Exhibit 10.5
Foster Wheeler
Inc.
Directors Deferred Compensation
and Stock Award Plan
Article I. Purpose and
Background of the Plan; Certain Definitions
(A)
Purpose and Background of the
Plan
Foster Wheeler Corporation
(hereinafter referred to as “FWC”) adopted its
Directors Deferred Compensation and Stock Award Plan, effective as
of April 26, 1999 (the “Original Effective Date”),
to enable its Non-employee Directors to defer receipt of
compensation for their services as Non-employee Directors to later
years and to provide part of the compensation for their services as
Non-employee Directors in shares of FWC Common Stock (“FWC
Shares”), delivery of which was also deferred. The
Board of Directors of Foster Wheeler Inc. (the
“Company”) has approved the assumption by the Company
of the FWC Directors Deferred Compensation and Stock Award Plan and
all outstanding obligations to Non-employee Directors under such
plan, in connection with the reorganization transactions
contemplated by that certain Agreement and Plan of Merger (the
“Merger Agreement”), dated as of May 25, 2001,
among FWC, Foster Wheeler Ltd. (“Parent”) and Foster
Wheeler LLC, an indirect wholly-owned subsidiary of Parent
(“FW LLC”). The Directors Deferred Compensation
and Stock Award Plan of the Company is hereby amended and restated
in its entirety (the “Plan”), effective as of the
Effective Time (as defined in the Merger Agreement and hereinafter
referred to as the “Amended and Restated Effective
Date”).
(B)
Certain Defined
Terms
For purposes of the Plan:
(i)
“Non-employee Director”
shall mean (a) each individual who participated in the FWC
Directors Deferred Compensation and Stock Award Plan prior to the
Amended and Restated Effective Date, and (b) each member of
the Board of Directors of Parent (the “Board”) who, on
the date of any deferral or award under the Plan, is not an
employee of Parent or its direct or indirect subsidiaries,
including, without limitation, the Company, and has not been,
within the period of five consecutive years ending on such date, an
employee of Parent or any such subsidiary or FWC.
(ii)
“Share” or
“Shares” means a common share or common shares of
Parent, as the case may be.
(iii)
“Share Unit” means a
promise by the Company to deliver one Share to the Non-employee
Director to whom such Share Unit is awarded, in accordance with the
terms and conditions of the Plan. Any Share Units denominated
in FWC Shares credited to a Non-employee Director’s Deferred
Compensation Account under the Plan prior to the Amended and
Restated Effective Date shall be automatically converted into Share
Units denominated in Shares, as described in the immediately
preceding sentence, on the basis of one Share for one FWC
Share.
(iv)
“Deferred Stock Award”
means an award of Share Units under the Plan.
Article II.
Maintenance of Records
The Company shall maintain a
Deferred Compensation Account for each Non-employee Director, which
shall be credited in accordance with the terms of this Plan and the
elections of each Non-employee Director pursuant to this
Plan.
Article III. Deferred
Stock Awards and Deferral of Fees
(A)
Deferred Stock Award
Amount
(i)
Each Non-employee Director, as of
the Original Effective Date, has received a one-time Deferred Stock
Award of 1,000 Share Units.
(ii)
Each new Non-employee Director, upon
commencement of his or her term on the Board, shall receive on the
date of the first Board meeting attended, a one-time Deferred Stock
Award of 1,000 Share Units, or such other amount as may from time
to time be established by resolution of the Board; provided
, however , that any Non-employee Director who participated
in the Plan immediately prior to the Amended and Restated Effective
Date shall not be entitled to a Deferred Stock Award under this
paragraph III(A)(ii) by reason of joining the Board during
calendar year 2001 on or following the Effective Time.
(iii)
Each Non-employee Director who is an
incumbent director on the first business day (defined as the first
day of the year on which the New York Stock Exchange is open) of
each calendar year, beginning in 2000, shall receive on such date
an annual Deferred Stock Award of 300 Share Units, or such other
amount as may from time to time be established by resolution of the
Board.
(iv)
Awards of Share Units pursuant to
subparagraphs (i), (ii) and (iii) of this paragraph
III(A) shall be credited to the Deferred Compensation Account
of the applicable Non-employee Director and Shares in respect of
such Share Units shall be delivered in accordance with the
provisions of Article VI hereof. The issuance and
delivery of Shares in respect of the Share Units shall be deferred
until the Non-employee Director ceases to be a member of the Board
in accordance with paragraph III(D) hereof, or, if the
Non-employee Director elects deferral beyond such cessation, the
time of payment or delivery specified by the Non-employee Director
in his or her Deferral Election under paragraph
III(B)(1) hereof.
(B)
Election to Defer Fees in Share
Units
(1)
Any Non-employee Director may elect
to defer, for a period of more than six months following such
election, receipt of all or any portion of the retainer and
meeting
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fees (“Fees”) to be
earned by such Non-employee Director and otherwise payable in cash
by indicating his or her election to the Secretary of the Company
on an election form supplied by the Secretary (“Deferral
Election”). A Non-employee Director’s Deferral
Election must specify (without limitation) (i) the portion of
such Fees to be deferred, (ii) the period for which Fee
payments are to be deferred pursuant to such Deferral Election
(“Deferral Period”) and (iii) the time(s) of
payment or delivery. Each Deferral Election is irrevocable
with respect to the compensation payable for the Deferral Period to
which it applies.
(2)
In addition, each individual who
participated in FWC’s Deferred Compensation Plan for
Directors (the “Deferred Compensation Plan”) as of the
Original Effective Date has been permitted to irrevocably elect to
transfer the entire balance in his or her deferred compensation
account under the Deferred Compensation Plan as of July 30,
1999 (the “Conversion Date”), to the Plan, by providing
written notice of such election to the Secretary. The time
and manner of such election (a “Conversion Election”)
shall be prescribed by the Secretary in accordance with the Plan,
except that clauses (ii) and (iii) of paragraph
III(B)(1) above shall also apply to Share Units credited to a
Non-employee Director’s Deferred Compensation Account by
reason of his or her Conversion Election.
(C)
Credit for Deferred Fees and
Company Supplemental Contributions
(1)
Each Non-employee Director’s
Deferred Compensation Account will be credited with the number of
Share Units equal to the number of Shares, including fractions,
that could have been purchased by such Non-employee Director had
the amount of the Fees accrued during the relevant Deferral Period
been used to purchase Shares on the date such Fees would have been
paid had they not been deferred, at a price equal to the Share Fair
Market Value, as defined below. The Deferred Compensation
Account of each Non-employee Director who made a Conversion
Election has also been credited with a number of Shares equal to
the number of FWC Shares, including fractions, that could have been
purchased by such Non-employee Director had the amount elected by
such Non-employee Director to be converted in accordance with
paragraph III(B)(2) been used to purchase FWC Shares at a
price equal to the Share Fair Market Value (as defined in the FWC
Directors Deferred Compensation and Stock Award Plan prior to the
Amended and Restated Effective Date) on the Conversion Date.
Each Non-employee Director’s Deferred Compensation Account
shall also be credited with a Company supplemental contribution of
Share Units (“Supplemental Contributions”) equal to the
number of Share Units determined in the first sentence of this
paragraph III(C)(1) multiplied by 15 percent.
(2)
“Share Fair Market
Value” shall be the mean of the high and low prices of a
Share on the New York Stock Exchange - Composite Tape (the
“Exchange”) on the date in question, provided
that if no sales of Shares were made on the Exchange on that date,
the mean of the high and low prices reported for the next preceding
day on which sales of Shares were made on the Exchange shall be
used.
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(D)
Vesting of Deferred Stock Awards
and Supplemental Contributions
(1)
The Share Units in connection with
the Deferred Stock Awards pursuant to
Article III(A)(i) and (ii) and the Supplemental
Contributions shall not vest until cessation of service on the
Board by reason of normal retirement in accordance with the
Company’s By-Laws (“normal retirement”) or death
or earlier, if cessation of service from the Board is in good
standing as approved by the Nominating Committee of the Board (the
“Nominating Committee”), and all such Share Units shall
be forfeited in the event of cessation of service under any other
circumstances.
(2)
The Share Units in connection with
the Deferred Stock Awards set forth in
Article III(A)(iii) shall vest on the earlier to occur of
(i) cessation of service on the Board by reason of normal
retirement or death or otherwise in good standing as approved by
the Nominating Committee, and (ii) the one-year anniversary of
the award of such Share Units, and all such Share Units shall be
forfeited in the event of cessation of service on the Board under
any other circumstances.
(E)
Advance Notice of
Election
Any Deferral Election with respect
to Fees to be earned during a calendar year shall be delivered to
the Secretary of the Company prior to the beginning of such
calendar year or, with respect to a new Non-employee Director,
within 30 days after the effective date of his or her election to
the Board with respect to Fees for Board service after such
election. Notwithstanding the foregoing each incumbent
Non-employee Director as of the effective date of the Plan, stated
in Article XI hereof, may deliver to the Secretary of the
Company within 30 days after such effective date a Deferral
Election with respect to Fees for Board service after such
election.
Each Non-employee Director who does
not provide notice to the Secretary of the Company of a Deferral
Election in accordance with the preceding sentence will be deemed
not to
