Item 5.02
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
On June 28, 2016, McDermott, Inc. (MI), a subsidiary of McDermott International, Inc. (MII), and
Mr. Stephen L. Allen, former Senior Vice President, Human Resources, entered into a Separation Agreement in connection with Mr. Allens previously announced retirement. The Separation Agreement provides for various severance
benefits to be provided to Mr. Allen, in exchange for, among other things, his agreement to several restrictive covenants.
The
severance benefits include:
(1) a lump-sum cash payment equal to six months of Mr. Allens base salary;
(2) an amount of 2016 bonus under the McDermott International, Inc. Executive Incentive Compensation Plan in the sole discretion of the
Compensation Committee of the Board of Directors based on actual performance results for 2016, prorated for the actual length of Mr. Allens 2016 service and to be paid at the time MII or MI, as applicable, pays its senior executive
officers 2016 bonuses;
(3) (i) the currently outstanding portion of Mr. Allens March 6, 2014
award of MII restricted stock units (RSUs) granted pursuant to the 2009 McDermott International, Inc. Long Term Incentive Plan (the 2009 LTIP)
(ii) the currently outstanding portion of the March 5, 2015 award of MII RSUs granted pursuant to the 2014 McDermott
International, Inc. Long Term Incentive Plan (the 2014 LTIP) and
(iii) 50% of the currently outstanding
portion of the February 26, 2016 award of MII RSUs granted pursuant to the 2014 LTIP,
which would, absent his retirement from
employment, remain outstanding and continue to vest through March 15, 2017 would, subject to certain conditions, including Mr. Allens performance of consulting services, vest and be settled on the date such award would otherwise be
settled in accordance with the terms of the 2009 LTIP or 2014 LTIP, as applicable, and the applicable grant agreement;
(4) the currently
outstanding portion of the May 12, 2014 award of MII RSUs granted pursuant to the 2014 LTIP which would, absent his retirement from employment, remain outstanding and continue to vest through May 15, 2017 would, subject to certain
conditions, including Mr. Allens performance of consulting services, vest and be settled on the date such award would otherwise be settled in accordance with the 2014 LTIP and the applicable grant agreement;
(5) the currently outstanding portion of the May 12, 2014 award of MII performance shares granted pursuant to the 2014 LTIP which would,
absent his retirement from employment, remain outstanding and continue to vest through May 15, 2017 would, subject to certain conditions, including Mr. Allens performance of consulting services, vest and be settled on the date such
award would otherwise be settled in accordance with the terms of the 2014 LTIP and applicable grant agreement, with the number of performance shares that would otherwise vest and settle prorated based on the number of days beginning on
January 1, 2014 and ending on July 1, 2016 relative to the total number of days in the performance period;
2
(6) the currently outstanding portion of the March 5, 2015 award of MII performance units
granted pursuant to the 2014 LTIP which would, absent his retirement from employment, remain outstanding and continue to vest through March 15, 2018 would, subject to certain conditions, including Mr. Allens performance of consulting
services, vest and be settled on the date such award would otherwise be settled in accordance with the terms of the 2014 LTIP and applicable grant agreement, with the number of performance shares that would otherwise vest and settle prorated based
on the number of days beginning on January 1, 2015 and ending on July 1, 2016 relative to the total number of days in the performance period;
(7) payment of an amount to fund three months of continuing health insurance coverage under the Consolidated Omnibus Reconciliation Act; and
(8) accrued but unutilized vacation pay.
All other outstanding unvested equity or performance-based awards previously granted to Mr. Allen have been forfeited.
The above description of the Separation Agreement is not complete and is qualified by reference to the complete document. A copy of the
Separation Agreement is filed as Exhibit 10.1 to this report and is incorporated into this Item 5.02 by reference.