2009 ROWAN COMPANIES, INC. INCENTIVE PLAN

1.  

Grant of SAR .  To carry out the purposes of the 2009 Rowan Companies, Inc. Incentive Plan (the “Plan”), and subject to the conditions described in this Agreement and the Plan, the Company hereby grants to the Participant a stock appreciation right (“SAR”) with respect to ______ shares of common stock, $0.125 par value per share of the Company (“Stock”), effective as of the Grant Date on the terms and conditions set forth herein and in the Plan, which Plan is incorporated herein by reference as a part of this Agreement.  All capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan; the Plan is incorporated herein by reference as a part of this Agreement.

2.  

Exercise Price .  The exercise price of Stock purchased pursuant to the exercise of this SAR shall be $             per share.

3.  

Exercise of SAR .  This SAR shall be exercisable in the manner described below for one-third of the aggregate number of SARs on and after the first anniversary of the Grant Date and an additional one-third on and after each of the second and third anniversaries of the Grant Date; provided, however, a SAR may be exercised only prior to its expiration date and, except as otherwise provided below, only while the Participant remains an Employee of the Company.  This SAR shall not be exercisable in any event after the expiration of ten years from the Grant Date hereof.  The SAR will terminate and cease to be exerciseable upon the Participant’s termination of employment with the Company, except that:

(a)  

If the Participant’s employment with the Company terminates by reason of Retirement, the Participant may exercise this SAR at any time during the period of five years following the date of such termination, but only as to the number of SARs that the Participant was entitled to purchase hereunder as of the date his employment so terminates, plus such additional number of SARs, if any, that the Committee, in its sole discretion, determines to be exercisable as of such Retirement.

(b)  

If the Participant dies within the five-year period following the date of the Participant’s termination of employment by reason of Retirement, the Participant’s estate, or the person who acquires this SAR by bequest or inheritance or otherwise by reason of the death of the Participant, may exercise this SAR at any time during the period of two years following the date of the Participant’s death, but only as to the number of SARs the Participant was entitled to purchase hereunder as of the date the Participant’s employment terminated by reason of Retirement.

(c)  

If the Participant’s employment with the Company terminates by reason of disability, the Participant may exercise this SAR in full at any time during the period of five years following the date of such termination, but only as to the number of SARs that the Participant was entitled to purchase hereunder as of the date his employment so terminates, plus such additional number of SARs, if any, that the Committee, in its sole discretion, determines to be exercisable as of such disability.

(d)  

If the Participant dies while in the employ of the Company or within the five-year period following the date of the Participant’s termination of employment by reason of disability, the Participant’s estate, or the person who acquires this SAR by bequest or inheritance or by reason of the death of the Participant, may exercise this SAR in full at any time during the period of two years following the date of the Participant’s death.

(e)  

If the Participant’s employment with the Company terminates other than by reason of Retirement, disability, or death, this SAR (to the extent vested as of the date of termination and not exercised prior thereto) shall terminate upon the expiration of 90 days following the date the Participant’s employment so terminates.

4.  

Exercise .  Subject to the limitations set forth herein and in the Plan, this SAR may be exercised by written notice provided to the Company, and may only be exercised with respect to a number of SAR Shares with respect to which the SAR is then exercisable.  Upon exercise of the SAR, the product of the number of the SARs exercised multiplied by the excess of the Fair Market Value (determined in accordance with the terms of the Plan) over the Exercise Price shall become payable to the Participant in shares of Stock, or, in the sole discretion of the Committee, in cash.  Such Stock issuance or single lump-sum cash payment shall be made as soon as practicable after becoming payable, but no later than 45 days after the date of exercise. Notwithstanding anything to the contrary contained herein, the Participant agrees that he will not exercise the SAR granted pursuant hereto, and that the Company will not be obligated to issue any Stock pursuant to this Award Agreement, if the exercise of the SAR or the issuance of such Stock would constitute a violation by the Participant or by the Company of any provision of any law or regulation of any governmental authority or any stock exchange or transaction quotation system.

5.  

Retirement .  For purposes of the Agreement and pursuant to the terms of the Plan, Retirement of an Employee shall have occurred if, as of the Employee’s date of termination of employment: