8-K

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): March 30, 2008

 

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	77056-6189
(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 8.01    Other Events.

On March 31, 2008, Rowan Companies, Inc. (the "Company") announced that its Board of Directors has decided to pursue a monetization of its wholly-owned manufacturing subsidiary, LeTourneau Technologies, Inc. ("LTI").

In connection with such announcement, the Company and Steel Partners II, L.P. ("Steel") have entered into an agreement dated March 30, 2008 (the "Agreement"), pursuant to which Steel has withdrawn its slate of three nominees for election to the Company's Board of Directors at the Company's 2008 Annual Meeting of Stockholders (the "2008 Annual Meeting") and has agreed not to engage in the solicitation of proxies in connection with the 2008 Annual Meeting.  The Agreement also provides that if the Company does not monetize its LTI investment by December 31, 2008, either Warren Lichtenstein or another person designated by Steel will be added to the Company's Board of Directors effective January 1, 2009.  The Company also agreed that if the LTI monetization is accomplished through an initial public offering of LTI's shares or a private sale of LTI, the Company will repurchase at least $400 million of its outstanding common stock.

The Company will reimburse Steel for its reasonable, documented, out-of-pocket expenses incurred in connection with Steel's intended solicitation of proxies from the Company's stockholders at the 2008 Annual Meeting of Stockholders and the negotiation of the Agreement, in an aggregate amount not to exceed $100,000.

The foregoing summary of the Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Agreement, which is attached as Exhibit 99.1, and incorporated herein by reference.  The press release is attached as Exhibit 99.2.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

Exhibit
Number	Exhibit Description
99.1	Agreement dated March 30, 2008, between Rowan Companies, Inc. and Steel Partners II, L.P.
99.2	Press release dated March 31, 2008

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 Chief Financial Officer (Principal Financial Officer)

Dated: March 31, 2008

INDEX TO EXHIBITS

EXHIBIT DESCRIPTION

Exhibit
Number	Exhibit Description
99.1	Agreement dated March 30, 2008, between Rowan Companies, Inc. and Steel Partners II, L.P.
99.2	Press release dated March 31, 2008

-2-

EX-99.1

EXHIBIT 99.1

[ROWAN COMPANIES LETTERHEAD]

March 30, 2008

Steel Partners II, L.P.

590 Madison Avenue

32nd Floor

New York, NY  10022

Gentlemen:

Steel Partners II, L.P. ("Steel") and Rowan Companies, Inc. (the "Company") have been engaging in preliminary good faith discussions concerning the Company's intention to monetize the value of the Company's wholly-owned subsidiary, LeTourneau Technologies, Inc. ("LTI").  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 Company's 2008 annual meeting of stockholders or at any special meeting of the Company's stockholders held in lieu thereof (collectively, the "2008 Stockholders' Meeting").

Therefore, Steel and the Company agree as follows:

1.Steel, by its signature below, irrevocably withdraws its Notice of Intention to Nominate Individuals for Election as Directors at the 2008 Annual Meeting of Stockholders of Rowan Companies, Inc., dated January 8, 2008, and Steel agrees that neither it nor any of its affiliates will seek to nominate any candidates to stand for election to the Company's Board of Directors at the 2008 Stockholders' Meeting.

2.Steel hereby agrees that it will not engage in any solicitation of proxies with respect to the election of directors or any other matter to be voted on at the 2008 Stockholders' Meeting.  The Company hereby acknowledges that the only matters to be voted on at the 2008 Stockholders' Meeting are the election of directors and the ratification of the appointment of auditors.

3.The Company hereby commits to pursue appropriate means to monetize its investment in LTI (which shall be achieved by entering into a transaction resulting in any one of the following:  (i) LTI becoming a separately traded public company, (ii) all or substantially all of LTI's assets being sold, (iii) a majority of LTI’s outstanding capital stock being sold, (iv) a merger of LTI with another entity in exchange for equity and/or cash, or (v) a similar transaction resulting in the Company independently receiving cash and/or stock proceeds in exchange for its interest in LTI) on or before December 31, 2008 and, if it fails to so consummate a monetization of its investment in LTI on or before December 31, 2008, then, effective January 1, 2009, the Company will increase the size of its Board of Directors by one director and fill such vacancy with a person to be designated by Steel (such designee, together with any successor to such designee appointed as a director in accordance with the terms hereof, referred to herein as the "Steel Designee").  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.  The Steel Designee referred to in this paragraph shall serve in the class of directors next standing for election at the Company's 2011 annual meeting of stockholders (the "2011 Stockholders' Meeting").  In the event a Steel Designee ceases for any reason to serve as a director of the Company prior to the 2011 Stockholders' Meeting, Steel will have the right to designate a person to fill such vacancy (the "Successor Designee") to hold office for the unexpired term of the Steel Designee.  Any Successor Designee must be approved in advance by the Company's Board of Directors, with such approval not to be unreasonably withheld, and appointed as a director to fill the vacancy promptly following such approval.

4. (a)  If monetization of LTI is accomplished through an initial public offering of all or a portion of the shares of capital stock of LTI or through a private sale of all or a portion of the shares of capital stock of LTI (a “Qualified Monetization”), the Company hereby agrees to repurchase at least $400 million of its outstanding shares of Common Stock in accordance with paragraph 4(b).

    (b) Any repurchases of shares of common stock required pursuant to this paragraph 4 shall be made pursuant to either or both of the following means:  (i) an open market share repurchase program, or (ii) an equity self-tender offer, in either case on terms to be determined by the Company.  The Company shall have 30 calendar days following the consummation of the Qualified Monetization to commence such open market repurchases (which shall be consummated within 60 days after commencement) and/or commence the equity self-tender offer; provided, however, that the Company shall be entitled to postpone any such commencement if (x) the Company is in possession of material nonpublic information concerning it or its business and affairs the disclosure of which would not otherwise be required at such time and the Board of Directors of the Company determines in good faith that the prompt public disclosure of such information would have a material adverse effect on the Company, provided that such postponement pursuant to this clause (x) shall not exceed 60 days, or (y) such commencement would otherwise occur during a quarterly blackout period, in which case such commencement shall occur within three business days following such quarterly blackout period.

5.The Company agrees to reimburse Steel for its reasonable, documented, out-of-pocket expenses incurred in connection with Steel's intended solicitation of proxies from the Company's stockholders at the 2008 Stockholders' Meeting and the negotiation of this letter agreement, in an aggregate amount not to exceed $100,000.  The Company agrees to pay such expenses to Steel within five business days of its receipt from Steel of supporting documentation for such expenses.

6.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 at law or in equity.

7.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.

[Continued on next page]

8.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:________________________________

                                                           Name:

                                                           Title:  

Confirmed and Agreed to:

STEEL PARTNERS II, L.P.

By:  Steel Partners II GP LLC

       General Partner

By:                                                               

Name: Warren G. Lichtenstein

Title: Managing Member

Dated:  March 30, 2008

EX-99.2

EXHIBIT 99.2

Rowan Companies, Inc.

News Release    

2800 Post Oak Boulevard, Suite 5450

         Houston, Texas  77056 (713) 621-7800

FOR IMMEDIATE RELEASE                                                                                                                               March 31, 2008

ROWAN COMPANIES TO PURSUE MONETIZATION

OF LETOURNEAU TECHNOLOGIES, INC.

STEEL PARTNERS WITHDRAWS NOMINEES FOR ROWAN BOARD

Houston, Texas – Rowan Companies, Inc. (NYSE:RDC) today announced that its Board of Directors has decided to pursue a monetization of its wholly-owned manufacturing subsidiary, LeTourneau Technologies, Inc. (LTI).  Rowan will be assisted in this matter by its financial advisors, Lehman Brothers, Inc. and Morgan Stanley & Co. Incorporated.

Daniel F. McNease, Chairman and Chief Executive Officer of Rowan, stated:  "LTI's leading market positions in its operating segments have enabled it to generate significant returns for Rowan over time.  Given LTI's record performance in 2007 and strength heading into 2008, we believe that now is the appropriate time for Rowan to crystallize the value we have created in LTI for the benefit of our stockholders."

The Company does not expect to disclose further developments regarding the process until the completion of a review and decision by the Board of Directors regarding a transaction or course of action.

In connection with this announcement, Rowan and Steel Partners II, L.P. have entered into an agreement pursuant to which Steel Partners has withdrawn its slate of three nominees for election to Rowan's Board of Directors at Rowan's 2008 Annual Meeting of Stockholders.  The agreement also provides that if Rowan does not monetize its LTI investment by the end of 2008, either Warren Lichtenstein or another person designated by Steel Partners will be added to Rowan's Board effective January 1, 2009.  Rowan also agreed that if the LTI monetization is accomplished through an initial public offering of LTI shares or a private sale of LTI, Rowan will repurchase at least $400 million of its outstanding common stock.

About LTI

LTI has manufacturing facilities in Longview and Houston, Texas and Vicksburg, Mississippi that collectively produce mining, timber and transportation equipment, alloy steel and steel plate, and drilling rigs and various rig components.  Featured drilling products include complete jack-up rigs, rig kits and component packages, primary drilling equipment such as mud pumps, drawworks, top drives, and rotary tables, and electrical components such as variable-speed motors and drives.

LTI built the first offshore jack-up drilling rig in 1955 and has designed or built more than 200 rigs since, including all 21 in the Rowan fleet and nine additional Rowan rigs under construction or on order.  LTI has led the strategic expansion and upgrade of Rowan's drilling fleet over the past decade and, in recent years, has expanded product lines, increased external sales and improved contributions to the Company's operating results.

About Rowan

Rowan Companies, Inc. is a major provider of international and domestic contract drilling services with a significant presence in the Middle East. The Company also owns and operates a manufacturing division (LTI) that produces equipment for the drilling, mining and timber industries. The Company's stock is traded on the New York Stock Exchange. Common Stock trading symbol: RDC.  Contact: William C. Provine, Vice-President – Investor Relations, 713-960-7575.  Website: www.rowancompanies.com

This report contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to the expectations, beliefs and future expected financial performance of the Company that are based on current expectations and are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected by the Company.  Among the factors that could cause actual results to differ materially include oil and natural gas prices, the level of offshore expenditures by energy companies, energy demand, the general economy, including inflation, weather conditions in the Company’s principal operating areas and environmental and other laws and regulations.  Other relevant factors have been disclosed in the Company’s filings with the U. S. Securities and Exchange Commission.