Document:

MASTER GUARANTEE AGREEMENT

           This MASTER GUARANTEE AGREEMENT, dated as of May 25, 2001 (this
"Guarantee Agreement"), is made by Foster Wheeler LLC, a Delaware limited
liability company ("FW LLC"), Foster Wheeler International Holdings Inc., a
Delaware corporation ("FW International" and together with FW LLC, the
"Guarantors") and Foster Wheeler Ltd., a Bermuda company ("FW Ltd." or the
"Supplemental Guarantor") for the benefit of the Beneficiaries and the Officers
(each as defined below). Capitalized terms used herein and not otherwise defined
shall have the definitions given such terms in the Merger Agreement (defined
below).

                              W I T N E S S E T H:

                  WHEREAS, (1) pursuant to an Agreement and Plan of Merger among
Foster Wheeler Corporation, a New York corporation, ("FWC"), FW Ltd. and FW LLC,
dated May 25, 2001 (the "Merger Agreement"), FWC will merge with and into FW
LLC, with FW LLC being the surviving entity, and with each outstanding share of
FWC common stock (other than those shares held by FWC or any direct or indirect
subsidiary of FWC) automatically converting into one common share of FW Ltd. and
all current stockholders of FWC becoming shareholders of FW Ltd., and (2) FWC
and /or its successor will take certain actions to reorganize the internal
structure of FWC so that FWC and/or its successor may take certain actions,
including the creation of new subsidiaries, the transfer and/or sale of certain
assets, liabilities and stock to the wholly-owned subsidiaries of FWC and /or
its successor, the execution of intercompany notes between the subsidiaries
and/or FWC, the amendment of certain employee benefit plans, employment
agreements and stock option plans (the "Reorganization");

                     WHEREAS, in connection with the Reorganization, the
sponsorship of those certain employee and director benefit plans and incentive
compensation plans listed in Annex 1 attached hereto (the "Plans") shall be
transferred from FWC to Foster Wheeler US Holdings, Inc., a Delaware corporation
("FW US"), including any assets, obligations and liabilities to each participant
or beneficiary of the Plans (collectively the "Beneficiaries") thereunder;

                     WHEREAS, in connection with the Reorganization, FW US shall
enter into certain change of control employment agreements, substantially in
the form attached as Annex 2 hereto, with each officer (collectively the
"Officers") listed in Annex 3 attached hereto (each agreement a "New Change of
Control Agreement" and collectively the "New Change of Control Agreements"), as
of the Effective Time;

                  WHEREAS, each Guarantor will obtain benefits from the
Reorganization and, accordingly, desires to execute this Guarantee Agreement in
order to guarantee FW US's obligations under the Plans and/or the New Change of
Control Agreements; and

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                  WHEREAS, FW Ltd. will obtain benefits from the Reorganization
and, accordingly, desires to execute this Guarantee Agreement in order to
guarantee the performance of the obligations of the Guarantors hereunder with
respect to the New Change of Control Agreements and to undertake certain other
obligations under the New Change of Control Agreements.

                     NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:

                     Section 1.On and after the Effective Time, the Guarantors
hereby jointly, severally, irrevocably and unconditionally guarantee FW US's
performance of its obligations under the Plans, as if the Guarantors sponsored
or maintained the Plans. This guarantee shall be a continuing, absolute and
unconditional guarantee and shall remain in full force and effect until all
obligations under the Plans have been performed in full by FW US or either of
the Guarantors, as the case may be.

                     Section 2.On and after the Effective Time, the Guarantors
hereby jointly, severally, irrevocably and unconditionally guarantee FW US's
performance of its obligations under the New Change of Control Agreements, as if
the Guarantors had entered into the New Change of Control Agreements with each
respective Officer. This guarantee shall be a continuing, absolute and
unconditional guarantee and shall remain in full force and effect until all
obligations under the New Change of Control Agreements have been performed in
full by FW US or either of the Guarantors, as the case may be.

                     Section 3.(a) On and after the Effective Time, the
Supplemental Guarantor hereby irrevocably and unconditionally guarantees the
Guarantors' performance of their obligations under the New Change of Control
Agreements. This guarantee shall be a continuing, absolute and unconditional
guarantee and shall remain in full force and effect until all obligations under
the New Change of Control Agreements have been performed in full by FW US, the
Guarantors or the Supplemental Guarantor, as the case may be.

                  (b) In addition to the guarantee in (a), the Supplemental
Guarantor hereby agrees to perform and be bound by its obligations under Section
11(d) of each New Change of Control Agreement.

                  Section 4. The obligations of each Guarantor and the
Supplemental Guarantor under this Guarantee Agreement are limited to the maximum
amount which, after giving effect to all other contingent and fixed liabilities
of such Guarantor or Supplemental Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee, will
result in the obligations of such Guarantor under the Guarantee not constituting
a fraudulent conveyance or fraudulent transfer under any applicable federal or
state law.

                  Section 5. Each payment to be made by a Guarantor or the
Supplemental Guarantor hereunder in respect of the obligations shall be made
without set-off, counterclaim, reduction or diminution of any kind or nature.

                                      -2-
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                     Section 6.The obligations of each Guarantor hereunder are
and shall be absolute and unconditional and any monies or amounts expressed
to be owing or payable by each Guarantor hereunder which may not be recoverable
from such Guarantor on the basis of a guarantee shall be recoverable from such
Guarantor as a primary obligor and principal debtor in respect thereof.

                    Section 7. The obligations of each Guarantor and the
Supplemental Guarantor hereunder shall be continuing and shall remain in full
force and effect until all the obligations have been paid and satisfied in full.

                  Section 8.THIS GUARANTEE AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE BENEFICIARIES, THE OFFICERS AND THE UNDERSIGNED HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK.

                  Section 9.This Guarantee Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which counterparts when executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.

                  Section 10. The invalidity or unenforceability of any
provision of this Guarantee Agreement shall not affect the validity or
enforceability of the remaining provisions herein.

                                      -3-
<PAGE>

           IN WITNESS WHEREOF, FW LLC, FW Ltd. and FW International have caused
this Guarantee Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized, effective for all purposes as of the date
first written.

                               FOSTER WHEELER LLC

                               By: /S/ THOMAS R. O'BRIEN
                                   ---------------------
                               Title: Manager

                               FOSTER WHEELER LTD.

                               By:  /S/ THOMAS R. O'BRIEN
                                    ---------------------
                                    Title: President and CEO

                               FOSTER WHEELER International Holdings, Inc.

                               By:  /S/ THOMAS R. O'BRIEN
                                    ---------------------
                                    Title: Senior Vice President

                                      -4-
<PAGE>

                                                                         ANNEX 1

                 LIST OF BENEFIT PLANS AND STOCK INCENTIVE PLANS
                 -----------------------------------------------

FW US Salaried Employees Pension Plan
FW US 401(k) Plan
Retirement Plan for Bargaining Unit Employees of Foster Wheeler USA Corporation
     and Foster Wheeler Energy Corporation
FW US Management Incentive Life Insurance Program
FW US Survivor Income Plan
FW US Supplemental Employee Retirement Plan
FW US Deferred Compensation Plan for Directors
1995 Stock Option Plan of FW US
1984 Stock Option Plan of FW US
Directors' Stock Option Plan of FW US
FW US Directors Deferred Compensation and Stock Award Plan
FW US Executive Compensation Plan
FW US Executive Stock Ownership Plan

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                                                                         ANNEX 2

                                    FORM OF
                                    -------
                     CHANGE OF CONTROL EMPLOYMENT AGREEMENT
                     --------------------------------------

<PAGE>

                                                                         ANNEX 3

                                LIST OF OFFICERS
                                ----------------

     Henry E. Bartoli
     John C. Blythe
     Lisa Fries Gardner
     Robert D. Iseman
     Thomas R. O'Brien
     Gilles A. Renaud
     James E. Schessler

<PAGE>[LOGO]

                              FOSTER WHEELER LTD.

                                                                  May 29, 2001

NAME
ADDRESS 1
CITY   STATE  POSTALCODE

Dear [FirstName] :

                     This letter will confirm the agreement between you and
Foster Wheeler Inc. (the "Company") regarding certain terms and conditions
relating to your employment by the Company.

                     In the event that the Company terminates your employment
(as defined in Paragraph 4 Subsections (a) and (b) of the Change of Control
Employment Agreement) between the date hereof and December 31, 2003 for any
reason, other than (i) death; (ii) disability (as defined in the Company's
long-term disability plan), or (iii) conviction of, indictment for, or the entry
of a guilty plea or plea of no contest with respect to a felony offense, the
Company agrees to provide you with the following separation benefits:

                     1. You will continue to receive your base salary in effect
on the date of termination of employment for a period (the "Salary Continuation
Period") commencing on the date of termination and continuing until the greater
of (i) December 31, 2003 or (ii) two years from the date of termination. Such
amounts shall be paid in accordance with the normal payroll practices of the
Company. In addition, you will receive credit for both age and service during
the Salary Continuation Period under all employee benefit plans of the Company,
including the Company's pension plan and SERP, which rely on age and/or service
to determine benefit. However, all of the additional pension benefit will be
paid under the non-qualified SERP Plan.

                     2. You will be entitled to receive all target bonuses under
the annual and long-term segments of the Company's Incentive Compensation Plan
(or any successor similar plan which may be adopted in lieu of such Incentive
Compensation Plan) for all calendar years within the Salary Continuation Period.
Such bonuses shall be paid at the same time as payments are made to the other
participants in such Incentive Compensation Plan or successor plan.

                     3. During the Salary Continuation Period your coverage
under all health and welfare benefit plans (except vacation and sick leave
accrual) will be maintained by the Company. Such coverage will be at the same
levels, including relative employer and employee portions of the cost of
coverage, as with respect to similarly situated plan participants on the
commencement of the Salary Continuation Period.

                        CLARENDON HOUSE, 2 CHURCH STREET
                            HAMILTON, HM CX, BERMUDA
       MAILING ADDRESS: PERRYVILLE CORPORATE PARK, CLINTON, NJ 08809-4000

<PAGE>

PAGE 2

                     4. Upon the commencement of the Salary Continuation Period,
the Company will cause all transfer and other restrictions to be removed from
all shares of capital stock of the Company then registered in your name. In
addition, any stock options which you then hold to purchase shares of capital
stock of the Company will be immediately vested.

                     The benefits enumerated above (the "Additional Benefits")
will be in addition to all other benefits afforded senior executives of the
Company upon termination of employment provided, however, that if, as a result
of a termination of your employment, you receive payments and benefits pursuant
to Paragraph 6, Subsection (a), of the Change of Control Agreement between you
and the Company, dated as of May 25, 2001, as such agreement may be amended from
time to time (the "Change of Control Agreement"), you shall be entitled to no
payments or benefits pursuant to this letter agreement. In consideration of the
Company agreement to make the Additional Benefits available to you, you agree
that upon your termination of employment you will execute a waiver and release
in the form attached hereto. You agree that no payments or benefits pursuant to
this letter agreement will be made or provided until ten (10) days after your
execution of such waiver and release.

                     This Agreement is not intended to preclude the benefits
payable under the Change of Control Agreement of May 25, 2001, should the events
as described therein occur.

                     This letter agreement (a) shall be binding upon and inure
to the benefit of you and the Company and our respective successors, assigns,
heirs, estates and legal representatives, including any entity with which the
Company may merge or consolidate or to which all or substantially all of its
assets may be transferred; or any affiliate of the Company or such entity
following the transactions referred to in the immediately preceding paragraph;
and (b) shall be governed and construed in accordance with the laws of the State
of New Jersey without giving effect to the principles of conflicts of law.

                     If any provision of this letter agreement is held invalid
or unenforceable by any arbiter agreed to by you and the Company or by a court
of competent jurisdiction, the other provisions hereof will remain in full force
and effect. Any provision of this letter agreement so held to be invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.

<PAGE>

PAGE 3

                     You hereby agree that you shall not defame, disparage, or
criticize any employee or director of the Company, or its affiliates or their
respective products or services in any medium to any person or entity.

                     The management and the Board of Directors of Foster Wheeler
Ltd. shall use reasonable best efforts to cause the Company's officers and
directors not to defame, disparage or criticize you. Nothing herein shall limit
any confidential discussions any of the Company's officers or directors may have
with the Company's attorneys or limit any truthful statements made by you or the
Company's officers or directors in any legal proceeding or as required by law.

                     If the foregoing correctly sets forth your understanding of
the agreement between you and the Company with respect to the subject matter
hereof, kindly execute the enclosed copy of this letter and return it to the
undersigned in which event it shall constitute a binding agreement between you
and the Company.

                                                              Very truly yours,

                                                              Richard J. Swift

Attachment
/js

Agreed to and Accepted:

------------------------
{Name}
{Date}

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