exv10wa



 






Exhibit 10.a




NONQUALIFIED STOCK OPTION AGREEMENT




     AGREEMENT made as of the          day of                         ,         ,
between Rowan Companies, Inc., a Delaware corporation (the “Company”) and             «Firstname»
«Lastname»             (“Employee”).



     To carry out the purposes of the Rowan Companies, Inc. Restated 1988 Nonqualified Stock Option
Plan (the “Plan”), by affording Employee the opportunity to purchase shares of common stock of the
Company (“Stock”), and in consideration of the mutual agreements and other matters set forth herein
and in the Plan, the Company and Employee hereby agree as follows:



     1. Grant of Option. The Company hereby irrevocably grants to Employee the right and option
(“Option”) to purchase all or any part of an aggregate of
«optamt» shares of Stock, on the
terms and conditions set forth herein and in the Plan, which Plan is incorporated herein by
reference as a part of this Agreement. This Option shall not be treated as an incentive stock
option within the meaning of section 422(b) of the Internal Revenue Code of 1986, as amended (the
“Code”).



     2. Purchase Price. The purchase price of Stock purchased pursuant to the exercise of this
Option shall be $  per share. For all purposes of this Agreement, fair market value of
Stock shall be determined in accordance with the provisions of the Plan.



     3. Exercise of Option. Subject to the earlier expiration of this Option as herein provided,
this Option may be exercised, by written notice to the Company at its principal executive office
addressed to the attention of its Chief Financial Officer, at any time and from time to time after
the date of grant hereof, but, except as otherwise provided below, this Option shall not be
exercisable for more than a percentage of the aggregate number of shares offered by this Option
determined by the number of full years from the date of grant hereof to the date of such exercise,
in accordance with the following schedule:



	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage of Shares
	Number of Full Years	 	 	That May Be Purchased
	 
	 	 	 	 	 	 
	Less than
	 	1 year
	 	 	 	  0%

	 
	 	1 year
	 	 	 	25%

	 
	 	2 years
	 	 	 	50%

	 
	 	3 years
	 	 	 	75%

	 
	 	4 years or more
	 	 	 	100%







     This Option may be exercised only while Employee remains an employee of the Company and will
terminate and cease to be exercisable upon Employee’s termination of employment with the Company,
except that:




    (a) If Employee’s employment with the Company terminates by reason of Normal Retirement
(as defined in Schedule A hereto), Employee may exercise this Option at any



 









 






time during the period of five years following the date of such termination, but only
as to the number of shares Employee was entitled to purchase hereunder as of the date his
employment so terminates, plus such additional number of shares, if any, that the Committee
(as defined in the Plan), in its sole discretion, determines to be exercisable as of such
retirement.




    (b) If employee dies within the five-year period following the date of Employee’s
termination of employment by reason of Normal Retirement, Employee’s estate, or the person
who acquires this Option by bequest or inheritance or otherwise by reason of the death of
Employee, may exercise this Option at any time during the period of two years following the
date of Employee’s death, but only as to the number of shares Employee was entitled to
purchase hereunder as of the date Employee’s employment terminated by reason of Normal
Retirement.




    (c) If Employee’s employment with the Company terminates by reason of Disability (as
defined in Schedule A hereto), Employee may exercise this Option in full at any time during
the period of five years following the date of such termination.




    (d) If Employee dies while in the employ of the Company or within the five year period
following the date of Employee’s termination of employment by reason of Disability,
Employee’s estate, or the person who acquires this Option by bequest or inheritance or by
reason of the death of Employee, may exercise this Option in full at any time during the
period of two years following the date of Employee’s death.


If Employee’s employment with the Company terminates other than by reason of Normal Retirement,
Disability or death, this Option (to the extent not exercised prior thereto) shall terminate as of
the date Employee’s employment so terminates. This Option shall not be exercisable in any event
after the expiration of ten years (seven years if Employee is a resident of the United Kingdom)
from the date of grant hereof. The purchase price of shares as to which this Option is exercised
shall be paid in full at the time of exercise in cash (including check, bank draft or money order
payable to the order of the Company). No fraction of a share of Stock shall be issued by the
Company upon exercise of an Option or accepted by the Company in payment of the purchase price
thereof; rather, Employee shall provide cash payment for such amount as is necessary to effect the
issuance and acceptance of only whole shares of Stock. Unless and until a certificate or
certificates representing such shares shall have been issued by the Company to Employee, Employee
(or the person permitted to exercise this Option in the event of Employee’s death) shall not be or
have any of the rights or privileges of a shareholder of the Company with respect to shares
acquirable upon an exercise of this Option.




     4. Transfer of Option. Except as provided herein, each Option and all rights granted there
under shall not be transferable other than by will or the laws of descent and distribution and
shall be exercisable during the Employee’s lifetime only by the Employee or, in the case of the
Employee’s death or incapacity, by the Employee’s guardian or legal representative. Employee
(hereinafter the “Initial Optionee” for the purposes of this Paragraph 4) may transfer this Option
(in whole or in part) subject to such conditions or limitations, if any, as



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the Committee may impose with respect to such transfer to any of (i) the spouse, children or
grandchildren (“immediate Family Members”) of the Initial Optionee, (ii) a trust or trusts for the
exclusive benefit of one or more of the Immediate Family Members and, if applicable, the Initial
Optionee, (iii) a partnership or limited liability company whose only partners, shareholders or
members are the Initial Optionee and/or one or more Immediate Family Members or (iv) an
organization that has been determined by the Internal Revenue Service to be exempt under Section
501 (c)(3) of the Code. Following any transfer by the Initial Optionee, this Option may not be
transferred except back to the Initial Optionee, unless the Committee approves otherwise on such
terms as it shall establish in its sole discretion. A transfer of this Option must be for no
consideration unless the Committee otherwise agrees to a transfer for consideration. The terms and
conditions of the Plan and this Option Agreement shall continue to be subject to the same
limitation, vesting and expiration provisions of (a), (b), (c) and (d) of Paragraph 3 above, which
shall be applied “as if” Employee continued to be the holder of the Option. If transferred, this
Option shall not be exercisable unless arrangements satisfactory to the Company have been made to
satisfy any tax withholding obligations the Company may have with respect to the transferee’s
exercise of the Option. Further, the Company shall have no obligation to provide any notices to an
Option transferee of any event, term or provision with respect to the Option, including, without
limitation, the early termination of the Option on account of termination of Employee’s employment.
No transfer of this Option shall be effective unless the Committee receives prior written notice of
the terms and conditions of any intended transfer, determines that the transfer complies with the
requirements imposed hereunder with respect to Option transfers and approves the transfer. Any
purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance of this Option
that does not satisfy the requirements set forth hereunder shall be void and unenforceable against
the Company.




     5. Withholding of Tax. To the extent that the exercise of this Option or the disposition of
shares of Stock acquired by exercise of this Option results in compensation income to Employee for
federal or state income tax purposes, Employee shall deliver to the Company at the time of such
exercise or disposition such amount of money as the Company may require to meet its obligation
under applicable tax laws or regulations, and, if Employee fails to do so, the Company is
authorized to withhold from any cash or Stock remuneration then or thereafter payable to Employee
any tax required to be withheld by reason of such resulting compensation income. Upon an exercise
of this Option, the Company is further authorized in its discretion to satisfy any withholding
requirement out of any cash or shares of Stock distributable to Employee upon such exercise.



     6. Status of Stock. The Company intends to register for issuance under the Securities Act
of 1933, as amended (the “Act”) the shares of Stock acquirable upon exercise of this Option, and to
keep such registration effective throughout the period this Option is exercisable. In the absence
of such effective registration or an available exemption from registration under the Act, issuance
of shares of Stock acquirable upon exercise of the Option 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 upon an exercise of this Option, Employee
(or the person permitted to exercise this Option in the event of Employee’s death or incapacity),
if requested by the Company to do so, will execute and



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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 Employee for failure to register the Stock or maintain the registration.



     Employee agrees that the shares of Stock, which Employee may acquire by exercising this
Option, will not be sold or otherwise disposed of in any manner, which would constitute a violation
of any applicable securities laws, whether federal, or state. Employee also agrees (i) that the
certificates representing the shares of Stock purchased under this Option 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 purchased
under this Option 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 the shares of Stock purchased under this Option.



     7. Employment Relationship. For purposes of this Agreement, Employee shall be considered
to be in the employment of the Company as long as Employee remains an employee of either the
Company, a parent or subsidiary corporation (as defined in section 424 of the Code) of the Company,
or a corporation or a parent or subsidiary of such corporation assuming or substituting a new
option for this Option. Any question as to whether and when there has been a termination of such
employment, and the cause of such termination, shall be determined by the Committee, and its
determination shall be final.



     8. 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 Employee.



     9. 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 Employee has executed this Agreement, all as of the day
and year first above written.



	 	 	 	 	 	 	 
	 	 	ROWAN COMPANIES, INC.

	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 
	ATTEST:


	 	 	 	Senior Vice President
	 	 
	 
 

	 	 	 	 	 	 
	 	 	 
	Assistant Secretary
	 	Employee

	 
 

	 	 	 	 	 	 
	

	 	Date:	 	 	 	 
	

	 	 	 	 






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SCHEDULE A

TO

STOCK OPTION AGREEMENT




     Normal Retirement. For purposes of the foregoing Stock Option Agreement, the “Normal
Retirement” by an Employee shall have occurred if:




	 	(a)  	in the case of an Employee who is an employee of Rowan Companies, Inc. or an
employee of an Employing Company, as defined in the Rowan Pension Plan (the “Rowan
Plan”), the Employee: (1) has satisfied the requirements for normal retirement
pursuant to the rules of the Rowan Plan which, in terms of age, is a minimum of 60 and
(2) has requested and received authorization from the administrative committee
appointed by the Company’s Board of Directors to administer the Rowan Plan to commence
receiving pension benefits; or
	 
	 	(b)  	in the case of an Employee who is an employee of LeTourneau, Inc. or an
employee of an Employing Company, as defined in the LeTourneau Pension Plan (the
“LeTourneau Plan”), the Employee: (1) has satisfied the requirements for either
normal or late retirement pursuant to the rules of the LeTourneau Plan, (2) has
requested and received authorization from the administrative committee appointed by
the Board of Directors of LeTourneau, Inc. to administer the LeTourneau Plan to
commence receiving pension benefits, and (3) would have satisfied the requirements for
normal retirement pursuant to the rules of the Rowan Plan if he or she was an employee
of Rowan Companies, Inc. or an employee of an Employing Company under the Rowan Plan.




Determination of the date of termination of employment by reason of Normal Retirement shall be
based on such evidence as the Committee may require and a determination by the Committee of such
date of termination shall be final and controlling on all interested parties.




     Disability. For purposes of the foregoing Stock Option Agreement, the “Disability” of
an Employee shall have occurred if he has a mental or physical condition which totally and
presumably permanently prevents him from engaging in any substantial gainful employment with the
Company or the Company subsidiary or affiliate with which he was employed prior to inception of his
disability which (i) did not arise while engaged in or as a result of being engaged in an illegal
act or enterprise, (ii) did not result from chronic alcoholism, addiction to narcotics or the use
of illegal or unauthorized drugs in any manner, (iii) did not result from service in the Armed
Forces of the United States which entitled the Employee to a Veteran’s Disability Pension, and (iv)
did not arise while employed by an employer other than the Company or a Company subsidiary or
affiliate of the Company. The existence of such Disability must be certified by two duly licensed
and practicing physicians selected, respectively, by the Committee and by the Employee (or his
representative). If they fail to agree, a third physician shall be selected by the Committee, and
the determination of any two of such three physicians shall be final and controlling on



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all interested parties. The determination of any such physicians shall be evidenced by appropriate
written certifications delivered to the Committee. Notwithstanding the foregoing, the Committee
may, in its discretion, waive the requirement of certification of Disability by licensed
physicians, and, in lieu of such certification, rely on such other appropriate medical evidence of
Disability as is deemed satisfactory by the Committee. Determination of whether such Disability
exists shall be made as promptly as possible after the date such Disability is claimed to have
commenced. Determination of the date of termination of employment by reason of Disability shall be
based on such evidence as the Committee may require and a determination by the Committee of such
date of termination shall be final and controlling on all interested parties.




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