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EXHIBIT 5
FOURTH AMENDMENT
TO
RIGHTS AGREEMENT
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ROWAN COMPANIES, INC. EXHIBIT 5
Fourth Amendment
to the Rights Agreement
as Amended Between
the Company and Citibank N.A.
as Rights Agent
THIS FOURTH AMENDMENT TO RIGHTS AGREEMENT, dated as of December 20,
2000 (the "Amendment"), between Rowan Companies, Inc., a Delaware corporation
(the "Company"), and Citibank, N.A., a national banking association, as Rights
Agent (the "Rights Agent").
WHEREAS, the Company and the Rights Agent have previously entered into
a Rights Agreement, dated as of February 25, 1992, as amended (the "Rights
Agreement");
WHEREAS, Section 26 of the Rights Agreement provides that prior to the
Distribution Date (as defined therein) and subject to certain exceptions, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of the Rights Agreement without the approval of any holders
of certificates representing shares of Common Stock of the Company;
WHEREAS, the date of this Amendment is prior to the Distribution Date;
and
WHEREAS, the Board of Directors of the Company has directed that the
Company and the Rights Agent amend the Rights Agreement pursuant to this
Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
promises contained herein, the parties hereby agree as follows:
SECTION 1. DEFINED TERMS; REFERENCES.
(a) Unless otherwise specifically defined herein, each term used herein
which is defined in the Rights Agreement has the meaning assigned to such term
in the Rights Agreement. Each reference to "hereof," "hereunder," "herein" and
"hereby" and each other similar reference and each reference to "this Agreement"
and each other similar reference contained in the Rights Agreement shall, after
this Amendment becomes effective, refer to the Rights Agreement as amended
hereby.
(b) Section 1 of the Rights Agreement is hereby amended by deleting the
definition of "Continuing Director" contained therein.
(c) Section 1 of the Rights Agreement is hereby amended by inserting in
the appropriate alphabetical position the following new definitions:
"Exchange Ratio" has the meaning set forth in Section 23.1(a).
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"Exempt Person" shall mean any Person other than the Company,
any Subsidiaries of the Company, any employee benefit plan maintained
by the Company or any of its Subsidiaries or any trustee or fiduciary
with respect to such plan acting in such capacity.
(d) Section 1 of the Rights Agreement is hereby amended by restating in
their entirety the following definitions to read in full as follows:
"Acquiring Person" shall mean any Person which shall be the
Beneficial Owner of 15% or more of the shares of Company Common Stock
then outstanding, but shall not include an Exempt Person; provided,
however, that if the Board of Directors of the Company determines in
good faith that a Person who would otherwise be an "Acquiring Person"
has become such (i) inadvertently (including, without limitation,
because (a) such Person was unaware that it beneficially owned a
percentage of Company Common Stock that would otherwise cause such
Person to be an "Acquiring Person" or (b) such Person was aware of the
extent of its Beneficial Ownership of Company Common Stock but was
unaware of the consequences of such Beneficial Ownership under this
Agreement) and (ii) without any intention of changing or influencing
control of the Company, and in all cases such Person, as promptly as
practicable after being advised of such determination, divested or
divests himself or itself of Beneficial Ownership of a sufficient
number of shares of Company Common Stock so that such Person would no
longer be an Acquiring Person, then such Person shall not be deemed to
be or to have become an "Acquiring Person" for any purposes of this
Agreement. In making the determination as to whether a Person who would
otherwise be an "Acquiring Person" has become such inadvertently and
without any intention of changing or influencing control of the
Company, the Board will be entitled to resolve all good faith doubts in
a manner that is against finding inadvertency or lack of intention to
change or influence control. The Board may take into account, but shall
not be bound by, any declarations that any such Person may have made on
Schedule 13D (or any comparable or successor report) under the Exchange
Act. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Company Common
Stock by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Company Common Stock then
outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the Company Common Stock then
outstanding by reason of the share purchases by the Company and shall,
after such share purchases by the Company, become the Beneficial Owner
of any additional Company Common Stock, then such Person shall be
deemed to be an "Acquiring Person" unless upon the consummation of the
acquisition of such additional shares of Company Common Stock such
Person does not own 15% or more of the shares of Company Common Stock
then outstanding.
"Board Approval" shall mean the adoption, in good faith, by
the Board of Directors of a resolution or resolutions authorizing or
approving the action or
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determination (i) by the unanimous written consent of all of the
members of the Board of Directors or (ii) by the affirmative vote of
not less than a majority of the members of the Board of Directors at a
meeting duly called and held at which a quorum was present and acting
throughout.
"Person" shall mean any individual, partnership, firm,
corporation, limited liability company, association, trust,
unincorporated organization or other entity, as well as any syndicate
or group acting in concert, and shall include any successor (by merger
or otherwise) of such Person.
SECTION 2. DUTIES OF RIGHTS AGENT
(a) The proviso in Section 20(b) of the Rights Agreement is hereby
amended in its entirety to read in full as follows:
"provided, however, that so long as any Person is an Acquiring Person
hereunder, such certificate shall be approved by Board Approval".
(b) The references to "a majority of the Continuing Directors" and "the
majority of the Continuing Directors" in Section 20(g) are hereby amended and
replaced with the following phrase:
"the Board of Directors by Board Approval".
SECTION 3. REDEMPTION AND TERMINATION. Clause (i) of Section 23(a) is
hereby amended and replaced with the following clause: "(i) the Close of
Business on the Stock Acquisition Date".
SECTION 4. EXCHANGE. The Rights Agreement is hereby amended by
inserting the following new Section 23.1.
SECTION 23.1. EXCHANGE.
(a) The Board of Directors may, at its option, at any time
after any Person first becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant
to the provisions of Section 7(e) hereof) for shares of
Company Common Stock at an exchange ratio of one share of
Company Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any
Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock then
outstanding. From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that theretofore
have not been exchanged pursuant to this Section 23.1(a) shall
thereafter be
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exercisable only in accordance with Section 13 and may not
be exchanged pursuant to this Section 23.1(a). The exchange
of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion
may establish.
(b) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to paragraph (a)
of this Section 23.1 and without any further action and
without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Company
Common Stock equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which
the exchange of the Company Common Stock for Rights will be
effected and, in the event of any partial exchange, the number
of Rights which will be exchanged. Any partial exchange shall
be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Company Common Stock issued but not outstanding or authorized
but unissued to permit any exchange of Rights as contemplated
in accordance with this Section 23.1, the Company shall take
all such action as may be necessary to authorize additional
shares of Company Common Stock for issuance upon exchange of
the Rights.
(d) The Company shall not be required to issue fractions of a
share of Company Common Stock or to distribute certificates
which evidence fractional shares of Company Common Stock. In
lieu of such fractional shares of Company Common Stock, the
Company shall pay to the registered holders of the Rights
Certificates with regard to which such shares of fractional
Company Common Stock would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of
a whole share of Company Common Stock. For the purposes of
this Section 23.1(d), the current market value of a whole
share of Company Common Stock shall be the closing price of a
share of Company Common Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of exchange pursuant to this
Section 23.1.
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SECTION 5. SUPPLEMENTS AND AMENDMENTS.
(a) The introductory phrase of the first sentence of Section 26, "Prior
to the Distribution Date" is hereby amended and replaced with the following
phrase:
"At any time when the Rights are then redeemable".
(b) The first reference in Section 26 to "majority of the Continuing
Directors" is hereby amended and replaced with the following phrase:
"Board of Directors by Board Approval".
(c) The penultimate sentence of Section 26 is amended and restated to
read in full as follows:
"Notwithstanding anything contained in this Agreement to the contrary,
from and after such time as any Person becomes an Acquiring Person,
this Agreement shall not be amended in any manner that would cause this
Agreement again to become amendable except in accordance with the
second sentence of this Section 26, or extend the period for redemption
of the Rights, or otherwise provide for the redemption of the Rights,
or provide for an earlier Final Expiration Date, or decrease the
Redemption Price, or change the Purchase Price, or change the number of
Units of Junior Preferred Stock for which a Right is exercisable.
SECTION 6. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
The phrase in the last sentence of Section 28 "or by a majority of the
Continuing Directors" is hereby deleted.
SECTION 7. SEVERABILITY. Section 30 of the Rights Agreement is hereby
amended by deleting the proviso contained therein and the semicolon that
immediately precedes such proviso.
SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS EXECUTED IN AND TO BE PERFORMED ENTIRELY IN SUCH STATE.
SECTION 9. COUNTERPARTS. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 10. TERMS AND CONDITIONS. All other terms, provisions and
conditions of the Rights Agreement shall remain in full force and effect, and
the Rights Agreement, as further amended by this Amendment, shall be deemed to
be one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
Attest: Rowan Companies, Inc.
By: /s/ MARK H. HAY By: /s/ E.E. THIELE
Name: Mark H. Hay Name: E.E. Thiele
Title: Corporate Secretary Title: Senior Vice President
Attest: Citibank, N.A.
By: /s/ ROBERT T. KIRCHNER By: /s/ JOHN REASOR
Name: Robert T. Kirchner Name: John Reasor
Title: Vice President Title: Vice President
