Exhibit 10.3
 
2009 ROWAN COMPANIES, INC. INCENTIVE PLAN
 
2009 RESTRICTED STOCK AGREEMENT
 
THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of the 5th day of
May, 2009 (the “Grant Date”), between Rowan Companies, Inc., a Delaware
corporation (the “Company”), and _______________ (the “Participant”).
 
1.  
Grant of Restricted Shares.     To carry out the purposes of the 2009 Rowan
Companies, Inc. Incentive Plan (the “Plan”), and subject to the conditions
described in this Agreement and the Plan, the Company hereby grants to the
Participant all right, title and interest in the record and beneficial ownership
of ______ shares (the “Restricted Shares”) of common stock, $0.125 par value per
share, of the Company (“Stock”).  The grant of such Restricted Shares shall be
effective as of the Grant Date.  All capitalized terms not otherwise defined
herein shall have the meanings set forth in the Plan; the Plan is incorporated
herein by reference as part of this Agreement.

 
2.  
Issuance and Transferability.   The Restricted Shares may be evidenced in such a
manner as the Committee shall deem appropriate.  Any certificates representing
the Restricted Shares granted hereunder shall be issued in the name of the
Participant as of the Grant Date and shall be marked with the following legend:

 
“The shares represented by this certificate have been issued pursuant to the
terms of the 2009 Rowan Companies, Inc. Incentive Plan and may not be sold,
pledged, transferred, assigned or otherwise encumbered in any manner except as
is set forth in the terms of such award dated May 5, 2009.”
 
Until restrictions lapse, the Restricted Share certificates shall be left on
deposit with the Company along with a stock power (substantially in the form
attached hereto as Exhibit A) endorsed in blank and shall not be transferable
except by will or the laws of descent and distribution or pursuant to a domestic
relations order.  No right or benefit hereunder shall in any manner be liable
for or subject to any debts, contracts, liabilities, or torts of the
Participant.  Any purported assignment, alienation, pledge, attachment, sale,
transfer or other encumbrance of the Restricted Shares, prior to the lapse of
restrictions, that does not satisfy the requirements hereunder shall be void and
unenforceable against the Company.  Notwithstanding the foregoing, in the case
of the Participant’s disability or death, the Participant’s rights under this
Agreement may be exercised by the Participant’s guardian or legal
representative.
 
3.  
Vesting/Forfeiture.   The Participant shall vest in his rights under the
Restricted Shares and any accumulated dividends described in Paragraph 5 hereof,
and the Company’s right to reclaim such shares or dividends shall lapse with
respect to one-third of the Restricted Shares on the first anniversary of the
Grant Date and an additional one-third of the Restricted Shares on each of the
second and third anniversaries of the Grant Date (each anniversary, a “Vesting
Date”), provided that the Participant remains continuously employed by the
Company from the Grant Date to such Vesting Date.  Notwithstanding the
foregoing, however, all Restricted Shares not then vested shall vest immediately
if the Participant’s employment with the Company terminates due to the
Participant’s disability or death.  In the event of the Participant’s Retirement
(as defined in Paragraph 4 below) prior to vesting, the Committee may, in its
sole discretion, accelerate vesting.  If the Participant’s employment with the
Company terminates other than by reason of Retirement, disability or death, the
Restricted Shares (to the extent not then vested) shall be forfeited as of the
date the Participant’s employment so terminates.  As soon as administratively
feasible following the vesting of the Restricted Shares, a Stock certificate
evidencing the vested Restricted Shares, less the amount of Stock withheld
pursuant to Paragraph 7 hereof, if any, shall be delivered without charge to the
Participant, or his designated representative, without restrictive legend.  If,
for any reason, the restrictions imposed by the Committee upon the Restricted
Shares are not satisfied at the end of the Restricted Period, any Restricted
Stock remaining subject to such restrictions shall be forfeited by the
Participant.

 

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4.  
Retirement.  For purposes of this Agreement, Retirement by an Employee shall
have occurred if, as of the Employee’s date of termination of employment:

 
(a) in the case of an Employee who is an employee of the Company or one of its
subsidiaries (other than LeTourneau, Inc. or its subsidiaries, the employees of
which are covered in (b) below), the Employee is a minimum of 60 years old and
has satisfied the requirements for normal retirement pursuant to the policies of
the Company in place at the time of termination; or
 
(b) in the case of an Employee who is an employee of LeTourneau, Inc. or one of
its subsidiaries, the Employee has satisfied the requirements for either normal
or late retirement pursuant to the polices of LeTourneau, Inc. in place at the
time of termination.
 
Determination of the date of termination of employment by reason of Retirement
and the satisfaction of the requirements for “Retirement” shall be based on such
evidence as the Committee may require and a determination by the Committee of
such date of termination and satisfaction shall be final and controlling on all
interested parties.
 
5.  
Dividends.   Any cash dividends that may be paid on the Restricted Shares after
the Grant Date shall be accumulated and held in an account or in escrow by the
Company until such time as the Participant shall vest in the Restricted Shares
to which such dividends are attributable as described in Paragraph 3 above.  The
Participant shall receive a cash payment equal to the pro rata portion of the
accumulated dividends paid (reduced by the amount of any taxes required to be
withheld with respect to such payment) with respect to the Restricted Shares as
they become vested.  All accumulated dividends attributable to unvested
Restricted Shares shall be forfeited, if and to the extent that the underlying
Restricted Shares are forfeited.

 
6.  
Employment Relationship. For purposes of this Agreement, the Participant shall
be considered to be in the employment of the Company as long as the Participant
remains an Employee of either the Company, a parent or subsidiary corporation
(as defined in Code Section 424) of the Company, or a corporation or a parent or
subsidiary of such corporation assuming this Agreement.  Any question as to
whether and when there has been a termination of such employment, and the cause
and date of such termination, shall be based on such evidence as the Committee
may require and a determination by the Committee as to the cause and date of
such termination shall be final and controlling on all interested parties.

 

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7.  
Withholding of Taxes.  The Company shall have the right to take any action as
may be necessary or appropriate to satisfy any international, federal, state or
local tax withholding obligations, including, but not limited to, the right to
withhold cash or shares of Stock sufficient to pay the amount required to be
withheld and to cause such Stock to be sold and the proceeds remitted to the
Company.  The Participant agrees that, if he makes an election under Code
Section 83(b) with regard to the Restricted Shares, he will so notify the
Company in writing within two days after making such election, so as to enable
the Company to timely comply with any applicable governmental reporting
requirements.

 
8.  
Reorganization of the Company.   The existence of this Agreement shall not
affect in any way the right or power of the Company or its stockholders to make
or authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company’s capital structure or its business; any merger or
consolidation of the Company; any issuance of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Stock or the rights thereof;
the dissolution or liquidation of the Company; any sale or transfer of all or
any part of its assets or business; or any other corporate act or proceeding,
whether of a similar character or otherwise.

 
9.  
Recapitalization Events.   In the event of stock dividends, spin-offs of assets
or other extraordinary dividends, stock splits, combinations of shares,
recapitalizations, mergers, consolidations, reorganizations, liquidations,
issuances of rights or warrants and similar transactions or events involving the
Company (“Recapitalization Events”), then for all purposes references herein to
Stock or to Restricted Shares shall mean and include all securities or other
property (other than cash) that holders of Stock of the Company are entitled to
receive in respect of Stock by reason of each successive Recapitalization Event,
which securities or other property (other than cash) shall be treated in the
same manner and shall be subject to the same restrictions as the underlying
Restricted Shares.

 
10.  
Status of Stock.  If required, the Company will register for issuance under the
Securities Act of 1933, as amended (the “Act”), the shares of Stock acquired
pursuant to this Agreement and to keep such registration effective.  In the
absence of such effective registration or an available exemption from
registration under the Act, issuance of shares of Stock acquired pursuant to
this Agreement will be delayed until registration of such shares is effective or
an exemption from registration under the Act is available.  The Company intends
to use its reasonable efforts to ensure that no such delay will occur.  In the
event exemption from registration under the Act is available, the Participant
(or the person permitted to receive the Participant’s shares in the event of the
Participant’s incapacity or death), if requested by the Company to do so, will
execute and deliver to the Company in writing an agreement containing such
provisions as the Company may require assuring compliance with applicable
securities laws.  The Company shall incur no liability to the Participant for
failure to register the Stock or maintain the registration.

 

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The Participant agrees that the shares of Stock, which the Participant may
acquire pursuant to this Agreement, will not be sold or otherwise disposed of in
any manner that would constitute a violation of any applicable securities laws,
whether federal or state.  The Participant also agrees (i) that the certificates
representing such shares of Stock may bear such legend or legends as the
Committee deems appropriate in order to assure compliance with applicable
securities laws, (ii) that the Company may refuse to register the transfer of
the shares of Stock acquired pursuant to this Agreement on the stock transfer
records of the Company if such proposed transfer would in the opinion of counsel
satisfactory to the Company constitute a violation of any applicable securities
law and (iii) that the Company may give related instructions to its transfer
agent, if any, to stop registration of the transfer of such shares.
 
11.  
Severability.   In the event that any provision of this Agreement shall be held
illegal, invalid, or unenforceable for any reason, such provision shall be fully
severable and shall not affect the remaining provisions of this Agreement, and
the Agreement shall be construed and enforced as if the illegal, invalid, or
unenforceable provision had never been included herein.

 
12.  
Certain Restrictions.   By executing this Agreement, the Participant
acknowledges that he will enter into such written representations, warranties
and agreements and execute such documents as the Company may reasonably request
in order to comply with the terms of this Agreement or the Plan, or securities
laws or any other applicable laws, rules or regulations.

 
13.  
Recoupment.   Notwithstanding any provision of this Agreement to the contrary,
the Committee may, in its sole discretion:

 
(a) recoup from Participants all or a portion of the Stock issued or cash paid
under this Agreement if the Company’s reported financial or operating results
are materially and negatively restated within five years of the grant or payment
of such amounts; and
 
(b) recoup from Participants who, in the Committee’s judgment, engaged in
conduct which was fraudulent, negligent or not in good faith, and which
disrupted, damaged, impaired or interfered with the business, reputation or
Employees of the Company or its Affiliates or which caused a subsequent
adjustment or restatement of the Company’s reported financial statements, all or
a portion of the Stock issued or cash paid under this Agreement within five
years of such conduct.
 
14.  
Amendment and Termination.  Except as otherwise provided in the Plan or this
Agreement, no amendment or termination of this Agreement shall be made by the
Company without the written consent of the Participant.

 
15.  
Code Section 409A; No Guarantee of Tax Consequences.   This award of Restricted
Shares is intended to be exempt from Code Section 409A.  The Company makes no
commitment or guarantee to the Participant that any federal or state tax
treatment will apply or be available to any person eligible for benefits under
this Agreement.

 

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16.  
Binding Effect.  This Agreement shall be binding upon and inure to the benefit
of any successors to the Company and all persons lawfully claiming under the
Participant.

 
17.  
Governing Law and Venue.  This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.  The courts in Harris County,
Texas shall be the exclusive venue for any dispute regarding the Plan or this
Agreement.

 
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
its officer thereunto duly authorized, and the Participant has executed this
Agreement, all as of the day and year first above written.
 
ROWAN COMPANIES, INC.
By:                                                                Date:                                           ,
20__

PARTICIPANT:
Date:                                           , 20__
Address:

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Exhibit A
 
STOCK POWER
FOR VALUE RECEIVED, ___________ (“Transferor”) hereby sells, assigns and
transfers unto Rowan Companies, Inc., ____________ shares of the common stock,
$.125 par value (“Common Stock”), of Rowan Companies, Inc., a Delaware
corporation (the “Company”), which shares of Common Stock are represented by
certificate no(s).____________, and hereby irrevocably appoints
__________________ as attorney-in-fact to transfer such shares of Common Stock
on the books of the Company, with full power of substitution on the premises.
Dated:  ____________, 20__
TRANSFEROR:

Printed Name: