Attached files
| file | filename |
|---|---|
| 8-K - FOSTER WHEELER AG | v171718_8k.htm |
| EX-10.1 - FOSTER WHEELER AG | v171718_ex10-1.htm |
Exhibit
No. 10.2
FIRST
AMENDMENT
TO
THE
EMPLOYMENT
AGREEMENT
BETWEEN
FOSTER WHEELER INC.
AND
BETH
B. SEXTON
WHEREAS, Foster Wheeler Ltd.
entered into an Employment Agreement (the “Agreement”) with Beth B. Sexton (the
“Executive”), dated as of April 7, 2008;
WHEREAS, Foster Wheeler Inc.
(the “Company”) assumed the Agreement from Foster Wheeler Ltd. on
January 23, 2009;
WHEREAS, the Company is
relocating its primary office from Clinton, New Jersey to Switzerland and the
Company acknowledges that such relocation constitutes a material negative change
in the employment relationship such that the Executive may terminate employment
for good reason pursuant to Agreement Section 4.1.2(iv) (Termination; For Good
Reason By the Executive);
WHEREAS, in exchange for the
valuable consideration provided by this Amendment, the Executive has agreed to
(i) delay exercising the Executive’s right to terminate employment for good
reason relating to the Swiss relocation and (ii) enter into a secondment
agreement with a primary place of business in Switzerland where she would
perform her duties through June 30, 2011; and
WHEREAS, pursuant to Section
9.6 of the Agreement, an amendment to the Agreement may be made pursuant to the
written consent of the Company and the Executive.
NOW THEREFORE, for good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and in further consideration of the following mutual promises,
covenants and undertakings, the parties agree that the Agreement is amended
effective as of January 18, 2010 by adding an addendum at
the end of the Agreement, to read as follows:
ADDENDUM
This
Addendum sets forth the terms and conditions applicable during the Executive’s
performance of duties (as described in Agreement Section 1.1) in Switzerland
from January 18, 2010 through the earlier of (i) June 30, 2011 or (ii) the date of
Agreement termination by the Company or Executive (the “Assignment
Term”). Unless otherwise provided in this Addendum, all Agreement
terms (including the Executive’s entitlement to the compensation and benefits
described in Agreement Section 3, as adjusted for merit increases since the date
of the Agreement) shall remain in full force and effect during the Assignment
Term.
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A-1.
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Location.
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During
the Assignment Term, the Executive shall perform her duties (as described in
Agreement Section 1) primarily at the Company’s offices in Switzerland, subject
to reasonable travel requirements consistent with the nature of the Executive’s
duties from time to time on behalf of the Company.
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A-2.
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Equity
Awards.
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(a) Assignment Term
Awards. During the Assignment Term, the Executive shall be
eligible to continue to participate in the Company’s long-term incentive
program, as determined by the Compensation Committee; provided, that the
economic value of the award the Executive receives in 2010 shall not be less
than 50% of the award the Executive received in November, 2009.
(b) Extended
Exercise. Upon the Executive’s termination of employment
(other than for Cause), all stock options outstanding as of the Executive’s
Termination Date shall remain exercisable for the shorter of one (1) year
following the Executive’s termination of employment or the remainder of the term
of the stock option(s).
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A-3.
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Transition Support and
Allowances.
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The
Company shall pay for the following expenses, allowances and benefits through
the Assignment Term. Such allowances and benefits shall not be
considered for purpose of any calculations under the Company’s benefit
plans. All of the benefits provided in this Addendum are inclusive of
a Representation Allowance of CHF 100,000.
(a) Work
Permits/Visas. The Company will assist in obtaining the proper
work permits and/or visas necessary for the provision of services in Switzerland
and reimburse the Executive for any work permit/visa, passport and immigration
expenses, including expenses for dependents of the Executives relocating or
intending to relocate to Switzerland.
(b) Transportation and
Expenses.
(i) Move-Related Transportation and
Expenses. The Company shall reimburse the Executive for actual
and reasonable expenses incurred in relation to the relocation to Switzerland,
including temporary living expenses (e.g., hotel costs, meals, transportation,
etc.) and reasonable expenses relating to the shipping of clothing, personal
effects and household goods. The Executive agrees to make reasonable
efforts to secure independent housing within a reasonable period of
time.
(ii) Personal Air
Travel. The Company shall provide reimbursement of
one (1) business-class round-trip ticket per month for personal travel
between Switzerland and the U.S. Each month, the Executive may use
the business-class round trip ticket to instead fly one (1) family member from
the U.S. to Switzerland. Once per quarter, in lieu of the Executive’s
trip to the U.S., the Company shall reimburse the cost of business-class
round-trip tickets for the Executive’s family to travel from the U.S. to
Switzerland.
(c) Cost-of-Living
Allowances. Beginning when the Executive secures independent
housing and the reimbursement of move-related expenses described in A-3(b)(i)
ceases, the Company shall pay the Executive monthly allowances consisting of the
following amounts:
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(i) Cost-of-living
allowance: CHF 6,327
(ii) Transportation: CHF
3,042
(iii) Housing: CHF
13,800
(iv) Utilities: CHF
400
The
allowances specified in (i) through (iv) shall be payable in advance in Swiss
Francs according to the Company’s payroll practices. The Company
shall also provide for reasonable advances to the Executive for the purpose of
obtaining housing and satisfying other relocation expenses.
(d) Settling-In
Allowance. The Company shall pay the Executive a one-time
settling-in allowance of CHF 5,000, payable in January 2010 or as soon as
possible thereafter.
(e) Medical
Coverage. To the extent U.S. medical coverage is not available
in Switzerland, the Company shall pay for the cost of securing substantially
similar coverage in Switzerland for the Executive and the Executive’s
family. Eligible dependents of the Executive shall continue to
maintain medical coverage irrespective of their relocation to
Switzerland.
(f) Seconded
Arrangement. The Executive shall be seconded to Foster Wheeler
Management AG in Switzerland and shall continue to remain an employee of the
Company. The Executive shall remain eligible to participate in the
Company’s employee benefit plans as set forth in Section 3 of the Agreement and
to receive U.S. social security benefits.
(g) Compassionate
Leave. The Executive shall be provided with up to five (5)
day’s paid compassionate leave in relation to the death of an immediate family
member. The Company shall reimburse the Executive and her dependents
for the cost of round-trip business airline tickets to attend funeral
services.
(h) Tax
Equalization. Under tax equalization, the Executive’s
obligation for income taxes shall not exceed the amount of income tax calculated
on Base Salary, short-term annual pay and long-term incentive pay applying his
or her home country tax rules without taking into consideration any foreign tax
credit. Such amount will be deducted from the Executive’s
paycheck. Should additional income taxes arise in the U.S. or
Switzerland as a result of the assignment, the Company shall pay the
additional tax. The Executive may choose, as an alternative to the
U.S. tax equalization program, to be personally responsible for the Swiss income
tax on his or her Base Salary, short-term incentive pay and long-term incentive
pay. In addition to the tax equalization on the compensation above,
the Executive will be reimbursed for any wealth tax due in Switzerland as a
result of the assignment.
(i) Tax Return Preparation and
Counseling Services. The Company shall retain the services of
a tax consultant to counsel the Executive with respect to the tax implications
of the move and to prepare the Executive’s U.S. and Switzerland tax returns as
required during the Assignment Term.
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(j) Legal
Services. The Company shall reimburse the Executive for legal
fees incurred in relation to an attorney’s review of this Addendum, up to a
maximum of USD 5,000.
(k) Tax
Gross-Up. To the extent that the provision of assignment
benefits described in this Section A-3 results in taxable income to the
Executive, the Company shall pay the Executive an amount to satisfy the
Executive’s Swiss and U.S. income tax obligation. Such payment shall
be grossed-up for taxes and made as soon as practicable after the tax liability
arises but in no event later than the end of the year following the year in
which the tax is due.
(l) Maximum Length of
Assignment. For the avoidance of doubt, the maximum period of
time during which the Executive may be considered to be “on assignment” and,
therefore, eligible for assignment-related compensation and benefits is five (5)
years from the start of the Assignment Term.
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A-4.
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Stay Bonus
Award.
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The
Company shall pay the Executive a cash stay bonus under the following
terms:
(a) Full Stay
Period. The Executive shall receive a cash bonus equal to 175%
of the Executive’s Base Salary then in effect, provided the Executive remains in
active employment until June 30, 2011. Payment of such
bonus shall be made in a single lump sum in July 2011.
(b) Minimum Stay; Minimum
Notice. The Executive shall receive a cash bonus equal to 125%
of the Executive’s Base Salary then in effect upon the termination of the
Executive’s employment if the Executive remains an active employee of the
Company through December 31, 2010, and provides the Company with at least four
(4) months advance written notice of her termination of
employment. Payment of such bonus shall be made in a single lump sum
within thirty (30) days of the date of termination of
employment. This 125% stay bonus shall be increased if the Executive
provides the requisite notice and works beyond December 31, 2010. In
such case, the amount of the stay bonus shall be increased on a pro-rata basis
based on the number of full months worked during the Assignment Term between
December 31, 2010 and June 30, 2011. For example, if the
Executive works one (1) full month beyond December 31, 2010, the
Executive shall receive another one-sixth (1/6th) of the
amount of the differential between 125% and 175%. Payment of such
bonus shall be made in a single lump sum within thirty (30) days of the
Executive’s termination of employment
(c) Termination Without Cause;
For Good Reason; Death; Disability. The stay bonus described
in paragraph (a) shall be payable in full and irrespective of the actual
duration of the Assignment Term if the Executive’s employment is terminated by
the Company without Cause, by the Executive for Good Reason (not including the
event of the assignment to Switzerland), or due to the Executive’s death or
Disability. In such case the stay bonus shall be paid in a lump sum
within thirty (30) days of termination of employment.
(d) Termination Relating to
Catastrophic Personal Event. The stay bonus described in
paragraph (a) shall be payable in full if the Executive remains an active
employee through December 31, 2010 and terminates employment during the
Assignment Term due to an unforeseen personal and catastrophic event affecting
the Executive or a family member, which event requires the Executive to relocate
to the U.S., and the Executive provides the Company with thirty (30) days
advance written notice.
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(e) Forfeiture of Stay
Bonus. The Executive shall forfeit the stay bonus (and must
repay the stay bonus if the stay bonus has been paid) if (i) the Executive does
not remain in active employment through December 31, 2010, the Executive provides the
Company with less than four (4) months advance written notice of her termination
of employment (less than thirty (30) days notice for termination due to a
catastrophic event described in A-4(d)), or (iii) the Executive’s employment is
terminated for Cause. The Executive must repay any paid stay bonus in
full within thirty (30) days of her termination of employment.
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A-5.
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Termination of
Employment.
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(a) During Assignment
Term. Except as otherwise provided in paragraph (b) or (c)
below, if the Executive’s employment is terminated for any reason during the
Assignment Term, the terms of Agreement Section 4 shall control; provided, that
the relocation to Switzerland shall not constitute an event giving rise to a
termination of employment for Good Reason. If the termination is for
any reason other than for Cause, the Company shall pay the reasonable costs
associated with repatriation to the U.S.
(b) Good Reason Termination
Relating to Swiss Relocation. Except as otherwise provided in
paragraph (c), if the Executive terminates employment after December 31, 2010
and has provided the Company with at least four (4) months advance written
notice of termination, such termination of employment shall be deemed a
termination by the Executive for Good Reason and the Executive shall be entitled
to the separation payments and benefits described in Agreement Sections 4.2.1
and 4.2.2 (or 4.3.2 if the termination occurs during a Change of Control
Period). In addition, the Company shall pay the reasonable costs
associated with repatriation to the U.S.
(c) Termination Relating to
Catastrophic Personal Event. If the Executive terminates
employment at any time during the Assignment Term due to an unforeseen personal
and catastrophic event affecting the Executive or a family member, which event
requires the Executive to relocate to the U.S., and the Executive provides the
Company with thirty (30) days advance written notice, then such termination of
employment shall be deemed a termination by the Executive for Good Reason and
the Executive shall be entitled to the separation payments and benefits
described in Agreement Sections 4.2.1 and 4.2.2 (or 4.3.2 if the termination
occurs during a Change of Control Period). In addition, the Company
shall pay the reasonable costs associated with repatriation to the
U.S.
(d) End of Assignment
Term. If the Executive terminates employment on or after June
30, 2011, such termination of employment shall be deemed a termination by the
Executive for Good Reason and the Executive shall be entitled to the separation
payments and benefits described in Agreement Sections 4.2.1 and 4.2.2 (or 4.3.2
if the termination occurs during a Change of Control Period). No
notice requirement shall apply for a termination of employment on or after June
30, 2011. In addition, the Company shall pay the reasonable costs
associated with repatriation to the U.S.
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A-6.
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Application of Section
409A to Benefits-in-Kind, Expense Reimbursements and
Allowances
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(a) Benefits-in-Kind; Expense
Reimbursements. Benefits-in-kind and any provision for
reimbursement of expenses during the assignment period will be subject to the
following rules, as required to comply with Code Section 409A:
(i) The
amount of in-kind benefits provided or expenses eligible for reimbursement in
one calendar year may not affect in-kind benefits or reimbursements to be
provided in any other calendar year.
(ii) Expenses
will be reimbursed as soon as administratively possible, but in no event shall
expenses be reimbursed later than December 31st of the
year following the year in which the expense was incurred.
(iii) The
right to an in-kind benefit or reimbursement may not be subject to liquidation
or exchange for another benefit.
(b) Allowances. Allowances
generally shall be paid monthly. In no event shall the payment of any
allowance be made later than March 15th of the
year following the year in which the Executive is entitled to
payment.
* * *
[Signature
Page Follows]
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IN WITNESS WHEREOF, the
parties hereto have executed this First Amendment to the Agreement effective as
of the date first written above.
FOSTER
WHEELER INC.
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By:
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/s/ Raymond J. Milchovich
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1/8/10
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Raymond
J. Milchovich
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Date
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/s/ Beth B. Sexton
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1/14/10
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Beth
B. Sexton
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Date
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