UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest reported event): February 1, 2017

 

FLUOR CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-16129

 

33-0927079

(State or other jurisdiction of
incorporation or organization)

 

(Commission File Number)

 

(IRS Employer Identification
Number)

 

6700 Las Colinas Boulevard
Irving, Texas

 

75039

(Address of principal executive offices)

 

(Zip Code)

 

(469) 398-7000

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o             Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o             Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


 

Item 5.02.                                         Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

(d)                                  On February 1, 2017, the Board of Directors (the “Board”) of Fluor Corporation (the “Corporation”) voted to increase the size of the Board to thirteen members, effective February 1, 2017. The Board elected Admiral Samuel J. Locklear III to the Board, effective February 1, 2017, to fill the new position authorized by the Board.

 

Admiral Locklear has been appointed as a member of the Audit and Governance Committees of the Board, effective February 2, 2017.  The Board has affirmatively determined that Admiral Locklear is independent of the Corporation and its management under New York Stock Exchange listing standards and the standards set forth in the Corporation’s Corporate Governance Guidelines.

 

Admiral Locklear will receive the standard compensation amounts payable to non-employee directors of the Corporation, as described in Exhibit 10.1 attached hereto.

 

In connection with Admiral Locklear’s election, the Corporation and Admiral Locklear entered into the form of indemnification agreement filed with the Corporation’s Annual Report on Form 10-K filed on February 25, 2009.

 

A copy of the Corporation’s February 1, 2017 press release announcing the election of Admiral Locklear is attached hereto as Exhibit 99.1.

 

The attached press release also mentions the retirement of Admiral Joseph W. Prueher.  After further consultation with the Board and clarification of the Corporation’s retirement policy, Admiral Prueher has agreed to stand for reelection at the next annual meeting of stockholders.

 

(e)                                   On February 1, 2017, the Organization and Compensation Committee of the Board made several modifications to the Corporation’s compensation programs.  A summary of the changes is as follows:

 

Long-Term Incentive Awards.  The Corporation’s current long-term incentive (“LTI”) program consists of three components: Value Driver Incentive (“VDI”) awards, restricted stock units (“RSUs”) and non-qualified stock options.  In 2016, the Chief Executive Officer’s direct reports received 50% of their LTI in VDI awards, with the option to elect to receive the remaining 50% in either RSUs or stock options.  The Chief Executive Officer’s grant form was determined by the Organization and Compensation Committee. In 2017, the Chief Executive Officer and his direct reports (the “Senior Officers”) will not have an option to elect the form of their LTI but will instead receive 25% of their LTI as stock options, 25% of their LTI as RSUs and 50% of their LTI as VDI awards.

 

VDI Goals.   For VDI awards granted in 2016 to the Senior Officers (which awards remain unchanged), the number of earned awards will be determined based upon the three-year average of annual performance ratings for each of two equally weighted measures: (i) earnings per share and (ii) return on operating assets employed (“ROAE”).  For VDI awards granted in 2017 to the Senior Officers, the number of earned awards will continue to be determined based upon the three-year average of annual performance ratings at the end of the performance period.  However, the number of earned awards will be based on three measures weighted as follows:  30% ROAE, 30% New Awards Gross Margin Dollars and 40% New Awards Gross Margin Percentage.  New Awards Gross Margin Dollars measures the total amount of project gross margin that the Corporation 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 Corporation expects to receive as a result of projects awarded within the performance period as a percentage of expected revenue from these projects. In addition, the number of earned awards for 2017 VDI grants will be modified based on the Corporation’s three-year cumulative total shareholder return relative to the engineering and construction peers included in the Corporation’s compensation peer group (“Relative TSR”).  If the Corporation’s Relative TSR is in the bottom 1/3 of the group, the earned awards will be decreased by 25%. If the Corporation’s Relative TSR is in the top 1/3 of the group, the earned awards will be increased by 25%. No adjustment will be made if the Corporation’s Relative TSR is in the middle 1/3.

 

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Item 7.01.  Regulation FD Disclosure.

 

A copy of the Corporation’s press release regarding the election of Admiral Locklear is furnished as Exhibit 99.1 hereto.

 

Item 9.01.  Financial Statements and Exhibits.

 

(d)                                  Exhibits.

 

Exhibit
Number

 

Description

10.1

 

Summary of Fluor Corporation Non-Management Director Compensation.

99.1

 

Press Release Issued by Fluor Corporation on February 1, 2017, announcing the election of a new director.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

February 7, 2017

 

FLUOR CORPORATION

 

 

 

 

By:

/s/ Carlos M. Hernandez

 

 

Carlos M. Hernandez

 

 

Chief Legal Officer and Secretary

 

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FLUOR CORPORATION

INDEX OF EXHIBITS

 

Exhibit
Number

 

Description

10.1

 

Summary of Fluor Corporation Non-Management Director Compensation.

99.1

 

Press Release Issued by Fluor Corporation on February 1, 2017, announcing the election of a new director.

 

5

Exhibit 10.1

 

Summary of Fluor Corporation Non-Management Director Compensation

 

Cash Compensation

 

Annual Retainer:

 

$

120,000

 

Annual Committee Chair Retainer:

 

 

 

Audit Committee Chair:

 

$

20,000

 

Organization and Compensation Committee Chair:

 

$

15,000

 

Governance Committee Chair:

 

$

15,000

 

Lead Independent Director Retainer:

 

$

30,000

 

Non-Committee Chair Members of the Executive Committee:

 

$

10,000

 

 

Retainers are paid quarterly in cash and can be deferred at the director’s election under the Fluor Corporation 409A Director Deferred Compensation Program (the “Deferred Compensation Program”). Effective January 1, 2013, directors no longer receive a 25% premium on the deferred amount deemed invested in company stock via the Deferred Compensation Program.

 

Equity Compensation

 

Each non-management director receives an annual grant of restricted stock units with a total market value of $150,000. The grant is made on the date of the annual meeting of shareholders. Restrictions on annual grants vest immediately on the first anniversary of the date of grant.  Directors can defer such units at their election under the Deferred Compensation Program.

 

Other Information

 

Fluor Corporation reimburses non-management directors for their travel and related expenses in connection with attending Board meetings and Board-related activities. Directors also receive life insurance ($75,000 in coverage) and business travel accident insurance ($250,000 in coverage). Directors’ charitable contributions that meet the guidelines of the Company’s employee charitable matching gift program are eligible for matching funds from the Company in an amount up to $5,000 per year.

 

Exhibit 99.1

 

Fluor Corporation

Brian Mershon/Brett Turner

6700 Las Colinas Blvd

Media Relations

Irving, Texas  75039

469.398.7621/864.281.6976

469.398.7000

 

 

 

 

Geoff Telfer/Jason Landkamer

 

Investor Relations

 

469.398.7070/469.398.7222

 

 

 

 

 

News Release

 

 

 

FOR IMMEDIATE RELEASE

 

Sam Locklear Elected to Fluor’s Board of Directors

 

IRVING, Texas (Feb. 1, 2017) — Fluor Corporation (NYSE: FLR) announced today that Sam Locklear, president of SJL Global Insights LLC, and retired U.S. Navy Admiral, was elected to its board of directors effective Feb. 1, 2017. In addition, Joseph W. Prueher, who has served on Fluor’s board since 2003, has elected to retire effective May 3, 2017.

 

“The addition of Admiral Locklear to Fluor’s board of directors provides the company another top-tier advisor with a global business perspective and demonstrated leadership credentials,” said David Seaton, chairman and CEO of Fluor. “Locklear’s nearly four decades of global experience serving in the United States Navy will further enable and bolster Fluor’s strategy to become the integrated solutions provider of choice for its clients around the world.

 

“On behalf of Fluor Corporation and all of our colleagues, I would also like to thank Joseph Prueher for his more than 13 years of excellent service to our company,” Seaton said.  “He has provided our company with great value and has been a tremendous mentor to me personally.”

 

Locklear retired from the U.S. Navy in 2015 as a four-star admiral after 39 years, including 15 years as a flag officer. During his tenure, Locklear served as Commander for the U.S. Pacific Command, Commander of the U.S. Naval Forces Europe and Africa, and Commander of NATO’s Allied Joint Forces Command. He was ranked eleventh among the 100 most influential people in global defense issues by Defense News in 2013.

 


 

Locklear also serves on the board of directors for the National Committee on U.S. China Relations, the Advisory Board for the Center for Strategic and International Studies (CSIS) Sumitro Chair for Southeast Asia Studies, and as a senior advisor to the Center for Climate and Security.

 

Admiral Locklear graduated from the U.S. Naval Academy in 1977. He is a 1992 graduate of the National Defense University’s Industrial College of the Armed Forces and holds a master’s degree in Public Administration from George Washington University. He received numerous awards and decorations including the Defense Distinguished Service Medal, the Defense Superior Service Medal, Legion of Merit, Bronze Star and decorations from South Korea, the Philippines, Australia and France.

 

About Fluor Corporation

 

Fluor Corporation (NYSE: FLR) is a global engineering, procurement, fabrication, construction and maintenance company that designs, builds and maintains capital-efficient facilities for its clients on six continents. For more than a century, Fluor has served our clients by delivering innovative and integrated solutions across the globe. With headquarters in Irving, Texas, Fluor ranks 155 on the FORTUNE 500 list with revenue of $18.1 billion in 2015 and has more than 60,000 employees worldwide. For more information, please visit www.fluor.com or follow us on Twitter @FluorCorp.

 

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