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): February 27, 2006
McDERMOTT INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
REPUBLIC OF PANAMA 001-08430 72-0593134
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
777 N. Eldridge Parkway, Houston, Texas 77079
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (281) 870-5000
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(Former name or former address, if changed since last report)
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:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry Into a Material Definitive Agreement
The Compensation Committee of our Board of Directors administers the
Executive Incentive Compensation Plan ("EICP"), a cash bonus plan under which
our executive officers participate. The bonus paid under the EICP is based
principally on business and individual performance, however, our Compensation
Committee may authorize additional payments to recognize exemplary
accomplishments in any year. Under the EICP, our Compensation Committee
establishes annual target awards, expressed as a percentage of the participating
executive officer's annual base salary.
On February 27, 2006, our Compensation Committee set specific target awards
and performance goals for several executive officers including, Messrs. Bruce W.
Wilkinson, Robert A. Deason, John A. Fees, Frank S. Kalman and John T. Nesser,
III. For the year ending December 31, 2006, the target awards for these
executive officers are as follows:
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Name of Executive Officer Target Award (as a percentage
of 2006 base salary)
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Bruce W. Wilkinson 80%
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Robert A. Deason 65%
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John A. Fees 65%
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Francis S. Kalman 55%
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John T. Nesser, III 55%
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Additionally, our Compensation Committee established weighted business and
individual performance measures for these executive officers. For fiscal year
2006, the business performance measures are based upon the combined operating
income of our three principal operating groups. For Messrs. Deason and Fees, the
business performance measures also include separate measures for the operating
income of two of our subsidiaries, J. Ray McDermott, S.A. and BWX Technologies,
Inc., respectively. Three levels of business performance measures were
established for the purpose of determining minimum, target and maximum bonus
levels for each executive officer.
Finally, the individual performance measures for these executive officers
include (1) targeted levels of company-wide or applicable operating group safety
averages at levels deemed appropriate by our Compensation Committee for Messrs.
Wilkinson, Deason and Fees; (2) the implementation of enterprise software for
Mr. Fees; and (3) the development and implementation of various strategic plans
for each of these executive officers as considered appropriate by our
Compensation Committee for improving shareholder value and our competitive
position within the industries we participate.
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.
McDERMOTT INTERNATIONAL, INC.
By: /s/ Michael S. Taff
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Michael S. Taff
Vice President and Chief Accounting
Officer
March 2, 2006