AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of May 25, 2001 among
Foster Wheeler Corporation, a New York corporation ("FWC"), Foster Wheeler Ltd.,
a Bermuda company ("FW Ltd.") owned by a trust, the beneficial owners of which
are the class of stockholders of FWC, and Foster Wheeler LLC, a Delaware limited
liability company ("Foster Wheeler LLC") and a newly formed, indirect
wholly-owned subsidiary of FW Ltd.
WHEREAS, the respective Boards of Directors of FWC and FW Ltd.
and the Manager of Foster Wheeler LLC deem it advisable and in the best
interests of their respective stockholders and member to reorganize so that FWC
will effectively change its domicile from New York to Bermuda by merging with
and into Foster Wheeler LLC, and having all current stockholders of FWC becoming
shareholders of FW Ltd. by operation of this Agreement and by operation of law
(the "Reorganization");
WHEREAS, the respective Boards of Directors of FWC and FW Ltd.
and the Manager of Foster Wheeler LLC have approved the merger of FWC with and
into Foster Wheeler LLC (the "Merger"), upon the terms and subject to the
conditions set forth in this Agreement, whereby each outstanding share of common
stock, par value $1.00 per share ("FWC Common Stock"), of FWC (other than those
shares held by FWC or any direct or indirect wholly-owned subsidiary of FWC),
will be automatically converted into one common share, par value $1.00 per share
("FW Ltd. Common Share"), of FW Ltd.;
WHEREAS, Foreign Holdings Ltd., a Bermuda company and
wholly-owned subsidiary of FW Ltd. has, as sole member of Foster Wheeler LLC,
approved the Merger and FW Ltd. has, as sole shareholder of Foreign Holdings
Ltd., approved the Merger; and
WHEREAS, the Merger requires the approval of the holders of
two thirds of the outstanding shares of FWC Common Stock. entitled to vote
thereon at the annual meeting of holders of FWC Common Stock (the "FWC
Stockholder Approval");
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
MERGER
1.1. MERGER
Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the Delaware Limited Liability Company Act
(the "DLLCA"), the New York Business Corporation Law (the "NYBCL") and the New
York Limited Liability Company Law (the "NYLLCL") , FWC shall be merged with and
into Foster Wheeler LLC at the Effective Time of the Merger (as defined in
Section 1.2). Following the Effective Time of the Merger, the separate corporate
existence of FWC shall cease and Foster Wheeler LLC shall continue as the
surviving entity (the "Surviving Entity") and shall succeed to and assume all
the rights and obligations of FWC in accordance with the DLLCA, the NYLLCL and
the NYBCL.
1.2. EFFECTIVE TIME
Subject to the provisions of this Agreement, the parties shall
duly prepare, execute and file (i) a certificate of merger (the "NEW YORK
CERTIFICATE OF MERGER") in accordance with Section 1003 of the NYLLCL with the
Department of State of New York, and (ii) a certificate of merger (the "DELAWARE
CERTIFICATE OF MERGER") in accordance with Section 18-209(c) of the DLLCA and
with the Secretary of State of Delaware. The Merger shall become effective upon
the later of (i) the filing of both the New York Certificate of Merger and the
Delaware Certificate of Merger and (ii) 11:59 p.m. on May 25, 2001. The date and
time when the Merger shall become effective is hereinafter referred to as the
"EFFECTIVE TIME."
1.3. EFFECTS OF THE MERGER
(a) GENERAL EFFECTS. The Merger shall have the effects set
forth in Section 906 of the NYBCL, Section 1004 of the NYLLCL and Section
18-209(g) of the DLLCA.
(b) ASSUMPTIONS OF OBLIGATIONS. The Surviving Entity
specifically assumes any obligation of FWC which require that such obligation is
specifically assumed by the Surviving Entity.
ARTICLE II
NAME, CERTIFICATE OF FORMATION AND
OPERATING AGREEMENT OF SURVIVING COMPANY
2.1. NAME OF SURVIVING CORPORATION
The name of the Surviving Entity shall be "Foster Wheeler
LLC".
2.2. CERTIFICATE OF FORMATION
The Certificate of Formation of Foster Wheeler LLC, as in
effect immediately prior to the Effective Time, shall, from and after the
Effective Time, be the certificate of formation of the Surviving Entity until
thereafter changed or amended as provided therein or by applicable law.
2.3. OPERATING AGREEMENT
The Operating Agreement of Foster Wheeler LLC as in effect
immediately prior to the Effective Time, shall, from and after the Effective
Time, be the Operating Agreement of the Surviving Entity until thereafter
changed or amended as provided therein or by applicable law.
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2.4. MANAGER
The Manager or Managers of Foster Wheeler LLC immediately
prior to the Effective Time shall be the Manager or Managers of the Surviving
Entity, until the earlier of such Manager's death, resignation or removal in
accordance with the Foster Wheeler LLC Operating Agreement, or as otherwise
provided by applicable law.
2.5. OFFICERS
The officers, if any, of Foster Wheeler LLC immediately prior
to the Effective Time shall be the officers of the Surviving Entity, until the
earlier of their death, resignation or removal in accordance with the Foster
Wheeler LLC Operating Agreement, or as otherwise provided by applicable law.
ARTICLE III
CONVERSION AND EXCHANGE OF STOCK
3.1. CONVERSION
At the Effective Time, by virtue of the Merger and without any
action on the part of the holder of any shares:
(a) FWC COMMON STOCK. Each issued and outstanding share of FWC
Common Stock shall be converted into and become one fully paid and nonassessable
FW Ltd. Common Share.
(b) CANCELLATION OF FWC-OWNED STOCK. Each outstanding share of
FWC Common Stock that is owned by FWC or by any direct or indirect wholly-owned
subsidiary of FWC prior to the Effective Time shall automatically be canceled
and retired and shall cease to exist, and no FW Ltd. Common Shares or other
consideration shall be delivered or deliverable in exchange for such shares of
FWC Common Stock.
(c) STOCK OPTION AND AWARD PLANS. Foster Wheeler LLC shall
cause its subsidiary Foster Wheeler US Holdings, Inc., a Delaware corporation
("FW US Holdings"), to assume all the rights and obligations of FWC under the
1984 Stock Option Plan of FWC, the 1995 Stock Option Plan of FWC, the Directors'
Stock Option Plan of FWC, the FWC Executive Compensation Plan, the FWC Directors
Deferred Compensation and Stock Award Plan, the FWC Executive Stock Ownership
Plan and any other plan or agreement providing for the grant or award to
employees or directors of options or other rights to purchase or receive FWC
Common Stock or any payment in respect thereof as each such plan or agreement
has been or may be amended to the Effective Time of the Merger (collectively,
the "Incentive Plans"). The outstanding options and other awards assumed by FW
US Holdings shall be exercisable or issuable upon the same terms and conditions
as under the Incentive Plans and the agreements relating thereto immediately
prior to the Effective Time of the Merger, except that upon the exercise or
issuance of such options or awards, FW Ltd. Common Shares shall be issuable in
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lieu of shares of FWC Common Stock. The number of FW Ltd. Common Shares issuable
upon the exercise or issuance of such an option or award immediately after the
Effective Time and the option price of each such option or award shall be the
number of shares and option price in effect immediately prior to the Effective
Time. All options or awards issued pursuant to the Incentive Plans after the
Effective Time shall entitle the holder thereof to purchase FW Ltd. Common
Shares in accordance with the terms of the Incentive Plans.
(d) RIGHTS. Each right issued and attached to a share of FWC
Common Stock pursuant to the Amended and Restated Rights Agreement, dated as of
September 30, 1997 between FWC and Mellon Investor Services LLC (formerly Chase
Mellon Shareholder Services, L.L.C.), as Rights Agent, shall be converted into
one attached right issued and attached to a Common Share of FW Ltd. pursuant to
the Rights Agreement dated as of May 21, 2001 between FW Ltd. and Mellon
Investor Services LLC, as Rights Agent.
3.2. EXCHANGE OF STOCK
(a) EXCHANGE PROCEDURES. Following the Effective Time, each
holder of an outstanding certificate or certificates theretofore representing
shares of FWC Common Stock may, but shall not be required to, surrender the same
to FW Ltd. for cancellation or transfer, and each such holder or transferee will
be entitled to receive certificates representing the same number of FW Ltd.
Common Shares as the shares of FWC Common Stock previously represented by the
stock certificates surrendered. If any certificate representing FW Ltd. Common
Shares is to be issued in a name other than that in which the certificate
theretofore representing FWC Common Stock surrendered is registered, it shall be
a condition to such issuance that the certificate surrendered shall be properly
endorsed and otherwise in proper form for transfer and that the person
requesting such issuance shall either: (i) pay FW Ltd. or its agents any taxes
or other governmental charges required by reason of the issuance of certificates
representing FW Ltd. Common Shares in a name other than that of the registered
holder of the certificate so surrendered; or (ii) establish to the satisfaction
of FW Ltd. or its agents that such taxes or governmental charges have been paid.
Until so surrendered or presented for transfer each outstanding certificate
which, prior to the Effective Time, represented FWC Common Stock shall be deemed
and treated for all corporate purposes to represent the ownership of the same
number of FW Ltd. Common Shares as though such surrender or transfer and
exchange had taken place.
(b) NO FURTHER OWNERSHIP RIGHTS IN FWC COMMON STOCK. All FW
Ltd. Common Shares issued upon the surrender for exchange of certificates in
accordance with the terms of this Article III shall be deemed to have been
issued (and paid) in full satisfaction of all rights pertaining to the shares of
FWC Common Stock theretofore represented by such certificates, subject, however,
to the Surviving Entity's obligation (if any) to pay any dividends or make any
other distributions with a record date prior to the Effective Time which may
have been declared or made by FWC on such shares of FWC Common Stock in
accordance with the terms of this Agreement or prior to the date of this
Agreement and which remain unpaid at the Effective Time, and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Entity of the shares of FWC Common Stock which were outstanding immediately
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prior to the Effective Time. If, after the Effective Time, certificates are
presented to the Surviving Entity they shall be canceled and exchanged as
provided in this Article III, except as otherwise provided by law.
ARTICLE IV
EMPLOYEE BENEFIT AND COMPENSATION PLANS
4.1. PLANS
At the Effective Time, each employee and director benefit and
deferred compensation plan and program to which FWC is then a party (the
"Benefit Plans") and each Incentive Plan shall be assumed by, and continue to be
the plan of, FW US Holdings. To the extent any Benefit Plan or Incentive Plan
provides for the issuance or purchase of, or otherwise relates to, FWC Common
Stock, after the Effective Time, such plan shall be deemed to provide for the
issuance or purchase of, or otherwise relate to, FW Ltd. Common Shares. FW US
Holdings shall offer to enter into change of control employment agreements (the
"New Change of Control Agreements") with each executive officer of FWC who, on
the date hereof, is a party to a Change of Control Employment Agreement with FWC
(each a "FWC Change of Control Agreement"), and the terms and conditions of the
New Change of Control Agreements shall be substantially similar to those of the
FWC Change of Control Agreements.
ARTICLE V
CONDITIONS PRECEDENT
5.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER
The respective obligation of each party to effect the Merger
is subject to the satisfaction or waiver of the following conditions:
(a) STOCKHOLDER APPROVAL. The FWC Stockholder Approval shall
have been obtained.
(b) FORM S-4. The registration statement on Form S-4 filed
with the Securities and Exchange Commission by FW Ltd. in connection with the
issuance of the FW Ltd. Common Shares in the Merger shall have become effective
under the Securities Act of 1933, as amended, and shall not be the subject of
any stock order or proceedings seeking a stop order.
(c) NYSE APPROVAL. The New York Stock Exchange shall have
confirmed that the shares of FW Ltd. may trade on the NYSE and succeed to the
ticker symbol "FWC".
(d) US TAX OPINION. FW Ltd. shall have received an opinion
from White & Case LLP confirming, as of the Effective Time, certain matters
discussed under the heading "Income Tax Considerations--United States Federal
Income Taxation - Receipt of Foster Wheeler Ltd. Common Shares" in the Form S-4
filed by FW Ltd.
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(e) BERMUDA TAX OPINION. FW Ltd. shall have received an
opinion from Conyers Dill & Pearman confirming, as of the Effective Time, the
matters discussed under the heading "Material Tax Considerations--Bermuda Tax
Consequences" in the Form S-4 filed by FW Ltd.
(f) GOVERNMENTAL, REGULATORY AND OTHER CONSENTS. All filings
required to be made prior to the Effective Time of the Merger with, and all
consents, approvals, permits and authorizations required to be obtained prior to
the Effective Time from, any court or governmental or regulatory authority or
agency, domestic or foreign, or other person in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby will have been made or obtained (as the case may be).
(g) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger or any of the other transactions contemplated hereby
shall be in effect.
(h) GUARANTEES. Foster Wheeler LLC and its subsidiary, Foster
Wheeler International Holdings, Inc., a Delaware corporation ("FW
International") shall have agreed in writing to unconditionally guarantee the
performance of the obligations of FW US Holdings under each of the Benefit
Plans, Incentive Plans and the New Change of Control Agreements. FW Ltd. shall
have agreed in writing to (i) guarantee such obligations of Foster Wheeler LLC
and FW International as they relate to the New Change of Control Agreements and
(ii) directly assume, or cause its affiliate to assume, the obligations of FW US
Holdings under each of the New Change of Control Agreements in the event FW US
Holdings ceases to be an affiliate of FW Ltd. and the executive party to such
New Change of Control Agreement is thereafter an employee of FW Ltd. or an
affiliate of FW Ltd.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
6.1. TERMINATION
This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval by the stockholders of FWC of
matters presented in connection with the Merger, by action of the Board of
Directors of FWC or of FW Ltd.
6.2. EFFECT OF TERMINATION
In the event of termination of this Agreement as provided in
Section 6.1, this Agreement shall forthwith become void and have no effect,
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without any liability or obligation on the part of FWC, Foster Wheeler LLC or FW
Ltd., other than the provisions of this Article VI and Article VII.
6.3. AMENDMENT
This Agreement may be amended by the parties at any time
before or after any required approval of matters presented in connection with
the Merger by the stockholders of FWC PROVIDED, HOWEVER, that after any such
approval, there shall be made no amendment that by law requires further approval
by such stockholders without the further approval of such stockholders. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties.
6.4. WAIVER
At any time prior to the Effective Time, the parties may waive
compliance by the other parties with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver of
such rights.
6.5. PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR
WAIVER
A termination of this Agreement pursuant to Section 6.1, an
amendment of this Agreement pursuant to Section 6.3 or a waiver pursuant to
Section 6.4 shall, in order to be effective, require in the case of FWC or FW
Ltd., action by its Board of Directors or in the case of Foster Wheeler LLC,
action by its Manager.
ARTICLE VII
GENERAL PROVISIONS
7.1. NOTICES
All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to FWC
Foster Wheeler Corporation
Perryville Corporate Park
Clinton, New Jersey 08809
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(b) if to FW Ltd.
Foster Wheeler Ltd.
c/o Conyers Dill & Pearman
Clarendon House
Church Street
P.O. Box HM666
Hamilton HM CX, Bermuda
(c) if to Foster Wheeler LLC
Foster Wheeler LLC
c/o Foster Wheeler Corporation
Perryville Corporate Park
Clinton, New Jersey 08809
7.2. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES
This Agreement (including the documents and instruments
referred to herein) (a) constitutes the entire agreement, and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter of this Agreement and (b) except for the
provisions of Article III, are not intended to confer upon any person other than
the parties any rights or remedies.
7.3. GOVERNING LAW
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
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IN WITNESS WHEREOF, FWC, Foster Wheeler LLC and FW Ltd. have
caused this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
Foster Wheeler Corporation
By:
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Name:
Title: Chairman, CEO & President
Foster Wheeler LLC
By:
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Name:
Title: Manager
Foster Wheeler Ltd.
By:
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Name:
Title: Secretary
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