Class Action Suit Filed Against Fluor Corporation and its Officers and Directors Alleging Misrepresentations and False Financial Statements

Business Wire, Sept 15, 1997

SAN DIEGO--(BUSINESS WIRE)--Sept. 15, 1997--A class action has been commenced in the United States District Court for the Central District of California on behalf of purchasers of Fluor Corporation ("Fluor") common stock during the period May 22, 1996 to Feb. 18, 1997.

The complaint charges Fluor and certain of its officers and directors with violations of the federal securities laws. The complaint alleges a fraudulent scheme and course of business by Fluor and certain of its top executives to artificially inflate Fluor's reported profits and the price of its common stock so that those top executives could collect millions of dollars of incentive and bonus compensation under Fluor's unique executive compensation plan which provided special bonus compensation to its top executives if, but only if, Fluor's profits met certain predetermined levels and its stock price traded at certain high levels as well.

As a result of defendants falsifying Fluor's Fiscal 1996 ("F96") net income and earnings per share ("EPS") and their false and misleading statements, assuring investors that the "re-engineering and restructuring" of Fluor's largest and most important business unit, the Fluor Daniel Engineering and Construction ("E&C") unit had succeeded, that the Fluor Daniel E&C unit's expansion was succeeding and its business was very strong, Fluor reported record net income and EPS of $268 million and $3.17 for F96 ended Oct. 31, 1996.

Defendants also assured investors that the success of the Fluor Daniel E&C unit would enable Fluor to meet its 15%-20% per year growth target in F97 to end Oct. 31, 1997, leading to sharply increased EPS for Fluor in F97 and F98. As a result, Fluor's stock climbed to an all-time high of $75-7/8 on Feb. 18, 1997, and Fluor's top executives collected millions in special incentive and bonus compensation for F96.

However, after close of trading on Feb. 18, 1997, defendants stunned the markets by revealing that Fluor's actual operating earnings for the 1stQ F97 -- the quarter ended Jan. 31, 1997 -- were much worse than earlier forecast, in significant part due to huge cost overruns on two Fluor Daniel E&C units' fixed-price power plant construction projects which Fluor refused to identify or quantify, as well as soaring overhead costs in its Fluor Daniel unit.

Fluor's common stock collapsed from over $75 to $62 on huge volume of 6.7 million shares, the largest one-day price decline on the largest one-day trading volume in Fluor's history -- thus wiping out in one trading day approximately $1 billion of Fluor common share holder market value.

Plaintiff seeks to recover damages on behalf of all purchasers of Fluor common stock during the Class Period (the "Class"). The plaintiff is represented by several law firms, including Milberg Weiss Bershad Hynes & Lerach LLP, who have expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Milberg Weiss has been actively engaged in commercial litigation, emphasizing securities and antitrust class actions, for more than 20 years. The firm has offices in New York, San Diego, San Francisco and Los Angeles and is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm to major positions in complex multi-district or consolidated litigations.

Milberg Weiss has taken a lead role in numerous important actions on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total approximately $2 billion. Visit the firm's website at http://www.milberg.com .

If you are a member of the Class described above, you may, no later than 60 days from today, move the Court to serve as lead plaintiff of the Class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, William Lerach, Alan Schulman or Darren Robbins of Milberg Weiss at 800/449-4900 or via e-mail at wsl@mwbhl.com .

CONTACT: Milberg Weiss Bershad Hynes & Lerach LLP

William Lerach/Alan Schulman/Darren Robbins, 800/449-4900

wsl@mwbhl.com