Document:

Stock Options

    Exhibit
      10.3

    

       

      2005
        ROWAN COMPANIES, INC. LONG-TERM INCENTIVE PLAN

      2006
        NONQUALIFIED STOCK OPTION AGREEMENT

       

      THIS
        NONQUALIFIED STOCK OPTION AGREEMENT
        (this
“Agreement”) is made as of the 28th
        day of
April,
        2006
        (“Grant
        Date”), between Rowan Companies, Inc., a Delaware corporation (the “Company”)
        and ____________
        (“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 ______ 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 $43.85
                per share.

            

       

      	3.  	
              Exercise
                of Option.
                This Option shall be exercisable in the manner described below for
                one-third of the aggregate number of shares offered by this Option
                on and
                after each of the first, second and third 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-Performance Shares

    Exhibit
      10d

    

      2005
        ROWAN COMPANIES, INC. LONG-TERM INCENTIVE PLAN

      2006
        PERFORMANCE SHARE AWARD AGREEMENT

      

       

      THIS
        PERFORMANCE SHARE AWARD AGREEMENT (this
        “Agreement”) is made as of the 28th
        day of
April,
        2006
        (“Award
        Date”) between Rowan Companies, Inc., a Delaware corporation (the “Company”) and
        ____________ (“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
        ROI Rank”
        means
        the Return on Investment of the Company and the Return on Investment of each
        of
        the Peer Group Companies ranked in descending order. Relative ROI Rank shall
        be
        expressed as a number from one to seven with the number one (1) representing
        the
        highest Relative ROI Rank and seven (7) the lowest.

       

      “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.

       

      
        
           

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Return
        on Investment”
        or
“ROI”
        means
x∕y
        where:

       

      x
        = the
        sum of operating income (loss) for each fiscal year that ends during the
        Performance Period; and

       

      y
        = the
        average of the net total of total assets less current liabilities as of the
        beginning and end of each fiscal year that ends during the Performance
        Period.

       

      “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
        both
        (i) the
        Relative ROI Rank of the Company is four (4) and Return on Investment is
        equal
        to zero (0) or greater and (ii) 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.

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      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
        follows: 

      

      (a)
        50%
        of the Target Shares multiplied by the percentage shown in the following
        chart
        that corresponds to the Relative ROI Rank.

      

      
        	
                Rowan
                  Relative ROI Rank

              	
                1

              	
                2

              	
                3

              	
                4

              	
                5

              	
                6

              	
                7

              
	
                Target
                  Share Payout if ROI 3
                  0

              	
                200%

              	
                167%

              	
                133%

              	
                100%

              	
                25%

              	
                0%

              	
                0%

              
	
                Target
                  Share Payout if ROI < 0

              	
                150%

              	
                125%

              	
                100%

              	
                75%

              	
                20%

              	
                0%

              	
                0%

              

      

      

      (b)
        50%
        of the Target Shares multiplied by the percentage shown in the following
        chart
        that corresponds to the Relative TSR Rank.

      

      
        	
                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 if TSR < 1

              	
                150%

              	
                125%

              	
                100%

              	
                75%

              	
                20%

              	
                0%

              	
                0%

              

      

      

      Participant’s
        Target Shares = ______.

      

      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.

      

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      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.

      

      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.

       

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

       

      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. 

      

      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.

      

       

      
        
           

          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

      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:

        

        __________________________________________

        __________________________________________

         

      

       

      
        
           

          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

      Appendix
        A

      

      

      Diamond
        Offshore Drilling, Inc.

      

      ENSCO
        International Incorporated

      

      GlobalSantaFe
        Corporation

      

      Noble
        Corporation

      

      TODCO

      

      Transocean
        Inc.

       

       

       

       

      -7-

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