Exhibit 10.2
PERFORMANCE SHARES
GRANT AGREEMENT
Amended and Restated 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")
selected you to receive a grant of Performance Shares under the Company's
amended and restated 2001 Directors and Officers Long-Term Incentive Plan (the
"Plan"). The provisions of the Plan are incorporated herein by reference. A copy
of the Plan is attached for your reference.
Performance Shares
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Performance Shares Award. You have been awarded an initial grant (the "Initial
Grant") of Performance Shares. This grant represents a right to receive shares
of common stock of the Company at the close of the applicable performance
measurement period, calculated as described below, provided the applicable
performance measures and vesting requirements set forth in this agreement have
been satisfied. No shares are awarded or issued to you on the Initial Grant
Date.
Vesting Requirements. Performance Shares do not provide you with any rights or
interest therein until they become vested on the third anniversary of the Date
of Grant, provided you are still employed by the Company or one of its
subsidiaries.
Forfeiture of Performance Shares. Performance Shares which are not vested at
your termination of employment for any reason shall, coincident therewith, be
forfeited.
In addition, in the event that (a) you are convicted of (i) a felony or (ii) a
misdemeanor involving fraud, dishonesty or moral turpitude, or (b) you engage in
conduct that adversely affects or may reasonably be expected to adversely affect
the business reputation or economic interests of the Company, as determined in
the sole judgment of the Committee, then all Performance Shares and all rights
or benefits awarded to you under this grant of Performance Units are forfeited,
terminated and withdrawn immediately upon such conviction or notice of such
determination. The Committee shall have the right to suspend any and all rights
or benefits awarded to you hereunder pending its investigation and final
determination with regard to such matters.
Number of Performance Shares. The number of Performance Shares ultimately
awarded to you, if any, shall be determined as of the _____ anniversary of the
Date of Grant (the "Performance Measurement Date"). The percentage of
Performance Shares in your Initial Grant in which you will vest shall be
determined based on the [performance measure] of the Company on ________ in
accordance with the schedule set forth below.
[Performance Measure] Vested Percentage
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_________ --%
_________ --%
_________ --%
For example, if the [performance measure] determined as of the close of the
Performance Measurement Date is ________, you will vest in ___% of the
Performance Shares in your Initial Grant. The number of shares of common stock
of the Company you receive shall be equal to the number of your vested
Performance Shares. No Performance Shares will vest if the [performance measure]
on the Performance Measurement Date is below _____.
Payment of Performance Shares. Except as otherwise provided below in the section
entitled "Change in Control," you will receive one share of common stock of the
Company for each Performance Share that vests on the Performance Measurement
Date. Shares shall be distributed as soon as administratively practicable after
the applicable Performance Measurement Date.
Change in Control
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If a Change in Control (as defined in the Plan) of the Company occurs, all
outstanding Performance Shares granted hereunder shall immediately vest. The
number of Performance Shares that vest in connection with a Change in Control
shall be the greater of (i) 100% of the Initial Grant or (ii) calculated in
accordance with the formula set forth above on a prorata basis, except that the
Performance Measurement Date shall be the date such Change in Control occurs.
Shares of common stock of the Company shall be distributed as soon as
administratively practicable thereafter.
Tax Consequences
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The Company has been advised that, in the opinion of counsel, the grants awarded
hereunder will have the following tax consequences under the present U. S.
Federal tax laws and regulations:
You will not realize income on the grant of Performance Shares. For U.S. federal
income tax purposes, you will be deemed to have received compensation taxable as
ordinary income equal to the fair market value, as of the Performance
Measurement Date, of the shares you receive, which will be included in your
taxable income and reported on IRS Form W-2 in the tax year in which they vest.
By acceptance of this letter you agree that, upon vesting in the shares, you
will promptly pay to the Company the amount of income tax which the Company is
required to withhold in connection with the income realized by you and that,
failing such payment by you, the Company is authorized to withhold such amount
from subsequent salary payments.
Transferability
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Performance Shares granted hereunder are non-transferable other than by will or
by the laws of descent and distribution or pursuant to a qualified domestic
relations order.
Securities and Exchange Commission Requirements
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If you are a Section 16 insider, this type of transaction must be reported on a
Form 4 before the end of the second (2nd) 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
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.
Those of you covered by these requirements will have already been advised of
your status. Others may become Section 16 insiders at some future date, in which
case reporting will be required at that time.
Other Information
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Neither the action of the Company in establishing the Plan, nor any action taken
by it, by the Committee or by your employer, nor any provision of the Plan or
this Agreement shall be construed as conferring upon you the right to be
retained in the employ of the Company, Inc. or any of its subsidiaries or
affiliates.