Contract
Exhibit
10d
2005
ROWAN COMPANIES, INC. LONG-TERM INCENTIVE PLAN
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 XxXxxxxxxx, Inc. or an employee
of an
Employing Company, as defined in the XxXxxxxxxx Pension Plan (the “XxXxxxxxxx
Plan”), the Employee: (1) has satisfied the requirements for either normal or
late retirement pursuant to the rules of the XxXxxxxxxx Plan, (2) has requested
and received authorization from the administrative committee appointed by
the
Board of Directors of XxXxxxxxxx, Inc. to administer the XxXxxxxxxx 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.
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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.
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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 Xxxxxx 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.
By:_____________________________________________ Date:___________________________
Xxxxxx
X.
Xxxxxx,
Vice
Chairman and Chief Administrative Officer
PARTICIPANT:
________________________________________________ Date:___________________________
Address:
__________________________________________
__________________________________________
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Appendix
A
Diamond
Offshore Drilling, Inc.
ENSCO
International Incorporated
GlobalSantaFe
Corporation
Noble
Corporation
TODCO
Transocean
Inc.
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