EXHIBIT 10.14
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made between
R&B Falcon Corporation, a Delaware corporation ("Company"), and
Xxxx X. Xxxx, Xx. ("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 non-qualified 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) "Cause" means Cause as defined in the Employment
Agreement;
(b) "Disability" means Disability as defined in the
Employment Agreement;
(c) "Employment Agreement" means that certain Employment
Agreement dated September 14, 1999 between the Optionee
and the Company; and
(d) "Window Period" means Window Period as defined in the
Employment Agreement.
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 425,000 shares ("Option Shares") of the
Company's Common Stock, at a price equal to $12.656 per
share.
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) On January 1, 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 January 1, 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 January 1, 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.
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. A. If the Optionee's employment with the Company is
terminated by the Company for Cause or is terminated by
the Optionee (other than by reason of retirement,
death, Disability or Good Reason or during a Window
Period), (a) the options herein granted to him that
are not exercisable on the date of his termination of
employment shall thereupon terminate, and (b) any
options herein granted to him that are exercisable on
the date of his termination of employment may be
exercised by the Optionee during a three-month period
beginning on such date, unless the Option Period shall
expire prior to such date, and shall thereafter
terminate.
B. If the Optionee's employment with the Company is
terminated: (i) by the Optionee for Good Reason or
during a Window Period; (ii) for any reason by the
Company other than for Cause or (iii) by reason of
retirement, death or Disability of Optionee, then (a)
the options granted to him that are not exercisable on
the date of such termination of employment shall be
thereupon be fully exercisable, and (b) all options
then held by the Optionee, whether theretofore
exercisable or exercisable by reason of the termination
of employment may be exercised by the Optionee during
the full remaining term of this Option; provided,
however, that all options granted hereunder shall
expire and not be exercisable on the first anniversary
of the Optionee's death.
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 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.
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. 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 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.
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 familiarized 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 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.
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 number of Option Shares held by
the Optionee hereunder, and the exercise price per
share set out in Paragraph 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 Paragraph 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 executed this _ _ day of
February 2000, effective as of the 28th day of January 2000.
R&B FALCON CORPORATION
By:_______________________
Xxxx X. Xxxx, Xx.
Chairman and Chief Executive Officer
OPTIONEE
_________________________
Xxxx X. Xxxx, Xx.
