Document:

FOSTER WHEELER INC.

                             STOCK OPTION AGREEMENT

           THIS STOCK OPTION AGREEMENT (this "Agreement"), dated as of the 15th
day of July, 2002, between Foster Wheeler Inc., a Delaware corporation, located
at Perryville Corporate Park, Clinton, New Jersey (the "Company") and Joseph T.
Doyle ("Optionee").

           WHEREAS, the Company is an indirect, wholly-owned subsidiary of
Foster Wheeler Ltd. ("Parent"),

           WHEREAS, the Company wishes to grant to the Optionee an option to
purchase common shares of Parent as a material inducement to enter into an
employment agreement with Parent and to encourage Optionee to remain in the
employ of Parent and/or its direct or indirect subsidiaries or affiliates, and

           WHEREAS, the Optionee is simultaneously herewith entering into an
employment agreement with Parent (the "Employment Agreement").

           NOW, THEREFORE, it is agreed as follows:

           1. OPTION. Pursuant to this Agreement and subject to the terms and
conditions hereof, the Company hereby grants to Optionee this non-qualified
stock option ("Option") to purchase 300,000 common shares of Parent at $1.87 per
share, which is the mean of the high and low sale prices of the Common Shares of
Parent on the New York Stock Exchange on the date of grant of this Option.

           2. EXERCISE OF OPTION. This Option shall become exercisable ("vest"),
in stages. Except as provided in Section 4 hereof, a portion of the Option
representing 60,000 shares shall vest on each date immediately preceding each of
the first through fifth anniversaries of July 15, 2002. This Option expires ten
(10) years from the date hereof.

           This Option may be exercised, to the extent exercisable in accordance
with this Agreement, in whole or part, by written notice to the Company, except
that this Option shall not be exercisable if, in the opinion of counsel for the
Company, exercise of this Option or delivery of shares pursuant thereto might
(i) result in a violation of any law or regulation of an agency of government or
(ii) have an adverse effect on the listing status or qualification of Parent
shares on any securities exchange.

           3. PAYMENT OF PURCHASE PRICE. Payment for shares as to which this
Option is exercised shall be made at the time written notice of exercise is
given. The option price shall be paid upon exercise (i) in cash in U.S. dollars,
or (ii) in common shares of Parent owned of record by the Optionee and purchased
or held for the requisite period of time as necessary to avoid a charge to the
Company's, Parent's or any of their affiliate's earnings for financial
reporting. Such common shares shall be valued at the mean of the high and low
sale prices of such shares on the

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New York Stock Exchange on the day of exercise. At the time of receipt of common
shares upon exercise of the Option, the Optionee shall be required to pay to, or
as directed by, the Company in cash any taxes of any kind required by law to be
withheld with respect to such shares, or make arrangements satisfactory to the
Board of Directors of the Company (the "Board") regarding payment of such taxes,
and the Company and Parent shall have the right to deduct any such taxes from
any payment of any kind otherwise due to the Optionee.

           4. TERMINATION OF EMPLOYMENT. If the Optionee's employment is
terminated without Cause (as defined in the Employment Agreement) or by the
Optionee for Good Reason (as defined in the Employment Agreement), the Optionee
shall have two years from the Termination Date (as defined in the Employment
Agreement) to exercise then-vested Options. All unvested Options shall expire.

           In the event the Optionee's employment is terminated as set forth in
the preceding paragraph within one year of the termination or retirement of Mr.
Raymond J. Milchovich, Chief Executive Officer of Foster Wheeler Ltd., all
unvested Options shall vest and be exercisable for a period of two years
following the Termination Date.

           If the Optionee's employment is terminated due to death or
disability, or the Optionee dies following termination of his employment while
the Option may be exercised in accordance with the preceding paragraphs of this
Section 4 or while disabled, the then-vested Option may be exercised by the
Optionee or by a legatee or legatees of the Optionee under his last will, or by
the Optionee's personal representative, as applicable, at any time after one
year from the date of grant, but prior to the expiration date of the Option. All
unvested Options shall expire.

           In the event that the Optionee's employment is terminated for Cause
(as defined in the Employment Agreement) or the Optionee terminates his
employment other than for Good Reason (as defined in the Employment Agreement),
this Option, to the extent unvested, shall be immediately forfeited and the
remainder of this Option, to the extent unexercised on the date which is ninety
(90) days after such termination, shall be forfeited.

           Notwithstanding the foregoing provisions of this Section 4, under no
circumstances shall this Option be exercised after the expiration date stated in
Section 2 hereof.

           5. INVESTMENT REPRESENTATIONS. If at the time of exercise of all or
part of the Option the common shares of Parent are not registered under the
Securities Act and/or there is no current prospectus in effect under the
Securities Act with respect to the common shares, the Optionee shall execute,
prior to the issuance of any such shares to the Optionee, an agreement (in such
form as the Board may specify) in which the Optionee, among other things,
represents, warrants and agrees that the Optionee is purchasing or acquiring the
shares acquired under this Agreement for the Optionee's own account, for
investment only and not with a view to the resale or distribution thereof, that
the Optionee has knowledge and experience in financial and business matters,
that the Optionee is capable of evaluating the merits and risks of owning any
such shares purchased or acquired under this Agreement, that the Optionee is a
person who is able to bear the economic risk of such ownership and that any
subsequent offer for sale or distribution of any such shares shall be made only
pursuant to (a) a registration statement on an appropriate form

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under the Securities Act, which registration statement has become effective and
is current with regard to the shares being offered or sold, or (b) a specific
exemption from the registration requirements of the Securities Act, it being
understood that to the extent any such exemption is claimed, the Optionee shall,
prior to any offer for sale or sale of such shares, obtain a prior favorable
written opinion, in the form and substance satisfactory to the Board, from
counsel acceptable to the Board, as to the applicability of such exemption
thereto.

           6. RECAPITALIZATION. In the event of changes in Parent common shares
by reason of share dividends, split-ups or combination of shares,
reclassifications, recapitalizations, mergers, consolidations, reorganizations
or liquidations, appropriate adjustments shall be made by the Board in (a) the
number and class of shares to which Optionee shall thenceforth be entitled upon
exercise of this Option, and (b) the price which the Optionee shall be required
to pay upon exercise. Whether any adjustment or modification is required as a
result of the occurrence of any of the events heretofore specified, and the
amount thereof, shall be determined, in good faith, by the Board, which
determination shall be final, binding and conclusive.

           7. CONTINUED EMPLOYMENT. So long as the Optionee shall continue to be
an employee of Parent, the Company or a subsidiary or affiliate of Parent, the
Option shall not be affected by (i) any change of duties or position, or (ii)
any temporary leave of absence approved by each employing corporation and by the
Board. Nothing in this Agreement shall confer upon the Optionee any right to
continue in the employ of Parent, the Company or a subsidiary or affiliate of
Parent or interfere in any way with the right of Parent, the Company or each
such subsidiary or affiliate to terminate the Optionee's employment at any time,
with or without cause.

           8. TRANSFERABILITY. This Option is not transferable by Optionee
except by will or by the laws of descent and distribution and is exercisable
during Optionee's lifetime only by him or a court appointed guardian. No
assignment or transfer by Optionee of this Option, or of the rights represented
thereby, whether voluntary or involuntary, by operation of law or otherwise,
except by will or by the laws of descent and distribution, shall vest in the
assignee or transferee any interest or right herein whatsoever. Upon any attempt
to assign or transfer this Option, the Option shall forthwith terminate.

           9. RIGHTS AS A SHAREHOLDER. Optionee shall not be deemed for any
purpose to be a shareholder of Parent except to the extent that this Option
shall have been exercised in accordance with this Agreement.

           10. CORPORATE ACTION BY PARENT. Existence of this Option shall not
impair the right of Parent or its shareholders to make adjustments,
recapitalizations, reorganizations or other changes in its capital structure or
business, to consummate any merger or consolidation of Parent, to issue bonds,
debentures, preferred or prior preference stocks ahead of or affecting the
common shares or the rights thereof, to dissolve or liquidate Parent, to sell or
transfer all or any part of its assets or business, or to do or take any other
corporate act or proceeding it or they might have done or taken if this Option
was not in existence.

           11. CHANGE OF CONTROL. During the 60-day period from and after a
Change of Control as defined in this Section 11 (the "Exercise Period"), the
Optionee shall have the right, whether or

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not this Option is fully exercisable and in lieu of the payment of the exercise
price for the common shares being purchased under the Option and by giving
written notice to the Company, to elect (within the Exercise Period) to
surrender all or part of this Option to the Company and to receive cash, within
30 days of such written notice, in an amount equal to the amount by which the
Change of Control Price per common share, as defined in this Section 11, on the
date of such election shall exceed the exercise price per common share under the
Option (the "Spread") multiplied by the number of common shares subject to the
Option as to which the right granted under this Section 11 shall have been
exercised.

           Notwithstanding any other provision of the Plan to the contrary, in
the event of a Change of Control, the Option outstanding as of the date such
Change of Control is determined to have occurred and not then exercisable and
vested shall become fully exercisable and vested to the full extent of the
Option.

           A "Change of Control" shall mean:

           (a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of voting
securities of Parent where such acquisition causes such Person to own 20% or
more of the combined voting power of the then outstanding voting securities of
Parent entitled to vote generally in the election of directors (the "Outstanding
Parent Voting Securities"); PROVIDED, HOWEVER, that for purposes of this
subsection (a), the following acquisitions shall not be deemed to result in a
Change of Control: (i) any acquisition directly from Parent or any corporation
or other legal entity controlled, directly or indirectly, by Parent, (ii) any
acquisition by Parent or any corporation or other legal entity controlled,
directly or indirectly, by Parent, (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by Parent or any corporation or
other legal entity controlled, directly or indirectly, by Parent or (iv) any
acquisition by any corporation pursuant to a transaction that complies with
clauses (i), (ii) and (iii) of subsection (c) below; and PROVIDED, FURTHER, that
if any Person's beneficial ownership of the Outstanding Parent Voting Securities
reaches or exceeds 20% as a result of a transaction described in clause (i) or
(ii) above, and such Person subsequently acquires beneficial ownership of
additional voting securities of Parent, such subsequent acquisition shall be
treated as an acquisition that causes such Person to own 20% or more of the
Outstanding Parent Voting Securities; or

           (b) individuals who, as of May 25, 2001, constitute the Board of
Directors of Parent (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board of Directors of Parent; PROVIDED, HOWEVER, that
any individual becoming a director subsequent to such date whose election, or
nomination for election by Parent'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 of Directors of Parent; or

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           (c) the approval by the shareholders of Parent of a reorganization,
merger or consolidation or sale or other disposition of all or substantially all
of the assets of Parent ("Business Combination") or, if consummation of such
Business Combination is subject, at the time of such approval by shareholders,
to the consent of any government or governmental agency, the obtaining of such
consent (either explicitly or implicitly by consummation); excluding, however,
such a Business Combination pursuant to which (i) all or substantially all of
the individuals and entities who were the beneficial owners of the Outstanding
Parent Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation that as a result of
such transaction owns Parent or all or substantially all of Parent'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 Parent Voting Securities, (ii) no Person (excluding any (x)
corporation owned, directly or indirectly, by the beneficial owners of the
Outstanding Parent Voting Securities as described in clause (i) immediately
preceding or (y) employee benefit plan (or related trust) of Parent or such
corporation resulting from such Business Combination, or any of their respective
subsidiaries) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board of
Directors of Parent, providing for such Business Combination; or

           (d) approval by the shareholders of Parent of a complete liquidation
or dissolution of Parent.

           For purposes of this Agreement, "Change of Control Price" means the
higher of (i) the highest reported sales price, regular way, of a common share
of Parent in any transaction reported on the New York Stock Exchange Composite
Tape or other national exchange on which such shares are listed during the
60-day period prior to and including the date of a Change of Control, or (ii) if
the Change of Control is the result of a tender or exchange offer or a Business
Combination, the highest price per Common Share paid in such tender or exchange
offer or Business Combination; PROVIDED, HOWEVER, that if the Optionee is an
officer or director of the Company or Parent and is subject to Section 16(b) of
the Exchange Act and the Option was granted within 240 days of the Change of
Control, the Change of Control Price for the Option shall be the fair market
value of the common shares on the date the Option is exercised or deemed
exercised. To the extent that the consideration paid in any such transaction
described above consists in whole or in part of securities or other non-cash
consideration, the value of such securities or other non-cash consideration
shall be determined in the sole discretion of the Board.

           12. ADMINISTRATION DISPUTES. This Agreement and the Option shall be
administered and interpreted exclusively by the Compensation Committee of the
Board of Parent, which shall have

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discretionary authority concerning all matters relating to the Option, and whose
actions and decisions shall be final and conclusive. Any controversy, claim or
dispute issues arising out of or relating to this Option shall be resolved in
accordance with the Dispute Resolution Procedure set forth in Section 10 of the
Employment Agreement.

           13. TERMS AND CONDITIONS. This Agreement is subject to all terms and
conditions of the Employment Agreement.

           14. GOVERNING LAW. This Agreement and the rights and obligations of
the parties hereto shall be governed by the laws of the State of New Jersey
without regard to the principles of conflicts of law which might otherwise
apply.

           15. NOTICE. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail to the Company at the office of the Secretary of Foster
Wheeler Inc., Perryville Corporate Park, Clinton, New Jersey 08809-4000, and to
the Optionee at his principal residence as reflected in the records of Parent.

           IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized Officers and Optionee has hereunto set his hand,
as of the day and year first above written.

                                            FOSTER WHEELER INC.

                                            By:________________________________
                                               Raymond J. Milchovich
                                               Chairman, President and CEO

                                                --------------------------------
                                                Joseph T. Doyle
                                                Optionee
ATTEST:

--------------------------------
          Secretary

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<PAGE>EMPLOYMENT AGREEMENT

           EMPLOYMENT AGREEMENT (this "Agreement") dated as of September 23,
2002, between FOSTER WHEELER LTD., a Bermuda company (the "Company"), and
BERNARD H. CHERRY (the "Executive").

           The Executive and the Company wish to enter into an employment
relationship on the terms and conditions set forth in this Agreement.

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

           1. EMPLOYMENT, DUTIES AND ACCEPTANCE.

              1.1 EMPLOYMENT, DUTIES. The Company hereby agrees to employ 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, Foster Wheeler Power Group, Inc. 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 Chairman,
President and Chief Executive Officer of the Company (the "Chairman"); provided,
however, that the Executive may participate in civic, charitable, industry, and
professional organizations to the extent that such participation does not
materially interfere with the performance of Executive's duties hereunder. The
Executive's title shall be President and Chief Executive Officer, Foster Wheeler
Power Group, Inc., 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 Company consistent with such position, and the Executive shall
have all authorities as are customarily and ordinarily exercised by executives
in similar positions in similar businesses of similar size in the United States.

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

              1.3 LOCATION. The duties to be performed by the Executive
hereunder shall be performed primarily at the Company's offices in Clinton, New
Jersey, subject to reasonable travel requirements consistent with the nature of
the Executive's duties from time to time on behalf of the Company. The Executive
shall keep Executive's primary residence within reasonable daily commute of the
Clinton, New Jersey area throughout the Term after relocating pursuant to the
terms of Section 3.8.

<PAGE>

           2. TERM OF EMPLOYMENT.

              2.1 TERM. The term of the Executive's employment under this
Agreement (the "Term") shall commence on November 4, 2002, or such earlier date
in respect of which the Executive provides at least three (3) days' advance
written notice to the Chairman (the "Effective Date"), and shall end on the date
on which the Term is terminated pursuant to Section 4.

           3. COMPENSATION; BENEFITS.

              3.1 SALARY. As compensation for all services to be rendered
pursuant to this Agreement, the Company agrees to pay to the Executive during
the Term a base salary, payable monthly in arrears, at the initial annual rate
of Four Hundred and Fifty Thousand Dollars ($450,000.00) (the "Base Salary"). On
each anniversary of the Effective Date or such other appropriate date during
each year of the Term when the salaries of executives at the Executive's level
are normally reviewed, the Company shall review the Base Salary and determine
if, and by how much, the Base Salary should be increased. Once increased, the
Base Salary shall not be decreased, and such increased amount shall be treated
as Base Salary hereunder. 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.

              3.2.1 Executive shall be eligible to participate, as determined by
the Compensation Committee of the Board of Directors of the Company (the
"Board"), in the Company's annual incentive program as in effect from time to
time for executives at the Executive's level. Initially, the Executive's
participation shall be in the discretionary bonus program designated the "Foster
Wheeler Annual Incentive Plan for 2002 and Subsequent Years." The Executive
shall be eligible for an annual incentive bonus at a target opportunity of
seventy percent (70%) of Base Salary (up to a maximum opportunity of two hundred
and ten percent (210%) of Base Salary) based upon the achievement of certain
business unit objectives established in advance by the Chairman. The actual
amount of any annual incentive bonus shall be determined by and in accordance
with the terms of the Company's annual incentive program as in effect from time
to time and the Executive shall have no absolute right to an annual incentive
bonus in any year.

              3.2.2 The Company shall pay to the Executive within five (5) days
after the Company receives this Agreement executed by the Executive a signing
bonus in the amount of Five Hundred Thousand Dollars ($500,000.00) (the "Signing
Bonus"). If the Company terminates the Executive for Cause (as defined below) or
if the Executive terminates employment with the Company other than with Good
Reason (as defined below), in either event before the first anniversary of the
Effective Date, the Executive shall repay to the Company, within thirty (30)
days of such termination, the net, after-tax amount of the Signing Bonus. In
addition, if for any reason the Executive

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does not commence employment with the Company on or before November 4, 2002, the
Executive shall repay to the Company, on or before November 9, 2002, the full
gross amount of the Signing Bonus.

           3.3 STOCK OPTIONS.

              3.3.1 On the Effective Date, the Company shall grant the Executive
an initial grant option to purchase Two Hundred and Fifty-Five Thousand
(255,000) shares of Company common stock. The exercise price for the initial
grant option shall be equal to the mean of the high and low price of Company
common stock on the New York Stock Exchange on the Effective Date. The initial
grant option shall have a term of ten (10) years from the Effective Date. A
portion of the initial grant option representing Fifty-One Thousand (51,000)
shares shall vest on each date immediately preceding each of the first through
fifth anniversaries of the Effective Date.

              3.3.2 During the Term, on the first anniversary of the Effective
Date, the Company shall grant the Executive a subsequent grant option to
purchase One Hundred Thousand (100,000) shares of Company common stock. The
exercise price for the subsequent grant option shall be equal to the mean of the
high and low price of Company common stock on the New York Stock Exchange on the
Effective Date. The subsequent grant option shall have a term of ten (10) years
from the grant date. A portion of the subsequent grant option representing
Twenty-Five Thousand (25,000) shares shall vest on each date immediately
preceding each of the first through fourth anniversaries of the grant date.

              3.3.3 The initial grant and subsequent grant options shall be
issued under stock option agreements on terms substantially the same as other
senior executives of the Company and shall be subject to the provisions of
Sections 3.7 and 4 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 the Term, the Executive shall be entitled to an
annual five (5) week paid vacation period in accordance with the applicable
executive vacation policy as in effect from time to time.

           3.6 BENEFITS AND PERQUISITES.

              3.6.1 During the Term and except as otherwise provided herein, the
Executive shall be entitled to participate in those defined benefit, defined
contribution, group insurance, medical, dental, disability and other benefit
plans of the Company for United States based employees as from time to time in
effect and on a basis no less favorable than any other executive at the
Executive's level. The Executive shall

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not be eligible to participate in the Company's current supplemental employee
retirement plan, known as the "Foster Wheeler Corporation Supplemental Employee
Retirement Plan," nor any successor or replacement plan.

              3.6.2 During the Term, the Executive shall be entitled to receive
the following perquisites:

                    (i) Company furnished automobile at a level no less
favorable than any other executive at the Executive's level;

                    (ii) Reimbursement of annual financial planning services at
a level no less favorable than any other executive at Executive's level;

                    (iii) Reimbursement on a one-time basis for legal expenses
associated with estate planning at a level no less favorable than any other
executive at Executive's level;

                    (iv) Facsimile machine for use at Executive's home; and

                    (v) Annual physical examination at a level no less favorable
than any other executive at Executive's level.

           3.7 CHANGE OF CONTROL. The Executive shall be covered under the
Company's Change in Control Agreement as in effect from time to time for
executives at the Executive's level. Any amounts and/or benefits payable, paid
or provided to the Executive under such Change in Control Agreement shall be in
lieu of and not in addition to amounts and/or benefits payable or provided under
this Agreement. This Agreement is not intended to preclude benefits payable
under the Change in Control Agreement should the events described therein occur.

           3.8 RELOCATION.

              3.8.1 The Company will provide the Executive the following
relocation assistance net of taxes:

                    (i) Provide furnished housing in the Clinton, New Jersey
area at Company expense for a twelve (12) month period to a maximum of Four
Thousand Five Hundred Dollars ($4,500.00) per month;

                    (ii) To assist with travel to and from permanent home during
the first year of employment, reimburse for weekend travel expense for a twelve
(12) month period to a maximum of Twenty-Five Thousand Dollars ($25,000.00);

                    (iii) Reimbursement for closing costs on the purchase of a
home in the Clinton, New Jersey area, should such purchase be made within two
(2) years after the Effective Date; and

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<PAGE>

                    (iv) Reimbursement for relocation of household goods if such
relocation takes place within two (2) years of the Effective Date.

           4. TERMINATION.

              4.1 TERMINATION EVENTS.

              4.1.1 Executive's employment and the Term shall terminate
immediately upon the occurrence of any of the following:

                    (i) the death of the Executive;

                    (ii) the physical or mental disability of the Executive,
whether totally or partially, such that with or without reasonable accommodation
the Executive is unable to perform the Executive's material duties, for a period
of not less than one hundred and eighty (180) consecutive days; or

                    (iii) notice of termination for "Cause". As used herein,
"Cause" means (i) conviction of a felony; (ii) actual or attempted theft or
embezzlement of Company assets; (iii) use of illegal drugs; (iv) material breach
of the Agreement that the Executive has not cured within thirty (30) days after
the Company has provided the Executive notice of the material breach which shall
be given within sixty (60) days of the Company's knowledge of the occurrence of
the material breach; (v) commission of an act of moral turpitude that in the
judgment of the Board can reasonably be expected to have an adverse effect on
the business, reputation or financial situation of the Company and/or the
ability of the Executive to perform the Executive's duties; (vi) gross
negligence or willful misconduct in performance of the Executive's duties; (vii)
breach of fiduciary duty to the Company; or (viii) willful refusal to perform
the duties of Executive's titled position.

              4.1.2 The Executive may immediately resign the Executive's
position for Good Reason and, in such event, the Term shall terminate. As used
herein, "Good Reason" means without the Executive's consent (i) material
diminution in title, duties, responsibilities or authority; (ii) reduction of
Base Salary and benefits except for across-the-board changes for executives at
the Executive's level; (iii) exclusion from executive benefit/compensation
plans; (iv) relocation of the Executive's principal business location by the
Company of greater than fifty (50) miles; (v) material breach of the Agreement
that the Company has not cured within thirty (30) days after the Executive has
provided the Company notice of the material breach which shall be given within
sixty (60) days of the Executive's knowledge of the occurrence of the material
breach; or (vi) resignation in compliance with applicable law or rules of
professional conduct.

                    4.1.3 The Company may terminate the Executive's employment
thirty (30) days following notice of termination without Cause given by the
Company and, in such event, the Term shall terminate. During such thirty (30)
day notice period, the Company may require that the Executive cease performing
some or all

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of the Executive's duties and/or not be present at the Company's offices and/or
other facilities.

              4.1.4 The Executive may voluntarily resign the Executive's
position effective thirty (30) days following notice to the Company of the
Executive's intent to voluntarily resign without Good Reason and, in such event,
the Term shall terminate. During such thirty (30) day notice period, the Company
may require that the Executive cease performing some or all of the Executive's
duties and/or not be present at the Company's offices and/or other facilities.

              4.1.5 The date upon which Executive's employment and the Term
terminate pursuant to this Section 4.1 shall be the Executive's "Termination
Date" for all purposes of this Agreement.

           4.2 PAYMENTS UPON A TERMINATION EVENT.

              4.2.1 Following any termination of the Executive's employment, the
Company shall pay or provide to the Executive, or the Executive's estate or
beneficiary, as the case may be, (i) Base Salary earned through the Termination
Date; (ii) the balance of any awarded but as yet unpaid, annual cash incentive
or other incentive awards for any calendar year prior to the calendar year
during which the Executive's Termination Date occurs; (iii) a payment
representing the Executive's accrued but unused vacation; (iv) any vested, but
not forfeited benefits on the Termination Date under the Company's employee
benefit plans in accordance with the terms of such plans; (v) vested stock
options; and (vi) benefit continuation and conversion rights to which the
Executive is entitled under the Company's employee benefit plans.

              4.2.2 Following a termination by the Company without Cause or by
the Executive for Good Reason, the Company shall pay or provide to the Executive
in addition to the payments in Section 4.2.1 above, (i) Base Salary at the rate
in effect on the Termination Date ("Termination Base Salary Rate"), payable
monthly following the Termination Date and continuing for twenty-four months
thereafter; (ii) an annual cash incentive payment for the calendar year that
includes the Executive's Termination Date and the following calendar year equal
to a percentage of the Termination Base Salary Rate equal to the average
percentage of base salaries paid as bonuses to the executives of the Company at
the Executive's level under the Company's annual incentive program during such
applicable calendar year and payable at the time that the Company pays annual
cash incentive payments to other participants in such program; (iii) two years
of continued health and welfare benefit plan coverage following the Termination
Date (excluding any additional vacation accrual or sick leave) at active
employee levels and active employee cost; (iv) executive level career transition
assistance services by a firm selected by the Executive and approved by the
Company; and (v) provided the Executive's employment is terminated pursuant to
this Section 4.2.2 within one year of the termination or retirement of the
Chairman who is Chairman on the Effective Date, full vesting of all granted
stock options which the Executive may exercise

                                      -6-
<PAGE>

for a period of two years following the Termination Date. Notwithstanding any
other provision of this Agreement, as consideration for the pay and benefits
that the Company shall provide the Executive pursuant to this Section 4.2.2, the
Executive shall provide the Company an enforceable waiver and release agreement
in a form that the Company normally requires and which is mutually acceptable to
the Executive and the Company.

           4.3 NO MITIGATION. Upon termination of the Executive's employment
with the Company, the Executive shall be under no obligation to seek other
employment or otherwise mitigate the obligations of the Company under this
Agreement.

           5. PROTECTION OF CONFIDENTIAL INFORMATION; NON-COMPETITION.

              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:

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

                                      -7-
<PAGE>

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

           5.2 In consideration of the Company's entering into this Agreement,
the Executive agrees that at all times during the Term and thereafter for the
time period described hereinbelow, the Executive shall not, directly or
indirectly, for Executive or on behalf of or in conjunction with, any other
person, company, partnership, corporation, business, group, or other entity
(each, a "Person"):

              5.2.1 until the first anniversary of the Termination Date, engage
in any activity for or on behalf of a Competitor, as director, employee,
shareholder, consultant or otherwise, which is the same as or similar to
activity in which Executive engaged at any time during the last two (2) years of
employment by the Company;

              5.2.2 until the second anniversary of the Termination Date, (i)
call upon any Person who is, at such Termination Date, engaged in activity on
behalf of the Company or any subsidiary or affiliate of the Company for the
purpose or with the intent of enticing such Person to cease such activity on
behalf of the Company or such subsidiary or affiliate; or (ii) solicit, induce,
or attempt to induce any customer of the Company to cease doing business in
whole or in part with or through the Company or a subsidiary or affiliate, or to
do business with any Competitor.

           For purposes of this Agreement, "Competitor" means a person or entity
who or which is engaged in a material line of business conducted by the Company.
For purposes of this Agreement, "a material line of business conducted by the
Company" means an activity of the Company generating gross revenues to the
Company of more than twenty-five million dollars ($25,000,000) in the
immediately preceding fiscal year of the Company.

              5.3 If the Executive commits a breach or threatens to breach any
of the provisions of Section 5.1 or 5.2 hereof, the Company shall have the right
and remedy to have the provisions of this Agreement specifically enforced by
injunction or otherwise by any court having jurisdiction, it being acknowledged
and agreed that any such breach will cause irreparable injury to the Company in
addition to money damage and that money damages alone will not provide a
complete or adequate remedy to the Company, it being further agreed that such
right and remedy shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company under law or in equity.

                                      -8-
<PAGE>

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

              5.5 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 Sections 5.1 or 5.2, or
any part thereof, are held to be unenforceable, the parties agree that the court
making such determination shall have the power to revise or modify such
provision to make it enforceable to the maximum extent permitted by applicable
law and, in its revised or modified form, said provision shall then be
enforceable.

              5.7 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. INTELLECTUAL PROPERTY.

           Notwithstanding and without limiting the provisions of Section 5, the
Company shall be the sole owner of all the products and proceeds of the
Executive's services hereunder, including, but not limited to, all materials,
ideas, concepts, formats, suggestions, developments, arrangements, packages,
programs and other intellectual properties that the Executive may acquire,
obtain, develop or create in connection with or during the Term, free and clear
of any claims by the Executive (or anyone claiming under the Executive) of any
kind or character whatsoever (other than the Executive's right to receive
payments hereunder), the Executive shall, at the request of the Company, execute
such assignments, certificates or other instruments as the Company may from time
to time deem necessary or desirable to evidence, establish, maintain, perfect,
protect, enforce or defend its right, title or interest in or to any such
properties.

           7. INDEMNIFICATION.

           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

                                      -9-
<PAGE>

and after the Term, and, to the maximum extent permitted by applicable law,
shall pay the Executive's expenses (including reasonable attorneys' fees and
expenses, which shall be paid in advance by the Company as incurred, subject to
recoupment in accordance with applicable law) in connection with any threatened
or actual action, suit or proceeding to which the Executive may be made a party,
brought by any shareholder of the Company directly or derivatively or by any
third party by reason of any act or omission or alleged act or omission in
relation to any affairs of the Company or any subsidiary or affiliate of the
Company of the Executive as an officer, director or employee of the Company or
of any subsidiary or affiliate of the Company. The Company shall use its best
efforts to maintain during the Term and thereafter insurance coverage sufficient
in the determination of the Company to satisfy any indemnification obligation of
the Company arising under this Section 7.

           8. NOTICES.

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

           If to the Company, to:

           Foster Wheeler, 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.

           9. GENERAL.

              9.1 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.

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

              9.3 This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party

                                      -10-
<PAGE>

that is not embodied in this Agreement, and neither party shall be bound by or
liable for any alleged representation, promise or inducement not so set forth.

              9.4 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 shall relieve the Company from its
obligations hereunder to the extent the same are not timely discharged by such
assignee.

              9.5 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.

              9.6 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.

              9.7 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.

              9.8 The parties acknowledge that this Agreement is the result of
arm's-length negotiations between sophisticated parties each afforded the
opportunity to utilize representation by legal counsel. Each and every provision
of this Agreement shall be construed as though both parties participated equally
in the drafting of same, and any rule of construction that a document shall be
construed against the drafting party shall not be applicable to this Agreement.

           10. DISPUTE RESOLUTION.

           Subject to the rights of the Company pursuant to Section 5.3 above,
any controversy, claim or dispute arising out of or relating to this Agreement,
the breach thereof, or the Executive's employment by the Company shall be
settled by arbitration with three arbitrators. The arbitration will be
administered by the American Arbitration Association in accordance with its
National Rules for Resolution of Employment Disputes. The arbitration proceeding
shall be confidential, and judgment on the award

                                      -11-
<PAGE>

rendered by the arbitrator may be entered in any court having jurisdiction. Any
such arbitration shall take place in the Clinton, New Jersey area, or in any
other mutually agreeable location. In the event any judicial action is necessary
to enforce the arbitration provisions of this Agreement, sole jurisdiction shall
be in the federal and state courts, as applicable, located in New Jersey. Any
request for interim injunctive relief or other provisional remedies or
opposition thereto shall not be deemed to be a waiver or the right or obligation
to arbitrate hereunder. The arbitrator shall have the discretion to award
reasonable attorneys' fees, costs and expenses to the prevailing party. To the
extent a party prevails in any dispute arising out of this Agreement or any of
its terms and provisions, all reasonable costs, fees and expenses relating to
such dispute, including the parties' reasonable legal fees, shall be borne by
the party not prevailing in the resolution of such dispute, but only to the
extent that the arbitrator or court, as the case may be, deems reasonable and
appropriate given the merits of the claims and defenses asserted.

           11. FREE TO CONTRACT.

           The Executive represents and warrants to the Company that as of both
the date of this Agreement and the Effective Date Executive is able freely to
accept engagement and employment by the Company as described in this Agreement
and that there are no existing agreements, arrangements or understandings,
written or oral, that would prevent Executive from entering into this Agreement,
would prevent Executive or restrict Executive in any way from rendering services
to the Company as provided herein during the Term or would be breached by the
future performance by the Executive of Executive's duties hereunder, provided
that the Company shall not require the Executive to use or disclose any trade
secrets of any third person. The Executive also represents and warrants that no
fee, charge or expense of any sort is due from the Company to any third person
engaged by the Executive in connection with Executive's employment by the
Company hereunder, except as disclosed in this Agreement.

           12. SUBSIDIARIES AND AFFILIATES.

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

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

                                      -12-
<PAGE>

                                         FOSTER WHEELER LTD.

                                         By:/S/ RAYMOND J. MILCHOVICH
                                            ------------------------------------
                                         Name:  Raymond J. Milchovich
                                         Title: Chairman, President and Chief
                                                    Executive Officer

                                         /S/BERNARD H. CHERRY
                                         ---------------------------------------
                                                Bernard H. Cherry

                                      -13-
<PAGE>

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