-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J9tC/wpfvp7u76BJF3/9n55kFh1SEFpTd5LWlrOO9q+xyNm5qv4vXWMmfoEbhrSv 4Yx2rsS+Dcrfx0mh5r1MZA== 0001157523-08-007864.txt : 20081006 0001157523-08-007864.hdr.sgml : 20081006 20081006170013 ACCESSION NUMBER: 0001157523-08-007864 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080930 ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20081006 DATE AS OF CHANGE: 20081006 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCDERMOTT INTERNATIONAL INC CENTRAL INDEX KEY: 0000708819 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED PLATE WORK (BOILER SHOPS) [3443] IRS NUMBER: 720593134 STATE OF INCORPORATION: R1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08430 FILM NUMBER: 081110169 BUSINESS ADDRESS: STREET 1: 777 N. ELDRIDGE PARKWAY CITY: HOUSTON STATE: TX ZIP: 77079 BUSINESS PHONE: 281-870-5000 MAIL ADDRESS: STREET 1: 777 N. ELDRIDGE PARKWAY CITY: HOUSTON STATE: TX ZIP: 77079 8-K 1 a5794808.txt MCDERMOTT INTERNATIONAL, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): September 30, 2008 McDERMOTT INTERNATIONAL, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) REPUBLIC OF PANAMA 001-08430 72-0593134 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 777 N. Eldridge Parkway, Houston, Texas 77079 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's Telephone Number, including Area Code: (281) 870-5901 -------------- ----------------------------------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ----------------------------------------- Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. In connection with Mr. Wilkinson's resignation as our Chief Executive Officer, Mr. Wilkinson entered into a Separation Agreement with our subsidiary, McDermott Incorporated, on September 30, 2008. Under the terms of the Separation Agreement, Mr. Wilkinson will provide general advisory services in connection with his separation for a period of 24 months following his resignation. Mr. Wilkinson will receive (a) a conditional pro-rated bonus payment for 2008 in an amount that will depend on the 2008 bonus generally paid to other employees under our EICP; (b) continued vesting of his outstanding equity awards through September 30, 2010; and (c) accelerated vesting of the unvested portion of his Supplemental Executive Retirement Plan ("SERP") account. Based on the vesting schedule of his existing equity awards, Mr. Wilkinson will vest in the following amounts and awards through September 30, 2010: 42,132 shares of deferred stock units and, depending on the performance of the company, between 90,000 and 174,000 shares of performance shares. The value of the accelerated portion of Mr. Wilkinson's SERP account as of September 30, 2008, is $362,643.08. The Separation Agreement also includes a covenant not to compete and a release of claims by Mr. Wilkinson, as described therein. A copy of the Separation Agreement is attached as Exhibit 10.1 hereto and is incorporated herein by reference. On October 1, 2008, Mr. Wilkinson also entered into a Consultancy Agreement with McDermott Incorporated, under which Mr. Wilkinson will provide consulting services to assist the Board, our Chief Executive Officer and our leadership team with successful business continuity following his departure for a period of up to one year. Under the Consultancy Agreement, Mr. Wilkinson will receive a lump-sum payment of $2,000,000.00 and a series of consulting payments of (a) $31,250.00 per month for a specified initial period and (b) a $2,900 per diem (i) for each partial or full day of service in excess of 10 days of service during each month of such initial period and (ii) for each partial or full day of service during the remaining term following such initial period. A copy of the Consultancy Agreement is attached as Exhibit 10.2 hereto and is incorporated herein by reference. Item 9.01 Financial Statements and Exhibits. (d) Exhibits 10.1 Separation Agreement 10.2 Consultancy Agreement SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. McDERMOTT INTERNATIONAL, INC. By: /s/Dennis S. Baldwin ------------------------------------------- Dennis S. Baldwin Vice President and Chief Accounting Officer October 6, 2008 EX-10.1 2 a5794808ex10-1.txt EXHIBIT 10.1 Exhibit 10.1 SEPARATION AGREEMENT -------------------- This Separation Agreement (the "Agreement") is entered into by and between, and shall inure to the benefit of and be binding upon, the following parties: Bruce W. Wilkinson, hereinafter referred to as "Mr. Wilkinson" ; and McDERMOTT INCORPORATED, hereinafter referred to as the "Company." WITNESSETH: ----------- WHEREAS, Mr. Wilkinson resigned from employment with the Company on September 30, 2008 (the "Resignation Date"); and WHEREAS, the Company and Mr. Wilkinson mutually desire to establish and agree upon the terms and conditions of Mr. Wilkinson's separation from service. NOW, THEREFORE, in consideration of the mutual promises and obligations set forth herein, Mr.Wilkinson and the Company hereby agree as follows: 1. Payments by the Company. If a bonus is paid to Company employees for fiscal year 2008 under the McDermott International, Inc. Executive Incentive Compensation Plan (the "EICP"), the Company will pay a bonus to Mr. Wilkinson. The gross amount of such bonus shall be calculated by multiplying Mr. Wilkinson's annualized base salary on January 1, 2008 by 100%, multiplying the resulting product by the applicable performance factor (not to exceed 2X), and multiplying the resulting figure by nine-twelfths (9/12). Any such bonus shall be paid in accordance with the Company's customary practice, but in no event later than March 15, 2009, and shall be subject to appropriate tax withholdings. Mr. Wilkinson previously received certain awards (the "Awards") under the McDermott International, Inc. 2001 Directors and Officers Long Term Incentive Plan (the "LTIP"). Subject to the provisions of Paragraph 5 below, Mr. Wilkinson's outstanding unvested Awards shall remain in full force and effect during the period from the Resignation Date through September 30, 2010 and any Awards scheduled to vest during that period shall become vested and payable in accordance with the terms of the LTIP and the applicable Grant Agreement. All other outstanding unvested Awards not scheduled to vest during that period shall be forfeited, unless a Change in Control (as defined in the LTIP) occurs and results in an early vesting on or before September 30, 2010. 2. Retiree Benefits. As of the first day of the month coincident with or next following his attainment of age 65, Mr. Wilkinson shall begin receiving benefits under the Retirement Plan for Employees of McDermott Incorporated and Participating Subsidiary and Affiliated Companies and, subject to Paragraph 5 below, under the Restoration of Retirement Income Plan (the "Excess Plan"). In addition, Mr. Wilkinson shall be entitled to receive the portion of his account balance in the McDermott International, Inc. New Supplemental Executive Retirement Plan ("SERP") in which he is vested as of his Resignation Date, and the vesting of the remaining portion of his SERP account shall be accelerated so that, subject to Paragraph 5 below, Mr. Wilkinson is 100% vested in such account as of his Resignation Date. SERP benefits shall be distributed in accordance with Mr. Wilkinson's existing election, in a single lump sum payment on the first day of the calendar month next following the six month anniversary of his Resignation Date. 3. Cooperation and Advisory Services. During the period beginning on the Resignation Date and continuing for twenty-four months thereafter, Mr. Wilkinson shall provide such cooperation and advisory services as the Company may request with respect to matters in which he was involved during his employment with the Company and similar matters arising in the ordinary course of business. Additionally, the Company or its affiliates may request Mr. Wilkinson's assistance with respect to matters outside the ordinary course of business; provided that any such request shall be subject to mutually acceptable terms and conditions. -2- 4. Release of Claims. In consideration of the foregoing, the adequacy of which is hereby expressly acknowledged, Mr. Wilkinson hereby unconditionally and irrevocably releases and forever discharges, to the fullest extent applicable law permits, the "Releasees," as defined below, from any and every action, cause of action, complaint, claim, demand, administrative charge, legal right, compensation, obligation, damages (including consequential, exemplary and punitive damages), liability, cost and/or expense (including attorney's fees) that he has, may have or may be entitled to from or against the Releasees, whether legal, equitable or administrative, in any forum or jurisdiction, whether known or unknown, foreseen or unforeseen, matured or unmatured, accrued or not accrued which arises directly or indirectly out of, or is based on or related in any way to Mr. Wilkinson's employment with or termination of employment from the Company, its predecessors, successors and assigns and past, present and future affiliates, subsidiaries, divisions and parent corporations, including, without limitation, any such matter arising from the negligence, gross negligence or willful misconduct of the Releasees, (together, the "Released Claims"); provided, however, that this Release does not apply to any claims solely and specifically (1) arising under the Age Discrimination in Employment Act of 1967, as amended arising after the date this Agreement is executed, (2) for indemnification (including, without limitation, under the Company's organizational documents or insurance policies) arising in connection with an action instituted by a third party against the Company, its affiliates or Mr. Wilkinson in his capacity as a former officer or director of the Company or its affiliates, or (3) arising from any breach or failure to perform this Agreement. -3- The parties intend this Release to cover any and all such Released Claims, whether arising under any employment contract (express or implied), policies, procedures or practices of any of the Releasees, and/or by any acts or omissions of any of the Releasees' agents or employees or former agents or employees and/or whether arising under any state or federal statute, including but not limited to Texas' employment discrimination laws, all federal discrimination laws, the Age Discrimination in Employment Act of 1967, as amended, the Employee Retirement Income Security Act of 1974, as amended, all local laws and ordinances and/or common law, without exception. As such, it is expressly acknowledged and agreed that this Release is a general release, representing a full and complete disposition and satisfaction of all of the Company's real or alleged legal obligations to Mr. Wilkinson with the exceptions noted above. The term "Releasees" means the Company, its predecessors, successors and assigns and past, present and future affiliates, subsidiaries, divisions and parent corporations and all their respective past, present and future officers, directors, shareholders, employee benefit plan administrators, employees and agents, individually and in their respective capacities. Mr. Wilkinson expressly agrees that neither he nor any person acting on his behalf will file or permit to be filed any action for legal or equitable relief against the Releasees involving any matter related in any way to his employment with, or resignation from employment with the Company, its predecessors, successors, assigns and past, present and future affiliates, subsidiaries, divisions and parent corporations, including the matters covered by the Released Claims. In the event that such an action is filed, Mr. Wilkinson agrees that the Releasees are entitled to legal and equitable remedies against him, including an award of attorney's fees. However, it is expressly understood and agreed that the foregoing sentence shall not apply to any charge filed by Mr. Wilkinson with the Equal Employment Opportunity Commission or any action filed by Mr. Wilkinson that is narrowly limited to seeking a determination as to the validity of this Agreement and enforcement thereof. Should Mr. Wilkinson file a charge with the Equal Employment Opportunity Commission or should any governmental entity, agency, or commission file a charge, action, complaint or lawsuit against any of the Releasees based on any Released Claim, Mr. Wilkinson agrees not to seek or accept any resulting relief whatsoever. -4- 5. Undertakings By Mr. Wilkinson. In consideration of the foregoing, the adequacy of which is expressly acknowledged and agreed, unless otherwise mutually agreed between Mr. Wilkinson and the Company, Mr. Wilkinson shall immediately return to the Company any and all documents, records, files, reports, memoranda, books, papers, plans, letters and any other data in his possession regardless of the medium held or stored that relate in any way to the business of the Company, and any credit cards, keys, access cards, calling cards, computer equipment and software, telephone, facsimile or other equipment or property of the Company, and agrees that during the period beginning on October 1, 2008 and ending on September 30, 2010: (a) He will not at any time disclose or use for his own benefit or purposes or for the benefit or purposes of any party other than the Company, any trade secrets, information, data or other confidential or proprietary information or data which may have come to Mr. Wilkinson's knowledge during his employment with the Company, provided, however that the foregoing shall not apply to information which is generally known to the industry or the public other than as a result of Mr. Wilkinson's breach of this undertaking. Notwithstanding the foregoing, this undertaking shall apply without limit of time; (b) He will refrain from performing any act, engaging in any conduct or course of action or making or publishing any adverse or untrue or misleading statement which has or may reasonably have the effect of demeaning the name or business reputation of the Releasees or which adversely affects or may reasonably adversely affect the best interests (economic or otherwise) of the Releasees; -5- (c) He will refrain from the solicitation, procurement, interference with or attempt to entice away from the Company and/or its affiliates of (i) any person or entity who is a material customer, supplier, agent or distributor of the Company and/or its affiliates with whom Mr. Wilkinson or any employee subordinate to Mr. Wilkinson had contact on behalf of the Company and/or its affiliates, or (ii) any senior employee or consultant employed by the Company and/or its affiliates on or after the Resignation Date; and (d) He will refrain from any direct or indirect involvement without prior notice to and consent of the Company, in any other enterprise which is competitive with any trade or business carried on by McDermott International, Inc., its subsidiaries and affiliates. Mr. Wilkinson expressly acknowledges and agrees that in the event that he institutes legal action in violation of Paragraph 4 above, or the Company determines that he has engaged in conduct prohibited under any of subparagraphs (a) through (d) above, or he fails to provide services reasonably requested by the Company pursuant to Paragraph 3 above, any payments otherwise due and owing pursuant to Paragraphs 1 above and under the SERP referenced in Paragraph 2 above shall be forfeited and all outstanding Awards shall be cancelled. Mr. Wilkinson further expressly agrees that the Company shall have the right, in its sole discretion, to suspend any such payment or benefit while an allegation that any of the undertakings set forth in the foregoing subparagraphs (a) through (d) have been breached is under investigation and agrees that this Agreement shall act as a complete bar to his entitlement to any legal, equitable or administrative remedy based upon any forfeiture, cancellation or suspension pursuant to this Paragraph 5. Mr. Wilkinson further agrees that if he institutes legal action in violation of Paragraph 4 above or the Company determines that he has engaged in conduct prohibited under any of subparagraphs (a) through (d) above, he shall repay to the Company, within thirty (30) days of receipt of written demand for repayment, 40% of the SERP benefits distributed to him pursuant to Paragraph 2 above and 100% of the value of any Award that became vested after the Resignation Date pursuant to Paragraph 1 above. In the event that legal action is taken by the Company to enforce this repayment obligation, the Company shall be entitled to the amount of the repayment obligation, interest on the unpaid amount, costs and attorney's fees. -6- 6. Miscellaneous Provisions. (a) Failure on the part of the Company or Mr. Wilkinson at any time to insist on strict compliance by the other party with any provisions of this Agreement shall not constitute a waiver of either party's obligations in respect thereof, or of either party's right hereunder to require strict compliance therewith in the future. (b) The obligations set forth in this Agreement are severable and divisible, and the unenforceability of any clause or portion thereof shall not affect the enforceability of the remainder of such clause or of any other obligation contained herein. 7. Entire Agreement. Mr. Wilkinson and the Company agree and acknowledge that this Agreement contains and comprises the entire agreement and understanding between the parties, that no other representation, promise, covenant or agreement of any kind whatsoever has been made to cause any party to execute this Agreement, and that all agreements and understandings between the parties are embodied and expressed in these agreements. The parties also agree that the terms of this Agreement shall not be amended or changed except in writing and signed by Mr. Wilkinson and a duly authorized agent of the Company. The parties to this Agreement further agree that this Agreement shall be binding on and inure to the benefit of Mr. Wilkinson, the Company and the Releasees as defined in this Agreement. Any other agreements or understandings between the parties, whether written or oral, are hereby null and void. -7- 8. Timing and Consultation with Counsel. Mr. Wilkinson acknowledges that he has been given a reasonable period of time within which to consider this Agreement and has been advised to discuss the terms of this Agreement with legal counsel. Mr. Wilkinson acknowledges that this Agreement was offered to him on September 29, 2008, that he was advised that (i) it could be executed at any time prior to October 21, 2008, and (ii) if accepted, the Agreement could be revoked, in writing, for up to seven (7) days following the date of such acceptance. Based upon his review, Mr. Wilkinson acknowledges that he fully and completely understands and accepts the terms of this Agreement, including the Release in Paragraph 4, and enters into it freely, voluntarily and of his own free will. 9. Applicable Law. This Agreement shall be interpreted and construed in accordance with the laws of the State of Texas. -8- I HAVE READ THE FOREGOING SEPARATION AGREEMENT, FULLY UNDERSTAND IT AND HAVE VOLUNTARILY EXECUTED IT ON THE DATE WRITTEN BELOW, SIGNIFYING THEREBY MY ASSENT TO, AND WILLINGNESS TO BE BOUND BY, ITS TERMS: Date: 9/30/2008 /s/ Bruce W. Wilkinson --------------------------------- ------------------------------- Bruce W. Wilkinson Before me, a Notary Public in and for Harris County, Texas, and for Bruce W. Wilkinson, personally appeared the above-named Bruce W. Wilkinson, who acknowledged that he did sign the foregoing instrument, and that the same is his free act and deed. IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Houston, Texas, this 30th day of September, 2008. /s/ Benjamin Bash -------------------------------------- NOTARY PUBLIC McDERMOTT INCORPORATED By: /s/ Preston Johnson, Jr. ------------------------------------------- Preston Johnson, Jr. Senior Vice President, Human Resources Before me, a Notary Public in and for Harris County, Texas, personally appeared the above-named McDermott Incorporated through Preston Johnson, Jr., its Senior Vice President, Human Resources, who acknowledged that he did sign the foregoing instrument for and on behalf of McDermott Incorporated, and that the same is the free act and deed of McDermott Incorporated and the free act and deed of him as its agent. IN WITNESS WHEREOF, I have hereunto set my hand and official seal at Houston, Texas, this 30th day of September, 2008. /s/ Benjamin Bash -------------------------------------- NOTARY PUBLIC -9- EX-10.2 3 a5794808ex10-2.txt EXHIBIT 10.2 Exhibit 10.2 CONSULTANCY AGREEMENT --------------------- THIS CONSULTANCY AGREEMENT ("Agreement") is made as of the 1st day of October, 2008 by and between McDermott Incorporated, a corporation existing under the laws of Delaware and having an office at 777 N. Eldridge Parkway, Houston, TX 77079-4411 (the "Company"), and Bruce W. Wilkinson of 715 Hunters Grove Lane, Houston, TX 770249 (the "Consultant"). WHEREAS the Company wishes to engage the services of the Consultant as specified herein, and the Consultant desires to undertake the rendition of such services: NOW, THEREFORE, the parties agree as follows: 1. Description of Services - As requested by the Company, the Consultant shall serve as a special consultant furnishing advice, consultation and related services pertaining to assisting the Board of Directors and Leadership Team in successful business continuity after his departure, including but not limited to: - facilitating relationship continuity and continued interface with key customers and investors; - working with Company leadership to promote business continuity during organization transformation; - assisting McDermott Leadership Team in the successful integration of existing merger and acquisition opportunities undertaken during his tenure; - leveraging knowledge and relationships to assist in near term transformation of new organization; and - any other activities as specifically directed by the Company. 2. Status - During the term of this Agreement, Consultant shall be an independent contractor and shall not be an employee of the Company. The Company shall not be entitled to exercise supervision over the details or methods of performance by Consultant hereunder or to require adherence to specific procedures in performing services hereunder. Except as provided herein, Consultant shall not be subject to rules or regulations applicable to Company's employees or any established work schedule or routine or other supervision of or direction by Company, as to hours worked or otherwise, provided, however, that all services rendered hereunder shall be so rendered to the satisfaction of Company. Consultant shall not have authority to obligate the Company to any Agreement or to exercise any supervision or direction over the Company's employees. Since the Consultant is not an employee of the Company, he is not entitled to participate in any of the Company's employee benefit plans, insurance coverages or programs, or other employee programs; provided, however, notwithstanding any other provision in this Agreement, if the Consultant was previously employed by the Company, the retirement and other benefits that he may be entitled to as a result of said previous employment with the Company shall continue uninterrupted in accordance with the terms and conditions of each respective benefit plan or other program and such benefits shall not be affected by nor have any relationship to this Agreement. 3. Compensation - The Consultant's individual contact shall be the General Counsel, or its designee, who shall be responsible for transmitting requests for such advice and consultation from the Company where necessary to enable the Consultant to carry out his responsibilities hereunder. Promptly following the execution of this Agreement, Consultant will receive a one-time payment of $2,000,000. Through March 31, 2009 (the "Initial Period"), Company agrees to pay $31,250.00 per month, which amount will be payable on the last day of each calendar month of the Initial Period. During each calendar month of the Initial Period for which the Consultant has provided services to the Company under this Agreement, the Company also agrees to pay the Consultant $2,900.00 for each day or partial day in excess of 10 days in which the Consultant provides services to the Company hereunder. The Company and Consultant may mutually agree to extend the Initial Period as necessary. For services rendered beyond the Initial Period, Company agrees to pay Consultant a per diem of $2,900.00 for each day or partial day in which the Consultant provides services to the Company under this Agreement. The Company also agrees to reimburse Consultant actual reasonable costs and expenses of travel, meals and lodging necessarily incurred by the Consultant in rendering services hereunder, but not any other fees, costs, or expenses. The Consultant shall submit a statement for each month in which services are rendered showing costs, expenses and per diems payable with respect to services rendered during such month. The Company agrees to remit to the Consultant the appropriate amount upon receipt of such invoices. The Consultant will be responsible for income or other taxes assessed on his receipt of the monthly fee, per diems or expense reimbursement from the Company. 4. Security and Non-Disclosure of Information - The Consultant shall be responsible for, and bear the expense of, compliance with governmental laws and regulations applicable to the procurement, utilization or production of information in connection with the furnishing of services hereunder. The Consultant shall keep secret and confidential such information pertaining to the Company, its activities, products, organization or internal affairs as the Consultant may acquire during the term of the Agreement. The Consultant shall not, during such term, aid any individual or organization in competition with the Company regarding matters or subjects similar or related to those referred to in Section 1 hereof. Consultant agrees that during the term of this Consultant Agreement he will refrain from 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 affects adversely or may reasonably affect adversely the Company's best interests, economic or otherwise. Consultant also acknowledges that applicable securities laws prohibit the trading of Company securities while in possession of any material non-public information, including information concerning the financial condition, results of operations, business or prospects of the Company. 5. Property and Information - All property and information, including but not limited to reports, findings, recommendations, plans, data, and memoranda of every description, and all copies thereof, furnished to the Consultant or developed in the course of or relating to the services rendered hereunder shall be the property of the Company and the Consultant shall not retain copies of any such matter or material. The Consultant agrees that all inventions, discovery or improvements (whether patentable or not) made or conceived by the Consultant are and will remain the sole property of the Company. The consultant further agrees to assist the Company in obtaining patents in the Company's name covering any such inventions, discoveries or improvements 2 6. Law - The Consultant will comply with all applicable laws and regulations in the course of his activities on the Company's behalf. This contract shall be constructed and governed under the laws of the State of Texas. 7. Code of Business Conduct - The Consultant expressly acknowledges that he has received and reviewed the McDermott International Code of Business Conduct (2006 Printing). The Consultant will conform his activities undertaken for or on behalf of the Company consistent with the principles of the highest ethical behavior as described therein. 8. Reports - The Consultant agrees that upon request, he will file periodic reports on Consultant's activities on the Company's behalf. 9. Indemnity - Company agrees to protect, hold harmless, defend, and indemnify Consultant from and against any and all claims, suits, and demands, of any kind whatsoever, by whomsoever asserted, as a result of, or arising from, the activities of Consultant under this Agreement; provided however that the Company shall have no liability or responsibility under this provision for any such claim, suit, or demand resulting from the gross negligence or intentional misconduct of Consultant. 10. Conflict of Interest - The Consultant agrees that it is not presently engaged and will not engage during the term of this Agreement in any activity which might reasonably create a conflict of interest between the Consultant and the Company or which might reasonably and adversely affect the Consultant's judgment with respect to the business of the Company. Consultant further agrees that it will accept no payment from any competitor or supplier of materials or services, customer, borrower, or lender of the Company. 11. Term - This Agreement shall be effective through September 30, 2009. Either party may terminate this Agreement upon thirty (30) days advance written notice to the other party. This Agreement will be terminated without further liability or obligation on the part of the Company should the Consultant breach any of the terms or covenants of this Agreement. 12. General a. Failure on the part of either party (the "first party") to insist on strict compliance by the other with any provisions of this Agreement shall not constitute a waiver of the other party's obligations in respect thereof, or of the first party's right hereunder to require strict compliance therein in the future. b. This Agreement sets forth the entire understanding of the parties as to the matters included herein, and can be amended or extended only by written Agreement signed by both parties. 3 c. This Agreement shall be binding upon and inure to the benefit of the parties hereto and permitted assigns, and Consultant shall not convey or assign his rights or obligations hereunder without the prior written consent of the Company. d. The obligations set forth in this Agreement are severable and divisible, and any clause or portion not enforceable thereof shall not cause the remainder of such clause or of the other obligations contained herein from being enforceable. IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written. McDERMOTT INCORPORATED CONSULTANT /s/ Preston Johnson, Jr. /s/ Bruce W. Wilkinson - ------------------------------------------ --------------------------------- Preston Johnson, Jr. Bruce W. Wilkinson Senior Vice President, Human Resources 4 -----END PRIVACY-ENHANCED MESSAGE-----