Restructuring Transaction Retention Agreement Michael S. Taff




 Exhibit 10.11 

RESTRUCTURING TRANSACTION 

RETENTION AGREEMENT 

THIS AGREEMENT is made by and between McDermott International, Inc., a corporation duly organized
under the laws of the Republic of Panama (the “Company”) and Michael S. Taff (“Employee”) as of the
10th day of December, 2009 (this “Agreement”).

 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: 

If the Company, with the prior approval of the Board of Directors of the Company, engages in a transaction that results in
the sale or other disposition of all or substantially all of the operations of either of its subsidiaries The Babcock & Wilcox Company or J. Ray McDermott, S.A. (each an “Operating Sub” and, together, the “Operating
Subs”), whether by sale of the capital stock or assets of one or both of the Operating Subs, spinoff of one or both of the Operating Subs or otherwise, with an Effective Date (this term and other terms that are capitalized (but not otherwise
defined herein) are used as defined in Section XIII of this Agreement) within the 24-month period beginning on the date of this Agreement (a “Restructuring Transaction”), Employee shall be entitled to compensation and benefits under the
circumstances set out below. In addition, if Employee’s employment is terminated under certain circumstances set out below before a Restructuring Transaction, Employee will be entitled to the compensation and benefits set out below. The sale or
disposition of less than 100% of the assets or stock of an Operating Sub shall not be considered a sale or other disposition of substantially all of the operations of such Operating Sub unless it is a sale or other disposition of at least 80% of the
stock or assets of such Operating Sub. 
  

	I.	 Obligations of the Company or a Successor Upon Termination of Employee In Connection With or After a Restructuring Transaction.



 In the event that either 

 

	 	(X)	 while employed by the Company, Employee’s employment by the Company is terminated following the date of this Agreement and before the earlier
of (A) the termination of this Agreement in accordance with Section XII and (B) the one-year anniversary of the Effective Date of a Restructuring Transaction, either (i) by the Company for any reason other than Cause or
Employee’s Disability or (ii) by Employee for Good Reason or 


  

	 	(Y)	 while employed by a Successor, Employee’s employment by such Successor is terminated following the Effective Date of a Restructuring
Transaction and before the one-year anniversary of such Effective Date, either (i) by the Successor for any reason other than Cause or Employee’s Disability or (ii) by Employee for Good Reason (in the case of either of the immediately
preceding clause (i) or this clause (ii), the Successor being substituted for the Company in the definitions of Cause and Good Reason herein), 



then, in either case, the Company or such Successor, as applicable, shall (in all cases, subject to the proviso in clause
(f) below with respect to awards described in that clause, no later than March 15 following the year in which Employee so terminates); provided that by such date, Employee has signed an agreement that is no longer subject to rescission
prepared by the Company or Successor, as applicable, which is solely a release of the Company, Successor (if applicable), and each of their respective affiliates, directors, officers and other customary persons from any claim or liability arising
out of or related to Employee’s employment with or termination from the Company or a Successor, except for amounts to which Employee is legally entitled pursuant to employee benefit plans or this Agreement, and rights to insurance coverage or
indemnification: 
  

	 	(a)	 pay to Employee within 30 days after the date of termination of Employee’s employment (or such earlier time as may be required by applicable
law) the Accrued Benefits; 


  

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	 	(b)	 in the event that a bonus is paid after the date of Employee’s termination of employment under the Company’s or such Successor’s
Executive Incentive Compensation Plan (such plan or any successor or replacement plan, including any annual bonus plan of such Successor, in any case in which Employee was a participant immediately prior to such termination being hereinafter
referred to as the “EICP”), as applicable, for the year prior to the year in which the termination takes place (the “Measurement Period”), pay to Employee in a lump sum, at the same time such bonus is paid to other participants
in the EICP, a cash bonus equal to the product of the multiplier used for Employee’s position during the Measurement Period and Employee’s annual base salary for the Measurement Period; 



 

	 	(c)	 pay to Employee in a lump sum, in cash, within 30 days after the date of termination of Employee’s employment, a payment equal to the product
of Employee’s target bonus under the 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 Employee’s employment and the denominator of which is 365; 


  

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


  

	 	(e)	 (1) pay to Employee in a lump sum, in cash, within 30 days after the date of termination of Employee’s employment, a payment equal to two times
the full annual cost of coverage for medical, dental and vision benefits provided to Employee and Employee’s covered dependents by the Company and, if applicable, a Successor for the year in which Employee’s termination takes place and
(2) permit Employee and Employee’s covered dependents to be covered under the Company’s, or if applicable, a Successor’s medical, dental and vision benefits for 48 months provided Employee pays the full then applicable COBRA
premium; 


  

	 	(f)	 as of the date of Employee’s termination of employment, cause Employee to have a fully vested and nonforfeitable interest in each of the awards
identified on the attached Schedule A (as the same may be modified pursuant to the terms of the applicable plans and award agreements in connection with the Restructuring Transaction), and to the extent applicable immediately pay such awards to
Employee; provided that none of the awards subject to Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), will be paid on a date earlier than as provided in the applicable award agreements without regard to this
Agreement; 


  

	 	(g)	 as of the date of Employee’s termination of employment, cause Employee to have a fully vested and nonforfeitable interest in Employee’s
account balance in the McDermott International, Inc. New Supplemental Executive Retirement Plan (“SERP”); provided that, notwithstanding anything to the contrary, Employee’s SERP benefits shall be distributed in accordance with the
terms of the SERP; and 


  

	 	(h)	 pay to Employee within 30 days after the date of termination of Employee’s employment an amount equal to the portion of Employee’s account
under the Thrift Plan for Employees of McDermott Incorporated and Participating Subsidiary and Affiliated Companies that was not vested as of the date of termination of Employee’s employment. 



Notwithstanding the foregoing provisions of Section I, payments and benefits shall be subject to reduction as set out in
Schedule B. 
  

	II.	 Obligations of the Company if Employee remains employed through the Effective Date of a Restructuring Transaction. 



In the event that Employee’s employment by the Company is not terminated as of the Effective Date of the
Restructuring Transaction under circumstances entitling Employee to benefits under Section I above, and if Employee has remained employed with the Company through the Effective Date of the Restructuring Transaction, then the Company or, if
applicable, the Successor shall (a) pay Employee on such Effective 
  

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Date a cash amount equal to one-third of 50% of the amount described in Section I(d) above and (b) cause Employee to be granted the number of whole shares of restricted stock under the
Company’s or Successor’s, as applicable, stock plan, as near equal in value to, but not greater than, two-thirds of 50% of the amount described in Section I(d) above, on terms and conditions set forth in the grant agreement approved in
accordance with such stock plan; provided, however, the restricted stock shall vest on the first anniversary of the Effective Date of the Restructuring Transaction if, and only if, Employee remains employed with the Company or the Successor through
such first anniversary. 
  

	III.	 Participation In Other Company Programs. 



Nothing in this Agreement shall prevent or limit Employee’s continuing or future participation in any plan, program,
policy or practice provided by the Company for which Employee may qualify, nor shall anything herein limit or otherwise affect such rights as Employee may have under any other contract or agreement with the Company, except as provided in Section X
of this Agreement. Amounts which are vested benefits or which Employee 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
Employee’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 Employee that any payment by the Company or a Successor under Section I of this Agreement shall be in lieu of any obligation on the part of the Company or such Successor 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 or such Successor in the event of termination of Employee’s employment as
provided in Section I of this Agreement with the Company or such Successor during the one-year period following the Effective Date of a Restructuring Transaction. 
  

	IV.	 Confidential and Proprietary Information. 



Employee 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. Employee shall not, during Employee’s 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 IV shall survive any termination of this Agreement. For purposes of this Section IV, 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 Employee. Employee acknowledges that the execution of this Agreement and the payments described in Section I of this Agreement constitute consideration for the limitations on
activities set forth in this Section IV, the adequacy of which is hereby expressly acknowledged by Employee. Employee understands and agrees that the Company shall suffer irreparable harm if Employee breaches Section IV of this Agreement, and that
monetary damages shall be inadequate to address any such breach. Accordingly, Employee 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. For purposes of this Section IV, the term “Company” shall include a
Successor. 
  

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	V.	 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 to the facsimile number 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 Employee:
	 	  

		 		 	  

		 		 	  

			
		 	 Facsimile:
	 	  



If to the Company or a Successor: 

McDermott International, Inc. 

Vice President, Human Resources 

777 N. Eldridge Parkway 

Houston, TX 77079 

Facsimile: 281-870-5095 

or to such other address as Employee, the Company or a Successor may hereafter specify in a notice furnished in writing in
accordance with this Section V. 
  

	VI.	 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 giving effect to any principles of conflict of laws thereof which would result in the application of the laws of any other jurisdiction. 

 

	VII.	 Successors and Assigns. 


  

	 	(a)	 This Agreement is personal to Employee and, without the prior written consent of the Company, shall not be assignable by Employee 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 Employee, and of the Company and any Successor and their respective
successors and assigns. 


  

	 	(c)	 The Company will require that any successor to all or substantially all of its business and/or assets (other than a Successor, as to which the last
sentence of this Section VII(c) shall apply) (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 such successor to its
business and/or assets. In the event that Employee becomes employed by a Successor in connection with a Restructuring Transaction, the Company shall require such Successor to expressly assume and adopt this Agreement and to honor the terms and
conditions of this Agreement applicable to such Successor, unless Employee terminates Employee’s employment within thirty-one days after the Effective Date of the Restructuring Transaction for a Good Reason event which occurs upon the
consummation of such Restructuring Transaction (in which case the Company shall remain obligated under this Agreement). 


  

	VIII.	 Employment by Subsidiaries. 



If Employee is not employed by McDermott International, Inc., but is only employed by a Subsidiary of McDermott
International, Inc., then, except for purposes of determining whether a Restructuring 
  

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Transaction has occurred, (a) the “Company” as defined herein shall be deemed to include such Subsidiary, and (b) termination of employment shall be determined with reference
to Employee’s employment by such Subsidiary, but, in each case, only if such Subsidiary is not a Successor. Further, the Company agrees that it will perform its obligations hereunder without regard to whether Employee is employed by the Company
or by a Subsidiary of the Company. 
  

	IX.	 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. 
  

	X.	 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; provided that: if Employee is entitled to payments and benefits under both Section I of this Agreement and the Change in Control Agreement between the Company and Employee,
dated as of October 1, 2008 (the “Change in Control Agreement”), Employee will receive payments and benefits only under Section I of this Agreement (and not under the Change in Control Agreement), except that Section I(f) of the
Change in Control Agreement will continue to apply, with the payments (if any) under such Section I(f) limited to those which would have been payable had Employee received the payments and benefits under the Change in Control Agreement (and not
under this Agreement) (it being the intention of the parties hereto that, in no event, shall substantially the same benefits become payable under both the Change in Control Agreement and Section I of this Agreement). This Agreement may be amended or
terminated (other than pursuant to Section XII of this Agreement) only by mutual agreement of the parties in writing. 
  

	XI.	 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 (or a Successor) 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)	 Employee’s or the Company’s (or a Successor’s) failure to insist upon strict compliance with any provision of this Agreement or the
failure to assert any right Employee or the Company (or a Successor) may have hereunder, including, without limitation, the right of Employee to terminate employment for Good Reason pursuant to paragraph (f) of Section XIII 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)	 Employee and the Company acknowledge that, except as may otherwise be provided under any other written agreement between Employee and the Company,
the employment of Employee by the Company is “at will.” 


  

	 	(e)	 For purposes of this Agreement, the date of termination of Employee’s employment shall be: (i) if Employee’s employment is terminated
by the Company (or a Successor) for Cause, the date on which the Company (or a Successor) delivers to Employee the resolution referred to in the last sentence of Section XIII, paragraph (c), or, with respect to a termination as described in this
Agreement under Section XIII, paragraph (c)(iii), the date on which the Company (or a Successor) notifies Employee of such termination, (ii) if Employee’s employment is terminated by the Company (or a Successor) for a reason other than
Cause (including on account of Disability), the date on which the Company (or a Successor) notifies Employee of such termination, or such later date as is reflected in such notification, (iii) if Employee’s employment is terminated by
Employee for Good Reason, the date on which Employee notifies the Company (or a Successor) of such termination (after having given the Company (or such Successor) notice and a 30-day cure period), or (iv) if Employee’s employment is
terminated by reason of death, the date of death of Employee. 


  

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	 	(f)	 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. 


  

	 	(g)	 In the event Employee’s employment is terminated (i) by the Company (or a Successor) for Cause or as a result of Employee’s
Disability, (ii) by Employee without Good Reason, or (iii) on account of Employee’s death, Employee shall not be entitled to the payments described in Section 1 of this Agreement. 



 

	XII.	 Term. 



This Agreement shall terminate on the earliest to occur of (i) the date one year after the Effective Date of a
Restructuring Transaction, or (ii) the date on which Employee’s employment with the Company (or a Successor) is terminated; provided, however, that if Employee’s employment with the Company (or a Successor) is terminated under any of
the circumstances described in Section I of this Agreement, Employee’s rights hereunder shall continue following the termination of Employee’s employment until all benefits to which Employee is entitled hereunder has been paid and the
Company’s (or a Successor’s) rights hereunder shall continue until all obligations owed to it hereunder have been satisfied. Notwithstanding the foregoing: (a) if no Restructuring Transaction shall have been completed with an
Effective Date on or before the second anniversary of the date of this Agreement, then this Agreement shall automatically terminate on such second anniversary; and (b) the provisions of this Section XII and Sections II, XIII and XIV shall
survive any termination of this Agreement. 
  

	XIII.	 Definitions. 



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

 

	 	(a)	 “Accrued Benefits” shall mean: 


  

	 	(i)	 Any portion of Employee’s Annual Base Salary earned through the date of termination of Employee’s employment and not yet paid;



  

	 	(ii)	 Reimbursement for any and all amounts advanced in connection with Employee’s employment for reasonable and necessary expenses incurred by
Employee through the date of termination of Employee’s employment in accordance with the Company’s (or a Successor’s) policies and procedures on reimbursement of expenses; 



 

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


  

	 	(iv)	 All other payments and benefits to which Employee may be entitled under the terms of any applicable compensation arrangement or benefit plan or
program of the Company (or a Successor) 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 (or such Successor) generally applicable to
the salaried employees of the Company (or such Successor). 


  

	 	(b)	 “Annual Base Salary” shall mean Employee’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 Employee to perform substantially Employee’s duties with the Company (occasioned by reason other than
physical or mental illness or disability of Employee) after a written demand for substantial performance is delivered to Employee 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 


  

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Officer believes that Employee has not substantially performed Employee’s duties, after which Employee shall have thirty days to defend or remedy such failure to substantially perform
Employee’s duties; 

  

	 	(ii)	 the willful engaging by Employee in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company; or



  

	 	(iii)	 the conviction of Employee with no further possibility of appeal or, or plea of guilty or nolo contendere by Employee to, any felony.



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

  

	 	(d)	 “Disability” shall mean circumstances that would qualify Employee for long-term disability benefits under the Company’s Long-Term
Disability Plan as in effect immediately prior to the Restructuring Transaction, whether or not such Plan remains in effect subsequent to the Restructuring Transaction. 



 

	 	(e)	 “Effective Date” with respect to a Restructuring Transaction for purposes of this Agreement shall be the effective date of date of the
consummation of the spinoff or split off (i.e., the date shares of the Subsidiary subject to the spinoff or split off are first distributed to the Company’s stockholders) or sale (i.e., the closing date for the sale) that results
in the completion of the Restructuring Transaction. 


  

	 	(f)	 “Good Reason” shall mean: 


  

	 	(i)	 any action by the Company which results in a material diminution in Employee’s position, authority, duties or responsibilities immediately
prior to the date of this Agreement; but, for the avoidance of doubt, if Employee has a position with either the Company or a Successor and, in either case, the employer is publicly traded, a material diminution in position, authority, duties or
responsibilities will not have occurred if Employee has a position, authority, duties and responsibilities substantially the same as those attendant to Employee’s position with the Company immediately prior to the date of this Agreement
(notwithstanding that the business operations of the Company or such Successor may be smaller or less complex). 


  

	 	(ii)	 Requiring Employee, without Employee’s consent, to be based at any office or location other than the office or location at which Employee was
employed immediately following the date of this Agreement; provided, however, that any such relocation requests shall not be grounds for resignation with Good Reason if such relocation is within a fifty mile radius of the location at which Employee
was employed immediately following the date of this Agreement or such relocation does not result in an increase in Employee’s actual commuting distance from his principal residence to Employee’s new office or location;



  

	 	(iii)	 a material reduction in Employee’s Annual Base Salary in effect immediately prior to the date of this Agreement or a material reduction in the
target multiplier used to calculate the annual bonus awarded to Employee below the target multiplier used to calculate the bonus paid to Employee under the EICP immediately prior to the date of this Agreement, provided, however that in either case a
material 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 material adverse change in Employee’s eligibility to participate in long-term incentive compensation plans as in effect immediately prior to
the date of this Agreement, unless Employee is eligible to participate in a comparable plan; or 


  

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	 	(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 Employee. 



In the event (A) any of the events described above occurs (an “Event”) or (B) the Company, in
connection with but prior to the Effective Date of a Restructuring Transaction, notifies Employee in writing that the terms and conditions of Employee’s employment will be changed in connection with the consummation of a Restructuring
Transaction in a manner that would constitute Good Reason (a “Company Notice”), Employee shall give the Company or Successor written notice (the “Employee Notice”) within 60 days following Employee’s knowledge of an Event or
receipt of the Company Notice, as applicable, that such change in employment terms or conditions would constitute Good Reason and Employee intends to terminate employment as a result. The Company or Successor shall have thirty days following receipt
of the Employee Notice in which to cure the Event or retract the Company Notice, or amend the Company Notice such that the proposed changes in employment terms or conditions do not constitute Good Reason. If the Company does not take such action
within that time, the Event, or the event described in the Company Notice when it would have occurred, as applicable, shall constitute Good Reason. If Employee does not provide the Employee Notice within 60 days as required above in this clause (f),
then the Event, or the change in employment terms and conditions described in the Company Notice, as applicable, shall not constitute Good Reason, and thereafter, for purposes of determining whether Employee has Good Reason, Employee’s terms
and conditions of employment after the occurrence of the Event or the implementation of the changes described in the Company Notice, as applicable, shall be substituted for those terms and conditions of Employee’s employment in effect
immediately prior to the date of this Agreement in each of clauses (i), (ii), (iii) and (iv) above. Notwithstanding the foregoing or any other provision of this Agreement, the Company and Employee agree that Employee will serve as chief
financial officer of The Babcock & Wilcock Company for one year after a Restructuring Transaction in which the Company disposes of The Babcock & Wilcox Company through a spinoff and will not have Good Reason by reason of such
change in duties and contemplated associated relocation of office or work location, but Employee may elect to terminate employment on the first anniversary of such one-year period (provided Employee provides at least 30 days prior written notice)
and such termination of employment shall be treated as for Good Reason entitling Employee to payments and benefits under Section I. 
  

	 	(g)	 “Subsidiaries” shall mean every corporation, 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. or, upon and following a Restructuring Transaction, by the Successor.



  

	 	(h)	 “Successor” shall mean an entity that has acquired a separate reporting segment of the Company (by reference to the Company’s audited
consolidated financial statements as of and for the year ended December 31, 2008) from the Company in a Restructuring Transaction or a Subsidiary that is sold or spun off to the stockholders of the Company in a Restructuring Transaction.



  

	XIV.	 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 (or a Successor, if applicable) and Employee shall each pay half of the administrative fees of the Association and the compensation of the arbitrator
and shall each be responsible for its own attorney’s fees and expenses relating to the conduct of the arbitration. 
  

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

			
	 MCDERMOTT INTERNATIONAL, INC.

		
	 By:
	 	
 




			
	 Printed Name:
	 	
 




			
	 Title:
	 	  

	 Date:
	 	
 





			
		
	 EMPLOYEE:
	 	
 




			
	 Date:
	 	  




 

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 SCHEDULE A 

 

	(a)	 2008 Performance Shares Agreement dated March 3, 2008, between Employee and the Company, the amount of shares calculated as if the
Restructuring Transaction were a “change in control” as defined in such grant agreement. 


  

	(b)	 2008 Restricted Stock Grant Agreement dated March 3, 2008, between Employee and the Company. 



 

	(c)	 2009 Performance Share Grant Agreement dated March 5, 2009, between the Company and Employee, applicable only as to the Initial Grant of
shares. 


  

	(d)	 2009 Deferred Stock Unit Grant Agreement dated March 5, 2009, between the Company and Employee. 



 

	(e)	 2009 Stock Option Grant Agreement dated March 5, 2009, between the Company and Employee. 



 

	(f)	 Any additional long-term incentive awards granted to Employee after the date of this Agreement; provided, however, only those awards are included in
this clause (f) if Employee has been employed with the Company or a Successor for at least one year following the grant date of that award. 



In the event the Committee (as defined in the Company’s applicable equity compensation plans) adjusts any of the foregoing or other
unvested equity-based awards in connection with a Restructuring Transaction that is a spin-off of The Babcock & Wilcox Company or J. Ray McDermott, S.A., the Committee shall make such adjustments thereto pursuant to the terms of the
applicable plans; provided that any resulting equity-based awards shall be equally divided, in the reasonable discretion of the Committee, between awards with respect to the equity securities of each of the Company and Successor. 

Effective as of the date of this Agreement, any of the foregoing awards that are subject to Section 409A of the Code are hereby
modified to provide that no “Change in Control” (as defined in the applicable award) shall occur unless it is a change in control within the meaning of Section 409A of the Code. 

 

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 SCHEDULE B 

Excise Tax Modified Cutback Provisions 

Anything in this Agreement to the contrary notwithstanding, in the event the Firm (as defined below) shall determine that
Employee shall become entitled to payments and/or benefits provided by this Agreement which would be subject to the excise tax imposed by Section 4999 of the Code (the “Payments”), the Firm shall determine whether to reduce any
of the Payments to the Reduced Amount (as defined below). The Payments shall be reduced to the Reduced Amount only if the Firm determines that Employee would have a greater Net After-Tax Receipt (as defined below) of aggregate Payments if the
Employee’s Payments were reduced to the Reduced Amount. If such a determination is not made by the Firm, Employee shall receive all Payments to which Employee is entitled under this Agreement. 

If the Firm determines that aggregate Payments should be reduced to the Reduced Amount, the Company shall promptly give
Employee notice to that effect and a copy of the detailed calculation thereof. All determinations made by the Firm under this Schedule B shall be binding upon the Company and Employee absent manifest error and shall be made as soon as reasonably
practicable and in no event later than 15 business days of the receipt of notice from the Company that there has been a Payment, or such earlier time as is requested by the Company. For purposes of reducing the Payments to the Reduced Amount, only
amounts payable under this Agreement (and no other Payments) shall be reduced. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing, in order, cash payments otherwise due under clauses (c), (d), (e) and
(h) of Section I of this Agreement, and then by reducing equity-based compensation otherwise due under clause (f) of Section I of this Agreement in chronological order with the most recent equity-based compensation awards reduced first.

 As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial
determination by the Firm hereunder, it is possible that amounts will have been paid or distributed by the Company to or for the benefit of Employee pursuant to this Agreement which should not have been so paid or distributed
(“Overpayment”) or that additional amounts which will have not been paid or distributed by the Company to or for the benefit of Employee pursuant to this Agreement could have been so paid or distributed
(“Underpayment”), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the Firm, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or
Employee which the Firm believes has a high probability of success determines that an Overpayment has been made, Employee shall pay any such Overpayment to the Company together with interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code; provided, however, that no amount shall be payable by Employee to the Company if and to the extent such payment would not either reduce the amount on which Employee is subject to tax under Section 1
and Section 4999 of the Code or generate a refund of such taxes. In the event that the Firm, based upon controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be paid promptly
(and in no event later than 60 days following the date on which the Underpayment is determined) by the Company to or for the benefit of Employee together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the
Code. 
 For purposes hereof, the following terms have the meanings set forth below: 

“Firm” shall mean an internationally recognized accounting or employee benefits consulting firm selected
by the Company with the input of Employee (but without Employee’s consent) and which shall not, during the one year preceding the date of its selection, have acted in any way on behalf of the Company or its affiliated companies. 

“Net After-Tax Receipt” shall mean the present value (as determined in accordance with Sections
280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a Payment net of all taxes imposed on Employee with respect thereto under Sections 1 and 4999 of the Code and under applicable state and local laws, determined by applying

  

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the highest marginal rate under Section 1 of the Code and under state and local laws which applied to the Employee’s taxable income for the immediately preceding taxable year, or such
other rate(s) as Employee certifies, in Employee’s sole discretion, as likely to apply to him in the relevant tax year(s). 

“Reduced Amount” shall mean the greatest amount of Payments that can be paid that would not result in
the imposition of the excise tax under Section 4999 of the Code if the Firm determines to reduce Payments pursuant to paragraph (a) of this Attachment A. 

 

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