Document:

Exhibit 10.1

                          McDERMOTT INTERNATIONAL, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                                            Amended and Restated

                                                      Effective December 1, 1999

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                                TABLE OF CONTENTS

SECTION 1  PARTICIPATION AND OTHER EMPLOYERS...................................1
   1.1   DEFINITIONS...........................................................1
   1.2   PARTICIPATION........................................................10
   1.3   OTHER EMPLOYERS......................................................11

SECTION 2  AMOUNT AND PAYMENT OF RETIREMENT INCOME............................12
   2.1   RETIREMENT - AMOUNT OF RETIREMENT INCOME.............................12
   2.2   EARLY RETIREMENT - AMOUNT OF RETIREMENT INCOME.......................14
   2.3   PAYMENT OF RETIREMENT INCOME.........................................15
   2.4   BENEFITS OTHER THAN ON RETIREMENT....................................15
   2.5   INCREASE IN BENEFITS.................................................20
   2.6   LUMP SUM ELECTION....................................................21

SECTION 3  SPECIAL PROVISIONS REGARDING PAYMENT OF BENEFITS...................23
   3.1   BENEFITS APPLICABLE TO PARTICIPANT WHO HAS BEEN OR IS
          EMPLOYED BY TWO OR MORE EMPLOYERS...................................23
   3.2   PARTICIPANTS TO FURNISH REQUIRED INFORMATION.........................23
   3.3   BENEFITS NOT ASSIGNABLE..............................................25
   3.4   CONDITIONS OF EMPLOYMENT NOT AFFECTED BY PLAN........................26
   3.5   ABANDONMENT OF BENEFITS..............................................26
   3.6   WRITTEN COMMUNICATIONS REQUIRED......................................27
   3.7   CONDUCT INJURIOUS TO THE COMPANY.....................................27

SECTION 4  ADMINISTRATION.....................................................28
   4.1   ADMINISTRATION BY COMMITTEE..........................................28
   4.2   RULES AND REGULATIONS OF COMMITTEE...................................29
   4.3   POWERS OF COMMITTEE..................................................29
   4.4   LIABILITY OF COMMITTEE...............................................30
   4.5   INDEMNIFICATION......................................................30
   4.6   APPLICABLE LAW.......................................................31

SECTION 5  GENERAL PROVISIONS.................................................31
   5.1   AMENDMENT AND DISCONTINUANCE.........................................31
   5.2   SOURCE OF BENEFITS...................................................32
   5.3   BINDING ON COMPANY, EMPLOYEES AND THEIR SUCCESSORS...................32

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                                   SECTION 1

                        PARTICIPATION AND OTHER EMPLOYERS

1.1  DEFINITIONS

     The following  words and phrases shall have the meaning stated below unless
     a different meaning is plainly required by the context:

     (1)  "Actuarial  equivalent" or "equivalent actuarial value" means equality
          in  value of the  aggregate  amounts  expected  to be  received  under
          similar  or  different   forms  of  payment,   based  upon   actuarial
          assumptions  as provided in this Plan or as adopted  from time to time
          by the Committee.

     (2)  "Affiliate"  or  "Affiliated  Company"  means a company which is not a
          Subsidiary  but in which  20% or more of the  voting  stock is  owned,
          directly or indirectly, by the Company.

     (3)  "Compensation"  means  the base  salary  earned  by a  Participant  in
          respect of services  with one or more  Employers  (regardless  of when
          such salary is actually paid), and awards  determined by the committee
          designated under the Company's Variable Supplemental Compensation Plan
          are allocable to such Participant  (regardless of when such awards are
          actually paid), but shall exclude all the other bonuses, any severance
          pay,  retirement  or other  income  under  this or any other  pension,
          profit sharing,  thrift saving or similar plans, stock awards of stock
          options,  other  allowances and other  additional  remuneration in any
          form.

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     (4)  "Committee"  means  a  Committee  consisting  of the  Chief  Financial
          Officer, the Chief Administrative  Officer and the Corporate Secretary
          of the  Company  or such  other  committee  appointed  by the Board of
          Directors of the Company,  which Committee  shall  administer the Plan
          pursuant to the provisions of Section 4 hereof.  Said Committee  shall
          serve  under  the  direction  and at the  pleasure  of  the  Board  of
          Directors of the Company and shall be designated the "SERP Committee."

     (5)  "Company" means McDermott  International,  Inc., a Panama Corporation,
          and its successor or successors.

     (6)  "Disability"  means a  mental  or  physical  condition  which,  in the
          opinion Committee,  is likely to be continuous and permanent such that
          the  Participant  is wholly  prevented from engaging in any occupation
          for wage or profit. A Participant will not be considered  disabled for
          purposes  of  the  Plan,  if in the  opinion  of  the  Committee,  the
          disability is a, result of:

          (a)  excessive  and  habitual  use  by the  participant  of  drugs  or
               narcotic, except on the prescription of a duly licensed physician
               or surgeon;

          (b)  injury or disease  sustained by the  participant  while willfully
               and illegally participating in fights, riots, civil insurrections
               or while committing a felony;

          (c)  injury or disease  sustained by the participant  while serving in
               any armed forces,

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          (d)  injury  or  disease   sustained  by  the  participant  which  was
               diagnosed or discovered subsequent to the date his employment was
               terminated; or

          (e)  injury or disease  sustained  by the  participant  (other  than a
               loaned  employee)  for anyone other than the Employer and arising
               out of such employment.

          The  Committee  before  approving  the  disability  of  a  Participant
          hereunder  shall  require  satisfactory  proof,  which may be evidence
          satisfactory  to the  Committee  that the  Participant  is entitled to
          disability  insurance benefits under the Social Security Act or may be
          in the form of a certificate from a duly licensed  physician  selected
          by the Committee, that the Participant has become disabled as provided
          herein. A Participant will not be considered  disabled for purposes of
          the Plan until the date the Employee considers the Participant to have
          been dropped from its employment rolls.

     (7)  "Employee"  means any officer  (other  than a person  acting only as a
     director) of an Employer.

     (8) "Employer" means, collectively or distributively as the context Company
     and any  Subsidiary  or Affiliated  Company  which has in  accordance  with
     Section 1.3 hereof.

     (9) "Final Adverse Monthly  Compensation"  means the Participant's  average
     monthly rate of three (3) Fiscal Years in the last ten (10) Fiscal Years of
     the  Participant's  employment  by an  Employer  prior to  retirement  such

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     average.  Such  three  (3)  Fiscal  Years  need  not  be  consecutive.  The
     Participant's  average monthly rate of  Compensation  will be determined by
     dividing  the total  Compensation  attributable  to such  three (3)  Fiscal
     Years, as determined in accordance with rules established by the Committee,
     by the number of full or  partial  months of the  Participant's  employment
     during  such  three  (3)  Fiscal  Years.  Compensation  attributable  to  a
     particular  Fiscal Year shall not include  base salary  earned (or Variable
     Supplemental  Compensation  awards determined to be paid) for periods prior
     to or following  such Fiscal Year,  regardless  of whether  payment  occurs
     during such Fiscal Year.

     (10) "Monthly Retirement Plan Offset" means:

          (a)  If payment(s)  under any other  retirement or pension  plan(s) or
               similar  fund(s) or  program(s)  (including  The  Retirement  and
               Restoration of Retirement Income Plans of McDermott  Incorporated
               and The Babcock & Wilcox Company,  and similar plans)  maintained
               by the  Employers,  any  Subsidiary or Affiliated  Company or any
               other previous employer is made monthly for life only, or monthly
               under  a  joint  and  survivor  form  of  payment  or in  monthly
               installment's  over a period  equal to or  greater  than ten (10)
               years,  to the  Participant.  or to his  spouse  or  other  Joint
               pensioner or  beneficiary,  the "Monthly  Retirement Plan Offset"
               shall be equal to such payments when and as they are made; or

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          (b)  If payment(s) under said other retirement or pension plan(s),  or
               other similar fund(s) or program(s),  is made in a lump sum or in
               any method of payment  other than monthly  payment for life only,
               monthly joint and survivor payments or monthly  installments over
               a  period  equal  to or  greater  than  ten  (10)  years,  to the
               Participant  or  to  his  spouse  or  other  joint  pensioner  or
               beneficiary,  the "Monthly  Retirement  Plan Offset"  shall be an
               actuarial equivalent amount, as determined by the Committee based
               upon the  interest  and  mortality  assumptions  used  under  the
               plan(s)  maintained by the Employers or any  Subsidiary or as may
               be determined  from time to time by the  Committee  under Section
               1.1(1),  hereof  with  respect  to such  plan(s)  or  fund(s)  or
               program(s) maintained by any other previous employer.

          However,  if any such Participant shall have contributed to the source
          of  payment(s)  or  fund(s)  out of which said  retirement  or pension
          payment(s) shall be paid or is payable,  then the "Monthly  Retirement
          Plan Offset" shall not include any portion of said amount attributable
          to the Participant's own contributions.  The term "Monthly  Retirement
          Plan  Offset",  with  respect to the Profit  Sharing  and Stock  Bonus
          Retirement  Plan of  McDermott  Incorporated  and  Hudson  Engineering
          Corporation's  Profit Sharing Trust Plan (which plans were  terminated
          on August 31,  1988) shall mean the Monthly  Profit  Sharing and Stock
          Bonus Retirement  Offset  determined  under Section  1.1(A)(29) of the
          Retirement Plan for Employees of McDermott Incorporated and Subsidiary

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          and Affiliated Companies.  If any Participant shall become entitled to
          or  shall be paid any  pension  or  retirement  income  payment(s)  or
          payment(s)  of  similar  kind,  under any plan in respect of which the
          Employer,  any  Subsidiary or Affiliate of any previous  employer have
          directly or indirectly  contributed by reason of any law of the United
          States or of any state  thereof or of any  foreign  country,  then the
          total  amount paid or payable to him in respect of any such  allowance
          or  payments   shall  be  considered  a  retirement  or  pension  plan
          maintained by the Employer,  any  Subsidiary or Affiliate or any other
          previous  employer for  purposes of this Plan.  United  States  Social
          Security  payment(s),  Workmen's  Compensation  and similar  benefits,
          shall, however, not be included in "Monthly Retirement Plan Offset".

     (11) "Number of Years of Credited Service" means:

          (a)  For those  Participants  covered  by  Section  2.1(A),  the total
               period of an Employee's Service computed in completed years until
               he attains age 60, or if earlier,  his  retirement  under Section
               2.2.  hereof,   provided  that  Service  prior  to  an  Employees
               attaining  age 35 shall not be counted for  purposes of the Plan.
               If an Employee has a period of Service upon his  attaining age 60
               of less than a completed year, there shall be added to his Number
               of Years of Credited  Service a fraction,  the numerator of which
               shall be the  number of his months of  Service  for said  period,
               computed in completed  months and the  denominator of which shall
               be 12.

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          (b)  For those  Participants  covered  by  Section  2.l(B),  the total
               period of an Employee's Service computed in completed years until
               he attains age 65, or if earlier.  his  retirement  under Section
               2.2.  hereof,   provided  that  Service  prior  to  an  Employees
               attaining  age 35 shall not be counted for  purposes of the Plan.
               If an Employee has a period of Service upon his  attaining age 65
               of less than a completed year, there shall be added to his Number
               of Years of Credited  Service a fraction,  the numerator of which
               shall be the  number of his months of  Service  for said  period,
               computed in completed  months and the  denominator of which shall
               be 12.

          (c)  For those  Participants  covered  by  Section  2.1(C),  the total
               period of an Employee's Service computed in completed years until
               he attains age 65, or if earlier,  his  retirement  under Section
               2.2.  hereof,   provided  that  Service  prior  to  an  Employees
               attaining  age 45 shall not be counted for  purposes of the Plan.
               If an Employee has a period of Service upon his  attaining age 65
               of less than a completed year, there shall be added to his Number
               of Years of Credited  Service a fraction,  the numerator of which
               shall be the  number of his months of  Service  for said  period,
               computed in completed  months and the  denominator of which shall
               be 12.

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     (12) "Participant"  means any Employee of an Employer who under Section 1.2
     has been selected to participate in the Plan.

     (13) "Plan" means the McDermott International,  Inc. Supplemental Executive
     Retirement  Plan as set forth in this  document and as it may  hereafter be
     amended from time to time.

     (14) "Retirement Date" means:

          (a)  For those  Participants  covered by Section 2.1(A), the first day
               of the  month  coincident  with  or  next  following  the  date a
               Participant attains age 60.

          (b)  For those  Participants  covered by Section 2.1(B), the first day
               of the  month  coincident  with  or  next  following  the  date a
               Participant attains age 65.

          (c)  For those  Participants  covered by Section 2.1(C), the first day
               of the  month  coincident  with  or  next  following  the  date a
               Participant attains age 65.

     (15)  "Subsidiary"  means a company  in which  more than 50% of the  voting
     stock is owned, directly or indirectly, by the Company.

     (16) "Service"  means that period of employment  with an Employer,  or with
     any.  Subsidiary  or  Affiliate,   including  any  predecessor,   from  the
     Employee's date of hire to the date of termination of his service. Transfer
     of  employment  among the Employers  and other  Subsidiaries  or Affiliates
     shall not be deemed an interruption of employment for purposes of the Plan,

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     and no period of  Service  rendered  for a given  Employer  shall  count as
     Service for more than one  Employer.  Employment  with any person,  firm or
     corporation  to which the  Employee  was  transferred  and  loaned for such
     employment by an Employer will be included in the Employee's Service in the
     same manner as if such  employment had been with an Employer.  Any Employee
     who is absent from active  employment due to accident or illness and during
     such  absence  remains on the payroll  shall be deemed to be in  employment
     during such absence.  Any voluntary  termination and any other absence from
     active  employment  not  deemed  a leave  of  absence  shall  terminate  an
     Employee's  Service as of the date the Employer  considers  the Employee to
     have been dropped from its employment  rolls. A period of authorized  leave
     of absence  granted by the  Employer or absence for the purpose of military
     service  pursuant to the requirement of law or by enlistment for not longer
     than the minimum period required by law, shall be counted as service if the
     Employee  resumes his employment  with an Employer at the end of such leave
     of absence or within the period  prescribed  by law for the exercise of his
     reemployment rights.

     (17) The masculine pronoun whenever used includes the feminine pronoun, and
     nouns stated in the singular shall include the plural whenever appropriate.

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     (18)  "Effective  Change in Control"  means an event or series of events by
     which (A) any "person" or "group" (as such terms are used in Section  13(d)
     and  14(d)  of the  Securities  Exchange  Act of  1934,  as  amended,  (the
     "Exchange  Act")) is or becomes the "beneficial  owner" (as defined in Rule
     13d-3 under the  Exchange  Act,  except that a person shall be deemed to be
     the "beneficial  owner" of all shares that any such person has the right to
     acquire  pursuant  to any  agreement  or  arrangement  or upon  exercise of
     conversion rights,  warrants,  options or otherwise,  without regard to the
     sixty day period  referred to in such Rule),  directly  or  indirectly,  of
     securities  representing  50% or more of the  combined  voting power of the
     Company's then outstanding voting securities,  excluding for these purposes
     the Company's  Series A  Participating  Preferred  Stock; or (B) during any
     period of two  consecutive  years (not  including  any period  prior to the
     effective  date of this  provision  of the  Plan),  individuals  who at the
     beginning of such period constituted the Board and any new directors, whose
     election  by  the  Board  or  nomination  for  election  by  the  Company's
     stockholders  was  approved by a vote of at least  two-thirds  (2/3) of the
     Company's  directors  then still in office who  either  were the  Company's
     directors 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.

     (19) "Fiscal Year" means the fiscal year of the Company.

1.2  PARTICIPATION

     Each  Employee  shall  become a  Participant  as of the date the  Committee
     selects the Employee for  participation  in the Plan.  Subject to obtaining
     the  consent of the  Committee,  any  participating  Employer  may elect by

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     proper  action  of its  board  of  directors,  to  designate  a  person  or
     committee,  other  than  the  Committee,  which  committee  shall  have the
     exclusive  authority to select Employees of such Employer for participation
     in the  Plan,  but  whose  authority  shall  consist  solely  of  selecting
     Employees of such Employer for  participation in the Plan. Any Employee who
     continues in the  employment of the Employers  beyond his  Retirement  Date
     shall no longer  qualify as a  Participant  under this Plan and,  except as
     otherwise  provided  in  Section  2.4(D),  he and his  spouse  shall not be
     entitled to any benefits whatsoever under this Plan. Also, if a Participant
     remains  in the  employment  of  the  Employers  but  has a  change  in his
     employment  status so that he no longer qualifies as an Employee as defined
     herein,  such person shall no longer  qualify as a  Participant  under this
     Plan and, except as otherwise provided in Section 2.4(D), he and his spouse
     shall not be entitled to any benefits  whatsoever under this Plan unless he
     has a subsequent change in his employment status so that he qualifies as an
     Employee   hereunder  and  the   applicable   committee   selects  him  for
     participation in the Plan.

1.3  OTHER EMPLOYERS

     Any  Subsidiary  or Affiliate  may adopt this Plan by proper  action of its
     board of directors,  provided,  however, that the administrative powers and
     control  of the  Company,  as  provided  in the Plan  shall  not be  deemed
     diminished  under  the Plan by  reason  of the  participation  of any other
     Employers  in the Plan.  Except as  otherwise  provided in Section 1.2 with
     respect to the  selection  Employees  for  participation  in the Plan,  the
     administrative  powers and control  granted in Section 4 of the Plan to the

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     Company with respect to the administration of the Plan by the Committee and
     other  matters  shall apply only with respect to the Company and not to any
     other  Employer.  Each  Employer  shall  have  the  obligation  to pay  the
     retirement  benefits  under  this Plan for its own  Employees  and no other
     Employer  shall  have such  obligation,  and any  failure  by a  particular
     Employer to live up to its obligation  under the Plan shall have non effect
     on any other Employer.

                                   SECTION 2

                     AMOUNT AND PAYMENT OF RETIREMENT INCOME

2.1  RETIREMENT - AMOUNT OF RETIREMENT INCOME

     (A)  Except as to those  Participants  described  in Section  2.1(B),  each
          Participant  who joined the Plan prior to April 1, 1989,  other than a
          Participant  to whom the  provisions of Section 2.2 or 2.4 apply,  who
          retires on his Retirement  Date shall be entitled to receive a monthly
          retirement benefit equal to:

          (1)  2% of his Final Average  Monthly  Compensation  multiplied by his
               Number of Years of Credited Service after attaining age 35; plus

          (2)  2% of his Final Average  Monthly  Compensation  multiplied by his
               Number of Years of Credited Service after attaining age 55; less

          (3)  the amount, if any, of the Participant's  Monthly Retirement Plan
               Offset;

          provided,  however,  that in any event, the monthly  retirement income
          payable to a Participant  (prior to giving effect to the Participant's
          Monthly  Retirement  Plan  Offset)  shall not  exceed 60% of his Final
          Average Monthly Compensation.

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     (B)  Each  Participant  who  joined the Plan prior to April 1, 1989 and was
          actively  employed by any Employer on March 31, 1989,  that is offered
          in writing,  in the sole  discretion  of the Committee or the Board of
          Directors, the opportunity to delay his Retirement Date under the Plan
          until  the age of 65 (or age 67 in the  case of R.E.  Howson)  and who
          then accepts and consents to such offer in writing,  shall be entitled
          to receive a monthly retirement benefit equal to:

          (1)  2% of his Final Average  Monthly  Compensation  multiplied by his
               Number of Years of Credited Service after attaining age 35; plus

          (2)  2% of his Final Average  Monthly  Compensation  multiplied by his
               Number of Years of Credited Service after attaining age 55; less

          (3)  The amount, if any, of the Participant's  Monthly Retirement Plan
               Offset;  provided,  however,  that  in  any  event,  the  monthly
               retirement  income  payable  to a  Participant  (prior  to giving
               effect to the Participant's Monthly Retirement Plan Offset) shall
               not  exceed  65%  of  his  Final  Average  Monthly  Compensation.
               Notwithstanding  the  foregoing,  the monthly  retirement  income
               payable to R.E. Howson  hereunder  (prior to giving effect to his
               Monthly Retirement Plan Offset) shall not exceed 73% of his Final
               Average Monthly Compensation.

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     (C)  Each  Participant who joins the Plan on or after April 1, 1989,  other
          than a Participant to whom the provisions of Section 2.2 or 2.4 apply,
          who  retires on his  Retirement  Date shall be  entitled  to receive a
          monthly retirement benefit equal to:

          (1)  3% of his Final Average  Monthly  Compensation  multiplied by his
               Number of Years of Credited Service after attaining age 45; less

          (2)  the amount, if any, of the participant's  Monthly Retirement Plan
               Offset;  provided,  however,  that  in  any  event,  the  monthly
               retirement  income  payable  to a  Participant  (prior  to giving
               effect to the Participant's Monthly Retirement Plan Offset) shall
               not exceed 60% of his Final Average Monthly Compensation.

2.2  EARLY RETIREMENT - AMOUNT OF RETIREMENT INCOME

     A Participant  who retires prior to his Retirement Date with the consent of
     the  Employer  (which  consent  may  be  withheld  in the  Employer's  sole
     discretion)  shall be  entitled to receive a monthly  retirement  income as
     determined  in  accordance  with the  applicable  provision  of Section 2.1
     hereof based upon the Participant's  Number of Years of Credited Service as
     determined  on  his  early   retirement  date  and  Final  Average  Monthly
     Compensation  as  determined  on  his  early  retirement  date,  or as to a
     Participant  covered  by  Section  2.1(B)  on the date he  attains  age 60,
     whichever is greater.

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2.3  PAYMENT OF RETIREMENT INCOME

     The  monthly  retirement  income  under  Section 2.1 and 2.2 hereof will be
     payable on the first day of each month.  The first  payment will be made on
     the Participant's Retirement Date, or upon his retirement under Section 2.2
     hereof,  whichever is earlier, and the last payment will be the payment due
     next preceding the retired  Participant's death,  provided,  however,  that
     following  a  retired   Participant's   death,  one  half  of  the  retired
     Participant's  monthly retirement income shall be paid to his spouse if she
     shall have been married to the  Participant  on the date of his  retirement
     under Section 2.1 or Section 2.2,  whichever is applicable,  and shall have
     survived him, for her lifetime.

2.4  BENEFITS OTHER THAN ON RETIREMENT

     (A)  Benefit Payable in the Event of Death on or Prior to Retirement  Date:
          If the service of a  Participant  is terminated by reason of his death
          on or prior to his  Retirement  Date,  his  surviving  spouse shall be
          entitled to receive for her remaining  lifetime a monthly income equal
          to the monthly  retirement  income to which the Participant would have
          been entitled  under  Section 2.1 if he had retired on his  Retirement
          Date  and if his  Compensation  for the one year  period  prior to his
          death had continued  without change to his Retirement Date;  provided,
          however,  that on the  deceased  Participant's  Retirement  Date,  the
          amount of monthly  income  payable to his  surviving  spouse  shall be
          reduced to one-half of said monthly income.

     (B)  Benefits Payable in the Event of Disability:  In the event an Employee
          becomes disabled while a Participant in the Plan, he shall be entitled
          to receive a monthly  retirement income equal to the amount of monthly

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          retirement  income  to  which  he  would  have  been  entitled  on his
          Retirement Date, computed as for retirement in accordance with Section
          2.1  hereof,  as if his  employment  had not been  terminated  but had
          continued  uninterrupted from the date of disability to his Retirement
          Date and as if his  Compensation  for the one year period prior to his
          disability had continued  without  change to his Retirement  Date. The
          monthly  retirement  income under this Section  2.4(B) will be payable
          commencing  on the first  day of each  month  coincident  with or next
          following said  Participant's  disability as determined  under Section
          1.1(5) hereof. The last payment will be as follows:

          (1)  if the  Participant  recovers  from his  disability  prior to his
               Retirement  Date,  the last payment shall be the payment due next
               preceding the date of such recovery; or

          (2)  if the  Participant  attains  his  Retirement  Date  while  still
               disabled, the last payment will be the payment next preceding the
               Participant's  death,   provided,   however,   that  following  a
               Participant's  death,  one  half  of  the  Participant's  monthly
               retirement  income  shall be paid to his spouse if she shall have
               been married to the  Participant on his Retirement Date and shall
               have survived him, for her lifetime.

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<PAGE>

     (C)  Benefit Payable in the Event of Death of Disabled:

          Participant  prior to Retirement Date: If a disabled  Participant dies
          prior to his Retirement  Date, his surviving  spouse shall be entitled
          to receive for her  remaining  lifetime a monthly  income equal to the
          monthly  retirement  income to which the  Participant  would have been
          entitled  under Section 2.1 if he had retired on his  Retirement  Date
          and  if  his  Compensation  for  the  one  year  period  prior  to his
          disability  had  continued  without  change  to his  Retirement  Date;
          provided, however, that on the deceased Participant's Retirement Date,
          the amount of monthly income payable to his surviving  spouse shall be
          reduced to one-half of said monthly income.

     (D)  (1)  Benefits  on  Termination  of  Service:   In  the  event  that  a
          Participant  who has  attained  age 60 on or before  December 31, 1993
          terminates  employment on or after December 31, 1993 for reasons other
          than his death disability or retirement  under Section 2.2 hereof.  he
          shall be entitled to receive a monthly retirement income as determined
          in  accordance  with the  applicable  provision of Section 2.1 hereof,
          based upon the  Participant's  Number of Years of Credited Service and
          Final Average Monthly Compensation as determined on December 31, 1993.
          The monthly  retirement  payment under this  paragraph will be payable
          commencing on the  Participant's  Retirement Date as determined  under
          Section 1.1(14)  hereof,  and the last payment will be the payment due
          next preceding the terminated  Participant's death, provided,  however
          that  following  a  terminated  Participant's  death,  one-half of the
          retired  Participant's  monthly retirement income shall be paid to his

                                       17
<PAGE>

          spouse if she shall have been married to the  Participant  on the date
          his monthly  retirement  payments  commenced,  and shall have survived
          him, for her lifetime.  If a Participant  should die after termination
          of employment and before monthly  retirement income payments commence,
          no benefits whatsoever shall be payable under this Plan.

          (2)  Except as to those Participants described in paragraph (1) above,
               in the event that a  Participant  terminates  employment  for any
               reason  other  than his death,  disability  or  retirement  under
               Section 2.2 hereof, he, and his spouse,  shall not be entitled to
               any benefits whatsoever under this Plan.

          (3)  Notwithstanding any other provision of this Plan to the contrary,
               in the event a  Participant's  employment is  terminated  for any
               reason  whatsoever  after  the  date of an  Effective  Change  in
               Control but prior to his Retirement  Date,  such  Participant (or
               his surviving  spouse, if any) shall be vested in and entitled to
               receive the greater of (i) the benefits to which such Participant
               or surviving spouse may be entitled to under any other provisions
               of this Plan, or (ii) the Deferred Vested Benefit provided below.
               The Deferred  Vested  Benefit with respect to such a  Participant
               shall be a non forfeitable  benefit determined in accordance with
               Section 2.1 hereof based on such Participant's Number of Years of
               Credited   Service  and  Final   Average   Monthly   Compensation
               determined of the date of the Effective Change in Control;

                                       18
<PAGE>

               provided,  however,  that  the  amount  of such  Deferred  Vested
               Benefit  payable to a Participant who is employed by any Employer
               other  than  J.  Ray  McDermott   S.A.  and  its  Subsidiary  and
               Affiliated Companies (prior to giving effect to the Participant's
               Monthly Retirement Plan Offset) shall not be less than 21% of the
               Participant's Final Average Monthly Compensation determined as of
               the date of his termination of employment.  The benefits  payable
               to a Participant under this subparagraph (3) shall be paid in the
               form of a lump sum distribution equal to the present value of the
               monthly income amounts that would otherwise be received under the
               Plan,  commencing as of the Participant's  date of termination of
               employment.

               The  amount  of  such  lump  sum  distribution  to be paid to any
               Participant shall be calculated using the following assumptions:

               (a)  The mortality  table based on the prevailing  commissioners'
                    standard  table  (described in Section  807(d)(5)(A)  of the
                    Code) used to determine reserves for group annuity contracts
                    issued on the date as of which  present  value is determined
                    (without  regard  to  any  other   subparagraph  of  Section
                    807(d)(5)   of  the  Code)   that  is   prescribed   by  the
                    Commissioner of Internal Revenue in revenue rulings, notices
                    or  other  guidance   published  in  the  Internal   Revenue
                    Bulletin; and

                                       19
<PAGE>

               (b)  The annual rate of interest on 30-year  Treasury  securities
                    as  specified  by the  Commissioner  of Internal  Revenue in
                    revenue rulings,  notices or other guidance published in the
                    Internal   Revenue   Bulletin   for  the   month  of  August
                    immediately  preceding  the  first  day of the Plan  Year in
                    which  the   Participant's   Retirement  Date  occurs.   The
                    applicable interest rate shall be determined annually.

               Payment  hereunder  shall be made within  thirty (30) days of the
               date  of  the  Participant's  termination  of  employment.  If  a
               Participant should die after terminating employment with a vested
               right   hereunder  and  prior  to  the  payment  of  a  lump  sum
               distribution, such distribution shall be payable to his surviving
               spouse,  if any,  at the  time it  would  have  been  paid to the
               Participant,  if such  spouse  shall  have  been  married  to the
               Participant  on  the  date  he  terminated  employment  with  the
               Employer.

2.5  INCREASE IN BENEFITS

     In the event a Participant,  or his surviving spouse, is receiving benefits
     under  Sections  2.1, 2.2 or 2.4 (A) through (C) hereof and the  Retirement
     Plan for Employees of McDermott  Incorporated and Subsidiary and Affiliated
     Companies  provides for an increase in pension payments after retirement as
     a result  of cost of  living  or  similar  adjustments,  then the  benefits
     payable  under  Sections  2.1,  2.2 or 2.4 (A) through (C) hereof  shall be
     similarly  increased  based  upon  the  same  cost  of  living  or  similar
     adjustments as set forth in such retirement plan.

                                       20
<PAGE>

2.6  LUMP SUM ELECTION

     Notwithstanding  anything to the  contrary  which may be  contained  in the
     Plan, a Participant  retiring under Section 2.1 or 2.2 after  attaining the
     age of 60 or terminating  employment  with a vested  interest under Section
     2.4(D)(1) shall have the right, with the consent of the Committee, to elect
     a lump sum  distribution  equal to the present value of the monthly  income
     amounts that would  otherwise be received  under the Plan. If a Participant
     retires at age 65, such  Participant  must have  requested,  in writing the
     consent of the  Committee to make such election at least twelve (12) months
     but not more than  eighteen  (18) months prior to such  Participant's  65th
     birthday.  If a  Participant  should die after  reaching  age 60 and before
     retiring, the spouse shall also have the right, with the written consent of
     the Committee, to elect a lump sum distribution.

     The amount of the lump sum distribution to be paid to any Participant shall
     be calculated using the following criteria:

     (A)  The form of benefit (e.g.,  joint and 50% survivor)  shall be the same
          as that  elected by the  Participant  under the ERISA  qualified  plan
          applicable to the Participant;

     (B)  The mortality  table based on the prevailing  commissioners'  standard
          table  (described  in  Section  807(d)(5)(A)  of  the  Code)  used  to
          determine  reserves for group annuity  contracts issued on the date as

                                       21
<PAGE>

          of which  present  value is  determined  (without  regard to any other
          subparagraph  of Section  807(d)(5) of the Code) that is prescribed by
          the Commissioner of Internal  Revenue in revenue  rulings,  notices or
          other guidance published in the Internal Revenue Bulletin; and

     (C)  The  annual  rate  of  interest  on  30-year  Treasury  securities  as
          specified by the  Commissioner of Internal Revenue in revenue rulings,
          notices or other guidance  published in the Internal  Revenue Bulletin
          for the month of  August  immediately  preceding  the first day of the
          Plan Year in which  the  Participant's  Retirement  Date  occurs.  The
          applicable   interest  rate  shall  be  determined   annually  Payment
          hereunder  shall  be  made  within  thirty  days  of the  date  of the
          Participant's retirement;  provided,  however that if the payment of a
          lump sum  distribution  hereunder would cause the Applicable  Employee
          Remuneration (as defined in Section  162(m)(4) of the Internal Revenue
          Code of  1986,  as  amended)  to  exceed  the  limitation  of  Section
          162(m)(1) of the Code,  then in its sole  discretion the Committee may
          defer such payment.  Deferred  payment  hereunder shall be made within
          thirty days of the first day of the fiscal year of the  Employer  next
          following the Participant's retirement date.

          A  deferred  lump  sum  distribution  shall  earn  interest  from  the
          Participant's date of retirement until paid,  compounded daily, at the
          minimum  commercial  lending  rate charged from time to time by Morgan
          Guaranty  Trust  Company of New York for loans in New York City.  If a
          Participant  should die after  retiring  and prior to the payment of a

                                       22
<PAGE>

          deferred lump sum distribution,  such distribution shall be payable to
          his spouse at the time it would have been paid to the Participant,  if
          she shall have been  married to him on his  Retirement  Date and shall
          have survived him. Any payment made under this Section 2.6 shall be in
          complete  satisfaction  of  any  amounts  which  may  be  due  to  any
          Participant or his surviving spouse or any other person claiming under
          either of them pursuant to any other provisions of the Plan."

                                   SECTION 3

                SPECIAL PROVISIONS REGARDING PAYMENT OF BENEFITS

3.1  BENEFITS APPLICABLE TO PARTICIPANT WHO HAS BEEN OR IS EMPLOYED BY TWO OR
     MORE EMPLOYERS

     In the event that a  Participant  or his  surviving  spouse is  entitled to
     benefits under the Plan and such Participant has been or is employed by any
     two or more Employers, his retirement benefit shall be computed by applying
     the  benefit  formulas  as if all the  Employers  were a  single  Employer,
     provided  there is a proper  allocation  (taking  into account the Credited
     Service and  Compensation  applicable to each Employer) of the costs of the
     resulting  benefits among the Employers by which such  Participant has been
     or is employed.

3.2  PARTICIPANTS TO FURNISH REQUIRED INFORMATION

     Each  Participant  will furnish to the Committee  such  information  as the
     Committee  considers  necessary or desirable for purposes of  administering
     the Plan, and the provisions of the Plan respecting any payments thereunder
     are conditional upon the Participant's  furnishing promptly such true, full
     and complete information as the Committee may request.

                                       23
<PAGE>

     Each Participant will submit proof of his age to the Committee at such time
     as required by the Committee.  The Committee  will, if such proof of age is
     not  submitted  as  required,  use as  conclusive  evidence  thereof,  such
     information as is deemed by it to be reliable,  regardless of the source of
     such information. Any adjustment required by reason of lack of proof or the
     misstatement of the age of persons entitled to benefits  hereunder,  by the
     Participant  or otherwise,  will be in such manner as the  Committee  deems
     equitable.

     Any notice or information which,  according to the terms of the Plan or the
     rules of the Committee,  must be filed with the Committee,  shall be deemed
     so filed at the time that it is actually received by the Committee.

     The  Employers,  the Committee,  and any person or persons  involved in the
     administration   of  the  Plan   shall  be   entitled   to  rely  upon  any
     certification, statement, or representation made or evidence furnished by a
     Participant  with  respect  to  his  age  or  other  facts  required  to be
     determined under any of the provisions of the Plan, and shall not be liable
     on account of the  payment of any monies or the doing of any act or failure
     to  act  in   reliance   thereon.   Any  such   certification,   statement,
     representation,  or evidence,  upon being duly made or furnished,  shall be
     conclusively  binding upon the person  furnishing same; but it shall not be
     binding upon the Employers,  the Committee,  or any other person or persons
     involved in the  administration  of the Plan, and nothing herein  contained
     shall be construed to prevent any of such parties from  contesting any such
     certification,  statement,  representation,  or  evidence or to relieve the
     Participant  from the  duty of  submitting  satisfactory  proof of any such
     fact.

                                       24
<PAGE>

3.3  BENEFITS NOT ASSIGNABLE

     Except for any indebtedness of a Participant to an Employer, no benefits or
     rights  shall  exist  under the Plan  which are  subject  in any  manner to
     voluntary  or  involuntary   anticipation,   alienation,   sale,  transfer,
     assignment, pledge, encumbrance or charge and any attempt so to anticipate,
     alienate,  transfer,  assign, pledge,  encumber or charge the same shall be
     void;  nor shall any such  benefit or right be in any manner  liable for or
     subject to the debts, contracts,  liabilities,  engagements, torts or other
     obligations  of the person  entitled  to such  benefit or right,  except as
     specifically provided in the Plan; nor shall any benefit or right under the
     Plan  constitute  an asset of a  Participant  or of any person  entitled to
     benefits under the Plan in case of the bankruptcy,  receivership or divorce
     of said  person;  and any such  benefit  or right  shall  be  payable  only
     directly to the Participant or to his surviving spouse.

     If a Participant  or any other person  entitled to benefits under this Plan
     becomes  bankrupt or makes an assignment for the benefit of creditors or in
     any way suffers a lien or judgment against his personal  assets,  or in any
     way attempts to anticipate,  alienate,  sell, assign,  pledge,  encumber or
     charge a benefit or right,  except as  specifically  provided  in the Plan,
     then such benefit or right in the discretion of the Committee may cease and
     terminate.

                                       25
<PAGE>

3.4  CONDITIONS OF EMPLOYMENT NOT AFFECTED BY PLAN

     The  establishment  and  maintenance  of the Plan will not be  construed as
     conferring any legal rights upon any Participant to the continuation of his
     employment with an Employer,  nor will the Plan interfere with the right of
     an  Employer to  discipline,  lay off or  discharge  any  Participant.  The
     adoption and  maintenance  of the Plan shall not be deemed to  constitute a
     contract  between the Employer  and any  Employee or to be a  consideration
     for, inducement to, or condition of employment of any person.

3.5  ABANDONMENT OF BENEFITS

     Each Participant and other person entitled to benefits hereunder shall file
     with the Committee  from time to time, in writing,  his post office address
     and each change of post office address,  and any check representing payment
     hereunder  and any  communication  addressed  to a  Participant,  a retired
     Participant,  or a surviving  spouse at his or her last address  filed with
     the  Committee  (or, if no such  address  has been filed,  then at his last
     address as  indicated on the records of the  Employer)  shall be binding on
     such person for all purposes of the Plan,  and the  Committee  shall not be
     obliged to search for or ascertain the location of any such person.

     If the  Committee,  for any  reason,  is in doubt as to whether  retirement
     income payments are being received by the person entitled thereto,  it may,
     by registered  mail  addressed to the person  concerned at his address last
     known to the  Committee,  notify such person that all  unmailed  and future
     retirement  income payments shall be henceforth  withheld until he provides
     the Committee  with evidence of his continued  life and his proper  mailing

                                       26
<PAGE>

     address.  Further, his right to any retirement income whatsoever including,
     without limitation, payments withheld as provided in the preceding sentence
     and  payment  checks  returned  or not cashed  shall,  at the option of the
     Committee,  be cancelled  forever if, at the expiration of three years from
     the date of such mailing,  he shall not have  provided the  Committee  with
     evidence of his continued life and his proper mailing address.

3.6  WRITTEN COMMUNICATIONS REQUIRED

     Any notice,  request,  instruction,  or other  communication to be given or
     made hereunder shall be in writing and either  personally  delivered to the
     addressee  or  deposited  in the  United  States  mail fully  postpaid  and
     properly  addressed to such  addressee at the last address for notice shown
     on the  Committee's  records  (or if no  address  has been  filed  with the
     Committee,  then at the last address for such addresses as indicated on the
     records of the Employer).

3.7  CONDUCT INJURIOUS TO THE COMPANY

     Notwithstanding  anything in the Plan to the contrary, any and all benefits
     otherwise payable to any Participant hereunder, except to the extent of any
     prior  distributions  under the Plan,  shall be forever  forfeited if it is
     determined by the Committee, in its sole discretion,  that such Participant
     has  engaged in conduct  injurious  to the  Company  or any  Subsidiary  or
     Affiliated Company, including but not limited to the following:

     (a)  dishonesty  while in the employ Of the  Company or any  Subsidiary  or
          Affiliated Company;

                                       27
<PAGE>

     (b)  imparting,  disclosing or  appropriating  proprietary  information for
          himself or to or for any other person, firm, corporation,  association
          or entity for any reason or purpose whatsoever,  except if required by
          law or at the Company's direction;

     (c)  performing  any act or engaging in any course of conduct  which has or
          may  reasonably  have the  effect of  demeaning  the name or  business
          reputation of the Company or any Subsidiary or Affiliated Company; and

     (d)  providing  goods  or  services  to or  becoming  an  employee,  owner,
          officer, agent, consultant,  advisor or director of any firm or person
          in  any  geographic  area  which  competes  with  the  Company  or any
          Subsidiary or  Affiliated  Company in any phase of any of the business
          lines  or  services  offered  by  the  Company  or any  Subsidiary  or
          Affiliated Company as of the Participant's Retirement Date.

     Any  determination  by the  Committee  that a  Participant  has  engaged in
     conduct  injurious to the Company  shall be  conclusive  and binding on all
     parties.

                                   SECTION 4

                                 ADMINISTRATION

4.1  ADMINISTRATION BY COMMITTEE

     The Plan will be  administered  by the Committee which shall appoint one of
     its members as a Chairman  and may appoint a  secretary,  who may, but need
     not, be a member of the Committee and the Committee may employ such agents,
     clerical and other  services,  legal counsel,  accountants and actuaries as
     may be required  for the purpose of  administering  the Plan. A majority of

                                       28
<PAGE>

     the members of the Committee shall  constitute a quorum for the transaction
     of business and shall have full power to act  hereunder.  The Committee may
     act  either  at a  meeting  at which a quorum  is  present  or by a writing
     subscribed by at least a majority of the members then serving.  Any written
     memorandum  signed by the  secretary or any member of the Committee who has
     been authorized to act on behalf of the Committee shall have the same force
     and effect as a formal  resolution  adopted in an open meeting.  Minutes of
     all  meetings  of the  Committee  and a record of any  action  taken by the
     Committee  shall be kept in written form by the secretary  appointed by the
     Committee.

4.2  RULES AND REGULATIONS OF COMMITTEE

     The Committee  shall have the authority to make such rules and  regulations
     and to take such action as may be necessary to carry out the  provisions of
     the Plan and  will,  subject  to the  provisions  of the Plan,  decide  any
     questions arising in the administration,  interpretation and application of
     the Plan,  which  decisions shall be conclusive and binding on all parties.
     The Committee may delegate any part of its authority and duties as it deems
     expedient.

4.3  POWERS OF COMMITTEE

     In order to effectuate the purposes of the Plan,  the Committee  shall have
     the power to construe the Plan and to make  equitable  adjustments  for any
     mistakes or errors  made in the  administration  of the Plan,  and all such
     actions or determinations  made by the Committee in good faith shall not be
     subject to review by anyone.

                                       29
<PAGE>

4.4  LIABILITY OF COMMITTEE

     No member of the  Committee  shall be liable for any loss unless  resulting
     from his own fraud, bad faith or intentional wrongdoing and no member shall
     be  personally  liable  upon  or  with  respect  to  any  agreement,   act,
     transaction or omission executed,  committed or suffered to be committed by
     the  Committee  or by himself as a member of the  Committee or by any other
     member, agent,  representative or employee of the Committee.  The Committee
     and any  individual  member of the Committee and any agent thereof shall be
     fully protected in relying upon the advice of  consultant(s)  or advisor(s)
     employed  by the  Company  or the  Committee,  including  but  without  any
     limitation,  any  attorney  insofar as legal  matters  are  concerned,  any
     accountant  insofar as  accounting  matters are  concerned  and any actuary
     insofar as actuarial matters are concerned.

4.5  INDEMNIFICATION

     The  Company  agrees to hold  harmless  and  indemnify  the  members of the
     Committee and all directors,  officers, and employees of the Company and of
     any Subsidiary or Affiliate which has adopted this Plan against any and all
     claims and causes of action whomsoever, and any losses therefrom, including
     without  limitation  costs of defense and  attorneys'  fees,  based upon or
     arising out of any act or omission  relating to or in connection  with this
     Plan, its  interpretation  or  administration,  other than losses resulting
     from the fraud, bad faith or intentional  wrongdoing of the party asserting
     the right to indemnification.

                                       30
<PAGE>

4.6  APPLICABLE LAW

     The Plan shall be construed,  administered  and enforced in accordance with
     the applicable provisions of the Employee Retirement Income Security Act of
     1974, as amended  ("ERISA"),  and the laws of the State of Louisiana  where
     ERISA pre-emption does not apply.

                                   SECTION 5

                               GENERAL PROVISIONS

5.1  AMENDMENT AND DISCONTINUANCE

     The Plan may be  amended  from  time to time in any  respect  whatever,  by
     resolution  of the  Board  of  Directors  of the  Company  specifying  such
     amendment and amendments may be made  retroactively  which, in the judgment
     of the Committee,  is necessary or advisable provided that such retroactive
     amendment  does not  deprive  a retired  or  disabled  Participant,  or his
     spouse,  without  his  or her  consent,  of a  right  to  receive  benefits
     hereunder.

     The participation in the Plan of Employers other than the Company shall not
     limit  the  power  of  the  Company  under  the  foregoing  provision,  and
     amendments by the Company shall be binding upon all other  Employers to the
     extent accepted by such  Employers.  Acceptance by each such Employer shall
     be presumed.  However the  discontinuance  of the Plan shall not affect the
     rights of retired  or  disabled  Participants  (or their  spouses)  who are
     receiving benefits under this Plan on the date of such discontinuance.

                                       31
<PAGE>

5.2  SOURCE OF BENEFITS

     All benefits  payable to  Participants of the Company under this Plan shall
     be paid from the general assets of the Company and all benefits  payable to
     Participants  of any  Subsidiary  or Affiliate  which has adopted this Plan
     shall be paid from the  general  assets of such  Subsidiary  or  Affiliate.
     Benefits shall not be paid from any special or separate fund and no special
     or separate fund shall be established,  or other segregation of assets made
     to make  payment of benefits to eligible  Participants  or their  surviving
     spouses  hereunder.  No Participant or surviving spouse or any other person
     shall  have,  under  any  circumstances,   any  interest  whatever  in  any
     particular property or assets of the Company or any Subsidiary or Affiliate
     by virtue of this Plan.

5.3  BINDING ON COMPANY, EMPLOYEES AND THEIR SUCCESSORS

     This Plan shall be binding upon and inure to the benefit of the Company and
     to the Subsidiaries and Affiliated  Companies which have adopted this Plan,
     their successors and assigns and the Participant and his heirs,  executors,
     administrators, tutors, and legal representatives.

IN WITNESS WHEREOF, McDermott International,  Inc. has caused this instrument to
be executed by its duly authorized officers on this 7th day of February, 2000.

ATTEST                                     MCDERMOTT INTERNATIONAL, INC.

/s/ John Tsai                              By: /s/ R.E. Tetrault
-------------------------------------          ---------------------------------
Assistant Secretary                            R.E. Tetrault
                                               Chairman of the Board and
                                               Chief Executive Officer

                                       32Exhibit 10.2

                          McDermott International, Inc.
                          -----------------------------
                   New Supplemental Executive Retirement Plan
                   ------------------------------------------
                            Effective January 1, 2005

                                    ARTICLE I

                                     Purpose
                                     -------

     1.1 Purpose of Plan. The purpose of this McDermott International, Inc., New
Supplemental  Executive Retirement Plan (the "Plan") is to advance the interests
of McDermott  International,  Inc., its subsidiaries and affiliates by providing
certain  retirement  benefits that will attract and retain highly  qualified key
employees  accountable  for the  successful  conduct of its business.  This Plan
replaces the prior Supplemental  Executive Retirement Plan, terminated effective
December 31, 2004.

     1.2 ERISA Status.  The Plan is governed by the Employee  Retirement  Income
Security Act of 1974, as amended ("ERISA").  It has been designed to qualify for
certain  exemptions under Title I of ERISA that apply to plans that are unfunded
and maintained primarily for the purpose of providing deferred  compensation for
a select group of management or highly compensated employees.

     1.3 Effective Date. The effective date of this Plan is January 1, 2005.

     1.4 Grantor Trust.  The Company may establish,  in its sole  discretion,  a
grantor trust to be utilized in conjunction with this Plan.

                                   ARTICLE II

                          Definitions and Construction
                          ----------------------------

     Definitions. Where the following words and phrases appear in the Plan, they
shall have the respective meanings set forth below, unless their context clearly
indicates to the contrary.

(1)  Account.  Collectively,  means the  Participant's  Company  Account and the
     Participant's Deferral Account.

(2)  Account Value.  At any given time,  the sum of all amounts  credited to the
     Participant's  Account,  adjusted  for any  income,  gain  or loss  and any
     payments attributable to such account.

(3)  Beneficiary.  The person designated by each Participant, on a form provided
     by the Company for this purpose, to receive the Participant's  distribution
     under Article VI in the event of the Participant's death prior to receiving
     complete payment of his Account.  In order to be effective under this Plan,

                                       1
<PAGE>

     any form  designating  a  Beneficiary  must be delivered  to the  Committee
     before  the  Participant's  death.  In the  absence  of such  an  effective
     designation of a Beneficiary, "Beneficiary" means the Participant's spouse,
     or if  there  is no  spouse  on the date of the  Participant's  death,  the
     Participant's  executor  or  administrator  or  heirs at law if there is no
     administration of the Participant's estate.

(4)  Board. The Board of Directors of McDermott International, Inc. or the board
     of directors of a company that is a successor to the Company.

(5)  Bonus. Any bonus paid to a Participant under any plan, policy or program of
     the Company providing for the payment of annual bonuses to employees or any
     extraordinary  payment paid to a Participant  if such payment is designated
     by the  Committee to be a Bonus for purposes of this Plan.  Bonus shall not
     include any compensation under the 2002 B&W Performance Incentive Plan.

(6)  Cause. Cause means:

     (a)  the overt and willful disobedience of orders or directives issued to a
          Participant that are within his scope of duties,  or any other willful
          and continued  failure of a Participant to perform  substantially  his
          duties with the Company  (occasioned  by reason other than physical or
          mental illness or disability)  after a written demand for  substantial
          performance  is delivered to the  Participant  by the Committee or the
          Chief Executive Officer of the Company which  specifically  identifies
          the  manner in which the  Committee  or the  Chief  Executive  Officer
          believes  that the  Participant  has not  substantially  performed his
          duties,  after which the Participant  shall have thirty days to defend
          or remedy such failure to substantially perform his duties;

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

     (c)  the  conviction  of the  Participant  with no further  possibility  of
          appeal  or, or plea of nolo  contendere  by the  Participant  to,  any
          felony or crime of falsehood.

     The cessation of employment of a Participant under subparagraph (a) and (b)
     above  shall not be deemed to be for  "Cause"  unless and until there shall
     have been  delivered  to him 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 such Committee  called and held
     for such purpose (after  reasonable  notice is provided to the  Participant
     and the  Participant  is  given  an  opportunity  to be  heard  before  the
     Committee),  finding that, in the good faith opinion of the Committee,  the
     Participant is guilty of the conduct  described in subparagraph  (a) or (b)
     above, and specifying the particulars thereof in detail.

                                       2
<PAGE>

(7)  Change in Control. A change in control shall occur when:

     (a)  any person (other than a trustee or other fiduciary holding securities
          under an  employee  benefit  plan of the  Company)  is or becomes  the
          "beneficial  owner" (as such term is used in ss. 13 of the  Securities
          Exchange  Act  of  1934,  as  amended),  directly  or  indirectly,  of
          securities of the Company  representing  twenty-five  percent (25%) or
          more of the combined  voting power of the Company's  then  outstanding
          voting securities;

     (b)  the  shareholders of the Company approve (i) 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 there to 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 (ii) the shareholders of the Company approve a plan
          of complete  liquidation of the Company, or (iii) an agreement for the
          sale or disposition by the Company of all or substantially  all of the
          Company's assets; or

     (c)  the  individuals  who,  at the  beginning  of any  period  of two  (2)
          consecutive  years,  constitute  the Board of Directors of the Company
          cease,  for any reason,  to  constitute  at lease a majority  thereof,
          unless the  election or  nomination  for election of each new director
          was approved by the vote of at least a majority of the directors  then
          still in office who were directors at the beginning of such period; or

     (d)  such other circumstances as may be deemed by the Board of Directors of
          McDermott International, Inc., in its sole discretion, to constitute a
          change in control of the Company with respect to any Participant.

     However,  in no event shall a Change In Control be deemed to have  occurred
     with respect to a Participant if the  Participant is part of the purchasing
     group which  consummates the Change In Control  transaction.  A Participant
     shall be deemed "part of a purchasing  group for purposes of the  preceding
     sentence if the  Participant  is an equity  participant  in the  purchasing
     company or group  (except for passive  ownership of less than three percent
     (3%)  of the  stock  of the  purchasing  company  or  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  members  of the  Board of  Directors  of the
     Company.)

                                       3
<PAGE>

     In no event  shall a Change In  Control  be deemed  to have  occurred  with
     respect to any  Participant as a result of the resolution of the Chapter 11
     proceedings  related to The  Babcock & Wilcox  Company  and  certain of its
     subsidiaries which were filed in the U. S. Bankruptcy Court for the Eastern
     District of Louisiana on February 22, 2000.

     For purposes of determining  whether a Change In Control has occurred,  the
     term "Company" shall mean McDermott International, Inc. with respect to all
     Participants,  and shall also mean the Company by which the  Participant is
     employed with respect to each Participant.

(8)  Code. The Internal Revenue Code of 1986, as amended.

(9)  Committee.   The  Compensation  Committee  of  the  Board,  or  such  other
     administrative  committee  that is appointed by the Board to administer the
     Plan.

(10) Company. McDermott International, Inc. and except where the context clearly
     indicates   otherwise,   shall  include  the  Company's   subsidiaries  and
     affiliates, as well as any successor to any such entities.

(11) Company Account.  The account  maintained by the Committee  reflecting each
     Participant's Company Contributions, together with any income, gain or loss
     and any payments attributable to such account.

(12) Company Contribution.  The total contributions  credited to a Participant's
     Company Account for any one Plan Year pursuant to the provisions of Section
     4.1 or 4.2.

(13) Compensation.  The salary, wages and other cash remuneration  received by a
     Participant  during  any Plan Year or in  respect  of  employment  with the
     Company,  including any contributions  made to a plan described in Sections
     125, 132(f) or 401(k) of the Code pursuant to a salary reduction  agreement
     entered  into  between a  Participant  and the  Company  and  Bonuses,  but
     excluding other additional remuneration in any form.

(14) Deemed  Investments.   With  respect  to  any  Account,   the  hypothetical
     investment  options  with  respect  to which  such  Account is deemed to be
     invested for purposes of  determining  the value of such Account under this
     Plan, as selected from time to time by the Committee in its discretion.

(15) Deferral Account.  The account maintained by the Committee  reflecting each
     Participant's  Deferral  Contributions,  together with any income,  gain or
     loss and any payments attributable to such amount.

(16) Deferral  Contribution.  Compensation  that is credited to a  Participant's
     Deferral Account pursuant to the provisions of Section 4.3.

                                       4
<PAGE>

(17) Eligible  Employee.  The  Company's CEO and any officers of the Company and
     its subsidiaries and affiliates.

(18) ERISA. The Employee Retirement Income Security Act of 1974, as amended.

(19) Exchange Act. The Securities Exchange Act of 1934, as amended.

(20) Hardship. An unforeseeable  financial emergency which is a severe financial
     hardship to the Participant  resulting from a sudden and unexpected loss or
     accident of the Participant or of a dependent of the Participant, a loss of
     the  Participant  due to  casualty,  or  other  similar  extraordinary  and
     unforeseeable  circumstances  arising  as a result  of  events  beyond  the
     control  of the  Participant.  To  qualify  as an  unforeseeable  financial
     emergency,  it must be  demonstrated  that such hardship cannot be relieved
     (i) by reimbursement or compensation by insurance or otherwise,  or (ii) by
     liquidation of the  Participant's  assets, to the extent the liquidation of
     such assets would not itself cause severe financial hardship.

(21) Participant. An Eligible Employee who has been selected by the Committee as
     a  Participant  in the Plan until  such  Eligible  Employee  ceases to be a
     Participant in accordance with Article III of the Plan.

(22) Plan Year. The twelve-consecutive month period commencing January 1 of each
     year.

(23) Retirement.  Termination  of service with the Company on or after the first
     of the calendar month following the Participant's  attainment of the age of
     65.

(24) Termination. The termination of a participant's employment with the Company
     for any reason whatsoever.

(25) Vested Account. The sum of the Participant's vested Company Account and the
     Participant's Deferral Account.

(26) Vested  Percentage.  The  percentage as to which a Participant is vested in
     his or her Company Account as determined under Sections 5.4 and 5.5.

(27) Years of Participation. The sum of whole Plan Years of participation in the
     Plan as an active employee in continuous  employment,  excluding fractional
     years.

                                       5
<PAGE>

                                   ARTICLE III

                                  Participation
                                  -------------

     The Committee,  in its sole discretion,  shall select and notify in writing
those  Eligible  Employees of the Company who shall  participate in the Plan. An
Eligible  Employee who has been selected by the Committee as a Participant shall
begin participation in the Plan effective on the date specified by the Committee
in its  notification  and shall  continue to  participate  in the Plan until the
earlier of (a) the date the  Committee  notifies the  Participant  that he is no
longer eligible to participate in the Plan or (b) the date of his Termination. A
Participant  who  ceases  to  participate  in the  Plan  pursuant  to (a) of the
preceding sentence shall be treated as if he had terminated  employment with the
Company  but (i) his  benefit,  if any,  shall not be  payable  until  after his
Termination,  and (ii) his Vested  Account  shall be  adjusted  as  provided  in
Article V. An  Eligible  Employee  who is rehired by the Company  following  his
Termination  shall become a Participant only if such Eligible  Employee is again
selected to participate in the Plan by the Committee.

                                   ARTICLE IV

                                  Contributions
                                  -------------

     4.1 Annual Company Contribution. As of the first day of each Plan Year, the
Company shall declare a contribution  percentage for each Participant's  Company
Account.  The contribution  percentage  declared for a Participant may, but need
not be, the same as the contribution percentage declared for other Participants.
Company  Contributions shall be credited as of the first day of the Plan Year or
at other such times as determined by the Committee to each Participant's Company
Account,  in an amount  equal to the  contribution  percentage  declared for the
Participant  multiplied by the  Participant's  Compensation  received during the
prior Plan Year.

     4.2  Discretionary  Company  Contribution.  The  Committee  may in its sole
discretion at any time make an extraordinary contribution to the Company Account
of any Participant.

     4.3  Participant  Deferrals.  For any Plan Year,  the Committee may, in its
sole  discretion,  allow a  Participant  to elect to defer  the  payment  by the
Company of any whole  percentage  (or dollar  amount) of his annual  base salary
that would  otherwise be paid during such Plan Year and of any whole  percentage
(or dollar  amount) of any Bonus earned during such Plan Year,  and instead have
such amounts  credited to his Deferral  Account.  The salary and Bonus otherwise
payable to the  Participant  shall be  reduced  by the  amount  the  Participant
elected to have contributed to the Participant's  Deferral Account,  which shall
be a Deferral Contribution.

                                       6
<PAGE>

     4.4  Manner  of  Deferral.  The  Committee  shall  prescribe,  in its  sole
discretion, the procedures, limitations and timing requirements, for Participant
Deferral Contribution elections.  Elections to make Deferral Contributions shall
be in writing,  on a form supplied by the  Committee,  and shall be  irrevocable
(except as otherwise  provided in the Plan) for the  applicable  period to which
they relate.

                                    ARTICLE V

                                    Accounts
                                    --------

     5.1  Company  Accounts.  The  Committee  shall  establish  and  maintain an
individual  bookkeeping  account  for  each  Participant,  which  shall  be  the
Participant's  Company  Account.  The Committee  shall credit the amount of each
Company  Contribution  made on behalf  of a  Participant  to such  Participant's
Company  Account  pursuant to Section 4.1 and 4.2. The  Committee  shall further
debit and/or credit the Participant's  Company Account with any income,  gain or
loss and any payments  attributable to such account on a daily basis, or at such
other  times  as it  shall  determine  appropriate.  The  sole  purpose  of  the
Participant's  Company  Account  is to record and  reflect  the  Company's  Plan
obligations related to Company Contributions to each Participant under the Plan.
The Company shall not be required to segregate any of its assets with respect to
Plan   obligations  nor  shall  any  provision  of  the  Plan  be  construed  as
constituting such segregation.

     5.2  Deferral  Accounts.  The  Committee  shall  establish  and maintain an
individual  bookkeeping  account  for  each  Participant,  which  shall  be  the
Participant's  Deferral  Account.  The Committee shall credit the amount of each
Deferral  Contribution  made on behalf of a  Participant  to such  Participant's
Deferral Account as soon as  administratively  feasible following the applicable
deferral.  The Committee  shall  further  debit and/or credit the  Participant's
Deferral Account with any income, gain or loss and any payments  attributable to
such  Account on a daily  basis,  or at such other  times as it shall  determine
appropriate. The sole purpose of the Participant's Deferral Account is to record
and reflect the Company's Plan obligations related to Deferral  Contributions of
each Participant  under the Plan. The Company shall not be required to segregate
any of its assets with respect to Plan  obligations,  nor shall any provision of
the Plan be construed as constituting such segregation.

     5.3  Hypothetical  Accruals to the Account.  In accordance  with procedures
established  by the Committee  and subject to this Section 5.3, the  Participant
may  designate the Deemed  Investments  with respect to which his or her Account
shall  be  deemed  to be  invested,  provided  such  designation(s)  are made in
accordance  with the procedures  established by the Committee.  If a Participant
fails to make a proper  designation,  then his  Account  shall be  deemed  to be
invested  in the Deemed  Investments  designated  by the  Committee  in its sole
discretion. A copy of any available prospectus or other disclosure materials for
each of the Deemed  Investments shall be made available to each Participant upon
request.  The  Committee  shall  determine  from time to time each of the Deemed
Investments made available under the Plan and may change any such determinations
at any time. Nothing herein shall obligate the Company to invest any part of its
assets in any of the investment vehicles serving as the Deemed Investments.

                                       7
<PAGE>

     5.4 Vesting of Company  Account.  A  Participant's  vested  percentage with
respect to the Participant's  Company Account,  adjusted by any income,  gain or
loss and any  payments  attributable  thereto,  shall be the lesser of i) twenty
percent  times the  Participant's  Years of  Participation,  and ii) 100%.  Upon
termination  of  employment  other than  described in Section 5.5, a Participant
shall forfeit all amounts  credited to his Account other than his Vested Account
value  determined as of the close of business  coincident with or next following
the date on which the Participant terminated employment; provided, however, that
amounts not so forfeited shall continue to be debited and credited in accordance
with Section 5.3 from and after termination of employment.

     5.5 Accelerated Vesting. The vesting provisions above notwithstanding,  the
Participant  shall have a Vested  Percentage of 100% for his entire Account upon
the soonest of the following to occur during the  Participant's  employment with
the Company:  (i) the date of termination of the  Participant's  employment as a
result of the  Participant's  death or disability or  termination by the Company
for reasons other than Cause,  (ii) the participant's  Retirement,  or (iii) the
date of termination of the Participant's employment within 24 months following a
Change of Control.

     5.6 Vesting of Deferral  Account.  A Participant's  Vested  Percentage with
regard to the Participant's Deferral Account shall at all times be 100%.

     5.7 Nature and Source of Payments.  The  obligation  to make  distributions
under  this  Plan  with  respect  to each  Participant  and any  Beneficiary  in
accordance  with the terms of this Plan  shall  constitute  a  liability  of the
Company  which  employed  the  Participant  when  the  obligation  was  accrued,
including any hypothetical  income, gain or loss and any payment or distribution
attributable to such accrual and no other Company shall have such obligation and
any failure by a particular Company to live up to its obligation under this Plan
shall have no effect on any other Company.  All distributions  payable hereunder
shall be made from the general  assets of the Company,  and nothing herein shall
be deemed to create a trust of any kind between the Company and any  Participant
or other person.  No special or separate fund shall be established nor shall any
other  segregation of assets be made to assure that  distributions  will be made
under this Plan. No Participant  or  Beneficiary  shall have any interest in any
particular  asset of the Company by virtue of the  existence of this Plan.  Each
Participant  and  Beneficiary  shall be an  unsecured  general  creditor  of the
Company.

     5.8  Statements  to   Participants.   Periodically  as  determined  by  the
Committee,  but not less frequently than annually,  the Committee shall transmit
to each Participant a written statement regarding the Participant's  Account for
the period  beginning on the date  following the effective date of the preceding
statement and ending on the effective date of the current statement.

                                       8
<PAGE>

                                   ARTICLE VI

                               Payment of Benefits
                               -------------------

     6.1  Occasions   for   Distributions.   The  Company  shall   distribute  a
Participant's Vested Account following the events and in the manner set forth in
this Article VI. A  Participant's  Vested Account shall be debited in the amount
of any distribution made from the Account as of the date of the distribution.

     6.2 Distribution  Elections. A Participant may file a distribution election
directing how his Vested Account shall be distributed following his Termination.
The  distribution  election must be made on a form supplied by the Committee for
that  purpose  and the  Committee  in its  sole  discretion  may  determine  the
available distribution options. To be effective,  the distribution election must
be filed upon  initial  enrollment  in the Plan or  otherwise at least 12 months
prior to the Participant's  Termination.  In the event of Termination due to the
death  of the  Participant,  no  such  restriction  applies.  In the  event  the
Participant  files  more  than  one  distribution   election,   the  last  valid
distribution  election  shall control.  In the event that no valid  distribution
election has been filed,  payment will be made in a lump sum,  within 90 days of
Termination.  If the Participant's  Vested Account Balance is less than $50,000,
the  Committee  will  distribute  the  Vested  Account  Balance  in a  lump  sum
irrespective of the Participant's Distribution Election.

     6.3  Distribution  of Vested Account upon  Termination of Employment.  If a
Participant  terminates  employment  with the Company for any reason  other than
disability or death, the Company shall  distribute or begin  distributing to the
Participant  within 90 days of Termination the full amount of the  Participant's
Vested Account.  Such  distributions  shall be in the form specified on the most
recently filed distribution election form.

     6.4  Distribution  on  Account  of  Disability.  If a  Participant  becomes
disabled, such determination to be made by the Committee in its sole discretion,
then  Contributions  under this Plan will cease.  Contributions  will not resume
unless and until the Participant  returns to work and formally  reenrolls in the
Plan  by  completing  and  filing  a  form  supplied  by the  Committee.  If the
Participant's  employment with the Company is interrupted for more than one year
by disability,  then within 90 days following the date when the  interruption of
employment  reaches one year, the Company shall distribute or begin distributing
to  the  Participant  the  full  amount  of  the  Participant's  Vested  Account
calculated as of the date the interruption of employment  reaches one year. Such
distributions  shall be in accordance with the last valid distribution  election
form filed by the Participant in accordance with Section 6.2.

     6.5   Distributions  on  Account  of  Death.   Within  90  days  after  the
Participant's  death, the Company shall distribute or begin  distributing to the
Beneficiary  the  Participant's  Vested  Account  as of the date of death.  Such
distributions  shall be in accordance with the last valid distribution  election
form filed by the Participant in accordance with Section 6.2.

                                       9
<PAGE>

     6.6  Continuation  of Accounts after  Commencement of  Distributions.  If a
Participant's  Vested  Account  is to be  distributed  in a form  other  than an
immediate  lump sum, then the Vested  Account shall continue to be adjusted with
any  hypothetical  income,  gain  or  loss  and any  payments  or  distributions
attributable  to such account as  described  in Sections 5.1 and 5.2,  until the
entire Vested Account has been distributed.

     6.7 Hardship Distribution. Anything to the contrary notwithstanding, in the
event  of a  Hardship  and  upon  the  written  request  of a  Participant,  the
Committee,  in its sole  discretion,  may  authorize  and direct the  Company to
accelerate distributions under this Plan to such Participant.  Distributions may
be  accelerated  under this Section 6.7 only to the extent that the  accelerated
distribution  is necessary to enable the  Participant  to resolve the  financial
need. If a Hardship  distribution  is made to a  Participant  under this Section
6.7, then the  Participant  will be suspended from the Plan for the remainder of
the Plan Year in which the Hardship distribution is made, and the following Plan
Year.  Any  distributions  made under this  Section  6.7 shall be first from the
Participant's  Deferral Account and then from the Participant's  Company Account
to the extent that it is vested.

     6.8 Distribution on Account of Completion of a Fixed Deferral  Period.  If,
with  respect to any  Deferral  Contribution  for a Plan Year,  the  Participant
elected at the time of such deferral,  on forms  provided by the  Committee,  to
receive a specified  portion of such  deferred  amount upon the  expiration of a
pre-determined  deferral  period,  the  Participant  shall  receive  a lump  sum
distribution  of that  portion  of such  Deferral  Contribution,  subject to any
income,  gain or loss and any  payments of  distributions  associated  with such
Deferral Contribution,  as previously elected. Such election must be made at the
time the  Deferral  Contribution  is elected,  and the  deferral  period must be
specified for a minimum of three years.

                                   ARTICLE VII

                                    Committee
                                    ---------

     7.1  Authority.  The  Committee  has full and  absolute  discretion  in the
exercise of each and every  aspect of the rights,  power,  authority  and duties
retained  or  granted  it under  the Plan,  including  without  limitation,  the
authority to determine all facts,  to interpret this Plan, to apply the terms of
this Plan to the facts determined,  to make decisions based upon those facts and
to make any and all other  decisions  required  of it by this Plan,  such as the
right to benefits, the correct amount and form of benefits, the determination of
any appeal, the review and correction of the actions of any prior administrative
committee,  and the other rights, powers, authority and duties specified in this
Article and  elsewhere  in this Plan.  The  Committee  may correct any defect or
supply any omission or reconcile any inconsistency in this Plan or any agreement
or document  related to this Plan in the manner and to the extent the  Committee
deems  necessary or appropriate to carry this Plan into effect.  Notwithstanding
any  provision  of law, or any  explicit  ruling or implicit  provision  of this
document, any action taken, or finding, interpretation,  ruling or decision made
by the  Committee  in the  exercise of any of its rights,  powers,  authority or
duties  under  this  Plan  shall  be final  and  conclusive  as to all  parties,
including  without   limitation  all  Participants,   former   Participants  and
beneficiaries, regardless of whether the Committee or one or more if its members
may have an actual or potential conflict of interest with respect to the subject
matter of the action,  finding,  interpretation,  ruling or  decision.  No final

                                       10
<PAGE>

action,  finding,  interpretation,  ruling or decision of the Committee shall be
subject to de novo review in any judicial proceeding.  No final action, finding,
interpretation,  ruling or decision of the  Committee may be set aside unless it
is held to have been  arbitrary and  capricious  by a final  judgment of a court
having  jurisdiction with respect to the issue. To the extent Plan distributions
are  payable in a form other than a single  lump sum (e.g.,  installments),  the
Committee shall determine the methodology for computing such payments.

     7.2  Delegation of Authority.  The Committee may delegate any of its powers
or  responsibilities to one or more members of the Committee or any other person
or entity.

     7.3  Procedures.  The  Committee  may  establish  procedures to conduct its
operations  and to carry out its  rights and  duties  under the Plan.  Committee
decisions  may be made by  majority  action.  The  Committee  may act by written
consent.

     7.4  Compensation  and Expenses.  The members of the Committee  shall serve
without  compensation for their services,  but all expenses of the Committee and
all  other  expense  incurred  in  administering  the Plan  shall be paid by the
Company

     7.5  Indemnification.  The  Company  shall  indemnify  the  members  of the
Committee  and/or  any of  their  delegates  against  the  reasonable  expenses,
including  attorney's  fees,  actually  and  appropriately  incurred  by them in
connection with the defense of any action, suit or proceeding,  of in connection
with any appeal  thereto,  to which they or any of them may be a party by reason
of any action taken or failure to act under or in  connection  with the Plan and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by  independent  legal counsel  selected by the Company) and against
all amounts paid by them in satisfaction of a judgment in any such action,  suit
or proceeding, except in relation to matters as to which it shall be adjudged in
a suit of final  adjudication  that such  Committee  member is liable for fraud,
deliberate  dishonesty of willful  misconduct in the  performance of his duties;
provided that within 60 days after the  institution of any such action,  suit or
proceeding a Committee  member has offered in writing to allow the  Company,  at
its own expense, to handle and defend any such action, suit or proceeding.

                                       11
<PAGE>

                                  ARTICLE VIII

                            Amendment and Termination
                            -------------------------

     The Company retains the power to amend the Plan or to terminate the Plan at
any  time by  action  of the  Board.  No such  amendment  or  termination  shall
adversely  affect any  Participant or  Beneficiary  with respect to his right to
receive a benefit in accordance  with Article VI,  determined as of the later of
the date that the Plan amendment or termination is adopted or the date such Plan
amendment  or  termination  is  effective,  unless the affected  Participant  or
Beneficiary consents to such amendment or termination.

                                   ARTICLE IX

                                  Miscellaneous
                                  -------------

     9.1 Plan Does Not Affect the Rights of Employee.  Nothing contained in this
Plan shall be deemed to give any  Participant  the right to be  retained  in the
employment  of the  Company , to  interfere  with the  rights of the  Company to
discharge any Participant at any time or to interfere with a Participant's right
to terminate his employment at any time.

     9.2 Nonalienation and Nonassignment. Except for debts owed the Company by a
Participant or  Beneficiary,  no amounts  payable or to become payable under the
Plan  to a  Participant  or  Beneficiary  shall  be  subject  in any  manner  to
anticipation,  alienation,  sale, transfer,  assignment,  pledge, encumbrance or
charge, whether voluntary,  involuntary,  by operation of law or otherwise,  and
any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber
or charge the same by a Participant  or  Beneficiary  prior to  distribution  as
herein provided shall be null and void.

     9.3 Tax  Withholding.  The Company  shall have the right to deduct from any
payments to a Participant  or  Beneficiary  under the Plan any taxes required by
law to be withheld with respect to such payments. In addition, the Company shall
have  the  right  to  deduct  from  any  Participant's   base  salary  or  other
compensation any applicable employment taxes or other required withholdings with
respect to a Participant.

     9.4 Setoffs. As a condition to the receipt of any benefits  hereunder,  the
Committee,  in its sole discretion,  may require a Participant or Beneficiary to
first execute a written authorization, in the form established by the Committee,
authorizing the Company to offset from the benefits  otherwise due hereunder any
and all amounts, debts or other obligations,  of any kind or nature, owed to the
Company  by the  Participant.  Where  such  written  authorization  has  been so
executed by a Participant,  benefits hereunder shall be reduced accordingly. The
Committee shall have full discretion to determine the application of such offset
and the manner in which such offset will reduce benefits under the Plan.

                                       12
<PAGE>

     9.5 Number  and  Gender.  Wherever  appropriate  herein,  words used in the
singular  shall be considered to include the plural and words used in the plural
shall be  considered  to include  the  singular.  The  masculine  gender,  where
appearing in the Plan, shall be deemed to include the feminine gender.

     9.6  Headings.  The headings of Articles  and Sections  herein are included
solely for  convenience,  and if there is any conflict between such headings and
the text of the Plan, the text shall control.

     9.7  Applicable  Law.  Except to the extent  preempted  by federal law, the
terms and provisions of the Plan shall be construed in accordance  with the laws
of the State of Texas.

     9.8 Successors.  All  obligations  under the Plan shall be binding upon the
Company and any successors and assigns,  in accordance  with its terms,  whether
the existence of such successor is the result of a direct or indirect  purchase,
merger,  consolidation or other transaction,  involving all or substantially all
of the business and/or assets of the Company.

     9.9 Claims Procedure. The Committee shall have sole discretionary authority
with regard to the  adjudication  of any claims made under the Plan.  All claims
for benefits  under the Plan shall be  submitted in writing,  shall be signed by
the claimant and shall be considered  filed on the date the claim is received by
the Committee.  In the event a claim is denied,  in whole or in part, the claims
procedures set forth below shall be applicable.

Upon the  filing  of a claim as above  provided  and in the  event  the claim is
denied,  in whole or in part, the Committee shall within ninety (90 days, (forty
five (45) days for  disability  related  claims,)  provide the  claimant  with a
written statement which shall be delivered or mailed to the claimant to his last
known address, which statement shall contain the following:

(a)  the specific reason or reasons for the denial of benefits;

(b)  a specific reference to the pertinent provisions of the Plan upon which the
     denial is based;

(c)  a description of any additional  material or information  necessary for the
     claimant to perfect his claim for benefits and an  explanation  of why such
     material and information is necessary; and

(d)  an explanation of the review procedure provided below.

If special  circumstances  require additional time for processing the claim, the
Committee  shall advise the claimant prior to the end of the initial ninety (90)
day or forty-five  (45) day period,  setting forth the reasons for the delay and
the  approximate  date the Committee  expects to render its  decision.  Any such
extension  shall not exceed ninety (90) days, or thirty (30) days for disability
related claims.

                                       13
<PAGE>

Within ninety (90) days after receipt of the written notice of denial of a claim
as provided  above,  a claimant or his authorized  representative  may request a
review of the denial  upon  written  application  to the  Committee,  may review
pertinent  documents  and may  submit  issues  and  comments  in  writing to the
Committee.  Within  sixty  (60)  days  (or  forty-five  days  in the  case  of a
disability  related  claim) after  receipt of a written  request for review,  or
within one hundred and twenty (120) days (or ninety days for disability  related
claims) in the event of special circumstances which require an extension of time
for  processing  such  application  for review,  the Committee  shall notify the
claimant of its decision by delivery or by Certified or  Registered  Mail to his
last known address.  The decision of the Committee shall be in writing and shall
include the specific  reasons for the decision  and specific  references  to the
pertinent  provisions of the Plan on which such decision is based. The Committee
shall  advise the  claimant  prior to the end of the  initial  sixty (60) day or
forty-five day period,  as applicable,  if additional  time is needed to process
such  application  for review.  The decision of the Committee shall be final and
conclusive.

     9.10 Claims/Disputes.  Any dispute or claim arising out of this Plan or the
breach  thereof,  which is not settled  under the Plan's  administrative  claims
procedure and which is pursued beyond such claims procedure, shall be brought in
Federal District Court, in Harris County, Texas.

     9.11 Conduct Injurious to the Company. Notwithstanding anything in the Plan
to the  contrary,  any and all  benefits  otherwise  payable to any  Participant
hereunder, except to the extent of any prior distributions under the Plan, shall
be  forever  forfeited  if it is  determined  by  the  Committee,  in  its  sole
discretion,  that such  Participant  has  engaged  in conduct  injurious  to the
Company, including but not limited to the following:

(a) dishonesty while in the employ of the Company;

(b)  imparting,  disclosing or appropriating proprietary information for himself
     or to or for any other person, firm, corporation, association or entity for
     any  reason or  purpose  whatsoever,  except if  required  by law or at the
     Company's direction;

(c)  performing  any act or engaging  in any course of conduct  which has or may
     reasonably have the effect of demeaning the name or business  reputation of
     the Company; or

(d)  providing  goods or services to or becoming an  employee,  owner,  officer,
     agent,  consultant,  advisor  or  director  of any  firm or  person  in any
     geographic  area which competes with the Company in any phase of any of the
     business lines or services  offered by the Company as of the  Participant's
     Retirement Date.

                                       14
<PAGE>

     9.12  Entire  Agreement.  This Plan  document  constitutes  the entire Plan
governing the Company and the  Participant  with respect to the subject  matters
hereof and supercedes all prior written and oral and all contemporaneous written
and oral  agreements  and  understandings,  with respect to the subject  matters
herein. This Plan may not be changed orally, but only by an amendment in writing
signed  by the  Company,  subject  to the  provisions  in  this  Plan  regarding
amendments thereto.

     IN WITNESS WHEREOF,  McDermott International,  Inc. has caused this Plan to
be executed by its duly authorized officer, effective as provided herein.

                                       15

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