Exhibit 10.77
EMPLOYMENT AGREEMENT
     EMPLOYMENT AGREEMENT (this “Agreement”) dated as of January _6_, 2009
between FOSTER WHEELER LTD., a Bermuda company (the “Company”), and LISA Z. WOOD
(the “Executive”).
     WHEREAS, the Executive is currently employed by the Company, and the
Executive and the Company wish to continue their employment relationship, on the
terms and conditions set forth in this Agreement.
     Accordingly, the Company and the Executive hereby agree as follows:
     1. Employment, Duties and Acceptance.
          1.1 Employment, Duties. The Company hereby agrees to continue to
employ the Executive for the Term (as defined in Section 2.1), to render
exclusive and full-time services to the Company; provided, however, that the
Executive may participate in civic, charitable, industry, and professional
organizations to the extent that such participation does not materially
interfere with the performance of Executive’s duties hereunder.
          1.2 Acceptance. The Executive hereby accepts such employment and
agrees to render the services described above. During the Term, and consistent
with the above, the Executive agrees to serve the Company faithfully and to the
best of the Executive’s ability, to devote the Executive’s entire business time,
energy and skill to such employment, and to use the Executive’s best efforts,
skill and ability to promote the Company’s interests.
          1.3 Fiduciary Duties to the Company. Executive acknowledges and agrees
that Executive owes a fiduciary duty of loyalty, fidelity and allegiance to act
at all times in the best interests of the Company and to do no act which would,
directly or indirectly, injure the Company’s business, interests, or reputation.
It is agreed that any direct or indirect interest in, connection with, or
benefit from any outside activities, particularly commercial activities, which
interest might in any way adversely affect Company, involves a possible conflict
of interest. In keeping with Executive’s fiduciary duties to the Company,
Executive agrees that Executive shall not knowingly become involved in a
conflict of interest with the Company, or upon discovery thereof, allow such a
conflict to continue. Moreover, Executive shall not engage in any activity which
might involve a possible conflict of interest without first obtaining approval
in accordance with the Company’s policies and procedures.
          1.4 Location. The duties to be performed by the Executive hereunder
shall be performed primarily at the Company’s offices in Clinton, New Jersey,
subject to reasonable travel requirements consistent with the nature of the
Executive’s duties from time to time on behalf of the Company. The Executive
shall keep Executive’s primary residence within reasonable daily commute of the
Clinton, New Jersey area throughout the Term.
     2. Term of Employment.
          2.1 Term. The term of the Executive’s employment under this Agreement
(the “Term”) shall commence on the date first above written (the “Effective
Date”), and shall end on the date on which the Term is terminated pursuant to
Section 4.

 

--------------------------------------------------------------------------------

 

     3. Compensation; Benefits.
          3.1 Salary. As compensation for all services to be rendered pursuant
to this Agreement, the Company agrees to pay to the Executive during the Term a
base salary at the initial annual rate of Two Hundred Seventy-Five Thousand
Dollars ($275,000) (the “Base Salary”). On each anniversary of the Effective
Date or such other appropriate date during each year of the Term when the
salaries of executives at the Executive’s level are normally reviewed, the
Company shall review the Base Salary and determine if, and by how much, the Base
Salary should be increased provided, however, the Base Salary under this
Agreement, including as subsequently adjusted upwards, may not be decreased
thereafter without the written consent of Executive, except for across-the-board
changes for executives at the Executive’s level. All payments of Base Salary or
other compensation hereunder shall be less such deductions or withholdings as
are required by applicable law and regulations.
          3.2 Bonus. The Executive shall be eligible to participate, as
determined by the Company in the Company’s annual incentive program as in effect
from time to time for executives at the Executive’s level. The Executive shall
be eligible for an annual incentive bonus at a target opportunity of forty
percent (40%) of Base Salary (up to a maximum opportunity of eighty percent
(80%) of Base Salary) based upon the achievement of certain business unit
objectives established in advance by the Company (the “Annual Bonus”). The
actual amount of any Annual Bonus shall be determined by and in accordance with
the terms of the Company’s annual incentive program as in effect from time to
time and the Executive shall have no absolute right to an Annual Bonus in any
year.
          3.3 Equity Awards. The Executive shall be eligible for annual equity
awards, as determined by the Company, under the Company’s equity award plan
covering executives at the Executive’s level, as in effect from time to time.
          3.4 Other Plans and Programs. During the Term, the Executive shall be
entitled to participate in those defined benefit, defined contribution, group
insurance, medical, dental, disability and other benefit plans, vacation
programs, automobile allowance programs, and business expense reimbursement
programs of the Company as from time to time in effect for those at the
Executive’s level.
     4. Termination.
          4.1 Termination Events.
               4.1.1 The Executive’s employment and the Term shall terminate
immediately upon the occurrence of any of the following:
                    (i) Death: the death of the Executive;
                    (ii) Disability: the physical or mental disability of the
Executive, whether totally or partially, such that with or without reasonable
accommodation the Executive is unable to perform the Executive’s material
duties, for a period of not less than one hundred and eighty (180) consecutive
days; or
                    (iii) For Cause By the Company: notice of termination for
“Cause.” As used herein, “Cause” means (A) conviction of a felony; (B) actual or
attempted theft or embezzlement of Company assets; (C) use of illegal drugs;
(D) material breach of the Agreement that the Executive has not cured within
thirty (30) days after the Company has provided the Executive notice of

2

--------------------------------------------------------------------------------

 

the material breach which shall be given within sixty (60) days of the Company’s
knowledge of the occurrence of the material breach; (E) commission of an act of
moral turpitude that in the judgment of the Company’s Board of Directors can
reasonably be expected to have an adverse effect on the business, reputation or
financial situation of the Company and/or the ability of the Executive to
perform the Executive’s duties; (F) gross negligence or willful misconduct in
performance of the Executive’s duties; (G) breach of fiduciary duty to the
Company; (H) willful refusal to perform the duties of Executive’s titled
position; or (I) a material violation of the Foster Wheeler Code of Business
Conduct and Ethics.
               4.1.2 For Good Reason By the Executive: The Executive may
immediately resign the Executive’s position for Good Reason and, in such event,
the Term shall terminate. As used herein, “Good Reason” means a material
negative change in the employment relationship without the Executive’s consent,
as evidenced by the occurrence of any of the following: (i) reduction of Base
Salary and benefits except for across-the-board changes for executives at the
Executive’s level; (ii) exclusion from executive benefit/compensation plans;
(iii) relocation of the Executive’s principal business location by the Company
of greater than fifty (50) miles; (iv) material breach of the Agreement by the
Company; or (v) resignation in compliance with securities/corporate governance
applicable law (such as the US Sarbanes-Oxley Act) or rules of professional
conduct specifically applicable to such Executive. For each event described
above in this Section 4.1.2, the Executive must notify the Company within ninety
(90) days of the occurrence of the event and the Company shall have thirty
(30) days after receiving such notice in which to cure.
               4.1.3 Without Cause By the Company: The Company may terminate the
Executive’s employment thirty (30) days following notice of termination without
Cause given by the Company and, in such event, the Term shall terminate. During
such thirty (30) day notice period, the Company may require that the Executive
cease performing some or all of the Executive’s duties and/or not be present at
the Company’s offices and/or other facilities.
               4.1.4 Without Good Reason By the Executive: The Executive may
voluntarily resign the Executive’s position effective thirty (30) days following
notice to the Company of the Executive’s intent to voluntarily resign without
Good Reason and, in such event, the Term shall terminate. During such thirty
(30) day notice period, the Company may require that the Executive cease
performing some or all of the Executive’s duties and/or not be present at the
Company’s offices and/or other facilities.
               4.1.5 Definition of Termination Date. The date upon which
Executive’s employment and the Term terminate pursuant to this Section 4.1 shall
be the Executive’s “Termination Date” for all purposes of this Agreement.
          4.2 Payments Upon a Termination Event.
               4.2.1 Entitlements Upon Termination For Any Reason. Following any
termination of the Executive’s employment, the Company shall pay or provide to
the Executive, or the Executive’s estate or beneficiary, as the case may be,
(i) Base Salary earned through the Termination Date; (ii) the balance of any
awarded (i.e., the amount and payment of the specific award has been fully
approved by the Company, including, where applicable, approval by Compensation
Committee of Foster Wheeler Ltd.’s Board of Directors) but as yet unpaid, annual
cash incentive or other incentive awards for any calendar year prior to the
calendar year during which the Executive’s Termination Date occurs provided,
however, if the Executive’s employment is terminated by the Company for Cause,
such incentive award, even if awarded, shall be immediately forfeited if
permitted under the law of the State in which the Executive resides; (iii) a
payment representing the Executive’s accrued but unused vacation; (iv) any
vested, but not forfeited benefits on the Termination Date under the Company’s
employee benefit

3

--------------------------------------------------------------------------------

 

plans in accordance with the terms of such plans; and (v) benefit continuation
and conversion rights to which the Executive is entitled under the Company’s
employee benefit plans.
               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 twelve (12) months thereafter, payable at the same
intervals at which active employees at the Executive’s level are paid;
                    (ii) an amount equal to one hundred percent (100%) of the
Executive’s annual cash incentive payment at target, payable once in a lump sum
at the same time that the Company pays annual cash incentives to its active
employees pursuant to its then current annual incentive program;
                    (iii) twelve (12) 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 twelve (12) 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.
Notwithstanding any other provision of this Agreement, as consideration for the
pay and benefits that the Company shall provide the Executive pursuant to this
Section 4.2.2, the Executive shall provide the Company an enforceable waiver and
release agreement in a form that the Company normally requires.
          4.3 Change of Control.
               4.3.1 Definitions.
                    (i) Affiliated Company. For purposes of this Agreement,
“Affiliated Company” means any company, directly or indirectly, controlled by,
controlling or under common control with the Company.
                    (ii) Change of Control. For the purpose of this Agreement, a
“Change of Control” shall mean:
                         (A) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of voting securities of the Company where such acquisition causes

4

--------------------------------------------------------------------------------

 

such Person to own 20% or more of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”), provided,
however, that for purposes of this subparagraph (A), the following acquisitions
shall not be deemed to result in a Change of Control: (I) any acquisition
directly from the Company or any corporation or other legal entity controlled,
directly or indirectly, by the Company, (II) any acquisition by the Company or
any corporation or other legal entity controlled, directly or indirectly, by the
Company, (III) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation or other legal entity
controlled, directly or indirectly, by the Company or (IV) any acquisition by
any corporation pursuant to a transaction that complies with clauses (I),
(II) and (III) of subparagraph (C) below; and provided, further, that if any
Person’s beneficial ownership of the Outstanding Company Voting Securities
reaches or exceeds 20% as a result of a transaction described in clauses (I) or
(II) above, and such Person subsequently acquires beneficial ownership of
additional voting securities of the Company, such subsequent acquisition shall
be treated as an acquisition that causes such Person to own 20% or more of the
Outstanding Company Voting Securities; or
                         (B) Individuals who, as of the date hereof, constitute
the Board (such individuals, the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company’s shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
                         (C) The approval by the shareholders of the Company of
a reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company (“Business Combination”) or, if
consummation of such Business Combination is subject, at the time of such
approval by shareholders, to the consent of any government or governmental
agency, the obtaining of such consent (either explicitly or implicitly by
consummation); excluding, however, such a Business Combination pursuant to which
(I) all or substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more than
60% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation that as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Voting
Securities, (II) no Person (excluding any (1) corporation owned, directly or
indirectly, by the beneficial owners of the Outstanding Company Voting
Securities as described in subclause (I) immediately preceding, or (2) employee
benefit plan (or related trust) of the Company or such corporation resulting
from such Business Combination, or any of their respective subsidiaries)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (III) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or

5

--------------------------------------------------------------------------------

 

                         (D) approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
                    (iii) Change of Control Period. For purposes of this
Agreement, the “Change of Control Period” shall mean the period commencing on
the date of a Change of Control and ending on the twenty-fourth-month
anniversary of such date.
                    (iv) Start Date. For purposes of this Agreement, “Start
Date” shall mean the first date of the Change of Control Period. Anything in
this Agreement to the contrary notwithstanding, if a Change of Control occurs
and if the Executive’s employment with the Company is terminated prior to the
date on which the Change of Control occurs, and if it is reasonably demonstrated
by the Executive that such termination of employment (A) was at the request of a
third party who has taken steps reasonably calculated to effect a Change of
Control or (B) otherwise arose in connection with or anticipation of a Change of
Control, then for all purposes of this Agreement the “Start Date” shall mean the
date immediately prior to the Termination Date.
               4.3.2 Obligations of the Company upon Executive’s Voluntary
Termination with Good Reason or the Company’s Involuntary Termination of
Executive Without Cause (Other Than for Death or Disability) During Change of
Control Period. If, during the Change of Control Period, the Company terminates
the Executive’s employment without Cause (other than for death or Disability) or
the Executive terminates his employment for Good Reason, the Company shall pay
or provide to the Executive the following:
                    (i) Accrued Obligations. The sum of (I) the Executive’s
Annual Base Salary through the Termination Date to the extent not theretofore
paid, and (II) any compensation previously deferred by the Executive (together
with any accrued interest or earnings thereon) and any accrued vacation pay, in
each case, to the extent not theretofore paid (the sum of the amounts described
in subclauses (I) and (II), the “Accrued Obligations”), all in a lump sum in
cash within 30 days following the Termination Date; and
                    (ii) Base Salary. Base Salary at the rate in effect on the
Termination Date and continuing for two (2) years thereafter, payable at the
same intervals at which active employees at the Executive’s level are paid;
                    (iii) Bonus. Two (2) payments, each in an amount equal to
one hundred percent (100%) of the Executive’s annual cash incentive payment at
target, one (1) of each such payments being payable in each of the two (2) years
following the Termination Date at the same time that the Company pays annual
cash incentives to its active employees pursuant to its then current annual
incentive program;
                    (iv) Medical Coverage. For two (2) years after the
Executive’s Termination Date, or such longer period as may be provided by the
terms of the appropriate health or welfare plan, program, practice or policy,
the Company shall continue benefits to the Executive and/or the Executive’s
family at least equal to those which would have been provided to them in
accordance with the health or welfare plans, programs, practices and policies if
the Executive’s employment had not been terminated or, if more favorable to the
Executive, and to the extent he otherwise is or becomes eligible therefor, as in
effect generally at any time thereafter with respect to other similarly situated
peer executives of the Company and the Affiliated Companies and their families;
provided, however, that the Executive remits monthly premiums for the full cost
of any health benefits; and provided further that if the Executive becomes
reemployed with another employer and is eligible to receive health or welfare
benefits under another employer provided plan, the health and welfare benefits

6

--------------------------------------------------------------------------------

 

described herein shall be secondary to those provided under such other plan
during such applicable period of eligibility. For purposes of determining
eligibility (but not the time of commencement of benefits) of the Executive for
retiree benefits pursuant to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed until the second
anniversary of the Termination Date and to have retired on such second
anniversary;
                    (v) Medical Payments. The Company shall make a cash payment
each month during the two-year period commencing after the Executive’s
Termination Date, equal to the full monthly premium for the health benefits
described in Section 4.3.2(iv) above minus the active employee cost of such
coverage, such full monthly premium to be grossed-up for any applicable income
taxes;
                    (vi) Outplacement Services. The Company shall, at its sole
expense as incurred, in an amount not to exceed $8,000.00 in the aggregate
(which amount includes any applicable gross-up for any taxes, other than Excise
Taxes as defined in Section 4.3.6 below, due for such payment), provide the
Executive with outplacement services the scope and provider of which shall be
selected by the Executive in the Executive’s sole discretion; and
                    (vii) Other Benefits. To the extent not theretofore paid or
provided, the Company shall timely pay or provide to the Executive any other
amounts or benefits required to be paid or provided or which the Executive is
eligible to receive under any plan, program, policy or practice or contract or
agreement of the Company and the Affiliated Companies (such other amounts and
benefits shall be hereinafter referred to as the “Other Benefits”).
               4.3.3 Obligations of the Company upon Executive’s Death. If the
Executive’s employment is terminated by reason of the Executive’s death during
the Change of Control Period, the Company shall provide the Executive’s estate
or beneficiaries with the Accrued Obligations and the timely payment or delivery
of the Other Benefits, and shall have no other severance obligations under this
Agreement. The Accrued Obligations shall be paid to the Executive’s estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the
Termination Date. With respect to the provision of Other Benefits, the term
“Other Benefits” as utilized in this Subsection 4.3.3 shall include, without
limitation, and the Executive’s estate and/or beneficiaries shall be entitled to
receive, benefits at least equal to the most favorable benefits provided by the
Company and the Affiliated Companies to the estates and beneficiaries of
similarly situated peer executives of the Company and the Affiliated Companies
under such plans, programs, practices and policies relating to death benefits,
if any, as in effect with respect to other similarly situated peer executives
and their beneficiaries at any time during the 120-day period immediately
preceding the Start Date or, if more favorable to the Executive’s estate and/or
the Executive’s beneficiaries, as in effect on the date of the Executive’s death
with respect to other similarly situated peer executives of the Company and the
Affiliated Companies and their beneficiaries.
               4.3.4 Obligations of the Company upon Executive’s Disability. If
the Executive’s employment is terminated by reason of the Executive’s disability
during the Change of Control Period, the Company shall provide the Executive
with the Accrued Obligations and the timely payment or delivery of the Other
Benefits, and shall have no other severance obligations under this Agreement.
The Accrued Obligations shall be paid to the Executive in a lump sum in cash
within 30 days of the Termination Date. With respect to the provision of Other
Benefits, the term “Other Benefits” as utilized in this Subsection 4.3.4 shall
include, and the Executive shall be entitled after the disability start date to
receive, disability and other benefits at least equal to the most favorable of
those generally provided by the Company and the Affiliated Companies to
similarly situated disabled executives and/or their families in accordance with
such plans, programs, practices and policies relating to disability, if any, as
in effect generally with respect to other similarly situated peer executives and
their families at any time

7

--------------------------------------------------------------------------------

 

during the 120-day period immediately preceding the Start Date or, if more
favorable to the Executive and/or the Executive’s family, as in effect at any
time thereafter generally with respect to other similarly situated peer
executives of the Company and the Affiliated Companies and their families.
               4.3.5 Obligations of the Company upon Executive’s Voluntary
Termination Without Good Reason or the Company’s Involuntary Termination of
Executive With Cause During Change of Control Period. If the Executive’s
employment is terminated for Cause during the Change of Control Period, the
Company shall provide to the Executive (i) the Executive’s Annual Base Salary
through the Termination Date, (ii) the amount of any compensation previously
deferred by the Executive, and (iii) Other Benefits, in each case to the extent
theretofore unpaid, and shall have no other severance obligations under this
Agreement. If the Executive voluntarily terminates employment during the Change
of Control Period, excluding a termination for Good Reason, the Company shall
provide to the Executive the Accrued Obligations and the timely payment or
delivery of Other Benefits, and shall have no other severance obligations under
this Agreement. In such case, all Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Termination Date.
               4.3.6 Certain Additional Payments by the Company.
                    (i) Definitions. The following terms shall have the
following meanings for purposes of this Subsection 4.3.6.
                         (A) Excise Tax. “Excise Tax” shall mean the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”), together with any interest or penalties imposed with respect to such
excise tax.
                         (B) Net After-Tax Amount. The “Net After-Tax Amount” of
a Payment shall mean the Value of a Payment net of all taxes imposed on the
Executive with respect thereto under Sections 1 and 4999 of the Code and
applicable state and local law, determined by applying the highest marginal
rates that are expected to apply to the Executive’s taxable income for the
taxable year in which the Payment is made.
                         (C) Parachute Value. “Parachute Value” of a Payment
shall mean the present value as of the date of the change of control for
purposes of Section 280G of the Code of the portion of such Payment that
constitutes a “parachute payment” under Section 280G(b)(2), as determined by the
Accounting Firm for purposes of determining whether and to what extent the
Excise Tax will apply to such Payment.
                         (D) Payment. A “Payment” shall mean any payment or
distribution in the nature of compensation (within the meaning of
Section 280G(b)(2) of the Code) to or for the benefit of the Executive, whether
paid or payable pursuant to this Agreement or otherwise.
                         (E) Safe Harbor Amount. The “Safe Harbor Amount” means
the maximum Parachute Value of all Payments that the Executive can receive
without any Payments being subject to the Excise Tax.
                         (F) Value. “Value” of a Payment shall mean the economic
present value of a Payment as of the date of the change of control for purposes
of Section 280G of the Code, as determined by the Accounting Firm (as defined
below) using the discount rate required by Section 280G(d)(4) of the Code.

8

--------------------------------------------------------------------------------

 

                    (ii) Gross-Up Payment. Notwithstanding anything in this
Agreement other than as set forth below in this Subsection 4.3.6(ii), in the
event it shall be determined that any Payment would be subject to the Excise
Tax, then the Executive shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by the Executive of all
taxes (and any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Any Gross-Up Payment will be made as soon as
reasonably practicable but in no event later than December 31 of the year
following the year in which the Excise Tax is incurred. Despite and as an
exception to the foregoing provisions of this Section 4.3.6(ii), if the
Executive is subject to the Excise Tax but the sum of the Payments when
calculated in accordance with the relevant provisions of the Code do not exceed
110% of the Executive’s Safe Harbor Amount, then (1) the Company shall not make
any Gross-Up Payment to the Executive, and (2) the Payments otherwise payable to
the Executive shall be reduced so that the Payments in the aggregate equal the
largest amount that does not exceed the Safe Harbor Amount. In such event, the
Company shall promptly notify the Executive of its intent to reduce the amount
of the Payments, and, to the extent permitted by applicable laws, shall consult
with the Executive as to which of the specific Payment(s) shall be so reduced in
order to bring the aggregate of the Payments within the Safe Harbor Amount.
                    (iii) Determination of the Gross-Up Payment. Subject to the
provisions of paragraph (iv) immediately below, all determinations required to
be made under this Subsection 4.3.6, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by
PricewaterhouseCoopers LLP or such other nationally recognized certified public
accounting firm as may be designated by the Executive (the “Accounting Firm”).
The Accounting Firm shall provide detailed supporting calculations both to the
Company and the Executive within 15 business days of the receipt of notice from
the Executive that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
of Control, the Executive may appoint another nationally recognized accounting
firm to make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to this Subsection 4.3.6, shall be paid by the Company to
the Executive within five days of the receipt of the Accounting Firm’s
determination. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made (“Underpayment”), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to paragraph (iv) below and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
                    (iv) Notification. The Executive shall notify the Company in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten business days after
the Executive is informed in writing of such claim. The Executive shall apprise
the Company of the nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which the Executive gives
such notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such period that the Company
desires to contest such claim, the Executive shall:

9

--------------------------------------------------------------------------------

 

                         (A) give the Company any information reasonably
requested by the Company relating to such claim;
                         (B) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company;
                         (C) cooperate with the Company in good faith in order
effectively to contest such claim; and
                         (D) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties) imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this paragraph (iv),
the Company shall control all proceedings taken in connection with such contest
and, at its sole discretion, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the applicable taxing
authority in respect of such claim and may, at its sole discretion, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties) imposed with respect to such advance or with
respect to any imputed income in connection with such advance; and provided,
further, that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s control of the contest shall be limited to issues
with respect to which the Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.
                    (v) Entitlement to Refund. If, after the receipt by the
Executive of an amount advanced by the Company pursuant to paragraph (iv) above,
the Executive becomes entitled to receive any refund with respect to such claim,
the Executive shall (subject to the Company’s complying with the requirements of
paragraph (iv)) promptly pay to the Company the amount of such refund (together
with any interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by the Executive of an amount advanced by the Company pursuant
to paragraph (iv), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
                    (vi) Consent to Withholding. Notwithstanding any other
provision of this Subsection 4.3.6, the Company may, in its sole discretion,
withhold and pay over to the

10

--------------------------------------------------------------------------------

 

Internal Revenue Service or any other applicable taxing authority, for the
benefit of the Executive, all or any portion of the Gross-Up Payment, and the
Executive hereby consents to such withholding.
          4.4 No Mitigation. Upon termination of the Executive’s employment with
the Company, the Executive shall be under no obligation to seek other employment
or otherwise mitigate the obligations of the Company under this Agreement.
     5. Protection of Confidential Information; Non-Competition;
Non-Solicitation.
          5.1 Confidential Information. The Executive acknowledges that the
Executive’s services will be unique, that they will involve the development of
Company-subsidized relationships with key customers, suppliers, and service
providers as well as with key Company employees and that the Executive’s work
for the Company will give the Executive access to highly confidential
information not available to the public or competitors, including trade secrets
and confidential marketing, sales, product development and other data and
information which it would be impracticable for the Company to effectively
protect and preserve in the absence of this Section 5 and the disclosure or
misappropriation of which could materially adversely affect the Company.
Accordingly, the Executive agrees:
               5.1.1 except in the course of performing the Executive’s duties
provided for in Section 1.1, not at any time, whether before, during or after
the Executive’s employment with the Company, to divulge to any other entity or
person any confidential information acquired by the Executive concerning the
Company’s or its subsidiaries’ or affiliates’ financial affairs or business
processes or methods or their research, development or marketing programs or
plans, or any other of its or their trade secrets. The foregoing prohibitions
shall include, without limitation, directly or indirectly publishing (or
causing, participating in, assisting or providing any statement, opinion or
information in connection with the publication of) any diary, memoir, letter,
story, photograph, interview, article, essay, account or description (whether
fictionalized or not) concerning any of the foregoing, publication being deemed
to include any presentation or reproduction of any written, verbal or visual
material in any communication medium, including any book, magazine, newspaper,
theatrical production or movie, or television or radio programming or
commercial. In the event that the Executive is requested or required to make
disclosure of information subject to this Section 5.1.1 under any court order,
subpoena or other judicial process, then, except as prohibited by law, the
Executive will promptly notify the Company, take all reasonable steps requested
by the Company to defend against the compulsory disclosure and permit the
Company to control with counsel of its choice any proceeding relating to the
compulsory disclosure. The Executive acknowledges that all information, the
disclosure of which is prohibited by this section, is of a confidential and
proprietary character and of great value to the Company and its subsidiaries and
affiliates; and
               5.1.2 to deliver promptly to the Company on termination of the
Executive’s employment with the Company, or at any time that the Company may so
request, all confidential memoranda, notes, records, reports, manuals, drawings,
software, electronic/digital media records, blueprints and other documents (and
all copies thereof) relating to the Company’s (and its subsidiaries’ and
affiliates’) business and all property associated therewith, which the Executive
may then possess or have under the Executive’s control.
          5.2 Company Protections. In consideration of the Company’s entering
into this Agreement, the Executive agrees that at all times during the Term and
thereafter for twenty-four (24) months, in the event the Executive’s employment
is terminated pursuant to Section 4.3.2 hereof, or for twelve (12) months, in
the event the Executive’s employment terminates for any other reason, the

11

--------------------------------------------------------------------------------

 

Executive shall not, directly or indirectly, for Executive or on behalf of or in
conjunction with, any other person, company, partnership, corporation, business,
group, or other entity (each, a “Person”):
               5.2.1 Non-Competition: engage in any activity for or on behalf of
a Competitor, as director, employee, shareholder (excluding any such
shareholding by the Executive of no more than 5% of the shares of a
publicly-traded company), consultant or otherwise, which is the same as or
similar to activity in which Executive engaged at any time during the last two
(2) years of employment by the Company; or
               5.2.2 Non-Solicitation: (i) call upon any Person who is, at such
Termination Date, engaged in activity on behalf of the Company or any subsidiary
or affiliate of the Company for the purpose or with the intent of enticing such
Person to cease such activity on behalf of the Company or such subsidiary or
affiliate; or (ii) solicit, induce, or attempt to induce any customer of the
Company to cease doing business in whole or in part with or through the Company
or a subsidiary or affiliate, or to do business with any Competitor.
For purposes of this Agreement, “Competitor” means a person or entity who or
which is engaged in a material line of business conducted by the Company. For
purposes of this Agreement, “a material line of business conducted by the
Company” means an activity of the Company generating gross revenues to the
Company of more than twenty-five million dollars ($25,000,000) in the
immediately preceding fiscal year of the Company.
          5.3 Remedies and Injunctive Relief. If the Executive commits a breach
or threatens to breach any of the provisions of Section 5.1 or 5.2 hereof, the
Company shall have the right and remedy to have the provisions of this Agreement
specifically enforced by injunction or otherwise by any court having
jurisdiction, it being acknowledged and agreed that any such breach will cause
irreparable injury to the Company in addition to money damage and that money
damages alone will not provide a complete or adequate remedy to the Company, it
being further agreed that such right and remedy shall be in addition to, and not
in lieu of, any other rights and remedies available to the Company under law or
in equity.
          5.4 Severability. If any of the covenants contained in Sections 5.1,
5.2 or 5.3, or any part thereof, hereafter are construed to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to the invalid
portions.
          5.5 Extension of Term of Covenants Following Violation. The period
during which the prohibitions of Section 5.2 are in effect shall be extended by
any period or periods during which the Executive is in violation of Section 5.2.
          5.6 Blue Penciling by Court. If any of the covenants contained in
Sections 5.1 or 5.2, or any part thereof, are held to be unenforceable, the
parties agree that the court making such determination shall have the power to
revise or modify such provision to make it enforceable to the maximum extent
permitted by applicable law and, in its revised or modified form, said provision
shall then be enforceable.
          5.7 Blue Penciling by One Court Not to Affect Covenants in Another
State. The parties hereto intend to and hereby confer jurisdiction to enforce
the covenants contained in Sections 5.1, 5.2 and 5.3 upon the courts of any
state within the geographical scope of such covenants. In the event that the
courts of any one or more of such states shall hold such covenants wholly
unenforceable by reason of the breadth of such covenants or otherwise, it is the
intention of the parties’ hereto that such

12

--------------------------------------------------------------------------------

 

determination not bar or in any way affect the Company’s right to the relief
provided above in the courts of any other states within the geographical scope
of such covenants as to breaches of such covenants in such other respective
jurisdictions, the above covenants as they relate to each state being for this
purpose severable into diverse and independent covenants.
     6. Intellectual Property.
          6.1 Company’s Rights. Notwithstanding and without limiting the
provisions of Section 5, the Company shall be the sole owner of all the products
and proceeds of the Executive’s services hereunder, including, but not limited
to, all materials, ideas, concepts, formats, suggestions, developments,
arrangements, packages, programs and other intellectual properties that the
Executive may acquire, obtain, develop or create in connection with or during
the Term, free and clear of any claims by the Executive (or anyone claiming
under the Executive) of any kind or character whatsoever (other than the
Executive’s right to receive payments hereunder), the Executive shall, at the
request of the Company, execute such assignments, certificates or other
instruments as the Company may from time to time deem necessary or desirable to
evidence, establish, maintain, perfect, protect, enforce or defend its right,
title or interest in or to any such properties.
     7. Indemnification.
          7.1 General Rule. In addition to any rights to indemnification to
which the Executive is entitled under the Company’s charter and by-laws, to the
extent permitted by applicable law, the Company will indemnify, from the assets
of the Company supplemented by insurance in an amount determined by the Company,
the Executive at all times, during and after the Term, and, to the maximum
extent permitted by applicable law, shall pay the Executive’s expenses
(including reasonable attorneys’ fees and expenses, which shall be paid in
advance by the Company as incurred, subject to recoupment in accordance with
applicable law) in connection with any threatened or actual action, suit or
proceeding to which the Executive may be made a party, brought by any
shareholder of the Company directly or derivatively or by any third party by
reason of any act or omission or alleged act or omission in relation to any
affairs of the Company or any subsidiary or affiliate of the Company of the
Executive as an officer, director or employee of the Company or of any
subsidiary or affiliate of the Company. The Company shall use its best efforts
to maintain during the Term and thereafter insurance coverage sufficient in the
determination of the Company to satisfy any indemnification obligation of the
Company arising under this Section 7.
     8. Notices.
     All notices, requests, consents and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, one day after sent by overnight courier
or three days after mailed first class, postage prepaid, by registered or
certified mail, as follows (or to such other address as either party shall
designate by notice in writing to the other in accordance herewith):
If to the Company, to:
Foster Wheeler Ltd.
Perryville Corporate Park
Clinton, NJ 08809-4000
Attention: General Counsel

13

--------------------------------------------------------------------------------

 

     If to the Executive, to the Executive’s principal residence as reflected in
the records of the Company.
     9. General.
          9.1 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New Jersey applicable
to agreements made between residents thereof and to be performed entirely in New
Jersey.
          9.2 Headings. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
          9.3 Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.
          9.4 Non-exclusivity of Rights. Other than as expressly set forth in
this Agreement, nothing in this Agreement shall prevent or limit the Executive’s
continuing or future participation in any plan, program, policy or practice
provided by the Company or the Affiliated Companies and for which the Executive
may qualify, nor shall anything herein limit or otherwise affect such rights as
the Executive may have under any other contract or agreement with the Company or
the Affiliated Companies. For avoidance of doubt, it is agreed and understood
that this Agreement shall not supersede or otherwise adversely affect any stock
option, restricted stock or other form of equity grant or award provided to
Executive prior to the Effective Date, or any indemnification agreement
heretofore entered into between the Company and the Executive. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan, policy, practice or program of or any contract or agreement with the
Company or any of the Affiliated Companies at or subsequent to the Termination
Date shall be payable in accordance with such plan, policy, practice or program
or contract or agreement except as explicitly modified by this Agreement.
Notwithstanding the foregoing, if the Executive receives payments and benefits
pursuant to this Agreement in connection with the termination of the Executive’s
employment, the Executive shall not be entitled to any severance pay or benefits
under any severance plan, program or policy of the Company and the Affiliated
Companies, unless specifically provided therein in a specific reference to this
Agreement.
          9.5 Full Settlement. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. The Company agrees to pay as incurred (within ten days
following the Company’s receipt of an invoice from the Executive, which invoice
the Executive must submit to the Company not later than March 1 of the year
following the year in which the expenses were incurred), to the full extent
permitted by law, all legal fees and expenses which the Executive may reasonably
incur as a result of any contest (regardless of the outcome thereof) by the
Company, the Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in
Section 7872(f)(2)(A) of the Code.
          9.6 Assignability. This Agreement, and the Executive’s rights and
obligations hereunder, may not be assigned by the Executive, nor may the
Executive pledge, encumber or

14

--------------------------------------------------------------------------------

 

anticipate any payments or benefits due hereunder, by operation of law or
otherwise. The Company may assign its rights, together with its obligations,
hereunder (i) to any affiliate or (ii) to a third party in connection with any
sale, transfer or other disposition of all or substantially all of any business
to which the Executive’s services are then principally devoted, provided that no
assignment pursuant to this Section 9.6 shall relieve the Company from its
obligations hereunder to the extent the same are not timely discharged by such
assignee.
          9.7 Assumption of Agreement by Successor. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place.
          9.8 Survival. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement or the Term to the
extent necessary to the intended preservation of such rights and obligations.
          9.9 Amendment. This Agreement may be amended, modified, superseded,
canceled, renewed or extended and the terms or covenants hereof may be waived,
only by a written instrument executed by both of the parties hereto, or in the
case of a waiver, by the party waiving compliance. The failure of either party
at any time or times to require performance of any provision hereof shall in no
manner affect the right at a later time to enforce the same. No waiver by either
party of the breach of any term or covenant contained in this Agreement, whether
by conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
          9.10 Counterparts. This Agreement 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.
          9.11 Acknowledgement of Ability to Have Counsel Review. The parties
acknowledge that this Agreement is the result of arm’s-length negotiations
between sophisticated parties each afforded the opportunity to utilize
representation by legal counsel. Each and every provision of this Agreement
shall be construed as though both parties participated equally in the drafting
of same, and any rule of construction that a document shall be construed against
the drafting party shall not be applicable to this Agreement.
     10. Dispute Resolution.
     Subject to the rights of the Company pursuant to Section 5.3 above, any
controversy, claim or dispute arising out of or relating to this Agreement, the
breach thereof, or the Executive’s employment by the Company shall be settled by
arbitration with three arbitrators. The arbitration will be administered by the
American Arbitration Association in accordance with its National Rules for
Resolution of Employment Disputes. The arbitration proceeding shall be
confidential, and judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction. Any such arbitration shall take place
in the Clinton, New Jersey area, or in any other mutually agreeable location. In
the event any judicial action is necessary to enforce the arbitration provisions
of this Agreement, sole jurisdiction shall be in the federal and state courts,
as applicable, located in New Jersey. Any request for interim injunctive relief
or other provisional remedies or opposition thereto shall not be deemed to be a
waiver or the right or obligation to arbitrate hereunder. The arbitrator shall
have the discretion to award reasonable attorneys’ fees, costs and expenses to
the prevailing party. To the extent a party prevails in any dispute

15

--------------------------------------------------------------------------------

 

arising out of this Agreement or any of its terms and provisions, all reasonable
costs, fees and expenses relating to such dispute, including the parties’
reasonable legal fees, shall be borne by the party not prevailing in the
resolution of such dispute, but only to the extent that the arbitrator or court,
as the case may be, deems reasonable and appropriate given the merits of the
claims and defenses asserted.
     11. Free to Contract.
     The Executive represents and warrants to the Company that Executive is able
freely to accept engagement and employment by the Company as described in this
Agreement and that there are no existing agreements, arrangements or
understandings, written or oral, that would prevent Executive from entering into
this Agreement, would prevent Executive or restrict Executive in any way from
rendering services to the Company as provided herein during the Term or would be
breached by the future performance by the Executive of Executive’s duties
hereunder. The Executive also represents and warrants that no fee, charge or
expense of any sort is due from the Company to any third person engaged by the
Executive in connection with Executive’s employment by the Company hereunder,
except as disclosed in this Agreement.
     12. Subsidiaries and Affiliates.
     As used herein, the term “subsidiary” shall mean any corporation or other
business entity controlled directly or indirectly by the Company or other
business entity in question, and the term “affiliate” shall mean and include any
corporation or other business entity directly or indirectly controlling,
controlled by or under common control with the Company or other business entity
in question.
     13. Code Section 409A Legal Requirement.
     Notwithstanding anything to the contrary in this Agreement, if the
Executive constitutes a “specified employee” as defined and applied in
Section 409A of the Code as of his Termination Date, to the extent any payment
under this Agreement constitutes deferred compensation (after taking into
account any applicable exemptions from Section 409A of the Code), and to the
extent required by Section 409A of the Code, no payments due under this
Agreement may be made until the earlier of: (i) the first day following the
sixth month anniversary of Executive’s Termination Date, or (ii) the Executive’s
date of death; provided, however, that any payments delayed during this
six-month period shall be paid in the aggregate in a lump sum as soon as
administratively practicable following the sixth month anniversary of the
Executive’s Termination Date. For purposes of Section 409A of the Code, each
“payment” (as defined by Section 409A of the Code) made under this Agreement
shall be considered a “separate payment.” In addition, for purposes of
Section 409A of the Code, the payments described in Sections 4.2.2 and 4.3.2
shall be deemed exempt from Section 409A of the Code to the full extent possible
under any available exemptions, including without limit, the “short-term
deferral” exemption of Treasury Regulation § 1.409A-1(b)(4) and (with respect to
amounts paid no later than the second calendar year following the calendar year
containing the Executive’s Termination Date) the “two-years/two-times”
separation pay exemption of Treasury Regulation § 1.409A-1(b)(9)(iii), which are
all hereby incorporated by reference.
[SIGNATURES FOLLOW]

16

--------------------------------------------------------------------------------

 

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

                  FOSTER WHEELER LTD.    
 
           
 
  By:   /s/ Raymond J. Milchovich    
 
           
 
  Name:   Raymond J. Milchovich    
 
  Title:   Chairman and Chief Executive Officer    

                  /s/ Lisa Z. Wood       Lisa Z. Wood           

17