Exhibit 10.20
EXHIBIT A
Foster Wheeler Annual Executive
Short-term Incentive Plan
(As Amended and Restated effective January 1, 2006)

 

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Table of Contents

         
Article 1.
  Introduction   1
    1.01
  Establishment and Applicability of Plan   1
    1.02
  Effective Date and Term   1
    1.03
  Governing Provisions   1  
Article 2.
  Definitions   1
    2.01
  Base Pay   1
    2.02
  Board   2
    2.03
  CEO   2
    2.04
  Committee   2
    2.05
  Company   2
    2.06
  Disabled   2
    2.07
  Leave of Absence   2
    2.08
  Participant   2
    2.09
  Plan   2
    2.10
  Senior Executive   2
    2.11
  Short-Term Incentive Target Percentage Opportunity   3  
Article 3.
  Participation and Eligibility   3
    3.01
  Eligibility for Participation   3
    3.02
  Partial Year Eligibility   3  
Article 4.
  Annual Incentive Award   3
    4.01
  Annual Incentive Award   3  
    4.02
  Approval Process   4  
Article 5.
  Plan Administration   4
    5.01
  Committee   4
    5.02
  Guarantees   4
    5.03
  Governance   4
    5.04
  Repayment of Overpayments   4  
Article 6.
  Miscellaneous   5
    6.01
  Plan Changes   5
    6.02
  Participant Covenants   5
    6.03
  Assignments   5
    6.04
  No Contract   5
    6.05
  Superseding Provisions   5
    6.06
  Prevailing Law   6
    6.07
  Indemnification of Committee and Board   6
    6.08
  No Prior Right of Award   6

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FOSTER WHEELER ANNUAL EXECUTIVE
SHORT-TERM INCENTIVE PLAN
(As Amended and Restated Effective January 1, 2006)
Article 1.
Introduction

1.01   Establishment and Applicability of Plan.       Foster Wheeler Ltd. (the
“Company”) established the Foster Wheeler Annual Executive Short-Term Incentive
Plan (the “Plan”) effective January 1, 2002. The objectives of the Plan are to
provide the Company with a vehicle through which it may award short-term
incentive compensation to eligible Senior Executives (as defined in Section 2.10
of this Plan) of the Company as determined by the Chairman, President and Chief
Executive Officer of the Company (the “CEO”) and the Compensation Committee (the
“Committee”) of the Board of Directors of the Company (the “Board”).       Only
Senior Executives are eligible for a short-term incentive compensation award
under this Plan. Management retains its usual authority and discretion regarding
short-term incentive compensation for other officers, employees, and consultants
of the Company and its affiliates.   1.02   Effective Date and Term.       The
Plan originally became effective January 1, 2002. Unless superseded or
terminated, the Plan, as amended from time to time, will continue in effect
during subsequent calendar years. This plan is a successor plan to and
supersedes in all respects the incentive compensation provisions of the
“Executive Compensation Plan” of the Company (which Executive Compensation Plan
was first approved by the Board on January 1, 1988 and amended from time to time
until the adoption of the present Plan).   1.03   Governing Provisions.      
For each full or partial year that the Plan is effective, the provisions
applicable to each Participant shall consist of (i) the Plan document set forth
herein and (ii) written determinations by the CEO and the Committee regarding
the Participant’s short-term incentive compensation.

Article 2.
Definitions

2.01   Base Pay.       “Base Pay” shall mean the Participant’s base salary rate
generally in effect during the calendar year for which an award of short-term
incentive compensation, if any, is made.

 

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2.02   Board.       “Board” shall mean the Board of Directors of the Company.  
2.03   CEO.       “CEO” shall mean the Chairman, President and Chief Executive
Officer of the Company.   2.04   Committee.       “Committee” shall mean the
Compensation Committee of the Board.   2.05   Company.       “Company” shall
mean Foster Wheeler Ltd.   2.06   Disabled.       “Disabled” shall mean a
Participant’s being physically or mentally unable to perform the material duties
of the Participant’s position for a continuous period of 18 months.   2.07  
Leave of Absence       “Leave of Absence” shall mean an approved leave of
absence from the Company which qualifies under the Family Medical Leave Act of
1993, as amended, or any other approved leave of absence accepted as such by the
Committee.   2.08   Participant.       “Participant” shall mean an employee
designated as described in Sections 3.01 and 3.02.   2.09   Plan.       “Plan”
shall mean the Foster Wheeler Annual Executive Short-Term Incentive Plan, as set
forth herein and as amended from time to time.   2.10   Senior Executive.      
“Senior Executive” shall mean those persons defined as such in the Foster
Wheeler Ltd. Compensation Committee Charter and such other senior executives
whom the CEO may designate from time-to-time as being covered by the Plan;
provided, however, that in all cases, all officers (as the term is defined in
Rule 16a-1 of the Securities Exchange Act) of the Company and all named
executive officers (as the term is defined in 17 CFR 229.402) of the Company
shall be deemed to be Senior Executives for the purposes of this Plan.   2.11  
Short-Term Incentive Target Percentage Opportunity       “Short-Term Incentive
Target Percentage Opportunity” shall mean the “target opportunity” or similar
number set forth in employment agreements or otherwise

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    established by the CEO, Committee, and/or Board and used as part of the
calculation of bonuses, short-term incentives, or annual incentives (which
bonuses and incentives can vary, in the CEO’s and Committee’s discretion, from
year to year and can incorporate the effect of factors including, but not
limited to, market comparability data, Base Pay, and performance-based
adjustments).

Article 3.
Participation and Eligibility

3.01   Eligibility for Participation.       Each Senior Executive of the Company
or any affiliate of the Company who is designated by name or title by the CEO as
eligible for a calendar year shall be a Participant for that calendar year.
Except as noted in Section 3.02 below, in order to participate in the Plan, the
Senior Executive must have been a full-time employee of the Company as of
January 1 of any calendar year with respect to which a short-term incentive
compensation award is made. A Participant in this Plan in any given year is
ineligible for participation in any other short-term incentive compensation plan
or program within the Company or its affiliated companies for that year.   3.02
  Partial Year Eligibility.       In addition, Senior Executives hired after
January 1, and individuals who otherwise are not active full-time Senior
Executives for the entire calendar year due to death, Disability, or Leave of
Absence, shall also be Participants for that calendar year. Generally, the
Participants described in this Section 3.02 will be eligible to receive an
annual short-term incentive compensation award proportionate to their period of
active service for the subject calendar year. For the avoidance of doubt, the
CEO and Committee have the absolute discretion to make or withhold any award to
any person who was a Participant or Senior Executive at any point during a given
year so long as such award is made pursuant to the procedures set forth
elsewhere in this Plan.

Article 4.
Annual Short-Term Incentive Award

4.01   Annual Short-Term Incentive Award.       Subject to the other provisions
of the Plan, the annual short-term incentive awards, if any, payable to a
Participant for a calendar year shall be recommended by the CEO. Within a
reasonable time after the end of each calendar year, the CEO shall set forth in
writing (i) the Participants eligible for awards; (ii) the amount of the award
(by individual or class of individuals and stated as a dollar amount or a
percentage of Base Pay); and (iii) any factors that should be considered by the
Committee in connection therewith. The awards recommended by the CEO shall only
be paid to the extent they are approved pursuant to Section 4.02.   4.02  
Approval Process.

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      The CEO’s recommendation shall be considered by the Committee. The
Committee may approve the recommendation with respect to any or all
Participants, approve a different amount of award for any or all Participants or
deny an award to any or all Participants. In no event may the amount of an award
be based upon a calculation of more than two times the Participant’s Short-Term
Incentive Target Percentage Opportunity; provided, however, that, for the
avoidance of doubt, the foregoing is not intended to limit the CEO’s or the
Committee’s discretion to adjust the amount of an award upward or downward based
upon other appropriate factors including, among other things, company, business
group, or operating unit performance. To the extent an award has been approved,
it shall be paid as directed by the Committee.

Article 5.
Plan Administration

5.01   Committee.       Subject to the terms hereof, the Committee shall have
authority to control and manage the operation and administration of the Plan,
including all rights and powers necessary or convenient to the carrying out of
its functions hereunder, whether or not such rights and powers are specifically
enumerated herein. The Committee may, in its discretion, delegate any of its
authority with regard to the administration of the Plan, or any portion of the
Plan, to any entity, officer or committee, with or without Committee oversight,
and, in such case, references to the Committee shall be deemed to refer to the
delegatee.   5.02   Guarantees.       The CEO, with the approval of the
Committee, may authorize award guarantees, for up to one year, for any new Plan
Participant. Each proposed guarantee will be decided on an individual basis
taking into account such factors as the Committee deems relevant.   5.03  
Governance.       The Committee shall have sole and exclusive authority to
construe and interpret the Plan, decide all questions of fact and questions of
eligibility and determine the amount, manner and time of payment of any
short-term incentive payment hereunder, which shall be final and binding.   5.04
  Repayment of Overpayments.

  (a)   If the Company discovers that it inadvertently overpaid a Participant or
former Participant with respect to any portion of a short-term incentive
compensation award, the Participant agrees to repay the overpayment amount to
the Company within 30 days of a written request. If the Participant or former
Participant does not make such repayment within 30 days, and has not provided
the Committee with clear and specific evidence (as determined by the Committee
in its discretion) establishing his or her entitlement to the amount the Company
considers to have been overpaid, the Company can recover such overpayment by
offsetting the overpayment amount against any money that might then or later be
due from the Company to the Participant or

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      former Participant, including money that is or becomes due as wages, base
pay or short-term incentive compensation to the Participant or former
Participant.     (b)   The Company’s right under this section to recover
overpayments through offset is not the exclusive means by which it may pursue
recovery of said overpayment. In addition to or in lieu of offset, the Company
may also pursue ordinary collection efforts or legal action against the
Participant or former Participant.

Article 6.
Miscellaneous

6.01   Plan Changes.       The Company reserves the right to modify or amend the
Plan, at any time, and from time to time, by action of the Board. The Company,
through the Board, also reserves the right to terminate the Plan at any time.
Neither amendment nor termination of the Plan may adversely affect any
short-term incentive payments fully awarded and approved pursuant to Article 4
before the amendment or termination effective date, and any such short-term
incentive payment will be paid notwithstanding the amendment or termination of
the Plan.   6.02   Participant Covenants.       If a Participant fails to adhere
to his/her material obligations to the Company, including, but not limited to
his/her restrictive covenant obligations, the CEO and the Committee, jointly and
severally, shall have the right to either revoke or amend the Participant’s
participation, and his or her entitlement to short-term incentive compensation
payments (including fully awarded and approved short-term incentive compensation
payments), as they deem appropriate in their sole discretion.   6.03  
Assignments.       No Participant may sell, assign, transfer, discount or pledge
as collateral for a loan or otherwise anticipate the right to any distribution
under this Plan.   6.04   No Contract.       This Plan does not constitute a
contract of employment with the Company for a specified term.   6.05  
Superseding Provisions.       The Plan supersedes any previous short-term
incentive compensation plans affecting the Participant for the term covered by
the Plan.       There are no oral agreements or understandings between the
Company and any Participant affecting or relating to the Plan which are not
referenced herein. No alteration, modification or change of the Plan shall be
effective unless approved in writing by the Committee.

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6.06   Prevailing Law.       The Plan shall be construed and enforced in
accordance with the laws of the State of New Jersey, without giving effect to
its conflict of laws provisions. The Plan is not subject to the provisions of
the Employee Retirement Income Security Act of 1974, as amended.   6.07  
Indemnification of Committee and Board.       In additions to such other rights
of indemnification as they may have, the members of the Committee and the Board
shall be indemnified by the Company against all costs and expenses reasonably
incurred by them in connection with any action, suit or proceeding to which they
or any of them may be a party by reason of any action taken or failure to act
under or in connection with the Plan or any award granted pursuant hereto, and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by legal counsel selected by the Company) or paid by them in
satisfaction of any judgment in any such action, suit or proceeding, except a
judgment based upon a finding of bad faith, provided that upon institution of
any such action, suit or proceeding, the Committee or Board member desiring
indemnification shall give the Company an opportunity, at its own expense, to
handle and defend the same.   6.08   No Prior Right of Award.       Nothing in
the Plan shall be deemed to give any officer or employee, or his or her legal
representative or assigns or any other person or entity claiming under or
through him or her, any contractual right to a bonus or short-term incentive
compensation award or otherwise to participate in the benefits of the Plan, and
in all cases, each short-term incentive compensation award shall be subject to
the approval and discretion of the CEO and the Committee.

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