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): April 28,
2006
ROWAN
COMPANIES, INC.
(Exact
name of registrant as specified in its charter)
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DELAWARE
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1-5491
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75-0759420
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(State or other
jurisdiction
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(Commission file
Number)
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(IRS
Employer
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of
incorporation)
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Identification
No.)
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2800 POST OAK BOULEVARD
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SUITE 5450
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HOUSTON, TEXAS
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77056-6127
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(Address
of principal executive offices)
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(zip
code)
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(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
March
10, 2006 and March 28, 2006, the Compensation Committee (the “Committee”)
approved the bonus calculations for certain executive officers. The
final
determination and approval for certain of such awards was completed
by the Board
in its April 28, 2006 meeting. The table below reflects annual bonus
awards for
fiscal 2005, which were paid in cash to certain executive officers.
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Name
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Title
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Cash
Bonus
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Daniel
F. McNease
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Chairman,
President and Chief Executive Officer
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$725,000
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Robert
G. Croyle
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Vice
Chairman and Chief Administrative Officer
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$507,000
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John
L. Buvens, Jr.
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Senior
Vice President - Legal
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$254,833
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Mark
A. Keller
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Senior
Vice President - Marketing
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$249,333
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Paul
L. Kelly
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Senior
Vice President - Special Projects
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$275,000
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David
P. Russell
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Vice
President - Drilling
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$238,333
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William
H. Wells
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Vice
President - Finance and Treasurer
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$238,533
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Short-Term
Incentive Compensation Award for Fiscal 2006
On
April
27, 2006, the Committee established the performance goals for the
Company’s
officers and key employees for fiscal 2006 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 April 28, 2006, the Board of Directors
approved
the Profit Sharing Plan and Bonus Plan.
The
2006
short-term incentive compensation performance goals are based in
part 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 in 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 participant’s incentive target. Payout will be determined as
follows:
| · |
Fifty
percent of target is non-discretionary, payable based on
achievement of
EBITDA relative to budget. Depending upon the extent to which
the EBITDA
performance goal is met or exceeded, a participant will receive
between
zero and 200% of this non-discretionary portion.
|
| · |
Fifty
percent of target is subject to achievement of certain individual
and/or
group goals and will be determined in the discretion of the
Committee.
Depending upon the extent to which the goals are met or exceeded,
a
participant will receive between zero and 200% of 50% of
this
discretionary portion.
|
-2-
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.
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Name
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Title
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Target
Bonus as % of Base Salary
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Daniel
F. McNease
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Chairman,
President and Chief Executive Officer
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75%
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Robert
G. Croyle
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Vice
Chairman and Chief Administrative Officer
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65%
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John
L. Buvens, Jr.
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Senior
Vice President - Legal
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55%
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Mark
A. Keller
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Senior
Vice President - Marketing
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55%
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David
P. Russell
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Vice
President - Drilling
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55%
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William
H. Wells
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Vice
President - Finance and Treasurer
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55%
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A
summary
of each of the Profit Sharing Plan and Bonus Plan is attached hereto
as Exhibit
10.1 and incorporated herein by reference.
Long-Term
Incentive Compensation Plan for Fiscal
2006
On
April 27, 2006, 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 “LTIP”) and established
performance criteria governing the potential award of additional common
stock
(the “Performance Shares”). On April 28, 2006, the Board of Directors approved
the awards and performance criteria recommended by the Committee. All
stock
options awarded vest in 33% increments over a three-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 (“NYSE”) on April 27, 2006. Restricted
stock awards granted to Messrs. McNease and Croyle cliff vest at the
end of the
third year from the dates of grant. Restricted stock granted to all
other
officers vest in 33% increments over a three-year service period. The
awards of
stock options and restricted stock made to certain of the executive
officers of
the Company under the LTIP are set forth in the table below.
|
Name
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Title
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Shares
of
Restricted
Stock
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Restricted
Stock
Value(1)
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Stock
Option
Shares
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Total
Shares
Underlying
Awards
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Daniel
F. McNease
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Chairman,
President and Chief Executive
Officer
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9,880
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$431,756
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20,478
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30,358
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Robert
G. Croyle
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Vice
Chairman and Chief Administrative Officer
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5,558
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$242,885
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11,520
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17,078
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John
L. Buvens, Jr.
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Senior
Vice President - Legal
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2,889
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$126,249
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6,372
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9,261
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Mark
A. Keller
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Senior
Vice President - Marketing
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2,889
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$126,249
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6,372
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9,261
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David
P. Russell
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Vice
President - Drilling
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2,889
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$126,249
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6,372
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9,261
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William
H. Wells
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Vice
President - Finance and Treasurer
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2,838
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$124,021
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6,258
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9,096
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(1)
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Amount
is based upon the last reported sales price of Rowan's
common stock on the NYSE on April 27,
2006.
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-3-
The
number of Performance Shares ultimately awarded, if any, is contingent
upon the
Company’s achievement of the following two metrics: (1) 50% will be determined
based on total shareholder return over the three-year period ending on
April 28,
2009, relative to a peer group of public companies comparable to the Company
and
(2) 50 % will be determined based on return on investment over the three-year
period ending on April 28, 2009, 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 - 59,276 shares, Croyle - 33,344 shares, Buvens
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18,442 shares, Keller - 18,442 shares, Russell - 18,442 shares and Wells
-
18,112 shares.
2006
Awards - Non-Employee Directors
On
April
28, 2006, certain non-employee directors of the Company received a
grant of
Restricted Stock Units under the LTIP. The units become fully vested as of
the date of the Company’s next annual meeting of stockholders, but are payable
in stock or cash only upon termination of service.
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Name
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Number
of Units
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Grant
- Value (1)
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William
T. Fox
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2,000
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$87,400
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Sir
Graham Hearne
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2,000
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$87,400
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John
R. Huff
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2,000
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$87,400
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Frederick
R. Lausen
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2,000
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$87,400
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H.
E. Lentz
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2,000
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$87,400
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Lord
Moynihan
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2,000
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$87,400
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P.
Dexter Peacock
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2,000
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$87,400
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_________________
| (1) |
Amount
is based upon the last reported sales price of
Rowan's common stock on the NYSE on April 27,
2006.
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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
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Exhibit
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Number
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Exhibit
Description
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10.1
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-4-
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/ William H. Wells___________
William H. Wells
Vice President - Finance and Treasurer
(Principal Financial Officer)
Dated:
May 4, 2006
-5-
INDEX
TO
EXHIBITS
EXHIBIT
DESCRIPTION
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Exhibit
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Number
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Exhibit
Description
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10.1
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-6-