Exhibit 10.5
THIRD AMENDMENT
TO THE
EMPLOYMENT AGREEMENT
BETWEEN FOSTER WHEELER INC.
AND
RAKESH JINDAL
     This THIRD AMENDMENT (this “Amendment”) to the Employment Agreement between
FOSTER WHEELER INC., a Delaware corporation (the “Company”), and RAKESH K.
JINDAL (the “Executive”), dated as of April 27, 2009 (the “Agreement”), is made
and entered into as of this May 25, 2010 (the “Effective Date”).
     WHEREAS, the Company and the Executive entered into a First Amendment to
the Agreement, effective January 18, 2010 (“First Amendment”) and a letter
amendment, effective April 1, 2010 (“Second Amendment”); and
     WHEREAS, the Company and the Executive have agreed to further amend the
Agreement as set forth herein; and
     WHEREAS, pursuant to the Agreement, an amendment to the Agreement may be
made pursuant to the written consent of the Company and the Executive.
     NOW THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, and in further consideration of
the following mutual promises, covenants and undertakings, the parties agree by
executing this Amendment to amend the Agreement, including its First Amendment
and Second Amendment, as follows:

1.   The Agreement is amended by replacing the Addendum set forth in the First
Amendment with the following addendum inserted at the end of the Agreement:

ADDENDUM
     This Addendum sets forth the terms and conditions applicable during the
Executive’s performance of duties (as described in Agreement Section 1.1) for
the period beginning as of the Effective Date and ending on the date the
Agreement is terminated pursuant to Agreement Section 4 (the “Term”). Unless
otherwise provided in this Addendum, all Agreement terms (including the
Executive’s entitlement to the compensation and benefits described in Agreement
Section 3, as adjusted for merit increases since the date of the Agreement)
shall remain in full force and effect during the Term.
A-1. Location.
     During the Term, the Executive shall perform his duties (as described in
Agreement Section 1) primarily at the Company’s offices in Geneva, Switzerland,
subject to reasonable travel requirements consistent with the nature of the
Executive’s duties from time to time on behalf of the Company.
A-2. Long-Term Incentive Awards.
     Upon the Executive’s termination of employment (other than for Cause), all
stock options outstanding as of the Executive’s Termination Date shall remain
exercisable for the shorter of one (1)

 

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year following the Executive’s termination of employment or the remainder of the
term of the stock option(s).
A-3. Stay Bonus Award.
     The Company shall pay the Executive a cash stay bonus under the following
terms.
     (a) New Addendum to Agreement. The Company shall pay the Executive a stay
bonus equal to 175% of the Executive’s Base Salary then in effect within thirty
(30) days of the Effective Date. Payment of such bonus shall be made in a single
lump sum.
     (b) Termination without Cause; For Good Reason; Death; Disability.
Notwithstanding anything else in this Addendum, the stay bonus described in
paragraph (a) shall be payable in full, and shall not be subject to forfeiture,
irrespective of the actual duration of the Term, if the Executive’s employment
is terminated by the Company without Cause, by the Executive for Good Reason
(not including the event of the assignment to Switzerland), or due to the
Executive’s death or Disability. In such case the stay bonus shall be paid in a
lump sum within thirty (30) days of termination of employment.
     (c) Termination Relating to Catastrophic Personal Event. The stay bonus
described in paragraph (a) shall be payable in full, and shall not be subject to
forfeiture, if the Executive remains in active employment through June 30, 2011
and terminates employment during the Term due to an unforeseen personal and
catastrophic event affecting the Executive or a family member, which event
requires the Executive to relocate to the U.S., and the Executive provides the
Company with thirty (30) days advance written notice.
     (d) Forfeiture of Stay Bonus. The Executive shall forfeit the stay bonus
(and must repay the stay bonus if the stay bonus has been paid) if (i) the
Executive does not remain in active employment through June 30, 2011, (ii) the
Executive (A) prior to June 30, 2011, provides the Company with less than twelve
(12) months advance written notice of termination of employment (less than
thirty (30) days notice for termination due to a catastrophic event described in
paragraph (c)) or (B) on or after June 30, 2011 and prior to June 30, 2012,
provides the Company with an advance written notice of termination of employment
such that the resulting termination date is prior to June 30, 2012, is less than
thirty (30) days after the notice for termination due to a catastrophic event
described in paragraph (c), or is less than ninety (90) days after the notice
for termination that is not due to a catastrophic event described in paragraph
(c), or (iii) prior to June 30, 2011, the Executive’s employment is terminated
for Cause. Upon any such forfeiture, the Executive must repay any paid stay
bonus in full within thirty (30) days of termination of employment.
A-4. Miscelleneous Terms
     (a) Agreement Terms. Unless otherwise provided in this Addendum, all
Agreement terms (including the Executive’s entitlement to the compensation and
benefits described in Agreement Section 3, as adjusted for merit increases since
the date of the Agreement) shall remain in full force and effect during the
Term.
     (b) Supplemental Long-Term Incentive Award. The Executive shall receive a
long-term incentive award of cash and restricted stock units on a date
designated by the Foster Wheeler AG Board of Directors (“Board”) or its
Compensation Committee (“Compensation Committee”) during the first open trading
window for Section 16 officers including or subsequent to (as the Board or
Compensation Committee shall in its discretion choose) the Effective Date (such
date selected by the Board or

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Compensation Committee, known as the “Grant Date”) with an economic value as of
the Grant Date equal to USD 606,000. Such award shall be made twenty percent
(20%) in cash and eighty percent (80%) in restricted stock units. The cash award
shall fully vest on the Grant Date; the restricted stock units shall vest
ratably on the first, second, and third anniversaries of a date selected by the
Committee or its designee within the open trading window that includes the Grant
Date and fully upon the Executive’s Involuntary Termination or Resignation for
Good Reason (as defined in the Omnibus Incentive Plan, but, for the avoidance of
doubt, not including the event of the assignment to Switzerland). The cash award
shall be paid in one lump sum within 30 days after the Grant Date; restricted
stock units that vest shall be settled by issuance of shares as provided in the
grant agreements described above, but in no event later than March 15 of the
year following the year in which the restricted stock units vest. For purposes
of this Section, the number of restricted stock units to be granted to the
Executive shall be consistent with the methodology used for valuing restricted
stock unit awards granted to employees which has been approved and adopted by
the Compensation Committee. Both the cash and the restricted stock units will be
granted under the Company’s Omnibus Incentive Plan and governed by separate
agreements entered into between the Executive and the Company or one of its
affiliates, and in the event of any inconsistency between such separate
agreements and the terms of the Agreement (including, but not limited to its
Section 4 and this Amendment), the Agreement shall govern and control. For
avoidance of doubt, nothing in the preceding sentence shall be construed to
limit the application of any provision of such separate agreements that
expressly refers to and incorporates a provision of this Agreement.
     (c) Assignment Benefits. During the Term and so long as assigned to
Switzerland, the Executive shall be entitled to the following benefits
(“Assignment Benefits”); all the benefits provided for in this Addendum are
inclusive of a Representative Allowance of CHF 100,000 and are in addition to
the perquisities and other benefits provided for in the Agreement:
     (i) Relocation Assistance: The following relocation assistance shall be
provided:
     (1) The Company will assist in obtaining the proper work permits and/or
visas necessary for the provision of services in Switzerland and reimburse the
Executive for any work permit/visa, passport and immigration expenses, including
expenses for dependents of the Executive relocating or intending to relocate to
Switzerland;
     (2) Home sale assistance, including the Company’s payment of realtor’s
fees, closing costs and any loss on the sale of the Executive’s principal
residence (basis for home includes major home improvements);
     (3) Reimbursement for two (2) house hunting trips of up to six (6) days
each, to include reasonable lodging, transportation and meals;
     (4) The cost of the shipment of household goods;
     (5) The cost of pet relocation, including transportation and kennel fees
related to the move; and
     (6) The loss on sale of automobiles or lease termination, including any
losses based on blue book/fair market value, costs, and penalties.
     (ii) Settling-in Allowance: A settling-in allowance of CHF 30,000 shall be
paid within thirty (30) days of the date the Effective Date.

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     (iii) Assignment Allowance: Prior to the earlier of the date upon which the
Executive’s immediate family relocates to Switzerland or June 30, 2011 (“First
Period”), the Company shall pay the Executive a monthly allowance of CHF 23,619
and after such date (“Second Period”), the Company shall pay to the Executive a
monthly allowance of CHF 22,303, consisting of the following amounts for each
period:

                  Allowance   First Period     Second Period  
(1) Cost-of-living allowance:
  CHF 5,121   CHF 4,439
 
               
(2) Loss of spousal income (payable once Executive’s spouse has permanently
relocated to Switzerland; payable for a maximum of 5 years
  CHF 1,256   CHF 1,256
 
               
(3) Housing:
  CHF 13,800   CHF 13,800
 
               
(4) Transportation:
  CHF 3,042   CHF 2,208
 
               
(5) Utilities:
  CHF 400   CHF 600
 
           
 
               
TOTAL
  CHF 23,619   CHF 22,303

Such allowances shall be payable in advance in Swiss Francs according to the
Company’s payroll practices. The Company shall also provide for reasonable
advances to the Executive for the purpose of obtaining housing and satisfying
other relocation expenses.
     (iv) Personal Air Travel and Home Leave: Until the earlier of the date upon
which the Executive’s immediate family relocates to Switzerland or June 30,
2011, (A) the Company shall provide reimbursement of one (1) business-class
round-trip ticket per month for personal travel between Switzerland and the U.S,
(B) each month, the Executive may use the business-class round trip ticket to
instead fly one (1) family member from the U.S. to Switzerland, and (C) once per
quarter, in lieu of the Executive’s trip to the U.S., the Company shall
reimburse the cost of business-class round-trip tickets for the Executive’s
family to travel from the U.S. to Switzerland. After the earlier of the dates
set forth above, (X) the Company shall reimburse the Executive for one (1) trip
per twelve (12) months per authorized dependent and for the Executive,
(Y) expenses eligible for reimbursement include a business class airline ticket
and local ground expenses to the original point of origin, and (Z) one (1) day
of travel shall be permitted each way as additional vacation.
     (v) Vacation and Holidays: The Executive’s paid time off shall be
consistent with that currently provided. Swiss holidays shall be established by
the Company.
     (vi) Continued Medical Coverage. To the extent U.S. medical coverage is not
available in Switzerland, the Company shall pay for the cost of securing
substantially similar coverage in Switzerland for the Executive and the
Executive’s family. Eligible dependents of the Executive shall continue to
maintain medical coverage irrespective of their relocation to Switzerland.

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     (vii) Tax Equalization. Under tax equalization, the Executive’s obligation
for income taxes shall not exceed the amount of income tax calculated each year
on Base Salary, short-term annual pay and long-term incentive pay applying the
U.S. tax rules without taking into consideration any foreign tax credit. Such
amount will be deducted from the Executive’s paycheck. Should additional income
taxes arise in the U.S. or Switzerland as a result of the assignment, the
Company shall pay the additional tax. The Executive may choose, as an
alternative to the U.S. tax equalization program, to be personally responsible
for the Swiss income tax on the Executive’s Base Salary, short-term incentive
pay and long-term incentive pay. In addition to the tax equalization on the
compensation above, the Executive will be reimbursed for any wealth tax due in
Switzerland as a result of the assignment.
     (viii) Tax Preparation Services: The Company shall retain the services of a
tax consultant to prepare the Executive’s U.S. and Switzerland tax returns, as
required, while the Executive is on assignment to Switzerland.
     (ix) Tax Gross-Up. To the extent that the provision of Assignment Benefits
results in taxable income to the Executive, the Company shall pay the Executive
an amount to satisfy the Executive’s Swiss and U.S. income tax obligation. Such
payment shall be grossed-up for taxes and made as soon as practicable after the
tax liability arises but in no event later than the end of the year following
the year in which the tax is due.
     (x) Seconded Arrangement: The Executive shall be seconded to Foster Wheeler
Management AG in Switzerland and shall continue to remain an employee of the
Company. The Executive remain eligible to participate in the Company’s employee
benefit plans as set forth in Section 3 of the Agreement and to receive U.S.
social security benefits.
     (xi) Legal Services. The Company shall reimburse the Executive for legal
fees incurred in relation to an attorney’s review of this Amendment, up to a
maximum of USD 5,000.
     (xii) Financial/Estate Planning. The Company shall reimburse the Executive
for one-time costs relating to the Executive’s financial and estate planning.
     (xiii) Compassionate Leave: The Executive shall be provided with up to five
(5) day’s paid compassionate leave in relation to the death of an immediate
family member. The Company shall reimburse the Executive and his dependents for
the cost of round-trip business airline tickets to attend funeral services.
     (xiv) U.S. Vehicle Allowance. For the avoidance of doubt, the Executive
shall remain entitled to participate in the Company’s automobile allowance
program as from time to time in effect for those at the Executive’s level as set
forth at Agreement Section 3.4.
     (xv) Education. The Company will pay the actual cost of the Executive’s
daughter’s registration and tuition fees and any required deposit for, and
transportation to and from, secondary school (i.e., what is generally known as
“high school” in the U.S. or the Swiss equivalent thereof). The Company has the
option of either paying such costs directly or reimbursing the Executive for
same. If the Company opts to reimburse the Executive, it shall do so by way of
lump sum payment promptly after the expenses are incurred, but in no event
earlier than January 1 or later than December 31 of the taxable year to which
they relate.

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     (d) Termination of Employment. If the Executive’s employment is terminated
for any reason, the terms of Agreement Section 4 (including the amendments to
same set forth in this Agreement) shall control; provided, that the relocation
to Switzerland shall not constitute an event giving rise to a termination of
employment for Good Reason. If the termination is for any reason other than for
Cause or a resignation by the Executive without Good Reason, the Company shall
pay the reasonable costs associated with the repatriation to the U.S.
A-5. Maximum Length of Assignment
     For the avoidance of doubt, the maximum period of time during which the
Executive may be considered to be “on assignment” and, therefore, eligible for
assignment-related compensation and Assignment Benefits is five (5) years from
the start of the Executive’s assignment to Switzerland, i.e., no later than
January 17, 2015.
A-6. Application of Section 409A to Benefits-in-Kind, Expense Reimbursements and
Allowances
     (a) Benefits-in-Kind; Expense Reimbursements. Benefits-in-kind and any
provision for reimbursement of expenses during the Executive’s assignment shall
be subject to the following rules, as required to comply with Code Section 409A:
     (i) The amount of in-kind benefits provided or expenses eligible for
reimbursement in one calendar year may not affect in-kind benefits or
reimbursements to be provided in any other calendar year.
     (ii) Expenses will be reimbursed as soon as administratively possible, but
in no event shall expenses be reimbursed later than December 31st of the year
following the year in which the expense was incurred.
     (iii) The right to an in-kind benefit or reimbursement may not be subject
to liquidation or exchange for another benefit.
     (b) Allowances. Allowances generally shall be paid monthly. In no event
shall the payment of any allowance be made later than March 15th of the year
following the year in which the Executive is entitled to payment.
* * *

2.   Agreement Sections 4.1.3 and 4.1.4 are hereby revised by replacing “thirty
(30) days” each time it appears in those Sections with “ninety (90) days”.   3.
  Agreement Section 4.1.5 is hereby revised by adding the following new sentence
to the end of Section 4.1.5:

In the event that the termination of the Executive’s employment does not
constitute a “separation from service” as defined in Section 409A of the
Internal Revenue Code of 1986, including all regulations and other guidance
issued pursuant thereto (the “Code”), the Executive’s rights to the payments and
benefits described in this Section 4 shall vest upon the Termination Date, but
no payment to the Executive that is subject to Section 409A shall be paid until
the Executive incurs a separation from service (or as set forth at Section 13.1,
until six months after such date if the Executive is a specified employee), and
any

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amounts that would otherwise have been paid prior to such date shall be paid
instead as soon as practicable after such date.

4.   Agreement Section 4.2.2 is hereby revised to read in its entirety as
follows:

          4.2.2. Payments Upon Involuntary Termination by the Company Without
Cause or Voluntary Termination of the Executive with Good Reason. Following a
termination by the Company without Cause or by the Executive for Good Reason,
the Company shall pay or provide to the Executive in addition to the payments
and benefits in Section 4.2.1 above:
               (i) Base Salary at the rate in effect on the Termination Date and
continuing for eighteen (18) months thereafter, payable at the same intervals at
which active employees at the Executive’s level are paid;
               (ii) Two (2) payments, the first in an amount equal to one
hundred percent (100%) of the Executive’s annual cash incentive bonus payment at
target, and the second in an amount equal to fifty percent (50%) of the
Executive’s annual cash incentive bonus payment at target, the first of such
payments being payable in the first year following the Termination Date at the
same time that the Company pays annual cash incentive bonuses to its active
employees pursuant to its then current Bonus Program (or, if no payment to its
active employees is made in the relevant year, at the time that such bonuses
normally would be scheduled to be paid) and the second being payable at the same
time in the second year following the Termination Date;
               (iii) eighteen (18) months of continued health and welfare
benefit plan coverage following the Termination Date (excluding any additional
vacation accrual or sick leave) at active employee levels, if and to the extent
the Executive was participating in any such plans on the Termination Date,
provided that the Executive remits monthly premiums for the full cost of any
health benefits;
               (iv) executive level career transition assistance services by a
firm selected by the Executive and approved by the Company in an amount not to
exceed $8,000.00 in the aggregate (which amount includes any applicable gross-up
for any taxes due for such payment); and
               (v) a cash payment each month during the eighteen (18) month
period following the Termination Date equal to the full monthly premium for the
health benefits described in clause (iii) above minus the active employee cost
of such coverage, such full monthly premium to be grossed-up by the Company for
any applicable income taxes.

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Notwithstanding any other provision of this Agreement, in no event, shall the
Executive be entitled to receive the pay and benefits that the Company shall
provide the Executive pursuant to this Section 4.2.2 unless the Executive
provides the Company an enforceable waiver and release agreement in a form that
the Company normally requires. Such release shall be furnished to the Executive
for the Executive’s review not later than 7 business days following the
Termination Date, and shall be executed and returned to the Company within
21 days of receipt (or within 45 days of receipt if the Executive’s separation
is part of a group). Provided the Executive does not timely revoke the waiver
and release agreement, pay and benefits pursuant to this Section 4.2.2 shall
commence on the 60th day following the Executive’s Termination Date. Any amounts
that otherwise would have been paid to the Executive pursuant to this
Section 4.2.2 before the 60th day shall be paid to the Executive, without
interest, on the 60th day.

5.   Agreement Section 4.3.2(i) is hereby revised by deleting its subsection
(II) and to read in its entirety as follows:

Accrued Obligations. The Executive’s Annual Base Salary through the Termination
Date and any accrued vacation pay, in each case, to the extent not theretofore
paid (the sum of the amounts described in this Subsection 4.3.2(i), the “Accrued
Obligations”), all in a lump sum in cash within 30 days following the
Termination Date; and

6.   Agreement Section 5.2 (Company Protections) is hereby revised by replacing
the term “twelve (12) months” with the term “nine (9) months”.   7.   Agreement
Section 12 is hereby revised by adding the following new Section 12.2:

12.2 To the maximum extent permitted by law and consistent with the substantive
terms of this Agreement, this Agreement shall be interpreted and administered in
such a manner that the payments to the Executive are either exempt from, or
comply with all requirements of, Section 409A of the Code.

8.   Counterparts. This Amendment may be executed in two or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment
to the Agreement as of the date first written above.

            FOSTER WHEELER INC.
      By:   /s/ Raymond J. Milchovich         Name:   Raymond J. Milchovich     
  Title:   Chairman, President & Chief Executive Officer     

                  /s/ Rakesh K. Jindal       RAKESH K. JINDAL           

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