EXHIBIT 10.8
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and Xxxxxxx X.
Xxxxxxxxxx ("Optionee"),
WITNESSETH:
WHEREAS, Optionee, being a duly elected or appointed member
of the Board of Directors of the Company, is entitled to receive
a non-qualified stock option award under the Company's 1999
Director Long-Term Incentive Plan ("Plan"), as an incentive to
the Optionee to remain a director 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. The Option 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 otherwise defined herein) shall have the meanings
assigned to such terms in the Plan.
2. On the terms and subject to the conditions contained
herein, the Committee hereby grants to the Optionee an
option ("Option") for a term of ten years ending on
February 14, 2010 ("Option Period") to purchase from
the Company 60,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $12.719 per
share.
3. This Option shall not be exercisable until after 6
months immediately following the Effective Date, and
thereafter shall be exercisable for Common Stock as
follows:
(a) On February 14, 2001, this Option shall be
exercisable for any number of shares up to and
including, but not in excess of, 33-1/3% of the
aggregate number of shares subject to this Option;
(b) On February 14, 2002, this Option shall be
exercisable for any number of shares up to and
including, but not in excess of, 66-2/3% of the
aggregate number of shares subject to this Option;
and
(c) On February 14, 2003, this Option shall be
exercisable for any number of shares of Common
Stock up to and including, but not in excess of,
100% of the aggregate number of shares subject to
this Option;
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.
4. The Option herein granted may be exercised by the
Optionee by giving written notice to the Secretary 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. 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 to the Optionee
certificates for the number of Option Shares with
respect to which such option has been so exercised.
5. Optionee may pay for any Option Shares with respect to
which the Option herein granted 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. The value of the
Common Stock so tendered shall be its Fair Market
Value.
6. The Option herein granted shall not be transferable by
the Optionee otherwise than as permitted by Section 13
of the Plan. During the lifetime of the Optionee, such
Option shall be exercisable only by him. No transfer of
the Option herein granted 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.
7. (a) Upon the first to occur during the Option Period
of:
(i) Change of Control; or
(ii) the termination of the Optionee's
service as a member of the board of
directors of the Company due to (A)
death or disability or (B) retirement at
age 60 or over;
the applicable restrictions on exercise set out in
Section 3 above (other than the initial six months
immediately following the Effective Date) shall
terminate and the Optionee's right to exercise this
Option thereafter shall no longer be subject to such
restrictions on exercise.
(b) If the Optionee's service as a member of the board
of directors of the Company terminates prior to the
occurrence of a date set forth in Section 7(a)(i)
above for any reason (other than any of the reasons
expressly set out in Section 7(a)(ii) above), then the
Option granted herein shall immediately terminate
and thereafter may not be exercised in whole or in part
by Optionee.
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)(3) of
the Exchange Act. 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 herein granted, 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 given 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:
Secretary, at the Company's then current address of its
principal office. Any notice given by the Company to
the Optionee directed to him at his 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 6, 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 will not exercise the option
herein granted, 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. For the purpose of this Agreement, a "Change of
Control" shall mean: (a) any "Person", as
such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than (i) the Optionee, (ii) the
Company or any of its subsidiaries or Affiliates (as
that term is defined in the Exchange Act), (iii) any
Person subject, as of the date of this Agreement or at
any prior time, to the reporting or filing requirements
of Section 13(d) of the Exchange Act with respect to
the securities of the Company or any Affiliate, (iv)
any trustee or other fiduciary holding or owning
securities under an employee benefit plan of the
Company, (v) any underwriter temporarily holding or
owning securities of the Company, or (vi) any
corporation owned directly or indirectly by the current
stockholders of the Company in substantially the same
proportion as their then ownership of stock of the
Company) becomes, after the date of this Agreement, the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of
the Company representing forty percent (40%) or more of
the combined voting power of the Company's then
outstanding securities; or (b) at any time a majority
of the members of the board of directors of the Company
is comprised of other than Continuing Directors (and
for this purpose "Continuing Directors" shall mean
members of the board of directors of the Company who
were directors as of the date of this Agreement, or who
were nominated by a majority of the members of the
board of directors of the Company and such majority was
comprised only of Continuing Directors at the time of
such nomination).
IN WITNESS WHEREOF, this Agreement is executed this
day of February, 2000, effective as of the 14th day of February,
2000.
R&B FALCON CORPORATION
By: _______________________
Xxxx X. Xxxx, Xx. - Chairman
and Chief Executive Officer
OPTIONEE
____________________________
Xxxxxxx X. Xxxxxxxxxx
