Document:

Stock Option Agreement

    Exhibit
      10f

       

      2005
        ROWAN COMPANIES, INC. LONG-TERM INCENTIVE PLAN

       

      NONQUALIFIED
        STOCK OPTION AGREEMENT

       

      THIS
        NONQUALIFIED STOCK OPTION AGREEMENT
        (this
“Agreement”) is made as of the ____day
        of
______(“Grant
        Date”), between Rowan Companies, Inc., a Delaware corporation (the “Company”)
        and [name] (“Participant”).

       

      
        	1.  	
                Grant
                  of Option.
                  To carry out the purposes of the 2005 Rowan Companies, Inc. Long-Term
                  Incentive Plan (the “Plan”), by affording Participant the opportunity to
                  purchase shares of common stock, $0.125 par value per share of
                  the Company
                  (“Stock”), and in consideration of the mutual agreements and other matters
                  set forth herein and in the Plan, the Company hereby irrevocably
                  grants to
                  Participant the right and option (“Option”) to purchase all or any part of
                  an aggregate of [number] shares of Stock, effective as of the Grant
                  Date
                  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.
                  All
                  capitalized terms not otherwise defined herein shall have the meanings
                  set
                  forth in the Plan. The Plan and this Option shall be administered
                  by the
                  Compensation Committee (the “Committee”) of the Board of Directors of the
                  Company. 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.

              

      

       

      
        	3.  	
                Exercise
                  of Option.
                  This Option shall be exercisable in the manner described below
                  for 25% of
                  the aggregate number of shares offered by this Option on and after
                  each of
                  the first, second, third and fourth anniversaries of the Grant
                  Date;
                  provided, however, this Option may be exercised only prior to its
                  expiration date and, except as otherwise provided below, only while
                  Participant remains an Employee of the Company. The Option will
                  terminate
                  and cease to be exercisable upon Participant’s termination of employment
                  with the Company, except that:

              

      

       

      
        	(a)  	
                If
                  Participant’s employment with the Company terminates by reason of
                  Retirement, Participant 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 that Participant was entitled to purchase
                  hereunder as of the date his employment so terminates, plus such
                  additional number of shares, if any, that the Committee, in its
                  sole
                  discretion, determines to be exercisable as of such
                  Retirement.

              

      

       

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

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

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

              

      

       

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

              

      

       

      If
        Participant’s employment with the Company terminates other than by reason of
        Retirement, Disability or death, this Option (to the extent not exercised
        prior
        thereto) shall terminate as of the date Participant’s employment so terminates.
        This Option shall not be exercisable in any event after the expiration of
        ten
        years from the Grant Date hereof. 

       

      
        	4.  	
                Manner
                  of Exercise.
                  In order to exercise this Option, the Participant shall deliver
                  to the
                  Chief Financial Officer or other designated officer of the Company
                  payment
                  in full for (i) the shares being purchased and (ii) unless other
                  arrangements have been made with the Committee, any required withholding
                  taxes. The payment of the exercise price for each Option shall
                  be either
                  in cash or by check payable and acceptable to the Company; provided,
                  however, with the consent of the Committee, which consent may be
                  granted
                  or withheld in the Committee’s sole discretion and subject to any
                  instructions or conditions as the Committee may impose, payment
                  of the
                  exercise price and/or withholding may be made by (x) tendering
                  to the
                  Company shares of Stock having an aggregate Fair Market Value as
                  of the
                  date of exercise that is not greater than the full exercise price
                  for the
                  shares with respect to which the Option is being exercised and
                  the amount
                  required to be withheld, or (y) the Company may deliver certificates
                  for
                  the shares of Stock for which the Option is being exercised to
                  a broker
                  for sale on behalf of Participant, provided that Participant has
                  irrevocably instructed such broker to remit directly to the Company
                  on
                  Participant’s behalf from the proceeds of such sale the full amount of the
                  exercise price, plus all required withholding taxes. In the event
                  that
                  Participant, with the consent of the Committee, elects to make
                  payment as
                  allowed under clause (x) above, the Committee may, upon confirming
                  that
                  Participant owns the number of shares being tendered, authorize
                  the
                  issuance of a new certificate for the number of shares being acquired
                  pursuant to the exercise of the Option, less the number of shares
                  being
                  tendered upon the exercise, and return to Participant (or not require
                  surrender of) the certificate for the shares being tendered upon
                  the
                  exercise. 

              

      

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      
        	5.  	
                Retirement.
                  For purposes of the Agreement and pursuant to the terms of the
                  Plan,
                  Retirement of 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.

       

      
        	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 that 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,
                  Participant (or the person permitted
                  to exercise this Option
                  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 by exercising
        this Option,
        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 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.

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      
        	7.  	
                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
                  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
                  in its
                  sole discretion, and its determination shall be
                  final.

              

      

       

      
        	8.  	
                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
                  Participant for federal or state income tax purposes, Participant
                  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 Participant fails to
                  do so, the
                  Company is authorized to withhold from any cash or Stock remuneration
                  then
                  or thereafter payable to Participant 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 Participant
                  upon such exercise.

              

      

       

      
        	9.  	
                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.

              

      

       

      
        	10.  	
                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 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 exercise price of the Option shall be adjusted as
                  deemed
                  necessary or appropriate in the sole discretion of the Committee
                  to
                  prevent enlargement or dilution of Participant’s rights under this
                  Agreement.

              

      

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      
        	11.  	
                Transfer
                  of Option.
                  Except as provided herein, all rights granted hereunder shall not
                  be
                  transferable other than by will or the laws of descent and distribution
                  and shall be exercisable during the Participant’s lifetime only by the
                  Participant or, in the case of the Participant’s death or incapacity, by
                  the Participant’s guardian or legal representative. Participant
                  (hereinafter the “Initial Optionee”) for the purposes of this Paragraph 11
                  may transfer this Option (in whole or in part) subject to Committee
                  approval, and such conditions and limitations, if any, as 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 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”
                  Participant 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 Participant’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.

              

      

       

      
        	12.  	
                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.

              

      

       

      
        	13.  	
                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 with this Agreement, the securities
                  laws or any
                  other applicable laws, rules or regulations, or the terms of the
                  Plan.

              

      

       

      
        	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.

              

      

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

      
        	15.  	
                No
                  Guarantee of Tax Consequences.   The
                  Company
                  makes no commitment or guarantee to Participant that any federal
                  or state
                  tax treatment will apply or be available to any person eligible
                  for
                  benefits under this Agreement.

              

      

       

      
        	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
                  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 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:

       

      ______________________________________

       

      ______________________________________

       

       

       

       

       

      -6-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].

      

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      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.

      

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      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. 

      

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      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:

       

      ____________________________________________

       

      ____________________________________________

       

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

      Appendix
        A

      

      

      Diamond
        Offshore Drilling, Inc.

      

      ENSCO
        International Incorporated

      

      GlobalSantaFe
        Corporation

      

      Noble
        Corporation

      

      TODCO

      

      Transocean
        Inc.

       

       

       

       

       

       

      -6-

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