1
EXHIBIT 10.13
FLUOR CORPORATION AND SUBSIDIARIES
Management Manual
================================================================================
Section: Compensation Page: 129
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
================================================================================
OBJECTIVE
To provide severance compensation to eligible executives of Fluor Corporation
and designated subsidiaries (the company) who leave the company, depending on
the circumstances and conditions leading to termination.
ELIGIBILITY
Executives of Fluor Corporation and designated subsidiaries actively at work who
are participants in the Fluor Corporation and Subsidiaries Executive Incentive
Compensation Plan.
DEFINITIONS
For the purpose of the Plan, the following definitions apply:
A. VOLUNTARY SEPARATION
Action taken by an executive for personal reasons, to seek other
employment, to accept another position, for failure to return at
conclusion of leave, or to voluntarily retire.
B. INVOLUNTARY SEPARATION
1. Action taken by the company due to reduction in force
resulting from reorganization or reduced workload or other
similar circumstances whereby the executive's services are
no longer required on the job. Executives involuntarily
separated who meet the retirement criteria may elect
retirement.
2. Action taken by the company when an executive is covered
by the Americans with Disabilities Act and is unable to
perform his/her essential job functions with reasonable
accommodation.
C. INVOLUNTARY DISCHARGE
Action taken by the company for reasons other than stated in
Paragraph B. above including but not limited to absenteeism,
misconduct, insubordination, appearing at work under the
influence of a controlled substance or alcohol, unethical
behavior, disclosure of confidential information, sexual
harassment, employment discrimination, or unsatisfactory
performance.
2
FLUOR CORPORATION AND SUBSIDIARIES
Management Manual
================================================================================
Section: Compensation Page: 130
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
(Continued)
Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
================================================================================
D. OFFICER
An executive who is a vice president or above of Fluor
Corporation, Fluor Daniel, Inc., Fluor Signature Services, Fluor
Global Services, Inc., or Fluor Constructors, Inc., who
participates in the Fluor Corporation and subsidiaries Executive
Incentive Compensation Plan.
E. COMPLETED YEARS OF ACCUMULATED SERVICE
A period of accumulated service with the company, subject to the
limitation set forth under Procedure, A.4.c.
F. BENEFICIARY
The beneficiary designated by the executive under the Fluor
Corporation Employee's Retirement Plan, or, if no such
designation has been made, then as designated under the Group
Life/Health Insurance Plan unless the executive otherwise makes
a beneficiary designation on the form provided by the
executive's corporate employer, or, in the absence of any
designation, the administrator or executor of the executive's
estate.
PROCEDURE
A. SEVERANCE PAY
1. Voluntary Separation
The company will not provide severance pay nor prorated
Incentive Compensation (Paragraph A under "Definitions").
2. Involuntary Separation
Severance pay will be based on current base salary and
total completed years of accumulated service as follows:
a. Officers
1. Two weeks' severance pay for each completed year
of accumulated service up to 52 weeks.
2. Minimum eight weeks' severance.
3
FLUOR CORPORATION AND SUBSIDIARIES
Management Manual
================================================================================
Section: Compensation Page: 131
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
(Continued)
Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
================================================================================
b. Non-Officer Executives
1. Two weeks' severance pay for each completed year
of accumulated service up to 26 weeks.
2. Minimum four weeks' severance
3. Involuntary Discharge
a. The company will not provide severance pay nor
consider proration of Incentive Compensation
(Paragraph C, Definitions).
4. Limitations
a. Maximum severance pay will be 52 weeks for officers,
26 weeks for non-officer executives.
b. Minimum severance pay will be eight weeks for
officers, four weeks for non-officer executives.
c. The total completed years of accumulated service
calculated for a severance payment may only be used
one time in severance calculations.
d. For executives involuntarily separated and placed on
Leave of Absence in Lieu of Layoff, severance pay
will be based on completed years of accumulated
service up to the effective date of the Leave of
Absence.
e. Officers in policy making positions who meet
retirement criteria will receive severance pay as
follows:
1. Officers who meet the minimum retirement income
requirement set forth by federal law, excluding
any amount payable under this Plan, will receive
severance pay for only the period from the date
of termination until January 2 following the
officer's 65th birthday subject to the
limitation set forth under Procedure, A.2.a.
2. Officers who do not meet the minimum retirement
income requirement set forth by federal law,
computed excluding any amount payable under this
Plan, will receive severance pay as determined
under Procedure, A.2.a.
4
FLUOR CORPORATION AND SUBSIDIARIES
Management Manual
================================================================================
Section: Compensation Page: 132
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
(Continued)
Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
================================================================================
f. In the case of involuntary separation due to an
executive's inability to perform his/her essential
job functions with reasonable accommodation, the
executive's severance pay amount will be reduced by
the expected entitlements under Fluor's short-term
and long-term disability for the number of weeks
determined under Procedure A.2.a and b. If the actual
entitlements received by the employee are less than
that deducted from severance pay, the employee will
be paid the difference for the period of weeks for
which the employee received severance. This provision
is not intended to affect any state or federal
benefits to which the executive may be entitled.
g. In cases where the executive is entitled to
legislated severance pay in non-U.S. countries,
executive's severance pay amount will be reduced by
any legislated severance payments required of the
company that are calculated with reference to the
number of weeks determined under Procedure A.2.a and
b.
5. Severance pay will be paid in a lump sum, or at the
discretion of the company, annual installments over a
period not to exceed the total number of weeks determined
under Paragraph A.2.a. and b. above.
6. In event of an executive's death prior to payment of the
entire entitlement, payment may be made to the designated
beneficiary in one lump sum or by continuation of
installments at the discretion of the executive's
corporate employer.
B. INCENTIVE COMPENSATION
(As defined in the Executive Incentive Compensation Plan, Fluor
Corporation and Subsidiaries Management Manual)
1. Voluntary Separation
The company will not provide a prorated incentive award.
2. Involuntary Separation
Incentive Compensation may be considered based on the
number of completed months of service during the current
fiscal year prior to termination and consistent with the
administration of the Plan during the year of termination.
5
FLUOR CORPORATION AND SUBSIDIARIES
Management Manual
================================================================================
Section: Compensation Page: 133
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
(Continued)
Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
================================================================================
3. Involuntary Discharge
The company will not provide a prorated incentive award.
C. COMPANY AUTOMOBILES
In company locations where officers/directors may be
assigned company-owned automobiles, the following will
apply:
a. Voluntary Separation
Officers/directors who voluntarily retire will be
presented with the automobile that is currently
assigned as a gift.
b. Involuntary Separation
Officers/directors who are requested to take early
retirement will be presented with the automobile
which is currently assigned as a gift.
c. Involuntary Discharge
Officers/directors will not be given an automobile,
and it will not be available for purchase.
D. CLUB MEMBERSHIP
Company memberships will not be awarded to an executive
regardless of reason for termination.
E. AUTOMOBILE ALLOWANCE
1. In locations where executives receive a car
allowance/insurance, the following will apply:
a. Voluntary Separation
The company will not provide a car
allowance/insurance.
6
FLUOR CORPORATION AND SUBSIDIARIES
Management Manual
================================================================================
Section: Compensation Page: 134
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
(Continued)
Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
================================================================================
b. Involuntary Separation
The company will not provide a car
allowance/insurance.
c. Involuntary Discharge
The company will not provide a car
allowance/insurance.
F. INSURANCE COVERAGE
Applicable insurance coverage, i.e., group health, long-term
disability, executive health, etc., will cease on date of
termination. Where applicable, departing executive may elect
continued coverage through the Consolidated Omnibus Budget
Reconciliation Act (COBRA).
G. TIME OFF WITH PAY (TOWP) PROGRAM
Balance will be paid at time of termination.
H. STOCK BASED AWARDS
1. Voluntary Separation
Upon qualified retirement, awards become 100 percent
vested.
2. Involuntary Separation
Upon qualified retirement, awards become 100 percent
vested.
3. Involuntary Discharge
Vested portion may be exercised.
I. LONG TERM INCENTIVE (LTI) PROGRAM
Applicable cash awards under the long-term incentive program
will not be prorated for any reason, except death or total and
permanent disability.
7
FLUOR CORPORATION AND SUBSIDIARIES
Management Manual
================================================================================
Section: Compensation Page: 135
Subject: EXECUTIVE SEVERANCE PLAN Effective: 07-21-99
(Continued)
Applies To: Fluor Corporation and Selected Subsidiaries Supersedes: 10-20-98
================================================================================
J. WAIVERS
A settlement agreement and release form must be obtained from
employees in exchange for severance benefits. No severance
benefit will be due employees unless a settlement and release
agreement provided by the company has been properly executed.
K. OUTPLACEMENT
In-house outplacement services are available.
L. PLAN TERMINATION
This Plan will expire December 31st., 2000. Any executive whose
employment terminates after the Plan expires, will not be
eligible for participation in the Plan. Further, no benefits
will accrue or be payable under the Plan after Plan Termination.
M. EXCEPTION
Approved by the Chief Executive Officer of Fluor Corporation.