EXHIBIT 10.19
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between R&B
Falcon Corporation, a Delaware corporation ("Company"), and Xxxxxx X.
Xxxxxxx ("Optionee") as of January 28, 2000 (the "Effective Date").
WITNESSETH:
WHEREAS, the Committee which administers the R&B Falcon
Corporation 1999 Employee Long-Term Incentive Plan ("Plan") has
selected the Optionee to receive a nonqualified stock option under the
terms of the Plan as an incentive to the Optionee to remain in the
employ of the Company and contribute to the performance of the
Company, on the terms and subject to the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. As used herein, the terms set forth below shall have
the following respective meanings:
(a) "Disability" means Disability as defined in the
Employment Agreement; and
(b) "Employment Agreement" means that certain Employment
Agreement dated August 25, 1999 between the Optionee
and the Company.
2. The option awarded hereunder is issued in accordance
with and subject to all of the terms, conditions and
provisions of the Plan and administrative interpretations
thereunder, if any, which have been adopted by the Committee
and are in effect on the date hereof. Capitalized terms
used but not defined herein shall have the meanings assigned
to such terms in the Plan.
3. On the terms and subject to the conditions contained
herein, the Company hereby grants to the Optionee an option
(the "Option") for a term of ten years ending on January 28,
2010 ("Option Period") to purchase from the Company 42,624
shares ("Option Shares") of the Company's Common Stock, at a
price equal to $12.656 per share.
4. This Option shall not be exercisable, except upon the
death or Disability of the Optionee, until after 6 months
immediately following the Effective Date and thereafter
shall be exercisable for any number of shares up to and
including the aggregate number of shares subject to this
Option, irrespective of whether the Optionee is an employee
of the Company at the time of any such exercise; provided
the number of shares as to which this Option becomes
exercisable shall, in each case, be reduced by the number of
shares theretofore purchased pursuant to the terms hereof.
5. The Option may be exercised by the Optionee, in whole
or in part, by giving written notice to the Compensation and
Benefits Department of the Company setting forth the number
of Option Shares with respect to which the option is to be
exercised, accompanied by payment for the shares to be
purchased and any appropriate withholding taxes, and
specifying the address to which the certificate for such
shares is to be mailed (or to the extent permitted by the
Company, the written instructions referred to in the last
sentence of this section). Payment shall be by means of
cash, certified check, bank draft or postal money order
payable to the order of the Company. As promptly as
practicable after receipt of such written notification and
payment, the Company shall deliver, or cause to be
delivered, to the Optionee certificates for the number of
Option Shares with respect to which the Option has been so
exercised.
6. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option
Shares with respect to which the Option is exercised by
tendering to the Company other shares of Common Stock at the
time of the exercise or partial exercise hereof. The
certificates representing such other shares of Common Stock
must be accompanied by a stock power duly executed with
signature guaranteed in accordance with market practice.
The value of the Common Stock so tendered shall be its Fair
Market Value.
7. The Option shall not be transferable by the Optionee
otherwise than as expressly permitted by the Plan. During
the lifetime of the Optionee, the Option shall be
exercisable only by her or him. No transfer of the Option
shall be effective to bind the Company unless the Company
shall have been furnished with written notice thereof and a
copy of such evidence as the Committee may deem necessary to
establish the validity of the transfer and the acceptance by
the transferee or transferees of the terms and conditions
hereof.
8. The Optionee shall have no rights as a stockholder with
respect to any Option Shares until the date of issuance of a
certificate for Option Shares purchased pursuant to this
Agreement. Until such time, the Optionee shall not be
entitled to dividends or to vote at meetings of the
stockholders of the Company.
9. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it
determines is required in connection with the option herein
granted. The Optionee may pay all or any portion of the
taxes required to be withheld by the Company or paid by the
Optionee in connection with the exercise of all or any
portion of the option herein granted by electing to have the
Company withhold shares of Common Stock, or by delivering
previously owned shares of Common Stock, having a Fair
Market Value equal to the amount required to be withheld or
paid. The Optionee must make the foregoing election on or
before the date that the amount of tax to be withheld is
determined ("Tax Date"). Any such election is irrevocable
and subject to disapproval by the Committee. If the
Optionee is subject to the short-swing profits recapture
provisions of Section 16(b) of the Exchange Act, any such
election shall be subject to the following additional
restrictions:
(a) Such election may not be made within six months of
the grant of this option, provided that this limitation
shall not apply in the event of death or Disability.
(b) Such election must be made either in an Election
Window (as hereinafter defined) or at such other time as may
be consistent with Section 16(b) of the Exchange Act and the
rules promulgated thereunder. Where the Tax Date in respect
of the exercise of all or any portion of this Option is
deferred until after such exercise and the Optionee elects
stock withholding, the full amount of shares of Common Stock
will be issued or transferred to the Optionee upon exercise
of this Option, but the Optionee shall be unconditionally
obligated to tender back to the Company on the Tax Date the
number of shares necessary to discharge with respect to such
Option exercise the greater of (i) the Company's withholding
obligation and (ii) all or any portion of the holder's
federal and state tax obligation attributable to the Option
exercise. An Election Window is any period commencing on
the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings
and ending on the twelfth business day following such
release.
10. Upon the acquisition of any shares pursuant to the
exercise of the Option, the Optionee will enter into such
written representations, warranties and agreements as the
Company may reasonably request in order to comply with
applicable securities laws or with this Agreement.
11. The certificates representing the Option Shares
purchased by exercise of an option will be stamped or
otherwise imprinted with a legend in such form as the
Company or its counsel may require with respect to any
applicable restrictions on sale or transfer, and the stock
transfer records of the Company will reflect stop-transfer
instructions, as appropriate, with respect to such shares.
12. Unless otherwise provided herein, every notice
hereunder shall be in writing and shall be delivered by hand
or by registered or certified mail. All notices of the
exercise by the Optionee of any option hereunder shall be
directed to R&B Falcon Corporation, Attention: Benefits and
Compensation Department, at the Company's principal office
address from time to time. Any notice given by the Company
to the Optionee directed to him or her at his or her address
on file with the Company shall be effective to bind any
other person who shall acquire rights hereunder. The
Company shall be under no obligation whatsoever to advise
the Optionee of the existence, maturity or termination of
any of the Optionee's rights hereunder and the Optionee
shall be deemed to have familiarized himself with all
matters contained herein and in the Plan which may affect
any of the Optionee's rights or privileges hereunder.
13. Whenever the term "Optionee" is used herein under
circumstances applicable to any other person or persons to
whom this award, in accordance with the provisions of
Paragraph 7, may be transferred, the word "Optionee" shall
be deemed to include such person or persons. References to
the masculine gender herein also include the feminine gender
for all purposes.
14. Notwithstanding any of the other provisions hereof, the
Optionee agrees that he or she will not exercise the Option,
and that the Company will not be obligated to issue any
shares pursuant to this Agreement, if the exercise of the
Option or the issuance of such shares of Common Stock would
constitute a violation by the Optionee or by the Company of
any provision of any law or regulation of any governmental
authority or any national securities exchange.
15. This Agreement is subject to the Plan, a copy of which
will be provided to the Optionee upon written request. The
terms and provisions of the Plan (including any subsequent
amendments thereto) are incorporated herein by reference.
In the event of a conflict between any term or provision
contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and
prevail. All definitions of words and terms contained in
the Plan shall be applicable to this Agreement.
16. In the event of a corporate merger or other business
combination in which the Company is not the surviving
entity, the economic equivalent number of the voting shares
of common stock of, or participating interests in, the
surviving entity, based on the terms of such merger or other
business combination, shall be substituted for the number of
Option Shares held by the Optionee hereunder, and the
exercise price per share set out in Section 3 above shall be
likewise adjusted, to reflect substantially the same
economic equivalent value of the Option Shares to the
Optionee prior to any such merger or other business
combination. In the event of a split-off, spin-off or
creating of a different class of common stock of the Company
(including, without limitation, a tracking stock), the
Optionee shall receive an option to purchase an equivalent
number of the shares of common stock or voting interests of
such separate entity being split-off or spun-off or of the
shares of the new class of common stock of the Company, as
if Optionee had owned the shares underlying the Option
Shares on the record date for any such split-off, spin-off
or creation of a new class of common stock of the Company,
and the exercise price set out in Section 3 hereof and
applicable to the options to purchase shares or the voting
interests of the new entity being split-off or spun-off
shall be adjusted to reflect substantially the same economic
equivalent value of the Option Shares to the Optionee prior
to any such split-off, spin-off or creation of a new class
of common stock of the Company
IN WITNESS WHEREOF, this Agreement is effective as of the 28th of
January, 2000.
R&B FALCON CORPORATION
By:________________________________
Xxxx X. Xxxx, Xx.
Chairman & Chief Executive Officer
OPTIONEE
___________________________________
Xxxxxx X. Xxxxxxx