10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 001-31305

FOSTER WHEELER AG

(Exact name of registrant as specified in its charter)

Switzerland (State or other jurisdiction of incorporation or organization)	98-0607469 (I.R.S. Employer Identification No.)
Perryville Corporate Park
Clinton, New Jersey	08809-4000
(Address of principal executive offices)	(Zip Code)

(908) 730-4000
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 126,437,389 registered shares (CHF 3.00 par value) were outstanding as of July 24, 2009.

FOSTER WHEELER AG

INDEX

Part I FINANCIAL INFORMATION
Item 1 — Financial Statements (Unaudited):	3
Consolidated Statement of Operations for the Fiscal Quarters and Six Months Ended June 30, 2009 and June 27, 2008	3
Consolidated Balance Sheet as of June 30, 2009 and December 26, 2008	4
Consolidated Statement of Changes in Equity for the Fiscal Six Months Ended June 30, 2009 and June 27, 2008	5
Consolidated Statement of Cash Flows for the Fiscal Six Months Ended June 30, 2009 and June 27, 2008	6
Notes to Consolidated Financial Statements	7
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3 — Quantitative and Qualitative Disclosures about Market Risk	64
Item 4 — Controls and Procedures	64
Part II OTHER INFORMATION
Item 1 — Legal Proceedings	66
Item 1A — Risk Factors	66
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds	66
Item 3 — Defaults Upon Senior Securities	66
Item 4 — Submission of Matters to a Vote of Security Holders	67
Item 5 — Other Information	67
Item 6 — Exhibits	68
Signatures	69
EX-10.1: EMPLOYMENT AGREEMENT
EX-10.2: THIRD AMENDMENT TO FOSTER WHEELER AG OMNIBUS INCENTIVE PLAN
EX-10.3: FOSTER WHEELER AG OMNIBUS INCENTIVE PLAN, RESTATED
EX-23.1: CONSENT OF ANALYSIS, RESEARCH & PLANNING CORPORATION
EX-23.2: CONSENT OF PETERSON RISK CONSULTING LLC
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.1: CERTIFICATION
EX-32.2: CERTIFICATION
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FOSTER WHEELER AG AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands of dollars, except per share amounts)
(unaudited)

	Fiscal Quarters Ended						Fiscal Six Months Ended
	June 30,			June 27,			June 30,			June 27,
	2009			2008			2009			2008
Operating revenues	$	1,308,801		$	1,701,022		$	2,573,324		$	3,496,746
Cost of operating revenues		1,088,842			1,454,806			2,190,613			3,033,559
Contract profit		219,959			246,216			382,711			463,187
Selling, general and administrative expenses		69,024			79,044			138,272			143,940
Other income, net		(11,490	)		(17,643	)		(19,693	)		(31,671	)
Other deductions, net		6,898			5,207			12,985			11,592
Interest income		(2,426	)		(12,167	)		(5,098	)		(22,698	)
Interest expense		1,302			4,860			5,469			11,011
Net asbestos-related provision/(gain)		1,756			(18,275	)		3,506			(32,463	)
Income before income taxes		154,895			205,190			247,270			383,476
Provision for income taxes		27,561			43,883			45,564			83,633
Net income		127,334			161,307			201,706			299,843
Less: Net income attributable to noncontrolling interests		5,130			552			6,639			1,025
Net income attributable to Foster Wheeler AG	$	122,204		$	160,755		$	195,067		$	298,818
Earnings per share (see Note 1):
Basic	$	0.97		$	1.12		$	1.54		$	2.08
Diluted	$	0.96		$	1.11		$	1.54		$	2.06

See notes to consolidated financial statements.

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FOSTER WHEELER AG AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
(in thousands of dollars, except share data and per share amounts)
(unaudited)

	June 30,			December 26,
	2009			2008
ASSETS
Current Assets:
Cash and cash equivalents	$	848,985		$	773,163
Short-term investments		3,777			2,448
Accounts and notes receivable, net:
Trade		543,548			608,994
Other		88,793			95,633
Contracts in process		261,668			241,135
Prepaid, deferred and refundable income taxes		30,573			31,667
Other current assets		43,496			37,146
Total current assets		1,820,840			1,790,186
Land, buildings and equipment, net		396,165			383,209
Restricted cash		25,500			22,737
Notes and accounts receivable — long-term		1,537			1,788
Investments in and advances to unconsolidated affiliates		211,819			210,776
Goodwill		69,840			62,165
Other intangible assets, net		59,968			59,874
Asbestos-related insurance recovery receivable		276,060			281,540
Other assets		79,323			82,223
Deferred income taxes		113,625			116,756
TOTAL ASSETS	$	3,054,677		$	3,011,254
LIABILITIES, TEMPORARY EQUITY AND EQUITY
Current Liabilities:
Current installments on long-term debt	$	23,020		$	24,375
Accounts payable		298,641			365,347
Accrued expenses		261,424			303,813
Billings in excess of costs and estimated earnings on uncompleted contracts		660,998			750,233
Income taxes payable		63,611			44,846
Total current liabilities		1,307,694			1,488,614
Long-term debt		191,528			192,989
Deferred income taxes		59,970			66,114
Pension, postretirement and other employee benefits		331,149			320,959
Asbestos-related liability		336,556			355,779
Other long-term liabilities		159,152			157,933
Commitments and contingencies
TOTAL LIABILITIES		2,386,049			2,582,388
Temporary Equity:
Non-vested share-based compensation awards subject to redemption		8,590			7,586
TOTAL TEMPORARY EQUITY		8,590			7,586
Equity:
Preferred shares:
$0.01 par value; authorized: June 30, 2009 - 0 shares and December 26, 2008 - 901,135 shares; issued and outstanding: June 30, 2009 - 0 shares and December 26, 2008 - 1,079 shares		—			—
Common shares:
$0.01 par value; authorized: June 30, 2009 - 0 shares and December 26, 2008 - 296,007,818 shares; issued and outstanding: June 30, 2009 - 0 shares and December 26, 2008 - 126,177,611 shares		—			1,262
Registered shares:
CHF 3.00 par value; authorized: June 30, 2009 - 189,623,871 shares; conditionally authorized: June 30, 2009 - 63,207,957 shares; issued and outstanding: June 30, 2009 - 126,437,389 shares		326,489			—
Paid-in capital		598,767			914,063
Retained earnings / (accumulated deficit)		167,092			(27,975	)
Accumulated other comprehensive loss		(468,033	)		(494,788	)
TOTAL FOSTER WHEELER AG SHAREHOLDERS’ EQUITY		624,315			392,562
Noncontrolling interests		35,723			28,718
TOTAL EQUITY		660,038			421,280
TOTAL LIABILITIES, TEMPORARY EQUITY AND EQUITY	$	3,054,677		$	3,011,254

See notes to consolidated financial statements.

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FOSTER WHEELER AG AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
(in thousands of dollars)
(unaudited)

											Retained			Accumulated			Total Foster
											Earnings/			Other			Wheeler AG
	Preferred		Common			Registered		Paid-in			(Accumulated			Comprehensive			Shareholders’			Noncontrolling
	Shares		Shares			Shares		Capital			Deficit)			Loss			Equity			Interests			Total Equity
Fiscal Six Months Ended June 30, 2009:
Balance at December 26, 2008	$	—	$	1,262		$	—	$	914,063		$	(27,975	)	$	(494,788	)	$	392,562		$	28,718		$	421,280
Net income		—		—			—		—			195,067			—			195,067			6,639			201,706
Foreign currency translation adjustments		—		—			—		—			—			18,516			18,516			391			18,907
Net loss on derivative instruments designated as cash flow hedges, net of tax		—		—			—		—			—			(1,376	)		(1,376	)		—			(1,376	)
Pension and other postretirement benefits, net of tax		—		—			—		—			—			9,615			9,615			(4	)		9,611
Comprehensive Income (1)																		221,822			7,026			228,848
Issuance of common shares upon exercise of share purchase warrants		—		—			—		9			—			—			9			—			9
Issuance of common shares upon vesting of restricted awards		—		1			—		(1	)		—			—			—			—			—
Repurchase and retirement of shares		—		—			—		(28	)		—			—			(28	)		—			(28	)
Cancellation of common shares and issuance of registered shares		—		(1,263	)		326,070		(324,807	)		—			—			—			—			—
Issuance of registered shares upon conversion of preferred shares		—		—			361		(361	)		—			—			—			—			—
Issuance of registered shares upon vesting of restricted awards		—		—			1		(1	)		—			—			—			—			—
Issuance of registered shares upon exercise of share purchase warrants		—		—			57		42			—			—			99			—			99
Distributions to noncontrolling interests		—		—			—		—			—			—			—			(21	)		(21	)
Share-based compensation expense-stock options and restricted awards		—		—			—		9,851			—			—			9,851			—			9,851
Balance at June 30, 2009	$	—	$	—		$	326,489	$	598,767		$	167,092		$	(468,033	)	$	624,315		$	35,723		$	660,038
Fiscal Six Months Ended June 27, 2008:
Balance at December 28, 2007	$	—	$	1,439		$	—	$	1,385,311		$	(554,595	)	$	(261,114	)	$	571,041		$	31,773		$	602,814
Net income		—		—			—		—			298,818			—			298,818			1,025			299,843
Foreign currency translation adjustments		—		—			—		—			—			20,259			20,259			1,553			21,812
Net gain on derivative instruments designated as cash flow hedges, net of tax		—		—			—		—			—			3,262			3,262			—			3,262
Pension and other postretirement benefits, net of tax		—		—			—		—			—			7,539			7,539			—			7,539
Comprehensive Income (2)																		329,878			2,578			332,456
Issuance of common shares upon exercise of share purchase warrants		—		1			—		351			—			—			352			—			352
Issuance of common shares upon exercise of stock options		—		1			—		2,434			—			—			2,435			—			2,435
Issuance of common shares upon vesting of restricted awards		—		1			—		(1	)		—			—			—			—			—
Issuance of common shares upon conversion of preferred shares		—		—			—		(1	)		—			—			(1	)		—			(1	)
Distributions to noncontrolling interests		—		—			—		—			—			—			—			(6,684	)		(6,684	)
Share-based compensation expense-stock options and restricted awards		—		—			—		4,756			—			—			4,756			—			4,756
Excess tax benefit related to equity-based incentive program		—		—			—		156			—			—			156			—			156
Balance at June 27, 2008	$	—	$	1,442		$	—	$	1,393,006		$	(255,777	)	$	(230,054	)	$	908,617		$	27,667		$	936,284

1	Comprehensive income for the fiscal quarter ended June 30, 2009 for Foster Wheeler AG, noncontrolling interests and total equity were $158,830, $5,688, and $164,518, respectively.
2	Comprehensive income for the fiscal quarter ended June 27, 2008 for Foster Wheeler AG, noncontrolling interests and total equity were $169,407, $1,099, and $170,506, respectively.

See notes to consolidated financial statements.

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FOSTER WHEELER AG AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of dollars)
(unaudited)

	Fiscal Six Months Ended
	June 30,			June 27,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	201,706		$	299,843
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization		21,446			22,286
Net asbestos-related provision/(gain)		3,506			(2,213	)
Share-based compensation expense-stock options and restricted awards		10,855			6,642
Excess tax benefit related to equity-based incentive program		—			(156	)
Deferred tax		3,459			4,861
Loss on sale of assets		522			22
Equity in the net earnings of partially-owned affiliates, net of dividends		3,280			(3,008	)
Other noncash items		(45	)		1,043
Changes in assets and liabilities:
Decrease/(increase) in receivables		87,406			(13,701	)
Net change in contracts in process and billings in excess of costs and estimated earnings on uncompleted contracts		(108,869	)		13,343
Decrease in accounts payable and accrued expenses		(121,889	)		(61,423	)
Increase in income taxes payable		17,871			16,489
Net change in other assets and liabilities		(25,294	)		(39,189	)
Net cash provided by operating activities		93,954			244,839
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of businesses, net of cash acquired		(8,883	)		(7,829	)
Change in restricted cash		(2,817	)		(24,613	)
Capital expenditures		(26,708	)		(42,220	)
Proceeds from sale of assets		454			613
Investments in and advances to unconsolidated affiliates		—			(3,600	)
Return of investment from unconsolidated affiliates		—			2,330
Increase in short-term investments		(1,261	)		—
Net cash used in investing activities		(39,215	)		(75,319	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase and retirement of fractional shares		(28	)		—
Distributions to noncontrolling interests		(21	)		(6,684	)
Proceeds from share purchase warrant exercises		108			352
Proceeds from stock option exercises		—			2,435
Excess tax benefit related to equity-based incentive program		—			156
Repayment of short-term debt		(731	)		—
Proceeds from issuance of long-term debt		1,865			21,969
Repayment of long-term debt and capital lease obligations		(5,026	)		(4,941	)
Net cash (used in)/provided by financing activities		(3,833	)		13,287
Effect of exchange rate changes on cash and cash equivalents		24,916			38,843
Increase in cash and cash equivalents		75,822			221,650
Cash and cash equivalents at beginning of year		773,163			1,048,544
Cash and cash equivalents at end of period	$	848,985		$	1,270,194

See notes to consolidated financial statements.

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FOSTER WHEELER AG AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands of dollars, except share data and per share amounts)
(unaudited)

1. Summary of Significant Accounting Policies

          Basis of Presentation — At a special court-ordered meeting of common shareholders held on January 27, 2009, the common shareholders of Foster Wheeler Ltd. approved a scheme of arrangement under Bermuda law. On February 9, 2009, after receipt of the approval of the scheme of arrangement by the Supreme Court of Bermuda and the satisfaction of certain other conditions, the transactions contemplated by the scheme of arrangement were effected. Pursuant to the scheme of arrangement, among other things, all previously outstanding whole common shares of Foster Wheeler Ltd. were cancelled and the common shareholders of Foster Wheeler Ltd. became common shareholders of Foster Wheeler AG, a Swiss corporation, and Foster Wheeler Ltd. became a wholly-owned subsidiary of Foster Wheeler AG, a holding company that owns the stock of its various subsidiary companies. The steps of the scheme of arrangement together with certain related transactions, which are collectively referred to throughout the Notes to the consolidated financial statements as the “Redomestication,” effectively changed our place of incorporation from Bermuda to the Canton of Zug, Switzerland. Please see Note 13 for further information related to the Redomestication.

          The fiscal year of Foster Wheeler AG ends on December 31 of each calendar year. Foster Wheeler AG’s fiscal quarters end on the last day of March, June and September. The fiscal year of Foster Wheeler Ltd., the parent company prior to the Redomestication, was the 52- or 53-week annual accounting period ending the last Friday in December for our U.S. operations and December 31 for non-U.S. operations and ended on December 26, 2008 for fiscal year 2008. The fiscal second quarter and six months ended of Foster Wheeler Ltd. for the fiscal year ended December 26, 2008, which for reporting purposes is also the fiscal second quarter and six months ended of Foster Wheeler AG for such fiscal year, ended on June 27, 2008.

          Foster Wheeler AG consolidated financial results for the second fiscal quarter represent the period from April 1, 2009 through June 30, 2009 and March 29, 2008 through June 27, 2008, in fiscal years 2009 and 2008, respectively. Foster Wheeler AG consolidated financial results for the first fiscal six months represent the period from December 27, 2008 through June 30, 2009 and December 29, 2007 through June 27, 2008, in fiscal years 2009 and 2008, respectively. The consolidated financial results include our U.S. operations, which have a fiscal year that is the 52- or 53-week annual accounting period ending the last Friday in December, and our non-U.S. operations, which have a fiscal year ending on December 31. Although the fiscal year for our parent company is now December 31, the fiscal year and fiscal quarter ending dates for both our U.S. and non-U.S. operations were not impacted by the Redomestication.

          On May 28, 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 165, “Subsequent Events,” to establish general standards of accounting and disclosure of events that occur after the balance sheet date but before financial statements are issued. In particular, SFAS No. 165 requires an evaluation of subsequent events through the date the financial statements are issued and defines the circumstances under which a subsequent event should be recognized and the circumstances for which a subsequent event should be disclosed. SFAS No. 165 also requires that we disclose the date through which we have evaluated subsequent events, which was August 5, 2009, the date of issuance, for our interim consolidated financial statements as of and for the fiscal quarter and six months ended June 30, 2009. SFAS No. 165 was first effective beginning with the quarterly consolidated financial statements ended June 30, 2009. Our adoption of SFAS No. 165 did not have a material impact on our consolidated statement of operations or consolidated balance sheet.

          The accompanying consolidated financial statements are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments only consisted of normal recurring items. Interim results are not necessarily indicative of results for a full year.

7

          The financial statements and notes are presented in accordance with the requirements of Form 10-Q and do not contain certain information included in our annual report on Form 10-K for the fiscal year ended December 26, 2008 (“2008 Form 10-K”), filed with the Securities and Exchange Commission on February 24, 2009. The consolidated balance sheet as of December 26, 2008 was derived from the audited financial statements included in our 2008 Form 10-K, but does not include all the disclosures required by accounting principles generally accepted in the United States of America for annual consolidated financial statements. Additionally, the presentation of our consolidated balance sheet as of December 26, 2008 reflects the adoption of SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51,” as described below. A summary of our significant accounting policies is presented below.

          Principles of Consolidation — The consolidated financial statements include the accounts of Foster Wheeler AG and all significant U.S. and non-U.S. subsidiaries as well as certain entities in which we have a controlling interest. Intercompany transactions and balances have been eliminated.

          We adopted SFAS No. 160 as of the beginning of fiscal year 2009. SFAS No. 160 amends the accounting and reporting standards for the noncontrolling interest in a subsidiary (formerly referred to as “minority interest”) and for the deconsolidation of a subsidiary. Under SFAS No. 160, the noncontrolling interest in a subsidiary is reported as equity in the parent company’s consolidated financial statements. SFAS No. 160 also requires that the parent company’s consolidated statement of operations include both the parent and noncontrolling interest share of the subsidiary’s statement of operations. Formerly, the noncontrolling interest share was shown as a reduction of income on the parent’s consolidated statement of operations. SFAS No. 160 was applied prospectively as of the beginning of the fiscal year; however, presentation and disclosure requirements are applied retrospectively for all periods presented. Upon our adoption of SFAS No. 160, we (i) reclassified our minority interest liability to a separate section entitled “noncontrolling interests” within total equity on our consolidated balance sheet, which increased total equity by $28,718 as of December 26, 2008; (ii) removed minority interest expense from the determination of total net income on our consolidated statement of operations, which increased total net income by $552 and $1,025 for the fiscal quarter and six months ended June 27, 2008, respectively; and (iii) included a reduction for net income attributable to noncontrolling interests in the determination of net income attributable to Foster Wheeler AG (as successor to Foster Wheeler Ltd. — please see Note 13 for further information related to the Redomestication) and earnings per share on the consolidated statement of operations, which corresponded to the net income and earnings per share figures previously reported.

          Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. Changes in estimates are reflected in the periods in which they become known. Significant estimates are used when accounting for long-term contracts including estimates of total costs and customer and vendor claims, employee benefit plan obligations, share-based compensation plans, uncertain tax positions and deferred taxes, and asbestos liabilities and expected recoveries, among others.

          Revenue Recognition on Long-Term Contracts — Revenues and profits on long-term contracts are recorded under the percentage-of-completion method.

          Progress towards completion on fixed price contracts is measured based on physical completion of individual tasks for all contracts with a value of $5,000 or greater. For contracts with a value less than $5,000, progress toward completion is measured based on the ratio of costs incurred to total estimated contract costs (the cost-to-cost method).

          Progress towards completion on cost-reimbursable contracts is measured based on the ratio of quantities expended to total forecasted quantities, typically man-hours. Incentives are also recognized on a percentage-of-completion basis when the realization of an incentive is assessed as probable. We include flow-through costs consisting of materials, equipment or subcontractor services as both operating revenues and cost of operating revenues on cost-reimbursable contracts when we have overall responsibility as the contractor for the engineering specifications and procurement or procurement services for such costs. There is no contract profit impact of flow-through costs as they are included in both operating revenues and cost of operating revenues.

          Contracts in process are stated at cost, increased for profits recorded on the completed effort or decreased for estimated losses, less billings to the customer and progress payments on uncompleted contracts.

8

          At any point, we have numerous contracts in progress, all of which are at various stages of completion. Accounting for revenues and profits on long-term contracts requires estimates of total estimated contract costs and estimates of progress toward completion to determine the extent of revenue and profit recognition. These estimates may be revised as additional information becomes available or as specific project circumstances change. We review all of our material contracts on a monthly basis and revise our estimates as appropriate for developments such as earning project incentive bonuses, incurring or expecting to incur contractual liquidated damages for performance or schedule issues, providing services and purchasing third-party materials and equipment at costs differing from those previously estimated and testing completed facilities, which, in turn, eliminates or confirms completion and warranty-related costs. Project incentives are recognized when it is probable they will be earned. Project incentives are frequently tied to cost, schedule and/or safety targets and, therefore, tend to be earned late in a project’s life cycle.

          Changes in estimated final contract revenues and costs can either increase or decrease the final estimated contract profit. In the period in which a change in estimate is recognized, the cumulative impact of that change is recorded based on progress achieved through the period of change. There were 19 and 20 separate projects that had final estimated contract profit revisions whose impact on contract profit exceeded $1,000 during the first six months of fiscal years 2009 and 2008, respectively. The changes in final estimated contract profit resulted in net increases of $20,230 and $26,180 to reported contract profit in the fiscal quarter and six months ended June 30, 2009, respectively, relating to the revaluation of work performed on contracts in prior periods. The changes in final estimated contract profit resulted in net increases of $13,560 and $13,020 to reported contract profit in the fiscal quarter and six months ended June 27, 2008, respectively, relating to the revaluation of work performed on contracts in prior periods. Please see Note 11 for further information related to changes in final estimated contract profit.

          Claims are amounts in excess of the agreed contract price (or amounts not included in the original contract price) that we seek to collect from customers or others for delays, errors in specifications and designs, contract terminations, disputed or unapproved change orders as to both scope and price or other causes of unanticipated additional costs. We record claims in accordance with paragraph 65 of Statement of Position (“SOP”) 81-1, “Accounting for Performance of Construction-Type and Certain Production-Type Contracts”, which states that recognition of amounts as additional contract revenue related to claims is appropriate only if it is probable that the claims will result in additional contract revenue and if the amount can be reliably estimated. Under SOP 81-1, those two requirements are satisfied by the existence of all of the following conditions: the contract or other evidence provides a legal basis for the claim; additional costs are caused by circumstances that were unforeseen at the contract date and are not the result of deficiencies in our performance; costs associated with the claim are identifiable or otherwise determinable and are reasonable in view of the work performed; and the evidence supporting the claim is objective and verifiable. If such requirements are met, revenue from a claim may be recorded only to the extent that contract costs relating to the claim have been incurred. Costs attributable to claims are treated as costs of contract performance as incurred and are recorded in contracts in process. As of June 30, 2009, our consolidated financial statements assumed recovery of commercial claims of $18,900, of which $100 has yet to be expended. As of December 26, 2008, our consolidated financial statements assumed recovery of commercial claims of $11,200, of which all was expended.

          In certain circumstances, we may defer pre-contract costs when it is probable that these costs will be recovered under a future contract. Such deferred costs would then be included in contract costs upon execution of the anticipated contract. We had $300 of deferred pre-contract costs as of June 30, 2009 and no deferred pre-contract costs as of December 26, 2008.

          Certain special-purpose subsidiaries in our global power business group are reimbursed by customers for their costs, including amounts related to principal repayments of non-recourse project debt, for building and operating certain facilities over the lives of the corresponding service contracts.

          Cash and Cash Equivalents — Cash and cash equivalents include highly liquid short-term investments with original maturities of three months or less at the date of acquisition. Cash and cash equivalents of $636,499 and $622,907 were maintained by our non-U.S. subsidiaries as of June 30, 2009 and December 26, 2008, respectively. These subsidiaries require a portion of these funds to support their liquidity and working capital needs, as well as to comply with required minimum capitalization and contractual restrictions. Accordingly, a portion of these funds may not be readily available for repatriation to U.S. entities.

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          Trade Accounts Receivable — Trade accounts receivable represent amounts billed to customers. In accordance with terms under our long-term contracts, our customers may withhold certain percentages of such billings until completion and acceptance of the work performed. Final payments of all such amounts withheld might not be received within a one-year period. In conformity with industry practice, however, the full amount of accounts receivable, including such amounts withheld, are included in current assets on the consolidated balance sheet.

          Trade accounts receivable are continually evaluated for collectibility. Provisions are established on a project-specific basis when there is an issue associated with the client’s ability to make payments or there are circumstances where the client is not making payment due to contractual issues.

          Contracts in Process and Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts — Under long-term contracts, amounts recorded in contracts in process and billings in excess of costs and estimated earnings on uncompleted contracts may not be realized or paid, respectively, within a one-year period. In conformity with industry practice, however, the full amount of contracts in process and billings in excess of costs and estimated earnings on uncompleted contracts is included in current assets and current liabilities on the consolidated balance sheet, respectively.

          Land, Buildings and Equipment — Depreciation is computed on a straight-line basis using estimated lives ranging from 10 to 50 years for buildings and from 3 to 35 years for equipment. Expenditures for maintenance and repairs are charged to expense as incurred. Renewals and betterments are capitalized. Upon retirement or other disposition of fixed assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gains or losses, if any, are reflected in earnings.

          Investments in and Advances to Unconsolidated Affiliates — We use the equity method of accounting for affiliates in which our investment ownership ranges from 20% to 50% unless significant economic or governance considerations indicate that we are unable to exert significant influence in which case the cost method is used. The equity method is also used for affiliates in which our investment ownership is greater than 50% but we do not have a controlling interest. Currently, all of our investments in affiliates in which our investment ownership is 20% or greater and that are not consolidated are recorded using the equity method. Affiliates in which our investment ownership is less than 20% are carried at cost.

          Intangible Assets — Intangible assets consist principally of goodwill, trademarks and patents. Goodwill is allocated to our reporting units on a relative fair value basis at the time of the original purchase price allocation. Patents and trademarks are amortized on a straight-line basis over periods of 3 to 40 years. Customer relationships, pipeline and backlog are amortized on a straight-line basis over periods of 1 to 13 years.

          We test goodwill for impairment at the reporting unit level as defined in SFAS No. 142, “Goodwill and Other Intangible Assets.” Our reporting units are defined as the components one level below our operating segments. In accordance with SFAS No. 142, these components constitute businesses for which discrete financial information is available and segment management regularly reviews the operating results of those components. Presently, goodwill exists in two of our reporting units — one within our Global Power Group business segment and one within our Global Engineering and Construction Group (“Global E&C Group”) business segment.

          The goodwill impairment test is a two-step process. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value, which is estimated based on discounted future cash flows, exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the fair value, the second step must be performed to measure the amount of the impairment loss, if any. The second step compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. In the fourth quarter of each fiscal year, we evaluate goodwill at each reporting unit to assess recoverability, and impairments, if any, are recognized in earnings. An impairment loss would be recognized in an amount equal to the excess of the carrying amount of the goodwill over the implied fair value of the goodwill. SFAS No. 142 also requires that intangible assets with determinable useful lives be amortized over their respective estimated useful lives and reviewed for impairment in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

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          We had total goodwill of $69,840 and $62,165 as of June 30, 2009 and December 26, 2008, respectively. Of the $69,840 of goodwill as of June 30, 2009, $51,273 is related to one of our Global Power Group’s European reporting units and $18,567 is related to our Global E&C Group’s U.S. reporting unit. In fiscal year 2008, the estimated fair value of each of the reporting units were sufficiently in excess of their carrying values even after conducting various sensitivity analyses on key assumptions, such that no adjustment to the carrying values of goodwill was required.

          We had total unamortized identifiable intangible assets of $59,968 and $59,874 as of June 30, 2009 and December 26, 2008, respectively. Of the $59,968 of identifiable intangible assets as of June 30, 2009, $54,950 is related to our Global Power Group and $5,018 is related to our Global E&C Group. The following table details amounts relating to our identifiable intangible assets:

	June 30, 2009							December 26, 2008
	Gross					Net		Gross					Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
	Amount		Amortization			Amount		Amount		Amortization			Amount
Patents	$	39,212	$	(23,995	)	$	15,217	$	39,180	$	(23,024	)	$	16,156
Trademarks		63,395		(23,495	)		39,900		63,347		(22,543	)		40,804
Customer relationships, pipeline and backlog		6,120		(1,269	)		4,851		3,592		(678	)		2,914
Total	$	108,727	$	(48,759	)	$	59,968	$	106,119	$	(46,245	)	$	59,874

          Amortization expense related to identifiable intangible assets, which is recorded within cost of operating revenues on the consolidated statement of operations, totaled $1,285 and $2,514 for the fiscal quarter and six months ended June 30, 2009, respectively. Amortization expense totaled $1,220 and $2,297 for the fiscal quarter and six months ended June 27, 2008, respectively. Amortization expense is expected to be approximately $5,100 in fiscal year 2009 and approximately $4,500 in each of the fiscal years 2010 through 2013.

          Income Taxes — Deferred tax assets/liabilities are established for the difference between the financial reporting and income tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

          Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. In evaluating our ability to realize our deferred tax assets within the various tax jurisdictions in which they arise, we consider all available positive and negative evidence, including scheduled reversals of taxable temporary differences, projected future taxable income, tax planning strategies and recent financial performance. Projecting future taxable income requires significant assumptions about future operating results, as well as the timing and character of taxable income in numerous jurisdictions.

          We do not make a provision for U.S. federal income taxes on non-U.S. subsidiary earnings if we expect such earnings to be indefinitely reinvested outside the United States.

          We recognize interest accrued on the potential tax liability related to unrecognized tax benefits in interest expense, and we recognize any potential penalties in other deductions, net on our consolidated statement of operations.

          Foreign Currency — The functional currency of our non-U.S. operations is typically the local currency of their country of domicile. Assets and liabilities of our non-U.S. subsidiaries are translated into U.S. dollars at period-end exchange rates with the resulting translation adjustment recorded as a separate component within accumulated other comprehensive loss. Income and expense accounts and cash flows are translated at weighted-average exchange rates for the period. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other deductions, net on our consolidated statement of operations.

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          Fair Value Measurements — In the first fiscal quarter of 2008, we adopted SFAS No. 157, “Fair Value Measurements,” except for non-financial assets and liabilities recognized or disclosed at fair value on a non-recurring basis for which the date of adoption was the beginning of the first fiscal quarter of 2009. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

          Our financial assets and liabilities that are recorded at fair value consist primarily of the assets or liabilities arising from derivative financial instruments. We value our derivative financial instruments using broker quotations, or market transactions in either the listed or over-the-counter markets, resulting in fair value measurements using level 2 inputs as defined under the SFAS No. 157 fair value hierarchy. See Note 7 for further information regarding our derivative financial instruments.

          The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate fair value:

• Cash, Cash Equivalents and Restricted Cash — The carrying value of our cash, cash equivalents and restricted cash approximates fair value because of the short-term maturity of these instruments.

• Short-term Investments — Short-term investments primarily consist of deposits with maturities in excess of three months but less than one year. Short-term investments are carried at cost plus accrued interest, which approximates fair value.

• Long-term Debt — We estimate the fair value of our long-term debt (including current installments) based on the quoted market prices for the same or similar issues or on the current rates offered for debt of the same remaining maturities.

• Foreign Currency Forward Contracts — We estimate the fair value of foreign currency forward contracts by obtaining quotes from financial institutions or market transactions in either the listed or over-the-counter markets.

• Interest Rate Swaps — We estimate the fair value of our interest rate swaps based on quotes obtained from financial institutions.

          Retirement of Registered Shares under Registered Share Repurchase Program — On September 12, 2008, we announced a share repurchase program pursuant to which Foster Wheeler Ltd.’s Board of Directors authorized the repurchase of up to $750,000 of Foster Wheeler Ltd.’s outstanding common shares. In connection with the Redomestication, Foster Wheeler AG adopted a share repurchase program pursuant to which it is authorized to repurchase up to $264,800 of its outstanding registered shares and designate the repurchased shares for cancellation. The amount authorized for repurchase of registered shares under the Foster Wheeler AG program is equal to the amount that remained available for repurchases under the Foster Wheeler Ltd. program as of February 9, 2009, the date of the completion of the Redomestication. The Foster Wheeler AG program replaces the Foster Wheeler Ltd. program, and no further repurchases will be made under the Foster Wheeler Ltd. program. Any repurchases will be made at our discretion in the open market or in privately negotiated transactions in compliance with applicable securities laws and other legal requirements and will depend on a variety of factors, including market conditions, share price and other factors. The program does not obligate us to acquire any particular number of registered shares. The program has no expiration date and may be suspended or discontinued at any time.

          All registered shares acquired under our registered share repurchase program are immediately retired upon purchase. The registered share value, on the consolidated balance sheet, is reduced for the par value of the retired registered shares. Paid-in capital, on the consolidated balance sheet, is reduced for the excess of fair value and related fees paid above par value for the registered shares acquired.

          Registered shares retired under the registered share repurchase program reduce the weighted-average number of registered shares outstanding during the reporting period when calculating earnings per share, as described below.

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          Earnings per Share — Basic earnings per share is computed by dividing net income attributable to Foster Wheeler AG by the weighted-average number of shares outstanding during the reporting period, excluding non-vested restricted shares of 82,980 and 165,960 as of June 30, 2009 and June 27, 2008, respectively. Restricted shares and restricted share units (collectively, “restricted awards”) are included in the weighted-average number of shares outstanding when such restricted awards vest.

          Diluted earnings per share is computed by dividing net income attributable to Foster Wheeler AG by the combination of the weighted-average number of shares outstanding during the reporting period and the impact of dilutive securities, if any, such as outstanding stock options, warrants to purchase shares and the non-vested portion of restricted awards to the extent such securities are dilutive.

          In profitable periods, outstanding stock options and warrants have a dilutive effect under the treasury stock method when the average share price for the period exceeds the assumed proceeds from the exercise of the warrant or option. The assumed proceeds include the exercise price, compensation cost, if any, for future service that has not yet been recognized in the consolidated statement of operations, and any tax benefits that would be recorded in paid-in capital when the option or warrant is exercised. Under the treasury stock method, the assumed proceeds are assumed to be used to repurchase shares in the current period. The dilutive impact of the non-vested portion of restricted awards is determined using the treasury stock method, but the proceeds include only the unrecognized compensation cost and tax benefits as assumed proceeds.

          The computations of basic and diluted earnings per share were as follows:

	Fiscal Quarters Ended				Fiscal Six Months Ended
	June 30,		June 27,		June 30,		June 27,
	2009		2008		2009		2008
Basic earnings per share:
Net income attributable to Foster Wheeler AG	$	122,204	$	160,755	$	195,067	$	298,818
Weighted-average number of shares outstanding for basic earnings per share		126,344,093		143,994,084		126,304,157		143,955,937
Basic earnings per share	$	0.97	$	1.12	$	1.54	$	2.08
Diluted earnings per share:
Net income attributable to Foster Wheeler AG	$	122,204	$	160,755	$	195,067	$	298,818
Weighted-average number of shares outstanding for basic earnings per share		126,344,093		143,994,084		126,304,157		143,955,937
Effect of dilutive securities:
Options to purchase shares		47,465		612,166		21,821		606,179
Warrants to purchase shares		478,728		591,423		474,067		603,300
Non-vested portion of restricted awards		184,892		223,677		67,237		219,670
Weighted-average number of shares outstanding for diluted earnings per share		127,055,178		145,421,350		126,867,282		145,385,086
Diluted earnings per share	$	0.96	$	1.11	$	1.54	$	2.06

          The following table summarizes the registered share equivalent of potentially dilutive securities that have been excluded from the denominator used in the calculation of diluted earnings per share due to their antidilutive effect:

	Fiscal Quarters Ended				Fiscal Six Months Ended
	June 30,		June 27,		June 30,		June 27,
	2009		2008		2009		2008
Shares issuable under outstanding options not included in the computation of diluted earnings per share because the assumed proceeds were greater than the average share price for the period		2,448,119		479,229		3,008,199		479,229

          Share-Based Compensation Plans — Our share-based compensation plans are accounted for in accordance with the provisions of SFAS No. 123R, “Share-Based Payment.” We estimate the fair value of each option award on the date of grant using the Black-Scholes option valuation model. We then recognize the grant date fair value of each option as compensation expense ratably using the straight-line attribution method over the service period (generally the vesting period). The Black-Scholes model incorporates the following assumptions:

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• Expected volatility – we estimate the volatility of our share price at the date of grant using historical volatility adjusted for periods of unusual stock price activity.

• Expected term – we estimate the expected term using the “simplified” method, as outlined in Staff Accounting Bulletin No. 107, “Share-Based Payment.”

• Risk-free interest rate – we estimate the risk-free interest rate using the U.S. Treasury yield curve for periods equal to the expected term of the options in effect at the time of grant.

• Dividends – we use an expected dividend yield of zero because we have not declared or paid a cash dividend since July 2001 and we do not have any plans to declare or pay any cash dividends.

          We used the following weighted-average assumptions to estimate the fair value of the options granted for the periods indicated:

	Fiscal Six Months Ended
	June 30,			June 27,
	2009			2008
Expected volatility		69.31	%		45.95	%
Expected term	3.28 years			3.62 years
Risk-free interest rate		1.45	%		2.15	%
Expected dividend yield		0	%		0	%

          We estimate the fair value of restricted awards using the market price of our shares on the date of grant. We then recognize the fair value of each restricted award as compensation cost ratably using the straight-line attribution method over the service period (generally the vesting period).

          We estimate pre-vesting forfeitures at the time of grant using a combination of historical data and demographic characteristics, and we revise those estimates in subsequent periods if actual forfeitures differ from those estimates. We record share-based compensation expense only for those awards that are expected to vest.

          Recent Accounting Developments — In December 2008, the FASB issued FASB Staff Position No. FSP FAS 132(R)-1 “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP FAS 132(R)-1”). FSP FAS 132(R)-1 will expand the disclosures regarding investments held by employer-sponsored defined benefit pension plans and other postretirement plans, with the purpose of providing additional information related to the valuation methodologies for these assets similar to disclosures regarding the valuation methodologies required by SFAS No. 157. Additionally, FSP FAS 132(R)-1 will require disclosures on how investment allocation decisions are made as well as significant concentrations of risk within plan assets. FSP FAS 132(R)-1 is effective for annual financial statements for fiscal years ending after December 15, 2009. We will amend our disclosures accordingly beginning with our consolidated financial statements included in our fiscal year 2009 Form 10-K.

          In June 2009, the FASB issued SFAS No. 167 “Amendments to FASB Interpretation No. 46(R).” SFAS No. 167 requires an enterprise to qualitatively assess the determination of the primary beneficiary (or “consolidator”) of a variable interest entity (“VIE”) based on whether the entity (1) has the power to direct matters that most significantly impact the activities of the VIE, and (2) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. SFAS No. 167 changes the consideration of kick-out rights, which are the ability to remove the enterprise with the power to direct the activities of a VIE, in determining if an entity is a VIE, which may cause certain additional entities to now be considered VIEs. In contrast to prior guidance, SFAS No. 167 requires an ongoing reconsideration of the primary beneficiary. SFAS No. 167 also amends the events that trigger a reassessment of whether an entity is a VIE. SFAS No. 167 is effective for financial statements issued for fiscal years beginning after November 15, 2009. We are currently assessing the impact that SFAS No. 167 may have on our consolidated financial statements and disclosures.

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          In July 2009, the FASB issued SFAS No. 168 “The FASB Accounting Standards Codification^TM and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162.” The FASB Accounting Standards Codification^TM (“Codification”) will become the sole source of authoritative U.S. generally accepted accounting principles (“U.S. GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. On the effective date of SFAS No. 168, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative under U.S. GAAP. SFAS No. 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. We will amend the references to U.S. GAAP in our disclosures accordingly beginning with our interim consolidated financial statements included in our fiscal third quarter of 2009 Form 10-Q.

2. Business Combinations

          In April 2009, we acquired substantially all of the assets of the offshore engineering division of OPE Holdings Ltd., a Canadian company that is listed on the TSX Venture Exchange and which we refer to as OPE, for a purchase price of approximately $8,900. The purchase price may be increased by $500 if the acquired company meets certain performance targets during the first year after the closing date. The acquired company is active in upstream oil and gas engineering services. The purchase price allocation and pro forma information for this acquisition were not material to our consolidated financial statements. This company’s financial results are included within our Global E&C Group business segment.

          In July 2008, we acquired the majority of the assets and work force of an engineering design company for $6,500, plus up to $1,500 to be paid if certain performance milestones are met over the following two years. This company, which has an engineering center in Kolkata, India, provides engineering services to the petrochemical, refining, upstream oil and gas, and power industries. The purchase price allocation and pro forma information for this acquisition were not material to our consolidated financial statements. This company’s financial results are included within our Global E&C Group business segment.

          In February 2008, we acquired all of the outstanding capital stock of a biopharmaceutical engineering company, based in Philadelphia, Pennsylvania, for $8,545 plus up to $3,638 to be paid over the following three years if certain conditions are met, plus up to an additional $8,700 to be paid if certain performance milestones are met over the following three years. This company provides design, engineering, manufacture, installation, validation and startup/commissioning services to the life sciences industry. The purchase price allocation and pro forma information for this acquisition were not material to our consolidated financial statements. This company’s financial results are included within our Global E&C Group business segment.

3. Equity Interests

          We own a noncontrolling equity interest in two electric power generation projects, one waste-to-energy project and one wind farm project in Italy and in a refinery/electric power generation project in Chile. We also own a 50% noncontrolling equity interest in an Italian project which generates earnings from royalty payments linked to the price of natural gas. The two electric power generation projects in Italy are each 42% owned by us, the waste-to-energy project is 39% owned by us and the wind farm project is 50% owned by us. The project in Chile is 85% owned by us; however, we do not have a controlling interest in the Chilean project as a result of participating rights held by the minority shareholder. We account for these investments in Italy and Chile under the equity method. The following is summarized financial information for these entities (each as a whole) in which we have an equity interest:

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	June 30, 2009				December 26, 2008
	Italian		Chilean		Italian		Chilean
	Projects		Project		Projects		Project
Balance Sheet Data:
Current assets	$	313,166	$	47,764	$	288,387	$	66,991
Other assets (primarily buildings and equipment)		651,022		132,200		618,083		137,007
Current liabilities		105,601		17,318		63,227		26,319
Other liabilities (primarily long-term debt)		524,270		68,824		535,954		70,950
Net assets		334,317		93,822		307,289		106,729

	Fiscal Quarters Ended
	June 30, 2009				June 27, 2008
	Italian		Chilean		Italian		Chilean
	Projects		Project		Projects		Project
Income Statement Data:
Total revenues	$	95,084	$	15,534	$	108,450	$	25,489
Gross earnings		26,095		9,486		35,182		14,216
Income before income taxes		22,616		8,053		28,336		12,351
Net earnings		15,833		6,684		19,456		10,251

	Fiscal Six Months Ended
	June 30, 2009				June 27, 2008
	Italian		Chilean		Italian		Chilean
	Projects		Project		Projects		Project
Income Statement Data:
Total revenues	$	199,158	$	33,346	$	216,913	$	52,074
Gross earnings		39,249		19,900		57,919		30,377
Income before income taxes		32,599		16,369		44,479		28,227
Net earnings		21,054		13,586		29,795		23,428

          Our equity in the net earnings of these partially-owned affiliates, which is recorded within other income, net on the consolidated statement of operations, totaled $10,639 and $16,891 for the fiscal quarter and six months ended June 30, 2009, respectively, and $13,317 and $24,880 for the fiscal quarter and six months ended June 27, 2008, respectively.

          Our investment in these equity affiliates, which is recorded within investments in and advances to unconsolidated affiliates on the consolidated balance sheet, totaled $199,449 and $200,352 as of June 30, 2009 and December 26, 2008, respectively. Distributions of $20,686 and $24,452 were received during the fiscal six months ended June 30, 2009 and June 27, 2008, respectively.

          We have guaranteed certain performance obligations of the Chilean project. We have a contingent obligation, which is measured annually based on the operating results of the Chilean project for the preceding year. We did not have a current payment obligation under this guarantee as of December 26, 2008.

          We also have guaranteed the obligations of our subsidiary under the Chilean project’s operations and maintenance agreement. The guarantee is limited to $20,000 over the life of the operations and maintenance agreement, which extends through 2016. No amounts have ever been paid under the guarantee.

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          In addition, we have provided a $10,000 debt service reserve letter of credit to cover debt service payments in the event that the Chilean project does not generate sufficient cash flow to make such payments. We are required to maintain the debt service reserve letter of credit during the term of the Chilean project’s debt, which matures in 2014. As of June 30, 2009, no amounts have been drawn under this letter of credit.

          Under the Chilean project’s operations and maintenance agreement, our subsidiary provides services for the management, operation and maintenance of the refinery/electric power generation facility. Our fees for these services were $2,096 and $4,232 for the fiscal quarter and six months ended June 30, 2009, respectively, and $2,323 and $4,656 for the fiscal quarter and six months ended June 27, 2008, respectively, and were recorded in operating revenues on our consolidated statement of operations. We had a receivable from our partially-owned affiliate in Chile of $2,790 and $12,615 recorded in trade accounts and notes receivable on our consolidated balance sheet as of June 30, 2009 and December 26, 2008, respectively.

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4. Long-term Debt

          The following table shows the components of our long-term debt:

	June 30, 2009						December 26, 2008
	Current		Long-term		Total		Current		Long-term		Total
Capital Lease Obligations	$	1,189	$	64,585	$	65,774	$	1,147	$	64,641	$	65,788
Special-Purpose Limited Recourse Project Debt:
Camden County Energy Recovery Associates		9,914		21,865		31,779		9,914		21,865		31,779
FW Power S.r.l.		5,382		90,556		95,938		4,562		88,750		93,312
Energia Holdings, LLC		3,187		13,239		16,426		4,675		16,426		21,101
Subordinated Robbins Facility Exit Funding Obligations:
1999C Bonds at 7.25% interest, due October 15, 2009		19		—		19		19		—		19
1999C Bonds at 7.25% interest, due October 15, 2024		—		1,283		1,283		—		1,283		1,283
1999D Accretion Bonds at 7% interest, due October 15, 2009		318		—		318		307		—		307
Term Loan in China at 4.86% interest, due July 6, 2009		2,928		—		2,928		—		—		—
Term Loan in China at 6.57% interest, due December 29, 2008		—		—		—		3,654		—		3,654
Other		83		—		83		97		24		121
Total	$	23,020	$	191,528	$	214,548	$	24,375	$	192,989	$	217,364

          Domestic Senior Credit Agreement — In October 2006, we executed a five-year domestic senior credit agreement to be used for our U.S. and non-U.S. operations. The senior credit agreement, as amended in May 2007, provides for a facility of $450,000, and includes a provision which permits future incremental increases of up to $100,000 in total availability under the facility. We can issue up to $450,000 under the letter of credit facility. A portion of the letters of credit issued under the domestic senior credit agreement have performance pricing that is decreased (or increased) as a result of improvements (or reductions) in the credit rating of the domestic senior credit agreement as reported by Moody’s Investors Service and/or Standard & Poor’s (“S&P”). We also have the option to use up to $100,000 of the $450,000 for revolving borrowings at a rate equal to adjusted LIBOR plus 1.50%, subject also to the performance pricing noted above. As a result of the improvement in our S&P credit rating in March 2007, we achieved, and continue to maintain, the lowest possible pricing under the performance pricing provisions of our domestic senior credit agreement.

          On December 18, 2008, Foster Wheeler AG, Foster Wheeler Ltd., certain of Foster Wheeler Ltd.’s subsidiaries and BNP Paribas, as Administrative Agent, entered into an additional amendment of our domestic senior credit agreement. The amendment includes a consent of the lenders under the credit agreement to the Redomestication. In addition, the amendment reflects the addition of Foster Wheeler AG as a guarantor of the obligations under the credit agreement and reflects changes relating to Foster Wheeler AG becoming the ultimate parent of Foster Wheeler Ltd. and its subsidiaries upon completion of the Redomestication. The amendment became effective upon consummation of the Redomestication on February 9, 2009.

          We had approximately $290,800 and $273,500 of letters of credit outstanding under this agreement as of June 30, 2009 and December 26, 2008, respectively. The letter of credit fees ranged from 1.50% to 1.60% of the outstanding amount, excluding a fronting fee of 0.125% per annum. There were no funded borrowings under this agreement as of June 30, 2009 or December 26, 2008.

          During the fiscal six months ended June 30, 2009, one of our subsidiaries based in China, which is 52% owned by us and which we consolidate into our financial statements, repaid its outstanding term loan at the scheduled maturity date. Also during the fiscal six months ended June 30, 2009, the same China based subsidiary entered into a new term loan for 20 million CNY (approximately $2,930 at the exchange rate in effect at the inception of the term loan) with an interest rate of 4.86% and which matures on July 6, 2009. Subsequent to the fiscal six months ended June 30, 2009, the term loan was repaid at the scheduled maturity date. Also subsequent to the fiscal six months ended June 30, 2009, our China based subsidiary entered into a new term loan for 20 million CNY (approximately $2,926 at the exchange rate in effect at the inception of the term loan) with an interest rate of 4.374% and which matures on January 8, 2010.

          During the second fiscal quarter of 2009 we adopted FASB Staff Position No. FSP FAS 107-1 and Accounting Principles Board (“APB”) 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (“FSP FAS 107-1 and APB 28-1”). FSP FAS 107-1 and APB 28-1 amends SFAS No. 107, “Disclosures about Fair Values of Financial Instruments,” to require disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements. Additionally, FSP FAS 107-1 and APB 28-1 also amends APB Opinion No. 28, “Interim Financial Reporting,” to require those disclosures in all interim financial statements.

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          The estimated fair values of our long-term debt were $217,913 and $227,866 as of June 30, 2009 and December 26, 2008, respectively. We estimate the fair value of our long-term debt (including current installments) based on the quoted market prices for the same or similar issues or on the current rates offered for debt of the same remaining maturities.

5. Pensions and Other Postretirement Benefits

          We have defined benefit pension plans in the United States, the United Kingdom, France, Canada and Finland, and we have other postretirement benefit plans for health care and life insurance benefits in the United States and Canada.

          Defined Benefit Pension Plans — Our defined benefit pension plans cover certain full-time employees. Under the plans, retirement benefits are primarily a function of both years of service and level of compensation. The components of benefit cost/(income) for our pension plans were as follows:

	Fiscal Quarter Ended June 30, 2009												Fiscal Quarter Ended June 27, 2008
	United			United									United			United
	States			Kingdom			Other			Total			States			Kingdom			Other			Total
Net periodic benefit cost/(income):
Service cost	$	—		$	1,350		$	158		$	1,508		$	—		$	2,702		$	183		$	2,885
Interest cost		4,972			10,199			445			15,616			5,009			12,634			499			18,142
Expected return on plan assets		(4,291	)		(8,299	)		(291	)		(12,881	)		(5,926	)		(12,395	)		(431	)		(18,752	)
Amortization of transition (asset)/obligation		—			(12	)		21			9			—			(14	)		24			10
Amortization of prior service cost		—			1,924			4			1,928			—			1,278			5			1,283
Amortization of net actuarial loss		2,041			3,346			124			5,511			716			4,252			114			5,082
SFAS No. 87 net periodic benefit cost/(income)		2,722			8,508			461			11,691			(201	)		8,457			394			8,650
SFAS No. 88 cost*		—			—			191			191			—			—			644			644
Total net periodic benefit cost/(income)	$	2,722		$	8,508		$	652		$	11,882		$	(201	)	$	8,457		$	1,038		$	9,294
Changes recognized in other comprehensive income:
Amortization of transition asset/(obligation)	$	—		$	12		$	(21	)	$	(9	)	$	—		$	14		$	(24	)	$	(10	)
Amortization of prior service cost		—			(1,924	)		(4	)		(1,928	)		—			(1,278	)		(5	)		(1,283	)
Amortization of net actuarial loss		(2,041	)		(3,346	)		(124	)		(5,511	)		(716	)		(4,252	)		(114	)		(5,082	)
Total loss recognized in other comprehensive income	$	(2,041	)	$	(5,258	)	$	(149	)	$	(7,448	)	$	(716	)	$	(5,516	)	$	(143	)	$	(6,375	)

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	Fiscal Six Months Ended June 30, 2009												Fiscal Six Months Ended June 27, 2008
	United			United									United			United
	States			Kingdom			Other			Total			States			Kingdom			Other			Total
Net periodic benefit cost/(income):
Service cost	$	—		$	2,608		$	310		$	2,918		$	—		$	5,417		$	359		$	5,776
Interest cost		9,898			19,740			869			30,507			9,980			25,303			993			36,276
Expected return on plan assets		(8,559	)		(16,059	)		(566	)		(25,184	)		(12,071	)		(24,839	)		(864	)		(37,774	)
Amortization of transition (asset)/obligation		—			(23	)		41			18			—			(29	)		49			20
Amortization of prior service cost		—			3,726			8			3,734			—			2,559			10			2,569
Amortization of net actuarial loss		3,918			6,403			239			10,560			1,394			8,518			229			10,141
SFAS No. 87 net periodic benefit cost/(income)		5,257			16,395			901			22,553			(697	)		16,929			776			17,008
SFAS No. 88 cost*		—			—			191			191			—			—			644			644
Total net periodic benefit cost/(income)	$	5,257		$	16,395		$	1,092		$	22,744		$	(697	)	$	16,929		$	1,420		$	17,652
Changes recognized in other comprehensive income:
Amortization of transition asset/(obligation)	$	—		$	23		$	(41	)	$	(18	)	$	—		$	29		$	(49	)	$	(20	)
Amortization of prior service cost		—			(3,726	)		(8	)		(3,734	)		—			(2,559	)		(10	)		(2,569	)
Amortization of net actuarial loss		(3,918	)		(6,403	)		(239	)		(10,560	)		(1,394	)		(8,518	)		(229	)		(10,141	)
Total loss recognized in other comprehensive income	$	(3,918	)	$	(10,106	)	$	(288	)	$	(14,312	)	$	(1,394	)	$	(11,048	)	$	(288	)	$	(12,730	)

* Charges were recorded in accordance with the provisions of SFAS No. 88, “Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits”, related to the settlement of obligations to former employees in Canada of $191 in the fiscal quarter and six months ended June 30, 2009 and $644 in the fiscal quarter and six months ended June 27, 2008.

          The U.S. pension plans, which are frozen to new entrants and additional benefit accruals, and the Canadian, Finnish and French plans are non-contributory. The U.K. plan, which is closed to new entrants, is contributory.

          Based on the minimum statutory funding requirements for fiscal year 2009, we are not required to make mandatory contributions to our U.S. pension plans. We made mandatory contributions of approximately $12,700 to our non-U.S. pension plans during the fiscal six months ended June 30, 2009. Based on the minimum statutory funding requirements for fiscal year 2009, we expect to make total mandatory contributions of approximately $25,100 to our non-U.S. pension plans in fiscal year 2009.

          Other Postretirement Benefits — Certain employees in the United States and Canada may become eligible for health care and life insurance benefits (“other postretirement benefits”) if they qualify for and commence normal or early retirement pension benefits as defined in the U.S. and Canadian pension plans while working for us. Additionally, one of our subsidiaries in the United States also has a benefit plan, referred to as the Survivor Income Plan (“SIP”), which provides coverage for an employee’s beneficiary upon the death of the employee. This plan has been closed to new entrants since 1988.

          The components of benefit cost for our other postretirement plans, including the SIP, were as follows:

	Fiscal Quarters Ended						Fiscal Six Months Ended
	June 30,			June 27,			June 30,			June 27,
	2009			2008			2009			2008
Net periodic postretirement benefit cost:
Service cost	$	32		$	38		$	67		$	71
Interest cost		1,283			1,125			2,437			2,314
Amortization of prior service credit		(1,156	)		(1,141	)		(2,313	)		(2,331	)
Amortization of net actuarial loss		178			35			423			233
Net periodic postretirement benefit cost	$	337		$	57		$	614		$	287
Changes recognized in other comprehensive income:
Amortization of prior service credit	$	1,156		$	1,141		$	2,313		$	2,331
Amortization of net actuarial loss		(178	)		(35	)		(423	)		(233	)
Total loss recognized in other comprehensive income	$	978		$	1,106		$	1,890		$	2,098

6. Guarantees and Warranties

          We have agreed to indemnify certain third parties relating to businesses and/or assets that we previously owned and sold to such third parties. Such indemnifications relate primarily to potential environmental and tax exposures for activities conducted by us prior to the sale of such businesses and/or assets. It is not possible to predict the maximum potential amount of future payments under these or similar indemnifications due to the conditional nature of the obligations and the unique facts and circumstances involved in each particular indemnification.

	Maximum	Carrying Amount of Liability
	Potential	June 30,		December 26,
	Payment	2009		2008
Environmental indemnifications	No limit	$	9,100	$	8,900
Tax indemnifications	No limit	$	—	$	—

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          We also maintain contingencies for warranty expenses on certain of our long-term contracts. Generally, warranty contingencies are accrued over the life of the contract so that a sufficient balance is maintained to cover our aggregate exposure at the conclusion of the project.

	Fiscal Six Months Ended
	June 30,			June 27,
Warranty Liability:	2009			2008
Balance at beginning of year	$	99,400		$	87,800
Accruals		14,900			22,400
Settlements		(1,300	)		(3,000	)
Adjustments to provisions		(5,100	)		(5,700	)
Balance at end of period	$	107,900		$	101,500

          We are contingently liable under standby letters of credit, bank guarantees and surety bonds, totaling $939,900 and $914,500 as of June 30, 2009 and December 26, 2008, respectively, primarily for performance guarantees. These balances include the standby letters of credit issued under the domestic senior credit agreement discussed in Note 4 and from other facilities worldwide. No material claims have been made against these guarantees, and based on our experience and current expectations, we do not anticipate any material claims.

          We have also guaranteed certain performance obligations in a Chilean refinery/electric power generation project in which we hold a noncontrolling equity interest. See Note 3 for further information.

7. Derivative Financial Instruments

          We are exposed to certain risks relating to our ongoing business operations. The risks managed by using derivative financial instruments relate primarily to foreign currency exchange rate risk and, to a significantly lesser extent, interest rate risk. Derivative financial instruments are recognized as assets or liabilities at fair value in our consolidated balance sheet, as required under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.”

	Fair Values of Derivative Financial Instruments
		Asset Derivatives					Liability Derivatives
	Location within					Location within
	Consolidated	June 30,		December 26,		Consolidated	June 30,		December 26,
	Balance Sheet	2009		2008		Balance Sheet	2009		2008
Derivatives designated as hedging instruments under SFAS No. 133
Interest rate swap contracts	Other assets		—		—	Other long-term liabilities		6,369		5,658
Derivatives not designated as hedging instruments under SFAS No. 133
Foreign currency forward contracts	Contracts in process or billings in excess of costs and estimated earnings on uncompleted contracts		3,777		3,883	Contracts in process or billings in excess of costs and estimated earnings on uncompleted contracts		11,994		21,711
Total derivatives		$	3,777	$	3,883		$	18,363	$	27,369

          Foreign Currency Exchange Rate Risk

          We operate on a worldwide basis with substantial operations in Europe that subject us to U.S. dollar translation risk mainly relative to the Euro and British pound. Under our risk management policies we do not hedge translation risk exposure. All activities of our non-U.S. affiliates are recorded in their functional currency, which is typically the local currency in the country of domicile of the affiliate. In the ordinary course of business, our affiliates do enter into transactions in currencies other than their respective functional currencies. We seek to minimize the resulting foreign currency transaction risk by contracting for the procurement of goods and services in the same currency as the sales value of the related long-term contract.

          We seek to further mitigate any remaining foreign currency transaction exposures—such as anticipated purchases or revenues—through the use of foreign currency forward exchange contracts. We utilize foreign currency forward exchange contracts solely to hedge specific foreign currency exposures, whether or not those contracts qualify for hedge accounting under SFAS No. 133. Nearly all of our foreign currency forward contracts are used to hedge foreign currency exposures on our contracts on which we recognize revenues, costs and profits on the percentage-of-completion method. None of the foreign currency forward contracts met the requirements for hedge accounting under SFAS No. 133 during the first fiscal six months of 2009 and 2008.

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          As of June 30, 2009, our primary foreign currency forward exchange contracts were as follows:

	Currency	Hedged Foreign		Notional Amount of		Notional Amount of
	Hedged	Currency Exposure		Forward Buy Contracts		Forward Sell Contracts
Functional	(bought or sold	(in equivalent		(in equivalent		(in equivalent
Currency	forward)	U.S. dollars)		U.S. dollars)		U.S. dollars)
British pound	Euro	$	2,887	$	1,510	$	1,377
	Australian dollar		7,295		—		7,295
	South African rand		4,015		—		4,015
	Thai baht		1,126		1,126		—
	U.S. dollar		56,725		—		56,725
Australian dollar	British pound		1,038		—		1,038
Canadian dollar	Euro		618		618		—
Chinese renminbi	Euro		5,375		—		5,375
	U.S. dollar		37,734		—		37,734
Euro	Canadian dollar		2,265		2,265		—
	Polish zloty		4,556		4,556		—
	U.S. dollar		24,124		7,782		16,342
Polish zloty	Euro		60,200		11,735		48,465
Singapore dollar	British pound		2,454		—		2,454
U.S. dollar	Chinese renminbi		61,446		61,446		—
	Euro		588		588		—
	British pound		444		444		—
	Singapore dollar		53		53		—
	Thai baht		434		434		—
	Total	$	273,377	$	92,557	$	180,820

          The notional amount provides one measure of the transaction volume outstanding as of quarter-end. Amounts ultimately realized upon final settlement of these financial instruments, along with the gains and losses on the underlying exposures within our long-term contracts, will depend on actual market exchange rates during the remaining life of the instruments. The contracts mature between fiscal years 2009 and 2011.

          We are exposed to credit loss in the event of non-performance by the counterparties. These counterparties are commercial banks that are primarily rated “BBB+” or better by Standard & Poor’s (or the equivalent by other recognized credit rating agencies).

          Increases in the fair value of the currencies sold forward result in losses while increases in the fair value of the currencies bought forward result in gains. The gain or loss from the portion of the mark-to-market adjustment related to the completed portion of the underlying contract is included in cost of operating revenues at the same time as the underlying foreign currency exposure occurs. The gain or loss from the remaining portion of the mark-to-market adjustment, specifically the portion relating to the uncompleted portion of the underlying contract is reflected directly in cost of operating revenues in the period in which the mark-to-market adjustment occurs. The incremental gain or loss from the remaining uncompleted portion of our contracts was as follows:

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		Amount of Gain/(Loss) Recognized in Income on Derivative
	Location of Gain/(Loss)	Fiscal Quarters Ended						Fiscal Six Months Ended
Derivatives Not Designated as Hedging	Recognized in Income on	June 30,			June 27,			June 30,		June 27,
Instruments under SFAS No. 133	Derivative	2009			2008			2009		2008
Foreign currency forward contracts	Cost of operating revenues	$	3,119		$	2,083		$	5,338	$	1,311
Foreign currency forward contracts	Other deductions, net		(95	)		(460	)		277		(324	)
Total		$	3,024		$	1,623		$	5,615	$	987

          The mark-to-market adjustments on foreign currency forward exchange contracts for these unrealized gains or losses are recorded in either contracts in process or billings in excess of costs and estimated earnings on uncompleted contracts on the consolidated balance sheet.

          During the fiscal six months ended June 30, 2009 and June 27, 2008, we included net cash (outflows)/inflows on the settlement of derivatives of $(7,690) and $5,194, respectively, within the “net change in contracts in process and billings in excess of costs and estimated earnings on uncompleted contracts,” a component of cash flows from operating activities in the consolidated statement of cash flows.

          Interest Rate Risk

          We use interest rate swap contracts to manage interest rate risk associated with some of our variable rate special-purpose limited recourse project debt. The aggregate notional amount of the receive-variable/pay-fixed interest rate swaps was $55,263 as of June 30, 2009.

          Upon entering into the swap contracts, we designate the interest rate swaps as cash flow hedges in accordance with SFAS No. 133. We assess at inception, and on an ongoing basis, whether the interest rate swaps are highly effective in offsetting changes in the cash flows of the project debt. Consequently, we record the fair value of interest rate swap contracts in our consolidated balance sheet at each balance sheet date. Changes in the fair value of the interest rate swap contracts are recorded as a component of other comprehensive loss.

							Amount of Gain/(Loss)
							Reclassified from
	Amount of Gain/(Loss)						Accumulated Other
	Recognized in Other					Location of Gain/(Loss)	Comprehensive Loss
	Comprehensive Income					Reclassified from	into Income
Derivatives in SFAS No. 133	Fiscal Quarters Ended					Accumulated Other	Fiscal Quarters Ended
Cash Flow Hedging	June 30,			June 27,		Comprehensive Loss into	June 30,		June 27,
Relationships	2009			2008		Income	2009		2008
Interest rate swap contracts	$	1,122		$	3,749	Interest expense	$	—	$	—
Total	$	1,122		$	3,749		$	—	$	—
	Fiscal Six Months Ended						Fiscal Six Months Ended
	June 30,			June 27,			June 30,		June 27,
	2009			2008			2009		2008
Interest rate swap contracts	$	(711	)	$	2,293	Interest expense	$	—	$	—
Total	$	(711	)	$	2,293		$	—	$	—

          The unrealized gain/(loss) recognized in other comprehensive loss on interest rate swap contracts of $1,122 and $(711) do not include the related tax (provision)/benefit of $(309) and $195 for the fiscal quarter and six months ended June 30, 2009, respectively. The unrealized gains recognized in other comprehensive income on interest rate swap contracts of $3,749 and $2,293 do not include the related tax provisions of $1,031 and $631 for the fiscal quarter and six months ended June 27, 2008, respectively.

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8. Share-Based Compensation Plans

          Our share-based compensation plans include both restricted awards and stock option awards. Compensation cost for our share-based plans of $5,501 and $10,855 was charged against income for the fiscal quarter and six months ended June 30, 2009, respectively. The related income tax benefit recognized in the consolidated statement of operations was $110 and $220 for the fiscal quarter and six months ended June 30, 2009, respectively. Compensation cost for our share-based plans of $4,150 and $6,642 was charged against income for the fiscal quarter and six months ended June 27, 2008, respectively. The related income tax benefit recognized in the consolidated statement of operations was $83 and $158 for the fiscal quarter and six months ended June 27, 2008, respectively. There were no option exercises under our share-based compensation plans in the fiscal six months ended June 30, 2009 and we received $2,435 in cash from option exercises for the fiscal six months ended June 27, 2008.

          As of June 30, 2009, we had $16,132 and $16,745 of total unrecognized compensation cost related to stock options and restricted awards, respectively. Those costs are expected to be recognized as expense over a weighted-average period of approximately 25 months.

          Our share-based compensation plans include a “change in control” provision, which provides for cash redemption of equity awards issued thereunder in certain limited circumstances. In accordance with Securities and Exchange Commission Accounting Series Release No. 268, “Presentation in Financial Statements of Redeemable Preferred Stocks,” we present the redemption amount of these equity awards as temporary equity on the consolidated balance sheet as the equity award is amortized during the vesting period. The redemption amount represents the intrinsic value, if any, of the equity award on the grant date. In accordance with FASB Emerging Issues Task Force Topic D-98, “Classification and Measurement of Redeemable Securities,” we do not adjust the redemption amount each reporting period unless and until it becomes probable that the equity awards will become redeemable (upon a change in control event). Upon vesting of the equity awards, we reclassify the intrinsic value of the equity awards, as determined on the grant date, to permanent equity. A reconciliation of temporary equity for the six months ended June 30, 2009 is as follows:

Temporary equity as of December 26, 2008	$	7,586
Compensation cost during the period for those equity awards with intrinsic value on the grant date		5,576
Intrinsic value of equity awards vested during the period for those equity awards with intrinsic value on the grant date		(4,572	)
Temporary equity as of June 30, 2009	$	8,590

9. Share Purchase Warrants

          In connection with the equity-for-debt exchange consummated in 2004, Foster Wheeler Ltd. issued 4,152,914 Class A common share purchase warrants and 40,771,560 Class B common share purchase warrants. In connection with the Redomestication, Foster Wheeler AG assumed Foster Wheeler Ltd.’s obligations under the related warrant agreement and has agreed to issue registered shares of Foster Wheeler AG upon exercise of outstanding warrants in accordance with their stated terms. See Note 13 for further information related to the Redomestication. Each Class A warrant entitles its owner to purchase 3.3682 registered shares at an exercise price of $4.689 per registered share thereunder, subject to the terms of the warrant agreement between the warrant agent and us. In connection with the Redomestication and in accordance with the terms of the warrant agreement, we extended the expiration date of our Class A warrants from September 24, 2009 to October 2, 2009 as a result of the periods from January 27, 2009 until January 30, 2009 and February 3, 2009 until February 6, 2009 when the warrants were not exercisable. Each Class B warrant entitled its owner to purchase 0.1446 common shares of Foster Wheeler Ltd. at an exercise price of $4.689 per common share thereunder, subject to the terms and conditions of the warrant agreement between the warrant agent and Foster Wheeler Ltd. The Class B warrants were exercisable on or before September 24, 2007.

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          Cumulatively through June 30, 2009, 3,978,821 Class A warrants and 38,730,407 Class B warrants have been exercised for a combined total of 19,751,467 common and registered shares. The number of registered shares issuable upon the exercise of the remaining outstanding Class A warrants is approximately 586,380 as of June 30, 2009.

          The holders of the Class A warrants are not entitled to vote, to receive dividends or to exercise any of the rights of registered shareholders for any purpose until such warrants have been duly exercised. We currently maintain and intend to continue to maintain at all times during which the warrants are exercisable, a “shelf” registration statement relating to the issuance of registered shares underlying the warrants for the benefit of the warrant holders, subject to the terms of the registration rights agreement. An initial registration statement became effective on December 28, 2005 and a replacement registration statement was filed and became effective on December 5, 2008.

          Also in connection with the equity-for-debt exchange consummated in 2004, we entered into a registration rights agreement with certain selling security holders in which we agreed to file a registration statement to cover resales of our securities held by them immediately following the exchange offer. We filed a registration statement in accordance with this agreement on October 29, 2004. This registration statement initially became effective on December 23, 2004. Subject to the selling security holders providing us with necessary information in accordance with the registration rights agreement, we are required to keep effective a registration statement covering resales by such security holders until December 23, 2009 unless certain events occur to terminate our obligations under the registration rights agreement prior to that date. If we fail to maintain the registration statement as required or it becomes unavailable for more than two 45-day periods in any consecutive 12-month period, we are required to pay damages at a rate of $13.7 per day for each day that the registration statement is not effective. As of June 30, 2009, the maximum exposure under this provision was approximately $1,200. We have not incurred, and do not expect to incur, any damages under the registration rights agreement.

10. Income Taxes

          The tax provision for each year-to-date period is calculated by multiplying pretax income by the estimated annual effective tax rate for such period. Our effective tax rate can fluctuate significantly from period to period and may differ significantly from the U.S. federal statutory rate as a result of income taxed in various non-U.S. jurisdictions with rates different from the U.S. statutory rate, as a result of our inability to recognize a tax benefit for losses generated by certain unprofitable operations and as a result of the varying mix of income earned in the jurisdictions in which we operate. In addition, SFAS No. 109, “Accounting for Income Taxes,” requires us to reduce our deferred tax benefits by a valuation allowance when, based upon available evidence, it is more likely than not that the tax benefit of losses (or other deferred tax assets) will not be realized in the future. In periods when operating units subject to a valuation allowance generate pretax earnings, the corresponding reduction in the valuation allowance favorably impacts our effective tax rate. Conversely, in periods when operating units subject to a valuation allowance generate pretax losses, the corresponding increase in the valuation allowance has an unfavorable impact on our effective tax rate.

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          First Fiscal Six Months of 2009

          Our effective tax rate for the first fiscal six months of 2009 was lower than the U.S. statutory rate of 35% due principally to the impact of the following:

• Income earned in tax jurisdictions with tax rates lower than the U.S. statutory rate, which is expected to contribute to an approximate 18-percentage point reduction in the effective tax rate for the full year 2009; and

• A valuation allowance increase because we are unable to recognize a tax benefit for losses subject to valuation allowance in certain jurisdictions (primarily the United States), which is expected to contribute to an approximate three-percentage point increase in the effective tax rate for the full year 2009, and other permanent differences.

          First Fiscal Six Months of 2008

          Our effective tax rate for the first fiscal six months of 2008 was lower than the U.S. statutory rate of 35% due principally to the impact of the following:

• Income earned in tax jurisdictions with tax rates lower than the U.S. statutory rate, which contributed to an approximate ten-percentage point reduction in the effective tax rate; and

• A valuation allowance decrease because we recognized earnings in jurisdictions where we had a full valuation allowance, which contributed to an approximate five-percentage point reduction in the effective tax rate.

          These variances were partially offset by losses in certain other jurisdictions for which no benefit is recognized (a valuation allowance is established) and other permanent differences.

          We evaluate, on a quarterly basis, the need for the valuation allowances against deferred tax assets in those jurisdictions in which we currently maintain a valuation allowance. Such evaluation includes a review of all available evidence, both positive and negative, in determining whether a valuation allowance is necessary.

          Our subsidiaries file income tax returns in numerous tax jurisdictions, including the United States, several U.S. states and numerous non-U.S. jurisdictions around the world. Tax returns are also filed in jurisdictions where our subsidiaries execute project-related work. The statute of limitations varies by jurisdiction. Because of the number of jurisdictions in which we file tax returns, in any given year the statute of limitations in a number of jurisdictions may expire within 12 months from the balance sheet date. As a result, we expect recurring changes in unrecognized tax benefits due to the expiration of the statute of limitations, none of which are expected to be individually significant. With few exceptions, we are no longer subject to U.S. (including federal, state and local) or non-U.S. income tax examinations by tax authorities for years before fiscal year 2004.

          A number of tax years are under audit by the relevant state and non-U.S. tax authorities. We anticipate that several of these audits may be concluded in the foreseeable future, including in fiscal year 2009. Based on the status of these audits, it is reasonably possible that the conclusion of the audits may result in a reduction of unrecognized tax benefits. However, it is not possible to estimate the magnitude of any such reduction at this time.

          We recognize interest accrued on the unrecognized tax benefits in interest expense and penalties on the unrecognized tax benefits in other deductions, net on our consolidated statement of operations. During the fiscal quarter and six months ended June 30, 2009, we recorded a net reduction in interest expense on unrecognized tax benefits of $2,176 and $2,238, respectively, which were net of previously accrued interest expense that were ultimately not assessed of $2,670 and $3,169, respectively, and net penalties on unrecognized tax benefits of $526 and $424, respectively, which were net of previously accrued tax penalties that were ultimately not assessed of $214 and $791, respectively. During the fiscal quarter and six months ended June 27, 2008, we recorded interest expense on unrecognized tax benefits of $931 and $2,163, respectively, and a reduction in net penalties on unrecognized tax benefits of $2,413 and $1,640, respectively, of which the amounts in both periods were net of previously accrued tax penalties that were ultimately not assessed of $3,000.

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11. Business Segments

          We operate through two business groups: our Global E&C Group and our Global Power Group.

Global Engineering and Construction Group

          Our Global E&C Group, which operates worldwide, designs, engineers and constructs onshore and offshore upstream oil and gas processing facilities, natural gas liquefaction facilities and receiving terminals, gas-to-liquids facilities, oil refining, chemical and petrochemical, pharmaceutical and biotechnology facilities and related infrastructure, including power generation and distribution facilities, and gasification facilities. Our Global E&C Group is also involved in the design of facilities in new or developing market sectors, including carbon capture and storage, solid fuel-fired integrated gasification combined-cycle power plants, coal-to-liquids, coal-to-chemicals and biofuels. Our Global E&C Group generates revenues from engineering, procurement and construction and project management activities pursuant to contracts spanning up to approximately four years in duration and from returns on its equity investments in various power production facilities.

          Our Global E&C Group provides the following services:

• Design, engineering, project management, construction and construction management services, including the procurement of equipment, materials and services from third-party suppliers and contractors.

• Environmental remediation services, together with related technical, engineering, design and regulatory services.

• Development, engineering, procurement, construction, ownership and operation of power generation facilities, from conventional and renewable sources, and waste-to-energy facilities in Europe.

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Global Power Group

          Our Global Power Group designs, manufactures and erects steam generating and auxiliary equipment for electric power generating stations and industrial facilities worldwide and owns and/or operates several cogeneration, independent power production and waste-to-energy facilities, as well as power generation facilities for the process and petrochemical industries. Our Global Power Group generates revenues from engineering activities, equipment supply, construction contracts, operating and maintenance agreements, royalties from licensing its technology, and from returns on its investments in several power production facilities.

          Our Global Power Group’s steam generating equipment includes a full range of technologies, offering independent power producers, utilities and industrial clients high-value technology solutions for converting a wide range of fuels, such as coal, lignite, petroleum coke, oil, gas, solar, biomass and municipal solid waste, into steam, which can be used for power generation, district heating or for industrial processes.

          Our Global Power Group offers several other products and services related to steam generators:

• Designs, manufactures and installs auxiliary and replacement equipment for utility power and industrial facilities, including surface condensers, feed water heaters, coal pulverizers, steam generator coils and panels, biomass gasifiers, and replacement parts for steam generators.

• Nitrogen-oxide (“NO_x”) reduction systems and components for pulverized coal steam generators such as, selective catalytic reduction systems, low NO_x combustion systems, low NO_x burners, primary combustion and overfire air systems and components, fuel and combustion air measuring and control systems and components.

• A broad range of site services including construction and erection services, maintenance engineering, steam generator upgrading and life extension, and plant repowering.

• Research and development in the areas of combustion, fluid and gas dynamics, heat transfer, materials and solid mechanics.

• Technology licenses to other steam generator suppliers in select countries.

Corporate and Finance Group

          In addition to these two business groups, which also represent operating segments for financial reporting purposes, we report corporate center expenses and expenses related to certain legacy liabilities, such as asbestos, in the Corporate and Finance Group (“C&F Group”), which we also treat as an operating segment for financial reporting purposes.

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          EBITDA is the primary measure of operating performance used by our chief operating decision maker. We define EBITDA as income attributable to Foster Wheeler AG before interest expense, income taxes, depreciation and amortization.

          A reconciliation of EBITDA to net income attributable to Foster Wheeler AG is shown below.

			Global		Global		C&F
	Total		E&C Group		Power Group		Group (1)
Fiscal Quarter Ended June 30, 2009:
Operating revenues (third-party)	$	1,308,801	$	1,030,471	$	278,330	$	—
EBITDA (2)	$	161,962	$	130,628	$	53,780	$	(22,446	)
Add: Net income attributable to noncontrolling interests		5,130
Less: Interest expense		1,302
Less: Depreciation and amortization		10,895
Income before income taxes		154,895
Less: Provision for income taxes		27,561
Net income		127,334
Less: Net income attributable to noncontrolling interests		5,130
Net income attributable to Foster Wheeler AG	$	122,204
Fiscal Quarter Ended June 27, 2008:
Operating revenues (third-party)	$	1,701,022	$	1,249,730	$	451,292	$	—
EBITDA (3)	$	220,428	$	155,688	$	68,378	$	(3,638	)
Add: Net income attributable to noncontrolling interests		552
Less: Interest expense		4,860
Less: Depreciation and amortization		10,930
Income before income taxes		205,190
Less: Provision for income taxes		43,883
Net income		161,307
Less: Net income attributable to noncontrolling interests		552
Net income attributable to Foster Wheeler AG	$	160,755
Fiscal Six Months Ended June 30, 2009:
Operating revenues (third-party)	$	2,573,324	$	1,982,883	$	590,441	$	—
EBITDA (4)	$	267,546	$	211,910	$	102,563	$	(46,927	)
Add: Net income attributable to noncontrolling interests		6,639
Less: Interest expense		5,469
Less: Depreciation and amortization		21,446
Income before income taxes		247,270
Less: Provision for income taxes		45,564
Net income		201,706
Less: Net income attributable to noncontrolling interests		6,639
Net income attributable to Foster Wheeler AG	$	195,067
Fiscal Six Months Ended June 27, 2008:
Operating revenues (third-party)	$	3,496,746	$	2,640,731	$	856,015	$	—
EBITDA (5)	$	415,748	$	290,148	$	132,794	$	(7,194	)
Add: Net income attributable to noncontrolling interests		1,025
Less: Interest expense		11,011
Less: Depreciation and amortization		22,286
Income before income taxes		383,476
Less: Provision for income taxes		83,633
Net income		299,843
Less: Net income attributable to noncontrolling interests		1,025
Net income attributable to Foster Wheeler AG	$	298,818

(1) Includes general corporate income and expense, our captive insurance operation and the elimination of transactions and balances related to intercompany interest.

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(2)	Includes in the fiscal quarter ended June 30, 2009: increased contract profit of $20,230 from the regular revaluation of final estimated contract profit*: $18,000 in our Global E&C Group and $2,230 in our Global Power Group; and a provision of $1,756 in our C&F Group on the revaluation of our asbestos liability and related asset.
(3)	Includes in the fiscal quarter ended June 27, 2008: increased/(decreased) contract profit of $13,560 from the regular revaluation of final estimated contract profit*: $16,120 in our Global E&C Group and $(2,560) in our Global Power Group; a gain of $20,000 in our C&F Group on the settlement of coverage litigation with an asbestos insurance carrier; and a charge of $1,725 in our C&F Group on the revaluation of our asbestos liability and related asset.
(4)	Includes in the fiscal six months ended June 30, 2009: increased contract profit of $26,180 from the regular revaluation of final estimated contract profit*: $24,510 in our Global E&C Group and $1,670 in our Global Power Group; and a provision of $3,506 in our C&F Group on the revaluation of our asbestos liability and related asset.
(5)	Includes in the fiscal six months ended June 27, 2008: increased/(decreased) contract profit of $13,020 from the regular revaluation of final estimated contract profit*: $18,300 in our Global E&C Group and $(5,280) in our Global Power Group; gains of $35,913 in our C&F Group on the settlement of coverage litigation with two asbestos insurance carriers; and a charge of $3,450 in our C&F Group on the revaluation of our asbestos liability and related asset.
*	Please refer to “Revenue Recognition on Long-Term Contracts” in Note 1 for further information regarding changes in our final estimated contract profit.

          The accounting policies of our business segments are the same as those described in our summary of significant accounting policies. The only significant intersegment transactions relate to interest on intercompany balances. We account for interest on those arrangements as if they were third party transactions—i.e. at current market rates, and we include the elimination of that activity in the results of the C&F Group.

          Operating revenues by industry were as follows:

	Fiscal Quarters Ended				Fiscal Six Months Ended
	June 30, 2009		June 27, 2008		June 30, 2009		June 27, 2008
Power generation	$	261,859	$	429,118	$	561,156	$	816,853
Oil refining		366,879		352,686		666,994		759,656
Pharmaceutical		19,234		15,674		34,604		34,109
Oil and gas		304,541		387,072		594,407		961,845
Chemical/petrochemical		320,642		465,630		653,682		830,945
Power plant operation and maintenance		27,816		36,690		51,909		65,906
Environmental		2,886		5,127		6,682		15,664
Other, net of eliminations		4,944		9,025		3,890		11,768
Total third-party revenues	$	1,308,801	$	1,701,022	$	2,573,324	$	3,496,746

12. Litigation and Uncertainties

Asbestos

          Some of our U.S. and U.K. subsidiaries are defendants in numerous asbestos-related lawsuits and out-of-court informal claims pending in the United States and the United Kingdom. Plaintiffs claim damages for personal injury alleged to have arisen from exposure to or use of asbestos in connection with work allegedly performed by our subsidiaries during the 1970s and earlier.

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          United States

          A summary of our U.S. claim activity is as follows:

	Number of Claims
	Fiscal Quarters Ended						Fiscal Six Months Ended
	June 30,			June 27,			June 30,			June 27,
	2009			2008			2009			2008
Open claims at beginning of period		131,010			130,810			130,760			131,340
New claims		1,040			1,800			2,340			2,820
Claims resolved		(1,550	)		(1,870	)		(2,600	)		(3,420	)
Open claims at end of period		130,500			130,740			130,500			130,740

          We had the following U.S. asbestos-related assets and liabilities recorded on our consolidated balance sheet as of the dates set forth below. Total U.S. asbestos-related liabilities are estimated through the fiscal second quarter of 2024. Although it is likely that claims will continue to be filed after that date, the uncertainties inherent in any long-term forecast prevent us from making reliable estimates of the indemnity and defense costs that might be incurred after that date.

	June 30,		December 26,
	2009		2008
Asbestos-related assets recorded within:
Accounts and notes receivable-other	$	33,900	$	38,200
Asbestos-related insurance recovery receivable		235,300		246,600
Total asbestos-related assets	$	269,200	$	284,800
Asbestos-related liabilities recorded within:
Accrued expenses	$	60,300	$	64,500
Asbestos-related liability		295,800		320,800
Total asbestos-related liabilities	$	356,100	$	385,300

          Since fiscal year-end 2004, we have worked with Analysis, Research & Planning Corporation (“ARPC”), nationally recognized consultants in projecting asbestos liabilities, to estimate the amount of asbestos-related indemnity and defense costs at year-end for the next 15 years. Based on its review of fiscal year 2008 activity, ARPC recommended that the assumptions used to estimate our future asbestos liability be updated as of fiscal year-end 2008. Accordingly, we developed a revised estimate of our aggregate indemnity and defense costs through fiscal year-end 2023 considering the advice of ARPC. In the fiscal fourth quarter of 2008, we increased our liability for asbestos indemnity and defense costs through fiscal year-end 2023 to $385,300, which brought our liability to a level consistent with ARPC’s reasonable best estimate. Our estimated asbestos liability decreased during the fiscal six months ended June 30, 2009 as a result of payments amounting to approximately $34,000, partially offset by an increase of $4,800 related to the rolling 15-year asbestos-related liability estimate.

          The amount paid for asbestos litigation, defense and case resolution was $13,400 and $34,000 for the fiscal quarter and six months ended June 30, 2009, respectively, and $17,200 and $37,200 for the fiscal quarter and six months ended June 27, 2008, respectively. During the fiscal quarter and six months ended June 30, 2009, we funded $10,800 and $17,200, respectively, of the payments, while all remaining amounts were paid from insurance proceeds. In fiscal year 2008, proceeds from settlements with our insurers exceeded payments made by $16,100 and $11,200 in the fiscal quarter and six months ended June 27, 2008, respectively. Through June 30, 2009, total cumulative indemnity costs paid were approximately $677,100 and total cumulative defense costs paid were approximately $301,300.

          As of June 30, 2009, total asbestos-related liabilities were comprised of an estimated liability of $139,900 relating to open (outstanding) claims being valued and an estimated liability of $216,200 relating to future unasserted claims through the fiscal second quarter of 2024.

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          Our liability estimate is based upon the following information and/or assumptions: number of open claims, forecasted number of future claims, estimated average cost per claim by disease type — mesothelioma, lung cancer and non-malignancies — and the breakdown of known and future claims into disease type — mesothelioma, lung cancer or non-malignancies. The total estimated liability, which has not been discounted for the time value of money, includes both the estimate of forecasted indemnity amounts and forecasted defense costs. Total defense costs and indemnity liability payments are estimated to be incurred through the fiscal second quarter of 2024, during which period the incidence of new claims is forecasted to decrease each year. We believe that it is likely that there will be new claims filed after the fiscal second quarter of 2024, but in light of uncertainties inherent in long-term forecasts, we do not believe that we can reasonably estimate the indemnity and defense costs that might be incurred after the fiscal second quarter of 2024. Historically, defense costs have represented approximately 30.8% of total defense and indemnity costs.

          The overall historic average combined indemnity and defense cost per resolved claim through June 30, 2009 has been approximately $2.8. The average cost per resolved claim is increasing and we believe it will continue to increase in the future.

          The asbestos-related asset recorded within accounts and notes receivable-other as of June 30, 2009 reflects amounts due in the next 12 months under executed settlement agreements with insurers and does not include any estimate for future settlements. The recorded asbestos-related insurance recovery receivable includes an estimate of recoveries from insurers in the unsettled insurance coverage litigation (referred to below) based upon the application of New Jersey law to certain insurance coverage issues and assumptions relating to cost allocation and other factors as well as an estimate of the amount of recoveries under existing settlements with other insurers. Such amounts have not been discounted for the time value of money.

          Since fiscal year-end 2005, we have worked with Peterson Risk Consulting LLC, nationally recognized experts in the estimation of insurance recoveries, to review our estimate of the value of the settled insurance asset and assist in the estimation of our unsettled asbestos insurance asset. Based on insurance policy data, historical claim data, future liability estimates including the expected timing of payments and allocation methodology assumptions we provided them, Peterson Risk Consulting LLC provided an analysis of the unsettled insurance asset as of June 30, 2009. We utilized that analysis to determine our estimate of the value of the unsettled insurance asset as of June 30, 2009.

          As of June 30, 2009, we estimated the value of our unsettled asbestos insurance asset related to ongoing litigation in New York state court with our subsidiaries’ insurers at $25,900. The litigation relates to the amounts of insurance coverage available for asbestos-related claims and the proper allocation of the coverage among our subsidiaries’ various insurers and our subsidiaries as self-insurers. We believe that any amounts that our subsidiaries might be allocated as self-insurer would be immaterial.

          An adverse outcome in the pending insurance litigation described above could limit our remaining insurance recoveries and result in a reduction in our insurance asset. However, a favorable outcome in all or part of the litigation could increase remaining insurance recoveries above our current estimate. If we prevail in whole or in part in the litigation, we will re-value our asset relating to remaining available insurance recoveries based on the asbestos liability estimated at that time.

          Over the last several years, certain of our subsidiaries have entered into settlement agreements calling for insurers to make lump-sum payments, as well as payments over time, for use by our subsidiaries to fund asbestos-related indemnity and defense costs and, in certain cases, for reimbursement for portions of out-of-pocket costs previously incurred.

          In the fiscal six months ended June 27, 2008, our subsidiaries reached agreements to settle their disputed asbestos-related insurance coverage with two additional insurers. As a result of these settlements, we increased our asbestos-related insurance asset and recorded gains of $20,000 and $35,900 in the fiscal second quarter and six months ended June 27, 2008, respectively. There were no settlements during the fiscal six months ended June 30, 2009.

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          We intend to continue to attempt to negotiate additional settlements where achievable on a reasonable basis in order to minimize the amount of future costs that we would be required to fund out of the cash flows generated from our operations. Unless we settle with the remaining insurers at recovery amounts significantly in excess of our current estimate, it is likely that the amount of our insurance settlements will not cover all future asbestos-related costs and we will be required to fund a portion of such future costs, which will reduce our cash flows and working capital.

          In fiscal year 2006, we were successful in our appeal of a New York state trial court decision that previously had held that New York, rather than New Jersey, law applies in the above coverage litigation with our subsidiaries’ insurers, and as a result, we increased our insurance asset and recorded a gain of $19,500. On February 13, 2007, our subsidiaries’ insurers were granted permission by the appellate court to appeal the decision to the New York Court of Appeals, the state’s highest court. On October 11, 2007, the New York Court of Appeals upheld the appellate court decision in our favor.

          Even if the coverage litigation is resolved in a manner favorable to us, our insurance recoveries (both from the litigation and from settlements) may be limited by insolvencies among our insurers. We have not assumed recovery in the estimate of our asbestos insurance asset from any of our currently insolvent insurers. Other insurers may become insolvent in the future and our insurers may fail to reimburse amounts owed to us on a timely basis. Failure to realize the expected insurance recoveries, or delays in receiving material amounts from our insurers, could have a material adverse effect on our financial condition and our cash flows.

          Based on the fiscal year-end 2008 liability estimate, an increase of 25% in the average per claim indemnity settlement amount would increase the liability by $59,800 and the impact on expense would be dependent upon available insurance recoveries. Assuming no change to the assumptions currently used to estimate our insurance asset, this increase would result in a charge in the statement of operations in the range of approximately 70% to 80% of the increase in the liability. Long-term cash flows would ultimately change by the same amount. Should there be an increase in the estimated liability in excess of this 25%, the percentage of that increase that would be expected to be funded by additional insurance recoveries will decline.

          We had net cash outflows of $17,200 as a result of asbestos liability indemnity payments and defense costs in excess of insurance settlement proceeds during the fiscal six months ended June 30, 2009. We expect to fund a total of $26,500 of the asbestos liability indemnity and defense costs from our cash flows in fiscal year 2009, net of the cash expected to be received from existing insurance settlements. This estimate assumes no additional settlements with insurance companies or elections by us to fund additional payments. As we continue to collect cash from insurance settlements and assuming no increase in our asbestos-related insurance liability or any future insurance settlements, the asbestos-related insurance receivable recorded on our consolidated balance sheet will continue to decrease.

          The estimate of the liabilities and assets related to asbestos claims and recoveries is subject to a number of uncertainties that may result in significant changes in the current estimates. Among these are uncertainties as to the ultimate number and type of claims filed, the amounts of claim costs, the impact of bankruptcies of other companies with asbestos claims, uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, as well as potential legislative changes. Increases in the number of claims filed or costs to resolve those claims could cause us to increase further the estimates of the costs associated with asbestos claims and could have a material adverse effect on our financial condition, results of operations and cash flows.

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          United Kingdom

          Some of our subsidiaries in the United Kingdom have also received claims alleging personal injury arising from exposure to asbestos. To date, 916 claims have been brought against our U.K. subsidiaries of which 363 remained open as of June 30, 2009. None of the settled claims has resulted in material costs to us.

          As of June 30, 2009, we had recorded total liabilities of $43,900 comprised of an estimated liability relating to open (outstanding) claims of $9,100 and an estimated liability relating to future unasserted claims through the fiscal second quarter of 2024 of $34,800. Of the total, $3,200 was recorded in accrued expenses and $40,700 was recorded in asbestos-related liability on the consolidated balance sheet. An asset in an equal amount was recorded for the expected U.K. asbestos-related insurance recoveries, of which $3,200 was recorded in accounts and notes receivable-other and $40,700 was recorded as asbestos-related insurance recovery receivable on the consolidated balance sheet. The liability estimates are based on a U.K. House of Lords judgment that pleural plaque claims do not amount to a compensable injury and accordingly, we have reduced our liability assessment. If this ruling is reversed by legislation, the total asbestos liability and related asset recorded in the U.K. would be approximately $59,600.

Project Claims

          In the ordinary course of business, we are parties to litigation involving clients and subcontractors arising out of project contracts. Such litigation includes claims and counterclaims by and against us for canceled contracts, for additional costs incurred in excess of current contract provisions, as well as for back charges for alleged breaches of warranty and other contract commitments. If we were found to be liable for any of the claims/counterclaims against us, we would incur a charge against earnings to the extent a reserve had not been established for the matter in our accounts or if the liability exceeds established reserves.

          Due to the inherent commercial, legal and technical uncertainties underlying the estimation of all of the project claims described herein, the amounts ultimately realized or paid by us could differ materially from the balances, if any, included in our financial statements, which could result in additional material charges against earnings, and which could also materially adversely impact our financial condition and cash flows.

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          Power Plant Arbitration — Eastern Europe

          In June 2006, we commenced arbitration against a client seeking final payment for our services in connection with two power plants that we designed and built in Eastern Europe. The dispute primarily concerns whether we are liable to the client for liquidated damages (“LDs”) under the contract for delayed completion of the projects. The client contends that it is owed LDs, limited under the contract at approximately €37,600 (approximately $53,200 at the exchange rate in effect as of June 30, 2009), and is retaining as security for these LDs approximately €22,000 (approximately $31,100 at the exchange rate in effect as of June 30, 2009) in contract payments otherwise due to us for work performed. The client contends that it is owed an additional €6,900 (approximately $9,800 at the exchange rate in effect as of June 30, 2009) for the cost of consumable materials it had to incur due to the extended commissioning period on both projects, the cost to relocate a piece of equipment on one of the projects and the cost of various warranty repairs and punch list work. We are seeking payment of the €22,000 (approximately $31,100 at the exchange rate in effect as of June 30, 2009 and which is recorded within contracts in process on the consolidated balance sheet) in retention that is being held by the client for LDs, plus approximately €4,900 (approximately $6,900 at the exchange rate in effect as of June 30, 2009) in interest on the retained funds, as well as approximately €9,100 (approximately $12,900 at the exchange rate in effect as of June 30, 2009) in additional compensation for extra work performed beyond the original scope of the contracts and the client’s failure to procure the required property insurance for the project, which should have provided coverage for some of the damages we incurred on the project related to turbine repairs. In October 2008, a liability award by the arbitration panel in our favor was received. The award includes amounts that are “fixed” and amounts that require substantiation at a hearing on damages, which is scheduled to begin in September 2009. With estimated interest to be awarded at the damages hearing, we believe the fixed amount awarded will be in line with our previously estimated recovery.

          Power Plant Dispute — Ireland

          In 2006, a dispute arose with a client because of material corrosion that is occurring at two power plants we designed and built in Ireland, which began operation in December 2005 and June 2006. There is also corrosion occurring to subcontractor-provided emissions control equipment and induction fans at the back-end of the power plants which is due principally to the low set point temperature design of the emissions control equipment that was set by our subcontractor. We have identified technical solutions to resolve the boiler tube corrosion and emissions control equipment corrosion and during the fiscal fourth quarter of 2008 entered into a settlement with the client under which we are implementing the technical solutions in exchange for a full release of all claims related to the corrosion (including a release from the client’s right under the original contract to reject the plants under our availability guaranty) and the client’s agreement to share the cost of the ameliorative work related to the boiler tube corrosion. Accordingly, the client has withdrawn its notice of arbitration that was originally filed in May 2008.

          Between fiscal year 2006 and the end of fiscal year 2008, we recorded charges totaling $61,700 in relation to this project. The implementation of the technical solutions is anticipated to be completed in 2011.

          Camden County Waste-to-Energy Project

          One of our project subsidiaries, Camden County Energy Recovery Associates, LP (“CCERA”) owns and operates a waste-to-energy facility in Camden County, New Jersey (the “Project”). The Pollution Control Finance Authority of Camden County (“PCFA”) issued bonds to finance the construction of the Project and to acquire a landfill for Camden County’s use. Pursuant to a loan agreement between the PCFA and CCERA, proceeds from the bonds were loaned by the PCFA to CCERA and used by CCERA to finance the construction of the facility. Accordingly, the proceeds of this loan were recorded as debt on CCERA’s balance sheet and, therefore, are included in our consolidated balance sheet. CCERA’s obligation to service the debt incurred pursuant to the loan agreement is limited to depositing all tipping fees and electric revenues received with the trustee of the PCFA bonds. The trustee is required to pay CCERA its service fees prior to servicing the PCFA bonds. CCERA has no other debt repayment obligations under the loan agreement with the PCFA.

          In 1997, the United States Supreme Court effectively invalidated New Jersey’s long-standing municipal solid waste flow rules and regulations, eliminating the guaranteed supply of municipal solid waste to the Project with its corresponding tipping fee revenue. As a result, tipping fees have been reduced to market rate in order to provide a steady supply of fuel to the Project. Since the ruling, those market-based revenues have not been, and are not expected to be, sufficient to service the debt on outstanding bonds issued by the PCFA to finance the construction of the Project.

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          In 1998, CCERA filed suit against the PCFA and other parties seeking, among other things, to void the applicable contracts and agreements governing the Project (Camden County Energy Recovery Assoc. v. N.J. Department of Environmental Protection, et al., Superior Court of New Jersey, Mercer County, L-268-98). Since 1999, the State of New Jersey has provided subsidies sufficient to ensure the payment of each of the PCFA’s debt service payments as they became due. The bonds outstanding in connection with the Project were issued by the PCFA, not by us or CCERA, and the bonds are not guaranteed by either us or CCERA. In the litigation, the defendants have asserted, among other things, that an equitable portion of the outstanding debt on the Project should be allocated to CCERA even though CCERA did not guarantee the bonds.

          At this time, we cannot determine the ultimate outcome of the foregoing and the potential effects on CCERA and the Project. If the State of New Jersey were to fail to subsidize the debt service, and there were to be a default on a debt service payment, the bondholders might proceed to attempt to exercise their remedies, by among other things, seizing the collateral securing the bonds. We do not believe this collateral includes CCERA’s plant.

Environmental Matters

          CERCLA and Other Remedial Matters

          Under U.S. federal statutes, such as the Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), the Clean Water Act and the Clean Air Act, and similar state laws, the current owner or operator of real property and the past owners or operators of real property (if disposal of toxic or hazardous substances took place during such past ownership or operation) may be jointly and severally liable for the costs of removal or remediation of toxic or hazardous substances on or under their property, regardless of whether such materials were released in violation of law or whether the owner or operator knew of, or was responsible for, the presence of such substances. Moreover, under CERCLA and similar state laws, persons who arrange for the disposal or treatment of hazardous or toxic substances may also be jointly and severally liable for the costs of the removal or remediation of such substances at a disposal or treatment site, whether or not such site was owned or operated by such person, which we refer to as an off-site facility. Liability at such off-site facilities is typically allocated among all of the financially viable responsible parties based on such factors as the relative amount of waste contributed to a site, toxicity of such waste, relationship of the waste contributed by a party to the remedy chosen for the site and other factors.

          We currently own and operate industrial facilities and we have also transferred our interests in industrial facilities that we formerly owned or operated. It is likely that as a result of our current or former operations, hazardous substances have affected the facilities or the real property on which they are or were situated. We also have received and may continue to receive claims pursuant to indemnity obligations from the present owners of facilities we have transferred, which claims may require us to incur costs for investigation and/or remediation.

          We are currently engaged in the investigation and/or remediation under the supervision of the applicable regulatory authorities at two of our or our subsidiaries’ former facilities (including Mountain Top, which is described below). In addition, we sometimes engage in investigation and/or remediation without the supervision of a regulatory authority. Although we do not expect the environmental conditions at our present or former facilities to cause us to incur material costs in excess of those for which reserves have been established, it is possible that various events could cause us to incur costs materially in excess of our present reserves in order to fully resolve any issues surrounding those conditions. Further, no assurance can be provided that we will not discover additional environmental conditions at our currently or formerly owned or operated properties, or that additional claims will not be made with respect to formerly owned properties, requiring us to incur material expenditures to investigate and/or remediate such conditions.

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          We have been notified that we are a potentially responsible party (“PRP”) under CERCLA or similar state laws at three off-site facilities. At each of these sites, our liability should be substantially less than the total site remediation costs because the percentage of waste attributable to us compared to that attributable to all other PRPs is low. We do not believe that our share of cleanup obligations at any of the off-site facilities as to which we have received a notice of potential liability will exceed $500 in the aggregate. We have also received and responded to a request for information from the United States Environmental Protection Agency (“USEPA”) regarding a fourth off-site facility. We do not know what, if any, further actions USEPA may take regarding this fourth off-site facility.

          Mountain Top

          In February 1988, one of our subsidiaries, Foster Wheeler Energy Corporation (“FWEC”), entered into a Consent Agreement and Order with the USEPA and the Pennsylvania Department of Environmental Protection (“PADEP”) regarding its former manufacturing facility in Mountain Top, Pennsylvania. The order essentially required FWEC to investigate and remediate as necessary contaminants, including trichloroethylene (“TCE”), in the soil and groundwater at the facility. Pursuant to the order, in 1993 FWEC installed a “pump and treat” system to remove TCE from the groundwater. It is not possible at the present time to predict how long FWEC will be required to operate and maintain this system.

          In the fall of 2004, FWEC sampled the private domestic water supply wells of certain residences in Mountain Top and identified approximately 30 residences whose water supply contained TCE at levels in excess of Safe Drinking Water Act standards. The subject residences are located approximately one mile to the southwest of where the TCE previously was discovered in the soils at the former FWEC facility.

          Since that time, FWEC, USEPA, and PADEP have cooperated in an investigation to, among other things, attempt to identify the source(s) of the TCE in the residential wells. Although FWEC believed the evidence available was not sufficient to support a determination that FWEC was responsible for the TCE in the residential wells, FWEC in October 2004 began providing the potentially affected residences with bottled water. It thereafter arranged for the installation, maintenance, and testing of filters to remove the TCE from the water being drawn from the wells. In August 2005, FWEC entered into a settlement agreement with USEPA whereby FWEC agreed to arrange and pay for the hookup of public water to the affected residences, which involved the extension of a water main and the installation of laterals from the main to the affected residences. The foregoing hookups have been completed. As residences were hooked up, FWEC ceased providing bottled water and filters to them. In March 2009, FWEC agreed with USEPA to arrange and pay for the hookup of approximately five additional residences, even though TCE has not been detected in the wells at those residences, and it also agreed to remediate a “seep” in the affected area. FWEC is incurring costs related to public outreach and communications in the affected area. FWEC may be required to pay the agencies’ costs in overseeing and responding to the situation. FWEC will incur further costs in connection with a Remedial Investigation / Feasibility Study (“RI/FS”) that in March 2009 it agreed to conduct, which RI/FS is likely to include, among other things, continuing to monitor the groundwater in the area of the affected residences. In April 2009, USEPA proposed for listing on the National Priorities List (“NPL”) an area consisting of FWEC’s former manufacturing facility, the affected residences, and any areas to which hazardous substances from the former facility may have come to be located, but USEPA also stated that the proposed listing may not be finalized if FWEC complies with its agreement to conduct the RI/FS. In June 2009, FWEC submitted comments opposing the proposed listing. FWEC has accrued its best estimate of the cost of the foregoing and it reviews this estimate on a quarterly basis.

          Other costs to which FWEC could be exposed could include, among other things, FWEC’s counsel and consulting fees, further agency oversight and/or response costs, costs and/or exposure related to potential litigation, and other costs related to possible further investigation and/or remediation. At present, it is not possible to determine whether FWEC will be determined to be liable for some or all of the items described in this paragraph or to reliably estimate the potential liability associated with the items.

          If one or more third-parties are determined to be a source of the TCE, FWEC will evaluate its options regarding the potential recovery of the costs FWEC has incurred, which options could include seeking to recover those costs from those determined to be a source.

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          Other Environmental Matters

          Our operations, especially our manufacturing and power plants, are subject to comprehensive laws adopted for the protection of the environment and to regulate land use. The laws of primary relevance to our operations regulate the discharge of emissions into the water and air, but can also include hazardous materials handling and disposal, waste disposal and other types of environmental regulation. These laws and regulations in many cases require a lengthy and complex process of obtaining licenses, permits and approvals from the applicable regulatory agencies. Noncompliance with these laws can result in the imposition of material civil or criminal fines or penalties. We believe that we are in substantial compliance with existing environmental laws. However, no assurance can be provided that we will not become the subject of enforcement proceedings that could cause us to incur material expenditures. Further, no assurance can be provided that we will not need to incur material expenditures beyond our existing reserves to make capital improvements or operational changes necessary to allow us to comply with future environmental laws.

          With regard to the foregoing, the waste-to-energy facility operated by our CCERA project subsidiary is subject to certain revisions to New Jersey’s mercury air emission regulations. The revisions make CCERA’s mercury control requirements more stringent, especially when the last phase of the revisions becomes effective in 2012. CCERA’s management believes that the data generated during recent stack testing tends to indicate that the facility will be able to comply with even the most stringent of the regulatory revisions without installing additional control equipment. Even if the equipment had to be installed, CCERA could assert that the project’s sponsor would be responsible to pay for the equipment. However, the sponsor may not have sufficient funds to do so or may assert that it is not so responsible. Estimates of the cost of installing the additional control equipment are approximately $30,000 based on our last assessment.

13. Redomestication

          Foster Wheeler AG was incorporated under the laws of Switzerland on November 18, 2008 and registered in the commercial register of the Canton of Zug, Switzerland on November 25, 2008 as a wholly-owned subsidiary of Foster Wheeler Ltd. At a special court-ordered meeting of common shareholders held on January 27, 2009, the common shareholders of Foster Wheeler Ltd. approved a scheme of arrangement under Bermuda law. On February 9, 2009, after receipt of the approval of the scheme of arrangement by the Supreme Court of Bermuda and the satisfaction of certain other conditions, the transactions contemplated by the scheme of arrangement were effected. Pursuant to the scheme of arrangement, among other things, each holder of whole common shares of Foster Wheeler Ltd., par value $0.01 per share, outstanding immediately before the transaction was effected received registered shares of Foster Wheeler AG, par value CHF 3.00 per share (approximately $2.58 based on the exchange rate as of February 9, 2009, the date when the Redomestication had been completed), on a one-for-one basis in respect of such outstanding Foster Wheeler Ltd. common shares (or, in the case of fractional shares of Foster Wheeler Ltd., cash for such fractional shares in lieu of registered shares of Foster Wheeler AG) and additional paid-in capital decreased by the same amount.

          The scheme of arrangement effectively changed our place of incorporation from Bermuda to the Canton of Zug, Switzerland. The scheme of arrangement was approved by the common shareholders of Foster Wheeler Ltd. on January 27, 2009 and was sanctioned by the Supreme Court of Bermuda on January 30, 2009. On February 9, 2009, the following steps occurred pursuant to the scheme of arrangement:

(1)	all fractional common shares of Foster Wheeler Ltd., totaling approximately 1,336 shares, were cancelled and Foster Wheeler Ltd. paid to each holder of fractional shares that were cancelled an amount based on the average of the high and low trading prices of Foster Wheeler Ltd. common shares on the NASDAQ Global Select Market on February 5, 2009 ($20.63), the business day immediately preceding the effectiveness of the scheme of arrangement;
(2)	all previously outstanding whole common shares of Foster Wheeler Ltd., totaling 126,276,112 whole shares, were cancelled;
(3)	Foster Wheeler Ltd., acting on behalf of its shareholders, issued 1,000 common shares (which constituted all of Foster Wheeler Ltd.’s common shares at such time) to Foster Wheeler AG;
(4)	Foster Wheeler AG increased its share capital and filed amended articles of association reflecting the share capital increase with the Swiss Commercial Register; and

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(5) Foster Wheeler AG issued an aggregate of 126,276,112 registered shares to the holders of whole Foster Wheeler Ltd. common shares that were cancelled.

          As a result of the scheme of arrangement, the common shareholders of Foster Wheeler Ltd. became common shareholders of Foster Wheeler AG and Foster Wheeler Ltd. became a wholly-owned subsidiary of Foster Wheeler AG, a holding company that owns the stock of its various subsidiary companies.

          In connection with consummation of the scheme of arrangement:

• concurrently with the issuance of registered shares to the holders of whole Foster Wheeler Ltd. common shares, Foster Wheeler AG issued to the holders of the preferred shares an aggregate of 139,802 registered shares, which was the number of registered shares of Foster Wheeler AG that such holders would have been entitled to receive had they converted their preferred shares into common shares of Foster Wheeler Ltd. immediately prior to the effectiveness of the scheme of arrangement (with Foster Wheeler Ltd. paying cash in lieu of fractional common shares otherwise issuable totaling approximately one share);

• Foster Wheeler AG executed a supplemental warrant agreement pursuant to which it assumed Foster Wheeler Ltd.’s obligations under the warrant agreement and agreed to issue registered shares of Foster Wheeler AG upon exercise of such warrants in accordance with their terms; and

• Foster Wheeler AG assumed Foster Wheeler Ltd.’s existing obligations in connection with awards granted under Foster Wheeler Ltd.’s incentive plans and other similar employee awards.

          We refer to the foregoing transactions together with the steps of the scheme of arrangement as the “Redomestication.”

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (amounts in thousands of dollars, except share data and per share amounts)

          The following is management’s discussion and analysis of certain significant factors that have affected our financial condition and results of operations for the periods indicated below. This discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto included in this quarterly report on Form 10-Q and our annual report on Form 10-K for the fiscal year ended December 26, 2008, which we refer to as our 2008 Form 10-K.

Safe Harbor Statement

          This management’s discussion and analysis of financial condition and results of operations, other sections of this quarterly report on Form 10-Q and other reports and oral statements made by our representatives from time to time may contain forward-looking statements that are based on our assumptions, expectations and projections about Foster Wheeler AG and the various industries within which we operate. These include statements regarding our expectations about revenues (including as expressed by our backlog), our liquidity, the outcome of litigation and legal proceedings and recoveries from customers for claims and the costs of current and future asbestos claims and the amount and timing of related insurance recoveries. Such forward-looking statements by their nature involve a degree of risk and uncertainty. We caution that a variety of factors, including but not limited to the factors described in Part I, Item 1A, “Risk Factors,” in our 2008 Form 10-K, which we filed with the Securities and Exchange Commission, or SEC, on February 24, 2009, and the following, could cause business conditions and our results to differ materially from what is contained in forward-looking statements:

• benefits, effects or results of our redomestication;

• further deterioration in the economic conditions in the United States and other major international economies;

• changes in investment by the oil and gas, oil refining, chemical/petrochemical and power industries;

• changes in the financial condition of our customers;

• changes in regulatory environments;

• changes in project design or schedules;

• contract cancellations;

• changes in our estimates of costs to complete projects;

• changes in trade, monetary and fiscal policies worldwide;

• compliance with laws and regulations relating to our global operations;

• currency fluctuations;

• war and/or terrorist attacks on facilities either owned by us or where equipment or services are or may be provided by us;

• interruptions to shipping lanes or other methods of transit;

• outcomes of pending and future litigation, including litigation regarding our liability for damages and insurance coverage for asbestos exposure;

• protection and validity of our patents and other intellectual property rights;

• increasing competition by non-U.S. and U.S. companies;

• compliance with our debt covenants;

• recoverability of claims against our customers and others by us and claims by third parties against us; and

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• changes in estimates used in our critical accounting policies.

          Other factors and assumptions not identified above were also involved in the formation of these forward-looking statements and the failure of such other assumptions to be realized, as well as other factors, may also cause actual results to differ materially from those projected. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described above in connection with any forward-looking statements that may be made by us.

          In addition, this management’s discussion and analysis of financial condition and results of operations contains several statements regarding current and future general global economic conditions. These statements are based on our compilation of economic data and analyses from a variety of external sources. While we believe these statements to be reasonably accurate, global economic conditions are difficult to analyze and predict and are subject to significant uncertainty and as a result, these statements may prove to be wrong. The challenges and drivers for each of our business segments are discussed in more detail in the section entitled “—Results of Operations-Business Segments,” within this Item 2.

          We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any additional disclosures we make in proxy statements, quarterly reports on Form 10-Q, annual reports on Form 10-K and current reports on Form 8-K filed with the Securities and Exchange Commission.

Overview

          We operate through two business groups — the Global Engineering & Construction Group, which we refer to as our Global E&C Group, and our Global Power Group. In addition to these two business groups, we also report corporate center expenses and expenses related to certain legacy liabilities, such as asbestos, in the Corporate and Finance Group, which we refer to as the C&F Group.

          Since fiscal year 2007, we have been exploring acquisitions within the engineering and construction industry to strategically complement or expand on our technical capabilities or access to new market segments. During the second fiscal quarter of 2009, we acquired substantially all of the assets of the offshore engineering division of OPE Holdings Ltd., a Canadian company that is listed on the TSX Venture Exchange and which we refer to as OPE. This acquisition expands our upstream oil and gas engineering services capabilities. We are also exploring acquisitions within the power industry to complement our product offering. However, there is no assurance that we will consummate acquisitions in the future.

          At a special court-ordered meeting of common shareholders held on January 27, 2009, the common shareholders of Foster Wheeler Ltd. approved a scheme of arrangement under Bermuda law. On February 9, 2009, after receipt of the approval of the scheme of arrangement by the Supreme Court of Bermuda and the satisfaction of certain other conditions, the transactions contemplated by the scheme of arrangement were effected. Pursuant to the scheme of arrangement, among other things, all previously outstanding whole common shares of Foster Wheeler Ltd. were cancelled and the common shareholders of Foster Wheeler Ltd. became common shareholders of Foster Wheeler AG, and Foster Wheeler Ltd. became a wholly-owned subsidiary of Foster Wheeler AG, a holding company that owns the stock of its various subsidiary companies. The steps of the scheme of arrangement together with certain related transactions, which are collectively referred to as the “Redomestication,” effectively changed our place of incorporation from Bermuda to the Canton of Zug, Switzerland. Please refer to Note 13 to the consolidated financial statements in this quarterly report on Form 10-Q for further information related to the Redomestication.

     Results for the Fiscal Second Quarter and Six Months ended June 30, 2009

          Our consolidated operating revenues decreased 23% to $1,308,800 in the second fiscal quarter of 2009, as compared to $1,701,100 in the corresponding period in fiscal year 2008. The decrease in operating revenues in the second fiscal quarter of 2009 reflects decreased flow-through revenues (described below) of $185,800 (representing 47% of the decrease in consolidated operating revenues), the foreign currency translation impact of the decline in the value of the British pound and Euro relative to the U.S. dollar and a decrease in the volume of business. Our consolidated operating revenues decreased approximately 10% excluding the impact of the change in flow-through revenues and foreign currency translation rates when comparing the second fiscal quarter of 2009 to the corresponding period of fiscal year 2008.

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          Our consolidated operating revenues decreased 26% to $2,573,300 in the first fiscal six months of 2009, as compared to $3,496,700 in the first fiscal six months of 2008. The decrease in operating revenues in the first fiscal six months of 2009 reflects decreased flow-through revenues (described below) of $518,400 (representing 56% of the decrease in consolidated operating revenues), the foreign currency translation impact of the decline in the value of the British pound and Euro relative to the U.S. dollar and a decrease in the volume of business. Our consolidated operating revenues decreased approximately 9% excluding the impact of the change in flow-through revenues and foreign currency translation rates when comparing the first fiscal six months of 2009 to the corresponding period of fiscal year 2008.

          Net income attributable to Foster Wheeler AG was $122,200 in the fiscal second quarter of 2009, compared to $160,800 in the corresponding period in fiscal year 2008. Net income attributable to Foster Wheeler AG for the fiscal second quarter of 2009, compared to the corresponding period of 2008, was unfavorably impacted by the following:

• Decreased contract profit of $26,300 in the fiscal second quarter of 2009, compared to the corresponding period of fiscal year 2008. Please refer to the section entitled “—Results of Operations-Contract Profit” below for further discussion.

• A decrease in equity earnings in certain of our equity interest projects in Italy and Chile of $2,700 for the fiscal second quarter of 2009, compared to the corresponding period of fiscal year 2008. Please refer to the section entitled “—Results of Operations-Other Income, net” below for further discussion.

• A decrease in interest income of $9,700 for the fiscal second quarter of 2009, compared to the corresponding period of fiscal year 2008. Please refer to the section entitled “—Results of Operations-Interest Income” below for further discussion.

• A decrease in income during the fiscal second quarter of 2009 as a result of a net change of $20,000 in asbestos-related provision/(gain), compared to the corresponding period of fiscal year 2008. Please refer to the section entitled “—Results of Operations-Net Asbestos-Related Provision/(Gain)” below for further discussion.

The impact of the above items was partially offset by the following:

• A decrease in selling, general and administrative expenses of $10,000, which is net of increased pension costs of $2,900 related to our U.S. pension plans, during the fiscal second quarter of 2009, compared to the corresponding period in fiscal year 2008. Please refer to the section entitled “—Results of Operations-Selling, General and Administrative (SG&A) Expenses” below for further discussion.

• A decrease in our effective tax rate of 3.6% during the fiscal second quarter of 2009 when compared to the corresponding period in fiscal year 2008, primarily driven by income earned in tax jurisdictions with tax rates lower than the U.S. statutory rate and other permanent differences, partially offset by an increase in our valuation allowance. Please refer to the section entitled “—Results of Operations-Provision for Income Taxes” below for further discussion.

          Net income attributable to Foster Wheeler AG was $195,100 in the first fiscal six months of 2009, compared to $298,800 in the corresponding period in fiscal year 2008. Net income attributable to Foster Wheeler AG for the first fiscal six months of 2009, compared to the corresponding period of 2008, was unfavorably impacted by the following:

• Decreased contract profit of $80,500 in the first fiscal six months of 2009, compared to the corresponding period of fiscal year 2008. Please refer to the section entitled “—Results of Operations-Contract Profit” below for further discussion.

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• A decrease in equity earnings in certain of our equity interest projects in Italy and Chile of $8,000 for the first fiscal six months of 2009, compared to the corresponding period of fiscal year 2008. Please refer to the section entitled “—Results of Operations-Other Income, net” below for further discussion.

• A decrease in interest income of $17,600 for the first fiscal six months of 2009, compared to the corresponding period of fiscal year 2008. Please refer to the section entitled “—Results of Operations-Interest Income” below for further discussion.

• A decrease in income as a result of a net change of $36,000 in asbestos-related provision/(gain) during the first fiscal six months of 2009, compared to the corresponding period of fiscal year 2008. Please refer to the section entitled “—Results of Operations-Net Asbestos-Related Provision/(Gain)” below for further discussion.

The impact of the above items was partially offset by the following:

• A decrease in selling, general and administrative expenses of $5,700, which is net of increased pension costs of $5,900 related to our U.S. pension plans, during the first fiscal six months of 2009, compared to the corresponding period in fiscal year 2008. Please refer to the section entitled “—Results of Operations-Selling, General and Administrative (SG&A) Expenses” below for further discussion.

• A decrease in our effective tax rate of 3.4% during the first fiscal six months of 2009 when compared to the corresponding period in fiscal year 2008, primarily driven by income earned in tax jurisdictions with tax rates lower than the U.S. statutory rate and other permanent differences, partially offset by an increase in our valuation allowance. Please refer to the section entitled “—Results of Operations-Provision for Income Taxes” below for further discussion.

          We generated net cash from operating activities of $94,000 in the first fiscal six months of 2009, as compared to $244,800 in the corresponding period in fiscal year 2008.

          Additional metrics included the following:

	Fiscal Quarters Ended
	June 30,		March 31,		June 27,
	2009		2009		2008
New orders, measured in terms of future revenues	$	933,800	$	906,000	$	840,500

	As of
	June 30,		March 31,		June 27,
	2009		2009		2008
Backlog of unfilled orders, measured in future revenues	$	4,890,500	$	4,911,200	$	8,172,800
Backlog, measured in terms of Foster Wheeler scope*	$	2,374,100	$	2,411,900	$	3,323,300
E&C man-hours in backlog (in thousands)		15,200		16,200		13,500

* As defined in the section entitled “—Backlog and New Orders” within Item 2.

     Challenges and Drivers

          Our primary operating focus continues to be booking quality new business and executing our contracts well. The global markets in which we operate are largely dependent on overall economic growth and the resultant demand for oil and gas, electric power, petrochemicals and refined products.

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          In our Global E&C business, we expect long-term demand to be strong for the end products produced by our clients, and to continue to stimulate investment by our clients in new and expanded plants. Notwithstanding the foregoing, the current weakness in the global economy has caused many of our E&C clients to reevaluate the size, timing and scope of their capital spending plans in relation to the kinds of energy and petrochemical projects in which we specialize. The challenges and drivers for our Global E&C Group are discussed in more detail in the section entitled “—Results of Operations-Business Segments-Global E&C Group-Overview of Segment” within this Item 2. Attracting and retaining qualified technical personnel to execute the existing backlog of unfilled orders and future bookings continues to be a management priority. Equally important is ensuring that we maintain an appropriate management infrastructure to integrate and manage the technical personnel.

          In our Global Power Group business, new order activity was unfavorably affected by several trends beginning in fiscal year 2008 and continuing into fiscal year 2009. These trends include weakness in the global economy and its impact on the near-term growth in demand for electricity, political and environmental sensitivity regarding coal-fired steam generators, credit concerns among certain clients and the recent sharp decline in natural gas prices, which increased the attractiveness of that fuel, in relation to coal, for the generation of electricity. The challenges and drivers for our Global Power Group are discussed in more detail in the section entitled “—Results of Operations-Business Segments-Global Power Group-Overview of Segment” within this Item 2.

New Orders

          The Global E&C Group’s new orders, measured in future revenues, increased to $847,700 in the fiscal second quarter of 2009 as compared to $809,500 in the fiscal first quarter of 2009 and $646,300 in the fiscal second quarter of 2008. These new orders are inclusive of flow-through revenues, as defined below, of $335,700, $96,700 and $108,300 for the fiscal second quarter of 2009, fiscal first quarter of 2009 and fiscal second quarter of 2008, respectively.

          The Global Power Group’s new orders decreased to $86,100 in the fiscal second quarter of 2009, as compared to $96,500 in the fiscal first quarter of 2009 and $194,200 in the fiscal second quarter of 2008. Our new orders during the fiscal second quarter of 2009 were impacted by the continuation of delays and cancellations of prospective projects occurring in the power markets that we serve.

Results of Operations:

     Operating Revenues:

	June 30, 2009		June 27, 2008		$ Change			% Change
Fiscal quarters ended	$	1,308,801	$	1,701,022	$	(392,221	)		(23.1	)%
Fiscal six months ended	$	2,573,324	$	3,496,746	$	(923,422	)		(26.4	)%

          The composition of our operating revenues varies from period to period based on the portfolio of contracts in execution during any given period. Our operating revenues are therefore dependent on our portfolio of contracts, the strength of the various geographic markets and industries we serve and our ability to address those markets and industries.

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          The geographic dispersion of our consolidated operating revenues for the fiscal quarters and six months ended June 30, 2009 and June 27, 2008 based upon where our projects are being executed, were as follows:

	Fiscal Quarters Ended										Fiscal Six Months Ended
	June 30,		June 27,								June 30,		June 27,
	2009		2008		$ Change			% Change			2009		2008		$ Change			% Change
Asia	$	439,102	$	416,653	$	22,449			5.4	%	$	830,882	$	734,730	$	96,152			13.1	%
Australasia *		266,571		344,043		(77,472	)		(22.5	)%		515,938		875,950		(360,012	)		(41.1	)%
Europe		286,445		346,430		(59,985	)		(17.3	)%		577,860		715,734		(137,874	)		(19.3	)%
Middle East		110,164		259,513		(149,349	)		(57.5	)%		218,006		587,240		(369,234	)		(62.9	)%
North America		157,761		293,022		(135,261	)		(46.2	)%		327,746		499,038		(171,292	)		(34.3	)%
South America		48,758		41,361		7,397			17.9	%		102,892		84,054		18,838			22.4	%
Total	$	1,308,801	$	1,701,022	$	(392,221	)		(23.1	)%	$	2,573,324	$	3,496,746	$	(923,422	)		(26.4	)%

* Australasia primarily represents Australia, New Zealand and the Pacific Islands.

          The decrease in operating revenues in the fiscal second quarter and six months ended June 30, 2009, compared to the corresponding periods of fiscal year 2008, were driven by decreased flow-through revenues (described below), the foreign currency translation impact of the decline in the value of the British pound and Euro relative to the U.S. dollar and decreased volume of business. Our consolidated operating revenues decreased approximately 10% and 9% excluding the impact of the change in flow-through revenues and foreign currency translation rates when comparing the fiscal second quarter and six months ended June 30, 2009, respectively, to the corresponding periods of fiscal year 2008.

          Our Global E&C Group’s operating revenues in the fiscal second quarter and six months ended June 30, 2009, included $549,100 and $1,060,300, respectively, of flow-through revenues. Flow-through revenues in the fiscal second quarter and six months ended June 30, 2009 decreased by $185,800 and $518,400, respectively, compared to the corresponding periods in fiscal year 2008, representing 85% and 79%, respectively, of the decreases in our Global E&C Group’s operating revenues. Flow-through revenues and costs result when we purchase materials, equipment or third-party services on behalf of our customer on a reimbursable basis with no profit on the materials, equipment or third-party services and where we have the overall responsibility as the contractor for the engineering specifications and procurement or procurement services for the materials, equipment or third-party services included in flow-through costs. Flow-through revenues and costs do not impact contract profit or net earnings.

          Our Global E&C Group’s operating revenues in the fiscal second quarter and six months ended June 30, 2009 increased approximately 9% and 3%, respectively, excluding the impact of the change in flow-through revenues and foreign currency translation rates, compared to the corresponding periods of fiscal year 2008. Operating revenues in the oil and gas, petrochemical and refining industries increased compared to the corresponding periods of fiscal year 2008 and demand for projects in these industries remains strong, as evidenced by our new order activity. Please refer to the section entitled, “—Business Segments” within this Item 2 for a discussion of our view of the market outlook for our Global E&C Group.

          Our Global Power Group, which predominantly serves the power generation industry, experienced decreases in operating revenues during the fiscal second quarter and six months ended June 30, 2009 of $173,000 and $265,600, respectively, compared to the corresponding periods of fiscal year 2008, which represented 44% and 29%, respectively, of the decreases in our consolidated operating revenues. Our Global Power Group’s operating revenues in the fiscal second quarter and six months ended June 30, 2009 decreased approximately 31% and 24%, respectively, excluding the impact of the change in foreign currency translation rates compared to the corresponding periods of fiscal year 2008.

          Please refer to the section entitled “—Business Segments” within this Item 2 for further information.

     Contract Profit:

	June 30, 2009		June 27, 2008		$ Change			% Change
Fiscal quarters ended	$	219,959	$	246,216	$	(26,257	)		(10.7	)%
Fiscal six months ended	$	382,711	$	463,187	$	(80,476	)		(17.4	)%

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          Contract profit is computed as operating revenues less cost of operating revenues. “Flow-through” amounts are recorded both as operating revenues and cost of operating revenues with no contract profit. Contract profit margins are computed as contract profit divided by operating revenues. Flow-through revenues reduce the contract profit margin calculation as they are included in operating revenues without any corresponding impact on contract profit. As a result, we analyze our contract profit margins excluding the impact of flow-through revenues as we believe that this is a more accurate measure of our operating performance.

          The decrease in contract profit in the fiscal second quarter of 2009, compared to the corresponding period of fiscal year 2008, resulted primarily from the net impact of the following:

• Our Global E&C Group experienced decreased contract profit mainly attributable to a foreign currency translation impact of approximately $22,900 which was primarily driven by the decline in value of the British pound and Euro relative to the U.S. dollar. Excluding the foreign currency translation impact, contract profit increased driven by the increased volume of operating revenues, excluding the impact of the change in flow-through revenues and foreign currency translation rates described above, while contract profit margins remained relatively unchanged.

• Our Global Power Group experienced decreased contract profit mainly attributable to decreased volume of operating revenues and a foreign currency translation impact of approximately $7,100 which was primarily driven by the decline in value of the Euro relative to the U.S. dollar, partially offset by increased contract profit margins.

          The decrease in contract profit in the first fiscal six months of 2009, compared to the corresponding period of fiscal year 2008, resulted primarily from the net impact of the following:

• Our Global E&C Group experienced decreased contract profit mainly attributable to a foreign currency translation impact of approximately $43,300 which was primarily driven by the decline in value of the British pound and Euro relative to the U.S. dollar. Excluding the foreign currency translation impact, contract profit decreased slightly driven by decreased contract profit margins, partially offset by increased volume of operating revenues, excluding the impact of the change in flow-through revenues and foreign currency translation rates described above.

• Our Global Power Group experienced decreased contract profit mainly attributable to a decreased volume of operating revenues, a foreign currency translation impact of approximately $10,300 which was primarily driven by the decline in value of the Euro relative to the U.S. dollar and a $7,500 commitment fee received in the fiscal first quarter of 2008 for a contract that our Global Power Group was not awarded, partially offset by increased contract profit margins, excluding the commitment fee noted above.

          Please refer to the section entitled “—Business Segments” within this Item 2 for further information.

     Selling, General and Administrative (SG&A) Expenses:

	June 30, 2009		June 27, 2008		$ Change			% Change
Fiscal quarters ended	$	69,024	$	79,044	$	(10,020	)		(12.7	)%
Fiscal six months ended	$	138,272	$	143,940	$	(5,668	)		(3.9	)%

          SG&A expenses include the costs associated with general management, sales pursuit, including proposal expenses, and research and development costs.

          The decrease in SG&A expenses in the fiscal second quarter of 2009, compared to the corresponding period in fiscal year 2008, resulted from decreases in general overhead costs of $7,900, which is net of increased pension costs of $2,900 related to our U.S. pension plans, and sales pursuit costs of $2,100, while research and development costs were relatively unchanged.

          The decrease in SG&A expenses in the first fiscal six months of 2009, compared to the corresponding period in fiscal year 2008, resulted from decreases in general overhead costs of $3,900, which is net of increased pension costs of $5,900 related to our U.S. pension plans, and sales pursuit costs of $1,900, while research and development costs were relatively unchanged.

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     Other Income, net:

	June 30, 2009		June 27, 2008		$ Change			% Change
Fiscal quarters ended	$	11,490	$	17,643	$	(6,153	)		(34.9	)%
Fiscal six months ended	$	19,693	$	31,671	$	(11,978	)		(37.8	)%

          Other income, net in the fiscal second quarter of 2009 consisted primarily of $10,700 in equity earnings generated from our investments, primarily from our ownership interests in build, own and operate projects in Italy and Chile. The decrease in other income, net in the fiscal second quarter of 2009, compared to the corresponding period of fiscal year 2008, resulted primarily from the following:

• A decrease in equity earnings of $1,700 in our Global E&C Group’s projects in Italy, which included the net impact of the following:

o A $5,200 increase in equity earnings in the fiscal second quarter of 2008, as a result of a regulatory ruling that provided for reimbursement of costs associated with emission rights that were incurred prior to the fiscal second quarter of 2008.

o A $400 increase in equity earnings in the fiscal second quarter of 2009 related to a new project which commenced operation subsequent to the fiscal second quarter of 2008.

• A decrease in equity earnings in our Global Power Group’s project in Chile of $1,000 which included a $1,500 decrease in equity earnings related to a decrease in the average electric tariff rates when compared to the average electric tariff rates in effect during the fiscal second quarter of 2008.

• A $1,300 gain from an insurance settlement in the fiscal second quarter of 2008.

          Other income, net in the first fiscal six months of 2009 consisted primarily of $17,500 in equity earnings generated from our investments, primarily from our ownership interests in build, own and operate projects in Italy and Chile. The decrease in other income, net in the first fiscal six months of 2009, compared to the corresponding period of fiscal year 2008, resulted primarily from the following:

• A decrease in equity earnings of $3,600 in our Global E&C Group’s projects in Italy, which included the net impact of the following:

o A $3,400 increase in equity earnings in the first fiscal six months of 2008, as a result of a regulatory ruling that provided for reimbursement of costs associated with emission rights that were incurred prior to the first fiscal six months of 2008.

o A $1,500 increase in equity earnings in the first fiscal six months of 2009 related to a new project which commenced operation subsequent to the first fiscal six months of 2008.

• A decrease in equity earnings in our Global Power Group’s project in Chile of $4,400 which included a $3,600 decrease in equity earnings related to a decrease in the average electric tariff rates when compared to the average electric tariff rates in effect during the first fiscal six months of 2008.

• A $1,300 gain from an insurance settlement in the first fiscal six months of 2008.

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     Other Deductions, net:

	June 30, 2009		June 27, 2008		$ Change		% Change
Fiscal quarters ended	$	6,898	$	5,207	$	1,691		32.5	%
Fiscal six months ended	$	12,985	$	11,592	$	1,393		12.0	%

          Other deductions, net in the fiscal second quarter of 2009 consisted primarily of $3,300 of legal fees, $1,400 of consulting fees, $900 of bank fees, $500 provision for dispute resolution and environmental remediation costs, $500 loss on sale of fixed assets and a net $500 in tax penalties, which included $200 of previously accrued tax penalties that were ultimately not assessed, partially offset by $800 of net foreign exchange gains. Net foreign exchange gains include the net amount of transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency of our subsidiaries.

          Other deductions, net in the fiscal second quarter of 2008 consisted primarily of $6,500 of legal fees, $800 of bank fees, $500 of consulting fees and a $400 provision for dispute resolution and environmental remediation costs, partially offset by a net $2,400 reduction in tax penalties, which included $3,000 of previously accrued tax penalties that were ultimately not assessed, and $1,000 of net foreign exchange gains.

          Other deductions, net in the first fiscal six months of 2009 consisted primarily of $7,400 of legal fees, $2,000 of consulting fees, $1,900 of bank fees, a net $400 in tax penalties, which included $800 of previously accrued tax penalties that were ultimately not assessed, $600 provision for dispute resolution and environmental remediation costs and $500 loss on sale of fixed assets, partially offset by $1,500 of net foreign exchange gains.

          Other deductions, net in the first fiscal six months of 2008 consisted primarily of $12,600 of legal fees, $2,100 of bank fees, a $1,800 provision for dispute resolution and environmental remediation costs and $1,400 of consulting fees, partially offset by $6,500 of net foreign exchange gains and a net $1,600 reduction in tax penalties, which included $3,000 of previously accrued tax penalties that were ultimately not assessed.

     Interest Income:

	June 30, 2009		June 27, 2008		$ Change			% Change
Fiscal quarters ended	$	2,426	$	12,167	$	(9,741	)		(80.1	)%
Fiscal six months ended	$	5,098	$	22,698	$	(17,600	)		(77.5	)%

          The decreases in interest income in the fiscal second quarter and six months ended June 30, 2009, as compared to the corresponding periods of fiscal year 2008, were driven primarily by lower interest rates and investment yields and, to a lesser extent, the impact of lower average cash and cash equivalents balances during the fiscal second quarter and six months ended June 30, 2009 when compared to the corresponding periods in fiscal year 2008.

     Interest Expense:

	June 30, 2009		June 27, 2008		$ Change			% Change
Fiscal quarters ended	$	1,302	$	4,860	$	(3,558	)		(73.2	)%
Fiscal six months ended	$	5,469	$	11,011	$	(5,542	)		(50.3	)%

          The decreases in interest expense in the fiscal second quarter and six months ended June 30, 2009, compared to the corresponding periods of fiscal year 2008, primarily resulted from net reductions in both periods of $2,200 of accrued interest expense on unrecognized tax benefits, which includes $2,700 and $3,200, respectively, of previously accrued interest expense on unrecognized tax benefits that were ultimately not assessed, and decreased interest expense related to decreased borrowings under several of our special-purpose limited recourse project debt facilities (please refer to Note 4 to the consolidated financial statements in this quarterly report on Form 10-Q for a detailed listing of the outstanding balances under our special-purpose limited recourse project debt), partially offset by increased interest expense related to increased borrowings under our FW Power S.r.L. special-purpose limited recourse project debt as we continue construction of the electric power generating wind farm projects in Italy.

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     Net Asbestos-Related Provision/(Gain):

	June 30, 2009		June 27, 2008			$ Change		% Change
Fiscal quarters ended	$	1,756	$	(18,275	)	$	20,031		(109.6	)%
Fiscal six months ended	$	3,506	$	(32,463	)	$	35,969		(110.8	)%

          The net asbestos-related provision in the fiscal second quarter and six months ended June 30, 2009 resulted from expenses of $1,800 and $3,500, respectively, related to the reevaluation of our asbestos liability and related asset resulting from our rolling 15-year asbestos liability estimate.

          In the first fiscal six months of 2008, our subsidiaries reached agreements to settle their disputed asbestos-related insurance coverage with two insurers. As a result of these settlements, we recorded gains of $20,000 and $35,900 in the fiscal second quarter and six months ended June 27, 2008, respectively, which are partially offset by charges of $1,700 and $3,400 in the fiscal second quarter and six months ended June 27, 2008, respectively.

          Please refer to Note 12 to the consolidated financial statements in this quarterly report on Form 10-Q for further information.

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     Provision for Income Taxes:

	June 30, 2009		June 27, 2008		$ Change			% Change
Fiscal quarters ended	$	27,561	$	43,883	$	(16,322	)		(37.2	)%
Fiscal six months ended	$	45,564	$	83,633	$	(38,069	)		(45.5	)%

          The tax provision for each year-to-date period is calculated by multiplying pretax income by the estimated annual effective tax rate for such period. Our effective tax rate can fluctuate significantly from period to period and may differ significantly from the U.S. federal statutory rate as a result of income taxed in various non-U.S. jurisdictions with rates different from the U.S. statutory rate, as a result of our inability to recognize a tax benefit for losses generated by certain unprofitable operations and as a result of the varying mix of income earned in the jurisdictions in which we operate. In addition, Statement of Financial Accounting Standards, or SFAS, No. 109, “Accounting for Income Taxes,” requires us to reduce our deferred tax benefits by a valuation allowance when, based upon available evidence, it is more likely than not that the tax benefit of losses (or other deferred tax assets) will not be realized in the future. In periods when operating units subject to a valuation allowance generate pretax earnings, the corresponding reduction in the valuation allowance favorably impacts our effective tax rate. Conversely, in periods in which operating units subject to a valuation allowance generate pretax losses, the corresponding increase in the valuation allowance has an unfavorable impact on our effective tax rate.

          First Fiscal Six Months of 2009

          Our effective tax rate for the first fiscal six months of 2009 was lower than the U.S. statutory rate of 35% due principally to the impact of the following:

• Income earned in tax jurisdictions with tax rates lower than the U.S. statutory rate, which is expected to contribute to an approximate 18-percentage point reduction in the effective tax rate for the full year 2009.

• A valuation allowance increase because we are unable to recognize a tax benefit for losses subject to valuation allowance in certain jurisdictions (primarily the United States), which is expected to contribute to an approximate three-percentage point increase in the effective tax rate for the full year 2009, and other permanent differences.

          First Fiscal Six Months of 2008

          Our effective tax rate for the first fiscal six months of 2008 was lower than the U.S. statutory rate of 35% due principally to the impact of the following:

• Income earned in tax jurisdictions with tax rates lower than the U.S. statutory rate, which contributed to an approximate ten-percentage point reduction in the effective tax rate; and

• A valuation allowance decrease because we recognized earnings in jurisdictions where we had a full valuation allowance, which contributed to an approximate five-percentage point reduction in the effective tax rate.

          These variances were partially offset by losses in certain other jurisdictions for which no benefit is recognized (a valuation allowance is established) and other permanent differences.

          We monitor the jurisdictions for which valuation allowances against deferred tax assets were established in previous years, and we evaluate, on a quarterly basis, the need for the valuation allowances against deferred tax assets in those jurisdictions. Such evaluation includes a review of all available evidence, both positive and negative, in determining whether a valuation allowance is necessary.

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          For statutory purposes, the majority of the U.S. federal tax benefits, against which valuation allowances have been established, do not expire until 2024 and beyond, based on current tax laws.

     Net Income Attributable to Noncontrolling Interests:

	June 30, 2009		June 27, 2008		$ Change		% Change
Fiscal quarters ended	$	5,130	$	552	$	4,578		829.3	%
Fiscal six months ended	$	6,639	$	1,025	$	5,614		547.7	%

          Net income attributable to noncontrolling interests represents third-party ownership interests in the results of our Global Power Group’s Martinez, California gas-fired cogeneration facility and our manufacturing facilities in Poland and the People’s Republic of China and our Global E&C Group’s South African operations.

          The increases in net income attributable to noncontrolling interests in the fiscal second quarter and six months ended June 30, 2009, compared to the corresponding periods in fiscal year 2008, primarily resulted from increased earnings of $1,800 and $2,200, respectively, from our operations in Martinez, California and increases of $1,300 and $2,200, respectively, from our operations in South Africa, which was a wholly-owned subsidiary during the first fiscal six months of 2008.

     EBITDA:

	June 30, 2009		June 27, 2008		$ Change			% Change
Fiscal quarters ended	$	161,962	$	220,428	$	(58,466	)		(26.5	)%
Fiscal six months ended	$	267,546	$	415,748	$	(148,202	)		(35.6	)%

          The decrease in EBITDA for the fiscal second quarter of 2009, compared to the corresponding period of 2008, resulted primarily from decreased contract profit of $26,300, decreased equity earnings in certain of our equity interest projects in Italy and Chile of $2,700, decreased interest income of $9,700, and a decrease in income as a result of the net change of $20,000 in the net asbestos-related provision/(gain), partially offset by decreased selling, general and administrative expenses of $10,000 as compared to these amounts in the corresponding period of fiscal year 2008. Please refer to the preceding discussion of each of these items within this “—Results of Operations” section.

          The decrease in EBITDA for the first fiscal six months of 2009, compared to the corresponding period of 2008, resulted primarily from decreased contract profit of $80,500, decreased equity earnings in certain of our equity interest projects in Italy and Chile of $8,000, decreased interest income of $17,600, and a decrease in income as a result of a net change of $36,000 in the net asbestos-related provision/(gain), partially offset by decreased selling, general and administrative expenses of $5,700 as compared to these amounts in the corresponding period of fiscal year 2008. Please refer to the preceding discussion of each of these items within this “—Results of Operations” section.

          See the individual segment explanations below for additional details.

          EBITDA is a supplemental financial measure not defined in generally accepted accounting principles, or GAAP. We define EBITDA as income attributable to Foster Wheeler AG before interest expense, income taxes, depreciation and amortization. We have presented EBITDA because we believe it is an important supplemental measure of operating performance. Certain covenants under our current and prior senior credit agreements use an adjusted form of EBITDA such that in the covenant calculations the EBITDA as presented herein is adjusted for certain unusual and infrequent items specifically excluded in the terms of our current and prior senior credit agreements. We believe that the line item on the consolidated statement of operations entitled “net income attributable to Foster Wheeler AG” is the most directly comparable GAAP financial measure to EBITDA. Since EBITDA is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, net income attributable to Foster Wheeler AG as an indicator of operating performance or any other GAAP financial measure. EBITDA, as calculated by us, may not be comparable to similarly titled measures employed by other companies. In addition, this measure does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. As EBITDA excludes certain financial information that is included in net income attributable to Foster Wheeler AG, users of this financial information should consider the type of events and transactions that are excluded. Our non-GAAP performance measure, EBITDA, has certain material limitations as follows:

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• It does not include interest expense. Because we have borrowed money to finance some of our operations, interest is a necessary and ongoing part of our costs and has assisted us in generating revenue. Therefore, any measure that excludes interest expense has material limitations;

• It does not include taxes. Because the payment of taxes is a necessary and ongoing part of our operations, any measure that excludes taxes has material limitations; and

• It does not include depreciation and amortization. Because we must utilize property, plant and equipment and intangible assets in order to generate revenues in our operations, depreciation and amortization are necessary and ongoing costs of our operations. Therefore, any measure that excludes depreciation and amortization has material limitations.

          A reconciliation of EBITDA to net income attributable to Foster Wheeler AG is shown below.

			Global		Global		C&F
	Total		E&C Group		Power Group		Group (1)
Fiscal Quarter Ended June 30, 2009:
EBITDA (2)	$	161,962	$	130,628	$	53,780	$	(22,446	)
Less: Interest expense		1,302
Less: Depreciation and amortization		10,895
Less: Provision for income taxes		27,561
Net income attributable to Foster Wheeler AG	$	122,204
Fiscal Quarter Ended June 27, 2008:
EBITDA (3)	$	220,428	$	155,688	$	68,378	$	(3,638	)
Less: Interest expense		4,860
Less: Depreciation and amortization		10,930
Less: Provision for income taxes		43,883
Net income attributable to Foster Wheeler AG	$	160,755
Fiscal Six Months Ended June 30, 2009:
EBITDA (4)	$	267,546	$	211,910	$	102,563	$	(46,927	)
Less: Interest expense		5,469
Less: Depreciation and amortization		21,446
Less: Provision for income taxes		45,564
Net income attributable to Foster Wheeler AG	$	195,067
Fiscal Six Months Ended June 27, 2008:
EBITDA (5)	$	415,748	$	290,148	$	132,794	$	(7,194	)
Less: Interest expense		11,011
Less: Depreciation and amortization		22,286
Less: Provision for income taxes		83,633
Net income attributable to Foster Wheeler AG	$	298,818

(1)	Includes general corporate income and expense, our captive insurance operation and the elimination of transactions and balances related to intercompany interest.
(2)	Includes in the fiscal quarter ended June 30, 2009: increased contract profit of $20,200 from the regular revaluation of final estimated contract profit*: $18,000 in our Global E&C Group and $2,200 in our Global Power Group; and a provision of $1,800 in our C&F Group on the revaluation of our asbestos liability and related asset.
(3)	Includes in the fiscal quarter ended June 27, 2008: increased/(decreased) contract profit of $13,600 from the regular revaluation of final estimated contract profit*: $16,100 in our Global E&C Group and $(2,500) in

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	our Global Power Group; a gain of $20,000 in our C&F Group on the settlement of coverage litigation with an asbestos insurance carrier; and a provision of $1,700 in our C&F Group on the revaluation of our asbestos liability and related asset.
(4)	Includes in the fiscal six months ended June 30, 2009: increased contract profit of $26,200 from the regular revaluation of final estimated contract profit*: $24,500 in our Global E&C Group and $1,700 in our Global Power Group; and a provision of $3,500 in our C&F Group on the revaluation of our asbestos liability and related asset.
(5)	Includes in the fiscal six months ended June 27, 2008: increased/(decreased) contract profit of $13,000 from the regular revaluation of final estimated contract profit*: $18,300 in our Global E&C Group and $(5,300) in our Global Power Group; a gain of $35,900 in our C&F Group on the settlement of coverage litigation with two asbestos insurance carriers; and a charge of $3,400 in our C&F Group on the revaluation of our asbestos liability and related asset.
*	Please refer to “Revenue Recognition on Long-Term Contracts” in Note 1 to the consolidated financial statements in this quarterly report on Form 10-Q for further information regarding changes in our final estimated contract profit.

          The accounting policies of our business segments are the same as those described in our summary of significant accounting policies. The only significant intersegment transactions relate to interest on intercompany balances. We account for interest on those arrangements as if they were third-party transactions—i.e. at current market rates, and we include the elimination of that activity in the results of the C&F Group.

Business Segments

          EBITDA, as discussed and defined above, is the primary measure of operating performance used by our chief operating decision maker.

     Global E&C Group

	Fiscal Quarters Ended										Fiscal Six Months Ended
	June 30,		June 27,								June 30,		June 27,
	2009		2008		$ Change			% Change			2009		2008		$ Change			% Change
Operating revenues	$	1,030,471	$	1,249,730	$	(219,259	)		(17.5	)%	$	1,982,883	$	2,640,731	$	(657,848	)		(24.9	)%
EBITDA	$	130,628	$	155,688	$	(25,060	)		(16.1	)%	$	211,910	$	290,148	$	(78,238	)		(27.0	)%

     Results

          The geographic dispersion of our Global E&C Group’s operating revenues for the fiscal quarters and six months ended June 30, 2009 and June 27, 2008 based upon where our projects are being executed, were as follows:

	Fiscal Quarters Ended										Fiscal Six Months Ended
	June 30,		June 27,								June 30,		June 27,
	2009		2008		$ Change			% Change			2009		2008		$ Change			% Change
Asia	$	413,434	$	377,479	$	35,955			9.5	%	$	780,396	$	641,880	$	138,516			21.6	%
Australasia *		264,921		341,813		(76,892	)		(22.5	)%		512,401		872,195		(359,794	)		(41.3	)%
Europe		153,198		208,472		(55,274	)		(26.5	)%		306,038		429,830		(123,792	)		(28.8	)%
Middle East		110,164		259,473		(149,309	)		(57.5	)%		218,006		587,127		(369,121	)		(62.9	)%
North America		59,691		52,781		6,910			13.1	%		118,349		93,474		24,875			26.6	%
South America		29,063		9,712		19,351			199.2	%		47,693		16,225		31,468			193.9	%
Total	$	1,030,471	$	1,249,730	$	(219,259	)		(17.5	)%	$	1,982,883	$	2,640,731	$	(657,848	)		(24.9	)%

* Australasia primarily represents Australia, New Zealand and the Pacific Islands.

          Our Global E&C Group’s operating revenues in the fiscal second quarter and six months ended June 30, 2009 included $549,100 and $1,060,300, respectively, of flow-through revenues. Flow-through revenues in the fiscal second quarter and six months ended June 30, 2009 decreased by $185,800 and $518,400, respectively, compared to the corresponding periods in fiscal year 2008, representing 85% and 79%, respectively, of the decreases in our Global E&C Group’s operating revenues.

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          Our Global E&C Group’s operating revenues in the fiscal second quarter and six months ended June 30, 2009 increased approximately 9% and 3%, respectively, excluding the impact of the change in flow-through revenues and foreign currency translation rates, compared to the corresponding periods of fiscal year 2008. Operating revenues in the oil and gas, petrochemical and refining industries increased compared to the corresponding periods of fiscal year 2008 and demand for projects in these industries remains strong, as evidenced by our new order activity.

          Please refer to the section entitled, “—Overview of Segment” below for our view of the market outlook for our Global E&C Group.

          The decrease in our Global E&C Group’s EBITDA in the fiscal second quarter of 2009, as compared to the corresponding period of fiscal year 2008, resulted primarily from the following:

• Our Global E&C Group experienced decreased contract profit mainly attributable to a foreign currency translation impact of approximately $22,900 which was primarily driven by the decline in value of the British pound and Euro relative to the U.S. dollar. Excluding the foreign currency translation impact, contract profit increased driven by the increased volume of operating revenues, excluding the impact of the change in flow-through revenues and foreign currency translation rates described above, while contract profit margins remained relatively unchanged.

• A decrease in equity earnings in our Global E&C Group’s projects in Italy of $1,700 for the fiscal second quarter of 2009, compared to the corresponding period of fiscal year 2008. Please refer to the section entitled “—Results of Operations-Other Income, net” above for further discussion.

          The decrease in our Global E&C Group’s EBITDA in the first fiscal six months of 2009, as compared to the corresponding period of fiscal year 2008, resulted primarily from the following:

• Our Global E&C Group experienced decreased contract profit mainly attributable to a foreign currency translation impact of approximately $43,300 which was primarily driven by the decline in value of the British pound and Euro relative to the U.S. dollar. Excluding the foreign currency translation impact, contract profit decreased slightly driven by decreased contract profit margins, partially offset by increased volume of operating revenues, excluding the impact of the change in flow-through revenues and foreign currency translation rates described above.

• A decrease in equity earnings in our Global E&C Group’s projects in Italy of $3,600 for the first fiscal six months of 2009, compared to the corresponding period of fiscal year 2008. Please refer to the section entitled “—Results of Operations-Other Income, net” above for further discussion.

          Overview of Segment

          Our Global E&C Group, which operates worldwide, designs, engineers and constructs onshore and offshore upstream oil and gas processing facilities, natural gas liquefaction facilities and receiving terminals, gas-to-liquids facilities, oil refining, chemical and petrochemical, pharmaceutical and biotechnology facilities and related infrastructure, including power generation and distribution facilities, and gasification facilities. Our Global E&C Group is also involved in the design of facilities in new or developing market sectors, including carbon capture and storage, solid fuel-fired integrated gasification combined-cycle power plants, coal-to-liquids, coal-to-chemicals and biofuels. Our Global E&C Group generates revenues from engineering, procurement, construction and project management activities pursuant to contracts spanning up to approximately four years in duration and from returns on its equity investments in various power production facilities.

          Our Global E&C Group owns one of the leading technologies (delayed coking) used in refinery residue upgrading and a hydrogen production process used in oil refineries and petrochemical plants. Additionally, our Global E&C Group has experience with, and is able to work with, a wide range of processes owned by others.

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          The current weakness in the global economy has caused many of our E&C clients to reevaluate the size, timing and scope of their capital spending plans in relation to the kinds of energy and petrochemical projects in which we specialize. The decline in oil and natural gas prices, relative to the second and third quarters of fiscal year 2008, and, to a lesser extent, credit concerns among certain clients, have contributed to this uncertain market. As a result, the environment for prospective projects has become somewhat less favorable than it was in fiscal year 2007 and in the first half of fiscal year 2008. Specifically, the market in the second half of fiscal year 2008 and to date in fiscal year 2009 has been characterized by instances of postponement or cancellation of our prospects; resizing of prospective projects to make them more economically viable; intensified competition among E&C contractors; and pricing pressure. While such factors may continue throughout the remainder of fiscal year 2009, we have nonetheless seen recent examples of projects moving forward. In addition, we believe world demand for energy will continue to grow over the long term and that clients will continue to invest in new and upgraded capacity to meet that demand. In that regard, we were successful in booking contracts for front-end engineering work in fiscal year 2008 and during the first and second quarters of fiscal year 2009, which is frequently the precursor to subsequent significant opportunities as projects move into the engineering, procurement and construction phase. Moreover, we have continued to be successful in booking contracts of varying types and sizes in our key end markets, including a very large award in the first six months of fiscal year 2009 for the engineering, procurement and construction of a new refinery in India. Our success in this regard is a reflection of our technical expertise, our long-term relationships with clients, and our selective approach in pursuit of new prospects where we believe we have significant differentiators.

     Global Power Group

	Fiscal Quarters Ended										Fiscal Six Months Ended
	June 30,		June 27,								June 30,		June 27,
	2009		2008		$ Change			% Change			2009		2008		$ Change			% Change
Operating revenues	$	278,330	$	451,292	$	(172,962	)		(38.3	)%	$	590,441	$	856,015	$	(265,574	)		(31.0	)%
EBITDA	$	53,780	$	68,378	$	(14,598	)		(21.3	)%	$	102,563	$	132,794	$	(30,231	)		(22.8	)%

          Results

          The geographic dispersion of our Global Power Group’s operating revenues for the fiscal quarters and six months ended June 30, 2009 and June 27, 2008 based upon where the project is being executed, were as follows:

	Fiscal Quarters Ended										Fiscal Six Months Ended
	June 30,		June 27,								June 30,		June 27,
	2009		2008		$ Change			% Change			2009		2008		$ Change			% Change
Asia	$	25,668	$	39,174	$	(13,506	)		(34.5	)%	$	50,486	$	92,850	$	(42,364	)		(45.6	)%
Australasia *		1,650		2,230		(580	)		(26.0	)%		3,537		3,755		(218	)		(5.8	)%
Europe		133,247		137,958		(4,711	)		(3.4	)%		271,822		285,904		(14,082	)		(4.9	)%
Middle East		—		40		(40	)		(100.0	)%		—		113		(113	)		(100.0	)%
North America		98,070		240,241		(142,171	)		(59.2	)%		209,397		405,564		(196,167	)		(48.4	)%
South America		19,695		31,649		(11,954	)		(37.8	)%		55,199		67,829		(12,630	)		(18.6	)%
Total	$	278,330	$	451,292	$	(172,962	)		(38.3	)%	$	590,441	$	856,015	$	(265,574	)		(31.0	)%

* Australasia primarily represents Australia, New Zealand and the Pacific Islands.

          Our Global Power Group, which predominantly serves the power generation industry, experienced decreases in operating revenues during the fiscal second quarter and six months ended June 30, 2009 of $173,000 and $265,600, respectively, compared to the corresponding periods of fiscal year 2008, which represented 44% and 29%, respectively, of the decreases in our consolidated operating revenues. Our Global Power Group’s operating revenues in the fiscal second quarter and six months ended June 30, 2009 decreased approximately 31% and 24%, respectively, excluding the impact of the change in foreign currency translation rates compared to the corresponding periods of fiscal year 2008.

          Please refer to the section entitled, “—Overview of Segment” below for our view of the market outlook for our Global Power Group.

          The decrease in our Global Power Group’s EBITDA in the fiscal second quarter of 2009, as compared to the corresponding period of fiscal year 2008, resulted primarily from the following:

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• Decreased volumes of business executed during the period. Refer to the section “—Overview of Segment” below for a discussion of the strength of the industries served and demand for our products and services.

• Our Global Power Group experienced decreased contract profit mainly attributable to decreased volume of operating revenues and a foreign currency translation impact of approximately $7,100 which was primarily driven by the decline in value of the Euro relative to the U.S. dollar, partially offset by increased contract profit margins.

• A decrease in equity earnings in our Global Power Group’s project in Chile of $1,000 which included a $1,500 decrease in equity earnings related to a decrease in the average electric tariff rates when compared to the average electric tariff rates in effect during the fiscal second quarter of 2008.

          The decrease in our Global Power Group’s EBITDA in the first fiscal six months of 2009, as compared to the corresponding period of fiscal year 2008, resulted primarily from the following:

• Decreased volumes of business executed during the period. Refer to the section “—Overview of Segment” below for a discussion of the strength of the industries served and demand for our products and services.

• Our Global Power Group experienced decreased contract profit mainly attributable to a decreased volume of operating revenues, a foreign currency translation impact of approximately $10,300 which was primarily driven by the decline in value of the Euro relative to the U.S. dollar and a $7,500 commitment fee received in the fiscal first quarter of 2008 for a contract that our Global Power Group was not awarded, partially offset by increased contract profit margins, excluding the commitment fee noted above.

• A decrease in equity earnings in our Global Power Group’s project in Chile of $4,400 which included a $3,600 decrease in equity earnings related to a decrease in the average electric tariff rates when compared to the average electric tariff rates in effect during the first fiscal six months of 2008.

          Overview of Segment

          Our Global Power Group designs, manufactures and erects steam generators for electric power generating stations, district heating plants and industrial facilities worldwide. Our competitive differentiation in serving these markets is the ability of our products to cleanly and efficiently burn a wide range of fuels, singularly or in combination. In particular, our CFB steam generators are able to burn coal grades of varying quality, as well as petroleum coke, lignite, municipal waste, waste wood, biomass, and numerous other materials. Among these fuel sources, coal is the most widely used, and thus the market drivers and constraints associated with coal strongly affect the steam generator market and our Global Power Group’s business. Additionally, our Global Power Group designs, manufactures and erects auxiliary equipment for electric power generating stations and industrial facilities worldwide and owns and/or operates several cogeneration, independent power production and waste-to-energy facilities, as well as power generation facilities for the process and petrochemical industries.

          Our Global Power Group’s new order activity was unfavorably affected by several trends beginning in fiscal year 2008 and continuing into fiscal year 2009. Weakness in the global economy reduced the near-term growth in demand for electricity. In addition, political and environmental sensitivity regarding coal-fired steam generators caused a number of our Global Power Group’s prospective projects to be postponed or cancelled as clients experienced difficulty in obtaining the required environmental permits or decided to wait for additional clarity regarding state and federal regulations. This environmental concern has been especially pronounced in the United States, and to a lesser extent in Europe, and is linked to the view that solid-fuel-fired steam generators contribute to global warming through the discharge of greenhouse gas emissions into the atmosphere. Credit concerns among certain clients also contributed to the slowed pace of new contract awards in the first six months of fiscal year 2009. Finally, the recent sharp decline in natural gas prices increased the attractiveness of that fuel, in relation to coal, for the generation of electricity. We believe that a combination of these factors will result in continued weak demand for new solid-fuel steam generators during the remainder of fiscal year 2009. During the first fiscal quarter of 2009, our Global Power Group was notified of the termination of a previously awarded contract

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for the design and supply of two CFB steam generators for a U.S. power project. Our Global Power Group removed the contract from its backlog of unfilled orders in the first fiscal quarter of 2009. The amount removed from backlog represented approximately 11% of our Global Power Group’s backlog as of the end of fiscal year 2008. Longer-term, we believe that world demand for electrical energy will continue to grow and that solid-fuel-fired steam generators will continue to fill a significant portion of this incremental generating capacity. The fuel-flexibility of our CFB steam generators enables them to burn a variety of fuels other than coal and to produce carbon-neutral electricity when fired by biomass. In addition, our steam generators can be designed to incorporate supercritical technology, which significantly improves efficiency and reduces emissions. We are also developing Flexi-Burn^TM technology that will enable steam generators to operate in a carbon capture environment.

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Liquidity and Capital Resources

          Fiscal Year-to-Date 2009 Activities

          During the first fiscal six months of 2009 we generated $94,000 from cash flows from operating activities, incurred capital expenditures of $26,700, paid $8,900 to purchase substantially all of the assets of the offshore engineering division of OPE and experienced an increase in cash and cash equivalents of $24,900 due to the effect of exchange rate changes on our cash and cash equivalents. Together, these were the primary factors resulting in a net increase in cash and cash equivalents of $75,800 during the first fiscal six months of 2009.

          Our cash and cash equivalents, short-term investments and restricted cash balances were:

	As of
	June 30,		December 26,
	2009		2008		$ Change		% Change
Cash and cash equivalents	$	848,985	$	773,163	$	75,822		9.8	%
Short-term investments		3,777		2,448		1,329		54.3	%
Restricted cash		25,500		22,737		2,763		12.2	%
Total	$	878,262	$	798,348	$	79,914		10.0	%

          Of the $878,300 total of cash and cash equivalents, short-term investments and restricted cash as of June 30, 2009, $664,700 was held by our non-U.S. subsidiaries.

          Cash Flows from Operating Activities:

Fiscal Six Months Ended
June 30, 2009	June 27, 2008		$ Change			% Change
$93,954	$	244,839	$	(150,885	)		(61.6	)%

          Net cash provided by operations in the first fiscal six months of 2009 was primarily from net income of $201,700 and non-cash charges included in net income of $43,000, partially offset by cash used for working capital needs of $125,500, net payments for asbestos liability indemnity and defense costs in excess of proceeds from settlements with asbestos insurance carriers of $17,200, and mandatory contributions to our non-U.S. pension plans of $12,700.

          Net cash provided by operations in the first fiscal six months of 2008 was $244,800. Net cash provided by operations in the first fiscal six months of 2008 was primarily from net income of $299,800 and net proceeds from settlements with asbestos insurers in excess of liability indemnity payments and defense costs of $11,200, partially offset by cash used for working capital activities of $45,300 and mandatory contributions to our non-U.S. pension plans of $17,000.

          The decrease in cash provided by operations of $150,900 in the first fiscal six months of 2009, as compared to the corresponding period of fiscal year 2008, resulted primarily from a decrease in net income of $98,100, an increase in cash used for working capital needs of $80,200 and net cash outflows for asbestos-related payments in excess of insurance proceeds (asbestos liability indemnity and defense costs net of related proceeds from settlements with asbestos insurance carriers) of $28,400, partially offset by an increase in non-cash charges included in net income of $13,500 and decreased mandatory contributions to our non-U.S. pension plans of $4,300.

          Our working capital varies from period to period depending on the mix, stage of completion and commercial terms and conditions of our contracts. Working capital in our Global E&C Group tends to rise as the workload of reimbursable contracts increases since services are rendered prior to billing clients while working capital tends to decrease in our Global Power Group when the workload increases as cash tends to be received prior to ordering materials and equipment and rendering of services.

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          Cash used for working capital needs in the first fiscal six months of 2009, compared to the corresponding period of fiscal year 2008, reflects an increase in cash used for working capital needs in our Global Power Group, as cash receipts from new client billings decreased relative to cash used for materials and equipment purchased and services rendered that were billed and collected from clients in the prior fiscal year, partially offset by a decrease in cash used for working capital needs in our Global E&C Group, as there was a decrease in new services rendered relative to cash receipts from new client billings.

          As more fully described below in “—Outlook,” we believe our existing cash balances and forecasted net cash provided from operating activities will be sufficient to fund our operations throughout the next 12 months. Our ability to increase or maintain our cash flows from operating activities in future periods will depend in large part on the demand for our products and services and our operating performance in the future. Please refer to the sections entitled “—Global E&C Group-Overview of Segment” and “—Global Power Group-Overview of Segment” above for our view of the outlook for each of our business segments.

          Cash Flows from Investing Activities:

Fiscal Six Months Ended
June 30, 2009	June 27, 2008			$ Change		% Change
$(39,215)	$	(75,319	)	$	36,104		(47.9	)%

          The net cash used in investing activities in the first fiscal six months of 2009 was primarily from capital expenditures of $26,700, which included $11,300 of expenditures in FW Power S.r.L. as we continue construction of the electric power generating wind farm projects in Italy, the $8,900 purchase price paid in April 2009 for substantially all of the assets of the offshore engineering division of OPE and an increase in restricted cash of $2,800 driven by an increase in the balance required for collateralized standby letters of credit, bank guarantees and surety bonds.

          Net cash used in investing activities in the first fiscal six months of 2008 was $75,300. The net cash used in investing activities in the first fiscal six months of 2008 was attributable primarily to capital expenditures of $42,200, which included $13,500 of expenditures in FW Power S.r.L., an increase in restricted cash of $24,600 primarily driven by an increase in client escrow funds and an increase in debt service funds for FW Power S.r.L., and the $7,800 purchase price, net of cash acquired, paid in February 2008 for all of the outstanding capital stock of a biopharmaceutical engineering company.

          The capital expenditures in the fiscal six months ended June 30, 2009 and June 27, 2008 related primarily to project construction (including the FW Power S.r.L. electric power generating wind farm projects in Italy noted above), leasehold improvements, information technology equipment and office equipment. Our capital expenditures decreased $15,500 in the first fiscal six months of 2009, compared to the corresponding period of fiscal year 2008, as a result of decreased expenditures in our Global E&C Group, primarily driven by operations in the U.S. and Asia, while our Global Power Group was relatively unchanged.

          Cash Flows from Financing Activities:

Fiscal Six Months Ended
June 30, 2009	June 27, 2008		$ Change			% Change
$(3,833)	$	13,287	$	(17,120	)		(128.8	)%

          The net cash used in financing activities in the first fiscal six months of 2009 was attributable primarily to the repayment of short-term and long-term debt and capital lease obligations of $5,800, partially offset by proceeds from issuance of long-term debt of $1,900.

          The net cash provided by financing activities in the first fiscal six months ended June 27, 2008 was attributable primarily to proceeds from the issuance of long-term project debt of $22,000 and cash provided from exercises of stock options of $2,400, partially offset by distributions to noncontrolling interests of $6,700 and repayment of long-term debt and capital lease obligations of $4,900.

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          Outlook

          Our liquidity forecasts cover, among other analyses, existing cash balances, cash flows from operations, cash repatriations from non-U.S. subsidiaries, working capital needs, unused credit line availability and claim recoveries and proceeds from asset sales, if any. These forecasts extend over a rolling 12-month period. Based on these forecasts, we believe our existing cash balances and forecasted net cash provided by operating activities will be sufficient to fund our operations throughout the next 12 months. Based on these forecasts, our primary cash needs will be to fund working capital, capital expenditures, asbestos liability indemnity and defense costs and acquisitions. We may also use cash to repurchase our shares under the share repurchase program that Foster Wheeler AG adopted as part of the Redomestication, as described further below, under which we are authorized to repurchase up to $264,800 of our outstanding registered shares. The majority of our cash balances are invested in short-term interest bearing accounts with maturities of less than three months. We continue to consider investing some of our cash in longer-term investment opportunities, including the acquisition of other entities or operations in the engineering and construction industry or power industry and/or the reduction of certain liabilities such as unfunded pension liabilities. We may elect to make discretionary contributions to our U.S. and U.K. pension plans during fiscal year 2009.

          We continue to monitor our credit exposure in light of the current global credit market crisis with respect to our counterparty credit exposure, in general, and specifically related to cash and cash equivalents, bonding and bank guarantees, forward currency contracts, pension assets, insurance assets and clients. We believe that we are well diversified and third-party credit exposure should not expose us to material downside risks. We will continue to closely monitor the global liquidity and credit market crisis and continue to take appropriate actions, as necessary, to limit our exposure.

          It is customary in the industries in which we operate to provide standby letters of credit, bank guarantees or performance bonds in favor of clients to secure obligations under contracts. We believe that we will have sufficient letter of credit capacity from existing facilities throughout the next 12 months.

          Our U.S. operating entities do not generate sufficient cash flows to fund our obligations related to corporate overhead expenses and asbestos-related liabilities or to fund the acquisition of our shares under our share repurchase program described below. Consequently, we require cash repatriations from our non-U.S. subsidiaries in the normal course of our operations to meet our U.S. cash needs and have successfully repatriated cash for many years. We believe that we can repatriate the required amount of cash from our non-U.S. subsidiaries and we continue to have access to the revolving credit portion of our domestic senior credit facility, if needed.

          We had net cash outflows of $17,200 as a result of asbestos liability indemnity payments and defense costs in excess of insurance settlement proceeds during the fiscal six months ended June 30, 2009. We expect to have net cash outflows of $26,500 as a result of asbestos liability indemnity payments and defense costs in excess of insurance settlement proceeds for the full twelve months of fiscal year 2009. This estimate assumes no additional settlements with insurance companies or elections by us to fund additional payments. As we continue to collect cash from insurance settlements and assuming no increase in our asbestos-related insurance liability or any future insurance settlements, the asbestos-related insurance receivable recorded on our balance sheet will continue to decrease.

          We anticipate spending €16,300 (approximately $23,000 at the exchange rate as of June 30, 2009) in FW Power S.r.L. in fiscal year 2009 as we continue construction of the electric power generating wind farm projects in Italy, of which €8,400 (approximately $11,300 at the exchange rate as of June 30, 2009) was spent as of June 30, 2009. We have secured total borrowing capacity under the FW Power S.r.L. credit facilities of €75,300 (approximately $106,500 at the exchange rate as of June 30, 2009).

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          We have a senior credit agreement which provides for a facility of $450,000 and includes a provision which permits future incremental increases of up to $100,000 in total availability under the facility. We had approximately $290,800 and $273,500 of letters of credit outstanding under our domestic senior credit agreement as of June 30, 2009 and December 26, 2008, respectively. The letter of credit fees range from 1.50% to 1.60%, excluding a fronting fee of 0.125% per annum. We do not intend to borrow under our domestic senior revolving credit facility during fiscal year 2009. A portion of the letters of credit issued under the domestic senior credit agreement have performance pricing that is decreased (or increased) as a result of improvements (or reductions) in the credit rating assigned to the domestic senior credit agreement by Moody’s Investors Service and/or Standard & Poor’s. As a result of the improvement in our S&P credit rating in March 2007, we achieved, and continue to maintain, the lowest possible pricing under the performance pricing provisions of our domestic senior credit agreement. This performance pricing is not expected to materially impact our liquidity or capital resources in fiscal year 2009.

          On December 18, 2008, Foster Wheeler AG, Foster Wheeler Ltd., certain of Foster Wheeler Ltd.’s subsidiaries and BNP Paribas, as Administrative Agent, entered into an additional amendment of our domestic senior credit agreement. The amendment includes a consent of the lenders under the credit agreement to the Redomestication. In addition, the amendment reflects the addition of Foster Wheeler AG as a guarantor of the obligations under the credit agreement and reflects changes relating to Foster Wheeler AG becoming the ultimate parent of Foster Wheeler Ltd. and its subsidiaries upon completion of the Redomestication. The amendment became effective upon consummation of the Redomestication on February 9, 2009.

          We are not required to make any mandatory contributions to our U.S. pension plans in fiscal year 2009 based on the minimum statutory funding requirements. We expect to contribute a total of approximately $25,100 to our non-U.S. pension plans in fiscal year 2009 based on the minimum statutory funding requirements, of which $12,700 was contributed in the first fiscal six months of 2009.

          Please refer to Note 4 to the consolidated financial statements in this quarterly report on Form 10-Q for further information regarding our debt obligations.

          On September 12, 2008, we announced a share repurchase program pursuant to which we were authorized to repurchase up to $750,000 of Foster Wheeler Ltd.’s outstanding common shares. In connection with the Redomestication described in Note 13 to the consolidated financial statements in this quarterly report on Form 10-Q, Foster Wheeler AG adopted a share repurchase program pursuant to which it is authorized to repurchase up to $264,800 of its outstanding registered shares and designate the repurchased shares for cancellation. The amount authorized for repurchase of registered shares under the Foster Wheeler AG program is equal to the amount that remained available for repurchases under the Foster Wheeler Ltd. program as of February 9, 2009, the date of the completion of the Redomestication. The Foster Wheeler AG program replaces the Foster Wheeler Ltd. program, and no further repurchases will be made under the Foster Wheeler Ltd. program. Any repurchases will be made at our discretion in the open market or in privately negotiated transactions in compliance with applicable securities laws and other legal requirements and will depend on a variety of factors, including market conditions, share price and other factors. The program does not obligate us to acquire any particular number of shares. The program has no expiration date and may be suspended or discontinued at any time. Any repurchases made pursuant to the share repurchase program will be funded using our cash on hand. Cumulatively through August 5, 2009, we have repurchased, under the Foster Wheeler Ltd. and Foster Wheeler AG programs, 18,098,519 shares for an aggregate cost of approximately $485,600 (which includes commissions of $400). We have executed the repurchases in accordance with 10b5-1 repurchase plans as well as other open market purchases. The 10b5-1 repurchase plans allow us to purchase shares at times when we may not otherwise do so due to regulatory or internal restrictions. Purchases under the 10b5-1 repurchase plans are based on parameters set forth in the plans.

          We have not declared or paid a cash dividend since July 2001 and we do not have any plans to declare or pay any cash dividends. Our current credit agreement contains limitations on cash dividend payments as well as other restricted payments.

Off-Balance Sheet Arrangements

          We own several noncontrolling equity interests in power projects in Chile and Italy. Certain of the projects have third-party debt that is not consolidated in our balance sheet. We have also issued certain guarantees for the Chilean project. Please refer to Note 3 to the consolidated financial statements in this quarterly report on Form 10-Q for further information related to these projects.

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Backlog and New Orders

          The backlog of unfilled orders includes amounts based on signed contracts as well as agreed letters of intent, which we have determined are legally binding and likely to proceed. Although backlog represents only business that is considered likely to be performed, cancellations or scope adjustments may and do occur. The elapsed time from the award of a contract to completion of performance may be up to approximately four years. The dollar amount of backlog is not necessarily indicative of our future earnings related to the performance of such work due to factors outside our control, such as changes in project schedules, scope adjustments or project cancellations. We cannot predict with certainty the portion of backlog to be performed in a given year. Backlog is adjusted quarterly to reflect project cancellations, deferrals, revised project scope and cost and sales of subsidiaries, if any.

          Backlog measured in Foster Wheeler scope reflects the dollar value of backlog excluding third-party costs incurred by us on a reimbursable basis as agent or principal, which we refer to as flow-through costs. Foster Wheeler scope measures the component of backlog with profit potential and corresponds to our services plus fees for reimbursable contracts and total selling price for fixed-price or lump-sum contracts.

          New Orders (Future Revenues)

	June 30, 2009								June 27, 2008
	Global			Global					Global		Global
	E&C Group			Power Group		Total			E&C Group		Power Group		Total
By Project Location:
Fiscal Quarters Ended
North America	$	367,000		$	43,400	$	410,400		$	124,000	$	70,700	$	194,700
South America		40,700			5,200		45,900			14,300		19,000		33,300
Europe		165,900			29,800		195,700			290,300		93,800		384,100
Asia		174,700			7,600		182,300			125,400		10,600		136,000
Middle East		40,400			—		40,400			71,700		—		71,700
Australasia and other		59,000			100		59,100			20,600		100		20,700
Total	$	847,700		$	86,100	$	933,800		$	646,300	$	194,200	$	840,500
Fiscal Six Months Ended
North America	$	449,400		$	83,300	$	532,700		$	289,500	$	386,000	$	675,500
South America		50,300			7,500		57,800			15,300		30,700		46,000
Europe		249,700			71,900		321,600			557,800		284,800		842,600
Asia		689,100			19,600		708,700			307,600		28,800		336,400
Middle East		89,500			—		89,500			132,000		—		132,000
Australasia and other		129,200			300		129,500			51,400		300		51,700
Total	$	1,657,200		$	182,600	$	1,839,800		$	1,353,600	$	730,600	$	2,084,200
By Industry:
Fiscal Quarters Ended
Power generation	$	3,000		$	58,300	$	61,300		$	26,500	$	157,500	$	184,000
Oil refining		505,000			—		505,000			430,400		—		430,400
Pharmaceutical		16,400			—		16,400			21,600		—		21,600
Oil and gas		100,700			—		100,700			13,900		—		13,900
Chemical/petrochemical		213,100			—		213,100			139,200		—		139,200
Power plant operation and maintenance		—			27,800		27,800			—		36,700		36,700
Environmental		800			—		800			5,400		—		5,400
Other, net of eliminations		8,700			—		8,700			9,300		—		9,300
Total	$	847,700		$	86,100	$	933,800		$	646,300	$	194,200	$	840,500
Fiscal Six Months Ended
Power generation	$	17,500		$	140,900	$	158,400		$	38,500	$	664,700	$	703,200
Oil refining		1,048,100			—		1,048,100			867,800		—		867,800
Pharmaceutical		34,200			—		34,200			40,000		—		40,000
Oil and gas		241,900			—		241,900			124,200		—		124,200
Chemical/petrochemical		313,600			—		313,600			253,000		—		253,000
Power plant operation and maintenance		—			41,700		41,700			—		65,900		65,900
Environmental		4,700			—		4,700			15,100		—		15,100
Other, net of eliminations		(2,800	)		—		(2,800	)		15,000		—		15,000
Total	$	1,657,200		$	182,600	$	1,839,800		$	1,353,600	$	730,600	$	2,084,200

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          Backlog (Future Revenues)

	June 30, 2009									June 27, 2008
	Global			Global						Global			Global
	E&C Group			Power Group			Total			E&C Group			Power Group			Total
By Contract Type:
Lump-sum turnkey	$	600		$	122,200		$	122,800		$	45,800		$	357,300		$	403,100
Other fixed-price		270,700			390,200			660,900			494,700			1,016,200			1,510,900
Reimbursable		3,992,500			122,800			4,115,300			6,117,700			147,400			6,265,100
Eliminations		(1,800	)		(6,700	)		(8,500	)		(3,600	)		(2,700	)		(6,300	)
Total	$	4,262,000		$	628,500		$	4,890,500		$	6,654,600		$	1,518,200		$	8,172,800
By Project Location:
North America	$	541,800		$	248,300		$	790,100		$	327,000		$	715,600		$	1,042,600
South America		150,100			83,900			234,000			26,400			97,300			123,700
Europe		592,400			239,100			831,500			768,200			618,000			1,386,200
Asia		1,082,300			56,500			1,138,800			1,735,600			85,700			1,821,300
Middle East		224,100			—			224,100			569,100			600			569,700
Australasia and other		1,671,300			700			1,672,000			3,228,300			1,000			3,229,300
Total	$	4,262,000		$	628,500		$	4,890,500		$	6,654,600		$	1,518,200		$	8,172,800
By Industry:
Power generation	$	29,800		$	510,600		$	540,400		$	69,200		$	1,396,400		$	1,465,600
Oil refining		1,923,500			—			1,923,500			1,763,000			—			1,763,000
Pharmaceutical		31,000			—			31,000			39,000			—			39,000
Oil and gas		1,768,300			—			1,768,300			3,319,500			—			3,319,500
Chemical/petrochemical		499,200			—			499,200			1,435,400			—			1,435,400
Power plant operation and maintenance		—			117,900			117,900			—			121,800			121,800
Environmental		5,200			—			5,200			13,100			—			13,100
Other, net of eliminations		5,000			—			5,000			15,400			—			15,400
Total	$	4,262,000		$	628,500		$	4,890,500		$	6,654,600		$	1,518,200		$	8,172,800
Backlog, measured in terms of Foster Wheeler Scope
Total	$	1,758,300		$	615,800		$	2,374,100		$	1,817,900		$	1,505,400		$	3,323,300
E&C Man-hours in Backlog (in thousands)
Total		15,200						15,200			13,500						13,500

          The foreign currency translation impact on backlog and Foster Wheeler scope backlog resulted in increases of $326,300 and $102,600, respectively, as of June 30, 2009 as compared to fiscal year end 2008.

Inflation

          The effect of inflation on our financial results is minimal. Although a majority of our revenues are realized under long-term contracts, the selling prices of such contracts, established for deliveries in the future, generally reflect estimated costs to complete the projects in these future periods. In addition, many of our projects are reimbursable at actual cost plus a fee, while some of the fixed-price contracts provide for price adjustments through escalation clauses.

Application of Critical Accounting Estimates

          Our consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America. Management and the Audit Committee of our Board of Directors approve the critical accounting policies.

          A full discussion of our critical accounting policies and estimates is included in our 2008 Form 10-K. We did not have a significant change to the application of our critical accounting policies and estimates during the first fiscal six months of 2009.

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Accounting Developments

          In December 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position No. FSP FAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP FAS 132(R)-1”). FSP FAS 132(R)-1 will expand the disclosures regarding investments held by employer-sponsored defined benefit pension plans and other postretirement plans, with the purpose of providing additional information related to the valuation methodologies for these assets similar to disclosures regarding the valuation methodologies required by SFAS No. 157. Additionally, FSP FAS 132(R)-1 will require disclosures on how investment allocation decisions are made as well as significant concentrations of risk within plan assets. FSP FAS 132(R)-1 is effective for annual financial statements for fiscal years ending after December 15, 2009. We will amend our disclosures accordingly beginning with our consolidated financial statements included in our fiscal year 2009 Form 10-K.

          In June 2009, the FASB issued SFAS No. 167 “Amendments to FASB Interpretation No. 46(R).” SFAS No. 167 requires an enterprise to qualitatively assess the determination of the primary beneficiary (or “consolidator”) of a variable interest entity (“VIE”) based on whether the entity (1) has the power to direct matters that most significantly impact the activities of the VIE, and (2) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. SFAS No. 167 changes the consideration of kick-out rights, which are the ability to remove the enterprise with the power to direct the activities of a VIE, in determining if an entity is a VIE, which may cause certain additional entities to now be considered VIEs. In contrast to prior guidance, SFAS No. 167 requires an ongoing reconsideration of the primary beneficiary. SFAS No. 167 also amends the events that trigger a reassessment of whether an entity is a VIE. SFAS No. 167 is effective for financial statements issued for fiscal years beginning after November 15, 2009. We are currently assessing the impact that SFAS No. 167 may have on our consolidated financial statements and disclosures.

          In July 2009, the FASB issued SFAS No. 168 “The FASB Accounting Standards Codification^TM and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162.” The FASB Accounting Standards Codification^TM (“Codification”) will become the sole source of authoritative U.S. generally accepted accounting principles (“U.S. GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. On the effective date of SFAS No. 168, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative under U.S. GAAP. SFAS No. 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. We will amend the references to U.S. GAAP in our disclosures accordingly beginning with our interim consolidated financial statements included in our fiscal third quarter of 2009 Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          During the fiscal quarter and six months ended June 30, 2009, there were no material changes in the market risks as described in our annual report on Form 10-K for the fiscal year ended December 26, 2008.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

          We maintain disclosure controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and we necessarily are required to apply our judgment in evaluating the cost-benefit relationship of possible controls and procedures.

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          As of the end of the period covered by this report, our chief executive officer and our chief financial officer carried out an evaluation, with the participation of our Disclosure Committee and management, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) pursuant to Exchange Act Rule 13a-15. Based on this evaluation, our chief executive officer and our chief financial officer concluded, at the reasonable assurance level, that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

          There were no changes in our internal control over financial reporting in the fiscal quarter ended June 30, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

          Please refer to Note 12 to the consolidated financial statements in this quarterly report on Form 10-Q for a discussion of legal proceedings, which is incorporated by reference in this Part II.

ITEM 1A. RISK FACTORS

          Information regarding our risk factors appears in Part I, Item 1A, “Risk Factors,” in our annual report on Form 10-K for the fiscal year ended December 26, 2008, which we filed with the SEC on February 24, 2009. There have been no material changes in those risk factors.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

          (c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers (amounts in thousands of dollars, except share data and per share amounts).

          On September 12, 2008, we announced a share repurchase program pursuant to which we were authorized to repurchase up to $750,000 of the outstanding common shares of Foster Wheeler Ltd. Prior to the completion of the Redomestication, Foster Wheeler Ltd., as sole shareholder of Foster Wheeler AG, approved a share repurchase program pursuant to which Foster Wheeler AG is authorized to repurchase up to $264,773 of its outstanding registered shares and designate the repurchased shares for cancellation. The amount authorized for repurchase of registered shares under the Foster Wheeler AG program is equal to the amount that remained available for repurchases under the Foster Wheeler Ltd. program as of February 9, 2009, the date of the completion of the Redomestication. The Foster Wheeler AG program replaces the Foster Wheeler Ltd. program, and no further repurchases will be made under the Foster Wheeler Ltd. program. As noted in the table below, there were no purchases under our share repurchase program during the fiscal second quarter of 2009.

					Total Number of			Approximate
					Shares Purchased			Dollar Value of
					as Part of			Shares that May
			Average		Publicly			Yet Be Purchased
	Total Number of		Price Paid		Announced Plans			Under the Plans
Fiscal Month	Shares Purchased(1)		per Share		or Programs			or Programs
April 1, 2009 through April 30, 2009		—	$	—		—
May 1, 2009 through May 31, 2009		—		—		—
June 1, 2009 through June 30, 2009		—		—		—
Total		—	$	—		—	(2)	$	264,773

(1)

During the fiscal second quarter of 2009, we did not repurchase any shares in open market transactions pursuant to our share repurchase program. We are authorized to repurchase up to $264,773 of our outstanding registered shares. The Foster Wheeler AG repurchase program, which replaced the Foster Wheeler Ltd. program as of February 9, 2009 (as described above), has no expiration date and may be suspended for periods or discontinued at any time. We did not repurchase any shares other than through our publicly announced repurchase programs.

(2)

As of June 30, 2009, an aggregate of 18,098,519 Foster Wheeler Ltd. common shares were purchased for a total of $485,227 since the inception of the Foster Wheeler Ltd. repurchase program announced on September 12, 2008. No further repurchases will be made under the Foster Wheeler Ltd. program. As of June 30, 2009, no repurchases have been made since the inception of the Foster Wheeler AG repurchase program on February 9, 2009, the date of the completion of the Redomestication.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

          None.

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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          On May 6, 2009, we held an annual general meeting of shareholders. The voting results of the annual general meeting of shareholders were as follows:

							Broker
	For		Against		Abstentions		Non-Votes
1. Election of directors. (*)
a. Robert C. Flexon		86,463,410		3,926,943		240,913		0
b. Maureen B. Tart-Bezer		88,778,272		1,605,769		247,225		0
c. James D. Woods		88,457,762		1,928,503		245,001		0
2. Re-election of independent auditor – PricewaterhouseCoopers AG		89,412,209		1,027,985		191,072		0
3. Ratification of appointment of independent registered public accounting firm – PricewaterhouseCoopers LLP		89,020,862		1,426,537		183,867		0

* In addition, the following directors continued to serve after the meeting: Eugene D. Atkinson, Steven J. Demetriou, Edward G. Galante, Stephanie Hanbury-Brown and Raymond J. Milchovich.

ITEM 5. OTHER INFORMATION

          None.

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ITEM 6. EXHIBITS

Exhibit No.	Exhibits
3.1	Articles of Association of Foster Wheeler AG. (Filed as Exhibit 3.1 to Foster Wheeler AG’s Form 8-K, dated February 6, 2009 and filed on February 9, 2009, and incorporated herein by reference.)
3.2	Organizational Regulations of Foster Wheeler AG. (Filed as Exhibit 3.2 to Foster Wheeler AG’s Form 8-K, dated February 6, 2009 and filed on February 9, 2009, and incorporated herein by reference.)
10.1	Employment Agreement, dated as of April 27, 2009, among Foster Wheeler Inc., Rakesh K. Jindal and Foster Wheeler International Corp.
10.2	Third Amendment to Foster Wheeler AG Omnibus Incentive Plan.
10.3	Foster Wheeler AG Omnibus Incentive Plan, Restated Effective as of February 9, 2009 (incorporating the First, Second, and Third Amendments).
23.1	Consent of Analysis, Research & Planning Corporation.
23.2	Consent of Peterson Risk Consulting LLC.
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Raymond J. Milchovich.
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Franco Baseotto.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Raymond J. Milchovich.
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Franco Baseotto.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

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SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	FOSTER WHEELER AG (Registrant)
Date: August 5, 2009	/s/ Raymond J. Milchovich
	Raymond J. Milchovich
	Chairman and Chief Executive Officer
Date: August 5, 2009	/s/ Franco Baseotto
	Franco Baseotto
	Executive Vice President, Chief Financial Officer and Treasurer

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EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

          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. Term of Employment.

               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

2

expense reimbursement programs of the Company as from time to time in effect for those at the Executive’s level.

               4. Termination.

                    4.1 Termination Events.

                         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

3

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

4

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.

     4.3 Change of Control.

          4.3.1 Definitions.

               (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

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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 terminated by reason of the Executive’s death during the Change of Control Period, the Company shall provide the Executive’s estate or beneficiaries with the Accrued Obligations

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and the timely payment or delivery of the Other Benefits, and shall have no other severance obligations under this Agreement. The Accrued Obligations shall be paid to the Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Termination Date. With respect to the provision of Other Benefits, the term “Other Benefits” as utilized in this Subsection 4.3.3 shall include, without limitation, and the Executive’s estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company and the Affiliated Companies to the estates and beneficiaries of similarly situated peer executives of the Company and the Affiliated Companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other similarly situated peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Start Date or, if more favorable to the Executive’s estate and/or the Executive’s beneficiaries, as in effect on the date of the Executive’s death with respect to other similarly situated peer executives of the Company and the Affiliated Companies and their beneficiaries.

                    4.3.4 Obligations of the Company upon Executive’s Disability. If the Executive’s employment is terminated by reason of the Executive’s disability during the Change of Control Period, the Company shall provide the Executive with the Accrued Obligations and the timely payment or delivery of the Other Benefits, and shall have no other severance obligations under this Agreement. The Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Termination Date. With respect to the provision of Other Benefits, the term “Other Benefits” as utilized in this Subsection 4.3.4 shall include, and the Executive shall be entitled after the disability start date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company and the Affiliated Companies to similarly situated disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other similarly situated peer executives and their families at any time during the 120-day period immediately preceding the Start Date or, if more favorable to the Executive and/or the Executive’s family, as in effect at any time thereafter generally with respect to other similarly situated peer executives of the Company and the Affiliated Companies and their families.

                    4.3.5 Obligations of the Company upon Executive’s Voluntary Termination Without Good Reason or the Company’s Involuntary Termination of Executive With Cause During Change of Control Period. If the Executive’s employment is terminated for Cause during the Change of Control Period, the Company shall provide to the Executive (i) the Executive’s Annual Base Salary through the Termination Date, (ii) the amount of any compensation previously deferred by the Executive, and (iii) Other Benefits, in each case to the extent theretofore unpaid, and shall have no other severance obligations under this Agreement. If the Executive voluntarily terminates employment during the Change of Control Period, excluding a termination for Good Reason, the Company shall provide to the Executive the Accrued Obligations and the timely payment or delivery of Other Benefits, and shall have no other severance obligations under this Agreement. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Termination Date.

                    4.3.6 Certain Additional Payments by the Company.

                         (i) Definitions. The following terms shall have the following meanings for purposes of this Subsection 4.3.6.

                              (A) Excise Tax. “Excise Tax” shall mean the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), together with any interest or penalties imposed with respect to such excise tax.

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                              (B) Net After-Tax Amount. The “Net After-Tax Amount” of a Payment shall mean the Value of a Payment net of all taxes imposed on the Executive with respect thereto under Sections 1 and 4999 of the Code and applicable state and local law, determined by applying the highest marginal rates that are expected to apply to the Executive’s taxable income for the taxable year in which the Payment is made.

                              (C) Parachute Value. “Parachute Value” of a Payment shall mean the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2), as determined by the Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.

                              (D) Payment. A “Payment” shall mean any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Executive, whether paid or payable pursuant to this Agreement or otherwise.

                              (E) Safe Harbor Amount. The “Safe Harbor Amount” means the maximum Parachute Value of all Payments that the Executive can receive without any Payments being subject to the Excise Tax.

                              (F) Value. “Value” of a Payment shall mean the economic present value of a Payment as of the date of the change of control for purposes of Section 280G of the Code, as determined by the Accounting Firm (as defined below) using the discount rate required by Section 280G(d)(4) of the Code.

                         (ii) Gross-Up Payment. Notwithstanding anything in this Agreement other than as set forth below in this Subsection 4.3.6(ii), in the event it shall be determined that any Payment would be subject to the Excise Tax, then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (and any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Any Gross-Up Payment will be made as soon as reasonably practicable but in no event later than December 31 of the year following the year in which the Excise Tax is incurred. Despite and as an exception to the foregoing provisions of this Section 4.3.6(ii), if the Executive is subject to the Excise Tax but the sum of the Payments when calculated in accordance with the relevant provisions of the Code do not exceed 110% of the Executive’s Safe Harbor Amount, then (1) the Company shall not make any Gross-Up Payment to the Executive, and (2) the Payments otherwise payable to the Executive shall be reduced so that the Payments in the aggregate equal the largest amount that does not exceed the Safe Harbor Amount. In such event, the Company shall promptly notify the Executive of its intent to reduce the amount of the Payments, and, to the extent permitted by applicable laws, shall consult with the Executive as to which of the specific Payment(s) shall be so reduced in order to bring the aggregate of the Payments within the Safe Harbor Amount.

                         (iii) Determination of the Gross-Up Payment. Subject to the provisions of paragraph (iv) immediately below, all determinations required to be made under this Subsection 4.3.6, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by PricewaterhouseCoopers LLP or such other nationally recognized certified public accounting firm as may be designated by the Executive (the “Accounting Firm”). The Accounting Firm shall provide detailed

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supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive may appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Subsection 4.3.6, shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to paragraph (iv) below and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

                         (iv) Notification. The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim. The Executive shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that the Company desires to contest such claim, the Executive shall:

                              (A) give the Company any information reasonably requested by the Company relating to such claim;

                              (B) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

                              (C) cooperate with the Company in good faith in order effectively to contest such claim; and

                              (D) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this paragraph (iv), the Company shall control all proceedings taken in connection with such contest and, at its sole discretion, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in

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one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties) imposed with respect to such advance or with respect to any imputed income in connection with such advance; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which the Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

                         (v) Entitlement to Refund. If, after the receipt by the Executive of an amount advanced by the Company pursuant to paragraph (iv) above, the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of paragraph (iv)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to paragraph (iv), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

                         (vi) Consent to Withholding. Notwithstanding any other provision of this Subsection 4.3.6, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the Executive, all or any portion of the Gross-Up Payment, and the Executive hereby consents to such withholding.

               4.4 No Mitigation. Upon termination of the Executive’s employment with the Company, the Executive shall be under no obligation to seek other employment or otherwise mitigate the obligations of the Company under this Agreement.

          5. Protection of Confidential Information; Non-Competition; Non-Solicitation.

               5.1 Confidential Information. The Executive acknowledges that the Executive’s services will be unique, that they will involve the development of Company-subsidized relationships with key customers, suppliers, and service providers as well as with key Company employees and that the Executive’s work for the Company will give the Executive access to highly confidential information not available to the public or competitors, including trade secrets and confidential marketing, sales, product development and other data and information which it would be impracticable for the Company to effectively protect and preserve in the absence of this Section 5 and the disclosure or misappropriation of which could materially adversely affect the Company. Accordingly, the Executive agrees:

                    5.1.1 except in the course of performing the Executive’s duties provided for in Section 1.1, not at any time, whether before, during or after the Executive’s employment with the Company, to divulge to any other entity or person any confidential information acquired by the Executive concerning the Company’s or its subsidiaries’ or affiliates’ financial affairs or business processes or methods or their research, development or marketing programs or plans, or any other of its or their trade secrets. The foregoing prohibitions shall include, without limitation, directly or indirectly

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publishing (or causing, participating in, assisting or providing any statement, opinion or information in connection with the publication of) any diary, memoir, letter, story, photograph, interview, article, essay, account or description (whether fictionalized or not) concerning any of the foregoing, publication being deemed to include any presentation or reproduction of any written, verbal or visual material in any communication medium, including any book, magazine, newspaper, theatrical production or movie, or television or radio programming or commercial. In the event that the Executive is requested or required to make disclosure of information subject to this Section 5.1.1 under any court order, subpoena or other judicial process, then, except as prohibited by law, the Executive will promptly notify the Company, take all reasonable steps requested by the Company to defend against the compulsory disclosure and permit the Company to control with counsel of its choice any proceeding relating to the compulsory disclosure. The Executive acknowledges that all information, the disclosure of which is prohibited by this section, is of a confidential and proprietary character and of great value to the Company and its subsidiaries and affiliates; and

                    5.1.2 to deliver promptly to the Company on termination of the Executive’s employment with the Company, or at any time that the Company may so request, all confidential memoranda, notes, records, reports, manuals, drawings, software, electronic/digital media records, blueprints and other documents (and all copies thereof) relating to the Company’s (and its subsidiaries’ and affiliates’) business and all property associated therewith, which the Executive may then possess or have under the Executive’s control.

               5.2 Company Protections. In consideration of the Company’s entering into this Agreement, the Executive agrees that at all times during the Term and thereafter for twenty-four (24) months, in the event the Executive’s employment is terminated pursuant to Section 4.3.2 hereof, or for twelve (12) months, in the event the Executive’s employment terminates for any other reason, the Executive shall not, directly or indirectly, for Executive or on behalf of or in conjunction with, any other person, company, partnership, corporation, business, group, or other entity (each, a “Person”):

                    5.2.1 Non-Competition: engage in any activity for or on behalf of a Competitor, as director, employee, shareholder (excluding any such shareholding by the Executive of no more than 5% of the shares of a publicly-traded company), consultant or otherwise, which is the same as or similar to activity in which Executive engaged at any time during the last two (2) years of employment by the Company or a subsidiary or affiliate of the Company; or

                    5.2.2 Non-Solicitation: (i) call upon any Person who is, at such Termination Date, engaged in activity on behalf of the Company or any subsidiary or affiliate of the Company for the purpose or with the intent of enticing such Person to cease such activity on behalf of the Company or such subsidiary or affiliate; or (ii) solicit, induce, or attempt to induce any customer of the Company or any subsidiary or affiliate of the Company to cease doing business in whole or in part with or through the Company or a subsidiary or affiliate, or to do business with any Competitor.

For purposes of this Agreement, “Competitor” means a person or entity who or which is engaged in a material line of business conducted by the Company and/or any subsidiary or affiliate of the Company. For purposes of this Agreement, “a material line of business conducted by the Company and/or any subsidiary or affiliate of the Company” means an activity of the Company and/or any subsidiary or affiliate of the Company generating gross revenues to the Company and/or any subsidiary or affiliate of the Company of more than twenty-five million dollars ($25,000,000) in the immediately preceding fiscal year of the Company.

               5.3 Remedies and Injunctive Relief. If the Executive commits a breach or threatens to breach any of the provisions of Section 5.1 or 5.2 hereof, the Company shall have the right

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and remedy to have the provisions of this Agreement specifically enforced by injunction or otherwise by any court having jurisdiction, it being acknowledged and agreed that any such breach will cause irreparable injury to the Company in addition to money damage and that money damages alone will not provide a complete or adequate remedy to the Company, it being further agreed that such right and remedy shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity.

               5.4 Severability. If any of the covenants contained in Sections 5.1, 5.2 or 5.3, or any part thereof, hereafter are construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect, without regard to the invalid portions.

               5.5 Extension of Term of Covenants Following Violation. The period during which the prohibitions of Section 5.2 are in effect shall be extended by any period or periods during which the Executive is in violation of Section 5.2.

               5.6 Blue Penciling by Court. If any of the covenants contained in Sections 5.1 or 5.2, or any part thereof, are held to be unenforceable, the parties agree that the court making such determination shall have the power to revise or modify such provision to make it enforceable to the maximum extent permitted by applicable law and, in its revised or modified form, said provision shall then be enforceable.

               5.7 Blue Penciling by One Court Not to Affect Covenants in Another State. The parties hereto intend to and hereby confer jurisdiction to enforce the covenants contained in Sections 5.1, 5.2 and 5.3 upon the courts of any state within the geographical scope of such covenants. In the event that the courts of any one or more of such states shall hold such covenants wholly unenforceable by reason of the breadth of such covenants or otherwise, it is the intention of the parties’ hereto that such determination not bar or in any way affect the Company’s right to the relief provided above in the courts of any other states within the geographical scope of such covenants as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being for this purpose severable into diverse and independent covenants.

          6. Intellectual Property.

               6.1 Company’s Rights. Notwithstanding and without limiting the provisions of Section 5, the Company shall be the sole owner of all the products and proceeds of the Executive’s services hereunder, including, but not limited to, all materials, ideas, concepts, formats, suggestions, developments, arrangements, packages, programs and other intellectual properties that the Executive may acquire, obtain, develop or create in connection with or during the Term, free and clear of any claims by the Executive (or anyone claiming under the Executive) of any kind or character whatsoever (other than the Executive’s right to receive payments hereunder), the Executive shall, at the request of the Company, execute such assignments, certificates or other instruments as the Company may from time to time deem necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend its right, title or interest in or to any such properties.

          7. Indemnification.

               7.1 General Rule. In addition to any rights to indemnification to which the Executive is entitled under the Company’s charter and by-laws, to the extent permitted by applicable law, the Company will indemnify, from the assets of the Company supplemented by insurance in an amount determined by the Company, the Executive at all times, during and after the Term, and, to the maximum

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extent permitted by applicable law, shall pay the Executive’s expenses (including reasonable attorneys’ fees and expenses, which shall be paid in advance by the Company as incurred, subject to recoupment in accordance with applicable law) in connection with any threatened or actual action, suit or proceeding to which the Executive may be made a party, brought by any shareholder of the Company directly or derivatively or by any third party by reason of any act or omission or alleged act or omission in relation to any affairs of the Company or any subsidiary or affiliate of the Company of the Executive as an officer, director or employee of the Company or of any subsidiary or affiliate of the Company. The Company shall use its best efforts to maintain during the Term and thereafter insurance coverage sufficient in the determination of the Company to satisfy any indemnification obligation of the Company arising under this Section 7.

          8. Notices.

          All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, one day after sent by overnight courier or three days after mailed first class, postage prepaid, by registered or certified mail, as follows (or to such other address as either party shall designate by notice in writing to the other in accordance herewith):

If to the Company, to:

Foster Wheeler Inc.
Perryville Corporate Park
Clinton, NJ 08809-4000
Attention: General Counsel

with a copy to:

Foster Wheeler AG
c/o Foster Wheeler Inc.
Perryville Corporate Park
Clinton, NJ 08809-4000
Attention: General Counsel

If to the Executive, to the Executive’s principal residence as reflected in the records of the Company.

If to the Guarantor, to:

Foster Wheeler International Corporation
Perryville Corporate Park
Clinton, NJ 08809-4000
Attention: Chief Legal Officer

               8.1 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New Jersey applicable to agreements made between residents thereof and to be performed entirely in New Jersey.

               8.2 Headings. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

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               8.3 Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter hereof, and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject matter hereof. No representation, promise or inducement has been made by either party that is not embodied in this Agreement, and neither party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

               8.4 Non-exclusivity of Rights. Other than as expressly set forth in this Agreement, nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company or the Affiliated Companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any other contract or agreement with the Company or the Affiliated Companies. For avoidance of doubt, it is agreed and understood that this Agreement shall not supersede or otherwise adversely affect any stock option, restricted stock or other form of equity grant or award provided to Executive prior to the Effective Date, or any indemnification agreement heretofore entered into between the Company and the Executive. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of the Affiliated Companies at or subsequent to the Termination Date shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement. Notwithstanding the foregoing, if the Executive receives payments and benefits pursuant to this Agreement in connection with the termination of the Executive’s employment, the Executive shall not be entitled to any severance pay or benefits under any severance plan, program or policy of the Company and the Affiliated Companies, unless specifically provided therein in a specific reference to this Agreement.

               8.5 Full Settlement. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. The Company agrees to pay as incurred (within ten days following the Company’s receipt of an invoice from the Executive, which invoice the Executive must submit to the Company not later than March 1 of the year following the year in which the expenses were incurred), to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.

               8.6 Assignability. This Agreement, and the Executive’s rights and obligations hereunder, may not be assigned by the Executive, nor may the Executive pledge, encumber or anticipate any payments or benefits due hereunder, by operation of law or otherwise. The Company may assign its rights, together with its obligations, hereunder (i) to any affiliate or (ii) to a third party in connection with any sale, transfer or other disposition of all or substantially all of any business to which the Executive’s services are then principally devoted, provided that no assignment pursuant to this Section 9.6 shall relieve the Company from its obligations hereunder to the extent the same are not timely discharged by such assignee.

               8.7 Assumption of Agreement by Successor. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

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               8.8 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Term to the extent necessary to the intended preservation of such rights and obligations.

               8.9 Amendment. This Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived, only by a written instrument executed by both of the parties hereto, or in the case of a waiver, by the party waiving compliance. The failure of either party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by either party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement.

               8.10 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

               8.11 Acknowledgement of Ability to Have Counsel Review. The parties acknowledge that this Agreement is the result of arm’s-length negotiations between sophisticated parties each afforded the opportunity to utilize representation by legal counsel. Each and every provision of this Agreement shall be construed as though both parties participated equally in the drafting of same, and any rule of construction that a document shall be construed against the drafting party shall not be applicable to this Agreement.

          9. Dispute Resolution.

          Subject to the rights of the Company pursuant to Section 5.3 above, any controversy, claim or dispute arising out of or relating to this Agreement, the breach thereof, or the Executive’s employment by the Company shall be settled by arbitration with three arbitrators. The arbitration will be administered by the American Arbitration Association in accordance with its National Rules for Resolution of Employment Disputes. The arbitration proceeding shall be confidential, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction. Any such arbitration shall take place in the Clinton, New Jersey area, or in any other mutually agreeable location. In the event any judicial action is necessary to enforce the arbitration provisions of this Agreement, sole jurisdiction shall be in the federal and state courts, as applicable, located in New Jersey. Any request for interim injunctive relief or other provisional remedies or opposition thereto shall not be deemed to be a waiver or the right or obligation to arbitrate hereunder. The arbitrator shall have the discretion to award reasonable attorneys’ fees, costs and expenses to the prevailing party. To the extent a party prevails in any dispute arising out of this Agreement or any of its terms and provisions, all reasonable costs, fees and expenses relating to such dispute, including the parties’ reasonable legal fees, shall be borne by the party not prevailing in the resolution of such dispute, but only to the extent that the arbitrator or court, as the case may be, deems reasonable and appropriate given the merits of the claims and defenses asserted.

          10. Free to Contract.

          The Executive represents and warrants to the Company that Executive is able freely to accept engagement and employment by the Company as described in this Agreement and that there are no existing agreements, arrangements or understandings, written or oral, that would prevent Executive from entering into this Agreement, would prevent Executive or restrict Executive in any way from rendering services to the Company as provided herein during the Term or would be breached by the future performance by the Executive of Executive’s duties hereunder. The Executive also represents and

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warrants that no fee, charge or expense of any sort is due from the Company to any third person engaged by the Executive in connection with Executive’s employment by the Company hereunder, except as disclosed in this Agreement.

          11. Subsidiaries and Affiliates.

          As used herein, the term “subsidiary” shall mean any corporation or other business entity controlled directly or indirectly by the Company or other business entity in question, and the term “affiliate” shall mean and include any corporation or other business entity directly or indirectly controlling, controlled by or under common control with the Company or other business entity in question.

          12. Code Section 409A Legal Requirement.

     12.1 Notwithstanding anything to the contrary in this Agreement, if the Executive constitutes a “specified employee” as defined and applied in Section 409A of the Code as of his Termination Date, to the extent any payment under this Agreement constitutes deferred compensation (after taking into account any applicable exemptions from Section 409A of the Code), and to the extent required by Section 409A of the Code, no payments due under this Agreement may be made until the earlier of: (i) the first day following the sixth month anniversary of Executive’s Termination Date, or (ii) the Executive’s date of death; provided, however, that any payments delayed during this six-month period shall be paid in the aggregate in a lump sum as soon as administratively practicable following the sixth month anniversary of the Executive’s Termination Date. For purposes of Section 409A of the Code, each “payment” (as defined by Section 409A of the Code) made under this Agreement shall be considered a “separate payment.” In addition, for purposes of Section 409A of the Code, the payments described in Sections 4.2.2 and 4.3.2 shall be deemed exempt from Section 409A of the Code to the full extent possible under any available exemptions, including without limit, the “short-term deferral” exemption of Treasury Regulation § 1.409A-1(b)(4) and (with respect to amounts paid no later than the second calendar year following the calendar year containing the Executive’s Termination Date) the “two-years/two-times” separation pay exemption of Treasury Regulation § 1.409A-1(b)(9)(iii), which are all hereby incorporated by reference.

          13. Guaranty.

     13.1 The Guarantor hereby unconditionally guarantees payment in full of all obligations of the Company under this Agreement.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

FOSTER WHEELER INC.
By: Name:	/s/ Raymond J. Milchovich Raymond J. Milchovich
Title:	Chairman, President & CEO
FOSTER WHEELER INTERNATIONAL CORPORATION (as to Section 13 only)
By: Name:	/s/ Peter J. Ganz Peter J. Ganz
Title:	Executive Vice President, General Counsel and Secretary
/s/ Rakesh K. Jindal
	Rakesh K. Jindal

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EX-10.2

Exhibit 10.2

Third Amendment to the
FOSTER WHEELER AG
Omnibus Incentive Plan

     The Foster Wheeler AG Omnibus Incentive Plan (the “Plan”) is hereby further amended as follows, pursuant to resolutions adopted by the Compensation Committee of the Board of Directors of Foster Wheeler AG at its meeting held on May 5, 2009:

1.	The first paragraph of Section 1.1 is replaced in its entirety with the following language:
	Establishment. Foster Wheeler Ltd., a Bermuda company, established an incentive compensation plan known as the Foster Wheeler Ltd. Omnibus Incentive Plan (the “Plan”). The Plan superseded and replaced the Foster Wheeler Inc. 1995 Stock Option Plan, the Directors Stock Option Plan, the 2004 Stock Option Plan, and the Management Restricted Stock Plan (the “Prior Plans”), except that the Prior Plans shall remain in effect until the awards granted under such plans have been exercised, forfeited, are otherwise terminated, or any and all restrictions lapse, as the case may be, in accordance with the terms of such awards. On February 9, 2009, Foster Wheeler AG became the ultimate parent company of Foster Wheeler Ltd. and its subsidiaries as a result of a redomestication effected pursuant to a scheme of arrangement under Bermuda law (the “Redomestication”), as described in Foster Wheeler Ltd.’s proxy statement dated December 19, 2008. In the Redomestication, all of the previously-outstanding common shares of Foster Wheeler Ltd. were cancelled and each holder of cancelled Foster Wheeler Ltd. common shares received registered shares of Foster Wheeler AG (or cash in lieu of any fractional shares). Effective upon the completion of the Redomestication, Foster Wheeler AG, a Swiss company (hereinafter referred to as the “Company”) assumed the Plan, renamed it the “Foster Wheeler AG Omnibus Incentive Plan,” and made certain amendments to the Plan.
2.	The first clause of Section 2(i) is replaced in its entirety with the following language:
	“Cause” means, with respect to any Participant, unless otherwise specified in (a) an applicable employment or other written agreement between the Company and a Participant or (b) an applicable employment or other written agreement between an Affiliate or a Subsidiary (which Affiliate or Subsidiary is incorporated in the United States or Bermuda) and a Participant which has been approved by the Board or Committee or executed by the person who is the Chief Executive Officer of the Company:
3.	The first clause of Section 2(j) is replaced in its entirety with the following language:
	“Change in Control” means, unless otherwise specified in (a) an applicable employment or other written agreement between the Company and a Participant or (b) an applicable employment or other written agreement between an Affiliate or a Subsidiary (which Affiliate or Subsidiary is incorporated in the United States or Bermuda) and a Participant which has been approved by the Board or Committee or executed by the person who is the Chief Executive Officer of the Company,

4.	The first clause of Section 2(q) is replaced in its entirety with the following language:
	“Disability” means, unless otherwise specified in (a) an applicable employment or other written agreement between the Company and a Participant or (b) an applicable employment or other written agreement between an Affiliate or a Subsidiary (which Affiliate or Subsidiary is incorporated in the United States or Bermuda) and a Participant which has been approved by the Board or Committee or executed by the person who is the Chief Executive Officer of the Company,
5.	Section 2(v) is replaced in its entirety with the following language:
	“Full Value Award” means an Award other than in the form of an ISO, NQSO, or SAR, and which is settled by the issuance of fully paid Shares. A Full-Value Award shall require the Participant to pay at least the par value for each Share issued out of the Company’s conditional capital. The Company reserves the right to arrange for payment to be made on the Participant’s behalf as part of an Award or otherwise.
6.	The first clause of Section 2(rr) is replaced in its entirety with the following language: “(i) the Foster Wheeler Inc. 1995 Stock Option Plan;”
7.	The first clause of Section 2(tt) is replaced in its entirety with the following language:
	“Resignation for Good Reason” means, unless otherwise specified in (x) an applicable employment or other written agreement between the Company and a Participant or (y) an applicable employment or other written agreement between an Affiliate or a Subsidiary (which Affiliate or Subsidiary is incorporated in the United States or Bermuda) and a Participant which has been approved by the Board or Committee or executed by the person who is the Chief Executive Officer of the Company, a material negative change in the employment relationship without the Participant’s consent;
8.	The first sentence of Section 2(ww) is replaced in its entirety with the following language:
	“Share” means a registered share of the Company, par value CHF 3.00 each, or such other par value as may be in effect from time to time.
	Effective upon the completion of the Redomestication, registered shares of the Company will be issued, held, made available, or used to measure benefits as appropriate under the Plan in lieu of Foster Wheeler Ltd. common shares with respect to all outstanding Awards issued prior to or after the completion of the Redomestication.
9.	Section 4.1 is replaced in its entirety with the following:

4.1	Number of Shares Available for Awards
(a)	Subject to adjustment as provided in Section 4.4 herein, the maximum number of Shares available for grant to Participants under this Plan (the “Share Authorization”) shall be:

(i)	Eight million one hundred sixty-thousand (8,160,000) Shares; plus
(ii)	(A) the number of Shares (not to exceed 1,400,000) which remained available for grant under the Company’s Prior Plans as of the Effective

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Date; and (B) the number of Shares (not to exceed 10,000,000) subject to outstanding awards as of the Effective Date under the Prior Plans that on or after the Effective Date cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent they are exercised for or settled in vested and nonforfeitable Shares).

(b)	All Shares of the Share Authorization may be granted as Full-Value Awards.
(c)	The maximum number of Shares of the Share Authorization that may be issued pursuant to ISOs under this Plan shall be nine million five hundred sixty thousand (9,560,000) Shares.
(d)	The maximum number of Shares of the Share Authorization that may be granted to Directors shall be 1,000,000 Shares.

10.	The last sentence of Section 4.2 is replaced in its entirety with the following:
	The Company will issue new Shares either based on the Company’s conditional or authorized capital or it may, in its full discretion, deliver treasury shares, shares available on the open market, or otherwise existing Shares.
11.	Section 4.3 is replaced in its entirety with the following:

          4.3 Annual Award Limits. Unless and until the Committee determines that an Award to a Covered Employee shall not be designed to qualify as Performance-Based Compensation, the following limits (each an “Annual Award Limit” and, collectively, “Annual Award Limits”) shall apply to grants of such Awards under this Plan:

(a)	Options. The maximum aggregate number of Shares subject to Options granted in any one Plan Year to any one Participant shall be 1,000,000, as adjusted pursuant to Sections 4.4 and/or 19.2.
(b)	SARs. The maximum number of Shares subject to Stock Appreciation Rights granted in any one Plan Year to any one Participant shall be 1,000,000, as adjusted pursuant to Sections 4.4 and/or 19.2.
(c)	Restricted Stock Units or Restricted Stock. The maximum aggregate grant with respect to Awards of Restricted Stock Units or Restricted Stock that a Participant may receive in any one Plan Year shall be 600,000 Shares, as adjusted pursuant to Sections 4.4 and/or 19.2, or equal to the value of 600,000 Shares, as adjusted pursuant to Sections 4.4 and/or 19.2.
(d)	Performance Units or Performance Shares. The maximum aggregate Award of Performance Units or Performance Shares that a Participant may receive in any one Plan Year shall be 600,000 Shares, as adjusted pursuant to Sections 4.4 and/or 19.2, or equal to the value of 600,000 Shares, as adjusted pursuant to Sections 4.4 and/or 19.2, determined as of the date of vesting or payout, as applicable.

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(e)	Cash-Based Awards. The maximum aggregate amount awarded or credited with respect to Cash-Based Awards to any one Participant in any one Plan Year may not exceed the greater of the value of $5,000,000 or 600,000 Shares, as adjusted pursuant to Sections 4.4 and/or 19.2, determined as of the date of vesting or payout, as applicable.
(f)	Other Stock-Based Awards. The maximum aggregate grant with respect to Other Stock-Based Awards pursuant to Section 10.2 in any one Plan Year to any one Participant shall be 600,000 Shares, as adjusted pursuant to Sections 4.4 and/or 19.2.

12.	The following new sentence is added to the end of Section 5.5 of the Plan:
	The Committee further shall have the discretion to determine whether any corporate event or transaction that results in the sale, spinoff or transfer of a Subsidiary, business group, operating unit, division, or similar organization constitutes a termination of employment (or services), and, if so, the effective date of such termination, for purposes of Awards granted under this Plan.
13.	The third paragraph of Section 6.6 is replaced in its entirety with the following language:
	Subject to any governing rules or regulations, as soon as practicable after receipt of written notification of exercise and full payment (including satisfaction of any applicable tax withholding), the Company shall deliver to the Participant evidence of book entry Shares in an appropriate amount based upon the number of Shares purchased under the Option(s).
14.	Section 8.4 is replaced in its entirety with the following: “[deleted]”
15.	The first sentence of Section 8.7 is replaced in its entirety with the following language:
	In the event that any Shares are required to be forfeited under any circumstances set forth in this Article 8, Article 20 or otherwise under this Plan or an Award Agreement, then the Company shall have the right (but not the obligation) to repurchase any or all of such forfeited Shares for $0.001 per Share repurchased.
16.	The first sentence of Section 9.7 is replaced in its entirety with the following language:
	In the event that any Shares are required to be forfeited under any circumstances set forth in this Article 9, Article 20 or otherwise under this Plan or an Award Agreement, then the Company shall have the right (but not the obligation) to repurchase any or all of such forfeited Shares for $0.001 per Share repurchased.
17.	The first sentence of Section 10.7 is replaced in its entirety with the following language:
	In the event that any Shares are required to be forfeited under any circumstances set forth in this Article 10, Article 20 or otherwise under this Plan or an Award Agreement, then the Company shall have the right (but not the obligation) to repurchase any or all of such forfeited Shares for $0.001 per Share repurchased.

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18.	The second paragraph of Section 11.1 is replaced in its entirety with the following language:
	In order to effect a forfeiture under this Article 11, the Committee may require that the Participant sell Shares received upon exercise or settlement of an Award to the Company or to such other person as the Company may designate at such price and on such other terms and conditions as the Committee in its sole discretion may require. Further, as a condition of each Award, the Company shall have, and each Participant shall be deemed to have given the Company, a proxy on each Participant’s behalf, and each Participant shall be required and be deemed to have agreed to execute any other documents necessary or appropriate to carry out this Article 11.
19.	The following new paragraph is added to the end of Section 12.2 of the Plan:
	For the sole purpose of enabling electronic trading of awarded Shares, the awarded Shares must be assigned and transferred to Cede & Co., the Nominee of the Bank Depository Trust Company, a U.S. clearing agency. Any Shares not held by Cede & Co. must be separately registered by a Participant prior to sale or trading.
20.	This Third Amendment is effective the date the Redomestication was completed, i.e., February 9, 2009.

     IN WITNESS WHEREOF, Foster Wheeler AG has caused this Third Amendment to the Plan to be executed.

FOSTER WHEELER AG
By: Name:	/s/ Peter J. Ganz Peter J. Ganz
Title:	Executive Vice President, General
	Counsel & Secretary

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EX-10.3

Exhibit 10.3

This document constitutes part
of a prospectus covering
securities that have been
registered under the Securities
Act of 1933.

Foster Wheeler AG Omnibus Incentive Plan

Restated Effective as of February 9, 2009
(Incorporating the First, Second, and Third Amendments)

Contents

Article 1. Establishment, Purpose, and Duration	1
Article 2. Definitions	1
Article 3. Administration	8
Article 4. Shares Subject to This Plan and Maximum Awards	9
Article 5. Eligibility and Participation	10
Article 6. Stock Options	11
Article 7. Stock Appreciation Rights	13
Article 8. Restricted Stock and Restricted Stock Units	16
Article 9. Performance Units/Performance Shares	18
Article 10. Cash-Based Awards and Other Stock-Based Awards	20
Article 11. Forfeiture of Awards	22
Article 12. Transferability of Awards	23
Article 13. Performance Measures	23
Article 14. Director Awards	25
Article 15. Dividend Equivalents	25
Article 16. Beneficiary Designation	25
Article 17. Rights of Participants	25
Article 18. Change in Control	26
Article 19. Amendment, Modification, Suspension, and Termination	27
Article 20. Withholding	27
Article 21. Successors	28
Article 22. General Provisions	28

i

Foster Wheeler Ltd.
Omnibus Incentive Plan

Article 1. Establishment, Purpose, and Duration

     1.1 Establishment. Foster Wheeler Ltd., a Bermuda company, established an incentive compensation plan known as the Foster Wheeler Ltd. Omnibus Incentive Plan (the “Plan”). The Plan superseded and replaced the Foster Wheeler Inc. 1995 Stock Option Plan, the Directors Stock Option Plan, the 2004 Stock Option Plan, and the Management Restricted Stock Plan (the “Prior Plans”), except that the Prior Plans shall remain in effect until the awards granted under such plans have been exercised, forfeited, are otherwise terminated, or any and all restrictions lapse, as the case may be, in accordance with the terms of such awards. On February 9, 2009, Foster Wheeler AG became the ultimate parent company of Foster Wheeler Ltd. and its subsidiaries as a result of a redomestication effected pursuant to a scheme of arrangement under Bermuda law (the “Redomestication”), as described in Foster Wheeler Ltd.’s proxy statement dated December 19, 2008. In the Redomestication, all of the previously-outstanding common shares of Foster Wheeler Ltd. were cancelled and each holder of cancelled Foster Wheeler Ltd. common shares received registered shares of Foster Wheeler AG (or cash in lieu of any fractional shares). Effective upon the completion of the Redomestication, Foster Wheeler AG, a Swiss company (hereinafter referred to as the “Company”) assumed the Plan, renamed it the “Foster Wheeler AG Omnibus Incentive Plan,” and made certain amendments to the Plan. This restated Plan incorporates three amendments, each of which was approved by Foster Wheeler Ltd.’s and/or the Company’s Board of Directors and/or Compensation Committee, as appropriate; it is effective as of February 9, 2009.

     This Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards, and Other Stock-Based Awards.

     This Plan shall become effective upon shareholder approval (the “Effective Date”) and shall remain in effect as provided in Section 1.3 hereof.

     1.2 Purpose of this Plan. The purpose of this Plan is to provide a means whereby designated Employees, Directors, and Third-Party Service Providers develop a sense of proprietorship and personal involvement in the development and financial success of the Company, and to encourage them to devote their best efforts to the business of the Company, thereby advancing the interests of the Company and its shareholders. A further purpose of this Plan is to provide a means through which the Company may attract able individuals to become Employees or serve as Directors or Third-Party Service Providers and to provide a means whereby those individuals upon whom the responsibilities of the successful administration and management of the Company are of importance, can acquire and maintain ownership of Shares, thereby strengthening their concern for the welfare of the Company.

     1.3 Duration of this Plan. Unless sooner terminated as provided herein, this Plan shall terminate ten (10) years from the Effective Date, e.g. on the day before the tenth (10^th) anniversary of the Effective Date. After this Plan is terminated, no Awards may be granted but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and this Plan’s terms and conditions. Notwithstanding the foregoing, no Incentive Stock Options may be granted more than ten (10) years after the earlier of: (a) adoption of this Plan by the Board, or (b) the Effective Date.

Article 2. Definitions

     Whenever used in this Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the word shall be capitalized:

(a)	“Affiliate” shall mean any corporation or other entity (including, but not limited to, a partnership or a limited liability company) that is affiliated with the Company through stock or equity ownership or otherwise, and is designated as an Affiliate for purposes of this Plan by the Committee.
(b)	“Annual Award Limit” or “Annual Award Limits” have the meaning set forth in Section 4.3.

(c)	“Applicable Laws” means the legal requirements relating to the administration of equity plans or the issuance of share capital by a company, including under the laws of Switzerland, applicable U.S. state corporate laws, U.S. federal and applicable state securities laws, other U.S. federal and state laws, the Code, any stock exchange rules and regulations that may from time to time be applicable to the Company, and the applicable laws, rules and regulations of any other country or jurisdiction where Awards are granted under the Plan, as such laws, rules, regulations, interpretations and requirements may be in place from time to time.
(d)	“Award” means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards, or Other Stock-Based Awards, in each case subject to the terms of this Plan.
(e)	“Award Agreement” means either: (i) a written agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award granted under this Plan, or (ii) a written or electronic statement issued by the Company to a Participant describing the terms and provisions of such Award, including in each case any amendment or modification thereof. The Committee may provide for the use of electronic, Internet, or other non-paper Award Agreements, and the use of electronic, Internet, or other non-paper means for the acceptance thereof and actions thereunder by a Participant.
(f)	“Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
(g)	“Board” or “Board of Directors” means the Board of Directors of the Company.
(h)	“Cash-Based Award” means an Award, denominated in cash, granted to a Participant as described in Article 10.
(i)	“Cause” means, with respect to any Participant, unless otherwise specified in (a) an applicable employment or other written agreement between the Company and a Participant or (b) an applicable employment or other written agreement between an Affiliate or a Subsidiary (which Affiliate or Subsidiary is incorporated in the United States or Bermuda) and a Participant which has been approved by the Board or Committee or executed by the person who is the Chief Executive Officer of the Company:

(i)	Conviction of a felony;
(ii)	Actual or attempted theft or embezzlement of Company, any Subsidiary, or any Affiliate assets;
(iii)	Use of illegal drugs;
(iv)	Material breach of an employment agreement between the Company, Affiliate or Subsidiary, as the case may be, and the Participant that the Participant has not cured within thirty (30) days after the Company, Affiliate or Subsidiary, as applicable, has provided the Participant notice of the material breach which shall be given within sixty (60) days of the Company’s, Affiliate’s or Subsidiary’s, as applicable, knowledge of the occurrence of the material breach;
(v)	Commission of an act of moral turpitude that in the judgment of the Committee can reasonably be expected to have an adverse effect on the business, reputation, or financial situation of the Company, any Subsidiary, or any Affiliate and/or the ability of the Participant to perform his or her duties;

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(vi)	Gross negligence or willful misconduct in performance of the Participant’s duties;
(vii)	Breach of fiduciary duty to the Company, any Subsidiary, or any Affiliate; or
(viii)	Willful refusal to perform the duties of the Participant’s titled position.

(j) “Change in Control” means, unless otherwise specified in (a) an applicable employment or other written agreement between the Company and a Participant or (b) an applicable employment or other written agreement between an Affiliate or a Subsidiary (which Affiliate or Subsidiary is incorporated in the United States or Bermuda) and a Participant which has been approved by the Board or Committee or executed by the person who is the Chief Executive Officer of the Company,

(i)	The acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of Beneficial Ownership of voting securities of the Company where such acquisition causes such Person to own twenty percent (20%) or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of Directors (the “Outstanding Company Voting Securities”), provided, however, that for purposes of this paragraph (i), the following acquisitions shall not be deemed to result in a Change in Control: (A) any acquisition directly from the Company or any corporation or other legal entity controlled, directly or indirectly, by the Company, (B) any acquisition by the Company or any corporation or other legal entity controlled, directly or indirectly, by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation or other legal entity controlled, directly or indirectly, by the Company, or (D) any acquisition by any corporation pursuant to a transaction that complies with clauses (A), (B), and (C) of paragraph (iii) below; and provided, further, that if any Person’s Beneficial Ownership of the Outstanding Company Voting Securities reaches or exceeds twenty percent (20%) as a result of a transaction described in clause (A) or (B) above, and such Person subsequently acquires Beneficial Ownership of additional voting securities of the Company, such subsequent acquisition shall be treated as an acquisition that causes such Person to own twenty percent (20%) or more of the Outstanding Company Voting Securities;
(ii)	Individuals who, as of the date hereof, constitute the Board (such individuals, the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’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 Board;
(iii)	The consummation of a reorganization, merger, amalgamation or consolidation or sale or other disposition of all or substantially all of the assets of the Company (“Business Combination”) or, if consummation of such Business Combination is subject to the consent of any government or governmental agency, the obtaining of such consent (either explicitly or implicitly by consummation); excluding, however, such a Business Combination pursuant to which (A) all or substantially all of the individuals and entities who were the Beneficial Owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than sixty percent (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

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from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Company or all or substantially all of the Company’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 Company Voting Securities, (B) no Person (excluding any (x) corporation owned, directly or indirectly, by the Beneficial Owner of the Outstanding Company Voting Securities as described in clause (A) immediately preceding, or (y) employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination, or any of their respective subsidiaries) Beneficially Owns, directly or indirectly, twenty percent (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 (C) 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

(iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(k)	“Change-in-Control Price” means the closing price of a Share on the last trading day before the Change in Control occurs.
(l)	“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time. For purposes of this Plan, references to sections of the Code shall be deemed to include references to any applicable regulations thereunder and any successor or similar provision, as well as any applicable interpretative guidance issued related thereto.
(m)	“Committee” means the Compensation Committee of the Board or a subcommittee thereof, or any other committee designated by the Board to administer this Plan. The members of the Committee shall be appointed from time to time by and shall serve at the discretion of the Board. If the Committee does not exist or cannot function for any reason, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee.
(n)	“Company” means Foster Wheeler AG, a Swiss company, and any successor thereto as provided in Article 21 herein.
(o)	“Covered Employee” means any key Employee who is or may become a “Covered Employee,” as defined in Code Section 162(m), and who is designated, either as an individual Employee or class of Employees, by the Committee within the shorter of: (i) ninety (90) days after the beginning of the Performance Period, or (ii) twenty-five percent (25%) of the Performance Period has elapsed, as a “Covered Employee” under this Plan for such applicable Performance Period.
(p)	“Director” means any individual who is a member of the Board of Directors of the Company and who is not an Employee.
(q)	“Disability” means, unless otherwise specified in (a) an applicable employment or other written agreement between the Company and a Participant or (b) an applicable employment or other written agreement between an Affiliate or a Subsidiary (which Affiliate or Subsidiary is incorporated in the United States or Bermuda) and a Participant which has been approved by the Board or Committee or executed by the person who is the Chief Executive Officer of the Company, (i) in the case of an Employee, the Employee qualifying for long-term disability benefits under any long-term disability program sponsored by the Company, Affiliate or Subsidiary in which the Employee participates, and (ii) in the case of a Director or Third-Party Service Provider, the inability of the Director or Third-Party Service Provider to engage in any

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substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death, or which has lasted or can be expected to last for a continuous period of not less than 12 months, as determined by the Committee, based upon medical evidence and in accordance with Code Section 22(e)(3).

(r)	“Effective Date” has the meaning set forth in Section 1.1.
(s)	“Employee” means any individual who performs services for and is designated as an employee of the Company, its Affiliates, and/or its Subsidiaries on the payroll records thereof. An Employee shall not include any individual during any period he or she is classified or treated by the Company, Affiliate, and/or Subsidiary as an independent contractor, a consultant, or any employee of an employment, consulting, or temporary agency or any other entity other than the Company, Affiliate, and/or Subsidiary, without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified as a common-law employee of the Company, Affiliate, and/or Subsidiary during such period.
(t)	“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.
(u)	“Fair Market Value” or “FMV” means the closing price of a Share on the most recent date on which Shares were publicly traded. In the event Shares are not publicly traded at the time a determination of their value is required to be made hereunder, the determination of their Fair Market Value shall be made by the Committee in such manner as it deems appropriate.
(v)	“Full-Value Award” means an Award other than in the form of an ISO, NQSO, or SAR, and which is settled by the issuance of fully paid Shares. A Full-Value Award shall require the Participant to pay at least the par value for each Share issued out of the Company’s conditional capital. The Company reserves the right to arrange for payment to be made on the Participant’s behalf as part of an Award or otherwise.
(w)	“Grant Date” means the date on which the Committee approves the grant of an Award by Committee action or such later date as specified in advance by the Committee.
(x)	“Grant Price” means the price established when the Committee approves the grant of an SAR pursuant to Article 7, used to determine whether there is any payment due upon exercise of the SAR. The Grant Price of any SAR will be at least the greater of the Fair Market Value of a Share or the par value of a Share.
(y)	“Incentive Stock Option” or “ISO” means an Option to purchase Shares granted under Article 6 to an Employee and that is designated as an Incentive Stock Option and that is intended to meet the requirements of Code Section 422, or any successor provision.
(z)	“Insider” means an individual who is, on the relevant date, an officer or Director of the Company, or a more than ten percent (10%) Beneficial Owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Board or Committee in accordance with Section 16 of the Exchange Act.
(aa)	“Involuntary Termination” means the Company’s, Affiliate’s and/or Subsidiary’s termination of a Participant’s employment or service other than for Cause.
(bb)	“Nonqualified Stock Option” or “NQSO” means an Option that is not intended to meet the requirements of Code Section 422, or that otherwise does not meet such requirements.
(cc)	“Non-Tandem SAR” means an SAR that is granted independently of any Option, as described in Article 7.

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(dd)	“Option” means an Incentive Stock Option or a Nonqualified Stock Option, as described in Article 6.
(ee)	“Option Price” means the price at which a Share may be purchased by a Participant pursuant to an Option. The Option Price will be at least the greater of the Fair Market Value of a Share or par value of a Share.
(ff)	“Other Stock-Based Award” means an equity-based or equity-related Award not otherwise described by the terms of this Plan, granted pursuant to Article 10.
(gg)	“Participant” means any eligible individual as set forth in Article 5 to whom an Award is granted.
(hh)	“Performance-Based Compensation” means compensation under an Award that is intended to satisfy the requirements of Code Section 162(m) for certain performance-based compensation paid to Covered Employees. Notwithstanding the foregoing, nothing in this Plan shall be construed to mean that an Award which does not satisfy the requirements for performance-based compensation under Code Section 162(m) does not constitute performance-based compensation for other purposes, including Code Section 409A.
(ii)	“Performance-Based Exception” means the exception for Performance-Based Compensation from the tax deductibility limitations of Code Section 162(m).
(jj)	“Performance Measures” means measures as described in Article 13 on which the performance goals are based and which are approved by the Company’s shareholders pursuant to this Plan in order to qualify Awards as Performance-Based Compensation.
(kk)	“Performance Period” means the period of time during which the performance goals must be met in order to determine the degree of payout and/or vesting with respect to an Award.
(ll)	“Performance Share” means an Award under Article 9 herein and subject to the terms of this Plan, denominated in fully paid Shares, the value of which at the time it is payable is determined as a function of the extent to which corresponding performance criteria or Performance Measure(s), as applicable, have been achieved.
(mm)	“Performance Unit” means an Award under Article 9 herein and subject to the terms of this Plan, denominated in units, the value of which at the time it is payable is determined as a function of the extent to which corresponding performance criteria or Performance Measure(s), as applicable, have been achieved.
(nn)	“Period of Restriction” means the period when Restricted Stock or Restricted Stock Units are subject to a substantial risk of forfeiture (based on the passage of time, the achievement of performance goals, or the occurrence of other events as determined by the Committee, in its discretion) by the exercise of the Company’s right to repurchase such Restricted Stock or Restricted Stock Units, as provided in Article 8.
(oo)	“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.
(pp)	“Plan” means the Foster Wheeler AG Omnibus Incentive Plan.
(qq)	“Plan Year” means the Company’s fiscal year.

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(rr)	“Prior Plans” mean, collectively: (i) the Foster Wheeler Inc. 1995 Stock Option Plan; (ii) the Directors Stock Option Plan; (iii) the 2004 Stock Option Plan; and (iv) the Management Restricted Stock Plan.
(ss)	“Restricted Stock” means an Award granted to a Participant pursuant to Article 8.
(tt)	“Resignation for Good Reason” means, unless otherwise specified in (x) an applicable employment or other written agreement between the Company and a Participant or (y) an applicable employment or other written agreement between an Affiliate or a Subsidiary (which Affiliate or Subsidiary is incorporated in the United States or Bermuda) and a Participant which has been approved by the Board or Committee or executed by the person who is the Chief Executive Officer of the Company, a material negative change in the employment relationship without the Participant’s consent; provided (a) the Participant notifies the Company of the material negative change within ninety (90) days of the occurrence of such change, (b) the material negative change is not cured by the Company within thirty (30) days after receiving notice from the Participant, and (c) the material negative change is evidenced by any of the following:

(i)	material diminution in title, duties, responsibilities or authority;
(ii)	reduction of base salary and benefits except for across-the-board changes for Employees at the Participant’s level;
(iii)	exclusion from executive benefit/compensation plans;
(iv)	relocation of the Participant’s principal business location by the Participant’s employer (the Company, Affiliate, or Subsidiary, as the case may be) of greater than fifty (50) miles;
(v)	material breach of the Participant’s employment agreement with the Company, Affiliate or Subsidiary, as the case may be; or
(vi)	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 Participant.

(uu)	“Restricted Stock Unit” means an Award granted to a Participant pursuant to Article 8, except no Shares are actually awarded to the Participant on the Grant Date.
(vv)	“Retirement” means termination of employment by the Participant after the Participant has attained age 65.
(ww)	“Share” means a registered share of the Company, par value CHF 3.00 each, or such other par value as may be in effect from time to time. Effective upon the completion of the Redomestication, registered shares of the Company will be issued, held, made available, or used to measure benefits as appropriate under the Plan in lieu of Foster Wheeler Ltd. common shares with respect to all outstanding Awards issued prior to or after the completion of the Redomestication.
(xx)	“Stock Appreciation Right” or “SAR” means an Award, designated as an SAR, pursuant to the terms of Article 7 herein.
(yy)	“Subsidiary” means any corporation or other entity, whether domestic or foreign, in which the Company has or obtains, directly or indirectly, a proprietary interest of more than fifty percent (50%) by reason of stock ownership or otherwise.

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(zz)	“Tandem SAR” means an SAR that is granted in connection with a related Option pursuant to Article 7, the exercise of which shall require forfeiture of the right to purchase a Share under the related Option (and when a Share is purchased under the Option, the Tandem SAR shall similarly be forfeited).
(aaa)	“Third-Party Service Provider” means any consultant, agent, advisor, or independent contractor who renders services to the Company, any Subsidiary, or an Affiliate that: (i) are not in connection with the offer or sale of the Company’s securities in a capital raising transaction; and (ii) do not directly or indirectly promote or maintain a market for the Company’s securities.

Article 3. Administration

     3.1 General. The Committee shall be responsible for administering this Plan, subject to this Article 3 and the other provisions of this Plan. The Committee shall consist of not less than two (2) Directors who are both non-employee directors, within the meaning of Rule 16b-3 of the Exchange Act, and “outside directors,” as defined in Treasury Regulation Section 1.162-27; provided, however, that if at any time any member of the Committee is not an outside director, as so defined, the Committee may establish a subcommittee, consisting of all members who are outside directors, for all purposes of any Award to a Covered Employee, unless the Committee determines that such an Award is not intended to qualify for the Performance-Based Exception. The Committee may employ attorneys, consultants, accountants, agents, and other individuals, any of whom may be an Employee, and the Committee, the Company, and its officers and Directors shall be entitled to rely upon the advice, opinions, or valuations of any such individuals. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Participants, the Company, and all other interested individuals.

     3.2 Authority of the Committee. The Committee shall have full and exclusive discretionary power to interpret the terms and the intent of this Plan and any Award Agreement or other agreement or document ancillary to or in connection with this Plan, to determine eligibility for Awards and to adopt such rules, regulations, forms, instruments, and guidelines for administering this Plan as the Committee may deem necessary or proper. Such authority shall include, but not be limited to, selecting Award recipients, establishing all Award terms and conditions (including the terms and conditions set forth in Award Agreements), granting Awards as an alternative to or as the form of payment for grants or rights earned or due under compensation plans or arrangements of the Company, construing any provision of the Plan or any Award Agreement, and, subject to Article 19, adopting modifications and amendments to this Plan or any Award Agreement, including without limitation, accelerating the vesting of any Award or extending the post-termination exercise period of an Award (subject to the limitations of Code Section 409A), and any other modifications or amendments that are necessary to comply with the laws of the countries and other jurisdictions in which the Company, its Affiliates, and/or its Subsidiaries operate.

     Notwithstanding the foregoing, members of the Board or the Committee who are either eligible for Awards or have been granted Awards may vote on any and all matters, including matters affecting the administration of the Plan or the grant of Awards pursuant to the Plan. However, no such member shall act upon the granting of a specific Award to himself or herself, but any such member may be counted in determining the existence of a quorum at any meeting of the Board or the Committee during which action is taken with respect to the granting of an Award to him or her.

     3.3 Delegation. The Committee may delegate to one or more of its members or to one or more officers of the Company, and/or its Subsidiaries and Affiliates or to one or more agents or advisors such administrative duties or powers as it may deem advisable, and the Committee or any individuals to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render advice with respect to any responsibility the Committee or such individuals may have under this Plan. The Committee may, by resolution, authorize one or more officers of the Company to do one or both of the following on the same basis as can the Committee: (a) designate Employees to be recipients of Awards; (b) determine the size of any such Awards; provided, however, (i) the Committee shall not delegate such responsibilities to any such officer for Awards granted to an Employee who is considered an Insider; (ii) the resolution providing such authorization sets forth the total number of Awards such officer(s) may grant; and (iii) the officer(s) shall report periodically to the Committee regarding the nature and scope of the Awards granted pursuant to the authority delegated.

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Article 4. Shares Subject to This Plan and Maximum Awards

     4.1 Number of Shares Available for Awards

(a) Subject to adjustment as provided in Section 4.4 herein, the maximum number of Shares available for grant to Participants under this Plan (the “Share Authorization”) shall be:

(i)

Eight million one hundred sixty thousand (8,160,000) Shares; plus

(ii)

(A) the number of Shares (not to exceed 1,400,000) which remained available for grant under the Company’s Prior Plans as of the Effective Date; and (B) the number of Shares (not to exceed 10,000,000) subject to outstanding awards as of the Effective Date under the Prior Plans that on or after the Effective Date cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent they are exercised for or settled in vested and nonforfeitable Shares).

(b)	All Shares of the Share Authorization may be granted as Full-Value Awards.
(c)	The maximum number of Shares of the Share Authorization that may be issued pursuant to ISOs under this Plan shall be nine million five hundred sixty thousand (9,560,000) Shares.
(d)	The maximum number of Shares of the Share Authorization that may be granted to Directors shall be 1,000,000 Shares.

     4.2 Share Usage. Shares covered by an Award shall only be counted as used to the extent they are actually issued. Any Shares related to Awards which terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such Shares, are settled in cash in lieu of Shares, or are exchanged with the Committee’s permission, prior to the issuance of Shares, for Awards not involving Shares, shall be available again for grant under this Plan. Moreover, if the Option Price of any Option granted under this Plan is satisfied by tendering Shares to the Company (by either actual delivery or by attestation and subject to Section 6.6), or if an SAR is exercised, only the number of Shares issued, net of the Shares tendered, if any, will be delivered for purposes of determining the maximum number of Shares available for delivery under this Plan. The Company will issue new Shares either based on the Company’s conditional or authorized capital or it may, in its full discretion, deliver treasury shares, shares available on the open market, or otherwise existing Shares.

     4.3 Annual Award Limits. Unless and until the Committee determines that an Award to a Covered Employee shall not be designed to qualify as Performance-Based Compensation, the following limits (each an “Annual Award Limit” and, collectively, “Annual Award Limits”) shall apply to grants of such Awards under this Plan:

(a)	Options. The maximum aggregate number of Shares subject to Options granted in any one Plan Year to any one Participant shall be 1,000,000, as adjusted pursuant to Sections 4.4 and/or 19.2.
(b)	SARs. The maximum number of Shares subject to Stock Appreciation Rights granted in any one Plan Year to any one Participant shall be 1,000,000, as adjusted pursuant to Sections 4.4 and/or 19.2.
(c)	Restricted Stock Units or Restricted Stock. The maximum aggregate grant with respect to Awards of Restricted Stock Units or Restricted Stock that a Participant may receive in any one Plan Year shall be 600,000 Shares, as adjusted pursuant to Sections 4.4 and/or 19.2, or equal to the value of 600,000 Shares, as adjusted pursuant to Sections 4.4 and/or 19.2.
(d)	Performance Units or Performance Shares. The maximum aggregate Award of Performance Units or Performance Shares that a Participant may receive in any one Plan Year shall be 600,000 Shares, as adjusted pursuant to Sections 4.4 and/or 19.2, or equal to the value of 600,000 Shares,

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	as adjusted pursuant to Sections 4.4 and/or 19.2, determined as of the date of vesting or payout, as applicable.
(e)	Cash-Based Awards. The maximum aggregate amount awarded or credited with respect to Cash-Based Awards to any one Participant in any one Plan Year may not exceed the greater of the value of $5,000,000 or 600,000 Shares, as adjusted pursuant to Sections 4.4 and/or 19.2, determined as of the date of vesting or payout, as applicable.
(f)	Other Stock-Based Awards. The maximum aggregate grant with respect to Other Stock-Based Awards pursuant to Section 10.2 in any one Plan Year to any one Participant shall be 600,000 Shares, as adjusted pursuant to Sections 4.4 and/or 19.2.

     4.4 Adjustments in Authorized Shares. In the event of any corporate event or transaction (including, but not limited to, a change in the authorized number of Shares of the Company or the capitalization of the Company) such as an amalgamation, a merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock dividend, stock split, reverse stock split, split up, spin-off, division, consolidation or other distribution of stock or property of the Company, combination of Shares, exchange of Shares, dividend in kind, or other like change in capital structure, number of issued Shares or distribution (other than normal cash dividends) to shareholders of the Company, or any similar corporate event or transaction, the Committee, in its sole discretion, in order to prevent dilution or enlargement of Participants’ rights under this Plan, shall substitute or adjust, as applicable, the number and kind of Shares that may be issued under this Plan or under particular forms of Awards, the number and kind of Shares subject to outstanding Awards, the Option Price or Grant Price applicable to outstanding Awards, the Annual Award Limits, and other value determinations applicable to outstanding Awards.

     The Committee, in its sole discretion, may also make appropriate adjustments in the terms of any Awards under this Plan to reflect, or related to, such changes or distributions and to modify any other terms of outstanding Awards, including modifications of performance goals and changes in the length of Performance Periods. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under this Plan.

     Subject to the provisions of Article 19 and notwithstanding anything else herein to the contrary, without affecting the number of Shares reserved or available hereunder, the Committee may authorize the issuance or assumption of benefits under this Plan in connection with any amalgamation, merger, consolidation, acquisition of property or stock, or reorganization upon such terms and conditions as it may deem appropriate (including, but not limited to, a conversion of equity awards into Awards under this Plan in a manner consistent with paragraph 53 of FASB Interpretation No. 44 or subsequent accounting guidance), subject to compliance with the rules under Code Sections 422 and 424, as and where applicable. The Committee shall provide to Participants reasonable written notice (which may include, without limit, notice by electronic means) within a reasonable time of any such determinations it makes.

Article 5. Eligibility and Participation

     5.1 Eligibility. Individuals eligible to participate in this Plan include all Employees, Directors, and Third-Party Service Providers.

     5.2 Actual Participation. Subject to the provisions of this Plan, the Committee may, from time to time, select from all eligible individuals, those individuals to whom Awards shall be granted and shall determine, in its sole discretion, the nature of, any and all terms permissible by law, and the amount of each Award.

     5.3 Leaves of Absence. Notwithstanding any other provision of the Plan to the contrary, for purposes of determining Awards granted hereunder, a Participant shall not be deemed to have incurred a termination of employment if such Participant is placed on military or sick leave or such other leave of absence which is considered as continuing intact the employment relationship with the Company, any Subsidiary, or any Affiliate. In such a case, the employment relationship shall be deemed to continue until the date when a Participant’s right to reemployment shall no longer be guaranteed either by law or contract.

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     5.4 Transfer of Service. Notwithstanding any other provision of the Plan to the contrary, for purposes of determining Awards granted hereunder, a Participant shall not be deemed to have incurred a termination of employment if the Participant’s status as an Employee, Director, or Third-Party Service Provider terminates and the Participant is then, or immediately thereafter becomes, an eligible individual due to another status or relationship with the Company, any Subsidiary, or any Affiliate.

     5.5 Termination of Employment. For purposes of Awards granted under this Plan, the Committee shall have discretion to determine whether a Participant has ceased to be employed by (or, in the case of a Director or Third Party Service Provider, has ceased providing services to) the Company, Affiliate and/or any Subsidiary, and the effective date on which such employment (or services) terminated, or whether any Participant is on an authorized leave of absence. The Committee further shall have the discretion to determine whether any corporate event or transaction that results in the sale, spinoff or transfer of a Subsidiary, business group, operating unit, division, or similar organization constitutes a termination of employment (or services), and, if so, the effective date of such termination, for purposes of Awards granted under this Plan.

Article 6. Stock Options

     6.1 Grant of Options. Subject to the terms and provisions of this Plan, Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee, in its sole discretion; provided that ISOs may be granted only to eligible Employees of the Company or of any parent or subsidiary corporation (as permitted under Code Sections 422 and 424).

     6.2 Award Agreement. Each Option grant shall be evidenced by an Award Agreement that shall specify the Option Price, the maximum duration of the Option, the number of Shares to which the Option pertains, the conditions upon which an Option shall become vested and exercisable, and such other provisions as the Committee shall determine which are not inconsistent with the terms of this Plan. The Award Agreement also shall specify whether the Option is intended to be an ISO or a NQSO.

     6.3 Option Price. The Option Price for each grant of an Option under this Plan shall be determined by the Committee in its sole discretion and shall be specified in the Award Agreement; provided, however, the Option Price must be at least equal to one hundred percent (100%) of the FMV of the Shares as determined on the Grant Date. With respect to a Participant who owns, directly or indirectly, more than ten percent (10%) of the total combined voting power of all classes of the stock of the Company, any Subsidiary, or any Affiliate, the Option Price of Shares subject to an ISO shall be at least equal to one hundred and ten percent (110%) of the Fair Market Value of such Shares on the ISO’s Grant Date. In any event, the Option Price shall not be less than the aggregate par value of the Shares covered by the Option.

     6.4 Term of Options. Each Option granted to a Participant shall expire at such time as the Committee shall determine when the Committee approves the grant; provided, however, no Option shall be exercisable later than the day before the tenth (10^th) anniversary of the Grant Date. Notwithstanding the foregoing, with respect to ISOs, in the case of a Participant who owns, directly or indirectly, more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, any Subsidiary, or an Affiliate, no such ISO shall be exercisable later than the day before the fifth (5^th) anniversary of the Grant Date.

     6.5 Exercise of Options. Options granted under this Article 6 shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which terms and restrictions need not be the same for each grant or for each Participant. Notwithstanding the foregoing, the Fair Market Value of Shares to which ISOs are exercisable for the first time by any Participant during any calendar year shall not exceed one hundred thousand dollars ($100,000). Any ISOs that become exercisable in excess of such amount shall be deemed Nonqualified Stock Options to the extent of such excess. In addition, in order to exercise any ISOs granted under this Article 6, the Participant must be an Employee of the Company, any Subsidiary, or any Affiliate from the Grant Date until at least three months before the date the ISO is exercised.

     6.6 Payment. Options granted under this Article 6 shall be exercised by the delivery of a notice of exercise to the Company or an agent designated by the Company in a form specified or accepted by the Committee, or by complying with any alternative procedures which may be authorized by the Committee, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares.

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     A condition of the issuance of the Shares as to which an Option shall be exercised shall be the payment of the Option Price. The Option Price of any Option shall be payable, in full, to the Company, under any of the following methods as determined by the Committee, in its sole discretion: (a) in cash or its equivalent; (b) by tendering (either by actual delivery or attestation) to the Company for repurchase previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the Option Price together with an assignment of the proceeds of the Share repurchase to pay the Option Price (provided that any such repurchase of Shares shall be subject to the Swiss Code of Obligations); (c) by a cashless (broker-assisted) exercise; (d) by a combination of (a), (b) and/or (c); or (e) any other method approved or accepted by the Committee in its sole discretion.

     Subject to any governing rules or regulations, as soon as practicable after receipt of written notification of exercise and full payment (including satisfaction of any applicable tax withholding), the Company shall deliver to the Participant evidence of book entry Shares in an appropriate amount based upon the number of Shares purchased under the Option(s).

     Unless otherwise determined by the Committee, all payments under all of the methods indicated above shall be paid in United States dollars.

     6.7 Restrictions on Share Transferability. The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem advisable, including, without limitation, minimum holding period requirements, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, or under any blue sky or state securities laws applicable to such Shares.

     6.8 Termination of Employment, Service as a Director or Third-Party Service Provider. Each Participant’s Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the Option following termination of the Participant’s employment or services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be, subject to Sections 5.3 and 5.4. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with each Participant, need not be uniform among all Options issued pursuant to this Article 6, and may reflect distinctions based on, among other things, the reasons for termination, or reasons relating to breach or threatened breach of restrictive covenants to which the Participant is subject, if any. Subject to Article 18, in the event a Participant’s Award Agreement does not set forth such provisions, the following provisions shall apply:

(a)	Involuntary Termination or Resignation for Good Reason. These termination events apply only to Participants who are Employees or Third-Party Service Providers. In the event that a Participant’s employment, or service as a Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates by reason of an Involuntary Termination or Resignation for Good Reason by the Participant, to the extent that an Option is not then exercisable, the Option shall immediately become vested and exercisable with respect to all Shares covered by the Participant’s Option, and the Option shall remain exercisable until the earlier of (A) the expiration of the term of the Option, or (B) six (6) months (three (3) months for ISOs) after the date of such termination.
(b)	Death or Disability. These termination events apply to all Participants. In the event that a Participant’s employment, or service as a Director or Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates by reason of death or Disability, to the extent that an Option is not then exercisable, the Option shall immediately become vested and exercisable with respect to all Shares covered by the Participant’s Option, and the Option shall remain exercisable until the earlier of (A) the expiration of the term of the Option, or (B) 12 months after the date of such termination. In the case of the Participant’s death, the Participant’s beneficiary or estate may exercise the Option.
(c)	Retirement. This termination event shall apply only to Participants who are Employees. In the event that a Participant’s employment terminates by reason of Retirement from the Company, Affiliate and/or any Subsidiary, to the extent an Option is not then exercisable, the Option shall become vested and exercisable as to a number of Shares determined as follows: (i) the total number of Shares covered by the Option times (ii) a ratio, the numerator of which is the total

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	number of months of employment from the Grant Date of the Option to the end of the month in which such termination occurs and the denominator of which is the total number of months of vesting required for a fully vested Option as set forth in the Award Agreement. The vested portion of the Option, as determined under this subsection (c), shall remain exercisable until the earlier of (A) the expiration of the term of the Option, or (B) 36 months after the date of such termination. The unvested portion of the Option shall be immediately forfeited.
(d)	Termination for Cause. This termination event applies to all Participants. In the event that a Participant’s employment, or service as a Director or Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates for Cause, all Options granted to such Participant shall expire immediately and all rights to purchase Shares (vested or nonvested) under the Options shall cease upon such termination. In addition, the provisions of Article 11 shall apply.
(e)	Other Termination. This termination event applies to all Participants, as follows:

(i)

In the event that a Participant’s employment, or service as a Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates for any reason other than those set forth in subsections (a) through (d) above, all then vested and exercisable Options shall remain exercisable from the date of such termination until the earlier of (A) the expiration of the term of the Option, or (B) 30 days after the date of such termination. Such Options shall only be exercisable to the extent that they were exercisable as of such termination date and all unvested Options shall be immediately forfeited.

(ii)

In the event that a Participant’s service as a Director with the Company, Affiliate and/or any Subsidiary terminates for any reason other than those set forth in subsections (b) through (d) above, to the extent the Option is not then exercisable, the Option shall become vested and exercisable as to a number of Shares determined as follows: (A) the total number of Shares covered by the Option times (B) a ratio, the numerator of which is the total number of months of service from the Grant Date of the Option to the end of the month in which such termination occurs and the denominator of which is the total number of months of vesting required for a fully vested Option as set forth in the Award Agreement. The vested portion of the Option, as determined under this paragraph (ii) shall remain exercisable from the date of such termination until the earlier of (x) the expiration of the term of the Option, or (y) 30 days after the date of such termination. The unvested portion of the Option shall be immediately forfeited.

     6.9 Notification of Disqualifying Disposition. If any Participant shall make any disposition of Shares issued pursuant to the exercise of an ISO under the circumstances described in Code Section 421(b) (relating to certain disqualifying dispositions), such Participant shall notify the Company of such disposition within ten (10) calendar days thereof.

Article 7. Stock Appreciation Rights

     7.1 Grant of SARs. Subject to the terms and conditions of this Plan, SARs may be granted to Participants at any time and from time to time as shall be determined by the Committee. The Committee may grant Non-Tandem SARs, Tandem SARs, or any combination of these forms of SARs.

     Subject to the terms and conditions of this Plan, the Committee shall have complete discretion in determining the number of SARs granted to each Participant and, consistent with the provisions of this Plan, in determining the terms and conditions pertaining to such SARs.

     The Grant Price for each grant of an SAR shall be determined by the Committee and shall be specified in the Award Agreement. Notwithstanding the foregoing, the Grant Price of a Non-Tandem SAR on the Grant Date shall be at least equal to the greater of one hundred percent (100%) of the FMV of the Shares as determined on the Grant Date or the par value of the Shares. The Grant Price of a Tandem SAR on the Grant Date shall equal the Option Price of the related Option.

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     7.2 SAR Agreement. Each SAR Award shall be evidenced by an Award Agreement that shall specify the Grant Price, the term of the SAR, and such other provisions as the Committee shall determine.

     7.3 Term of SAR. The term of an SAR granted under this Plan shall be determined by the Committee, in its sole discretion, and except as determined otherwise by the Committee and specified in the SAR Award Agreement, no SAR shall be exercisable later than the day before the tenth (10^th) anniversary of the Grant Date. Notwithstanding the foregoing, for SARs granted to Participants outside the United States, the Committee has the authority to grant SARs that have a term greater than ten (10) years.

     7.4 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option. A Tandem SAR may be exercised only with respect to the Shares for which its related Option is then exercisable. Notwithstanding the foregoing, with respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR shall expire no later than the expiration of the underlying ISO; (ii) the value of the payout with respect to the Tandem SAR may be for no more than one hundred percent (100%) of the difference between the Option Price of the underlying ISO and the Fair Market Value of the Shares subject to the underlying ISO at the time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only when the Fair Market Value of the Shares covered by the ISO exceeds the Option Price of the ISO.

     7.5 Exercise of Non-Tandem SARs. SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion, imposes.

     7.6 Settlement of SARs. Upon the exercise of an SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying:

(a)	The excess of the Fair Market Value of a Share on the date of exercise over the Grant Price; by
(b)	The number of Shares with respect to which the SAR is exercised.

     At the discretion of the Committee, the payment upon SAR exercise may be in cash, fully paid Shares, or any combination thereof, or in any other manner approved by the Committee in its sole discretion. The Committee’s determination regarding the form of SAR payout shall be set forth in the Award Agreement pertaining to the grant of the SAR.

     7.7 Termination of Employment, Service as a Director or Third-Party Service Provider. Each Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the SAR following termination of the Participant’s employment with or services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be, subject to Sections 5.3 and 5.4. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with Participants, need not be uniform among all SARs issued pursuant to this Plan, and may reflect distinctions based on, among other things, the reasons for termination, or reasons relating to breach or threatened breach of restrictive covenants to which the Participant is subject, if any. Subject to Article 18, in the event a Participant’s Award Agreement does not set forth such provisions, the following provisions shall apply:

(a) Involuntary Termination or Resignation for Good Reason. These termination events apply only to Participants who are Employees or Third-Party Service Providers. In the event that a Participant’s employment, or service as a Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates by reason of an Involuntary Termination or Resignation for Good Reason by the Participant, to the extent that an SAR is not then exercisable, the SAR shall immediately become vested and exercisable with respect to all Shares covered by the Participant’s SAR, and the SAR shall remain exercisable until the earlier of (A) the expiration of the term of the SAR, or (B) six (6) months (three (3) months for SARs granted in tandem with ISOs) after the date of such termination.

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(b)	Death or Disability. These termination events apply to all Participants. In the event that a Participant’s employment, or service as a Director or Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates by reason of death or Disability, to the extent that an SAR is not then exercisable, the SAR shall immediately become vested and exercisable with respect to all Shares covered by the Participant’s SAR, and the SAR shall remain exercisable until the earlier of (A) the expiration of the term of the SAR, or (B) 12 months after the date of such termination. In the case of the Participant’s death, the Participant’s beneficiary or estate may exercise the SAR.
(c)	Retirement. This termination event applies only to Participants who are Employees. In the event that a Participant’s employment terminates by reason of Retirement from the Company, Affiliate and/or any Subsidiary, to the extent an SAR is not then exercisable, the SAR shall become vested and exercisable as to a number of Shares determined as follows: (i) the total number of Shares covered by the SAR times (ii) a ratio, the numerator of which is the total number of months of employment from the Grant Date of the SAR to the end of the month in which such termination occurs and the denominator of which is the total number of months of vesting required for a fully vested SAR as set forth in the Award Agreement. The vested portion of the SAR, as determined under this subsection (c), shall remain exercisable until the earlier of (A) the expiration of the term of the SAR, or (B) 36 months after the date of such termination. The unvested portion of the SAR shall be immediately forfeited.
(d)	Termination for Cause. This termination event applies to all Participants. In the event that a Participant’s employment, or service as a Director or Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates for Cause, all SARs granted to such Participant shall expire immediately and all rights to purchase Shares (vested or nonvested) under the SARs shall cease upon such termination. In addition, the provisions of Article 11 shall apply.
(e)	Other Termination. This termination event applies to all Participants, as follows:

(i)

In the event that a Participant’s employment, or service as a Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates for any reason other than those set forth in subsections (a) through (d) above, all then vested and exercisable SARs shall remain exercisable from the date of such termination until the earlier of (A) the expiration of the term of the SAR, or (B) 30 days after the date of such termination. Such SARs shall only be exercisable to the extent that they were exercisable as of such termination date and all unvested SARs shall be immediately forfeited.

(ii)

In the event that a Participant’s service as a Director with the Company, Affiliate and/or any Subsidiary terminates for any reason other than those set forth in subsections (b) through (d) above, to the extent the SAR is not then exercisable, the SAR shall become vested and exercisable as to a number of Shares determined as follows: (A) the total number of Shares covered by the SAR times (B) a ratio, the numerator of which is the total number of months of service from the Grant Date of the SAR to the end of the month in which such termination occurs and the denominator of which is the total number of months of vesting required for a fully vested SAR as set forth in the Award Agreement. The vested portion of the SAR, as determined under this paragraph (ii) shall remain exercisable from the date of such termination until the earlier of (x) the expiration of the term of the SAR, or (y) 30 days after the date of such termination. The unvested portion of the SAR shall be immediately forfeited.

     7.8 Other Restrictions. The Committee shall impose such other conditions and/or restrictions on any Shares received upon exercise of an SAR granted pursuant to this Plan as it may deem advisable or desirable. These restrictions may include, but shall not be limited to, a requirement that the Participant hold the Shares received upon exercise of an SAR for a specified period of time.

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Article 8. Restricted Stock and Restricted Stock Units

     8.1 Grant of Restricted Stock or Restricted Stock Units. Subject to the terms and provisions of this Plan, the Committee, at any time and from time to time, may grant Restricted Stock and/or Restricted Stock Units to Participants in such amounts as the Committee shall determine. Restricted Stock Units shall be similar to Restricted Stock except that no Shares are actually awarded.

     8.2 Restricted Stock or Restricted Stock Unit Agreement. Each Restricted Stock and/or Restricted Stock Unit grant shall be evidenced by an Award Agreement that shall specify the Period(s) of Restriction, the number of Shares of Restricted Stock or the number of Restricted Stock Units granted, and such other provisions as the Committee shall determine.

     8.3 Other Restrictions. The Committee shall impose such other conditions and/or restrictions on any Shares of Restricted Stock or Restricted Stock Units granted pursuant to this Plan as it may deem advisable including, without limitation, a requirement that Participants pay a stipulated purchase price for each Share of Restricted Stock or each Restricted Stock Unit, restrictions based upon the achievement of specific performance goals, time-based restrictions on vesting following the attainment of the performance goals, time-based restrictions, and/or restrictions under Applicable Laws or under the requirements of any stock exchange or market upon which such Shares are listed or traded, or holding requirements or sale restrictions placed on the Shares by the Company upon vesting of such Restricted Stock or Restricted Stock Units.

     8.4 [deleted]

     8.5 Voting Rights. Unless otherwise set forth in a Participant’s Award Agreement and permitted by Applicable Law, a Participant holding Shares of Restricted Stock granted hereunder shall be granted the right to exercise full voting rights with respect to those Shares during the Period of Restriction. A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder.

     8.6 Termination of Employment, Service as a Director or Third-Party Service Provider. Each Award Agreement shall set forth the extent to which the restrictions placed on Restricted Stock and/or Restricted Stock Units shall lapse following termination of the Participant’s employment with or services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be, subject to Sections 5.3 and 5.4. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with each Participant, need not be uniform among all Shares of Restricted Stock or Restricted Stock Units issued pursuant to this Plan, and may reflect distinctions based on, among other things, the reasons for termination, or reasons relating to breach or threatened breach of restrictive covenants to which the Participant is subject, if any. Subject to Article 18, in the event a Participant’s Award Agreement does not set forth such provisions, the following provisions shall apply:

(a) Involuntary Termination or Resignation for Good Reason. These termination events apply only to Participants who are Employees or Third-Party Service Providers.

(i)

If the Award is not intended to qualify for the Performance-Based Exception, in the event that a Participant’s employment or service, as the case may be, with the Company, Affiliate and/or any Subsidiary terminates by reason of an Involuntary Termination or Resignation for Good Reason by the Participant, to the extent any Shares of Restricted Stock or Restricted Stock Units, as the case may be, are not then vested, all Shares of Restricted Stock or all Restricted Stock Units, as the case may be, shall immediately become fully vested on the date of such termination and any restrictions shall lapse.

(ii)

If the Award granted to Participants who are Employees is intended to qualify for the Performance-Based Exception, the Award shall become fully vested and any restrictions shall lapse upon attainment of the applicable Performance Measures.

(b) Death or Disability. These termination events apply to all Participants.

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(i)

If the Award is not intended to qualify for the Performance-Based Exception, in the event that a Participant’s employment, or service as a Director or Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates by reason of death or Disability, to the extent any Shares of Restricted Stock or Restricted Stock Units, as the case may be, are not then vested, all Shares of Restricted Stock or all Restricted Stock Units, as the case may be, shall immediately become fully vested on the date of such termination and any restrictions shall lapse.

(ii)

If the Award granted to Participants who are Employees is intended to qualify for the Performance-Based Exception, the Award shall become fully vested and any restrictions shall lapse upon attainment of the applicable Performance Measures.

(c) Retirement. This termination event applies only to Participants who are Employees.

(i)

If the Award is not intended to qualify for the Performance-Based Exception, in the event that a Participant’s employment terminates by reason of Retirement from the Company, Affiliate and/or any Subsidiary, to the extent any Award covering Shares of Restricted Stock or Restricted Stock Units, as the case may be, are not then vested, the Award shall become vested on the date of such termination (for Shares of Restricted Stock, upon attainment of age 65 regardless of whether there is a termination of employment) and any restrictions shall lapse as to a number of Shares or Units, as the case may be, determined as follows: (A) the total number of Shares of Restricted Stock or Restricted Units, as applicable, times (B) a ratio, the numerator of which is the total number of months of employment from the Grant Date of the Award to the end of the month in which the Participant’s termination occurs (for Shares of Restricted Stock, attainment of age 65 occurs) and the denominator of which is the total number of months of vesting required for a fully vested Award as set forth in the Award Agreement.

(ii)

If the Award is intended to qualify for the Performance-Based Exception, the Award shall become vested to the extent described in this subsection (c) and any restrictions on the vested portion shall lapse upon attainment of the applicable Performance Measures.

(d)

Termination for Cause. This termination event applies to all Participants. In the event that a Participant’s employment, or service as a Director or Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates for Cause all vested and unvested Shares of Restricted Stock or all vested and unvested Restricted Stock Units, as the case may be, shall be forfeited to the Company. In addition, the provisions of Article 11 shall apply.

(e)

Other Termination. This termination event applies to all Participants, as follows:

(i)

In the event that a Participant’s employment, or service as a Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates for any reason other than as described in subsections (a) through (d), all unvested Shares of Restricted Stock or all unvested Restricted Stock Units, as the case may be, shall be immediately forfeited to the Company.

(ii)

In the event that a Participant’s service as a Director with the Company, Affiliate and/or any Subsidiary terminates for any reason other than as described in subsections (b) through (d), to the extent any Award covering Shares of Restricted Stock or Restricted Stock Units, as the case may be, are not then vested, the Award shall become vested on the date of such termination and any restrictions shall lapse as to a number of Shares or Units, as the case may be, determined as follows: (A) the total number of Shares of Restricted Stock or Restricted Units, as applicable, times (B) a ratio, the numerator of which is the total number of months of service from the Grant Date of the Award to the end of the month in which the Participant’s termination occurs and the denominator of which is the total number of months of vesting required for a fully vested Award as set

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forth in the Award Agreement. The unvested portion of the Award shall be immediately forfeited to the Company.

     8.7 Forfeiture and Right of Repurchase. In the event that any Shares are required to be forfeited under any circumstances set forth in this Article 8, Article 20 or otherwise under this Plan or an Award Agreement, then the Company shall have the right (but not the obligation) to repurchase any or all of such forfeited Shares for $0.001 per Share repurchased. The Company shall have 90 days from the date of any event giving rise to forfeiture within which to effect a repurchase of any or all of the Shares subject to such forfeiture conditions. The Company’s right to repurchase the Shares is assignable by the Company, in its sole discretion, to a Subsidiary, Affiliate or other party to whom such rights can be assigned under Applicable Laws.

     8.8 Section 83(b) Election. The Committee may provide in an Award Agreement that the Award of Restricted Stock is conditioned upon the Participant making or refraining from making an election with respect to the Award under Code Section 83(b). If a Participant makes an election pursuant to Code Section 83(b) concerning a Restricted Stock Award, the Participant shall be required to file promptly a copy of such election with the Company.

Article 9. Performance Units/Performance Shares

     9.1 Grant of Performance Units/Performance Shares. Subject to the terms and provisions of this Plan, the Committee, at any time and from time to time, may grant Performance Units and/or Performance Shares to Participants in such amounts and upon such terms as the Committee shall determine.

     9.2 Performance Unit/Performance Shares Agreement. Each Performance Unit and/or Performance Share grant shall be evidenced by an Award Agreement that shall specify the number of Performance Shares or the number of Performance Units granted, the applicable Performance Period, and such other terms and provisions as the Committee shall determine.

     9.3 Value of Performance Units/Performance Shares. Each Performance Unit shall have an initial value that is established by the Committee at the time of grant. Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the Grant Date. The Committee shall set performance goals in its discretion which, depending on the extent to which they are met, will determine the value and/or number of Performance Units/Performance Shares that will be paid out to the Participant.

     9.4 Earning of Performance Units/Performance Shares. Subject to the terms of this Plan, after the applicable Performance Period has ended, the holder of Performance Units/Performance Shares shall be entitled to receive payout on the value and number of Performance Units/Performance Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance goals have been achieved.

     9.5 Form and Timing of Payment of Performance Units/Performance Shares. Payment of earned Performance Units/Performance Shares shall be as determined by the Committee and as evidenced in the Award Agreement. Subject to the terms of this Plan, the Committee, in its sole discretion, may pay earned Performance Units/Performance Shares in the form of cash or in fully paid Shares (or in a combination thereof) equal to the value of the earned Performance Units/Performance Shares at the close of the applicable Performance Period, or as soon as practicable after the end of the Performance Period. Any Shares may be granted subject to any restrictions deemed appropriate by the Committee. The determination of the Committee with respect to the form of payout of such Awards shall be set forth in the Award Agreement pertaining to the grant of the Award.

     9.6 Termination of Employment, Service as a Director or Third-Party Service Provider. Each Award Agreement shall set forth the extent to which the Participant shall have the right to receive payment for any Performance Units and/or Performance Shares following termination of the Participant’s employment with or services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be, subject to Sections 5.3 and 5.4. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with each Participant, need not be uniform among all Awards of Performance Units or Performance Shares issued pursuant to this Plan, and may reflect distinctions based on, among other things, the reasons for termination, or reasons relating to the breach or threatened breach of restrictive covenants to which the

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Participant is subject, if any. Subject to Article 18, in the event that a Participant’s Award Agreement does not set forth such termination provisions, the following termination provisions shall apply:

(a) Involuntary Termination or Resignation for Good Reason. These termination events apply only to Participants who are Employees or Third-Party Service Providers.

(i)

If the Award is not intended to qualify for the Performance-Based Exception, in the event that a Participant’s employment or service, as the case may be, with the Company, Affiliate and/or any Subsidiary terminates by reason of an Involuntary Termination or Resignation for Good Reason by the Participant, the Participant shall receive a full payout of the Performance Units and/or Performance Shares.

(ii)

If the Award granted to Participants who are Employees is intended to qualify for the Performance-Based Exception, the Participant shall receive a payout as determined under this subsection (a) upon attainment of the applicable Performance Measures.

(b) Death or Disability. These termination events apply to all Participants.

(i)	If the Award is not intended to qualify for the Performance-Based Exception, in the event that a Participant’s employment or service, as the case may be, with the Company, Affiliate and/or any Subsidiary terminates by reason of death or Disability, the Participant shall receive a full payout of the Performance Units and/or Performance Shares.
(ii)	If the Award granted to Participants who are Employees is intended to qualify for the Performance-Based Exception, the Participant shall receive a payout as determined under this subsection (b) upon attainment of the applicable Performance Measures.

(c) Retirement. This termination event applies only to Participants who are Employees.

(i)

If the Award is not intended to qualify for the Performance-Based Exception, in the event that a Participant’s employment with the Company, Affiliate and/or any Subsidiary, terminates during a Performance Period due to Retirement, the Participant shall receive a prorated payout of the Performance Units and/or Performance Shares, unless the Committee determines otherwise. The prorated payout shall be determined by the Committee, shall be based upon the length of time that the Participant held the Performance Units and/or Performance Shares during the Performance Period, and shall further be adjusted based on the achievement of the pre-established performance goals.

(ii)

If the Award is intended to qualify for the Performance-Based Exception, the Participant shall receive a payout as determined under this subsection (c) upon attainment of the applicable Performance Measures.

(d)

Termination for Cause. This termination event applies to all Participants. In the event that a Participant’s employment, or service as a Director or Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates for Cause during a Performance Period, all Performance Units and/or Performance Shares (vested or unvested) shall be immediately forfeited to the Company. In addition, the provisions of Article 11 shall apply.

(e)

Other Termination. This termination event applies to all Participants, as follows:

(i) In the event that a Participant’s employment, or service as a Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates during a Performance Period for any reason other than as described in subsections (a) through (d), all unvested

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Performance Units and/or Performance Shares shall be immediately forfeited to the Company.

(ii)

In the event that a Participant’s service as a Director with the Company, Affiliate and/or any Subsidiary terminates during a Performance Period for any reason other than as described in subsections (b) through (d), to the extent any Award covering Performance Units and/or Performance Shares are not then vested, the Award shall become vested on the date of such termination and any restrictions shall lapse as to a number of Performance Units or Performance Shares, as the case may be, determined as follows: (A) the total number of Performance Shares or Performance Units, as applicable, times (B) a ratio, the numerator of which is the total number of months of service from the Grant Date of the Award to the end of the month in which the Participant’s termination occurs and the denominator of which is the total number of months of vesting required for a fully vested Award as set forth in the Award Agreement. The unvested portion of the Award shall be immediately forfeited to the Company.

     9.7 Forfeiture and Right of Repurchase. In the event that any Shares are required to be forfeited under any circumstances set forth in this Article 9, Article 20 or otherwise under this Plan or an Award Agreement, then the Company shall have the right (but not the obligation) to repurchase any or all of such forfeited Shares for $0.001 per Share repurchased. The Company shall have 90 days from the date of any event giving rise to forfeiture within which to effect a repurchase of any or all of the Shares subject to such forfeiture conditions. The Company’s right to repurchase the Shares is assignable by the Company, in its sole discretion, to a Subsidiary, Affiliate or other party to whom such rights can be assigned under Applicable Laws.

Article 10. Cash-Based Awards and Other Stock-Based Awards

     10.1 Grant of Cash-Based Awards. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Cash-Based Awards to Participants in such amounts and upon such terms as the Committee may determine.

     10.2 Other Stock-Based Awards. The Committee may grant other types of equity-based or equity-related Awards not otherwise described by the terms of this Plan (including the grant or offer for sale of unrestricted Shares) in such amounts and subject to such terms and conditions, as the Committee shall determine. Such Awards may involve the transfer of actual fully paid Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares and may include, without limitation, Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States.

     10.3 Cash-Based Award or Stock-Based Award Agreement. Each Cash-Based Award or Stock-Based Award grant shall be evidenced by an Award Agreement that shall specify the amount of the Cash-Based Award or Stock-Based Award granted and such other terms and provisions as the Committee shall determine; provided that no Award Agreement shall provide for the issuance of Shares except on a fully paid basis.

     10.4 Value of Cash-Based and Other Stock-Based Awards. Each Cash-Based Award shall specify a payment amount or payment range as determined by the Committee. Each Other Stock-Based Award shall be expressed in terms of Shares or units based on Shares, as determined by the Committee. The Committee may establish performance goals in its discretion. If the Committee exercises its discretion to establish performance goals, the number and/or value of Cash-Based Awards or Other Stock-Based Awards that will be paid out to the Participant will depend on the extent to which the performance goals are met, and provided the cash or services received by the Company in exchange for Shares shall have a value not less than the aggregate par value of any Shares issued as part of such other Stock-Based Award.

     10.5 Payment of Cash-Based Awards and Other Stock-Based Awards. Payment, if any, with respect to a Cash-Based Award or an Other Stock-Based Award shall be made in accordance with the terms of the Award, in cash or fully paid Shares as the Committee determines.

     10.6 Termination of Employment, Service as a Director or Third-Party Service Provider. The Committee shall determine the extent to which the Participant shall have the right to receive Cash-Based Awards or

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Other Stock-Based Awards following termination of the Participant’s employment with or provision of services to the Company, its Affiliates, and/or its Subsidiaries, as the case may be, subject to Sections 5.3 and 5.4. Such provisions shall be determined in the sole discretion of the Committee, such provisions may be included in an agreement entered into with each Participant, but need not be uniform among all Awards of Cash-Based Awards or Other Stock-Based Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination, or reasons relating to the breach or threatened breach of restrictive covenants to which the Participant is subject, if any. Subject to Article 18, in the event that a Participant’s Award Agreement does not set forth such termination provisions, the following termination provisions shall apply:

(a) Involuntary Termination or Resignation for Good Reason. These termination events apply only to Participants who are Employees or Third-Party Service Providers.

(i)

If the Award is not intended to qualify for the Performance-Based Exception, in the event that a Participant’s employment or service, as the case may be, with the Company, Affiliate and/or any Subsidiary terminates by reason of an Involuntary Termination or Resignation for Good Reason by the Participant, the Participant shall receive a full payout of the Performance Units and/or Performance Shares.

(ii)

If the Award granted to Participants who are Employees is intended to qualify for the Performance-Based Exception, the Participant shall receive a payout as determined under this subsection (a) upon attainment of the applicable Performance Measures.

(b) Death or Disability. These termination events apply to all Participants.

(i)	If the Award is not intended to qualify for the Performance-Based Exception, in the event that a Participant’s employment or service, as the case may be, with the Company, Affiliate and/or any Subsidiary terminates by reason of death or Disability, the Participant shall receive a full payout of the Award.
(ii)	If the Award granted to Participants who are Employees is intended to qualify for the Performance-Based Exception, the Participant shall receive a payout as determined under this subsection (b) upon attainment of the applicable Performance Measures.

(c) Retirement. This termination event applies only to Participants who are Employees.

(i)

If the Award is not intended to qualify for the Performance-Based Exception, in the event that a Participant’s employment with the Company, Affiliate and/or any Subsidiary, terminates during a Performance Period due to Retirement, the Participant shall receive a prorated payout of the Award, unless the Committee determines otherwise. The prorated payout shall be determined by the Committee, shall be based upon the length of time that the Participant held the Award during the Performance Period, and shall further be adjusted based on the achievement of the pre-established performance goals. Unless the Committee determines otherwise in the event of Retirement, payment of the earned Award shall be made at the same time as payments are made to Participants who did not terminate employment during the applicable Performance Period.

(ii)

If the Award is intended to qualify for the Performance-Based Exception, the Participant shall receive a payout as determined under this subsection (c) upon attainment of the applicable Performance Measures.

(d) Termination for Cause. This termination event applies to all Participants. In the event that a Participant’s employment, or service as a Director or Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates for Cause the Award (vested or unvested) shall be immediately forfeited to the Company. In addition, the provisions of Article 11 shall apply.

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(e) Other Termination. This termination event applies to all Participants, as follows:

(i)

In the event that a Participant’s employment, or service as a Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary terminates during a Performance Period for any reason other than as described in subsections (a) through (d), the unvested portion of the Award shall be immediately forfeited to the Company.

(ii)

In the event that a Participant’s service as a Director with the Company, Affiliate and/or any Subsidiary terminates during a Performance Period for any reason other than as described in subsections (b) through (d), to the extent the Award is unvested, the Award shall become vested on the date of such termination and any restrictions shall lapse as to a portion of the Award determined as follows: (A) the total value of the Award times (B) a ratio, the numerator of which is the total number of months of service from the Grant Date of the Award to the end of the month in which the Participant’s termination occurs and the denominator of which is the total number of months of vesting or the performance period required for a fully vested Award as set forth in the Award Agreement. The unvested portion of the Award shall be immediately forfeited to the Company.

     10.7 Forfeiture and Right of Repurchase. In the event that any Shares are required to be forfeited under any circumstances set forth in this Article 10, Article 20 or otherwise under this Plan or an Award Agreement, then the Company shall have the right (but not the obligation) to repurchase any or all of such forfeited Shares for $0.001 per Share repurchased. The Company shall have 90 days from the date of any event giving rise to forfeiture within which to effect a repurchase of any or all of the Shares subject to such forfeiture conditions. The Company’s right to repurchase the Shares is assignable by the Company, in its sole discretion, to a Subsidiary, Affiliate or other party to whom such rights can be assigned under Applicable Laws.

Article 11. Forfeiture of Awards.

     11.1 General. Notwithstanding anything else to the contrary contained herein, the Committee in granting any Award shall have the full power and authority to determine whether, to what extent and under what circumstances such Award shall be forfeited, cancelled or suspended. Unless an Award Agreement includes provisions expressly superseding the provisions of this Article 11, the provisions of this Article 11 shall apply to all Awards. Any such forfeiture shall be effected by the Company in such manner and to such degree as the Committee, in its sole discretion, determines, and will in all events (including as to the provisions of this Article 11) be subject to the Applicable Laws.

     In order to effect a forfeiture under this Article 11, the Committee may require that the Participant sell Shares received upon exercise or settlement of an Award to the Company or to such other person as the Company may designate at such price and on such other terms and conditions as the Committee in its sole discretion may require. Further, as a condition of each Award, the Company shall have, and each Participant shall be deemed to have given the Company, a proxy on each Participant’s behalf, and each Participant shall be required and be deemed to have agreed to execute any other documents necessary or appropriate to carry out this Article 11.

     11.2 Forfeiture Events. Unless otherwise specified by the Committee, in addition to any vesting or other forfeiture or repurchase conditions that may apply to an Award and Shares issued pursuant to an Award, each Award granted under the Plan will be subject to the following forfeiture conditions:

(a) Competitive Activity. All outstanding Awards and Shares issued pursuant to an Award held by an Participant will be forfeited in their entirety (including as to any portion of an Award or Shares subject thereto that are vested or as to which any repurchase or resale rights or forfeiture restrictions in favor of the Company or its designee with respect to such Shares have previously lapsed) if the Participant, without the consent of the Company, while employed or in service, as the case may be, or within six (6) months after termination of employment or service, establishes an employment or similar relationship with a competitor of the Company or engages in any similar activity that is in conflict with or adverse to the interests of the Company, as determined by the Committee in its sole discretion; provided, that if an Participant has sold Shares issued upon

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exercise or settlement of an Award within six (6) months prior to the date on which the Participant would otherwise have been required to forfeit such Shares or the Option under this subsection (a) as a result of the Participant’s competitive or similar acts, then the Company will be entitled to recover any and all profits realized by the Participant in connection with such sale.

(b)

Termination for Cause. All outstanding Awards and Shares issued pursuant to an Award held by an Participant will be forfeited in their entirety (including as to any portion of an Award or Shares subject thereto that are vested or as to which any repurchase or resale rights or forfeiture restrictions in favor of the Company or its designee have previously lapsed) if the Participant’s employment or service is terminated by the Company for Cause; provided, however, that if an Participant has sold Shares issued upon exercise or settlement of an Award within six (6) months prior to the date on which the Participant would otherwise have been required to forfeit such Shares under this subsection (b) as a result of termination of the Participant’s employment or service for Cause, then the Company will be entitled to recover any and all profits realized by the Participant in connection with such sale; and provided further, that in the event the Committee determines that it is necessary to establish whether grounds exist for termination for Cause, the Award will be suspended during any period required to conduct such determination, meaning that the vesting, exercisability and/or lapse of restrictions otherwise applicable to the Award will be tolled and if grounds for such termination are determined to exist, the forfeiture specified by this subsection (b) will apply as of the date of suspension, and if no such grounds are determined to exist, the Award will be reinstated on its original terms.

Article 12. Transferability of Awards

     12.1 Transferability. Except as provided in Section 12.2 below, during a Participant’s lifetime, his or her Awards shall be exercisable only by the Participant or the Participant’s legal representative. Except as permitted by the Committee, Awards shall not be transferable other than by will or the laws of descent and distribution; no Awards shall be subject, in whole or in part, to attachment, execution, or levy of any kind; and any purported transfer in violation hereof shall be null and void. The Committee may establish such procedures as it deems appropriate for a Participant to designate a beneficiary to whom any amounts payable or Shares deliverable in the event of, or following, the Participant’s death, may be provided.

     12.2 Committee Action. The Committee may, in its discretion, determine that notwithstanding Section 12.1, any or all Awards (other than ISOs) shall be transferable to and exercisable by such transferees, and subject to such terms and conditions, as the Committee may deem appropriate; provided, however, no Award may be transferred for value (as defined in the General Instructions to Form S-8).

     For the sole purpose of enabling electronic trading of awarded Shares, the awarded Shares must be assigned and transferred to Cede & Co., the Nominee of the Bank Depository Trust Company, a U.S. clearing agency. Any Shares not held by Cede & Co. must be separately registered by a Participant prior to sale or trading.

Article 13. Performance Measures

     13.1 Performance Measures. The performance goals upon which the payment or vesting of an Award to a Covered Employee that is intended to qualify as Performance-Based Compensation shall be limited to the following Performance Measures:

(a)	Net earnings or net income (before or after taxes);
(b)	Earnings per share (basic or fully diluted);
(c)	Net sales or revenue growth;
(d)	Net operating profit;
(e)	Return measures (including, but not limited to, return on assets, capital, invested capital, equity, sales, or revenue);
(f)	Cash flow (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity, and cash flow return on investment);
(g)	Earnings before or after taxes, interest, depreciation, and/or amortization;
(h)	Booking activity and Backlog growth (including, but not limited to, as measured in man-hours, future revenues, Foster Wheeler scope and/or contract profit);

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(i)	Gross or operating margins;
(j)	Productivity ratios;
(k)	Share price (including, but not limited to, growth measures and total shareholder return);
(l)	Expense targets;
(m)	Leverage targets (including, but not limited to, absolute amount of consolidated debt, EBITDA/consolidated debt ratios and/or debt to equity ratios);
(n)	Credit rating targets;
(o)	Margins;
(p)	Operating efficiency;
(q)	Safety;
(r)	Market share;
(s)	Customer satisfaction;
(t)	Working capital targets;
(u)	Economic value added or EVA® (net operating profit after tax minus the sum of capital multiplied by the cost of capital);
(v)	Developing new products and lines of revenue;
(w)	Reducing operating expenses;
(x)	Developing new markets;
(y)	Meeting completion schedules;
(z)	Developing and managing relationships with regulatory and other governmental agencies;
(aa)	Managing cash;
(bb)	Managing claims against the Company, including litigation; and
(cc)	Identifying and completing strategic acquisitions.

     Any Performance Measure(s) may be used to measure the performance of the Company, any Subsidiary, or an Affiliate as a whole or any business unit of the Company, any Subsidiary, or an Affiliate or any combination thereof, as the Committee may deem appropriate, or any of the above Performance Measures as compared to the performance of a group of comparator companies, or published or special index that the Committee, in its sole discretion, deems appropriate, or the Committee may select Performance Measure (j) above as compared to various stock market indices. The Committee also has the authority to provide for accelerated vesting of any Award based on the achievement of performance goals pursuant to the Performance Measures specified in this Article 13.

     Notwithstanding the foregoing, for each Award designed to qualify for the Performance-Based Exception, the Committee shall establish and set forth in the Award the applicable performance goals for that Award no later than the latest date that the Committee may establish such goals without jeopardizing the ability of the Award to qualify for the Performance-Based Exception and the Committee shall be satisfied that the attainment of such Performance Measure(s) shall represent value to the Company in an amount not less than the par value of any related Performance Shares.

     13.2 Evaluation of Performance. Subject to Section 13.3, the Committee may provide in any such Award that any evaluation of performance may include or exclude any of the following events that occurs during a Performance Period: (a) asset write-downs and other asset revaluations, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year, (f) acquisitions or divestitures, (g) foreign exchange gains and losses, and (h) changes in material liability estimates. To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that meets the requirements of Code Section 162(m) for deductibility.

     13.3 Adjustment of Performance-Based Compensation. The degree of payout and/or vesting of Awards designed to qualify for the Performance-Based Exception shall be determined based upon the written certification of the Committee as to the extent to which the performance goals and any other material terms and conditions precedent to such payment and/or vesting have been satisfied. The Committee shall have the sole discretion to adjust the determinations of the value and degree of attainment of the pre-established performance goals; provided, however, that the performance goals applicable to Awards which are designed to qualify for the

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Performance-Based Exception, and which are held by Covered Employees, may not be adjusted so as to increase the payment under the Award (the Committee shall retain the sole discretion to adjust such performance goals upward, or to otherwise reduce the amount of the payment and/or vesting of the Award relative to the pre-established performance goals).

     13.4 Committee Discretion. In the event that applicable tax and/or securities laws change to permit Committee discretion to alter the governing Performance Measures without obtaining shareholder approval of such changes, the Committee shall have sole discretion to make such changes without obtaining shareholder approval. In addition, in the event that the Committee determines that it is advisable to grant Awards that shall not qualify as Performance-Based Compensation, the Committee may make such grants without satisfying the requirements of Code Section 162(m) and base vesting on Performance Measures other than those set forth in Section 13.1.

Article 14. Director Awards

     The Board shall determine all Awards to Directors. The terms and conditions of any grant to any such Director shall be set forth in an Award Agreement and shall be otherwise subject to the Plan.

Article 15. Dividend Equivalents

     Any Participant selected by the Committee may be granted dividend equivalents based on the dividends declared on Shares that are subject to any Award, to be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award is exercised, vests or expires, as determined by the Committee. Such dividend equivalents shall be converted to cash or additional Shares by such formula and at such time and subject to such limitations as may be determined by the Committee. Notwithstanding the foregoing, no dividend equivalent described in this Article 15 which is conditioned on exercise of a Nonqualified Stock Option or a Stock Appreciation Right may be provided under this Plan.

     Notwithstanding the foregoing, if the grant of an Award to a Covered Employee is designed to comply with the requirements of the Performance-Based Exception, the Committee may apply any restrictions it deems appropriate to the payment of dividends declared with respect to such Award, such that the dividends and/or the Award maintain eligibility for the Performance-Based Exception. With respect to Restricted Stock and/or Restricted Stock Units, in the event that any dividend constitutes a derivative security or an equity security pursuant to the rules under Section 16 of the Exchange Act, such dividend shall be subject to a vesting period equal to the remaining vesting period of the Shares of Restricted Stock and/or Restricted Stock Unit with respect to which the dividend is paid.

Article 16. Beneficiary Designation

     Each Participant under this Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Plan is to be paid in case of his death before he receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. In the absence of any such beneficiary designation, benefits remaining unpaid or rights remaining unexercised at the Participant’s death shall be paid to or exercised by the Participant’s spouse, executor, administrator, or legal representative, as determined by the Committee, in its sole discretion.

Article 17. Rights of Participants

     17.1 Employment. Nothing in this Plan or an Award Agreement shall interfere with or limit in any way the right of the Company, its Affiliates, and/or its Subsidiaries, to terminate any Participant’s employment or service on the Board or to the Company at any time or for any reason not prohibited by law, nor confer upon any Participant any right to continue his employment or service as a Director or Third-Party Service Provider for any specified period of time.

     Neither an Award nor any benefits arising under this Plan shall constitute an employment contract with the Company, its Affiliates, and/or its Subsidiaries and, accordingly, subject to Articles 3 and 19, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Committee without giving rise to any liability on the part of the Company, its Affiliates, and/or its Subsidiaries.

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     17.2 Participation. No individual shall have the right to be selected to receive an Award under this Plan. In addition, the receipt of any Award shall not create a right to receive a future Award.

     17.3 Rights as a Shareholder. Except as otherwise provided herein, a Participant shall have none of the rights of a shareholder with respect to Shares covered by any Award until the Participant becomes the registered holder of such Shares.

Article 18. Change in Control

     18.1 Change in Control of the Company. Upon the occurrence of a Change in Control while the Participant is employed or in service with the Company, an Affiliate and/or any Subsidiary, unless otherwise specifically prohibited under Applicable Laws, or by the rules and regulations of any governing governmental agencies or national securities exchanges, or unless the Committee shall determine otherwise in the Award Agreement:

(a)	Any and all Options and SARs granted hereunder shall become immediately vested and exercisable.
(b)	Any Period of Restriction for Restricted Stock and Restricted Stock Units granted hereunder that have not previously vested shall end, and such Restricted Stock and Restricted Stock Units shall become fully vested.
(c)	The target payout opportunities attainable under all outstanding Awards which are subject to achievement of any of the Performance Measures specified in Article 13, or any other performance conditions or restrictions that the Committee has made the Award contingent upon, shall be deemed to have been earned as of the effective date of the Change in Control, and such Awards treated as follows:

(i)

The vesting of all such Awards denominated in Shares shall be accelerated as of the effective date of the Change in Control, and there shall be paid out to Participants a pro rata number of fully paid Shares based upon an assumed achievement of all relevant targeted performance goals and upon the length of time within the Performance Period, if any, that has elapsed prior to the Change in Control. The Committee has the authority to pay all or any portion of the value of the Shares in cash.

(ii)

All such Awards denominated in cash shall be paid pro rata to Participants, with the proration determined as a function of the length of time within the Performance Period, if any, that has elapsed prior to the Change in Control, and based on an assumed achievement of all relevant targeted performance goals.

(d) Subject to Article 19, herein, the Committee shall have the authority to make any modifications to the Awards as determined by the Committee to be appropriate before the effective date of the Change in Control.

     18.2 Treatment of Awards. In the event of a Change in Control where the Company ceases to have publicly traded equity securities, after the consummation of the Change in Control, if no replacement awards are issued in lieu of outstanding Awards under the Plan, then the Plan and all outstanding Awards granted hereunder shall terminate, and the Company (or successor) shall pay Participants an amount for their outstanding Awards determined using the Change-in-Control Price. Participants with outstanding Options and SARs shall be given an opportunity to exercise all their Options and SARs in connection with the consummation of the Change in Control and receive payment for any acquired Shares using the Change-in-Control Price. In each case where payment is required under this Section 18.2, such payment shall be made no later than ten (10) business days after the consummation of such Change in Control.

     18.3 Employment or Other Agreement. Notwithstanding the foregoing, to the extent that an employment or other agreement with the Company, Affiliate or Subsidiary provides benefits of greater value upon a

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Change in Control than those provided in this Article 18, the rights set forth in such other agreement shall supercede the provisions of this Article 18. In addition, to the extent that another employment or change in control agreement provides benefits with respect to Awards covered by this Plan that are of lesser value than the benefits provided under a Award granted under the Plan, the Award shall supersede such other employment or change in control agreement to such extent.

Article 19. Amendment, Modification, Suspension, and Termination

     19.1 Amendment, Modification, Suspension, and Termination. Subject to Section 19.3, the Committee may, at any time and from time to time, alter, amend, modify, suspend, or terminate this Plan and any Award Agreement in whole or in part; provided, however, that, without the prior approval of the Company’s shareholders and except as provided in Section 4.4, Options or SARs issued under this Plan will not be repriced, replaced, or regranted through cancellation, or by lowering the Option Price of a previously granted Option or the Grant Price of a previously granted SAR, and no material amendment of this Plan shall be made without shareholder approval if shareholder approval is required by Applicable Laws.

     19.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4.4 hereof) affecting the Company or the financial statements of the Company or of changes in Applicable Laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under this Plan.

     19.3 Awards Previously Granted. Notwithstanding any other provision of this Plan to the contrary (other than Section 19.4), no termination, amendment, suspension, or modification of this Plan or an Award Agreement shall adversely affect in any material way any Award previously granted under this Plan, without the written consent of the Participant holding such Award.

     19.4 Amendment to Conform to Law. Notwithstanding any other provision of this Plan to the contrary, the Committee may amend the Plan or an Award Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan or an Award Agreement to any present or future law relating to plans of this or similar nature (including, but not limited to, Code Section 409A), and to the administrative regulations and rulings promulgated thereunder. By accepting an Award under this Plan, each Participant agrees to any amendment made pursuant to this Section 19.4 to any Award granted under the Plan without further consideration or action.

Article 20. Withholding

     20.1 General. The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, the amount necessary to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan.

     20.2 Stock Settled Awards. Each Participant shall make such arrangements as the Committee may require, within a reasonable time prior to the date on which any portion of an Award settled in Shares is scheduled to vest, for the payment of all withholding tax obligations through either (i) giving instructions to a broker for the sale on the open market of a sufficient number of Shares to pay the withholding tax in a manner that satisfies all Applicable Laws, (ii) depositing with the Company an amount of funds equal to the estimated withholding tax liability, or (iii) such other method as the Committee in its discretion may approve, including a combination of (i) and (ii). If a Participant fails to make such arrangements, or if by reason of any action or inaction of the Participant the Company fails to receive a sufficient amount to satisfy the withholding tax obligation, then, anything else contained in this Plan or any Award to the contrary notwithstanding, the Shares that would otherwise have vested on such date shall be subject to forfeiture, as determined by the Committee, regardless of the Participant’s status as an Employee, Director or Third-Party Service Provider; provided, that the Committee, in its sole discretion, may permit a Participant to cure any failure to provide funds to meeting the withholding tax obligation (including any penalties or interest thereon), if the Committee determines that the failure was due to factors beyond the Participant’s control.

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Article 21. Successors

     All obligations of the Company under this Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, amalgamation, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

Article 22. General Provisions

     22.1 Forfeiture Events.

(a)

The Committee may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture (including repurchase of Shares for nominal consideration), or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall not be limited to, failure to remit the amounts necessary to satisfy the Participant’s tax withholding obligations, termination of employment for Cause, termination of the Participant’s provision of services to the Company, Affiliate, and/or Subsidiary, violation of material Company, Affiliate, and/or Subsidiary policies, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company, its Affiliates, and/or its Subsidiaries.

(b)

If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, if the Participant knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly negligently failed to prevent the misconduct, or if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, the Participant shall reimburse the Company the amount of any payment in settlement of an Award earned or accrued during the twelve (12) month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever just occurred) of the financial document embodying such financial reporting requirement.

     22.2 Right of Offset. The Company, any Subsidiary, or an Affiliate may, to the extent permitted by applicable law, deduct from and set off against any amounts the Company, any Subsidiary, or an Affiliate, as the case may be, may owe to the Participant from time to time, including amounts payable in connection with any Award, owed as wages, fringe benefits, or other compensation owed to the Participant, such amounts as may be owed by the Participant to the Company, any Subsidiary, or an Affiliate, as the case may be, although the Participant shall remain liable for any part of the Participant’s payment obligation not satisfied through such deduction and setoff. By accepting any Award granted hereunder, the Participant agrees to any deduction or setoff under this Section 22.2.

     22.3 Compliance with Code Section 162(m). The Company intends that the Awards granted to Covered Employees shall satisfy the requirements of the Performance-Based Exception, unless otherwise determined by the Committee when the Award is granted. Accordingly, the terms of this Plan, including the definition of Covered Employee and other terms used therein, shall be interpreted in a manner consistent with Code Section 162(m) and regulations thereunder. Notwithstanding the foregoing, because the Committee cannot determine with certainty whether a given Participant will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean only a person designated by the Committee as likely to be a Covered Employee with respect to a fiscal year. If any provision of the Plan or any Award Agreement designated as intended to satisfy the Performance-Based Exception does not comply or is inconsistent with the requirements of Code Section 162(m) or regulations thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements, and no provision shall be deemed to confer upon the Committee or any other person sole discretion to increase the amount of compensation otherwise payable in connection with such Award upon attainment of the applicable performance objectives. Payment of any amount that the Company reasonably determines would not be deductible by reason of Code

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Section 162(m) shall be deferred until the earlier of the earliest date on which the Company reasonably determines that the deductibility of the payment will not be so limited, or the year following the termination of employment.

     22.4 Legend. The certificates for Shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer of such Shares.

     22.5 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural.

     22.6 Severability. In the event any provision of this Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan, and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

     22.7 Requirements of Law. The granting of Awards and the issuance of Shares under this Plan shall be subject to all Applicable Laws, and to such approvals by any governmental agencies or stock exchange as may be required.

     22.8 Securities Law Compliance. With respect to Insiders, transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successor under the Exchange Act. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee.

     22.9 Delivery of Title. The Company shall have no obligation to issue or deliver evidence of title for Shares issued under this Plan prior to:

(a)	Obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and
(b)	Completion of any registration or other qualification of the Shares under any applicable national or foreign law or ruling of any governmental body that the Company determines to be necessary or advisable.

     22.10 Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

     22.11 Investment Representations. The Committee may require any individual receiving Shares pursuant to an Award under this Plan to represent and warrant in writing that the individual is acquiring the Shares for investment and without any present intention to sell or distribute such Shares.

     22.12 Employees Based Outside of the United States. Notwithstanding any provision of this Plan to the contrary, in order to comply with the laws in other countries in which the Company, its Affiliates, and/or its Subsidiaries operate or have Employees, Directors, or Third-Party Service Providers, the Committee, in its sole discretion, shall have the power and authority to:

(a)	Determine which Affiliates and Subsidiaries shall be covered by this Plan;
(b)	Determine which Employees, Directors, and/or Third-Party Service Providers outside the United States are eligible to participate in this Plan;
(c)	Modify the terms and conditions of any Award granted to Employees and/or Third-Party Service Providers outside the United States to comply with applicable foreign laws;

29

(d)	Establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable. Any subplans and modifications to Plan terms and procedures established under this Section 22.12 by the Committee shall be attached to this Plan document as appendices; and
(e)	Take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals.

     Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate applicable law.

     22.13 Uncertificated Shares. To the extent that this Plan provides for issuance of certificates to reflect the transfer of Shares, the transfer of such Shares may be effected on a noncertificated basis, to the extent not prohibited by Applicable Laws.

     22.14 Unfunded Plan. Participants shall have no right, title, or interest whatsoever in or to any investments that the Company, and/or its Subsidiaries, and/or its Affiliates may make to aid it in meeting its obligations under this Plan. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, beneficiary, legal representative, or any other individual. To the extent that any individual acquires a right to receive payments from the Company, its Subsidiaries, and/or its Affiliates under this Plan, such right shall be no greater than the right of an unsecured general creditor of the Company, any Subsidiary, or an Affiliate, as the case may be. All payments to be made hereunder shall be paid from the general funds of the Company, any Subsidiary, or an Affiliate, as the case may be and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in this Plan.

     22.15 No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to this Plan or any Award. The Committee shall determine whether cash, Awards, or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.

     22.16 Retirement and Welfare Plans. Neither Awards made under this Plan nor Shares or cash paid pursuant to such Awards may be included as “compensation” for purposes of computing the benefits payable to any Participant under the Company’s, any Subsidiary’s, or an Affiliate’s retirement plans (both qualified and non-qualified) or welfare benefit plans unless such other plan expressly provides that such compensation shall be taken into account in computing a Participant’s benefit.

     22.17 Deferred Compensation. It is the Company’s intent that any Awards granted under this Plan are structured to be exempt from Code Section 409A, or are structured to comply with the requirements of deferred compensation subject to Code Section 409A. To the extent any Award under this Plan constitutes deferred compensation (after taking into account the definition of Resignation for Good Reason as provided in Section 2(tt), and any applicable exemptions from Code Section 409A), and to the extent required by Code Section 409A, no payment will be made to a Participant who is a “specified employee” (as defined by Code Section 409A) until the earlier of: (i) the first day following the sixth month anniversary of the Participant’s “separation from service,” as defined by Code Section 409A, or (ii) the Participant’s date of death; provided, however, that any payments delayed during this six month period shall be paid in the aggregate as soon as administratively practicable following the sixth month anniversary of the Participant’s separation from service. For purposes of Code Section 409A, each “payment” (as defined by Code Section 409A) made under this Plan shall be considered a “separate payment” for purposes of Code Section 409A. Notwithstanding the Company’s intentions, if any Award granted under this Plan would be considered deferred compensation as defined under Code Section 409A (after taking into account any applicable exemptions), and if this Plan or the terms of an Award fail to meet the requirements of Code Section 409A with respect to such Award, then such Award shall remain in effect and be subject to taxation in accordance with Code Section 409A. The Company shall have no liability for any tax imposed on a Participant by Code Section 409A, and if any tax is imposed on the Participant, the Participant shall have no recourse against the Company for payment of any such tax.

30

     22.18 Nonexclusivity of this Plan. The adoption of this Plan shall not be construed as creating any limitations on the power of the Board or Committee to adopt such other compensation arrangements as it may deem desirable for any Participant.

     22.19 No Constraint on Corporate Action. Nothing in this Plan shall be construed to: (a) limit, impair, or otherwise affect the Company’s, any Subsidiary’s, or an Affiliate’s right or power to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to amalgamate, merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets; or (b) limit the right or power of the Company, any Subsidiary, or an Affiliate to take any action which such entity deems to be necessary or appropriate.

     22.20 Governing Law. The Plan and each Award Agreement shall be governed by the laws of the state of New Jersey, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan to the substantive law of another jurisdiction. Unless otherwise provided in the Award Agreement, recipients of an Award under this Plan are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of New Jersey, to resolve any and all issues that may arise out of or relate to this Plan or any related Award Agreement.

     22.21 Indemnification. Subject to requirements of New Jersey law, each individual who is or shall have been a member of the Board, or a Committee appointed by the Board, or an officer of the Company to whom authority was delegated in accordance with Article 3, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under this Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgement in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his/her own behalf, unless such loss, cost, liability, or expense is a result of his/her own willful misconduct or except as expressly provided by statute.

     The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled under the Company’s Articles of Association and its organizational regulations, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

FOSTER WHEELER AG
By:	/s/ Peter J. Ganz
Name:		Peter J. Ganz
Title:		Executive Vice President, General Counsel & Secretary

31

EX-23.1

Exhibit 23.1

CONSENT OF ANALYSIS, RESEARCH & PLANNING CORPORATION

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (File No. 333-155960) and Form S-8 (File Nos. 33-34694, 333-25945, 33-59739, 333-77125, 333-88912, 333-101524, 333-119308, 333-134592, 333-129815) of Foster Wheeler AG (the “Company”) of (i) the references to us in the form and context in which they appear in the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended June 30, 2009, and (ii) the use of or reliance on the information contained in our report to the Company to assist the Company in setting forth an estimate of the Company’s total liability for asbestos-related indemnity and defense costs in such registration statements.

August 3, 2009

Analysis, Research & Planning Corporation

By: Name:	/s/ THOMAS VASQUEZ THOMAS VASQUEZ
Title:	VICE PRESIDENT

EX-23.2

Exhibit 23.2

CONSENT OF PETERSON RISK CONSULTING LLC

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (File No. 333-155960) and Form S-8 (File Nos. 33-34694, 333-25945, 33-59739, 333-77125, 333-88912, 333-101524, 333-119308, 333-134592, 333-129815) of Foster Wheeler AG (the “Company”) of (i) the references to us in the form and context in which they appear in the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended June 30, 2009, and (ii) the use of or reliance on the information contained in our report to the Company to assist the Company in setting forth an estimate of the Company’s asbestos insurance assets in such registration statements.

August 3, 2009

Peterson Risk Consulting LLC

By: Name:	/s/ Patrick J. McGrath Patrick J. McGrath
Title:	MANAGING DIRECTOR

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

          I, Raymond J. Milchovich, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Foster Wheeler AG;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

          (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

          (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

          (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

          (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

          (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

          (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2009	/s/ Raymond J. Milchovich
	Raymond J. Milchovich
	Chairman and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

          I, Franco Baseotto, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Foster Wheeler AG;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

          (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

          (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

          (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

          (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

          (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

          (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2009	/s/ Franco Baseotto
	Franco Baseotto
	Executive Vice President, Chief Financial Officer and Treasurer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

          In connection with the Quarterly Report of Foster Wheeler AG (the “Company”) on Form 10-Q for the period ended June 30, 2009, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Raymond J. Milchovich, Chairman and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

          1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

          2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 5, 2009	/s/ Raymond J. Milchovich
	Raymond J. Milchovich
	Chairman and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

          In connection with the Quarterly Report of Foster Wheeler AG (the “Company”) on Form 10-Q for the period ended June 30, 2009, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Franco Baseotto, Executive Vice President, Chief Financial Officer and Treasurer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

          1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

          2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 5, 2009	/s/ Franco Baseotto
	Franco Baseotto
	Executive Vice President, Chief Financial Officer and Treasurer