EX-10.2



 Exhibit 10.2 

McDERMOTT INTERNATIONAL, INC. 

Performance Unit Grant Agreement 

(February 26, 2016) 
 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 units (“Performance Units”) under the
2014 McDermott International, Inc. Long-Term Incentive Plan (the “Plan”) on February 26, 2016 (the “Date of Grant”). The provisions of the Plan are incorporated herein by reference. 

Any reference or definition contained in this Performance Unit 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 but that are defined in the Plan shall have the respective meanings ascribed to such terms in the Plan. 

Performance Units 
 Grant of
Performance Units. You have been awarded a grant of Performance Units shown on the Notice of Grant dated February 26, 2016, which is incorporated herein by reference. Each Performance Unit represents a right to receive the value of one
Share on the Vesting Date (as set forth in the “Vesting Requirements” paragraph below), provided the applicable performance measures and vesting requirements set forth in this Agreement shall have been satisfied. No Shares or cash amounts
are awarded or issued to you hereunder on the Date of Grant. 
 Vesting Requirements. Except as provided below, the Performance Units 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 Units 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 Units will continue to vest, provided your termination date is on or after the second anniversary of the Date of Grant. The
number of Performance Units 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 Units 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.


 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 

  
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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 Units 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 Units that will vest pursuant to the preceding sentence will be the total number
of Performance Units 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, and this award is not assumed or substituted with a Replacement Award by the surviving company as set forth below (“Assumed”), then the Performance Units will vest
as of the Change in Control at the greater of target level or the actual performance level measured through the date the Change in Control becomes effective as determined in accordance with Schedule A to this Agreement. 


 

	 	•	 	If a Change in Control of the Company occurs, this award is Assumed by the surviving company and, during the period following the Change in Control and prior to the end of the third anniversary of the Grant Date,
(i) you terminate your employment for “Good Reason” (as defined below), (ii) you are involuntarily terminated for reasons other than for “Cause” (as defined below) or (iii) you die or suffer a Disability, then the
Performance Units will become fully vested with the applicable performance measures deemed to have been achieved at the greater of target level or the actual performance level measured through the date of the Change in Control as determined in
accordance with Schedule A to this Agreement. 

  

	 	•	 	In the event that, prior to the date the Change in Control becomes effective, your employment was terminated due to a “Reduction in Force” as described above, or due to your death or Disability as described
above, a number of Performance Units will vest as of the Change in Control based on the greater of target level or the actual performance level measured through the date of the Change in Control as determined in accordance with Schedule A to this
Agreement and, in the case of a “Reduction in Force,” multiplied by the applicable percentage determined pursuant to the “Reduction in Force” paragraph above. 


For this purpose an assumed award qualifies as a “Replacement Award” if the following requirements are met: (a) it is of the
same type as this award, (b) it has a value at least equal to the value of this award, (c) it relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with
the Company or its successor following the Change in Control, (d) if the Participant holding the this award is subject to U.S. federal income tax under the Code, the tax consequences to such Participant under the Code of the Replacement Award
are not less favorable to such Participant than the tax consequences of this award, and (e) its other terms and conditions are not less favorable to the Participant holding the Replacement Award than the terms and conditions of this award
(including the provisions that would apply in the event of a subsequent Change in Control). The determination of whether an award has been Assumed will be made in the discretion of the Committee as constituted immediately prior to the effective date
of the Change in Control. 

  
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 For this purpose “Cause” means: (i) your continued failure to perform
substantially your duties with the Company (occasioned by reason other than your physical or mental illness, death or disability) after a written demand for substantial performance is delivered to you by the Committee which specifically identifies
the manner in which the Committee or the Chief Executive Officer believes that you have not substantially performed your duties, after which you shall have 30 days to defend or remedy such failure to substantially perform your duties; (ii) the
engaging by you in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company; or (iii) your conviction of, with no further possibility of appeal for, or plea of guilty or nolo contendere by you to, any
felony. The cessation of your employment under items (i) and (ii) of this paragraph shall not be deemed to be for “Cause” unless and until there shall have been delivered to you a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire membership of the Committee at a meeting of the Committee called and held for such purpose (after reasonable notice is provided to you and you are given an opportunity,
together with counsel, to be heard before the Committee), finding that, in the good faith opinion of the Committee, you are guilty of the conduct described in items (i) or (ii) of this paragraph, and specifying the particulars thereof in
detail. 
 For this purpose “Good Reason” means any one or more of the following events which occurs following a Change in Control:
(a) a material diminution in your duties or responsibilities of from those applicable immediately before the date on which a Change in Control occurs; (b) a material reduction in your annual salary as in effect on the Effective Date of
this Agreement or as the same may be increased from time to time; (c) the failure by the Company to continue in effect any compensation plan in which you participate immediately before the Change in Control which is material to your total
compensation, unless a comparable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue your participation therein (or in such substitute or alternative
plan) on a basis not materially less favorable than existed immediately before the Change in Control, unless the action by the Company applies to all similarly situated employees; (d) the failure by the Company to continue to provide you with
material benefits in the aggregate that are substantially similar to those enjoyed by you under any of the Company’s pension, savings, life insurance, medical, health and accident, or disability plans in which you were participating immediately
before the Change in Control if such benefits are material to your total compensation, the taking of any other action by the Company which would directly or indirectly materially reduce any of such benefits or deprive you of any fringe benefit
enjoyed by you at the time of the Change in Control if such fringe benefit is material to your total compensation, unless the action by the Company applies to all similarly situated employees; or (e) a change in the location of your principal
place of employment with the Company by more than 50 miles from the location where you were principally employed immediately before the Change in Control without your consent. If a Change in Control occurs and any of the events described above
occurs prior to the third anniversary of such Change in Control (an “Event”), you shall give the Company written notice (the “Notice”) within 60 days following your knowledge of an Event that you intend to terminate employment as
a result. The Company shall have 30 days following receipt of the Notice in which to cure the Event. If the Company does not take such action within that time, the Event shall constitute Good Reason. If you do not provide the Notice within 60 days
as required above then the Event shall not constitute Good Reason, and thereafter, for purposes of determining whether you have Good Reason, your terms and conditions of employment after the occurrence of the Event shall be substituted for those
terms and conditions of your employment in effect immediately prior to the date of this Agreement. 

  
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 Forfeiture of Performance Units. Except as provided above, Performance Units which are not vested as of
the date of your termination of employment with the Company for any reason 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 Units 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 any such matters. 
 Earned Award. Except as otherwise provided above,
the number of Performance Units in which you will vest, if any (the “Earned Award”), shall be determined based on the Company’s relative Return on Average Invested Capital (“ROAIC”) improvement (as determined as set forth in
Schedule A) as compared to the Competitor Peer Group (as set forth in Schedule B) for the period beginning January 1, 2016 and ending on December 31, 2018. 

Payment of Earned Award. You (or your estate or beneficiaries, if applicable) will receive the value of one Share for each Performance Unit that vests
as an Earned Award. In the sole discretion of the Committee, Performance Units shall be paid in (i) Shares, (ii) cash equal to the Fair Market Value of the Shares otherwise deliverable on the Vesting Date, or (iii) any combination
thereof, which 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 vesting occurs following a Change in Control (as applicable).

 Taxes 
 You will realize
income in connection with this grant of Performance Units in accordance with the tax laws of the jurisdictions applicable to you. You are solely responsible for the taxes associated with the Performance Units, 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 or whole Shares having an aggregate Fair Market Value equal to but not exceeding the amount (as determined by the Company) of such required tax withholding, unless the
Committee determines to cause the withholding obligation to be satisfied by another method permitted by the Plan. The Committee may, in its discretion, allow additional withholding of cash or Shares for taxes, on such terms and conditions as it may
determine, provided that the Committee determines in good faith in consultation with its advisors that allowing such additional withholding will not result in adverse accounting consequences to the Company. 

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, 

  
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and you hereby authorize the Company to withhold such amount (as determined by the Company), 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. 
 Transferability

 Performance Units 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 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 for us 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, and its implementing regulations (“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. Notwithstanding any provision of the award to the contrary, if you are a “specified employee” within the meaning of Section 409A as of the date of your termination of employment and
the Company determines, in good faith, that immediate payments of any amounts or benefits would cause a violation of Section 409A, then any amounts or benefits which are payable under this award upon your “separation from service”
within the meaning of Section 409A which (i) are subject to the provisions of Section 409A; (ii) are not otherwise excluded under Section 409A; and (iii) would otherwise be payable during the first six-month period
following such separation from service shall be paid on the first business day next following the earlier of (1) the date that is six months and one day following the date of termination or (2) the date of the participant’s death. In
addition, any payments to be made upon a Change in Control will only be made upon such event if such event qualifies as a “change in control event” within the meaning of Section 409A. 

  
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 Schedule A 

To determine the Company’s relative ROAIC improvement as compared to the Competitor Peer Group: 

 

	(A)	Calculate the Company’s ROAIC for the year ended December 31, 2015 (“MDR 2015 ROAIC”) and for the years ended December 31, 2016, 2017 and 2018. 


 

	(B)	Calculate the simple average of the Company’s ROAIC for the years ended December 31, 2016, 2017 and 2018 (“MDR 3-Year Average ROAIC”). The MDR 3-Year Average ROAIC will determine whether the Earned
Award shall be determined under column (1), (2) or (3), as set forth below. 

  

	(C)	Subtract the MDR 2015 ROAIC from MDR 3-Year Average ROAIC to determine MDR’s ROAIC improvement over the three-year performance period (“MDR ROAIC Improvement”). 


 

	(D)	Calculate the ROAIC for each company in the Competitor Peer Group for the years ended December 31, 2015 (each, a “Competitor Peer 2015 ROAIC”) and for the years ended December 31, 2016, 2017 and
2018. For any company in the Competitor Peer Group which has not reported its results for the periods ending December 31, 2016, 2017 or 2018 on or before March 1, 2019, the Committee may determine the ROAIC for such company and period
based on publicly available information. 

  

	(E)	Calculate the simple average ROAIC, for each company in the Competitor Peer Group, for the years ended December 31, 2016, 2017 and 2018 (each, a “Competitor Peer 3-Year Average ROAIC”). 


 

	(F)	For each company in the Competitor Peer Group, subtract the Competitor Peer 2015 ROAIC from the Competitor Peer 3-Year Average ROAIC to determine each company in the Competitor Peer Group’s ROAIC improvement over
the three-year performance period, and determine the median of such amounts (“Competitor Peer Group Median ROAIC Improvement”). 

  

	(G)	Subtract the MDR ROAIC Improvement from the Competitor Peer Group Median ROAIC Improvement to determine the Amount by which MDR ROAIC Improvement Exceeds Competitor Peer Group Median ROAIC Improvement and accordingly
the Earned Award, subject to the appropriate column for Earned Awards as determined under (B) above. 

  

																	
	 	  	MDR 3-Year Average ROAIC	 	 	<6%	 	 	>6% and < 10%	 	 	>10%	 
	 Performance
	  	Amount by which MDR ROAIC
Improvement Exceeds Competitor
Peer Group Median ROAIC
Improvement	 	 	(1)
Earned Award*	 	 	(2)
Earned Award*	 	 	(3)
Earned Award*	 
	Maximum	  	 	>6	% 	 	 	50	% 	 	 	200	% 	 	 	200	% 
	Target	  	 	2	% 	 	 	50	% 	 	 	100	% 	 	 	100	% 
	Threshold	  	 	0	% 	 	 	50	% 	 	 	50	% 	 	 	50	% 
		  	 	<0	% 	 	 	0	% 	 	 	0	% 	 	 	50	% 

  

	*	Earned Awards between the amounts shown will be calculated by linear interpolation. For the avoidance of doubt, the maximum Earned Award will be 200% of the Performance Units shown on your Notice of Grant.



  
 Schedule A-1 








 ROAIC shall be calculated annually per the equation set forth below: 

Adjusted Net Income 

Average Invested Capital 
 Where: 

 

	 	•	 	The numerator is the sum of the last four quarters Adjusted Net Income 

  

	 	•	 	The denominator is the average of the last five quarters’ closing invested capital amounts 

  

			
	 Adjusted Net Income, for purposes of this calculation, shall be comprised of:

 
 •    Net Income
(including net income attributable to non-controlling interest)
  

•    Less one-off gains or losses arising from the sale of businesses

 
 •    Plus finance
costs
  
 •    Plus
imputed finance costs
  

•    Less finance income

 
 •    Less goodwill
impairments
	  	 Average Invested Capital, for purposes of this calculation, shall be comprised of:

 
 •    Shareholders’
equity (including equity attributable to non-controlling interest)
  

•    Less goodwill
  

•    Plus current portion of borrowings

 
 •    Plus non-current
portion of borrowings
  

•    Plus capitalized operating leases

 
 •    Less excess cash
(which for MDR shall be cash balances in excess of any minimum liquidity requirements under MDR’s principal credit facilities plus $200M, and for each company in the Competitor Peer Group shall be cash balances in excess of 7% of such
company’s annual revenues)



  
 Schedule A-2 








 Schedule B 

Competitor Peer Group: 
  

	 	•	 	Archrock, Inc. 

  

	 	•	 	Helix Energy Solutions Group, Inc. 

  

	 	•	 	Oceaneering International, Inc. 

  

	 	•	 	Superior Energy Services, Inc. 

  

	 	•	 	Tidewater Inc. 

  

	 	•	 	Saipem SpA 

  

	 	•	 	Subsea7 SA 

  

	 	•	 	Technip SA 

  

	 	•	 	Swiber Holdings Limited 

  

	 	•	 	SapuraKencana Petroleum Berhad 

 Provided that each company included in the Competitor Peer Group has had its
primary common equity security continuously listed or traded on a national securities exchange throughout the Measurement Period. 

  
 Schedule B 








 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).

 
 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.



  
 Exhibit A-1 









			
		  	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, Human Resources and Senior Vice President,
General Counsel and Corporate Secretary. 

  
 Exhibit A-2