THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

McDermott International, Inc. (MDR)

3/31/2006 Proxy Information

McDermott is a large business organization with worldwide operations, and it engages in numerous purchase, sale and other transactions annually. We have various types of business arrangements with corporations and other organizations in which a McDermott executive officer, director, or nominee for director may also be a director, executive or investor, or have some other direct or indirect relationship. We enter into these arrangements in the ordinary course of our business, and they typically involve McDermott receiving or providing some good or service on a nonexclusive basis and at arm’s-length negotiated rates or in accordance with regulated price schedules.

Each of Messrs. Wilkinson, Kalman, Nesser and Sannino has irrevocably elected to satisfy withholding obligations relating to all or a portion of any applicable federal, state or other taxes that may be due on the vesting in the year ending December 31, 2006 of certain shares of restricted stock awarded under various long-term incentive plans by returning to us the number of such vested shares having a fair market value equal to the amount of such taxes. These elections, which apply to an aggregate of 55,000, 5,000, 28,500 and 18,350 shares vesting in the year ending December 31, 2006 and held by Messrs. Wilkinson, Kalman, Nesser and Sannino, respectively, are subject to approval of the Compensation Committee of our Board of Directors, which approval was granted. In the year ended December 31, 2005, each of Messrs. Wilkinson, Kalman and Sannino made a similar election which applied to an aggregate of 10,000, 5,000 and 1,500 shares, respectively, that vested in the year ended December 31, 2005. Those elections were also approved by the Compensation Committee. We expect any transfers reflecting shares of restricted stock returned to us will be reported in the SEC filings made by those transferring holders who are obligated to report transactions in our securities under Section 16 of the Securities Exchange Act of 1934.

4/8/2005 Proxy Information

McDermott is a large business organization with worldwide operations, and it engages in numerous purchase, sale and other transactions annually. We have various types of business arrangements with corporations and other organizations in which a McDermott executive officer, director, or nominee for director may also be a director, executive or investor, or have some other direct or indirect relationship. We enter into these arrangements in the ordinary course of our business, and they typically involve McDermott receiving or providing some good or service on a nonexclusive basis and at arm’s-length negotiated rates or in accordance with regulated price schedules.

Each of Messrs. Wilkinson, Burkart, Henzler, Kalman and Sannino has irrevocably elected to satisfy withholding obligations relating to all or a portion of any applicable federal, state or other taxes that may be due on the vesting in the year ending December 31, 2005 of certain shares of restricted stock awarded under various long-term incentive plans by returning to us the number of such vested shares having a fair market value equal to the amount of such taxes. These elections, which apply to an aggregate of 10,000, 1,000, 2,165, 5,000 and 1,500 shares vesting in the year ending December 31, 2005 and held by Messrs. Wilkinson, Burkart, Henzler, Kalman and Sannino, respectively, are subject to approval of the Compensation Committee of our Board of Directors, which approval was granted. In the year ended December 31, 2004, each of Messrs. Wilkinson, Burkart, Fees, Henzler, Kalman, Nesser and Sannino made a similar election which applied to an aggregate of 96,906, 1,000, 10,571, 10,617, 5,000, 19,009 and 13,980 shares, respectively, that vested in the year ended December 31, 2004. Those elections were also approved by the Compensation Committee. We expect any transfers reflecting shares of restricted stock returned to us will be reported in the SEC filings made by those transferring holders who are obligated to report transactions in our securities under Section 16 of the Securities Exchange Act of 1934.

4/2/2004 Proxy Information

Newfield Exploration Company, a company of which Joe B. Foster (one of our directors) is the Non-executive Chairman of the Board and Philip J. Burguieres (another of our directors) is also a member of the Board of Directors, managed and operated an offshore producing oil and gas property for one of J. Ray McDermott’s subsidiaries under a production and operation agreement. During 2003, J. Ray McDermott sold its interest in this property and, as a result, terminated the production and operation agreement. Under the agreement, however, this subsidiary was required to pay Newfield (1) an operations management fee of $10,764 per month, (2) a marketing services fee at a rate of $.01/MMBTU, with a minimum monthly fee of $1,500, (3) a minimum accounting and property supervision fee of $5,382 per month and (4) reimbursement for certain costs incurred by Newfield in connection with the agreement. During fiscal year 2003, this subsidiary paid approximately $485,000 to Newfield under the agreement. This J. Ray McDermott subsidiary also sold natural gas at established market prices to Newfield. During fiscal year 2003, such natural gas sales were approximately $2.95 million. Another subsidiary of J. Ray McDermott also periodically enters into agreements to design, fabricate or install offshore pipelines or structures for Newfield. There were no such transactions between Newfield and J. Ray McDermott during the year ended December 31, 2003.

From time to time, one or more of our subsidiaries purchases materials, products or services from Northrop Grumman Corporation or one or more of its affiliated companies. One of our directors, Thomas C. Shievelbein, is also the President of Northrop Grumman Newport News, a subsidiary of the Northrop Grumman Corporation. During fiscal year 2003, such purchases amounted to approximately $2.5 million.

Each of Messrs. Wilkinson, Burkhart, Fees, Henzler, Kalman, Nesser and Sannino has irrevocably elected to satisfy withholding obligations relating to all or a portion of any applicable federal, state or other taxes that may be due on the vesting in fiscal year 2004 of certain shares of restricted stock that each has been awarded under various long-term incentive plans by returning to us a number of such vested shares having a fair market value equal to the amount of such taxes. These elections, which apply to an aggregate of 96,906, 1,000, 10,571, 11,867, 5,000, 21,509 and 13,980 shares vesting in fiscal year 2004 with respect to Messrs. Wilkinson, Burkhart, Fees, Henzler, Kalman, Nesser and Sannino, respectively, are subject to approval of the Compensation Committee of our Board of Directors, which the Compensation Committee has granted.

We expect any transfers of shares of restricted stock back to us will be reported in the SEC filings made by those transferring holders who are obligated to report transactions in our securities under Section 16 of the Securities Exchange Act of 1934.

Richard E. Woolbert was Executive Vice President and Chief Administrative Officer of McDermott International from February 1995 until his retirement in January 1999, and served as Senior Vice President and Chief Administrative Officer from August 1991 to 1995.

4/4/2003 Proxy Information

Newfield Exploration Company, a company of which Joe B. Foster (one of our directors) is the Non-executive Chairman of the Board and Philip J. Burguieres (another of our directors) is also a member of the Board of Directors, manages and operates an offshore producing oil and gas property for one of J. Ray McDermott’s subsidiaries under a production and operation agreement. Under the agreement, this subsidiary is required to pay Newfield (1) an operations management fee of $10,947 per month, (2) a marketing services fee at a rate of $.01/ MMBTU, with a minimum monthly fee of $1,500, (3) a minimum accounting and property supervision fee of $5,474 per month and (4) reimbursement for certain costs incurred by Newfield in connection with the agreement. During fiscal year 2002, this subsidiary paid approximately $925,000 to Newfield under the agreement. We estimate that this subsidiary will pay approximately $900,000 under the agreement during fiscal year 2003. This J. Ray McDermott subsidiary also sold natural gas at established market prices to Newfield. During fiscal year 2002, such natural gas sales were approximately $2.23 million. Another subsidiary of J. Ray McDermott also periodically enters into agreements to design, fabricate or install offshore pipelines or structures for Newfield. There were no such transactions between Newfield and J. Ray McDermott during the year ended December 31, 2002.

From time to time, one or more of J. Ray McDermott’s subsidiaries purchases oil and gas pressure control equipment for customer projects from Cooper Cameron Corporation. Our Chairman and Chief Executive Officer, Bruce W. Wilkinson, is a director of Cooper Cameron Corporation. During fiscal year 2002, such purchases amounted to approximately $712,000.

In 2002, McDermott relocated some of its executive officers from New Orleans, Louisiana to its offices in Houston, Texas, in order to establish a greater corporate presence in Houston. McDermott provided those employees with professional relocation assistance. McDermott’s domestic relocation policy provides financial and professional relocation assistance to qualifying employees through its third-party relocation administrator. In 2002, McDermott expended approximately $300,000 for these relocations. The fair market value of homes entered into McDermott’s relocation program was determined by averaging the appraisals received from independent real estate appraisers solicited by McDermott’s third-party relocation administrator.