<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Kerr-McGee Corporation
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock
- - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
(5) Total fee paid:
- - --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- - --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- - --------------------------------------------------------------------------------
(3) Filing Party:
- - --------------------------------------------------------------------------------
(4) Date Filed:
- - --------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
<S> <C> <C>
[KERR-MCGEE LOGO] KERR-MCGEE CORPORATION
KERR-MCGEE CENTER
P. O. BOX 25861
OKLAHOMA CITY, OKLAHOMA 73125
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1997
</TABLE>
TO THE STOCKHOLDERS:
The 1997 Annual Meeting of Stockholders of Kerr-McGee Corporation (the
"Company") will be held in the Robert S. Kerr Auditorium, Kerr-McGee Center, 123
Robert S. Kerr Avenue, Oklahoma City, Oklahoma, at 9:00 a.m. on Tuesday, May 13,
1997, for the following purposes:
1. To elect nine directors.
2. To ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants.
3. To transact such other business as may properly come before the meeting.
The Board of Directors has fixed March 17, 1997, as the record date for
determination of stockholders entitled to notice of and to vote at this meeting.
STOCKHOLDERS OF RECORD WILL BE ADMITTED UPON VERIFICATION OF OWNERSHIP AT
THE ADMISSIONS COUNTER AT THE MEETING. BENEFICIAL OWNERS SHOULD PRESENT EVIDENCE
OF STOCK OWNERSHIP TO THE ATTENDANT AT THE ADMISSIONS COUNTER FOR ADMITTANCE TO
THE MEETING.
To ensure your representation at the meeting, please sign and promptly mail
the enclosed proxy, which is being solicited on behalf of the Board of Directors
of the Company. A return envelope, which requires no postage if mailed in the
United States, is enclosed for such purpose. If you receive more than one form
of proxy, it is an indication that your shares are registered in more than one
account. All proxy forms received by you should be signed and mailed to ensure
that all your shares are voted.
By Order of the Board of Directors
RUSSELL G. HORNER, JR.
Secretary
March 31, 1997
<PAGE> 3
KERR-MCGEE CORPORATION
KERR-MCGEE CENTER
P. O. BOX 25861
OKLAHOMA CITY, OKLAHOMA 73125
PROXY STATEMENT FOR
1997 ANNUAL MEETING OF STOCKHOLDERS
March 31, 1997
The accompanying proxy is solicited on behalf of the Board of Directors
(the "Board") of Kerr-McGee Corporation (the "Company"). This Proxy Statement
and the accompanying form of proxy are first being mailed to stockholders on or
about March 31, 1997.
Proxies in the form enclosed that are properly signed and returned will be
voted as directed, unless revoked before exercise by written notice from the
stockholder to the Secretary of the Company at the address set forth above or by
the stockholders voting by ballot at the 1997 Annual Meeting. Unless directed
otherwise, returned proxies will be voted for the election of the nominees for
director listed below and on other matters as recommended by the Board of
Directors.
Under Section 216 of the Delaware General Corporation Law and the
Kerr-McGee Corporation ByLaws ("ByLaws"), a majority of the shares of the common
stock, present in person or represented by proxy, shall constitute a quorum for
purposes of the annual meeting. In all matters other than the election of
directors, the affirmative vote of the majority of shares present in person or
represented by proxy at the annual meeting and entitled to vote on the subject
matter shall be the act of the stockholders. Abstentions will have the effect of
votes against a proposal and broker nonvotes have no effect on the vote.
Directors shall be elected by a plurality of the votes present in person or
represented by proxy at the annual meeting and entitled to vote on the election
of Directors.
VOTING SECURITIES
The Company's only class of voting securities is its common stock having a
par value of $1.00 per share (the "Common Stock"), of which there were
48,050,062 shares outstanding as of the close of business on March 17, 1997, the
record date for stockholders entitled to receive notice of and to vote at this
meeting. Each share is entitled to one vote. The number of shares outstanding
does not include shares held in treasury, which will not be voted.
ITEM NO. 1
ELECTION OF DIRECTORS
In accordance with the ByLaws, the Board has designated nine as the number
of Directors to be elected at the forthcoming Annual Meeting of Stockholders.
Eight of the nominees are incumbent Directors who were elected at the 1996
Annual Stockholders' Meeting. Mr. McDaniel was elected a Director effective
February 1, 1997. Three current Directors, Earnest H. Clark, Jr., Robert S.
Kerr, Jr., and John J. Nevin, having reached the mandatory retirement age of 70
prior to May 13, 1997, are not
1
<PAGE> 4
standing for reelection to the Board, and Frank A. McPherson retired as a
Director, as well as Chairman of the Board and Chief Executive Officer,
effective February 1, 1997.
All nominees have consented to serve, and the Company has no reason to
believe any nominee will be unavailable. Should any nominee become unavailable
for any reason, the proxies will be voted for a substitute nominee to be named
by the Board unless the number of Directors constituting a full board is
reduced. Each person elected Director at an annual meeting will be elected to
serve until the next Annual Stockholders' Meeting or until a successor is
elected.
Certain information with respect to the nominees for Director, including
their principal occupations during the past five years, is set forth below:
<TABLE>
<CAPTION>
NAME, AGE (AS OF FEBRUARY 1, 1997), FIRST BECAME
PRINCIPAL OCCUPATION & OTHER DIRECTORSHIPS A DIRECTOR
------------------------------------------ ------------
<S> <C> <C>
[PAUL M. ANDERSON PAUL M. ANDERSON, 51 -- President and Chief Executive 1996
PHOTO] Officer of PanEnergy Corp, a provider of natural gas
transportation and related services in North America
since 1995; President of PanEnergy Corp from 1993 to
1995; President of Panhandle Eastern Pipeline and Group
Vice President from 1991 to 1993. Director, TEPPCO
Partners, L.P. and Temple-Inland Inc.
------------------------------------------------------------------------
[BENNETT E. BIDWELL BENNETT E. BIDWELL, 69 -- Retired; Chairman of Pentastar 1986
PHOTO] Transportation Group, Inc., a national car rental firm,
from 1991 through 1992. Chairman of Chrysler Motors
Corporation from 1988 through 1990. Director, T I Group,
PLC.
------------------------------------------------------------------------
[LUKE R. CORBETT LUKE R. CORBETT, 49 -- Chairman of the Board and Chief 1995
PHOTO] Executive Officer of the Company since February 1, 1997;
President and Chief Operating Officer from May 1995
through January 1997; Group Vice President from 1992 to
May 1995; Senior Vice President of the Company from 1991
until 1992. Director, Devon Energy Corporation and OGE
Energy Corp.
------------------------------------------------------------------------
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
NAME, AGE (AS OF FEBRUARY 1, 1997), FIRST BECAME
PRINCIPAL OCCUPATION & OTHER DIRECTORSHIPS A DIRECTOR
------------------------------------------ ------------
<S> <C> <C>
[MARTIN C. JISCHKE MARTIN C. JISCHKE, 55 -- President of Iowa State 1993
PHOTO] University since 1991. Director, Bankers Trust
Corporation.
------------------------------------------------------------------------
[TOM J. McDANIEL TOM J. MCDANIEL, 58 -- Vice Chairman of the Company 1997
PHOTO] since February 1, 1997; Senior Vice President and
Corporate Secretary from 1989 through January 1997.
Director, Devon Energy Corporation.
------------------------------------------------------------------------
[WILLIAM C. MORRIS WILLIAM C. MORRIS, 58 -- Chairman of the Board of J. & 1977
PHOTO] W. Seligman & Co., Incorporated, Chairman of the Board
of Tri- Continental Corporation and Chairman of the
Boards of the Companies in the Seligman family of
investment companies, all since December 1988. Chairman
of the Board of Carbo Ceramics, Inc., since 1987.
------------------------------------------------------------------------
[JOHN J. MURPHY JOHN J. MURPHY, 65 -- Retired; Chairman of the Board of 1990
PHOTO] Dresser Industries, Inc., hydrocarbon energy products
and services, from 1983 through November 1996; Chief
Executive Officer of Dresser Industries, Inc., from 1983
to 1995; President of Dresser Industries, Inc. from 1982
to 1992. Director, Carbo Ceramics, Inc., PepsiCo Inc.
and NationsBank Corporation.
------------------------------------------------------------------------
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
NAME, AGE (AS OF FEBRUARY 1, 1997), FIRST BECAME
PRINCIPAL OCCUPATION & OTHER DIRECTORSHIPS A DIRECTOR
------------------------------------------ ------------
<S> <C> <C>
[RICHARD M. ROMPALA RICHARD M. ROMPALA, 50 -- President and Chief Executive 1996
PHOTO] Officer of The Valspar Corporation, a manufacturer of
paints and related coatings, since October 1995;
President of The Valspar Corporation since March 1994;
Group Vice President of PPG Industries from 1987 to
1994.
------------------------------------------------------------------------
[FARAH M. WALTERS FARAH M. WALTERS, 52 -- President and Chief Executive 1993
PHOTO] Officer of University Hospitals of Cleveland and
University Hospitals Health System, Inc. since 1992;
Executive Director of University Hospitals of Cleveland
and Senior Executive Vice President of University
Hospitals Health Systems, Inc. from 1989 to 1992.
Director, KeyBank National Association and LTV
Corporation.
</TABLE>
None of the above nominees is related to any executive officer of the
Company, its subsidiaries or affiliates.
For additional information relating to directors and executive officers,
see "Security Ownership" and "Executive Compensation and Other Compensation."
BOARD OF DIRECTORS MEETINGS, COMPENSATION AND COMMITTEES
During 1996 the Board held seven meetings. Each Director attended 75% or
more of the aggregate number of meetings of the Board and the committees of the
Board on which each such director served. Directors discharge their
responsibilities not only by attending Board and committee meetings but also
through communication with the Chairman and other members of management relative
to matters of mutual interest and concern to the Company. Board members who are
not employees of the Company are paid an annual fee of $30,000 and an additional
fee of $1,000 for each Board meeting and committee meeting attended. Directors
are reimbursed for travel expenses and lodging.
Pursuant to a Plan of Deferred Compensation adopted in 1982, any Director
who is not an employee of the Company may elect to defer compensation as a
director until such person ceases to be a director, after which the deferred
compensation, together with interest, will be paid in ten equal annual
installments.
In 1988, a Stock Deferred Compensation Plan for Non-Employee Directors was
approved. The non-employee director may elect to defer compensation as a
Director through the purchase of Common Stock on a year-by-year basis by
notifying the Company on or before December 31 of the preceding
4
<PAGE> 7
year. The stock acquired in this nonqualified plan may not be distributed to the
non-employee director until 185 days after the participant ceases being a
director.
The Board has established and currently maintains an Audit Committee, an
Executive Compensation Committee, a Nominating Committee and a Finance Committee
as standing committees.
The Audit Committee meets periodically with the Company's independent
public accountants to review plans for the audit and the audit results and
recommends selection of the independent public accountants. The Audit Committee
also meets with the Director of Internal Auditing to review the scope and
results of the Company's internal auditing activities and assessment of the
system of internal controls. The Audit Committee consists of six independent
non-employee directors: Robert S. Kerr, Jr. (Chairman), Paul M. Anderson,
Earnest H. Clark, Jr., Martin C. Jischke, Richard M. Rompala and Farah M.
Walters. The Committee met twice during 1996.
The Nominating Committee recommends nominees to the Board of Directors. The
Nominating Committee will consider recommendations for the position of director
submitted by stockholders in writing to the Corporate Secretary, Kerr-McGee
Corporation, P.O. Box 25861, Oklahoma City, Oklahoma 73125. Recommendations must
be received by the Company at least 90 days prior to the meeting at which the
Election of Directors will take place. Recommendations should include the
individual's name, mailing address, experience and a signed consent to serve.
The Nominating Committee consists of four independent non-employee directors:
Earnest H. Clark, Jr. (Chairman), Robert S. Kerr, Jr., William C. Morris and
Farah M. Walters. Frank A. McPherson served as an ex-officio member until his
retirement. The Committee did not meet in 1996.
The Executive Compensation Committee reviews the salaries and incentive pay
awards as recommended by the Chief Executive Officer for all officers of the
Company and recommends to the full Board such changes as it may deem
appropriate. It also administers the Annual Incentive Compensation Plan, the
Long Term Incentive Program, the Executive Deferred Compensation Plan and the
Supplemental Executive Retirement Plan. The Executive Compensation Committee
recommends but does not fix the cash compensation of the Chief Executive
Officer. The cash compensation of the Chief Executive Officer is determined by
all of the independent non-employee directors. The Executive Compensation
Committee consists of five independent non-employee directors: Bennett E.
Bidwell (Chairman), Martin C. Jischke, John J. Murphy, John J. Nevin and Richard
M. Rompala. The Committee met twice in 1996.
The Finance Committee reviews the annual budget, other budget and financial
matters as may be requested and strategy as may be required. The Finance
Committee consists of five independent non-employee directors: John J. Nevin
(Chairman), Paul M. Anderson, Bennett E. Bidwell, William C. Morris and John J.
Murphy. The Committee met twice in 1996.
5
<PAGE> 8
SECURITY OWNERSHIP
The following table sets forth the number of shares of Common Stock
beneficially owned as of December 31, 1996 by each director and nominee, each of
the executive officers named in the Summary Compensation Table and all directors
and officers as a group, and the percentage represented by such shares of the
total Common Stock outstanding on that date:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME OR GROUP BENEFICIALLY OWNED CLASS
------------- ------------------ ----------
<S> <C> <C>
Paul M. Anderson........................................... 305(1) *
Bennett E. Bidwell......................................... 1,994(1)
Earnest H. Clark, Jr....................................... 342(1)
Luke R. Corbett............................................ 98,978(4)
Martin C. Jischke.......................................... 2,516(1)
Robert S. Kerr, Jr......................................... 40,692(2)(3)
Tom J. McDaniel............................................ 33,663(4)
Frank A. McPherson......................................... 160,789(4)
William C. Morris.......................................... 11,200
John J. Murphy............................................. 1,284(1)
John J. Nevin.............................................. 2,134(1)
Richard M. Rompala......................................... 447(1)
Farah M. Walters........................................... 2,398(1)
John C. Linehan............................................ 87,278(4)
Robert C. Scharp........................................... 51,091(4)
All directors and executive officers as a group, including
those named above........................................ 705,349(4) 1.46
</TABLE>
- - ---------------
* The percentage of shares beneficially owned by any director, nominee or
executive officer does not exceed 1%.
(1) Includes shares held by the Stock Deferred Compensation Plan for
Non-Employee Directors.
(2) Includes (i) 15,031 shares held in two trusts of which Mr. Kerr and his wife
are co-trustees and (ii) 25,661 shares held by The Kerr Foundation, Inc. of
which Mr. Kerr is Chairman of the Board of Trustees and President.
(3) Does not include (i) 120 shares held by Mr. Kerr's wife and (ii) 350 shares
held in a trust for the benefit of one of Mr. Kerr's children of which Mr.
Kerr's wife is the Trustee in all of which beneficial interest is
disclaimed.
(4) Includes shares issuable upon the exercise of outstanding stock options that
are exercisable within 60 days of December 31, 1996: 136,799 shares for Mr.
McPherson; 86,999 shares for Mr. Corbett; 70,533 shares for Mr. Linehan;
24,533 shares for Mr. McDaniel; 46,400 shares for Mr. Scharp; and 503,011
shares for all directors and executive officers as a group.
6
<PAGE> 9
ITEM NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, an independent public accounting firm, has been
selected as the Company's independent public accountants for 1997 in accordance
with the recommendation of the Audit Committee. This firm served in the same
capacity for the year ended December 31, 1996. Representatives of Arthur
Andersen LLP will be present at the Annual Meeting to make a statement if they
desire to do so and will be available to respond to appropriate questions from
stockholders.
The stockholders will be asked to ratify the appointment of Arthur Andersen
LLP as independent public accountants for 1997. The Board of Directors
recommends a vote "FOR" ratification of the appointment of Arthur Andersen LLP.
If the appointment of Arthur Andersen LLP is not approved by the
stockholders, Arthur Andersen LLP ceases to act as the Company's independent
public accountants or the Board of Directors removes Arthur Andersen LLP as the
Company's independent public accountants, the Board will appoint other
independent public accountants.
7
<PAGE> 10
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table includes individual compensation information on the
Chief Executive Officer and the four other most highly paid executive officers
for services rendered in all capacities for the fiscal years ended December 31,
1996, 1995 and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
------------
NO. OF
ANNUAL COMPENSATION SECURITIES
-------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION(1) YEAR SALARY BONUS OPTIONS(2) COMPENSATION(3)
------------------------------ ---- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Frank A. McPherson, 1996 $698,077 $800,000 40,000 $43,077
Retired as Chairman of 1995 668,385 775,000 40,000 40,103
the Board and Chief 1994 589,000 150,000 40,000 35,340
Executive Officer effective
February 1, 1997
Luke R. Corbett, 1996 413,847 475,000 22,000 26,023
Chairman of the 1995 379,816 440,000 21,000 22,789
Board and Chief 50,000(4)
Executive Officer 1994 296,167 75,000 20,000 17,770
John C. Linehan, 1996 294,231 265,000 18,000 18,846
Executive Vice 1995 283,846 280,000 17,000 17,031
President and Chief 1994 270,000 65,000 18,000 16,200
Financial Officer
Tom J. McDaniel, 1996 269,231 245,000 11,000 17,346
Vice Chairman of 1995 259,231 260,000 15,000 15,554
the Board 1994 250,000 65,000 12,000 15,000
Robert C. Scharp, 1996 254,231 230,000 9,000 16,446
Senior Vice 1995 243,462 220,000 12,000 14,608
President 1994 206,250 50,000 11,400 12,375
</TABLE>
- - ---------------
(1) Effective February 1, 1997 upon Mr. McPherson's retirement, Luke R. Corbett
became Chairman of the Board and Chief Executive Officer. Also on that date,
Tom J. McDaniel became Vice Chairman and John C. Linehan was named Executive
Vice President and Chief Financial Officer.
(2) The Company has never granted free-standing Stock Appreciation Rights
("SARs") and has not granted tandem SARs since January 1991.
(3) Consists entirely of 401(k) Company contributions pursuant to the Savings
Investment Plan and amounts contributed under the non-qualified benefits
restoration plan. Company contributions
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<PAGE> 11
pursuant to the Savings Investment Plan for 1996 were $10,192 each to
Messrs. McPherson, Corbett, Linehan, McDaniel and Scharp. Amounts
contributed under the non-qualified benefits restoration plan for 1996 on
behalf of Messrs. McPherson, Corbett, Linehan, McDaniel and Scharp were
$32,885, $15,831, $8,654, $7,154 and $6,254, respectively. The amounts
contributed by the Company to the Kerr-McGee Corporation Benefits
Restoration Plan on behalf of such persons are identical to the amounts that
would have been contributed pursuant to the Savings Investment Plan except
for the Internal Revenue Code ("Code") limitations.
(4) On May 9, 1995, upon being named President and Chief Operating Officer, a
one-time option for 50,000 shares was granted at an exercise price of $54.50
per share, which was 100% of the fair market value of a share of Common
Stock on May 9, 1995.
STOCK OPTIONS
The following table contains information concerning stock options granted
during the fiscal year ended December 31, 1996 to the five most highly
compensated executive officers of the Company:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENT OF
NO. OF TOTAL
SECURITIES OPTIONS PER GRANT
UNDERLYING GRANTED TO SHARE DATE
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION PRESENT
NAME GRANTED(1) FISCAL YEAR PRICE DATE VALUE(2)
---- ---------- ------------ -------- ---------- --------
<S> <C> <C> <C> <C> <C>
Frank A. McPherson............... 40,000 12.9% $64.875 January 9, 2006 $501,600
Luke R. Corbett.................. 22,000 7.1 64.875 January 9, 2006 275,880
John C. Linehan.................. 18,000 5.8 64.875 January 9, 2006 225,720
Tom J. McDaniel.................. 11,000 3.5 64.875 January 9, 2006 137,940
Robert C. Scharp................. 9,000 2.9 64.875 January 9, 2006 112,860
</TABLE>
- - ---------------
(1) All stock options granted in 1996 were non-qualified stock options. The
exercise price per option is 100% of the fair market value of a share of
Common Stock on the date of grant. No option expires more than ten years
from the date of grant. At or after the grant of an option, the Executive
Compensation Committee may, in its discretion, grant a participant a SAR. A
SAR is only exercisable during the term of the associated option. No SARs
were granted in 1996, nor have any been granted since 1991. Options may also
provide that, upon the commencement of any tender offer for at least 25% of
the outstanding Common Stock, all options and any accompanying SARs held for
more than six months shall become immediately exercisable in full. If an
optionee and the Company have previously agreed, the option shall be
automatically repurchased by the Company at its fair market value if any
person has made a successful tender offer for the Common Stock that,
together with shares then owned by such person, would be 25% or more of the
outstanding shares of Common Stock. The purchase price will generally be the
difference between the tender offer price and the exercise price of the
option. All executive officers of the Company have agreed to this automatic
repurchase provision with respect to all their options.
(2) The present value was computed in accordance with the Black-Scholes option
pricing model, with assumptions consistent with the Statement of Financial
Accounting Standards No. 123,
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<PAGE> 12
"Accounting for Stock-Based Compensation", as permitted by the rules of the
Securities and Exchange Commission. Based on Black-Scholes, the value on
January 9, 1996, the grant date, was $12.54 per option. The Company
believes, however, that it is not possible to accurately determine the value
of options at the time of grant using any option pricing model, including
Black-Scholes, since any valuation depends on numerous assumptions. The
model assumes: (a) an expected option term of 5.8 years; (b) interest rate
of 5.46% which represents the U.S. Treasury Strip Rate at the date of grant
with maturity corresponding to the expected option term; (c) volatility of
17.97% calculated using monthly stock prices for the 5.8 years prior to the
date of the grant; and (d) dividends at an average annual dividend yield of
3.07% for the ten years prior to December 31, 1996.
OPTION/SAR EXERCISES AND HOLDINGS
The following table sets forth information for the named executives with
respect to options/SARs exercised during 1996 and the value of unexercised
options/SARs held as of December 31, 1996.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS
SHARES DECEMBER 31, 1996 AT DECEMBER 31, 1996(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Frank A. McPherson.......... 6,956 $877,543 96,799 80,001 $2,638,724 $1,350,026
Luke R. Corbett............. 2,877 366,875 65,999 76,001 1,635,240 1,290,853
John C. Linehan............. -- -- 52,866 35,334 1,468,701 589,268
Tom J. McDaniel............. 11,833 237,144 11,867 25,000 309,946 452,625
Robert C. Scharp............ -- -- 35,600 20,800 966,294 378,600
</TABLE>
- - ---------------
(1) Options/SARs are "in-the-money" if the fair market value of the Common Stock
exceeds the exercise price. At December 31, 1996, the closing price of the
Common Stock on the New York Stock Exchange was $72.00.
10
<PAGE> 13
RETIREMENT PLANS
The Company maintains retirement plans for all employees, including
officers. The following table shows the estimated annual pension benefits
payable to a covered participant at normal retirement age under the Company's
qualified defined benefit plan, as well as the nonqualified benefits restoration
plan that provides benefits that would otherwise be denied participants by
reason of certain Code limitations on qualified plan benefits, based on
remuneration that is covered under the plans and years of service with the
Company and its subsidiaries:
RETIREMENT PLAN TABLE
<TABLE>
<CAPTION>
AVERAGE ANNUAL 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
COMPENSATION SERVICE SERVICE SERVICE SERVICE SERVICE
- - -------------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 400,000.......................... $ 93,932 $125,242 $156,553 $187,864 $ 219,174
600,000.......................... 141,932 189,242 236,553 283,864 331,174
800,000.......................... 189,932 253,242 316,553 379,864 443,174
1,000,000.......................... 237,932 317,242 396,553 475,864 555,174
1,200,000.......................... 285,932 381,242 476,553 571,864 667,174
1,400,000.......................... 333,932 445,242 556,553 667,864 779,174
1,600,000.......................... 381,932 509,242 636,553 763,864 891,174
1,800,000.......................... 429,932 573,242 716,553 859,864 1,003,174
</TABLE>
Covered compensation under the retirement plans consists of salary and
bonus as reflected in the Summary Compensation Table plus pre-tax Section 125
and 401(k) benefit contributions as reflected under All Other Compensation in
the Summary Compensation Table, based on the highest 36 consecutive months over
the previous 120 months prior to retirement. Amounts shown have been computed on
a straight-life annuity basis. As of December 31, 1996, Mr. McPherson had 34
years of credited service; Mr. Corbett, 11; Mr. Linehan, 11; Mr. McDaniel, 12;
and Mr. Scharp, 21.
Pursuant to the Company's Supplemental Executive Retirement Plan (the
"SERP"), adopted effective January 1, 1991, and revised May 3, 1994, certain key
senior executives are eligible to receive supplemental retirement benefits. The
SERP is a defined benefit plan and is administered by the Executive Compensation
Committee (the "Committee"). Management recommends to the Committee employees
for participation in the SERP, and the Committee then selects the participants.
Eligible employees may receive benefits under the SERP upon retirement on or
after age 62, upon retirement prior to age 62 if the employee is disabled or
dies, or upon a change of control of the Company, or if termination of service
from the Company occurs under certain circumstances. Benefits under the SERP
equal a specified percentage of an eligible employee's final average monthly
compensation at retirement in the form of a monthly income for life payable as
an actuarially equivalent tax-equalized lump sum. Generally, the SERP benefit at
retirement is calculated by determining (i) the eligible employee's final
average monthly compensation multiplied by a percentage based on years of
Company service minus (ii) the sum of the anticipated monthly amounts payable to
the eligible employee as a primary social security benefit and monthly amounts
payable under the Company's qualified and non-qualified defined benefit plans.
The plan provisions establish a minimum benefit for employees who were
participants before May 3, 1994, regardless of the years of Company service.
11
<PAGE> 14
The percentage of final average monthly compensation used to determine the
SERP benefit ranges from 40% to 70%, depending on when the executive became a
participant in the SERP, the age at which the employee retires and the reason
for the retirement. As of December 31, 1996, the estimated lump sum SERP benefit
payable upon retirement to the executive officers named in the Summary
Compensation Table -- assuming (i) retirement at age 62 (except Mr. McPherson
who retired effective February 1, 1997 at the age of 63) and (ii) salaries are
maintained at their current level, is: Mr. McPherson, $1,627,885; Mr. Corbett,
$1,042,883; Mr. Linehan, $930,284; Mr. McDaniel, $1,370,519 and Mr. Scharp,
$315,664.
EMPLOYMENT AND CONSULTING AGREEMENTS
The Company does not have Employment Agreements in force with any of the
executive officers.
Mr. McPherson retired as Chairman of the Board and Chief Executive Officer
of the Company on February 1, 1997. Mr. McPherson has agreed to serve as a
consultant to the Company for a period of two years following his retirement,
which period may be extended by the Company for one additional year. Mr.
McPherson will be reimbursed for his consulting services at the rate of $300,000
per year and will receive life insurance coverage at least equal to the coverage
previously provided prior to his retirement under the Company's group life
insurance plan. Mr. McPherson has agreed not to engage in certain activities
which compete in any material respect with any business of the Company. Upon a
change in control of the Company, amounts remaining unpaid under the agreement
will be immediately paid to Mr. McPherson and the agreement will remain in
effect in accordance with its terms.
CHANGE OF CONTROL ARRANGEMENTS
With respect to Messrs. McPherson, Corbett, Linehan, McDaniel and Scharp,
as well as certain other executive officers, the Company has agreed to provide
certain benefits in the event of a "change of control" (as defined) of the
Company. If a change of control of the Company occurs, the executive whose
employment is subsequently terminated for any reason other than death,
disability or "cause" (as defined), or who subsequently terminates employment
for "good reason" (as defined), will be entitled to receive a maximum lump sum
cash payment equal to three times the executive's annual base salary. In
addition, upon such termination, the executive will be entitled to receive
amounts that he or she would otherwise have been entitled to receive under the
SERP with the specified percentage multiplier being 70% or the amount as
determined when the SERP is calculated using the eligible employee's service, as
described under "Retirement Plans" above. The Company also has made provision
under its Benefits Restoration Plan for the crediting of additional years of age
and service to certain executive officers, including those named in the Summary
Compensation Table, whose employment is terminated under the circumstances
described above following a change of control of the Company. If an executive
who has been granted options and the Company have previously agreed, options
shall be automatically repurchased by the Company if any person has made a
successful tender offer for the Common Stock that, together with shares then
owned by such person, would be 25% or more of the outstanding shares of Common
Stock. The purchase price will generally be the difference between the tender
offer price and the exercise price of the options. All executive officers of the
Company have agreed to this automatic repurchase provision with respect to all
their options. In addition, in the event any person acquires 25% or more of the
outstanding Common Stock, restrictions on shares of restricted stock shall
lapse.
12
<PAGE> 15
REPORT ON EXECUTIVE COMPENSATION
The Executive Compensation Committee (the "Committee") is comprised of five
independent non-employee directors and is responsible for administering
compensation programs that make it possible for the Company to attract and
retain employees with the skills and attitudes necessary to provide the Company
with a fully competitive and capable management.
The Committee reviews the salaries and incentive pay awards as recommended
by the Chief Executive Officer (the "CEO") for the officers of the Company. It
recommends to the full Board such changes as it may deem appropriate. The
Committee recommends but does not fix the compensation of the CEO, which is
determined by all of the independent non-employee directors. Set forth below is
the report on the Company's executive compensation policies for 1996 and how
they affected the Company's CEO and the Company's other officers (including the
four other highest paid officers).
The Company seeks to provide fully competitive levels of total compensation
for its key executives through a mix of base salaries, annual incentive pay,
long-term incentives and other benefits. The Committee believes that incentive
or "at risk" compensation is a key ingredient in motivating executive
performance to maximize shareholder value and align executive performance with
company objectives. Total compensation is targeted to be competitive at the
median level of a peer group of comparable energy and chemical companies, which
includes companies constituting the S&P Domestic Integrated Oil Index referred
to in the Performance Graph on page 16, as well as other comparable energy and
chemical companies selected with the assistance of an independent consulting
firm to be representative of the Company's size and business activities (the
"Comparison Group"). Since the Company has a substantial amount of its business
outside the United States, its compensation policies must also be
internationally competitive and flexible. This both attracts and retains high
quality management, as well as facilitating global management.
BASE SALARIES
In determining base salaries for executive officers, the Committee annually
reviews current competitive market compensation data of the Comparison Group
prepared by an independent consulting firm. The Committee's policy is to set
executive officers' base salaries at or near the median of base salaries of
comparable positions within the Comparison Group to enable the Company to be
competitive and to attract and retain key executives. When salary increases are
made, the Committee also takes into consideration the individual's performance
based on the CEO's evaluation of the executive officer's performance, the
Board's evaluation of the CEO's performance and all executive officers' current
and prior job related experience and tenure. No specific weight is assigned to
any individual factor in determining salary increases.
ANNUAL INCENTIVE COMPENSATION
The Company's Annual Incentive Compensation Plan (the "AICP") provides an
opportunity for key employees to earn supplemental incentive compensation each
year if the Company's financial targets are met or exceeded. The Committee
believes that setting threshold and competitive target returns is the
appropriate approach to annual incentive pay.
13
<PAGE> 16
Before the AICP awards are made, the Company must earn a minimum return on
average capital employed ("ROACE") established by the Committee at the beginning
of the year. The amount of each executive officer's award is directly related to
the amount by which the threshold ROACE is exceeded and to the position and
performance of the individual executive officer.
In 1996, Kerr-McGee's financial results exceeded budget projections and the
Company achieved historical record earnings. The rolling five-year average total
return to stockholders as reflected in the chart on page 16, exceeds the S&P 500
and the Domestic Integrated Oil stocks. The 1996 ROACE threshold was exceeded,
triggering incentive compensation awards. Awards for Mr. McPherson and the four
other highest paid officers are set forth in the Summary Compensation Table. The
total awards granted corporate officers in any given year may not exceed 1.7% of
pretax income from continuing operations, before extraordinary and unusual
items.
LONG-TERM INCENTIVES
The Company's stockholders have approved the use of Company stock in the
form of stock options and restricted stock awards to provide long-term
incentives for the Company's key executives. No restricted stock awards were
granted in 1996. The Committee believes that the use of stock options provides a
direct relationship between the executives' compensation and the stockholders'
interests and is an important key employee retention tool that rewards long-term
management performance measured by corporate results. The aggregate value of
stock options granted to each executive officer, including the CEO, is based on
a percentage of the individual's salary. The percentage is set annually by the
Committee after considering surveys and reports by an independent consulting
firm as to competitive awards made within the Comparison Group, as well as the
individual's level of responsibility and a subjective performance evaluation.
The amount and terms of prior awards were also considered by the Committee when
making 1996 awards. The number of stock options granted in 1996 to Mr. McPherson
and the four other highest paid officers is set forth in the Option Grants
Table.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Chief Executive Officer's compensation is determined in accordance with
the policies described above, including consideration by the Committee of
competitive compensation of CEOs within the Comparison Group compiled by an
independent consulting firm. Mr. McPherson's annual base salary was last
increased in February 1996 to $700,000.
In 1996, the Company's overall financial results exceeded projections with
net income at a record high. Kerr-McGee's total return -- stock price
appreciation plus dividends -- to stockholders for 1996 was 16%. For the five
years ended December 31, 1996, the Company's total return to stockholders ranked
among the top three companies in its industry peer group. Under Mr. McPherson's
leadership, the Company successfully completed its E&P restructuring program,
continued its Stock Repurchase Program and positioned its business units for
improved financial results. In determining Mr. McPherson's compensation, no
specific weight was assigned by the Committee to any individual factor. The
Committee believes that Mr. McPherson's leadership played a major role in the
Company's performance and awarded Mr. McPherson a 1996 incentive award under the
Company's AICP as shown in the Summary Compensation Table.
14
<PAGE> 17
The Committee believes that executive compensation for 1996 appropriately
reflects its policy to align such compensation with overall business strategy,
values and management initiatives and to ensure that the Company's goals and
performance are consistent with the interests of its stockholders.
FEDERAL INCOME TAX DEDUCTIBILITY
Code Section 162(m) generally limits the corporate deduction on
compensation paid to an executive officer in excess of $1 million. The Company
has adopted a Deferred Compensation Plan that allows executive officers to defer
a portion of salary or incentive pay. At the current time it is not mandatory
that an executive officer defer any compensation in any taxable year. The
Company has determined that the impact to the Company of being unable to deduct
that portion of annual incentive pay to such officers that together with their
base salary, exceeds $1 million, will be minimal. The Committee believes it is
in the stockholders' interest to maintain compensation plans that support the
achievement of long-term strategic objectives and enhance stockholder value.
Submitted by:
EXECUTIVE COMPENSATION COMMITTEE
Bennett E. Bidwell, Chairman
Martin C. Jischke
John J. Murphy
John J. Nevin
Richard M. Rompala
OTHER INDEPENDENT NON-EMPLOYEE DIRECTORS
Paul M. Anderson
Earnest H. Clark, Jr.
Robert S. Kerr, Jr.
William C. Morris
Farah M. Walters
15
<PAGE> 18
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total return to stockholders on the Company's Common Stock
against the cumulative total return of the S&P 500 Index and the S&P Domestic
Integrated Oil Index for the five year period 1992 through 1996.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
KERR-MCGEE CORPORATION
S&P 500 INDEX AND S&P DOMESTIC INTEGRATED OIL INDEX
[GRAPH]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Assumes $100 invested on
December 31, 1991
S&P 500 100 108 118 120 165 203
KMG 100 121 125 132 187 217
S&P Domestic
Integrated Oil
Index 100 102 108 113 129 161
</TABLE>
Year-end index
Data supplied by Compustat
STOCKHOLDER PROPOSALS
Stockholder proposals for the 1998 Annual Meeting must be received at the
principal executive offices of the Company no later than December 1, 1997.
16
<PAGE> 19
EXPENSE OF SOLICITATION
The cost of this proxy solicitation will be borne by the Company. To assist
in the proxy solicitation, the Company has engaged Georgeson & Co. for a fee of
$13,500 plus out-of-pocket expenses. The Company will reimburse brokers, banks
or other persons for reasonable expenses in sending proxy material to beneficial
owners. Proxies may be solicited through the mail, telephonic or telegraphic
communications or meetings with stockholders or their representatives by
directors, officers and other employees of the Company who will receive no
additional compensation.
OWNERSHIP OF STOCK OF THE COMPANY
To the best of the Company's knowledge, no person beneficially owned more
than 5% of any class of the Company's outstanding voting securities at the close
of business on March 17, 1997, except as set forth below:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
TITLE NAME AND ADDRESS OF BENEFICIAL PERCENT
OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
-------- ------------------- ---------- --------
<S> <C> <C> <C>
Common Stock............... FMR Corp. 3,626,290(1) 7.48%
82 Devonshire Street
Boston, MA 02109-3614
Common Stock............... State Street Bank and Trust Company 3,138,976(2) 6.50%
225 Franklin St.
Boston, MA 02110
</TABLE>
- - ---------------
(1) Based on a Schedule 13G for the year ended December 31, 1996, FMR Corp. has
sole voting power over 254,283 shares and sole power to dispose over
3,626,290 shares. FMR Corp. reports that it holds no shares over which it
has shared voting or shared disposition power.
(2) Based on a Schedule 13G for the year ended December 31, 1996, State Street
Bank and Trust Company has sole voting power over 464,491 shares, sole power
to dispose over 592,828 shares, shared voting power over 2,538,685 and
shared power to dispose over 2,546,148 shares. Included in these totals are
shares the reporting person holds as Trustee of the Company's Employee Stock
Ownership Plan for the benefit of the Plan participants. The decisions with
respect to the voting and disposition are made by the Plan participants.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who own more than 10% of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission ("SEC") and the New York Stock Exchange initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Officers, directors and greater than 10%
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
17
<PAGE> 20
To the Company's knowledge, based solely on the information furnished to
the Company and written representations that no other reports were required
during the fiscal year ended December 31, 1996, all applicable Section 16(a)
filing requirements were complied with except that Robert S. Kerr, Jr. made a
late filing of a Form 4 to report one transaction.
OTHER MATTERS
The Company does not know of any matters to be presented at the meeting
other than those set out in the notice preceding this Proxy Statement. If any
other matters should properly come before the meeting, it is intended that the
persons named on the enclosed proxy will vote said proxy therein at their
discretion.
RUSSELL G. HORNER, JR.
Secretary
18
<PAGE> 21
===============================================================================
BY SIGNING AND PROMPTLY RETURNING THE ENCLOSED PROXY CARD, YOU WILL SAVE YOUR
COMPANY THE EXPENSE OF ADDITIONAL MAILING AND SOLICITATION COSTS.
- - -------------------------------------------------------------------------------
THIS PROXY MATERIAL HAS BEEN FORWARDED TO YOU BECAUSE YOU WERE A STOCKHOLDER ON
THE RECORD DATE, MARCH 17, 1997.
IT IS IMPORTANT THAT YOU VOTE AND SIGN THE PROXY CARD AND RETURN IT IN THE
ENCLOSED ENVELOPE AS SOON AS POSSIBLE.
===============================================================================
[KERR-MCGEE CORPORATION LOGO]
<PAGE> 22
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
[KERR KERR-McGEE The undersigned hereby appoints Luke R. Corbett, Tom J. McDaniel and Russell G.
MCGEE CORPORATION Horner, Jr., and each of them, as Proxies, each with the power to appoint his
LOGO] PROXY substitute, and hereby authorizes them to represent and to vote, as designated
Kerr-McGee Center below, all the shares of Common Stock of Kerr-McGee Corporation held of record
P. O. Box 25861 by the undersigned on March 17, 1997 at the Annual Meeting of Stockholders to
Oklahoma City, Oklahoma be held on May 13, 1997 or any adjournment thereof (1) as hereinafter specified
73125 on the matters as more particularly described in the Company's proxy statement
and (2) in their discretion on any such other business as may properly come
before the meeting.
</TABLE>
(CONTINUED ON BACK)
- - --------------------------------------------------------------------------------
<PAGE> 23
- - --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE "FOR" ITEMS 1 AND 2
1. ELECTION OF DIRECTORS
Paul M. Anderson, Bennett E. Bidwell, Luke R. Corbett, Martin C.
Jischke, Tom J. McDaniel, William C. Morris, John J. Murphy, Richard
M. Rompala and Farah M. Walters.
<TABLE>
<S> <C> <C>
[ ] FOR [ ] WITHHOLD [ ] WITHHOLD for the following only, write name(s): ------------------------
----------------------------------------------------------------------------------------------------------
</TABLE>
2. Ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants.
[ ] FOR [ ] WITHHOLD [ ] ABSTAIN
The Proxies are authorized to vote in their discretion upon such
other business as may properly come before the meeting. If no
direction is given, this proxy will be voted FOR items 1 and 2.
<TABLE>
<S> <C>
Dated , 1997 Signature
----------------------------------- -------------------------------------------------
Signature, if held jointly --------------------------------
</TABLE>
Please sign exactly as the name appears above. When signing as
attorney, executor, administrator, trustee or guardian, please give
full title. If a corporation, please sign full corporation name by
president or other authorized officer. If a partnership, please sign
in partnership name by authorized person.
- - -------------------------------------------------------------------------------
<PAGE> 24
March 31, 1997
To Participants In The Kerr-McGee Corporation
SAVINGS INVESTMENT PLAN and the
EMPLOYEE STOCK OWNERSHIP PLAN Dated September 12, 1989:
As a participant in the Kerr-McGee Corporation Savings Investment Plan
("SIP") and the Kerr-McGee Corporation Employee Stock Ownership Plan dated
September 12, 1989 ("ESOP"), you owned shares of Common Stock of the Company on
March 17, 1997, the record date for stockholders entitled to vote at the annual
stockholders' meeting to be held on May 13, 1997. This stock is held in trust by
Bank of New York as Trustee for the SIP and State Street Bank and Trust Company,
as Trustee for the ESOP.
Each plan provides that the shares of Common Stock of the Company which
have been allocated to your account will be voted by the Trustees in accordance
with your written instructions. Both the SIP and ESOP provide that shares
allocated to participants for which no voting instructions are received shall be
voted by the Trustees in the same proportion as those allocated shares for which
instructions are received. The ESOP also provides that shares which have not yet
been allocated (approximately 1.3 million shares of the nearly 2.6 million
shares in the ESOP) shall also be voted by the Trustees in the same proportion
as those allocated shares for which instructions are received.
Your vote is important! You are urged to complete and mail your voting
instructions promptly. IF THE TRUSTEES DO NOT RECEIVE VOTING INSTRUCTIONS FROM
YOU, THE SHARES IN BOTH PLANS FOR WHICH NO INSTRUCTIONS ARE RECEIVED AND THE
UNALLOCATED SHARES IN THE ESOP WILL BE VOTED IN THE SAME PROPORTION AS THE TOTAL
SHARES FOR WHICH INSTRUCTIONS ARE RECEIVED BY THE TRUSTEES.
Enclosed for your information and use are the following:
1. Notice of the Annual Meeting and Proxy Statement. (Since your shares
will be voted through the Trustees, the enclosed voting instructions
replace the Proxy referred to in the Proxy Statement.)
2. Voting instructions to the Trustee for each Plan for your use in
directing the Trustees to vote your shares. THE SHARES ALLOCATED TO YOUR
ACCOUNTS ARE NOTED ON THE ENCLOSED VOTING INSTRUCTIONS.
3. A postage-paid, self-addressed envelope for your use in returning your
voting instructions to Liberty Bank and Trust Company of Oklahoma City,
N.A., which will tabulate the voting instructions for each Trustee.
Very truly yours,
KERR-McGEE CORPORATION
BENEFITS COMMITTEE
By:
------------------------------------
John C. Linehan, Chairman
<PAGE> 25
VOTING INSTRUCTIONS TO THE TRUSTEES
FOR ANNUAL STOCKHOLDERS' MEETING OF
KERR-MCGEE CORPORATION
TO BE HELD ON MAY 13, 1997
Bank of New York, Trustee State Street Bank & Trust Co.,
Kerr-McGee Corporation Trustee
Savings Investment Plan Kerr-McGee Corporation
One Wall Street, 8th Floor Employee Stock Ownership Plan
New York, NY 10286 P.O. Box 1994
Boston, MA 02101
- - --------------------------------------------------------------------------------
I hereby direct that all my shares of Kerr-McGee Corporation common stock, the
voting of which I am entitled to direct pursuant to the Kerr-McGee Corporation
Savings Investment Plan ("SIP") and the Kerr-McGee Corporation Employee Stock
Ownership Plan ("ESOP"), be voted by Bank of New York (as Trustee of the SIP)
and State Street Bank and Trust Co. (as Trustee of the ESOP) at the Annual
Meeting of Stockholders on May 13, 1997, as follows:
---------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE "FOR" ITEMS 1 and 2.
---------------------------------------------------------------
1. ELECTION OF DIRECTORS SIP ESOP
Paul M. Anderson,
Bennett E. Bidwell, ____ FOR ____ FOR
Luke R. Corbett,
Martin C. Jischke, ____ WITHHOLD ____ WITHHOLD
Tom J. McDaniel,
William C. Morris, ____ WITHHOLD for ____ WITHHOLD for
John J. Murphy, the following the following
Richard M. Rompala, only, write only, write
Farah M. Walters. name(s) name(s)
__________________ __________________
2. To ratify the appointment of ____ FOR ____ FOR
Arthur Andersen LLP as the
Company's independent public ____ AGAINST ____ AGAINST
accountants.
____ ABSTAIN ____ ABSTAIN
The Trustees are authorized to grant the Proxies authority to vote in their
discretion upon such other business as may properly come before the meeting.
- - --------------------------------------------------------------------------------
Because the SIP and ESOP are separate plans, you are entitled to vote
separately the shares of Kerr-McGee Corporation common stock you hold in each
plan.
Please sign below. The Trustees will vote your shares as you direct. IF YOU
SIGN BELOW, BUT DO NOT GIVE ANY INSTRUCTIONS OR GIVE ONLY PARTIAL INSTRUCTIONS
WITH RESPECT TO EITHER THE SIP OR THE ESOP, THE TRUSTEE FOR THAT PLAN WILL VOTE
FOR ITEMS 1 AND 2. Please sign exactly as your name appears below.
If you do not return voting instructions to the Trustees, the shares for which
no instructions are received will be voted in the same proportion by each
Trustee as the total shares for which instructions are received by such Trustee.
------------------------------
Signature of Participant
------------------------------
Social Security Number
, 1997
------------------------
Date
<PAGE> 26
March 31, 1997
To Participants In The Kerr-McGee Corporation
SAVINGS INVESTMENT PLAN:
As a participant in the Common Stock Fund of the Kerr-McGee Corporation
Savings Investment Plan ("Plan"), you owned shares of Common Stock of the
Company on March 17, 1997, the record date for stockholders entitled to vote at
the annual stockholders' meeting to be held on May 13, 1997. This stock is held
in trust by Bank of New York, as Trustee.
The Plan provides that shares of Common Stock of the Company which have
been allocated to your Participant Contribution Account and Company Contribution
Account will be voted by the Trustee in accordance with your written
instructions. So that your instructions may be received and tabulated by the
Trustee in sufficient time to vote according to your instructions, you are urged
to complete and mail your voting instructions promptly. IF THE TRUSTEE DOES NOT
RECEIVE VOTING INSTRUCTIONS FROM YOU, YOUR SHARES WILL BE VOTED IN THE SAME
PROPORTION AS THE TOTAL SHARES FOR WHICH INSTRUCTIONS ARE RECEIVED BY THE
TRUSTEE.
Enclosed for your information and use are the following:
1. Notice of the Annual Meeting and Proxy Statement. (Since your shares
will be voted through the Trustee, the enclosed voting instructions
replace the Proxy referred to in the Proxy Statement.)
2. Voting instructions to the Trustee for your use in directing the Trustee
to vote your shares. THE SHARES ALLOCATED TO YOUR ACCOUNTS ARE NOTED ON
THE ENCLOSED VOTING INSTRUCTIONS.
3. A postage-paid, self-addressed envelope for your use in returning your
voting instructions to Liberty Bank and Trust Company of Oklahoma City,
N.A., which will tabulate the voting instructions for the Trustee.
Very truly yours,
KERR-McGEE CORPORATION
BENEFITS COMMITTEE
By:
------------------------------------
John C. Linehan, Chairman
<PAGE> 27
VOTING INSTRUCTIONS TO THE TRUSTEE
FOR ANNUAL STOCKHOLDERS' MEETING OF
KERR-MCGEE CORPORATION
TO BE HELD ON MAY 13, 1997
Bank of New York, Trustee
Kerr-McGee Corporation
Savings Investment Plan
One Wall Street, 8th Floor
New York, NY 10286
- - --------------------------------------------------------------------------------
I hereby direct that all my shares of Kerr-McGee Corporation common stock, the
voting of which I am entitled to direct pursuant to the Kerr-McGee Corporation
Savings Investment Plan ("SIP"), be voted by Bank of New York, (as Trustee of
the SIP) at the Annual Meeting of Stockholders on May 13, 1997, as follows:
---------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE "FOR" ITEMS 1 and 2.
---------------------------------------------------------------
1. ELECTION OF DIRECTORS SIP
Paul M. Anderson,
Bennett E. Bidwell, FOR
Luke R. Corbett, -----
Martin C. Jischke, WITHHOLD
Tom J. McDaniel, -----
William C. Morris, WITHHOLD for the
John J. Murphy, ----- following only, write
Richard M. Rompala, name(s)
Farah M. Walters.
--------------------
2. To ratify the appointment of FOR
Arthur Andersen LLP as the -----
Company's independent public AGAINST
accountants. -----
ABSTAIN
-----
The Trustee is authorized to grant the Proxies authority to vote in their
discretion upon such other business as may properly come before the meeting.
- - --------------------------------------------------------------------------------
Please sign below. The Trustee will vote your shares as you direct. IF YOU
SIGN BELOW, BUT DO NOT GIVE ANY INSTRUCTIONS OR GIVE ONLY PARTIAL INSTRUCTIONS,
THE TRUSTEE WILL VOTE FOR ITEMS 1 AND 2. Please sign exactly as your name
appears below.
If you do not return voting instructions to the Trustee, the shares for which
no instructions are received will be voted in the same proportion by the
Trustee as the total shares for which instructions are received by the Trustee.
-------------------------------
Signature of Participant
-------------------------------
Social Security Number
, 1997
-------------------------
Date
<PAGE> 28
March 31, 1997
To Participants In The Kerr-McGee
UK EMPLOYEE SAVINGS PLAN
As a participant in the Kerr-McGee UK Employee Savings Plan, you owned shares
of Common Stock of the Company on March 17, 1997, the record date for
Stockholders entitled to vote at the Annual Stockholders' Meeting to be held on
May 13, 1997. This stock is held in Trust by Kerr-McGee Oil (U.K.) PLC, as
Trustee.
The Plan provides that shares of Common Stock of the Company which have been
allocated to your account will be voted by the Trustee in accordance with your
voting instructions. So that your voting instructions may be received and
tabulated by the Trustee in sufficient time to vote according to your
instructions, you are urged to complete and mail your voting instructions
promptly. If the Trustee does not receive voting instructions from you, the
shares for which no instructions are received will be voted in the same
proportion as the total shares for which instructions are received by the
Trustee.
The total shares allocated to your account as of December 31, 1996, the last
allocation prior to the record date, were reported on your Share Allocation
Statement. If you are unable to locate your Share Allocation Statement or wish
to know the exact number of shares you are entitled to direct the Trustee to
vote, you should contact Dawn Gardner at Kerr- McGee Oil (U.K.) PLC, 75 Davies
Street, London W1Y 1FA, Tel: 071-872-9738.
Enclosed for your information and use are the following:
1. Notice of the Annual Meeting and Proxy Statement. (Since your shares
will be voted through the Trustee, the enclosed voting instructions
replace the Proxy referred to in the Proxy Statement.)
2. Voting instructions for your use in directing the Trustee to vote your
shares.
3. A postage paid, self-addressed envelope for your use in returning your
voting instructions to the Trustee. The Trustee will forward it to
Liberty National Bank and Trust Company, the Company's Transfer Agent,
which tabulates all of the voting instructions and proxies for the
Annual Meeting.
PLEASE NOTE THAT ALL VOTING INSTRUCTIONS SHOULD BE RETURNED TO KERR-McGEE OIL
(U.K.) PLC, TO THE ATTENTION OF MS. DAWN GARDNER.
Very truly yours,
KERR-McGEE OIL (U.K.) PLC
By:
--------------------------------
Frank Sharratt, Director
<PAGE> 29
VOTING INSTRUCTIONS TO THE TRUSTEE
For Annual Stockholders' Meeting of Kerr-McGee Corporation
To Be Held on May 13, 1997
Trustee
Kerr-McGee UK Employee Savings Plan
I hereby direct that all my shares of Common Stock of Kerr-McGee Corporation in
the Kerr-McGee UK Employee Savings Plan be voted at the Annual Meeting of the
Stockholders of the Company on May 13, 1997, as follows:
The Board of Directors recommends you Vote "FOR" Items 1 and 2
1. ELECTION OF DIRECTORS
Paul M. Anderson, Bennett E. Bidwell, Luke R. Corbett, Martin
C. Jischke, Tom J. McDaniel, William C. Morris, John J. Murphy,
Richard M. Rompala, Farah M. Walters.
[ ] FOR [ ] WITHHOLD [ ] WITHHOLD VOTE ONLY
FROM
2. To ratify the appointment of Arthur Andersen LLP as the
Company's independent public accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Trustee is authorized to grant the Proxies authority to vote in their
discretion upon such other business as may properly come before the meeting.
The Trustee will vote your shares as you direct. If you sign below but do not
give any instructions, the Trustee will vote "FOR" Items 1 and 2. Please sign
below.
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Signature of Participant
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(Type or Print Name Here)
Dated , 1997.
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