FLUOR CORP (Form: 8-K, Received: 11/02/2020 17:19:05)

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 event reported): October 30, 2020

FLUOR CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		001-16129		33-0927079
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

6700 Las Colinas Blvd. Irving, Texas		75039
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (469) 398-7000

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:

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

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

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

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value per share	FLR	New York Stock Exchange
Preferred Stock Purchase Rights	FLR	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 5.02.

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

On November 2, 2020, Fluor Corporation (the “Corporation”) announced that its Board of Directors (the “Board”) appointed Mr. David E. Constable, a member of the Board, to serve as Chief Executive Officer of the Corporation, effective January 1, 2021. In anticipation of his expected retirement from the Corporation, Mr. Carlos M. Hernandez will step down from his position as Chief Executive Officer and as a member of the Board on December 31, 2020. Through June 30, 2021, Mr. Hernandez will remain with the Corporation in a non-executive officer role serving as Special Advisor to the Chief Executive Officer and Chairman to provide transition services, including support in completing and filing the fiscal 2020 annual report on Form 10-K.

Mr. Constable, age 59, has served as a director of the Corporation since 2019. He previously served as chief executive officer (from 2011) and president (from 2014) of Sasol Limited, an integrated chemicals and energy company, until his retirement in 2016. Prior to joining Sasol Limited, Mr. Constable had a nearly 30-year career at the Corporation, serving in various leadership roles within the company from 1982 to 2011 before returning to the Corporation’s Board of Directors in 2019.

Mr. Constable does not have any family relationships with any director or executive officer of the Corporation, and there are no arrangements or understandings with any person pursuant to which he was selected as an officer or director of the Corporation. In addition, there have been no transactions involving Mr. Constable that would be required to be disclosed pursuant to Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934.

In his role as Chief Executive Officer, Mr. Constable will receive an annual base salary for 2021 of $1.35 million. He will be eligible for a cash award under the Corporation’s annual incentive program with a target award of 150% of base salary and for 2021 annual long-term incentive equity awards of $9.35 million, all of which shall be subject to approval and such terms and conditions as established by the Board’s Organization and Compensation Committee. In connection with his appointment, Mr. Constable will also receive a $5 million sign-on equity award, equally split between restricted stock units and stock options that vest annually over five years. The stock options are exercisable only if the Company’s stock price appreciates by at least 25% for a period of 20 consecutive trading days during such five-year period. Mr. Constable will receive a transition and relocation payment of $1 million (which must be repaid in full if his employment terminates within twelve months), and selected relocation payments under the Fluor policy. He will also participate in other plans and benefit programs generally available to the Corporation’s executives.

Mr. Hernandez’s current compensation will remain unchanged through December 31, 2020, including remaining eligible for a 2020 annual incentive payment to be determined by the Board’s Organization and Compensation Committee and subject to his continued employment through the payment date. Under a retirement and release agreement, he will, as of December 31, 2020, vest in the cash retention award granted him in November 2019 and be entitled to a severance payment of $1.725 million, which is subject to recoupment if he competes against the Corporation, fails to provide transition services through June 30, 2021, or fails to sign a release of any claims against the Corporation and its related persons and entities. For his services during the transition period, he will continue to receive his current salary and will generally participate in benefit programs available to non-executives. During the transition period, his work will be at a level that results in a “separation of service” on the Transition Date under the Fluor 409A Executive Deferred Compensation Program and for purposes of Section 409A of the Internal Revenue Code (the “Code”), and is subject to termination and forfeiture of benefits if he competes with the Corporation. Provided that he signs a release after he retires from the Corporation on July 1, 2021, he will be paid a 2021 bonus of $862,500, and, as a retirement-eligible executive, will be eligible for continued vesting of his outstanding equity awards (including those granted in 2020, assuming he remains employed through February 22, 2021), subject to compliance with certain restrictive covenants. Following his retirement, Mr. Hernandez will serve as a consultant to the Corporation through June 30, 2022 for a quarterly payment of $125,000 and will be subject to a non-competition and non-solicitation agreement.

The foregoing description of Mr. Constable’s and Mr. Hernandez’s compensation are summaries and are qualified by reference to the terms of their respective agreements, which will be filed with the Corporation’s 2020 annual report on Form 10-K with the Securities and Exchange Commission.

Item 7.01.

Regulation FD Disclosure.

A copy of the Corporation’s press release regarding the foregoing matters is furnished as Exhibit 99.1 hereto.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
99.1		Press Release issued by Fluor Corporation on November 2, 2020.

104		Cover Page Interactive Data File, formatted in Inline XBRL, and included as Exhibit 101.

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.

Date: November 2, 2020	FLUOR CORPORATION

	By:	/s/ John R. Reynolds
		John R. Reynolds
		Executive Vice President, Chief Legal Officer and Secretary

Exhibit 99.1

Fluor Corporation	Irving, Texas 75039
6700 Las Colinas Blvd	Media Relations
Irving, Texas 75039	469.398.7621 tel

469.398.7000 main tel	Jason Landkamer
	Investor Relations
	469.398.7222 tel


News Release

Fluor Corporation Announces Leadership Transition

David E. Constable Appointed Chief Executive Officer, Effective January 1, 2021

Carlos Hernandez to Retire at Year-End 2020

IRVING, Texas (November 02, 2020) – Fluor Corporation (NYSE: FLR) announced today that David E. Constable, a member of the Fluor Board of Directors, has been appointed chief executive officer (CEO), effective January 1, 2021. Constable succeeds Carlos Hernandez, who will retire as CEO and a member of the company’s Board at the end of the year.

Constable is a versatile executive with significant international experience and a proven track record of driving growth and value creation across multiple industries. He brings 30 years of insight to Fluor’s business, strategy and operations, having held various leadership roles within the company from 1982 to 2011, before returning as a Board member in 2019. From 2011 to 2016, Constable served as CEO of Sasol Ltd, where he executed a comprehensive change program and implemented a new operating model focused on enhancing growth across the organization.

“We are pleased to appoint David, a proven executive with a deep understanding of our operations and opportunities, as Fluor’s next CEO,” said Alan Boeckmann, executive chairman of the Board. “This leadership transition is the result of the Board’s long-term succession planning process and follows a comprehensive external search. David brings a unique combination of deep insight to Fluor and an outside perspective from his prior experience as CEO of Sasol. His successful history of leading integrated global operations with a focus on effective risk management makes him ideally positioned to lead Fluor. I have had the opportunity to work closely with David over the last 25 years, both on the Fluor Board and as a member of the management team, and can personally attest to his unparalleled understanding of our business and dedication to our company. Our Board is confident David is the right person to shape and lead the company’s transformation strategy, which will enable us to achieve our full potential.”

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Boeckmann continued, “On behalf of the Board and the management team, I thank Carlos for his 13 years of leadership and many contributions to Fluor. As CEO, Carlos played an integral role setting Fluor on the path to restore confidence in our financial reporting. He oversaw our 2019 strategic review, which focused on lowering our risk profile and strengthening our balance sheet, and helped establish a culture of teamwork and transparency, laying the groundwork for Fluor’s future success. We are grateful to have had an executive of Carlos’s caliber step in to lead the company over this critical period. As a result, Fluor is on the right track and we are well prepared to enter a new chapter. We are grateful for his service to our company.”

“It has been an honor to serve as CEO of Fluor over the last year and a half, and a member of this great team for over a decade,” Hernandez said. “While it has been a challenging time for Fluor, we have made significant progress conducting our strategic review, strengthening our operations and completing the restatement of our financial results. Particularly, with the onset of the COVID-19 pandemic, I am proud of how our team adapted to the dynamic environment, remained focused on our objectives and continued delivering for our customers and shareholders. Given the strength of our team and the momentum underway, the Board and I are confident that now is the right time to welcome new leadership to Fluor, and that the company is well positioned for the next phase of growth under David.”

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“I am excited to rejoin such a great company and am honored to be leading Fluor during this important time in its history,” said Constable. “Since first joining Fluor in 1982 and returning again as a Board member last year, I have seen firsthand the team’s hard work and commitment to improving the business and delivering for our customers. Given my role on the Board, I am confident we will have a smooth transition. Fluor has a unique value proposition, strong industry position and the right talent to enable us to capitalize on the opportunities ahead and enhance value for all stakeholders.”

Constable and the Fluor leadership team will hold a business update conference call with the investment community in mid-January to share details on the company’s transformation strategy.

About David E. Constable

Constable has served as a director on the Fluor Board since 2019, and is chair of the Commercial Strategies and Operational Risk Committee, and a member of the Executive and Governance Committees. He was the president and chief executive officer of Sasol Limited from 2011 to 2016, where he drove a comprehensive group-wide change program, which culminated in the roll-out of the organization’s new operating model and its related structures, systems and processes. Prior to joining Sasol, Constable held various roles with Fluor from 1982 to 2011, most recently as group president, Operations, where he was responsible for the multi-functional entity that served Fluor’s core business groups. He was also responsible for a number of businesses at Fluor.

Page 4 of 4

Constable is a member of the ABB Ltd. board, and serves as a director on the Rio Tinto plc and Rio Tinto Ltd. boards. He previously served on the board of Anadarko Petroleum Corporation from 2016 until its merger with Occidental Petroleum in 2019.

Constable graduated from the University of Alberta with a bachelor’s in Engineering and is a registered professional engineer. He is a graduate of Thunderbird University’s International Management Program and Wharton Business School’s Advanced Management Program.

About Fluor Corporation

Fluor Corporation (NYSE: FLR) is a global engineering, procurement, fabrication, construction and maintenance company with projects and offices on six continents. Fluor’s 45,000 employees build a better world and provide sustainable solutions by designing, building and maintaining safe, well executed projects. Fluor had revenue of $17.3 billion in 2019 and is ranked 181 among the Fortune 500 companies. With headquarters in Irving, Texas, Fluor has served its clients for more than 100 years. For more information, please visit www.fluor.com or follow Fluor on Twitter, LinkedIn, Facebook and YouTube.

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