Exhibit 10.2
STOCK OPTION
GRANT AGREEMENT
2001 Directors and Officers Long-Term Incentive Plan
On _______ (the "Date of Grant") the Compensation Committee of the Board of
Directors (the "Committee") of McDermott International, Inc. (the "Company")
granted to you, pursuant to the 2001 Directors and Officers Long-Term Incentive
Plan (the "Program") of the Company, certain Non-Qualified Stock Options (the
"Options"), upon the terms and conditions set forth in the Program, and/or in
this Agreement (hereinafter, the "Grant"). The provisions of the Program are
incorporated herein by reference. A copy of the Program is enclosed for your
reference.
Any reference or definition contained in this Agreement shall, except as
otherwise specified, be construed in accordance with the terms and conditions of
the Program and all determinations and interpretations made by the Committee
with regard to any question arising hereunder or under the Program shall be
binding and conclusive on you and your legal representatives and beneficiaries.
The term "Company" as used in this Agreement with reference to employment shall
include subsidiaries of the Company. Whenever the words "you or your" are used
in any provision of this Agreement under circumstances where the provision
should logically be construed to apply to the beneficiary, estate, or personal
representative, to whom any rights under this Agreement may be transferred by
will or by the laws of descent and distribution, it shall be deemed to include
such person.
Subject to the terms and conditions of the Program, the terms and conditions of
this Grant, are as follows:
1. Number and Price of Options - The Company grants to you the option to
purchase from the Company at the price of $_______ up to, but not exceeding
in the aggregate, the number of shares of the Company's Common Stock (the
"Common Stock"), as shown on the attached Notice of Grant and as explained
hereinafter and in the Program.
2. Option Term - Options have been granted for a period of ten (10) years from
the Date of Grant (the "Option Term").
3. Exercise of Options - Options do not provide you with any rights or
interest therein until they become exercisable upon the earliest of the
following:
(a) your termination of employment due to death or disability;
(b) your termination of employment due to retirement, other than early
retirement, under a funded or unfunded retirement plan or arrangement
of the Company or any subsidiary;
(c) at the sole discretion of the Committee, upon your termination of
employment by reason of dismissal for the convenience of the Company
or early retirement under a funded or unfunded retirement plan or
arrangement of the Company or any subsidiary; and
(d) with respect to ______ of the stock subject thereto, on a cumulative
basis, on or after the _________ anniversaries of the Date of Grant,
provided you have continued in the employment of the Company through
such anniversary or anniversaries.
Options which are exercisable at the time of termination of employment continue
to be exercisable until terminated as described in paragraph 5 below.
Options which are not and do not become exercisable at the time of your
termination of employment shall, coincident therewith, terminate and be of no
force or effect.
4. How to Exercise - The Options hereby granted shall be exercised by written
notice to Mr. L. J. Sannino, Senior Vice President, Human Resources,
specifying the number of shares you then desire to purchase, which may not
be fewer than twenty-five (25), together with a check payable to the order
of McDermott International, Inc. for an amount in United States dollars
equal to the option price of such shares or, if the Committee permits,
shares of Common Stock having an aggregate fair market value (as of the
trading date immediately preceding the date of exercise) equal to such
option price, or a combination of cash and such shares. You may also use
the Simultaneous Exercise and Sale of Options ("SESO") Program.
5. Termination of Options - The Options, which become exercisable as provided
in paragraph 3 above, shall terminate and be of no force or effect as
follows:
(a) If your employment terminates during the Option Term by reason of
normal retirement or disability, the Options terminate and have no
force or effect upon the expiration of the Option Term;
(b) If your employment terminates during the Option Term by reason of
death, the Options terminate and have no force or effect three (3)
years after the date of death, or upon the expiration of the Option
Term, whichever occurs first;
(c) If your employment terminates during the Option Term due to your early
retirement or dismissal for the convenience of the Company, the
Options terminate and have no force or effect upon the expiration of
three (3) to twelve (12) months after your termination, as may be
determined at the sole discretion of the Committee, but in no event
later than the expiration of the Option Term;
(d) If your employment terminates during the Option Term for any other
reason, the Options terminate and have no force or effect upon the
expiration of three (3) months after your termination of employment or
the expiration of the Option Term, whichever occurs first;
(e) If you should be convicted of (i) a felony or (ii) a misdemeanor
involving fraud, dishonesty, or moral turpitude, or (b) you should
engage in conduct that brings or may reasonably be expected to bring
disrepute or discredit to the Company as determined in the sole
judgment of the Committee, the Options terminate and have no force or
effect immediately upon notice of such conviction or determination, as
appropriate. In addition, your right to exercise Options may be
suspended during any inquiry regarding any of the above referenced
acts pending a final determination by the Committee; and
(f) If you continue in the employ of the Company through the Option Term,
the Options terminate and have no force or effect upon the expiration
of the Option Term.
6. Who Can Exercise - During your lifetime the Options shall be exercisable
only by you. No assignment or transfer of the Options, whether voluntary or
involuntary, by operation of law or otherwise, except by will or the laws
of descent and distribution or pursuant to a Qualified Domestic Relations
Order, shall vest in the assignee or transferee any interest whatsoever.
7. Securities and Exchange Commission Requirements. If you are a Section 16
insider, this type of transaction must be reported on a Form 4 before the
end of the second (2) business day following the Date of Grant. Please be
aware that if you are going to reject the grant, you should do so
immediately after the Date of Grant to avoid potential Section 16
liability. Please advise Kathy Peres and Renee Hack immediately by e-mail,
fax or telephone call if you intend to reject this Grant. Absent such
notice of rejection, the Company will prepare and file the required Form 4
on your behalf within the required two business day deadline. If Section 16
applies to you, you are also subject to Rule 144. This Rule is applicable
only when the shares are sold, so you need not take any action under Rule
144 at this time.
Those of you covered by these requirements have already been advised of
your status. Others of you may become Section 16 insiders at some future
date, in which case reporting will be required at that time.
The Internal Revenue Service has ruled that income recognized upon the exercise
of non-qualified stock options is compensation reportable on Form W-2 and is
subject to income tax withholding. You will be required to pay forthwith to the
Company the amount which the Company must withhold on your behalf upon exercise
of the Options. State income tax and FICA withholding may also be required and
will be withheld in the same manner.
Neither the action of the Company in establishing the Program, nor any action
taken by it, by the Committee or the Board of Directors under this Program nor
any provisions of this Agreement shall be construed as giving to you the right
to be retained in the employ of the Company.