights on these shares.
RESTRICTED UNITS
A restricted unit grant of 2,400 units vesting 25% (600 shares) per year
beginning one year from date of hire.
LONG-TERM INCENTIVES
In December we will recommend to the Organization and Compensation
Committee the grant of a Long-Term Incentive (LTI) award valued at
$1,000,000. This award will be comprised of non-qualified stock options,
restricted shares, restricted tandem units, and a cash award which you have
the potential to earn from zero to twice this cash amount based on targeted
Company performance (based on current design).
SEVERANCE / POST RETIREMENT SUPPLEMENTAL BENEFIT PAYMENT
If you are involuntarily separated from the Company for any reason, except
for cause, the Company will provide you with one year's pay at your then
current base salary.
If you continue your employment to early or normal retirement, the Company
has agreed to pay you one year's pay, at your then current base salary, as
a supplemental retirement benefit.
AUTOMOBILE ALLOWANCE
You will be provided a monthly automobile allowance of $1,400. Automobile
insurance will be provided for one automobile at no expense to you.
CLUB MEMBERSHIP
As a senior level executive you will be eligible for a club membership at a
club of your choice, within reason, and with the final approval of Alan
Boeckmann. The Company will pay the annual dues and business related
expenses.
PERSONAL FINANCIAL PLANNING
You will be reimbursed for financial planning services during your first
two years of employment and the year of retirement up to a maximum of
$15,000 per year.
TAX SERVICES
Annual tax planning services will be reimbursed up to a maximum of $4,000
per year.
Initialed__________
Mr. D. Michael Steuert
May 7, 2001
Page 3
ESTATE ENHANCEMENT PROGRAM
You will be eligible to participate in a program which allows you to use
deferred compensation to make payments on a life insurance policy which can
be held in trust and provides a tax advantage vehicle for
survivors/beneficiaries.
RELOCATION
Should you sell your current residence and move to the Aliso Viejo area,
you will be reimbursed for travel, moving, relocation and buy/sale expenses
in accordance with the attached Personnel Policy (HR-121). Should you
voluntarily terminate your employment with the company (except when caused
by death or permanent total disability) within one year from your
relocation date you will be required to reimburse to the company 100% of
those costs previously transmitted. The company will provide you full tax
gross up protection for Federal and State personal income tax liability for
costs associated with your move to the Aliso Viejo, California area.
TEMPORARY HOUSING
The company will provide you with a company provided apartment for up to
six months. This can be extended with Alan Boeckmann's approval.
EXECUTIVE DEFERRED COMPENSATION PROGRAM (EDCP)
You will be eligible to participate in this program from date of hire. Two
deferral options are available to help you reduce your tax obligations and
plan for financial security: the Deferred Salary account and the Deferred
Incentive Award account. Participation is entirely voluntary. Amounts
deferred under this program may be deferred until termination, retirement
or for a specified period of time of one year or more and will accrue
monthly interest based on the allocation of your Executive Deferred
Compensation Program balance among the available crediting options.
Participation in this program is subject to continued Executive status.
SALARIED EMPLOYEE'S SAVINGS INVESTMENT PLAN 401(K)
You will be eligible immediately to participate in the 401(k) Plan. You may
elect to defer up to 16% of your base monthly salary. After one year of
service the company match is discretionary. In 2001 the company is matching
100% (dollar for dollar) on the first 4% for eligible employees. If you
elect, you may rollover the funds from a qualified plan and constitute a
rollover contribution under applicable IRS Code.
FLUOR CORPORATION DEFINED RETIREMENT PLAN
You will be eligible to participate in the Fluor Corporation Defined
Retirement Plan after completing one year of service. Once eligible, the
company credits your account with a percentage of pay based on you age and
years of service as of January 1 of the plan year. The vesting schedule for
participants is 100% after five years of service.
FLUOR CORPORATION PERFORMANCE PLAN
You will be eligible to participate in the Fluor Corporation Performance
Plan after one year of service. Based on financial performance, the Company
will make an annual contribution to an account in your name. You will
manage the investment of your contributions among several varied investment
funds. The amount of the contribution will depend on the overall financial
performance of the Company and employees will receive awards based on
percentage of base salary. The vesting schedule for participants is 100%
after five years of service.
Initialed__________
Mr. D. Michael Steuert
May 7, 2001
Page 4
FLUOR CORPORATION PERFORMANCE PLAN
You will be eligible to participate in the Fluor Corporation Performance
Plan after one year of service. Based on financial performance, the Company
will make an annual contribution to an account in your name. You will
manage the investment of your contributions among several varied investment
funds. The amount of the contribution will depend on the overall financial
performance of the Company and employees will receive awards based on
percentage of base salary. The vesting schedule for participants is 100%
after five years of service.
COMPANY-PAID PHYSICAL EXAMINATION PROGRAM
As a member of the Management Team, you will be provided an annual physical
examination at company expense. You will be notified by the company
physician when it is time to schedule your physical. Participation in this
program is subject to continued Executive status.
GROUP HEALTH, LIFE, AND LONG-TERM DISABILITY INSURANCE COVERAGE
Your share of the cost for a standard group health insurance will be 0.5%
of your base salary up to a maximum of $186.28 per month. Your share of the
cost for group dental insurance is 0.1% of your base salary up to a maximum
of $18.20 a month. Additionally, you may, at your option, cover your
dependents on our group health care and life insurance plans for a monthly
premium. You may also purchase additional life insurance.
EXECUTIVE HEALTH CARE
Eligibility in this program is immediate and will provide reimbursement for
health care expenses to you and your dependents which exceed covered charge
payments under Option 1 of the Fluor Employee's Health Care Plan. Items
generally covered by this Plan include:
1. Deductibles and co-insurance
2. Reasonable and customary charges not covered under Option 1, and
3. Charges for private rooms
TIME OFF WITH PAY (TOWP)
TOWP accrues on each day worked from the date of hire at the rate of 3.54
hours per week, or 184 hours/23 days per year. In addition, we will credit
your TOWP account with 160 hours.
Initialed__________
Mr. D. Michael Steuert
May 7, 2001
Page 5
CHANGE OF CONTROL
A Change of Control plan is ready for immediate implementation should the
Chairman and the Board of Directors choose to implement it. Presently,
there are no individual executive change-of-control agreements in place.
However, there is change of control language included in the plan documents
that govern our Executive Deferred Compensation Plan and Stock-Based Award
Agreements.
OTHER
The Immigration Reform and Control Act of 1986 requires Fluor to verify and
record both your identity and right to work in the United States.
Accordingly, this offer of employment is contingent on your being able to
satisfy the above-mentioned law on or before your first day of work.
Further, the EMT status of a position is discretionary and subject to
change.
In addition, this offer is conditional upon your successful completion of a
pre-employment drug screen, conducted by the company. We recommend that you
not resign your current position until a satisfactory drug test result is
received. Please contact Dr. Sam Elias at (949) 831-1776 to schedule an
appointment. The offer is also conditional on positive responses on
completing the reference checks.
Furthermore, as with most companies, the employment relationship with Fluor
Corporation is based on the mutual consent of you and the Company.
Accordingly, either you or Fluor Corporation can terminate the employment
relationship at will, without cause or advance notice. While Fluor
Corporation's benefits and policies may be changed from time to time, this
letter reflects our entire agreement concerning our at-will relationship.
Initialed__________
Mr. D. Michael Steuert
May 7, 2001
Page 6
We look forward to your joining the Company and are sure that your employment
with Fluor Corporation will be both successful and rewarding for you. If you
have any further questions, please call me at (949) 349-3047. We would
appreciate your returning a signed copy of this offer letter to me as soon as
possible. An additional copy is enclosed for your records.
Sincerely,
/s/ Lisa Glatch
Lisa Glatch
Senior Vice President
Human Resources and Administration
Fluor Corporation
ACCEPTED BY: REPORT DATE:
/S/ D. MICHAEL STEUERT MAY 21, 2001
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D. MICHAEL STEUERT DATE
LG:OLS:ch
cc: Alan Boeckmann
Lew Smith
Initialed__________