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EXHIBIT 10 B




NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT




     AGREEMENT made as of the ___day of                    ,                    between Rowan Companies,
Inc. a Delaware corporation (the “Company”) and                                        
                                         (“Director”).



     To carry out the purposes of the Rowan Companies, Inc. Nonemployee Directors Stock Option Plan
(the “Plan”), by affording Director 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 Director hereby agrees as follows:



     1. Grant of Option. The Company hereby irrevocably grants to Director the right and
option (“Option”) to purchase all or any part of an aggregate of                     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.



     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 or more
	 	100%






     This Option may be exercised only while Director remains a director of the Company and will
terminate and cease to be exercisable upon termination of Director’s status as a director of the
Company, except that:




          (a) If Director’s status as a director of the Company terminates by reason of
disability (within the meaning of section 22(e)(3) of the Internal Revenue Code of 1986, as
amended), this Option may be exercised in full by Director (or Director’s estate or the
person who acquires this Option by will or the laws of descent and distribution or otherwise
by reason of the death of Director) at any time during the earlier of the five-



 









 






year period following such termination or the expiration of the original term of this
Option.




          (b) If Director’s status as a director of the Company terminates on or after his
attainment of the age of 70, this Option may be exercised in full by Director (or Director’s
estate or the person who acquires this Option by will or the laws of descent and
distribution or otherwise by reason of the death of Director) at any time during the earlier
of the five-year period following such termination or the expiration of the original term of
this Option.




          (c) If Director dies while a director of the Company or within a five-year period
described in (a) or (b) above, Director’s estate, or the person who acquires this Option by
will or the laws of descent and distribution or otherwise by reason of the death of
Director, may exercise this Option in full at any time during the earlier of the two-year
period following the date of Director’s death or the expiration of the original term of this
Option.



This Option shall not be exercisable in any event after the expiration of ten years 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,
Director shall provide a 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 Director, Director (or the person
permitted to exercise this Option in the event of Director’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
thereunder shall not be transferable other than by will or the laws of descent and distribution and
shall be exercisable during the Director’s lifetime only by the Director or, in the case of the
Director’s death or incapacity, by the Director’s guardian or legal representative. Director
(hereinafter the “Initial Optionee” for purposes of this Paragraph 4) may transfer this Option (in
whole or in part) subject to such conditions or limitations, if any, as the Board 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 Board 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 Board otherwise agrees to a
transfer for consideration. The terms and conditions of the Plan and



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this Option Agreement shall be binding upon any transferee. Following any transfer, this
Option shall continue to be subject to the same terms and conditions as were applicable immediately
prior to the transfer, including, without limitation, vesting and the expiration provisions of (a),
(b), and (c) of Paragraph 3 above, which shall be applied “as if” Director 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 Director’s status as a director of the Company. No transfer of this
Option shall be effective unless the Board 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. 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 this 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., Director (or the person permitted to exercise this Option in the event of Director’s
death or incapacity), 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 to assure compliance
with applicable securities laws. The Company shall incur no liability to Director for failure to
register the Stock or maintain the registration.



     Director agrees that the shares of Stock which Director 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. Director also agrees (i) that the
certificates representing the shares of Stock purchased under this Option may bear such legend or
legends as the Company 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.



     6. 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 Director.



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     7. 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 disputes regarding the Plan or this Agreement.



     IN WITNESS THEREOF, the Company has caused this Agreement to be duly executed by its officer
thereunto duly authorized, and Director has executed this Agreement, all as of the day and year
first above written.



	 	 	 	 	 
	 	 	ROWAN COMPANIES, INC.
	 
	 	 	 	 
	

	 	By:
	 	

	 
	 	 	 	 
	ACCEPTED:
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Director
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	Date
	 	 	 	 







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