EXHIBIT 10.29
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between
R&B Falcon Corporation, a Delaware corporation ("Company"), and
____________________ ("Optionee") as of December 1, 1998 (the
"Effective Date").
WITNESSETH:
Whereas, pursuant to the Agreement and Plan of Merger dated
as of the 2 1 day of August, 1998, among R&B Falcon Corporation,
RBF Cliffs Acquisition Corp. and Cliffs Drilling Company (the
"Merger Agreement"), R&B Falcon Corporation (the "Company")
agreed to grant stock options to certain employees of Cliffs
Drilling Company;
Whereas, the Company has adopted the R&B Falcon Corporation
1998 Acquisition Option Plan (the "Plan") to fulfill its
obligations under the Merger Agreement to grant such stock
options.
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) "Cause" means Involuntary Termination as described in
Company's Personnel Policies and Procedures, in effect from time
to time,
(b) "Change of Control" means a Change of Control as
defined in Section 18 of this Agreement.
(c) "Disability" means Disability as defined in the
Company's Personnel Policies and Procedures, in effect from time
to time,
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 December 1, 2008
("Option Period") to purchase from the Company _______ shares
("Option Shares") of the Company's Common Stock, at a price equal
to $9.125 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 Common Stock as follows:
(a) After one year following the Effective Date, this Option
shall be exercisable for any number of shares up to and
including, but not in excess of, 50% of the aggregate number of
shares subject to this Option;
(b) After two years following the Effective Date, this
Option shall be exercisable for any number of shares up to and
including, but not in excess of, 75% of the aggregate number of
shares subject to this Option; and
(c) After three years following the Effective Date, 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.
Notwithstanding anything to the contrary in this Agreement
(including, without limitation, this Section and Section 7
below), this Option shall not be exercisable unless and until the
Optionee has been continuously employed by the Company
(including, for this purpose only, Cliffs Drilling Company)
and/or its Affiliates for a period of one year.
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 (or to the
extent permitted by the Company from time to time, to have such
number of Option Shares electronically transferred to Optionee's
account at Optionee's broker in accordance with Optionee's
written instructions).
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. (a) Upon the first to occur during the Option Period
of:
(i) Change of Control; or
(ii) the termination of the Optionee's
employment due to (A) death or Disability, (B)
involuntary termination by the Company and all
Affiliates for any reason other than Cause or
(C) retirement at age 60 or over;
the applicable restrictions on exercise set out in Section 4
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 employment with the Company and all
Affiliates 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 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 e5ective 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.
9. 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 (or to the extent permitted by the Company, from time
to time, the number of such Option Shares has been electronically
transferred to Optionee's account at Optionee's broker). Until
such time, the Optionee shall not be entitled to dividends or to
vote at meetings of the stockholders of the Company.
10. 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 shall 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.
11. 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
12. 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.
13. 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 familiarize himself with all
matters contained herein and in the Plan which may affect any of
the Optionee's rights or privileges hereunder,
14. 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 8, 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.
15. 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.
16. This Agreement is subject to the Plan, a copy of which
will be provided the to Optionee upon written racquets. 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,
17. 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 Option Shares hereunder, and the price per
share set out in Section 3 hereof shall be adjusted to reflect
substantially the same economic equivalent value of the Option
Shares to the Optionee immediately prior to any such merger or
other business combination.
18. 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 Us 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).
19. Adjustments. 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 Participant 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 Participant 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
Participant 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 Participant
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 prices set out
in Section 3 hereof and applicable to the options to purchase
shares or the voting interests of the new entity being spin-off
or spin-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 executed effective
as of December 1, 1998.
R&B FALCON CORPORATION
By:_______________________
Xxxxxxxx X. Xxxx,
Senior Vice President
OPTIONEE
__________________________
