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New Supplemental Executive Retirement Plan

Addendum or Modifications

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McDermott International, Inc

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Title: New Supplemental Executive Retirement Plan
Governing Law: Texas     Date: 1/7/2005
Industry: Oil Well Services and Equipment     Sector: Energy

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Exhibit 10.2

McDermott International, Inc.

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New Supplemental Executive Retirement Plan

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Effective January 1, 2005

ARTICLE I

Purpose

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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

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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,

 

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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.

 

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(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.)

 

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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.

 

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(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.

 

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ARTICLE III

Participation

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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

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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.

 

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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

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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 det


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