Exhibit 4.20


 


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 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)                                  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 No-Transfer 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 No-Transfer 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)                                 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)                                  The
Company will 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)                                    The
Company will 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)                                 The
Company 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 will not apply to list, and if listed, will use its
reasonable best efforts (which in any


 


5

















 


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)                                 The
Company 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)                                     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 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.


 


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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 (including, without limitation, the rights to receive
dividends payable under this Section), 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.


 


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


 


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(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 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


 


8

















 


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).


 


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


 


“Company” means Foster Wheeler Ltd.


 


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“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 No-Transfer
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).


 


“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.


 


“No-Transfer Agreement” means the No-Transfer Agreement dated
April 8, 2004 among the Company, Foster Wheeler LLC, a Delaware limited
liability company, and the security holders party thereto, as amended on May 4,
May 7 and May 19, 2004, and as further 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).


 


“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.


 


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


 


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(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”).


 


o                                    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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