Exhibit 10.1

THE BABCOCK & WILCOX COMPANY

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (the “Agreement”) is made by and between The Babcock &
Wilcox Company, a corporation incorporated under the laws of the State of
Delaware (“B&W”), and Michael S. Taff, an individual (“Mr. Taff”), as of
June 29, 2011 (the “Effective Date”).

WHEREAS, Mr. Taff presently serves as Senior Vice President and Chief Financial
Officer of B&W and has elected to terminate his employment with B&W in
accordance with the Restructuring Transaction Retention Agreement by and between
Mr. Taff and McDermott International, Inc. dated as of December 10, 2009 and
assumed by B&W (the “Restructuring Transaction Retention Agreement”); and

WHEREAS, B&W desires to engage the services of Mr. Taff following the exercise
of his rights under the Restructuring Transaction Retention Agreement to elect
to terminate his employment and pending the search for a successor as chief
financial officer, and Mr. Taff desires to provide such services.

NOW, THEREFORE, the parties agree as follows:

 

  1. Description of Services.

a. Mr. Taff agrees to perform financial services for B&W during the Consulting
Term (as defined in Section 8). Except as otherwise provided herein, Mr. Taff
will have the title of Senior Vice President & Chief Financial Officer, and
perform those tasks generally requested of him by B&W’s President and Chief
Executive Officer. As requested by B&W’s Chief Executive Officer, Mr. Taff
agrees to support and provide assistance in B&W’s search for another Chief
Financial Officer. If B&W appoints another person as B&W’s Chief Financial
Officer during the Consulting Term, Mr. Taff’s title will change to Senior Vice
President. If and when Mr. Taff’s title changes to Senior Vice President, he
will use his reasonable best efforts to perform all services necessary to
transition the new Chief Financial Officer into his or her position. During the
Consulting Term, Mr. Taff will serve as an officer and/or director of B&W’s
subsidiaries and Affiliates (as defined in Section 6), as requested by B&W. The
services described in this Section 1a are collectively referred to as the
“Services.”

b. Following B&W’s appointment of another person as its Chief Financial Officer,
at the written request of B&W’s Chief Executive Officer or Chief Financial
Officer, Mr. Taff agrees to (a) cooperate with B&W in the preparation and
reporting of its quarterly and/or annual financial statements in respect of any
period in which Mr. Taff was Chief Financial Officer and (b) execute and deliver
any certifications, representation letters and other documents as B&W may
reasonably request from time to time in connection with the preparation and/or
reporting of such financial statements, including, without limitation,
representations to the Chief Executive Officer and Chief Financial Officer
substantially similar in form and substance to the representations provided by
B&W and its executive officers to B&W’s external auditors. Following the
Consulting Term, B&W agrees to pay Mr. Taff $5,200.00 for each day in which
Mr. Taff provides, at the written request of B&W’s Chief Executive Officer or
Chief Financial Officer, such assistance.

c. Notwithstanding anything herein to the contrary, following the earlier to
occur of (i) B&W’s appointment of another person as its Chief Financial Officer
or (ii) the termination of the Consulting Term, Mr. Taff will not be required to
execute or deliver any certifications required by

 

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(i) Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or (ii) Rules 13a-14(b) and 15d-14(b) of the
Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States
Code, in each case with respect to the Company’s quarterly and/or annual
financial statements.

 

  2. Status. Mr. Taff acknowledges and agrees that at all times during the
Consulting Term when Mr. Taff is providing Services to B&W and B&W’s
subsidiaries and Affiliates (collectively, “Company”), Mr. Taff is an
independent contractor and not an “employee” (or person of similar status) of
the Company for purposes of: (1) the Internal Revenue Code of 1986, as amended
(hereinafter “Code”); and (2) participation in any employee benefit plans of the
Company. The Company does not have any right to control and direct Mr. Taff, not
only as to the result to be accomplished by the services provided for herein,
but also as to the details and means by which the result is accomplished.
Mr. Taff acknowledges that he is waiving the right to participation in the
Company’s benefit plans, including fringe benefit plans or other similar plans,
and the right to any other benefit or item of compensation not expressly
provided for herein that is provided to employees of the Company. Mr. Taff
acknowledges that he will not be paid any “wages” (as defined in the Code)
hereunder and that he shall be solely responsible for all taxes, including
income and employment taxes, imposed on him by reason of any compensation,
benefits or other amounts payable hereunder, and will report such compensation
as earnings from self-employment. Mr. Taff shall not be subject to any
established work schedule or routine or other supervision of or direction by
B&W, as to hours worked or otherwise, notwithstanding that all the Services
rendered hereunder shall be so rendered to the satisfaction of B&W and in
compliance with applicable B&W policies and procedures. Notwithstanding any
other provision in this Agreement, the retirement and other benefits that
Mr. Taff may be entitled to as a result of his previous employment with B&W,
including any benefits under the Restructuring Transaction Retention Agreement,
shall continue in accordance with the terms and conditions of each respective
benefit plan or other program.

 

  3. Indemnity. Mr. Taff shall indemnify, defend and hold harmless the Company,
its officers, directors, employees and agents, of and from all claims, suits,
liabilities, damages or expenses relating to any liabilities incurred by the
Company as a result of Mr. Taff’s failure to pay income and other taxes. For the
avoidance of doubt, Mr. Taff shall have no obligation under the foregoing
indemnity resulting from the failure of B&W to satisfy its own tax obligations.

 

  4. Contact and Location. Mr. Taff shall take general direction from B&W’s
Chief Executive Officer in connection with the Services. The parties agree that
the Services are to be performed principally from B&W’s headquarters in
Charlotte, North Carolina. During the Consulting Term, B&W will make available
to Mr. Taff an office and staff personnel in Charlotte as Mr. Taff may require
to perform his duties hereunder. Mr. Taff may perform some of the Services
remotely from his home in Houston, Texas as long as the Services are being
performed effectively, as reasonably determined by the Chief Executive Officer.

 

  5.

Compensation. During the Consulting Term, B&W agrees to pay Mr. Taff $112,629.00
per month, payable in two equal installments on the 15th and last day of each
month. Partial months will be prorated, however, the parties agree that the
prorated payment for July 2011 will be included in the first payment paid in
August 2011. In addition, B&W shall reimburse Mr. Taff any reasonable
out-of-pocket business expenses incurred in connection with performing the
Services during the Consulting Term (or thereafter in accordance with the last
sentence of

 

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Section 1b), each within 30 days after Mr. Taff provides written documentation
that such expenses have been incurred, but in no event will be paid later than
March 15 of the calendar year following the calendar year in which such expenses
were incurred. B&W further agrees to provide for Mr. Taff’s use in Charlotte
during the Consulting Term: (1) a furnished apartment (not to exceed a cost of
$3,200 per month, inclusive of utilities and housekeeping); and (2) a car (not
to exceed a cost of $900 per month). Notwithstanding anything else herein to the
contrary, B&W shall not pay or reimburse Mr. Taff for any more than two
(2) round trip flights to or from Houston, Texas per month.

 

  6. Non-Disclosure and Non-Solicitation. Mr. Taff acknowledges that he has
previously received and, during the Consulting Term, will continue to receive
new and different confidential and trade secret information which includes, but
is not limited to any and all information, data and knowledge that has been
created, discovered, developed or otherwise become known to the Company or in
which property rights have been assigned or otherwise conveyed to the Company,
which information, data or knowledge has commercial value in the business in
which the Company or its ventures is engaged, including without limitation
(a) information regarding plans for research, development, new products,
marketing and selling, business plans, budgets and unpublished financial
statements, suppliers and customers and (b) information regarding internal cost
structure and allocation, pricing methodologies and bidding processes
(collectively, “Confidential Information”). Confidential Information shall not
include any information, data or knowledge that is or becomes generally known or
available to the public without any breach of confidentiality by Mr. Taff or a
third party. Mr. Taff agrees to maintain all Confidential Information in strict
confidence and will not disclose or make available to any other person or
entity, or use for any reason other than in the performance of the Services
under this Agreement, any Confidential Information, except for such disclosures
as may otherwise be required by law or legal process (in which case Mr. Taff, if
legally permissible, shall notify B&W in writing of such legal or judicial
proceeding as soon as practicable but prior to disclosure following his receipt
of notice of such a proceeding, and permit B&W to seek to protect its interests
and information at its sole cost and expense). For purposes of this Agreement,
the term “Affiliate” means an Affiliate of B&W within the meaning of Rule 12b-2
promulgated under Section 12 of the Exchange Act. During the Consulting Term and
for a period of one-year thereafter, Mr. Taff will not, whether on Mr. Taff’s
own behalf or on behalf of or in conjunction with any other individual or
entity, directly or indirectly: (1) solicit or encourage any employee of the
Company to leave the employment of the Company; (2) hire any such employee who
was employed by the Company as of the date of the termination of the Consulting
Term or who left the employment of the Company coincident with, or within
one-year prior to or after, the termination of the Consulting Term; or
(3) directly or indirectly, solicit or encourage to cease to work with the
Company any consultant then under contract with the Company.

 

  7.

B&W Property. All property and information, including, devices, records, data,
notes, reports, findings, plans, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, materials, equipment, customer
or client lists or information, cost, pricing and bidding information, business
plans or any other documents or property, in whatever medium stored (including
all reproductions of the aforementioned items) obtained by Mr. Taff or developed
in the course of or relating to the Services (the “Property”) shall be and
remain the exclusive property of the Company. Mr. Taff agrees to deliver to B&W
(and will not keep in his possession, recreate or deliver to anyone else) all
Confidential Information and Property on the termination or expiration of this
Agreement, or sooner if requested by B&W in writing. Mr. Taff

 

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shall take all requested actions and execute all requested documents (including
any licenses or assignments required by a government contract) at the Company’s
sole expense (but without further remuneration) to assist the Company in
validating, maintaining, protecting, enforcing, perfecting, recording, patenting
or registering any of the Company’s rights in the Property.

 

  8. Term.

a. Mr. Taff shall provide the Services from July 31, 2011 through July 31, 2012,
unless the Services are terminated earlier as set forth below in this Section 8
(“Consulting Term”). Notwithstanding the fact that the date to commence the
Services is subsequent to the Effective Date of this Agreement, both B&W and
Mr. Taff intend and agree that this Agreement shall be fully binding and in full
force and effect from and after the Effective Date. Sections 1b through 3 and 6
through 11 shall survive any termination of the Consulting Term, the parties’
consulting relationship, and the termination or expiration of this Agreement.

b. B&W may terminate the Services and the Consulting Term for any reason upon
thirty (30) days advance written notice to Mr. Taff.

c. Mr. Taff may terminate the Services and the Consulting Term for any reason on
ninety (90) days’ advance written notice to B&W; provided that if B&W appoints
another person as Chief Financial Officer, Mr. Taff may terminate the Services
and the Consulting Term for any reason on sixty (60) days’ advance written
notice to B&W.

d. Either party to this Agreement may terminate the Services and the Consulting
Term immediately on written notice without further liability or obligation,
except as otherwise specified herein, should the other party materially breach
this Agreement.

 

  9. Ethics and Compliance. Mr. Taff acknowledges that he has received B&W’s
Code of Business Conduct, including related Company policies and procedures, and
agrees to comply therewith. If B&W reasonably suspects a breach of its Code of
Business Conduct, it reserves the right to investigate to determine whether a
breach has occurred. During the investigation, B&W may withhold any payment due
to Mr. Taff under this Agreement. B&W may terminate the Services and the
Consulting Term without notice or liability if it determines, in its sole
discretion, that Mr. Taff breached its Code of Business Conduct or has engaged
in any course of conduct which has, or may reasonably be expected to have, the
effect of demeaning the name or business reputation of the Company or affects
adversely, or may reasonably be expected to affect adversely, the Company’s best
interests, economic or otherwise.

 

  10.

Noncompetition and Conflict of Interest. During the Consulting Term, Mr. Taff
shall not, directly or indirectly, without the prior written approval of the
Company, act in any capacity for, be employed by, provide services to, or
contract with any other company or entity engaged in Competing Services (a
“Competitive Entity”), or acquire any interest of any type in any Competitive
Entity; provided, however, that the foregoing shall not be deemed to prohibit
Mr. Taff from acquiring, solely as an investment and through market purchases,
securities of any Competitive Entity which are registered under Section 12(b) or
12(g) of the Exchange Act and which are publicly traded, so long as Mr. Taff is
not part of any control group of such Competitive Entity and such securities,
including converted securities, do not constitute more than one percent of the
outstanding voting power of that entity. For the purposes of this

 

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Agreement, the phrase “Competing Services” shall mean any services that are the
same as or similar to the services currently being provided or offered by the
Company and/or which are provided or offered by the Company during the
Consulting Term. Competing Services include but are not limited to the
following: (a) power generation systems, including fossil-fired steam generating
systems, replacement commercial nuclear steam generators, environmental
equipment, replacement parts and related services; and (b) government
operations, including supply of nuclear components to the U.S. Government and
various services including uranium processing, environmental site restoration
services and management and operating services for government-owned facilities.
During the Consulting Term, Mr. Taff further agrees not to engage in any
activity which might reasonably create a conflict of interest between himself
and the Company or which might reasonably and adversely affect his judgment with
respect to the business of the Company.

 

  11. Miscellaneous.

a. Failure on the part of a party to insist on strict compliance by the other
with any provision of this Agreement shall not constitute a waiver of
obligations in respect thereof.

b. This Agreement sets forth the entire understanding of the parties with
respect to the matters discussed herein and can be amended or extended only by
written agreement signed by both parties.

c. This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither party may
assign its rights or obligations in and to this Agreement without the prior
written consent of the other party, which consent may be given or withheld in
the sole discretion of such party but may not be unreasonably delayed.

d. The obligations set forth in this Agreement are severable and divisible, and
no clause or portion thereof that is not enforceable shall cause the remainder
of such clause or other obligations contained herein to be unenforceable.

e. This Agreement shall be construed under and governed by the laws of the State
of North Carolina, exclusive of its conflict of laws provisions.

f. Mr. Taff will, by virtue of his appointment as an officer of the Company, be
entitled to the same rights to coverage under the directors and officers
liability and insurance policies and indemnification under the Company’s Bylaws
(or analogous governing documents) as are provided to the officers of the
Company generally, and the Company shall take all reasonable steps necessary to
give effect to this provision.

[SIGNATURES ON THE FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties as of
the date first written above.

 

THE BABCOCK & WILCOX COMPANY     MICHAEL S. TAFF

  /s/ Brandon C. Bethards

   

/s/ Michael S. Taff

By:   Brandon C. Bethards     Title:   President & Chief Executive Officer    

 

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