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 determine appropriate. The sole purpose of the
Participant's Company Account is to record and reflect the Company's Plan
obligations related to Company Contributions to each Participant under the Plan.
The Company shall not be required to segregate any of its assets with respect to
Plan obligations nor shall any provision of the Plan be construed as
constituting such segregation.
5.2 Deferral Accounts. The Committee shall establish and maintain an
individual bookkeeping account for each Participant, which shall be the
Participant's Deferral Account. The Committee shall credit the amount of each
Deferral Contribution made on behalf of a Participant to such Participant's
Deferral Account as soon as administratively feasible following the applicable
deferral. The Committee shall further debit and/or credit the Participant's
Deferral Account with any income, gain or loss and any payments attributable to
such Account on a daily basis, or at such other times as it shall determine
appropriate. The sole purpose of the Participant's Deferral Account is to record
and reflect the Company's Plan obligations related to Deferral Contributions of
each Participant under the Plan. The Company shall not be required to segregate
any of its assets with respect to Plan obligations, nor shall any provision of
the Plan be construed as constituting such segregation.
5.3 Hypothetical Accruals to the Account. In accordance with procedures
established by the Committee and subject to this Section 5.3, the Participant
may designate the Deemed Investments with respect to which his or her Account
shall be deemed to be invested, provided such designation(s) are made in
accordance with the procedures established by the Committee. If a Participant
fails to make a proper designation, then his Account shall be deemed to be
invested in the Deemed Investments designated by the Committee in its sole
discretion. A copy of any available prospectus or other disclosure materials for
each of the Deemed Investments shall be made available to each Participant upon
request. The Committee shall determine from time to time each of the Deemed
Investments made available under the Plan and may change any such determinations
at any time. Nothing herein shall obligate the Company to invest any part of its
assets in any of the investment vehicles serving as the Deemed Investments.
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5.4 Vesting of Company Account. A Participant's vested percentage with
respect to the Participant's Company Account, adjusted by any income, gain or
loss and any payments attributable thereto, shall be the lesser of i) twenty
percent times the Participant's Years of Participation, and ii) 100%. Upon
termination of employment other than described in Section 5.5, a Participant
shall forfeit all amounts credited to his Account other than his Vested Account
value determined as of the close of business coincident with or next following
the date on which the Participant terminated employment; provided, however, that
amounts not so forfeited shall continue to be debited and credited in accordance
with Section 5.3 from and after termination of employment.
5.5 Accelerated Vesting. The vesting provisions above notwithstanding, the
Participant shall have a Vested Percentage of 100% for his entire Account upon
the soonest of the following to occur during the Participant's employment with
the Company: (i) the date of termination of the Participant's employment as a
result of the Participant's death or disability or termination by the Company
for reasons other than Cause, (ii) the participant's Retirement, or (iii) the
date of termination of the Participant's employment within 24 months following a
Change of Control.
5.6 Vesting of Deferral Account. A Participant's Vested Percentage with
regard to the Participant's Deferral Account shall at all times be 100%.
5.7 Nature and Source of Payments. The obligation to make distributions
under this Plan with respect to each Participant and any Beneficiary in
accordance with the terms of this Plan shall constitute a liability of the
Company which employed the Participant when the obligation was accrued,
including any hypothetical income, gain or loss and any payment or distribution
attributable to such accrual and no other Company shall have such obligation and
any failure by a particular Company to live up to its obligation under this Plan
shall have no effect on any other Company. All distributions payable hereunder
shall be made from the general assets of the Company, and nothing herein shall
be deemed to create a trust of any kind between the Company and any Participant
or other person. No special or separate fund shall be established nor shall any
other segregation of assets be made to assure that distributions will be made
under this Plan. No Participant or Beneficiary shall have any interest in any
particular asset of the Company by virtue of the existence of this Plan. Each
Participant and Beneficiary shall be an unsecured general creditor of the
Company.
5.8 Statements to Participants. Periodically as determined by the
Committee, but not less frequently than annually, the Committee shall transmit
to each Participant a written statement regarding the Participant's Account for
the period beginning on the date following the effective date of the preceding
statement and ending on the effective date of the current statement.
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ARTICLE VI
Payment of Benefits
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6.1 Occasions for Distributions. The Company shall distribute a
Participant's Vested Account following the events and in the manner set forth in
this Article VI. A Participant's Vested Account shall be debited in the amount
of any distribution made from the Account as of the date of the distribution.
6.2 Distribution Elections. A Participant may file a distribution election
directing how his Vested Account shall be distributed following his Termination.
The distribution election must be made on a form supplied by the Committee for
that purpose and the Committee in its sole discretion may determine the
available distribution options. To be effective, the distribution election must
be filed upon initial enrollment in the Plan or otherwise at least 12 months
prior to the Participant's Termination. In the event of Termination due to the
death of the Participant, no such restriction applies. In the event the
Participant files more than one distribution election, the last valid
distribution election shall control. In the event that no valid distribution
election has been filed, payment will be made in a lump sum, within 90 days of
Termination. If the Participant's Vested Account Balance is less than $50,000,
the Committee will distribute the Vested Account Balance in a lump sum
irrespective of the Participant's Distribution Election.
6.3 Distribution of Vested Account upon Termination of Employment. If a
Participant terminates employment with the Company for any reason other than
disability or death, the Company shall distribute or begin distributing to the
Participant within 90 days of Termination the full amount of the Participant's
Vested Account. Such distributions shall be in the form specified on the most
recently filed distribution election form.
6.4 Distribution on Account of Disability. If a Participant becomes
disabled, such determination to be made by the Committee in its sole discretion,
then Contributions under this Plan will cease. Contributions will not resume
unless and until the Participant returns to work and formally reenrolls in the
Plan by completing and filing a form supplied by the Committee. If the
Participant's employment with the Company is interrupted for more than one year
by disability, then within 90 days following the date when the interruption of
employment reaches one year, the Company shall distribute or begin distributing
to the Participant the full amount of the Participant's Vested Account
calculated as of the date the interruption of employment reaches one year. Such
distributions shall be in accordance with the last valid distribution election
form filed by the Participant in accordance with Section 6.2.
6.5 Distributions on Account of Death. Within 90 days after the
Participant's death, the Company shall distribute or begin distributing to the
Beneficiary the Participant's Vested Account as of the date of death. Such
distributions shall be in accordance with the last valid distribution election
form filed by the Participant in accordance with Section 6.2.
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6.6 Continuation of Accounts after Commencement of Distributions. If a
Participant's Vested Account is to be distributed in a form other than an
immediate lump sum, then the Vested Account shall continue to be adjusted with
any hypothetical income, gain or loss and any payments or distributions
attributable to such account as described in Sections 5.1 and 5.2, until the
entire Vested Account has been distributed.
6.7 Hardship Distribution. Anything to the contrary notwithstanding, in the
event of a Hardship and upon the written request of a Participant, the
Committee, in its sole discretion, may authorize and direct the Company to
accelerate distributions under this Plan to such Participant. Distributions may
be accelerated under this Section 6.7 only to the extent that the accelerated
distribution is necessary to enable the Participant to resolve the financial
need. If a Hardship distribution is made to a Participant under this Section
6.7, then the Participant will be suspended from the Plan for the remainder of
the Plan Year in which the Hardship distribution is made, and the following Plan
Year. Any distributions made under this Section 6.7 shall be first from the
Participant's Deferral Account and then from the Participant's Company Account
to the extent that it is vested.
6.8 Distribution on Account of Completion of a Fixed Deferral Period. If,
with respect to any Deferral Contribution for a Plan Year, the Participant
elected at the time of such deferral, on forms provided by the Committee, to
receive a specified portion of such deferred amount upon the expiration of a
pre-determined deferral period, the Participant shall receive a lump sum
distribution of that portion of such Deferral Contribution, subject to any
income, gain or loss and any payments of distributions associated with such
Deferral Contribution, as previously elected. Such election must be made at the
time the Deferral Contribution is elected, and the deferral period must be
specified for a minimum of three years.
ARTICLE VII
Committee
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7.1 Authority. The Committee has full and absolute discretion in the
exercise of each and every aspect of the rights, power, authority and duties
retained or granted it under the Plan, including without limitation, the
authority to determine all facts, to interpret this Plan, to apply the terms of
this Plan to the facts determined, to make decisions based upon those facts and
to make any and all other decisions required of it by this Plan, such as the
right to benefits, the correct amount and form of benefits, the determination of
any appeal, the review and correction of the actions of any prior administrative
committee, and the other rights, powers, authority and duties specified in this
Article and elsewhere in this Plan. The Committee may correct any defect or
supply any omission or reconcile any inconsistency in this Plan or any agreement
or document related to this Plan in the manner and to the extent the Committee
deems necessary or appropriate to carry this Plan into effect. Notwithstanding
any provision of law, or any explicit ruling or implicit provision of this
document, any action taken, or finding, interpretation, ruling or decision made
by the Committee in the exercise of any of its rights, powers, authority or
duties under this Plan shall be final and conclusive as to all parties,
including without limitation all Participants, former Participants and
beneficiaries, regardless of whether the Committee or one or more if its members
may have an actual or potential conflict of interest with respect to the subject
matter of the action, finding, interpretation, ruling or decision. No final
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action, finding, interpretation, ruling or decision of the Committee shall be
subject to de novo review in any judicial proceeding. No final action, finding,
interpretation, ruling or decision of the Committee may be set aside unless it
is held to have been arbitrary and capricious by a final judgment of a court
having jurisdiction with respect to the issue. To the extent Plan distributions
are payable in a form other than a single lump sum (e.g., installments), the
Committee shall determine the methodology for computing such payments.
7.2 Delegation of Authority. The Committee may delegate any of its powers
or responsibilities to one or more members of the Committee or any other person
or entity.
7.3 Procedures. The Committee may establish procedures to conduct its
operations and to carry out its rights and duties under the Plan. Committee
decisions may be made by majority action. The Committee may act by written
consent.
7.4 Compensation and Expenses. The members of the Committee shall serve
without compensation for their services, but all expenses of the Committee and
all other expense incurred in administering the Plan shall be paid by the
Company
7.5 Indemnification. The Company shall indemnify the members of the
Committee and/or any of their delegates against the reasonable expenses,
including attorney's fees, actually and appropriately incurred by them in
connection with the defense of any action, suit or proceeding, of in connection
with any appeal thereto, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company) and against
all amounts paid by them in satisfaction of a judgment in any such action, suit
or proceeding, except in relation to matters as to which it shall be adjudged in
a suit of final adjudication that such Committee member is liable for fraud,
deliberate dishonesty of willful misconduct in the performance of his duties;
provided that within 60 days after the institution of any such action, suit or
proceeding a Committee member has offered in writing to allow the Company, at
its own expense, to handle and defend any such action, suit or proceeding.
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ARTICLE VIII
Amendment and Termination
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The Company retains the power to amend the Plan or to terminate the Plan at
any time by action of the Board. No such amendment or termination shall
adversely affect any Participant or Beneficiary with respect to his right to
receive a benefit in accordance with Article VI, determined as of the later of
the date that the Plan amendment or termination is adopted or the date such Plan
amendment or termination is effective, unless the affected Participant or
Beneficiary consents to such amendment or termination.
ARTICLE IX
Miscellaneous
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9.1 Plan Does Not Affect the Rights of Employee. Nothing contained in this
Plan shall be deemed to give any Participant the right to be retained in the
employment of the Company , to interfere with the rights of the Company to
discharge any Participant at any time or to interfere with a Participant's right
to terminate his employment at any time.
9.2 Nonalienation and Nonassignment. Except for debts owed the Company by a
Participant or Beneficiary, no amounts payable or to become payable under the
Plan to a Participant or Beneficiary shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, whether voluntary, involuntary, by operation of law or otherwise, and
any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber
or charge the same by a Participant or Beneficiary prior to distribution as
herein provided shall be null and void.
9.3 Tax Withholding. The Company shall have the right to deduct from any
payments to a Participant or Beneficiary under the Plan any taxes required by
law to be withheld with respect to such payments. In addition, the Company shall
have the right to deduct from any Participant's base salary or other
compensation any applicable employment taxes or other required withholdings with
respect to a Participant.
9.4 Setoffs. As a condition to the receipt of any benefits hereunder, the
Committee, in its sole discretion, may require a Participant or Beneficiary to
first execute a written authorization, in the form established by the Committee,
authorizing the Company to offset from the benefits otherwise due hereunder any
and all amounts, debts or other obligations, of any kind or nature, owed to the
Company by the Participant. Where such written authorization has been so
executed by a Participant, benefits hereunder shall be reduced accordingly. The
Committee shall have full discretion to determine the application of such offset
and the manner in which such offset will reduce benefits under the Plan.
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9.5 Number and Gender. Wherever appropriate herein, words used in the
singular shall be considered to include the plural and words used in the plural
shall be considered to include the singular. The masculine gender, where
appearing in the Plan, shall be deemed to include the feminine gender.
9.6 Headings. The headings of Articles and Sections herein are included
solely for convenience, and if there is any conflict between such headings and
the text of the Plan, the text shall control.
9.7 Applicable Law. Except to the extent preempted by federal law, the
terms and provisions of the Plan shall be construed in accordance with the laws
of the State of Texas.
9.8 Successors. All obligations under the Plan shall be binding upon the
Company and any successors and assigns, in accordance with its terms, whether
the existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or other transaction, involving all or substantially all
of the business and/or assets of the Company.
9.9 Claims Procedure. The Committee shall have sole discretionary authority
with regard to the adjudication of any claims made under the Plan. All claims
for benefits under the Plan shall be submitted in writing, shall be signed by
the claimant and shall be considered filed on the date the claim is received by
the Committee. In the event a claim is denied, in whole or in part, the claims
procedures set forth below shall be applicable.
Upon the filing of a claim as above provided and in the event the claim is
denied, in whole or in part, the Committee shall within ninety (90 days, (forty
five (45) days for disability related claims,) provide the claimant with a
written statement which shall be delivered or mailed to the claimant to his last
known address, which statement shall contain the following:
(a) the specific reason or reasons for the denial of benefits;
(b) a specific reference to the pertinent provisions of the Plan upon which the
denial is based;
(c) a description of any additional material or information necessary for the
claimant to perfect his claim for benefits and an explanation of why such
material and information is necessary; and
(d) an explanation of the review procedure provided below.
If special circumstances require additional time for processing the claim, the
Committee shall advise the claimant prior to the end of the initial ninety (90)
day or forty-five (45) day period, setting forth the reasons for the delay and
the approximate date the Committee expects to render its decision. Any such
extension shall not exceed ninety (90) days, or thirty (30) days for disability
related claims.
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Within ninety (90) days after receipt of the written notice of denial of a claim
as provided above, a claimant or his authorized representative may request a
review of the denial upon written application to the Committee, may review
pertinent documents and may submit issues and comments in writing to the
Committee. Within sixty (60) days (or forty-five days in the case of a
disability related claim) after receipt of a written request for review, or
within one hundred and twenty (120) days (or ninety days for disability related
claims) in the event of special circumstances which require an extension of time
for processing such application for review, the Committee shall notify the
claimant of its decision by delivery or by Certified or Registered Mail to his
last known address. The decision of the Committee shall be in writing and shall
include the specific reasons for the decision and specific references to the
pertinent provisions of the Plan on which such decision is based. The Committee
shall advise the claimant prior to the end of the initial sixty (60) day or
forty-five day period, as applicable, if additional time is needed to process
such application for review. The decision of the Committee shall be final and
conclusive.
9.10 Claims/Disputes. Any dispute or claim arising out of this Plan or the
breach thereof, which is not settled under the Plan's administrative claims
procedure and which is pursued beyond such claims procedure, shall be brought in
Federal District Court, in Harris County, Texas.
9.11 Conduct Injurious to the Company. Notwithstanding anything in the Plan
to the contrary, any and all benefits otherwise payable to any Participant
hereunder, except to the extent of any prior distributions under the Plan, shall
be forever forfeited if it is determined by the Committee, in its sole
discretion, that such Participant has engaged in conduct injurious to the
Company, including but not limited to the following:
(a) dishonesty while in the employ of the Company;
(b) imparting, disclosing or appropriating proprietary information for himself
or to or for any other person, firm, corporation, association or entity for
any reason or purpose whatsoever, except if required by law or at the
Company's direction;
(c) performing any act or engaging in any course of conduct which has or may
reasonably have the effect of demeaning the name or business reputation of
the Company; or
(d) providing goods or services to or becoming an employee, owner, officer,
agent, consultant, advisor or director of any firm or person in any
geographic area which competes with the Company in any phase of any of the
business lines or services offered by the Company as of the Participant's
Retirement Date.
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9.12 Entire Agreement. This Plan document constitutes the entire Plan
governing the Company and the Participant with respect to the subject matters
hereof and supercedes all prior written and oral and all contemporaneous written
and oral agreements and understandings, with respect to the subject matters
herein. This Plan may not be changed orally, but only by an amendment in writing
signed by the Company, subject to the provisions in this Plan regarding
amendments thereto.
IN WITNESS WHEREOF, McDermott International, Inc. has caused this Plan to
be executed by its duly authorized officer, effective as provided herein.
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