Exhibit 4.20


 


DRAFT 5/25/04


 


FOSTER WHEELER LTD.


 


Certificate of Designation

of

Series B 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 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 consideration
payable therefor, which shall be equal to at least 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 which shall be the date the Exchange Offer is consummated (the “Original
Issue Date”) without obtaining the prior written consent of the Holders,
provided that, to the extent permitted under the Lock-up Agreement, the Company
may issue additional Preferred Shares up to the full number of Preferred Shares
designated in Section 1(a) on the closing date of one subsequent offering
period, if any (the “Subsequent Offering Period”) announced by the Company on
the business day following the expiration date of the exchange offer pursuant
to which Preferred Shares are first issued (the “Second Issue Date”).


 


3.             Conversion.  (a) 
Subject to adjustment pursuant to Section 9, the Preferred Shares
will become convertible, at the option of the Holder, into Common Shares on a 1
(one) to [           ]
basis (the “Conversion Ratio”) in the manner specified in this Section 3,
subject to and effective immediately upon: (i) approval of the Increase of
Capital (as defined in Section 3(b)) by the Members, and (ii) approval of
the Bonus Issue (as defined in Section 3(c)) by the Board of Directors,
which approval shall be subject to the Increase of Capital.


 


(b)           (i)            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”).


 


(ii)           The Company, at all times following the
Increase of Capital, if any, shall reserve that number of Common Shares
sufficient to allow the Conversion of all of the issued and outstanding
Preferred Shares on such date.


 


(c)           On
the date this Certificate of Designation is approved by the authority of the
Board of Directors in final form, the Board of Directors shall resolve, in
substantially the form of Exhibit “A” to this Certificate of Designation (the
“Bonus Resolution”) and subject to the approval of the Increase of Capital by
the Members, to bonus issue fully paid Common Shares to the holders of the
Preferred Shares, such Bonus Resolution to be effective [two Business Days
after the Second Issue Date]/[on the Original Issue Date](1) (the “Bonus
Issue”), in preference to and to the exclusion of the holders of Common Shares,
by capitalizing an amount of [US$       ]
standing to the credit of the share premium account of the Company (the
“Capitalization”) to pay up the full nominal value of such number of Common
Shares for each of the Preferred Shares as is equal to the Conversion Ratio
less one, or with respect to any fractional Preferred Share, less such fraction
(the “Bonus Issue Shares”), pursuant to Bye-law 64 and Section 40 of the
Companies Act 1981 of Bermuda (the “Act”). 
The issuance of Bonus Issue Shares to any Holder is subject to and
conditional upon the Company having sufficient share premium (which shall be
reserved in the Bonus Resolution) to fully effect the Capitalization and is
further conditional upon the conversion of the Preferred Share(s) held by such
Holder into Common Shares in accordance with this Section 3 (a
“Conversion”) in each case.  Such Bonus
Issue Shares may be issued to any one or more Holders in discrimination to and
to the exclusion of any one or more other Holders who have not effected a
Conversion of their Preferred Shares. 
The Capitalization shall be effected and the Bonus Issue Shares shall be
issued, in respect of each Preferred Share or fraction thereof, subject to and
upon a Holder’s delivery to the Company of a Notice of Conversion in respect of
such Preferred Share(s) or fraction thereof in accordance with
Section 3(d).  The Company (i)
shall not take any action that would impair, rescind or alter the Bonus
Resolution following its adoption as described in this paragraph (c) and (ii)
shall at all times after the Increase in Capital reserve that number of Common
Shares sufficient to allow, and maintain sufficient share premium to effect,
the Bonus Issue.


 


(d)           In
order to effect a Conversion, a Holder shall deliver (via facsimile or
otherwise) a copy of a fully executed Notice of Conversion, in the form
attached hereto, to the Company at its principal office (Attention: Secretary).
Upon receipt by the Company of a Notice of Conversion, the Company shall
promptly send, via facsimile if possible, a confirmation to such Holder stating
that the Notice of Conversion has been received and the name and telephone
number of a contact person at the Company regarding the Conversion.


 


(e)           Upon
receipt by the Company of the Notice of Conversion from a Holder and to effect
a Conversion of the Holder’s Preferred Shares:


 












(1)  Select one, as appropriate. 
The effective date will be determined at the Original Issue Date, after
determining whether there will be a Subsequent Offering Period.


 


2

















 


(i)            the
Bonus Issue Shares in respect of each Preferred Share or fractional Preferred
Share being converted shall be issued to such Holder as an integral part of the
Conversion and the Capitalization of the par value of such Bonus Issue Shares
shall be effected in full and reflected in the Company’s records;


 


(ii)           simultaneously
with and following upon the action set forth in (i) above, each Preferred Share
or fraction thereof described in such Notice of Conversion will immediately
cease to have the rights and restrictions of a Preferred Share or fraction
thereof and each such Preferred Share will become one fully paid Common Share
and each such fraction of Preferred Share will become an equal fraction of a
Common Share;


 


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


 


(iv)          the
Company will pay all stamp and transfer taxes, if any, payable upon any
Conversion provided, however, that (i) a Holder shall pay any such tax which is
due because the Holder requests the Common Shares issuable in respect of its
Preferred Shares upon a Conversion to be issued in a name other than the
Holder’s name, and (ii) the Company (or the transfer agent) may refuse to issue
Common Shares to be issued in a name other than the Holder’s name until it
receives cash from the Holder in an amount sufficient to pay any tax referred
to in (i) above.


 


(f)            Upon
a Conversion, the relevant 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.


 


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) Holders are entitled to dividends as set forth in this
Section 6, in each case subject to Section 54 of the Act.  Each Holder shall be


 


3

















 


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 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 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 and, until the actions
described in clause (iii) of this paragraph (c) have been taken, the Board of
Directors shall not increase the number of directors to more than 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 directors 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.  If the Company has failed
to take any of the actions described in, or takes any action prohibited under,
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,
in preference to and to the exclusion of the holders of the Common Shares.  Thereafter on each quarterly anniversary of
the sixth Business Day following the Original Issue Date that occurs before the
Preferred Shares have become optionally convertible, if the Company has not
taken any of the actions described in, or takes any action prohibited under,
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, in preference to and to
the exclusion of the holders of the Common Shares.  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.


 


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(d)           Under
the Lock-up Agreement, the Company has agreed to, as soon as practicable
following the Original Issue Date and in any event no later than thirty
calendar days thereafter, file a preliminary proxy statement with the
Securities and Exchange Commission (the “SEC”) regarding meetings 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.  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, in
preference to and to the exclusion of the holders of the Common Shares.  Thereafter on each quarterly anniversary of
the thirty-first day following the Original Issue Date, 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, in preference to and to the exclusion of the holders of the Common
Shares.


 


(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.  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, in preference to and to the exclusion of the holders of the
Common Shares.  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, in preference to and to the exclusion of the holders of the Common
Shares.


 


(f)            Under
the Lock-up Agreement, the Company has agreed to convene meetings of its
shareholders to approve the actions described in clauses (A) and (B) of
paragraph (d) above on or prior to October 24, 2004.  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, in
preference to and to the exclusion of the holders of the Common Shares.  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, in
preference to and to the exclusion of the holders of the Common Shares.


 


(g)           Under
the Lock-up Agreement, the Company has agreed that it will use its commercially
reasonable best efforts to (i) list the Common Shares 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 Shares on the OTC Bulletin Board or, at such time as
the Company meets the applicable listing criteria, to list the Preferred Shares
on the New York Stock Exchange or the NASDAQ Stock Market, in each case as
promptly as practicable if the Preferred Shares do not become convertible on or
prior to October 24, 2004, provided that, after the Preferred Shares have
become convertible, the Company has agreed not to apply to list, and


 


5

















 


if listed, to use its reasonable best efforts (which in any event shall
include any action within the Company’s control) to promptly delist, the
Preferred Shares.  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 as it
relates to listing but not the delisting of the Preferred Shares, 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, in preference to and to the exclusion of the holders of the
Common Shares.  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, in preference to and to
the exclusion of the holders of the Common Shares.


 


(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 paragraph (d) hereof,
including (A) adopting board resolutions recommending such actions, (B)
distributing timely notice of such meetings to its shareholders, (C) complying
with applicable proxy solicitation requirements as soon as practicable, (D) if
a quorum is not present on a scheduled date of any such meeting, postponing and
reconvening such meeting at least twice and (E) with respect to the action
described in clause (B) of paragraph (d), duly convening and holding a separate
general meeting of the holders of Common Shares.  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, in
preference to and to the exclusion of the holders of the Common Shares.  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 subject to
Section 54 of the Act, the Company shall declare and pay a dividend on the
issued and outstanding Preferred Shares in the aggregate amount of $1,000,000,
in preference to and to the exclusion of the holders of the Common Shares.


 


(i)            Under
the Lock-up Agreement and pursuant to Section 3(c) hereof, the Board of
Directors is required (i) to adopt the Bonus Resolution on the date this
Certificate of Designation is approved in final form, with effect [two Business
Days after the Second Issue Date]/[on the Original Issue Date] and (ii)
following its adoption, the Company is required (x) to refrain from taking any
action to impair, rescind or alter the Bonus Resolution following its adoption
in accordance with Section 3(c) and (y) to at all times after the Increase
in Capital reserve that number of Common Shares sufficient to allow, and
maintain sufficient share premium to effect, the Bonus Issue.  If the Board of Directors has failed to take
the action described in clause (i), or if the Company has failed to take or to
refrain from taking, as the case may be, the actions described in clause (ii)
of the first sentence of this paragraph, then on the sixth day following its
failure, the Company shall declare


 


6

















 


and pay a dividend on the issued and outstanding Preferred Shares in
the aggregate amount of $2,500,000, in preference to and to the exclusion of
the holders of the Common Shares. 
Thereafter on each quarterly anniversary of the first such payment date,
if the Board of Directors has not taken the action described in clause (i) (or refrain
from taking the action described in 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 aggregated amount of $2,500,000, in
preference to and to the exclusion of the holders of the Common Shares.


 


(j)            All
dividends payable under this Section shall be cumulative.  Without limiting any other rights of the
Holders hereunder, under the Lock-up Agreement (including, without limitation,
the rights to receive dividends payable under this Section and the right
under the Lock-up Agreement to be paid an amount equal to any dividends not
paid as required under this Certificate of Designation, at law or otherwise),
upon the default of the equivalent of six quarterly dividends on the Preferred
Shares, the Holders may, voting as a class, elect at least two members of the
Board of Directors at each Annual General Meeting of the Company, such right to
continue until all dividends payable hereunder have been paid in full.


 


7.             Voting Rights.  (a) 
Prior to the Preferred Shares becoming convertible, 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.  Until the Preferred Shares have become
convertible, 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.  If and when the preferred
shares become convertible at each Holder’s option, they will cease to vote
except in limited circumstances as required by Bermuda law and as set forth
herein.


 


(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 at which the Holders are entitled to
vote 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.


 


7

















 


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 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 such subdivision, split,
reclassification or consolidation and division or combination becoming
effective.  Without limiting the
foregoing, the Conversion Ratio and the Bonus Issue for purposes of the
Conversion of the Preferred Shares shall be adjusted in accordance with this
Section 9 following the Increase of Capital if the reverse split (i.e.,
consolidation) referred to in clause (B) of Section 6(d) is duly approved
by the Members and the holders of the Common Shares of the Company in
accordance with the Bye-laws and Bermuda law.


 


(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 a
Conversion, 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


 


8

















 


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 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 3(c).


 


“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.


 


“Bonus Issue” has the meaning set forth in Section 3(c).


 


“Bonus Issue Shares” has the meaning set forth in
Section 3(c).


 


“Bonus Resolution” has the meaning set forth in Section 3
(c).


 


“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(b).


 


“Capitalization” has the meaning set forth in Section 3(c).


 


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“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(c).


 


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


 


“Exchange Offer” has the meaning set forth in the Lock-up
Agreement.


 


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


 


“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(b).


 


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


 


“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.


 


“Notice of Conversion” shall mean a notice in the form annexed
hereto.


 


“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).


 


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


 


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


 


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“Subsequent Offering Period” has the meaning set forth in
Section 2.


 


(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 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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ANNEX


 


NOTICE
OF CONVERSION


 


(To be executed by the registered Holder in
order to convert the

Series B Convertible Preferred Shares)


 


To:          Foster
Wheeler Ltd.


 


The undersigned hereby irrevocably elects to convert (the “Conversion”)
             
Series B Convertible Preferred Shares of Foster Wheeler Ltd. (the “Company”)
into common shares par value $1.00 of the Company (the “Common Shares”), in
accordance with the provisions of the Certificate of Designation of Series B
Convertible Preferred Shares, as of the date written below.  If securities are to be issued in the name
of a person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto.


 


It is understood that each holder of a Preferred Share will receive
that number of Common Shares equal to the Conversion Ratio, as adjusted in
accordance with Section 9 of the Certificate of Designation, and if not,
this Notice of Conversion shall not be effective.


 


Except as provided below, the Company shall electronically issue the
Common Shares issuable pursuant to the Conversion to the account of the
undersigned or its nominee (which is
               )
with DTC through its Deposit Withdrawal Agent Commission System (“DTC
Transfer”).


 


•              In lieu of receiving
the Common Shares issuable pursuant to the Conversion by way of DTC Transfer,
the undersigned hereby requests that the Company issue the Common Shares to the
undersigned and deliver to the undersigned physical certificates representing
such Common Shares.


 


	
   

  	
  Date of Conversion:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


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Exhibit “A”


 


FOSTER
WHEELER LTD.


UNANIMOUS
WRITTEN CONSENT OF THE BOARD OF DIRECTORS


 


The Undersigned, being all of the members of the Board of Directors (the
“Board”) of Foster Wheeler Ltd., a company incorporated and existing under the
laws of Bermuda (the “Company”), hereby consent to and unanimously adopt the
following resolutions and hereby direct that this Unanimous Written Consent be
filed with the minutes of the proceedings of the Board.


 


W H E R E A S:


 


1.             The Company has undertaken an exchange
offer (the “Exchange Offer”) as described in a Registration Statement filed on
Form S-4 (the “Registration Statement”) dated
[                         ]
2004, approved by the Board and filed by the Company and certain of its
subsidiaries with the US Securities and Exchange Commission (the “SEC”) under
the U.S. Securities Act of 1933, as amended and declared effective by the SEC
on [                ],
2004.


 


2.             Pursuant to the terms of the Exchange
Offer, inter
alia, the Company has designated a series of its preferred shares as
Series B Convertible Preferred Shares, the terms of which (the “Terms”) are set
forth in the form of Certificate of Designation (the “Certificate of
Designation”) filed as Exhibit 4.20 to the Registration Statement (the
“Preferred Shares” which term includes any fraction of such a share) and the
Company has issued
[              ]
of the Preferred Shares.


 


3.             The Terms require the Company to: (i)
convene a general meeting of its shareholders in order to increase its
authorized capital to include at least
[            ]
additional US$1.00 par value common shares of the Company (the “Increase of
Capital”); and (ii) subject to the Increase of Capital, to approve the Bonus
Issue (as defined below).


 


4.             In accordance with the Terms and subject
to the Increase of Capital, effective [two Business Days (as defined in the
Certificate of Designation) following the Second Issue Date]/[on the Original Issue
Date (as defined in the Certificate of Designation)] (the “Effective Date”),
the Board desires to bonus issue fully paid common shares of the Company to the
holders of the Preferred Shares (the “Holders”) following the Increase of
Capital (the “Bonus Issue”), by capitalizing an amount standing to the credit
of the share premium account of the Company (the “Capitalization”) sufficient
to pay up the full nominal value of that number of common shares of US$1.00 par
value each of the Company issuable under the Conversion Ratio (as defined in
the Certificate of Designation) less one, or with respect to any
fractional Preferred Share, less such fraction, for each of the Preferred
Shares (the “Bonus Issue Shares”), pursuant to Bye-law 64 of the Bye-laws of
the Company and Section 40 of the Companies Act 1981 of Bermuda (the
“Act”), the Bonus Issue Shares to be issued, in the case of each Preferred


 


13

















 


Share, to the Holder subject to and upon such Holder’s delivery to the
Company of a Notice of Conversion (as defined in the Certificate of
Designation) in respect of such Preferred Share(s) in accordance with the Terms
and for the purpose of a Conversion (as defined in the Certificate of
Designation) of such Preferred Share(s).


 


5.             The issuance of the Bonus Issue Shares
shall be subject to and conditional upon the Conversion of the Preferred Shares
by the Holder in each case, and the Bonus Issue Shares may be issued to any one
or more Holders, on Conversion (as defined in the Certificate of Designation)
of the Preferred Shares of such Holder, in discrimination to and to the
exclusion of any one or more other Holders who have not effected such
Conversion of their Preferred Shares. 
The Bonus Issue shall be made to the Holders in preference to and to the
exclusion of the holders of common shares of the Company.


 


6.             The anti-dilution provisions set forth in
Section 9 of the Certificate of Designation shall apply to the Bonus Issue
Shares.


 


RESOLVED
that:


 


1.     Subject to the Increase of Capital, the Bonus
Issue and the Capitalization be and are hereby approved with effect from the
Effective Date, pursuant to which the Bonus Issue Shares will be issued to each
Holder subject to and upon such Holder’s delivery to the Company of a Notice of
Conversion (as defined in the Certificate of Designation) in respect of such
Holder’s Preferred Share(s) in accordance with the Terms;


 


2.     the issuance of the Bonus Issue Shares is subject
to and conditional upon the Conversion of the Preferred Shares in each case,
and the Bonus Issue Shares shall be issued to any one or more Holders in
discrimination to and to the exclusion of any one or more other Holders who
have not effected such Conversion of their Preferred Shares, and the Bonus
Issue shall be made to the Holders in preference to and to the exclusion of the
holders of common shares of the Company;


 


3.     Such amount standing to the credit of the share
premium account of the Company as is sufficient to pay up the full nominal
value of all Bonus Issue Shares be and is hereby reserved for purposes of the
Capitalization;


 


4.     subject to the Increase of Capital, that number of
common shares of the Company equal to the Bonus Issue Shares be and are hereby
reserved for issuance as the Bonus Issue Shares upon Conversion of the
Preferred Shares in accordance with the Terms; and


 


5.     the anti-dilution provisions set forth in
section 9 of the Certificate of Designation shall apply to the Bonus Issue
Shares.


 


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