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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.            )

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Definitive Proxy Statement

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Soliciting Material under §240.14a-12

 

FLUOR CORPORATION

(Name of Registrant as Specified In Its Charter)

 

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LOGO

October 14, 2020

Dear Fellow Stockholders:

On behalf of your Board of Directors, thank you for your investment in Fluor. Our Board appreciates that it is elected by you, our stockholders, to oversee the management of our Company for the long-term benefit of our stakeholders.

Since our last annual meeting of stockholders, your Board of Directors has driven a number of significant changes at Fluor, which we have addressed in our public announcements and filings with the Securities and Exchange Commission ("SEC"). Our actions to date include the following:

In addition, as we have described over the past year, in early 2020, in response to an inquiry from the SEC, the Board of Directors formed an independent Special Committee. This committee was empowered to review the projects where we recorded charges in the first half of 2019, including the Radford Nitrocellulose project, and other related issues. Working with external advisors and financial experts, the Special Committee engaged in a detailed review of projects from 2016 through 2019 representing a majority of Fluor's lump sum projects, based on revenue.

The review by the Special Committee concluded that there were errors related to the timing of charges and revenue. To correct for this, we restated our financial results for the fiscal years 2016 through 2019 to reflect the underlying performance on the Radford Nitrocelluolose project. In addition, we also identified other errors that while quantitatively immaterial were also in need of correction. You can find a full explanation of the Special Committee's work and Audit Committee's conclusions in our 2019 Form 10-K filed on September 25, 2020.


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We take the matters identified through the Special Committee's review seriously and, in concert with your Board of Directors, have implemented further changes in our operations and financial reporting, including the following:

By taking these and other actions, we believe that we are positioning Fluor for a brighter future.

As we move forward, we remain accountable to stockholders through a variety of governance practices, including fully independent Board committees, the annual election of directors, majority voting in uncontested director elections, and a robust Board evaluation process. Since last year's annual meeting, we continued to engage with stockholders on a number of topics, including governance, sustainability and compensation. We value this feedback and look forward to continued dialogue. More information about these practices, and others, can be found in this Proxy Statement. It is our belief that strong corporate governance practices such as these are critical to building long-term stockholder value.

We are pleased to invite you to join us at the Fluor Corporation 2020 annual meeting of stockholders to be held on Tuesday, November 24, 2020 at 8:00 a.m., Central Standard Time. To support the health and well-being of our employees and shareholders, this year's meeting will be held virtually via a live audio webcast at www.virtualshareholdermeeting.com/FLR2020. At this year's meeting, we will vote on the election of twelve directors, the ratification of the selection of Ernst & Young LLP as Fluor's independent registered accounting firm and the approval of the Fluor Corporation 2020 Performance Incentive Plan. We will also hold a non-binding advisory vote on the compensation of Fluor's named executive officers. Members of management will report on the Company's operations and respond to stockholder questions.

It is important that your shares be represented and voted at the annual meeting regardless of how many shares you own. Whether or not you plan to join the meeting, we encourage you to review our proxy materials and promptly cast your vote over the Internet or by phone. Alternatively, if you receive a paper copy of the proxy materials by mail, you may vote by signing, dating and mailing the proxy card or voting instruction card in the envelope provided. Voting in one of these ways will ensure that your shares are represented at the meeting.

On behalf of the Board of Directors, we would like to thank Samuel J. Locklear III, Nader H. Sultan and Lynn C. Swann, who stepped down from the Board during 2019, and Peter K. Barker and Deborah D. McWhinney, who will be retiring from the Board upon the expiration of their terms at this year's annual meeting of stockholders, for their many years of service and contributions to our Company.


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The Board remains committed to serving your interests and greatly appreciates your continued support of our Company. We look forward to you joining us virtually on November 24th.

Sincerely,    


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Alan L. Boeckmann
Executive Chairman
  Carlos M. Hernandez
Chief Executive Officer

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LOGO

Notice of Annual Meeting of Stockholders


 

WHEN
Tuesday, November 24, 2020
8:00 a.m. Central Standard Time

WHERE
Online via webcast at
www.virtualshareholdermeeting.com/FLR2020

RECORD DATE
Close of business on September 28, 2020


  

  

 

 

ITEMS OF BUSINESS
1.   The election of the twelve directors named in the proxy statement to serve until the 2021 annual meeting of stockholders and until their respective successors are elected and qualified.
2.   An advisory vote to approve the Company's executive compensation.
3.   The approval of the Fluor Corporation 2020 Performance Incentive Plan.
4.   The ratification of the appointment by our Audit Committee of Ernst & Young LLP as independent registered public accounting firm for the fiscal year ending December 31, 2020.

 

 

Stockholders will also act on such other matters as may be properly presented at the meeting or any adjournment or postponement thereof.

 

 

 

All stockholders of record at the close of business on September 28, 2020 are entitled to receive notice of, and to vote at, the annual meeting. Due to concerns related to the coronavirus (COVID-19) outbreak, the annual meeting of stockholders will be a virtual meeting, conducted exclusively via live audio webcast at www.virtualshareholdermeeting.com/FLR2020. There will not be a physical location for the annual meeting, and you will not be able to attend the meeting in person. Please cast your vote as instructed in the Notice of Internet Availability of Proxy Materials (the "Notice"), by either voting your shares over the Internet or by phone, as promptly as possible. Alternatively, if you wish to receive paper copies of your proxy materials, including the proxy card or voting instruction card, please follow the instructions in the Notice. Once you receive paper copies of your proxy materials, please complete, sign, date and promptly return the proxy card or voting instruction card in the postage-prepaid return envelope provided, or follow the instructions set forth on the proxy card or voting instruction card to authorize the voting of your shares over the Internet or by phone. Your prompt response is necessary to ensure that your shares are represented at the meeting.

    By Order of the Board of Directors,

 

 

GRAPHIC
October 14, 2020
Irving, Texas
  John R. Reynolds
Executive Vice President, Chief Legal Officer and Secretary

 

 
   
   
    Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on November 24, 2020:  
    This proxy statement and the Company's 2019 Annual Report to Stockholders are available at
www.proxyvote.com.
   

 

 

Please take time to vote your shares!

 

 

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TABLE OF CONTENTS

 
  Page  

Proxy Summary

    i  

PROPOSAL 1 — ELECTION OF DIRECTORS

    1  

Director Nominees

    2  

Director Skills Matrix

    2  

Director Biographies

    3  

Corporate Governance

    9  

Corporate Governance Highlights

    9  

Stockholder Engagement

    10  

Sustainability

    10  

Board Independence

    10  

Risk Management Oversight

    11  

Board Leadership

    12  

Board of Directors Meetings and Committees

    13  

Board and Committee Evaluations

    18  

Consideration of Director Nominees

    19  

Related Person Transactions

    20  

Certain Legal Proceedings

    21  

Communications with the Board

    22  

Compensation Committee Interlocks and Insider Participation

    22  

PROPOSAL 2 — ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

    23  

Compensation Discussion and Analysis

    24  

Organization and Compensation Committee Report

    48  

Summary Compensation Table

    49  

All Other Compensation

    52  

Grants of Plan-Based Awards in 2019

    53  

Outstanding Equity Awards at 2019 Fiscal Year End

    56  

Option Exercises and Stock Vested in 2019

    57  

Nonqualified Deferred Compensation

    58  

Pension Benefits

    60  

Potential Payments Upon Termination or Change in Control

    61  

Pay Ratio Disclosure

    67  

Director Compensation

    69  

PROPOSAL 3 — APPROVAL OF THE FLUOR CORPORATION 2020 PERFORMANCE INCENTIVE PLAN

    73  

Equity Compensation Plan Information

    89  

PROPOSAL 4 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

    90  

Report of the Audit Committee

    92  

Stock Ownership and Stock-Based Holdings of Executive Officers and Directors

    94  

Stock Ownership of Certain Beneficial Owners

    96  

Delinquent Section 16(a) Reports

    97  

Other Business

    98  

Additional Information

    98  

Questions and Answers About the Annual Meeting and Voting

    102  

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PROXY SUMMARY

This is a summary only, and does not contain all of the information that you should consider in connection with this proxy statement. Please read the entire proxy statement carefully before voting.

GOVERNANCE HIGHLIGHTS

Our commitment to strong governance practices is illustrated by the following:

    Annual director elections
    Majority voting for directors in uncontested elections
    Director mandatory retirement age
    Annual board and committee self-evaluations
    Annual evaluations of individual directors
    Stockholder right to call special meetings
    100% independent Board committees
    10 out of 12 director nominees are independent
    Independent lead director
    Regular executive sessions of independent directors
    Proxy access right
    Executive compensation clawback policy
    Stock ownership guidelines for directors and executive officers
    Prohibition on hedging or pledging Company securities

VOTING MATTERS

Stockholders are being asked to vote on the following matters:

GRAPHIC

Stockholders also will transact any other business that may properly come before the meeting.

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HOW TO VOTE

You are entitled to vote at the 2020 annual meeting of stockholders if you were a stockholder of record at the close of business on September 28, 2020, the record date for the meeting.

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Restatement

As previously disclosed, the Company announced that (a) the SEC is conducting an investigation and has requested documents and information related to projects for which the Corporation recorded charges in the second quarter of 2019 and (b) the Company received a subpoena from the U.S. Department of Justice ("DOJ") seeking documents and information related to the second quarter 2019 charges; certain of the projects associated with those charges; and certain project accounting, financial reporting and governance matters. Following the receipt of the SEC inquiry, we, together with external counsel and forensic accountants, and subsequently, under the oversight of a Special Committee of the Board of Directors, conducted an internal investigation into matters described in the inquiry and subpoena as well as related matters. As a result of the findings of the Special Committee, we announced that we would correct misstatements in our previously issued consolidated financial statements by restating such financial statements. We accomplished this on September 25, 2020, when we filed our 2019 Form 10-K, which reports our financial results for our 2016 through 2019 fiscal years. In light of the Special Committee's work, we also implemented a number of changes to our operations, internal controls and governance structures, as described this proxy statement. We encourage you to review the Form 10-K for additional information regarding the work of the Special Committee.

FLUOR CORPORATION   |  2020 PROXY STATEMENT        iii

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ELECTION OF DIRECTORS

 

 

LOGO

Proxy Statement

October 14, 2020

This proxy statement is furnished in connection with the solicitation by the Board of Directors of Fluor Corporation (the "Company" or "Fluor") of your proxy for use at the virtual annual meeting of stockholders to be online via webcast at www.virtualshareholdermeeting.com/FLR2020 on Tuesday, November 24, 2020, at 8:00 a.m. Central Standard Time, or at any adjournment or postponement thereof. This proxy statement is first being mailed or made available to stockholders on or about October 14, 2020.

The current mailing address of the principal executive offices of Fluor Corporation is 6700 Las Colinas Boulevard, Irving, Texas 75039. Please direct any communications to this mailing address.

PROPOSAL 1 — ELECTION OF DIRECTORS

The terms of each of the Company's current directors will expire at the 2020 annual meeting. Each of Alan M. Bennett, Rosemary T. Berkery, Alan L. Boeckmann, David E. Constable, H. Paulett Eberhart, Peter J. Fluor, James T. Hackett, Carlos M. Hernandez, Thomas C. Leppert, Teri P. McClure, Armando J. Olivera and Matthew K. Rose has been nominated for election at the annual meeting to serve a one-year term expiring at the annual meeting in 2021 and until his or her respective successor is elected and qualified. Mr. Peter K. Barker and Ms. Deborah D. McWhinney will be retiring from the Board effective upon the expiration of their terms at the 2020 annual meeting. Mr. Fluor, who had previously announced his decision to retire from the Board, has, upon consultation with the Board, agreed to delay his retirement until the 2021 annual meeting and be nominated for re-election at the 2020 annual meeting. Accordingly, the Board has set the number of directors at twelve, effective as of the 2020 annual meeting.

Each of the nominees listed above has agreed to serve as a director of the Company if elected. The Company knows of no reason why the nominees would not be available for election or, if elected, would not be able to serve. If any of the nominees decline or are unable to serve as a nominee at the time of the annual meeting, the persons named as proxies may vote either (1) for a substitute nominee designated by the Board to fill the vacancy or (2) just for the remaining nominees, leaving a vacancy. Alternatively, the Board may reduce the size of the Board.

Under the standard applicable to the Company's director elections, a director must receive the affirmative vote of a majority of the votes cast; except that directors shall be elected by a plurality of the votes cast if as of the record date for such meeting, the number of director nominees exceeds the number of directors to be elected (a situation we do not anticipate). A majority of the votes cast means that the number of shares voted "for" a director nominee must exceed the number of shares voted "against" that director nominee. If an incumbent director is not re-elected, the Governance Committee will consider his or her contingent resignation given prior to the meeting and make a recommendation to the Board on whether to accept or reject the resignation. The Board will then

FLUOR CORPORATION   |  2020 PROXY STATEMENT        1

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ELECTION OF DIRECTORS

 

 

 

publicly announce its decision regarding whether to accept the resignation and, if not, the reasons why.

Director Nominees

As discussed further below under "Corporate Governance — Consideration of Director Nominees," the Governance Committee is responsible for reviewing with the Board, on an annual basis (and as needed), the composition of the Board to assess whether the skills, experience, characteristics and other criteria established by the Board are currently represented on the Board as a whole and in individual Board members, and to assess the criteria that may be needed in the future. The Company's directors have experience with businesses that operate in industries in which the Company operates, such as oil and gas and infrastructure, and collectively have additional skills that are important to overseeing the Company's business, such as knowledge of construction services, financial matters, risk oversight and compliance, and familiarity with non-U.S. markets. The following pages highlight the specific experience, qualifications, attributes and skills that our individual directors possess which have led the Governance Committee to conclude that each such individual should continue to serve on the Company's Board.

Director Skills Matrix

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ELECTION OF DIRECTORS

Director Biographies

The following biographical information is furnished with respect to each of the nominees for election at the annual meeting.

ALAN M. BENNETT

GRAPHIC
Age: 70

Director Since: 2011

Board Committees:
Audit (Chair since February 2020),
Executive and Organization and
Compensation

Independent: Yes

  POSITION AND BUSINESS EXPERIENCE

President and Chief Executive Officer of H&R Block, Inc., a publicly traded entity providing tax, banking and business and consulting services, from 2010 until his retirement in 2011; Interim Chief Executive Officer of H&R Block from 2007 to 2008; Senior Vice President and Chief Financial Officer of Aetna Inc., a provider of health care benefits, from 2001 to 2007.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS


Mr. Bennett brings to the Board a deep understanding of business operations, finance, sales and marketing, developed through his experience as a former Chief Executive Officer, Chief Financial Officer and Vice President of Sales and Marketing. His leadership roles at H&R Block and Aetna provide the Board with valuable public company insights into business strategy and financial planning. In addition, he brings almost 40 years of experience in accounting and financial matters to our Audit Committee.

OTHER BOARD SERVICE


Director, Halliburton Company

Director, The TJX Companies, Inc.

ROSEMARY T. BERKERY

GRAPHIC
Age: 67

Director Since: 2010

Board Committees:
Audit, Executive and
Governance (Chair since September 2019)

Independent: Yes

  POSITION AND BUSINESS EXPERIENCE

Vice Chair of UBS Wealth Management Americas and Chair of UBS Bank USA, each a wealth management banking business, from 2010 until her retirement in April 2018; Vice Chairman, Executive Vice President and General Counsel of Merrill Lynch & Co., Inc., a global securities and financial services business, from 2001 to 2008; joined Merrill Lynch in 1983.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS


Ms. Berkery's broad range of experience in financial, business and legal matters makes her a valued member of the Board. Her experience leading a $50 billion wealth management bank allows her to provide valued counsel on matters such as finance, banking arrangements, global business strategies, marketing and market risks. In addition, her 35 years in the legal field make her an excellent resource to the Governance Committee and the Board on legal and compliance matters.

OTHER BOARD SERVICE


Director, Mutual of America Life Insurance Company

Director, The TJX Companies, Inc.

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ELECTION OF DIRECTORS

 

 

 

ALAN L. BOECKMANN

GRAPHIC
Executive Chairman

Age: 72

Director Since: 2019 (with previous service from 2001 to 2012)

Board Committees: Executive (Chair since May 2019)

Independent: No

  POSITION AND BUSINESS EXPERIENCE

Executive Chairman (since 2019) of Fluor Corporation; non-executive Chairman of Fluor from 2011 until his retirement in 2012; Chairman and Chief Executive Officer of Fluor Corporation from February 2002 until his retirement in 2011; joined Fluor in 1979 with previous service from 1974 to 1977.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS


Mr. Boeckmann's experience as former Chairman and Chief Executive Officer of the Company, along with his 36 years of experience with the Company, give him a deep knowledge of the industries in which the Company operates as well as the Company's opportunities, challenges and operations. Additionally, his service as a director of other global public companies allows him to bring a diverse knowledge of strategy, finance and operations to our Board.

OTHER BOARD SERVICE


Director, Sempra Energy

Former director, Archer-Daniels-Midland Company

Former director, BP p.l.c.

DAVID E. CONSTABLE

GRAPHIC
Age: 58

Director Since: 2019

Board Committees: Commercial Strategies and Operational Risk (Chair since September 2019), Executive and Governance

Independent: Yes

  POSITION AND BUSINESS EXPERIENCE
Chief Executive Officer (from 2011) and President (from 2014) of Sasol Limited, a publicly traded integrated chemicals and energy company, until his retirement in 2016; Group President, Project Operations at Fluor Corporation from 2009 to 2011; Group President, Power at Fluor from 2005 to 2009; joined Fluor in 1982.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS


Mr. Constable's 30 years of service at Fluor, including as Group President of both Project Operations and Power, and his perspective as a client earned during his role as Chief Executive Officer of Sasol, provide the Board with a unique perspective of the Company and its industry. In addition, his roles as a director at other public companies within the industries we operate give him the experience to provide valuable advice on commercial strategies and operational risk.

OTHER BOARD SERVICE


Director, ABB Ltd.

Director, Rio Tinto Limited and Rio Tinto plc

Former director, Anadarko Petroleum Corporation

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ELECTION OF DIRECTORS

 

 

 

H. PAULETT EBERHART

GRAPHIC
Age: 67

Nominee
(with previous service
from 2010 to 2011)

Independent: Yes

  POSITION AND BUSINESS EXPERIENCE

Chairman and Chief Executive Officer of HMS Ventures, a privately-held business involved with technology services and the acquisition and management of real estate, since 2014; President and Chief Executive Officer of CDI Corp., a provider of engineering and information technology outsourcing and professional staffing services, from 2011 through 2014; Chairman and Chief Executive Officers of HMS Ventures from 2009 to 2011; President and Chief Executive Officer from Invensys Process Systems, Inc., a process automation company, from 2007 to 2009.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS


Ms. Eberhart's qualifications to serve on the Board include her many years of service as a Chief Executive Officer at both private and public companies. Her board service at other companies, including as a lead director at a public company, provides the Board with valuable corporate governance experience. In addition, her many years of service as an executive at Electronic Data Systems Corporation bring valuable operational, financial and accounting expertise to the Board.

OTHER BOARD SERVICE


Director, LPL Financial Holdings Inc.

Director, Valero Energy Corporation

Former director, Anadarko Petroleum Corporation

Former director, Cameron International Corporation

PETER J. FLUOR

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LEAD INDEPENDENT DIRECTOR*

Age: 73

Director Since: 1984

Board Committees: Executive

Independent: Yes

*Mr. Fluor intends to retire as of the 2021 annual meeting of stockholders

  POSITION AND BUSINESS EXPERIENCE

Chairman and Chief Executive Officer of Texas Crude Energy, LLC, an international oil and gas exploration and production company, since 2001; President and Chief Executive Officer of Texas Crude Energy from 1980 to 2001; joined Texas Crude Energy in 1972.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS


Mr. Fluor has more than 45 years of experience in the energy industry, currently serving as Chairman and Chief Executive Officer of Texas Crude Energy. His vast knowledge of the global oil and gas industry and his experience managing international businesses allow him to provide trusted counsel to our Board. In addition, his unique heritage and understanding of our Company's legacy, together with his extensive knowledge of our business operations, clients and executives, make him an invaluable asset to our Board.

OTHER BOARD SERVICE


Former director, Anadarko Petroleum Corporation

Former director, Cameron International Corporation

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ELECTION OF DIRECTORS

JAMES T. HACKETT

GRAPHIC
Age: 66

Director Since: 2016
(with previous service from 2001 to 2015)

Board Committees:
Organization and
Compensation (Chair since February 2020),
Commercial Strategies
and Operational Risk
and Executive

Independent: Yes

  POSITION AND BUSINESS EXPERIENCE

President of Tessellation Services, LLC, a privately-held consulting services firm, since 2020; Executive Chairman of Alta Mesa Resources, Inc., an onshore oil and gas acquisition, exploration and production company, from 2018 to 2020; Interim Chief Executive Officer of Alta Mesa from 2018 to 2019; Partner of Riverstone Holdings LLC, an energy and power focused private investment firm, from 2013 to 2018; Executive Chairman of Anadarko Petroleum Corporation from 2012 until his retirement in 2013; Chief Executive Officer of Anadarko from 2003 to 2012.

In September 2019, Alta Mesa Resources, Inc. and certain of its subsidiaries filed for protection under Chapter 11 of the United States Bankruptcy Code while Mr. Hackett was Executive Chairman.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS


Mr. Hackett has extensive knowledge of the global oil and gas industry. His several decades of executive experience, as well as his experience serving on other public company boards and as a former Chairman of the Board of the Federal Reserve Bank of Dallas, enable him to provide respected guidance on business strategy and financial matters, as well as perspective about the oil and gas and power markets.

OTHER BOARD SERVICE


•     Director, Enterprise Products Holdings LLC

Director, National Oilwell Varco, Inc.

Former director, Alta Mesa Resources, Inc.

Former director, Cameron International Corporation

CARLOS M. HERNANDEZ

GRAPHIC
Age: 66

Director Since: 2019

Board Committees:
Executive

Independent: No

  POSITION AND BUSINESS EXPERIENCE

Chief Executive Officer (since 2019) of Fluor Corporation; Chief Legal Officer and Secretary of Fluor from 2007 to 2019; General Counsel and Secretary for ArcelorMittal Americas, a major steel producer which is part of the ArcelorMittal steel group from 2005 to 2007; General Counsel and Secretary of International Steel Group (ISG), Inc., prior to its acquisition by Mittal Steel Company from 2004 to 2005.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS


Mr. Hernandez, the Company's Chief Executive Officer, brings to the Board extensive leadership experience with, and knowledge of, the Company's business and strategy. His 13 years of senior leadership experience with the Company provide the Board with perspective on the development of the Company's operations, strategy and risk management. In addition, his background in the legal field brings to the Board valuable insight into legal and compliance matters.

OTHER BOARD SERVICE


N/A

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ELECTION OF DIRECTORS

 

 

 

THOMAS C. LEPPERT

GRAPHIC
Age: 66

Director Since: 2019

Board Committees:
Commercial Strategies
and Operational Risk
and Governance

Independent: Yes

  POSITION AND BUSINESS EXPERIENCE

Chief Executive Officer of Kaplan, Inc. a provider of education services to colleges, universities and businesses from 2014 until his retirement in 2015; President and Chief Operating Officer of Kaplan from 2013 to 2014; Mayor of the City of Dallas from 2007 to 2011; Chairman and Chief Executive Officer of The Turner Corporation from 1999 to 2006, one of the largest construction services companies in the U.S.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS


Mr. Leppert's diverse leadership background in the public and private sectors, both as a corporate chief executive officer and elected political official, provide him with valuable experience in business, strategy, project management and governance. His prior service as Chief Executive Officer of The Turner Corporation, one of the nation's largest general building companies, provide the Board with unique insight and experience in the construction services industry.

OTHER BOARD SERVICE


Former director, Tutor Perini Corporation

Former director, W.S. Atkins PLC

TERI P. MCCLURE

GRAPHIC
Age: 56

Director Since: 2020

Board Committees:
Audit and Governance

Independent: Yes

  POSITION AND BUSINESS EXPERIENCE

Chief Human Resources Officer and Senior Vice President, Labor at United Parcel Service, Inc., the world's largest package delivery company and provider of global supply chain management services, from 2016 until her retirement in 2019; Senior Vice President, Legal, Compliance & Public Affairs, General Counsel & Secretary at UPS from 2006 to 2016; General Counsel at UPS from 2006 to 2006; joined UPS in 1995.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS


Ms. McClure's long tenure as a senior executive of a Fortune 500 company make her a valued member of our Board. Her broad experience and expertise provide the Board with unique experience and knowledge in human capital strategy and executive compensation, as well as compliance and regulatory, corporate governance and legal matters.

OTHER BOARD SERVICE


Director, GMS,  Inc.

Director, JetBue Airways Corporation

Director, Lennar Corporation

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ARMANDO J. OLIVERA

GRAPHIC
Age: 71

Director Since: 2012

Board Committees:
Commercial Strategies
and Operational Risk
and Organization and
Compensation

Independent: Yes

  POSITION AND BUSINESS EXPERIENCE

Senior Advisor, Ridge-Lane Limited Partners, a strategic advisory firm, since 2017 and Partner in the Ridge-Lane Sustainability Practice since 2018; President (from 2003) and Chief Executive Officer (from 2008) of Florida Power & Light Company, an electric utility that is a subsidiary of a publicly traded energy company, until his retirement in 2012; joined Florida Power & Light in 1972.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS


Mr. Olivera's tenure as the former President and Chief Executive Officer of one of the largest electric utilities in the United States provides him with extensive knowledge of financial and accounting matters, as well as a keen understanding of the power industry and its regulations. Additionally, his experience as a consultant and his role as a director of other public companies gives him the experience to provide valuable advice to our Board and its committees from a governance, sustainability and risk perspective.

OTHER BOARD SERVICE


Director, Consolidated Edison, Inc.

Director, Lennar Corporation

Former director, AGL Resources, Inc.

MATTHEW K. ROSE

GRAPHIC
Age: 61

Director Since: 2014

Board Committees:
Audit and Organization
and Compensation

Independent: Yes

  POSITION AND BUSINESS EXPERIENCE

Advisor to BDT Capital Partners, LLC, an investment and advisory firm specializing in family and founder-led companies, since 2019; Executive Chairman, Burlington Northern Santa Fe, LLC, a subsidiary of Berkshire Hathaway Inc. (and former public company) and one of the largest freight rail systems in North America ("BNSF"), from 2014 until his retirement in 2019; Chairman and Chief Executive Officer of BNSF from 2002 to 2014; joined BNSF in 1993.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS


Mr. Rose's qualifications to serve on the Board include his extensive leadership experience obtained from overseeing a large, complex and highly regulated organization, his considerable knowledge of operations management and business strategy and his deep understanding of public company oversight. In addition, his experience serving on other public company boards, as well as the board of the Federal Reserve Bank of Dallas, makes him a valuable member of our Board.

OTHER BOARD SERVICE


Director, AT&T Inc.

GRAPHIC

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Corporate Governance Highlights

Fluor has long believed that good corporate governance practices promote the principles of fairness, transparency, accountability and responsibility and will help manage the Company for the long-term benefit of its stockholders. During the past year, we continued to review our corporate governance policies and practices, compare them to those suggested by various commentators on corporate governance and the practices of other public companies and engage with our stockholders on corporate governance issues.

The following list highlights some of our core governance values:

 
   

Proxy Access

 

Our proxy access bylaws give stockholders the ability to nominate and include director nominees in the Company's proxy materials. Proxy access is available to a stockholder, or group of up to 20 stockholders, that have owned at least 3% of our outstanding shares of common stock for at least three years, to nominate up to two directors or 20% of the Board (whichever is greater), provided that the requirements of the bylaws are met.

Annual Director Elections

 

All directors stand for election on an annual basis.

Annual Board Evaluations

 

We conduct annual evaluations of the Board, its committees and all individual Board members.

Stockholder Right to Call a Special Meeting

 

Holders of at least 25% of our outstanding shares of common stock have the right to call a special meeting of stockholders.

Majority Voting Provisions

 

Our corporate governance documents contain majority (as opposed to supermajority) voting provisions.

Director Independence

 

All directors, with the exception of our Executive Chairman and our Chief Executive Officer, are independent. We also have a Lead Independent Director who presides over executive sessions of the independent directors of the Board and approves agendas and schedules for Board meetings.

Each year, our Board reviews all committee charters and in our most recent review the Board updated each of the charters for the Audit Committee, Executive Committee, Governance Committee and Organization and Compensation Committee. In addition, the Board reviewed and updated the Company's Corporate Governance Guidelines. You can access our current committee charters, Corporate Governance Guidelines, Code of Business Conduct and Ethics for Members of the Board of Directors, as well as other information regarding our corporate governance practices, on our website at www.fluor.com under "Sustainability" — "Governance" — "Corporate Governance Documents." Our Code of Business Conduct and Ethics for Fluor employees can be found on our website at www.fluor.com under "Sustainability" — "Ethics and Compliance" — "The Code."

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In March 2020, the Board adopted a limited duration stockholder rights agreement designed to protect stockholders from efforts to capitalize on recent market volatility as a result of the COVID-19 pandemic. Under the terms of the rights agreement, the rights expire on December 31, 2020, unless earlier redeemed or exchanged.

Stockholder Engagement

Fluor has a long tradition of engaging with its stockholders and being responsive to their perspectives. In addition to our regular investor days organized by Investor Relations, we meet with stockholders on corporate governance and other topics of interest to them. Prior to adopting corporate governance initiatives, including those noted above, we consider the policies of our stockholders and solicit certain of their perspectives on potential courses of action. Since our last annual meeting, we conducted extensive stockholder engagement. Members of management, as well as several members of our Board, participated in meetings with several stockholders, which covered topics such as governance, sustainability and compensation. Our team reported to the Board on the investor feedback and, based on that feedback, we have enhanced our proxy statement disclosure regarding our directors' skills. In addition, we have added disclosure regarding our sustainability efforts.

Sustainability

Fluor's sustainability mission envisions meeting the needs of our clients while conducting business in a socially, economically and environmentally responsible manner to the benefit of current and future generations, thereby creating value for all stakeholders. Fluor helps clients safeguard the environment, conserve energy, protect lives and strengthen economies and social structures of communities. You can read more about our client offerings, as well as our initiatives to develop a diverse workforce; our excellence in health, safety and environmental matters; our commitment to integrity and ethical business conduct; our proactive approach to community involvement and other sustainability efforts, by visiting the Fluor Corporation Sustainability Report at www.fluor.com under the "Sustainability" — "Sustainability Report" section. The Fluor Corporation Sustainability Report is not incorporated by reference in, and does not form a part of, this proxy statement.

Board Independence

In accordance with New York Stock Exchange ("NYSE") listing standards and our Corporate Governance Guidelines, our Board determines annually which directors are independent and, through the Governance Committee, oversees the independence of directors throughout the year. In addition to meeting the minimum standards of independence adopted by the NYSE, a director qualifies as "independent" only if the Board affirmatively determines that the director has no material relationship with the Company (either directly, or as a partner, stockholder or officer of an organization that has a relationship with the Company). A relationship is "material" if, in the judgment of the Board, the relationship would interfere with the director's independent judgment.

Our Board has adopted director independence standards for assessing the independence of our directors. These criteria include restrictions on the nature and extent of any affiliations the directors and their immediate family members may have with us, our independent accountants, organizations with which we do business, other companies where our executive officers serve as compensation committee members and non-profit entities with which we have a relationship. Our independence standards are included in our Corporate Governance Guidelines, which are available on our website at www.fluor.com under the "Sustainability" — "Governance" section.

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The Board, as recommended by the Governance Committee, has determined that each of the Company's current directors and director nominees (other than Mr. Boeckmann and Mr. Hernandez) are independent of the Company and its management under NYSE listing standards and the standards set forth in our Corporate Governance Guidelines. In addition, the Board previously determined that Admiral Samuel J. Locklear III, Mr. Nader H. Sultan and Mr. Lynn C. Swann, each of whom resigned from the Board during fiscal year 2019, were independent. The Board also determined that each of the members of the Audit, Commercial Strategies and Operational Risk, Governance and Organization and Compensation Committees has no material relationship with Fluor and is independent within the meaning of the NYSE listing standards and Fluor's director independence standards for such committee.

In making its independence determination with regard to Mr. Constable, the Board considered his former role as an executive officer of the Company (until 2011) but noted that he has not provided services to the Company since then. Mr. Boeckmann and Mr. Hernandez are not independent under the NYSE listing standards and our Corporate Governance Guidelines because of their employment as the Executive Chairman and Chief Executive Officer of the Company, respectively.

Finally, the Board reviewed charitable contributions made to non-profit organizations for which Board members (or their respective spouses) serve as an employee or on the board of directors. Specifically, the Board considered that certain directors and/or their family members (Mr. Barker, Ms. Berkery, Mr. Hackett, Mr. Leppert, Ms. McWhinney, Mr. Olivera and Mr. Rose) are affiliated with non-profit organizations that received contributions from the Company in 2019, 2018 and/or 2017. No organization received contributions in a single year in excess of $100,000; and therefore these contributions fell well below the thresholds of the Company's independence standards.

Risk Management Oversight

 
   

The Board

 

As part of its oversight function, the Board monitors how management operates the Company. When granting authority to management, approving strategies and receiving management reports, the Board considers, among other things, the risks and vulnerabilities the Company faces. In addition, the Board discusses risks related to the Company's business strategy at the Board's annual strategic planning meeting. The Board also delegates responsibility for the oversight of certain risks to the Board's committees, each of which reports quarterly to the Board regarding the areas they oversee.

Audit Committee

 

Reviews and discusses with management the Company's most significant risks, methods of risk assessment, risk mitigation strategies, and the overall effectiveness of the Company's guidelines, policies and systems with respect to risk assessment and management.
     
  Considers risk issues associated with financial reporting, disclosure process, legal matters, regulatory compliance and information technology, as well as accounting risk exposure. The Audit Committee also receives periodic reports from management on cybersecurity measures and assessments.

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Commercial Strategies and Operational Risk Committee

 

Created in late 2019, this Committee reviews and discusses with management the Company's commercial strategies and operational risks, the Company's prospective and current projects, including operational risks with respect to such prospects and projects, as well as the Company's risk identification and risk mitigation policies, procedures and practices for its strategic and operational risks.

Organization and Compensation Committee

 

Annually reviews the Company's compensation policies and programs, as well as the mix and design of short-term and long-term compensation, to confirm that our compensation programs do not encourage unnecessary and excessive risk taking.

Governance Committee

 

Responsible for overseeing issues that may create governance risks, such as board composition, director selection and the other governance policies and practices that are critical to the success of the Company.

Board Leadership

The Chairman of the Board is elected by the Board on an annual basis. The Board, together with the Governance Committee, annually reviews the structure of the Board, and, as set forth in the Bylaws and the Corporate Governance Guidelines, the Board is empowered to choose any one of its members as Chairman of the Board. In connection with the transition to a new Chief Executive Officer in 2019, the Board determined that it would be appropriate to separate the positions of Chairman and Chief Executive Officer. Accordingly, the positions of Chairman of the Board and Chief Executive Officer of the Company are currently held by different individuals, with Mr. Boeckmann serving as Executive Chairman of the Board and Mr. Hernandez serving as Chief Executive Officer. The Board believes that this structure is best for the Company at the current time, as it allows Mr. Hernandez to focus on the Company's strategy, business and day-to-day operations, while enabling Mr. Boeckmann to focus on Board matters and serve as a liaison between the Board and the Company's senior management, headed by Mr. Hernandez. This structure also allows the Board to benefit from Mr. Boeckmann's prior experience and knowledge of the Company's business and affairs from his prior service as Chief Executive Officer. In his role as Executive Chairman, Mr. Boeckmann provides guidance and support to the Chief Executive Officer and senior management, presides over Board meetings, prepares the agenda for each Board meeting and performs such other duties as the Board may request from time to time.

To provide for independent leadership, the Board has also established a Lead Independent Director position, as it believes that the role of Lead Independent Director promotes effective governance when the Company has a non-independent Chairman. The Lead Independent Director is elected every three years, and his or her duties are closely aligned with the role of an independent chairman. In particular, the Lead Independent Director's primary responsibility is to preside over and

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set the agenda for all executive sessions of the independent directors of the Board. The Lead Independent Director also:

The Lead Independent Director also has the authority to call executive sessions of the independent directors, as needed. Mr. Peter J. Fluor has served as Lead Independent Director since February 2018. In October 2020, the independent members of the Board designated Mr. Alan M. Bennett to serve as Lead Independent Director for a three-year term that will begin on October 28, 2020 and that will expire in October 2023.

The Board believes that its current leadership structure provides independent Board leadership and engagement. In addition, each of the Audit, Commercial Strategies and Operational Risk, Governance and Organization and Compensation Committees is composed entirely of independent directors. Consequently, independent directors directly oversee critical matters such as the compensation policy for executive officers, succession planning, our methods of risk assessment and risk mitigation strategies, our policies and practices related to corporate governance, the director nominations process, our corporate finance strategies and initiatives, and the integrity of our financial statements and internal controls over financial reporting.

Board of Directors Meetings and Committees

During 2019, the Board held eleven meetings, one of which was an extensive two-day strategic planning session. Each of the current directors attended more than 75% of the aggregate number of meetings of the Board and of the Board committees on which he or she served and which were held during the period that each director served. Thus far, in 2020, the Board has held seventeen meetings and was fully engaged throughout the Special Committee's internal review.

As discussed earlier, the Lead Independent Director presides over all executive sessions of the independent directors. Executive sessions of independent directors must take place at each regular Board meeting according to our Corporate Governance Guidelines. During 2019, seven executive sessions of the independent directors were held.

The Board has a policy that directors attend the annual meeting of stockholders each year. All directors serving on the Board at that time attended the 2019 annual meeting of stockholders.

Our Board has five standing committees:

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Each committee has a charter that has been approved by the Board. With the exception of the Executive Committee, each committee must review the appropriateness of its charter and perform a self-evaluation at least annually. Any recommended changes to the charters require approval by the Board. The table below shows the current chairs and membership of each committee, and the independence status of each director.

Director   Independent
Audit
Committee


Commercial
Strategies and
Operational
Risk Committee




Executive
Committee


Governance
Committee


Organization
and
Compensation
Committee
Peter K. Barker     ·               ·
Alan M. Bennett  
C     ·     ·
Rosemary T. Berkery     ·       ·   C    
Alan L. Boeckmann         C    
David E. Constable         C   ·   ·    
Peter J. Fluor*  
    ·    
James T. Hackett         ·   ·       C
Carlos M. Hernandez         ·    
Thomas C. Leppert         ·       ·    
Teri P. McClure  
·       ·  
Deborah D. McWhinney     ·           ·    
Armando J. Olivera  
  ·       ·
Matthew K. Rose     ·               ·

* Lead Independent Director  C Chair    ·    Member

In addition, in 2020, Messrs. Bennett and Leppert served on the Special Committee that was formed to review the projects where we recorded changes in the first half of 2019 and other related issues.

AUDIT COMMITTEE

 
   
Members:

Alan M. Bennett, Chair*

Peter K. Barker* **

Rosemary T. Berkery

Teri P. McClure

Deborah D. McWhinney**

Matthew K. Rose*

  Each of the directors who serves on the Audit Committee is independent within the meaning set forth in Securities and Exchange Commission regulations, NYSE listing standards and our Corporate Governance Guidelines.

*Audit Committee Financial Expert, as determined by the Board.

**Retiring from the Board at the 2020 annual meeting.

Meetings During Fiscal 2019:

Five, including one to review the Company's 2018 Annual Report, Form 10-K and the proxy materials for the 2019 annual meeting. In the first nine months of 2020, the Audit Committee has met five times. At the end of each of the four regular meetings of the committee, the members of the Audit Committee met privately with the Company's independent registered public accounting firm, and also met with the Company's head of internal audit and other members of management.

Key Responsibilities:

The responsibilities of the Audit Committee and its activities during 2019 are described in the "Report of the Audit Committee" section of this proxy statement on pages 92 and 93. The Audit

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Committee also meets in executive sessions, at least quarterly, with the Chief Executive Officer, the Chief Financial Officer, the Chief Legal Officer, the Chief Compliance Officer, the head of internal audit and the Company's independent registered public accounting firm.

COMMERCIAL STRATEGIES AND OPERATIONAL RISK COMMITTEE

 
   
Members:

David E. Constable, Chair

James T. Hackett

Thomas C. Leppert

Armando J. Olivera

  Each of the members of the Commercial Strategies and Operational Risk Committee is independent within the meaning set forth in NYSE listing standards and our Corporate Governance Guidelines.

Meetings During Fiscal 2019:

The committee, which was formed in October 2019, met once in 2019. In the first nine months of 2020, the committee has met six times and held numerous information sessions focused on specific project reviews.

Key Responsibilities:

The Commercial Strategies and Operational Risk Committee's primary responsibilities, which are discussed in detail within its charter, are to:

EXECUTIVE COMMITTEE

 
   
Members:

Alan L. Boeckmann, Chair

Alan M. Bennett

Rosemary T. Berkery

David E. Constable

Peter J. Fluor*

James T. Hackett

Carlos M. Hernandez

  Each of the members of the Executive Committee is independent within the meaning set forth in NYSE listing standards and our Corporate Governance Guidelines, other than Mr. Boeckmann and Mr. Hernandez.

*Retiring from the Board at the 2021 annual meeting.

Meetings During Fiscal 2019:

Three, including one to discuss individual director evaluations.

Key Responsibilities:

When the Board is not in session, the Executive Committee has all of the power and authority of the Board, subject to applicable laws, rules, regulations and the listing standards of the NYSE.

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GOVERNANCE COMMITTEE

 
   
Members:

Rosemary T. Berkery, Chair

David E. Constable

Thomas C. Leppert

Teri P. McClure

Deborah D. McWhinney*

  Each of the members of the Governance Committee is independent within the meaning set forth in NYSE listing standards and our Corporate Governance Guidelines.

*Retiring from the Board at the 2020 annual meeting.

Meetings During Fiscal 2019:

Six.

Key Responsibilities:

The Governance Committee's primary responsibilities, which are discussed in detail within its charter, are to:

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ORGANIZATION AND COMPENSATION COMMITTEE

 
   
Members:

James T. Hackett, Chair

Peter K. Barker*

Alan M. Bennett

Armando J. Olivera

  Each of the members of the Organization and Compensation Committee is independent within the meaning set forth in NYSE listing standards and our Corporate Governance Guidelines.

Matthew K. Rose

  *Retiring from the Board at the 2020 annual meeting.

Meetings During Fiscal 2019:

Ten. Each of the four regular meetings included an executive session attended by the committee members and the committee's independent compensation advisor.

Key Responsibilities:

The Organization and Compensation Committee's primary responsibilities, which are discussed in detail within its charter, are to:

The responsibilities of the Organization and Compensation Committee and its activities during 2019 are further described in the "Compensation Discussion and Analysis" section of this proxy statement. The Organization and Compensation Committee has the authority under its charter to delegate any portion of its responsibilities to a subcommittee denominated by it when appropriate, but did not do so in 2019.

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Board and Committee Evaluations

In order to monitor and improve their effectiveness, and to solicit and act upon feedback received, the Board and its committees engage in an annual formal self-evaluation process. As part of the self-evaluation process, directors consider various topics related to Board composition, structure, effectiveness and responsibilities. While the Board and each of its committees conduct the self-evaluations annually, the Board considers its performance and that of its committees continuously throughout the year and shares feedback with management. The self-evaluation process that the Board has historically used is conducted as follows:

GRAPHIC

For fiscal 2019, the Governance Committee used a third-party consultant, experienced in corporate governance matters, to assist with the Board and committee evaluation process. Directors were interviewed by the independent third party and gave specific feedback on individual directors, committees and the Board as a whole. During the interviews, directors responded to questions to elicit information to be used in improving Board and committee effectiveness. The independent third party synthesized the results and comments received during such interviews. At subsequent meetings, the Lead Independent Director, in conjunction with the independent third-party, presented the findings to the Governance Committee and the Board, followed by review and discussion by the full Board.

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Consideration of Director Nominees

The Board of Directors believes that the Board, as a whole, should include individuals with a diverse range of backgrounds and experience to give the Board both depth and breadth in the mix of skills represented for the benefit of our stockholders. Forty-two percent of our director nominees are women or ethnically diverse individuals.

As provided in our Corporate Governance Guidelines, while all directors should possess business acumen and must exercise sound judgment in their oversight of our operations, the Board endeavors to include in its overall composition an array of targeted skills that complement one another rather than requiring each director to possess the same skills, perspectives and interests. Accordingly, the Board and Governance Committee consider the qualifications of directors and director nominees both individually and in the broader context of the Board's overall composition and the Company's current and future needs.

The Board and Governance Committee also understand the importance of board refreshment and aim to strike a balance between the knowledge that comes from longer-term service on the board with the new experience, ideas and energy that can come from adding directors to the Board. To that end, our Corporate Governance Guidelines provide that non-management directors may not stand for re-election after the end of the year in which they reach the age of 75. In addition, the Board and Governance Committee view the consistent focus on Board membership criteria, Board composition and size, as well as the anticipation of vacancies, to be integral parts of board refreshment. Each of these items is further discussed below.

Our Corporate Governance Guidelines contain Board membership criteria that apply to current directors as well as nominees for director. The Governance Committee is responsible for reviewing with the Board on an annual basis (and as needed), and recommending to the Board, the skills, experience, characteristics and other criteria for identifying and evaluating Board members. The Governance Committee evaluates the composition of the Board annually (and as needed) to assess whether the skills, experience, characteristics and other criteria established by the Board are currently represented on the Board as a whole, and in individual directors, and to assess the criteria that may be appropriate in light of the Company's anticipated future needs. This annual review takes into consideration issues of diversity of thought and background (including gender, race, ethnicity, national background, geography and age), experience, qualifications, attributes and skills. Certain criteria that our Board looks for in a candidate include, among other things, an individual's business experience and skills, judgment, independence, integrity, reputation and international background, the individual's understanding of such areas as finance, marketing, information technology, regulation and public policy, whether the individual has the ability to commit sufficient time and attention to the activities of the Board, the fit of the individual's skills and personality with those of other directors in building a Board that is effective, collegial and responsive to the needs of the Company, and the absence of any potential conflicts with the Company's interests. The Board assesses its effectiveness in achieving these goals in the course of assessing director candidates, which is an ongoing process.

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The Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Governance Committee regularly assesses the appropriate size of the Board, and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated or otherwise arise, the Governance Committee considers various potential candidates for director. Candidates may come to the attention of the Governance Committee through various means, including current Board members, professional search firms, stockholders or other persons. Candidates are evaluated at meetings of the Governance Committee, and may be considered at any point during the year. The Governance Committee reviews a variety of information about candidates, including materials provided by professional search firms, if applicable, or other parties suggesting the candidate. In evaluating candidates, the Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board. In 2019 and 2020, Mr. Constable, Ms. Eberhart and Mr. Leppert were recommended for nomination as Board members by an executive officer. Ms. McClure was recommended by an independent director.

The policy of the Governance Committee is to consider properly submitted stockholder recommendations for candidates for membership on the Board as described above under "— Identifying and Evaluating Nominees for Director." If a stockholder properly recommends an individual to the Governance Committee to serve as a director, all recommendations are aggregated and considered by the Governance Committee at a meeting prior to the issuance of the proxy statement for our annual meeting. Any materials provided by a stockholder in connection with the recommendation of a director candidate are forwarded to the Governance Committee. In evaluating these recommendations, the Governance Committee assesses candidates in light of the membership criteria set forth under "— Director Qualifications" above and the Board's existing composition. Any stockholder wishing to recommend a candidate for consideration by the Governance Committee should submit a recommendation in writing indicating the candidate's qualifications and other relevant biographical information and provide confirmation of the candidate's consent to serve as director. This information should be addressed to the Secretary, Fluor Corporation, 6700 Las Colinas Boulevard, Irving, Texas 75039. Stockholders also have the ability to nominate directors for election in accordance with the Bylaws. See "Additional Information — Advance Notice Procedures" and "— Proxy Access Procedures" on page 100 of this proxy statement, and Sections 2.04 and 2.10 of our Bylaws, which are included on our website at www.fluor.com under "Sustainability" — "Governance."

Related Person Transactions

The Company has adopted a written policy for the approval of transactions to which the Company is a party and in which the aggregate amount involved in the transaction will or may be expected to exceed $100,000 in any calendar year if any director, director nominee, executive officer, greater-than-5% beneficial owner or their respective immediate family members have or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity).

The policy provides that the Governance Committee reviews certain transactions and determines whether or not to approve or ratify those transactions. In doing so, the committee takes into account, among other factors it deems appropriate, whether the transaction is on terms that are no less favorable to the Company than terms generally available to an unaffiliated third party under the

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same or similar circumstances and the extent of the related person's interest in the transaction. In addition, the Board has delegated authority to the chair of the Governance Committee to pre-approve or ratify transactions where the aggregate amount involved is expected to be less than $1 million. A summary of any new transactions pre-approved by the chair is provided to the full Governance Committee for its review in connection with each regularly scheduled Governance Committee meeting.

The Governance Committee has considered and adopted standing pre-approvals under the policy for limited transactions with related persons. Pre-approved transactions include, but are not limited to:

On September 10, 2019, the Company entered into an agreement with Mr. David T. Seaton, the Company's former CEO, specifying the terms of Mr. Seaton's departure from the Company. As part of that agreement, Mr. Seaton purchased a golf club membership from the Company for $150,000, which was the fair market value of such membership interest.

Alan L. Boeckmann, the Executive Chairman of our Board and the Company's former CEO, receives distributions of deferred compensation and payments of supplemental benefits under arrangements that were previously disclosed and were approved by the Organization and Compensation Committee and the Board's independent directors at the time he served as CEO and for which he chose annuity payments instead of lump sum payment.

Certain Legal Proceedings

Since September 2018, nine separate purported stockholders' derivative actions were filed against various current and former members of the Board of Directors, including our nominees other than Mses. Eberhart and McClure, as well as certain of Fluor's current and former executives. Fluor Corporation is named as a nominal defendant in the actions. The complaints generally allege federal securities law violations and breaches of the individuals' fiduciary duties, including for purported oversight failures, with regard to statements that were made concerning the company's internal and disclosure controls, risk management, revenue recognition, and gas-fired power business, which statements the plaintiffs assert were materially misleading. While these proceedings are in early stages and no assurance can be given as to their ultimate outcomes, the Company does not believe it is probable that a loss will be incurred.

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Communications with the Board

Individuals may communicate with the Board and individual directors by writing directly to the Board of Directors c/o the Secretary, Fluor Corporation, 6700 Las Colinas Boulevard, Irving, Texas 75039. Stockholders and other parties interested in communicating directly with the Lead Independent Director or with the independent directors as a group may do so by writing directly to the Lead Independent Director c/o the Secretary at the above address. The Lead Independent Director, with the assistance of Fluor's internal legal counsel, is primarily responsible for monitoring any such communications from stockholders and other interested parties to the Board, individual directors, the Lead Independent Director or the independent directors as a group, and provides copies or summaries of such communications to the other directors as he considers appropriate.

Communications will be forwarded to all directors if they relate to substantive matters and include suggestions or comments that the Lead Independent Director considers to be important for the directors to know. The Board will give appropriate attention to written communications on issues that are submitted by stockholders and other interested parties, and will respond if and as appropriate.

Compensation Committee Interlocks and Insider Participation

During 2019, Mr. Bennett, Mr. Barker, Ms. Berkery, Mr. Fluor, Mr. Hackett, Ms. McWhinney, Mr. Olivera and Mr. Rose served on the Organization and Compensation Committee. During 2019, there were no compensation committee interlocks between the Company and other entities involving the Company's executive officers and directors.

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PROPOSAL 2 — EXECUTIVE COMPENSATION

PROPOSAL 2 — ADVISORY VOTE TO APPROVE EXECUTIVE
COMPENSATION

We are asking stockholders to vote on an advisory resolution to approve the compensation of the Company's named executive officers as reported in this proxy statement.

We urge stockholders to read the "Compensation Discussion and Analysis" beginning on page 24, which describes in more detail how our executive compensation program operates and is designed to achieve our compensation objectives, as well as the Summary Compensation Table and related compensation tables and narrative appearing on pages 49 through 66, which provide detailed information on the compensation of our named executives.

In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and as a matter of good corporate governance, we are asking stockholders to approve the following advisory resolution at the annual meeting:

This advisory resolution, commonly referred to as a "say on pay" resolution, is non-binding on the Board. Although non-binding, the Board and the Organization and Compensation Committee will review and consider the voting results when evaluating our executive compensation program. An advisory stockholder vote on the frequency of stockholder votes to approve executive compensation is required to be held at least once every six years. The Company last held an advisory vote on frequency in 2017. After consideration of the majority vote of stockholders at the 2017 annual meeting of stockholders in favor of an annual frequency and other factors, the Board decided to hold advisory votes to approve executive compensation annually until the next advisory vote on frequency. Accordingly, the next advisory vote to approve executive compensation will be held at the 2021 annual meeting of stockholders.

LOGO

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COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis describes the principles, objectives and features of our compensation program, as well as the decisions made under this program for 2019, for our named executive officers (referred to herein as the "named executives"). For 2019, our named executives were:

Name
Position
Carlos M. Hernandez   Chief Executive Officer (effective May 1, 2019)
D. Michael Steuert   Executive Vice President and Chief Financial Officer (effective June 1, 2019)(1)
Alan L. Boeckmann   Executive Chairman (effective May 1, 2019)
Garry W. Flowers   Executive Vice President, Construction, HSE and Risk
Taco de Haan   Group President, Diversified Services
David T. Seaton   Former Chairman and Chief Executive Officer (through April 30, 2019)
Bruce A. Stanski   Former Executive Vice President and Chief Financial Officer (through May 31, 2019)

(1)
Mr. Steuert retired from his position as Chief Financial Officer in July 2020.

Executive Summary

In response to the Company's performance and changing industry dynamics, in 2019 the Company initiated a comprehensive operational and strategic review that focused on cash generation and de-risking our project portfolio. We had several leadership changes and implemented new project pursuit criteria to improve execution and build a stronger backlog. We have also made progress reducing overhead expenses, closing offices, and continuing the process of exiting certain of our businesses.

New Awards and Backlog. In 2019, new awards were $10.6 billion and ending consolidated backlog was $28.4 billion (excluding backlog associated with discontinued operations).

Cash Flow From Operations and Earnings. In 2019, we remained focused on generating positive cash flow from operations to present the financial strength necessary to compete in our businesses. At the end of 2019, we had $2.0 billion in cash and marketable securities after returning $118 million in dividends to stockholders. Net losses attributable to Fluor from continuing operations were $1.7 billion, or $11.97 per diluted share, in 2019, compared to earnings from continuing operations of $9.2 million, or $0.07 per share for 2018.

Restatement of Previously Issued Financial Statements. In 2020, a Special Committee of independent members of the Board, along with its independent external advisors and financial experts, led a review of our previously issued financial information. As a result of this review, we restated annual financial results for 2016, 2017, and 2018, and for each of the interim previously issued quarterly periods for 2018 and 2019. Please refer to our annual report on Form 10-K for the year ended December 31, 2019 for a full explanation of the restatement. The effects of the

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restatement are reflected in the 2017 and 2018 achievement and performance ratings of the long-term incentive awards that were granted in 2017 and that are discussed below.

For 2019, our long-term incentives included a mix of restricted stock units ("RSUs"), stock-based performance awards under our Value Driver Incentive ("VDI") plan and stock option grants to certain of our named executives. The VDI awards are settled in stock and are earned based on achievement of performance targets over a three-year period tied to average annual new awards gross margin dollars and percentage, and average annual return on operating assets employed. The number of earned VDI units for the named executives is further adjusted based on the Company's total shareholder return ("TSR") relative to a select group of peers. These performance objectives focus named executives on the creation of long-term Company value for the benefit of our stockholders.

Our annual incentives are paid in cash and are based primarily on the achievement of pre-established financial, operational, strategic and performance goals as well as safety measures.

Our executive compensation program is designed to align the interests of named executives with those of our stockholders, motivate excellent performance and link pay with Company performance. In 2019, we incurred execution challenges on a number of projects, resulting in our performance not meeting our targets for the year. This is reflected in the payouts for the named executives' annual incentive awards, which averaged 46% of target, and the settlement of the 2017 VDI awards (for which the performance period ended on December 31, 2019), under which payouts were 39% of target. The dollar value realized on vesting of the 2017 VDI awards was 7% of the grant date target value. Consistent with our philosophy of aligning named executive and stockholder interests as well as linking pay with performance, below-target performance in 2019 will also negatively impact future payouts for the VDI awards granted in 2018 and 2019 (which include fiscal year 2019 in the performance period) when payouts for those awards are determined at the end of the applicable three-year performance period. These actual and potential payouts, as well as the realizable pay analysis below, demonstrate our pay-for-performance alignment and commitment.

The chart below illustrates our CEO's average "realizable" compensation as compared to his target total direct compensation ("TDC") over the last three fiscal years. While Mr. Hernandez only became CEO in 2019, he has been a named executive in each of the last three fiscal years and participated in the executive compensation program during that period. Realizable compensation shows the value of the compensation our CEO actually earned or could expect to earn as of the end of 2019, while target TDC represents his target compensation opportunity at the time of grant.

While both target TDC and realizable compensation include actual base salaries, realizable compensation reflects both (i) actual performance against goals that impacts the funding of annual incentives and VDI awards and (ii) changes in stock price from the grant date. Over the last three years, our annual incentives have paid out below target as a result of performance falling short of goals. In addition, the realizable value of our long-term equity incentives is significantly below the target opportunity due to both performance and stock price. Taking into account the Company's stock price at the time of vesting, the value realized on the 2017 VDI awards was 7% of the grant

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date target value. As of December 31, 2019, none of the options granted to named executives in the last three years were in-the-money and the value of each of the RSU awards granted to named executives in the last three years was below their grant date target value. As shown in the graph below, average realizable compensation for our Chief Executive Officer for 2017 to 2019 was equal to 45% of his target TDC, which we believe demonstrates strong pay for performance alignment.

CEO Target TDC and Realizable Pay

3-Year Average (2017 - 2019)

GRAPHIC


(1)
Target TDC consists of actual base salary, target annual incentive and the value of all long-term incentives on the date of grant.

(2)
Realizable pay includes: (i) actual base salary; (ii) actual annual incentive paid; (iii) the value of options on the date of exercise (if exercised), or on December 31, 2019 (if unexercised); and (iv) the value of other long-term incentive awards on the vesting date (if vested) or on December 31, 2019 (if unvested), as further discussed in the Outstanding Equity Awards at 2019 Fiscal Year End table on page 56. Unvested VDI awards do not reflect the impact of any modifiers that are to be applied at the end of the applicable performance period.

The Company's leadership team experienced several changes in 2019. Mr. Hernandez, previously our Chief Legal Officer, was promoted to Chief Executive Officer effective May 1, 2019. Mr. Boeckmann was appointed as Executive Chairman on the same date. In addition, Mr. Steuert was appointed as our new Chief Financial Officer, effective June 1, 2019. As part of these leadership transitions, the Company approved new compensation packages for each of Messrs. Hernandez, Boeckmann and Steuert, which are described below.

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New Chief Executive Officer Compensation. In connection with his appointment as CEO on May 1, 2019, the Board approved the following compensation for Mr. Hernandez:

New Executive Chairman Compensation. In connection with his appointment as Executive Chairman on May 1, 2019, the Board approved the following compensation for Mr. Boeckmann:

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New Chief Financial Officer Compensation. In connection with his appointment as Chief Financial Officer on June 1, 2019, the Organization and Compensation Committee (the "Committee") approved the following compensation for Mr. Steuert:

Separation Arrangements with Departing Executives. In 2019, by mutual agreement with the Company, each of Mr. Seaton and Mr. Stanski separated from the Company. In connection with their respective departures, the Company entered into separation agreements with each of Mr. Seaton and Mr. Stanski. Each of these agreements contains customary confidentiality and cooperation covenants, a release of claims, and non-competition and non-solicitation restrictions that bind the departing executives and protect the Company.

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Changes to Executive Compensation for 2020

In 2020, due to the delayed filing of the Company's 2019 annual report on Form 10-K, as well as the ongoing impact of the COVID-19 pandemic, the Committee determined that for 2020 only, the weightings of the performance measures for annual incentive awards for named executives will be: (i) 90% strategic performance and (ii) 10% safety. The strategic performance portion of the award will be based on the Committee's evaluation of each named executive's achievement of six strategic objectives that have been set by the Committee for all executive officers.

Effective in 2020, the Company's VDI awards will be renamed Performance Awards. The number of earned shares under the Performance Awards will be determined based on the Company's performance using two equally rated measures: (i) return on invested capital ("ROIC") and (ii) earnings per share ("EPS"). The number of earned shares will be modified based on the Company's three-year cumulative total shareholder return relative to companies in the S&P 500 on the date of grant ("Relative TSR"). If the Company's Relative TSR is in the bottom 1/3 of the S&P 500, the earned shares will be decreased by 30%. If the Company's Relative TSR is in the top 1/3 of the S&P 500, the earned shares will be increased by 30%. No adjustment will be made if the Company's Relative TSR is in the middle 1/3.

In April 2020, in response to the business environment as impacted by the COVID-19 pandemic, executive officers voluntarily agreed to a temporary 20% reduction in base pay. This temporary reduction in base pay ended in September 2020.

Our executive compensation policies reflect our strong focus on sound governance. As in prior years, the following practices and policies were in effect during 2019:

What we do   What we do not do

Maintain robust stock ownership guidelines, including a 6x base salary requirement for the CEO

Maintain a clawback policy for performance-based compensation

Provide a balanced program design that does not encourage behavior that could create material adverse risks to our business; and conduct an annual compensation risk assessment

Engage an independent compensation consultant for our fully independent Committee

Prohibit hedging, pledging and short-term trading of Company stock

 

No single trigger change in control agreements

No excise tax gross-ups in change in control agreements

No repricing of stock options without stockholder approval

No payments of dividends or dividend equivalents on unvested stock awards

No individual employment agreements for our executive officers

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How Named Executive Compensation is Tied to Performance

We use a balanced approach to compensation with a variety of pay elements to support the attraction and retention of key executive talent necessary to run our business, and reward the achievement of both short-term and long-term goals, the majority of which are directly linked to performance as described in the table below:

Component


Primary Purpose
Linkage to Performance

Base Salaries

  Provide a market competitive, stable level of income to attract and retain top talent  

Individual responsibility, performance and contributions to the Company, overall salary movements in the Compensation Peer Group and internal pay equity are considered by the Board or the Committee, as applicable, in determining initial salary levels and appropriate salary adjustments each year

Annual Incentive Awards

 

Provide annual cash compensation for achievement of annual performance goals

 


Pays out based on Company achievement of near-term objectives that support long-term Company value creation, including net earnings, cash flow from operations and safety, as well as achievement of identified strategic goals

Completely at-risk, depending on the level of actual performance against the established criteria

Long-Term Incentives

 

 

 

 

Value Driver Incentive Performance Units

 

Provide a stock-based incentive and retention vehicle that is linked to performance measures that focus named executives on the creation of long-term value

 


Units are earned based on performance against new project awards and return on assets criteria, on average, over a three-year period, and modified based on the Company's three-year cumulative TSR relative to peers

Vest at the end of the performance period, aligning the interests of named executives with those of long-term stockholders by focusing named executives on the Company's financial performance over a multi-year period

Completely at-risk, depending on actual performance against the relevant measures (and stock price)

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Component


Primary Purpose
Linkage to Performance

Restricted Stock Units

  Provide a long-term equity ownership and retention vehicle that is directly linked to stockholder value creation over time  

Vest in equal thirds over three years, aligning the interests of named executives with those of stockholders by focusing named executives on the Company's financial performance over a multi-year period

Value is at-risk, increasing or decreasing with the stock price over the vesting period

Stock Options (granted to Messrs. Hernandez, Steuert and Boeckmann in 2019)

 

Provide a long-term vehicle that is directly linked to growing the value of our stock price over time

 


Vest in equal thirds over three years and have a ten-year term, aligning the interests of named executives with those of stockholders by focusing named executives on long-term stockholder value creation

Completely at-risk, attaining value only if the stock price grows over the initial grant price

Components of 2019 Named Executive Compensation

The Company provides named executives with base salaries that provide a competitive, stable level of income, since most other elements of their compensation are at-risk based on Company performance. The Committee reviews base salaries for named executives annually and upon a change in responsibilities.

In establishing and annually evaluating base salary levels, the Committee and, with respect to the CEO and Executive Chairman, the independent directors of the Board, consider the following factors:

Following the annual review at the beginning of 2019, the base salaries of Messrs. Hernandez, Flowers, de Haan and Stanski increased between 3.0% and 5.0%. Mr. Seaton's base salary

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remained unchanged from 2018. In May 2019, Mr. Hernandez's base salary was subsequently increased at the time of his promotion to Chief Executive Officer. The 2019 annualized base salaries for the named executives as of December 31, 2019 (or for Mr. Seaton, his last day of employment) were as follows:

Named Executive

  2019 Base
Salary

Carlos M. Hernandez

  $1,100,000

D. Michael Steuert

  $830,000

Alan L. Boeckmann

  $500,000

Garry W. Flowers

  $562,400

Taco de Haan

  $486,700

David T. Seaton

  $1,334,000

Bruce A. Stanski

  $753,500

For 2019, the base salaries for each of our named executives generally approximated or were lower than the median of the Compensation Peer Group.

Cash-based annual incentives are provided to motivate and reward named executives for achieving annual performance objectives. In 2019, Messrs. Hernandez, Flowers, de Haan, Seaton and Stanski each participated in the annual incentive award program and had a target annual incentive amount, established as a percentage of annual base salary. This percentage reflects each named executive's respective organizational level, position and responsibility for achievement of the Company's strategic goals, and aligns with market practice.

The 2019 target annual incentives for each of our named executives who participated in the 2019 annual incentive award program are shown below. Messrs. Steuert and Boeckmann did not participate in the annual incentive award program and had alternative arrangements which are described above under "Leadership Changes." The final target annual incentives for Messrs. Hernandez, Flowers, de Haan, Seaton and Stanski were as follows:

Named Executive



Percentage of Base Salary
Target Annual
Incentive Amount

Carlos M. Hernandez

    121 %(1) $1,332,600

Garry W. Flowers

  95 % $534,400

Taco de Haan

    85 % $413,700

David T. Seaton

  150 %(2[nc_te,h]) $2,001,000

Bruce A. Stanski

    100 % $633,000(3)

(1)
Mr. Hernandez's target annual percentage and incentive amount was prorated to reflect 100% of his base salary prior to his appointment as CEO, and 150% of his base salary from and after his appointment as CEO.

(2)
Mr. Seaton forfeited his 2019 annual incentive in connection with his termination of employment effective September 13, 2019.

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(3)
Mr. Stanski's target annual incentive award was pro-rated for the period between January 1, 2019 and October 11, 2019 and paid out based on actual achievement of performance measures, but assuming a performance rating of 1.0 for the strategic portion of the award.

A named executive could receive from zero to 200% of the target annual incentive amount, depending on the extent to which the Company and the named executive met, failed to meet or exceeded certain performance measures relating to overall Company performance, achievement of certain strategic goals and, for Mr. de Haan, the performance of the Diversified Services business that he oversees. The types of measures and relative weightings of those measures are determined by the Committee each year and are tailored to the named executive's position and organizational responsibility. The performance measures have remained fairly consistent over the past five years, however the Committee has adjusted the relative weightings of each measure from time to time to reflect the Company's operational and strategic priorities.

When determining the performance measures and the target achievement levels, the Committee considers the Company's annual operating plan and strategic priorities for the upcoming year, as well as the Company's performance in the previous year. For 2019, the performance measures were a combination of objective financial targets and strategic and safety performance measures, which were tied to goals established at the beginning of the year. The use of multiple financial and strategic goals prevents an overemphasis on any one financial metric and focuses the named executives on key areas of importance to the Company and its shareholders. The 2019 performance measures, along with their respective weightings, for the named executives who had annual incentive targets were as follows:

2019 Measure


Carlos M.
Hernandez


Garry W.
Flowers(1)


Taco de
Haan


David T.
Seaton(2)


Bruce A.
Stanski(3)

Corporate Net Earnings

  50%   50%   25%   50%   50%

Cash Flow from Operations

  15%   15%   10%   15%   15%

Diversified Services EBIT

      30%    

Safety

  10%   10%   10%   10%   10%

Strategic Performance

  25%   25%   25%   25%   25%

(1)
For Mr. Flowers, the table reflects the performance measures and weightings of his annual incentive for the period from and after his promotion to an executive officer position on July 31, 2019. For the period prior to July 31, 2019, Mr. Flowers's annual incentive was determined based on a different set of metrics and weightings, which are described below under "Other Compensation Decisions," and his final annual incentive was prorated accordingly.

(2)
Mr. Seaton forfeited his 2019 annual incentive in connection with his termination of employment effective September 13, 2019.

(3)
Mr. Stanski's annual incentive award paid out based on actual achievement of performance measures, but assuming a performance rating of 1.0 for the Strategic Performance portion of the award.

Corporate Net Earnings. Corporate net earnings is defined as the amount of net earnings attributable to Fluor excluding the following items which are not related to the Company's ongoing core business operations: earnings for discontinued operations; the financial impact of any acquisition activity (including integration costs and other expenses); expenses associated with reorganization and restructuring programs; merger, acquisition or strategic investment activity and integration costs; dispositions; and pension settlements.

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Cash Flow from Operations. Cash flow from operations is defined as total segment profit plus the fiscal year change in the business unit project working capital accounts (accounts receivable, work in progress, advance billings and accounts payable).

Diversified Services EBIT (Segment Profit). Diversified Services Earnings Before Interest and Tax ("EBIT"), the profit measure used for compensation purposes, is typically the same as segment profit, the profit measure reported externally in our financial statements. Segment profit is calculated as revenue less cost of revenue and earnings attributable to noncontrolling interests excluding: corporate general and administrative expense; interest expense; interest income; domestic and foreign income taxes; other non-operating income and expense items; and earnings from discontinued operations. Diversified Services segment profit results can be found on page F-26 of our annual report on Form 10-K as filed with the Securities and Exchange Commission on September 25, 2020. In 2019, the Diversified Services EBIT goals were reclassified to be consistent with segment reporting changes reflected in our financial statements.

Safety. Safety performance was assessed based on the Company's overall safety performance using both leading and lagging performance indicators.

Strategic Performance. Strategic performance was measured against qualitative strategic goals identified at the beginning of the year for each named executive, which are outlined below.

The performance ranges for the corporate net earnings and cash flow from operations measures, together with the actual achievement of the measures and the resulting performance ratings, are presented in the table below.

2019 Performance Ranges (in millions)

Measure


Min
Target
Max
2019 Actual
Achievement


Performance
Rating

  (.25 rating)(1)   (1.0 rating)   (2.0 rating)        

Corporate Net Earnings

  $197.0   $375.0 - $414.0   $591.0   $(982.1)(2)   0.00

Cash Flow from Operations

  $364.0   $692.0 - $765.0   $1,092.0   $370.8(3)   0.26

Diversified Services EBIT

  $62.0   $117.0 - $130.0   $185.0   $(2.6)(4)   0.00

(1)
The minimum rating level for each goal is required to be satisfied before there is any payout for that specific performance measure.

(2)
The amount shown is for net earnings attributable to Fluor, excluding certain items discussed above under "— Performance Measures for 2019 — Corporate Net Earnings."

(3)
Cash Flow from Operations is defined above under "— Performance Measures for 2019 — Cash Flow from Operations."

(4)
Diversified Services EBIT is defined above under "— Performance Measures for 2019 — Diversified Services EBIT (Segment Profit)."

Pursuant to the terms of the agreement described above under "Leadership Changes," Mr. Stanski's annual incentive award paid out based on actual achievement of the performance measures, but assuming a performance rating of 1.0 for the Strategic Performance portion of the award. Mr. Seaton forfeited his 2019 annual incentive in connection with his termination of employment. The Committee

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set the same strategic objectives for all executive officers in 2019. The 2019 strategic objectives and key achievements for each named executive participating in the 2019 annual incentive program were as follows:

Named Executive
Strategic Goals
Key Achievements

Carlos M. Hernandez

 

Position Fluor and each business segment for versatility, diversification and growth.

 

Made changes to project pursuit and risk criteria to position the Company for sustainable growth.

 

Drive improvements in the cost of doing business.

 

Identified opportunities for overhead reduction and made progress towards Company's overhead reduction goals.

 

Strengthen our customer confidence, talent development and succession planning at all leadership levels.

 

Made changes to executive leadership team to empower the Company to execute its strategic plan.

 

Continue to maintain industry leading safety standards

 

Championed the Safer Together initiative to continue to drive a culture of safety.

Garry W. Flowers

 


Position Fluor and each business segment for versatility, diversification and growth.


 


Took on newly enhanced risk management role with enhanced reporting and accountability.

 

Drive improvements in the cost of doing business.

 

Assumed responsibility for the execution of challenging projects.

 

Continue to maintain industry leading safety performance.

 

Championed the Safer Together initiative to continue to drive a culture of safety.

Taco de Haan

 


Position Fluor and each business segment for versatility, diversification and growth.

 


Led restructuring of Stork and the strategic realignment of Stork's portfolio of businesses.

 

Strengthen our customer confidence, talent development and succession planning at all leadership levels.

 

Reviewed and revised succession plans to align with the restructuring of Stork.

 

Continue to maintain industry leading safety performance.

 

Focused on maintaining safety while completing consolidation, restructuring and divestment plans within the segment.

Achievement of the strategic performance measure varied among the named executives because of the differences in responsibilities and individual accomplishments. No named executive received a rating higher than 1.40 because none of the financial performance measures achieved target performance.

Each named executive's strategic performance rating, other than the CEO and Mr. Stanski's, was determined based on evaluations and recommendations by the CEO that were assessed and subsequently approved by the Committee. In the case of the CEO, strategic performance was assessed by the independent directors of the Board after consideration of a recommendation from the Committee.

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Achievement of the safety performance measure was determined using management's assessment of the overall safety performance of the Company, which was reviewed and approved by the Committee. The safety performance measure was not a significant factor in determining compensation, and no named executive's aggregate compensation was materially affected by the level of achievement of this measure.

Once the level of achievement for each measure was determined, each named executive's overall performance rating was calculated by multiplying each measure's rating (which can range from 0.00 to 2.00) by its relative weighting, and then aggregating those amounts. The overall performance rating was then multiplied by the individual's target annual incentive amount to determine the annual incentive payment for each named executive. Based on performance, annual incentive award cash payouts averaged 46% of target for the named executives.

Other than respect to Mr. Seaton who forfeited his 2019 annual incentive in connection with his termination of employment, the 2019 target annual incentive percentages and amounts for each named executive who participated in the 2019 annual incentive program, as well as the actual annual incentive amounts to be paid, were as follows:

Named Executive


Percentage of
Base Salary


Target Annual
Incentive
Amount



X
Overall
Performance
Rating



=
Annual
Incentive
Amount

Carlos M. Hernandez

  121%(1)   $1,332,600   X   0.44   =   $586,400

Garry W. Flowers

  95%   $534,400   X   0.61   =   $366,800(3)

Taco de Haan

  85%   $413,700   X   0.34   =   $140,700

Bruce A. Stanski

  100%   $633,000(2)   X   0.39   =   $247,000

(1)
Mr. Hernandez's target annual percentage and incentive amount was prorated to reflect 100% of his base salary prior to his appointment as CEO, and 150% of his base salary from and after his appointment as CEO.

(2)
Mr. Stanski's target annual incentive award was pro-rated for the period between January 1, 2019 and October 11, 2019.

(3)
Mr. Flowers's annual incentive amount reflects a portion attributable to his annual incentive earned prior to his promotion to an executive officer position on July 31, 2019.

The stockholder-approved 2017 Performance Incentive Plan allows the Committee to grant various forms of long-term equity incentives. The Committee's objectives in granting long-term equity awards are to motivate named executives and reward the achievement of superior operating results and stock price appreciation, facilitate the attraction and retention of key management personnel and align the interests of management and stockholders through equity ownership.

As discussed earlier, our compensation program is designed to align pay with performance. Named executives receive target long-term incentive grants that reflect potential pay, based on market considerations as well as individual contributions, experience, advancement potential and internal pay equity. In 2019, when initially determining the compensation for Messrs. Hernandez, de Haan, Seaton and Stanski, the Committee determined to maintain performance-based VDI awards as 50% of the long-term incentive grant to named executives, and to provide the remaining 50% as RSUs. Mr. Flowers, who was not an executive officer when the long-term incentive awards for the named executives were established in 2019, participated in different long-term incentive arrangements that are described below under "Other Compensation Decisions."

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The Committee believes that the mix of long-term incentive components aligns the interests of named executives with those of stockholders by encouraging named executives to focus on long-term growth of the Company, while also providing named executives with a balanced pay package similar to many of our peers. In determining the relevant allocations, VDI awards were valued at the target performance level (and converted into performance units based on the closing stock price on the 2019 grant date) and RSUs were valued at the fair market value (closing stock price) on the date of grant.

The 2019 target annual long-term incentive award values approved by the Committee were as follows:

Named Executive


VDI Award
Value


RSU Award
Value


Total
Long-Term
Incentive
Award Value

Carlos M. Hernandez

  $1,625,000   $1,625,000   $3,250,000

Taco de Haan

  $600,000   $600,000   $1,200,000

David T. Seaton

  $4,650,000   $4,650,000   $9,300,000

Bruce A. Stanski

  $1,425,000   $1,425,000   $2,850,000

The total value of the initial 2019 long-term incentive awards for these named executives increased from 2018 levels by between 5.0% and 14.3% in order to align award values with competitive market levels and support retention.

The Committee determines the dollar value of long-term incentive awards for named executives at the first regularly scheduled meeting of the Committee each year, which is typically held in January or February. The determinations are made at that time to coincide with the annual performance review, when prior year performance information is available. The equity awards are then granted on the third business day following the publication of our annual results, based on the closing stock price on that date. RSUs vest one-third per year in each of the years following the grant date.

During the course of 2019, Mr. Hernandez received additional RSU awards and stock options upon his promotion to CEO. In addition, Messrs. Steuert and Boeckmann, who were not employed by the company when the Committee determined 2019 compensation for the other named executives, each received RSU awards and stock options upon their appointments as Chief Financial Officer and Executive Chairman, respectively. These awards are described separately above under "Leadership Changes."

The VDI awards granted to the named executives in 2019 are subject to a three-year performance period, which started on January 1, 2019 and ends on December 31, 2021. The awards will be earned based upon actual performance for each year during the three-year performance period and will vest and be payable in shares in March 2022, subject to continued employment and performance achievement. Upon vesting, additional shares will be issued equal to the amount of any accrued dividends paid by the Company with respect to shares actually earned.

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The Committee established the following 2019 performance criteria and relative weightings for the 2019 VDI awards for named executives:

The number of earned shares for all named executives will be modified based on the Company's three-year cumulative TSR relative to the engineering and construction peers included in the Compensation Peer Group ("Relative TSR"). If the Company's Relative TSR is in the bottom third of the group, the earned shares will be decreased by 25%. If the Company's Relative TSR is in the top third of the group, the earned shares will be increased by 25%. No adjustment will be made if the Company's Relative TSR is in the middle third. In no event will the number of earned shares exceed two times the target number of shares.

New awards gross margin dollars measures the total amount of project gross margin that the Company expects to receive as a result of projects awarded within the performance period. New awards gross margin percentage is the total amount of gross margin the Company expects to receive as a result of projects awarded within the performance period as a percentage of expected revenue from those projects. When determining whether the new awards performance goals have been met, the Committee takes into account any changes affecting project gross margin backlog (e.g., scope changes, adjustments or cancellations) that occurred during the year. ROAE is calculated by dividing full-year corporate net earnings (excluding the items noted above under "Annual Incentive Awards – Corporate Net Earnings" and after-tax interest expense) by average net assets employed for the previous five quarters. Net assets employed is defined as total assets (excluding excess cash and current and non-current marketable securities) minus current liabilities (excluding non-recourse debt).

In the first quarter of 2019, the Committee set minimum (paid at 25% of target), target (paid at 100% of target), upper target (paid at 150% of target) and maximum (paid at 200% of target) performance levels for the portion of the 2019 VDI awards that were subject to the 2019 performance goals. Performance goals for 2020 and 2021 will be set in each respective year. The Committee believed that using three annual performance goals instead of a single three-year goal best orients executives to focus on long-term achievements, while avoiding disincentives or windfalls due to volatile economic factors such as commodity prices and currency exchange rates that are difficult to forecast and impact our operating margins and growth. When setting these performance goals, the Committee considered the Company's past performance, business outlook and other corporate financial measures. The Committee also considered how likely it will be for the Company to achieve the goals. We believe that the target goals have been established at levels that should be appropriately difficult to attain. Goals above target are stretch goals and will require an increasingly challenging level of performance in order to be achieved.

Each year, the Committee determines the actual achievement of the performance measures for the previous year. At the end of the three-year period, the Committee will average the performance from each year and determine the number of earned units by multiplying the number of target units by the

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average of the three annual performance ratings (ranging from 0.00 to 2.00). The Committee will then apply the Relative TSR modifier, which may increase or decrease the number of earned units; however, the final number of earned units may not exceed two times the target number of units. The final number of units earned, and related dividend shares, vest in full approximately three years from the date of grant. The three-year performance period and vesting are intended to facilitate retention of the participating executives and to link the value of the awards to long-term stock price performance. A named executive's unvested award is subject to risk of forfeiture if, prior to vesting, the named executive's employment with the Company is terminated for any reason other than retirement, death, disability or a qualifying termination within two years after a change in control of the Company.

The eventual determination of the payout of 2019 VDI awards for the named executives is illustrated below:

GRAPHIC

In 2017, the Committee granted VDI awards to certain of the named executives, which were subject to a three-year performance period. The performance criteria and relative weightings for the 2017 VDI awards for named executives were the same as the 2019 VDI Awards, i.e. 40% of the total award was based on average annual new awards gross margin percentage, 30% of the total award was based on average annual new awards gross margin dollars and 30% of the total award was based on ROAE. The performance targets were set at the beginning of each year during the performance period. Following each year of the performance period, the Committee determined the actual achievement of the performance measures for the previous year. At the end of the three-year period, the Committee averaged the performance outcomes and determined the number of earned units by multiplying the number of target units granted in 2017 by the average of the three annual performance ratings (which could range from 0.00 to 2.00). The Committee then applied the Relative

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TSR modifier in the same manner as set forth above for the 2019 VDI awards. The performance metrics were also the same as set forth above for the 2019 VDI awards.

Based on the Company's performance over the performance period, the named executives each earned 39% of their target VDI units granted in 2017, as reflected in the Outstanding Equity Awards at 2019 Fiscal Year End table on page 56. The earned units are subject to a three-year post-vest holding period. During the post-vest holding period, named executives may not sell or otherwise transfer the underlying shares of Company common stock (except in the case of death).

The 2017 VDI award for Mr. de Haan, who was not an executive officer in 2017, was based on the same performance measures as the other named executives, calculated over a one-year period (the 2017 calendar year) with a three-year vesting period, and payable in cash. Except for this single year performance period, the performance criteria, relative weightings and 2017 performance targets for Mr. de Haan were the same as those of the other named executives, including being subject to adjustment using a Relative TSR modifier measured over the 2017 fiscal year.

The performance targets for each year of the performance period, together with the actual achievement and performance ratings, are set forth below.

  Performance Ranges
     

Measure


Min
Target
Max
Actual
Achievement


Performance
Rating

 

(.25 rating)

 

(1.0 rating)

 

(2.0 rating)

       

FY 2017 Targets

                   

NAGM%

  4.1%   7.4%   10.3%   15.6%   2.00

NAGM$

  $876.4   $1,548.6   $2,190.9   $774.7   0.00

ROAE

  6.3%   11.1%   15.7%   5.1%   0.00

FY 2018 Targets

                   

NAGM%

  3.7%   7.4%   11.1%   6.3%   0.71

NAGM$

  $785.0   $1,568.0   $2,352.0   $1,747.0   1.23

ROAE

  5.0%   9.0%   16.0%   5.6%   0.31

FY 2019 Targets

                   

NAGM%

  4.0%   8.0%   12.0%   (5.2)%   0.00

NAGM$

  $805.2   $1,608.4   $2,412.6   $(467.7)   0.00

ROAE

  4.8%   9.7%   14.5%   (24.1)%   0.00

Other Compensation Decisions

Mr. Flowers was not an executive officer of the Company when the compensation levels and opportunities for the named executives were established in 2019. As a result, he participated in different compensation arrangements than the other named executives. As noted above, for 2019, Mr. Flowers' base salary was $562,400 and his target annual incentive was $534,400, or 95% of his base salary. Mr. Flowers was appointed as an executive officer on July 31, 2019. Following his appointment, his target annual incentive remained the same. However, the performance measures for his annual incentive award were revised for the period of time from and after his promotion to be in line with the other named executives, and his final annual incentive was prorated accordingly. The performance measures for the portion of Mr. Flowers' annual incentive earned prior to his appointment as an executive officer consisted of corporate net earnings (30%); cash flow from operations (10%); overhead spend (10%); new awards gross margin dollars (10%); days away, restricted and transfer incidence rate (3%); total case incidence rate (3%); health, safety and

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environmental audit score (4%); and individual performance (30%). Based on performance against both these pre- and post-executive officer appointment objectives, Mr. Flowers' annual incentive award cash payout was 69% of his target. Mr. Flowers' total target 2019 long-term incentive award value was $1,625,000, with the awards delivered in the same mix as the named executives, with 50% granted in the form of RSUs and 50% granted in the form of VDI awards. His 2019 VDI award is based on the same performance measures as the other named executives, including the Relative TSR modifier, but is calculated over a one-year performance period (the 2019 calendar year) with a three-year vesting period and payable in cash. Mr. Flowers earned 50% of his target 2019 VDI award, which vests in full in 2022.

We periodically grant cash or equity retention awards to reflect competitive market situations, address specific project objectives or reinforce succession planning objectives. In 2019, we granted cash retention awards to Messrs. Hernandez and Boeckmann, each in the amount of $1,750,000, which will vest in their entirety in November 2022, subject to continued employment. We also granted equity retention awards to Messrs. Steuert, Flowers and de Haan in the form of RSUs as follows: Mr. Steuert, $1,000,000 in RSUs vesting on December 31, 2021; for Mr. Flowers, $1,000,000 in RSUs vesting on November 11, 2021; and for Mr. de Haan, $1,500,000 in RSUs vesting on November 11, 2022, in each case subject to continued employment. Mr. Steuert's retention award was forfeited upon his retirement in 2020. For further detail on the equity retention awards, see footnote 7 to the Summary Compensation Table beginning on page 49 and Grants of Plan-Based Awards on page 53.

In 2017, Mr. Flowers received a cash retention award in order to retain his services for key projects. A total of $150,000 of that award vested and was paid in 2019, and none of the award remains further outstanding. For further detail, see footnote 10 to the Summary Compensation Table beginning on page 49.

Other Elements of Named Executive Compensation

In 2019, in lieu of reimbursement of typical perquisites, each of the named executives was paid a taxable monthly allowance as set forth in the All Other Compensation table on page 52. The Committee believes that these allowances are reasonable costs and are justified by the perceived value to the named executives. The allowances are intended to provide convenience in light of the demands on the named executives and are considered an important part of a competitive compensation package. We do not pay for items such as tax and financial planning, and club membership dues, which are items that are typically reimbursed or paid directly by our peers. When determining the allowance amounts, the Committee considered the value of perquisites provided to similarly situated executives in our Compensation Peer Group. In addition, named executives are required to have a physical examination each year that is paid for by the Company. Named executives may have spousal travel paid for by the Company only when it is for an approved business purpose, in which case a related tax gross-up is provided. In 2019, the Company did not provide any tax gross-ups other than for spousal business travel. Named executives can make personal use of charter aircraft in conjunction with a business purpose, but the named executive is required to reimburse the Company for the incremental operational cost of such personal use. Our 2019 perquisite costs, which are small in relation to total direct compensation, approximated the median of the Compensation Peer Group.

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The named executives are eligible to participate in Fluor's Executive Deferred Compensation Program. The Company offers this program to provide retirement and tax planning flexibility and to remain competitive with other companies within our Compensation Peer Group and general industry. Please refer to the discussion in the Nonqualified Deferred Compensation section beginning on page 58 for a more detailed discussion of this program.

The Company provides each of the named executives with cash severance in the event of a termination of employment by the Company without cause. The Company believes its severance policy assists in attracting and retaining qualified executives. The level of any cash severance payment is based upon base salary and years of service at the time of separation. In addition, each named executive has a change in control agreement that provides additional payments and other benefits if the executive is terminated without cause or if the named executive terminates employment for good reason within two years following a change in control of the Company. The change in control agreements are designed to reinforce and encourage the continued attention and dedication of the executives without distraction in the face of potentially disruptive circumstances arising from the possibility of a change in control and to serve as an incentive to their continued commitment to, and employment with, the Company. All of the potential change in control payments are "double trigger," meaning a named executive must incur a qualifying termination of employment following a change in control in order to be eligible for these payments. In addition, if any excise taxes are triggered in connection with a change in control, our change in control agreements do not provide for a tax gross-up. The Company will, instead, automatically reduce any payments under the agreement to the extent necessary to prevent payments from being subject to those excise taxes, but only if by reason of the reduction, the executive's after-tax benefit of the reduced payments exceeds the after-tax benefit if such reduction were not made.

Please refer to the discussion under "Potential Payments Upon Termination or Change in Control" beginning on page 61 for a more detailed discussion of these arrangements. Severance and change in control benefits are provided to be competitive with the Compensation Peer Group.

Establishing Executive Compensation

The Committee has responsibility for establishing and implementing the Company's executive compensation philosophy. The Committee reviews and determines all components of named executives' compensation (other than with respect to the compensation of our CEO and Executive Chairman, which the Committee reviews and recommends for approval by our independent directors), including making individual compensation decisions and reviewing and revising the Company's compensation program and practices.

The Committee has established the following compensation philosophy and objectives for the Company's named executives:

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The Committee reviews the Company's compensation philosophy and objectives each year to determine if revisions are necessary in light of market conditions, the Company's strategic goals or other relevant factors. In each of the last five years, the Committee determined that no revisions to the executive compensation philosophy and objectives were necessary, although the Committee has adjusted the specific elements of compensation used to implement its philosophy as the business and operating environment have evolved.

In addition, the Committee reviewed the incentive compensation we provide to our employees, including our named executives, and evaluated the mix of plans and performance criteria, the Committee's ability to exercise discretion over certain components of compensation and our risk management practices generally. Based on this review, the Committee believes that our compensation program is designed to appropriately align compensation with our business strategy and not to encourage behavior that could create material adverse risks to our business.

The Committee has the authority under its charter to engage, retain and terminate the services of outside legal counsel, compensation consultants and other advisors. In 2019, the Committee again engaged Frederic W. Cook & Co., Inc. ("FW Cook") to serve as its independent compensation consultant to advise the Committee on all matters related to executive and non-management director compensation. The compensation consultant conducts an annual review of the total compensation program for the CEO and the other named executives.

In 2019, as part of the Committee's oversight of certain aspects of risk, FW Cook conducted a broad-based review of the Company's compensation program and discussed its findings with the Committee, indicating that the Company's compensation programs do not encourage behaviors that would create material risk for the Company. FW Cook also provided written and verbal advice at Committee meetings, attended executive sessions of the Committee to respond to questions, and had individual calls and meetings with the chair of the Committee to provide advice and perspective on executive compensation issues. FW Cook was engaged by, and reports directly to, the Committee and does not perform any other services for the Company. The Committee has determined that none of the work of FW Cook has raised any conflicts of interest.

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In making compensation decisions, the Committee looks at the practices of our Compensation Peer Group. The Committee annually reviews with FW Cook the composition of the Compensation Peer Group and makes refinements if necessary based on objective criteria established by the Committee.

Since 2009, the Committee has applied a generally consistent process and set of criteria for selection of the Compensation Peer Group. Potential peer companies were identified by applying the following objective selection criteria:

For 2019, the Committee determined that the peer group selection criteria should remain unchanged but made changes to the overall peer group where application of the criteria resulted in removing three companies and adding two. Halliburton Company was removed due to falling outside the market capitalization range. Dover Corporation and W.W. Grainger were removed because they were no longer viewed as relevant peer companies. Icahn Enterprises was added to the peer group. In addition, McDermott International was added to the peer group to replace Chicago Bridge & Iron Company, which merged into McDermott International in May 2018.

The companies comprising Fluor's Compensation Peer Group for purposes of establishing 2019 compensation were:

AECOM Technology Corporation*

 

Jacobs Engineering Group Inc.*

Cummins Inc.

 

Johnson Controls International plc

Deere & Company

 

KBR,  Inc.*

Eaton Corporation plc

 

L3 Harris Technologies (formerly L-3 Communications Corporation)

EMCOR Group*

 

McDermott International*

Emerson Electric Co.

 

PACCAR Inc.

Icahn Enterprises

 

Parker-Hannifin Corporation

Ingersoll-Rand plc

 

Quanta Services,  Inc.*


*
Direct competitors and other engineering and construction peers.

The Committee reviews benchmarking comparisons prepared by its compensation consultant for each named executive against similar positions within the Compensation Peer Group.

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Before the Committee makes decisions on executive compensation, the CEO reviews compensation for the other named executives (other than the Executive Chairman) and makes recommendations to the Committee based on their individual and group performance. At the beginning of the year, the CEO proposes to the Committee current year base salary adjustments, annual incentive award target percentages and long-term incentive grants for each of the other named executives. The Committee reviews and approves the compensation actually paid to the named executives after consideration of the recommendations made by the CEO. The Committee has discretion to modify named executives' compensation from the CEO's recommendation, but did not exercise that discretion for the named executives with respect to 2019 compensation.

The independent members of the Board assess the CEO's performance each year. They also receive input from the Executive Chairman on the CEO's performance to determine the CEO's annual incentive payout for the prior year and to set target compensation for the following year, including any base salary adjustment, annual incentive award target percentage and long-term incentive grants. Each year the independent members of the Board also have a thorough discussion before determining the Executive Chairman's annual incentive payouts for the prior year and setting target compensation for the following year.

Other Aspects of Our Executive Compensation Program

We hold an annual "say on pay" advisory vote to approve our named executive compensation. At our 2019 annual meeting of stockholders, the compensation of our named executives was approved by stockholders, with approximately 88% of the votes cast for approval. The Committee evaluated the results of the 2019 advisory vote at its May meeting. The Committee also considered many other factors in evaluating our executive compensation program, including the Committee's assessment of the interaction of our compensation plans with our corporate business objectives, evaluations of our program by the Committee's independent compensation consultant, including with respect to "best practices," and a review of data of our Compensation Peer Group. Taking all of this information into account, the Committee did not make any changes to our executive compensation program and policies as a result of the 2019 "say on pay" advisory vote. However, in response to an evaluation of market practices, the Committee approved changes to the company's annual incentive and long-term incentive programs as discussed above under "Changes to Executive Compensation for 2020."

Pursuant to the Company's clawback policy in effect through 2019, if the Board determined that any key executive or employee engaged in fraud or willful misconduct that caused or otherwise contributed to a need for a material restatement of the Company's financial results, the Board would review all performance-based compensation earned by that employee during the fiscal periods materially affected by the restatement. If the Board determined that any such compensation would have been lower if it had been based on the restated results, the Board could, to the extent permitted by applicable law, seek recoupment of such compensation.

This clawback policy was expanded in 2020 to provide the Board or a Board committee with the discretion to recover compensation in the event of any material restatement of financial results,

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whether or not an executive officer or employee is individually "at fault." Under the expanded policy, in the event of a material restatement of the Company's financial results, the Board or a Board committee will evaluate the circumstances and may, in its discretion, recover from any current or former executive officer or employee the portion of any performance-based compensation earned by that executive or employee during the fiscal periods materially affected by the restatement that would not have been earned had performance been measured on the basis of the restated results.

Outside of our clawback policy, we also consider other potential recourse mechanisms as part of our approach to executive compensation. In addition to potential legal remedies and disciplinary or other employment actions that may be available to the Company, named executive compensation may be subject to forfeiture, recovery, or adjustment in a variety of circumstances under our other policies and agreements. These include: (i) our ability to pursue appropriate remedies for violations of our Code of Conduct; (ii) forfeiture of compensation if a named executive's employment is terminated for "cause" under the terms of our agreements with named executives, which includes, among other things, termination for dishonesty, fraud, willful misconduct, breach of fiduciary duty, conflict of interest, commission of a felony, material failure or refusal to perform job duties in accordance with Company policies, material violation of Company policy that causes harm to the Company or its subsidiaries or other wrongful conduct of a similar nature and degree; (iii) forfeiture and recovery of compensation in the event a named executive breaches applicable restrictive covenants; and (iv) potential downward adjustments by the Committee to pay opportunities or incentive plan payouts.

Executive officers are required to hold Fluor common stock to align their financial interests with those of our stockholders. The Company maintains stock ownership guidelines for named executives as follows:

Role
Value of Shares or Share
Units to be Owned
Chief Executive Officer   6 times base salary
Chief Financial Officer and Executive Chairman   3.5 times base salary
Group President and Executive Vice President   2 times base salary

Named executives may sell shares of Fluor common stock if the guidelines are met and will be met after the sale. To the extent a named executive has not satisfied the guidelines, a named executive may only sell up to 50% of the net shares acquired from the exercise of stock options or the vesting of RSUs and VDI awards. Unvested RSUs and earned but unvested VDI units are considered as owned by the named executive in determining whether the named executive has met the ownership guidelines. As of the date of this report, each of Messrs. Boeckmann, Flowers and de Hann had met these stock ownership guidelines. The other named executives who have not met these guidelines are therefore subject to the holding requirements.

Our insider trading policy prohibits all directors, employees (including executive officers) and contractors of the Company and its subsidiaries from engaging in short term or speculative trading in Company securities. It is against the policy for directors and employees to trade in puts, calls or other publicly traded "over-the-counter" options in Company securities, or to sell Company securities

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short. In addition, directors and employees are prohibited from engaging in any hedging or monetization transactions involving Company securities (such as zero cost collars and forward sale contracts).

Directors and employees are also prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan or otherwise. The policy does not prohibit broker-assisted exercise or settlement of equity awards granted by the Company that may involve an extension of credit only until the sale is settled, provided that any such transaction complies with the terms of the policy.

The Committee considers the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code ("Section 162(m)"). However, compensation paid to covered executives subject to Section 162(m) in excess of $1,000,000 generally will not be deductible as a result of 2017 tax reform legislation unless it qualifies as "performance based compensation" (as defined under Section 162(m) prior to 2018) and qualifies for transition relief applicable to certain "grandfathered" arrangements in place as of November 2, 2017. The Committee historically has retained discretion to provide payments not intended to be deductible under Section 162(m) and expects that covered employee compensation for 2019 and future years will not be fully deductible. However, the Committee expects to continue to prioritize performance-based compensation arrangements for our executives, regardless of whether deductible under amended Section 162(m).

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ORGANIZATION AND COMPENSATION COMMITTEE REPORT

ORGANIZATION AND COMPENSATION COMMITTEE
REPORT

Management of the Company has prepared the Compensation Discussion and Analysis as required by Item 402(b) of Regulation S-K, and the Organization and Compensation Committee has reviewed and discussed it with management. Based on this review and discussion, the Committee recommended that the Compensation Discussion and Analysis be included in the proxy statement for the Company's 2020 annual meeting of stockholders.

 
   
    The Organization and Compensation Committee

 

 

James T. Hackett, Chair*
Alan M. Bennett
Peter K. Barker
Armando J. Olivera
Matthew K. Rose

*
Appointed Chair in February 2020

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SUMMARY COMPENSATION TABLE

The table below summarizes the total compensation earned by or granted to each of the 2019 named executives in the relevant years. The 2019 named executives are the two individuals who held the position of principal executive officer in 2019, the two individuals who held the position of the principal financial officer in 2019, and the three other highest paid executive officers.

(a)


(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)  

Name and
Principal Position



Year


Salary
($)(1)



Bonus
($)



Stock
Awards
($)(2)




Option
Awards
($)(3)




Non-Equity
Incentive
Plan
Compensation
($)(4)






Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)









All Other
Compensation
($)(5)




Total
($)

 

Carlos M. Hernandez

  2019   $949,196     $3,836,522   $1,000,008   $586,400     $150,121   $6,522,247  

Chief Executive Officer

  2018   $651,346     $2,942,476     $334,200     $124,827   $4,052,849  

(effective May 1, 2019)

  2017   $630,032     $1,588,728   $643,788   $278,500     $117,117   $3,258,165  

D. Michael Steuert

  2019   $462,898   $316,700 (6) $2,271,784 (7) $787,509       $28,875   $3,867,766  

Executive Vice President

                                     

and Chief Financial Officer

                                     

(effective June 1, 2019)

                                     

Alan L. Boeckmann

  2019   $323,084   $335,000 (8) $1,350,068   $1,350,013       $292,818   $3,650,983 (9)

Executive Chairman

                                     

(effective May 1, 2019)

                                     

Garry W. Flowers

  2019   $559,880   $150,000 (10) $2,007,179 (7)   $773,050     $101,629   $3,591,738  

Executive Vice President

  2018   $543,507   $100,000 (10) $1,440,420     $915,925     $103,131   $3,102,983  

  2017   $530,026   $100,000   $1,044,424   $411,290   $243,300     $108,113   $2,437,153  

Taco de Haan

  2019   $456,610     $2,434,588 (7)   $140,700   $246,000   $86,460   $3,364,358  

Group President, Diversified

                                     

Services and President, Stork

                                     

David T. Seaton

  2019   $974,867     $8,363,876         $2,487,599   $11,826,342 (11)

Former Chairman and

  2018   $1,328,029     $9,606,359   $500,016   $921,000     $318,197   $12,673,601  

Chief Executive Officer

  2017   $1,295,029     $5,626,512   $2,200,021   $836,000     $296,225   $10,253,787  

(until April 30, 2019)

                                     

Bruce A. Stanski

  2019   $747,989     $2,422,405     $247,000     $173,369   $3,590,763  

Former Executive Vice

  2018   $714,861     $2,419,791     $373,200     $110,713   $3,618,565  

President and Chief Financial

  2017   $647,111   $220,000   $1,007,390   $401,257   $291,600     $106,183   $2,673,541  

Officer (until May 31, 2019)

                                     

(1)
The amounts in column (c) include salary paid, and any time off with pay utilized, during the year.

(2)
The amounts in column (e) represent the aggregate grant date fair value of the RSUs and VDI awards granted in each year, calculated based on the closing price of the Company's common stock on the NYSE on the date of grant in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 ("ASC 718"). For 2019, this amount includes the value of the shares subject to the third tranche of the 2017 VDI awards, the second tranche of the 2018 VDI awards and the first tranche of the 2019 VDI awards, for each of which the performance objectives were set in 2019. The performance objectives for the first tranche of the 2017 VDI award were set and reported in 2017. The performance objectives for the second tranche of the 2017 VDI award and the first tranche of the 2018 VDI award were set and reported in 2018. Under SEC rules, tranches for which performance objectives have not been set do not have a reportable grant date fair value under ASC 718 and, therefore, are not included in the table above. The performance objectives for the third tranche of the 2018 VDI awards and the second tranche of the 2019 VDI awards will be established in 2020. The performance objectives for the third tranche of the 2019 VDI awards will be established in 2021. Compensation for the remaining tranches of the 2018 and 2019 VDI awards will be reported in future Summary Compensation Tables as compensation for the year in which the performance objectives are established.

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COMPENSATION TABLES

 

Carlos M.
Hernandez


D. Michael
Steuert


Alan L.
Boeckmann


Garry W.
Flowers


Taco T. de
Haan


David T.
Seaton


Bruce A.
Stanski

RSUs

$2,625,081 $2,271,784 $1,350,068 $1,812,591 $2,100,025 $4,650,003 $1,425,105

2017 VDI

$304,616 $194,588 $1,040,969 $189,875

2018 VDI

$345,052 $127,140 $1,065,399 $314,767

2019 VDI

$561,773 $207,423 $1,607,505 $492,658

Total

$3,836,522 $2,271,784 $1,350,068 $2,007,179 $2,434,588 $8,363,876 $2,422,405
(3)
The amounts in column (f) represent the aggregate grant date fair value of options granted in each year. The fair value of these awards is based on the Black-Scholes option pricing model on the date of grant in accordance with ASC 718. Assumptions used in the calculation of these amounts are included in the "Stock-Based Plans" footnote to the Consolidated Financial Statements of the Company, as included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

(4)
The amounts in column (g) represent amounts earned as annual incentive in each year. Mr. Flowers' 2019 amount also includes $406,250, which represents the earned amount of his 2019 VDI award, which is payable in cash and had a one-year performance period beginning January 1, 2019 and ending December 31, 2019.

(5)
The amounts in column (i) are detailed in a separate All Other Compensation table below.

(6)
This amount reflects a cash bonus of $316,700 paid to Mr. Steuert in lieu of any annual incentive for his extraordinary efforts in 2019. This amount was determined based on his annual target bonus of 100% of his base salary, prorated from his appointment as Chief Financial Officer in June 2019, and the market value of the portion of his target bonus which he received in the form of a grant of RSUs based on the stock price of $9.59 on September 25, 2020.

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COMPENSATION TABLES

 

(7)
These amounts include the grant date fair value of the following retention awards granted in 2019: $1,000,000 in RSUs vesting on December 31, 2021 to Mr. Steuert; $1,000,000 in RSUs vesting on November 11, 2021 to Mr. Flowers; and $1,500,000 in RSUs vesting on November 11, 2022 to Mr. de Haan. Mr. Steuert's retention award was forfeited upon his retirement in 2020.

(8)
This amount reflects a cash bonus of $335,000 paid to Mr. Boeckmann in lieu of any annual incentive for his extraordinary efforts in 2019. This amount was determined based on his annual target bonus of 100% of his base salary, prorated from his appointment as Executive Chairman in May 2019.

(9)
The present value of accumulated benefits under the US Executives' Supplemental Benefit Plan for Mr. Boeckmann was $1,735,000 on December 31, 2018 and $1,403,000 on December 31, 2019 which resulted in a change in pension value of ($332,000). This amount is not disclosed in column (h) above as the change in pension value was negative.

(10)
This amount includes the portion of a retention award granted to Mr. Flowers in 2017 that vested on March 31, 2018. Under the terms and conditions of the retention agreement, $250,000 was deposited in Mr. Flowers' deferred compensation account in 2017. The first $100,000 of that amount vested on March 31, 2018. The remaining $150,000 vested on March 31, 2019. Annual incentive payments appear in column (g).

(11)
Mr. Seaton forfeited his 2019 RSU grant and his 2019 VDI award as a result of his separation from the Company. Excluding his forfeited awards with a value of $6,257,508, Mr. Seaton's compensation for 2019 would be as set forth in the table below.

Year
Salary
($)


Bonus
($)


Stock
Awards
($)



Option
Awards
($)



Non-Equity
Incentive
Plan
Compensation
($)





All Other
Compensation
($)



Total
($)

David T. Seaton

2019 $974,867 $2,106,368 $2,487,599 $5,568,834

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COMPENSATION TABLES

 

 

ALL OTHER COMPENSATION

The following table describes each component of the All Other Compensation column (column (i)) of the Summary Compensation Table for 2019.

(a)


(b)
(c)
(d)
(e)
(f)
(g)

Name


Company
Contributions
to Qualified and
Nonqualified
Defined
Contribution Plans
($)(1)







Tax
Gross-up
($)(2)



Perquisite
Allowances
($)(3)



Other
Perquisites
($)(4)



Other
Payments
($)(5)



Total All Other
Compensation
($)(6)

Carlos M. Hernandez

  $66,729   $4,425   $62,100   $16,867     $150,121

D. Michael Steuert

      $28,875       $28,875

Alan L. Boeckmann

  $13,231     $36,000     $243,587   $292,818

Garry W. Flowers

  $54,486   $1,995   $32,400   $12,748     $101,629

Taco de Haan

  $57,283     $5,752   $23,425     $86,460

David T. Seaton

  $115,145   $18,904   $29,625   $37,351   $2,286,574   $2,487,599

Bruce A. Stanski

  $27,548   $8,209   $41,250   $21,362   $75,000   $173,369

(1)
The amounts in column (b) represent contributions made by the Company to each individual's account in the Company's 401(k) plan and amounts credited by the Company into each individual's account in the Company's non-qualified deferred compensation plan. Contributions to the 401(k) plan and amounts credited to the non-qualified deferred compensation plan by the Company were made or provided on the same basis as provided to all other eligible salaried employees.

(2)
The amounts in column (c) represent the tax gross-up provided for business-related spousal travel.

(3)
The amounts in column (d) represent the aggregate annual perquisite allowance, which is paid monthly as a substitute for the Company reimbursing or paying for perquisites such as an automobile allowance, tax and financial planning, and club membership dues. To the extent any of the allowance was used for a business purpose, the amount of the allowance shown here was not reduced.

(4)
The amounts in column (e) represent the incremental cost for business-related spousal travel, the cost of business-related physical examinations, the cost of personal use of non-primary country clubs, and the cost of car lease payments for one Europe-based named executive, each of which was less than $25,000. Named executives may also use our corporate travel agency to arrange personal travel, at no incremental cost to the Company.

(5)
The amounts in column (f) represent the following items: (i) for Mr. Seaton, a severance payment equal to one times his base salary of $1,334,000 and a cash payment equal to the value of his unused time-off with pay balance equal to $952,574; (ii) for Mr. Stanski, a relocation payment of $75,000 pursuant to his separation agreement with the Company; and (iii) for Mr. Boeckmann, fees equal to $31,250 in connection with his initial appointment as a non-management director in May 2019 before he was named as Executive Chairman; and monthly distributions of deferred compensation and payments of supplemental benefits totaling $212,337 under arrangements that were previously disclosed and were approved by the Organization and Compensation Committee and the Board's independent directors at the time he previously served as an executive officer and for which he chose annuity payments instead of a lump sum payment.

(6)
The amounts in column (g) represent the totals of columns (b) through (f). Our 2019 perquisite costs approximated the median of the Compensation Peer Group.

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COMPENSATION TABLES

GRANTS OF PLAN-BASED AWARDS IN 2019

(a)


(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)  

              Estimated Future
Payouts Under
Equity Incentive
Plan Awards(2)




Estimated Future
Payouts Under
Non-Equity Incentive
Plan Awards(3)




               

Name

  Type of
Award(1)


Grant
Date


Approval
Date


Target
(#)


Maximum
(#)


Target
($)


Maximum
($)


All
Other
Stock
Awards:
Number
of
Shares
of
Stock or
Units
(#)(4)











All Other
Option
Awards:
Number of
Securities
Under-
lying
Options
(#)(5)









Exercise
or Base
Price of
Option Awards
Per Share
($/sh)(6)






Grant Date
Fair Value of
Stock and
Option
Awards
($)
 

Carlos M. Hernandez

  RSU   2/26/2019   2/19/2019           42,429       $1,625,031 (7)

  RSU   5/16/2019   5/16/2019           33,900       $1,000,050 (7)

  SO   5/16/2019   5/16/2019             123,222   $29.50   $1,000,008 (8)

  2017 VDI   2/19/2019   2/19/2019   8,660   17,320             $304,616 (9)

  2018 VDI   2/19/2019   2/19/2019   8,169   16,338             $345,052 (10)

  2019 VDI   2/26/2019   2/19/2019   14,143   28,286             $561,773 (11)

  AI   N/A   N/A       $1,332,600   $2,665,200          

D. Michael Steuert

  RSU   6/1/2019   5/22/2019           45,879       $1,271,766 (7)

  RSU   11/11/2019   11/11/2019           52,939       $1,000,018 (7)

  SO   6/1/2019   5/22/2019             103,269   $27.72   $787,509 (8)

Alan L. Boeckmann

  RSU   5/16/2019   5/16/2019           45,765       $1,350,068 (7)

  SO   5/16/2019   5/16/2019             166,350   $29.50   $1,350,013 (8)

Garry W. Flowers

  RSU   2/26/2019   2/19/2019           21,216       $812,573 (7)

  RSU   11/11/2019   11/11/2019           52,939       $1,000,018 (7)

  2017 VDI   2/19/2019   2/19/2019   5,532   11,064             $194,588 (9)

  2019 Cash VDI (12) N/A   N/A       $812,500   $1,625,000          

  AI   N/A   N/A       $534,400   $1,068,800          

Taco de Haan

  RSU   2/26/2019   2/19/2019           15,666       $600,008 (7)

  RSU   11/11/2019   11/11/2019           79,408       $1,500,017 (7)

  2018 VDI   2/19/2019   2/19/2019   3,010   6,020             $127,140 (10)

  2019 VDI   2/26/2019   2/19/2019   5,222   10,444             $207,423 (11)

  AI   N/A   N/A       $413,700   $827,400          

David T. Seaton

  RSU   2/26/2019   2/19/2019           121,410       $4,650,003 (7)

  2017 VDI   2/19/2019   2/19/2019   29,594   59,188             $1,040,969 (9)

  2018 VDI   2/19/2019   2/19/2019   25,223   50,446             $1,065,399 (10)

  2019 VDI   2/26/2019   2/19/2019   40,470   80,940             $1,607,505 (11)

  AI   N/A   N/A       $2,001,000 (13) $4,002,000          

Bruce A. Stanski

  RSU   2/26/2019   2/19/2019           37,209       $1,425,105 (7)

  2017 VDI   2/19/2019   2/19/2019   5,398   10,796             $189,875 (9)

  2018 VDI   2/19/2019   2/19/2019   7,452   14,904             $314,767 (10)

  2019 VDI   2/26/2019   2/19/2019   12,403   24,806             $492,658 (11)

  AI   N/A   N/A       $753,500   $1,507,000          

(1)
The types of awards reported in this table are as follows: RSUs, Stock Options ("SO"), the third tranche of the 2017 VDI Awards, the second tranche of the 2018 VDI Awards, the first tranche of the 2019 VDI Awards, Mr. Flowers' 2019 cash VDI award, and Annual Incentive ("AI").

(2)
Columns (e) and (f) show the target and maximum number of units for each individual under the third tranche of their 2017 VDI awards, the second tranche of their 2018 VDI awards, and the first tranche of their 2019 VDI awards (except with respect to Mr. Flowers whose cash-based 2019 VDI award is reflected in columns (g) and (h)). The Committee has established threshold levels for the 2019 performance goals for each award, but not for the overall award. All potential payouts are performance driven and can be earned from 0 to 200% of target. The performance goals are described in the Compensation Discussion and Analysis beginning on page 37. The third tranche of the 2018 VDI award and the second tranche of the 2019 VDI award will be presented in the 2020 table. The third tranche of the 2019 VDI award will be presented in the 2021 table. All three tranches of the 2017, 2018 and 2019 VDI awards, if earned, will vest in full on March 6, 2020, March 6, 2021, and March 6, 2022, respectively.

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COMPENSATION TABLES

(3)
Columns (g) and (h) show the target and maximum payouts for each individual of their 2019 annual incentive award. The Committee has established threshold levels for each of the performance goals, but not for the overall award. All potential payouts are performance driven and can be earned from 0 to 200% of target. The performance goals are described in the Compensation Discussion and Analysis beginning on page 32.

(4)
The amounts in column (i) represent the number of RSUs granted on February 26, 2019 as part of the 2019 long-term incentive awards. These RSUs vest one-third per year on March 6th in each of the three years following the grant date. This column also includes RSUs granted on May 16, 2019 to Messrs. Boeckmann and Hernandez and RSUs granted on June 1, 2019 to Mr. Steuert. These RSUs vest one-third per year in each of the three years following the grant date. In addition, this column includes the number of RSUs granted on November 11, 2019 to Messrs. Steuert, Flowers and de Haan as part of retention agreements with each individual that vest in full as follows: for Mr. Steuert, on December 31, 2021; for Mr. Flowers, on November 11, 2021; and for Mr. de Haan, on November 11, 2022. Mr. Steuert's retention award was forfeited upon his retirement in 2020.

(5)
The amounts in column (j) represent the number of nonqualified stock options granted on May 16, 2019 to Messrs. Boeckmann and Hernandez and the number of nonqualified stock options granted on June 1, 2019 to Mr. Steuert. These options vest one-third per year on each of the first three anniversaries of the applicable grant date.

(6)
The amounts in column (k) represent the exercise price of the nonqualified stock options, which was the closing price of the Company's common stock on the NYSE on the date of grant.

(7)
This amount represents the grant date fair value of RSUs granted as part of 2019 long-term incentive awards. For those RSUs granted on February 26, 2019, the value is computed in accordance with ASC 718, using the grant price of $38.30 per share, which was the closing price of the Company's common stock on the NYSE on the date of grant. For those RSUs granted on May 16, 2019, the value is computed in accordance with ASC 718, using the grant price of $29.50 per share, which was the closing price of the Company's common stock on the NYSE on the date of grant. For those RSUs granted on June 1, 2019, the value is computed in accordance with ASC 718, using the grant price of $27.72 per share, which was the closing price of the Company's common stock on the NYSE on the date of grant. For those RSUs granted on November 11, 2019, the value is computed in accordance with ASC 718, using the grant price of $18.89 per share, which was the closing price of the Company's common stock on the NYSE on the date of grant.

(8)
This amount represents the grant date fair value of nonqualified stock options granted. For those stock options granted on May 16, 2019, the value is computed in accordance with ASC 718, using a Black Scholes option pricing model value of $8.12 per option. For those stock options on June 1, 2019, the value is computed in accordance with ASC 718, using a Black Scholes option pricing model value of $7.63 per option.

(9)
This amount represents the grant date fair value of the target number of shares subject to the third tranche of the 2017 VDI awards granted on February 19, 2019, using the grant price of $37.00 per unit, which was the closing price of the Company's common stock on the NYSE on February 19, 2019, the date the 2019 performance goals were approved, less a liquidity discount of 11.68% related to the Post-Vest Holding Period on the common stock underlying these awards, plus an adjustment upward by 7.64% for the Relative TSR modifier derived using a Monte Carlo Simulation approach.

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    As described in footnote 2 of the Summary Compensation Table beginning on page 49, one-third of the shares subject to the 2017 VDI awards have a 2019 grant date fair value under applicable accounting standards and, therefore, are reported as 2019 compensation in the Summary Compensation Table and this Grants of Plans Based Awards Table. The grant date fair value of the first and second tranches of the 2017 VDI award were presented in the 2017 and 2018 tables, respectively.

(10)
This amount represents the grant date fair value of the target number of shares subject to the second tranche of the 2018 VDI awards granted on February 19, 2019, using the grant price of $37.00 per unit, which was the closing price of the Company's common stock on the NYSE on February 19, 2019, the date the 2019 performance goals were approved, plus an adjustment upward by 14.16% for the Relative TSR modifier derived using a Monte Carlo Simulation approach.

As noted above, one-third of the shares subject to the 2018 VDI awards have a 2019 grant date fair value under applicable accounting standards and, therefore, are reported as 2019 compensation in the Summary Compensation Table and this Grants of Plans Based Awards Table. The grant date fair value of the first tranche of the 2018 VDI award was presented in the 2018 tables; and the grant date fair value of the remaining tranche of the 2018 VDI award will be presented in the 2020 tables.

(11)
This amount represents the grant date fair value of the target number of shares subject to the first tranche of the 2019 VDI awards granted to the named executives on February 26, 2019, using the grant price of $38.30 per unit, which was the closing price of the Company's common stock on the NYSE on the date of grant, plus an adjustment upward by 3.71% for the Relative TSR modifier derived using a Monte Carlo Simulation approach.

    As noted above, only one-third of the shares subject to the 2019 VDI awards granted to the named executives have a 2019 grant date fair value under applicable accounting standards and, therefore, are reported as 2019 compensation in the Summary Compensation Table and this Grants of Plans Based Awards Table. The grant date fair value of the remaining two tranches of the 2019 VDI awards granted to the named executives will be presented in the 2020 and 2021 tables, respectively.

(12)
Mr. Flowers' 2019 VDI award is payable in cash and had a one-year performance period beginning January 1, 2019 and ending December 31, 2019. Columns (g) and (h) show the target and maximum payouts for Mr. Flowers' 2019 VDI award. The payout is performance driven, and could be earned from 0 to 200% of target.

(13)
Mr. Seaton forfeited his annual incentive award for 2019 at separation.

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COMPENSATION TABLES

OUTSTANDING EQUITY AWARDS AT 2019 FISCAL
YEAR END

(a)


(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)

  Option Awards(1)
Stock Awards

Name


Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable








Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable








Option
Exercise
Price
($)





Option
Grant
Date




Option
Expiration
Date




Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)








Market Value
of Shares or
Units of
Stock That
Have Not
Vested
($)(3)








Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)(4)












Equity
Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(5)

Carlos M. Hernandez

  17,067     $70.76   2/28/2011   2/28/2021   107,129   $2,022,596   18,953   $357,833

  23,364     $62.50   2/27/2012   2/27/2022                

  29,028     $61.45   2/25/2013   2/25/2023                

  28,653     $79.19   2/21/2014   2/21/2024                

  43,416     $59.05   2/23/2015   2/23/2025                

  30,160   15,080   $55.35   2/23/2017   2/23/2027                

    123,222   $29.50   5/16/2019   5/16/2029                

D. Michael Steuert

    103,269   $27.72   6/01/2019   6/01/2029   98,818