Document:

Amendment No. 2 to Employee Matters Agreement

 EXHIBIT 10.3 
 AMENDMENT NO. 2 TO EMPLOYEE MATTERS AGREEMENT 
 THIS AMENDMENT NO. 2 TO
EMPLOYEE MATTERS AGREEMENT dated as of August 10, 2010 (this “Amendment”) is among McDermott International, Inc., a Panamanian corporation (“MII”), McDermott Investments, LLC, a Delaware limited liability company
(“MI”), The Babcock & Wilcox Company, a Delaware corporation (“B&W”), and Babcock & Wilcox Investment Company, a Delaware corporation (“BWICO” and, together with MII, MI and B&W, the
“Parties”). 
 PRELIMINARY STATEMENT 
 WHEREAS, the Parties are parties to an Employee Matters Agreement dated as of July 2, 2010 (as amended on August 3, 2010, the “Employee Matters Agreement”; capitalized terms used but
not defined in this Amendment shall have the respective meanings given such terms in the Employee Matters Agreement); and 

WHEREAS, Section 3.4(c) of the Employee Matters Agreement contains provisions relating to the treatment of MII Options held by each
holder of one or more of such stock options under any of the MII Legacy Equity Plans who is a Former B&W Officer or is now serving on the board of directors of both MII and B&W, which provisions contemplate that each such holder shall
receive, in substitution for each such MII Option (which shall be cancelled), both a Replacement B&W Option with respect to shares of B&W Common Stock and a Post-Distribution MII Option with respect to shares of MII Common Stock; and

 WHEREAS, the Parties desire to amend Section 3.4(c) of the Employee Matters Agreement as provided herein, to clarify
that the post-Distribution value of the Post-Distribution MII Options and the Replacement B&W Options referred to therein would each represent approximately one-half of the total value of such awards; 

NOW, THEREFORE, in consideration of the premises and the mutual agreements this Amendment contains and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, MII, MI, B&W and BWICO hereby agree as follows: 
 Section 1. Amendment. The Employee Matters Agreement is hereby amended as follows: 
 (a) The second and third sentences of Section 3.4(c) of the Employee Matters Agreement are hereby amended to read in their entirety as follows: 

In each case, the number of shares of MII Common Stock subject to the Post-Distribution MII Option shall be determined by multiplying the
aggregate fair market value of the number of shares of MII Common Stock subject to the MII Option using the Pre-Distribution MII Share Price by a fraction, the numerator of which is the Post-Distribution MII Share Price and the denominator of which
is the Pre-Distribution MII Share Price, and dividing that product by the Post-Distribution MII Share Price, with the resulting number of shares subject to the Post-Distribution MII Option being rounded up or down to the nearest whole

  

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share. In each case, the number of shares of B&W Common Stock subject to the Replacement B&W Option shall be determined by multiplying the fair market value of the number of shares of MII
Common Stock subject to the MII Option using the Pre-Distribution MII Share Price by a fraction, the numerator of which is one-half of the Post-Distribution B&W Share Price and the denominator of which is the Pre-Distribution MII Share Price,
and dividing that product by the Post-Distribution B&W Share Price, with the resulting number of shares subject to the Replacement B&W Option being rounded up or down to the nearest whole share. 

Section 2. Effect on Agreement. When this Amendment becomes effective pursuant to the provisions of Section 3 hereof,
(i) all references to “this Agreement” in the Employee Matters Agreement shall be deemed to refer to the Employee Matters Agreement as amended by the Amendment to Employee Matters Agreement dated as of August 3, 2010 entered into
by the Parties (the “Prior Amendment”) and as further amended by this Amendment, and (ii) all references to the “Employee Matters Agreement” in the Master Separation Agreement or any of the Ancillary Agreements shall be
deemed to refer to the Employee Matters Agreement as amended by the Prior Amendment and this Amendment, in each case unless the context otherwise requires. Except as previously amended by the Prior Amendment or amended hereby, all provisions of the
Employee Matters Agreement are and will remain in full force and effect. 
 Section 3. Execution in Counterparts;
Effectiveness. This Amendment may be executed in two or more counterparts, each of which will be deemed an original but all of which together shall be considered one and the same amendment and shall become effective when counterparts have been
signed by each of the Parties and delivered to the other Parties, it being understood that each of the Parties need not sign the same counterpart. 
 Section 4. Governing Law. To the extent not preempted by applicable federal law, this Amendment shall be governed by, and construed and enforced in accordance with, the substantive laws of the
State of Texas, without regard to any conflicts of law provisions thereof that would result in the application of the laws of any other jurisdiction. 
 [Signatures on Following Pages] 
  

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 IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first
above written. 
  

					
	MCDERMOTT INTERNATIONAL, INC.
		
	By:	 	 /S/ LIANE K. HINRICHS

		 	Name:	 	Liane K. Hinrichs
		 	Title:	 	Senior Vice President, General Counsel and Corporate Secretary
	
	MCDERMOTT INVESTMENTS, LLC
		
	By:	 	 /S/ LIANE K. HINRICHS

		 	Name:	 	Liane K. Hinrichs
		 	Title:	 	Senior Vice President, General Counsel and Corporate Secretary
	
	THE BABCOCK & WILCOX COMPANY
		
	By:	 	 /S/ MICHAEL S. TAFF

		 	Name:	 	Michael S. Taff
		 	Title:	 	Senior Vice President and Chief Financial Officer
	
	BABCOCK & WILCOX INVESTMENT COMPANY
		
	By:	 	 /S/ MICHAEL S. TAFF

		 	Name:	 	Michael S. Taff
		 	Title:	 	Senior Vice President and Chief Financial OfficerMcDermott International, Inc. Director and Executive Deferred Compensation Plan

 McDermott International, Inc. 

Director and Executive Deferred Compensation Plan 
 As Amended and Restated November 8, 2010 
 ARTICLE I 

 Purpose 
 1.1 Purpose of Plan. The purpose of this McDermott International, Inc. Director and Executive Deferred Compensation Plan (the “Plan”) is to advance the interests of McDermott
International, Inc., its subsidiaries and affiliates by providing certain deferred compensation opportunities for directors and executives as well as retirement benefits that will attract and retain highly qualified key employees accountable for the
successful conduct of its business. 
 1.2 ERISA Status. This Plan, to the extent of executive participation, 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. This Plan is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and regulations and rulings
issued thereunder, to the extent applicable. 
 1.3 Effective Date. The original effective date of this Plan was
January 1, 2005, and this Plan was amended and restated as of the close of business December 31, 2008. The effective date of this amendment and restatement is the close of business November 8, 2010 (the “Effective Date”).

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

	 	2.1	Account. Collectively, means the Participant’s Company Account and the Participant’s Deferral Account. 

 

	 	2.2	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. 

  

	 	2.3	Beneficial Owner or Beneficial Ownership. Beneficial Owner or Beneficial Ownership has the meaning ascribed to such term in Rule 13d-3 of the General
Rules and Regulations under the Exchange Act. 

  

	 	2.4	 Beneficiary. Each person designated by a 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 or her Account. In order to be effective under this Plan, 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 estate, or heirs at law if there is no
administration of the Participant’s estate. 

  

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

  

	 	2.6	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 2009 McDermott International, Inc. Long-Term Incentive Plan and
any successor plan thereto. 

  

	 	2.7	Cause. Cause means: 

  

	 	(a)	the overt and willful disobedience of orders or directives issued to a Participant who is an Eligible Employee that are within his scope of duties, or any other willful
and continued failure of such 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 such
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 such Participant has not substantially performed his duties,
after which such Participant shall have 30 days to defend or remedy such failure to substantially perform his duties; 

  

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

  

	 	(c)	the conviction of a Participant who is an Eligible Employee with no further possibility of appeal or, or plea of nolo contendere by such Participant to, any
felony or crime of falsehood. 

 The cessation of employment of a Participant in any situation involving any
conditions or facts described under either subparagraph (a) or (b) above shall not be deemed to be for “Cause” unless and until there shall have been delivered such Participant 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. 

  
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	 	2.8	Change in Control. means the occurrence or existence of any of the following facts or circumstances after the Effective Date: 

 

	 	(a)	any person (other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation or other entity owned, directly or
indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing thirty percent
(30%) or more of the combined voting power of the Company’s then outstanding voting securities; 

  

	 	(b)	within any period of two (2) consecutive years (not including any period prior to the initial execution of this Plan), individuals who at the beginning of such
period constitute the Board, and any new Directors (other than a Director designated by a Person who has entered into an agreement with the Company to effect any transaction described in Clause (a), (c), (d) or (e) of this
Section 2.7) whose election by the Board or nomination for election by the stockholders of the Company, was approved by a vote of at least two-thirds (2/3) of the Directors, then still in office who either were 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 of the Board; 

  

	 	(c)	a merger or consolidation of the Company, with any other corporation or other entity has been consummated, other than a merger or consolidation which results in the
voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the combined
voting power of the voting securities of the Company or the surviving entity outstanding immediately after such merger or consolidation; 

  

	 	(d)	the shareholders of the Company approve: (i) a plan of complete liquidation of the Company; or (ii) an agreement for the sale or disposition by the Company of
all or substantially all of the Company’s assets; or 

  

	 	(e)	 within one year following the consummation of a merger or consolidation transaction involving the Company (whether as a constituent corporation, the
acquiror, the direct or indirect parent entity of the acquiror, the entity being acquired, or the direct or indirect parent entity of the entity being acquired): (i) individuals who, at the time of the execution and delivery of the definitive
agreement pursuant to which such transaction has been consummated by the parties thereto (a “Definitive Transaction 

  
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Agreement”) (or, if there are multiple such agreements relating to such transaction, the first time of execution and delivery by the parties to any such agreement) (the “Execution
Time”), constituted the Board cease, for any reason (excluding death, disability or voluntary resignation but including any such voluntary resignation effected in accordance with any Definitive Transaction Agreement), to constitute a majority
of the Board; or (ii) either individual who, at the Execution Time, served as the Chief Executive Officer or Chief Financial Officer of the Company does not, for any reason (excluding as a result of death, disability or voluntary termination
but including any such voluntary termination effected in accordance with any Definitive Transaction Agreement), serve as the Chief Executive Officer or Chief Financial Officer, as applicable, of the Company or, if the Company does not continue as a
registrant with a class of equity securities registered pursuant to Section 12(b) of the Exchange Act, as the Chief Executive Officer or Chief Financial Officer, as applicable, of a corporation or other entity that is (A) a registrant with
a class of equity securities registered pursuant to Section 12(b) of the Exchange Act and (B) the surviving entity in such transaction or a direct or indirect parent entity of the surviving entity or the Company following the consummation
of such transaction; provided, however, that a Change in Control shall not be deemed to have occurred pursuant to this clause (e) in the case of a merger or consolidation which results in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 55% of the combined voting power of the voting securities of the Company or the
surviving entity outstanding immediately after such merger or consolidation. 

 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 a transaction resulting in a Change in Control. 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: (i) passive ownership of less than three percent (3%) of the stock of
the purchasing company; or (ii) ownership of equity participation in the purchasing company or group which is otherwise not significant, as determined prior to the Change in Control by a majority of the non-employee continuing Directors).

 Anything in this definition to the contrary notwithstanding, no Change in Control shall be deemed to have
occurred unless such event constitutes an event specified in Code Section 409A(2)(A)(v) and the Treasury Regulations promulgated thereunder. 
  

	 	2.9	Code. The Internal Revenue Code of 1986, as amended. 

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

  

	 	2.11	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. 

  

	 	2.12	Company Account. The notional 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. 

  

	 	2.13	Company Contribution. The total contributions credited to a Participant’s Company Account for each Plan Year pursuant to the provisions of
Section 4.1 or 4.2. 

  

	 	2.14	Compensation. In the case of Participants who are Eligible Employees, the salary, wages and other cash remuneration received by a Participant during any
Plan Year or in respect of employment or service 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, and amounts, if any, deferred by the Participant under this Plan, but unless authorized by the Committee, excluding cash payments under the 2009 McDermott International, Inc. Long-Term Incentive Plan and any successor
plan thereto and other additional remuneration in any form. 

 In the case of a Participant who is
a Director and not an employee of the Company, the annual retainer and fees received by the Participant during any Plan Year. 
  

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

  

	 	2.16	Deferral Account. The notional 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. 

  

	 	2.17	Deferral Contribution. Compensation that is deferred by a Participant pursuant to Section 4.3 and credited to a Participant’s Deferral Account
pursuant to the provisions of Section 4.3. 

  

	 	2.18	Director. Any individual who is a member of the Board; provided, however, that any member of the Board who is employed by the Company shall be considered
an Eligible Employee under this Plan and not a Director (except for purposes of Section 2.7). 

  
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	 	2.19	Disabled. A Participant will be considered Disabled if the Committee determines in its sole discretion that the Participant is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.

  

	 	2.20	Eligible Employee. The Company’s CEO and any officers of the Company and its subsidiaries and affiliates. 

 

	 	2.21	ERISA. The Employee Retirement Income Security Act of 1974, as amended. 

 

	 	2.22	Exchange Act. The Securities Exchange Act of 1934, as amended. 

 

	 	2.23	IRS. The Internal Revenue Service. 

  

	 	2.24	Participant. An Eligible Employee or Director who has been selected by the Committee as a Participant in this Plan or a portion thereof until such
Eligible Employee or Director ceases to be a Participant in accordance with Article III of this Plan. 

  

	 	2.25	Person. Person has the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Section 13(d) and 14(d) thereof,
including a “group” (as that term is used in Section 13(d)(3) thereof). 

  

	 	2.26	Plan Year. The twelve-consecutive month period commencing January 1 of each year. 

 

	 	2.27	Retirement. Retirement means, in the case of a Participant who is an Eligible Employee, Separation from Service with the Company on or after the first of
the calendar month following the Participant’s attainment of the age of 65. 

  

	 	2.28	Separation from Service. If the Participant is an Eligible Employee, a Separation from Service occurs on the date a Participant dies, retires or otherwise
has a termination of employment with the Company. A termination of employment occurs on the date after which the Participant and the Company reasonably anticipate that no further services will be performed by the Participant or that the level of
bona fide services reasonably anticipated to be performed after such date will permanently decrease to 49% or less of the average level of bona fide services provided in the immediately preceding 36 months. 

If the Participant is a Director, a Separation from Service occurs on the date the Participant ceases to be a Director of the Company,
provided that as of such date the Participant and the Company reasonably anticipate that no further services will be performed by the Participant or that the level of bona fide services reasonably anticipated to be performed after such date
will permanently decrease to 49% or less of the average level of bona fide services provided in the immediately preceding 36 months. 

  
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	 	2.29	Specified Person. Specified Person shall have the meaning set forth in Code Section 409A(a)(2)(B)(i) and regulations and rulings promulgated by the
IRS thereunder. 

  

	 	2.30	Unforeseeable Emergency. A severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s
spouse, the Participant’s Beneficiary, or any dependent (as defined in Section 409A of the Code) of the Participant; loss of a Participant’s property due to casualty; or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of a Participant. Whether a Participant is faced with an Unforeseeable Emergency is to be determined by the Committee in its sole discretion, based on the relevant facts and circumstances of each
case. In any case, a distribution on account of Unforeseeable Emergency may not exceed the amount necessary to relieve the emergency, plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into
account the extent that the emergency may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe
financial hardship, or by cessation of deferrals under this Plan. 

  

	 	2.31	Vested Account. The sum of the Participant’s vested Company Account and the Participant’s Deferral Account. 

 

	 	2.32	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.

  

	 	2.33	Years of Participation. The sum of whole Plan Years of participation in this Plan as an active Eligible Employee in continuous employment or as a Director
in continuous service, excluding fractional years. 

 ARTICLE III 

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

  
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participate in this Plan by the Committee. A Director who again becomes a member of the Board following his or her Separation from Service shall become a Participant only if such Director is
again selected to participate in this 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, which may be zero, 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 bookkeeping entries as of the first day of this 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 or her annual base salary, retainer or fees that would otherwise be paid
during such Plan Year and/or of any whole percentage (or dollar amount) of any Bonus earned during such Plan Year, and instead have such amounts credited as a bookkeeping entry to his or her Deferral Account. The Compensation otherwise payable to a
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. 

4.4 Participant Elections. Unless a different time is established by the Committee for a particular
deferral election, prior to the first day of each Plan Year, each Participant shall file a written election with the Committee specifying (i) the type(s) and amount(s) of Compensation that he or she wishes to defer pursuant to Section 4.3,
if Deferral Contributions are permitted by the Committee for the relevant Plan Year, (ii) the payment date or payment commencement date pertaining to the portion of his or her Vested Account that is attributable to contributions made in the
relevant Plan Year, and (iii) the form of payment of the portion of his or her Vested Account that is attributable to contributions made in the relevant Plan Year. Such election with respect to any Plan Year must be filed with the Committee no
later than the last day of the immediately preceding Plan Year; provided, however, that an election made by a new Participant who is first eligible to participate in this Plan may be made no later than the 30th day following the date on which he or she is initially eligible to
participate in this Plan, but only with respect to Compensation earned after the effective date of such election. If Deferral Contributions are permitted, a Participant who is (a) an Eligible Employee may elect to defer up to 50% of his or her
annual salary and/or up to 100% of any Bonus earned in any Plan Year or (b) a Director may elect to defer up to 100% of his or her annual retainer and fees earned in any Plan Year. 

  
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 Except as set forth in
Section 6.3, a Participant shall not be permitted to change his or her election with respect to the timing or form of payment and any election made hereunder shall not apply with respect to prior Plan Years. Failure to make a timely Deferral
Contribution election will result in no Deferral Contributions for the relevant Plan Year. If a Participant fails to make a timely election specifying time and form of payment, payment of the portion of the Participant’s Vested Account that is
attributable to contributions made in the relevant Plan Year shall be paid in accordance with Section 6.4. 
 4.5
Suspension of Deferral Contributions. Except as provided below, an election to make Deferral Contributions in a Plan Year shall be irrevocable on the last day of the immediately preceding Plan Year. To the extent expressly permitted under
Code Section 409A and regulations and rulings promulgated by the IRS thereunder, the deferral election of a Participant who is an Eligible Employee shall be suspended during any unpaid leave of absence granted in accordance with any applicable
Company policy; provided, however that such deferral election shall become fully operative as of the first day of the payroll period commencing coincident with or next following the Participant’s return to active employment following
termination of the approved unpaid leave in this Plan Year to which the Participant’s deferral pertains. In the event of an Unforeseeable Emergency, a Participant shall suspend deferrals in order to relieve the emergency, provided that the
deferrals must be suspended for the entire remainder of the applicable Plan Year. In the event of a Disability, the Participant may suspend deferrals by the later of the end of the taxable year of the Company in which the Disability arises, or the
15th of the third month following the date that the Disability arises. 
 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. A separate
“Company Sub Account” may be maintained for each Participant for each Plan Year in respect of which Company Contributions are credited under this Plan for the benefit of the Participant. 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 based upon the performance of the Deemed Investments selected by the Participant 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 the Participant under this Plan. The Company shall not be required to segregate any of its assets with respect to
Plan obligations nor shall any provision of this 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. A separate “Deferral Sub Account” may be maintained for each
Participant for each Plan Year in respect of which Deferral Contributions are credited under this Plan for the benefit of the Participant. The Committee shall credit the amount of each Deferral Contribution made on

  
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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 based upon the performance of the Deemed Investments selected by the Participant 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 the Participant under this Plan. 

5.3 Hypothetical Accruals to the Account. In accordance with procedures established by the Committee and subject to this
Section 5.3, each Participant may designate the Deemed Investments with respect to which his or her Account shall be deemed to be invested. 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 Participant may change such designation with respect to future Company and Deferral Contributions, as well as amounts already credited to his or her Account in accordance
with procedures established by the Committee. 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 this 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. 
 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) 20% times the Participant’s Years of Participation, and (ii) 100%. Except as provided in
Section 5.5, upon Separation from Service or cessation of Plan participation, whichever is earlier, a Participant shall forfeit all amounts credited to his or her Company Account other than his or her Vested Account value determined as of the
close of business coincident with or next following the date of such Separation from Service or cessation of Plan participation, as applicable, provided, however, that amounts not so forfeited shall continue to be debited and credited in accordance
with Section 5.3 from and after Separation from Service. 
 5.5 Accelerated Vesting. The vesting provisions
in Section 5.4 notwithstanding, the Participant shall have a Vested Percentage of 100% for his or her entire Account upon the soonest of the following to occur during the Participant’s employment with the Company: (i) the date of
Separation from Service as a result of the Participant’s death or disability or termination by the Company for any reason other than Cause, (ii) the Participant’s Disability, (iii) the Participant’s Retirement (if the
Participant is not a Director), or (iv) the date a Change in Control occurs. Each Participant who was employed by the Company on December 31, 2008 shall have a vested percentage of 100% of amounts allocated to his or her Account as of
December 31, 2008 and future gains and losses thereon. Amounts allocated on or after January 1, 2009 and gains and losses thereon shall vest in accordance with Section 5.4 and the first sentence of this Section 5.5. 

5.6 Vesting of Deferral Account. A Participant’s Vested Percentage with regard to his or her Deferral Account shall at
all times be 100%. 

  
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 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 entity within the Company which
employed the Participant or for whom the Participant rendered services when the obligation was accrued, and no other entity shall have such obligation and any failure by a particular entity to live up to its obligation under this Plan shall have no
effect on any other entity. 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, with respect to his or her rights and benefits under this Plan (including Accounts), 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. 
 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. The occasions for distributions shall be (i) the Participant’s Separation From Service, including upon Retirement (if the Participant is not a Director) or death, (ii) Disability, (iii) the
occurrence of an Unforeseeable Emergency, or (iv) the completion of fixed period of deferral. 
 6.2 Distribution
Elections. A Participant shall elect the time and form of payment of his or her Vested Account in the manner set forth in Section 4.4. A Participant who fails to timely file a distribution election for a Plan Year shall be deemed to
have elected to receive the portion of his or her Vested Account attributable to the relevant Plan Year in a single lump-sum payment within 30 days after his or her Separation from Service, or on the first day of the seventh month following his
Separation from Service if he or she is a Specified Person as of the date of the Separation from Service. If a Participant’s Vested Account is less than $50,000, it will be distributed in a single lump-sum distribution irrespective of any
election to the contrary. 
 6.3 Change of Former Timing of Payments. A Participant may make a subsequent election
no later than 12 months prior to the date that he or she would be eligible to receive a distribution under this Plan, to change the timing and form of payment of the distribution; provided, however, that the payment, or first payment in the case of
a series of payments, under the subsequent election shall be deferred to a date that is at least five (5) years after the date the Participant would have been eligible to receive, or begin receiving, the distribution under the

  
 11 

 
prior election. To be effective, any such election must be in writing timely made and received by the Committee, and cannot be effective for at least 12 months after the date on which the
election is made. The requirement in this Section 6.3 that the first payment with respect to which any election thereunder applies must be deferred for at least five (5) years shall not apply to a payment on account of the
Participant’s death, Disability or in the event of an Unforeseeable Emergency. 
 6.4 Distribution on Account of
Separation from Service or Disability. Subject to Section 6.8, upon a Participant’s Disability or Separation from Service, the Company shall distribute, or begin distributing, to the Participant (or the Participant’s
Beneficiary) within a reasonable period of time (commencing not later than 30 days after such separation), the Participant’s Vested Account. Such distribution(s) shall be in the form specified on the distribution election form(s) filed with the
Committee that covers the relevant Vested Account. If no effective election form exists, the distribution shall be distributed in the form of a lump-sum payment equal to the relevant portion of the Participant’s Vested Account. 

6.5 Continuation of Hypothetical Accruals to the Vested Account After Commencement of Distributions. If any Vested Account
of a Participant is to be distributed in a form other than a lump sum, then such Vested Account shall continue to be adjusted for hypothetical income, gain or loss and any payment or distributions attributable to the Vested Account as described in
Section 5.1, and 5.2, until the entire Vested Account has been distributed. 
 6.6 Unforeseeable Emergency
Distribution. In the event that the Committee, upon the written request of a Participant, determines in its sole discretion that such Participant has incurred an Unforeseeable Emergency, as defined in Section 2.30, such Participant may
be entitled to receive a distribution of part or all of the Participant’s Vested Account, in an amount not to exceed the lesser of (a) the amount determined by the Committee in accordance with Section 2.30, or (b) the value of
such Participant’s Vested Account at the time of the emergency. Such amount shall be paid in a single lump-sum payment as soon as administratively practicable after the Committee has made its determination with respect to the availability and
amount of such distribution; provided, however, that the payment shall not be made after the later of the end of the taxable year of the Company with respect to which the Unforeseeable Emergency arises or the 15th day of the third month following
the date of the occurrence of the Unforeseeable Emergency. If a Participant’s Account is deemed to be invested in more than one Deemed Investment, such distribution shall be made pro rata from each of such Deemed Investments. For purposes of
the foregoing, such distribution shall be made from the Participant’s Account beginning with the oldest Account in the following order: First, such amount shall be debited from the Participant’s Deferral Account, and second,
from the Participant’s Company Account (subject to forfeitures with respect to the non-vested portion of the Company Account utilized for such distribution). 
 6.7 Distribution on Account of Completion of a Fixed Deferral Period. At the time of a Participant’s election to participate in this Plan, the Participant may elect to receive the
Distribution of a Participant’s Vested Account (established only in respect of the relevant Plan Year), or any applicable Vested Plan Year Company Sub-Account or Plan Year Deferral Sub-Account on the completion of a fixed deferral period
elected by the Participant on forms provided by the Committee. 

  
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 6.8 Limitation on Distributions to Certain Key Employees. Notwithstanding any
other provision of this Plan to the contrary, to the extent that a Participant is a Specified Person and the Participant’s distribution is on account of Separation from Service, distributions may not be made before the date which is six months
after the date of the Separation from Service. Payments to which the Participant would otherwise be entitled during the six-month period described above shall be delayed and paid in a lump sum on the first day of the seventh month after the date of
the Separation from Service. 
 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 this 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 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. 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 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 this Plan. Committee decisions shall be made by majority action. The Committee may act by written consent. 

  
 13 

  
 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 this 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, or 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 this 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 or willful misconduct in the performance of his or her 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. 
 ARTICLE VIII  

Amendment and Termination 
 The Company retains the power to amend this Plan or to terminate this 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 or her 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. No amendment or termination of this Plan shall be made in a manner that results in noncompliance with the requirements of Code Section 409A, to the extent
applicable. 
 ARTICLE IX  
 Miscellaneous 
 9.1 Plan Does Not Confer Right to be a
Director or an Employee. Nothing contained in this Plan shall be deemed to give any Participant the right to be retained in the employment or directorship 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 or directorship at any time. 
 9.2 Nonalienation and Nonassignment. Except for debts owed to the Company by a Participant or Beneficiary, and in accordance with Section 9.5, no amounts payable or to become payable
under this 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. 

  
 14 

  
 9.3 Tax
Withholding. The Company shall have the right to deduct from any payments to a Participant or Beneficiary under this Plan any taxes required by applicable 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 FICA Withholding/Employee Deferrals/Company Contributions. If the Participant is an employee of the Company, for each payroll period, the Company shall withhold from that portion of the
Participant’s Compensation that is not being deferred under this Plan, the Participant’s share of FICA and other applicable taxes that are required to be withheld with respect to (i) Employee Deferrals, and (ii) Company
Contributions as they vest and become subject to such FICA withholding. To the extent that there are insufficient funds to satisfy all applicable tax withholding requirements in a timely manner, the Company reserves the right to reduce the
Participant’s Employee Deferrals, as required to provide available funds for applicable tax withholding requirements. To the extent there are still insufficient funds to satisfy all such applicable tax withholding requirements, the Participant
shall timely remit cash funds to the Company sufficient to cover such withholding requirements. 
 9.5 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, incurred in the ordinary course of the service relationship, 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 this Plan; provided,
however, that the amount offset in any one taxable year does not exceed $5,000 and the offset is taken at the same time and in the same amount as the debt otherwise would have been due from the Participant, but only at the time that an amount is
otherwise payable to a Participant under this Plan. 
 9.6 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 this Plan, shall be deemed to include the feminine gender. 

9.7 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 this Plan, the text shall control. 
 9.8 Applicable Law. Except to
the extent preempted by U.S. federal law, the terms and provisions of this Plan shall be construed in accordance with the laws of the State of Texas, other than any conflicts of laws provisions thereof which would result in the application of the
laws of any other jurisdiction. 

  
 15 

  
 9.9
Successors. All obligations under this 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. 
 9.10
Claims Procedure. The Committee shall have sole discretionary authority with regard to the adjudication of any claims made under this Plan. All claims for benefits under this 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,
or 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 or her 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 this 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. 

Within ninety (90) days after receipt of the written notice of denial of a claim as provided above, a claimant or his or her 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 by Certified or Registered Mail to his or her 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 this 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. 

  
 16 

  
 9.11
Claims/Disputes. Any dispute or claim arising out of this Plan or the breach thereof, which is not settled under this Plan’s administrative claims procedure and which is pursued beyond such claims procedure, shall be brought in
Federal District Court, in Harris County, Texas. 
 9.12 Conduct Injurious to the Company. Notwithstanding
anything in this Plan to the contrary, any and all benefits otherwise payable to any Participant hereunder, except to the extent of any prior distributions under this 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 or while serving as a director of the Company; 

 

	(b)	imparting, disclosing or appropriating proprietary information for himself or herself or to or for any other person, firm, corporation, association or entity for any
reason or purpose whatsoever, except if required by applicable 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 or the date the Participant ceases to be a Director. 

9.13 Compliance with Code Section 409A. This Plan is intended to meet the requirements of Section 409A of the
Code, as applicable, in order to avoid any adverse tax consequences resulting from any failure to comply with Section 409A of the Code and, as a result, this Plan shall be operated in a manner consistent with such compliance. Except to the
extent expressly set forth in this Plan, the Participant (and/or the Participant’s Beneficiary, as applicable) shall have no right to dictate the taxable year in which any payment hereunder that is subject to Section 409A of the Code
should be paid. 
 9.14 No Guarantee of Tax Consequences. None of the Board, officers or employees of the Company,
the Company or any affiliate of the Company makes any commitment or guarantee that any federal, state or local tax treatment will apply or be available to any individual or person participating hereunder or eligible to participate hereunder.

 9.15 Entire Agreement. This Plan document constitutes the entire Plan governing the Company and each
Participant with respect to the subject matters hereof and supersedes all prior written and oral and all contemporaneous written and oral agreements and understandings, with respect to the subject matters hereof. 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. 

  
 17 

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

			
	McDermott International, Inc.
		
	By:	 	 /s/ Stephen M. Johnson

		
	Title:	 	 President and Chief Executive Officer

		
	Date:	 	 November 8, 2010

  
 18

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