Document:

EX-10.3

Exhibit 10.3

FOSTER WHEELER AG OMNIBUS INCENTIVE PLAN

Notice of Director Nonqualified Stock Option Grant

Director:                                         

     Pursuant to the attached Director Nonqualified Stock Option Agreement, you have been granted a
nonqualified stock option to purchase registered shares of Foster Wheeler AG, a Swiss company (the
“Company”) as follows:

	 	 	 
	Date of Grant:

	 	[                    ]
	 
	 	 
	Exercise Price Per Share:

	 	The greater of                      US dollars (USD)
per Share or the par value of a Share
(as such par value is defined in Article
4 of the Company’s Articles of
Association), denominated in Swiss
francs (CHF) on the date of delivery of
the Share
	 
	 	 
	Total Number of Shares Subject
to this Option:

	 	                     registered shares
	 
	 	 
	Type of Option:

	 	Nonqualified Stock Option
	 
	 	 
	Expiration Date:

	 	[                    ]
	 
	 	 
	Vesting/Exercise Schedule:

	 	So long as you provide continuous
service to the Company or any Affiliate,
and except as otherwise set forth in
Section 5 of the Option Agreement, the
Shares underlying this Option shall vest
and become exercisable on [                    ].
	 
	 	 
	Termination Period:

	 	Following your termination of service
with the Company and all its Affiliates,
the Option may be exercised, but only as
to Shares that were vested on the date
of such termination, through the
Expiration Date set forth above;
provided, however, the Option may
terminate as of an earlier date in
connection with certain events as set
forth in the Plan and in Section 5 of
the Option Agreement. 

You are responsible for keeping track of
the periods during which the Option may
be exercised, including those periods
that apply following your termination of
service with the Company and all its
Affiliates for any reason. The Company
will not provide further notice of such
exercise periods.

 

 

	 	 	 
	Transferability:

	 	Unless otherwise provided in the Option
Agreement or the Plan, this Option may
not be transferred.

     By your signature and the signature of the Company’s representative below, you and the Company
agree that this Option is granted under and governed by the terms and conditions of the Foster
Wheeler AG Omnibus Incentive Plan and the Director Nonqualified Stock Option Agreement, both of
which are attached and made a part of this document.

     In addition, you agree and acknowledge that your rights to any Shares underlying the Option
vest only as you provide services to the Company or its Affiliates over time, that the grant of the
Option is not as consideration for services you rendered to the Company or its Affiliates prior to
your Date of Grant, and that nothing in this Notice or the attached documents confers upon you any
right to continue your service relationship with the Company or its Affiliates for any period of
time, nor does it interfere in any way with your right or the Company’s (or its Affiliates’) right
to terminate that relationship at any time, for any reason, with or without cause.

	 	 	 	 	 
	 

	 	FOSTER WHEELER AG	 	 
	 
	 	 	 	 
	 
	 

Participant

	 	 

By: Raymond J. Milchovich
	 	 
	 

	 	Its: Chairman & CEO	 	 

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FOSTER WHEELER AG OMNIBUS INCENTIVE PLAN

Director Nonqualified Stock Option Agreement

     1. Grant of Option. Foster Wheeler AG, a Swiss company (the “Company”),
hereby grants to                                          (“Optionee”), an option (the “Option”) to
purchase the total number of registered shares (the “Shares”) subject to the Option, set
forth in the Notice of Director Nonqualified Stock Option Grant (the “Notice”), at the
exercise price per Share set forth in the Notice (the “Exercise Price”), subject to the
terms, definitions and provisions of the Foster Wheeler AG Omnibus Incentive Plan (the
“Plan”) adopted by the Company, which is incorporated in this Director Nonqualified Stock
Option Agreement (the “Option Agreement”) by reference. Unless otherwise defined in this
Option Agreement, the terms used in this Option Agreement shall have the meanings defined in the
Plan; provided, however, that the term “Shares” as defined above shall be interpreted to refer to
the specific number of shares set forth in the Notice but shall otherwise have the meaning set
forth in Section 2(ww) of the Plan. This Option Agreement shall be deemed executed by the Company
and Optionee upon execution by such parties of the Notice.

     2. Designation of Option. This Option is intended to be a Nonqualified Stock Option
(as defined in Section 2(bb) of the Plan).

     3. Exercise of Option. This Option shall be exercisable during its term in accordance
with the Vesting/Exercise Schedule set out in the Notice and with the provisions of Section 5 of
this Option Agreement as follows:

     (a) Right to Exercise.

     (i) This Option may not be exercised for a fraction of a registered share.

     (ii) In the event of Optionee’s death, Disability (as defined in Section 2(q)
of the Plan) or other termination of service, the exercisability of the Option is
governed by Section 5 below, subject to the limitations contained in this Section 3.

     (iii) In no event may this Option be exercised after the Expiration Date of the
Option as set forth in the Notice.

     (b) Method of Exercise.

     (i) This Option shall be exercisable by delivering to the Company a written
Notice of Exercise (containing substantially the information described in
Exhibit A hereto, and substantially in the form attached as Exhibit
A, or in any other form acceptable to the Committee) which shall state
Optionee’s election to exercise the Option, the number of Shares in respect of which
the Option is being exercised, and such other representations and agreements as to
the holder’s investment intent with respect to such Shares as may be required by the
Company pursuant to the provisions of the Plan. Such written notice shall be signed
by Optionee and shall be delivered to the Company by such means as are determined by
the Committee in its discretion to constitute adequate delivery. The written notice
shall be accompanied by payment of the Exercise Price. This Option shall be deemed
to be exercised upon receipt by the Company of such written notice accompanied by
payment of the Exercise Price. Swiss law requires the execution of a specific form
of exercise notice for Shares to issue out of the conditional capital of the
Company. By signing this Agreement, you appoint the Company’s

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Secretary and each of its Assistant Secretaries your proxy with the right of
substitution to execute and deliver the requisite form of exercise notice at or
about the time you provide the Company a Notice of Exercise.

     (ii) For the sole purpose of enabling electronic trading of the awarded Shares
on the NASDAQ Global Select Market, Optionee shall assign and transfer the awarded
Shares to Cede & Co., the Nominee of the Depository Trust Company, a US clearing
agency. Such assignment and transfer shall be signed by Optionee and shall be
delivered to the Company by such means as are determined by the Committee in its
discretion to constitute adequate delivery. The foregoing assignment and transfer
will not adversely affect Optionee’s beneficial ownership of, or ability to trade,
the awarded Shares.

     (iii) The Company is not obligated, and will have no liability for failure, to
issue or deliver any Shares upon exercise of the Option unless such issuance or
delivery would comply with the Applicable Laws (as defined in Section 2(c) of the
Plan), with such compliance determined by the Company in consultation with its legal
counsel. This Option may not be exercised if the issuance of such Shares upon such
exercise or the method of payment of consideration for such shares would constitute
a violation of any applicable federal or state securities or other law or
regulation, including any rule under Part 221 of Title 12 of the Code of Federal
Regulations as promulgated by the Federal Reserve Board, or other Applicable Laws.
As a condition to the exercise of this Option, the Company may require Optionee to
make any representation and warranty to the Company as may be required by the
Applicable Laws. Assuming such compliance, for income tax purposes the Shares shall
be considered transferred to Optionee on the date on which the Option is exercised
with respect to such Shares. The Company may postpone issuing and delivering any
Shares for so long as the Company reasonably determines to be necessary to satisfy
the following:

     (A) its completing or amending any securities registration or
qualification of the Shares or its or the Optionee’s satisfying any
exemption from registration under any federal or state law, rule or
regulation;

     (B) its receiving proof it considers satisfactory that a person seeking
to exercise the Option after the Optionee’s death is entitled to do so;

     (C) the Optionee complying with any requests for representations under
the Plan; and

     (D) its compliance with the restrictions of Code Section 409A to the
extent applicable, including any regulations issued pursuant thereto,
including the Committee’s right to amend any provision of this Option
Agreement to the extent necessary to comply with Code Section 409A.

     4. Method of Payment. Payment of the Exercise Price (in US dollars) shall be by any
of the following, or a combination of the following, at the election of Optionee:

     (a) cash or cashier’s check;

     (b) through a cashless (broker-assisted) exercise; or

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     (c) a combination of paragraphs (a) and (b) immediately above.

     5. Termination of Relationship; Vesting Acceleration on Certain Events. Following the
date of the Optionee’s termination of service for any reason (the “Termination Date”),
Optionee may exercise the Option only as set forth in the Notice and this Section 5. The Committee
has the discretion to determine the Optionee’s Termination Date for purposes of the Option. To the
extent that Optionee is not vested in the Shares as of his or her Termination Date, the Option
shall terminate as to unvested Shares as of the Termination Date. If Optionee does not exercise
this Option as to vested Shares prior to the earlier of the Expiration Date of the Option as set
forth in the Notice or the relevant dates specified below in this Section 5, the Option shall
terminate in its entirety. In no event may the Option be exercised as to any Shares after the
Expiration Date of the Option as set forth in the Notice.

     (a) Termination as a Result of Death or Disability. In the event of the
Optionee’s termination of service as a result of his or her death or Disability (as defined
in Section 2(q) of the Plan) on or after January 1, [___], any unvested Shares under the
Option shall immediately become fully vested and exercisable and all remaining Shares
subject to the Option shall remain exercisable until the earlier of:

     (i) the Expiration Date; or

     (ii) the one (1) year anniversary of the day the Optionee terminates service
due to death or Disability.

In the event of the Optionee’s death, the Optionee’s beneficiary or estate may exercise the
vested Shares under the Option.

     (b) Termination for Cause. In the event the Optionee’s service is terminated
for Cause (as defined in Section 2(i) of the Plan), all unvested Shares under the Option and
all unexercised, vested Shares under the Option shall expire immediately, be forfeited and
considered null and void, and the provisions of Section 9 of this Agreement shall control.

     (c) Termination — General. In the event of the Optionee’s termination of
service other than as a result of Optionee’s death, Disability (as defined in Section 2(q)
of the Plan) or Cause (as defined in Section 2(i) of the Plan) on or after January 1,
[___], the vesting of the Option shall accelerate such that Optionee shall be vested in and
able to exercise the Option as of the Termination Date as to that number of Shares subject
to the Option that equals the product of:

     (i) the total number of Shares subject to the Option, times

     (ii) a ratio, the numerator of which is the total number of months of service
from January 1, [___] to the end of the month in which the date of termination of
service occurs, and the denominator of which is twelve (12), rounded to the nearest
whole number.

The remaining portion of the unvested and unexercisable Option which is not accelerated for
vesting purposes shall be immediately forfeited.

Example: The following example is included merely for demonstrative
purposes.

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Ann, a director, is granted 1,000 Options on November 13, 2009. She will vest 100%
in her Options on December 31, 2010. Ann subsequently announces her termination of
service effective June 1, 2010.

As of June 1, 2010, Ann will immediately vest in Shares underlying the unvested
Options equal to the amount of 500 (equal to 1,000 Options multiplied by 6 (i.e., 6
months of service from January 1, 2010) divided by 12.

All Shares under the Option which become immediately vested and exercisable pursuant to this
paragraph (c) shall remain exercisable until the earlier of:

     (A) the Expiration Date; or

     (B) the date which is thirty (30) days after the day the Optionee
terminates service for reasons other than as a result of Optionee’s death,
Disability (as defined in Section 2(q) of the Plan) or Cause (as defined in
Section 2(i) of the Plan); provided, however, that in the event that
applicable securities law (including Section 306 of the Sarbanes-Oxley Act),
a rule or listing requirement of the principal stock exchange on which the
Company’s Shares are listed, or the Company’s blackout or stock trading
policy prohibits the Optionee from trading in Shares (collectively, a
“Blackout”) during any portion of the 30-day exercise period, then the
running of such 30-day exercise period shall be suspended until the first
date on which the Blackout is lifted by the Company as it relates to the
Optionee, or in the opinion of the Company’s legal counsel or legal
compliance officer, the Blackout no longer applies, but in no event shall
such Option be exercisable after the Expiration Date.

     (d) Change in Control Acceleration. In the event of a Change in Control (as
defined in Section 2(j) of the Plan) which closes on a date prior to an Optionee’s
termination of service but on or after January 1, 2009, any unvested Shares under the Option
shall immediately become fully vested and exercisable and all remaining Shares subject to
the Option shall remain exercisable through their Expiration Date, effective as of
immediately prior to consummation of the Change in Control. Notwithstanding the foregoing,
to the extent that a service, change in control or other agreement or arrangement with the
Company or an Affiliate provides benefits of greater value upon a Change in Control that
those provided in this paragraph (d), the rights set forth in such other agreement shall
supersede the provisions of this paragraph (d). Comparatively, to the extent that a
service, change in control or other agreement or arrangement with the Company or an
Affiliate provides benefits of lesser value upon a Change in Control that those provided in
this paragraph (d), the rights set forth in this paragraph (d) shall supersede the
provisions of such other agreement.

     (e) Other Termination Events. Notwithstanding anything to the contrary
contained in this Option Agreement, the Option will terminate and expire immediately upon
the occurrence of the circumstances set forth in Section 11.2 of the Plan, and the
provisions of Section 9 of this Agreement shall control.

     6. Relation of Other Agreement(s) to Option. As an express condition to acceptance of
this Option, subject to the special exception provided under Section 5(d) of this Option Agreement
(which governs a Change in Control situation), Optionee agrees that:

6

 

     (a) Except to the extent he or she is or subsequently becomes a party to (i) a written
service or other agreement with the Company, or (ii) a written service or other agreement
with an Affiliate or a Subsidiary (which Affiliate or Subsidiary is incorporated in the
United States or Bermuda) which has been approved by the Board or Committee or by the person
who is the Chief Executive Officer of the Company (the “Other Agreement”), the only vesting
and lapse of forfeiture restriction provisions that govern the Option under this Option
Agreement are set forth in Section 5 of this Option Agreement;

     (b) To the extent that the vesting and lapse of forfeiture restriction provisions of
this Agreement or the Plan’s terms are inconsistent with an Other Agreement, the provisions
of his or her Other Agreement shall govern and control, subject to the special exception
provided under Section 5(d) of this Option Agreement (which governs a Change in Control
situation); and

     (c) Except as expressly provided in paragraph (b) above, the terms of any Other
Agreement shall in no way alter or amend, or provide additional rights or benefits, under
the Option governed by this Option Agreement.

     7. Non-Transferability of Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by him or her. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of Optionee.

     8. Changes in Company’s Capital Structure. Subject to any required action by the
Company’s Board and stockholders, as may be determined to be appropriate and equitable by the
Committee, to prevent dilution or enlargement of rights, the Committee shall:

     (a) adjust proportionately the number of Shares covered by the Option and the Exercise
Price for any increase or decrease in the number of issued and outstanding registered shares
resulting from a subdivision or combination of such shares or the payment of a stock
dividend or any other increase or decrease in the number of such outstanding registered
shares of the Company effected without the receipt of consideration by the Company; and

     (b) if the Company is a participating corporation in any merger or consolidation and
provided the Option is not terminated upon consummation of such merger or consolidation,
modify such Option to pertain to and apply to the securities or other property to which a
holder of the number of shares subject to the unexercised portion of this Option would have
been entitled upon such consummation.

Notwithstanding anything to the contrary, such adjustments by the Committee shall be final, binding
and conclusive.

     9. Forfeiture Events. Upon the occurrence of any of the events set forth in Section
11.2 of the Plan (a “Forfeiture Event”), Optionee, without any further action by the Company or
Optionee, shall forfeit, as of the first day of any such Forfeiture Event:

     (a) all rights and interest to this Option;

     (b) any Shares issued upon exercise of the Option then owned by or for the benefit of
the Optionee; and

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     (c) any and all profits realized by the Optionee, on an after-tax basis, pursuant to
any sales or transfer of any Shares previously subject to the Option within the six (6)
month period prior to the date of such Forfeiture Event.

Additionally, the Company shall have the right to issue a stop transfer order and other appropriate
instructions and other documents implementing the above-described forfeiture to its transfer agent,
Cede & Co., the depository or any of its nominees, and/or any other person with respect to this
Option and the Shares, and the Company further shall be entitled to reimbursement from the Optionee
of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company in
enforcing the Company’s rights under this Section 9. By accepting this Option Grant, the Optionee
hereby consents to a deduction from any amounts the Company owes to Optionee from time to time
(including amounts owed to the Optionee as compensation as well as any other amounts owed to
Optionee by the Company), to the extent of any amounts that the Optionee owes to the Company under
this Section 9. Whether or not the Company elects to make any set-off in whole or in part, if the
Company does not recover by means of set-off the full amount the Optionee owes to the Company,
calculated as set forth above, the Optionee agrees to pay immediately the unpaid balance to the
Company. The Optionee hereby grants the Company a proxy on his or her behalf, and the Optionee
hereby agrees to execute any documents necessary or appropriate to carry out the foregoing.

     10. US Tax Consequences. Below is a brief summary as of the date of this Option of
certain United States federal tax consequences of exercise of this nonqualified stock option and
disposition of the Shares under the laws in effect as of the Date of Grant. THIS SUMMARY IS
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX
ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. There may be a regular federal
(and state) income tax liability upon Optionee’s exercise of the Option. Optionee will be treated
as having received compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If
Shares issued upon exercise of this Option are held for at least one year, any gain realized on
disposition of those Shares will be treated as long-term capital gain for federal income tax
purposes.

     11. Effect of Agreement. Optionee acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions thereof (and has had an
opportunity to consult counsel regarding the Option terms), and hereby accepts this Option and
agrees to be bound by its contractual terms as set forth herein and in the Plan. Optionee hereby
agrees to accept as binding, conclusive and final all decisions and interpretations of the
Committee regarding any questions relating to the Option. In the event of a conflict between the
terms and provisions of the Plan and the terms and provisions of the Notice and this Option
Agreement, the Plan terms and provisions shall prevail.

     12. Governing Law. The laws of the state of New Jersey, without giving effect to
principles of conflicts of law, will apply to the Plan, to the Option and the Option Agreement
(including the Notice). The Company agrees, and Optionee agrees as a condition to acceptance of
the Option, to submit to the jurisdiction of the courts located in the jurisdiction in which the
Optionee provides, or most recently provided, his or her primary services to the Company.

     13. Data Protection. Optionee acknowledges and agrees (by executing this Option
Agreement) to the collection, use, processing and transfer of certain personal data as described in
this Section 13. The Optionee understands that he or she is not obliged to consent to such
collection, use, processing and transfer of personal data. However, the Optionee understands that
his or her failure to provide such consent may affect his or her ability to participate in the
Plan. The Optionee understands that the Company may hold certain personal information about the
Optionee, including his or her name,

8

 

social security number (or other tax identification number), salary, nationality, position
title, position evaluation rating along with details of all past awards and current awards
outstanding under the Plan, for the purpose of managing and administering the Plan (the “Data”).
The Company, or its Affiliates, will transfer Data amongst themselves as necessary for the purpose
of implementation, administration and management of the Plan. The Company and/or any of it
Affiliates may further transfer Data to any third parties assisting the Company in the
implementation, administration and management of the Plan. These various recipients of Data may be
located elsewhere throughout the world. The Optionee authorizes these various recipients of Data
to receive, possess, use, retain and transfer the Data, in electronic or other form, for the
purposes of implementing, administering and managing the Plan, including any required transfer of
such Data as may be required for the subsequent holding of Shares subject to the Option on the
Optionee’s behalf by a broker or other third party with whom the Optionee may elect to deposit any
Shares subject to the Option acquired pursuant to the Plan. The Optionee understands that he or
she may, at any time, review Data with respect to the Optionee and require any necessary amendments
to such Data. The Optionee also understands that he or she may withdraw the consents to use Data
herein by notifying the Company in writing; however, the Optionee understands that by withdrawing
his or her consents to use Data, the Optionee may affect his or her ability to participate in the
Plan.

     14. Service Matters. The award of this Option does not form part of Optionee’s
entitlement to remuneration or benefits in terms of his or her services to the Company. Optionee’s
terms and conditions of service are not affected or changed in any way by this Option or by the
terms of the Plan or this Option Agreement. No provision of this Agreement or of the Option
granted hereunder shall give the Optionee any right to continue in the service of the Company or
any Affiliate, create any inference as to the length of service of the Optionee, affect the right
of the Company or any Affiliate to terminate the service of the Optionee, with or without Cause (as
defined in Section 2(i) of the Plan), or give the Optionee any right to participate in any employee
welfare or benefit plan or other program (other than the Plan) of the Company or any Affiliate.
Optionee acknowledges and agrees (by executing this Agreement) that the granting of Options under
this Agreement are made on a fully discretionary basis by the Company and that this Agreement does
not lead to a vested right to further Option awards in the future. Further, the Options set forth
in this Agreement constitute a non-recurrent benefit and the terms of this Agreement are only
applicable to the Options distributed pursuant to this Agreement.

     15. Tax Provisions Applicable to Non-US Persons. This Section 15 shall apply to
Optionee if he or she is resident in and/or subject to the laws of a country other than the United
States at the time of grant of this Option and during the period in which he or she holds this
Option or the Shares issued pursuant thereto.

     (a) Applicable if Optionee is not a US person (including as to UK persons):
Optionee hereby agrees to indemnify and keep indemnified the Company and any Affiliate from
and against any liability for, or obligation to pay, income tax and national insurance or
social security contributions arising on the grant of the Option, vesting of the Shares or
the exercise of the Option.

     (b) Applicable if Optionee is a UK person: Where any obligation to pay income
tax or national insurance contributions or social security contributions (any such
obligation or contribution, a “Tax Liability”) arises, the Company or any Affiliate
may recover from Optionee an amount of money sufficient to meet the Tax Liability by any of
the following arrangements:

     (i) deduction from salary or other payments due to Optionee; or

     (ii) withholding from the issuance to Optionee of that number of Shares
(otherwise to be acquired by Optionee on exercise of the Option) whose aggregate
Fair

9

 

Market Value on the date of exercise is, so far as possible, equal to but
neither less than nor more than the amount of Tax Liability.

     16. Severability. In the event that any provision of this Option Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining
parts of this Option Agreement, and this Option Agreement shall be construed and enforced as if the
illegal or invalid provision had not been included.

     17. Waiver; Cumulative Rights. The failure or delay of either party to require
performance by the other party of any provision hereof shall not affect its right to require
performance of such provision unless and until such performance has been waived in writing. Each
and every right hereunder is cumulative and may be exercised in part or in whole from time to time.

     18. Amendment of Nonqualified Stock Option. The Committee may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension or discontinuation
(other than as explicitly permitted under the Plan) shall be made that would adversely affect
Optionee’s rights under this Option Agreement without his or her consent.

     19. Representations. As a condition to Optionee’s receipt of this Option, Optionee
represents and warrants the following:

     (a) Optionee is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and knowledgeable
decision to accept this Option;

     (b) Optionee is acquiring the Option and the Shares subject thereto for investment only
for his or her own account, and not with a view, or for resale in connection with, any
“distribution” thereof under Applicable Law (as defined in Section 2(c) of the Plan);

     (c) Optionee understands that neither Option nor the Shares have been registered in all
State jurisdictions within the United States, and that the exemption(s) from registration
relied upon may depend upon his or her investment intent as set forth above;

     (d) Optionee further understands that prior to any resale by him or her of the Shares
acquired upon exercise of this Option without registration of such resale in relevant State
jurisdictions, the Company may require him or her to furnish the Company with an opinion of
counsel acceptable to the Company that he or she may sell or transfer such Shares pursuant
to an available exemption under Applicable Law;

     (e) Optionee understands that the Company is under no obligation to assist him or her
in this process by registering the Shares in any jurisdiction or by ensuring that an
exemption from registration is available; and

     (f) Optionee further agrees that as a condition to exercise of this Option, the Company
may require him or her to furnish contemporaneously dated representations similar to those
set forth in this Section 19.

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EXHIBIT A

FOSTER WHEELER AG OMNIBUS INCENTIVE PLAN

Exercise Notice of Options of Foster Wheeler AG

	 	 	 
	Date:

	 	[Date]
	 
	 	 
	From:

	 	[Name, Address, e-mail]
	 
	 	 
	To:

	 	Foster Wheeler AG
	 

	 	c/o Foster Wheeler Inc.
	 

	 	Perryville Corporate Park
	 

	 	Clinton, New Jersey 08809-4000

Ladies and Gentlemen,

I herewith exercise [number of options] granted to me in the Nonqualified Stock Option Grant dated
[date of award agreement] under the [name of plan] which entitle me to [number of shares, which
number should be equal to the number of options set forth above] registered shares of Foster
Wheeler AG with a par value of [_X_] Swiss francs (CHF).

I unconditionally subscribe for the number of registered shares as stated above and undertake to
pay the exercise price of [exercise price] US dollars (USD) per share as stated in the respective
plan and/or agreement.

I request that Foster Wheeler AG deliver [number of shares] out of its conditional capital
according to Article 5 of its Articles of Association after the receipt of my payment and I
herewith assign and transfer these shares to Cede & Co. in its capacity as Nominee of the
Depository Trust Company, New York City, in order to and with the sole purpose of enabling the
electronic trading of the aforementioned shares on the NASDAQ Global Select Market.

Yours sincerely,

	 	 	 
	 
	 

[Name]EX-10.4

Exhibit 10.4

FOSTER WHEELER AG OMNIBUS INCENTIVE PLAN

Director Restricted Stock Unit Award Agreement

	 	 	 
	Name of Participant:

	 	                                                                               
	 
	 	 
	Date of Grant:

	 	[                    ]
	 
	 	 
	Number of Restricted Stock Units Awarded:

	 	                                        

     Pursuant to the Foster Wheeler AG Omnibus Incentive Plan (the “Plan”), a copy of which has
been delivered to you, along with a prospectus describing the material terms of the Plan, and in
accordance with the terms and conditions of the Plan and your agreement to such additional terms,
conditions and restrictions as are set forth below, you have been granted as of the date set forth
above a Restricted Stock Unit Award (the “Restricted Stock Unit Award”), meaning the right to
receive registered shares of Foster Wheeler AG (the “Company”) on the terms and conditions set
forth herein. Capitalized terms used but not defined in this Director Restricted Stock Unit Award
Agreement (the “Agreement”) have the meanings ascribed to them in the Plan.

     1. Acceptance of Restricted Stock Unit Award. Subject to the terms and conditions of
this Agreement and the Plan (the terms of which are incorporated herein by reference) and effective
as of the date set forth above, the Company hereby grants to you and you hereby accept the grant of
the number of Restricted Stock Units (the “Units”) set forth above. Units will be settled only in
Shares of the Company on a one Share for one Unit basis, rounded up or down to the nearest whole
Share, and not in cash.

     2. Relation of Restricted Stock Unit Award to Other Agreement(s). As an express
condition to acceptance of this Restricted Stock Unit Award, subject to the special exception
provided under Section 3(e) of this Agreement (which governs a Change in Control situation), you
agree that:

          (a) Except to the extent you are or subsequently become a party to (i) a written
service or other agreement with the Company, or (ii) a written service or other agreement
with an Affiliate or Subsidiary (which Affiliate or Subsidiary is incorporated in the United
States or Bermuda) which has been approved by the Board or Committee or executed by the
person who is the Chief Executive Officer of the Company (the “Other Agreement”), the only
vesting and lapse of forfeiture restriction provisions that govern the Restricted Stock Unit
Award under this Agreement are set forth in Section 3 of this Agreement;

          (b) To the extent that the vesting and lapse of forfeiture restriction provisions of
this Agreement or the Plan’s terms are inconsistent with an Other Agreement, the provisions
of your Other Agreement shall govern and control, subject to the special exception provided
under Section 3(e) of this Agreement (which governs a Change in Control situation); and

 

 

     (c) Except as expressly provided in paragraph (b) above, the terms of any Other
Agreement shall in no way alter or amend, or provide additional rights or benefits, under
the Restricted Stock Unit Award governed by this Agreement.

     3. Vesting; Termination; Assignment and Proxy; Payment of Par Value.

     (a) General Vesting Rule. You will be issued Shares in settlement of the Units
only as you vest in the Units, meaning that the Units will be settled in whole Shares on the
day on which you vest in any portion of the Units (hereinafter referred to as a “Vesting
Date”). So long as you provide continued service to the Company or any Affiliate through
such Vesting Date(s), and except as otherwise set forth in this Section 3, the Units shall
vest and your right to receive and retain the Shares in settlement of such Units will become
nonforfeitable on December 31, [___].

     (b) Termination as a Result of Death or Disability. In the event of your
termination of service as a result of your death or Disability (as defined in Section 2(q)
of the Plan) on or after January 1, [___], any unvested Units shall immediately vest as of
the date of such termination for death or Disability.

     (c) Termination for Cause. In the event your service is terminated for Cause
(as defined in Section 2(i) of the Plan), all unvested Units and all Shares received in
settlement of vested Units shall expire immediately, be forfeited and considered null and
void, and the provisions of Section 4 of this Agreement shall control.

     (d) Termination — General. In the event of your termination of service other
than as a result of your death, Disability (as defined in Section 2(q) of the Plan) or Cause
(as defined in Section 2(i) of the Plan) on or after January 1, [___], any unvested Units
shall vest pro-rata as of the date of your termination of service based on the following
formula:

     (i) the total number of Units, times

     (ii) a ratio, the numerator of which is the total number of months of service
from January 1, [___] to the end of the month in which the date of your termination
of service occurs, and the denominator of which is twelve (12), rounded to the
nearest whole number.

The remaining portion of the unvested Units which are not accelerated for vesting purposes
shall be immediately forfeited.

Example: The following example is included merely for demonstrative
purposes.

Ann, a director, is granted 1,000 Units on November 13, 2009. She will vest 100% in
her Units on December 31, 2010. Ann subsequently announces her termination of
service effective June 1, 2010.

As of June 1, 2010, Ann will immediately vest in unvested Units equal to the amount
of 500 (equal to 1,000 Units multiplied by 6 (i.e., 6 months of service from January
1, 2010) divided by 12.

2

 

     (e) Change in Control Acceleration. In the event of a Change in Control (as
defined in Section 2(j) of the Plan) which closes on a date prior to your termination of
service but on or after January 1, [___], any unvested Units shall immediately become fully
vested, effective as of immediately prior to consummation of the Change in Control.
Notwithstanding the foregoing, to the extent that a service, change in control or other
agreement or arrangement with the Company or an Affiliate provides benefits of greater value
upon a Change in Control that those provided in this paragraph (e), the rights set forth in
such other agreement shall supersede the provisions of this paragraph (e). Comparatively,
to the extent that a service, change in control or other agreement or arrangement with the
Company or an Affiliate provides benefits of lesser value upon a Change in Control that
those provided in this paragraph (e), the rights set forth in this paragraph (e) shall
supersede the provisions of such other agreement.

     (f) Other Termination Events. Notwithstanding anything to the contrary
contained in this Agreement, the Units will terminate and expire immediately upon the
occurrence of the circumstances set forth in Section 11.2 of the Plan, and the provisions of
Section 4 of this Agreement shall control.

     (g) Forfeiture Price. In the event that any Shares previously issued to you in
settlement of the Units are required to be forfeited under Section 3(c) or Section 3(f),
then the Company will have the right (but not the obligation) to repurchase any or all of
such forfeited Shares for $0.001 per Share. The Company will have ninety (90) days from the
date of any event giving rise to forfeiture under Section 3(c) or Section 3(f), as the case
may be, within which to effect a repurchase of any or all of the Shares subject to such
forfeiture conditions. The Company’s right to repurchase the Shares under this paragraph
(g) is assignable by the Company, in its sole discretion, to an Affiliate or other party to
whom such rights can be assigned under the Applicable Laws (as defined in Section 2(c) of
the Plan).

     (h) Assignment and Transfer. For the sole purpose of enabling electronic
trading of the awarded Shares on the NASDAQ Global Select Market, the awarded Shares must be
assigned and transferred to Cede & Co., the Nominee of the Depository Trust Company, a US
clearing agency. By signing this Agreement, you make such assignment and transfer to Cede &
Co., effective upon the date of delivery of Shares under this Agreement. By signing this
Agreement, you also (i) appoint the Company’s Secretary and each of its Assistant
Secretaries your proxy with the right of substitution to make such assignment and transfer
to Cede & Co. and (ii) agree to execute and deliver any further documents as the Company or
Cede & Co. may require in order to effectuate such assignment and transfer to Cede & Co.,
all with such assignment and transfer being effective upon the date of delivery of Shares
under this Agreement. For the avoidance of doubt, the foregoing assignment and transfer
will not adversely affect your beneficial ownership of, or ability to trade, the awarded
Shares.

     (i) Exercise Notice. Swiss law requires the execution of an exercise notice
for Shares to issue out of the conditional capital of the Company. By signing this
Agreement, you appoint the Company’s Secretary and each of its Assistant Secretaries your
proxy with the right of substitution to execute and deliver an exercise notice at or about
the time you vest in the Units. The Company reserves the right to require you to sign and
deliver an exercise notice substantially in the form attached hereto as Exhibit A, with it
being understood that any payment of par value will be in accordance with Section 3(j)
below.

     (j) Payment of Par Value. Swiss law and the Company’s Articles of Association
require that par value be paid in cash to the Company for any Shares issued in settlement of
your Restricted Stock Unit Award if the Company does not have treasury shares available on
the date

3

 

of delivery of such Shares. However, if such cash payment is required, the Company has
arranged to have the payment made on your behalf as part of your award. Accordingly, you
yourself will not have to make any such payment.

     (k) Termination of Relationship. The Committee shall have the discretion to
determine whether your service has been terminated as well as the date of such termination
of service for purposes of this Restricted Stock Unit Award.

     4. Forfeiture Events. In addition to the rights available to the Company under
Section 3(g) immediately above, upon the occurrence of any of the events set forth in Section 11.2
of the Plan (a “Forfeiture Event”), you, without any further action by the Company or you, shall
forfeit, as of the first day of any such Forfeiture Event:

     (a) all rights and interest to these Units;

     (b) any Shares received in settlement of these Units then owned by you or by another
person for your benefit; and

     (c) any and all profits realized by you, on an after-tax basis, pursuant to any sales
or transfer of any Shares received in settlement of these Units within the six (6) month
period prior to the date of such Forfeiture Event.

Additionally, the Company shall have the right to issue a stop transfer order and other appropriate
instructions and other documents implementing the above-described forfeiture to its transfer agent,
Cede & Co., the depository or any of its nominees, and/or any other person with respect to this
Unit and the Shares, and the Company further shall be entitled to reimbursement from you of any
fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company in enforcing
the Company’s rights under this Section 4. By accepting this Restricted Stock Unit Award, you
hereby consent to a deduction from any amounts the Company owes to you from time to time (including
amounts owed to you as compensation as well as any other amounts owed to you by the Company), to
the extent of any amounts that you owe to the Company under this Section 4. Whether or not the
Company elects to make any set-off in whole or in part, if the Company does not recover by means of
set-off the full amount you owe to the Company, calculated as set forth above, you agree to pay
immediately the unpaid balance to the Company. You hereby grant the Company a proxy on your
behalf, and you hereby agree to execute any documents necessary or appropriate to carry out the
foregoing.

     5. Form of Shares. The Company is authorized to issue registered shares in
certificated or uncertificated form and it may choose the form of issuance if and when registered
shares issue.

     6. Changes in Company’s Capital Structure. Subject to any required action by the
Company’s Board and stockholders, as may be determined to be appropriate and equitable by the
Committee, to prevent dilution or enlargement of rights, the Committee shall:

     (a) adjust proportionately the number of Units for any increase or decrease in the
number of issued and outstanding registered shares resulting from a subdivision or
combination of such shares or the payment of a stock dividend or any other increase or
decrease in the number of such outstanding registered shares of the Company effected without
the receipt of consideration by the Company; and

     (b) if the Company is a participating corporation in any merger or consolidation and
provided the Units are not terminated upon consummation of such merger or consolidation,

4

 

modify such Units to pertain to and apply to the securities or other property to which
a holder of the number of shares subject to the Units would have been entitled upon such
consummation.

Notwithstanding anything to the contrary, such adjustments by the Committee shall be final, binding
and conclusive.

     7. US Tax Consequences. Below is a brief summary as of the date of this Restricted
Stock Unit Award of certain United States federal tax consequences of the award of the Units and
disposition of the Shares delivered in settlement of the Units under the laws in effect as of the
date of grant. THIS SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
YOU SHOULD CONSULT A TAX ADVISER BEFORE SETTLEMENT OF THIS RESTRICTED STOCK UNIT AWARD OR
DISPOSING OF THE SHARES ISSUED IN SETTLEMENT. There may be a regular federal (and state) income
tax liability when the Units vest on the Vesting Date(s). You will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the current Fair Market Value
of the Shares underlying the Units on the date of vesting (i.e., when the forfeiture provisions
lapse). If Shares issued upon vesting of this Restricted Stock Unit Award are held for at least
one year, any gain realized on disposition of those Shares will be treated as long-term capital
gain for federal income tax purposes.

     8. Effect of Agreement. You acknowledge receipt of a copy of the Plan and represent
that you are familiar with the terms and provisions thereof (and have had an opportunity to consult
counsel regarding the Units’ terms), and hereby accept this Restricted Stock Unit Award and agree
to be bound by its contractual terms as set forth herein and in the Plan. You hereby agree to
accept as binding, conclusive and final all decisions and interpretations of the Committee
regarding any questions relating to the Units. In the event of a conflict between the terms and
provisions of the Plan and the terms and provisions of this Agreement, the Plan terms and
provisions shall prevail.

     9. Restriction on Transferability. Until settlement of the Units and issuance to you
of the Shares subject thereto, the Units may not be sold, transferred, pledged, assigned or
otherwise alienated at any time. Any attempt to do so contrary to the provisions hereof shall be
null and void. Notwithstanding the above and subject to Section 11 below, distribution can be made
pursuant to will, the laws of descent and distribution, intra-family transfer instruments or to an
inter vivos trust.

     10. Voting Rights. You will have no voting or any other rights as a shareholder of
the Company with respect to the Units prior to the date on which you are issued the Shares in
settlement thereof. Upon delivery of the Shares in settlement of the Units, you will, subject to
and governed by the procedures under the Company’s Articles of Association, obtain voting and other
rights.

     11. Designation of Beneficiaries. You may, in accordance with procedures established
by the Committee, designate one or more beneficiaries to receive all or part of any Shares to be
distributed to you hereunder in settlement of Units in the case of your death, and you may change
or revoke such designation at any time. In the event of your death, any Shares distributable
hereunder that are subject to such a designation (to the extent such a designation is enforceable
under the Applicable Laws (as defined in Section 2(c) of the Plan)) will be distributed to such
beneficiary or beneficiaries in accordance with this Agreement. Any other Shares distributable
will be distributed to your estate. If there is any question as to the legal right of any
beneficiary to receive a distribution hereunder, the amount in question will be paid over to your
estate, in which event neither the Company nor any affiliate of the Company will have any further
liability to anyone with respect to such amount.

     12. Amendment of Restricted Stock Unit Award. The Committee may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension or discontinuation
(other

5

 

than as explicitly permitted under the Plan) shall be made that would adversely affect your
rights under this Agreement without your consent.

     13. Governing Law. The laws of the state of New Jersey, without giving effect to
principles of conflicts of law, will apply to the Plan, this Restricted Stock Unit Award and this
Agreement. The Company agrees, and you agree as a condition to acceptance of the Restricted Stock
Unit Award, to submit to the jurisdiction of the courts located in the jurisdiction in which you
provide, or most recently provided, your primary services to the Company.

     14. Data Protection. You acknowledge and agree (by executing this Agreement) to the
collection, use, processing and transfer of certain personal data as described in this Section 14.
You understand that you are not obliged to consent to such collection, use, processing and transfer
of personal data. However, you understand your failure to provide such consent may affect your
ability to participate in the Plan. You understand that the Company may hold certain personal
information about you, including your name, social security number (or other tax identification
number) salary, nationality, job title, position evaluation rating along with details of all past
awards and current awards outstanding under the Plan, for the purpose of managing and administering
the Plan (the “Data”). The Company, or its Affiliates, will transfer Data amongst themselves as
necessary for the purpose of implementation, administration and management of the Plan. The
Company and/or any of it Affiliates may further transfer Data to any third parties assisting the
Company in the implementation, administration and management of the Plan. These various recipients
of Data may be located elsewhere throughout the world. You authorize these various recipients of
Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the
purposes of implementing, administering and managing the Plan, including any required transfer of
such Data as may be required for the subsequent holding of Shares subject to the Unit on your
behalf by a broker or other third party with whom you may elect to deposit any Shares subject to
the Unit acquired pursuant to the Plan. You understand that you may, at any time, review Data with
respect to you and require any necessary amendments to such Data. You also understand that you may
withdraw the consents to use Data herein by notifying the Company in writing; however, you
understand that by withdrawing your consent to use Data, you may affect your ability to participate
in the Plan.

     15. Service Matters. This Restricted Stock Unit Award does not form part of your
entitlement to remuneration or benefits in terms of your services to the Company. Your terms and
conditions of service are not affected or changed in any way by this Restricted Stock Unit Award or
by the terms of the Plan or this Agreement. No provision of this Agreement or of the Restricted
Stock Unit Award granted hereunder shall give you any right to continue in the service of the
Company or any Affiliate, create any inference as to the length of your service, affect the right
of the Company or any Affiliate to terminate your service, with or without Cause (as defined in
Section 2(i) of the Plan), or give you any right to participate in any employee welfare or benefit
plan or other program (other than the Plan) of the Company or any Affiliate. You acknowledge and
agree (by executing this Agreement) that the granting of the Restricted Stock Unit Award under this
Agreement is made on a fully discretionary basis by the Company and that this Agreement does not
lead to a vested right to further awards in the future. Further, the Restricted Stock Unit Award
set forth in this Agreement constitutes a non-recurrent benefit and the terms of this Agreement are
only applicable to the Units awarded pursuant to this Agreement.

     16. Tax Provisions Applicable to Non-US Persons. This Section 16 shall apply to you
if you are resident in and/or subject to the laws of a country other than the United States at the
time of grant of the Restricted Stock Unit Award and during the period in which you hold this
Restricted Stock Unit Award or the Shares issued in settlement thereof.

6

 

     (a) Applicable if you are not a US person (including as to UK persons): You
hereby agree to indemnify and keep indemnified the Company and any Affiliate from and
against any liability for, or obligation to pay, income tax and national insurance or social
security contributions arising on the grant of the Restricted Stock Unit Award, vesting of
the Restricted Stock Unit Award or the issuance of the Shares in settlement.

     (b) Applicable if you are a UK person: Where any obligation to pay income tax
or national insurance contributions or social security contributions (any such obligation or
contribution, a “Tax Liability”) arises, the Company or any Affiliate may recover from you
an amount of money sufficient to meet the Tax Liability by any of the following
arrangements:

     (i) deduction from salary or other payments due to you; or

     (ii) withholding from the issuance to you of that number of Shares (otherwise
to be acquired by you in settlement of the Units) whose aggregate Fair Market Value
on the date of exercise is, so far as possible, equal to but neither less than nor
more than the amount of Tax Liability.

If you are unable to satisfy your Tax Liability pursuant to either subparagraph (i) or
clause (ii) above, the Company may additionally cause the forfeiture of any Shares otherwise
scheduled to become vested under the Restricted Stock Unit Award on a given date to avoid
imposition of any Tax Liability to you.

     17. Severability. In the event that any provision of this Agreement shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining
parts of this Agreement, and this Agreement shall be construed and enforced as if the illegal or
invalid provision had not been included.

     18. Waiver; Cumulative Rights. The failure or delay of either party to require
performance by the other party of any provision hereof shall not affect its right to require
performance of such provision unless and until such performance has been waived in writing. Each
and every right hereunder is cumulative and may be exercised in part or in whole from time to time.

     19. Representations. As a condition to your receipt of this Restricted Stock Unit
Award and the Shares to be issued in settlement thereof, you represent and warrant the following:

     (a) You are aware of the Company’s business affairs and financial condition and have
acquired sufficient information about the Company to reach an informed and knowledgeable
decision to accept this Restricted Stock Unit Award;

     (b) You are acquiring the Restricted Stock Unit Award and the Shares subject thereto
for investment only for your own account, and not with a view, or for resale in connection
with, any “distribution” thereof under Applicable Law (as defined in Section 2(c) of the
Plan);

     (c) You understand that neither the Units nor the Shares have been registered in all
State jurisdictions within the United States, and that the exemption(s) from registration
relied upon may depend upon your investment intent as set forth above;

     (d) You further understand that prior to any resale by you of the Shares acquired in
settlement of these Units without registration of such resale in relevant State
jurisdictions, the

7

 

Company may require you to furnish the Company with an opinion of counsel acceptable to
the Company that you may sell or transfer such Shares pursuant to an available exemption
under Applicable Law;

     (e) You understand that the Company is under no obligation to assist you in this
process by registering the Shares in any jurisdiction or by ensuring that an exemption from
registration is available; and

     (f) You further agree that as a condition to settlement of these Units, the Company may
require you to furnish contemporaneously dated representations similar to those set forth in
this Section 19.

     By your signature below, you indicate your acceptance of the terms of this Restricted Stock
Unit Award, and acknowledge that you have received copies of the Plan and the prospectus, in each
case as currently in effect. By signing this Agreement, you acknowledge that your personal
information regarding participation in the Plan and information necessary to determine and pay, if
applicable, benefits under the Plan must be shared with other entities, including companies related
to the Company and persons responsible for certain acts in the administration of the Plan. By
signing this Agreement, you consent to such transmission of personal data as the Company believes
is appropriate to administer the Plan.

	 	 	 	 
	 	 Accepted and Agreed to by Participant:
	 	 
	 	 
 
	 	 

	 	      Participant
	 	 
	 	 
	 	 Acknowledged and Agreed to by Company:
	 	 
	 	 

	 	 
	 	 

	 	          Raymond J. Milchovich
	 	 

	 	          Chairman & CEO

8

 

EXHIBIT A

FOSTER WHEELER AG OMNIBUS INCENTIVE PLAN

Exercise Notice of RSUs of Foster Wheeler AG

	 	 	 
	Date:

	 	[Date]
	 
	 	 
	From:

	 	[Name, Address, e-mail]
	 
	 	 
	To:

	 	Foster Wheeler AG
	 

	 	c/o Foster Wheeler Inc.
	 

	 	Perryville Corporate Park
	 

	 	Clinton, New Jersey 08809-4000

Ladies and Gentlemen,

I herewith exercise [number of RSUs] granted to me in the Restricted Stock Unit Award Agreement
dated [date of award agreement] under the [name of plan] which entitle me to [number of shares,
which number should be equal to the number of RSUs set forth above] registered shares of Foster
Wheeler AG with a par value of [_X_] Swiss francs (CHF).

I unconditionally subscribe for the number of registered shares as stated above and undertake to
pay as the exercise price an equal amount of at least [_X_] CHF per share, paid in US dollars (USD)
while taking into consideration a CHF-USD exchange rate as effective on the day of the delivery of
the shares.

I request that Foster Wheeler AG deliver [number of shares] out of its conditional capital
according to Article 5 of its Articles of Association after the receipt of my payment and I
herewith assign and transfer these shares to Cede & Co. in its capacity as Nominee of the
Depository Trust Company, New York City, in order to and with the sole purpose of enabling the
electronic trading of the aforementioned shares on the NASDAQ Global Select Market.

Yours sincerely,

                                                            

[Name]

9

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