EXHIBIT 10.2
R&B FALCON CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between R&B Falcon
Corporation, a Delaware corporation ("Company") and P.C. Chatterjee
("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 January
28, 2010 ("Option Period") to purchase from the Company
5,500 shares ("Option Shares") of the Company's Common
Stock, at a price equal to $12.656 per share.
3. This Option shall not be exercisable until after 6 months
immediately following the Effective Date, and thereafter on
January 1, 2001 shall be exercisable for any number of
shares 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
March, 2000, effective as of the 28th day of January, 2000.
R&B FALCON CORPORATION
By: _______________________
Paul B. Loyd, Jr. - Chairman and
Chief Executive Officer
OPTIONEE
________________________
P.C. Chatterjee
