EXHIBIT 10.5

SEPARATION AGREEMENT

This Separation Agreement (this “Agreement”) is entered into by and between, and
shall inure to the benefit of and be binding upon, the following parties:

JOHN T. McCORMACK, hereinafter referred to as “Employee”; and

MCDERMOTT, INC., a Delaware corporation, hereinafter referred to as the
“Company.”

W I T N E S S E T H:

WHEREAS, Employee is currently an employee of the Company;

WHEREAS, pursuant to a resignation letter in the form attached hereto as Exhibit
A, Employee has tendered to McDermott International, Inc., a Panamanian
corporation of which the Company is a wholly owned subsidiary (“MII”),
Employee’s resignation from all positions held as an officer, employee, member
of the board of directors or board of managers (and member of any and all
committees thereof), of MII and its subsidiaries and joint venture entities, and
from any and all positions or capacities with respect to any employee benefit
plan sponsored or maintained by any such entity, effective October 31, 2013;
provided that Employee shall remain an employee of the Company until the close
of business on November 1, 2013 (the “Resignation Date”); and

WHEREAS, Employee and the Company mutually desire to establish and agree on the
terms and conditions of Employee’s separation from service;

NOW, THEREFORE, in consideration of the premises and the mutual agreements,
covenants and obligations set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, Employee and the Company hereby agree as follows:

Section 1. Termination Date and Type. For purposes of interpreting and applying
the provisions of compensation arrangements and employee benefit plans of MII or
any of its subsidiaries (including the Company) applicable to Employee and
subject to Section 2 hereof, (a) Employee’s date of termination of employment
shall be the Resignation Date, (b) Employee’s termination of employment is
voluntary by Employee and not by the Company, and (c) subject to complying with
the requirements of this Agreement, Employee shall be entitled to the
compensation and benefits provided in this Agreement.

Section 2. Severance Benefits and Payments. Subject to the execution of this
Agreement by Employee and the lapse of the seven (7) day revocation period
referenced in Section 7 hereof (the “Revocation Period”) without revocation of
the Agreement or any part hereof by Employee, Employee shall be entitled to
receive the following payments and benefits, to which Employee would not
otherwise be entitled, subject to the terms and conditions set forth in this
Agreement:

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(a) each currently outstanding award of MII stock options (Stock Options”),
restricted stock units (“RSUs”) and performance shares (“Performance Shares”)
granted to Employee under the 2009 McDermott International, Inc. Long Term
Incentive Plan (the “MII LTIP”) which would, absent Employee’s termination of
employment, remain outstanding and, to the extent applicable, continue to vest
after the Resignation Date shall remain in full force and effect and, to the
extent applicable, continue to vest and shall be settled in accordance with the
terms of the MII LTIP and the applicable grant agreement as if Employee’s
employment had continued until October 31, 2015, provided, however, that each
outstanding award of RSUs that would continue to vest and be settled as if
Employee’s employment had continued until October 31, 2015, shall vest and be
settled on the earlier to occur of March 15, 2014 or the next anniversary of the
Grant Date (as defined in the applicable award agreement) for each such award.
Any such Stock Options, whether now vested or upon becoming vested, shall be
exercisable until the stated maximum expiration date in the applicable grant
agreement notwithstanding any provision in any related grant agreement providing
for earlier termination in the event of a termination of employment.

All payments made pursuant to this Section 2 shall be subject to appropriate tax
withholding and are subject to all the terms and conditions of this Agreement.

Section 3. Release of Claims.

(a) General Release by Employee. In consideration of the foregoing (including
the payments and benefits under Section 2 hereof, which the Company is not
required to make or provide under any preexisting agreement, plan or policy),
which Employee hereby expressly acknowledges as good and sufficient
consideration for the releases provided below, Employee hereby unconditionally
and irrevocably releases, acquits and forever discharges, to the fullest extent
permitted by applicable law, (i) the Company and all of its predecessors,
successors and assigns, (ii) all of the Company’s past, present and future
affiliates, parent corporations (including MII), subsidiaries, divisions and
joint venture entities and all of their respective predecessors, successors and
assigns and (iii) all of the past, present and future officers, directors,
managers, shareholders, investors, employee benefit plan administrators,
employees, agents, attorneys and other representatives of each of the entities
described in the immediately preceding clauses (i) and (ii), individually and in
their respective representative capacities (the persons or entities referred to
in the immediately preceding clauses (i), (ii) and (iii) being, individually, a
“Releasee” and, collectively, the “Releasees”), from any and every action, cause
of action, complaint, claim, demand, administrative charge, legal right,
compensation, obligation, damages (including consequential, exemplary and
punitive damages), liability, cost or expense (including attorney’s fees) that
Employee has, may have or may be entitled to from or against any of the
Releasees, whether legal, equitable or administrative, in any forum or
jurisdiction, whether known or unknown, foreseen or unforeseen, matured or
unmatured, accrued or not accrued, which arises directly or indirectly out of,
or is based on or related in any way to Employee’s employment with or
termination of employment from the Company or Employee’s service for or other
affiliation with MII or any of its subsidiaries (including the Company) or joint
venture entities, including any such matter arising from the negligence, gross
negligence or

 

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reckless, willful or wanton misconduct of any of the Releasees (together, the
“Released Claims”); provided, however, that this Release does not apply to, and
the Released Claims do not include: (i) any claims arising solely and
specifically under the U.S. Age Discrimination in Employment Act of 1967 after
the date this Agreement is executed by Employee; (ii) any claim for
indemnification (including under MII’s or the Company’s organizational documents
or insurance policies) arising in connection with an action instituted by a
third party against MII or the Company or any of their affiliates or Employee,
in his capacity as an officer, director, manager, employee, agent or other
representative of MII or the Company or any of their affiliates; (iii) any
claims for vested benefits under the Company’s 401(k) plan or vested benefits
under the McDermott International, Inc. Director and Executive Deferred
Compensation Plan; (iv) any claims relating to Employee’s eligibility to
continue participating in health coverage currently available to Employee in
accordance with the U.S. Consolidated Omnibus Reconciliation Act, subject to the
terms, conditions and restrictions of that Act; (v) any claim arising from any
breach or failure to perform any provision of this Agreement; or (vi) any claim
for worker’s compensation benefits or any other claim that cannot be waived by a
general release.

(b) Release to be Full and Complete; Waiver of Claims, Rights and Benefits. The
parties intend this Release to cover any and all such Released Claims, whether
they are contract claims, equitable claims, fraud claims, tort claims,
discrimination claims, harassment claims, whistleblower or retaliation claims,
personal injury claims, constructive or wrongful discharge claims, emotional
distress claims, pain and suffering claims, public policy claims, claims for
debts, claims for expense reimbursement, wage claims, claims with respect to any
other form of compensation, claims for attorneys’ fees, other claims or any
combination of the foregoing, and whether they may arise under any employment
contract (express or implied), policies, procedures, practices or by any acts or
omissions of any of the Releasees or whether they may arise under any state,
local or federal law, statute, ordinance, rule or regulation, including all
Texas employment discrimination laws, the Texas Commission on Human Rights Act,
the Texas Labor Code, all U.S. federal discrimination laws, the U.S. Age
Discrimination in Employment Act of 1967, the U.S. Employee Retirement Income
Security Act of 1974, Title VII of the U.S. Civil Rights Act of 1964, the U.S.
Civil Rights Act of 1991, the U.S. Rehabilitation Act of 1973, the U.S.
Americans with Disabilities Act of 1990, the U.S. Equal Pay Act, the U.S.
National Labor Relations Act, the U.S. Fair Labor Standards Act, the U.S. Older
Workers Benefit Protection Act, the U.S. Worker Adjustment and Retraining
Notification Act, the U.S. Family and Medical Leave Act, the U.S. Sarbanes-Oxley
Act of 2002 or common law, without exception. As such, it is expressly
acknowledged and agreed that this Release is a general release, representing a
full and complete disposition and satisfaction of all of the Company’s and any
Releasee’s real or alleged legal obligations to Employee, with the only
exceptions being as expressly stated in the proviso to Section 3(a) hereof.
Employee understands and agrees, in compliance with any law, statute, ordinance,
rule or regulation which requires a specific release of unknown claims or
benefits, that this Agreement includes a release of unknown claims, and Employee
hereby expressly waives and relinquishes any and all Released Claims and any
associated rights or benefits that Employee may have, including any that are
unknown to Employee at the time of the execution this Agreement.

 

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(c) Certain Representations of Employee. Employee represents and warrants that:
(i) Employee is the sole and lawful owner of all rights, titles and interests in
and to all Released Claims; and (ii) Employee has the fully legal right, power,
authority and capacity to execute and deliver this Agreement.

(d) Covenant Not to Sue. Employee expressly agrees that neither Employee nor any
person acting on Employee’s behalf will file or bring or permit to be filed or
brought any lawsuit or other action before any court, agency or other
governmental authority for legal or equitable relief against any of the
Releasees involving any of the Released Claims. In the event that such an action
is filed against any of the Releasees, Employee agrees that such Releasees are
entitled to legal and equitable remedies against Employee, including an award of
attorney’s fees. However, it is expressly understood and agreed that the
foregoing sentence shall not apply to any charge filed by Employee with the
Equal Employment Opportunity Commission or to any action filed by Employee that
is narrowly limited to seeking a determination as to the validity of this
Agreement and enforcement thereof. Should Employee file a charge with the Equal
Employment Opportunity Commission, or should any governmental entity, agency or
commission file a charge, action, complaint or lawsuit against any of the
Releasees based on any Released Claim, Employee agrees not to seek or accept any
resulting relief whatsoever.

Section 4. Return of Materials, Nondisparagement and Cooperation Undertakings.

(a) Return of Materials. On or promptly after the Resignation Date, Employee
shall return to MII or the Company, with no request being required of MII or the
Company: (i) any and all documents, records, files, reports, memoranda, books,
papers, plans, letters and any other data in Employee’s possession regardless of
the medium maintained, held or stored (whether documentary, computer or other
electronic storage or other) that relate in any way to the business or
operations of MII or the Company or any of their past or present affiliates,
subsidiaries, divisions or joint ventures (such entities being, individually, a
“Company Entity” and, collectively, the “Company Entities”) (and Employee shall
not retain, recreate or deliver to anyone else such information); and (ii) any
credit cards, keys, access cards, calling cards, computer equipment and
software, telephone, facsimile or other equipment or property of any of the
Company Entities.

(b) Nondisparagement. Employee shall refrain from making, directly or
indirectly, in any public or private communication (whether oral, written or
electronic), any criticisms or negative or disparaging comments or other
statements about the Company or any of the other Releasees, or about any aspect
of the respective businesses, operations, financial results or prospects of any
of the Company Entities, including comments relating to Employee’s termination
of employment. Notwithstanding the foregoing, it is understood and agreed that
nothing in this Section 4(b) or in Section 5 hereof is intended to prevent
Employee from: (i) testifying truthfully in any legal proceeding brought by any
governmental authority or other third party or to interfere with any obligation
Employee may have to cooperate with or provide information to any government
agency or commission, subject to compliance with the provisions of Section 5(c)
hereof, if applicable; (ii) advising Employee’s spouse of the terms and
conditions of this Agreement; or (iii) consulting with Employee’s own legal
counsel, as contemplated by Section 7 of this Agreement.

 

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(c) Cooperation. Employee agrees to be reasonably available to the Company
Entities or their representatives (including their attorneys) to provide
information and assistance as requested by MII or the Company. Such information
and assistance may include testifying (and preparing to testify) as a witness in
any proceeding or otherwise providing information or reasonable assistance to
the Company Entities in connection with any investigation, claim or suit, and
cooperating with the Company Entities regarding any litigation, government
investigation, regulatory matter, claim or other disputed item involving any of
the Company Entities that relate to matters within the knowledge or
responsibility of Employee during Employee’s employment. Specifically, Employee
agrees (i) to meet with the Company Entities’ representatives, their counsel or
other designees at reasonable times and places with respect to any matter within
the scope of the foregoing provisions of this Section 4(c); (ii) to provide
truthful testimony regarding any such matter to any applicable court, agency or
other adjudicatory body; (iii) to provide the Company Entities with immediate
notice of contact or subpoena by any non-governmental adverse party (known to
Employee to be adverse to any of the Company Entities or their interests), and
(iv) to not voluntarily assist any such non-governmental adverse party or such
non-governmental adverse party’s representatives. Such cooperation required by
Employee shall not unreasonably interfere with Employee’s other business
endeavors.

(d) Consulting Services. During the period from the November 2, 2013 through the
date that is six-months immediately after the Resignation Date, the “Consulting
Period”), Employee shall provide such consulting services to the Company
Entities as any of the Company Entities may request in accordance with the terms
and conditions set forth in Exhibit B hereto, which is incorporated by reference
in and shall be deemed to form an integral part of this Agreement. The
Consulting Period may be extended by written agreement between the Company and
Employee. It is understood and agreed by the parties hereto that in no event
will the level of consulting services performed by Employee hereunder exceed 20%
of the average level of services (measured by hours) he performed over the
36-month period ending on the Resignation Date (or, if Employee’s period of
employment prior to the Resignation Date is a shorter period, then over such
shorter period).

(e) Enforcement. The covenants set forth in the foregoing provisions of this
Section 4 may be enforced pursuant to the provisions of Section 5(f) hereof.

Section 5. Confidentiality and Non-Competition Agreement.

(a) Definition of Trade Secrets and Confidential Business Information. Employee
acknowledges and agrees that any and all non-public information regarding the
Company Entities and their customers and suppliers (including any and all
information relating to the Company Entities’ respective business plans or
practices, products, services, contracts with customers, backlog, bids
outstanding, target projects, financial or

 

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operational performance, finances, financial accounting policies, practices or
systems, internal controls or internal control systems, financial projections or
budgets, board of directors or board committee proceedings, investor relations
practices, capital expenditures, equipment, pricing strategies, marketing
programs or plans, executive management or other personnel, human resources
plans, policies, practices, records or systems, information technology systems
or other business systems, project management, business strategy, profits or
overhead) is confidential and the unauthorized disclosure of such confidential
information could result in irreparable harm to one or more of the Company
Entities. Such confidential information, in whatever form maintained, held or
stored (whether documentary, computer or other electronic storage or other),
includes each Company Entity’s proprietary interest in its trade secrets,
including its lists of customers and prospective customers, and other
information that has recognized value and that is not generally available
through other sources (collectively, “Trade Secrets”), and information regarding
each Company Entity’s various services, projects, products, procedures or
systems that is treated as confidential by such Company Entity which may not
rise to the level of a Trade Secret (collectively, “Confidential Business
Information”). Confidential Business Information does not include information
that properly and lawfully has become generally known to the public other than
as a result of any act or omission of Employee. Collectively, Trade Secrets and
Confidential Business Information (and including all the non-public information
referred to in the first sentence of this Section 5(a) and all information
relating to Employee’s separation from service with the Company) are referred to
herein as “Confidential Information.”

(b) Importance of Confidential Information. The parties hereby agree that
Employee has been provided with Confidential Information during the period of
Employee’s employment. By signing this Agreement, Employee acknowledges delivery
to and receipt by Employee of Confidential Information. Employee further
acknowledges that the preservation and protection of the Confidential
Information was an essential part of Employee’s employment with the Company and
that Employee has had a duty of fidelity and trust to the Company Entities in
handling the Confidential Information.

(c) Nondisclosure or Misuse. Employee agrees that Employee will not disclose or
take away any of the Confidential Information, directly or indirectly, or use
such information in any way. Without limiting the generality of the foregoing,
Employee will not disclose any of the Confidential Information to any securities
analysts, shareholders, prospective investors, customers, competitors or any
other third party, including any third party who has or may express an interest
in acquiring any of the Company Entities or all or any significant portion of
their respective outstanding equity securities or assets. If Employee is legally
required to disclose any Confidential Information, Employee shall, to the extent
not prohibited by applicable law or legal process, promptly notify the Company
in writing of such requirement so that the Company or any of the other Company
Entities may seek an appropriate protective order or other relief or waive
compliance with the nondisclosure provisions of this Section 5 with respect to
such Confidential Information. To the extent not prohibited by applicable law,
Employee agrees to cooperate with and not to oppose any effort by the Company or
any other Company Entity to resist or narrow such request or to seek a
protective order or

 

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other appropriate remedy. In any such case, Employee will: (i) disclose only
that portion of the Confidential Information that, according to written advice
of Employee’s counsel, is required to be disclosed; (ii) use reasonable best
efforts to obtain assurances that such Confidential Information will be treated
confidentially; and (iii) to the extent not prohibited by applicable law,
promptly notify the Company in writing of the items of Confidential Information
so disclosed. The foregoing obligations are in addition to any confidentiality
obligations Employee may have under any other agreements or arrangements with
any of the Company Entities.

(d) Return of Confidential Information. On or promptly after the Resignation
Date, all documents or other information containing or referring to any of the
Confidential Information as may be in Employee’s possession, or over which
Employee may have control, regardless of whether prepared by Employee, shall be
returned by Employee to the Company in accordance with the provisions of
Section 4(a) hereof.

(e) Noncompetition Agreement. Employee acknowledges and agrees that information,
including the Confidential Information, Employee has acquired will enable
Employee to irreparably injure the Company if Employee should engage in
competition during the period beginning from the date of this Agreement and
extending through the first anniversary of the Resignation Date (the
“Non-Compete Period”). Accordingly, as a material and substantial part of the
agreements set forth herein, and particularly in consideration of the waiver or
removal of selling restrictions or forfeiture provisions with respect to, or
vesting of, equity-based awards pursuant to Section 2 hereof, Employee hereby
agrees that the following covenants are reasonable and necessary covenants for
the protection of the value of the agreements of Employee contained herein:

(i) During the Non-Compete Period, Employee shall not, directly or indirectly,
without the prior written approval of the Company’s Chief Executive Officer
(which approval shall not be unreasonably withheld), on behalf 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 prohibit Employee 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
Securities and Exchange Act of 1934 and which are publicly traded, so long as
Employee is not part of any control group of such Competitive Entity and such
securities, including any securities issuable on conversion or exchange of any
convertible or exchangeable securities, beneficially owned (as determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934) by
Employee do not constitute more than one percent of the outstanding voting power
of that entity. For the purposes of this 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 any of the Company Entities, in
any case in any of the oil and gas producing regions of the world in which the
Company Entities operate. Competing Services include engineering, procurement,
construction and installation services and project management services for
offshore oil and gas field development, including any such services related to
fixed or floating production facilities, pipelines or subsea systems.

 

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(ii) During the Non-Compete Period, Employee shall not, directly or indirectly,
solicit any Company Entity’s Protected Customers for the purpose of engaging in
any business which is the same as or similar to the business in which a Company
Entity is engaged. The phrase “Protected Customers” means all persons or
entities to whom a Company Entity has sold, or proposed the sale of, any product
or service within the period of three (3) years immediately prior to the
Resignation Date.

(iii) During the Non-Compete Period, Employee shall not, on Employee’s own
behalf or on behalf of any other person or entity, solicit, divert or recruit
any person who is, during such time frame, an employee of a Company Entity to
leave such employment or in any other manner attempt, directly or indirectly, to
influence, induce, or encourage any employee of a Company Entity to leave the
employment of that Company Entity.

(f) Enforcement of Covenants. Employee acknowledges that the injury that would
be suffered by the Company Entities as a result of a breach or threatened breach
of the provisions of Section 4 hereof or this Section 5 would be immediate and
irreparable and that, because of the difficulty of measuring economic loss of
any such breach or threatened breach, an award of monetary damages to the
Company Entities for any such breach would be an inadequate remedy. Accordingly,
in the event that the Company determines that Employee has breached or attempted
to breach or is threatening to breach any provision of Section 4 hereof or this
Section 5, in addition to any other remedies at law or in equity that any of the
Company Entities may have available to them, it is agreed that each of the
Company Entities shall be entitled, upon application to any court of proper
jurisdiction, to temporary or permanent restraining orders or injunctions
against Employee prohibiting such breach or attempted or threatened breach,
without the necessity of: (i) proving immediate or irreparable harm;
(ii) establishing that monetary damages are inadequate or that the Company
Entities do not have an adequate remedy at law; or (iii) posting any bond with
respect thereto.

(g) Right of Court or Arbitrator to Reform Restrictions. The Company and
Employee state that it was their intent to enter into a valid and enforceable
agreement. Employee and the Company hereby acknowledge the reasonableness of the
restrictions set forth in this Section 5, including the reasonableness of the
geographic area, duration as to time and scope of activity restrained. Employee
agrees that if an arbitrator or court of competent jurisdiction finds that this
Section 5 contains limitations as to geographic area, time or scope of activity
to be restrained that are not reasonable and impose a greater restraint than is
necessary to protect the goodwill or other business interest of the Company
Entities, the arbitrator or court may: (i) reform the covenants to the extent
necessary to cause the limitations contained in this Section 5 as to geographic
area, time or scope of activity to be reasonable and to impose a restraint that
is not greater than necessary to protect the goodwill or business interests of
the Company Entities; and (ii) enforce this Section 5 as so reformed.

 

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(h) Repayment and Forfeiture. Employee agrees that in the event that
(i) Employee breaches any term of Sections 3 or 4 hereof or this Section 5, or
(ii) Employee challenges the validity of all or any part of this Section 5, and
all or any part of this Section 5 is found invalid or unenforceable for any
reason whatsoever by a court of competent jurisdiction or an arbitrator in a
proceeding between Employee and a Company Entity, in addition to any other
remedies at law or in equity the Company may have available to it, the Company
shall not be obligated to make any of the payments and may cease to make such
payments or to provide for any of the benefits specified in Section 2 hereof,
and shall be entitled to recoup from Employee any and all of the value of the
payments and benefits provided pursuant to Section 2 hereof that have vested or
been paid pursuant to that Section.

Section 6. Entire Agreement; Amendment; Third-Party Beneficiaries. Employee and
the Company agree and acknowledge that this Agreement contains and comprises the
entire agreement and understanding between the parties with respect to the
subject matter hereof, that no other representation, promise, covenant or
agreement of any kind whatsoever has been made to cause either party hereto to
execute this Agreement, that all agreements and understandings between the
parties with respect to the subject matter hereof are embodied and expressed in
this Agreement and that this Agreement supersedes all prior agreements,
negotiations, discussions, understandings and commitments, written or oral,
between the parties hereto with respect to such subject matter. The parties also
agree that the terms of this Agreement shall not be amended or changed except in
writing and signed by Employee and a duly authorized agent of the Company. The
parties to this Agreement further agree that this Agreement shall be binding on
and inure to the benefit of Employee and the Company and the Company’s
successors and assigns. Except to the extent otherwise provided in this
Agreement with respect to the Company Entities and the Releasees (each such
Company Entity and each such Releasee hereby being expressly made a third-party
beneficiary of this Agreement), the provisions of this Agreement shall not
confer upon any third party any remedy, claim, liability, reimbursement or other
right in excess of those existing without reference to this Agreement.

Section 7. Timing and Consultation with Counsel. Employee acknowledges that
Employee has been given a reasonable period of time, not less than twenty-one
(21) days, within which to consider this Agreement and has been advised to
discuss the terms of this Agreement with legal counsel of Employee’s own
choosing. Employee acknowledges that this Agreement was offered to Employee on
October 21, 2013, and Employee was advised that if accepted (i) it must be
executed on or prior to November 11, 2013, and (ii) the Agreement could be
revoked, in writing, for up to seven (7) days following the date of such
acceptance. If Employee revokes this Agreement, Employee’s resignation shall
nevertheless remain effective. Employee represents that Employee has relied on
Employee’s own knowledge and judgment and on the advice of independent legal
counsel of Employee’s choosing and has consulted with such other independent
advisors as Employee and Employee’s counsel deemed appropriate in connection
with Employee’s review of this Agreement and Employee’s rights with respect to
Employee’s separation from service from the Company and other Company Entities
and with respect to this Agreement. Based on Employee’s review, Employee
acknowledges that Employee fully and completely understands and accepts all the
terms of this Agreement, including the Release in Section 3 hereof, and their
legal effects, and Employee is entering into this Agreement voluntarily and of
Employee’s own free will, with full consideration of any and all rights which

 

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Employee may currently have. Employee further acknowledges that Employee is not
relying on any representations or statements made by the Company or any other
Company Entity, or by any of their respective officers, directors, employees,
affiliates, agents, attorneys or other representatives, regarding this
Agreement, except to the extent such representations are expressly set forth in
this Agreement. Employee also acknowledges that Employee is not relying upon a
legal duty, if one exists, on the part of the Company or any other Company
Entity, or any of their respective officers, directors, employees, subsidiaries,
affiliates, agents, attorneys or other representatives, to disclose any
information in connection with the execution of this Agreement or its
preparation, it being expressly understood that Employee shall never assert any
failure to disclose information on the part of any such person or entity as a
ground for challenging this Agreement or any provision hereof.

Section 8. Applicable Law; Venue. This Agreement shall be interpreted and
construed in accordance with the substantive laws of the State of Texas, without
giving effect to any conflicts of laws provisions thereof that would result in
the application of the laws of any other jurisdiction. THE EXCLUSIVE VENUE FOR
THE RESOLUTION OF ANY DISPUTE RELATING TO THIS AGREEMENT OR EMPLOYEE’S
EMPLOYMENT (EXCEPT FOR ANY DISPUTE THAT MAY BE SUBJECTED TO ARBITRATION BY
MUTUAL AGREEMENT OF THE PARTIES HERETO AFTER THE DATE HEREOF) SHALL BE IN THE
STATE AND FEDERAL COURTS LOCATED IN HARRIS COUNTY, TEXAS AND THE PARTIES HEREBY
EXPRESSLY CONSENT TO THE JURISDICTION OF THOSE COURTS.

Section 9. Section 409A; Other Tax Matters. This Agreement is intended to
provide payments that are exempt from or compliant with the provisions of
Section 409A of the U.S. Internal Revenue Code of 1986 (the “Code”) and related
regulations and Treasury pronouncements (“Section 409A”), and the Agreement
shall be interpreted accordingly. Notwithstanding any provisions of an RSU to
the contrary, no RSU shall be settled by reason of a change in control of
McDermott International, Inc. or disability of Employee unless such event is a
change in control or disability, as applicable, within the meaning of
Section 409A. Notwithstanding anything herein to the contrary, if on the date of
Employee’s separation from service Employee is a “specified employee,” as
defined in Section 409A, then all or a portion of any severance payments, or
benefits under this Agreement that would be subject to the additional tax
provided by Section 409A(a)(1)(B) of the Code if not delayed as required by
Section 409A(a)(2)(B)(i) of the Code shall be delayed until the first day of the
seventh month following Employee’s separation from service date (or, if earlier,
Employee’s date of death) and shall be paid as a lump sum (without interest) on
such date. For purposes of this Agreement, a termination of Employee’s
employment must be a “separation from service” for purposes of Section 409A.
Employee acknowledges and agrees that Employee has obtained no advice from the
Company or any of the other Company Entities, or any of their respective
officers, directors, employees, subsidiaries, affiliates, agents, attorneys or
other representatives, and that none of such persons or entities have made any
representation regarding the tax consequences, if any, of Employee’s receipt of
the payments, benefits and other consideration provided for in this Agreement.
Employee further acknowledges and agrees that Employee is personally responsible
for the payment of all federal, state and local taxes that are due, or may be
due, for any payments and other consideration received by Employee under this
Agreement. Employee agrees to indemnify the Company and hold the Company
harmless for any and all taxes, penalties or other assessments that Employee is,
or may become, obligated to pay on account of any payments made and other
consideration provided to Employee under this Agreement.

 

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Section 10. Miscellaneous Provisions.

(a) Waivers. Any term or provision of this Agreement may be waived, or the time
for its performance may be extended, by the party hereto entitled to the benefit
thereof. Any such waiver shall be validly and sufficiently given for the
purposes of this Agreement if, as to either party hereto, it is in writing
signed by such party or an authorized representative thereof. Failure on the
part of the Company or Employee at any time to insist on strict compliance by
the other party with any provisions of this Agreement shall not constitute a
waiver of the obligations of either party hereto in respect thereof, or of
either such party’s right hereunder to require strict compliance therewith in
the future. No waiver of any breach of this Agreement shall be deemed to
constitute a waiver of any other or subsequent breach.

(b) Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under applicable law, that provision shall be severable
and this Agreement shall be construed and enforced as if that illegal, invalid
or unenforceable provision never comprised a part hereof, and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision, and there shall be
added automatically as part of this Agreement a provision as similar in its
terms to such illegal, invalid or unenforceable provision as may be possible and
be legal, valid and enforceable.

(c) Further Assurances. Employee shall, on request by the Company from time to
time after the date hereof, execute, acknowledge and deliver to the Company such
other documents and instruments as the Company may require to give effect to the
provisions of this Agreement, including a confirmatory release of the Released
Claims as of the Resignation Date.

(d) Section Headings. Titles and headings to Sections and subsections hereof are
for the purpose of reference only and shall in no way limit, define or otherwise
affect the provisions hereof.

(e) Construction. In this Agreement, unless the context clearly indicates
otherwise: (i) words used in the singular include the plural and words used in
the plural include the singular; (ii) reference to any gender includes the other
gender and the neuter; (iii) the words “include,” “includes” and “including”
shall be deemed to be followed by the words “without limitation”; (iv) the words
“shall” and “will” are used interchangeably and have the same meaning; (v) the
word “or” shall have the inclusive meaning represented by the phrase “and/or”;
(vi) the words “this Agreement,” “herein,” “hereunder,” “hereof,” “hereto” and
words of similar import shall be deemed references to this Agreement as a whole
and not to any particular Section or other provision of this Agreement;
(vii) reference to any law (including statutes and ordinances) means such law
(including all rules and regulations promulgated thereunder) as amended,
modified, codified or reenacted, in whole or in part, and in effect at the time
of determining

 

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compliance or applicability; (viii) relative to the determination of any period
of time, “from” means “from and including” and “through” means “through and
including”; and (ix) all references to dollar amounts herein shall be in respect
of lawful currency of the United States. The language this Agreement uses shall
be deemed to be the language that the parties hereto have chosen to express
their mutual intent, and no rule of strict construction shall be applied against
either party hereto.

(f) Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.

[Signature page follows]

 

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I HAVE READ THE FOREGOING SEPARATION AGREEMENT, I FULLY UNDERSTAND ITS TERMS AND
THAT I MAY BE WAIVING SIGNIFICANT LEGAL RIGHTS BY EXECUTING IT, AND I HAVE
VOLUNTARILY EXECUTED IT ON THE DATE WRITTEN BELOW, SIGNIFYING THEREBY MY ASSENT
TO, AND WILLINGNESS TO BE BOUND BY, ITS TERMS:

 

Date: October 29, 2013               /s/ John T. McCormack         JOHN T.
McCORMACK

Before me, a Notary Public in and for Harris County, Texas, personally appeared
the above-named Mr. John T. McCormack, who acknowledged that he executed the
foregoing instrument for the purposes and consideration therein expressed, and
acknowledged the same to be his free act and deed.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal, in the
County of Harris and State of Texas, this 29th day of October, 2013.

 

      /s/ Angela Smith       NOTARY PUBLIC     McDERMOTT, INC.     By:   /s/
Gary L. Carlson       Name: Gary L. Carlson       Title: SVP & CAO

Before me, a Notary Public in and for Harris County, Texas, personally appeared
the above-named officer of McDermott, Inc., who acknowledged that he executed
the foregoing instrument for and on behalf of McDermott, Inc., a Delaware
corporation, and for the purposes and consideration therein expressed, and
acknowledged the same to be his free act and deed and the free act and deed of
said corporation.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal, in the County
of Harris and State of Texas, this 29 day of October, 2013.

 

            /s/ Angela Smith       NOTARY PUBLIC

 

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EXHIBIT A

Notice of Resignation

To the Board of Directors of McDermott International, Inc.

Effective as of the open of business on October 31, 2013, the undersigned, John
T. McCormack, resigns from all positions held as an officer of McDermott
International, Inc., a Panamanian corporation (“McDermott”), and from all
positions held as an officer, employee, member of the board of directors or
board of managers (and member of any and all committees thereof) of any of
McDermott’s subsidiaries (whether corporations, limited liability companies,
limited partnerships or other forms of entity) and joint venture entities, and
from any and all positions or capacities with respect to any employee benefit
plan sponsored or maintained by any such entity; provided, however, that the
effectiveness of this resignation from employment with McDermott, Inc., a
Delaware corporation and a wholly owned subsidiary of McDermott, shall not be
effective until the close of business on November 1, 2013. This resignation is
not subject to any condition to effectiveness (including, but not limited to,
acceptance by the Board of Directors of McDermott) and is irrevocable.

Dated: October 29, 2013

 

/s/ John T. McCormack

John T. McCormack

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EXHIBIT B

CONSULTING SERVICES

TERMS AND CONDITIONS

 

1. Description of Services. As requested by the MII or the Company, John T.
McCormack (“Consultant”) shall serve as a special consultant furnishing advice,
consultation and related services including, but not limited to, special
assignments as determined by the President and Chief Executive Officer of MII or
his designee.

 

2. Status. During the Consulting Period, Consultant shall be an independent
contractor and shall not be an employee of MII, the Company or any of the other
Company Entities. None of the Company Entities shall be entitled to exercise
supervision over the details or methods of performance by Consultant hereunder
or to require adherence to specific procedures in performing services hereunder,
other than procedures or policies to the extent applicable to all independent
contractors and consultants of the Company Entities on a general basis,
including the most recent McDermott International, Inc. Code of Business
Conduct. Except as provided herein, Consultant shall not be subject to rules or
regulations applicable to employees of the Company Entities or any established
work schedule or routine or other supervision of or direction by any of the
Company Entities, as to hours worked or otherwise; provided, however, that all
services rendered hereunder shall be so rendered in a diligent, prudent and
competent manner and to the satisfaction of MII and the Company. Consultant
shall not have authority to obligate any of the Company Entities to any
agreement or to exercise any supervision or direction over any employees of any
of the Company Entities. Since Consultant is not an employee of the Company,
Consultant is not hereby entitled to participate in any of the Company’s
employee benefit plans, programs or arrangements; provided, however, the
retirement and other payments or benefits that Consultant may be entitled to as
a result of previous employment with the Company shall continue uninterrupted in
accordance with the terms and conditions of each respective benefit plan or
arrangement.

 

3. Compensation. Consultant’s individual contact shall be the President and
Chief Executive Officer of MII or his designee, who shall be responsible for
transmitting requests for such advice and consultation from the Company Entities
where necessary to enable Consultant to carry out Consultant’s responsibilities
hereunder. During the Consulting Period, the Company agrees to pay Consultant
$4,500 per day for each day that he performs consulting services to the Company
Entities as requested by MII or the Company during the Consulting Period
(“Consulting Fees”). The Company also agrees to reimburse Consultant for
reasonable costs and expenses of airfare and other travel, meals and lodging
actually incurred by Consultant in performance of consulting services hereunder,
in accordance with the then-operative and applicable policies of MII and the
Company, and reasonable administrative costs, such as costs for telephone calls,
internet usage, printing, etc., necessarily incurred by Consultant in rendering
consulting services hereunder, but not any other fees, costs, or expenses.
Consultant shall submit a statement for each month in which consulting services
are rendered, showing costs, expenses and days worked with respect to services
rendered during such month, along with documentation substantiating expenses for
which reimbursement is sought. The Company agrees to remit to Consultant the
appropriate amount promptly following receipt of such statements. Consultant
will be responsible for income or other taxes assessed on Consultant’s receipt
of fees and expense reimbursements from the Company.

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4. Security and Non-Disclosure of Information. Consultant shall be responsible
for, and bear the expense of, compliance with governmental laws and regulations
applicable to the procurement, utilization or production of information in
connection with the furnishing of services hereunder. Consultant agrees that,
during the Consulting Period, Consultant will refrain from performing any act or
engaging in any course of conduct which has or may reasonably have the effect of
demeaning the name or business reputation of the Company or affects adversely or
may reasonably affect adversely the Company’s best interests, economic or
otherwise. Consultant also acknowledges that applicable securities laws prohibit
the trading of Company securities while in possession of any material non-public
information, including information concerning the financial condition, results
of operations, business or prospects of MII and its subsidiaries.

 

5. Property and Information. All property and information, including but not
limited to reports, findings, recommendations, plans, data, and memoranda of
every description, and all copies thereof, furnished to Consultant or developed
in the course of or relating to the services rendered hereunder shall be the
property of the applicable Company Entities, and Consultant shall not retain
copies of any such matter or material. Consultant agrees that all inventions,
discovery or improvements (whether patentable or not) made or conceived by
Consultant are and will remain the sole property of the applicable Company
Entities, and Consultant further agrees to assist the applicable Company
Entities in obtaining patents in their names covering any such inventions,
discoveries or improvements.

 

6. Law. Consultant will comply with all applicable laws and regulations in the
course of Consultant’s activities on behalf the Company Entities.

 

7. Code of Business Conduct. Consultant expressly acknowledges that Consultant
has received and reviewed the most recent McDermott International, Inc. Code of
Business Conduct, and Consultant will conform Consultant’s activities undertaken
for or on behalf of the Company Entities consistent with the principles of the
highest ethical behavior as described therein.

 

Signature:  

/s/ John T. McCormack

    Date:   October 29, 2013   John T. McCormack      

 

8. Reports. Consultant agrees that, upon request, Consultant will file periodic
reports on Consultant’s activities on behalf the Company Entities.

 

9. Indemnity. The Company agrees to protect, hold harmless, defend, and
indemnify Consultant from and against any and all claims, suits, and demands, of
any kind whatsoever, by whomsoever asserted, as a result of, or arising from,
the consulting services provided by Consultant under this Agreement to the
Company Entities; provided, however, that the Company shall have no liability or
responsibility under this provision for any such claim, suit, or demand
resulting from the gross negligence or intentional misconduct of Consultant.

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10. Conflict of Interest. Consultant agrees that Consultant is not presently
engaged and will not engage during the term of this Consulting Agreement in any
activity which might reasonably create a conflict of interest between Consultant
and any of the Company Entities or which might reasonable and adversely affect
Consultant’s judgment with respect to the business of the Company Entities.
Consultant further agrees that Consultant will accept no payment from any
competitor or supplier of materials or services, customer, borrower, or lender
of the Company Entities.

 

11. Consulting Period. The Consulting Period shall begin on November 2, 2013 and
continue through April 30, 2014, unless terminated earlier by Consultant upon
thirty (30) days advance written notice to the Company or extended by the mutual
written agreement of the Company and Consultant. The Consulting Period will be
terminated without further liability or obligation on the part of the Company
should Consultant breach any of the terms or covenants of this Agreement
(including this Exhibit B).