<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 23, 2000
REGISTRATION NO. 333-44874
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
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 77056-6127
(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. [ ]
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.
================================================================================
<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 covering 340,035 shares of
our common stock that 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. We
are registering the shares on behalf of 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.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF FACTORS THAT YOU
SHOULD CONSIDER BEFORE YOU INVEST IN THE SHARES BEING SOLD WITH THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS OCTOBER 20, 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
<TABLE>
<S> <C>
Risk Factors................................................4
Recent Events...............................................7
Where You Can Find More Information.........................8
Selling Stockholders........................................9
Description of the Securities..............................11
Indemnification of Directors and Officers..................11
Plan of Distribution.......................................12
Legal Opinion..............................................12
Experts....................................................12
</TABLE>
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<PAGE> 4
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.
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;
o political conflicts in oil-producing areas; 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.
In 1999, we experienced a 35% decline in revenues and incurred a net loss of
$9.7 million. Our 1999 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. The volatility inherent in our drilling business indicates
that we may again experience losses in the future.
OUR MARKETS REMAIN HIGHLY COMPETITIVE, WHICH MAY CAUSE US DIFFICULTY IN
DIFFERENTIATING OUR PRODUCTS AND SERVICES AND MAINTAINING SATISFACTORY PRICE
LEVELS.
The drilling, manufacturing and aviation markets in which we operate are highly
fragmented, with many competitors offering a wide variety of interchangeable
products and services. The collective capacity of the drilling, manufacturing
and aviation markets in which we operate has generally exceeded the demand for
the products and services. More sellers than buyers yields a commodity-type
price environment where the lowest price often gets the sale. 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. During periods of market weakness, when we have tried to
maintain drilling day rates, we often lost work to our competitors, our rig
utilization declined and our operating results suffered. Some of our competitors
possess greater financial resources than we do.
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<PAGE> 5
OUR FLEET EXPANSION PROGRAM MAY ENCOUNTER LIQUIDITY PROBLEMS.
If we experience operating conditions over the next few years like those we have
experienced during the recent past, our results of operations and working
capital will not be adequate to finance our planned construction and outside
financing may not be available. We would be forced to suspend our construction
program.
We have in progress a fleet expansion program under which we currently plan to
spend more than $275 million over the 2001-2003 period. We expect to spend
another $100-150 million over this period for upgrades to existing equipment and
facilities and new aircraft. Only the cost to complete Rowan Gorilla VII in 2001
is financed at this time, leaving as much as $350 million of planned capital
expenditures to be financed from working capital or results of operations. We
currently have no other available lines of credit.
OUR RESULTS OF OPERATIONS WILL BE ADVERSELY AFFECTED IF WE ARE UNABLE TO SECURE
CONTRACTS FOR ROWAN GORILLA VII AND ROWAN GORILLA VIII.
The addition to our drilling fleet of Rowan Gorilla VII in 2001 and Rowan
Gorilla VIII in 2003 will, in each case, significantly increase our daily
operating costs. Neither rig has been contracted at this time, and current
market day rates for comparable rigs would only slightly exceed the expected
daily operating costs of Gorilla VII and Gorilla VIII. We may be unable to
secure economical drilling contracts for Gorilla VII and Gorilla VIII, in which
case their delivery will negatively impact our operating results.
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 wells, leased properties or
underground geological 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 jack-up
rigs, an offshore drilling platform whose three legs independently penetrate the
ocean floor, flooding semi-submersible ballast tanks to help fix the floating
drilling unit over well site and drilling into high-pressure formations are
complex, hazardous activities and we frequently encounter 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. Because of the ongoing
hazards associated with our operations:
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 increase 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.
5
<PAGE> 6
GOVERNMENT REGULATIONS AND ENVIRONMENTAL RISKS, WHICH REDUCE OUR BUSINESS
OPPORTUNITIES AND INCREASE OUR OPERATING COSTS, MIGHT WORSEN IN THE FUTURE.
Government regulations dictate design and operating criteria for drilling
vessels and aircraft, determine taxation levels to which we (and our customers)
are subject, control and often limit access to potential markets and impose
extensive requirements concerning employee safety, environmental protection and
pollution control. Environmental regulations, in particular, prohibit access to
some markets and make others less economical, increase equipment and personnel
costs and often impose liability without regard to negligence or fault. In
addition, governmental regulations may discourage our customers' activities,
reducing demand for our products and 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.
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 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 to purchase junior preferred
stock under our rights plan, whereby the ownership of Rowan shares by
a potential acquirer can be significantly diluted by the sale at a
significant discount of additional Rowan shares to all other
stockholders, which could discourage unsolicited acquisition
proposals.
6
<PAGE> 7
RECENT EVENTS
On March 10, 2000, Rowan announced contracts with PanCanadian covering an
estimated $41 million in revenues for drilling services by Rowan Gorilla III and
Rowan Gorilla V offshore eastern Canada. Both rigs are presently operating under
such contracts, which are expected to conclude in November. We currently
estimate that 2000 revenues for services provided by Rowan Gorilla III and Rowan
Gorilla V to PanCanadian will exceed the previous estimate.
Rowan continues to pursue legal remedies from BP Amoco for its termination, in
January 1998, of a $67 million drilling contract for Rowan Gorilla V. The
discovery and deposition processes are continuing and current trial dates are as
follows: January 22, 2001 in London and April 16, 2001 in Harris County, Texas.
On October 17, 2000, Rowan announced unaudited third quarter 2000 operating
results. For the three months ended September 30, 2000, Rowan generated net
income of $25.6 million, or $.27 per share, on revenues of $190.8 million,
compared to net income of $.6 million, or $.01 per share, on revenues of $119.9
million during the third quarter of 1999.
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.
o Rowan's Annual Report on Form 10-K for the fiscal year ended December
31, 1999.
o Rowan's Quarterly Reports on Form 10-Q for the three months ended
March 31, 2000 and the three months ended June 30, 2000.
o The description of the common stock contained in our 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 our 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.
We encourage you to read the entire prospectus and the documents to which we
have referred you. In this prospectus, the words "registrant", "we", "our",
"ours" and "us" refer to Rowan Companies, Inc. and its subsidiaries.
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 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
77056-6127, Attention: Corporate Secretary, telephone: (713) 621-7800.
7
<PAGE> 8
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 "Risk Factors," "Recent Events,"
"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.
Please do not put undue certainty on these forward-looking statements, which
speak only as of the date of this prospectus.
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.
8
<PAGE> 9
SELLING STOCKHOLDERS
This prospectus relates to the sale of Rowan common stock by the selling
stockholders, specifically shares they obtain following conversion of their
Series C Floating Rate Subordinated Convertible Debentures due 2010. The $9.6
million of Series C debentures are first convertible in $1,000 increments 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, or approximately
0.4% of Rowan's outstanding shares. 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 mature on April 27, 2010 and vest or become convertible in specified
amounts and intervals, as follows: $2.4 million of debentures convertible into
84,954 shares of Rowan common stock on or after April 27, 2001; $4.8 million of
debentures convertible into 169,908 shares of Rowan common stock on or after
April 27, 2002; $7.2 million of debentures convertible into 254,862 shares of
Rowan common stock on or after April 27, 2003; and $9.606 million of debentures
convertible into 340,035 shares of Rowan common stock on or after April 27,
2004. No Series C debentures vest prior to April 27, 2001.
The selling stockholders were offered Series C debentures through their
participation in Rowan's 1998 Convertible Debenture Incentive Plan, previously
approved by Rowan's stockholders. Each debenture was purchased through the
issuance of a promissory note in favor of Rowan. Upon each debenture conversion,
the selling stockholder will remit to Rowan the debenture amount being
converted, and Rowan will apply such amount against the outstanding promissory
note balance. We will then issue to the selling stockholder one share of Series
C preferred stock for each $1,000 of debentures converted and, following
immediate conversion of the preferred stock, shares of our common stock based
upon the conversion price, and simultaneously retire our debenture obligation.
The selling stockholders have indicated that any sales of shares of our common
stock that result from the conversions described above will be made 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.
We 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 September 30, 2000. The number of shares of common
stock obtainable by each selling stockholder upon their conversion of Series C
debentures is shown under the column heading "Shares Covered by this
Prospectus".
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
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 5,558 1,056,821 1,504,244 180,000 1,504,244
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 3,551 165,748 170,304 35,009 170,304
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
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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---------------------------
(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 Rowan subsidiary.
(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 the conversion of floating rate subordinated convertible
debentures (including Series III, Series A and Series B) and the exercise
of nonqualified stock 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 September 30, 2000. Mr.
Palmer's shares represent about 1.6% of Rowan's outstanding shares of
common stock as of September 30, 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 adopted by the
board on February 25, 1992 (see "Description Of The Securities" below for more
information on the rights agreement). If issued, the preferred stock could be
used as a method of discouraging, delaying or preventing a change in control of
Rowan. Although we have no present intention to issue any shares of our
preferred stock, other than shares issued under our debenture plans, there can
be no assurance that we will not do so in the future.
DESCRIPTION OF THE SECURITIES
As of September 30, 2000, Rowan had 94,348,304 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 entitles its
holder of record to one vote on matters presented at any official meeting of
Rowan stockholders. Each share of common stock has attached to it rights to
acquire one one-hundredth of a share of our Series A junior preferred stock
under 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, each right may
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. We have designated 1,500,000 shares of our preferred stock Series
A junior preferred stock and reserved these shares for issuance upon exercise of
the rights. You can find additional information concerning the terms of the
rights in our Registration Statement on Form 8-A relating to the rights, which
information has been incorporated by reference.
Rowan's $9.6 million principal amount of Series C floating rate subordinated
convertible debentures due 2010 were issued on April 27, 2000, bear interest at
prime plus 1/2% and mature on April 27, 2001. The process by which the Series C
debentures are convertible into shares of Rowan common stock and the conversion
vesting schedule are described above under "Selling Stockholders".
Rowan has reserved for issuance up to 9,606 shares of Series C Preferred Stock,
$1.00 par value, in connection with the conversion of Series C debentures. The
preferred stock has no voting or dividend rights and a nominal liquidation
preference and is immediately convertible into shares of Rowan common stock, as
described above under Selling Stockholders.
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 breaches of their fiduciary duty of care.
We maintain directors' and officers' liability coverage that generally insures
Rowan 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 Rowan.
11
<PAGE> 12
PLAN OF DISTRIBUTION
The selling stockholders, or their pledgees, donees, transferees or other
successors in interest may sell these shares from time to time. 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 in accordance with 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
engage brokers or dealers who 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 under Rule 144 or under another exemption from
registration may be sold under Rule 144 rather than in accordance with this
Prospectus.
LEGAL OPINION
The legal validity of the common stock offered hereby will be passed upon for
Rowan 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
Rowan'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
----------
================================================================================
<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:
<TABLE>
<S> <C>
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
=======
</TABLE>
All of the expenses set forth above have been or will be paid by Rowan. 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.
Our Certificate of Incorporation and bylaws contain provisions permitted by the
Delaware General Corporation Law (under which Rowan is organized) which, in
general terms, provide that directors and officers will be indemnified by Rowan,
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 Rowan director or officer. In
addition, our Certificate of Incorporation contains provisions permitted by the
Delaware General Corporation Law which limit the monetary liability of Rowan
directors for breaches of their fiduciary duty of care.
We maintain directors' and officers' liability insurance. Subject to stated
conditions, the policy insures Rowan directors and officers 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 Rowan.
See also the undertakings set out in response to Item 17.
ITEM 16. EXHIBITS.
Exhibit
Number Description
------ -----------
4.1 Restated Certificate of Incorporation dated February 17, 1984,
incorporated by reference to Exhibit 4.1 to 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, amended as of April 28, 2000, incorporated by reference to
Exhibit 3b to Form 10-Q for the fiscal quarter ended March 31, 2000
(File No. 1-5491).
4.3 Rights Agreement as amended between Rowan and Citibank, N.A. as Rights
Agent, incorporated by reference to Exhibit 4d to 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
Registration Statement No. 333-84369 on Form S-8 (File No. 1-5491).
II-1
<PAGE> 15
4.5 Certificate of Amendment of Certificate of Incorporation dated April
24, 1987, incorporated by reference to Exhibit 4.5 to Registration
Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.6 Certificate of Designation of the Series A Junior Preferred Stock dated
March 2, 1992, incorporated by reference to Exhibit 4.6 to Registration
Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.7 Certificate of Designation of the Series III Preferred Stock dated
November 30, 1994, incorporated by reference to Exhibit 4.7 to
Registration Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.8 Certificate of Designation (and Certificate of Correction related
thereto) of the Series A Preferred Stock dated August 5, 1998 and
January 28, 1999, respectively, incorporated by reference to Exhibit
4.8 to Registration Statement No. 333-84369 on Form S-8 (File No.
1-5491).
4.9 Certificate of Designation of the Series B Preferred Stock dated June
24, 1999, incorporated by reference to Exhibit 4.9 to Registration
Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.10* Certificate of Designation of the Series C Preferred Stock dated July
28, 2000.
5.1* Opinion of Andrews & Kurth L.L.P., counsel for Rowan Companies, Inc.
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 Notice of Annual Meeting
of Stockholders and Proxy Statement dated March 13, 1998.
----------------
* Previously filed
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:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) 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 under 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.
(c) 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)(a) and (A)(1)(b) 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 under 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 under 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 under 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
In accordance with 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 October 20, 2000.
ROWAN COMPANIES, INC.
(Registrant)
By: C. R. PALMER
C. R. Palmer,
Chairman of the Board, President and Chief
Executive Officer
In accordance with 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, October 20, 2000
(C. R. Palmer) President and Chief
Executive Officer
E. E. THIELE Principal Financial Officer October 20, 2000
(E. E. Thiele)
WILLIAM H. WELLS Principal Accounting Officer October 20, 2000
(William H. Wells)
*HENRY O. BOSWELL Director October 20, 2000
(Henry O. Boswell)
*HANS M. BRINKHORST Director October 20, 2000
(Hans M. Brinkhorst)
*R. G. CROYLE Director October 20, 2000
(R. G. Croyle)
*FREDERICK R. LAUSEN Director October 20, 2000
(Frederick R. Lausen)
*H. E. LENTZ Director October 20, 2000
(H. E. Lentz)
*D. F. MCNEASE Director October 20, 2000
(D. F. McNease)
*LORD MOYNIHAN Director October 20, 2000
(Lord Moynihan)
*WILFRED P. SCHMOE Director October 20, 2000
(Wilfred P. Schmoe)
*CHARLES P. SIESS, JR. Director October 20, 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 dated February 17, 1984,
incorporated by reference to Exhibit 4.1 to 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, amended as of April 28, 2000, incorporated by reference to
Exhibit 3b to Form 10-Q for the fiscal quarter ended March 31, 2000
(File No. 1-5491).
4.3 Rights Agreement as amended between Rowan and Citibank, N.A. as Rights
Agent, incorporated by reference to Exhibit 4d to 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
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 Registration
Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.6 Certificate of Designation of the Series A Junior Preferred Stock dated
March 2, 1992, incorporated by reference to Exhibit 4.6 to Registration
Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.7 Certificate of Designation of the Series III Preferred Stock dated
November 30, 1994, incorporated by reference to Exhibit 4.7 to
Registration Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.8 Certificate of Designation (and Certificate of Correction related
thereto) of the Series A Preferred Stock dated August 5, 1998 and
January 28, 1999, respectively, incorporated by reference to Exhibit
4.8 to Registration Statement No. 333-84369 on Form S-8 (File No.
1-5491).
4.9 Certificate of Designation of the Series B Preferred Stock dated June
24, 1999, incorporated by reference to Exhibit 4.9 to Registration
Statement No. 333-84369 on Form S-8 (File No. 1-5491).
4.10* Certificate of Designation of the Series C Preferred Stock dated July
28, 2000.
5.1* Opinion of Andrews & Kurth L.L.P., counsel for Rowan Companies, Inc.
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 Notice of Annual Meeting
of Stockholders and Proxy Statement dated March 13, 1998.
</TABLE>
----------------
* Previously filed
