FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT BETWEEN FOSTER WHEELER INC. AND RAKESH K. JINDAL
Exhibit 10.95
WHEREAS, Xxxxxx Xxxxxxx Ltd. entered into an Employment Agreement (the “Agreement”) with
Xxxxxx X. Xxxxxx (the “Executive”), dated as of September 23, 2008;
WHEREAS, Xxxxxx Xxxxxxx Inc. (the “Company”) assumed the Agreement from Xxxxxx Xxxxxxx 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(iii) (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, (ii) enter into a secondment agreement with a primary place of
business in Switzerland where he would perform his duties and (iii) consider entering into a new
addendum to the Agreement between the Executive and the Company by June 30, 2012; and
WHEREAS, pursuant to Section 9.9 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 for the period
beginning as of January 18, 2010 and ending on the earlier of (i) the date the Executive enters
into a new addendum to the Agreement, as described in Section A-6 (“New Addendum to Employment
Agreement”), (ii) June 30, 2012 or (iii) the date the Agreement is terminated for any reason by the
Company or Executive (the “Initial 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 Initial Assignment Term.
A-1. Location.
During the Initial Assignment Term, the Executive shall perform his 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.
A-2. Long-Term Incentive Awards.
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).
A-3. Transition Support and Allowances.
The Company shall pay for the following expenses, allowances and benefits through the Initial
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:
| (i) | Cost-of-living allowance: CHF 5,121 |
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| (ii) | Loss of spousal income: CHF 1,256 (payable once Executive’s spouse has permanently relocated to Switzerland; payable for a maximum of five years) | ||
| (iii) | Transportation: CHF 3,042 | ||
| (iv) | Housing: CHF 13,800 | ||
| (v) | Utilities: CHF 400 | ||
| (vi) | Educational expenses: CHF 2,173 |
The allowances 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 practicable 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 Xxxxxx Xxxxxxx
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 his 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
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move and to prepare the Executive’s U.S. and Switzerland tax returns as required during the
Initial Assignment Term.
(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.
A-4. Stay Bonus Award.
The Company shall pay the Executive a cash stay bonus under the following terms.
(a) New Addendum to Agreement. The Company shall pay the Executive a stay bonus equal
to 175% of the Executive’s Base Salary then in effect within thirty (30) days of the earlier of (i)
the date the Executive enters into the New Addendum to Employment Agreement as described in Section
A-6, or (ii) June 30, 2011, provided the Executive remains in active employment until such date.
Payment of such bonus shall be made in a single lump sum.
(b) 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
Initial 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.
(c) Termination Relating to Catastrophic Personal Event. The stay bonus described in
paragraph (a) shall be payable in full if the Executive remains in active employment through June
30, 2011 and terminates employment during the Initial 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.
(d) Increase in Stay Bonus. The amount of the stay bonus in Section A-4(a), (b) or
(c) shall be increased if the Executive (i) stays in active employment with the Company beyond June
30, 2011, (ii) does not enter into the New Addendum to Employment Agreement with the Company, and
(iii) gives at least twelve (12) months advance written notice of his intent to terminate
employment (thirty (30) days notice for termination due to a catastrophic event described in
A-4(c)). 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 Initial Assignment Term beyond June 30, 2011 and the
end of the Initial Assignment Term. For example, if the Executive works one (1) full month beyond
June 30, 2011, the Executive shall receive another one-eighteenth (1/18th) of the amount
of stay bonus.
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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 June 30, 2011, (ii) the Executive provides the Company with less than
twelve (12) months advance written notice of his termination of employment (less than thirty (30)
days notice for termination due to a catastrophic event described in A-4(c)), 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 his termination of employment.
A-5. Termination of Employment.
(a) During Initial Assignment Term. If the Executive’s employment is terminated for
any reason during the Initial Assignment Term, the terms of Agreement Section 4 shall control;
provided, that the relocation to Switzerland shall constitute an event giving rise to a termination
of employment for Good Reason only in accordance with the terms and conditions as set forth in
paragraph (b) and (c) below. 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 June 30, 2011 and has
provided the Company with at least twelve (12) 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 Initial 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.
A-6. New Addendum to Employment Agreement
(a) Rights and Obligations Relating to New Addendum. The Executive shall have the
right, and the Company shall have the obligation, to enter into a New Addendum to Employment
Agreement no later than June 30, 2012 with terms no less favorable to the Executive than those set
forth in this Section A-6. 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 secondment period covered by the New Addendum to Employment Agreement
following the Initial Assignment Term. In the event the Company does not agree to enter into a New
Addendum to Employment Agreement by June
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30, 2012, or if the terms and conditions of the New Addendum to Employment Agreement are less
favorable to the Executive than those set forth in this Section A-6 (unless the Executive agrees to
enter into the New Addendum to Employment Agreement despite such less favorable terms or
conditions), then the Executive may voluntarily terminate employment with the Company, and 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 such
case, the Company shall pay the reasonable costs associated with repatriation to the U.S.
(b) Supplemental Long-Term Incentive Award. The Executive shall be entitled to a
supplemental long-term incentive award provided that the Executive (i) remains in active employment
through the end of Initial Assignment Term and (ii) enters into the New Addendum to Employment
Agreement no later than June 30, 2012. In such case, the Executive shall receive a supplemental
long-term award with an economic value as of the grant date equal to USD 606,000. The award shall
be made twenty percent (20%) in cash and eighty percent (80%) in restricted stock units, which
units shall vest ratably over a period of three (3) years. The award shall be made within thirty
(30) days of signing the New Addendum to Employment Agreement. For purposes of this Section, the
number of restricted stock units to be granted to the Executive shall be consistent with the
methodology used for valuing restricted stock unit awards granted to employees which has been
approved and adopted by the Compensation Committee of the Board. Such award will be granted under
the Company’s Omnibus Incentive Plan and governed by separate agreements entered into between the
Executive and the Company. The entitlement to such award shall be reflected in the New Addendum to
Employment Agreement.
(c) New Severance Terms. The New Addendum to Employment Agreement shall contain
substantially similar terms as the Agreement with respect to the Executive’s termination of
employment for Cause by the Company, or for Good Reason by the Executive; provided, that the value
of the Executive’s severance pay and benefits under the New Addendum to Employment Agreement shall
be increased from using a multiplier of 1.0 for such severance pay and benefits wherever used to a
multiplier of 1.5 for such severance pay and benefits. In addition, the New Addendum to Employment
Agreement shall contain substantially similar terms as the Agreement with respect to the
Executive’s non-solicitation and non-competition restrictions upon his termination of employment;
provided, that such restrictions shall be reduced from a period of twelve (12) months after
termination to a period of nine (9) months after termination.
(d) Assignment Benefits. At the end of the Initial Assignment Term and while assigned
to Switzerland, the Executive shall be entitled to the following benefits:
(i) Relocation Assistance: The following relocation assistance shall be provided:
(1) Home sale assistance, including the Company’s payment of realtor’s fees,
closing costs and any loss on the sale of the Executive’s principal residence (basis
for home includes major home improvements);
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(2) Reimbursement for two (2) house hunting trips of up to six (6) days each,
to include reasonable lodging, transportation and meals;
(3) The cost of the shipment of household goods;
(4) The cost of pet relocation, including transportation and kennel fees
related to the move; and
(5) The loss on sale of automobiles or lease termination penalties based on
blue book/fair market value.
(ii) Settling-in Allowance: A settling-in allowance of CHF 30,000 shall be paid within
thirty (30) days of the date the Executive enters into the New Addendum to Employment
Agreement.
(iii) Assignment Allowance: The Company shall pay the Executive a monthly allowance of
CHF 24,476 consisting of the following amounts:
| (1) | Cost-of-living allowance: CHF 4,439 | ||
| (2) | Loss of spousal income: CHF 1,256 (payable once Executive’s spouse has permanently relocated to Switzerland; payable for a maximum of five years) | ||
| (3) | Housing: CHF 13,800 | ||
| (4) | Transportation: CHF 2,208 | ||
| (5) | Utilities: CHF 600 | ||
| (6) | Educational expenses: CHF 2,173 |
Such allowances 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.
(iv) Home Leave: The Company shall reimburse the Executive for one (1) trip per twelve
(12) months per authorized dependent and for the Executive. Expenses eligible for
reimbursement include a business class airline ticket and local ground expenses to the
original point of origin. One (1) day of travel shall be permitted each way as additional
vacation.
(v) Vacation and Holidays: The Executive’s paid time off shall be consistent with that
currently provided. Swiss holidays shall be established by the Company.
(vi) Continued 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
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dependents of the Executive shall continue to maintain medical coverage irrespective of
their relocation to Switzerland.
(vii) 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.
(viii) Tax Preparation Services: The Company shall retain the services of a tax
consultant to prepare the Executive’s U.S. and Switzerland tax returns, as required, while
the Executive is on assignment to Switzerland.
(ix) Tax Gross-Up. To the extent that the provision of assignment benefits described in
this Section A-6 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.
(x) Seconded Arrangement: The Executive shall be seconded to Xxxxxx Xxxxxxx Management
AG in Switzerland and shall continue to remain an employee of the Company. The Executive
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.
(xi) Legal Services. The Company shall reimburse the Executive for legal fees incurred
in relation to an attorney’s review of the New Addendum to Employment Agreement, up to a
maximum of USD 5,000.
(xii) Financial/Estate Planning. The Company shall reimburse the Executive for one-time
costs relating to the Executive’s financial and estate planning.
(xiii) 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 his dependents for the cost of round-trip business airline
tickets to attend funeral services.
(e) Termination of Employment. If the Executive’s employment is terminated for any
reason under the New Addendum to Employment Agreement, the terms of Agreement Section 4 (subject to
Section A-6(c), “New Severance Terms,” of this Addendum) shall control; provided, that the
relocation to Switzerland shall not constitute an event giving rise to a
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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.
A-7. 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 Initial Assignment Term.
A-8. Application of Section 409A to Benefits-in-Kind, Expense Reimbursements and Allowances
(a) Benefits-in-Kind; Expense Reimbursements. Benefits-in-kind and any provision for
reimbursement of expenses during the Executive’s assignment shall 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.
XXXXXX XXXXXXX INC.
By:
|
/s/ Xxxxxxx X. Xxxxxxxxxx | 1/8/10 | ||||
| Xxxxxxx X. Xxxxxxxxxx | Date | |||||
| /s/ Xxxxxx X. Xxxxxx | 1/14/10 | |||||
| Xxxxxx X. Xxxxxx | Date | |||||
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