EXHIBIT 10.301
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 May 19, 1999 (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 March 25, 1998 between the Optionee and the Company.
(c) "Replacement Employment Agreement" shall be as defined in
Paragraph 18 of this 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 May 19, 2009 ("Option Period")
to purchase from the Company 86,400 shares ("Option Shares") of
the Company's Common Stock, at a price equal to $10.062 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) On November 19, 1999, 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 May 19, 2000, 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 May 19, 2001, 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
during the Option Period by the Company for "Cause" (as defined
in the Replacement Employment Agreement) or by the Executive for
any reason other than (i) death or (ii) "Good Reason" or during a
"Window Period" (in each case as "Good Reason" and "Window
Period" are defined in the Replacement Employment Agreement)
during the term of the Replacement Employment Agreement, as
extended from time to time, then (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
during the term of the Replacement Employment Agreement, as
extended from time to time, (i) by the Optionee for Good Reason
or during a Window Period; (ii) for any reason by the Company
other than for "Cause" (as defined in the Employment Agreement)
or (iii) by reason of death or disability, 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.
18. In the event Optionee voluntarily relinquishes and releases the
Company from its obligations under the Employment Agreement on or
before June 19, 1999 in consideration of the Company executing a
new employment agreement with Optionee in form and substance
satisfactory to the Company (the "Replacement Employment
Agreement"), this Agreement shall remain in full force and
effect. Otherwise, this Agreement shall be of no further legal
effect.
IN WITNESS WHEREOF, this Agreement is executed this 19th day of May,
1999, effective as of the 19th day of May, 1999.
R&B FALCON CORPORATION
By:
Xxxx X. Xxxx, Xx. - Chairman
OPTIONEE
_________________________
Xxxxxx X. Xxxxxxx
