Attached files
| file | filename |
|---|---|
| EX-10.2 - EXHIBIT 10.2 - MCDERMOTT INTERNATIONAL INC | a611937910-2.htm |
| EX-10.3 - EXHIBIT 10.3 - MCDERMOTT INTERNATIONAL INC | a611937910-3.htm |
| EX-10.4 - EXHIBIT 10.4 - MCDERMOTT INTERNATIONAL INC | a611937910-4.htm |
| EX-10.1 - EXHIBIT 10.1 - MCDERMOTT INTERNATIONAL INC | a611937910-1.htm |
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): December 10,
2009
|
McDERMOTT
INTERNATIONAL, INC.
|
|
(Exact
name of registrant as specified in its
charter)
|
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REPUBLIC
OF PANAMA
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001-08430
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72-0593134
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(State
or other jurisdiction
|
(Commission
|
(IRS
Employer
|
|
of
incorporation)
|
File
Number)
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Identification
No.)
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777
N. Eldridge Parkway, Houston, Texas
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77079
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(Address
of principal executive offices)
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(Zip
Code)
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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:
oÿ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
oÿ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
oÿ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
oÿ 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.
On
December 7, 2009, McDermott International, Inc. (“McDermott” or “we”) announced
plans to separate its two principal operating subsidiaries, The Babcock &
Wilcox Company (“B&W”) and J. Ray McDermott, S.A. (“J. Ray”) into two
independent, publicly traded companies. In connection with that
announcement, on December 10, 2009, we entered into retention agreements with 17
key members of McDermott’s management, including each of our current officers
who were named executive officers in the proxy statement for our 2009 annual
meeting of stockholders, except Mr. Robert A. Deason (the “named
executives”). As a result of Mr. Deason’s previously announced
retirement at the end of this year, we did not enter into a retention agreement
with him.
We used
two basic forms of retention agreements; one form for the named executives and
four other officers (collectively, the “Tier 1 Employees”) and a second form for
nine other management employees, including our other officers (the “Tier 2
Employees”). The retention agreements for Tier 1 and Tier 2 Employees
are summarized below. This summary is qualified by reference to the
complete retention agreements, forms of which are attached as exhibits to this
report and incorporated by reference into this Item.
Generally,
the retention agreements provide a retention or severance payment to these
employees in connection with the disposition of all or substantially all of the
stock or assets of B&W or J. Ray (whether by a spin-off, sale or otherwise),
which we have referred to as a “restructuring transaction” in the retention
agreements.
In the
event the employee remains employed with McDermott or its subsidiaries or a
successor company on the effective date of a restructuring transaction, the
retention agreements contemplate a one-time bonus payable in restricted stock
that would vest on the first anniversary of the effective date of the
restructuring transaction in the event the employee remains employed through
that date, which payment would be in the following respective
amounts:
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(1)
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for
each of the Tier I Employees, an amount equal to 100% (149.5% in the case
of Mr. Fees) of the sum of his or her then-current annual base salary plus
target bonus under McDermott’s (or successor’s) short-term incentive plan
or any successor or replacement plan (the “STIP”), provided that, with
respect to Mr. Taff, one-third of his bonus would be payable in cash on
the effective date of the restructuring transaction;
and
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(2)
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for
each of the Tier 2 Employees, an amount equal to 50% of the sum of his or
her then-current annual base salary plus target bonus under the
STIP.
|
The
retention agreements also contemplate the provision of severance benefits,
generally in the event the applicable employee’s employment with McDermott or
one of its subsidiaries or a successor company (including the separated B&W
or J. Ray companies) is terminated prior to the first anniversary of the
effective date of the restructuring transaction, either by the employer company
for any reason other than “Cause” or “Disability” (each as defined in the
retention agreements) or by the employee for “Good Reason” (as defined in the
retention agreements). The severance benefits would include, for each
applicable employee, subject to the execution by the employee of a release of
claims against the company and certain affiliated persons and
parties:
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(1)
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payment,
in cash, of all accrued benefits through the date of
termination;
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(2)
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payment,
in cash, of any STIP bonus with respect to the immediately preceding year,
if such bonus has not been paid as of the date of termination but STIP
bonuses are subsequently paid with respect to that year under the
STIP;
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(3)
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payment,
in cash, of a pro-rated target STIP bonus for the then current
year;
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(4)
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payment,
in cash, of an amount equal to a percentage (299% in the case of Mr. Fees,
200% in the case of each other Tier 1 Employee and 100% in the case of
each Tier 2 Employee) of the sum of the employee’s then-current annual
base salary plus target bonus under the
STIP;
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(5)
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payment,
in cash, of a lump-sum equal to a percentage (200% in the case of each
Tier 1 Employee and 100% in the case of each Tier 2 Employees) of the full
annual cost of coverage for medical, dental and vision benefits provided
to the employee and his or her covered dependents, plus extended COBRA
benefits for 48 months;
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(6)
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full
vesting in various outstanding long-term incentive awards granted prior to
the effective date of the retention agreement (provided that, with respect
to Mr. Taff, who has agreed to serve as B&W’s Chief Financial Officer
following the proposed separation of B&W, full vesting also in
long-term incentive awards granted after the date of the retention
agreement, for each such award which he has held for at least one year at
the time of employment
termination);
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(7)
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full
vesting in the employee’s account balance in McDermott’s New Supplemental
Executive Retirement Plan; and
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(8)
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payment,
in cash, of an amount equal to the portion of the employee’s 401(k)
account that is not vested at the time of employment
termination.
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Mr. Fees’
retention agreement also contains restrictions on his ability to compete with us
(including both B&W and J. Ray), or solicit our employees, for two years
following the termination of his employment.
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Item
9.01
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Financial
Statements and Exhibits.
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(d) Exhibits
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10.1
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Form
of Restructuring Transaction Retention Agreement between McDermott
International, Inc. and John A.
Fees.
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10.2
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Form
of Restructuring Transaction Retention Agreement between McDermott
International, Inc. and Michael S.
Taff.
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10.3
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Form
of Restructuring Transaction Retention Agreement between McDermott
International, Inc. and Tier 1 Employees (other than Messrs. Fees or
Taff).
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10.4
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Form
of Restructuring Transaction Retention Agreement between McDermott
International, Inc. and Tier 2
Employees.
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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.
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| McDERMOTT INTERNATIONAL, INC. | |||
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By:
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/s/Dennis
S. Baldwin
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Dennis
S. Baldwin
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Vice
President and Chief Accounting Officer
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|||
December
11, 2009