<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant / /
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ROWAN COMPANIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
MARK HAY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rules 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
ROWAN COMPANIES, INC.
5450 TRANSCO TOWER
2800 POST OAK BOULEVARD
HOUSTON, TEXAS 77056-6196
(713) 621-7800
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FRIDAY, APRIL 28, 1995
To the Stockholders:
The Annual Meeting of the Stockholders of Rowan Companies, Inc., a Delaware
corporation (the "Company") will be held in the Transco Auditorium located on
Level 2 of the Transco Tower, 2800 Post Oak Boulevard, Houston, Texas, on
Friday, April 28, 1995 at 9:00 A.M., Houston time, for the following purposes:
1. To elect three Class I Directors to serve until the third
succeeding annual meeting and until their respective successors are duly
elected and qualified.
2. To transact such other business as may properly come before such
meeting or any adjournment thereof.
March 1, 1995, has been fixed as the date of record for determining
stockholders entitled to receive notice of and to vote at the Annual Meeting of
Stockholders. A list of all stockholders entitled to vote is on file at the
principal executive offices of the Company, 5450 Transco Tower, 2800 Post Oak
Boulevard, Houston, Texas, 77056-6196.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ MARK H. HAY
Secretary
March 10, 1995
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, DATE, SIGN AND MAIL BACK THE
ACCOMPANYING PROXY IN THE ENCLOSED RETURN ENVELOPE AT YOUR EARLIEST CONVENIENCE.
<PAGE> 3
ROWAN COMPANIES, INC.
5450 TRANSCO TOWER
2800 POST OAK BOULEVARD
HOUSTON, TEXAS 77056-6196
---------------------------------------
PROXY STATEMENT
---------------------------------------
SOLICITATION AND REVOCABILITY OF PROXIES
The enclosed proxy is solicited by and on behalf of the Board of Directors
of Rowan Companies, Inc. for use at the Annual Meeting of Stockholders to be
held on April 28, 1995, in the Transco Auditorium located on Level 2 of the
Transco Tower, 2800 Post Oak Boulevard, Houston, Texas, or any adjournment
thereof. The cost of solicitation will be paid by the Company. In addition to
solicitation by mail, solicitation of proxies may be made personally or by
telephone or telecopy by the Company's employees, and arrangements may be made
with brokerage houses or other custodians, nominees and fiduciaries to send
proxies and proxy material to their principals.
The enclosed proxy, even though executed and returned, may be revoked at
any time prior to the voting of the proxy by either (i) attending the meeting
and voting in person or (ii) giving written notice of such revocation to Mr.
Mark H. Hay, Secretary of the Company, at Rowan Companies, Inc., 5450 Transco
Tower, 2800 Post Oak Boulevard, Houston, Texas 77056-6196. The enclosed proxy
may also be revoked by a subsequently dated proxy received by the Company prior
to the voting of the previously dated proxy.
The Proxy Statement and the related form of proxy are being first mailed or
delivered to stockholders on or about March 10, 1995.
1
<PAGE> 4
VOTING SECURITIES OUTSTANDING
At the close of business on March 1, 1995, the record date for determining
those stockholders entitled to notice of and to vote at the Annual Meeting of
Stockholders, there were outstanding 84,310,787 shares of $.125 par value Common
Stock of the Company ("Common Stock"), each share of which is entitled to one
vote on the matters to be presented at the meeting.
SECURITY OWNERSHIP OF MANAGEMENT
AND PRINCIPAL STOCKHOLDERS
MANAGEMENT
The table below sets forth the number of shares of Common Stock of the
Company owned as of March 1, 1995 by nominees for director, continuing directors
(including Mr. Palmer who is Chief Executive Officer), the four other most
highly compensated executive officers of the Company and all directors and
executive officers as a group:
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
NAME BENEFICIALLY OWNED(1)(2)
-------------------------------------------------------- ------------------------
<S> <C>
Directors:
Ralph E. Bailey 20,000
Henry O. Boswell 25,000
H. E. Lentz 25,200(3)
C. R. Palmer 588,845
Wilfred P. Schmoe 5,000
Charles P. Siess, Jr. 6,000
Peter Simonis 4,700
C. W. Yeargain 290,699
Executive Officers (not Directors):
R. G. Croyle 82,078(4)
D. F. McNease 31,250
E. E. Thiele 65,750
J. Earl Beckman 6,250
All Directors and Executive Officers as a group (24 in
number) 1,423,084
</TABLE>
- ---------------
(1) Except as noted otherwise, the persons and the group listed have sole voting
and sole dispositive power with respect to the shares shown herein.
(2) All directors and executive officers as a group beneficially owned 1.69% of
the outstanding shares of Common Stock; no continuing director, nominee or
executive officer owned more than .70% of the Common Stock. Included herein
are shares of Common Stock that may be acquired prior to April 29, 1995
through the conversion of Series I Floating Rate Convertible Subordinated
Debentures (the "Series I Debentures"), the Series II Floating Rate
Convertible Subordinated Debenture (the "Series II Debenture") and the
exercise of Nonqualified Stock Options (the "Options") as follows: C. R.
Palmer -- Series II Debenture and Options -- 400,000 shares and 182,500
shares, respectively; R. G. Croyle -- Series I Debentures and
Options -- 43,478 shares and 37,500 shares, respectively; D. F.
McNease -- Options -- 31,250 shares; E. E. Thiele -- Options -- 18,750
shares; J. Earl Beckman -- Options -- 6,250 shares; and all directors and
executive officers as a group -- Series I Debentures, the Series II
Debenture and Options -- 78,261 shares, 400,000 shares and 372,750 shares,
respectively.
(3) Mr. Lentz's shares are owned jointly with his wife. The total includes 200
shares held in the names of Mr. Lentz's two minor children with respect to
which Mr. Lentz's wife serves as custodian. Mr. Lentz disclaims beneficial
ownership of such shares.
(4) Includes 1,000 shares and 100 shares owned by Mr. Croyle's children and
wife, respectively. Mr. Croyle disclaims beneficial ownership of such
shares.
2
<PAGE> 5
PRINCIPAL STOCKHOLDERS
The table below sets forth, as of March 1, 1995, certain information as to
those persons who, to the knowledge of the Company, beneficially owned more than
five percent of the Company's outstanding Common Stock:
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT
TITLE NAME AND ADDRESS BENEFICIALLY OF
OF CLASS OF BENEFICIAL OWNER(1) OWNED CLASS
-------- ---------------------- ----------- -------
<S> <C> <C> <C>
Common Stock The Equitable Companies Incorporated 12,420,800(2) 14.7%(2)
787 Seventh Avenue
New York, New York 10019;
AXA
23, Avenue Matignon
75008 Paris, France;
The Mutuelles AXA Group
detailed in (2) below
Common Stock Sanford C. Bernstein & Co., Inc. 5,809,836(3) 6.9%(3)
One State Street Plaza
New York, N.Y. 10004
Common Stock State of Wisconsin 5,181,000(4) 6.14%(4)
Investment Board
P.O. Box 7842
Madison, Wisconsin 53707
Common Stock Metropolitan Life Insurance Company 4,662,700(5) 5.53%(5)
One Madison Avenue
New York, N.Y. 10010
</TABLE>
- ------------
(1) To the knowledge of the Company, no other person owns more than 5% of the
outstanding shares of Common Stock.
(2) Based on information contained in written correspondence directed to the
Company on March 2, 1995, The Equitable Companies Incorporated
("Equitable") and the AXA companies ("AXA") described below as a group had,
as of January 31, 1995, sole voting power with respect to 12,365,200 shares
and sole dispositive power with respect to 12,420,800 shares. Based on
information contained in that correspondence, 4,214,700 shares and
8,206,100 shares of the shares shown above were beneficially owned by
Equitable's subsidiaries, The Equitable Life Assurance Society of the
United States ("Equitable U.S.") and Alliance Capital Management L.P.
("Alliance Capital"), respectively, and that Equitable U.S. had sole voting
power and sole dispositive power with respect to 4,214,700 while Alliance
Capital had sole voting power and sole dispositive power with respect to
8,150,500 shares and 8,206,100 shares, respectively. AXA and the five
mutual insurance companies comprising The Mutuelles Group, namely Alpha
Assurances I.A.R.D. Mutuelle and Alpha Assurances Vie Mutuelle, both
located at 101-100 Terrasse Boieldieu, 92042 Paris La Defense France, and
AXA Assurances I.A.R.D. Mutuelle and AXA Assurances Vie Mutuelle, both
located at La Grande Arche, Pardi Nord, 92044 Paris La Defense France, and
Uni Europe Assurance Mutuelle, 24 Ru Drouot, 75009 Paris France, disclaim
any beneficial interest in and disclaim any deemed voting power or
dispositive power with respect to any of the shares shown above.
(3) Based on information contained in the named stockholder's Schedule 13G dated
February 7, 1995, filed pursuant to the Securities Exchange Act of 1934,
which Schedule 13G also stated that the named stockholder had sole voting
power with respect to 3,245,632 shares and sole dispositive power with
respect to 5,809,836 shares. Sanford C. Bernstein & Co., Inc. is an
investment advisor for various clients.
(4) Based on information contained in the named stockholder's Schedule 13G dated
February 13, 1995, filed pursuant to the Securities Exchange Act of 1934,
which Schedule 13G also stated that the named
(Footnotes continued on following page)
3
<PAGE> 6
stockholder had sole voting power and sole dispositive power with respect to
5,181,000 shares. The State of Wisconsin Investment Board is a government
agency which manages public pension funds.
(5) Based on information contained in the named stockholder's Schedule 13G dated
February 9, 1995, filed pursuant to the Securities Exchange Act of 1934,
which Schedule 13G also stated that the named stockholder had sole voting
power with respect to 4,217,700 shares and sole dispositive power with
respect to 4,662,700 shares. Furthermore, based on information contained in
the Schedule 13G dated February 10, 1994 of a Metropolitan Life Insurance
Company subsidiary, State Street Research & Management Company, One
Financial Center, 38th Floor, Boston, MA 02111, 4,644,200 of the shares
shown above were beneficially owned by State Street Research & Management.
Additionally, such Schedule 13G stated that State Street Research &
Management had sole voting power with respect to 4,199,200 shares and sole
dispositive power with respect to 4,644,200 shares. State Street Research &
Management, an investment adviser for various clients, disclaims any
beneficial interest in such shares.
All of the Company's directors, executive officers and any greater than ten
percent stockholders are required by Section 16(a) of the Securities Exchange
Act of 1934 to file with the Securities and Exchange Commission and the New York
Stock Exchange initial reports of ownership and reports of changes in ownership
of the Company's Common Stock and to furnish the Company with copies of such
reports. Based on a review of those reports and written representations that no
other reports were required, the Company believes that all applicable Section
16(a) filing requirements were complied with except that two executive officers,
James B. Davis and William C. Provine, both Vice Presidents, each had one report
covering one transaction that they inadvertently failed to report on a timely
basis.
QUORUM AND OTHER MATTERS
The presence at the Annual Meeting of Stockholders, in person or by proxy,
of the holders of at least a majority of the outstanding shares of Common Stock
at the close of business on March 1, 1995 is necessary to constitute a quorum.
In accordance with Delaware law and pursuant to the provisions of the Company's
Bylaws, holders of shares shall be treated as being present at the Annual
Meeting of Stockholders if the holders of such shares are present in person or
are represented by valid proxies, whether the proxy cards granting such proxies
are marked as casting a vote or abstaining or are left blank. The Company
amended its Bylaws in December 1992 to revise, in accordance with Delaware law,
certain provisions regarding matters voted on by stockholders, including the
addition of language to specifically address the treatment of abstentions and
non-votes.
If a quorum is present at the Annual Meeting, the election of each nominee
for Class I Director will be approved if the votes cast in favor of the election
of such nominee exceed the votes cast opposing the election of such nominee.
Unless otherwise directed thereon, a validly executed proxy will be treated as a
vote cast in favor of the election of the Class I Director nominees listed
below. In determining the number of votes cast, shares abstaining from voting on
such election and shares held in street name that are indicated as not being
voted on by brokers due to lack of discretionary authority will not be treated
as votes cast.
Action on any other matter to come before the Annual Meeting of
Stockholders will be approved if a quorum is present and the votes cast in favor
of the matter exceed the votes cast opposing such matter. In determining the
number of votes cast, shares abstaining from voting on such matters and shares
held in street name that are indicated as not being voted on by brokers due to
lack of discretionary authority will not be treated as votes cast.
4
<PAGE> 7
ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes.
Classes I and III consist of three directors each and Class II consists of two
directors. Each Director holds office for a term ending on the date of the third
annual meeting following the annual meeting at which such director was elected.
Class I directors are to be elected at the 1995 Annual Meeting of Stockholders.
The persons named in the enclosed proxy have been selected as a proxy
committee by the directors of the Company and valid proxies will be voted in the
manner directed thereon. If no direction is made, the proxies will be voted for
the election of the Class I Director nominees listed below. Although the Board
of Directors of the Company does not contemplate that any of the nominees will
be unable to serve, if such a situation arises prior to the meeting, the proxy
committee will vote for a replacement nominee in accordance with its best
judgement.
The table below sets forth certain information regarding the nominees for
director and continuing directors as of March 1, 1995.
NOMINEES AND CONTINUING DIRECTORS
---------------------------------------
<TABLE>
<CAPTION>
YEAR
PRINCIPAL OCCUPATION FIRST
FOR THE PAST BECAME
NAME(1)(2) FIVE YEARS AGE DIRECTOR
---------- -------------------- --- --------
<S> <C> <C> <C>
NOMINEES: CLASS I (TERM EXPIRES IN 1998)
- --------- ------------------------------
H.E. Lentz Managing Director, Lehman Brothers Inc. 50 1990
(investment bankers) since March 1993;
Investment Banker, Wasserstein Perella & Co.,
Inc. (March 1988 through February 1993).
Wilfred P. Schmoe Retired; formerly Executive Vice President, 67 1992
(a)(b)(e) Director and member of the Executive Committee
(May 1984 to November 1988) of E.I. DuPont de
Nemours & Co. (diversified chemical/energy
conglomerate).
Charles P. Siess, Jr. Retired; formerly Chairman of the Board and 68 1991
(a)(b)(c)(e) Chief Executive Officer, Cabot Oil & Gas
Corporation (January 1990 to December 1992);
Vice Chairman of the Board, Marathon
Manufacturing Company (August 1986 until
retiring in February 1987).
CONTINUING DIRECTORS: CLASS II (TERM EXPIRES IN 1996)
- --------------------- -------------------------------
Ralph E. Bailey Chairman of the Board and Chief Executive 70 1993
(b)(d)(e) Officer of American Bailey Corporation
(manufacturing and energy investments) and
Chairman of the Board and, until February 1992,
Chief Executive Officer of United Meridian
Corporation (oil and gas exploration and
production).
C. W. Yeargain Chairman of the Board, LeTourneau, Inc.; 69 1975
(c)(d) Executive Vice President of the Company until
retiring in March 1991.(3)
CONTINUING DIRECTORS: CLASS III (TERM EXPIRES IN 1997)
- --------------------- --------------------------------
Henry O. Boswell Retired; formerly President (1983-1987) of Amoco 65 1988
(a)(b)(c)(d)(e) Production Company (oil and gas production).
</TABLE>
(Table continued on the following page)
5
<PAGE> 8
<TABLE>
<CAPTION>
YEAR
PRINCIPAL OCCUPATION FIRST
FOR THE PAST BECAME
NAME(1)(2) FIVE YEARS AGE DIRECTOR
---------- ------------------ --- ---------
<S> <C> <C> <C>
C. R. Palmer Chairman of the Board, President and Chief 60 1969
(c)(d) Executive Officer of the Company.(3)
Peter Simonis Chairman of the Board, British American Offshore 68 1985
(d) Limited (Company-owned U.K. drilling contractor)
since March 1987; Chairman of the Board
(1979-1987) of Haden Group plc (London-based
international engineering contractors).
</TABLE>
- ------------
(1) Directorships other than those listed in the table are as follows: Ralph E.
Bailey is a director of General Signal Corporation and The Williams
Companies, Inc.; Henry O. Boswell is a director of Service Master Management
Corporation, the general partner of Service Master Limited Partnership, and
Cabot Oil & Gas Corporation; H.E. Lentz is a director of Imperial Holly
Corporation; and Charles P. Siess, Jr. is a director of Cabot Corporation,
Cabot Oil & Gas Corporation and Camco, Inc.
(2) Committee memberships are indicated by (a) for Audit Committee, (b) for
Compensation Committee, (c) for Executive Committee, (d) for Nominating
Committee and (e) for 1986 Debenture Plan Committee. See "Committees of the
Board of Directors" below for information on functions performed by the
Committees. The Board of Directors held five meetings during 1994. All
directors attended at least 75% of the 1994 meetings of the Board of
Directors and Committees on which they served.
(3) In addition to his Board membership, Mr. Yeargain continues to serve the
Company in a consulting capacity. See "Certain Transactions" on page 15.
Information regarding Mr. Palmer's compensation is disclosed in the Summary
Compensation Table under Executive Compensation below.
COMMITTEES OF THE
BOARD OF DIRECTORS
The functions performed by the committees of the Board of Directors are as
follows:
The Audit Committee has as its principal functions to recommend to the
Board of Directors each year the firm of independent auditors to be selected by
the Company and its subsidiaries, to review the reports to be rendered and the
fees to be charged by the independent auditors and to review with the
independent auditors the principal accounting policies of the Company and its
subsidiaries and other pertinent matters either at the initiative of the
Committee or at the request of the independent auditors. The Audit Committee
held one meeting in 1994.
The Compensation Committee recommends to the Board of Directors from time
to time the compensation to be paid to the executive and other officers of the
Company and its subsidiaries and any plan for additional compensation that it
deems appropriate. The Compensation Committee held two meetings in 1994.
The Nominating Committee generally designates, on behalf of the Board of
Directors, candidates for the directors of the class to be elected at the next
meeting of stockholders. The Nominating Committee will consider for election to
the Board qualified nominees recommended by stockholders. To make such a
recommendation, stockholders should submit to the Company's Secretary a
biographical sketch of the prospective candidate, which should include age,
principal occupation and business experience and other directorships, including
positions previously held or now held. The Nominating Committee held one meeting
in 1994.
The Executive Committee has, except for certain qualifications noted in the
Company's Bylaws, the authority to exercise all of the powers of the Board in
the management of the business and affairs of the Company. The Executive
Committee held three meetings in 1994.
6
<PAGE> 9
The 1986 Debenture Plan Committee administers the Company's 1986
Convertible Debenture Incentive Plan. The 1986 Debenture Plan Committee has
broad authority to interpret, amend, suspend or terminate such Plan and to make
all determinations necessary or advisable for the administration of the Plan.
The 1986 Debenture Plan Committee held one meeting in 1994.
EXECUTIVE COMPENSATION
The following tabulation sets forth for the fiscal years ended December 31,
1994, 1993 and 1992 annual compensation of the Chief Executive Officer and the
other four most highly compensated executive officers of the Company (the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-----------------
ANNUAL COMPENSATION SHARES UNDERLYING
---------------------- DEBENTURES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AND OPTIONS(#) COMPENSATION($)
- ------------------------------- ---- --------- -------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
C. R. Palmer 1994 $ 766,667 -0- 791,111(1) -0-
Chairman of the Board, 1993 700,000 $900,000 -0- -0-
President and Chief 1992 700,000 -0- -0- -0-
Executive Officer
R. G. Croyle 1994 200,000 -0- 187,963(1) -0-
Executive Vice President 1993 170,000 100,000 25,000 -0-
1992 156,000 -0- 25,000 -0-
D. F. McNease 1994 175,000 -0- 187,963(1) -0-
Senior Vice 1993 153,333 100,000 25,000 -0-
President-Drilling 1992 133,333 -0- 25,000 -0-
E. E. Thiele 1994 166,667 -0- 187,963(1) -0-
Senior Vice 1993 145,000 75,000 25,000 -0-
President-Finance, 1992 130,000 -0- 25,000 -0-
Administration and Treasurer
J. Earl Beckman 1994 215,000(2) -0- 187,963(1) $ 4,873(3)
Vice President-Manufacturing; 1993 N/A N/A N/A N/A
President and Chief Executive 1992 N/A N/A N/A N/A
Officer of LeTourneau, Inc.
</TABLE>
- ---------------
(1) Included herein are shares of Common Stock that may be acquired through the
conversion of Series III Floating Rate Convertible Subordinated Debentures
(the "Series III Debentures"), which were offered and issued on November
30, 1994, and the exercise of Options, which were granted on April 22,
1994, as follows: C. R. Palmer -- Series III Debentures and
Options -- 711,111 shares and 80,000 shares, respectively; R. G. Croyle, D.
F. McNease, E. E. Thiele and J. Earl Beckman -- Series III Debentures and
Options -- in each case, 162,963 and 25,000, respectively.
(2) Represents the base salary paid to Mr. Beckman in 1994, the year that he
became an employee by way of the Company's purchase of the net assets of
his former employer, Marathon LeTourneau Company. Mr. Beckman was elected
President and Chief Executive Officer of LeTourneau, Inc. ("LeTourneau")
and Vice President of the Company on February 18, 1994 and April 22, 1994,
respectively.
(3) Represents the amount of the LeTourneau, Inc. match to the designated
portion of Mr. Beckman's contributions made in 1994 to that company's
401(k) plan (a defined contribution plan) entitled the LeTourneau, Inc.
Savings and Investment Plan. As a benefit for its drilling and aviation
employees (which includes Messrs. Palmer, Croyle, McNease and Thiele), the
Company's Board approved on October 21, 1994 the establishment of a similar
401(k) plan, entitled Rowan Companies, Inc. Savings and Investment Plan.
Such plan, however, will not be effective until April 1995.
7
<PAGE> 10
No executive officer received any non-cash compensation during fiscal years
1994, 1993 and 1992 having an aggregate incremental cost to the Company in
excess of the lesser of $50,000 or 10% of his or her total annual salary and
bonus as reported in this table.
OPTION GRANTS IN LAST FISCAL YEAR
The table below sets forth information pertinent to stock options granted
under the Company's 1988 Nonqualified Stock Option Plan (the "1988 Plan") to the
Named Executive Officers during 1994:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
--------------------------------------------------------------- REALIZABLE VALUE
PERCENT MARKET AT ASSUMED ANNUAL
NUMBER OF OF TOTAL PRICE OF RATES OF STOCK
SHARES OPTIONS STOCK ON PRICE APPRECIATION
UNDERLYING GRANTED TO DATE OF EXERCISE OR FOR OPTION TERM
OPTIONS EMPLOYEES IN GRANT(1) BASE PRICE EXPIRATION --------------------------------
NAME GRANTED(#) FISCAL 1994 ($/SHARE) ($/SHARE) DATE(2) 0%(3) 5% 10%
----- ---------- ------------- ---------- ------------ ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. R. Palmer..... 80,000 8.1% $ 7.13 $ 1.00 4-22-04 $490,000 $848,470 $1,398,433
R. G. Croyle..... 25,000 2.5 7.13 1.00 4-22-04 153,125 265,147 437,010
D. F. McNease.... 25,000 2.5 7.13 1.00 4-22-04 153,125 265,147 437,010
E. E. Thiele..... 25,000 2.5 7.13 1.00 4-22-04 153,125 265,147 437,010
J. Earl Beckman.. 25,000 2.5 7.13 1.00 4-22-04 153,125 265,147 437,010
</TABLE>
- ---------------
(1) Last reported sales price of the Common Stock on the New York Stock Exchange
on April 22, 1994, the date of grant.
(2) Options become exercisable in 25% increments over a four-year period with
the options being 100% exercisable four years after the date of grant.
Exercisability may accelerate upon the occurrence of certain events such as
corporate reorganizations, death or disability (as set forth in the option
agreement or the plan).
(3) Value represents the difference between the per share market price (see
footnote (1) above) and the per share exercise price on the date of grant
times the number of underlying shares.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
For each of the Named Executive Officers, the information set forth below
reflects, for the fiscal year ended December 31, 1994, options under the
Company's 1980 Nonqualified Stock Option Plan (the "1980 Plan") and 1988 Plan
which were exercised and the value realized thereon as well as exercisable and
unexercisable options which were unexercised at year-end 1994 and the value
realizable thereon at such date:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE DECEMBER 31, 1994(#) DECEMBER 31, 1994($)(1)
EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. R. Palmer............ -0- -0- 162,500 80,000 $ 853,125 $ 420,000
R. G. Croyle............ -0- -0- 18,750 56,250 98,438 295,313
D. F. McNease........... 15,000 $103,125 12,500 56,250 65,625 295,313
E. E. Thiele............ 18,750 108,593 -0- 56,250 -0- 295,313
J. Earl Beckman......... -0- -0- -0- 25,000 -0- 131,250
</TABLE>
- ---------------
(1) Represents the difference between $6.25, which was the last reported per
share sales price of the Company's Common stock on the New York Stock
Exchange on December 31, 1994, and the per share exercise price of $1.00
times the number of underlying shares.
8
<PAGE> 11
OPTION PLANS
As amended by the stockholders at the Annual Meeting of Stockholders in
April 1992, the 1988 Plan permits the grant to key employees of the Company and
its subsidiaries prior to January 21, 2003 of options to purchase 7,000,000
shares, of which options to purchase 3,536,179 shares (net of forfeitures) of
the Company's Common Stock had been granted at an option exercise price per
share of $1.00 as of March 1, 1995. Outstanding options under the 1988 Plan
expire between April 1999 and April 2004. Options granted under the 1988 Plan
were nonqualified options and expire ten years after the date of grant.
The authority of the Board of Directors to grant additional options under
the 1980 Plan expired on January 25, 1990. The 1980 Plan provided for the grant
of options to key employees of the Company and its subsidiaries, and the
exercise prices and terms of options granted under the 1980 Plan were determined
by the Compensation Committee. As of March 1, 1995, options to purchase a total
of 971,500 shares (net of forfeitures) of the Company's Common Stock had been
granted under the 1980 Plan at an option exercise price of $1.00 per share.
Outstanding options under the 1980 Plan expire between April 1998 and April
1999. Outstanding options under the 1980 Plan are nonqualified options and
expire ten years after the date of grant.
Options granted under the 1980 and 1988 Plans become exercisable in 25%
increments over a four-year period with the options being 25% exercisable one
year after the date of grant and 100% exercisable four years after the date of
grant.
CONVERTIBLE DEBENTURE INCENTIVE PLAN
The Rowan Companies, Inc. 1986 Convertible Debenture Incentive Plan (the
"Plan") was approved at the Company's 1986 Annual Meeting of Stockholders. The
Plan provides for the issuance to key employees of the Company and its
subsidiaries of up to $20,000,000 in aggregate principal amount of the Company's
floating rate convertible subordinated debentures (the "Debentures"). The
Debentures are convertible into fully paid and nonassessable shares of preferred
stock, which are immediately convertible into fully paid and nonassessable
shares of Common Stock of the Company. The ultimate conversion price for each
issue is the closing price of the Company's Common Stock on the day prior to the
issuance of the Debentures.
The Plan is administered by the 1986 Debenture Plan Committee of the Board
of Directors (the "Debenture Committee"). The Debenture Committee has the
authority to select key employees of the Company or any subsidiary who may
purchase Debentures. The Debenture Committee also determines with respect to
each series of Debentures, the interest rate, conversion price and other terms
and conditions of the Debentures, all consistent with the provisions of the
Plan. After November 30, 1994, no more Debentures may be offered under the Plan.
The first Debenture offering consisted of $5,125,000 aggregate principal
amount of Series I Debentures issued in June 1986, which were ultimately
convertible into 891,304 shares of Common Stock at $5.75 per share until June
1996. The second Debenture offering consisted of $4,500,000 aggregate principal
amount of the Series II Debenture issued in September 1987, which was ultimately
convertible into 500,000 shares of Common Stock at $9.00 per share until
September 1997. The aggregate principal amount of Debentures outstanding under
these two issues at March 1, 1995 was $4,050,000, which are convertible into
478,261 shares of Common Stock. No conversions occurred in 1994. All employees
participating in the Series I and Series II Debenture offerings have borrowed
the Debenture purchase price from an unaffiliated third party. Promissory notes
evidencing any outstanding borrowings bear interest at the same rate as the
Debentures and are secured by a pledge of the Debentures purchased. The Company
has guaranteed such outstanding employee indebtedness secured by a pledge of the
Debentures purchased.
The third Debenture offering was made in November 1994. This offering
consisted of $10,300,000 aggregate principal amount of Series III Debentures,
which are ultimately convertible into 1,525,926 shares of Common Stock at $6.75
per share in specified amounts and intervals until November 2004. The table
below sets forth information pertinent to Series III Debentures purchased under
the Plan in 1994 by the Named
9
<PAGE> 12
Executives. Because less than one year has lapsed since the Debentures were
issued, no conversions have occurred and all were outstanding at March 1, 1995.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
PERCENT AT ASSUMED ANNUAL
NUMBER OF OF TOTAL RATES OF STOCK
SHARES DEBENTURES PRICE APPRECIATION
FACE UNDERLYING PURCHASED BY CONVERSION OR FOR DEBENTURE TERM
AMOUNT OF DEBENTURE EMPLOYEES IN BASE PRICE EXPIRATION -------------------------
NAME DEBENTURE PURCHASED(#) FISCAL 1994 ($/SHARE) DATE 5% 10%
- ------------------- ---------- ------------ ------------ ------------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
C. R. Palmer....... $4,800,000(1) 711,111 46.6% $6.75 11-30-04 $7,818,694 $12,449,963
R. G. Croyle....... 1,100,000(2) 162,963 10.7 6.75 11-30-04 1,791,784 2,853,117
D. F. McNease...... 1,100,000(2) 162,963 10.7 6.75 11-30-04 1,791,784 2,853,117
E. E. Thiele....... 1,100,000(2) 162,963 10.7 6.75 11-30-04 1,791,784 2,853,117
J. Earl Beckman.... 1,100,000(2) 162,963 10.7 6.75 11-30-04 1,791,784 2,853,117
</TABLE>
- ---------------
(1) After one, two, three and four years from the date of the Debenture
(November 30, 1994) until the expiration date, portions of the Debenture in
the amounts of $1,100,000, $1,200,000, $1,200,000 and $1,300,000,
respectively, are convertible into 162,963, 177,778, 177,778 and 192,592
shares, respectively, of Common Stock.
(2) After one, two, three and four years from the date of the Debenture
(November 30, 1994) until the expiration date, portions of the Debenture in
the amounts of $250,000, $250,000, $300,000 and $300,000, respectively, are
convertible into 37,037, 37,037, 44,444 and 44,445 shares, respectively, of
Common Stock.
All employees participating in the Series III Debenture offering have
borrowed the Debenture purchase price from the Company. Promissory notes
evidencing the borrowings bear interest at the same rate as the Debentures and
are secured by a pledge of the Debentures purchased.
PENSION PLAN
The Company offers to eligible employees participation in a
non-contributory, defined benefit pension plan. All salaried and hourly
employees (including executive officers but excluding non-US. citizens) of the
Company and its drilling and aviation subsidiaries who have completed one year
of employment (as defined in the Plan) are eligible to participate in the
pension plan. Pursuant to the terms of the pension plan, the cost of which is
borne by the Company, an eligible employee generally will receive a pension at
age 60 pursuant to a formula which is based upon the employee's number of years
of credited service and his average annual compensation during the highest five
consecutive years of his final ten years of service. Compensation for this
purpose is based on salary, excluding discretionary bonuses. Because applicable
provisions of the Internal Revenue Code, as amended, currently limit the annual
benefits payable to any individual from the pension plan to $120,000, the
pension plan provides that benefits of a plan retiree which are limited by the
provisions of the Internal Revenue Code shall be increased each year that
adjustments to such provisions permit a benefit increase. As of January 31,
1995, the Company and its drilling and aviation subsidiaries had approximately
1,800 employees eligible to participate in such pension plan.
The Company's manufacturing subsidiaries offer to eligible employees
participation in a separate non-contributory, defined benefit pension plan. This
plan is substantially similar to the Company's pension plan except that: an
eligible employee generally will receive a pension at age 65 rather than at age
60; the benefits are subject to reduction for Social Security benefits; and no
provision has been made for increasing the annual benefits payable to any
individual under this plan for the purpose of tracking an upward adjustment in
the limitation imposed by the Internal Revenue Code. As of January 31, 1995, the
Company's manufacturing subsidiaries had approximately 770 employees eligible to
participate in this pension plan.
The same entities having a pension plan also have pension restoration plans
which provide for the restoration of any retirement income that is lost under
those pension plans because of the previously
10
<PAGE> 13
mentioned Internal Revenue Code limitations on benefits payable or the
compensation level on which they are based. Both pension restoration plans are
unfunded and benefits thereunder are paid directly by the sponsoring companies.
To date, the board of directors of the sponsoring companies have selected three
employees, C. R. Palmer, J. Earl Beckman and C. W. Yeargain (now retired), to be
participants under the pension restoration plans.
The following table illustrates, for representative average earnings and
years of credited service, the annual retirement benefit payable to eligible
employees of the Company and its drilling and aviation subsidiaries under the
Company's pension and pension restoration plans computed on the basis of a life
annuity with 60 payments guaranteed.
PENSION PLAN TABLE(1)
<TABLE>
<CAPTION>
YEARS OF SERVICE (2)
-----------------------------------------------------------------------------------
COMPENSATION(3) 15 20 25 30 35 40
- ----------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 125,000 $ 32,812 $ 43,750 $ 54,687 $ 65,625 $ 76,562 $ 87,500
150,000 39,375 52,500 65,625 78,750 91,875 105,000
175,000 45,937 61,250 76,562 91,875 107,187 122,500
200,000 52,500 70,000 87,500 105,000 122,500 140,000
225,000 59,062 78,750 98,437 118,125 137,812 157,500
250,000 65,625 87,500 109,375 131,250 153,125 175,000
300,000 78,750 105,000 131,250 157,500 183,750 210,000
400,000 105,000 140,000 175,000 210,000 245,000 280,000
500,000 131,250 175,000 218,750 262,500 306,250 350,000
600,000 157,500 210,000 262,500 315,000 367,500 420,000
700,000 183,750 245,000 306,250 367,500 428,750 490,000
800,000 210,000 280,000 350,000 420,000 490,000 560,000
900,000 236,250 315,000 393,750 472,500 551,250 630,000
1,000,000 262,500 350,000 437,500 525,000 612,500 700,000
</TABLE>
- ---------------
(1) The benefits listed in the table are not subject to reduction for Social
Security benefits or other offset amounts.
(2) As of December 31, 1994, the Named Executive Officers (excluding J. Earl
Beckman) were credited under either or both the pension and pension
restoration plans of the Company and its drilling and aviation subsidiaries
with years of service as follows: C. R. Palmer -- 34; R. G. Croyle -- 21; D.
F. McNease -- 21; and E. E. Thiele -- 25.
(3) The annual benefit amount payable to C. W. Yeargain, who retired as an
executive officer in March 1991, is $158,430. The estimated annual benefit
amount payable upon retirement to C. R. Palmer is $418,909. The other
executive officers named in "Executive Compensation" above (but excluding J.
Earl Beckman) will basically be entitled to receive the annual benefits
amounts based upon their 1994 salary amount set forth under "Salary" in the
table on page 7 and their credited years of service under the pension plan
(see Footnote (2) above).
Based upon his 1994 salary of $215,000, the estimated annual benefit
payable upon retirement to J. Earl Beckman is approximately $45,485, such
benefit being based upon 15 years of projected service at age 65 under the
pension and pension restoration plans of the Company's manufacturing
subsidiaries and six years under a plan of a company previously owning the
assets of LeTourneau.
DIRECTOR COMPENSATION
Each director who is not a salaried officer of the Company or a subsidiary
receives $20,000 annually for serving as a director, $500 for attending a
regular or special Board meeting and $250 or $500 for attending a meeting of
each committee on which he serves, depending on the length of the meeting. In
addition, directors are reimbursed for reasonable travel expenses.
11
<PAGE> 14
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
COMPENSATION POLICY FOR EXECUTIVE OFFICERS
Under the supervision of the Compensation Committee (the "Committee") of
the Board of Directors, the Company has developed and implemented compensation
policies and programs that seek to retain and motivate employees of the Company
and its subsidiaries whose performance contributes to the Company's goal of
maximizing stockholder value in an industry that has suffered a prolonged
downturn. In addition, these compensation policies attempt to align the
executive officers' interests with those of the stockholders by providing
incentive compensation related to the value of the Company's Common Stock.
Compensation decisions are made by the Committee after reviewing recommendations
prepared by the Company's Chief Executive Officer, with the assistance of other
Company personnel. The Company has combined salaries with stock option grants,
convertible debenture offerings and selected cash bonuses to provide a
compensation balance. The balance established by the Committee is designed to
reward past performance, retain key employees and encourage future performance.
In approving and establishing compensation for an executive officer,
several factors are considered by the Committee. Performance criteria include
individual performance, overall Company performance versus that of its
competitors and performance of the price of the Company's Common Stock in
comparison to prior levels and to the relative stock prices of its competitors.
Since the contract drilling industry has been in a prolonged downturn, overall
corporate performance has included factors such as maintaining equipment and
personnel and protecting the strength of the Company's balance sheet. When
evaluating individual performance, particular emphasis has been placed on the
executive officers' success in enabling the Company to increase its market
share, their ability to develop innovative ways to obtain better returns on the
Company's assets and their maintenance of the Company's ability to respond to
upturns in the drilling industry. Emphasis is placed upon an individual's
integrity, loyalty and competence in his areas of responsibility. When
evaluating the foregoing performance criteria in setting executive compensation,
the Committee gives greatest weight to those factors it believes have or will
contribute the most towards maximizing stockholder value and increasing the
Company's financial viability. The factors that contribute the most towards
these goals vary depending on the state of the industry in which the Company
operates.
Based upon the Committee's determination, all of the executives named
above, including Mr. Palmer (see "Chief Executive Officer Compensation" below),
received a salary increase in 1994. As discussed above, factors considered by
the Committee in setting compensation included each individual's past
contributions and performance, as well as the Company's operating results and
the performance of the Company's stock in comparison to its competitors,
management of its assets and debts and implementing and maintaining effective
cost controls. Additionally, setting salaries which are both externally
competitive relative to the industry and internally equitable when considering
performance and responsibility levels were pursued objectives. Competitor
comparisons for purposes of determining executive officer compensation consisted
of a comparison to the competitors in the Company's peer group described below
under "Stockholder Return Performance Presentation" along with comparison to
certain additional public companies in the energy service industry. Although no
specific target has been established, the Committee generally seeks to set
salaries at the median to high end of the range in comparison to peer group
companies. Measurement of each individual's performance is to some extent
subjective, and the Company does not make compensation awards based on the
degree to which an individual achieves predetermined objective criteria.
In addition to regular salary payments to executive officers in 1994, the
Committee determined to make stock option grants to all of the Company's
executive officers, including Mr. Palmer, at an exercise price of $1.00 per
share and also determined on November 30, 1994 to offer to certain of the
Company's senior executive officers, which included Mr. Palmer, the opportunity
to purchase convertible debentures. The primary basis for these stock option
grants and convertible debenture offerings was management's performance in
keeping the Company's organization intact and maintaining a strong balance sheet
under continuing adverse market conditions in its largest business segment,
drilling, as well as the positive earnings contributions by the Company's
aviation and manufacturing segments and the Committee's evaluation of the
12
<PAGE> 15
individual performance of each officer. The criteria used in evaluating
individual performance for purposes of these awards were the same as the
criteria discussed above that are considered when setting regular compensation.
Previous option grants and debenture offerings to and held by executive officers
were taken into account when determining the amount of new option and
convertible debenture awards.
Although the Committee chose to revise the compensation of the Named
Executive Officers for the fiscal year just ended, it attempts to avoid treating
salaries, stock option grants and debenture offerings as entitlements and
recommends compensation revisions only when it believes such changes are
warranted.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee's determination for setting Mr. Palmer's salary for 1994,
which had not been revised since 1990, was based on the facts that (i) the
Company had survived a severe industry downturn when many of its competitors had
failed, merged or ceased to exist, (ii) the Company had been able to maintain a
relatively strong balance sheet throughout the past five year period, which was
a period of unprecedented difficulty, enabling it to maintain its employees and
equipment at competitive levels, (iii) the Company had, in consequence,
increased its market share, leaving it well positioned to capitalize on any
significant increase in offshore drilling activity and (iv) the Company had
successfully completed the acquisition of the net assets of Marathon LeTourneau
Company in February 1994. No specific quantitative measure of the Company's
performance was used for this purpose. Emphasis was also placed on evaluating
the Company's performance versus the performance of the competitors in the
Company's peer group described below under "Stockholder Return Performance
Presentation", as well as certain additional public companies in the energy
service industry. The Committee believed, and believes, that the Company's
relatively strong position in the contract drilling industry has been in large
part attributable to Mr. Palmer's abilities and contributions.
In 1990, the Committee granted Mr. Palmer a salary of $700,000 a year, and
granted him restricted stock options relating to 300,000 shares of Common Stock,
having a value on the date of grant of $3,825,000, and vesting in equal annual
installments in each of the next four years. Restricted stock options were used
in the compensation package because they (i) did not require use of the
Company's cash and working capital and (ii) tied a significant portion of Mr.
Palmer's compensation closely to the interests of the Company's stockholders.
Based on Mr. Palmer's continuing performance and contributions, the Committee
determined in each of the years 1991, 1992 and 1993 to maintain Mr. Palmer's
regular salary at the level which had been established in 1990.
As noted above, the Committee did not revise Mr. Palmer's regular salary
level for 1993. In December 1993, the Committee granted Mr. Palmer a cash bonus
of $900,000 in recognition of his outstanding contributions toward returning the
Company to profitability and protecting the Company's financial viability
throughout the prolonged downturn in the contract drilling industry, during
which several of the Company's competitors underwent bankruptcies or
restructurings that destroyed the value of their stockholders' investments. As
part of its determination, the Committee also took into account the fact that no
bonuses or stock options had been granted to Mr. Palmer since 1990. In addition,
the Committee considered the effects of a recent tax law change that removed the
existing $135,000 cap on the Medicare portion of the FICA tax so that the
Company and its employees will collectively pay a 2.9% Medicare tax on all
compensation paid to the Company's employees after 1993. In light of this
change, the Committee determined that payment of a bonus to Mr. Palmer in 1993
would allow a greater benefit to be received by Mr. Palmer at a smaller cost to
the Company than if the bonus were granted at a later time.
1994 represented the final year of the compensation package granted to Mr.
Palmer in 1990. In reviewing Mr. Palmer's contribution over the preceding five
years, which, in addition to matters discussed above, included the successful
acquisition of the net assets of Marathon LeTourneau Company in 1994, the
Committee determined that it was crucial to the interests of the Company and its
stockholders to retain the services of and to continue to provide incentives for
its Chief Executive. In view of the cash bonus awarded Mr. Palmer in 1993, the
Committee determined not to grant additional cash awards based on prior
contributions. Instead, the Committee decided to raise Mr. Palmer's salary to
$800,000 and to grant him options to acquire 80,000 shares of Common Stock at
$1.00 per share. In addition, Mr. Palmer was awarded
13
<PAGE> 16
the opportunity to purchase, and he has so purchased, $4,800,000 of the
Company's Series III Debentures. These debentures are described under
"Convertible Debenture Incentive Plan" on pages 9 and 10.
The Committee has also discussed and considered a recent amendment to the
tax code that will generally limit the Company's ability to deduct compensation
in excess of $1 million to a particular executive. The Committee intends to
consider the deductibility of the compensation paid to its executive officers in
the future. However, given the current level of the Company's net operating
losses and investment tax credit carryforwards, deductibility of compensation is
not an immediate concern.
This report has been provided by the following members of the Committee:
Charles P. Siess, Jr., Chairman
Ralph E. Bailey
Henry O. Boswell
Wilfred P. Schmoe
The foregoing report of the Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933, as amended, or under
the Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such acts.
14
<PAGE> 17
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparison of the yearly percentage change
in the cumulative total stockholder return on the Company's Common Stock, the
cumulative total return of the Standard & Poor's Composite 500 Stock Index and
the cumulative total return of a Company-selected peer group for the period of
five calendar years commencing January 1, 1990 and ending December 31, 1994. One
change from 1994 in the component companies comprising the selected peer group
was the Company's decision that Noble Drilling Corp. replace Chiles Offshore
Corp. as a result of Noble acquiring Chiles in September 1994.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
ROWAN COMMON STOCK, S&P 500 INDEX &
COMPANY-SELECTED PEER GROUP**
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) ROWAN S&P 500 PEER GROUP**
<S> <C> <C> <C>
1989 100 100 100
1990 100 97 79
1991 51 126 45
1992 70 136 36
1993 80 150 72
1994 56 152 62
</TABLE>
___________________
* Total return assumes reinvestment of dividends.
** Energy Service Company, Inc., Global Marine, Inc.,
Noble Drilling Corp., and Reading & Bates Corp.
CERTAIN TRANSACTIONS
Mr. Peter Simonis, a Class III Director of the Company, received in 1994
1,000 Pound Sterling for services as Chairman of the Board of British American
Offshore Limited. In addition, an annual fee of 14,000 Pound Sterling was paid
in 1994 by British American Offshore Limited to Kismire Limited, a management
consulting company of which Mr. Simonis is a director. British American is a
wholly owned subsidiary of the Company organized to perform contract drilling
services in the U.K. sector of the North Sea utilizing rigs owned by the
Company or others.
In 1994, the Company paid an aggregate of $34,000 in consulting fees to C.
W. Yeargain, a Class II director who was an Executive Vice President of the
Company until his retirement in March 1991 and, since March 1994, has been
Chairman of the Board of LeTourneau. Mr. Yeargain is paid $50,000 per year in
quarterly installments and $500 per diem for consulting services rendered.
15
<PAGE> 18
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche L.L.P. has been selected as principal
auditors for the Company for the year ending December 31, 1995. A representative
of Deloitte & Touche is expected to be present at the Annual Meeting of
Stockholders on April 28, 1995 and will be offered the opportunity to make a
statement if he desires to do so. He will also be available to respond to
appropriate questions.
STOCKHOLDERS PROPOSALS
Any stockholder who wishes to submit a proposal for presentation at the
1996 Annual Meeting of Stockholders must forward such proposal to the Secretary
of the Company, at the address indicated on the cover page of this proxy
statement, so that the Secretary receives it no later than November 11, 1995.
FORM 10-K
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS
AND ANY FINANCIAL STATEMENT SCHEDULES THERETO. THE COMPANY WILL FURNISH TO ANY
SUCH PERSON ANY EXHIBIT DESCRIBED IN THE LIST ACCOMPANYING THE FORM 10-K, UPON
THE PAYMENT, IN ADVANCE, OF REASONABLE FEES RELATED TO THE COMPANY'S FURNISHING
SUCH EXHIBIT(S). REQUESTS FOR COPIES OF SUCH REPORT AND/OR EXHIBIT(S) SHOULD BE
DIRECTED TO MR. MARK H. HAY, SECRETARY OF THE COMPANY, AT THE COMPANY'S
PRINCIPAL ADDRESS AS SHOWN ON THE COVER PAGE HEREOF
OTHER BUSINESS
Management of the Company does not know of any other matters which are to
be presented for action at the meeting. However, if any other matters properly
come before the meeting, it is intended that the enclosed proxy will be voted in
accordance with the discretion of the persons voting the proxy unless otherwise
designated thereon.
BY THE ORDER OF THE BOARD OF DIRECTORS
/s/ C. R. PALMER
Chairman
March 10, 1995
16
<PAGE> 19
[ROWAN LOGO]
<PAGE> 20
- --------------------------------------------------------------------------------
PROXY
ROWAN COMPANIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints C. R. Palmer and Mark H. Hay proxies, each
with power to act without the other and with full power of substitution, and
hereby authorizes each of them to represent and vote, as designated below, all
the shares of stock of Rowan Companies, Inc. ("Company") standing in the name of
the undersigned with all powers which the undersigned would possess if present
at the Annual Meeting of Stockholders of the Company to be held April 28, 1995
or any adjournment thereof.
<TABLE>
<S> <C> <C>
1. ELECTION OF CLASS I DIRECTORS
/ / FOR all nominees listed below / / AGAINST all nominees listed below / / ABSTAIN
(except as marked to the
contrary below)
</TABLE>
(INSTRUCTION: To vote against any individual nominee strike a line
through the nominee's name in the list below.)
H. E. Lentz Wilfred P. Schmoe Charles P. Siess, Jr.
2. With discretionary authority on any other matter which may properly come
before the meeting.
(Continued, and to be dated and signed, on the other side)
- --------------------------------------------------------------------------------
<PAGE> 21
- --------------------------------------------------------------------------------
(CONTINUED FROM OTHER SIDE)
IF A CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED AS INDICATED. IF NO CHOICE IS
SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 AND IN ACCORDANCE WITH THE
DISCRETION OF THE PERSONS VOTING THE PROXY WITH RESPECT TO ANY OTHER MATTER NOT
KNOWN AT THE TIME OF SOLICITATION OF THIS PROXY THAT MAY PROPERLY COME BEFORE
THE MEETING. ALL PRIOR PROXIES ARE HEREBY REVOKED.
---------------------------------
SIGNATURE
---------------------------------
SIGNATURE
Dated , 1995
---------------------
Please complete, date, sign and return this proxy promptly in the enclosed
envelope. Sign exactly as name appears hereon. Executors, administrators,
trustees, etc. should so indicate when signing. If the signature is for a
corporation, please sign full corporate name by authorized officer. If shares
are registered in more than one name, all holders must sign.
- --------------------------------------------------------------------------------
