Item 3. Legal Proceedings
Kerr-McGee Chemical Corporation (KMCC), a wholly owned subsidiary of the company, has been informed by the Environmental Protection Agency (EPA) that it is one of several companies against whom a civil action may be filed for the recovery of remediation costs incurred by the EPA at the Bayou Bonfouca Superfund site located at Slidell, Louisiana. KMCC never owned nor operated the site, nor disposed of any waste at the site. It is alleged that a former wood-treating subsidiary of American Creosoting Corporation (ACC) had owned the site at one time, but ACC sold it in 1958. The company acquired ACC in 1964. The company and the government have entered into an agreement in principle regarding the company's obligations at this site, and the company has established a reserve.
The company continues its efforts to obtain the necessary approvals to decommission a facility located in West Chicago, Illinois, which processed thorium ores and was closed in 1973. Currently, the State of Illinois has jurisdiction of this site, and the company has agreed to offsite disposal of the waste material.
For a discussion of contingencies, including a detailed discussion of the West Chicago matter, reference is made to the Environmental Matters section of Management's Discussion and Analysis and Note 13 to the Consolidated Financial Statements in the 1995 Annual Report to Stockholders, which discussion and note are incorporated by reference in Item 7 and Item 8, respectively.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
None submitted during the fourth quarter of 1995.
Executive Officers of the Registrant
The following is a list of executive officers, their ages, and their positions and offices as of January 1, 1996:
Name Age Office
Frank A. McPherson 62 Chairman of the Board and Chief Executive Officer since 1983.
Luke R. Corbett 48 President and Chief Operating Officer since 1995. President of Kerr-McGee Coal Corporation since 1995. President of Kerr-McGee China Petroleum Ltd. since 1994. President of Kerr-McGee Canada Ltd. since 1989. President of Kerr- McGee Oil (U.K.) PLC since 1987. Group Vice President from 1992 until 1995. Senior Vice President from 1991 until 1992. Vice President, Oil and Gas Exploration from 1987 until 1991.
Wayne T. Ewing 62 Senior Vice President since 1995. Executive Vice President of Marketing for Kerr-McGee Coal Corporation from 1993 until 1995. Executive consultant from 1990 until 1993.
George R. Hennigan 60 Senior Vice President since 1991. President of Kerr-McGee Chemical Corporation since 1991. Executive Vice President, Kerr-McGee Chemical Corporation from 1984 until 1991.
John C. Linehan 56 Senior Vice President and Chief Financial Officer since 1987.
Tom J. McDaniel 57 Senior Vice President since 1986 and Secretary since 1989.
Robert C. Scharp 48 Senior Vice President since 1991. Senior Vice President, Production, Exploration and Production Division since 1995. President of Kerr-McGee Coal Corporation from 1991 until 1995. Vice President of Operations for Kerr- McGee Coal Corporation from 1990 until 1991.
Michael G. Webb 48 Senior Vice President since 1993. Senior Vice President, Exploration, Exploration and Production Division since 1992. Vice President, Exploration from 1992 to 1993. Vice President, North American Onshore Exploration from 1991 until 1992. Exploration Manager, Kerr-McGee Canada Ltd. from 1988 until 1991.
R. G. Horner, Jr. 56 Vice President and General Counsel since 1986.
J. Michael Rauh 46 Vice President and Controller since 1987.
Donald F. Schiesz 58 Vice President, Safety and Environment since 1994. Senior Vice President of Kerr-McGee Chemical Corporation from 1991 until 1994. Vice President and General Manager of the Pigment Division for Kerr-McGee Chemical Corporation from 1984 until 1991.
Thomas B. Stephens 51 Vice President and Treasurer since 1985.
Jean B. Wallace 41 Vice President, Human Resources since 1989.
Dale E. Warfield 52 Vice President, General Administration since 1994. Vice President, Materials Management and Transportation from 1991 until 1994. Director of Purchasing and Materials Management from 1990 until 1991.
There is no family relationship between any of the executive officers.
PART II
Item 5.
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
Information relative to the market in which the company's common stock is traded, the high and low sales prices of the common stock by quarters for the past two years, and the approximate number of holders of common stock is furnished in Note 29 to the Consolidated Financial Statements in the 1995 Annual Report to Stockholders, which note is incorporated by reference in Item 8.
Quarterly dividends declared totaled $1.55 per share for the year 1995 and $1.52 per share for each of the years 1994 and 1993. Cash dividends have been paid continuously since 1941 and totaled $79 million in 1995, $78 million in 1994, and $73 million in 1993.
Item 6.
Item 6. Selected Financial Data
Information regarding selected financial data required in this item is presented in the schedule captioned "Six-Year Financial Summary" in the 1995 Annual Report to Stockholders and is incorporated herein by reference.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
"Management's Discussion and Analysis" in the 1995 Annual Report to Stockholders is incorporated herein by reference.
Item 8.
Item 8. Financial Statements and Supplementary Data
The following financial statements and supplementary data included in the 1995 Annual Report to Stockholders are incorporated herein by reference:
Report of Independent Public Accountants
Consolidated Statement of Income
Consolidated Statement of Retained Earnings
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Notes to Financial Statements
Item 9.
Item 9. Change in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
(a) Identification of directors -
For information required under this section, reference is made to the "Election of Directors" section of the company's proxy statement for 1996 made in connection with its Annual Stockholders' Meeting to be held on May 14, 1996.
(b) Identification of executive officers -
The information required under this section is set forth in the caption "Executive Officers of the Registrant" on pages 22 and 23 of this Form 10-K pursuant to Instruction 3 to Item 401(b) of Regulation S-K and General Instruction G(3) to Form 10-K.
(c) Compliance with Section 16(a) of the 1934 Act -
For information required under this section, reference is made to the "Compliance with Section 16(a) of the Securities Exchange Act of 1934" section of the company's proxy statement for 1996 made in connection with its Annual Stockholders' Meeting to be held on May 14, 1996.
Item 11.
Item 11. Executive Compensation
For information required under this section, reference is made to the "Executive Compensation and Other Information" section of the company's proxy statement for 1996 made in connection with its Annual Stockholders' Meeting to be held on May 14, 1996.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
For information required under this section, reference is made to the "Security Ownership" portion of the "Election of Directors" section of the company's proxy statement for 1996 made in connection with its Annual Stockholders' Meeting to be held on May 14, 1996.
Item 13.
Item 13. Certain Relationships and Related Transactions
For information required under this section, reference is made to the "Election of Directors" and "Certain Relationships and Related Transactions" sections of the company's proxy statement for 1996 made in connection with its Annual Stockholders' Meeting to be held on May 14, 1996.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. Financial Statements -
The following consolidated financial statements of Kerr- McGee Corporation and its subsidiary companies, included in the company's 1995 Annual Report to Stockholders, are incorporated by reference in Item 8:
Report of Independent Public Accountants
Consolidated Statement of Income for the Years Ended December 31, 1995, 1994, and 1993
Consolidated Statement of Retained Earnings for the Years Ended December 31, 1995, 1994, and 1993
Consolidated Balance Sheet at December 31, 1995 and 1994
Consolidated Statement of Cash Flows for the Years Ended December 31, 1995, 1994, and 1993
Notes to Financial Statements
(a) 2. Financial Statement Schedules -
Report of Independent Public Accountants on Financial Statement Schedule
Schedule II - Valuation Accounts and Reserves for the Years Ended December 31, 1995, 1994, and 1993
Schedules I, III, IV, and V are omitted as the subject matter thereof is either not present or is not present in amounts sufficient to require submission of the schedules in accordance with instructions contained in Regulation S-X.
(a) 3. Exhibits -
Exhibit No.
3.1 Restated Certificate of Incorporation of Kerr-McGee Corporation, filed as Exhibit 3.1 to the report on Form 10-Q for the quarter ended June 30, 1987, and incorporated herein by reference.
3.2 Bylaws of Kerr-McGee Corporation, as amended, filed as Exhibit 3(b) to the report on Form 10-K for the year ended December 31, 1986, and incorporated herein by reference.
4.1 Amended and Restated Rights Agreement dated as of July 11, 1989, filed as Exhibit 1 to the report on Form 8-K dated July 13, 1989, and incorporated herein by reference.
4.2 The company agrees to furnish to the Securities and Exchange Commission, upon request, copies of each of the following instruments defining the rights of the holders of certain long-term debt of the company: the Indenture dated as of June 1, 1976, between the company and Citibank, N.A., as trustee, relating to the company's 8-1/2% Sinking Fund Debentures due June 1, 2006; the Indenture dated as of November 1, 1981, between the company and United States Trust Company of New York, as trustee, relating to the company's 7% Debentures due November 1, 2011; the Note Agreement dated as of November 29, 1989, among the Kerr-McGee Corporation Employee Stock Ownership Plan Trust (the Trust) and several lenders, providing for a loan guaranteed by the company of $125 million to the Trust; the Facilities Agreement dated March 3, 1991, providing for borrowings of up to $65 million through September 3, 1993, by National Titanium Dioxide Company Limited (Cristal), a Saudi Arabian limited liability company (owned 25% by a wholly owned subsidiary of the company), and several banks with 25% of the loans guaranteed on a several basis by a wholly owned subsidiary; the $325 million Credit Agreement dated as of August 25, 1994, providing for a five- year revolving credit facility with a bullet maturity on the fifth anniversary of the execution of the Credit Agreement; the Revolving Credit Agreement dated as of October 16, 1992, and the first amendment to the Credit Agreement dated as of December 21, 1994, among Kerr-McGee Corporation, Kerr-McGee Oil (U.K.) PLC, and several banks providing for revolving credit of up to $230 million through December 31, 1999; and the Revolving Credit Agreement dated as of February 24, 1995 between Kerr-McGee China Petroleum Ltd., as borrower, and Kerr-McGee Corporation, as guarantor, and several banks providing for revolving credit of up to $105 million through February 24, 1998. The total amount of securities authorized under each of such instruments does not exceed 10% of the total assets of the company and its subsidiaries on a consolidated basis.
4.3 Kerr-McGee Corporation Direct Purchase and Dividend Reinvestment Plan filed on Form S-3 effective August 19, 1993, Registration No. 33-66112, and incorporated herein by reference.
10.1* Deferred Compensation Plan for Non- Employee Directors as amended and restated effective October 1, 1990, filed as Exhibit 10(1) to the report filed on Form 10-K for the year ended December 31, 1990, and incorporated herein by reference.
10.2* Kerr-McGee Corporation Stock Deferred Compensation Plan for Non-Employee Directors as amended and restated effective August 1, 1995.
10.3* Description of the company's Annual Incentive Compensation Plan.
10.4* The Long Term Incentive Program as amended and restated effective May 9, 1995, filed as Exhibit 4.2 on Form 10-Q for the quarter ended March 31, 1995, and incorporated herein by reference.
10.5* Benefits Restoration Plan as amended and restated effective September 13, 1989, filed as Exhibit 10(6) to the report on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10.6* Kerr-McGee Corporation Executive Deferred Compensation Plan as amended and restated effective January 1, 1996.
10.7* Kerr-McGee Corporation Supplemental Executive Retirement Plan as amended and restated effective May 3, 1994, filed as Exhibit 10.8 on Form 10-K for the year ended December 31, 1994, and incorporated herein by reference.
10.8* Amended and restated Agreement, restated as of December 31, 1992, between the company and Frank A. McPherson filed as Exhibit 10(9) on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10.9* Amended and restated Agreement, restated as of December 31, 1992, between the company and John C. Linehan filed as Exhibit 10(10) on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10.10* Amended and restated Agreement, restated as of December 31, 1992, between the company and Luke R. Corbett filed as Exhibit 10(11) on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10.11* Amended and restated Agreement, restated as of December 31, 1992, between the company and Tom J. McDaniel filed as Exhibit 10.13 on Form 10-K for the year ended December 31, 1994, and incorporated herein by reference.
10.12* Amended and restated Agreement, as of December 31, 1992, between the company and George R. Hennigan filed as Exhibit 10(13) on Form 10-K for the year ended December 31, 1993, and incorporated herein by reference.
10.13* Form of agreement, amended and restated as of December 31, 1992, between the company and certain executive officers not named in the Summary Compensation Table contained in the company's definitive Proxy Statement for the 1995 Annual Meeting of Stockholders, filed as Exhibit 10(14) on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
12 Computations of ratio of earnings to fixed charges.
13 1995 Annual Report to Stockholders.
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
24 Powers of Attorney.
27 Financial Data Schedule (electronic filing only).
*These exhibits relate to the compensation plans and arrangements of the company.
(b) Reports on Form 8-K -
No reports on Form 8-K were filed by the Registrant during the quarter ended December 31, 1995.
Report of Independent Public Accountants On Financial Statement Schedule
To Kerr-McGee Corporation:
We have audited in accordance with generally accepted auditing standards, the consolidated financial statements included in Kerr- McGee Corporation's 1995 Annual Report to Stockholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 16, 1996. Our report on the consolidated financial statements includes an explanatory paragraph with respect to the adoption of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," in 1995 as discussed in Note 3 to the financial statements. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The Schedule of Valuation Accounts and Reserves is the responsibility of the company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic consolidated financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole.
(ARTHUR ANDERSEN LLP) ARTHUR ANDERSEN LLP
Oklahoma City, Oklahoma, February 16, 1996
SCHEDULE II
KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES VALUATION ACCOUNTS AND RESERVES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
KERR-McGEE CORPORATION
By: Frank A. McPherson* Frank A. McPherson, Chairman of the Board and Chief Executive Officer
March 29, 1996 By: (John C. Linehan) Date John C. Linehan, Senior Vice President and Chief Financial Officer
By: (J. Michael Rauh) J. Michael Rauh, Vice President and Controller and Chief Accounting Officer
* By his signature set forth below, John C. Linehan has signed this Annual Report on Form 10-K as attorney-in-fact for the officer noted above, pursuant to power of attorney filed with the Securities and Exchange Commission.
By: (John C. Linehan) John C. Linehan
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities and on the date indicated.
By: Bennett E. Bidwell* Bennett E. Bidwell, Director
By: E. H. Clark, Jr.* E. H. Clark, Jr., Director
By: Luke R. Corbett* Luke R. Corbett, Director
By: Martin C. Jischke* Martin C. Jischke, Director
By: Robert S. Kerr, Jr.* Robert S. Kerr, Jr., Director
March 29, 1996 By: Frank A. McPherson* Date Frank A. McPherson, Director
By: William C. Morris* William C. Morris, Director
By: John J. Murphy* John J. Murphy, Director
By: John J. Nevin* John J. Nevin, Director
By: Farah M. Walters* Farah M. Walters, Director
* By his signature set forth below, John C. Linehan has signed this Annual Report on Form 10-K as attorney-in-fact for the directors noted above, pursuant to power of attorney filed with the Securities and Exchange Commission.
By: (John C. Linehan) John C. Linehan