LTIP 0517


    Exhibit
      10g

    

      2005
        ROWAN COMPANIES, INC. LONG-TERM INCENTIVE PLAN

      PERFORMANCE
        SHARE AWARD AGREEMENT

      


       

      THIS
        PERFORMANCE SHARE AWARD AGREEMENT (this
        “Agreement”) is made as of the ____day
        of
______(“Award
        Date”) between Rowan Companies, Inc., a Delaware corporation (the “Company”) and
        [name] (“Participant”).

       

      1. Agreement
        to Grant Performance Shares.   Subject
        to the conditions described in this Agreement and the 2005 Rowan Companies,
        Inc.
        Long-Term Incentive Plan (the “Plan”), the Company hereby agrees to grant shares
        of common stock, $0.125 par value per share, of the Company (“Stock”) to
        Participant in consideration for services to be performed and contingent
        upon
        the occurrence of certain events as set forth herein. Prior to the actual
        issuance of such shares, Participant shall have no rights as a shareholder
        pursuant to this Agreement including but not limited to any rights to receive
        or
        accrue dividends with respect to such shares or the right to vote such
        shares.

      


      2. Definitions.
        For
        purposes of this Agreement, the following terms shall have the following
        meaning:

      


      “Average
        Stock Price”means
        the
        average of the closing prices for the Stock or the common stock of each of
        the
        Peer Group Companies on each of the twenty-five (25) trading days immediately
        preceding the date of the determination.

       

      “Committee”
        means
        the Compensation Committee of the Board of Directors of the
        Company.

       

      “Peer
        Group Companies”
        means
        the companies listed on Appendix A attached hereto.

       

      “Performance
        Period”
        means a
        period of three years beginning on the Award Date and ending on the third
        anniversary thereof.

       

      “Relative
        TSR Rank”
        means
        the Total Shareholder Return of the Stock and the Total Shareholder Return
        of
        the common stock of each of the Peer Group Companies ranked in descending
        order.
        Relative TSR Rank shall be expressed as a number from one to seven with the
        number one (1) representing the highest Relative TSR Rank and seven (7) the
        lowest.

       

      “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 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.

       

      “Target
        Shares”
        means
        the number of shares of Stock that will be transferred to Participant if
        the
        Relative TSR Rank of the Stock is four (4) and Total Shareholder Return is
        equal
        to one (1) or greater. Participant’s Target Shares shall be set forth in
        paragraph 3 below.

       

      “Total
        Shareholder Return”
        or
“TSR”
        means
x∕y
        where:

       

      x
        = the
        sum of (i) the difference between the Average Stock Price as of the last
        trading
        day of the Performance Period and the Average Stock Price as of the first
        day of
        the Performance Period; and (ii) all dividends paid on the Stock during the
        Performance Period; and

       

      y
        = the
        Average Stock Price as of the first day of the Performance Period.

       

      All
        capitalized terms not otherwise defined herein shall have the meanings set
        forth
        in the Plan, the terms of which are incorporated herein by
        reference.

       

      3. Determination
        of Performance Shares.
        Provided
        that Participant is continuously employed by the Company throughout the
        Performance Period as soon as administratively feasible, but not later than
        seventy-five (75) days after the last day of the Performance Period, the
        Company
        shall transfer to Participant a number of shares of Stock to be determined
        as a
        percentage of the Target Shares based on the Relative TSR Rank according
        to the
        following chart.

      


      
        	
                Rowan
                  Relative TSR Rank

              	
                1

              	
                2

              	
                3

              	
                4

              	
                5

              	
                6

              	
                7

              
	
                Target
                  Share Payout

                if
                  TSR 3
                  1

              	
                200%

              	
                167%

              	
                133%

              	
                100%

              	
                25%

              	
                0%

              	
                0%

              
	
                Target
                  Share Payout - Negative

                If
                  TSR < 1

              	
                150%

              	
                125%

              	
                100%

              	
                75%

              	
                20%

              	
                0%

              	
                0%

              


      

      


      Participant’s
        Target Shares = [number].

      


      
        
          
          

        

        
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      4. Retirement,
        Disability, Death, or Change of Control.
        Except
        as otherwise provided below, in the event that Participant’s employment with the
        Company terminates prior to the last day of the Performance Period for any
        reason other than Retirement, Disability or death, this Agreement shall
        terminate and all rights of Participant to receive Stock under this Agreement
        shall be forfeited. In the event of Participant’s termination of employment by
        reason of Retirement, Disability or death, Participant shall receive at the
        conclusion of the Performance Period a prorated portion of the Target Shares
        based on the period of employment during the Performance Period prior to
        such
        termination. In the event of Participant’s termination of employment following a
        Change of Control or Retirement, the Committee, in its sole discretion, may
        grant Stock to Participant in an amount in excess of the amount that would
        be
        otherwise granted to Participant; provided, however, that the maximum number
        of
        shares of Stock awarded Participant pursuant to this Agreement shall not
        exceed
        200% of the Target Shares.

      


      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 acquired pursuant to this Agreement. In
        the absence of such effective registration or an available exemption from
        registration under the Act, issuance of shares of Stock 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,
        Participant (or the person entitled to receive Participant’s shares in the
        event
        of
        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 Participant
        for
        failure to register the Stock or maintain the registration.

      


      Participant
        agrees that the shares of Stock, which 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. 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.

      


      6. Employment
        Relationship.
        For
        purposes of this Agreement, Participant shall be considered to be in the
        employment of the Company as long as Participant 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 this Agreement. 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 in its sole discretion, and its
        determination shall be final.

      


      7. Withholding
        of Taxes.   
        The
        Company shall have the right to take any action as may be necessary or
        appropriate to satisfy any federal, state or local tax withholding obligations,
        including, but not limited to, the right to withhold 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. In the event that the proceeds of such
        sale shall exceed the legally required withholding amount, the Company shall
        remit the difference in cash to Participant. In the event that the proceeds
        of
        such sale are less than the legally required withholding amount, the Company
        may
        withhold the difference from any cash or Stock then or thereafter payable
        to
        Participant.

      


      
        
          
          

        

        
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      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”), for all purposes references herein to Stock 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 and the number of Target Shares and the Average Stock
        Price may be adjusted as deemed necessary or appropriate in the sole discretion
        of the Committee to prevent enlargement or diminution in Participant’s rights
        under this Agreement.

      


      10. 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.

      


      11. Certain
        Restrictions.
        By
        executing this Agreement, 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 the terms of the Plan
        or
        this Agreement, or the securities law or any other applicable laws, rules
        or
        regulations.

      


      12. Amendment
        and Termination.   In
        the event that the common stock of any Peer Group Company ceases to be publicly
        traded during the Performance Period, the Committee shall have the authority
        to
        substitute the common stock of any successor in interest to the stock or
        assets
        of such Peer Group Company, provided that the common stock of such successor
        is
        publicly traded and provided further that such successor is determined by
        the
        Committee to be an appropriate Peer Group Company. If the Committee substitutes
        the common stock of a successor, the Total Shareholder Return of such successor
        common stock shall determine its Relative TSR Rank. If the Committee determines
        that the common stock of a successor cannot or should not be substituted
        for the
        common stock of a Peer Group Company that has ceased to be publicly traded,
        then
        Relative TSR Rank of such Peer Group Company shall be based on Total Sharehold
        Return of such common stock as of the date that such common stock ceases
        to be
        publicly traded. 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 Participant. 

      


      
        
          
          

        

        
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      13. 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 Participant.

      


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

      


      


      ROWAN
        COMPANIES INC.

      


      


      


      By:_________________________________________      Date:_____________________________________    

      Robert
        G.
        Croyle, 

      Vice
        Chairman and Chief Administrative Officer

      


      


      


      PARTICIPANT:

      


      ______________________________________                    Date:_____________________________________    

      


      


      Address:

       

      ____________________________________________

       

      ____________________________________________

       

       


      
        
          
          

        

        
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      Appendix
        A

      


      


      Diamond
        Offshore Drilling, Inc.

      


      ENSCO
        International Incorporated

      


      GlobalSantaFe
        Corporation

      


      Noble
        Corporation

      


      TODCO

      


      Transocean
        Inc.

       

       

       

       

       

       

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