EMPLOYMENT
      AGREEMENT

     

    EMPLOYMENT
      AGREEMENT
      (this
“Agreement”)
      dated
      as of August 11, 2006, between FOSTER
      WHEELER LTD.,
      a
      Bermuda company (the “Company”),
      and
Raymond J.
      Milchovich
      (the
“Executive”).

     

    The
      Company wishes to continue to employ the Executive, and the Executive wishes
      to
      continue employment with the Company, on the terms and conditions set forth
      in
      this Agreement.

     

    Accordingly,
      the Company and the Executive hereby agree as follows:

     

    	1.  	
            Employment,
              Duties and Acceptance.

          


     

    1.1  Employment,
      Duties.
      The
      Company hereby employs the Executive for the Term (as defined in Section 2.1),
      to render exclusive and full-time services to the Company, in the capacity
      of
      president and chief executive officer of the Company and to perform such other
      duties consistent with such position (including service as a director or officer
      of any affiliate of the Company if elected) as may be assigned by the Board
      of
      Directors of the Company (the “Board”);
      provided, however, that the Executive may, subject to approval by the Board,
      serve on the Board of Directors of not more than two for-profit businesses
      at
      any time during the Term that do not compete with the Company and may
      participate in civic, charitable and industry organizations to the extent that
      such participation does not materially interfere with the performance of his
      duties hereunder. The Executive’s title shall be President and Chief Executive
      Officer, or such other titles of at least equivalent level consistent with
      the
      Executive’s duties from time to time as may be assigned to the Executive by the
      Board, and the Executive shall have all authorities as are customarily and
      ordinarily exercised by executives in similar positions in similar businesses
      in
      the United States. The Executive shall report solely to the Board. The Company
      agrees to use its best efforts to cause the Executive to be elected to the
      Board, and to have the Executive serve as Chairman of the Board throughout
      his
      service on the Board during the Term.

     

    1.2  Acceptance.
      The
      Executive hereby accepts such continued employment and agrees to render the
      services described above. During the Term, and consistent with the above, the
      Executive agrees to serve the Company faithfully and to the best of the
      Executive’s ability, to devote the Executive’s entire business time, energy and
      skill to such employment, and to use the Executive’s best efforts, skill and
      ability to promote the Company’s interests.

     

    1.3  Location.
      The
      duties to be performed by the Executive hereunder shall be performed primarily
      at the Company’s offices in Clinton, New Jersey, subject to reasonable travel
      requirements consistent with the nature of the Executive’s duties from time to
      time on behalf of the Company. The Executive shall keep his primary residence
      within reasonable daily commute of the Clinton, New Jersey area throughout
      the
      Term.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    	2.  	
            Term
              of Employment.

          


     

    2.1  Term.
      The
      term of the Executive’s employment under this Agreement (the “Term”)
      shall
      commence on August 11, 2006 (the “Effective
      Date”),
      and
      shall end on the earlier of (i) the third anniversary of the Effective Date
      and
      (ii) such earlier date on which the Term is terminated pursuant to Section
      4;
      provided, however, that upon the third anniversary of the Effective Date, and
      upon each anniversary thereafter, the Term shall be automatically extended
      for
      one (1) year unless either the Company or the Executive shall have given written
      notice to the other at least ninety (90) days prior thereto that the Term shall
      not be so extended.

     

    	3.  	
            Compensation;
              Benefits.

          


     

    3.1  Salary.
      As
      compensation for all services to be rendered pursuant to this Agreement, the
      Company agrees to pay to the Executive during the Term a base salary, payable
      monthly in arrears, at the initial annual rate of $945,000 (the “Base
      Salary”).
      On
      each anniversary of the Effective Date or such other appropriate date as may
      be
      agreed by the parties during the Term, the Company shall review the Base Salary
      and determine if, and by how much, the Base Salary should be increased. Once
      the
      Base Salary has been increased hereunder, it shall not be decreased. All
      payments of Base Salary or other compensation hereunder shall be less such
      deductions or withholdings as are required by applicable law and
      regulations.

     

    3.2  Bonus.
      In
      addition to the amounts to be paid to the Executive pursuant to Section 3.1,
      if
      the Company achieves 100% or more of the Company’s target objectives for a
      fiscal year of the Company, such target objectives which are recommended by
      the
      Executive and approved by the Compensation Committee of the Board (the
“Compensation
      Committee”)
      not
      later than March 31 of such year, the Executive shall receive an annual bonus
      (an “Annual
      Bonus”)
      equal
      to the product of (i) the Executive’s Base Salary at the rate in effect at
      the beginning of such fiscal year and (ii) 100%. Should the Company achieve
      objectives in a fiscal year which are recommended by the Executive and approved
      by the Compensation Committee not later than March 31 to be significantly beyond
      expectations for the Company’s performance for such year, the 100% multiplier
      set forth in clause (ii) of the preceding sentence shall be increased up to
      a maximum of two (2) times the foregoing multiplier. Upon recommendation by
      the
      Executive and approval by the Compensation Committee not later than March 31
      of
      the year to which it relates, a formula will be established to provide for
      recognition of threshold objectives below the target and for pro rata awards
      between the threshold award opportunity and the maximum award opportunity.
      Any
      Annual Bonus earned hereunder shall be payable not later than two and one-half
      months following the end of the fiscal year to which it relates. Except in
      the
      event of a termination of the Executive’s employment pursuant to Section 4.4, in
      the event that the Executive’s employment shall terminate other than on a date
      which is the last day of a fiscal year of the Company, the Executive’s Annual
      Bonus with respect to the fiscal year in which employment terminates shall
      be
      prorated at target for the actual number of days of the Executive’s employment
      by the Company during such fiscal year, and such Annual Bonus, if any, shall
      be
      payable on the date that executive bonuses are paid generally, whether or not
      the Executive remains employed on such date. The Executive shall be entitled
      to
      no Annual Bonus in respect of the year 2006 or the fiscal year of the Company
      in
      which his Employment terminates if such termination is pursuant to Section
      4.4.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    3.3  Long-Term
      Incentive.
      Subject
      to the provisions of Section 4 of this Agreement, the Executive will receive
      on
      the Effective Date (known as the “Grant
      Date”)
      the
      following:

     

    3.3.1  A
      grant
      of a number of shares of common stock of the Company (“Common
      Stock”)
      with
      an economic value as of the Grant Date equal to approximately $4,987,500 (the
      “Restricted
      Stock”).
      The
      Restricted Stock will be granted under the Company’s Omnibus Incentive Plan. The
      Restricted Stock will be issued on the Grant Date.

     

    3.3.2  A
      grant
      of stock options to purchase shares of Common Stock with an economic value
      as of
      the Grant Date equal to approximately $4,987,500 (the “Options”).
      The
      Options will be granted under the Company’s Omnibus Incentive Plan and for
      purposes of such Plan (a) the Options will be Nonqualified Stock Options, (b)
      the exercise price will be equal to the Fair Market Value for a share of Common
      Stock as defined under the terms of the Company’s Omnibus Incentive Plan, and
      (c) the Expiration Date will be the last business day immediately preceding
      the
      fifth anniversary of the Grant Date. The Options will be issued on the Grant
      Date. For purposes of Section 3.3.1 and Section 3.3.2 herein, the determination
      of the number of Restricted Stock and Options to be granted to Executive shall
      be consistent with the methodology used by Hewitt Associates for valuing
      restricted stock and stock options granted to employees of its publicly traded
      clients.

     

    With
      respect to the Restricted Stock and the Options issued on the Grant Date,
      one-third (33-1/3%) of both the Restricted Stock and the Options will vest
      on
      the first anniversary of such Grant Date, another third will vest on the second
      anniversary of such Grant Date, and the remaining one-third of both the
      Restricted Stock and the Options will vest on the third anniversary of such
      Grant Date, provided that the Executive is still employed on such dates, subject
      to the provisions of Section 4 of this Agreement. Executive shall not be
      eligible to receive any additional regular cycle grants under the Company’s
      Omnibus Incentive Plan until after the third anniversary of the Grant
      Date.

     

    The
      Restricted Stock and Options will be governed by separate agreements entered
      into between the Executive and the Company, and in the event of any
      inconsistency between such separate agreements and the terms of this Agreement
      (including, but not limited to Section 4), this Agreement shall govern and
      control. For avoidance of doubt, nothing in the preceding sentence shall be
      construed to limit the application of any provision of such separate agreements
      that expressly refers to and incorporates a provision of this
      Agreement.

     

    3.4  Business
      Expenses.
      The
      Company shall pay or reimburse the Executive for all reasonable expenses
      actually incurred or paid by the Executive during the Term in the performance
      of
      the Executive’s services under this Agreement, subject to and in accordance with
      applicable expense reimbursement and related policies and procedures as in
      effect from time to time.

     

    3.5  Vacation.
      During
      each year of the Term, the Executive shall be entitled to a paid vacation period
      or periods of five (5) weeks taken in accordance with applicable vacation policy
      as in effect from time to time.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    3.6  Fringe
      Benefits; Perquisites; Executive Cooperation.

     

    (i)  During
      the Term, the Executive shall be entitled to participate in those employee
      pension benefits plans, group insurance, medical, dental, disability and other
      benefit plans and perquisites of the Company as from time to time in effect
      and
      made available to senior executives of the Company generally; provided, however,
      that the Executive shall not be entitled to participate in any non-tax qualified
      defined benefit or defined contribution plan offered by the Company or in any
      Company split-dollar management life insurance program.

     

    (ii)  During
      the Term, the Executive shall be provided by the Company with the following
      perquisites:

     

    (a)  supplemental
      term life insurance equal to Executive’s Base Salary;

     

    (b)  an
      annual
      physical examination;

     

    (c)  home
      office equipment and associated services for business use in Executive’s
      homes;

     

    (d)  should
      the personal security of the Executive become an issue, reasonable security
      measures shall be provided by the Company, as required and determined by the
      Executive and subject to approval by the Compensation Committee of the Board;
      and

     

    (e)  annual
      reimbursement for the reasonable fees associated with financial planning and
      income tax advice and document preparation.

     

    (iii)  Should
      the Company so elect, the Executive will cooperate in assisting the Company
      in
      obtaining a key man life insurance policy on the life of the Executive, the
      beneficiary of which shall be the Company, including completing all necessary
      application materials and submitting to one or more physical examinations with
      a
      physician of the Company’s choice.

     

    3.7  SERP.
      Notwithstanding anything in this Agreement to the contrary, that certain
      Amendment dated January 23, 2003 (regarding Executive’s SERP benefit) to
      the Executive’s original Employment Agreement with the Company dated
      October 22, 2001 shall remain in full force and effect until the last
      scheduled SERP payment is made in October, 2006.

     

    	4.  	
            Termination.

          


     

    4.1  General.
      Following any termination of the Executive’s employment, the Company shall pay
      or provide to the Executive, or his estate or beneficiary, as the case may
      be,
      (i) Base Salary earned through the date of such termination; (ii) except in
      the
      case of a termination described in Section 4.4, any earned, but unpaid, annual
      cash incentive or other incentive awards; (iii) a payment representing the
      Executive’s accrued but unpaid vacation; (iv) any vested, but not forfeited
      benefits on the date of such termination under the Company’s employee benefit
      plans in accordance with the terms of such plans; and (v) benefit continuation
      and conversion rights to which the Executive is entitled under the Company’s
      employee benefit plans and this Agreement.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    4.2  Death.
      In
      addition to those payments and benefits described in Section 4.1, if the
      Executive shall die during the Term, the Term shall immediately terminate and
      the Executive shall be entitled to no further payments or benefits hereunder,
      except: (i) the Company shall make a lump sum cash payment to the Executive’s
      estate or beneficiary, as the case may be, within two (2) months following
      such
      termination equal to one (1) year of the Base Salary on the date of such
      termination; (ii) continuing receipt of the medical benefits described in
      Section 3.6(i) during the twenty-four (24) month period commencing on the date
      of such termination; (iii) any granted but unvested Options set forth in Section
      3.3 herein shall become vested and exercisable and shall remain so for the
      period commencing the date of such termination through the second anniversary
      of
      such termination; and (iv) any granted but unvested Restricted Stock set forth
      in Section 3.3 shall become vested.

     

    4.3  Disability.
      In
      addition to those payments and benefits described in Section 4.1, if during
      the
      Term the Executive shall become physically or mentally disabled (a “Disability”),
      whether totally or partially, such that the Executive is unable to perform
      the
      Executive’s principal services hereunder for a period of not less than one
      hundred eighty (180) consecutive days, the Company may at any time after the
      last day of such period (provided that such disability is continuing), by
      written notice to the Executive, terminate the Term and Executive shall be
      entitled to no further payments or benefits hereunder, except that the Executive
      shall be entitled to receive the payments and benefits described in Section
      4.2
      above, less any payments made to the Executive pursuant to a Company disability
      insurance plan.

     

    4.4  For
      Cause.
      Without
      Good Reason.
      In
      addition to those payments and benefits described in Section 4. 1, if the
      Company terminates the Executive’s employment for Cause or the Executive
      terminates his employment other than for Good Reason, the Term shall terminate
      immediately and (i) the Executive shall be entitled to receive no further
      amounts or benefits hereunder, except as required by law; (ii) all unvested
      Options and Restricted Stock set forth in Section 3.3 herein shall be
      immediately forfeited; and (iii) all vested Options and Restricted Stock set
      forth in Section 3.3 herein which are not forfeited pursuant to clause (ii)
      of
      this sentence shall be forfeited on the date which is ninety (90) days following
      such termination. For purposes of this Agreement, “Cause”
shall
      mean the Executive (i) being convicted of, or pleading guilty or not contest
      to,
      a felony (except for motor vehicle violations); (ii) engaging in conduct that
      constitutes gross misconduct or fraud in connection with the performance of
      his
      duties to the Company; or (iii) materially breaching this Agreement which the
      Executive does not cure within thirty (30) days after the Company provides
      written notice of such breach to the Executive. The Executive shall not
      terminate his employment without Good Reason prior to the date which is thirty
      (30) days following the date on which the Executive provides written notice
      of
      such termination to the Company; provided, however, that the Company may waive
      such notice period in writing.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    4.5  Without
      Cause; For Good Reason.
      In
      addition to those payments and benefits described in Section 4.1, if during
      the
      Term the Company terminates the Executive’s employment without Cause or if the
      Executive terminates his employment with Good Reason, the Term shall immediately
      terminate and the Executive shall be entitled to no further payments or benefits
      hereunder, except: (i) the Company shall make a lump sum cash payment to the
      Executive within two (2) months following such termination equal to the sum
      of
      (a) two hundred percent (200%) of the Base Salary on the date of such
      termination and (b) two hundred percent (200%) of the Executive’s Annual Bonus
      at target; (ii) continuing receipt of those benefits described in Section 3.6(i)
      during the twenty-four month period commencing on the date of such termination;
      (iii) any granted but unvested Options set forth in Section 3.3 herein shall
      become vested and exercisable and shall remain so for the period commencing
      the
      date of such termination through the second anniversary of such termination;
      (iv) any granted but unvested Restricted Stock set forth in Section 3.3 shall
      become vested; and (v) the Company shall pay the reasonable cost of
      executive-level career assistance services for the Executive by a firm
      designated by the Executive for a period of twelve months following such
      termination. For purposes of this Agreement, “Good
      Reason”
shall
      mean, without the Executive’s consent, the occurrence of any of the following
      during the Term: (i) a material change in the Executive’s position causing it to
      be of materially less stature or responsibility, or a change in the Executive’s
      reporting relationship, but in each case only if the Company does not cure
      such
      change within thirty (30) days after the Executive provides written notice
      of
      such change to the Company (the Executive’s notice to be given within thirty
      (30) days of such change); or (ii) following a “Change
      of Control”
(as
      defined in Section 4.6.2), the relocation of the Executive’s principal place of
      employment by more than fifty (50) miles; (iii) the Company materially breaches
      this Agreement and does not cure such breach within thirty (30) days after
      the
      Executive provides written notice of such breach to the Company (the Executive’s
      notice to be provided within thirty (30) days of his being notified of such
      breach); or (iv) the Executive is not nominated for election to the Board or,
      if
      elected to the Board, is not named as its Chairman, or the Executive is not
      timely renominated for election to the Board or is involuntarily removed from
      the Board under circumstances that would not constitute Cause or Disability
      hereunder. The Company shall not terminate the Executive’s employment without
      Cause prior to the date which is thirty (30) days following the date on which
      the Company provides written notice of such termination to the Executive;
      provided, however, that the Executive may waive such notice period in writing.
      Notwithstanding anything to the contrary in this Section 4.5, if the Executive
      constitutes a “specified
      employee”
      as
      defined and applied in Code Section 409A, as of his termination date, any
      payments due hereunder that may constitute deferred compensation payments under
      Code Section 409A may not commence to Executive until the first day following
      the sixth-month anniversary of Executive’s termination date; provided, however,
      that any payments delayed during this six-month period shall be paid in the
      aggregate as soon as administratively practicable following the six-month
      anniversary of the Executive’s termination date.

     

    4.6  Change
      of Control.

     

    4.6.1  In
      addition to those payments and benefits described in Section 4.1, if during
      the
      Term the Company terminates the Executive’s employment without Cause or the
      Executive terminates his employment with Good Reason, in each case within the
      twenty-four (24) month period following a Change of Control, or if the Executive
      terminates his employment for any reason during the thirty (30) day period
      commencing on the date which is twelve (12) months following a Change of
      Control, the Term shall immediately terminate and the Executive shall be
      entitled to no further payments or benefits hereunder, except (i) the Company
      shall make a lump sum cash payment to the Executive equal to the sum of (a)
      three hundred percent (300%) of the Base Salary on the date of such termination
      and (b) three hundred percent (300%) of the Executive’s Annual Bonus at target;
      (ii) continuing receipt of those benefits described in Section 3.6(i) during
      the
      thirty-six month period commencing on the date of each termination; (iii) any
      granted but unvested Options set forth in Section 3.3 herein shall become vested
      and exercisable and shall remain so for the period commencing on the date of
      such termination through the second anniversary of such termination; (iv) any
      granted but unvested Restricted Stock set forth in Section 3.3 shall become
      vested; (v) the Company shall pay the reasonable cost of executive-level career
      assistance services for the Executive by a firm designated by the Executive
      for
      a period of twelve months following such termination; and (vi) the payment
      required, if any, pursuant to Section 4.6.3.1-7.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    4.6.2  For
      purposes of this Agreement, a “Change
      of Control”
shall
      be deemed to occur upon: (i) the sale, lease, conveyance or other disposition
      of
      all or substantially all of the Company’ s assets as an entirety or
      substantially as an entirety to any person, entity or group of persons acting
      in
      concert other than in the ordinary course of business; (ii) any transaction
      or
      series of related transactions (as a result of a tender offer, merger,
      consolidation or otherwise) that results in any Person (as defined in Section
      13(h)(8)(E) under the Securities Exchange Act of 1934) becoming the beneficial
      owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934),
      directly or indirectly, or more than 20% of the aggregate voting power of all
      classes of common equity of the Company, except if such Person is (w) a
      subsidiary of the Company, (x) an employee benefit plan for employees of the
      Company or (y) a company formed to hold the Company’ s common equity securities
      and whose shareholders constituted, at the time such company became such holding
      company, substantially all the shareholders of the Company; or (iii) a change
      in
      the composition of the Board over a period of thirty-six (36) consecutive months
      or less such that a majority of the then current Board members ceases to be
      comprised of individuals who either (a) have been Board members
      continuously since the beginning of such period, or (b) have been elected
      or nominated for election as Board members during such period by at least a
      majority of the Board members described in clause (a) who were still in
      office at the time such election or nomination was approved by the
      Board.

     

    4.6.3.1 If
      it
      shall be determined that any payment or distribution of any type to or in
      respect of the Executive made directly or indirectly, by the Company, whether
      paid or payable or distributed or distributable pursuant to the terms of this
      Agreement or otherwise (the “Total
      Payments”),
      is or
      will be subject to the excise tax imposed by Section 4999 of the Internal Code
      of 1986, as amended (the “Code”),
      or
      any interest or penalties with respect to such excise tax (such excise tax,
      together with any such interest and penalties, are collectively referred to
      as
      the “Excise
      Tax”),
      then
      the Executive shall be entitled to receive an additional payment (a
“Gross-Up
      Payment”)
      in an
      amount such that after payment by the Executive of all taxes (including any
      interest or penalties imposed with respect to such taxes) imposed upon the
      Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
      to the Excise Tax imposed upon the Total Payments.

     

    4.6.3.2 All
      computations and determinations relevant to Section 4.6.3 and this 4.6.4 shall
      be made by a national accounting firm selected and reimbursed by the Company
      from among the five (5) largest accounting firms in the United States (the
      “Accounting
      Firm”),
      subject to the Executive’s consent (not to be unreasonably withhold), which firm
      may be the Company’s accountants. Such determinations shall include whether any
      of the Total Payments are “parachute
      payments”
(within
      the meaning of Section 280G of the Code). In making the initial determination
      hereunder as to whether a Gross-Up Payment is required, the Accounting Firm
      shall determine that no Gross-Up Payment is required if the Accounting Firm
      is
      able to conclude that no “Change of Control” has occurred (within the meaning of
      Section 280G of the Code). If the Accounting Firm determines that a Gross-Up
      Payment is required, the Accounting Firm shall provide its determination (the
      “Determination”),
      together with detailed supporting calculations regarding the amount of any
      Gross-Up Payment and any other relevant matter both to the Company and the
      Executive by no later than ten (10) days following the Termination Date, if
      applicable, or such earlier time as is requested by the Company or the Executive
      (if the Executive reasonably believes that any of the Total Payments may be
      subject to the Excise Tax). If the Accounting Firm determines that no Excise
      Tax
      is payable by the Executive, it shall furnish the Executive and the Company
      with
      a written statement that such Accounting Firm has concluded that no Excise
      Tax
      is payable (including the reasons therefor) and that the Executive has
      substantial authority not to report any Excise Tax on his federal income tax
      return.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    4.6.3.3 If
      a
      Gross-Up Payment is determined to be payable, it shall be paid to the Executive
      within twenty (20) days after the Determination (and all accompanying
      calculations and other material supporting the Determination) is delivered
      to
      the Company by the Accounting Firm. Any determination by the Accounting Firm
      shall be binding upon the Company and the Executive, absent manifest
      error.

     

    4.6.3.4 As
      a
      result of uncertainty in the application of Section 4999 of the Code at the
      time
      of the initial determination by the Accounting Firm hereunder, it is possible
      that Gross-Up Payments not made by the Company should have been made
      (“Underpayment”),
      or
      that Gross-Up Payments will have been made by the Company which should not
      have
      been made (“Overpayments”).
      In
      either such event, the Accounting Firm shall determine the amount of the
      Underpayment or Overpayment that has occurred. In the case of an Underpayment,
      the amount of such Underpayment (together with any interest and penalties
      payable by the Executive as a result of such Underpayment) shall be promptly
      paid by the Company to or for the benefit of the Executive.

     

    4.6.3.5 In
      the
      case of an Overpayment, the Executive shall, at the direction and expense of
      the
      Company, take such steps as are reasonably necessary (including the filing
      of
      returns and claims for refund), follow reasonable instructions from, and
      procedures established by, the Company, and otherwise reasonably cooperate
      with
      the Company to correct such Overpayment, provided, however, that (i) the
      Executive shall not in any event be obligated to return to the Company an amount
      greater than the net after-tax portion of the Overpayment that he has retained
      or has recovered as a refund from the applicable taxing authorities and (ii)
      this provision shall be interpreted in a manner consistent with the intent
      of
      this Section 4.6.3, which is to make the Executive whole, on an after-tax basis,
      from the application of the Excise Taxes, it being acknowledged and understood
      that the correction of an Overpayment may result in the Executive repaying
      to
      the Company an amount which is less than the Overpayment.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    4.6.3.6 The
      Executive shall notify the Company in writing of any claim by the Internal
      Revenue Service relating to the possible application of the Excise Tax under
      Section 4999 of the Code to any of the payments and amounts referred to herein
      and shall afford the Company, at its expense, the opportunity to control the
      defense of such claim (for the sake of clarity, if the Internal Revenue Service
      is successful in any such claim or the Executive reaches a final settlement
      with
      the Internal Revenue Service with respect to such claim (after having afforded
      the Company, at its expense, the opportunity to control the defense of such
      claim), the amount of the Excise Tax resulting from such successful claim or
      settlement shall be determinative as to whether or not there has been an
      Underpayment or an Overpayment for purposes of Section 4.6.3.4).

     

    4.6.3.7 Without
      limiting the intent of this Section 4.6.3 to make the Executive whole, on an
      after-tax basis, from the application of the Excise Taxes, all determinations
      by
      the Accounting Firm shall be made with a view to minimizing the application
      of
      Sections 280G and 4999 of the Code of any of the Total Payments, subject,
      however, to the following: the Accounting Firm shall make its determination
      on
      the basis of “substantial
      authority”
(within
      the meaning of Section 6230 of the Code) and shall provide opinions to that
      effect to both the Company and the Executive upon the request of either of
      them.

     

    4.6.3.8 Notwithstanding
      anything to the contrary in this Section 4.6, if the Executive constitutes
      a
“specified
      employee”
      as
      defined and applied in Code Section 409A as of his termination date, any
      payments due under this Section 4.6 that may constitute deferred compensation
      payments within the meaning of Code Section 409A may not commence to Executive
      until the first day following the six-month anniversary of Executive’s
      termination date; provided, however, that any such 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 Executive’s termination
      date.

     

    4.7  End
      of
      Term.
      In
      addition to those payments and benefits described in Section 4.1, if the Term
      of
      this Agreement terminates by reason of the Company’s written notice pursuant to
      Section 2.1 herein not to extend the Term, the Executive shall be entitled
      to no
      further payments or benefits, except that the Company shall make a lump sum
      cash
      payment to the Executive within two (2) months following such termination equal
      to two hundred percent (200%) of the Base Salary on the date of such
      termination.

     

    4.8  No
      Mitigation.
      Upon
      termination of the Executive’s employment with the Company, the Executive shall
      be under no obligation to seek other employment or otherwise to mitigate the
      obligations of the Company under this Agreement.

     

    	5.  	
            Protection
              of Confidential Information: Non-Competition.

          


     

    5.1  The
      Executive acknowledges that the Executive’s services will be unique, that they
      will involve the development of Company-subsidized relationships with key
      customers, suppliers, and service providers as well as with key Company
      employees and that the Executive’s work for the Company will give the Executive
      access to highly confidential information not available to the public or
      competitors, including trade secrets and confidential marketing, sales, product
      development and other data and information which it would be impracticable
      for
      the Company to effectively protect and preserve in the absence of this Section
      5
      and the disclosure or misappropriation of which could materially adversely
      affect the Company. Accordingly, the Executive agrees:

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    5.1.1  except
      in
      the course of performing the Executive’s duties provided for in Section 1.1, not
      at any time, whether before, during or after the Executive’s employment with the
      Company, to divulge to any other entity or person any confidential information
      acquired by the Executive concerning the Company’s or its affiliates’ financial
      affairs or business processes or methods or their research, development or
      marketing programs or plans, or any other of its or their trade secrets. The
      foregoing prohibitions shall include, without limitation, directly or indirectly
      publishing (or causing, participating in, assisting or providing any statement,
      opinion or information in connection with the publication of) any diary, memoir,
      letter, story, photograph, interview, article, essay, account or description
      (whether fictionalized or not) concerning any of the foregoing, publication
      being deemed to include any presentation or reproduction of any written, verbal
      or visual material in any communication medium, including any book, magazine,
      newspaper, theatrical production or movie, or television or radio programming
      or
      commercial. In the event that the Executive is requested or required to make
      disclosure of information subject to this Section 5.1.1 under any court order,
      subpoena or other judicial process, then, except as prohibited by law, the
      Executive will promptly notify the Company, take all reasonable steps requested
      by the Company to defend against the compulsory disclosure and permit the
      Company to control with counsel of its choice any proceeding relating to the
      compulsory disclosure. The Executive acknowledges that all information, the
      disclosure of which is prohibited by this section, is of a confidential and
      proprietary character and of great value to the Company.

     

    5.1.2  to
      deliver promptly to the Company on termination of the Executive’s employment
      with the Company, or at any time that the Company may so request, all
      confidential memoranda, notes, records, reports, manuals, drawings, blueprints
      and other documents (and all copies thereof) relating to the Company’s business
      and all property associated therewith, which the Executive may then possess
      or
      have under the Executive’s control.

     

    5.2  In
      consideration of the Company’s entering into this Agreement, the Executive
      agrees that at all times during the Term and thereafter, until the first
      anniversary of the date of the termination of the Term for any reason, the
      Executive shall not, directly or indirectly, for himself or on behalf of or
      in
      conjunction with, any other person, company, partnership, corporation, business,
      group, or other entity (each, a “Person”):

     

    5.2.1  provide
      services to a “Competitor”
(as
      defined below), as an officer, director, shareholder, owner, partner, joint
      venturer, or in any other capacity, whether as an executive, independent
      contractor, consultant, advisor, or sales representative; or

     

    5.2.2  call
      upon
      any Person who is or that is, at such date of termination, engaged in activity
      on behalf of the Company or any affiliate of the Company for the purpose or
      with
      the intent of enticing such Person to cease such activity on behalf of the
      Company or such affiliate.

     

    For
      purposes of this Agreement, “Competitor” means, on any date, a person or entity
      that is primarily engaged in a material line of business conducted by the
      Company.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    5.3  If
      the
      Executive commits a breach of any of the provisions of Section 5.1 or 5.2
      hereof, the Company shall have the right and remedy to have the provisions
      of
      this Agreement specifically enforced by any court having equity jurisdiction,
      it
      being acknowledged and agreed that any such breach will cause irreparable injury
      to the Company and that money damages will not provide an adequate remedy to.
      the Company, and, if the Executive attempts or threatens to commit a breach
      of
      any of the provisions of Section 5.1 or 5.2, the right and remedy to be granted
      a preliminary and permanent injunction in any court having equity jurisdiction
      against the Executive committing the attempted or threatened breach, it being
      agreed that each of such rights and remedies shall be independent of the others
      and shall be severally enforceable, and that all of such rights and remedies
      shall be in addition to, and not in lieu of, any other rights and remedies
      available to the Company under law or in equity.

     

    5.4  If
      any of
      the covenants contained in Section 5.1, 5.2 or 5.3, or any part thereof,
      hereafter are construed to be invalid or unenforceable, the same shall not
      affect the remainder of the covenant or covenants, which shall be given full
      effect, without regard to the invalid portions.

     

    5.5  The
      period during which the prohibitions of Section 5.2 are in effect shall be
      extended by any period or periods during which the Executive is in violation
      of
      Section 5.2.

     

    5.6  If
      any of
      the covenants contained in Section 5.1 or 5.2, or any part thereof, are held
      to
      be unenforceable because of the duration of such provision or the area covered
      thereby, the parties agree that the court making such determination shall have
      the power to reduce the duration and/or area of such provision so as to be
      enforceable to the maximum extent permitted by applicable law and, in its
      reduced form, said provision shall then be enforceable.

     

    5.7  The
      parties hereto intend to and hereby confer jurisdiction to enforce the covenants
      contained in Sections 5.1, 5.2 and 5.3 upon the courts of any state within
      the
      geographical scope of such covenants. In the event that the courts of any one
      or
      more of such states shall hold such covenants wholly unenforceable by reason
      of
      the breadth of such covenants or otherwise, it is-the intention of the parties’
hereto that such determination not bar or in any way affect the Company’s right
      to the relief provided above in the courts of any other states within the
      geographical scope of such covenants as to breaches of such covenants in such
      other respective jurisdictions, the above covenants as they relate to each
      state
      being for this purpose severable into diverse and independent
      covenants.

     

    	6.  	
            Inventions
              and Patents.

          


     

    6.1  The
      Executive agrees that all processes, technologies and inventions (collectively,
      “Inventions’),
      including new contributions, improvements, ideas and discoveries, whether
      patentable or not, conceived, developed, invented or made by him during the
      Term
      shall belong to the Company, provided that such Inventions grew out of the
      Executive’s work with the Company or any of its subsidiaries or affiliates, are
      related in any manner to the business (commercial or experimental) of the
      Company or any of its subsidiaries or affiliates or are conceived or made on
      the
      Company’s time or with the use of the Company’s facilities or materials. The
      Executive shall further: (a) promptly disclose such Inventions to the Company;
      (b) assign to the Company, without additional compensation, all patent and
      other
      rights to such Inventions for the United States and foreign countries; (c)
      sign
      all papers necessary to carry out the foregoing; and (d) give testimony in
      support of the Executive’s inventorship.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    6.2  The
      Executive agrees that the Executive will not assert any rights to any Invention
      as having been made or acquired by the Executive prior to the date of this
      Agreement, except for Inventions, if any, disclosed to the Company in writing
      prior to the date hereof.

     

    	7.  	
            Intellectual
              Property.

          


     

    Notwithstanding
      and without limiting the provisions of Section 6, the Company shall be the
      sole
      owner of all the products and proceeds of the Executive’s services hereunder,
      including, but not limited to, all materials, ideas, concepts, formats,
      suggestions, developments, arrangements, packages, programs and other
      intellectual properties that the Executive may acquire, obtain, develop or
      create in connection with or during the Term, free and clear of any claims
      by
      the Executive (or anyone claiming under the Executive) of any kind or character
      whatsoever (other than the Executive’s right to receive payments hereunder), the
      Executive shall, at the request of the Company, execute such assignments,
      certificates or other instruments as the Company may from time to time deem
      necessary or desirable to evidence, establish, maintain, perfect, protect,
      enforce or defend its right, title or interest in or to any such
      properties.

     

    	8.  	
            Indemnification.

          


     

    In
      addition to any rights to indemnification to which the Executive is entitled
      under the Company’s charter and by-laws, to the extent permitted by applicable
      law, the Company will indemnify, from the assets of the Company supplemented
      by
      insurance in an amount determined by the Company, the Executive at all times,
      during and after the Term, and, to the maximum extent permitted by applicable
      law, shall pay the Executive’s expenses (including reasonable attorneys’ fees
      and expenses, which shall be paid in advance by the Company as incurred, subject
      to recoupment in accordance with applicable law) in connection with any
      threatened or actual action, suit or proceeding to which the Executive may
      be
      made a party, brought by any shareholder of the Company directly or derivatively
      or by any third party by reason of any act or omission or alleged act or
      omission in relation to any affairs of the Company or any subsidiary or
      affiliate of the Company of the Executive as an officer, director or employee
      of
      the Company or of any subsidiary or affiliate of the Company. The Company shall
      maintain during the Term and thereafter insurance coverage sufficient in the
      determination of the Company to satisfy any indemnification obligation of the
      Company arising under this Section 8.

     

    	9.  	
            Notices.

          


     

    All
      notices, requests, consents and other communications required or permitted
      to be
      given hereunder shall be in writing and shall be deemed to have been duly given
      if delivered personally, one day after sent by overnight courier or three days
      after mailed first class, postage prepaid, by registered or certified mail,
      as
      follows (or to such other address as either party shall designate by notice
      in
      writing to the other in accordance herewith):

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    If
      to the
      Company, to:

     

    Foster
      Wheeler, Inc.

    Perryville
      Corporate Park

    Clinton,
      NJ 08809-4000

    Attention:
      General Counsel

     

    If
      to the
      Executive, to the Executive’s principal residence as reflected in the records of
      the Company.

     

    	10.  	
            General.

          


     

    10.1  This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      laws of the State of New Jersey applicable to agreements made between residents
      thereof and to be performed entirely in New Jersey.

     

    10.2  The
      section headings contained herein are for reference purposes only and shall
      not
      in any way affect the meaning or interpretation of this Agreement.

     

    10.3  Except
      as
      otherwise provided herein, this Agreement sets forth the entire agreement and
      understanding of the parties relating to the subject matter hereof, and
      supersedes all prior agreements, arrangements and understandings, written or
      oral, relating to the subject matter hereof. For avoidance of doubt, it is
      agreed and understood that this Agreement shall not supersede or otherwise
      adversely effect (i) that certain Amendment dated January 23, 2003
      referenced in Section 3.7 herein, (ii) any stock option, restricted stock or
      other form of equity grant or award heretofore provided to Executive, or any
      indemnification agreement heretofore entered into between the Company and the
      Executive. No representation, promise or inducement has been made by either
      party that is not embodied in this Agreement, and neither party shall be bound
      by or liable for any alleged representation, promise or inducement not so set
      forth.

     

    10.4  This
      Agreement, and the Executive’s rights and obligations hereunder, may not be
      assigned by the Executive, nor may the Executive pledge, encumber or anticipate
      any payments or benefits due hereunder, by operation of law or otherwise. The
      Company may assign its rights, together with its obligations, hereunder (i)
      to
      any affiliate or (ii) to a third party in connection with any sale, transfer
      or
      other disposition of all or substantially all of any business to which the
      Executive’s services are then principally devoted, provided that no assignment
      pursuant to clause (ii) shall relieve the Company from its obligations hereunder
      to the extent the same are not timely discharged by such assignee.

     

    10.5  The
      respective rights and obligations of the parties hereunder shall survive any
      termination of this Agreement or the Term to the extent necessary to the
      intended preservation of such rights and obligations.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    10.6  This
      Agreement may be amended, modified, superseded, canceled, renewed or extended
      and the terms or covenants hereof may be waived, only by a written instrument
      executed by both of the parties hereto, or in the case of a waiver, by the
      Party
      waiving compliance. The failure of either party at any time or times to require
      performance of any provision hereof shall in no manner affect the right at
      a
      later time to enforce the same. No waiver by either party of the breach of
      any
      term or covenant contained in this Agreement, whether by conduct or otherwise,
      in any one or more instances, shall be deemed to be, or construed as, a further
      or continuing waiver of any such breach, or a waiver of the breach of any other
      term or covenant contained in this Agreement.

     

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

     

    10.8  (i)
      Notwithstanding any provision of this Agreement to the contrary, if the
      Executive is a “specified
      employee”
      as
      defined in Section 409A of the U.S. Internal Revenue Code of 1986, as amended
      (the “Code”)
      he
      shall not be entitled to any payments until the earlier of (i) the date which
      is
      the first business day following the date that is six months after the Effective
      Date or (ii) the Executive’s date of death. The provisions of this Section 10.8
      shall only apply if required to comply with Section 409A of the
      Code.

     

    (ii)
      If
      any provision of this Agreement contravenes any regulations or Treasury guidance
      promulgated under Section 409A of the Code, or could cause any amounts or
      benefits hereunder to be subject to taxes, interest or penalties under Section
      409A of the Code, the Company may, in its sole discretion and without the
      Executive’s consent, modify the Agreement to: (i) comply with, or avoid being
      subject to, Section 409A of the Code and avoid the imposition of taxes, interest
      and penalties under Section 409A of the Code, and (ii) maintain, to the maximum
      extent practicable, the original intent of the applicable provision without
      contravening the provisions of Section 409A of the Code. This Section 10.8
      does
      not create an obligation on the part of the Company to modify this Agreement
      and
      does not guarantee that the amounts or benefits owed under the Agreement will
      not be subject to interest and penalties under Section 409A of the
      Code.

     

    	11.  	
            Dispute
              Resolution.

          


     

    Subject
      to the rights of the Company pursuant to Section 5.3 above, any controversy,
      claim or dispute arising out of or relating to this Agreement, the breach
      thereof, or the Executive’s employment by the Company shall be settled by
      arbitration with three arbitrators. The arbitration will be administered by
      the
      American Arbitration Association in accordance with its National Rules for
      Resolution of Employment Disputes. The arbitration proceeding shall be
      confidential, and judgment on the award rendered by the arbitrators may be
      entered in any court having jurisdiction. Any such arbitration shall take place
      in the Clinton, New Jersey area, or in any other mutually agreeable location.
      In
      the event any judicial action is necessary to enforce the arbitration provisions
      of this Agreement, sole jurisdiction shall be in the federal and state courts,
      as applicable, located in New Jersey. Any request for interim injunctive relief
      or other provisional remedies or opposition thereto shall not be deemed to
      be a
      waiver or the right or obligation to arbitrate hereunder. The arbitrator shall
      have the discretion to award reasonable attorneys’ fees, costs and expenses to
      the prevailing party. To the extent a party prevails in any dispute arising
      out
      of this Agreement or any of its terms and provisions, all reasonable costs,
      fees
      and expenses relating to such dispute, including the parties’ reasonable legal
      fees shall be borne by the party not prevailing in the resolution of such
      dispute, but only to the extent that the arbitrator or court, as the case may
      be, deems reasonable and appropriate given the merits of the claims and defenses
      asserted.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    	12.  	
            Free
              to Contract.

          


     

    The
      Executive represents and warrants to the Company that he is able freely to
      accept engagement and employment by the Company as described in this Agreement
      and that there are no existing agreements, arrangements or understandings,
      written or oral, that would prevent him from entering into this Agreement,
      would
      prevent him or restrict him in any way from rendering services to the Company
      as
      provided herein during the Term or would be breached by the future performance
      by the Executive of his duties hereunder. 

     

    	13.  	
            Subsidiaries
              and Affiliates.

          


     

    As
      used
      herein, the term “subsidiary”
shall
      mean any corporation or other business entity controlled directly or indirectly
      by the corporation or other business entity in question, and the term
“affiliate”
shall
      mean and include any corporation or other business entity directly or indirectly
      controlling, controlled by or under common control with the corporation or
      other
      business entity in question.

     

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

     

    FOSTER
      WHEELER LTD.

     

    


     

    By:
      ___________________________

           
Joseph
      J.
      Melone

           
Vice
      Chairman

     

     

     

    _____________________________

    Raymond
      J. Milchovich

     

    
      
         

      

      
        15