EMPLOYMENT AGREEMENT (this “Agreement”) dated as
of April 27, 2009, among FOSTER WHEELER INC., a
Delaware corporation having a principal place of business in
Clinton, New Jersey (the “Company”), RAKESH K.
JINDAL (the “Executive”), and FOSTER WHEELER
INTERNATIONAL CORP ., a Delaware corporation having a principal
place of business in Clinton, New Jersey (the
“Guarantor”).
WHEREAS , the Executive is currently employed by the
Company, and the Executive and the Company wish to continue their
employment relationship, on the terms and conditions set forth in
this Agreement; and
WHEREAS , the Guarantor is an affiliate of the Company and
will receive substantial indirect benefits from the
Executive’s employment with the Company on the terms set
forth in this Agreement and all parties desire that the Guarantor
guaranty the Company’s obligations under this
Agreement;
ACCORDINGLY , the parties hereby agree as
follows:
1.
Employment, Duties and Acceptance.
1.1
Employment, Duties . The Company hereby agrees to
continue to employ the Executive for the Term (as defined in
Section 2.1), to render exclusive and full-time services to
the Company; 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. As the
Company may require, the services the Executive provides to the
Company may include serving as an officer of the Parent (as defined
in Section 4.3.1), but in no event shall such service as an
officer be deemed to create an employment relationship with the
Parent.
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
Fiduciary Duties to the Company . Executive
acknowledges and agrees that Executive owes a fiduciary duty of
loyalty, fidelity and allegiance to act at all times in the best
interests of the Company and to do no act which would, directly or
indirectly, injure the Company’s business, interests, or
reputation. It is agreed that any direct or indirect interest in,
connection with, or benefit from any outside activities,
particularly commercial activities, which interest might in any way
adversely affect Company, involves a possible conflict of interest.
In keeping with Executive’s fiduciary duties to the Company,
Executive agrees that Executive shall not knowingly become involved
in a conflict of interest with the Company, or upon discovery
thereof, allow such a conflict to continue. Moreover, Executive
shall not engage in any activity which might involve a possible
conflict of interest without first obtaining approval in accordance
with the Company’s policies and procedures.
1.4
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.
2.1
Term . The term of the Executive’s employment
under this Agreement (the “Term”) shall commence on the
date first set forth above (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 at the initial annual
rate of Three Hundred Thirty Thousand Dollars ($330,000)(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 and/or the Compensation Committee of
the Parent’s (as defined in Section 4.3.1) Board of
Directors (the entire Board of Directors, the “Board”;
the Compensation Committee of the Board, the
“Committee”) as necessary or appropriate to comply with
company policy, applicable law, or exchange listing requirements,
shall review the Base Salary and determine if, and by how much, the
Base Salary should be increased provided, however, the Base
Salary under this Agreement, including as subsequently adjusted
upwards, may not be decreased thereafter without the written
consent of Executive, except for across-the-board changes for
executives at the Executive’s level. 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 . The Executive shall be eligible to
participate, as determined by the Company, and/or the Committee as
necessary or appropriate to comply with company policy, applicable
law, or exchange listing requirements, in the Company’s
annual incentive program as in effect from time to time for
executives at the Executive’s level. The Executive shall be
eligible for an annual incentive bonus at a target opportunity of
fifty percent (50%) of Base Salary (up to a maximum opportunity of
one hundred percent (100%) of Base Salary) based upon the
achievement of certain business unit objectives established in
advance by the Company, and/or the Committee as necessary or
appropriate to comply with company policy, applicable law, or
exchange listing requirements (the “Annual Bonus”). The
actual amount of any Annual 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 Bonus in any year.
3.3
Equity Awards . The Executive shall be eligible for
annual equity awards, as determined by the Company, and/or the
Committee as necessary or appropriate to comply with company
policy, applicable law, or exchange listing requirements, under the
Company’s and/or the Parent’s equity award plan
covering executives at the Executive’s level, as in effect
from time to time.
3.4
Other Plans and Programs . During the Term, the
Executive shall be entitled to participate in those defined
benefit, defined contribution, group insurance, medical, dental,
disability and other benefit plans, vacation programs, automobile
allowance programs, and business
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expense
reimbursement programs of the Company as from time to time in
effect for those at the Executive’s level.
4.1.1
The Executive’s employment and the Term shall terminate
immediately upon the occurrence of any of the following:
(i)
Death : the death of the Executive;
(ii)
Disability : 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)
For Cause By the Company : notice of termination for
“Cause.” As used herein, “Cause” means
(A) conviction of a felony; (B) actual or attempted theft
or embezzlement of Company assets; (C) use of illegal drugs;
(D) 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; (E) commission of an
act of moral turpitude that in the judgment of the Parent’s
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; (F) gross negligence or willful misconduct in
performance of the Executive’s duties; (G) breach of
fiduciary duty to the Company; (H) willful refusal to perform
the duties of Executive’s titled position; or (I) a
material violation of the Foster Wheeler Code of Business Conduct
and Ethics.
4.1.2
For Good Reason By the Executive : 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 a material negative change in the
employment relationship without the Executive’s consent, as
evidenced by the occurrence of any of the following:
(i) reduction of Base Salary and benefits except for
across-the-board changes for executives at the Executive’s
level; (ii) exclusion from executive benefit/compensation
plans; (iii) relocation of the Executive’s principal
business location by the Company of greater than fifty
(50) miles; (iv) material breach of the Agreement by the
Company; or (v) resignation in compliance with
securities/corporate governance applicable law (such as the US
Sarbanes-Oxley Act) or rules of professional conduct specifically
applicable to such Executive. For each event described above in
this Section 4.1.2, the Executive must notify the Company
within ninety (90) days of the occurrence of the event and the
Company shall have thirty (30) days after receiving such
notice in which to cure.
4.1.3
Without Cause By the Company : 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 of the Executive’s
duties and/or not be present at the Company’s offices and/or
other facilities.
4.1.4
Without Good Reason By the Executive : 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
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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
Definition of Termination Date . 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
Entitlements Upon Termination For Any Reason .
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 ( i.e. , the amount and
payment of the specific award has been fully approved by the
Company, including, where applicable, approval by the Committee)
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 provided, however,
if the Executive’s employment is terminated by the Company
for Cause, such incentive award, even if awarded, shall be
immediately forfeited if permitted under the law of the State in
which the Executive resides; (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; and (v) benefit continuation and
conversion rights to which the Executive is entitled under the
Company’s employee benefit plans.
4.2.2
Payments Upon Involuntary Termination by the Company Without
Cause or Voluntary Termination of the Executive with Good
Reason . 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 and benefits
in Section 4.2.1 above:
(i) Base
Salary at the rate in effect on the Termination Date and continuing
for twelve (12) months thereafter, payable at the same intervals at
which active employees at the Executive’s level are
paid;
(ii) an
amount equal to one hundred percent (100%) of the Executive’s
annual cash incentive payment at target, payable once in a lump sum
at the same time that the Company pays annual cash incentives to
its active employees pursuant to its then current annual incentive
program;
(iii) twelve
(12) months of continued health and welfare benefit plan
coverage following the Termination Date (excluding any additional
vacation accrual or sick leave) at active employee levels, if and
to the extent the Executive was participating in any such plans on
the Termination Date, provided that the Executive remits monthly
premiums for the full cost of any health benefits;
(iv) executive
level career transition assistance services by a firm selected by
the Executive and approved by the Company in an amount not to
exceed $8,000.00 in the aggregate (which amount includes any
applicable gross-up for any taxes due for such payment);
and
(v) a
cash payment each month during the twelve (12) month period
following the Termination Date equal to the full monthly premium
for the health benefits
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described in
clause (iii) above minus the active employee cost of such
coverage, such full monthly premium to be grossed-up by the Company
for any applicable income taxes.
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.
(i)
Affiliated Company . For purposes of this Agreement,
“Affiliated Company” means any company, directly or
indirectly, controlled by, controlling or under common control with
the Parent.
(ii)
Change of Control . For the purpose of this
Agreement, 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 the Parent where such acquisition causes such Person
to own 20% or more of the combined voting power of the then
outstanding voting securities of the Parent entitled to vote
generally in the election of directors (the “Outstanding
Parent Voting Securities”), provided, however , that
for purposes of this subparagraph (A), the following acquisitions
shall not be deemed to result in a Change of Control: (I) any
acquisition directly from the Parent or any corporation or other
legal entity controlled, directly or indirectly, by the Parent,
(II) any acquisition by the Parent or any corporation or other
legal entity controlled, directly or indirectly, by the Parent,
(III) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Parent or any corporation or
other legal entity controlled, directly or indirectly, by the
Parent or (IV) any acquisition by any corporation pursuant to
a transaction that complies with clauses (I), (II) and
(III) of subparagraph (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 clauses (I) or
(II) above, and such Person subsequently acquires beneficial
ownership of additional voting securities of the 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 the date hereof, constitute the Parent’s Board
(such individuals, the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Parent’s
Board; provided, however , that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by the 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 Parent’s Board;
or
(C) The
approval by the shareholders of the Parent of a reorganization,
merger or consolidation or sale or other disposition of all or
substantially all of the assets of the 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
5
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 the Parent or all or substantially
all of the 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 (1) corporation owned, directly or indirectly, by
the beneficial owners of the Outstanding Parent Voting Securities
as described in subclause (I) immediately preceding, or
(2) employee benefit plan (or related trust) of the 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, providing for such Business Combination; or
(D) approval
by the shareholders of the Parent of a complete liquidation or
dissolution of the Parent.
(iii)
Change of Control Period . For purposes of this
Agreement, the “Change of Control Period” shall mean
the period commencing on the date of a Change of Control and ending
on the twenty-fourth (24 th )
month anniversary of such date.
(iv)
Parent . For purposes of this Agreement,
“Parent” shall mean Foster Wheeler AG, a Swiss
corporation.
(v)
Start Date . For purposes of this Agreement,
“Start Date” shall mean the first date of the Change of
Control Period. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the
Executive’s employment with the Company is terminated prior
to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of
employment (A) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or
(B) otherwise arose in connection with or anticipation of a
Change of Control, then for all purposes of this Agreement the
“Start Date” shall mean the date immediately prior to
the Termination Date.
4.3.2
Obligations of the Company upon Executive’s Voluntary
Termination with Good Reason or the Company’s Involuntary
Termination of Executive Without Cause (Other Than for Death or
Disability) During Change of Control Period . If, during
the Change of Control Period, the Company terminates the
Executive’s employment without Cause (other than for death or
Disability) or the Executive terminates his employment for Good
Reason, the Company shall pay or provide to the Executive the
following:
(i)
Accrued Obligations . The sum of (I) the
Executive’s Annual Base Salary through the Termination Date
to the extent not theretofore paid, and (II) any compensation
previously deferred by the Executive (together with any accrued
interest or earnings thereon) and any accrued vacation pay, in each
case, to the extent not theretofore paid (the sum of the
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amounts
described in subclauses (I) and (II), the “Accrued
Obligations”), all in a lump sum in cash within 30 days
following the Termination Date; and
(ii)
Base Salary . Base Salary at the rate in effect on
the Termination Date and continuing for two (2) years
thereafter, payable at the same intervals at which active employees
at the Executive’s level are paid;
(iii)
Bonus . Two (2) payments, each in an amount
equal to one hundred percent (100%) of the Executive’s annual
cash incentive payment at target, one (1) of each such
payments being payable in each of the two (2) years following
the Termination Date at the same time that the Company pays annual
cash incentives to its active employees pursuant to its then
current annual incentive program;
(iv)
Medical Coverage . For two (2) years after the
Executive’s Termination Date, or such longer period as may be
provided by the terms of the appropriate health or welfare plan,
program, practice or policy, the Company shall continue benefits to
the Executive and/or the Executive’s family at least equal to
those which would have been provided to them in accordance with the
health or welfare plans, programs, practices and policies if the
Executive’s employment had not been terminated or, if more
favorable to the Executive, and to the extent he otherwise is or
becomes eligible therefor, as in effect generally at any time
thereafter with respect to other similarly situated peer executives
of the Company and the Affiliated Companies and their families;
provided , however , that the Executive remits
monthly premiums for the full cost of any health benefits; and
provided further that if the Executive becomes reemployed
with another employer and is eligible to receive health or welfare
benefits under another employer provided plan, the health and
welfare benefits described herein shall be secondary to those
provided under such other plan during such applicable period of
eligibility. For purposes of determining eligibility (but not the
time of commencement of benefits) of the Executive for retiree
benefits pursuant to such plans, practices, programs and policies,
the Executive shall be considered to have remained employed until
the second anniversary of the Termination Date and to have retired
on such second anniversary;
(v)
Medical Payments . The Company shall make a cash
payment each month during the two-year period commencing after the
Executive’s Termination Date, equal to the full monthly
premium for the health benefits described in Section 4.3.2(iv)
above minus the active employee cost of such coverage, such full
monthly premium to be grossed-up for any applicable income
taxes;
(vi)
Outplacement Services . The Company shall, at its
sole expense as incurred, in an amount not to exceed $8,000.00 in
the aggregate (which amount includes any applicable gross-up for
any taxes, other than Excise Taxes as defined in Section 4.3.6
below, due for such payment), provide the Executive with
outplacement services the scope and provider of which shall be
selected by the Executive in the Executive’s sole discretion;
and
(vii)
Other Benefits . To the extent not theretofore paid
or provided, the Company shall timely pay or provide to the
Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the
Company and the Affiliated Companies (such other amounts and
benefits shall be hereinafter referred to as the “Other
Benefits”).
4.3.3
Obligations of the Company upon Executive’s Death
. If the Executive’s employment is terminate
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