Compensation


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 
Date of Report (Date of earliest event reported): May 17, 2005
 

 
ROWAN COMPANIES, INC.
(Exact name of registrant as specified in its charter)
        
        

 DELAWARE

 1-5491

 75-0759420

 (State or other jurisdiction

 (Commission file Number)

 (IRS Employer

 of incorporation)

 

 Identification No.)

            
                    
            

 2800 POST OAK BOULEVARD

 

 SUITE 5450

 

 HOUSTON, TEXAS

 77056-6127

   (Address of principal executive offices)

   (zip code)


(713) 621-7800
(Registrant’s telephone number, including area code)


Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

 


Item 1.01 Entry into a Material Definitive Agreement
 
Short-Term Incentive Compensation Award for Fiscal 2005
 
On May 9, 2005, the Compensation Committee (the “Committee”) of the Board of Directors of Rowan Companies, Inc. (the “Company”) established the performance goals for the Company’s officers and key employees for fiscal 2005 under two integrated short-term incentive compensation plans, a broad-based profit sharing plan (the “Profit Sharing Plan”) and a targeted bonus plan (the “Bonus Plan”). Any awards under the Bonus Plan will only be made after the Profit Sharing Plan has been fully funded, and Bonus Plan awards to individual employees are first reduced by Profit Sharing Plan payouts. On May 17, 2005, the Board of Directors approved the Profit Sharing Plan and Bonus Plan.
 
The 2005 short-term incentive compensation performance goals are based on the results of the Company’s drilling operations, specifically, the percentage of EBITDA return on revenues in excess of a minimum threshold (with respect to the Profit Sharing Plan) and relative to budget (with respect to the Bonus Plan). Each participant of the Bonus Plan has an aggregate incentive target that is a percentage of the participant’s base salary. The amount of the aggregate payment under the Bonus Plan could range from zero to 200% of the incentive target, depending upon the extent to which the performance goals are met or exceeded. Between 60-75% of any aggregate payment under the Bonus Plan will be determined in this manner, whereas the remaining 25-40% is subject to the discretion of the Committee. The aggregate incentive targets established under the Bonus Plan for certain of the executive officers of the Company are set forth in the table below.
 
Name
Title
Target Bonus as % of Base Salary
 
Daniel F. McNease
 
 
Chairman, President and Chief Executive Officer (CEO)
 
 
75%
 
 
Robert G. Croyle
 
 
Vice Chairman and Chief Administrative Officer (CAO)
 
 
65%
 
 
Paul L. Kelly
 
 
Senior Vice President - Special Projects
 
 
55%
 
 
John L. Buvens, Jr.
 
 
Senior Vice President - Legal
 
 
55%
 
 
Mark A. Keller
 
 
Senior Vice President - Marketing
 
 
55%
 
 
David P. Russell
 
 
Vice President - Drilling Operations
 
 
55%
 
 
William H. Wells
 
 
Vice President - Finance and Treasurer
 
 
55%
 
 
A summary of each of the Profit Sharing Plan and Bonus Plan is attached hereto as Exhibit 10.1 and incorporated herein by reference.
 
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Long-Term Incentive Compensation Plan for Fiscal 2005
 
On May 9, 2005, the Committee approved awards of stock options and restricted stock to the Company’s officers and certain key employees under the 2005 Rowan Companies, Inc. Long-Term Incentive Plan (the “Long-Term Plan”) and established performance criteria governing the potential award of additional common stock (the “Performance Shares”). On May 17, 2005, the Board of Directors approved the awards and performance criteria recommended by the Committee. Pursuant to the Long-Term Plan, the stock options and restricted stock awarded to each participant vest in 25% increments over a four-year service period and the option exercise price was set at the mean of the high and low per-share sales price on the New York Stock Exchange on May 16, 2005. The awards of stock options and restricted stock made to certain of the executive officers of the Company under the Long-Term Plan are set forth in the table below.

Name
Title
Shares of Restricted Stock
Restricted Stock Value (1)
Stock Option Shares (2)
 
Total Shares
 
Daniel F. McNease
 
 
Chairman, President and CEO
 
 
20,400
 
 
$527,544
 
 
43,700
 
 
64,100
 
 
Robert G. Croyle
 
 
Vice Chairman and CAO
 
 
10,900
 
 
281,874
 
 
23,300
 
 
34,200
 
 
Paul L. Kelly
 
 
Senior Vice President - Special Projects
 
 
2,700
 
 
69,822
 
 
5,800
 
 
8,500
 
 
John L. Buvens, Jr.
 
 
Senior Vice President - Legal
 
 
6,800
 
 
175,848
 
 
14,600
 
 
21,400
 
 
Mark A. Keller
 
 
Senior Vice President - Marketing
 
 
6,800
 
 
175,848
 
 
14,600
 
 
21,400
 
 
David P. Russell
 
 
Vice President - Drilling Operations
 
 
6,100
 
 
157,746
 
 
13,100
 
 
19,200
 
 
William H. Wells
 
 
Vice President - Finance and Treasurer
 
 
5,400
 
 
139,644
 
 
11,700
 
 
17,100
 

(1)  
Amount is based upon the last reported per-share sales price of Rowan's common stock on the New York Stock Exchange on May 17, 2005.

(2)  
Stock options are exercisable at $24.98 per share, the mean of the high and low per-share sales price of Rowan's common stock on the New York Stock Exchange on May 16, 2005.

The number of Performance Shares ultimately awarded, if any, is contingent upon the Company’s total shareholder return over the three-year period ending on May 17, 2008, relative to a peer group of public companies comparable to the Company. Performance Shares awarded to the individuals listed above can range from zero to 200% of a predetermined target, with the maximum awards as follows: McNease - 62,800 shares, Croyle - 33,400 shares, Kelly - 8,400 shares, Buvens - 21,000 shares, Keller - 21,000, Russell - 18,800 and Wells - 16,800.

The Long-Term Plan was filed via Form 8-K on May 10, 2005 and is incorporated herein by reference.
 
 
Item 9.01. Financial Statements and Exhibits

(c) Exhibits
 
Exhibit
 
Number
Exhibit Description 
   
10.1 
 
 
 
-3-

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
                              ROWAN COMPANIES, INC.

            By: /s/ W. H. WELLS
   W. H. Wells,
   Vice President - Finance and Treasurer (Principal Financial Officer)


Dated: May 23, 2005
 
 
-4-
 
 
 INDEX TO EXHIBITS
 
 
EXHIBIT DESCRIPTION
 
Exhibit
 
Number
Exhibit Description 
   
10.1
 
 
 

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