Exhibit 10.3
This document constitutes part
of a prospectus covering
securities that have been
registered under the Securities
Act of 1933.
Foster Wheeler AG Omnibus Incentive Plan
Restated Effective as of February 9, 2009
(Incorporating the First, Second, and Third Amendments)

 

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

 

Contents

         
Article 1. Establishment, Purpose, and Duration
    1  
 
       
Article 2. Definitions
    1  
 
       
Article 3. Administration
    8  
 
       
Article 4. Shares Subject to This Plan and Maximum Awards
    9  
 
       
Article 5. Eligibility and Participation
    10  
 
       
Article 6. Stock Options
    11  
 
       
Article 7. Stock Appreciation Rights
    13  
 
       
Article 8. Restricted Stock and Restricted Stock Units
    16  
 
       
Article 9. Performance Units/Performance Shares
    18  
 
       
Article 10. Cash-Based Awards and Other Stock-Based Awards
    20  
 
       
Article 11. Forfeiture of Awards
    22  
 
       
Article 12. Transferability of Awards
    23  
 
       
Article 13. Performance Measures
    23  
 
       
Article 14. Director Awards
    25  
 
       
Article 15. Dividend Equivalents
    25  
 
       
Article 16. Beneficiary Designation
    25  
 
       
Article 17. Rights of Participants
    25  
 
       
Article 18. Change in Control
    26  
 
       
Article 19. Amendment, Modification, Suspension, and Termination
    27  
 
       
Article 20. Withholding
    27  
 
       
Article 21. Successors
    28  
 
       
Article 22. General Provisions
    28  

i

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

 

Foster Wheeler Ltd.
Omnibus Incentive Plan
Article 1. Establishment, Purpose, and Duration
     1.1 Establishment. Foster Wheeler Ltd., a Bermuda company, established an
incentive compensation plan known as the Foster Wheeler Ltd. Omnibus Incentive
Plan (the “Plan”). The Plan superseded and replaced the Foster Wheeler Inc. 1995
Stock Option Plan, the Directors Stock Option Plan, the 2004 Stock Option Plan,
and the Management Restricted Stock Plan (the “Prior Plans”), except that the
Prior Plans shall remain in effect until the awards granted under such plans
have been exercised, forfeited, are otherwise terminated, or any and all
restrictions lapse, as the case may be, in accordance with the terms of such
awards. On February 9, 2009, Foster Wheeler AG became the ultimate parent
company of Foster Wheeler Ltd. and its subsidiaries as a result of a
redomestication effected pursuant to a scheme of arrangement under Bermuda law
(the “Redomestication”), as described in Foster Wheeler Ltd.’s proxy statement
dated December 19, 2008. In the Redomestication, all of the
previously-outstanding common shares of Foster Wheeler Ltd. were cancelled and
each holder of cancelled Foster Wheeler Ltd. common shares received registered
shares of Foster Wheeler AG (or cash in lieu of any fractional shares).
Effective upon the completion of the Redomestication, Foster Wheeler AG, a Swiss
company (hereinafter referred to as the “Company”) assumed the Plan, renamed it
the “Foster Wheeler AG Omnibus Incentive Plan,” and made certain amendments to
the Plan. This restated Plan incorporates three amendments, each of which was
approved by Foster Wheeler Ltd.’s and/or the Company’s Board of Directors and/or
Compensation Committee, as appropriate; it is effective as of February 9, 2009.
     This Plan permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units, Cash-Based Awards, and Other Stock-Based
Awards.
     This Plan shall become effective upon shareholder approval (the “Effective
Date”) and shall remain in effect as provided in Section 1.3 hereof.
     1.2 Purpose of this Plan. The purpose of this Plan is to provide a means
whereby designated Employees, Directors, and Third-Party Service Providers
develop a sense of proprietorship and personal involvement in the development
and financial success of the Company, and to encourage them to devote their best
efforts to the business of the Company, thereby advancing the interests of the
Company and its shareholders. A further purpose of this Plan is to provide a
means through which the Company may attract able individuals to become Employees
or serve as Directors or Third-Party Service Providers and to provide a means
whereby those individuals upon whom the responsibilities of the successful
administration and management of the Company are of importance, can acquire and
maintain ownership of Shares, thereby strengthening their concern for the
welfare of the Company.
     1.3 Duration of this Plan. Unless sooner terminated as provided herein,
this Plan shall terminate ten (10) years from the Effective Date, e.g. on the
day before the tenth (10th) anniversary of the Effective Date. After this Plan
is terminated, no Awards may be granted but Awards previously granted shall
remain outstanding in accordance with their applicable terms and conditions and
this Plan’s terms and conditions. Notwithstanding the foregoing, no Incentive
Stock Options may be granted more than ten (10) years after the earlier of:
(a) adoption of this Plan by the Board, or (b) the Effective Date.
Article 2. Definitions
     Whenever used in this Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:

  (a)   “Affiliate” shall mean any corporation or other entity (including, but
not limited to, a partnership or a limited liability company) that is affiliated
with the Company through stock or equity ownership or otherwise, and is
designated as an Affiliate for purposes of this Plan by the Committee.     (b)  
“Annual Award Limit” or “Annual Award Limits” have the meaning set forth in
Section 4.3.

 

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

 

  (c)   “Applicable Laws” means the legal requirements relating to the
administration of equity plans or the issuance of share capital by a company,
including under the laws of Switzerland, applicable U.S. state corporate laws,
U.S. federal and applicable state securities laws, other U.S. federal and state
laws, the Code, any stock exchange rules and regulations that may from time to
time be applicable to the Company, and the applicable laws, rules and
regulations of any other country or jurisdiction where Awards are granted under
the Plan, as such laws, rules, regulations, interpretations and requirements may
be in place from time to time.     (d)   “Award” means, individually or
collectively, a grant under this Plan of Nonqualified Stock Options, Incentive
Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock
Units, Performance Shares, Performance Units, Cash-Based Awards, or Other
Stock-Based Awards, in each case subject to the terms of this Plan.     (e)  
“Award Agreement” means either: (i) a written agreement entered into by the
Company and a Participant setting forth the terms and provisions applicable to
an Award granted under this Plan, or (ii) a written or electronic statement
issued by the Company to a Participant describing the terms and provisions of
such Award, including in each case any amendment or modification thereof. The
Committee may provide for the use of electronic, Internet, or other non-paper
Award Agreements, and the use of electronic, Internet, or other non-paper means
for the acceptance thereof and actions thereunder by a Participant.     (f)  
“Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to
such term in Rule 13d-3 of the General Rules and Regulations under the Exchange
Act.     (g)   “Board” or “Board of Directors” means the Board of Directors of
the Company.     (h)   “Cash-Based Award” means an Award, denominated in cash,
granted to a Participant as described in Article 10.     (i)   “Cause” means,
with respect to any Participant, unless otherwise specified in (a) an applicable
employment or other written agreement between the Company and a Participant or
(b) an applicable employment or other written agreement between an Affiliate or
a Subsidiary (which Affiliate or Subsidiary is incorporated in the United States
or Bermuda) and a Participant which has been approved by the Board or Committee
or executed by the person who is the Chief Executive Officer of the Company:

  (i)   Conviction of a felony;     (ii)   Actual or attempted theft or
embezzlement of Company, any Subsidiary, or any Affiliate assets;     (iii)  
Use of illegal drugs;     (iv)   Material breach of an employment agreement
between the Company, Affiliate or Subsidiary, as the case may be, and the
Participant that the Participant has not cured within thirty (30) days after the
Company, Affiliate or Subsidiary, as applicable, has provided the Participant
notice of the material breach which shall be given within sixty (60) days of the
Company’s, Affiliate’s or Subsidiary’s, as applicable, knowledge of the
occurrence of the material breach;     (v)   Commission of an act of moral
turpitude that in the judgment of the Committee can reasonably be expected to
have an adverse effect on the business, reputation, or financial situation of
the Company, any Subsidiary, or any Affiliate and/or the ability of the
Participant to perform his or her duties;

2

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

 

  (vi)   Gross negligence or willful misconduct in performance of the
Participant’s duties;     (vii)   Breach of fiduciary duty to the Company, any
Subsidiary, or any Affiliate; or     (viii)   Willful refusal to perform the
duties of the Participant’s titled position.

  (j)   “Change in Control” means, unless otherwise specified in (a) an
applicable employment or other written agreement between the Company and a
Participant or (b) an applicable employment or other written agreement between
an Affiliate or a Subsidiary (which Affiliate or Subsidiary is incorporated in
the United States or Bermuda) and a Participant which has been approved by the
Board or Committee or executed by the person who is the Chief Executive Officer
of the Company,

  (i)   The acquisition by any individual, entity, or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of Beneficial
Ownership of voting securities of the Company where such acquisition causes such
Person to own twenty percent (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 paragraph (i), the following
acquisitions shall not be deemed to result in a Change in Control: (A) any
acquisition directly from the Company or any corporation or other legal entity
controlled, directly or indirectly, by the Company, (B) any acquisition by the
Company or any corporation or other legal entity controlled, directly or
indirectly, by the Company, (C) 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 (D)
any acquisition by any corporation pursuant to a transaction that complies with
clauses (A), (B), and (C) of paragraph (iii) below; and provided, further, that
if any Person’s Beneficial Ownership of the Outstanding Company Voting
Securities reaches or exceeds twenty percent (20%) as a result of a transaction
described in clause (A) or (B) 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 twenty percent (20%) or more of the Outstanding Company Voting
Securities;     (ii)   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;     (iii)   The consummation of a reorganization, merger, amalgamation 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 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
(A) 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
sixty percent (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

3

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

 

      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, (B) no Person (excluding any (x) corporation owned, directly or
indirectly, by the Beneficial Owner of the Outstanding Company Voting Securities
as described in clause (A) immediately preceding, or (y) 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, twenty percent (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 (C) 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

  (iv)   Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.

  (k)   “Change-in-Control Price” means the closing price of a Share on the last
trading day before the Change in Control occurs.     (l)   “Code” means the U.S.
Internal Revenue Code of 1986, as amended from time to time. For purposes of
this Plan, references to sections of the Code shall be deemed to include
references to any applicable regulations thereunder and any successor or similar
provision, as well as any applicable interpretative guidance issued related
thereto.     (m)   “Committee” means the Compensation Committee of the Board or
a subcommittee thereof, or any other committee designated by the Board to
administer this Plan. The members of the Committee shall be appointed from time
to time by and shall serve at the discretion of the Board. If the Committee does
not exist or cannot function for any reason, the Board may take any action under
the Plan that would otherwise be the responsibility of the Committee.     (n)  
“Company” means Foster Wheeler AG, a Swiss company, and any successor thereto as
provided in Article 21 herein.     (o)   “Covered Employee” means any key
Employee who is or may become a “Covered Employee,” as defined in Code
Section 162(m), and who is designated, either as an individual Employee or class
of Employees, by the Committee within the shorter of: (i) ninety (90) days after
the beginning of the Performance Period, or (ii) twenty-five percent (25%) of
the Performance Period has elapsed, as a “Covered Employee” under this Plan for
such applicable Performance Period.     (p)   “Director” means any individual
who is a member of the Board of Directors of the Company and who is not an
Employee.     (q)   “Disability” means, unless otherwise specified in (a) an
applicable employment or other written agreement between the Company and a
Participant or (b) an applicable employment or other written agreement between
an Affiliate or a Subsidiary (which Affiliate or Subsidiary is incorporated in
the United States or Bermuda) and a Participant which has been approved by the
Board or Committee or executed by the person who is the Chief Executive Officer
of the Company, (i) in the case of an Employee, the Employee qualifying for
long-term disability benefits under any long-term disability program sponsored
by the Company, Affiliate or Subsidiary in which the Employee participates, and
(ii) in the case of a Director or Third-Party Service Provider, the inability of
the Director or Third-Party Service Provider to engage in any

4

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

 

      substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death, or which
has lasted or can be expected to last for a continuous period of not less than
12 months, as determined by the Committee, based upon medical evidence and in
accordance with Code Section 22(e)(3).

  (r)   “Effective Date” has the meaning set forth in Section 1.1.     (s)  
“Employee” means any individual who performs services for and is designated as
an employee of the Company, its Affiliates, and/or its Subsidiaries on the
payroll records thereof. An Employee shall not include any individual during any
period he or she is classified or treated by the Company, Affiliate, and/or
Subsidiary as an independent contractor, a consultant, or any employee of an
employment, consulting, or temporary agency or any other entity other than the
Company, Affiliate, and/or Subsidiary, without regard to whether such individual
is subsequently determined to have been, or is subsequently retroactively
reclassified as a common-law employee of the Company, Affiliate, and/or
Subsidiary during such period.     (t)   “Exchange Act” means the Securities
Exchange Act of 1934, as amended from time to time, or any successor act
thereto.     (u)   “Fair Market Value” or “FMV” means the closing price of a
Share on the most recent date on which Shares were publicly traded. In the event
Shares are not publicly traded at the time a determination of their value is
required to be made hereunder, the determination of their Fair Market Value
shall be made by the Committee in such manner as it deems appropriate.     (v)  
“Full-Value Award” means an Award other than in the form of an ISO, NQSO, or
SAR, and which is settled by the issuance of fully paid Shares. A Full-Value
Award shall require the Participant to pay at least the par value for each Share
issued out of the Company’s conditional capital. The Company reserves the right
to arrange for payment to be made on the Participant’s behalf as part of an
Award or otherwise.     (w)   “Grant Date” means the date on which the Committee
approves the grant of an Award by Committee action or such later date as
specified in advance by the Committee.     (x)   “Grant Price” means the price
established when the Committee approves the grant of an SAR pursuant to
Article 7, used to determine whether there is any payment due upon exercise of
the SAR. The Grant Price of any SAR will be at least the greater of the Fair
Market Value of a Share or the par value of a Share.     (y)   “Incentive Stock
Option” or “ISO” means an Option to purchase Shares granted under Article 6 to
an Employee and that is designated as an Incentive Stock Option and that is
intended to meet the requirements of Code Section 422, or any successor
provision.     (z)   “Insider” means an individual who is, on the relevant date,
an officer or Director of the Company, or a more than ten percent (10%)
Beneficial Owner of any class of the Company’s equity securities that is
registered pursuant to Section 12 of the Exchange Act, as determined by the
Board or Committee in accordance with Section 16 of the Exchange Act.     (aa)  
“Involuntary Termination” means the Company’s, Affiliate’s and/or Subsidiary’s
termination of a Participant’s employment or service other than for Cause.    
(bb)   “Nonqualified Stock Option” or “NQSO” means an Option that is not
intended to meet the requirements of Code Section 422, or that otherwise does
not meet such requirements.     (cc)   “Non-Tandem SAR” means an SAR that is
granted independently of any Option, as described in Article 7.

5

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

 

  (dd)   “Option” means an Incentive Stock Option or a Nonqualified
Stock Option, as described in Article 6.     (ee)   “Option Price” means the
price at which a Share may be purchased by a Participant pursuant to an Option.
The Option Price will be at least the greater of the Fair Market Value of a
Share or par value of a Share.     (ff)   “Other Stock-Based Award” means an
equity-based or equity-related Award not otherwise described by the terms of
this Plan, granted pursuant to Article 10.     (gg)   “Participant” means any
eligible individual as set forth in Article 5 to whom an Award is granted.    
(hh)   “Performance-Based Compensation” means compensation under an Award that
is intended to satisfy the requirements of Code Section 162(m) for certain
performance-based compensation paid to Covered Employees. Notwithstanding the
foregoing, nothing in this Plan shall be construed to mean that an Award which
does not satisfy the requirements for performance-based compensation under Code
Section 162(m) does not constitute performance-based compensation for other
purposes, including Code Section 409A.     (ii)   “Performance-Based Exception”
means the exception for Performance-Based Compensation from the tax
deductibility limitations of Code Section 162(m).     (jj)   “Performance
Measures” means measures as described in Article 13 on which the performance
goals are based and which are approved by the Company’s shareholders pursuant to
this Plan in order to qualify Awards as Performance-Based Compensation.     (kk)
  “Performance Period” means the period of time during which the performance
goals must be met in order to determine the degree of payout and/or vesting with
respect to an Award.     (ll)   “Performance Share” means an Award under
Article 9 herein and subject to the terms of this Plan, denominated in fully
paid Shares, the value of which at the time it is payable is determined as a
function of the extent to which corresponding performance criteria or
Performance Measure(s), as applicable, have been achieved.     (mm)  
“Performance Unit” means an Award under Article 9 herein and subject to the
terms of this Plan, denominated in units, the value of which at the time it is
payable is determined as a function of the extent to which corresponding
performance criteria or Performance Measure(s), as applicable, have been
achieved.     (nn)   “Period of Restriction” means the period when Restricted
Stock or Restricted Stock Units are subject to a substantial risk of forfeiture
(based on the passage of time, the achievement of performance goals, or the
occurrence of other events as determined by the Committee, in its discretion) by
the exercise of the Company’s right to repurchase such Restricted Stock or
Restricted Stock Units, as provided in Article 8.     (oo)   “Person” shall have
the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and
used in Sections 13(d) and 14(d) thereof, including a “group” as defined in
Section 13(d) thereof.     (pp)   “Plan” means the Foster Wheeler AG Omnibus
Incentive Plan.     (qq)   “Plan Year” means the Company’s fiscal year.

6

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

 

  (rr)   “Prior Plans” mean, collectively: (i) the Foster Wheeler Inc. 1995
Stock Option Plan; (ii) the Directors Stock Option Plan; (iii) the 2004 Stock
Option Plan; and (iv) the Management Restricted Stock Plan.     (ss)  
“Restricted Stock” means an Award granted to a Participant pursuant to Article
8.     (tt)   “Resignation for Good Reason” means, unless otherwise specified in
(x) an applicable employment or other written agreement between the Company and
a Participant or (y) an applicable employment or other written agreement between
an Affiliate or a Subsidiary (which Affiliate or Subsidiary is incorporated in
the United States or Bermuda) and a Participant which has been approved by the
Board or Committee or executed by the person who is the Chief Executive Officer
of the Company, a material negative change in the employment relationship
without the Participant’s consent; provided (a) the Participant notifies the
Company of the material negative change within ninety (90) days of the
occurrence of such change, (b) the material negative change is not cured by the
Company within thirty (30) days after receiving notice from the Participant, and
(c) the material negative change is evidenced by any of the following:

  (i)   material diminution in title, duties, responsibilities or authority;    
(ii)   reduction of base salary and benefits except for across-the-board changes
for Employees at the Participant’s level;     (iii)   exclusion from executive
benefit/compensation plans;     (iv)   relocation of the Participant’s principal
business location by the Participant’s employer (the Company, Affiliate, or
Subsidiary, as the case may be) of greater than fifty (50) miles;     (v)  
material breach of the Participant’s employment agreement with the Company,
Affiliate or Subsidiary, as the case may be; or     (vi)   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 Participant.

  (uu)   “Restricted Stock Unit” means an Award granted to a Participant
pursuant to Article 8, except no Shares are actually awarded to the Participant
on the Grant Date.     (vv)   “Retirement” means termination of employment by
the Participant after the Participant has attained age 65.     (ww)   “Share”
means a registered share of the Company, par value CHF 3.00 each, or such other
par value as may be in effect from time to time. Effective upon the completion
of the Redomestication, registered shares of the Company will be issued, held,
made available, or used to measure benefits as appropriate under the Plan in
lieu of Foster Wheeler Ltd. common shares with respect to all outstanding Awards
issued prior to or after the completion of the Redomestication.     (xx)  
“Stock Appreciation Right” or “SAR” means an Award, designated as an SAR,
pursuant to the terms of Article 7 herein.     (yy)   “Subsidiary” means any
corporation or other entity, whether domestic or foreign, in which the Company
has or obtains, directly or indirectly, a proprietary interest of more than
fifty percent (50%) by reason of stock ownership or otherwise.

7

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

 

  (zz)   “Tandem SAR” means an SAR that is granted in connection with a related
Option pursuant to Article 7, the exercise of which shall require forfeiture of
the right to purchase a Share under the related Option (and when a Share is
purchased under the Option, the Tandem SAR shall similarly be forfeited).    
(aaa)   “Third-Party Service Provider” means any consultant, agent, advisor, or
independent contractor who renders services to the Company, any Subsidiary, or
an Affiliate that: (i) are not in connection with the offer or sale of the
Company’s securities in a capital raising transaction; and (ii) do not directly
or indirectly promote or maintain a market for the Company’s securities.

Article 3. Administration
     3.1 General. The Committee shall be responsible for administering this
Plan, subject to this Article 3 and the other provisions of this Plan. The
Committee shall consist of not less than two (2) Directors who are both
non-employee directors, within the meaning of Rule 16b-3 of the Exchange Act,
and “outside directors,” as defined in Treasury Regulation Section 1.162-27;
provided, however, that if at any time any member of the Committee is not an
outside director, as so defined, the Committee may establish a subcommittee,
consisting of all members who are outside directors, for all purposes of any
Award to a Covered Employee, unless the Committee determines that such an Award
is not intended to qualify for the Performance-Based Exception. The Committee
may employ attorneys, consultants, accountants, agents, and other individuals,
any of whom may be an Employee, and the Committee, the Company, and its officers
and Directors shall be entitled to rely upon the advice, opinions, or valuations
of any such individuals. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the
Participants, the Company, and all other interested individuals.
     3.2 Authority of the Committee. The Committee shall have full and exclusive
discretionary power to interpret the terms and the intent of this Plan and any
Award Agreement or other agreement or document ancillary to or in connection
with this Plan, to determine eligibility for Awards and to adopt such rules,
regulations, forms, instruments, and guidelines for administering this Plan as
the Committee may deem necessary or proper. Such authority shall include, but
not be limited to, selecting Award recipients, establishing all Award terms and
conditions (including the terms and conditions set forth in Award Agreements),
granting Awards as an alternative to or as the form of payment for grants or
rights earned or due under compensation plans or arrangements of the Company,
construing any provision of the Plan or any Award Agreement, and, subject to
Article 19, adopting modifications and amendments to this Plan or any Award
Agreement, including without limitation, accelerating the vesting of any Award
or extending the post-termination exercise period of an Award (subject to the
limitations of Code Section 409A), and any other modifications or amendments
that are necessary to comply with the laws of the countries and other
jurisdictions in which the Company, its Affiliates, and/or its Subsidiaries
operate.
     Notwithstanding the foregoing, members of the Board or the Committee who
are either eligible for Awards or have been granted Awards may vote on any and
all matters, including matters affecting the administration of the Plan or the
grant of Awards pursuant to the Plan. However, no such member shall act upon the
granting of a specific Award to himself or herself, but any such member may be
counted in determining the existence of a quorum at any meeting of the Board or
the Committee during which action is taken with respect to the granting of an
Award to him or her.
     3.3 Delegation. The Committee may delegate to one or more of its members or
to one or more officers of the Company, and/or its Subsidiaries and Affiliates
or to one or more agents or advisors such administrative duties or powers as it
may deem advisable, and the Committee or any individuals to whom it has
delegated duties or powers as aforesaid may employ one or more individuals to
render advice with respect to any responsibility the Committee or such
individuals may have under this Plan. The Committee may, by resolution,
authorize one or more officers of the Company to do one or both of the following
on the same basis as can the Committee: (a) designate Employees to be recipients
of Awards; (b) determine the size of any such Awards; provided, however, (i) the
Committee shall not delegate such responsibilities to any such officer for
Awards granted to an Employee who is considered an Insider; (ii) the resolution
providing such authorization sets forth the total number of Awards such
officer(s) may grant; and (iii) the officer(s) shall report periodically to the
Committee regarding the nature and scope of the Awards granted pursuant to the
authority delegated.

8

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

 

Article 4. Shares Subject to This Plan and Maximum Awards
     4.1 Number of Shares Available for Awards

  (a)   Subject to adjustment as provided in Section 4.4 herein, the maximum
number of Shares available for grant to Participants under this Plan (the “Share
Authorization”) shall be:

  (i)   Eight million one hundred sixty thousand (8,160,000) Shares; plus    
(ii)   (A) the number of Shares (not to exceed 1,400,000) which remained
available for grant under the Company’s Prior Plans as of the Effective Date;
and (B) the number of Shares (not to exceed 10,000,000) subject to outstanding
awards as of the Effective Date under the Prior Plans that on or after the
Effective Date cease for any reason to be subject to such awards (other than by
reason of exercise or settlement of the awards to the extent they are exercised
for or settled in vested and nonforfeitable Shares).

  (b)   All Shares of the Share Authorization may be granted as Full-Value
Awards.     (c)   The maximum number of Shares of the Share Authorization that
may be issued pursuant to ISOs under this Plan shall be nine million five
hundred sixty thousand (9,560,000) Shares.     (d)   The maximum number of
Shares of the Share Authorization that may be granted to Directors shall be
1,000,000 Shares.

     4.2 Share Usage. Shares covered by an Award shall only be counted as used
to the extent they are actually issued. Any Shares related to Awards which
terminate by expiration, forfeiture, cancellation, or otherwise without the
issuance of such Shares, are settled in cash in lieu of Shares, or are exchanged
with the Committee’s permission, prior to the issuance of Shares, for Awards not
involving Shares, shall be available again for grant under this Plan. Moreover,
if the Option Price of any Option granted under this Plan is satisfied by
tendering Shares to the Company (by either actual delivery or by attestation and
subject to Section 6.6), or if an SAR is exercised, only the number of Shares
issued, net of the Shares tendered, if any, will be delivered for purposes of
determining the maximum number of Shares available for delivery under this Plan.
The Company will issue new Shares either based on the Company’s conditional or
authorized capital or it may, in its full discretion, deliver treasury shares,
shares available on the open market, or otherwise existing Shares.
     4.3 Annual Award Limits. Unless and until the Committee determines that an
Award to a Covered Employee shall not be designed to qualify as
Performance-Based Compensation, the following limits (each an “Annual Award
Limit” and, collectively, “Annual Award Limits”) shall apply to grants of such
Awards under this Plan:

  (a)   Options. The maximum aggregate number of Shares subject to Options
granted in any one Plan Year to any one Participant shall be 1,000,000, as
adjusted pursuant to Sections 4.4 and/or 19.2.     (b)   SARs. The maximum
number of Shares subject to Stock Appreciation Rights granted in any one Plan
Year to any one Participant shall be 1,000,000, as adjusted pursuant to
Sections 4.4 and/or 19.2.     (c)   Restricted Stock Units or Restricted Stock.
The maximum aggregate grant with respect to Awards of Restricted Stock Units or
Restricted Stock that a Participant may receive in any one Plan Year shall be
600,000 Shares, as adjusted pursuant to Sections 4.4 and/or 19.2, or equal to
the value of 600,000 Shares, as adjusted pursuant to Sections 4.4 and/or 19.2.  
  (d)   Performance Units or Performance Shares. The maximum aggregate Award of
Performance Units or Performance Shares that a Participant may receive in any
one Plan Year shall be 600,000 Shares, as adjusted pursuant to Sections 4.4
and/or 19.2, or equal to the value of 600,000 Shares,

9

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

 

      as adjusted pursuant to Sections 4.4 and/or 19.2, determined as of the
date of vesting or payout, as applicable.     (e)   Cash-Based Awards. The
maximum aggregate amount awarded or credited with respect to Cash-Based Awards
to any one Participant in any one Plan Year may not exceed the greater of the
value of $5,000,000 or 600,000 Shares, as adjusted pursuant to Sections 4.4
and/or 19.2, determined as of the date of vesting or payout, as applicable.    
(f)   Other Stock-Based Awards. The maximum aggregate grant with respect to
Other Stock-Based Awards pursuant to Section 10.2 in any one Plan Year to any
one Participant shall be 600,000 Shares, as adjusted pursuant to Sections 4.4
and/or 19.2.

     4.4 Adjustments in Authorized Shares. In the event of any corporate event
or transaction (including, but not limited to, a change in the authorized number
of Shares of the Company or the capitalization of the Company) such as an
amalgamation, a merger, consolidation, reorganization, recapitalization,
separation, partial or complete liquidation, stock dividend, stock split,
reverse stock split, split up, spin-off, division, consolidation or other
distribution of stock or property of the Company, combination of Shares,
exchange of Shares, dividend in kind, or other like change in capital structure,
number of issued Shares or distribution (other than normal cash dividends) to
shareholders of the Company, or any similar corporate event or transaction, the
Committee, in its sole discretion, in order to prevent dilution or enlargement
of Participants’ rights under this Plan, shall substitute or adjust, as
applicable, the number and kind of Shares that may be issued under this Plan or
under particular forms of Awards, the number and kind of Shares subject to
outstanding Awards, the Option Price or Grant Price applicable to outstanding
Awards, the Annual Award Limits, and other value determinations applicable to
outstanding Awards.
     The Committee, in its sole discretion, may also make appropriate
adjustments in the terms of any Awards under this Plan to reflect, or related
to, such changes or distributions and to modify any other terms of outstanding
Awards, including modifications of performance goals and changes in the length
of Performance Periods. The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on Participants under this
Plan.
     Subject to the provisions of Article 19 and notwithstanding anything else
herein to the contrary, without affecting the number of Shares reserved or
available hereunder, the Committee may authorize the issuance or assumption of
benefits under this Plan in connection with any amalgamation, merger,
consolidation, acquisition of property or stock, or reorganization upon such
terms and conditions as it may deem appropriate (including, but not limited to,
a conversion of equity awards into Awards under this Plan in a manner consistent
with paragraph 53 of FASB Interpretation No. 44 or subsequent accounting
guidance), subject to compliance with the rules under Code Sections 422 and 424,
as and where applicable. The Committee shall provide to Participants reasonable
written notice (which may include, without limit, notice by electronic means)
within a reasonable time of any such determinations it makes.
Article 5. Eligibility and Participation
     5.1 Eligibility. Individuals eligible to participate in this Plan include
all Employees, Directors, and Third-Party Service Providers.
     5.2 Actual Participation. Subject to the provisions of this Plan, the
Committee may, from time to time, select from all eligible individuals, those
individuals to whom Awards shall be granted and shall determine, in its sole
discretion, the nature of, any and all terms permissible by law, and the amount
of each Award.
     5.3 Leaves of Absence. Notwithstanding any other provision of the Plan to
the contrary, for purposes of determining Awards granted hereunder, a
Participant shall not be deemed to have incurred a termination of employment if
such Participant is placed on military or sick leave or such other leave of
absence which is considered as continuing intact the employment relationship
with the Company, any Subsidiary, or any Affiliate. In such a case, the
employment relationship shall be deemed to continue until the date when a
Participant’s right to reemployment shall no longer be guaranteed either by law
or contract.

10

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

 

     5.4 Transfer of Service. Notwithstanding any other provision of the Plan to
the contrary, for purposes of determining Awards granted hereunder, a
Participant shall not be deemed to have incurred a termination of employment if
the Participant’s status as an Employee, Director, or Third-Party Service
Provider terminates and the Participant is then, or immediately thereafter
becomes, an eligible individual due to another status or relationship with the
Company, any Subsidiary, or any Affiliate.
     5.5 Termination of Employment. For purposes of Awards granted under this
Plan, the Committee shall have discretion to determine whether a Participant has
ceased to be employed by (or, in the case of a Director or Third Party Service
Provider, has ceased providing services to) the Company, Affiliate and/or any
Subsidiary, and the effective date on which such employment (or services)
terminated, or whether any Participant is on an authorized leave of absence. The
Committee further shall have the discretion to determine whether any corporate
event or transaction that results in the sale, spinoff or transfer of a
Subsidiary, business group, operating unit, division, or similar organization
constitutes a termination of employment (or services), and, if so, the effective
date of such termination, for purposes of Awards granted under this Plan.
Article 6. Stock Options
     6.1 Grant of Options. Subject to the terms and provisions of this Plan,
Options may be granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Committee, in
its sole discretion; provided that ISOs may be granted only to eligible
Employees of the Company or of any parent or subsidiary corporation (as
permitted under Code Sections 422 and 424).
     6.2 Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the maximum duration of the
Option, the number of Shares to which the Option pertains, the conditions upon
which an Option shall become vested and exercisable, and such other provisions
as the Committee shall determine which are not inconsistent with the terms of
this Plan. The Award Agreement also shall specify whether the Option is intended
to be an ISO or a NQSO.
     6.3 Option Price. The Option Price for each grant of an Option under this
Plan shall be determined by the Committee in its sole discretion and shall be
specified in the Award Agreement; provided, however, the Option Price must be at
least equal to one hundred percent (100%) of the FMV of the Shares as determined
on the Grant Date. With respect to a Participant who owns, directly or
indirectly, more than ten percent (10%) of the total combined voting power of
all classes of the stock of the Company, any Subsidiary, or any Affiliate, the
Option Price of Shares subject to an ISO shall be at least equal to one hundred
and ten percent (110%) of the Fair Market Value of such Shares on the ISO’s
Grant Date. In any event, the Option Price shall not be less than the aggregate
par value of the Shares covered by the Option.
     6.4 Term of Options. Each Option granted to a Participant shall expire at
such time as the Committee shall determine when the Committee approves the
grant; provided, however, no Option shall be exercisable later than the day
before the tenth (10th) anniversary of the Grant Date. Notwithstanding the
foregoing, with respect to ISOs, in the case of a Participant who owns, directly
or indirectly, more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company, any Subsidiary, or an Affiliate, no such
ISO shall be exercisable later than the day before the fifth (5th) anniversary
of the Grant Date.
     6.5 Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which terms and restrictions need
not be the same for each grant or for each Participant. Notwithstanding the
foregoing, the Fair Market Value of Shares to which ISOs are exercisable for the
first time by any Participant during any calendar year shall not exceed one
hundred thousand dollars ($100,000). Any ISOs that become exercisable in excess
of such amount shall be deemed Nonqualified Stock Options to the extent of such
excess. In addition, in order to exercise any ISOs granted under this Article 6,
the Participant must be an Employee of the Company, any Subsidiary, or any
Affiliate from the Grant Date until at least three months before the date the
ISO is exercised.
     6.6 Payment. Options granted under this Article 6 shall be exercised by the
delivery of a notice of exercise to the Company or an agent designated by the
Company in a form specified or accepted by the Committee, or by complying with
any alternative procedures which may be authorized by the Committee, setting
forth the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.

11

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

 

     A condition of the issuance of the Shares as to which an Option shall be
exercised shall be the payment of the Option Price. The Option Price of any
Option shall be payable, in full, to the Company, under any of the following
methods as determined by the Committee, in its sole discretion: (a) in cash or
its equivalent; (b) by tendering (either by actual delivery or attestation) to
the Company for repurchase previously acquired Shares having an aggregate Fair
Market Value at the time of exercise equal to the Option Price together with an
assignment of the proceeds of the Share repurchase to pay the Option Price
(provided that any such repurchase of Shares shall be subject to the Swiss Code
of Obligations); (c) by a cashless (broker-assisted) exercise; (d) by a
combination of (a), (b) and/or (c); or (e) any other method approved or accepted
by the Committee in its sole discretion.
     Subject to any governing rules or regulations, as soon as practicable after
receipt of written notification of exercise and full payment (including
satisfaction of any applicable tax withholding), the Company shall deliver to
the Participant evidence of book entry Shares in an appropriate amount based
upon the number of Shares purchased under the Option(s).
     Unless otherwise determined by the Committee, all payments under all of the
methods indicated above shall be paid in United States dollars.
     6.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, minimum holding period requirements, restrictions under applicable
federal securities laws, under the requirements of any stock exchange or market
upon which such Shares are then listed and/or traded, or under any blue sky or
state securities laws applicable to such Shares.
     6.8 Termination of Employment, Service as a Director or Third-Party Service
Provider. Each Participant’s Award Agreement shall set forth the extent to which
the Participant shall have the right to exercise the Option following
termination of the Participant’s employment or services to the Company, its
Affiliates, and/or its Subsidiaries, as the case may be, subject to Sections 5.3
and 5.4. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Options issued pursuant to this
Article 6, and may reflect distinctions based on, among other things, the
reasons for termination, or reasons relating to breach or threatened breach of
restrictive covenants to which the Participant is subject, if any. Subject to
Article 18, in the event a Participant’s Award Agreement does not set forth such
provisions, the following provisions shall apply:

  (a)   Involuntary Termination or Resignation for Good Reason. These
termination events apply only to Participants who are Employees or Third-Party
Service Providers. In the event that a Participant’s employment, or service as a
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates by reason of an Involuntary Termination or Resignation for Good
Reason by the Participant, to the extent that an Option is not then exercisable,
the Option shall immediately become vested and exercisable with respect to all
Shares covered by the Participant’s Option, and the Option shall remain
exercisable until the earlier of (A) the expiration of the term of the Option,
or (B) six (6) months (three (3) months for ISOs) after the date of such
termination.     (b)   Death or Disability. These termination events apply to
all Participants. In the event that a Participant’s employment, or service as a
Director or Third-Party Service Provider with the Company, Affiliate and/or any
Subsidiary terminates by reason of death or Disability, to the extent that an
Option is not then exercisable, the Option shall immediately become vested and
exercisable with respect to all Shares covered by the Participant’s Option, and
the Option shall remain exercisable until the earlier of (A) the expiration of
the term of the Option, or (B) 12 months after the date of such termination. In
the case of the Participant’s death, the Participant’s beneficiary or estate may
exercise the Option.     (c)   Retirement. This termination event shall apply
only to Participants who are Employees. In the event that a Participant’s
employment terminates by reason of Retirement from the Company, Affiliate and/or
any Subsidiary, to the extent an Option is not then exercisable, the Option
shall become vested and exercisable as to a number of Shares determined as
follows: (i) the total number of Shares covered by the Option times (ii) a
ratio, the numerator of which is the total

12

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

 

      number of months of employment from the Grant Date of the Option to the
end of the month in which such termination occurs and the denominator of which
is the total number of months of vesting required for a fully vested Option as
set forth in the Award Agreement. The vested portion of the Option, as
determined under this subsection (c), shall remain exercisable until the earlier
of (A) the expiration of the term of the Option, or (B) 36 months after the date
of such termination. The unvested portion of the Option shall be immediately
forfeited.     (d)   Termination for Cause. This termination event applies to
all Participants. In the event that a Participant’s employment, or service as a
Director or Third-Party Service Provider with the Company, Affiliate and/or any
Subsidiary terminates for Cause, all Options granted to such Participant shall
expire immediately and all rights to purchase Shares (vested or nonvested) under
the Options shall cease upon such termination. In addition, the provisions of
Article 11 shall apply.     (e)   Other Termination. This termination event
applies to all Participants, as follows:

  (i)   In the event that a Participant’s employment, or service as a
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates for any reason other than those set forth in subsections (a) through
(d) above, all then vested and exercisable Options shall remain exercisable from
the date of such termination until the earlier of (A) the expiration of the term
of the Option, or (B) 30 days after the date of such termination. Such Options
shall only be exercisable to the extent that they were exercisable as of such
termination date and all unvested Options shall be immediately forfeited.    
(ii)   In the event that a Participant’s service as a Director with the Company,
Affiliate and/or any Subsidiary terminates for any reason other than those set
forth in subsections (b) through (d) above, to the extent the Option is not then
exercisable, the Option shall become vested and exercisable as to a number of
Shares determined as follows: (A) the total number of Shares covered by the
Option times (B) a ratio, the numerator of which is the total number of months
of service from the Grant Date of the Option to the end of the month in which
such termination occurs and the denominator of which is the total number of
months of vesting required for a fully vested Option as set forth in the Award
Agreement. The vested portion of the Option, as determined under this paragraph
(ii) shall remain exercisable from the date of such termination until the
earlier of (x) the expiration of the term of the Option, or (y) 30 days after
the date of such termination. The unvested portion of the Option shall be
immediately forfeited.

     6.9 Notification of Disqualifying Disposition. If any Participant shall
make any disposition of Shares issued pursuant to the exercise of an ISO under
the circumstances described in Code Section 421(b) (relating to certain
disqualifying dispositions), such Participant shall notify the Company of such
disposition within ten (10) calendar days thereof.
Article 7. Stock Appreciation Rights
     7.1 Grant of SARs. Subject to the terms and conditions of this Plan, SARs
may be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee may grant Non-Tandem SARs, Tandem
SARs, or any combination of these forms of SARs.
     Subject to the terms and conditions of this Plan, the Committee shall have
complete discretion in determining the number of SARs granted to each
Participant and, consistent with the provisions of this Plan, in determining the
terms and conditions pertaining to such SARs.
     The Grant Price for each grant of an SAR shall be determined by the
Committee and shall be specified in the Award Agreement. Notwithstanding the
foregoing, the Grant Price of a Non-Tandem SAR on the Grant Date shall be at
least equal to the greater of one hundred percent (100%) of the FMV of the
Shares as determined on the Grant Date or the par value of the Shares. The Grant
Price of a Tandem SAR on the Grant Date shall equal the Option Price of the
related Option.

13

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

 

     7.2 SAR Agreement. Each SAR Award shall be evidenced by an Award Agreement
that shall specify the Grant Price, the term of the SAR, and such other
provisions as the Committee shall determine.
     7.3 Term of SAR. The term of an SAR granted under this Plan shall be
determined by the Committee, in its sole discretion, and except as determined
otherwise by the Committee and specified in the SAR Award Agreement, no SAR
shall be exercisable later than the day before the tenth (10th) anniversary of
the Grant Date. Notwithstanding the foregoing, for SARs granted to Participants
outside the United States, the Committee has the authority to grant SARs that
have a term greater than ten (10) years.
     7.4 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable. Notwithstanding the foregoing, with respect to a Tandem SAR granted
in connection with an ISO: (i) the Tandem SAR shall expire no later than the
expiration of the underlying ISO; (ii) the value of the payout with respect to
the Tandem SAR may be for no more than one hundred percent (100%) of the
difference between the Option Price of the underlying ISO and the Fair Market
Value of the Shares subject to the underlying ISO at the time the Tandem SAR is
exercised; and (iii) the Tandem SAR may be exercised only when the Fair Market
Value of the Shares covered by the ISO exceeds the Option Price of the ISO.
     7.5 Exercise of Non-Tandem SARs. SARs may be exercised upon whatever terms
and conditions the Committee, in its sole discretion, imposes.
     7.6 Settlement of SARs. Upon the exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:

  (a)   The excess of the Fair Market Value of a Share on the date of exercise
over the Grant Price; by     (b)   The number of Shares with respect to which
the SAR is exercised.

     At the discretion of the Committee, the payment upon SAR exercise may be in
cash, fully paid Shares, or any combination thereof, or in any other manner
approved by the Committee in its sole discretion. The Committee’s determination
regarding the form of SAR payout shall be set forth in the Award Agreement
pertaining to the grant of the SAR.
     7.7 Termination of Employment, Service as a Director or Third-Party Service
Provider. Each Award Agreement shall set forth the extent to which the
Participant shall have the right to exercise the SAR following termination of
the Participant’s employment with or services to the Company, its Affiliates,
and/or its Subsidiaries, as the case may be, subject to Sections 5.3 and 5.4.
Such provisions shall be determined in the sole discretion of the Committee,
shall be included in the Award Agreement entered into with Participants, need
not be uniform among all SARs issued pursuant to this Plan, and may reflect
distinctions based on, among other things, the reasons for termination, or
reasons relating to breach or threatened breach of restrictive covenants to
which the Participant is subject, if any. Subject to Article 18, in the event a
Participant’s Award Agreement does not set forth such provisions, the following
provisions shall apply:

  (a)   Involuntary Termination or Resignation for Good Reason. These
termination events apply only to Participants who are Employees or Third-Party
Service Providers. In the event that a Participant’s employment, or service as a
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates by reason of an Involuntary Termination or Resignation for Good
Reason by the Participant, to the extent that an SAR is not then exercisable,
the SAR shall immediately become vested and exercisable with respect to all
Shares covered by the Participant’s SAR, and the SAR shall remain exercisable
until the earlier of (A) the expiration of the term of the SAR, or (B) six
(6) months (three (3) months for SARs granted in tandem with ISOs) after the
date of such termination.

14

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

 

  (b)   Death or Disability. These termination events apply to all Participants.
In the event that a Participant’s employment, or service as a Director or
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates by reason of death or Disability, to the extent that an SAR is not
then exercisable, the SAR shall immediately become vested and exercisable with
respect to all Shares covered by the Participant’s SAR, and the SAR shall remain
exercisable until the earlier of (A) the expiration of the term of the SAR, or
(B) 12 months after the date of such termination. In the case of the
Participant’s death, the Participant’s beneficiary or estate may exercise the
SAR.     (c)   Retirement. This termination event applies only to Participants
who are Employees. In the event that a Participant’s employment terminates by
reason of Retirement from the Company, Affiliate and/or any Subsidiary, to the
extent an SAR is not then exercisable, the SAR shall become vested and
exercisable as to a number of Shares determined as follows: (i) the total number
of Shares covered by the SAR times (ii) a ratio, the numerator of which is the
total number of months of employment from the Grant Date of the SAR to the end
of the month in which such termination occurs and the denominator of which is
the total number of months of vesting required for a fully vested SAR as set
forth in the Award Agreement. The vested portion of the SAR, as determined under
this subsection (c), shall remain exercisable until the earlier of (A) the
expiration of the term of the SAR, or (B) 36 months after the date of such
termination. The unvested portion of the SAR shall be immediately forfeited.    
(d)   Termination for Cause. This termination event applies to all Participants.
In the event that a Participant’s employment, or service as a Director or
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates for Cause, all SARs granted to such Participant shall expire
immediately and all rights to purchase Shares (vested or nonvested) under the
SARs shall cease upon such termination. In addition, the provisions of
Article 11 shall apply.     (e)   Other Termination. This termination event
applies to all Participants, as follows:

  (i)   In the event that a Participant’s employment, or service as a
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates for any reason other than those set forth in subsections (a) through
(d) above, all then vested and exercisable SARs shall remain exercisable from
the date of such termination until the earlier of (A) the expiration of the term
of the SAR, or (B) 30 days after the date of such termination. Such SARs shall
only be exercisable to the extent that they were exercisable as of such
termination date and all unvested SARs shall be immediately forfeited.     (ii)
  In the event that a Participant’s service as a Director with the Company,
Affiliate and/or any Subsidiary terminates for any reason other than those set
forth in subsections (b) through (d) above, to the extent the SAR is not then
exercisable, the SAR shall become vested and exercisable as to a number of
Shares determined as follows: (A) the total number of Shares covered by the SAR
times (B) a ratio, the numerator of which is the total number of months of
service from the Grant Date of the SAR to the end of the month in which such
termination occurs and the denominator of which is the total number of months of
vesting required for a fully vested SAR as set forth in the Award Agreement. The
vested portion of the SAR, as determined under this paragraph (ii) shall remain
exercisable from the date of such termination until the earlier of (x) the
expiration of the term of the SAR, or (y) 30 days after the date of such
termination. The unvested portion of the SAR shall be immediately forfeited.

     7.8 Other Restrictions. The Committee shall impose such other conditions
and/or restrictions on any Shares received upon exercise of an SAR granted
pursuant to this Plan as it may deem advisable or desirable. These restrictions
may include, but shall not be limited to, a requirement that the Participant
hold the Shares received upon exercise of an SAR for a specified period of time.

15

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

 

Article 8. Restricted Stock and Restricted Stock Units
     8.1 Grant of Restricted Stock or Restricted Stock Units. Subject to the
terms and provisions of this Plan, the Committee, at any time and from time to
time, may grant Restricted Stock and/or Restricted Stock Units to Participants
in such amounts as the Committee shall determine. Restricted Stock Units shall
be similar to Restricted Stock except that no Shares are actually awarded.
     8.2 Restricted Stock or Restricted Stock Unit Agreement. Each Restricted
Stock and/or Restricted Stock Unit grant shall be evidenced by an Award
Agreement that shall specify the Period(s) of Restriction, the number of Shares
of Restricted Stock or the number of Restricted Stock Units granted, and such
other provisions as the Committee shall determine.
     8.3 Other Restrictions. The Committee shall impose such other conditions
and/or restrictions on any Shares of Restricted Stock or Restricted Stock Units
granted pursuant to this Plan as it may deem advisable including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock or each Restricted Stock Unit, restrictions based
upon the achievement of specific performance goals, time-based restrictions on
vesting following the attainment of the performance goals, time-based
restrictions, and/or restrictions under Applicable Laws or under the
requirements of any stock exchange or market upon which such Shares are listed
or traded, or holding requirements or sale restrictions placed on the Shares by
the Company upon vesting of such Restricted Stock or Restricted Stock Units.
     8.4 [deleted]
     8.5 Voting Rights. Unless otherwise set forth in a Participant’s Award
Agreement and permitted by Applicable Law, a Participant holding Shares of
Restricted Stock granted hereunder shall be granted the right to exercise full
voting rights with respect to those Shares during the Period of Restriction. A
Participant shall have no voting rights with respect to any Restricted Stock
Units granted hereunder.
     8.6 Termination of Employment, Service as a Director or Third-Party Service
Provider. Each Award Agreement shall set forth the extent to which the
restrictions placed on Restricted Stock and/or Restricted Stock Units shall
lapse following termination of the Participant’s employment with or services to
the Company, its Affiliates, and/or its Subsidiaries, as the case may be,
subject to Sections 5.3 and 5.4. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Award Agreement entered
into with each Participant, need not be uniform among all Shares of Restricted
Stock or Restricted Stock Units issued pursuant to this Plan, and may reflect
distinctions based on, among other things, the reasons for termination, or
reasons relating to breach or threatened breach of restrictive covenants to
which the Participant is subject, if any. Subject to Article 18, in the event a
Participant’s Award Agreement does not set forth such provisions, the following
provisions shall apply:

  (a)   Involuntary Termination or Resignation for Good Reason. These
termination events apply only to Participants who are Employees or Third-Party
Service Providers.

  (i)   If the Award is not intended to qualify for the Performance-Based
Exception, in the event that a Participant’s employment or service, as the case
may be, with the Company, Affiliate and/or any Subsidiary terminates by reason
of an Involuntary Termination or Resignation for Good Reason by the Participant,
to the extent any Shares of Restricted Stock or Restricted Stock Units, as the
case may be, are not then vested, all Shares of Restricted Stock or all
Restricted Stock Units, as the case may be, shall immediately become fully
vested on the date of such termination and any restrictions shall lapse.    
(ii)   If the Award granted to Participants who are Employees is intended to
qualify for the Performance-Based Exception, the Award shall become fully vested
and any restrictions shall lapse upon attainment of the applicable Performance
Measures.

  (b)   Death or Disability. These termination events apply to all Participants.

16

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

 

  (i)   If the Award is not intended to qualify for the Performance-Based
Exception, in the event that a Participant’s employment, or service as a
Director or Third-Party Service Provider with the Company, Affiliate and/or any
Subsidiary terminates by reason of death or Disability, to the extent any Shares
of Restricted Stock or Restricted Stock Units, as the case may be, are not then
vested, all Shares of Restricted Stock or all Restricted Stock Units, as the
case may be, shall immediately become fully vested on the date of such
termination and any restrictions shall lapse.     (ii)   If the Award granted to
Participants who are Employees is intended to qualify for the Performance-Based
Exception, the Award shall become fully vested and any restrictions shall lapse
upon attainment of the applicable Performance Measures.

  (c)   Retirement. This termination event applies only to Participants who are
Employees.

  (i)   If the Award is not intended to qualify for the Performance-Based
Exception, in the event that a Participant’s employment terminates by reason of
Retirement from the Company, Affiliate and/or any Subsidiary, to the extent any
Award covering Shares of Restricted Stock or Restricted Stock Units, as the case
may be, are not then vested, the Award shall become vested on the date of such
termination (for Shares of Restricted Stock, upon attainment of age 65
regardless of whether there is a termination of employment) and any restrictions
shall lapse as to a number of Shares or Units, as the case may be, determined as
follows: (A) the total number of Shares of Restricted Stock or Restricted Units,
as applicable, times (B) a ratio, the numerator of which is the total number of
months of employment from the Grant Date of the Award to the end of the month in
which the Participant’s termination occurs (for Shares of Restricted Stock,
attainment of age 65 occurs) and the denominator of which is the total number of
months of vesting required for a fully vested Award as set forth in the Award
Agreement.     (ii)   If the Award is intended to qualify for the
Performance-Based Exception, the Award shall become vested to the extent
described in this subsection (c) and any restrictions on the vested portion
shall lapse upon attainment of the applicable Performance Measures.

  (d)   Termination for Cause. This termination event applies to all
Participants. In the event that a Participant’s employment, or service as a
Director or Third-Party Service Provider with the Company, Affiliate and/or any
Subsidiary terminates for Cause all vested and unvested Shares of Restricted
Stock or all vested and unvested Restricted Stock Units, as the case may be,
shall be forfeited to the Company. In addition, the provisions of Article 11
shall apply.     (e)   Other Termination. This termination event applies to all
Participants, as follows:

  (i)   In the event that a Participant’s employment, or service as a
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates for any reason other than as described in subsections (a) through
(d), all unvested Shares of Restricted Stock or all unvested Restricted Stock
Units, as the case may be, shall be immediately forfeited to the Company.    
(ii)   In the event that a Participant’s service as a Director with the Company,
Affiliate and/or any Subsidiary terminates for any reason other than as
described in subsections (b) through (d), to the extent any Award covering
Shares of Restricted Stock or Restricted Stock Units, as the case may be, are
not then vested, the Award shall become vested on the date of such termination
and any restrictions shall lapse as to a number of Shares or Units, as the case
may be, determined as follows: (A) the total number of Shares of Restricted
Stock or Restricted Units, as applicable, times (B) a ratio, the numerator of
which is the total number of months of service from the Grant Date of the Award
to the end of the month in which the Participant’s termination occurs and the
denominator of which is the total number of months of vesting required for a
fully vested Award as set

17

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

 

      forth in the Award Agreement. The unvested portion of the Award shall be
immediately forfeited to the Company.

     8.7 Forfeiture and Right of Repurchase. In the event that any Shares are
required to be forfeited under any circumstances set forth in this Article 8,
Article 20 or otherwise under this Plan or an Award Agreement, then the Company
shall have the right (but not the obligation) to repurchase any or all of such
forfeited Shares for $0.001 per Share repurchased. The Company shall have
90 days from the date of any event giving rise to forfeiture within which to
effect a repurchase of any or all of the Shares subject to such forfeiture
conditions. The Company’s right to repurchase the Shares is assignable by the
Company, in its sole discretion, to a Subsidiary, Affiliate or other party to
whom such rights can be assigned under Applicable Laws.
     8.8 Section 83(b) Election. The Committee may provide in an Award Agreement
that the Award of Restricted Stock is conditioned upon the Participant making or
refraining from making an election with respect to the Award under Code
Section 83(b). If a Participant makes an election pursuant to Code Section 83(b)
concerning a Restricted Stock Award, the Participant shall be required to file
promptly a copy of such election with the Company.
Article 9. Performance Units/Performance Shares
     9.1 Grant of Performance Units/Performance Shares. Subject to the terms and
provisions of this Plan, the Committee, at any time and from time to time, may
grant Performance Units and/or Performance Shares to Participants in such
amounts and upon such terms as the Committee shall determine.
     9.2 Performance Unit/Performance Shares Agreement. Each Performance Unit
and/or Performance Share grant shall be evidenced by an Award Agreement that
shall specify the number of Performance Shares or the number of Performance
Units granted, the applicable Performance Period, and such other terms and
provisions as the Committee shall determine.
     9.3 Value of Performance Units/Performance Shares. Each Performance Unit
shall have an initial value that is established by the Committee at the time of
grant. Each Performance Share shall have an initial value equal to the Fair
Market Value of a Share on the Grant Date. The Committee shall set performance
goals in its discretion which, depending on the extent to which they are met,
will determine the value and/or number of Performance Units/Performance Shares
that will be paid out to the Participant.
     9.4 Earning of Performance Units/Performance Shares. Subject to the terms
of this Plan, after the applicable Performance Period has ended, the holder of
Performance Units/Performance Shares shall be entitled to receive payout on the
value and number of Performance Units/Performance Shares earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance goals have been achieved.
     9.5 Form and Timing of Payment of Performance Units/Performance Shares.
Payment of earned Performance Units/Performance Shares shall be as determined by
the Committee and as evidenced in the Award Agreement. Subject to the terms of
this Plan, the Committee, in its sole discretion, may pay earned Performance
Units/Performance Shares in the form of cash or in fully paid Shares (or in a
combination thereof) equal to the value of the earned Performance
Units/Performance Shares at the close of the applicable Performance Period, or
as soon as practicable after the end of the Performance Period. Any Shares may
be granted subject to any restrictions deemed appropriate by the Committee. The
determination of the Committee with respect to the form of payout of such Awards
shall be set forth in the Award Agreement pertaining to the grant of the Award.
     9.6 Termination of Employment, Service as a Director or Third-Party Service
Provider. Each Award Agreement shall set forth the extent to which the
Participant shall have the right to receive payment for any Performance Units
and/or Performance Shares following termination of the Participant’s employment
with or services to the Company, its Affiliates, and/or its Subsidiaries, as the
case may be, subject to Sections 5.3 and 5.4. Such provisions shall be
determined in the sole discretion of the Committee, shall be included in the
Award Agreement entered into with each Participant, need not be uniform among
all Awards of Performance Units or Performance Shares issued pursuant to this
Plan, and may reflect distinctions based on, among other things, the reasons for
termination, or reasons relating to the breach or threatened breach of
restrictive covenants to which the

18

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

 

Participant is subject, if any. Subject to Article 18, in the event that a
Participant’s Award Agreement does not set forth such termination provisions,
the following termination provisions shall apply:

  (a)   Involuntary Termination or Resignation for Good Reason. These
termination events apply only to Participants who are Employees or Third-Party
Service Providers.

  (i)   If the Award is not intended to qualify for the Performance-Based
Exception, in the event that a Participant’s employment or service, as the case
may be, with the Company, Affiliate and/or any Subsidiary terminates by reason
of an Involuntary Termination or Resignation for Good Reason by the Participant,
the Participant shall receive a full payout of the Performance Units and/or
Performance Shares.     (ii)   If the Award granted to Participants who are
Employees is intended to qualify for the Performance-Based Exception, the
Participant shall receive a payout as determined under this subsection (a) upon
attainment of the applicable Performance Measures.

  (b)   Death or Disability. These termination events apply to all Participants.

  (i)   If the Award is not intended to qualify for the Performance-Based
Exception, in the event that a Participant’s employment or service, as the case
may be, with the Company, Affiliate and/or any Subsidiary terminates by reason
of death or Disability, the Participant shall receive a full payout of the
Performance Units and/or Performance Shares.     (ii)   If the Award granted to
Participants who are Employees is intended to qualify for the Performance-Based
Exception, the Participant shall receive a payout as determined under this
subsection (b) upon attainment of the applicable Performance Measures.

  (c)   Retirement. This termination event applies only to Participants who are
Employees.

  (i)   If the Award is not intended to qualify for the Performance-Based
Exception, in the event that a Participant’s employment with the Company,
Affiliate and/or any Subsidiary, terminates during a Performance Period due to
Retirement, the Participant shall receive a prorated payout of the Performance
Units and/or Performance Shares, unless the Committee determines otherwise. The
prorated payout shall be determined by the Committee, shall be based upon the
length of time that the Participant held the Performance Units and/or
Performance Shares during the Performance Period, and shall further be adjusted
based on the achievement of the pre-established performance goals.     (ii)   If
the Award is intended to qualify for the Performance-Based Exception, the
Participant shall receive a payout as determined under this subsection (c) upon
attainment of the applicable Performance Measures.

  (d)   Termination for Cause. This termination event applies to all
Participants. In the event that a Participant’s employment, or service as a
Director or Third-Party Service Provider with the Company, Affiliate and/or any
Subsidiary terminates for Cause during a Performance Period, all Performance
Units and/or Performance Shares (vested or unvested) shall be immediately
forfeited to the Company. In addition, the provisions of Article 11 shall apply.
    (e)   Other Termination. This termination event applies to all Participants,
as follows:

  (i)   In the event that a Participant’s employment, or service as a
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates during a Performance Period for any reason other than as described in
subsections (a) through (d), all unvested

19

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

 

      Performance Units and/or Performance Shares shall be immediately forfeited
to the Company.     (ii)   In the event that a Participant’s service as a
Director with the Company, Affiliate and/or any Subsidiary terminates during a
Performance Period for any reason other than as described in subsections
(b) through (d), to the extent any Award covering Performance Units and/or
Performance Shares are not then vested, the Award shall become vested on the
date of such termination and any restrictions shall lapse as to a number of
Performance Units or Performance Shares, as the case may be, determined as
follows: (A) the total number of Performance Shares or Performance Units, as
applicable, times (B) a ratio, the numerator of which is the total number of
months of service from the Grant Date of the Award to the end of the month in
which the Participant’s termination occurs and the denominator of which is the
total number of months of vesting required for a fully vested Award as set forth
in the Award Agreement. The unvested portion of the Award shall be immediately
forfeited to the Company.

     9.7 Forfeiture and Right of Repurchase. In the event that any Shares are
required to be forfeited under any circumstances set forth in this Article 9,
Article 20 or otherwise under this Plan or an Award Agreement, then the Company
shall have the right (but not the obligation) to repurchase any or all of such
forfeited Shares for $0.001 per Share repurchased. The Company shall have
90 days from the date of any event giving rise to forfeiture within which to
effect a repurchase of any or all of the Shares subject to such forfeiture
conditions. The Company’s right to repurchase the Shares is assignable by the
Company, in its sole discretion, to a Subsidiary, Affiliate or other party to
whom such rights can be assigned under Applicable Laws.
Article 10. Cash-Based Awards and Other Stock-Based Awards
     10.1 Grant of Cash-Based Awards. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may grant Cash-Based
Awards to Participants in such amounts and upon such terms as the Committee may
determine.
     10.2 Other Stock-Based Awards. The Committee may grant other types of
equity-based or equity-related Awards not otherwise described by the terms of
this Plan (including the grant or offer for sale of unrestricted Shares) in such
amounts and subject to such terms and conditions, as the Committee shall
determine. Such Awards may involve the transfer of actual fully paid Shares to
Participants, or payment in cash or otherwise of amounts based on the value of
Shares and may include, without limitation, Awards designed to comply with or
take advantage of the applicable local laws of jurisdictions other than the
United States.
     10.3 Cash-Based Award or Stock-Based Award Agreement. Each Cash-Based Award
or Stock-Based Award grant shall be evidenced by an Award Agreement that shall
specify the amount of the Cash-Based Award or Stock-Based Award granted and such
other terms and provisions as the Committee shall determine; provided that no
Award Agreement shall provide for the issuance of Shares except on a fully paid
basis.
     10.4 Value of Cash-Based and Other Stock-Based Awards. Each Cash-Based
Award shall specify a payment amount or payment range as determined by the
Committee. Each Other Stock-Based Award shall be expressed in terms of Shares or
units based on Shares, as determined by the Committee. The Committee may
establish performance goals in its discretion. If the Committee exercises its
discretion to establish performance goals, the number and/or value of Cash-Based
Awards or Other Stock-Based Awards that will be paid out to the Participant will
depend on the extent to which the performance goals are met, and provided the
cash or services received by the Company in exchange for Shares shall have a
value not less than the aggregate par value of any Shares issued as part of such
other Stock-Based Award.
     10.5 Payment of Cash-Based Awards and Other Stock-Based Awards. Payment, if
any, with respect to a Cash-Based Award or an Other Stock-Based Award shall be
made in accordance with the terms of the Award, in cash or fully paid Shares as
the Committee determines.
     10.6 Termination of Employment, Service as a Director or Third-Party
Service Provider. The Committee shall determine the extent to which the
Participant shall have the right to receive Cash-Based Awards or

20

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

 

Other Stock-Based Awards following termination of the Participant’s employment
with or provision of services to the Company, its Affiliates, and/or its
Subsidiaries, as the case may be, subject to Sections 5.3 and 5.4. Such
provisions shall be determined in the sole discretion of the Committee, such
provisions may be included in an agreement entered into with each Participant,
but need not be uniform among all Awards of Cash-Based Awards or Other
Stock-Based Awards issued pursuant to the Plan, and may reflect distinctions
based on the reasons for termination, or reasons relating to the breach or
threatened breach of restrictive covenants to which the Participant is subject,
if any. Subject to Article 18, in the event that a Participant’s Award Agreement
does not set forth such termination provisions, the following termination
provisions shall apply:

  (a)   Involuntary Termination or Resignation for Good Reason. These
termination events apply only to Participants who are Employees or Third-Party
Service Providers.

  (i)   If the Award is not intended to qualify for the Performance-Based
Exception, in the event that a Participant’s employment or service, as the case
may be, with the Company, Affiliate and/or any Subsidiary terminates by reason
of an Involuntary Termination or Resignation for Good Reason by the Participant,
the Participant shall receive a full payout of the Performance Units and/or
Performance Shares.     (ii)   If the Award granted to Participants who are
Employees is intended to qualify for the Performance-Based Exception, the
Participant shall receive a payout as determined under this subsection (a) upon
attainment of the applicable Performance Measures.

  (b)   Death or Disability. These termination events apply to all Participants.

  (i)   If the Award is not intended to qualify for the Performance-Based
Exception, in the event that a Participant’s employment or service, as the case
may be, with the Company, Affiliate and/or any Subsidiary terminates by reason
of death or Disability, the Participant shall receive a full payout of the
Award.     (ii)   If the Award granted to Participants who are Employees is
intended to qualify for the Performance-Based Exception, the Participant shall
receive a payout as determined under this subsection (b) upon attainment of the
applicable Performance Measures.

  (c)   Retirement. This termination event applies only to Participants who are
Employees.

  (i)   If the Award is not intended to qualify for the Performance-Based
Exception, in the event that a Participant’s employment with the Company,
Affiliate and/or any Subsidiary, terminates during a Performance Period due to
Retirement, the Participant shall receive a prorated payout of the Award, unless
the Committee determines otherwise. The prorated payout shall be determined by
the Committee, shall be based upon the length of time that the Participant held
the Award during the Performance Period, and shall further be adjusted based on
the achievement of the pre-established performance goals. Unless the Committee
determines otherwise in the event of Retirement, payment of the earned Award
shall be made at the same time as payments are made to Participants who did not
terminate employment during the applicable Performance Period.     (ii)   If the
Award is intended to qualify for the Performance-Based Exception, the
Participant shall receive a payout as determined under this subsection (c) upon
attainment of the applicable Performance Measures.

  (d)   Termination for Cause. This termination event applies to all
Participants. In the event that a Participant’s employment, or service as a
Director or Third-Party Service Provider with the Company, Affiliate and/or any
Subsidiary terminates for Cause the Award (vested or unvested) shall be
immediately forfeited to the Company. In addition, the provisions of Article 11
shall apply.

21

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

 

  (e)   Other Termination. This termination event applies to all Participants,
as follows:

  (i)   In the event that a Participant’s employment, or service as a
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates during a Performance Period for any reason other than as described in
subsections (a) through (d), the unvested portion of the Award shall be
immediately forfeited to the Company.     (ii)   In the event that a
Participant’s service as a Director with the Company, Affiliate and/or any
Subsidiary terminates during a Performance Period for any reason other than as
described in subsections (b) through (d), to the extent the Award is unvested,
the Award shall become vested on the date of such termination and any
restrictions shall lapse as to a portion of the Award determined as follows:
(A) the total value of the Award times (B) a ratio, the numerator of which is
the total number of months of service from the Grant Date of the Award to the
end of the month in which the Participant’s termination occurs and the
denominator of which is the total number of months of vesting or the performance
period required for a fully vested Award as set forth in the Award Agreement.
The unvested portion of the Award shall be immediately forfeited to the Company.

     10.7 Forfeiture and Right of Repurchase. In the event that any Shares are
required to be forfeited under any circumstances set forth in this Article 10,
Article 20 or otherwise under this Plan or an Award Agreement, then the Company
shall have the right (but not the obligation) to repurchase any or all of such
forfeited Shares for $0.001 per Share repurchased. The Company shall have
90 days from the date of any event giving rise to forfeiture within which to
effect a repurchase of any or all of the Shares subject to such forfeiture
conditions. The Company’s right to repurchase the Shares is assignable by the
Company, in its sole discretion, to a Subsidiary, Affiliate or other party to
whom such rights can be assigned under Applicable Laws.
Article 11. Forfeiture of Awards.
     11.1 General. Notwithstanding anything else to the contrary contained
herein, the Committee in granting any Award shall have the full power and
authority to determine whether, to what extent and under what circumstances such
Award shall be forfeited, cancelled or suspended. Unless an Award Agreement
includes provisions expressly superseding the provisions of this Article 11, the
provisions of this Article 11 shall apply to all Awards. Any such forfeiture
shall be effected by the Company in such manner and to such degree as the
Committee, in its sole discretion, determines, and will in all events (including
as to the provisions of this Article 11) be subject to the Applicable Laws.
     In order to effect a forfeiture under this Article 11, the Committee may
require that the Participant sell Shares received upon exercise or settlement of
an Award to the Company or to such other person as the Company may designate at
such price and on such other terms and conditions as the Committee in its sole
discretion may require. Further, as a condition of each Award, the Company shall
have, and each Participant shall be deemed to have given the Company, a proxy on
each Participant’s behalf, and each Participant shall be required and be deemed
to have agreed to execute any other documents necessary or appropriate to carry
out this Article 11.
     11.2 Forfeiture Events. Unless otherwise specified by the Committee, in
addition to any vesting or other forfeiture or repurchase conditions that may
apply to an Award and Shares issued pursuant to an Award, each Award granted
under the Plan will be subject to the following forfeiture conditions:

  (a)   Competitive Activity. All outstanding Awards and Shares issued pursuant
to an Award held by an Participant will be forfeited in their entirety
(including as to any portion of an Award or Shares subject thereto that are
vested or as to which any repurchase or resale rights or forfeiture restrictions
in favor of the Company or its designee with respect to such Shares have
previously lapsed) if the Participant, without the consent of the Company, while
employed or in service, as the case may be, or within six (6) months after
termination of employment or service, establishes an employment or similar
relationship with a competitor of the Company or engages in any similar activity
that is in conflict with or adverse to the interests of the Company, as
determined by the Committee in its sole discretion; provided, that if an
Participant has sold Shares issued upon

22

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

 

      exercise or settlement of an Award within six (6) months prior to the date
on which the Participant would otherwise have been required to forfeit such
Shares or the Option under this subsection (a) as a result of the Participant’s
competitive or similar acts, then the Company will be entitled to recover any
and all profits realized by the Participant in connection with such sale.    
(b)   Termination for Cause. All outstanding Awards and Shares issued pursuant
to an Award held by an Participant will be forfeited in their entirety
(including as to any portion of an Award or Shares subject thereto that are
vested or as to which any repurchase or resale rights or forfeiture restrictions
in favor of the Company or its designee have previously lapsed) if the
Participant’s employment or service is terminated by the Company for Cause;
provided, however, that if an Participant has sold Shares issued upon exercise
or settlement of an Award within six (6) months prior to the date on which the
Participant would otherwise have been required to forfeit such Shares under this
subsection (b) as a result of termination of the Participant’s employment or
service for Cause, then the Company will be entitled to recover any and all
profits realized by the Participant in connection with such sale; and provided
further, that in the event the Committee determines that it is necessary to
establish whether grounds exist for termination for Cause, the Award will be
suspended during any period required to conduct such determination, meaning that
the vesting, exercisability and/or lapse of restrictions otherwise applicable to
the Award will be tolled and if grounds for such termination are determined to
exist, the forfeiture specified by this subsection (b) will apply as of the date
of suspension, and if no such grounds are determined to exist, the Award will be
reinstated on its original terms.

Article 12. Transferability of Awards
     12.1 Transferability. Except as provided in Section 12.2 below, during a
Participant’s lifetime, his or her Awards shall be exercisable only by the
Participant or the Participant’s legal representative. Except as permitted by
the Committee, Awards shall not be transferable other than by will or the laws
of descent and distribution; no Awards shall be subject, in whole or in part, to
attachment, execution, or levy of any kind; and any purported transfer in
violation hereof shall be null and void. The Committee may establish such
procedures as it deems appropriate for a Participant to designate a beneficiary
to whom any amounts payable or Shares deliverable in the event of, or following,
the Participant’s death, may be provided.
     12.2 Committee Action. The Committee may, in its discretion, determine that
notwithstanding Section 12.1, any or all Awards (other than ISOs) shall be
transferable to and exercisable by such transferees, and subject to such terms
and conditions, as the Committee may deem appropriate; provided, however, no
Award may be transferred for value (as defined in the General Instructions to
Form S-8).
     For the sole purpose of enabling electronic trading of awarded Shares, the
awarded Shares must be assigned and transferred to Cede & Co., the Nominee of
the Bank Depository Trust Company, a U.S. clearing agency. Any Shares not held
by Cede & Co. must be separately registered by a Participant prior to sale or
trading.
Article 13. Performance Measures
     13.1 Performance Measures. The performance goals upon which the payment or
vesting of an Award to a Covered Employee that is intended to qualify as
Performance-Based Compensation shall be limited to the following Performance
Measures:

  (a)   Net earnings or net income (before or after taxes);     (b)   Earnings
per share (basic or fully diluted);     (c)   Net sales or revenue growth;    
(d)   Net operating profit;     (e)   Return measures (including, but not
limited to, return on assets, capital, invested capital, equity, sales, or
revenue);     (f)   Cash flow (including, but not limited to, operating cash
flow, free cash flow, cash flow return on equity, and cash flow return on
investment);     (g)   Earnings before or after taxes, interest, depreciation,
and/or amortization;     (h)   Booking activity and Backlog growth (including,
but not limited to, as measured in man-hours, future revenues, Foster Wheeler
scope and/or contract profit);

23

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

 

  (i)   Gross or operating margins;     (j)   Productivity ratios;     (k)  
Share price (including, but not limited to, growth measures and total
shareholder return);     (l)   Expense targets;     (m)   Leverage targets
(including, but not limited to, absolute amount of consolidated debt,
EBITDA/consolidated debt ratios and/or debt to equity ratios);     (n)   Credit
rating targets;     (o)   Margins;     (p)   Operating efficiency;     (q)  
Safety;     (r)   Market share;     (s)   Customer satisfaction;     (t)  
Working capital targets;     (u)   Economic value added or EVA® (net operating
profit after tax minus the sum of capital multiplied by the cost of capital);  
  (v)   Developing new products and lines of revenue;     (w)   Reducing
operating expenses;     (x)   Developing new markets;     (y)   Meeting
completion schedules;     (z)   Developing and managing relationships with
regulatory and other governmental agencies;     (aa)   Managing cash;     (bb)  
Managing claims against the Company, including litigation; and     (cc)  
Identifying and completing strategic acquisitions.

     Any Performance Measure(s) may be used to measure the performance of the
Company, any Subsidiary, or an Affiliate as a whole or any business unit of the
Company, any Subsidiary, or an Affiliate or any combination thereof, as the
Committee may deem appropriate, or any of the above Performance Measures as
compared to the performance of a group of comparator companies, or published or
special index that the Committee, in its sole discretion, deems appropriate, or
the Committee may select Performance Measure (j) above as compared to various
stock market indices. The Committee also has the authority to provide for
accelerated vesting of any Award based on the achievement of performance goals
pursuant to the Performance Measures specified in this Article 13.
     Notwithstanding the foregoing, for each Award designed to qualify for the
Performance-Based Exception, the Committee shall establish and set forth in the
Award the applicable performance goals for that Award no later than the latest
date that the Committee may establish such goals without jeopardizing the
ability of the Award to qualify for the Performance-Based Exception and the
Committee shall be satisfied that the attainment of such Performance Measure(s)
shall represent value to the Company in an amount not less than the par value of
any related Performance Shares.
     13.2 Evaluation of Performance. Subject to Section 13.3, the Committee may
provide in any such Award that any evaluation of performance may include or
exclude any of the following events that occurs during a Performance Period:
(a) asset write-downs and other asset revaluations, (b) litigation or claim
judgments or settlements, (c) the effect of changes in tax laws, accounting
principles, or other laws or provisions affecting reported results, (d) any
reorganization and restructuring programs, (e) extraordinary nonrecurring items
as described in Accounting Principles Board Opinion No. 30 and/or in
management’s discussion and analysis of financial condition and results of
operations appearing in the Company’s annual report to shareholders for the
applicable year, (f) acquisitions or divestitures, (g) foreign exchange gains
and losses, and (h) changes in material liability estimates. To the extent such
inclusions or exclusions affect Awards to Covered Employees, they shall be
prescribed in a form that meets the requirements of Code Section 162(m) for
deductibility.
     13.3 Adjustment of Performance-Based Compensation. The degree of payout
and/or vesting of Awards designed to qualify for the Performance-Based Exception
shall be determined based upon the written certification of the Committee as to
the extent to which the performance goals and any other material terms and
conditions precedent to such payment and/or vesting have been satisfied. The
Committee shall have the sole discretion to adjust the determinations of the
value and degree of attainment of the pre-established performance goals;
provided, however, that the performance goals applicable to Awards which are
designed to qualify for the

24

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

 

Performance-Based Exception, and which are held by Covered Employees, may not be
adjusted so as to increase the payment under the Award (the Committee shall
retain the sole discretion to adjust such performance goals upward, or to
otherwise reduce the amount of the payment and/or vesting of the Award relative
to the pre-established performance goals).
     13.4 Committee Discretion. In the event that applicable tax and/or
securities laws change to permit Committee discretion to alter the governing
Performance Measures without obtaining shareholder approval of such changes, the
Committee shall have sole discretion to make such changes without obtaining
shareholder approval. In addition, in the event that the Committee determines
that it is advisable to grant Awards that shall not qualify as Performance-Based
Compensation, the Committee may make such grants without satisfying the
requirements of Code Section 162(m) and base vesting on Performance Measures
other than those set forth in Section 13.1.
Article 14. Director Awards
     The Board shall determine all Awards to Directors. The terms and conditions
of any grant to any such Director shall be set forth in an Award Agreement and
shall be otherwise subject to the Plan.
Article 15. Dividend Equivalents
     Any Participant selected by the Committee may be granted dividend
equivalents based on the dividends declared on Shares that are subject to any
Award, to be credited as of dividend payment dates, during the period between
the date the Award is granted and the date the Award is exercised, vests or
expires, as determined by the Committee. Such dividend equivalents shall be
converted to cash or additional Shares by such formula and at such time and
subject to such limitations as may be determined by the Committee.
Notwithstanding the foregoing, no dividend equivalent described in this
Article 15 which is conditioned on exercise of a Nonqualified Stock Option or a
Stock Appreciation Right may be provided under this Plan.
     Notwithstanding the foregoing, if the grant of an Award to a Covered
Employee is designed to comply with the requirements of the Performance-Based
Exception, the Committee may apply any restrictions it deems appropriate to the
payment of dividends declared with respect to such Award, such that the
dividends and/or the Award maintain eligibility for the Performance-Based
Exception. With respect to Restricted Stock and/or Restricted Stock Units, in
the event that any dividend constitutes a derivative security or an equity
security pursuant to the rules under Section 16 of the Exchange Act, such
dividend shall be subject to a vesting period equal to the remaining vesting
period of the Shares of Restricted Stock and/or Restricted Stock Unit with
respect to which the dividend is paid.
Article 16. Beneficiary Designation
     Each Participant under this Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under this Plan is to be paid in case of his death before he
receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. In the absence of any such
beneficiary designation, benefits remaining unpaid or rights remaining
unexercised at the Participant’s death shall be paid to or exercised by the
Participant’s spouse, executor, administrator, or legal representative, as
determined by the Committee, in its sole discretion.
Article 17. Rights of Participants
     17.1 Employment. Nothing in this Plan or an Award Agreement shall interfere
with or limit in any way the right of the Company, its Affiliates, and/or its
Subsidiaries, to terminate any Participant’s employment or service on the Board
or to the Company at any time or for any reason not prohibited by law, nor
confer upon any Participant any right to continue his employment or service as a
Director or Third-Party Service Provider for any specified period of time.
     Neither an Award nor any benefits arising under this Plan shall constitute
an employment contract with the Company, its Affiliates, and/or its Subsidiaries
and, accordingly, subject to Articles 3 and 19, this Plan and the benefits
hereunder may be terminated at any time in the sole and exclusive discretion of
the Committee without giving rise to any liability on the part of the Company,
its Affiliates, and/or its Subsidiaries.

25

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

 

     17.2 Participation. No individual shall have the right to be selected to
receive an Award under this Plan. In addition, the receipt of any Award shall
not create a right to receive a future Award.
     17.3 Rights as a Shareholder. Except as otherwise provided herein, a
Participant shall have none of the rights of a shareholder with respect to
Shares covered by any Award until the Participant becomes the registered holder
of such Shares.
Article 18. Change in Control
     18.1 Change in Control of the Company. Upon the occurrence of a Change in
Control while the Participant is employed or in service with the Company, an
Affiliate and/or any Subsidiary, unless otherwise specifically prohibited under
Applicable Laws, or by the rules and regulations of any governing governmental
agencies or national securities exchanges, or unless the Committee shall
determine otherwise in the Award Agreement:

  (a)   Any and all Options and SARs granted hereunder shall become immediately
vested and exercisable.     (b)   Any Period of Restriction for Restricted Stock
and Restricted Stock Units granted hereunder that have not previously vested
shall end, and such Restricted Stock and Restricted Stock Units shall become
fully vested.     (c)   The target payout opportunities attainable under all
outstanding Awards which are subject to achievement of any of the Performance
Measures specified in Article 13, or any other performance conditions or
restrictions that the Committee has made the Award contingent upon, shall be
deemed to have been earned as of the effective date of the Change in Control,
and such Awards treated as follows:

  (i)   The vesting of all such Awards denominated in Shares shall be
accelerated as of the effective date of the Change in Control, and there shall
be paid out to Participants a pro rata number of fully paid Shares based upon an
assumed achievement of all relevant targeted performance goals and upon the
length of time within the Performance Period, if any, that has elapsed prior to
the Change in Control. The Committee has the authority to pay all or any portion
of the value of the Shares in cash.     (ii)   All such Awards denominated in
cash shall be paid pro rata to Participants, with the proration determined as a
function of the length of time within the Performance Period, if any, that has
elapsed prior to the Change in Control, and based on an assumed achievement of
all relevant targeted performance goals.

  (d)   Subject to Article 19, herein, the Committee shall have the authority to
make any modifications to the Awards as determined by the Committee to be
appropriate before the effective date of the Change in Control.

     18.2 Treatment of Awards. In the event of a Change in Control where the
Company ceases to have publicly traded equity securities, after the consummation
of the Change in Control, if no replacement awards are issued in lieu of
outstanding Awards under the Plan, then the Plan and all outstanding Awards
granted hereunder shall terminate, and the Company (or successor) shall pay
Participants an amount for their outstanding Awards determined using the
Change-in-Control Price. Participants with outstanding Options and SARs shall be
given an opportunity to exercise all their Options and SARs in connection with
the consummation of the Change in Control and receive payment for any acquired
Shares using the Change-in-Control Price. In each case where payment is required
under this Section 18.2, such payment shall be made no later than ten
(10) business days after the consummation of such Change in Control.
     18.3 Employment or Other Agreement. Notwithstanding the foregoing, to the
extent that an employment or other agreement with the Company, Affiliate or
Subsidiary provides benefits of greater value upon a

26

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

 

Change in Control than those provided in this Article 18, the rights set forth
in such other agreement shall supercede the provisions of this Article 18. In
addition, to the extent that another employment or change in control agreement
provides benefits with respect to Awards covered by this Plan that are of lesser
value than the benefits provided under a Award granted under the Plan, the Award
shall supersede such other employment or change in control agreement to such
extent.
Article 19. Amendment, Modification, Suspension, and Termination
     19.1 Amendment, Modification, Suspension, and Termination. Subject to
Section 19.3, the Committee may, at any time and from time to time, alter,
amend, modify, suspend, or terminate this Plan and any Award Agreement in whole
or in part; provided, however, that, without the prior approval of the Company’s
shareholders and except as provided in Section 4.4, Options or SARs issued under
this Plan will not be repriced, replaced, or regranted through cancellation, or
by lowering the Option Price of a previously granted Option or the Grant Price
of a previously granted SAR, and no material amendment of this Plan shall be
made without shareholder approval if shareholder approval is required by
Applicable Laws.
     19.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.4 hereof) affecting the Company or the financial statements of the
Company or of changes in Applicable Laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent unintended dilution or enlargement of the benefits or potential
benefits intended to be made available under this Plan. The determination of the
Committee as to the foregoing adjustments, if any, shall be conclusive and
binding on Participants under this Plan.
     19.3 Awards Previously Granted. Notwithstanding any other provision of this
Plan to the contrary (other than Section 19.4), no termination, amendment,
suspension, or modification of this Plan or an Award Agreement shall adversely
affect in any material way any Award previously granted under this Plan, without
the written consent of the Participant holding such Award.
     19.4 Amendment to Conform to Law. Notwithstanding any other provision of
this Plan to the contrary, the Committee may amend the Plan or an Award
Agreement, to take effect retroactively or otherwise, as deemed necessary or
advisable for the purpose of conforming the Plan or an Award Agreement to any
present or future law relating to plans of this or similar nature (including,
but not limited to, Code Section 409A), and to the administrative regulations
and rulings promulgated thereunder. By accepting an Award under this Plan, each
Participant agrees to any amendment made pursuant to this Section 19.4 to any
Award granted under the Plan without further consideration or action.
Article 20. Withholding
     20.1 General. The Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, the amount necessary
to satisfy federal, state, and local taxes, domestic or foreign, required by law
or regulation to be withheld with respect to any taxable event arising as a
result of this Plan.
     20.2 Stock Settled Awards. Each Participant shall make such arrangements as
the Committee may require, within a reasonable time prior to the date on which
any portion of an Award settled in Shares is scheduled to vest, for the payment
of all withholding tax obligations through either (i) giving instructions to a
broker for the sale on the open market of a sufficient number of Shares to pay
the withholding tax in a manner that satisfies all Applicable Laws,
(ii) depositing with the Company an amount of funds equal to the estimated
withholding tax liability, or (iii) such other method as the Committee in its
discretion may approve, including a combination of (i) and (ii). If a
Participant fails to make such arrangements, or if by reason of any action or
inaction of the Participant the Company fails to receive a sufficient amount to
satisfy the withholding tax obligation, then, anything else contained in this
Plan or any Award to the contrary notwithstanding, the Shares that would
otherwise have vested on such date shall be subject to forfeiture, as determined
by the Committee, regardless of the Participant’s status as an Employee,
Director or Third-Party Service Provider; provided, that the Committee, in its
sole discretion, may permit a Participant to cure any failure to provide funds
to meeting the withholding tax obligation (including any penalties or interest
thereon), if the Committee determines that the failure was due to factors beyond
the Participant’s control.

27

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

 

Article 21. Successors
     All obligations of the Company under this Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
amalgamation, merger, consolidation, or otherwise, of all or substantially all
of the business and/or assets of the Company.
Article 22. General Provisions
     22.1 Forfeiture Events.

  (a)   The Committee may specify in an Award Agreement that the Participant’s
rights, payments, and benefits with respect to an Award shall be subject to
reduction, cancellation, forfeiture (including repurchase of Shares for nominal
consideration), or recoupment upon the occurrence of certain specified events,
in addition to any otherwise applicable vesting or performance conditions of an
Award. Such events may include, but shall not be limited to, failure to remit
the amounts necessary to satisfy the Participant’s tax withholding obligations,
termination of employment for Cause, termination of the Participant’s provision
of services to the Company, Affiliate, and/or Subsidiary, violation of material
Company, Affiliate, and/or Subsidiary policies, breach of noncompetition,
confidentiality, or other restrictive covenants that may apply to the
Participant, or other conduct by the Participant that is detrimental to the
business or reputation of the Company, its Affiliates, and/or its Subsidiaries.
    (b)   If the Company is required to prepare an accounting restatement due to
the material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, if the Participant
knowingly or grossly negligently engaged in the misconduct, or knowingly or
grossly negligently failed to prevent the misconduct, or if the Participant is
one of the individuals subject to automatic forfeiture under Section 304 of the
Sarbanes-Oxley Act of 2002, the Participant shall reimburse the Company the
amount of any payment in settlement of an Award earned or accrued during the
twelve (12) month period following the first public issuance or filing with the
United States Securities and Exchange Commission (whichever just occurred) of
the financial document embodying such financial reporting requirement.

     22.2 Right of Offset. The Company, any Subsidiary, or an Affiliate may, to
the extent permitted by applicable law, deduct from and set off against any
amounts the Company, any Subsidiary, or an Affiliate, as the case may be, may
owe to the Participant from time to time, including amounts payable in
connection with any Award, owed as wages, fringe benefits, or other compensation
owed to the Participant, such amounts as may be owed by the Participant to the
Company, any Subsidiary, or an Affiliate, as the case may be, although the
Participant shall remain liable for any part of the Participant’s payment
obligation not satisfied through such deduction and setoff. By accepting any
Award granted hereunder, the Participant agrees to any deduction or setoff under
this Section 22.2.
     22.3 Compliance with Code Section 162(m). The Company intends that the
Awards granted to Covered Employees shall satisfy the requirements of the
Performance-Based Exception, unless otherwise determined by the Committee when
the Award is granted. Accordingly, the terms of this Plan, including the
definition of Covered Employee and other terms used therein, shall be
interpreted in a manner consistent with Code Section 162(m) and regulations
thereunder. Notwithstanding the foregoing, because the Committee cannot
determine with certainty whether a given Participant will be a Covered Employee
with respect to a fiscal year that has not yet been completed, the term Covered
Employee as used herein shall mean only a person designated by the Committee as
likely to be a Covered Employee with respect to a fiscal year. If any provision
of the Plan or any Award Agreement designated as intended to satisfy the
Performance-Based Exception does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such provision
shall be construed or deemed amended to the extent necessary to conform to such
requirements, and no provision shall be deemed to confer upon the Committee or
any other person sole discretion to increase the amount of compensation
otherwise payable in connection with such Award upon attainment of the
applicable performance objectives. Payment of any amount that the Company
reasonably determines would not be deductible by reason of Code

28

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

 

Section 162(m) shall be deferred until the earlier of the earliest date on which
the Company reasonably determines that the deductibility of the payment will not
be so limited, or the year following the termination of employment.
     22.4 Legend. The certificates for Shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer of such
Shares.
     22.5 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.
     22.6 Severability. In the event any provision of this Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of this Plan, and this Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.
     22.7 Requirements of Law. The granting of Awards and the issuance of Shares
under this Plan shall be subject to all Applicable Laws, and to such approvals
by any governmental agencies or stock exchange as may be required.
     22.8 Securities Law Compliance. With respect to Insiders, transactions
under the Plan are intended to comply with all applicable conditions of
Rule 16b-3 or its successor under the Exchange Act. To the extent any provision
of the Plan or action by the Committee fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
Committee.
     22.9 Delivery of Title. The Company shall have no obligation to issue or
deliver evidence of title for Shares issued under this Plan prior to:

  (a)   Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and     (b)   Completion of any
registration or other qualification of the Shares under any applicable national
or foreign law or ruling of any governmental body that the Company determines to
be necessary or advisable.

     22.10 Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
     22.11 Investment Representations. The Committee may require any individual
receiving Shares pursuant to an Award under this Plan to represent and warrant
in writing that the individual is acquiring the Shares for investment and
without any present intention to sell or distribute such Shares.
     22.12 Employees Based Outside of the United States. Notwithstanding any
provision of this Plan to the contrary, in order to comply with the laws in
other countries in which the Company, its Affiliates, and/or its Subsidiaries
operate or have Employees, Directors, or Third-Party Service Providers, the
Committee, in its sole discretion, shall have the power and authority to:

  (a)   Determine which Affiliates and Subsidiaries shall be covered by this
Plan;     (b)   Determine which Employees, Directors, and/or Third-Party Service
Providers outside the United States are eligible to participate in this Plan;  
  (c)   Modify the terms and conditions of any Award granted to Employees and/or
Third-Party Service Providers outside the United States to comply with
applicable foreign laws;

29

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

 

  (d)   Establish subplans and modify exercise procedures and other terms and
procedures, to the extent such actions may be necessary or advisable. Any
subplans and modifications to Plan terms and procedures established under this
Section 22.12 by the Committee shall be attached to this Plan document as
appendices; and     (e)   Take any action, before or after an Award is made,
that it deems advisable to obtain approval or comply with any necessary local
government regulatory exemptions or approvals.

     Notwithstanding the above, the Committee may not take any actions
hereunder, and no Awards shall be granted, that would violate applicable law.
     22.13 Uncertificated Shares. To the extent that this Plan provides for
issuance of certificates to reflect the transfer of Shares, the transfer of such
Shares may be effected on a noncertificated basis, to the extent not prohibited
by Applicable Laws.
     22.14 Unfunded Plan. Participants shall have no right, title, or interest
whatsoever in or to any investments that the Company, and/or its Subsidiaries,
and/or its Affiliates may make to aid it in meeting its obligations under this
Plan. Nothing contained in this Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any Participant, beneficiary,
legal representative, or any other individual. To the extent that any individual
acquires a right to receive payments from the Company, its Subsidiaries, and/or
its Affiliates under this Plan, such right shall be no greater than the right of
an unsecured general creditor of the Company, any Subsidiary, or an Affiliate,
as the case may be. All payments to be made hereunder shall be paid from the
general funds of the Company, any Subsidiary, or an Affiliate, as the case may
be and no special or separate fund shall be established and no segregation of
assets shall be made to assure payment of such amounts except as expressly set
forth in this Plan.
     22.15 No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to this Plan or any Award. The Committee shall determine
whether cash, Awards, or other property shall be issued or paid in lieu of
fractional Shares or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.
     22.16 Retirement and Welfare Plans. Neither Awards made under this Plan nor
Shares or cash paid pursuant to such Awards may be included as “compensation”
for purposes of computing the benefits payable to any Participant under the
Company’s, any Subsidiary’s, or an Affiliate’s retirement plans (both qualified
and non-qualified) or welfare benefit plans unless such other plan expressly
provides that such compensation shall be taken into account in computing a
Participant’s benefit.
     22.17 Deferred Compensation. It is the Company’s intent that any Awards
granted under this Plan are structured to be exempt from Code Section 409A, or
are structured to comply with the requirements of deferred compensation subject
to Code Section 409A. To the extent any Award under this Plan constitutes
deferred compensation (after taking into account the definition of Resignation
for Good Reason as provided in Section 2(tt), and any applicable exemptions from
Code Section 409A), and to the extent required by Code Section 409A, no payment
will be made to a Participant who is a “specified employee” (as defined by Code
Section 409A) until the earlier of: (i) the first day following the sixth month
anniversary of the Participant’s “separation from service,” as defined by Code
Section 409A, or (ii) the Participant’s date of death; provided, however, that
any payments delayed during this six month period shall be paid in the aggregate
as soon as administratively practicable following the sixth month anniversary of
the Participant’s separation from service. For purposes of Code Section 409A,
each “payment” (as defined by Code Section 409A) made under this Plan shall be
considered a “separate payment” for purposes of Code Section 409A.
Notwithstanding the Company’s intentions, if any Award granted under this Plan
would be considered deferred compensation as defined under Code Section 409A
(after taking into account any applicable exemptions), and if this Plan or the
terms of an Award fail to meet the requirements of Code Section 409A with
respect to such Award, then such Award shall remain in effect and be subject to
taxation in accordance with Code Section 409A. The Company shall have no
liability for any tax imposed on a Participant by Code Section 409A, and if any
tax is imposed on the Participant, the Participant shall have no recourse
against the Company for payment of any such tax.

30

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

 

     22.18 Nonexclusivity of this Plan. The adoption of this Plan shall not be
construed as creating any limitations on the power of the Board or Committee to
adopt such other compensation arrangements as it may deem desirable for any
Participant.
     22.19 No Constraint on Corporate Action. Nothing in this Plan shall be
construed to: (a) limit, impair, or otherwise affect the Company’s, any
Subsidiary’s, or an Affiliate’s right or power to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure, or to amalgamate, merge or consolidate, or dissolve, liquidate, sell,
or transfer all or any part of its business or assets; or (b) limit the right or
power of the Company, any Subsidiary, or an Affiliate to take any action which
such entity deems to be necessary or appropriate.
     22.20 Governing Law. The Plan and each Award Agreement shall be governed by
the laws of the state of New Jersey, excluding any conflicts or choice of law
rule or principle that might otherwise refer construction or interpretation of
this Plan to the substantive law of another jurisdiction. Unless otherwise
provided in the Award Agreement, recipients of an Award under this Plan are
deemed to submit to the exclusive jurisdiction and venue of the federal or state
courts of New Jersey, to resolve any and all issues that may arise out of or
relate to this Plan or any related Award Agreement.
     22.21 Indemnification. Subject to requirements of New Jersey law, each
individual who is or shall have been a member of the Board, or a Committee
appointed by the Board, or an officer of the Company to whom authority was
delegated in accordance with Article 3, shall be indemnified and held harmless
by the Company against and from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under this Plan and against and from any and all amounts paid by
him or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgement in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his/her own behalf, unless such loss, cost, liability,
or expense is a result of his/her own willful misconduct or except as expressly
provided by statute.
     The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such individuals may be entitled under the
Company’s Articles of Association and its organizational regulations, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.

            FOSTER WHEELER AG
      By:   /s/ Peter J. Ganz       Name: Peter J. Ganz      Title: Executive
Vice President, General
Counsel & Secretary     

31