SECOND AMENDMENT TO THE EMPLOYMENT AGREEMENT BETWEEN FOSTER WHEELER INC. AND FRANCO BASEOTTO
EXHIBIT
10.1
SECOND AMENDMENT
TO
THE
BETWEEN
XXXXXX XXXXXXX INC.
AND
FRANCO
BASEOTTO
This
SECOND AMENDMENT (this
“Amendment”) to the Employment Agreement between XXXXXX XXXXXXX INC., a
Delaware corporation (the “Company”), and FRANCO BASEOTTO (the
“Executive”), dated as of May 6, 2008 (the “Agreement”), is made and entered
into as of May 4, 2010 (the “Effective Date”).
WHEREAS, Xxxxxx Xxxxxxx Ltd.
entered into the Agreement with the Executive; and
WHEREAS, the Company
thereafter assumed the Agreement from Xxxxxx Xxxxxxx Ltd. on or about February
9, 2009, and the Company and the Executive entered into a First Amendment to the
Agreement, effective January 18, 2010 (“First Amendment”); and
WHEREAS, the Company and the
Executive have agreed to further amend the Agreement as set forth herein;
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 by executing this Amendment to
amend the Agreement, including its First Amendment, as follows:
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1.
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The
Agreement is amended by replacing the Addendum set forth in the First
Amendment with the following addendum inserted at the end of the
Agreement:
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ADDENDUM
This
Addendum sets forth the terms and conditions applicable during the Executive’s
performance of duties (as described in Agreement Section 1.1) for the period
beginning as of the Effective Date and ending on the date
the Agreement is terminated pursuant to Agreement Section 4 (the
“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
Term.
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A-1.
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Location.
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During
the Term, the Executive shall perform his duties (as described in Agreement
Section 1) primarily at the Company’s offices in Geneva, 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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Long-Term
Incentive Awards.
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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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Stay Bonus
Award.
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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 Effective Date. Payment of such bonus shall be made in a
single lump sum.
(b) Termination without Cause;
For Good Reason; Death; Disability. Notwithstanding anything else in this
Addendum, the stay bonus described in paragraph (a) shall be payable in full,
and shall not be subject to forfeiture, irrespective of the actual duration of
the 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, and shall not be subject to forfeiture,
if the Executive remains in active employment through June 30, 2011 and
terminates employment during the 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) 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 (A) prior
to June 30, 2011, provides the Company with less than twelve (12) months advance
written notice of termination of employment (less than thirty (30) days notice
for termination due to a catastrophic event described in paragraph (c)) or (B)
on or after June 30, 2011 and prior to June 30, 2012, provides the Company with
an advance written notice of termination of employment such that the resulting
termination date is prior to June 30, 2012, is less than thirty (30) days after
the notice for termination due to a catastrophic event described in paragraph
(c), or is less than ninety (90) days after the notice for termination that is
not due to a catastrophic event described in paragraph (c), or (iii) prior to
June 30, 2011, the Executive’s employment is terminated for
Cause. Upon any such forfeiture, the Executive must repay any paid
stay bonus in full within thirty (30) days of termination of
employment.
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A-4.
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Miscelleneous
Terms
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(a) Agreement
Terms. 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
Term.
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(b) Supplemental Long-Term
Incentive Award. The Executive shall receive an award of
restricted stock units on a date designated by the Xxxxxx Xxxxxxx AG Board of
Directors or its Compensation Committee (“Compensation Committee”) during the
first open trading window for Section 16 officers subsequent to the Effective
Date (known as the “Grant Date”) with an economic value as of the Grant Date
equal to USD
2,500,000. Such award shall vest ratably on the first, second,
and third anniversaries of the Grant Date. Restricted stock units
that vest shall be settled by issuance of shares as provided in the grant
agreements described above, but in no event later than March 15 of the year
following the year in which the restricted stock units vest. 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. 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 or one of its affiliates, and in the event of any
inconsistency between such separate agreements and the terms of the Agreement
(including, but not limited to its Section 4 and this Amendment), the Agreement
shall govern and control. For avoidance of doubt, nothing in the
preceding sentence shall be construed to limit the application of any provision
of such separate agreements that expressly refers to and incorporates a
provision of this Agreement.
(c) Assignment
Benefits. During the Term and so long as assigned to
Switzerland, the Executive shall be entitled to the following benefits
(“Assignment Benefits”); all the benefits provided for in this Addendum are
inclusive of a Representative Allowance of CHF 100,000 and are in addition to
the perquisities and other benefits provided for in the Agreement:
(i) Relocation
Assistance: The following relocation assistance shall be
provided:
(1) 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 Executive relocating or intending to relocate to
Switzerland;
(2) 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);
(3) Reimbursement
for two (2) house hunting trips of up to six (6) days each, to include
reasonable lodging, transportation and meals;
(4) The
cost of the shipment of household goods;
(5) The
cost of pet relocation, including transportation and kennel fees related to the
move; and
(6) The
loss on sale of automobiles or lease termination, including any losses based on
blue book/fair market value, costs, and penalties.
(ii) Settling-in
Allowance: A settling-in allowance of CHF 30,000 shall be paid
within thirty (30) days of the date the Effective Date.
(iii) Assignment
Allowance: Prior to the earlier of the date upon which the
Executive’s immediate family relocates to Switzerland or June 30, 2011 (“First
Period”), the Company shall pay the Executive a monthly allowance of CHF 28,086
and after such date (“Second Period”), the Company shall pay to the Executive a
monthly allowance of CHF 26,115, consisting of the following amounts for each
period:
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Allowance
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First Period
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Second Period
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(1) Cost-of-living
allowance:
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CHF
8,544
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CHF
7,207
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(2) Housing:
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CHF
16,100
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CHF
16,100
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(3) Transportation:
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CHF
3,042
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CHF
2,208
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(4) Utilities:
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CHF 400
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CHF 600
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TOTAL
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CHF
28,086
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CHF
26,115
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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) Personal Air Travel and Home
Leave: Until the earlier of the date upon which the
Executive’s immediate family relocates to Switzerland or June 30, 2011, (A) the
Company shall provide reimbursement of one (1) business-class round-trip ticket
per month for personal travel between Switzerland and the U.S, (B) 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, and (C) 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. After the earlier of the dates set forth above, (X) the
Company shall reimburse the Executive for one (1) trip per twelve (12) months
per authorized dependent and for the Executive, (Y) expenses eligible for
reimbursement include a business class airline ticket and local ground expenses
to the original point of origin, and (Z) 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 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
each year on Base Salary, short-term annual pay and long-term incentive pay
applying the U.S. 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
the Executive’s 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.
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(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 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 this Amendment, 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.
(xiv) U.S. Vehicle
Allowance. Any
vehicle allowance provided under Company policy for vehicles based in the U.S.
shall cease upon the earlier of (A) the date upon which the Executive’s
immediate family relocates to Switzerland or (B) June 30,
2011.
(d) Termination of
Employment. If the Executive’s employment is terminated for
any reason, 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 or a resignation by the Executive without Good
Reason, the Company shall pay the reasonable costs associated with the
repatriation to the U.S.
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A-5.
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Maximum Length of
Assignment
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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 Assignment Benefits is five (5) years from the start of the
Executive’s assignment to Switzerland, i.e., no later than January 17,
2015.
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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 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.
* *
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2.
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Agreement
Sections 4.1.3 and 4.1.4 are hereby revised by replacing “thirty (30)
days” each time it appears in those Sections with “ninety (90)
days”.
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3.
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Agreement
Section 4.1.5 is hereby revised by adding the following new sentence to
the end of Section 4.1.5:
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In the
event that the termination of the Executive’s employment does not constitute a
“separation from service” as defined in Section 409A of the Internal Revenue
Code of 1986, including all regulations and other guidance issued pursuant
thereto (the “Code”),
the Executive’s rights to the payments and benefits described in this Section 4
shall vest upon the Termination Date, but no payment to the Executive that is
subject to Section 409A shall be paid until the Executive incurs a separation
from service (or as set forth at Section 13.1, until six months after such date
if the Executive is a specified employee), and any amounts that would otherwise
have been paid prior to such date shall be paid instead as soon as practicable
after such date.
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4.
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The
phrase “within 30 days” in Agreement Section 4.2.2(i) and (ii) and
4.3.2(i) is hereby revised to read “on the 30th
day”.
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5.
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The
last paragraph in Agreement Section 4.2.2 is hereby revised to read in its
entirety as follows:
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Notwithstanding
any other provision of this Agreement, in no event, shall the Executive be
entitled to receive the pay and benefits that the Company shall provide the
Executive pursuant to this Section 4.2.2 unless the Executive provides the
Company an enforceable waiver and release agreement in a form that the Company
normally requires. Such release shall be furnished to the Executive
for the Executive’s review not later than 7 business days following
the Termination Date, and shall be executed and returned to the Company within
21 days of receipt (or within 45 days of receipt if the Executive’s separation
is part of a group). Provided the Executive does not timely revoke
the waiver and release agreement, pay and benefits pursuant to this Section
4.2.2 shall commence on the 60th day following the Executive’s Termination
Date. Any amounts that otherwise would have been paid to the
Executive pursuant to this Section 4.2.2 before the 60th day shall be paid to
the Executive, without interest, on the 60th day.
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6.
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Agreement
Section 4.3.2(i)(A) is hereby revised to read in its entirety as
follows:
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Accrued
Obligations. The sum of (I)
the Executive’s Annual Base Salary through the Termination Date to the extent
not theretofore paid, (II) the product of (1) the higher of:
(a) any Recent Annual Bonus, and (b) the Annual Bonus paid or payable,
including any bonus or portion thereof which has been earned but deferred (and
annualized for any fiscal year consisting of less than twelve full months or
during which the Executive was employed for less than twelve full months), for
the most recently completed fiscal year during the Change of Control Period, if
any (such higher amount being referred to as the “Highest Annual Bonus”) and (2)
a fraction, the numerator of which is the number of days in the current fiscal
year through the Termination Date, and the denominator of which is 365, and
(III) any accrued vacation pay, in each case, to the extent not theretofore paid
(the sum of the amounts described in subclauses (I), (II), and (III), (the
“Accrued Obligations”);
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7.
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Agreement
Section 13 is hereby revised by adding the following new Section
13.2:
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13.2 Interpretation
and Administration of Agreement. To the maximum
extent permitted by law and consistent with the substantive terms of this
Agreement, this Agreement shall be interpreted and administered in such a manner
that the payments to the Executive are either exempt from, or comply with all
requirements of, Section 409A of the Code.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the
parties hereto have executed this Second Amendment to the Agreement as of the
date first written above.
| XXXXXX XXXXXXX INC. | |||
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By:
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/s/ Xxxxxxx X. Xxxxxxxxxx | |
| Name: Xxxxxxx X. Xxxxxxxxxx | |||
| Title: Chairman, President & Chief Executive Officer | |||
| /s/ Franco Baseotto | |||
| FRANCO BASEOTTO | |||
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