Exhibit 4.20


 


FOSTER WHEELER
LTD.


 


Certificate of
Designation

of

Series B Voting Convertible Preferred Shares


 


1.             Number
and Description. 
(a)  The Company’s preferred
shares shall include a  series of
[             ]
preferred shares, which shall be designated as its Series B Voting Convertible
Preferred Shares (the “Preferred Shares”), par value U.S.$1.00 per
share.


 


(b)           All
Preferred Shares shall be denominated in United States currency, and all
payments and distributions thereon or with respect thereto shall be made in
United States currency.  All references
herein to “U.S.$”, “$” or “dollars” refer to United States currency.


 


(c)           Preferred
Shares may be issued by the Company only on full payment of the nominal value
of U.S.$1.00 per share, so that all Preferred Shares shall be issued as fully
paid.


 


2.             Issuance.  The Company may not increase or decrease the
number of Preferred Shares designated as Preferred Shares and may not issue
additional Preferred Shares after the date of first issuance of any Preferred
Shares (the “Original Issue Date”) without obtaining the prior written
consent of the Holders.


 


3.             Conversion.  (a) 
Subject to adjustment pursuant to Section 9, the Preferred Shares are
mandatorily convertible into Common Shares (the “Conversion”) on a 1 to
[     ] basis (the “Conversion Ratio”) in a
manner specified in Section 3(b), effective automatically and immediately upon
approval of the Increase of Capital (as defined in Section 3(d)) by the Members
(the “Conversion Event”).


 


(b)           The
Conversion shall occur as follows:


 


(i)            each Preferred
Share will automatically and immediately cease to have the rights and
restrictions of a Preferred Share and will become one fully paid Common Share;
and


 


(ii)           simultaneously with
the action set forth in subsection (i), and as part of the Conversion, the
Company will bonus issue in respect of each Preferred Share or fractional
Preferred Share, that number of additional fully paid Common Shares equal to
the number of Common Shares issuable under the Conversion Ratio upon conversion
of such Preferred Share or fractional Preferred Share, less one, or with
respect to any fractional Preferred Share, less such fraction, and the par
value of such bonus issued Common Shares will be capitalized from the Company’s
Share Premium Account;


 


(iii)          the Company will
reflect the Conversion in its Register of Members; and


 

















 


(iv)          the Company will pay
all taxes, if any, payable upon conversion of the Preferred Shares.


 


(c)           Upon
the Conversion, the Preferred Shares shall no longer be in existence.  Share certificates representing the
converted Preferred Shares shall be deemed cancelled if not returned to the
Company on or prior to the date of Conversion for cancellation; provided that a
new certificate shall be issued by the Company for the Common Shares resulting
from the Conversion if requested by a Holder.


 


(d)           As
soon as practicable after the Original Issue Date, the Board of Directors shall
call a general meeting (the “General Meeting”) of all Members entitled
to vote for the purpose of the Members considering, and, if thought fit,
effecting and approving an increase in the authorized capital of the Company
from US$161,500,000, consisting of 160,000,000 Common Shares, par value US$1.00
each and 1,500,000 preferred shares, par value US$1.00 each (including the
Preferred Shares) to
US$[               ]
by the creation of an additional [      ] Common
Shares, par value US$1.00 each, or to such greater amount and number of Common
Shares as may be necessary to ensure that the Company has sufficient authorized
Common Shares to meet any increase of Common Shares issuable under the
Conversion Ratio set forth in Section 3 hereof, as adjusted in accordance with
Section 9 hereof, ranking pari passu in all respects with the existing Common
Shares and having the rights and restrictions set out in the Bye-laws (the “Increase
of Capital”).


 


4.             Ranking.  For so long as any of the Preferred Shares
remain issued and outstanding the Company may authorize or issue any classes or
series of shares ranking on a parity with or senior to the Preferred Shares as
to dividends, distributions out of contributed surplus or distributions upon
liquidation, winding-up and dissolution of the Company.


 


5.             Liquidation
Preference and Rights.  (a)  Each Preferred Share
shall have a liquidation preference of U.S.$0.01 per share (the “Liquidation
Preference”).


 


(b)           In the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company the Holders shall be
entitled to be paid out of the assets of the Company available for distribution
to its
Members an amount in cash equal to the Liquidation Preference before any
distribution shall be made or any assets distributed in respect of the Common
Shares of the Company.  Thereafter, the
Preferred Shares shall rank equally with the Common Shares and Holders shall
share equally and ratably with holders of Common Shares in the assets, if any,
remaining after the payment of all of the Company’s debts and liabilities as if
each Preferred Share had been converted into Common Shares in accordance with
the Conversion Ratio prior to such liquidation, dissolution or winding up,
whether or not the Company has sufficient authorized capital to effect such
conversion in accordance with the terms hereof.


 


6.             Rights to Dividends, Return of
Capital.  (a) Subject to
Section 54 of the Companies Act 1981 of Bermuda (the “Act”), each Holder
shall be entitled to receive, out of the funds of the Company legally available
therefor, dividends, distributions of contributed surplus or any other
distributions on the Preferred Shares on a pro rata basis if, as and when
dividends are declared and paid, or distributions of contributed surplus or any
other distributions are made, by the Board of Directors on the Common Shares,
as though the Preferred Shares had been


 


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converted into Common Shares in accordance with the Conversion Ratio
prior to the declaration and payment of such dividend or the making of such
distribution, whether or not the Company has sufficient authorized capital to
effect such conversion in accordance with the terms hereof.


 


(b)           Notwithstanding
any provision of the Act or the Bye-laws which would permit the Company to
return or distribute share capital or other property of the Company to the
holders of Common Shares, upon the Company’s return or distribution of any of
its share capital or of any other property of the Company, in accordance with
applicable law, to any holders of Common Shares, whether by way of a repurchase
of Common Shares, a reduction of issued share capital, a bonus issue of shares
(other than as described under Section 3(b)(ii) hereof) or otherwise (each such
event a “Capital Distribution”) each Holder shall be entitled to receive a pro
rata share of such Capital Distribution, as though the Preferred Shares had
been converted into Common Shares in accordance with the Conversion Ratio prior
to the Capital Distribution, whether or not the Company has sufficient
authorized capital to effect such conversion in accordance with the terms
hereof.


 


(c)           Under
the Lock-up Agreement, the Company has agreed that, within five Business days
following the Original Issue Date (i) the Board of Directors shall have
increased the number of directors from seven to eight; (ii) three of the six
incumbent independent directors shall have resigned; and (iii) the continuing
members of Board of Directors shall have nominated and appointed four members
proposed by the Holders who are party to the Lock-up Agreement  that qualify as independent directors and
are reasonably acceptable to the continuing members of the Board of Directors.
Subject to Section 54 of the Act, if the Company has failed to take any of the
actions described in the first sentence of this paragraph, then on the sixth
Business Day following the Original Issue Date, the Company shall declare and
pay a dividend on the issued and outstanding Preferred Shares in the aggregate
amount of $2,500,000.  Thereafter on
each quarterly anniversary of the sixth Business Day following the Original
Issue Date, if the Company has not taken any of the actions described in
clauses (i), (ii) and (iii) of the first sentence of this paragraph, then the
Company shall declare and pay a dividend on the issued and outstanding
Preferred Shares in the aggregate amount of $2,500,000.  Notwithstanding the foregoing, the Company
shall not be required to declare or pay any dividend under this paragraph
unless the Holders who were party to the Lock-up Agreement have delivered to
the Company the names and resumes of no less than seven potential nominees that
are in each case independent of management and are reasonably expected to be
reasonably acceptable to the continuing members of the Board on or before the
date that is two weeks prior to the date such dividends would have otherwise
been required to be declared and paid.


 


(d)           Under
the Lock-up Agreement, the Company has agreed to, within thirty days following
the Original Issue Date, file a preliminary proxy statement with the Securities
and Exchange Commission (the “SEC”) regarding 
a meeting of its shareholders in order to recommend adoption and
approval of the following actions: (A) to increase its authorized capital
sufficient to allow conversion of the Preferred Shares hereunder and (B) to
authorize a reverse split (i.e., consolidation) of its issued and
outstanding Common Shares on a one-to-four basis. Subject to Section 54 of the
Act, if the Company has failed to file such proxy statement, then on the
thirty-first day following the Original Issue Date, the Company shall declare
and pay a dividend on the issued and outstanding Preferred Shares in the
aggregate amount of $1,000,000. 
Thereafter on each quarterly anniversary of the thirty-first day
following the Original Issue Date,


 


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if the Company has not filed
such proxy statement, then the Company shall declare and pay a dividend on the
issued and outstanding Preferred Shares in the aggregate amount of $1,000,000.


 


(e)           Under
the Lock-up Agreement, the Company has agreed to, mail the proxy statement
described in paragraph (d) above within five 
Business Days following the date that the SEC clears such proxy to be
mailed.  Subject to Section 54 of the
Act, if the Company has failed to take the action described in the first
sentence of this paragraph, then on the sixth day following such clearance
date, the Company shall declare and pay a dividend on the issued and
outstanding Preferred Shares in the aggregate amount of $1,000,000.  Thereafter on each quarterly anniversary of
the sixth day following such clearance date, if the Company has not mailed such
proxy, then the Company shall declare and pay a dividend on the issued and
outstanding Preferred Shares in the aggregate amount of $1,000,000.


 


(f)            Under
the Lock-up Agreement, the Company has agreed to convene a meeting of its
shareholders to approve the actions described in clauses (A) and (B) of
paragraph (d) above on or prior to October 24, 2004.  Subject to Section 54 of the Act, if the Company has failed to
take the action described in the first sentence of this paragraph, then on
October 25, 2004, the Company shall declare and pay a dividend on the issued
and outstanding Preferred Shares in the aggregate amount of $2,500,000.  Thereafter on each quarterly anniversary of
October 25, if the Company has not taken the action described in the first
sentence of this paragraph, then the Company shall declare and pay a dividend
on the issued and outstanding Preferred Shares in the amount of $2,500,000.


 


(g)           Under
the Lock-up Agreement, the Company has agreed that it will use its commercially
reasonable best efforts to (i) list the Common Stock on the New York Stock
Exchange or the NASDAQ Stock Market as promptly as practicable; provided that the Company shall not be
obliged to apply for such listing until such time as it reasonably believes it
meets the applicable listing criteria, and (ii) to cooperate to the extent
allowed by applicable laws or rules in facilitating the quotation of the
Preferred Stock on the OTC Bulletin Board or, at such time as the Company meets
the applicable listing criteria, to list the Preferred Stock on the New York
Stock Exchange or the NASDAQ Stock Market, in each case as promptly as
practicable if the Conversion does not occur on or prior to October 24,
2004.  Subject to Section 54 of the Act,
if the Company has failed to use its commercially reasonable best efforts to
take such actions as may be required under clause (i) of the first sentence of
this paragraph, or to cooperate under clause (ii) of the first sentence of this
paragraph, then on the 30th Business Day following the receipt of notice of
such failure from the holders of 25% of the Preferred Shares outstanding, if
such failure shall not have been cured prior to such date, the Company shall
declare and pay a dividend on the issued and outstanding Preferred Shares in
the aggregate amount of $1,000,000. 
Thereafter on each quarterly anniversary of the first such payment date,
if the Company has not used its commercially reasonable best efforts to take
such actions as may be required under clause (i) of the first sentence of this
paragraph, or to cooperate under clause (ii) of the first sentence of this
paragraph, then the Company shall declare and pay a dividend on the issued and
outstanding Preferred Shares in the aggregate amount of $1,000,000.


 


(h)           Under the Lock-up Agreement, the
Company has agreed that it will take all steps necessary to adopt the
appropriate amendments to its organizational documents to effect the actions
described in the first sentence of each of paragraphs (d), (e) and (f) hereof,
including (A)


 


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adopting board resolutions
recommending such actions, (B) distributing timely notice of such meeting to
its shareholders, (C) complying with applicable proxy solicitation requirements
as soon as practicable, and (D) if a quorum is not present on a scheduled date
of such meeting, postponing and reconvening such meeting at least twice.  Subject to Section 54 of the Act, if the
Company has failed to take such actions as may be required under the first
sentence of this paragraph, then on the 30th Business Day following
receipt of notice of such failure from the holders of 25% of the Preferred
Shares outstanding, if such failure shall not have been cured prior to such
date, the Company shall declare and pay a dividend on the issued and
outstanding Preferred Shares in the aggregate amount of $1,000,000.  Thereafter, on each quarterly anniversary of
the first such payment date, if the Company has failed to take such action as
may be required under the first sentence of this paragraph, then the Company
shall declare and pay a dividend on the issued and outstanding Preferred Shares
in the aggregate amount of $1,000,000.


 


7.             Voting Rights.  (a) 
Each Holder shall have the number of votes for each Preferred Share that
such Holder would have if that Preferred Share had been converted into
Common Shares in accordance with the Conversion Ratio, whether or not the
Company has sufficient authorized capital to effect such conversion in
accordance with the terms hereof.  The
Holders shall vote with the holders of Common Shares as a single class on all
matters brought before the Members of the Company except as set forth herein or
in the Bye-laws or as required under applicable law and, for greater certainty,
shall be entitled to notice of and to attend and vote at all general meetings
of the Company including, without limitation, the General Meeting.


 


(b)           Any
amendment, alteration or repeal of the terms of the Memorandum of Association,
the Bye-laws, this Certificate of Designation or the Adopting Resolution or any
change in the terms of the Preferred Shares, however effected (including by
merger, amalgamation or scheme of arrangement or similar reorganization), in
each case that would affect the powers, preferences or rights of the Preferred
Shares will require the approval of Holders of at least three-fourths of the
issued and outstanding Preferred Shares consenting or voting as a separate
class.  This approval can be evidenced
either by unanimous consent in writing or by a resolution passed at a special
general meeting of the Holders at which a quorum consisting of at least two
persons holding or representing one-third of the issued and outstanding
Preferred Shares is present.


 


(c)           Notice
of all general meetings of the Company and of any special general meeting of
the Holders shall be given by the Company to the Holders in accordance with the
provisions of the Bye-laws relating to notice for general meetings and notice
to Members.


 


8.             Redemption,
Pre-emptive Rights and Sinking Fund.  (a)  Holders have no
redemption, pre-emptive or sinking fund rights.


 


9.             Anti-Dilution.  The Conversion Ratio as set forth in Section
3 shall be subject to the following adjustments:


 


(a)           Share Splits; Subdivisions; Reverse Splits;
Consolidations and Divisions; and Combinations.  If the issued and outstanding Common Shares
are subdivided, split or reclassified into a greater number of Common Shares on
or after the Original Issue Date, the Conversion Ratio in effect at the opening
of business on the day following the day upon which such


 


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subdivision, split or reclassification becomes effective shall be
proportionately increased.  Conversely,
if the outstanding Common Shares shall be combined, consolidated and divided or
reclassified into a smaller number of Common Shares, the Conversion Ratio in
effect at the opening of business on the day following the day upon which such
combination, consolidation and division or reclassification becomes effective
shall be proportionately reduced.  Such
increase or reduction, as the case may be, will become effective immediately
after the opening of business on the day following the day upon which such
subdivision, split, reclassification or consolidation and division or
combination becomes effective.


 


(b)           Reorganization Events. 
In the event:


 


(i)            any consolidation,
amalgamation or merger of the Company with or into another person or of another
person with or into the Company; or


 


(ii)           any sale, transfer,
lease or conveyance to another person of the assets of the Company as an
entirety or substantially as an entirety; or


 


(iii)          any
reclassification, reorganization or recapitalization (other than a
reclassification to which paragraph (a) of this Section 9 applies),


 


(any of subsections (i) - (iii), a “Reorganization
Event”), were to occur after the Original Issue Date, and pursuant to the
terms of such Reorganization Event, shares or other securities, property or
assets of the Company, the resulting company, successor or transferee or
affiliate thereof, or the acquiror or affiliate thereof, or any other person,
or cash are to be received by or distributed to the holders of Common Shares,
then each Holder of Preferred Shares shall be entitled to receive upon the
occurrence of the Conversion Event, the number of shares or other securities,
property or assets of the Company, the resulting company, successor or
transferee or affiliate thereof, or the acquiror or affiliate thereof, or any
other person, or cash received by or distributable upon or as a result of such
Reorganization Event to a holder of the number of Common Shares into which such
Preferred Shares are convertible at the Conversion Ratio applicable prior to
such Reorganization Event whether or not the Company has sufficient authorized
capital to effect such conversion in accordance with the terms hereof.


 


In the event of such a Reorganization Event,
the person formed by consolidation or merger or resulting from amalgamation or
the person that acquires the assets of the Company shall execute and deliver to
the transfer agent for the Common Shares an agreement providing that the Holder
of each Preferred Share that remains issued and outstanding after the
Reorganization Event (if any) shall have the rights provided by this Section
9.  Such supplemental agreement shall
provide for adjustments which, for events subsequent to the effective date of
such supplemental agreement, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9.  The above provisions of this subsection (b)
shall similarly apply to successive Reorganization Events.


 


(c)           Notice of Adjustment. 
Whenever the Conversion Ratio is adjusted in accordance with this
Section 9, the Company shall: (i) forthwith compute the Conversion Ratio in
accordance with this Section 9 and prepare and transmit to the transfer agent
for the Common Shares an Officer’s Certificate setting forth the adjusted
Conversion Ratio, the method of


 


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calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and (ii) as soon as
practicable following the occurrence of an event that requires an adjustment to
the Conversion Ratio pursuant to this Section 9 (or if the Company is not aware
of such occurrence, as soon as practicable after becoming so aware), provide a
written notice to the Holders of the occurrence of such event and a statement
setting forth in reasonable detail the method by which the adjustment to the
Conversion Ratio was determined and setting forth the adjusted Conversion
Ratio.


 


10.                               Definitions; Construction.


 


(a)           Definitions.  The following terms, as used herein, have
the following meanings:


 


“Act” has the meaning set forth in
Section 6.


 


“Adopting Resolution” means the
resolution or resolutions of the Board of Directors adopting this Certificate
of Designation.


 


“Board of Directors” has the same
meaning as the definition of the Board set forth in Bye-law 1(1)(i) of the
Bye-laws.


 


“Business Day” means any day excluding
Saturday, Sunday or any day that shall be in the City of New York a legal
holiday or a day on which banking institutions are authorized or required by
law or other governmental actions to close.


 


“Bye-laws” means the bye-laws of the
Company as amended from time to time.


 


“Capital Distribution” has the meaning
set forth in Section 6.


 


“Common Shares” means common shares of
the Company, par value US$1.00 per share.


 


“Company” means Foster Wheeler Ltd.


 


“Conversion” has the meaning set forth
in Section 3(a).


 


“Conversion Event” has the meaning set
forth in Section 3(a).


 


“Conversion Ratio” has the meaning set
forth in Section 3(a).


 


“General Meeting” has the meaning set
forth in Section 3(d).


 


“Holder” means each person who is
entered in the register of members of the Company as the holder of one or more
Preferred Shares.


 


“Increase of Capital” has the meaning
set forth in Section 3(d).


 


“Liquidation Preference” has the
meaning set forth in Section 5(a).


 


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“Lock-up Agreement” means the Lockup
Agreement dated       , 2004 among the Company,
Foster Wheeler LLC, a Delaware limited liability company, and the security
holders party thereto.


 


“Members” has the meaning set forth in
Bye-law 1(1)(w) of the Bye-laws and includes the Holders.


 


“Memorandum of Association” means the
Company’s memorandum of association, as amended from time to time.


 


“Officer’s Certificate” means a
certificate executed by a duly appointed and authorized officer of the Company.


 


“Original Issue Date” has the meaning
set forth in Section 2.


 


“person” means an individual or a
company, partnership, trust, incorporated or unincorporated association, joint
venture, joint stock company, limited liability company, government (or any
agency or political subdivision thereof) or other entity of any kind.


 


“Preferred Shares” has the meaning set
forth in Section 1.


 


“Reorganization Event” has the meaning
set forth in Section 9(b).


 


“SEC” has the meaning set forth in
Section 6(d).


 


“Share Premium Account” has the
meaning set forth in Section 40(1) of the Act.


 


(b)           Rules
of Construction.  The definitions in
Section 10 shall apply equally to both the singular and plural forms of the
terms defined.  Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.  The words “include”,
“includes” and “including” shall be deemed to be followed by the
phrase “without limitation.”  References
to “Sections” are references to Sections of this Certificate of Designation
unless otherwise stated.


 


(c)           References.  Unless the context shall otherwise require,
all references herein to (i) persons include their respective permitted
successors and assigns or, in the case of governmental persons, persons
succeeding to the relevant functions of such persons, (ii) agreements and other
contractual instruments include subsequent amendments, assignments and other
modifications thereto to the date hereof and thereafter, but in the case of any
amendment, assignment or modification after the date hereof, only to the extent
such amendments, assignments or other modifications thereto are not prohibited by
their terms, (iii) statutes and related regulations include any amendments of
same and any successor statutes and regulations and (iv) time shall be deemed
to be to New York City, New York, U.S.A. time.


 


11.          No Impairment.  The Company will not do any act or thing,
whether by amendment of this Certificate of Designation or through any
reorganization, recapitalization, transfer of assets, consolidation, merger or
amalgamation, dissolution, issue or sale of securities


 


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or any other voluntary action, to avoid or to seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company.


 


12.          Bye-Laws.  This Certificate of Designation is adopted
pursuant to Section 44(3) of the Bye-laws and shall be attached to and read in
conjunction with the Bye-Laws.


 


13.          Register
of Members. 
The Company shall maintain a current register of members in which the
Holders from time to time shall be entered in accordance with the Act.


 


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