<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 31, 2000
REGISTRATION NO. 333
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ROWAN COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 2800 POST OAK BOULEVARD 75-0759420
(STATE OR OTHER JURISDICTION OF SUITE 5450 (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) HOUSTON, TEXAS 77056-6196 IDENTIFICATION NUMBER)
(713) 621-7800
(ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
C. R. PALMER
2800 POST OAK BOULEVARD
SUITE 5450
HOUSTON, TEXAS 77056-6196
(713) 621-7800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this registration statement,
as determined by the selling stockholders in light of market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ] ____________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities to be Registered Amount to be registered(1) Offering Price Aggregate Offering Amount of Registration Fee
Per Share(3) Price(3)
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<S> <C> <C> <C> <C>
Common Stock, par value $.125(2) 340,035(1) $31.75(3) $10,796,111(3) $2,850.17
====================================================================================================================================
</TABLE>
(1) Subject to adjustment to prevent dilution resulting from stock splits,
stock dividends or similar transactions. There are also registered
hereunder such indeterminate number of additional shares of Common Stock,
par value $.125 per share, of the registrant as may be issuable upon
conversion of the floating rate subordinated convertible debentures and
preferred stock, par value $1.00 per share, of the registrant pursuant to
the anti-dilution and similar provisions of such floating rate subordinated
convertible debentures and preferred stock.
(2) Includes the preferred stock purchase rights (as adjusted and as subject to
further adjustment in certain events, including stock splits, stock
dividends or similar transactions) associated with the Common Stock.
(3) Estimated pursuant to Regulation 457(c) solely for the purpose of
calculating the registration fee based on the average of the high and low
prices reported on the New York Exchange as of August 29, 2000.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registrant statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
1
<PAGE> 2
PROSPECTUS
ROWAN COMPANIES, INC.
340,035 SHARES
COMMON STOCK, $.125 PAR VALUE
ISSUABLE UPON CONVERSION OF
SERIES C FLOATING RATE SUBORDINATED
DEBENTURES DUE 2010
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
This prospectus is a part of a registration statement that covers 340,035 shares
of our Common Stock that are issuable upon conversion of shares of our preferred
stock, par value $1.00 per share, which are issuable upon conversion of our
currently outstanding floating rate subordinated convertible debentures. These
shares may be offered and sold from time to time by any stockholder identified
in this prospectus (each considered a "selling stockholder" and, taken together,
the "selling stockholders").
All proceeds from the sale of the Common Stock discussed in this prospectus will
go to the selling stockholders who offer and sell their shares. We will not
receive any of the proceeds from those sales.
We encourage you to read the entire prospectus and the documents to which we
have referred you. In this prospectus, the words "registrant", "Company", "we",
"our", "ours" and "us" refer to Rowan Companies, Inc. and its subsidiaries.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS THAT
YOU SHOULD CONSIDER BEFORE YOU INVEST IN THE SHARES BEING SOLD WITH THIS
PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS AUGUST 31, 2000
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<PAGE> 3
YOU SHOULD ONLY RELY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS. WE HAVE NOT, AND THE SELLING STOCKHOLDERS HAVE NOT,
AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE
OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF COMMON STOCK ONLY IN
JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. YOU SHOULD NOT ASSUME THAT
THE INFORMATION CONTAINED IN THIS PROSPECTUS OR THE DOCUMENTS INCORPORATED BY
REFERENCE IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE OF THOSE DOCUMENTS. NO
ACTION IS BEING TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES TO PERMIT A
PUBLIC OFFERING OF THE COMMON STOCK OR POSSESSION OR DISTRIBUTION OF THIS
PROSPECTUS IN ANY SUCH JURISDICTION. PERSONS WHO COME INTO POSSESSION OF THIS
PROSPECTUS IN JURISDICTIONS OUTSIDE THE UNITED STATES AND CANADA ARE REQUIRED TO
INFORM THEMSELVES ABOUT AND TO OBSERVE THE RESTRICTIONS OF THAT JURISDICTION
RELATED TO THIS OFFERING AND THE DISTRIBUTION OF THIS PROSPECTUS.
TABLE OF CONTENTS
Where You Can Find More Information.........................3
Risk Factors................................................5
Selling Stockholders........................................9
Description of the Securities..............................11
Indemnification of Directors and Officers..................11
Plan of Distribution.......................................12
Legal Opinion..............................................12
Experts....................................................12
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission under the Securities
Exchange Act of 1934. The registration statement of which this prospectus forms
a part and these reports, proxy statements and other information can be
inspected and copied at the Public Reference Room maintained by the SEC at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of the materials
may also be obtained from the SEC at prescribed rates by writing to the Public
Reference Room maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The SEC maintains a World Wide Web site on the Internet at http://www.sec.gov
that contains reports, proxy and information statements and other information
regarding us. The reports, proxy and information statements and other
information about us can be downloaded from the SEC's website and can also be
inspected and copied at the offices of the New York Stock Exchange, Inc., 20
Broad Street, New York, New York 10005, on which our common stock is traded.
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<PAGE> 4
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. Any information incorporated by reference is considered
to be part of the prospectus. In addition, information that we file later with
the SEC will automatically update and supersede the information in this
prospectus. Accordingly, we incorporate by reference the documents listed below
and any future filings we will make with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 until the selling stockholders
sell all their shares of common stock as provided for in this prospectus. Our
SEC Commission File Number is 1-5491.
(i) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999.
(ii) The Company's Quarterly Reports on Form 10-Q for the three
months ended March 31, 2000 and the three months ended June 30,
2000.
(iii) The description of the Common Stock contained in the Company's
registration statement on Form 8-A (No. 1-5491) filed with the
SEC on May 13, 1993 and the description of the Preferred Stock
Purchase Rights contained in the Company's registration
statement on Form 8-A/A filed with the SEC on August 6, 1997, in
each case as amended.
We have filed with the SEC a registration statement on Form S-3, which is made
up of this prospectus and all amendments and exhibits, which are collectively
referred to as the registration statement, under the Securities Act of 1933, as
amended. This prospectus is only a part of the registration statement, and does
not contain all of the information that the registration statement contains,
parts of which have been left out of the prospectus as permitted by the rules of
the SEC. Accordingly, information included in this prospectus from a document
contained elsewhere in the registration statement is not necessarily complete
and, in each case, the source document being referred to, whether an exhibit to
this registration statement or otherwise filed with the SEC, should be
consulted. The information in this prospectus is qualified in its entirety by
the reference to the source document. For more information, refer to the
registration statement.
At your request, we will provide at no cost to you, a copy of all or a part of
the documents or information that is referred to above as incorporated herein by
reference, not including any exhibits (unless the exhibits have been
incorporated by reference into those documents). Your request should be directed
to Rowan Companies, Inc., 2800 Post Oak Boulevard, Suite 5450, Houston, Texas
77056-6196, Attention: Corporate Secretary, telephone: (713) 621-7800.
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<PAGE> 5
FORWARD-LOOKING STATEMENTS
We believe that some statements contained or incorporated by reference in this
prospectus are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and are considered prospective. These
include statements contained under "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business." The following statements are or may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995:
o statements before, after or including the words "may," "will,"
"could," "should," "believe," "expect," "future," "potential,"
"anticipate," "intend," "plan," "estimate" or "continue" or the
negative or other variations of these words; and
o other statements about matters that are not historical facts.
We may not achieve future results covered by the forward-looking statements. The
statements are subject to risks, trends, uncertainties and other factors that
could cause actual results to differ materially from the future results that the
statements express or imply. Among the factors that could cause actual results
to differ materially are:
o oil, natural gas and other commodity prices;
o the level of offshore expenditures by energy companies;
o the general economy, including inflation;
o weather conditions in our principal operating areas;
o environmental and other laws and regulations; and
o the level of merger and acquisition activity in the businesses in
which we operate.
Please do not put undue reliance on these forward-looking statements, which
speak only as of the date of this prospectus.
RISK FACTORS
You should consider carefully the following risk factors, in addition to the
other information contained and incorporated by reference in this prospectus,
before deciding to invest in our common stock.
DEPRESSED OIL AND NATURAL GAS PRICES COULD GREATLY REDUCE DEMAND FOR OUR
OFFSHORE DRILLING AND RELATED SERVICES.
The success of our offshore drilling, manufacturing and aviation operations
depends upon the condition of the oil and gas industry, particularly the level
of offshore drilling activity. Demand for our offshore drilling and related
services is vulnerable to periodic declines in drilling activity typically
associated with depressed oil and natural gas prices. Oil and natural gas prices
have historically been volatile, and the offshore drilling market was generally
depressed from the early 1980s until the mid-1990s.
While the drilling industry has benefited from the recent increase in oil and
natural gas prices, it has not fully recovered from the dramatic decline in
prices during 1998 and the ensuing reduction in drilling activity and day rates.
This decline in prices was generally attributable to increased worldwide
production coupled with slowing global demand. Energy companies responded to
depressed prices by reducing their drilling expenditures, either by allowing
contract options to lapse or by canceling or deferring planned drilling
projects. Our drilling operations have improved over the past twelve months but
remain well below peak 1997 and early-1998 levels.
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<PAGE> 6
Demand for drilling services also depends on additional factors that are beyond
our control, including:
o fluctuations in the worldwide demand for oil and natural gas;
o the willingness and ability of the Organization of Petroleum Exporting
Countries ("OPEC") to limit production levels and influence prices;
and
o the level of production in non-OPEC countries.
Our drilling and aviation operations will be adversely affected by future
declines in oil and natural gas prices, but we cannot predict the extent of that
effect. We also cannot assure you that a reduction in offshore drilling activity
will not occur for other reasons. In addition, the ongoing consolidation of the
oil and gas industry, as evidenced by several recent mergers among major energy
companies, has temporarily reduced the amount of money spent on drilling and
drilling-related services by such majors.
WE EXPERIENCED OPERATING LOSSES IN 1999.
Although we have achieved profitability in each of our last four quarters ended
June 30, 2000, we incurred a net loss and a loss from operations in the first
and second quarters and for the full year of 1999. Our revenues and earnings
were negatively affected by lower rig utilization and day rates due to the
decline in oil and natural gas prices discussed above. Contributing to the
deficit were the timing of certain shipments by our manufacturing division and
the normal seasonal reduction in our aviation operations.
OUR BUSINESS IS COMPETITIVE AND WE MAY BE UNABLE TO COMPETE SUCCESSFULLY.
The drilling, manufacturing and aviation markets are highly competitive, and no
single competitor is dominant. In the drilling market, a general oversupply of
rigs has lasted for well over a decade, and we believe that competition for
drilling contracts will continue to be intense for the foreseeable future. The
aviation and manufacturing markets are also characterized by vigorous
competition among several competitors. Some of our competitors possess greater
financial resources than we do.
OUR FLEET EXPANSION PROGRAM MAY RESULT IN SHORT-TERM LIQUIDITY PROBLEMS.
We began a fleet expansion program in 1995 that represented our first new
construction since the mid-1980s. In total, four Super Gorilla Class heavy-duty
jack-up rigs will be constructed under the program at a total cost of
approximately $850-900 million. Capital expenditures in 1999 included $90
million toward the construction of Gorilla VI and $31 million toward the
construction of Gorilla VII. We estimate 2000 capital expenditures will be
between $215 and $230 million, including about $160 million for Gorillas VI, VII
and VIII.
Gorilla V, Gorilla VI and Gorilla VII are substantially financed through 12-year
notes guaranteed by the U.S. Department of Transportation's Maritime
Administration ("MARAD") under its Title XI Program. Under the MARAD financing,
each note is collateralized by the rig whose construction it finances. We
guaranteed construction of the rigs and are obligated for the repayment of the
debt.
Given the volatile operating conditions experienced during the past three years
as discussed above, there can be no assurance that working capital will be
adequate throughout the period required to complete construction or that other
outside financing will be available. We currently have no other available credit
facilities.
OUR RESULTS OF OPERATIONS WILL BE ADVERSELY AFFECTED IF WE ARE UNABLE TO SECURE
CONTRACTS FOR GORILLA VII AND GORILLA VIII.
Construction of Gorilla VII should be completed by year-end 2001. Gorilla VIII
is scheduled for delivery during the third quarter of 2003. Neither rig has yet
been contracted. We may be unable to secure economical drilling contracts for
Gorilla VII and Gorilla VIII.
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WE ARE SUBJECT TO OPERATING RISKS SUCH AS BLOWOUTS AND WELL FIRES THAT COULD
RESULT IN ENVIRONMENTAL DAMAGE, PROPERTY LOSS, PERSONAL INJURY AND DEATH.
Our drilling operations are subject to many hazards that could increase the
likelihood of accidents. Accidents can result in:
o costly delays or cancellations of drilling operations;
o serious damage to or destruction of equipment;
o personal injury or death;
o significant impairment of producing properties, lease blocks or
geophysical formations; and
o major environmental damage.
Our offshore drilling operations are also subject to marine hazards, either at
offshore sites or while drilling equipment is under tow, such as vessel
capsizings, collisions or groundings. In addition, raising and lowering the legs
of jack-up rigs, ballasting semi-submersible units and drilling into
high-pressure formations are complex, hazardous activities and frequently cause
problems.
Our manufacturing and aviation operations also present serious risks. Our
manufacturing processes could pollute the air, land and inland waters, and the
products we manufacture could be implicated in lawsuits alleging environmental
harm, property loss, personal injury and death. Operating helicopters and
fixed-wing aircraft is similarly hazardous, particularly in Alaska where weather
conditions can be severe.
We have had accidents in the past demonstrating some of the hazards described
above, including high pressure drilling accidents resulting in lost or damaged
drilling formations, towing accidents resulting in lost drilling equipment and
flying accidents resulting in lost aircraft and deaths. While we have not yet
suffered any material uninsured losses:
o we may experience a higher number of accidents in the future than
expected;
o our insurance coverage may prove inadequate to cover losses that are
greater than anticipated;
o our insurance deductibles may increase; or
o our insurance premiums may be increased to the point where maintaining
our current level of coverage is prohibitively expensive.
Any similar events could yield future operating losses and have a significant
adverse impact on our business.
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION AND ENVIRONMENTAL RISK.
Our drilling, manufacturing and aviation operations subject us to many
government regulations, particularly with respect to equipping drilling vessels
and aircraft and engaging in drilling. Government regulations also determine the
level of taxation to which we and our customers are subject and the
environmental precautions we and they must take. The United States and other
governments in countries where we operate impose extensive regulations governing
environmental protection and pollution control. Some of these regulations impose
liability without regard to negligence or fault. In addition, environmental laws
and regulations, whether currently in effect or enacted in the future, may
increase our cost of doing business and discourage our customers from drilling
for hydrocarbons, thereby reducing demand for our services. We may be liable for
damages resulting from pollution of offshore waters and, under United States
regulations, must establish financial responsibility in order to drill offshore.
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POLITICAL AND ECONOMIC CONDITIONS IN COUNTRIES IN WHICH WE OPERATE COULD
ADVERSELY AFFECT US.
Our foreign operations are subject to political, economic and other risks not
encountered in our domestic operations, including:
o uncertain economic conditions in areas where we provide drilling and
aviation services and manufacture products;
o the lack of well-developed legal systems in some foreign
jurisdictions, which could make it difficult for us to enforce our
contractual rights;
o restrictions on the right to convert or repatriate currency; and
o expropriation of property, including our customers' drilling rights.
ANTI-TAKEOVER PROVISIONS IN OUR CERTIFICATE OF INCORPORATION, BYLAWS AND RIGHTS
PLAN COULD MAKE IT DIFFICULT FOR HOLDERS OF OUR COMMON STOCK TO RECEIVE A
PREMIUM FOR THEIR SHARES UPON A CHANGE OF CONTROL.
Holders of the common stock of acquisition targets typically receive a premium
for their shares upon a change of control. Delaware law and the following
provisions, among others, of our Certificate of Incorporation, Bylaws and Rights
Plan could have the effect of delaying or preventing a change of control and
could thereby prevent holders of our common stock from receiving such a premium:
o The affirmative vote of 80% of the outstanding shares of our capital
stock is required to approve business combinations that have not been
approved by our board of directors. We are also subject to a provision
of Delaware corporate law that prohibits us from engaging in a
business combination with any interested stockholder for three years
from the date that person became an interested stockholder unless
specified conditions are met.
o Special meetings of stockholders may not be called by anyone other
than the chairman of the board, our president, our board of directors
or the executive committee of our board.
o Our board of directors is divided into three classes whose terms end
in successive years, so that less than a majority of our board comes
up for election at any annual meeting.
o Our board of directors has the authority to issue up to 5,000,000
shares of preferred stock and to determine the voting rights and other
privileges of these shares without any vote or action by our
stockholders.
o We have issued "poison pill" rights under our Rights Plan, which could
have the effect of discouraging unsolicited acquisition proposals.
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SELLING STOCKHOLDERS
This prospectus relates to the sale of Rowan Common Stock by the selling
stockholders, specifically shares obtained by them following conversion of their
Series C Floating Rate Subordinated Convertible Debentures due 2010 (the "Series
C Debentures"). The $9.6 million of Series C Debentures are first convertible
into 9,606 shares of Rowan Series C Preferred Stock, par value $1.00 per share,
which is then convertible into 340,035 shares of Rowan Common Stock. The
conversion price of $28.25 per common share was the average of the high and low
trading price on April 27, 2000, the date the Series C Debentures were sold to
the selling stockholders. The Series C Debentures vest or become convertible in
specified amounts and intervals until April 27, 2010. No Series C Debentures
vest prior to April 27, 2001.
The selling stockholders purchased their Series C Debentures from Rowan through
their participation in the 1998 Convertible Debenture Incentive Plan, previously
approved by Rowan's stockholders. The selling stockholders have indicated that
they intend to sell all shares of Common Stock resulting from the conversions
described above on the New York Stock Exchange or the Pacific Exchange - Stock &
Options. Such sales are expected to be made at market prices as quoted on those
exchanges on the date of sale. Any selling stockholder, however, may also make
privately negotiated sales directly or through a broker or brokers or otherwise
as described under "Plan of Distribution".
All proceeds from the sale of the Rowan Common Stock under this prospectus will
go to the selling stockholders who offer and sell their shares. Rowan will not
receive any of the proceeds from the sales.
The following table lists the selling stockholders, their positions and their
Common Stock holdings as of July 31, 2000. The number of shares of Common Stock
obtainable by their conversion of Series C Debentures is shown as "Shares
Covered by this Prospectus".
<TABLE>
<CAPTION>
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Shares Shares Beneficial
Shares 401(k) Acquirable Total Covered Ownership
Beneficially Plan within 60 Beneficial by this After
Selling Stockholder Position (1) Owned (2) Holdings Days (3) Ownership Prospectus(4) Offering (5)
--------------------- ----------------------- -------------- --------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
C.R. Palmer Chairman of the Board, 441,865 5,544 1,056,821 1,504,230 180,000 1,504,230
President and Chief
Executive Officer
R.G. Croyle Executive Vice President 6,000 149,469 155,469 35,009 155,469
D.F. McNease Executive Vice President - 1,005 3,542 165,748 170,295 35,009 170,295
Drilling
E.E. Thiele Senior Vice President - 23,250 229,006 252,256 35,009 252,256
Finance, Administration
and Treasurer
P.L. Kelly Senior Vice President - 18,000 29,000 47,000 20,000 47,000
Special Projects
Dan C. Eckermann Vice President - 57,625 57,625 20,000 57,625
Manufacturing
C. W. Johnson Vice President - Aviation 35,209 145,343 180,552 15,008 180,552
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</TABLE>
(1) Each selling stockholder continuously served in the position shown above
for more than the past three years except Mr. McNease, who served from
October 1993 to April 1999 as Senior Vice President - Drilling, and Mr.
Eckermann, who has served from September 1996 to present as President and
Chief Executive Officer of LeTourneau, Inc., a subsidiary of the Company.
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<PAGE> 10
(2) Included in the beneficially owned amounts of Mr. Palmer are 20,752 shares
of Common Stock held in the estate of his mother over which he may be
deemed to have some measure of investment control. Included in the
beneficially owned amounts of Mr. Croyle are 1,000 shares owned by Mr.
Croyle's son. Mr. Croyle disclaims beneficial ownership of such shares.
(3) Within 60 days, each selling stockholder may obtain additional Rowan Common
Stock through (i) the conversion of Series III Floating Rate Subordinated
Convertible Debentures ("Series III Debentures"); (ii) the conversion of
Series A Floating Rate Subordinated Convertible Debentures ("Series A
Debentures"); (iii) the conversion of Series B Floating Rate Subordinated
Convertible Debentures ("Series B Debentures") and (iv) the exercise of
Nonqualified Stock Options ("Options"), as follows:
<TABLE>
<CAPTION>
Debentures
------------------------------------------
Selling Stockholder Series III Series A Series B Options Total
----------------------- ------------ --------------------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
C. R. Palmer 711,111 42,016 44,444 259,250 1,056,821
R. G. Croyle 65,926 8,404 8,889 66,250 149,469
D. F. McNease 103,705 8,404 8,889 44,750 165,748
E. E. Thiele 162,963 8,404 8,889 48,750 229,006
Paul L. Kelly 5,042 5,333 18,625 29,000
Dan C. Eckermann 5,042 5,333 47,250 57,625
C. W. Johnson 125,926 3,362 3,555 12,500 145,343
</TABLE>
(4) Amount represents the number of shares of Rowan Common Stock obtainable by
each selling stockholder upon his conversion of all Series C Debentures.
The Series C Debentures are convertible or vest incrementally over a
four-year period. The earliest conversion dates and the number of shares of
Common Stock then obtainable are as follows:
<TABLE>
<CAPTION>
Shares Obtainable on April 27,
---------------------------------------------------------
Selling Stockholder 2001 2002 2003 2004 Total
----------------------- ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
C. R. Palmer 44,991 44,991 44,991 45,027 180,000
R. G. Croyle 8,743 8,743 8,743 8,780 35,009
D. F. McNease 8,743 8,743 8,743 8,780 35,009
E. E. Thiele 8,743 8,743 8,743 8,780 35,009
Paul L. Kelly 4,991 4,991 4,991 5,027 20,000
Dan C. Eckermann 4,991 4,991 4,991 5,027 20,000
C. W. Johnson 3,752 3,752 3,752 3,752 15,008
</TABLE>
(5) Assumes each selling stockholder converts all vested Series C Debentures
into Rowan Common Stock and then sells all of the shares. Except for Mr.
Palmer, each selling stockholder's shares represent less than one percent
of Rowan's outstanding shares of Common Stock as of July 31, 2000. Mr.
Palmer's shares represent about 1.6% of Rowan's outstanding shares of
Common Stock as of July 31, 2000.
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AUTHORIZED PREFERRED STOCK
Our Certificate of Incorporation authorizes the issuance of preferred stock with
designations, rights and preferences determined by our Board of Directors.
Accordingly, the Board is empowered, without stockholder approval, to issue
preferred stock with dividend, liquidation, conversion, voting or other rights
that could adversely affect the voting or other rights of our Common
Stockholders. We have reserved 1,500,000 shares of preferred stock for possible
issuance in connection with our Stockholder Rights Agreement (the "Rights
Agreement") adopted by the Board on February 25, 1992 (see DESCRIPTION OF THE
SECURITIES). If issued, the preferred stock could be used, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company. Although we have no present intention to issue any
shares of our preferred stock, there can be no assurance that we will not do so
in the future.
DESCRIPTION OF THE SECURITIES
As of July 31, 2000, Rowan had 94,294,529 shares of Common Stock outstanding.
The Common Stock is listed on the New York Stock Exchange and the Pacific
Exchange - Stock & Options. Each share of Common Stock has attached to it rights
(the "Rights") to acquire one one-hundredth of a share of our Series A Junior
Preferred Stock pursuant to the Rights Agreement.
The Rights Agreement provides for the distribution to our stockholders of one
Right for each outstanding share of Common Stock. Each Right entitles its holder
to purchase from us one one-hundredth of a share of our Series A Junior
Preferred Stock at an exercise price of $75.00. In addition, under certain
circumstances, each Right will entitle the holder to purchase our securities or
the securities of an acquiring entity at 1/2 market value. The Rights are
exercisable only if a person or group acquires 15% or more of our outstanding
Common Stock or makes a tender offer for 30% or more of our outstanding Common
Stock. The Rights will expire on February 25, 2002. We may generally redeem the
Rights at a price of $.01 per Right at any time until the 10th day following
public announcement that a 15% position has been acquired. One million five
hundred thousand shares of our preferred stock have been designated Series A
Junior Preferred Stock and reserved for issuance upon exercise of the Rights.
Additional information concerning the terms of the Rights is contained in our
Registration Statement on Form 8-A relating to the Rights, which information has
been incorporated by reference herein.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Certificate of Incorporation and Bylaws provide that our directors and
officers will be indemnified by Rowan, to the full extent authorized or
permitted by law, for all losses they may incur in connection with any claim or
legal action involving them while serving as a Rowan director or officer. In
addition, our Certificate of Incorporation limits the monetary liability of
Rowan directors for certain breaches of their fiduciary duty of care.
Rowan maintains directors' and officers' liability coverage which generally
insures the directors and officers against liability arising from actions taken
in their official capacities. The policy will pay on behalf of the directors and
officers for those losses for which they are held personally liable and not
indemnified by the Company.
11
<PAGE> 12
PLAN OF DISTRIBUTION
These shares may be sold from time to time by the selling stockholders, or by
pledgees, donees, transferees or other successors in interest. These sales may
be made on one or more exchanges or in the over-the-counter market, or otherwise
at prices and at terms then prevailing or at prices related to the then current
market price, or in negotiated transactions directly with purchasers. The shares
may also be sold by one or more of the following:
(1) a block trade in which the broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
(2) purchases by a broker or dealer as principal and resale by the broker
or dealer for its account pursuant to this Prospectus;
(3) an exchange distribution in accordance with the rules of the exchange;
and
(4) ordinary brokerage transactions and transactions in which the broker
solicits purchasers.
In effecting sales, brokers or dealers engaged by the selling stockholders may
arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions or discounts from selling stockholders in amounts to be
negotiated immediately prior to the sale. These brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933 in connection with these sales. In
addition, any securities covered by this Prospectus that qualify for sale
pursuant to Rule 144 or under another exemption from registration may be sold
under Rule 144 rather than pursuant to this Prospectus.
LEGAL OPINION
Certain legal matters with respect to the Common Stock offered hereby will be
passed upon for the Company by Andrews & Kurth L.L.P., 600 Travis Street,
Suite 4200, Houston, Texas 77002.
EXPERTS
The consolidated financial statements of Rowan Companies, Inc. and subsidiaries
as of December 31, 1999 and 1998 and for each of the three years in the period
ended December 31, 1999 incorporated in this Prospectus by reference from the
Company's Annual Report on Form 10-K for the year ended December 31, 1999 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated by reference, and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
====================================== =====================================
12
<PAGE> 13
================================================================================
ROWAN COMPANIES, INC.
340,035 SHARES OF
COMMON STOCK
============
PROSPECTUS
============
================================================================================
13
<PAGE> 14
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the Common
Stock being registered are estimated as follows:
Registration fee.................... $ 2,850
Blue Sky fees and expenses.......... -0-
Legal fees and expenses............. 3,000
Accounting fees and expenses........ 3,500
Printing and engraving expenses..... 750
Stock exchange listing fee.......... 815
Miscellaneous expenses.............. 250
-------
Total................... $11,165
=======
All of the expenses set forth above have been or will be paid by the Company.
Any additional expenses incurred in connection with the sale of Common Stock
offered hereby by selling stockholders will be paid by such selling
stockholders. It is impracticable to estimate any such additional expenses.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Certificate of Incorporation and Bylaws contain provisions
permitted by the Delaware General Corporation Law (under which the Company is
organized) which, in general terms, provide that directors and officers will be
indemnified by the Company, to the full extent authorized or permitted by law,
for all losses that may be incurred by them in connection with any claim or
legal action in which they may become involved by reason of their service as a
director or officer of the Company. In addition, the Company's Certificate of
Incorporation contains provisions permitted by the Delaware General Corporation
Law which limit the monetary liability of directors of the Company for certain
breaches of their fiduciary duty of care.
The Company maintains directors' and officers' liability insurance. Subject
to stated conditions, the policy insures the directors and officers of the
Company against liability arising out of actions taken in their official
capacities. The policy will pay on behalf of the directors and officers for
those losses for which they are held personally liable and not indemnified by
the Company.
See also the undertakings set out in response to Item 17.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Company dated February 17, 1984, incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement No. 333-84369 on Form S-8 (File No. 1-5491) and
Exhibits 4.4, 4.5, 4.6, 4.7, 4.8, 4.9 and 4.10 below.
4.2 Bylaws of the Company, amended as of April 28, 2000, incorporated by reference to Exhibit 3b to the Company's
Form 10-Q for the fiscal quarter ended March 31, 2000 (File No. 1-5491).
4.3 Rights Agreement as amended between the Company and Citibank, N.A. as Rights Agent, incorporated by reference
to Exhibit 4d to the Company's Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-5491).
4.4 Certificate of Change of Address of Registered Office and of Registered Agent dated July 25, 1984,
incorporated by reference to Exhibit 4.4 to the Company's Registration Statement No. 333-84369 on Form S-8
(File No. 1-5491).
</TABLE>
II-1
<PAGE> 15
<TABLE>
<S> <C>
4.5 Certificate of Amendment of Certificate of Incorporation dated April 24, 1987, incorporated by reference to
Exhibit 4.5 to the Company's Registration Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.6 Certificate of Designation of the Company's Series A Junior Preferred Stock dated March 2, 1992, incorporated
by reference to Exhibit 4.6 to the Company's Registration Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.7 Certificate of Designation of the Company's Series III Preferred Stock dated November 30, 1994, incorporated
by reference to Exhibit 4.7 to the Company's Registration Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.8 Certificate of Designation of (and Certificate of Correction related thereto) the Company's Series A Preferred
Stock dated August 5, 1998 and January 28, 1999, respectively, incorporated by reference to Exhibit 4.8 to the
Company's Registration Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.9 Certificate of Designation of the Company's Series B Preferred Stock dated June 24, 1999, incorporated by
reference to Exhibit 4.9 to the Company's Registration Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.10 Certificate of Designation of the Company's Series C Preferred Stock dated July 28, 2000.
5.1 Opinion of Andrews & Kurth L.L.P., counsel for Rowan Companies, Inc. (filed herewith).
23.1 Consent of Deloitte & Touche L.L.P. (filed herewith ).
23.2 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1).
24 Powers of Attorney.
99.1 Rowan Companies, Inc. 1998 Convertible Debenture Incentive Plan, incorporated by reference to Appendix B
to the Company's Notice of Annual Meeting of Stockholders and Proxy Statement dated March 13, 1998.
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
II-2
<PAGE> 16
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions set forth under ITEM 15. INDEMNIFICATION
OF DIRECTORS AND OFFICERS, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas on August 31, 2000.
ROWAN COMPANIES, INC.
(Registrant)
By: C.R. PALMER
C.R. Palmer,
Chairman of the Board, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
----------------------- ------------------ ----------------
<S> <C> <C>
C. R. PALMER Chairman of the Board, August 31, 2000
(C. R. Palmer) President and Chief
Executive Officer
E. E. THIELE Principal Financial Officer August 31, 2000
(E. E. Thiele)
WILLIAM H. WELLS Principal Accounting Officer August 31, 2000
(William H. Wells)
*HENRY O. BOSWELL Director August 31, 2000
(Henry O. Boswell)
*HANS M. BRINKHORST Director August 31, 2000
(Hans M. Brinkhorst)
*R. G. CROYLE Director August 31, 2000
(R. G. Croyle)
*FREDERICK R. LAUSEN Director August 31, 2000
(Frederick R. Lausen)
*H. E. LENTZ Director August 31, 2000
(H. E. Lentz)
*D. F. MCNEASE Director August 31, 2000
(D. F. McNease)
*LORD MOYNIHAN Director August 31, 2000
(Lord Moynihan)
*WILFRED P. SCHMOE Director August 31, 2000
(Wilfred P. Schmoe)
*CHARLES P. SIESS, JR. Director August 31, 2000
(Charles P. Siess, Jr.)
*BY C. R. PALMER
(C. R. Palmer, Attorney-in-fact)
</TABLE>
II-4
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Company dated February 17, 1984, incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement No. 333-84369 on Form S-8 (File No. 1-5491) and
Exhibits 4.4, 4.5, 4.6, 4.7, 4.8, 4.9 and 4.10 below.
4.2 Bylaws of the Company, amended as of April 28, 2000, incorporated
by reference to Exhibit 3b to the Company's Form 10-Q for the
fiscal quarter ended March 31, 2000 (File No. 1-5491).
4.3 Rights Agreement as amended between the Company and Citibank, N.A. as Rights Agent, incorporated by reference
to Exhibit 4d to the Company's Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-5491).
4.4 Certificate of Change of Address of Registered Office and of Registered Agent dated July 25, 1984,
incorporated by reference to Exhibit 4.4 to the Company's Registration Statement No. 333-84369 on Form S-8
(File No. 1-5491).
4.5 Certificate of Amendment of Certificate of Incorporation dated April 24, 1987, incorporated by reference to
Exhibit 4.5 to the Company's Registration Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.6 Certificate of Designation of the Company's Series A Junior Preferred Stock dated March 2, 1992, incorporated
by reference to Exhibit 4.6 to the Company's Registration Statement No. 333-84369 on Form S-8 (File
No. 1-5491).
4.7 Certificate of Designation of the Company's Series III Preferred Stock dated November 30, 1994, incorporated
by reference to Exhibit 4.7 to the Company's Registration Statement No. 333-84369 on Form S-8 (File
No. 1-5491).
4.8 Certificate of Designation of (and Certificate of Correction related thereto) the Company's Series A Preferred
Stock dated August 5, 1998 and January 28, 1999, respectively, incorporated by reference to Exhibit 4.8 to the
Company's Registration Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.9 Certificate of Designation of the Company's Series B Preferred Stock dated June 24, 1999, incorporated by
reference to Exhibit 4.9 to the Company's Registration Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.10 Certificate of Designation of the Company's Series C Preferred Stock dated July 28, 2000.
5.1 Opinion of Andrews & Kurth L.L.P., counsel for Rowan Companies, Inc. (filed herewith).
23.1 Consent of Deloitte & Touche L.L.P. (filed herewith).
23.2 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1).
24 Powers of Attorney.
99.1 Rowan Companies, Inc. 1998 Convertible Debenture Incentive Plan, incorporated by reference to Appendix B to the
Company's Notice of Annual Meeting of Stockholders and Proxy Statement dated March 13, 1998.
</TABLE>
