ex10-1.htm


    CHANGE
IN CONTROL

    AGREEMENT

    


    


    THIS
AGREEMENT is made as of the 1st day of April, 2009 by and between McDermott
International, Inc., a corporation duly organized under the laws of the Republic
of Panama (the “Company”) and Stephen M. Johnson (“Executive”.)

    


    In
consideration of the mutual covenants and agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, the parties hereto agree as follows:

    


    
      	
                        I.

            	
              Obligations
      of the Company Upon Termination of Executive After Change In
      Control.

               

            


    

    Following
the Effective Date of a Change In Control, in the event Executive’s employment
by the Company is terminated before the one-year anniversary of the Effective
Date of a Change In Control either (i) by the Company for any reason other than
Cause, or (ii) by the Executive for Good Reason, then subject to the provisions
of paragraph (b) below, the Company shall:

    


    
      	
              (a)  

            	
              Pay
      to the Executive within thirty days after the date of termination of
      Executive’s employment (or such earlier time as may be required by law)
      the Accrued Benefits;

            


    

    


    
      	
              (b)  

            	
              In
      the event that a bonus is paid after the date of Executive’s termination
      of employment under the Company’s Executive Incentive Compensation Plan
      (“EICP”) for the year prior to the year in which the termination takes
      place (the “Measurement Period”), pay to the Executive in a lump sum, at
      the same time such bonus is paid to other EICP participants, a cash bonus
      equal to the product of the multiplier used for Executive’s position
      during the Measurement Period and Executive’s annual base salary for
      the Measurement Period.

            


    

    


    
      	
              (c)  

            	
              Pay
      to Executive in a lump sum in cash within thirty days after the date of
      termination of Executive’s employment a payment equal to the product of
      Executive’s target bonus under EICP as in effect immediately prior to the
      date of termination and a fraction, the numerator of which is the number
      of days that have elapsed in the year in which the termination takes place
      through the date of termination of Executive’s employment and the
      denominator of which is 365.

            


    

    


    
      	
              (d)  

            	
              Pay
      to Executive in a lump sum in cash as soon as administratively practicable
      after the date of termination of Executive’s employment 200% of the sum of
      (1) Executive’s annual base salary as in effect immediately prior to the
      date of termination of Executive’s employment, and (2) Executive’s target
      bonus under EICP as in effect immediately prior to the date of
      termination.

            


    

    


    
      	
              (e)  

            	
              Pay
      to Executive in a lump sum in cash within thirty days after the date of
      termination of Executive’s employment a payment equal to two times the
      full annual cost of coverage for medical, dental and vision benefits
      provided to Executive and Executive’s covered dependents by Company for
      the year in which Executive’s termination takes
  place.

            


    

    


    
      	
              II.  

            	
              Participation
      In Other Company Programs.

            


    

    


    Nothing
in this Agreement shall prevent or limit Executive’s continuing or future
participation in any plan, program, policy or practice provided by the Company
for which Executive may qualify, nor, subject to paragraph (d) of Section X,
shall anything herein limit or otherwise affect such rights as Executive may
have under any contract or agreement with the Company.  Amounts which
are vested benefits or which Executive is otherwise entitled to receive under
any plan, policy, practice or program of or any contract or agreement with the
Company at or subsequent to the date of termination of Executive’s employment
shall be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this
Agreement.  Notwithstanding the foregoing, it is expressly understood
and acknowledged by Executive that any payment by the Company under Section I
hereof shall be in lieu of any obligation on the part of the Company for payment
of severance benefits under the Severance Plan for Employees of McDermott
Incorporated and Participating Subsidiary and Affiliated Companies or any
successor thereto or any other plan, policy or agreement of the Company in the
event of termination of Executive’s employment as provided in Section I hereof
with the Company during the one-year period following the Effective Date of a
Change In Control.

    


    
      	
              III.  

            	
              Confidential
      and Proprietary Information.

            


    

    


    Executive
acknowledges and agrees that any and all non-public information regarding the
Company, any of its Subsidiaries and its or their customers (including but not
limited to any and all information relating to its or their business practices,
products, services, finances, management, strategy, profits and overhead) is
confidential and the unauthorized disclosure of such confidential information
will result in irreparable harm to the Company.  Executive shall not,
during his employment by the Company or any of its Subsidiaries and for a period
of five years after termination of such employment (or such shorter period as
may be required by law), disclose or permit the disclosure of any such
confidential information to any person other than an employee or director of the
Company or its Subsidiaries or any successor thereto or an individual engaged by
the Company or its Subsidiaries or any successor thereto to render professional
services to the Company or its Subsidiaries under circumstances that require
such person to maintain the confidentiality of such information, except as such
disclosure may be required by law.  The provisions of this Section III
shall survive any termination of this Agreement.  For purposes of this
Section III, the term “confidential information” shall not include information
that was or becomes generally available to the public other than as a result of
disclosure by Executive.  Executive acknowledges that the execution of
this Agreement and the payments described in Section I herein constitute
consideration for the limitations on activities set forth in this Section III,
the adequacy of which is hereby expressly acknowledged by
Executive.  Executive understands and agrees that the Company shall
suffer irreparable harm if Executive breaches Section III hereof, and that
monetary damages shall be inadequate to address any such
breach.  Accordingly, Executive agrees that the Company shall have the
right, to the extent permitted by applicable law, and in addition to any other
rights or remedies it may have, to obtain from any court of competent
jurisdiction, injunctive relief to restrain any breach or threatened breach
hereof or otherwise to specifically enforce the provisions hereof.

    


    
      	
              IV.  

            	
              Notices.

            


    

    


    All
notices and other communications provided for by this Agreement shall be in
writing and shall be deemed to have been duly given when (a) delivered by hand,
(b) sent by facsimile or email to the facsimile number or email address given
below, provided that a copy is also sent by a nationally recognized overnight
delivery service, (c) the day after being sent by a nationally recognized
overnight delivery service, or (d) three days after being mailed by United
States Certified Mail, return receipt requested, postage prepaid, addressed as
follows:

    


    


    


    If to
Executive:                   Stephen
M. Johnson

    Village on Memorial

    15200 Memorial, Apartment
1806

    Houston,
TX  77079

    


    Email:                   smjohnson@mcdermott.com

    


    Facsimile:            281-870-5924

    


    If to the
Company:             McDermott
International, Inc.

    c/o                       
Preston Johnson

    Senior
Vice President, Human Resources

    777 N. Eldridge Parkway

    Houston,
TX  77079

    


    Email:                  pjohnsonjr@mcdermott.com

    


    Facsimile:           281-870-5095

    


    or to
such other address as any party may have furnished to the other in writing in
accordance with this Agreement.

    


    
      	
              V.  

            	
              Governing
      Law.

            


    

    


    The
provisions of this Agreement shall be interpreted and construed in accordance
with, and enforcement may be made under, the law of the State of Texas without
reference to principles of conflict of laws.

    


    
      	
              VI.  

            	
              Successors
      and Assigns.

            


    

    


    
      	
              (a)  

            	
              This
      Agreement is personal to Executive and, without the prior written consent
      of the Company, shall not be assignable by Executive otherwise than by
      will or the laws of descent and
distribution.

            


    

    


    
      	
              (b)  

            	
              This
      Agreement shall be binding upon and shall inure to the benefit of the
      Company and its successors and
assigns.

            


    

    


    
      	
              (c)  

            	
              The
      Company will require that any successor to all or substantially all of its
      business and/or assets (whether such successor acquires such business
      and/or assets directly or indirectly, and whether by purchase, merger,
      consolidation or otherwise) expressly assume and agree to perform this
      Agreement in the same manner and to the same extent that the Company would
      be required to perform it if no such succession had taken
      place.  As used in this Agreement, “Company” shall mean the
      Company as herein defined and any successor to its business and/or
      assets.

            


    

    


    
      	
              VII.  

            	
              Employment
      by Subsidiaries.

            


    

    


    If
Executive is not employed by McDermott International, Inc., but is only employed
by one or more Subsidiaries of McDermott International, Inc., then (a) the
“Company” as defined herein shall be deemed to include such Subsidiary or
Subsidiaries, and (b) termination of employment shall be determined with
reference to Executive’s employment by all such
Subsidiaries.  Further, the Company agrees that it will perform its
obligations hereunder without regard to whether Executive is employed by the
Company or by a Subsidiary or Subsidiaries of the Company.

    


    
      	
              VIII.  

            	
              Severability.

            


    

    


    If any
provision or portion of this Agreement shall be determined to be invalid or
unenforceable for any reason, the remaining provisions of this Agreement shall
be unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by applicable law.

    


    
      	
              IX.  

            	
              Entire
      Agreement; Amendment.

            


    

    


    This
Agreement sets forth the entire Agreement of the parties hereto and supersedes
all prior agreements, understandings and covenants between the parties with
respect to the subject matter hereof.  Except as provided in Section
X, paragraphs (d) and (f) or Section XI, this Agreement may be amended or
terminated only by mutual agreement of the parties in writing.

    


    
      	
              X.  

            	
              Miscellaneous.

            


    

    


    
      	
              (a)  

            	
              The
      captions and headings of this Agreement are not part of the provisions
      hereof and shall have no force or
effect.

            


    

    


    
      	
              (b)  

            	
              The
      Company shall be entitled to withhold from any amounts payable under this
      Agreement such Federal, state, local, foreign or excise taxes as shall be
      required or permitted to be withheld pursuant to any applicable law or
      regulation.

            


    

    


    
      	
              (c)  

            	
              Executive’s
      or the Company’s failure to insist upon strict compliance with any
      provision of this Agreement or the failure to assert any right Executive
      or the Company may have hereunder, including, without limitation, the
      right of Executive to terminate employment for Good Reason pursuant to
      paragraph (g) of Section XII of this Agreement, shall not be deemed to be
      a waiver of such provision or right or any other provision or right of
      this Agreement.

            


    

    


    
      	
              (d)  

            	
              Executive
      and the Company acknowledge that, except as may otherwise be provided
      under any other written agreement between Executive and the Company, the
      employment of Executive by the Company is “at will” and, subject to the
      last sentence of paragraph (f) of Section XII hereof, Executive’s
      employment may be terminated by either Executive or the Company at any
      time prior to the Effective Date of a Change In Control, in which case
      this Agreement shall terminate as provided in Section XI below and
      Executive shall have no further rights under this
    Agreement.

            


    

    


    
      	
              (e)  

            	
              For
      purposes of this Agreement, the date of termination of Executive’s
      employment shall be: (i) if Executive’s employment is terminated by the
      Company for Cause, the date on which the Company delivers to Executive the
      resolution referred to in the last sentence of Section XII, paragraph (c),
      or, with respect to a termination under Section XII, paragraph (c)(iii),
      the date on which the Company notifies Executive of such termination, (ii)
      if Executive’s employment is terminated by the Company because of
      Executive’s Disability or for a reason other than Cause or Executive’s
      death or Disability, the date on which the Company notifies Executive of
      such termination, (iii) if executive’s employment is terminated by
      Executive for Good Reason, the date on which Executive notifies the
      Company of such termination (after having given the Company notice and a
      thirty-day cure period), or (iv) if Executive’s employment is terminated
      by reason of death, the date of death of
  executive.

            


    

    


    
      	
              (f)  

            	
              The
      Company may terminate this Agreement at any time prior to a Change In
      Control upon giving Executive written notice of such termination at least
      thirty days prior to the date of termination if either of the following
      circumstances take place: (i) Executive’s position with the Company is
      changed so that he ceases to be an officer of the Company, or (ii)
      Executive ceases to be a fulltime employee; provided that if a Change In
      Control is announced or occurs during such thirty-day period, the
      termination shall not be effective.

            


    

    


    
      	
              (g)  

            	
              This
      Agreement may be executed in two counterparts, each of which shall be
      deemed an original and together shall constitute one and the same
      agreement, with one counterpart being delivered to each party
      hereto.

            


    

    


    
      	
              (h)  

            	
              In
      the event the Executive’s employment is terminated following the Effective
      Date of a Change In Control and before the one-year anniversary of the
      Effective Date of a Change In Control (i) by the Company for Cause or an a
      result of Executive’s death or disability, or (ii) by Executive without
      Good Reason, Executive shall not be entitled to the payments described in
      Section 1 hereof.

            


    

    


    
      	
              XI.  

            	
              Term.

            


    

    


    This
Agreement shall terminate on the earliest to occur of (i) termination by the
Company in accordance with Section X, paragraph (f) above, (ii) the date one
year after the Effective Date of a Change or Control, or (iii) the date on which
Executive’s employment with the Company is terminated (subject to the last
sentence of Section XII, paragraph (g)); provided, however, that if Executive’s
employment with the Company is terminated under any of the circumstances
described in Section I hereof, Executive’s rights hereunder shall continue
following the termination of his/her employment with the Company until all
benefits to which Executive is entitled hereunder has been paid and the
Company’s rights hereunder shall continue until all obligations owed to it
hereunder have been satisfied.

    


    
      	
              XII.  

            	
              Definitions.

            


    

    


    For
purposes of this Agreement, the following terms shall have the meanings given
them in this Section XII.

    


    
      	
              (a)  

            	
              “Accrued
      Benefits” shall mean:

            


    

    


    
      	
               
      

            	
                      
      (i)

            	
              Any
      portion of Executive’s Annual Base Salary earned through the date of
      termination of Executive’s employment and not yet
  paid;

            


    

    


    
      	
              (ii)  

            	
              Reimbursement
      for any and all amounts advanced in connection with Executive’s employment
      for reasonable and necessary expenses incurred by Executive through the
      date of termination of Executive’s employment in accordance with the
      Company’s policies and procedures on reimbursement of
      expenses;

            


    

    


    
      	
              (iii)  

            	
              Any
      earned vacation pay not theretofore used or paid in accordance with the
      Company’s policy for payment of earned and unused vacation time;
      and

            


    

    


    
      	
              (iv)  

            	
              All
      other payments and benefits to which Executive may be entitled under the
      terms of any applicable compensation arrangement or benefit plan or
      program of the Company that do not specify the time of distribution;
      provided that Accrued Benefits shall not include any entitlement to
      severance under any severance policy of the Company generally applicable
      to the salaried employees of the
Company.

            


    

    


    
      	
              (b)  

            	
              “Annual
      Base Salary” shall mean Executive’s annual rate of pay excluding all other
      elements of compensation such as, without limitation, bonuses,
      perquisites, expatriate or hardship premiums, restricted stock awards,
      stock options and retirement and welfare
  benefits.

            


    

    


    
      	
              (c)  

            	
              “Cause”
      shall mean:

            


    

    


    
      	
               
      

            	
                      
      (i)

            	
              the
      willful and continued failure of Executive to perform substantially
      his/her duties with the Company (occasioned by reason other than physical
      or mental illness or disability of Executive) after a written demand for
      substantial performance is delivered to Executive by the Compensation
      Committee of the Board or the Chief Executive Officer of the Company which
      specifically identifies the manner in which the Compensation Committee of
      the Board or the Chief Executive Officer believes that Executive has not
      substantially performed his/her duties, after which Executive shall have
      thirty days to defend or remedy such failure to substantially perform
      his/her duties:

            


    

    


    
      	
              (ii)  

            	
              the
      willful engaging by Executive in illegal conduct or gross misconduct which
      is materially and demonstrably injurious to the Company;
  or

            


    

    


    
      	
              (iii)  

            	
              the
      conviction of Executive with no further possibility of appeal or, or plea
      of nolo contendere by Executive to, any
felony.

            


    

    


    The
cessation of employment of Executive under subparagraph (i) and (ii) above shall
not be deemed to be for “Cause” unless and until there shall have been delivered
a Executive 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 Compensation
Committee of the Board at a meeting of such Committee called and held for such
purpose (after reasonable notice is provided to Executive and Executive is given
an opportunity, together with counsel, to be heard before the Compensation
Committee of the Board), finding that, in the good faith opinion of the
Compensation Committee of the Board, Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying the particulars
thereof in detail.

    


    
      	
              (d)  

            	
              “Change
      In Control” shall be deemed to occur
if:

            


    

    


    
      	
               
      

            	
                      
      (i)

            	
              When
      any “person” or “group” of persons (as such terms are used in §13 and 14
      of the Securities Exchange Act of 1934, as amended from time to time (the
      “Exchange Act”)), other than the Company or any employee benefit plan
      sponsored by the Company, becomes the “beneficial owner” (as such term is
      used in §13 of the Exchange Act) of 30 percent or more of the total number
      of the Company’s common shares at the time outstanding;
  or

            


    

    


    
      	
              (ii)  

            	
              The
      shareholders of the Company approve: a) a merger or consolidation of the
      Company, with any other corporation, other than a merger or consolidation
      which would result in the voting securities of the Company outstanding
      immediately prior thereto, continuing to represent  (either by
      remaining outstanding or by being converted into voting securities of the
      surviving entity) at least fifty percent (50%) of the combined voting
      power of the voting securities of the Company or such surviving entity
      outstanding immediately after such merger or consolidation, or b) the
      shareholders of the Company approve a plan of complete liquidation of the
      Company, or c) an agreement for the sale or disposition by the Company of
      all or substantially all of the Company’s assets
  or;

            


    

    


    
      	
              (iii)  

            	
              During
      any period of two (2) consecutive years (not including any period prior to
      the execution of this Plan), individuals who at the beginning of such
      period constitute the Board of the Company,  and any new
      Director of the Company (other than a Director designated by a Person who
      has entered into an agreement with the Company to effect a transaction
      described in Clauses (a) or (c) of this Section 2.5) whose election by the
      Company’s Board or nomination for election by the stockholders of the
      Company, was approved by a vote of at least two-thirds (2/3) of the
      Directors of the Company’s Board, then still in office who either were
      Directors thereof at the beginning of the period or whose election or
      nomination for election was previously so approved, cease for any reason
      to constitute a majority thereof;
or

            


    

    


    
      	
              (iv)  

            	
              Such
      other circumstances as may be deemed by the Board in its sole discretion
      to constitute a change in control of the
  Company.

            


    

    


    However,
in no event shall a “Change in Control” be deemed to have occurred with respect
to the Executive if the Executive is part of the purchasing group which
consummates the Change-in-Control transaction.  An Executive shall be
deemed “part of a purchasing group” for purposes of the preceding sentence if
the Executive is an equity participant in the purchasing company or group
(except for: (i) passive ownership of less than three percent (3%) of the stock
of the purchasing company; or (ii) ownership of equity participation in the
purchasing company or group which is otherwise not significant, as determined
prior to the Change in Control by a majority of the non-employee continuing
Directors).  A Change In Control shall not result from any transaction
precipitated by the Company’s insolvency, appointment of a conservator or
determination by a regulatory agency that the Company is insolvent.

    


    
      	
              (e)  

            	
              “Disability”
      shall mean circumstances that qualify Executive for long-term disability
      benefits under the Company’s Long-Term Disability Plan as in effect
      immediately prior to the Change In
Control.

            


    

    


    
      	
              (f)  

            	
              “Effective
      Date” with respect to a Change In Control for purposes of this Agreement
      shall be the earliest to occur of (i) the date on which the Company
      receives a copy of a Schedule 13D disclosing beneficial ownership of
      shares in accordance with Section XII, paragraph (d)(i) above; (ii) the
      effective date of the consummation of a merger, consolidation, share
      exchange or similar form of corporate transaction or liquidation or
      reorganization in accordance with Section XII, paragraph (d)(ii); or (iii)
      the date of the annual or special meeting of shareholders at which the
      last director necessary to meet the requirements of Section XII, paragraph
      (d)(iii) is elected.  Upon the occurrence of the Effective Date
      of a Change In Control, the Board of Directors or its designee shall,
      within thirty days thereof, provide written notice to Executive of the
      Effective Date of the Change In Control.  Notwithstanding
      anything to the contrary in this Agreement, if a Change In Control occurs
      and if Executive’s employment with the Company is terminated within the
      ninety days prior to the Effective Date of the Change In Control as
      determined in accordance with the first sentence of this paragraph (f),
      and if it is reasonably demonstrated by Executive that such termination of
      employment was at the request of a third party who has taken steps
      reasonably calculated to effect a Change In Control, or otherwise arose in
      connection with or in anticipation of a Change In Control, then for all
      purposes of this Agreement, the “Effective Date” of the Change In Control
      shall mean the date immediately prior to the date of such termination of
      employment.

            


    

    


    
      	
              (g)  

            	
              “Good
      Reason” shall mean:

            


    

    


    
      	
               
      

            	
                      
      (i)

            	
              the
      assignment to Executive of duties that are materially inconsistent with
      Executive’s position, authority, duties or responsibilities immediately
      prior to the Change In Control, or any other action by the Company which
      results in a material diminution in such position, authority, duties or
      responsibilities;

            


    

    


    
      	
              (ii)  

            	
              requiring
      Executive, without his consent, to be based at any office or location
      other than the office or location a which Executive was employed
      immediately prior to the Change In Control; provided, however, that any
      such relocation requests shall not be grounds for resignation with Good
      Reason if such relocation is within a twenty-mile radius of the location
      at which Executive was based prior to the Effective Date of a Change In
      Control;

            


    

    


    
      	
              (iii)  

            	
              a
      reduction in Executive’s Annual Base Salary in effect immediately prior to
      the Change In Control or a reduction in the target multiplier used to
      calculate the annual bonus awarded to Executive below the target
      multiplier used to calculate the bonus paid to Executive under the EICP
      immediately prior to the Change In Control, provided, however that in
      either case a reduction in the Annual Base Salary or the target bonus
      multiplier shall not be considered “Good Reason” with respect to any year
      for which such reduction is part of a reduction uniformly applicable to
      all similarly situated employees;

            


    

    


    
      	
              (iv)  

            	
              a
      change in Executive’s eligibility to participate in incentive compensation
      plans as in effect immediately prior to the Change In Control;
      or

            


    

    


    
      	
              (v)  

            	
              any
      material breach of this Agreement by the Company, excluding for this
      purpose an isolated, insubstantial or inadvertent action not taken in bad
      faith and which is remedied by the Company promptly after receipt of
      notice thereof given by Executive.

            


    

    


    Upon the
occurrence of any of the events described above, Executive shall give the
Company written notice that such event constitutes Good Reason and the Company
shall thereafter have thirty days in which to cure.  If the Company
has not cured in that time, the event shall constitute Good Reason.

    


    
      	
              (h)  

            	
              “Subsidiaries”
      shall mean every, limited liability company, partnership or other entity
      of which 50% or more of the total combined voting power of all classes of
      voting securities or other equity interests is owned, directly or
      indirectly, by McDermott International,
Inc.

            


    

    


    
      	
              XIII.  

            	
              Arbitration

            


    

    


    Any
controversy or claim arising out of or relating to this Agreement (or the breach
thereof) shall be settled by final and binding arbitration in Houston, Texas by
one arbitrator selected in accordance with the Commercial Arbitration Rules (the
“Rules”) of the American Arbitration Association (the “Association”) then in
effect.  Subject to the following provisions, the arbitration shall be
conducted in accordance with the Rules then in effect.  Any award
entered by the arbitrator shall be final and binding, and judgment may be
entered thereon by any party hereto in any court of law having competent
jurisdiction.  This arbitration provision shall be specifically
enforceable.  The Company and the Executive shall each pay half of the
administrative fees of the Association and the compensation of the arbitrator
and shall each be responsible for its or his/her own attorney’s fees and
expenses relating to the conduct of the arbitration.

    


    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.

    


    McDERMOTT INTERNATIONAL,
INC.

    


    


    By:                      /s/ John A.
Fees

    


    Printed
Name:                 
John A. Fees

    


    Title:                                 Chief
Executive Officer

    


    Date:                                
April 1,
2009

    


    


    


    Executive:                        /s/ Stephen M.
Johnson

     

    Date:                                
April 1,
2009