sc13da1301874122_02052009.htm

0000921895-09-000367.txt : 20090209 0000921895-09-000367.hdr.sgml : 20090209 20090209171044 ACCESSION NUMBER: 0000921895-09-000367 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20090209 DATE AS OF CHANGE: 20090209 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ROWAN COMPANIES INC CENTRAL INDEX KEY: 0000085408 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [1381] IRS NUMBER: 750759420 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-30728 FILM NUMBER: 09582082 BUSINESS ADDRESS: STREET 1: 2800 POST OAK BLVD. STREET 2: SUITE 5450 CITY: HOUSTON STATE: TX ZIP: 77056-6127 BUSINESS PHONE: 7136217800 MAIL ADDRESS: STREET 1: 2800 POST OAK BOULEVARD STREET 2: SUITE 5450 CITY: HOUSTON STATE: TX ZIP: 77056-6127 FORMER COMPANY: FORMER CONFORMED NAME: ROWAN DRILLING CO INC DATE OF NAME CHANGE: 19711110 FORMER COMPANY: FORMER CONFORMED NAME: ROWAN DRILLING CO DATE OF NAME CHANGE: 19671112 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: STEEL PARTNERS II LP CENTRAL INDEX KEY: 0000915653 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 590 MADISON AVENUE STREET 2: 32ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-758-3232 MAIL ADDRESS: STREET 1: 590 MADISON AVENUE, 32ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: STEEL PARTNERS II L P DATE OF NAME CHANGE: 19950627 SC 13D/A 1 sc13da1301874122_02052009.htm sc13da1301874122_02052009.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 13)1

Rowan Companies, Inc.

(Name of Issuer)

Common Stock, par value $0.125

(Title of Class of Securities)

779382100

(CUSIP Number)

STEVEN WOLOSKY, ESQ.

OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

February 5, 2009

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

_______________

1 The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP NO. 779382100

1	NAME OF REPORTING PERSON STEEL PARTNERS II, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 9,878,219
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 9,878,219
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,878,219
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.7%
14	TYPE OF REPORTING PERSON PN

CUSIP NO. 779382100

1	NAME OF REPORTING PERSON STEEL PARTNERS II MASTER FUND L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION CAYMAN ISLANDS
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 9,878,219
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 9,878,219
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,878,219
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.7%
14	TYPE OF REPORTING PERSON PN

CUSIP NO. 779382100

1	NAME OF REPORTING PERSON STEEL PARTNERS LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 9,878,219
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 9,878,219
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,878,219
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.7%
14	TYPE OF REPORTING PERSON OO

CUSIP NO. 779382100

1	NAME OF REPORTING PERSON WEBFINANCIAL L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 9,878,219
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 9,878,219
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,878,219
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.7%
14	TYPE OF REPORTING PERSON PN

CUSIP NO. 779382100

1	NAME OF REPORTING PERSON WARREN G. LICHTENSTEIN
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 9,878,219
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 9,878,219
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,878,219
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.7%
14	TYPE OF REPORTING PERSON IN

CUSIP NO. 779382100

1	NAME OF REPORTING PERSON JOHN J. QUICKE
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 - *
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER - 0 - *
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - 0 - *
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0% *
14	TYPE OF REPORTING PERSON IN

* See Item 5

CUSIP NO. 779382100

The following constitutes Amendment No. 13 to the Schedule 13D filed by the undersigned (“Amendment No. 13”). This Amendment No. 13 amends the Schedule 13D as specifically set forth.

Item 3.

Source and Amount of Funds or Other Consideration.

Item 3 is hereby amended and restated to read as follows:

The aggregate purchase price of the 9,878,219 Shares owned by Steel Partners II is approximately $270,885,713, including brokerage commissions. The Shares owned by Steel Partners II were acquired with partnership funds.

Steel Partners II effects purchases of securities primarily through margin accounts maintained for it with prime brokers, which may extend margin credit to it as and when required to open or carry positions in the margin accounts, subject to applicable federal margin regulations, stock exchange rules and the prime brokers’ credit policies. In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the accounts.

Item 4.

Purpose of Transaction.

Item 4 is hereby amended to add the following:

On February 5, 2009, the Issuer and Steel Partners II entered into a letter agreement (the “Settlement Agreement”), pursuant to which Steel Partners II has agreed not to seek to nominate any candidates to stand for election to the Board of Directors of the Issuer (the “Board”) or engage in the solicitation of proxies with respect to the election or removal of directors or any other matter to be voted on at the Issuer’s 2009 Annual Meeting of Stockholders (the “2009 Annual Meeting”). The Issuer has agreed to nominate a Steel Partners II designee for election to Class III of the Board for election at the 2009 Annual Meeting and to recommend the election and solicit proxies for the election of the Steel Partners II designee and three other nominees to be chosen by the Board. Immediately before such election, the Board will increase the size of the Board from 11 members to 12 members. Until after the Issuer’s 2010 Annual Meeting of Stockholders, the Board will not increase the size of the Board in excess of 12 members and will not take any action that would cause the number of directors comprising Class I of the Board to change from 4 members. The parties agreed that either the Steel Partners II designee or John Quicke, a current director, will serve on the Audit Committee of the Board and the other will serve on the Compensation Committee of the Board, effective promptly following the 2009 Annual Meeting.

Additionally, the Issuer will reimburse Steel Partners II for its reasonable, documented, out-of-pocket expenses incurred in connection with Steel Partners II’s intended nomination of directors and solicitation of proxies from the Issuer’s stockholders at the 2009 Annual Meeting and the negotiation of the Settlement Agreement, in an aggregate amount not to exceed $25,000.

The Issuer will cease to have any obligations under the Settlement Agreement and Steel Partners II will cause the Steel Partners II designee to resign as a director if, at any time, Steel Partners II and certain of its affiliates cease at any time to beneficially own and have an economic interest in or representing, in the aggregate at least 5% of the total Shares then outstanding.

The foregoing description of the Settlement Agreement is not complete and is qualified in its entirety by reference to its full text. A copy of the Settlement Agreement is filed as exhibit 99.1 hereto and is incorporated herein by reference.

CUSIP NO. 779382100

Item 5.

Interest in Securities of the Issuer.

Item 5 is hereby amended and restated to read as follows:

(a) The aggregate percentage of Shares reported owned by each person named herein is based upon 113,003,698 Shares outstanding, which is the total number of Shares outstanding as of October 31, 2008 as reported in the Issuer’s quarterly report on Form 10-Q for the quarter ended September 30, 2008, filed with the Securities and Exchange Commission on November 7, 2008.

As of the close of business on February 6, 2009, Steel Partners II beneficially owned 9,878,219 Shares, constituting approximately 8.7% of the Shares outstanding. By virtue of their relationships with Steel Partners II discussed in further detail in Item 2, each of Steel Master, Partners LLC, Web L.P. and Warren G. Lichtenstein may be deemed to beneficially own the Shares owned by Steel Partners II.

John J. Quicke, as a member of a “group” with the other Reporting Persons for purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), may be deemed to beneficially own the Shares owned by Steel Partners II.

(b) Each of the Reporting Persons may be deemed to have the sole power to vote and dispose of the Shares reported in this Schedule 13D owned directly by Steel Partners II.

(c) Schedule A annexed hereto lists all transactions in the Shares by the Reporting Persons since the filing of Amendment No. 12 to the Schedule 13D. All of such transactions were effected in the open market, unless otherwise indicated.

(d) No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the Shares.

(e) Not applicable.

The filing of this Schedule 13D shall not be construed as an admission that the Reporting Persons are, for purposes of Section 13(d) of the Exchange Act, the beneficial owners of any securities covered by this Schedule 13D.

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 is hereby amended to add the following:

On February 5, 2009, Steel Partners II entered into the Settlement Agreement as discussed in further detail in Item 4.

Item 7.

Material to be Filed as Exhibits.

Item 7 is hereby amended to add the following exhibit:

99.1

Letter agreement between Rowan Companies, Inc. and Steel Partners II, L.P., dated February 5, 2009.

CUSIP NO. 779382100

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: February 9, 2009	STEEL PARTNERS II, L.P.

	By:		Steel Partners II GP LLC General Partner

	By:	/s/ Sanford Antignas
		Sanford Antignas as Attorney-In-Fact for Warren G. Lichtenstein, Managing Member

STEEL PARTNERS II MASTER FUND L.P.

By:		Steel Partners II GP LLC General Partner

By:	/s/ Sanford Antignas
	Sanford Antignas as Attorney-In-Fact for Warren G. Lichtenstein, Managing Member

	STEEL PARTNERS LLC

	By:	/s/ Sanford Antignas
		Sanford Antignas as Attorney-In-Fact for Warren G. Lichtenstein, Manager

WEBFINANCIAL L.P.

By:	Steel Partners II GP LLC General Partner

By:		/s/ Sanford Antignas
		Sanford Antignas as Attorney-In-Fact for Warren G. Lichtenstein, Managing Member

	/s/ Sanford Antignas
	SANFORD ANTIGNAS as Attorney-In-Fact for Warren G. Lichtenstein

	/s/ John J. Quicke
	JOHN J. QUICKE

CUSIP NO. 779382100

SCHEDULE A

Transactions in the Securities of the Issuer Since the Filing of Amendment No. 12 to the Schedule 13D

Class of

Security

Securities

Purchased / (Sold)

Price ($)

Date of

Purchase / Sale

STEEL PARTNERS II, L.P.

Common Stock	(9,250)	14.0221	01/26/09
Common Stock	(9,250)	14.0221	01/26/09
Common Stock	(92,068)	14.0238	01/28/09
Common Stock	(92,068)	14.0238	01/28/09

STEEL PARTNERS II MASTER FUND L.P.

None

STEEL PARTNERS LLC

None

WEBFINANCIAL L.P.

None

WARREN G. LICHTENSTEIN

None

JOHN J. QUICKE

None

EX-99.1 2 ex991to13da1301874122_020509.htm SETTLEMENT AGREEMENT ex991to13da1301874122_020509.htm

Exhibit 99.1

Rowan Companies, Inc.

2800 POST OAK BOULEVARD, SUITE 5450

HOUSTON, TEXAS 77056-6127

February 5, 2009

Steel Partners II, L.P.

590 Madison Avenue

32nd Floor

New York, NY 10022

Gentlemen:

Steel Partners II, L.P. (“Steel”) has requested that the Board of Directors (the “Board”) of Rowan Companies, Inc. (the “Company”) nominate a designee of Steel to stand for election to the Board at the Company’s 2009 annual meeting of stockholders or at any special meeting of the Company’s stockholders held in lieu thereof (collectively, the “2009 Stockholders’ Meeting”). Alternatively, Steel has expressed to the Company its intention to engage in an election contest in connection with the election of directors at the 2009 Stockholders’ Meeting. Both Steel and the Company believe it is in their best interests that they not engage in an election contest in connection with the election of directors at the 2009 Stockholders’ Meeting.

Therefore, Steel and the Company agree as follows:

1. Steel and its affiliates have not sought, and Steel will not, and will cause its affiliates not to, seek to nominate any candidates to stand for election to the Board at the 2009 Stockholders’ Meeting.

2. Steel will not, and will cause its affiliates not to, engage in any solicitation of proxies with respect to the election or removal of directors or any other matter to be voted on at the 2009 Stockholders’ Meeting. If the Steel Designee (as defined below) is elected to the Board at the 2009 Stockholders’ Meeting and subsequently resigns from the Board prior to the Company’s 2010 annual meeting of stockholders or any special meeting of the Company’s stockholders held in lieu thereof (collectively, the “2010 Stockholders’ Meeting”), then Steel shall not, and shall cause its affiliates not to, nominate or permit the Steel Designee to stand for election to the Board at the 2010 Stockholders’ Meeting.

February 5, 2009

Steel Partners II, L.P.

Page 2

3. The Company will cause a person to be designated by Steel (such designee referred to herein as the “Steel Designee”) to be nominated for the election to Class III of the Board at the 2009 Stockholders’ Meeting and will recommend the election and solicit proxies for the election of the Steel Designee and three (3) other nominees as chosen by the Board. The Steel Designee shall either be Warren Lichtenstein or, if it is not Mr. Lichtenstein, the Steel Designee must be approved in advance by the Company’s Board of Directors, with such approval not to be unreasonably withheld. Steel shall notify the Company of the name and qualifications of the Steel Designee by no later than February 20, 2009. The Board shall have until March 1, 2009 to approve or reasonably reject such nominee, in which case Steel will have five business days to propose an alternative designee. To the extent the Steel Designee is not approved by the Board by March 15, 2009 but is approved by April 1, 2009, pursuant to the immediately preceding sentence prior to the finalization of the Company’s proxy statement in connection with the 2009 Stockholders’ Meeting, any Steel Designee who is thereafter approved by the Board shall be added by the Company to its slate of nominees for election to the Board in supplemental proxy materials to be promptly prepared and mailed to the stockholders in connection with the 2009 Stockholders’ Meeting. To the extent it is not reasonably practicable to add the Steel Designee in supplemental proxy materials a reasonable time before the 2009 Stockholders’ Meeting pursuant to the immediately preceding sentence, the Steel Designee shall be appointed to Class III of the Board immediately after the conclusion of the 2009 Stockholders’ Meeting. Effective as of the 2009 Stockholders’ Meeting, the Company shall cause the Board to increase the size of the Board to twelve (12) directors. Steel will cause the Steel Designee to provide responses that shall be true and correct in all material respects to all reasonable requests for information by the Company in connection with the proxy materials to be filed by the Company in connection with the 2009 Stockholders’ Meeting, and the Steel Designee shall promptly provide an agreement consenting to be named as a nominee in such proxy materials and to serve as a director upon election to the Board. The Company shall provide Steel with an opportunity to review and comment on the portions of all proxy materials to be filed by the Company in connection with the 2009 Stockholders’ Meeting from and after the date hereof containing statements relating to Steel, the Steel Designee and this letter agreement. Steel will review such materials promptly. Until after the 2010 Stockholders’ Meeting, the Company will not permit the Board to increase the size of the Board in excess of twelve (12) directors and shall not take any action that would cause the number of directors comprising Class I of the Board, who next stand for election at the 2010 Stockholders’ Meeting, to change from four (4).

4. If the Steel Designee is elected to the Board at the 2009 Stockholders’ Meeting or appointed to the Board immediately after the conclusion of the 2009 Stockholders’ Meeting pursuant to the terms of Section 3, then, after the 2009 Stockholders’ Meeting and prior to the Company’s 2012 annual meeting of stockholders or any special meeting of the Company’s stockholders held in lieu thereof, if the Steel Designee (or any successor designee appointed pursuant to this paragraph) ceases for any reason to serve as a director of the Company, then Steel shall have the right to designate a replacement for the Steel Designee to hold office for the remaining unexpired term of the Steel Designee (or any successor designee appointed pursuant to this paragraph). Such replacement designee must be approved in advance by the Board, with such approval not to be unreasonably withheld. The name and biographical information regarding the replacement designee must be submitted in writing by Steel to the Company within thirty (30) days after the date of the Steel Designee’s departure from the Board. If the Board does not approve such designee, Steel shall have thirty (30) days to suggest another replacement. If so approved by the Board, the Company shall promptly cause the vacancy created by the Steel Designee’s departure from the Board to be filled by such designee. Steel shall have no right to designate a replacement for the Steel Designee or any successor designee appointed pursuant to this paragraph (a) other than as set forth in this paragraph, (b) if the persons and entities comprising the “Steel Partners Group,” as such term is defined in the proxy statement of the Company filed in connection with the Company’s 2008 annual meeting of stockholders (the “Steel Partners Group”), cease at any time to beneficially own and have an economic interest in or representing, in the aggregate at least five percent (5%) of the total shares of common stock, par value $.125 per share, of the Company (the “Common Shares”) then outstanding (determined without giving effect to any dilution resulting from the exercise or conversion of any securities exercisable for or convertible into Common Shares which are not at such time so exercised or converted) or (c) if at any meeting of the Company’s stockholders regarding the election of directors, the Steel Designee or any such successor designee is removed as a director.

February 5, 2009

Steel Partners II, L.P.

Page 3

5. The Company shall cease to have any obligations pursuant to this letter agreement and Steel shall cause the Steel Designee to resign as a director if, at any time, the Steel Partners Group ceases at any time to beneficially own and have an economic interest in or representing, in the aggregate at least five percent (5%) of the total Common Shares then outstanding (determined without giving effect to any dilution resulting from the exercise or conversion of any securities exercisable for or convertible into Common Shares which are not at such time so exercised or converted).

6. If the Steel Designee is elected to the Board at the 2009 Stockholders’ Meeting or appointed to the Board immediately after the conclusion of the 2009 Stockholders’ Meeting pursuant to the terms of Section 3, then, promptly following the 2009 Stockholders’ Meeting and subject to applicable laws, rules and regulations (including any requirements under the Securities Exchange Act of 1934, as amended, or the rules of the New York Stock Exchange or any other applicable securities exchange or automated inter-dealer quotation system on which the Common Shares are then listed or quoted), the Company shall cause the Board to cause the Audit Committee of the Board to add as a member either the Steel Designee or John J. Quicke (“Quicke”) (or any applicable successor designated by Steel) and the Compensation Committee of the Board to add as a member either the Steel Designee or Quicke (or any applicable successor designated by Steel), whichever one is not designated to the Audit Committee. Steel represents and warrants that the Steel Designee and Quicke will satisfy the requirements under applicable laws for serving on such committees.

7. The Company agrees to reimburse Steel for its reasonable, documented, out-of-pocket expenses incurred in connection with Steel’s intended nomination of directors and solicitation of proxies from the Company’s stockholders at the 2009 Stockholders’ Meeting and the negotiation of this letter agreement, in an aggregate amount not to exceed $25,000. The Company agrees to pay such expenses to Steel within ten (10) business days of its receipt from Steel of supporting documentation for such expenses.

8. Steel, on behalf of itself and its affiliates, including, without limitation, the Steel Designee and Quicke, (a) acknowledges that the United States securities laws prohibit any person who has access to material nonpublic information from trading while in possession of such information or providing that information to others in certain circumstances, and agrees to comply with these requirements, and (b) will maintain in strict confidence all nonpublic information it receives whether in connection with this letter agreement or otherwise; provided, however, that nothing in this paragraph will prohibit Steel or its affiliates from disclosing any such information to its attorneys, accountants or financial or other advisors in connection with its assessment of its investment in the Company. Steel will cause its affiliates and any persons or entities to whom Steel or its affiliates disclose any such information to maintain the confidentiality of such information as if they were direct parties hereto and will be responsible for any failure of any such person or entity to do so.

February 5, 2009

Steel Partners II, L.P.

Page 4

9. The Company and Steel each acknowledge and agree that money damages would not be a sufficient remedy for any breach (or threatened breach) of this letter agreement by it and that, in the event of any breach or threatened breach hereof, the non-breaching party shall be entitled to seek injunctive and other equitable relief, without proof of actual damages, that the breaching party shall not plead in defense thereto that there would be an adequate remedy at law, and that the breaching party agrees to waive any applicable right or requirement that a bond be posted by the non-breaching party. Such remedies shall not be the exclusive remedies for a breach of this letter agreement, but will be in addition to all other remedies available in law or in equity.

10. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the principles of the conflicts of laws thereof. The parties hereby irrevocably submit to the exclusive jurisdiction of the courts of the State of Delaware and irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this letter agreement in the courts of the State of Delaware or the United States of America located in Delaware, and further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. This letter agreement shall inure to the benefit of the parties hereto and their respective successors and assigns (for the avoidance of doubt, Steel’s obligation under this letter agreement shall be binding upon any party with which Steel merges, consolidates or otherwise combines and Steel shall not permit itself or its assets to be acquired unless such acquirer agrees in writing for the benefit of the Company to assume Steel’s obligations hereunder). Nothing in this letter agreement, whether express or implied, may be construed to give any person or entity other than the parties any legal or equitable right, remedy or claim under or in respect of this letter agreement.

11. This letter agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute the same agreement. One or more counterparts of this letter agreement may be delivered by telecopier or PDF electronic transmission, with the intention that they shall have the same effect as an original counterpart hereof.

Very truly yours,

ROWAN COMPANIES, INC.

By:	/s/ William H. Wells
	Name:	William H. Wells
	Title:	Vice President, Finance and Chief Financial Officer

Confirmed and Agreed to as of the date set forth above:

STEEL PARTNERS II, L.P.

By:	Steel Partners II GP LLC General Partner

By:	/s/ Warren G. Lichtenstein
	Name:	Warren G. Lichtenstein
	Title:	Managing Member