EXHIBIT 10.2

McDERMOTT INTERNATIONAL, INC.

Performance Share Grant Agreement

(March 6, 2014)

The Compensation Committee of the Board of Directors (the “Committee”) of
McDermott International, Inc. (“McDermott” or the “Company”) has selected you to
receive a grant of performance shares (“Performance Shares”) under the 2009
McDermott International, Inc. Long-Term Incentive Plan (the “Plan”) on March 6,
2014 (the “Date of Grant”). The provisions of the Plan are incorporated herein
by reference.

Any reference or definition contained in this Performance Share Grant Agreement
(this “Agreement”) shall, except as otherwise specified, be construed in
accordance with the terms and conditions of the Plan and all determinations and
interpretations made by the Committee with regard to any question arising
hereunder or under the Plan shall be binding and conclusive on you and your
beneficiaries, successors, assigns, estate or personal representatives. The term
“Company,” as used in this Agreement with reference to employment or service,
shall include subsidiaries of McDermott. Whenever the words “you” or “your” are
used in any provision of this Agreement under circumstances where the provision
should logically be construed to apply to any beneficiary, successors, assigns,
estate or personal representative to whom any rights under this Agreement may be
transferred by will or by the laws of descent and distribution, they shall be
deemed to include any such person or estate. This Agreement shall be subject to
the Plan and the Company’s Clawback Policy, which is attached hereto as Exhibit
A and is incorporated herein by reference. Capitalized terms not defined in this
Agreement shall have the meaning ascribed to such terms in the Plan.

Performance Shares

Grant of Performance Shares. You have been awarded a grant of Performance Shares
shown on the Notice of Grant dated March 6, 2014, which is incorporated herein
by reference. This grant represents a right to receive Shares, calculated as
described below, provided the applicable performance measures and vesting
requirements set forth in this Agreement shall have been satisfied. No Shares
are awarded or issued to you on the Date of Grant.

Vesting Requirements. Except as provided below, the Performance Shares do not
provide you with any rights or interest therein until they become vested, if at
all, on the third anniversary of the Date of Grant (the “Vesting Date”),
provided you are then still employed by the Company.

 

  • Reduction in Force. In the event you terminate employment prior to the third
anniversary of the Date of Grant due to a “Reduction in Force,” then: 33% of the
Performance Shares will continue to vest, provided your termination date is on
or after the first anniversary of the Date of Grant; and 66% of the Performance
Shares will continue to vest, provided your termination date is on or after the
second anniversary of the Date of Grant. The number of Performance Shares that
will vest pursuant to the preceding sentence will be determined by multiplying
(a) the applicable percentage from the preceding sentence by (b) the total
number of Performance Shares that would have vested, if any, based on actual
performance had you remained employed with the Company until the third
anniversary of the Date of Grant, as determined in accordance with the schedules
set forth under the caption “Earned Award” below.

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For this purpose, the term “Reduction in Force” means an involuntary termination
of employment with the Company due to elimination of a previously required
position or previously required services, or due to the consolidation of
departments, abandonment of facilities or offices, technological change or
declining business activities, where such termination is intended to be
permanent; or under other circumstances which the Committee, in accordance with
standards uniformly applied with respect to similarly situated employees,
designates as a reduction in force.

 

  • Death or Disability. 100% of the Performance Shares shall vest on the third
anniversary of the Date of Grant in the event of the prior occurrence of either
(1) the termination of your employment with the Company due to death or (2) your
Disability, in each case subject to achievement of the applicable performance
measures for vesting. The number of Performance Shares that will vest pursuant
to the preceding sentence will be the total number of Performance Shares that
would have vested, if any, based on actual performance had you remained employed
with the Company until the third anniversary of the Date of Grant, as determined
in accordance with the schedules set forth under “Earned Award” below.

 

  • Change in Control. If a Change in Control of the Company occurs, the number
of Performance Shares that shall immediately vest on the date such Change in
Control occurs shall be the greater of (i) 100% of the Performance Shares or
(ii) the vested percentage of Performance Shares determined in accordance with
the schedules set forth under “Earned Award” below determined as of the date the
Change in Control occurs, with a Vesting Date as of the date such Change in
Control occurs. Shares shall be distributed as soon as administratively
practicable after the date of the Change in Control, but in any event no later
than 30 days following the date of the Change in Control.

Forfeiture of Performance Shares. Except as provided above, Performance Shares
which are not vested as of the date of your termination of employment with the
Company shall, coincident therewith, terminate and be of no further force or
effect.

In the event that, while you are employed by the Company or are performing
services for or on behalf of the Company under any consulting agreement, (a) you
are convicted of (i) a felony or (ii) a misdemeanor involving fraud, dishonesty
or moral turpitude, or (b) you engage in conduct that adversely affects or may
reasonably be expected to adversely affect the business reputation or economic
interests of the Company, as determined in the sole judgment of the Committee,
then all Performance Shares and all rights or benefits awarded to you under this
Agreement shall be forfeited, terminated and withdrawn immediately upon
(1) notice to the Committee of such conviction pursuant to (a) above or
(2) final determination pursuant to (b) above by the Committee. The Committee
shall have the right to suspend any and all rights or benefits awarded to you
hereunder pending its investigation and final determination with regard to such
matters.

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Earned Award. Except as otherwise provided above, the number of Performance
Shares in which you will vest, if any (the “Earned Award”), shall be determined
based on the Company’s aggregate consolidated operating income for the period
beginning January 1, 2014 and ending on December 31, 2016, as set forth below:

 

Performance

   Aggregate Consolidated
Operating Income*      Award
Percentage**  

Maximum

   >$ 210         150 % 

Target

   $ 180         100 % 

Threshold

   $ 150         50 % 

< Threshold

   <$ 150         0 % 

 

* In millions

** Award Percentages between the amounts shown will be calculated by linear
interpolation. For the avoidance of doubt, the maximum Earned Award will be 150%
of the Performance Shares shown on your Notice of Grant.

Payment of Earned Award. Except as otherwise provided above in the section
entitled “Vesting Requirements — Change in Control,” you (or your estate or
beneficiaries, if applicable) will receive one Share for each Performance Share
that vests as an Earned Award. Shares shall be distributed as soon as
administratively practicable after the Vesting Date, but in any event no later
than 30 days after the applicable Vesting Date or the date a Change in Control
occurs.

Taxes

You will realize income in connection with this grant of Performance Shares in
accordance with the tax laws of the jurisdictions applicable to you. You are
solely responsible for the taxes associated with the Performance Shares, and you
should consult with and rely on your own tax advisor, accountant or legal
advisor as to the tax consequences to you of this grant.

By acceptance of this Agreement, you agree that any amount which the Company is
required to withhold on your behalf, including PAYE, federal or state income tax
and employee national insurance contributions or FICA withholding, or pursuant
to applicable Company policy, in connection with income realized by you under
this Agreement will be satisfied by withholding cash, whole Shares having an
aggregate Fair Market Value equal to but not exceeding the amount of such
required tax withholding, unless the Committee determines to satisfy the
statutory minimum withholding obligation by another method permitted by the
Plan.

Regardless of the withholding method referred to above, you are liable to the
Company for the amount of income tax and employee national insurance
contributions or FICA withholding which the Company is required to withhold in
connection with the income realized by you in connection with this Agreement,
and you hereby authorize the Company to withhold such amount, in whole or in
part, from subsequent salary payments, without further notice to you, if the
withholding method referred to above is not utilized or does not completely
cover such required tax withholding.

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Transferability

Performance Shares granted hereunder are non-transferable other than by will or
by the laws of descent and distribution or pursuant to a qualified domestic
relations order.

Securities and Exchange Commission Requirements

If you are a Section 16 insider, this type of transaction must be reported on a
Form 4. Please be aware that if you intend to reject the grant, you should do so
immediately after the Date of Grant to avoid potential Section 16 liability.
Please advise Dennis Edge and Kim Wolford immediately by e-mail, fax or
telephone if you intend to reject this grant. Absent such notice of rejection,
the Company intends to prepare and file the required Form 4 on your behalf
(pursuant to your standing authorization to do so).

If you are currently subject to these requirements, you will have already been
advised of your status. If you become a Section 16 insider at some future date,
reporting will be required in the same manner noted above.

Other Information

Neither the action of the Company in establishing the Plan, nor any provision of
the Plan, nor any action taken by the Company, your employer, the Committee or
the Board of Directors under the Plan, nor any provision of this Agreement shall
be construed as giving to you the right to be retained in the employ of the
Company or any of its subsidiaries or affiliates.

This award is intended to comply with or be exempt from Section 409A of the
Internal Revenue Code of 1986, as amended (“Section 409A”), and ambiguous
provisions, if any, shall be construed in a manner that is compliant with or
exempt from the application of Section 409A, as appropriate.

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Exhibit A

POLICY NO. 1405-003 — EFFECTIVE DATE: 08/02/13

 

SUBJECT:                Clawback Policy AFFECTS:    McDermott International,
Inc. and its subsidiaries and affiliated companies (hereinafter referred to as
“the Company”) PURPOSE:    To govern the clawback of certain compensation
awarded to executive officers of the Company. POLICY:   

If the consolidated financial statements of the Company and its subsidiaries are
materially restated within three years of the first public release or filing
with the U.S. Securities and Exchange Commission (the “SEC”) of such financial
statements, and the Compensation Committee of the Board of Directors of the
Company (the “Committee”) determines, in its reasonable discretion, that (1) any
current or former executive officer (as defined in Rule 3b-7 promulgated by the
SEC under the Securities Exchange Act of 1934, as amended) of the Company (an
“Executive”) has engaged in intentional misconduct and (2) such misconduct
caused or partially caused the need for such restatement, then the Committee
may, within 12 months after such a material restatement, require that the
executive forfeit and/or return to the Company all or a portion of the
compensation vested, awarded or received under any bonus award (including
pursuant to the Company’s Executive Incentive Compensation Plan), equity award
(including any award of stock options, shares of restricted stock, deferred
stock units or restricted stock units) or other award during the period subject
to restatement and the 12-month period following the first public issuance or
filing with the SEC of the financial statements that were restated (including,
with respect to any such award that is subject to a multi-year vesting period,
any compensation vested, awarded or received thereunder during such vesting
period if such vesting period includes all or part of such 12-month period);
provided, however, that any forfeiture and/or return of compensation by an
Executive under this policy will, in any event, be limited to any portion
thereof that the Executive would not have received if the consolidated financial
statements of the Company and its subsidiaries had been reported properly at the
time of first public release or filing with the SEC; provided, further, that
this policy shall not apply with respect to any restatement of the consolidated
financial statements of the Company and its subsidiaries as to which the need
for restatement is determined following the occurrence of a Change in Control
(as defined in the Company’s Director and Executive Officer Deferred
Compensation Plan, as amended and restated November 8, 2010).

 

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The vesting, payment or other receipt of any rights or benefits awarded by the
Company to an Executive which are subject to this policy may be suspended
pending an investigation and final determination by the Committee with regard to
any alleged misconduct that may be subject to a determination by the Committee
under this policy.

 

By accepting any award as to which this policy applies, each Executive must
agree to the foregoing and agree to forfeit and/or return compensation to the
Company as provided by this policy, as the same may be modified by, or
superseded by a replacement policy adopted by, the Committee, as the Committee
may deem necessary to comply with regulations issued by the SEC under the
Dodd-Frank Wall Street Reform and Consumer Protection Act. The terms of this
policy shall in no way limit the ability of the Company to pursue forfeiture or
reclamation of amounts under applicable law as the Compensation Committee may
consider appropriate in its reasonable discretion.

Interpretation Contact for the above policy is the Senior Vice President, Chief
Administration Officer and Senior Vice President, General Counsel and Corporate
Secretary.