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NAME: Thomas R. O’Brien, general counsel and senior vice president for corporate affairs. AGE: 63 THE COMPANY: Foster Wheeler Corp. is a $4 billion engineering services and products company based in Clinton, N.J. Three-quarters of the company’s revenues come from the designing, engineering and construction of petroleum refineries and chemical, petrochemical, pharmaceutical and industrial plants throughout the world. The remaining revenue comes from an engineering group that designs, manufactures and builds steam-generating and other equipment for power stations and cogeneration markets. The group also provides environmental services. Foster Wheeler, with locations in 28 countries and the United States, employs 10,170 people. DEPARTMENT: The company has 26 lawyers worldwide, with most of them located at the company’s headquarters. About half of the attorneys are assigned to subsidiaries, where they handle core legal work. Most of their work involves the formulation, drafting, negotiation and due diligence of contracts. The contracts can range from straightforward engineering projects to the full engineering, procurement and construction of a pharmaceutical plant in Asia. A number of the lawyers have engineering backgrounds, including some who were engineers with Foster Wheeler before becoming lawyers. The contracts are “voluminous,” O’Brien said. They include such items as schedules, exhibits and costs. All of the contract work is subject to O’Brien’s review. The other half of the legal team deals with intellectual property, litigation and securities and corporate governance matters. Foster Wheeler owns and licenses patents, trademarks and know-how used in each of its industry groups. None of the patents or trademarks is material to the business. Local lawyers are hired to deal with local safety, labor, tax, land use and environmental regulations. The company’s operations are subject to strict environment laws, such as the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 and the Clean Air Act. LITIGATION: Like some old-line industrial companies, Foster Wheeler is embroiled in claims involving personal injuries from the company’s one-time use of asbestos. It currently has about 122,000 claims pending against it. The company primarily used asbestos in power-generation equipment and in boilers for civilian and military ships from the 1940s to 1960s. “The volume of claims is increasing and it’s very much a concern,” said O’Brien. In the nine years O’Brien has been with the company, asbestos has gone from being an insignificant part of the company’s legal concerns to a large percentage of its legal matters, he said. So far, the company has paid out more than $300 million in claims, almost all of which is covered by insurance. O’Brien believes Foster Wheeler has a plan in place to manage the claims. Some cases are settled, others are dismissed and some go to trial. Outside counsel takes care of all asbestos matters, but O’Brien admits it is increasingly occupying his time. He is the only in-house attorney involved with the asbestos litigation. “I spend the largest single chunk of my time on them,” he said. The onslaught of asbestos litigation in recent years has crippled some companies, including W.R. Grace & Co., which filed for Chapter 11 bankruptcy last year. According to Foster Wheeler’s filings with the Securities and Exchange Commission, the many asbestos-related bankruptcies have reduced the number of solvent defendants. This could lead to more lawsuits and greater demands on Foster Wheeler. However, O’Brien said that he believes his company has an effective management program in place. “The whole area has a lot of uncertainty,” he said. “Congress needs to address it. The money being paid out by insurance companies is going into the hands of lawyers and unimpaired claimants that have not had manifestations of injury.” Other litigation includes project claims Foster Wheeler brings against project owners for costs above or not included in the contract price. The number of project claims has risen because of the increase in lump-sum contracts in the 1990s. There are also a number of counterclaims against Foster Wheeler brought by project owners. There are a small number of lawsuits pending that involve injuries suffered on a construction site, in which Foster Wheeler is either a defendant or a plaintiff. Finally, the company has general litigation, including human resources matters. The HR matters might include breach of contract or alleged discrimination. FALLOUT FROM ACCOUNTING SCANDALS: The scandals have led to a heightened scrutiny of internal corporate activity, O’Brien said, explaining that Foster Wheeler is working to develop a due diligence process with which corporate officers will be comfortable. The July signing of the Sarbanes-Oxley Act, a measure designed to clean up corporate accounting and governance, is still being sorted out, O’Brien said. He said the fact that the company’s legal home is in Bermuda hasn’t caused the company any problems yet, although offshore companies are receiving close scrutiny from Congress and the media. BIGGEST CRISIS: Foster Wheeler has high levels of debt. At the end of 2001, it was in violation of certain covenants in its revolving credit agreements, but was able to get a series of waivers from lenders, according to filings with the SEC. In August, it received new lines of credit that extend into 2005. Negotiations with bank groups to renew the loans have been a “major, major issue given the condition of our balance sheet,” O’Brien said. OUTSIDE COUNSEL: Evert & Weathersby in Atlanta handles asbestos litigation. Roseland, N.J.-based Wolff & Samson takes care of environmental work and some litigation. White & Case in New York handles securities matters. ROUTE TO THE TOP: Born in Orange, N.J., O’Brien attended Fairfield University in Connecticut. After graduating from college in 1960, he served on active duty as a naval flight officer with the U.S. Marine Corps in the United States and Asia. Discharged in 1965, O’Brien went to work in a management-development program at the New York Telephone Co. before resigning to attend Seton Hall University School of Law. He graduated there in 1970 while working part time at Gurry and Conlan in South Orange, N.J. In 1974, he became a partner in the Morris Plains, N.J., firm of Harper, McCoy and O’Brien, which later became Harper, O’Brien and Mulvaney. While at the firm he did civil litigation. Former Governor Thomas Kean appointed O’Brien to the post of director of the New Jersey Division of Gaming Enforcement in 1983, where he was charged with enforcing the state Casino Act. From there, O’Brien joined Wolff & Samson in 1986. In 1993, he was hired as Foster Wheeler’s general counsel. FAMILY: O’Brien lives in Morris Township, N.J., with his wife, Midge, of 37 years. The couple has six children and 10 grandchildren. LAST BOOK READ: “Theodore Rex,” by Edmund Morris.

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