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

SCHEDULE 14A

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

 

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Fluor Corporation
6700 Las Colinas Boulevard
Irving, Texas 75039

March 15, 2011

Dear Shareholder:

        You are cordially invited to attend the 2011 annual meeting of shareholders. The meeting will be held on Thursday, May 5, 2011, beginning at 9:00 a.m. Central Daylight Time, at Fluor Corporation, 6700 Las Colinas Boulevard, Irving, Texas 75039. A map showing the meeting location is included for your convenience on the back page of this booklet.

        Information about the meeting is presented on the following pages. In addition to the formal items of business to be brought before the meeting, members of management will report on the company's operations and respond to shareholder questions.

        We are pleased to be using the U.S. Securities and Exchange Commission rule that allows companies to furnish proxy materials to their shareholders primarily over the Internet. We believe that this process expedites shareholders' receipt of proxy materials, lowers the costs of the annual meeting and helps to conserve natural resources. On or about March 15, 2011, we will begin mailing our shareholders a Notice of Internet Availability of Proxy Materials (the "Notice") containing instructions on how to access our 2011 Proxy Statement and 2010 Annual Report and how to vote online. The Notice will also include instructions on how to request a paper copy of the proxy materials, including the notice of annual meeting, proxy statement, annual report and proxy card.

        Whether or not you plan to attend the meeting, your vote is important and we encourage you to review our proxy materials and promptly cast your vote using the instructions provided in the Notice. You may vote your shares over the Internet or via a toll-free telephone number. Alternatively, if you request or receive a paper copy of the proxy materials by mail, you may vote over the Internet, you may vote by telephone, or you may sign, date and mail the proxy card in the envelope provided. Instructions regarding the three methods of voting are contained in the Notice or proxy card.

        Thank you for your continued support of Fluor Corporation. I look forward to seeing you on May 5^th, when I will welcome you for the first time as Fluor's Chief Executive Officer and a member of the Board of Directors.

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 5, 2011

        The annual meeting of shareholders of Fluor Corporation will be held at Fluor Corporation, 6700 Las Colinas Boulevard, Irving, Texas 75039, on Thursday, May 5, 2011, at 9:00 a.m. Central Daylight Time. At the meeting, our shareholders will consider and vote on the following matters:

1.

The election of three Class III directors named in the proxy statement to serve until the 2014 annual meeting of shareholders and until their respective successors are elected and qualified.



2.

An advisory vote on the company's executive compensation.



3.

An advisory vote on the frequency of shareholder advisory votes on the company's executive compensation.



4.

The amendment of our Amended and Restated Certificate of Incorporation to declassify the Board of Directors.



5.

The amendment of our Amended and Restated Certificate of Incorporation to remove and replace the supermajority voting provisions.



6.

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, 2011.



7.

Such other matters as may be properly presented at the meeting or any adjournment thereof.

        All shareholders of record at the close of business on March 10, 2011 are entitled to receive notice of and to vote at the meeting. Shareholders are cordially invited to attend the meeting in person; however, regardless of whether you plan to attend the meeting in person, please cast your vote as instructed in the Notice of Internet Availability of Proxy Materials (the "Notice") as promptly as possible. Alternatively, if you wish to receive paper copies of your proxy materials, including the proxy 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 in the postage-prepaid return envelope provided, or follow the instructions set forth on the proxy card to authorize the voting of your shares over the Internet or by telephone. Your prompt response is necessary to ensure that your shares are represented at the meeting.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 5, 2011: This proxy statement and the company's 2010 Annual Report to Shareholders are available at www.proxyvote.com.

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FLUOR CORPORATION

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PROXY STATEMENT

March 15, 2011

        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 annual meeting of shareholders to be held at Fluor Corporation, 6700 Las Colinas Boulevard, Irving, Texas 75039, on Thursday, May 5, 2011, at 9:00 a.m. Central Daylight Time, or at any adjournment or postponement thereof (the "Annual Meeting").

        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.

Internet Availability of Proxy Materials

        As permitted by U.S. Securities and Exchange Commission rules, we are making this proxy statement and our annual report available to our shareholders primarily via the Internet, rather than mailing printed copies of these materials to each shareholder. We believe that this process will expedite shareholders' receipt of proxy materials, lower the costs of the Annual Meeting and help to conserve natural resources. On or about March 15, 2011, we will begin mailing to each shareholder (other than those who previously requested electronic delivery of all materials or previously elected to receive delivery of a paper copy of the proxy materials) a Notice of Internet Availability of Proxy Materials (the "Notice") containing instructions on how to access and review the proxy materials, including our proxy statement and our annual report, on the Internet and how to access an electronic proxy card to vote on the Internet or by telephone. The Notice also contains instructions on how to receive a paper copy of the proxy materials. If you receive a Notice by mail, you will not receive a printed copy of the proxy materials unless you request one. If you receive a Notice by mail and would like to receive a printed copy of our proxy materials, please follow the instructions included in the Notice.

Voting Instructions

        If you own your shares of common stock of record or you hold shares in a Fluor or Fluor subsidiary's retirement plan participant account, you may authorize the voting of your shares over the Internet at www.proxyvote.com or telephonically by calling 1-800-690-6903 and by following the instructions in the Notice. If you requested a paper copy of the proxy materials, you may also authorize the voting of your shares by following the instructions on the enclosed proxy card. Authorizations submitted over the Internet or by telephone must be received by 11:59 p.m. Eastern Daylight Time on

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May 4, 2011, except with respect to shares held in company retirement plans, which, as discussed below, must be received by 5:59 p.m. Eastern Daylight Time on May 3, 2011 to be voted by the trustee.

        If the shares you own are held in "street name" by a bank or brokerage firm, your bank or brokerage firm may provide you with a Notice. Follow the instructions on the Notice to access our proxy materials and vote online, or to request a paper or email copy of our proxy materials. If you receive these materials in paper form, the materials include a voting instruction card so you can instruct your broker, bank or other holder of record how to vote your shares.

        On March 10, 2011, the company had 176,830,353 shares of common stock outstanding. The presence at the meeting, in person or by proxy, of a majority of the outstanding shares of Fluor common stock on the record date will constitute a quorum at the Annual Meeting. Abstentions and broker non-votes (broker-held shares for which the brokers have not received voting instructions from clients and with respect to which the brokers do not have discretionary authority to vote on a matter) are counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Meeting.

        Shareholders have one vote for each share of Fluor common stock owned by them as of the close of business on March 10, 2011, the record date, with respect to all business of the meeting. Each director nominee receiving the majority of votes cast (number of shares voted "for" a director nominee must exceed the number of votes cast "against" that director nominee) will be elected as a director, provided that if the number of nominees exceeds the number of directors to be elected (a situation we do not anticipate), the directors shall be elected by a plurality of the votes cast. Abstentions and broker non-votes are not counted in the determination of votes cast, and thus do not have an effect on the outcome of voting for directors. The New York Stock Exchange rules no longer grant brokers discretionary authority to vote in the election of directors. Therefore, if you hold your shares of company common stock in street name and do not provide voting instructions to your broker, your shares will not be voted in the election of directors. We urge you to promptly provide voting instructions to your broker to ensure that your shares are voted in the election of directors. Please follow the instructions set forth in the Notice.

        With respect to the advisory vote on executive compensation, the advisory vote on the frequency of advisory votes on executive compensation and the ratification of the independent auditors, the affirmative vote of the majority of shares represented in person or by proxy at the Annual Meeting and entitled to vote is required. Abstentions have the same effect as a vote against these proposals, and broker non-votes will have no effect on the outcome of the proposals. Each of these votes is advisory, and the Board will give consideration to the voting results.

        With respect to the amendments to the Amended and Restated Certificate of Incorporation to declassify the Board and to remove and replace the supermajority voting provisions, the affirmative vote of the holders of 80% of the total voting power of all outstanding shares of voting stock is required. Abstentions and broker non-votes have the same effect as a vote against these proposals.

        For shares other than shares held in the Fluor retirement plans, if you properly submit a proxy without giving specific voting instructions, the proxyholders named therein will vote in accordance with the recommendation of the Board of Directors (1) FOR the election of the three director nominees listed below, (2) FOR the approval of the advisory resolution on executive compensation, (3) FOR the amendment of our Amended and Restated Certificate of Incorporation to declassify the Board, (4) FOR the amendment of our Amended and Restated Certificate of Incorporation to remove and replace the supermajority voting provisions and (5) FOR the ratification of the appointment of Ernst & Young LLP as independent registered public accounting firm for the year ending December 31, 2011. If

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no voting instructions are given with respect to the advisory vote on the frequency of shareholder advisory votes on the company's executive compensation, your shares will not be voted on that matter. As to any other business that may properly come before the meeting, the proxyholders will vote in accordance with their best judgment, although the company does not presently know of any other business. For shares held of record, you may revoke your proxy by submitting a later-dated vote in person at the annual meeting, via the Internet, by telephone or by delivering written notice to the Secretary of the company at any time prior to 24 hours before the commencement of the Annual Meeting. If the shares you own are held in "street name" by a bank or brokerage firm, you should contact your bank or brokerage firm if you wish to revoke previously given voting instructions.

        For shares held in the company retirement plans, voting instructions (and any revocation of voting instructions) must be received by 5:59 p.m. Eastern Daylight Time on May 3, 2011, in order for the trustee to vote your shares in accordance with your instructions. If your voting instructions are not received by 5:59 p.m. Eastern Daylight Time on May 3, 2011, or if you do not provide properly completed and executed voting instructions, any shares you hold in the company retirement plans will be voted by the trustee in favor of the three nominees for director, and in proportion to the manner in which the other company retirement plan participants vote their shares with respect to the other proposals.

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ELECTION OF DIRECTORS

Proposal 1

        In accordance with the company's Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, which currently provide for a "classified" board, three Class III directors, Peter J. Fluor, Joseph W. Prueher and Suzanne H. Woolsey, have been nominated for election at the Annual Meeting to serve a three-year term expiring at the annual meeting in 2014 and until their respective successors are elected and qualified.

        Each of the three 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 present Board to fill the vacancy or (2) for the balance of the 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 publicly announce its decision regarding whether to accept the resignation and, if not, the reasons why.

Biographical Information, including Experience, Qualifications, Attributes and Skills

        The following biographical information is furnished with respect to each of the three nominees for election at the Annual Meeting and each of the Class I and Class II directors whose terms will continue after the Annual Meeting. The information presented includes information each director has given us about his or her age, all positions he or she holds with the company, his or her principal occupation and business experience for at least the past five years, and the names of other public companies of which he or she currently serves or has served as a director in the last five years. Directors are shown as serving from the dates of their original elections to the Board of Directors of Fluor prior to its reverse spin-off transaction in November 30, 2000 wherein Fluor's coal segment was separated from Fluor's other businesses and became Massey Energy Company.

        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 the appropriate skills and characteristics required of members of the Board in the context of the current make-up of the Board. The company's directors have experience with businesses that operate in industries in which the company operates, such as oil and gas and government contracting, or have particular skills that are beneficial to the company's business, such as knowledge of financial matters, risk oversight, compliance and familiarity with non-U.S. markets. The following information highlights 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.

        Prior to re-nominating Admiral Prueher, the Governance Committee considered his membership on the board of directors of Merrill Lynch prior to and at the time of its acquisition by Bank of

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America. We note that Admiral Prueher was not a member of Merrill Lynch's finance committee, which was the committee delegated with risk oversight. In addition, Admiral Prueher has been a distinguished member of our Board since 2003. The Governance Committee affirmed the benefits to our Board of his membership and chose to re-nominate him as a director.

Class III Director Nominees

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Class I Directors—Term Expires 2012

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Class II Directors—Term Expires 2013

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Board Recommendation

        The Board of Directors recommends a vote FOR the election of Peter J. Fluor, Joseph W. Prueher and Suzanne H. Woolsey.

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CORPORATE GOVERNANCE

General

        The company has long believed that good corporate governance practices promote the principles of fairness, transparency, accountability and responsibility and will ensure that the company is managed for the long-term benefit of its shareholders. During the past year, we continued to review our corporate governance policies and practices and to compare them to those suggested by various commentators on corporate governance and the practices of other public companies.

        Specifically, in 2010, our Board reviewed its current structure as well as voting standards for approval of certain matters by our shareholders. In early 2010, the Board amended the company's Amended and Restated Bylaws to eliminate the presumption that the Chairman of the Board and Chief Executive Officer positions are always combined. In December 2010, the Board voted to submit for shareholder approval two sets of amendments to our Amended and Restated Certificate of Incorporation—one declassifying the Board and another removing and replacing the supermajority voting requirements in our Certificate of Incorporation. The Board believes that these changes promote good corporate governance and are consistent with the interests of our shareholders.

        In addition, in late 2010, our Board reviewed all committee charters and amended the charters for our Audit, Governance and Organization and Compensation Committees as well as the company's Corporate Governance Guidelines and also approved an updated Code of Business Conduct and Ethics for Fluor employees. 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, in the governance section of our website at www.fluor.com under "Sustainability." Our Code of Business Conduct and Ethics for Fluor employees can be found in the ethics and compliance section of our website under "Sustainability."

Determination of Independence of Directors

        Under New York Stock Exchange rules and our Corporate Governance Guidelines, a director of the company qualifies as "independent" only if the Board of Directors affirmatively determines that the director has no material relationship with the company (either directly, or as a partner, shareholder 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.

        Under standards adopted by the Board, a director is not independent if any of the following relationships exist:

•

The director is, or has been within the last three years, an employee of Fluor, or an immediate family member is, or has been within the last three years, an executive officer, of Fluor.



•

The director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from Fluor, other than director and committee fees, and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service); provided, however, that compensation received by a director for former service as an interim Chairman or Chief Executive Officer or other executive officer need not be considered in determining independence under this test. Additionally, compensation received by an immediate family member for service as an employee of Fluor (other than as an executive officer) need not be considered in determining independence under this test.

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(A) The director is a current partner or employee of a firm that is Fluor's internal or external auditor; (B) the director has an immediate family member who is a current partner of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and who personally works on Fluor's audit; or (D) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on Fluor's audit within that time.



•

The director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of Fluor's present executive officers at the same time serves or served on that company's compensation committee.



•

The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, Fluor for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company's consolidated gross revenues.



•

The director (or his or her spouse) is an executive officer or a member of the board of directors of a non-profit organization that the company or the Fluor Foundation made charitable contributions to in a single year in excess of the greater of 2% of such charitable organization's consolidated gross revenues or $100,000, excluding any matching gifts made by the Fluor Foundation in connection with donations by Fluor employees or directors.

        Pursuant to the Corporate Governance Guidelines, the Board of Directors undertook its annual review of director independence in February 2011. During this review, the Board considered transactions and relationships between each director (including any member of his or her immediate family) and the company and its subsidiaries and affiliates, including those reported under "Certain Relationships and Related Transactions" below. In making independence determinations, the Board considered each relationship not only from the standpoint of the director, but also from the standpoint of persons and organizations with which the director has a relationship. As provided in our Corporate Governance Guidelines, the purpose of this review is to determine whether any such relationships or transactions would interfere with the director's independent judgment, and therefore be inconsistent with a determination that the director is independent.

        The Board determined that Mr. Seaton is not independent under the New York Stock Exchange listing standards and our Corporate Governance Guidelines because of his employment as the Chief Executive Officer of the company. Similarly, the Board determined that Mr. Boeckmann is not independent because of his former employment as Chief Executive Officer of the company.

        When assessing the independence of the other directors, the Board reviewed all payments made to or received by any entity, within the last three fiscal years, for which those Board members serves as either an employee or board member or an immediate family member serves as an executive officer. Specifically, the Board considered that Mr. Barker is an employee of JP Morgan Chase & Co., and Ms. Berkery is an employee of UBS Wealth Management Americas and UBS Bank USA, and the company did business with both entities or their affiliates during the last three years. Neither Mr. Barker nor Ms. Berkery is an executive officer of the entity for which they work. The Board also considered payments to a law firm at which Mr. Barker's brother is a partner, and payments to a tax consulting firm at which Ms. Berkery's brother is a partner. Neither Mr. Barker's brother nor Ms. Berkery's brother personally provide services to the company. Finally, the Board considered that certain directors (Mr. Barker, Mr. Fluor, Mr. Kresa, Mr. O'Hare, Admiral Prueher and Dr. Woolsey) are board members of entities that did business with the company in 2010, 2009 and/or 2008. In each case noted above, the payments to or from any of the foregoing entities did not exceed the greater of

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$1 million or 2% of such other entity's consolidated gross revenues for any one of the last three fiscal years, and therefore fell below the thresholds of the company's independence standards disclosed above.

        In addition, the Board reviewed charitable contributions made to non-profit organizations for which those 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 (Dr. Adesida, Mr. Barker, Mr. Fluor, Mr. Hackett, Mr. Kresa, Mr. O'Hare, Admiral Prueher and Dr. Woolsey) are affiliated with non-profit organizations that received contributions from the company in 2010, 2009 and/or 2008. No organization received contributions in a single year which exceeded the greater of 2% of such charitable organization's consolidated gross revenues or $100,000; and therefore these contributions fell below the thresholds of the company's independence standards discussed above. In fact, no organization received a contribution in excess of $30,000 in any one year.

        Finally, the Board reviewed the employment of J. Robert Fluor, II, the brother of Mr. Peter Fluor. Mr. J. Robert Fluor II is employed by a subsidiary of the company to provide community relations support. He does not have policy-making authority and is, therefore, not an executive officer for purposes of the independence standards discussed above.

        As a result of this review, the Board affirmatively determined that the following directors, including each of those directors standing for election at the Annual Meeting, are independent of the company and its management under New York Stock Exchange listing standards and the standards set forth in the Corporate Governance Guidelines: Dr. Adesida, Mr. Barker, Ms. Berkery, Mr. Fluor, Mr. Hackett, Mr. Kresa, Mr. O'Hare, Admiral Prueher, Mr. Sultan and Dr. Woolsey. The Board also determined that each of the members of the Audit, Governance and Organization and Compensation Committees has no material relationship with Fluor and is independent within the meaning of Fluor's director independence standards and New York Stock Exchange listing standards for such committee.

Board Leadership

        The Chairman of the company's Board is elected by the Board on an annual basis. Currently, the positions of Chairman of the Board and Chief Executive Officer of the company are held by separate individuals, with Mr. Seaton serving as Chief Executive Officer and Mr. Boeckmann, the company's former Chief Executive Officer, serving as non-executive Chairman of the Board. The Board believes that at the current time this structure is best for the company, as it allows Mr. Seaton to focus on the company's strategy, business and operations, while enabling Mr. Boeckmann to assist with Board matters and serve as a liason between the Board and the company's senior management, headed by Mr. Seaton. This structure also allows the Board to benefit from Mr. Boeckmann's prior experience and knowledge of the company's business and affairs.

        In his role as Chairman of the Board, Mr. Boeckmann presides over Board meetings, provides input on the agenda for each Board meeting, meets with the Chief Executive Officer to receive reports on the operation of the company and performs such other duties as the Board may request from time to time. Even though the roles of Chairman and Chief Executive Officer are currently held by different individuals, the Board does not believe that a formal policy separating the two positions is necessary or desirable and the two positions might be held by the same individual in the future if circumstances were to make combining the two roles desirable. However, the company has also established a lead independent director position, as it believes that the role of Lead Independent Director is a useful one in promoting good Board governance when the company has a non-independent Chairman. As

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discussed below, the Lead Independent Director is elected every three years, and his or her duties are closely aligned with the role of an independent, non-executive chairman.

Lead Independent Director

        To provide for independent leadership, in 2003, the Board created the position of Lead Independent Director, whose primary responsibility is to preside over and set the agenda for all executive sessions of the Board in which management directors and other members of management do not participate. The Lead Independent Director also approves agendas and schedules for meetings of the Board and information sent to the Board, chairs Board meetings in the Chairman's absence, acts as a liaison between the independent directors and the Chairman, provides guidance on the director orientation process for new Board members, consults and communicates with shareholders, as appropriate, and monitors communications to the Board from shareholders and other interested parties. In 2009, the independent members of the Board designated Mr. Peter J. Fluor to serve in this position for a three-year term that expires in February 2012.

Consideration of Director Nominees

Shareholder Recommendations

        The policy of the Governance Committee is to consider properly submitted shareholder recommendations for candidates for membership on the Board as described below under "—Identifying and Evaluating Nominees for Director." In evaluating those recommendations, the Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board and to address the membership criteria set forth under "—Director Qualifications and Diversity" below. Any shareholder 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 Carlos M. Hernandez, Chief Legal Officer and Secretary, Fluor Corporation, 6700 Las Colinas Boulevard, Irving, Texas 75039. In addition, our Amended and Restated Bylaws permit shareholders to nominate directors for consideration at an annual shareholder meeting. See "Additional Information—Advance Notice Procedures" on page 71 of this proxy statement, and Section 2.04 of our Amended and Restated Bylaws, which are included in the governance section of our website at www.fluor.com under "Sustainability."

Director Qualifications and Diversity

        The Board of Directors believes that the Board, as a whole, should include individuals with a diverse range of background and experience to give the Board both depth and breadth in the mix of skills represented for the benefit of our shareholders. 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, perspective 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.

        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) the appropriate skills and characteristics required of

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Board members in the context of the current make-up of the Board. This annual review takes into consideration issues of diversity of background (including gender, race, ethnicity 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, regulation and public policy, whether the individual has the ability to commit sufficient time and attention to the activities of the Board 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.

Identifying and Evaluating Nominees for Director

        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, shareholders or other persons. Candidates are evaluated at meetings of the Governance Committee, and may be considered at any point during the year. As described above, the Governance Committee considers properly submitted shareholder recommendations for candidates for the Board. If a shareholder 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 shareholder in connection with the recommendation of a director candidate are forwarded to the Governance Committee, which will consider the recommended candidate in light of the director qualifications discussed above and the Board's existing composition. The Governance Committee also reviews materials provided by professional search firms, if applicable, or other parties in connection with a candidate who is not proposed by a shareholder. In evaluating such recommendations, the Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board.

        In 2010, the company continued to employ Spencer Stuart, a professional search firm that researched and evaluated potential candidates for the Board. In 2010, Ms. Berkery was recommended for nomination as a board member by one of the Board's non-management directors.

Communications with the Board

        Individuals may communicate with the Board and individual directors by writing directly to the Board of Directors c/o Carlos M. Hernandez, Chief Legal Officer and Secretary, Fluor Corporation, 6700 Las Colinas Boulevard, Irving, Texas 75039. Shareholders 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 Chief Legal Officer and Secretary at the above address. The Lead Independent Director will, with the assistance of Fluor's internal legal counsel, be primarily responsible for monitoring any such communication from shareholders and other interested parties to the Board, individual directors, the Lead Independent Director or the independent directors as a group, and provide 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

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directors to know. The Board will give appropriate attention to written communications on issues that are submitted by shareholders and other interested parties, and will respond if and as appropriate.

Board of Directors Meetings and Committees

        During 2010, the Board held ten meetings, one of which was an extensive two-day strategic planning session. Each of the directors attended at least 75% of the aggregate number of meetings of the Board and of the Board committees on which he or she served.

        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 least quarterly according to our Corporate Governance Guidelines. During 2010, five executive sessions of independent directors were held.

        A Board meeting immediately follows the Annual Meeting. The Board has a policy that directors attend the annual meeting of shareholders each year. All directors attended the 2010 annual meeting of shareholders.

        The standing committees of the Board consist of an Audit Committee, Executive Committee, Governance Committee and Organization and Compensation Committee. 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 are then submitted to the Board for approval.

Audit Committee

        The current members of the Audit Committee are Kent Kresa (Chair), Ilesanmi Adesida, Peter K. Barker, Dean R. O'Hare, Nader H. Sultan and Suzanne H. Woolsey. All current members qualify, and all members during 2010 qualified, as "independent" within the meaning of Securities and Exchange Commission regulations, the listing standards of the New York Stock Exchange and the company's Corporate Governance Guidelines. The Board has determined that each of Mr. Kresa, Mr. Barker and Mr. O'Hare qualify as an "audit committee financial expert" under the rules of the Securities and Exchange Commission. None of the members of the Audit Committee serve on the audit committees of more than two other public companies.

        The Audit Committee held six meetings during 2010, one of which was to review the company's 2009 Annual Report, Form 10-K and proxy materials for the 2010 annual meeting. 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, the company's head of internal audit and other members of management, without the presence of any other company officers or personnel.

        The charter of the Audit Committee was amended in November 2010 and is available on the company's website at www.fluor.com under "Sustainability"—"Governance"—"Corporate Governance Documents." The functions of the Audit Committee and its activities during 2010 are described in the "Report of the Audit Committee" section of this proxy statement.

Executive Committee

        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 listing standards of the New York Stock Exchange. The current members of the Executive Committee are Alan L. Boeckmann (Chair), Peter J. Fluor, Kent Kresa and Dean R. O'Hare.

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Governance Committee

        The current members of the Governance Committee are Dean R. O'Hare (Chair), Peter K. Barker, Rosemary T. Berkery, Peter J. Fluor, James T. Hackett, Joseph W. Prueher, Nader H. Sultan and Suzanne H. Woolsey. All current members qualify, and all members during 2010 qualified, as "independent" within the meaning of the listing standards of the New York Stock Exchange and the company's Corporate Governance Guidelines. During 2010, the Governance Committee held four meetings.

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

•

identify qualified candidates to be nominated for election to the Board and directors qualified to serve on the company's committees;



•

develop, review and evaluate background information for any candidates for the Board, including those recommended by shareholders, and make recommendations to the Board regarding such candidates. For information relating to nominations of directors by our shareholders, see "—Consideration of Director Nominees" above;



•

oversee the independence of the directors;



•

develop, implement, monitor and oversee policies and practices relating to corporate governance, including the company's Corporate Governance Guidelines and Code of Business Conduct and Ethics for Members of the Board of Directors; and



•

oversee the annual evaluation of the Board and the committees of the Board.

        The Governance Committee has the ability, under its charter, to engage, retain and terminate the services of outside legal counsel, search firms and other advisors. In 2010, a third party search firm, Spencer Stuart, researched and provided recommendations regarding potential new directors.

        The charter of the Governance Committee was amended in November 2010 and February 2011 and is available on the company's website at www.fluor.com under "Sustainability"—"Governance"—"Corporate Governance Documents."

Organization and Compensation Committee

        The current members of the Organization and Compensation Committee are Peter J. Fluor (Chair), Ilesanmi Adesida, James T. Hackett, Kent Kresa and Joseph W. Prueher. All current members qualify, and all members during 2010 qualified, as "independent" within the meaning of the listing standards of the New York Stock Exchange and the company's Corporate Governance Guidelines. The Organization and Compensation Committee held six meetings during 2010. Four of the six meetings included an executive session attended by the committee members and the committee's independent compensation advisor. The two meetings that did not have an executive session were teleconferences.

        The Organization and Compensation Committee has the ability under its charter to engage, retain and terminate the services of outside legal counsel, compensation consultants and other advisors. In 2010, the Organization and Compensation Committee again engaged Frederic W. Cook & Co., Inc. to serve as its independent compensation consultant and to advise the committee on all matters related to executive compensation. The compensation consultant conducts an annual review of the total compensation program for the Chief Executive Officer and other senior management reporting to him and, in doing so, completes a report benchmarking the senior executives against other executives with

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similar responsibilities in order to assist the Organization and Compensation Committee in making compensation decisions. The 2010 compensation review provided the committee with relevant market data and alternatives to consider when making compensation decisions in 2010 for the Chief Executive Officer and other senior management reporting to him. In addition, in 2010, the compensation consultant conducted a review of non-management director compensation and provided recommendations to the committee which were subsequently recommended to the Board for approval.

        In early 2011, the compensation consultant conducted a broad-based review of the company's compensation programs and policies 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. Frederic W. Cook & Co., Inc. also provided verbal advice to the Organization and Compensation Committee at the 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. Frederic W. Cook & Co., Inc. was engaged by, and reports directly to, the committee and does not perform any other services for the company.

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

•

review and monitor the company's top level organizational structure and senior management succession planning and recommend the appointment of corporate officers and group executive officers of the company's principal operating units;



•

review and approve compensation strategy, set corporate goals and objectives relevant to the Chief Executive Officer, corporate officers and group executive officers, evaluate the achievement of these goals and set compensation levels;



•

establish the base salary, incentive compensation and other compensation for the company's Chief Executive Officer and review and approve the Chief Executive Officer's recommendations for senior management reporting to him; and



•

review the compensation for non-management directors.

        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 2010.

        The charter of the Organization and Compensation Committee was amended in November 2010 and February 2011 and is available on the company's website at www.fluor.com under "Sustainability"—"Governance"—"Corporate Governance Documents."

        The responsibilities of our Organization and Compensation Committee and its activities during 2010 are further described in the "Compensation Discussion and Analysis" section of this proxy statement.

Certain Relationships and Related Transactions

        Peter J. Fluor, a member of our Board, is the brother of J. Robert Fluor, II, who is employed by a Fluor subsidiary to assist with ongoing community relations efforts. J. Robert Fluor, II does not perform a policy-making function and is, therefore, not an executive officer. During 2010, J. Robert Fluor, II earned total compensation of approximately $335,400 from the company. The Organization and Compensation Committee, of which Peter J. Fluor is the Chair, did not individually review or approve J. Robert Fluor, II's compensation.

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        In February 2011, we agreed to sell one of our country club memberships to our non-executive Chairman, Alan Boeckmann. The membership was sold to Mr. Boeckmann for $250,000, the same price at which it could be purchased from the club.

Review and Approval of Transactions with Related Persons

        The company has adopted a written policy for approval of transactions to which the company is a party and 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 subject to the policy 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 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:

•

employment of immediate family members of directors, director nominees, executive officers and greater-than-5% beneficial owners in non-executive positions with the company;



•

business transactions with other companies at which a related person's only relationship is as an employee (other than an executive officer) if the amount of business falls below the thresholds in the New York Stock Exchange's listing standards and the company's director independence standards; and



•

contributions to non-profit organizations at which a related person's only relationship is as an employee (other than an executive officer) or director if the aggregate amount involved does not exceed the lesser of $1 million or 2% of the organization's consolidated gross annual revenues.

        At least annually, a summary of new transactions covered by the standing pre-approvals described above is provided to the Governance Committee for its review. In 2011, the transaction between the company and Mr. Boeckmann mentioned above under "Certain Relationships and Related Transactions" was pre-approved by the Chair of the Governance Committee; and a summary of the transaction was provided to the Governance Committee.

Risk Management Oversight

        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 annual strategic planning

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meeting every June. The Board also delegates responsibility for the oversight of certain risks to the Board's committees.

        Under the Audit Committee charter, the Audit Committee is responsible for reviewing and discussing 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. In particular, the Audit Committee considers risk issues associated with our overall financial reporting, disclosure process and legal compliance, as well as accounting risk exposure. The Audit Committee is provided quarterly reports on enterprise risk management, including the economic, geographic, operational and market risks facing our company. In carrying out its responsibilities related to risk oversight, the Audit Committee meets with the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer, the Chief Compliance Officer, the head of internal audit and the independent registered public accounting firm in executive sessions at least quarterly, and with the Chief Legal Officer as determined from time to time by the Audit Committee, to discuss particular risks facing the company.

        The Organization and Compensation Committee is also tasked with certain elements of risk oversight. The Organization and Compensation Committee annually reviews the company's compensation policies and programs, as well as the mix of short-term and long-term compensation, to confirm that our compensation programs do not encourage unnecessary and excessive risk taking. Finally, the Governance Committee is responsible for overseeing governance 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 business. Each of the Audit Committee, Governance Committee and Organization and Compensation Committee report quarterly to the Board regarding the areas of risk they oversee.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

        During 2010, Peter J. Fluor, Ilesanmi Adesida, Peter K. Barker, H. Paulett Eberhart, James T. Hackett, Kent Kresa, Joseph W. Prueher and Peter S. Watson served on the Organization and Compensation Committee. As discussed above under "Certain Relationships and Related Transactions," Peter Fluor's brother is an employee of a subsidiary of the company. There are no compensation committee interlocks between the company and other entities involving the company's executive officers and directors.

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ADVISORY VOTE ON EXECUTIVE COMPENSATION

Proposal 2

        We are asking shareholders to approve an advisory resolution on the company's executive compensation as reported in this proxy statement. As described below in the "Compensation Discussion and Analysis" section of this proxy statement, the Organization and Compensation Committee has structured our executive compensation program to achieve the following key objectives that contribute to the company's long-term success:

•

We seek to closely align the interests of our named executive officers with the interests of our shareholders. We design our annual and long-term incentive programs to reward our named executives for achievement of specific short-term and long-term goals that enhance shareholder value. In addition, between 38% and 78% of the compensation of our named executive officers is provided in equity-based compensation; and named executives are expected to hold company shares or share units with a value between two and six times their base salary.



•

We have a significant portion of pay that is performance-based.  Payments under our annual and long term incentive programs are significantly impacted by company performance. Specifically, 85% to 90% of the annual incentive award for named executives is tied to company performance, including corporate measures such as net earnings, return on assets employed and business segment performance. Lower performance of these measures during 2010 was partially responsible for a significant decrease in cash compensation paid to named executives. In addition, long term incentive payouts under the company's value driver incentive ("VDI") program are tied to performance measures related to the company's new awards, a key driver for shareholder returns. In 2010, payouts under the VDI program were much lower than 2009 due to lower new award margins during the performance period.



•

We structure our executive compensation programs to be competitive within the marketplace so that we can attract and retain our highly qualified executives, who are critical to achieving our strategic objectives and building shareholder value. In order to attract and retain qualified executives, we generally target total compensation for our named executives at the 50^th percentile of the peer group against which our compensation is benchmarked.

        We urge shareholders to read the "Compensation Discussion and Analysis" beginning on page 23 of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and related compensation tables and narrative appearing on pages 38 through 55, which provide detailed information on the compensation of our named executives. The Organization and Compensation Committee and the Board of Directors believe that the policies and procedures articulated in the "Compensation Discussion and Analysis" are effective in achieving our goals and that the compensation of our named executives reported in this proxy statement has supported and contributed to the company's success.

        In accordance with recently adopted 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 shareholders to approve the following advisory resolution at the 2011 Annual Meeting of Shareholders:

        RESOLVED, that the shareholders of Fluor Corporation (the "Company") approve, on an advisory basis, the compensation of the Company's named executives as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables and narrative in the Proxy Statement for the Company's 2011 Annual Meeting of Shareholders.

        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.

Board Recommendation

        The Board of Directors recommends a vote FOR the approval of the advisory resolution on executive compensation.

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ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES
ON EXECUTIVE COMPENSATION

Proposal 3

        In Proposal 2 above, we are asking shareholders to vote on an advisory resolution on executive compensation. Pursuant to recently adopted Section 14A of the Exchange Act, in this Proposal 3 we are asking shareholders to vote on whether future advisory votes on executive compensation should occur every year, every two years or every three years.

        The Board believes that a triennial vote on executive compensation is appropriate for a number of reasons. Most significantly, our compensation programs are designed to reward long-term performance, and a triennial vote corresponds with the payout and vesting periods under our long-term incentive awards. In addition, we believe that a triennial advisory vote on executive compensation reflects the appropriate time frame for the Organization and Compensation Committee and the Board to evaluate the results of the most recent advisory vote on executive compensation, to discuss the implications of that vote with shareholders to the extent needed, to develop and implement any adjustments to our executive compensation programs that may be appropriate in light of a past advisory vote on executive compensation, and for shareholders to see and evaluate the Organization and Compensation Committee's actions in context. In this regard, because the advisory vote on executive compensation occurs after we have already implemented our executive compensation programs for the current year, and because the different elements of compensation are designed to operate in a integrated manner and to complement one another, we expect that in many cases it may not be appropriate or feasible to fully address and respond to any one year's advisory vote on executive compensation by the time of the following year's annual meeting of shareholders.

        The Board is also aware of views that some have expressed in support of conducting an annual advisory vote on executive compensation. We are aware that some shareholders believe that annual advisory votes will enhance or reinforce accountability. However, we have in the past and will in the future continue to be engaged with our shareholders on a number of topics and in a number of forums. Thus, we view the advisory vote on executive compensation as an additional, but not exclusive, means for our shareholders to communicate with us regarding their views on the company's executive compensation programs. We believe that the many avenues that have and will continue to exist for shareholder engagement differentiate the company's situation from that of companies in some countries where an annual advisory vote on executive compensation is prevalent. Also, because our executive compensation programs are designed to operate over the long-term and to enhance long-term performance, we are concerned that an annual advisory vote on executive compensation could lead to a near-term perspective inappropriately bearing on our executive compensation programs.

        We understand that our shareholders may have different views as to what is an appropriate frequency for advisory votes on executive compensation, and we will carefully review the voting results. Shareholders will be able to specify one of four choices for this proposal on the proxy card: one year, two years, three years or abstain. This advisory vote on the frequency of future advisory votes on executive compensation is non-binding on the Board.

Board Recommendation

        The Board acknowledges that there are a number of points of view regarding the relative benefits of triennial and more frequent say-on-pay votes. Accordingly, the Board is not recommending that shareholders support any specific view. The Board will carefully consider and expects to be guided by the alternative that receives the most shareholder support in determining the frequency of future say-on-pay votes. Notwithstanding the outcome of the shareholder vote, the Board may in the future decide to conduct advisory votes on a more or less frequent basis and may vary its practice based on factors such as discussions with shareholders and the adoption of material changes to compensation programs.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Summary

        We seek to closely align the interests of our named executives with the interests of our shareholders and to reward our named executives for achievement of short-term and long-term strategic and operational goals that contribute to the long-term success of the company. We also strive to provide compensation that will attract and retain highly qualified executives to lead our company. We believe our executive compensation programs fulfill these key objectives.

        In this Executive Summary we highlight (1) the relationship between our named executives' compensation and the company's 2010 financial performance and (2) key compensation policies adopted by our Organization and Compensation Committee (the "Committee") as they relate to governance, risk mitigation and best practices.

Financial Overview

        In 2010, the company faced another year of slow global recovery and continued economic uncertainty. In the face of these challenges, solid progress was made in growing our project backlog, which was $34.9 billion at year end, nearly matching 2008's record. Bolstered by an improving global economic climate, new project awards reached an all-time record of $27.4 billion for the year. Also, at December 31, 2010, one-, three- and five-year total shareholder returns exceeded those of the S&P 500 and our peer group. However, the year was not without its disappointments. Earnings performance was significantly impacted by charges relating to certain projects, including $343 million in charges on one project for a variety of execution challenges, including material and equipment delivery issues, productivity issues, weather-related delays and the bankruptcy of a major subcontractor, with net earnings at $357.5 million at year end. In addition, revenue of $20.8 billion in 2010 fell slightly from $22.0 billion in 2009.

        The chart below summarizes some of the key company financial results for fiscal 2010 compared to fiscal 2009.

Pay for Performance

        While the company made great progress in 2010, with growth in project backlog and new awards, and shareholder returns that outpaced market comparisons, a substantial percentage of each named executive's cash compensation was tied to financial results that were lower than both the target achievement outlined in our 2010 plans as well as our 2009 financial performance. As a result, cash payments to named executives in 2010 under both our annual and long term incentive programs were

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significantly lower than 2009. Each of the cash payments under our incentive plans, relative to 2009 payments, is set forth below for those named executives who were also named executives in 2009.

        An explanation of the impact of the company's performance on the payment of the annual and long-term cash-based incentives is set forth below:

•

Cash Annual Incentives.  As noted on page 27 below, between 55% and 80% of each named executive's annual cash incentive award was tied to the company's net earnings and corporate return on operating assets employed for 2010, both of which were below the minimum performance required for those measures and significantly lower than 2009. As a result, payouts ranged from 26% of target for our Chief Executive Officer to 60% of target for a group president. These payouts compare to a range of 90% to 115% of target for our named executives last year, including 109% for our Chief Executive Officer.



•

Cash Value Driver Incentive ("VDI") Payouts.  As noted on pages 29-30 below, prior to 2010, one third of the long term incentive plan award was granted under the company's cash-based VDI program. Due to lower gross margins on new awards obtained during the performance periods, payouts under the VDI program in 2010 for awards made in 2008 and 2009 were based on lower-than-target performance and were thus substantially lower than prior years.



•

Total Cash Compensation.  The company's 2010 financial results had a significant impact on the cash compensation paid to named executives in 2010, which was, on an aggregate basis for the named executives who were also named in 2009, 46% lower than their cash compensation in 2009.

Additional Compensation

        In addition, several other Committee decisions affected compensation in 2010, as summarized below:

•

Base salaries.  Salaries for some named executives were increased slightly from 2009 levels, with increases up to 6%. However, neither the Chief Executive Officer nor the Chief Financial Officer received a salary increase in either 2010 or 2009. The Committee believed these salary determinations were appropriate given the current economic conditions, general market trends, current salaries in relation to the peer group and the performance of the company.



•

Long term incentive awards.  Long term incentive target awards were increased for some named executives from the prior year in order to approximate the 50^th percentile of the Compensation Peer Group and, in Mr. Seaton's case, to reflect his new position as Chief Operating Officer in 2010. In 2010, long term incentive award values were divided evenly between options and restricted stock units as a result of the Committee's previously disclosed decision to suspend the

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company's cash-based VDI program in 2010. Under SEC reporting rules, equity awards such as stock options and restricted stock units are reported in the Summary Compensation Table for the year in which they are granted, based upon their grant date value, whereas long term cash incentive arrangements such as the VDI program are reported in the Summary Compensation Table only in the last year of the performance period, based on the amount actually earned. Although 2010 awards were only marginally increased, this change in the mix of long term incentive awards (from ¹/3 cash and ²/3 stock

in prior periods to 100% equity-based compensation in 2010), and the SEC reporting standards for equity and cash awards discussed above, results in higher amounts being reflected in the Summary Compensation Table on page 38. Specifically, if one third of the value shown in the "stock awards" and "option awards" columns of the Summary Compensation Table for 2010 were removed from those columns and a corresponding change were made to overall compensation, the table would provide a more consistent year-over-year comparison of annual compensation.

Governance Practices

        The Committee has endeavored to maintain good governance standards in our compensation practices. The following policies were in effect in 2010 and remain in effect in 2011:

•

No tax gross-ups:  Our named executives are not provided with any tax gross-ups other than for business-related spousal travel.



•

Change in control agreements are governed by double trigger arrangements:  Change in control payments are made to named executives and other senior executives only upon a qualifying termination of employment (i.e., without cause or as a result of good reason) within two years of a change in control of the company.



•

Robust stock ownership guidelines:  Named executives are required to own company stock and stock units valued between two and six times their individual base salaries.



•

Clawback of performance-based compensation allowed:  The Board of Directors may seek recoupment of performance-based compensation of key employees, including named executives, who engage in fraud or willful misconduct that caused or otherwise contributed to a need for a material restatement of the company's financial results.



•

Repricing of options not allowed without shareholder approval:  Our current stock plans do not allow the company to reprice options without shareholder approval.



•

Independence of executive compensation consultant:  The advisor retained by the Committee provides no services to management.



•

Our policies contain restrictions on hedging, pledging and short term trading: Our insider trading policy for executive officers and non-employee directors prohibits transactions involving short term or speculative trading in, or any hedging or monetization transactions involving, company securities. In addition, our policy prohibits the holding of company securities in a margin account or pledging company securities unless the company's Chief Legal Officer approves such transaction after the executive clearly demonstrates that he or she may repay the loan without resort to the pledged securities.



•

Risk management assessments are conducted annually:  In fiscal 2010, the Committee initiated an annual risk management assessment for our compensation and benefit programs for named executives and all other employees.

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Components of 2010 Named Executive Compensation

Base Salary

        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. In determining base salaries for positions held by named executives, the Committee generally targets the 50^th percentile for similar types of executives within the Compensation Peer Group. Base salaries may deviate from the 50^th percentile for named executives with more experience or specialized duties or skill sets. The individual named executives' base salaries for 2010 were at approximately the 50^th percentile of the Compensation Peer Group, with the exception of Mr. Oosterveer and Mr. Steuert. Mr. Oosterveer's base salary currently falls within the first quartile of similarly situated executives because he is fairly new to his position. Mr. Steuert's base salary falls within the top quartile of chief financial officers within the Compensation Peer Group because his salary reflects his years of experience and the level of duties he has at the company. Base salaries for named executives are reviewed annually and upon a change in responsibilities. In evaluating the Chief Executive Officer's base salary and his recommendations for the base salaries of the other named executives, the Committee considered the following factors during its 2010 annual review:

•

the Compensation Peer Group data and other general industry survey data for comparable positions;



•

individual level of responsibility, performance and contributions to the company;



•

internal equitability based on relative duties and responsibilities;



•

the company's 2010 salary increase percentage budget; and



•

the Chief Executive Officer's feedback on the performance of the other named executives.

        Increases up to 6% from December 31, 2009 are reflected in the base salaries for 2010 reported in column (c) of the Summary Compensation Table on page 38.

Annual Incentive Program

        The annual incentive program is administered by the Committee pursuant to the shareholder-approved Fluor Corporation 2008 Executive Performance Incentive Plan. Cash-based annual incentives are provided to reward named executives for performance during the year. Each named executive participates in this program and is provided with a target annual incentive amount, based on a percentage of his annual base salary. This percentage reflects the executive's respective organizational level, position and responsibility for achievement of the company's strategic goals. For 2010, all named executives were provided an annual incentive target percentage of base salary that approximated the 50^th percentile of target award percentages for executives with similar job responsibilities within the Compensation Peer Group.

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        The named executives' target annual incentives for 2010 were as follows:

        A named executive may receive more or less than the target annual incentive amount, depending on whether he meets, fails to meet or exceeds certain performance measures relating to overall company performance and the individual's own performance or the performance of his group or function during the year. The types of measures and relative weight of those measures are determined by the Committee each year and are tailored to the named executive's position and organizational responsibility. The measures have remained fairly consistent over the past five years, but their relative weightings have changed slightly. When making its determination, the Committee considers the company's annual operating plan and strategic priorities, as well as the company's performance in the previous year. The discretionary individual and team performance measures are subjective; and no targets are set for these measures. The other measures for each named executive are objective. For 2010, the Committee selected both corporate financial and strategic measures. The use of multiple financial goals prevents an over-emphasis on any one financial metric; and the other metrics assist in focusing executives on key areas of importance to the company, including safety. The measures, along with their respective weightings, for each named executive were as follows:

        Corporate net earnings ties to the amount set forth in our financial statements but may be adjusted at the discretion of the Committee for extraordinary non-operating events. Corporate ROAE is calculated by dividing full year corporate net earnings by net assets. Net assets is defined as total assets (excluding excess cash) minus current liabilities (excluding non-recourse debt). No adjustments were made to these measures for purposes of 2010 compensation decisions.

        Corporate safety includes two distinct measures: Fluor's days away from work incidence rate and Fluor's total recordable case incidence rate. Fluor's days away from work incidence rate is defined as a work-related injury or illness that involves days away from work beyond the day of injury or onset of the illness. Fluor's total recordable case incidence rate is defined as work-related injury or illness that results in one or more of the following: death, days away from work, restricted work or transfer to another job, medical treatment beyond first aid, loss of consciousness, or a significant injury or illness diagnosed by a physician or other licensed health care professional. Incidence rates for both measures

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represent the number of recordable cases per 100 full-time workers (working 40 hours per week, 50 weeks per year), and are calculated using the following equation:

        Oil and Gas group segment profit is reported in our financial statements on page F-42 of our annual report on Form 10-K as filed with the Securities and Exchange Commission on February 23, 2011. Segment profit is calculated as revenue less cost of revenue and earnings attributable to noncontrolling interests excluding: corporate administrative and general expense; interest expense; interest income; domestic and foreign income taxes; and other non-operating income and expense items. The Oil and Gas group's segment profit measure can be adjusted at the discretion of the Committee for extraordinary non-operating events. No adjustments were made to this measure in 2010 for purposes of compensation decisions. In addition, discretionary individual and team functional measures are given a rating based on subjective evaluations and recommendations by the Chief Executive Officer.

        The 2010 performance ranges for each of the measures applicable to our named executives, together with the actual achievement amounts for such measures, are presented below. With respect to corporate net earnings and corporate ROAE, actual achievement must be between 95% and 105% of the target amount for the target to be met. The company's performance for 2010 varied with respect to each corporate measure: corporate net earnings and ROAE were both below the minimum. The company's performance with respect to the corporate safety measures exceeded the maximum; while the Oil and Gas group segment profit measure was just above minimum. The overall level of achievement of the targets in 2010 was lower than the last ten years.

        Achievement of the discretionary individual and team performance measure varied among the named executives because of the difference in responsibilities and the accomplishments of each individual. The Committee determined the achievement of the discretionary individual and team performance measure for the Chief Executive Officer and also the other named executives, after taking into account the Chief Executive Officer's recommendations with regard to other named executives. Subjective evaluations made by the Chief Executive Officer were based on each named executive's leadership and group accomplishments. Individual performance was not a significant factor in determining compensation, and no named executive's compensation was materially affected by his level of achievement of this measure.

        Once the achievement amounts are determined and compared to the various targets, each named executive's overall performance rating is calculated by multiplying each measure's rating (which can range from 0% to 200% achievement) by its relative weighting, and then aggregating those amounts.

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The aggregate amount (the overall performance rating) is then multiplied by the individual's target annual incentive amount to determine the annual incentive payment for each named executive.

        The annual incentive amounts for each named executive were determined as follows.

        For 2010, the average annual incentive payment for all named executives was between minimum and target achievement based on company, group and individual performance. The annual incentive payment for each named executive was significantly lower than his 2009 payment, due to the failure to achieve minimum performance for the Corporate Net Earnings and ROAE measures. With the exception of 2007 and 2008, historically, annual incentive payments have been close to target levels, and not at or above the upper target level. Payments for 2010 were below this historical trend.

Long Term Incentive Program

        In 2010, the company's long term incentives were awarded by the Committee under the shareholder-approved Fluor Corporation 2008 Executive Performance Incentive Plan. The plan was designed to allow for awards that create increased value for our shareholders, reward the achievement of superior operating results, facilitate the retention of key management personnel and align the interests of management and shareholders through equity ownership.

        In 2010, the long term incentive awards for named executives included two components:

•

50% restricted stock units; and



•

50% non-qualified stock options.

        As disclosed last year, the Committee did not grant awards under the cash-based Value Driver Incentive (VDI) program for 2010, in order to re-evaluate and refine the program for 2011, as further described below. The total dollar award value for the restricted stock unit and option grants made in 2010 was targeted and granted at approximately the same total dollar award value as the aggregate long-term awards granted in 2009, which were at approximately the 50^th percentile of the Compensation Peer Group. Long term incentive grants made to Mr. Seaton were greater than prior years due to his promotion to Chief Operating Officer near the end of 2009.

        Under SEC reporting rules, equity awards such as stock options and restricted stock units are reported in the Summary Compensation Table on page 38 for the year in which they are granted, based upon their grant date value, whereas long term cash incentive arrangements such as the VDI program are reported in the Summary Compensation Table only in the last year of the performance period, based on the amount actually earned. The Committee's decision to suspend the VDI program and award long term incentive compensation in only stock options and restricted stock units in 2010 results in higher amounts of stock awards and option awards being reflected in the Summary Compensation Table for long term compensation in 2010.

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Equity Awards

        The Committee determines the dollar value of annual equity awards for named executives at the first regularly scheduled meeting of the Committee each year, which is typically held in February. The determinations are made at that time because it coincides with the annual performance review and compensation adjustment cycle, which are addressed at that same meeting. The equity awards are granted after the meeting on the third business day following the publication of our annual results, based on the closing price on that date. Stock options provide actual economic value to the holder if the price of Fluor stock has increased from the grant date at the time the option is exercised. Restricted stock units have economic value when they vest, so they incentivize holders to create shareholder value but also have some retention value even if the stock price declines or stays flat. Stock options motivate executive officers by providing more potential upside, while restricted stock units align named executives with shareholders and balance our compensation program design, as they take into account both upside and downside risk in our stock price. Both stock options and restricted stock units, which vest over time, encourage retention. The combination of the two components aligns the interests of named executives with those of shareholders without overemphasizing any one type of grant, and reflects a structure similar to many of our peers in granting more than one form of award.

Value Driver Incentive Program

        In January 2010, the Committee suspended the company's cash-based VDI program for future grants due to uncertainties from evolving compensation legislation or regulation and for other corporate reasons. However, portions of two prior awards under the 2008-2009 VDI program and the 2009-2010 VDI program were earned in 2010. The prior awards were based upon the achievement of the following weightings and objectives and were measured over a two-year performance period:

•

75% of the total award was based on new awards gross margin dollars; and



•

25% of the total award was based on new awards gross margin percentage.

        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 these projects. The Committee selected these performance criteria because, although measured over a relatively short period, they relate to contracts that typically will extend a number of years into the future and thus, will generate, and position the company for, increased future earnings. The Committee believes the inclusion of the two different measures is appropriate given the diversified nature of our business. These measures are not reported in our financial statements and the disclosure of the new awards gross margin targets would result in competitive harm to the company.

        Each of the VDI plans for 2008-2009 and 2009-2010 had payouts as of December 31, 2010. For the 2008-2009 VDI plan, the final half of the total award was paid at an achievement of 92% of the target payout level based on 2008-2009 performance achievement for each named executive. For the 2009-2010 VDI plan, the first half of the award was paid to named executives in 2011 at an achievement of 14% of the target payout level based on cumulative performance over the two-year performance period. The final half of the 2009-2010 award will be paid at the same level in March 2012. The VDI payouts are detailed in the Non-Equity Incentive Plan Compensation table on page 40. In the past five years, VDI payouts have ranged from just above minimum through maximum and have averaged between target and upper target.

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Revised Value Driver Incentive Program

        During 2010, with the assistance of the Committee's independent compensation consultant, the Committee reviewed the long term incentive program, re-establishing the VDI program for stock-based VDI grants in 2011 and beyond. The Committee believes that the VDI program provides an incentive for named executives to grow the business and create shareholder value, as the awards are denominated in company shares, as described below. The vesting requirements of the program also enhance retention.

        In 2011, VDI awards will constitute one third of the long term incentive grant, with stock options and restricted stock units each comprising an additional third. Performance goals under the new program will continue to be based on the new awards gross margin dollars and new awards gross margin percentage objectives; but the performance measurement period will be one year (i.e., January 1^st to December 31^st). Generally, in the first quarter of a year, the Committee will set threshold (paid at 50% of target), target (paid at 100%), upper target (paid at 150% of target) and maximum (paid at 200% of target) levels for both objectives of the VDI plan for the performance period. When setting these performance goals, the Committee will consider the company's past performance, current business outlook and other corporate financial measures. When determining whether the performance goals have been met, the Committee will take into account any scope changes or project cancellations that occurred during the year with respect to new awards obtained during the performance period.

        During the first quarter of each year, the Committee will grant performance units based on a target value of the grant. The number of units granted will be calculated using the closing trading value of our common stock on the date of grant. On the first anniversary of the grant date, the Committee will determine the actual achievement of the performance measures and the number of performance units will be adjusted by multiplying the number of performance units by the performance rating (ranging from 0.0 to 2.0). The performance units, as adjusted on the first anniversary for performance, will vest 100% on the date two years following the adjustment date and will be settled in cash or stock, as elected by the named executive, provided that any award for a named executive not meeting company stock ownership guidelines will be settled in stock.

        However, to address the cash incentive compensation gap that will occur in 2011 and 2012 as a result of the change in the payout schedule under the revised VDI program to three years from the grant date and the fact that no VDI awards were made in 2010 while the program was suspended:

•

VDI awards made in 2011 will be paid half in 2012 and half in 2014; and



•

VDI awards made in 2012 will be paid half in 2013 and half in 2015.

Payments under the award will be subject to risk of forfeiture if, prior to payment, the participant'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.

Other Compensation Decisions

        In 2009, Mr. Seaton was promoted to Chief Operating Officer. The increase in his compensation for 2010 reflected the increased responsibilities of his new role. Effective February 3, 2011, Mr. Seaton was promoted to Chief Executive Officer, and the Committee adjusted his compensation accordingly. His base salary was increased to $1,025,000; and his target annual incentive was increased to 125% of his base salary, or $1,281,300. In addition, his target long term incentive award was increased to $6,250,000.

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Other Elements of Named Executive Compensation

Perquisites

        The Committee evaluates perquisites based on their cost efficiency, motivational value and benefits to the company. Perquisites, which are relatively small in relation to total direct compensation, are targeted at the 50^th percentile of the Compensation Peer Group. In 2010, named executives were paid a taxable monthly allowance as a substitute for the company reimbursing or paying for the following perquisites: an automobile allowance, tax and financial planning, and company-owned country club membership dues. 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. The Committee does not provide any other tax gross-ups. 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. None of the named executives used charter aircraft in 2010 for personal reasons. Executive perquisites and benefits are provided so that overall compensation for named executives is competitive.

Executive Deferred Compensation Program

        The named executives are eligible to participate in Fluor's Executive Deferred Compensation Program. The company offers this program to provide individuals 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 table on page 48 for a more detailed discussion of these arrangements.

Severance and Change-in-Control Benefits

        The company provides each of the named executives with cash severance in the event of a termination of employment by the company without cause through a company severance policy that the company believes assists in attracting and retaining qualified candidates, including during any potential change in control. The level of any cash severance payment is based upon base salary plus years of service. In addition, each named executive has a change in control agreement that provides additional payments and other benefits if we terminate his employment 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 disturbing circumstances arising from the possibility of the change in control and to serve as an incentive to their continued employment with the company. No gross up for excise taxes, if any, is payable under the change in control agreements. The company will, however, automatically reduce any payments under the agreement to the extent necessary to prevent payments being subject to the excise tax, but only if by reason of the reduction, the after-tax benefit of the reduced payments exceeds the after-tax benefit if such reduction were not made.

        The employment letter extended to Mr. Steuert also provides certain severance benefits. However, a severance payment will not be paid to Mr. Steuert under the employment letter if he receives the payments and other benefits under his change in control agreement. Please refer to the discussion under "Potential Payments Upon Termination or Change in Control" below for a more detailed discussion of these arrangements. Severance and change-in-control benefits are provided to be competitive within the Compensation Peer Group.

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Establishing Executive Compensation

Compensation Philosophy and Objectives and Risk Assessment

        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 our Chief Executive Officer's compensation, 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 plans, programs and other arrangements.

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

•

Align the interests of named executives with those of the shareholders.  The Committee believes it is appropriate to tie a significant portion of executive compensation to the value of the company's stock in order to closely align the interests of named executives with the interests of our shareholders. The Committee also believes that executives should have a meaningful ownership interest in the company and has established and regularly reviews executive stock ownership guidelines.



•

Have a significant portion of pay that is performance-based.  Fluor expects superior performance. Our executive compensation programs are designed to reward executives when performance results for the company and the executive meet or exceed stated objectives. The Committee believes that compensation paid to executives should be closely aligned with the performance of the company.



•

Provide competitive compensation.  The company's executive compensation programs are designed to attract, retain and motivate highly qualified executives critical to achieving Fluor's strategic objectives and building shareholder value.

        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 three years, the Committee determined that no revisions to the executive compensation philosophy and objectives were necessary.

        In addition, the Committee reviewed the incentive compensation we provide to our named executives, including evaluating the mix of programs 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 executive compensation programs are designed to appropriately align compensation with our business strategy and not to encourage behaviors that could create material adverse risks to our business.

Peer Group Comparisons

        In making compensation decisions, the Committee looks at the practices of a group of publicly-traded peer companies (the "Compensation Peer Group"). The Committee annually reviews the composition of the Compensation Peer Group and makes refinements based on input from the Committee's consultant and human resources staff.

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        In May 2009, the Committee requested that the compensation consultant conduct a holistic review of the Compensation Peer Group. Potential peer companies were identified by applying the following objective selection criteria:

•

Direct competitors and key customers based on Standard & Poor's Global Industry Classification Standard (GICS) codes (2010—capital goods, 101010—energy equipment and services, and 101020—combustible fuels);



•

Generally comparable pay models;



•

Generally comparable revenues, number of employees and market capitalization value (with a guideline of 0.25x to 4.0x on all three measures, subject to exception for direct engineering and construction peers); and



•

Companies commonly identified as engineering and construction peers (based on disclosures in their most recent proxy statements).

        After identifying all potentially relevant peers, the Compensation Peer Group was narrowed by removing non-engineering and constructions peers to generally position Fluor at the median on all three key size measures.

        As a result of this review, twenty-one companies were removed from the Compensation Peer Group and twelve new companies were added. These changes decreased our Compensation Peer Group from forty companies to thirty-one companies. For comparison purposes, Fluor's trailing four quarter revenues, earnings, number of employees and market capitalization approximated the medians of both the prior and current peer group, but the resulting size range of the new peer group is more tightly bound. The companies comprising Fluor's Compensation Peer Group for purposes of determining 2010 compensation were:

        The Committee reviews benchmarking comparisons for each named executive based on a job title comparison among the Compensation Peer Group. All job titles that appear to contain similar responsibilities are included in the benchmarking comparisons for each of the named executives.

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        The Committee sets target compensation levels for the named executives as follows:

•

Base salary compensation is targeted at the 50^th percentile for similar job titles, experience and tenure of executives within the Compensation Peer Group. The Committee believes targeting compensation at this level helps the company attract and retain executives. However, from time to time, the Committee may approve compensation at levels outside the 50^th percentile depending on a number of factors, including the named executive's experience, skill sets, industry knowledge and other similar attributes.



•

Base salary plus annual incentive (i.e., cash) compensation is similarly targeted at the 50^th percentile of the Compensation Peer Group for attainment of target-level company and individual performance objectives under the annual incentive program. Annual incentive payments may be made above the 50^th percentile if above-target company and individual performance is attained. If company and individual objectives are not met, annual incentive compensation may be below the 50^th percentile or not paid at all.



•

Total direct compensation, or base salary plus annual and long term incentive grants (cash-based and equity-based), is also targeted at the 50^th percentile of the Compensation Peer Group for attainment of target-level company performance. Achievement of superior company performance and continued stock price appreciation will result in growth of actual total direct compensation over time. Below-target company performance and diminishing stock price appreciation will decrease actual total direct compensation.

        A significant portion of total direct compensation is allocated to annual and long term incentives in accordance with the company's compensation philosophy. The Committee reviews the Compensation Peer Group data each year to determine the appropriate level and mix of incentive compensation including cash-based and equity-based incentives. For 2010, the target allocation between base salary and all other types of incentive compensation (cash-based and equity-based) as a percentage of the total compensation for the Chief Executive Officer was approximately 13% in base salary and 87% in target annual incentive compensation and long term incentive award value. The target allocation mix for the Chief Financial Officer was approximately 23% in base salary and 77% in target annual incentive compensation and long term incentive award value. The target allocation mix was slightly different for all other named executives ranging from approximately 17% to 27% in base salary and 83% to 73% in target annual incentive compensation and long term incentive award value. The differences in the proportion of compensation that is at-risk among the named executives reflects the Committee's policy of providing greater at-risk compensation for executives with the highest amount of responsibility and impact on company results.

        In 2010, the Chief Executive Officer participated in the same compensation programs with similar metrics as other named executives. His compensation is higher than other named executives because the incentive targets reflect his additional responsibilities and the median target compensation of the peer group, therefore yielding higher payment opportunities.

Role of Company Management in Compensation Decisions

        Before the Committee makes decisions on base salary and annual and long term incentives, the Chief Executive Officer annually reviews compensation for the named executives other than himself and makes recommendations to the Committee based on individual and group performance. At the beginning of the year, he proposes to the Committee base salary adjustments for the current year, annual incentive award payments for the previous year and current-year long term incentive grants for each of the other named executives. The Committee reviews and approves the compensation actually

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paid to the named executives after consideration of the recommendations made by the Chief Executive Officer. The Committee may exercise discretion to modify named executives' compensation from that recommended by the Chief Executive Officer, but did not exercise that discretion for the named executives in 2010.

Other Aspects of Our Executive Compensation Programs

Clawback Policy

        Pursuant to the company's clawback policy, if the Board determines that any key executive or employee, including any named executive, has 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 will review all performance-based compensation earned by that employee during the fiscal periods materially affected by the restatement. If the Board determines that any performance-based compensation would have been lower if it had been based on the restated results, the Board will, to the extent permitted by applicable law, seek recoupment of performance-based compensation as it deems appropriate.

Stock Ownership Guidelines

        Both directors and executive officers are encouraged to hold Fluor common stock to align their financial interests with those of the shareholders. The company has established ownership guidelines for both of these groups. The Chief Executive Officer is expected to own and retain a minimum number of shares or share units totaling in value six times his base salary. Other actively employed named executives are expected to own and retain a minimum number of shares or share units totaling in value no less than two times, and up to five times, each executive's base salary depending on position. Executives are expected to meet or exceed the applicable guideline by position within three to five years of entering such position. Named executives are expected to retain 100% of the net shares acquired from the exercise of stock options or the vesting of restricted stock to the extent the guidelines are not met. As of the date of this report, all named executives and directors were in compliance with these stock ownership guidelines.

Restrictions on Certain Trading Activities

        Our insider trading policy for executive officers and non-employee directors prohibits transactions involving short term or speculative trading in, or any hedging or monetization transactions involving, company securities. In addition, our policy prohibits the holding of company securities in a margin account or pledging company securities unless the company's Chief Legal Officer approves such transaction after the executive clearly demonstrates that he or she may repay the loan without resort to the pledged securities.

Employment Contracts

        The company does not generally enter into employment agreements. The company did extend an employment letter to Mr. Steuert when he was hired. In addition, from time to time, the company may make multi-year retention awards to promote the continued service of key executives. These arrangements are discussed in more detail in the compensation tables below.

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Tax Implications

        The Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code, which generally prohibits the company from deducting compensation in excess of $1,000,000 that is paid to named executives other than the Chief Financial Officer. In February of each year, the Committee sets and approves a net earnings performance hurdle to allow named executives' annual incentive award payments, restricted stock unit awards and VDI awards to qualify as "performance based compensation" as defined under Section 162(m) of the Internal Revenue Code. Stock options are deductible under the provisions of the stock plans and the structure of the related grant agreements. For 2010, approximately 97% of the Chief Executive Officer's taxable income qualified as deductible for federal income tax purposes. The compensation of all other named executives was fully deductible.

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 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 2011 annual meeting of shareholders.

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SUMMARY COMPENSATION TABLE

        The table below summarizes the total compensation earned by each of the named executives in 2010.

        The 2010 named executives include the principal executive officer, the principal financial officer and the three other highest paid executives. The positions listed below reflect the positions held as of December 31, 2010. Effective February 2, 2011, Mr. Boeckmann retired from his position as Chief Executive Officer and Mr. Seaton was appointed to the position.

        As discussed in the Compensation Discussion and Analysis on page 29, the grant date fair value of stock awards and option awards granted in 2010 increased over the grant date fair value of those awards in 2009 due in part to our suspension of our cash (non-equity) long term incentive program. Under Securities and Exchange Commission reporting rules, the full grant date fair value of equity awards is reported in the year restricted stock unit or stock option awards are granted, whereas long-term incentive cash awards are reported based only on the actual amounts paid out, and are reported in the year in which the performance goals are satisfied and the amounts are earned. Correspondingly, the change in the long term mix increased the size of the 2010 equity awards in comparison to the 2009 equity awards.

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NON-EQUITY INCENTIVE PLAN COMPENSATION

        The following table and related footnotes describe each component of the Non-Equity Incentive Plan Compensation column (g) of the Summary Compensation Table on page 38.

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ALL OTHER COMPENSATION

        The following table and related footnotes describe each component of the All Other Compensation column (i) of the Summary Compensation Table for 2010.

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GRANTS OF PLAN-BASED AWARDS IN 2010

        The table below provides information about equity and non-equity awards granted to the named executives in 2010.

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NEW HIRE AND RETENTION AGREEMENTS

        The company extended an employment letter to Mr. Steuert in 2001 in conjunction with him joining the company. The company agreed to provide him with one year's pay at his current base salary if he is terminated by the company for any reason other than for cause or Change in Control. If he retires from the company, he will receive one year's pay, at his then-current base salary, as a supplemental retirement benefit. No other named executive has an employment contract.

        In August 2010, the company granted a retention award to Mr. Steuert to ensure his services and expertise were retained. If Mr. Steuert satisfies the terms and conditions of the retention agreement including without limitation, continuous employment with the company through June 1, 2012, 7,619 restricted stock units granted under the retention agreement will vest on June 1, 2012.

        In November 2007, the company entered into a retention agreement with Mr. Oosterveer to ensure his continued service and management of his business unit. If Mr. Oosterveer satisfied the terms and conditions of the retention agreement, including without limitation, continuous employment with the company, he would receive a cash payment of €250,000, which would vest 100% three (3) years from date of grant on November 18, 2010. Mr. Oosterveer satisfied the terms and conditions of this retention agreement and received a cash payment of €250,000, converted to U.S. dollars ($339,951), on November 18, 2010.

        In December 2009, the company entered into an additional retention agreement with Mr. Oosterveer to ensure his continued service. If Mr. Oosterveer satisfies the terms and conditions of the retention agreement, including without limitation, continuous employment with the company at each vesting date, he will receive a cash payment of $600,000, which vests in equal thirds (or $200,000 each) on each of March 30, 2010, March 30, 2011 and March 30, 2012. Mr. Oosterveer has already satisfied the first third of the agreement and received a cash payment of $200,000 on March 30, 2010.

        In January 2008, the company entered into a retention agreement with Mr. Seaton to ensure his services were retained for continued growth of the company. If Mr. Seaton satisfies the terms and conditions of the retention agreement including, without limitation, continuous employment with the company, he will receive an award consisting of two components. First, assuming continuous employment at each vesting date, the 32,928 restricted stock units granted under the retention agreement will vest in equal thirds (or 10,976 restricted stock units each) on January 31, 2011, January 31, 2012 and January 31, 2013. Second, Mr. Seaton received on January 31, 2008 a sum of $1,000,000 credited to his special deferred compensation program accounts that will vest, together with any accrued gains or losses, on March 31, 2013 if he is employed by the company through that date.

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OUTSTANDING EQUITY AWARDS AT 2010 FISCAL YEAR END

        All nonqualified stock options have a ten year term. Options granted in 2006 and 2007 have a vesting schedule of 20% per year over five years. The options granted in 2006 and earlier have a first vesting date of the fifth of February in the year following grant, with subsequent vestings occurring on each fifth of February for the following four years. In 2007, the annual grant date and subsequent vesting dates were changed to March to follow the year end earnings release. Options granted in 2007 have a first vesting date of the sixth of March in the year following grant, with subsequent vestings occurring on each sixth of March for the following four years. Beginning in 2008, option grants vest one third per year over three years on the sixth of March.

        Outstanding restricted stock shares granted prior to 2006 vest in full on the tenth anniversary of grant. Restricted stock shares granted in 2006 and 2007 generally have a vesting schedule of 20% per year over five years. The restricted stock shares granted in 2006 have a first vesting date of the fifth of February in the year following grant, with subsequent vestings occurring on each fifth of February for the following four years. In 2007, the annual grant date and subsequent vesting dates were changed to March to follow the year end earnings release. Restricted stock shares granted in 2007 have a first vesting date of the sixth of March in the year following grant, with subsequent vestings occurring on each sixth of March for the following four years. Beginning in 2008, restricted stock units were granted instead of restricted stock shares. Restricted stock units vest one-third per year over three years on the sixth of March beginning one year after grant. Upon vesting, named executives will receive a cash payment equal to the amount of dividends that would have otherwise been paid from the date of grant on an equivalent number of shares.

        The market value in the Market Value of Shares or Units of Stock That Have Not Vested column (g) is determined by multiplying the number of shares by the closing price ($66.26) of the company's common stock on the New York Stock Exchange on December 31, 2010, the last trading day of the fiscal year.

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        The following table provides information on the holdings of stock options and restricted stock shares and units by the named executives as of December 31, 2010.

        The following table provides the number of unvested restricted stock shares or units by vesting date for each named executive as of December 31, 2010.

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