COOPER CAMERON CORP, DEF 14A, 1997-03-27

COOPER CAMERON CORP
DEF 14A, 1997-03-27
OIL & GAS FIELD MACHINERY & EQUIPMENT

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<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 [X]
Filed by a Party other than the Registrant [ ]
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

COOPER CAMERON CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

- --------------------------------------------------------------------------------
(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:

- --------------------------------------------------------------------------------
(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:

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(4) Date Filed:

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<PAGE> 2

[COOPER CAMERON LOGO]
515 Post Oak Boulevard, Suite 1200
Houston, Texas 77027

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 8, 1997

To the Stockholders of
COOPER CAMERON CORPORATION:

Notice is hereby given that the Annual Meeting of Stockholders of COOPER
CAMERON CORPORATION will be held at the Doubletree Hotel at Post Oak, 2001 Post
Oak Boulevard, Houston, Texas, on Thursday, May 8, 1997, at 10:00 a.m., for the
following purposes:

1) To elect two (2) members of the Board of Directors;

2) To approve an amendment to the Amended and Restated 1995 Stock
Option Plan for Non-Employee Directors;

3) To approve the Amended and Restated Cooper Cameron Corporation
Long-Term Incentive Plan;

4) To approve the Cooper Cameron Corporation Management Incentive
Compensation Plan, as amended;

5) To transact such other business as may properly come before the
meeting and any adjournments thereof.

Only stockholders of record as of the close of business on March 14, 1997
(the "Record Date"), will be entitled to notice of and to vote at the Annual
Meeting of Stockholders or any adjournment(s) thereof.

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO COMPLETE,
DATE, SIGN AND RETURN THE ACCOMPANYING PROXY PROMPTLY IN THE ENVELOPE PROVIDED.
IF YOU DECIDE TO ATTEND THE MEETING, YOU MAY, IF SO DESIRED, REVOKE THE PROXY
AND VOTE THE SHARES IN PERSON.

By Order of the Board of Directors,

/s/ FRANKLIN MYERS

Franklin Myers
Senior Vice President, General
Counsel and Secretary

Houston, Texas
March 21, 1997
<PAGE> 3

COOPER CAMERON CORPORATION
515 POST OAK BOULEVARD, SUITE 1200
HOUSTON, TEXAS 77027

PROXY STATEMENT
FOR

ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD MAY 8, 1997

The following information is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Cooper Cameron Corporation
(the "Company") to be voted at the Annual Meeting of Stockholders of the Company
to be held at the Doubletree Hotel at Post Oak, 2001 Post Oak Boulevard,
Houston, Texas on the 8th day of May, 1997, at 10:00 a.m. local time, and at any
adjournment(s) thereof. The approximate date this Proxy Statement and the
enclosed form of proxy are first being sent to stockholders is March 24, 1997.
----------------------------------------------

INFORMATION CONCERNING PROXY
----------------------------------------------

A proxy may be revoked by a stockholder at any time prior to the exercise
thereof by filing with the Secretary of the Company a written revocation or duly
executed proxy bearing a later date, or by attending the meeting and giving
notice of such revocation. Attendance at the meeting does not by itself
constitute revocation of a proxy. Unless marked to the contrary, such proxies
will be voted for the election of the two directors, for the approval of the
amendment to the Amended and Restated 1995 Stock Option Plan for Non-Employee
Directors, for the approval of the amendment and restatement of the Cooper
Cameron Corporation Long-Term Incentive Plan and for the approval of the Cooper
Cameron Corporation Management Incentive Compensation Plan, as amended. If any
other business is brought before the meeting, the proxies will be voted in
accordance with the judgment of the persons voting the proxies.

The cost of solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by the directors,
officers and employees of the Company without additional compensation, by
personal interview, telephone, telegram, or otherwise. Arrangements also may be
made with brokerage firms and other custodians, dealers, banks and trustees, or
their nominees who hold the voting securities of record, for the forwarding of
solicitation material to the beneficial owners thereof. Upon request, the
Company will reimburse such brokers, custodians, dealers, banks, or their
nominees for the reasonable out-of-pocket expenses incurred by them in
connection therewith. In addition, the Company has retained Corporate Investor
Communications to assist in the solicitation of proxies for which the Company
will pay an estimated fee of $4,500, plus expenses and disbursements.

Cooper Cameron's Annual Report to Stockholders for the year ended December
31, 1996, including financial statements, is being mailed herewith to all
stockholders entitled to vote at the Annual Meeting. The Annual Report does not
constitute a part of the proxy soliciting material.

1
<PAGE> 4

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OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
--------------------------------------------------------------------------

On the Record Date, there were 25,641,585 shares of Common Stock of the
Company outstanding, which constituted the only outstanding voting securities.
Each share of Common Stock has one vote. The presence, in person or by proxy, of
the holders of a majority of all the outstanding shares of stock entitled to
vote at the meeting is necessary to constitute a quorum at the Annual Meeting of
Stockholders or any adjournment(s) or postponement(s) thereof. The affirmative
vote of the holders of a majority of the Company's voting stock present in
person or by proxy and entitled to vote at the meeting at which a quorum is
present is required for the election of each director, for the approval of the
amendment to the Amended and Restated 1995 Stock Option Plan for Non-Employee
Directors, for the approval of the amendment and restatement of the Cooper
Cameron Corporation Long-Term Incentive Plan, and for the approval of the Cooper
Cameron Corporation Management Incentive Compensation Plan, as amended. Proxies
marked as abstaining (including proxies containing broker non-votes) on any
matter to be acted upon by stockholders will be treated as present at the
meeting for purposes of determining a quorum, but will not be counted as votes
cast on such matters.

A copy of the list of stockholders entitled to vote at the Annual Meeting
will be available for inspection by qualified stockholders for proper purposes
at the offices of the Company during normal business hours.

For Cooper Cameron Employees: If you are a participant in the Cooper
Cameron Corporation Retirement Savings Plan ("CC-SAVE"), the accompanying proxy
card will include the number of equivalent shares credited to your account by
The Chase Manhattan Bank, N.A., as Trustee for CC-SAVE ("Trustee"). When your
proxy card is returned properly signed, it will serve as direction to the
Trustee to vote the shares held in CC-SAVE for your account in accordance with
your directions. If you return a proxy card properly signed, but do not indicate
your voting preference, the shares represented by your proxy card will be voted
FOR all items specified in the Notice. The shares of Common Stock credited to
participants' accounts for which no directions are received ("Uninstructed
Shares") will be voted by the Trustee in the same proportion (for/against) as
the shares of Common Stock for which instructions are received from CC-SAVE
participants. Properly signed proxy cards from CC-SAVE participants will serve
as a direction to the Trustee to vote all of the Uninstructed Shares in the same
manner as indicated by CC-SAVE participants. If you fail to return a proxy card
properly signed, the equivalent shares of Common Stock credited to your account
will then be voted by the Trustee in the same proportion as the shares for which
instructions were received from other CC-SAVE participants.

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<PAGE> 5

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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
--------------------------------------------------------------------------

The following table sets forth those persons who, to the knowledge of the
Company, beneficially owned five percent or more of the shares of Common Stock
outstanding as of March 14, 1997, on which date 25,641,585 shares were
outstanding.

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) CLASS
------------------------------------ ------------ -------
<S> <C> <C>
FMR Corp.................................................... 3,213,421(2) 12.5
82 Devonshire Street
Boston, Massachusetts 02109-3614
J.P. Morgan & Co., Incorporated............................. 2,815,262(3) 11.0
60 Wall Street
New York, New York 10260
T. Rowe Price Associates, Inc............................... 2,306,250(4) 9.0
100 East Pratt Street
Baltimore, Maryland 21202
Husic Capital Management.................................... 1,397,850(5) 5.5
555 California Street, Suite 2900
San Francisco, CA 94104
</TABLE>

- ---------------

(1) Except as otherwise indicated, all shares are owned directly and the owner
has sole voting and investment power with respect thereto.

(2) According to a Schedule 13G filed with the Securities and Exchange
Commission (the "SEC") by FMR Corp., as of December 31, 1996, FMR Corp. had
sole dispositive power over 3,213,421 shares. FMR Corp.'s wholly-owned
subsidiary, Fidelity Management & Research Company, is the beneficial owner
of 3,213,421 shares.

(3) According to a Schedule 13G/A filed with the Securities and Exchange
Commission by J.P. Morgan & Co., Incorporated ("J.P. Morgan"), as of
December 31, 1996, J.P. Morgan had sole voting power over 1,910,316 shares
of the Company's Common Stock, shared voting power over 34,864 shares, sole
dispositive power over 2,729,026 shares and shared dispositive power over
39,047 shares.

(4) According to a Schedule 13G filed with the SEC by T. Rowe Price Associates,
Inc. ("Price Associates"), as of December 31, 1996, Price Associates had
sole voting power over 180,250 shares and sole dispositive power over
2,306,250 shares of the Company's Common Stock. These securities are owned
by various individual and institutional investors which Price Associates
serves as investment adviser with power to direct investments and/or sole
power to vote the securities. For purposes of the reporting requirements of
the Securities Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such securities.

(5) According to a Schedule 13G filed with the SEC by Husic Capital Management,
as of December 31, 1996, Husic had shared voting power over 1,024,400 shares
and shared dispositive power over 1,397,850 shares of the Company's Common
Stock.

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<PAGE> 6

-------------------------------------------------------
PROPOSAL 1: ELECTION OF DIRECTORS

--------------------------------------------------------

The Bylaws of the Company provide that the Board of Directors will be
comprised of not less than five nor more than fifteen members. The authorized
number of directors is six, divided into three classes having two members in
Class I, two members in Class II and two members in Class III. Each class is
elected for a term of three years, so that the term of one class of directors
expires at each Annual Meeting of Stockholders.

NOMINEES

The Board of Directors has nominated C. Baker Cunningham and Sheldon R.
Erikson for election to the Board of Directors for three-year terms expiring at
the Annual Meeting of Stockholders in 2000, or when their successors are elected
and qualified. The affirmative vote of the holders of at least a majority of a
quorum is required in order to elect each director. The enclosed proxy (unless
otherwise directed, revoked or suspended) will be voted for the election of
these two nominees for director.

If any nominee should be unable to serve as a director, which is not
anticipated, the shares represented by proxies will be voted for the election of
a substitute nominated by the Board of Directors. Set forth on the following
pages are the names of and certain information with respect to, the persons
nominated as directors and the continuing directors of the Company.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF THE DIRECTOR NOMINEES.
------------------------------------
NOMINEES FOR DIRECTORS
------------------------------------

CLASS II -- TERM ENDING 2000

SHELDON R. ERIKSON

Chairman of the Board of the Company since May 1996, President and Chief
Executive Officer since January 1995, and a director since March 1995. Age 55.
He was Chairman of the Board from 1988 to 1995 and President and Chief Executive
Officer from 1987 to 1995 of The Western Company of North America, an
international petroleum service company engaged in pressure pumping, well
stimulating and cementing. Previously, he was President of the Joy Petroleum
Equipment Group of Joy Manufacturing Company. Prior to joining Joy, he served as
President of the Petroleum Services Group and the Oilfield Services Group of NL
Industries, Inc., as well as Executive Vice President and Chief Operating
Officer of Digicon, Inc., Group Vice President of the Plastic and Chemicals
Group of Hoover Universal Corporation and General Manager of the Mining Products
Department of General Electric Company. He is a director of Triton Energy
Corporation. He also serves on the board of directors of the National Ocean
Industries Association and The Petroleum Equipment Suppliers Association.

C. BAKER CUNNINGHAM

Member of Cooper Cameron's Compensation Committee and a director since
November 1996. Age 55. He is now, and has been since 1993, Chairman, President
and Chief Executive Officer of Belden Inc. He held various positions with Cooper
Industries, Inc. from 1970 to 1993, including Executive Vice President,
Operations from 1982 to 1993.

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<PAGE> 7

---------------------------------
CONTINUING DIRECTORS
--------------------------------

CLASS III -- TERM ENDING 1998

MICHAEL E. PATRICK

Member of Cooper Cameron's Audit Committee and a director since November
1996. Age 53. He has been Vice President and Chief Investment Officer of Meadows
Foundation, Inc. since 1995. He was a Managing Director and Partner with M.E.
Zukerman Energy Advisors from 1994 to 1995 and served as Executive Vice
President and Chief Financial Officer of Lomas Financial Corporation, as well as
President of Lomas Mortgage USA, from 1992 to 1994. Previously, he was Executive
Vice Chancellor for Asset Management for the University of Texas System from
1984 to 1991. He is a director of BJ Services Company and a trustee of St.
Edward's University.

MICHAEL J. SEBASTIAN

Chairman of Cooper Cameron's Audit Committee and a director since November
1994. Age 66. Mr. Sebastian retired in August 1995, after serving as Executive
Vice President, Operations of Cooper Industries, Inc. since February 1982,
responsible for Cooper's former Petroleum & Industrial Equipment segment. He is
a director of Quanex Corporation and Gardner Denver Machinery Inc.

CLASS I -- TERM ENDING 1999

GRANT A. DOVE

Chairman of Cooper Cameron's Compensation Committee and a director since
June 1995. Age 68. Mr. Dove is now, and has been since 1991, a Managing Partner
of Technology Strategies and Alliances, which performs strategic planning and
investment banking services. He was Chief Executive Officer of Microelectronics
and Computer Technology Corporation from 1987 to 1991 and currently serves as a
director. From 1982 until 1987 he was Executive Vice President of Texas
Instruments Incorporated and previously served as Senior Vice President. He is
Chairman and a director of Optek Technology, Inc., and is a director of U. S.
West, Inc., Control Data Systems, Inc., Intervoice, Inc., and the Forefront
Group, Inc.

DAVID ROSS III

Member of Cooper Cameron's Compensation Committee and a director since June
1995. Age 56. Mr. Ross is an adjunct professor and member of the Board of
Overseers of the Jesse H. Jones Graduate School of Administration at Rice
University. From 1987 until 1993 he was Chairman and Chief Executive Officer of
the Sterling Consulting Group, a firm which provides analytical research,
planning and evaluation services to companies in the oil and gas industry.
Between 1984 and 1987 he was a principal in the Sterling Group, a firm which
participates in leveraged buyouts, primarily in the chemical industry, and Camp,
Ross, Santoski & Hanzlik, Inc., which provides planning and consulting services
to the oil and gas industry.

ADVISORY DIRECTOR

NATHAN M. AVERY

Appointed an advisory director in December 1996. Age 62. Mr. Avery was a
director of the Company from June 1995 to December 1996. Mr. Avery is now, and
has been since 1972, Chairman of the Board, President and Chief Executive
Officer of Galveston-Houston Company, a company specializing in the
manufacturing of products to serve the oilfield. He has been an active
participant in the oil and gas industry since the 1960s. He was Chairman of the
Board of directors of Bettis Corporation until December 1996. He is a director
and member of the Executive Committee of Daniel Industries and a director of
Prime Cable.

5
<PAGE> 8

--------------------------------------------------------------------

PROPOSAL 2: APPROVAL OF AMENDMENT TO THE
AMENDED AND RESTATED 1995 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
--------------------------------------------------------------------

The Board of Directors has adopted, subject to stockholder approval, an
amendment to the Cooper Cameron Corporation Amended and Restated 1995 Stock
Option Plan for Non-Employee Directors (the "Directors Plan") to provide to each
director of the Company who is not an employee of the Company or any of its
subsidiaries ("Eligible Director") options in lieu of the director's annual
retainer and automatic annual option grants.

VOTE REQUIRED.

THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST WILL BE REQUIRED TO
APPROVE THE AMENDMENT TO THE DIRECTORS PLAN, PROVIDED SUCH AFFIRMATIVE VOTE ALSO
CONSTITUTES A MAJORITY OF THE QUORUM.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO
THE AMENDED AND RESTATED 1995 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS.

DESCRIPTION OF THE DIRECTORS PLAN

The following summary describes briefly the principal features of the
Directors Plan, and is qualified in its entirety by reference to the full text
of the Directors Plan, as amended by the proposed First Amendment, the full text
of which amendment is provided as Appendix A to this Proxy Statement.

General Terms.

The Board of Directors and the Company's sole stockholder adopted and
approved the Directors Plan on May 3, 1995 and adopted and approved an Amended
and Restated Directors Plan on June 28, 1995. The purpose of the Directors Plan
is to increase stockholder value and to advance the interests of the Company and
its stockholders by strengthening its ability to attract and retain the services
of experienced and knowledgeable directors and by causing each non-employee
director to acquire an equity interest in the Company by issuing stock options,
pursuant to the terms of the Directors Plan. A total of 250,000 shares of Common
Stock are reserved and available for issuance under the Directors Plan. Grants
totaling 125,421 shares have been made as of December 31, 1996, including 58,000
shares granted in May 1996, and 15,000 shares granted in November 1996. The
options granted in May and November 1996 are subject to stockholder approval of
this proposed First Amendment to the Directors Plan.

Each director of the Company who is not an employee of the Company or any
of its subsidiaries ("Eligible Director") is eligible to participate in the
Directors Plan. If the nominees for election named in this proxy statement are
elected, five directors and one advisory director will qualify as non-employee
directors under the Directors Plan in 1997.

Stock Options.

The options granted pursuant to the Directors Plan are non-qualified
options having an exercise price equal to the fair market value of the Common
Stock on the date the option is granted. Options granted under the Directors
Plan are exercisable 12 months from the date of grant. Such options terminate
and cease to be outstanding five years and one day after the date on which they
are granted. If an Eligible Director to whom an option is granted ceases to be
an Eligible Director by reason of death or disability, the option becomes
immediately exercisable in full. All outstanding options granted under the
Directors Plan become exercisable immediately if a Change in Control occurs. No
awards will be made or options granted under the Directors Plan after May 3,
2005. On March 10, 1997, the reported closing price of the Company's Common
Stock in New York Stock Exchange Composite Transactions was $68.50 per share.

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<PAGE> 9

Federal Income Tax Consequences.

The following is a brief description of the federal income tax consequences
generally arising with respect to grants of options under the Directors Plan.
This discussion is intended for the information of stockholders considering how
to vote at the Annual Meeting of Stockholders and not as tax guidance to
non-employee directors who participate in the Directors Plan. The grant of an
option will create no tax consequences for the optionee. Upon exercise of an
option, the optionee must generally recognize ordinary income at the time of the
exercise of such option measured by the excess of the then fair market value of
the shares over the option price. The Company will be entitled to claim a tax
deduction for compensation paid equal to the amount the optionee recognizes as
ordinary income. Upon a taxable disposition of shares acquired by the optionee
upon the exercise of an option, any amount received by the optionee in excess of
the sum of (i) the option price of the shares as of the date of exercise and
(ii) the amount includable in income with respect to such option, if any (such
sum being his or her "basis" in the shares), will, in general, be treated as
long- or short-term capital gain, depending upon the holding period of the
shares. If upon disposition the optionee receives less than his or her basis in
the shares, the loss will be treated as a long- or short-term capital loss,
depending upon the holding period of the shares.

DESCRIPTION OF THE AMENDMENT

The First Amendment to the Directors Plan provides for each Eligible
Director to elect to receive, in lieu of the annual retainer of $30,000 for
service on the Board, which would otherwise be paid in cash (a) a 9,000 share
stock option, (b) a 6,000 share stock option and one-third of the cash retainer,
or (c) a 3,000 share stock option and two-thirds of the cash retainer. The
Directors Plan also provides for an initial option grant of 3,000 shares of
Common Stock to each Eligible Director on the first trading date on which such
individual becomes an Eligible Director. If the Company has a non-executive
(non-full time employed) Chairman of the Board, an initial grant for 10,000
shares of Common Stock will be made on the first trading date on which such
individual becomes the non-executive Chairman of the Board. The First Amendment
to the Directors Plan further provides for the grant of an additional option for
3,000 shares of Common Stock to Eligible Directors in each subsequent year
during the term of the Directors Plan on the first trading date following the
Annual Meeting of Stockholders of the Company.

New Plan Benefits Table.

The following table sets forth the number of shares of Common Stock that
have been granted to non-employee Directors as a group under the Directors Plan
in 1996, in lieu of retainers and as automatic grants, subject to stockholder
approval of the proposed First Amendment to the Directors Plan.

AMENDED PLAN BENEFITS

1995 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

<TABLE>
<CAPTION>
POSITION NUMBER OF SHARES
-------- ----------------
<S> <C>
Non-Employee Directors as a Group (7 in number)............. 45,000 options in lieu of retainer
28,000 automatic options(1)
</TABLE>

- ---------------

(1) Includes a 10,000 share option for the former non-executive Chairman of the
Board of the Company.

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<PAGE> 10

- --------------------------------------------------------------------------------
PROPOSAL 3: APPROVAL OF THE AMENDED AND RESTATED
COOPER CAMERON CORPORATION LONG-TERM INCENTIVE PLAN
- --------------------------------------------------------------------------------

The Board of Directors has adopted the Amended and Restated Cooper Cameron
Corporation Long-Term Incentive Plan (the "Plan") which provides for long-term
compensation and incentive opportunities for executives and key employees of the
Company and its subsidiaries.

The Plan, as amended, authorizes the issuance of options to purchase up to
4,000,000 shares of Common Stock to employees of the Company for all purposes
under the Plan, including the award of stock options, stock appreciation rights,
restricted stock grants, and performance awards. The amendments to this Plan are
effective as of March 11, 1997, subject to the approval by the stockholders of
the Company.

The Board of Directors believes that the future success of the Company and
its subsidiaries and divisions is dependent upon the quality and continuity of
management, and that compensation programs have been important in attracting and
retaining individuals of superior ability and in motivating their efforts on
behalf of the Company.

VOTE REQUIRED.

THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST WILL BE REQUIRED TO
APPROVE THE PLAN, PROVIDED SUCH AFFIRMATIVE VOTE ALSO CONSTITUTES A MAJORITY OF
THE QUORUM.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDED AND
RESTATED COOPER CAMERON CORPORATION LONG-TERM INCENTIVE PLAN.

BACKGROUND AND REASONS FOR ADOPTION

Under section 162(m) of the Internal Revenue Code, the federal income tax
deductibility of compensation paid to the Company's Chief Executive Officer and
to each of its four other most highly compensated executive officers may be
limited to the extent that such compensation exceeds $1 million in any one year.
Under section 162(m), the Company may deduct compensation in excess of that
amount if it qualifies as "performance-based compensation," as defined in
section 162(m). Options granted under the Plan qualify thereunder as
performance-based compensation. Performance awards under the Plan are also
designed to qualify thereunder as performance-based compensation. Therefore,
stockholder approval of the Plan will allow the Company to continue to receive a
federal income tax deduction respecting the grant of options and performance
awards to its executives, including the Chief Executive Officer and its four
other most highly compensated executive officers.

DESCRIPTION OF THE PLAN

The following summary describes briefly the principal features of the Plan,
and is qualified in its entirety by reference to the full text of the Plan,
which is provided as Appendix B to this Proxy Statement.

General Terms.

The Board of Directors and the Company's sole stockholder adopted and
approved the Cooper Cameron Corporation Long Term Incentive Plan on May 3, 1995,
and adopted the amended and restated Plan, on March 11, 1997. The purpose of the
Plan is to promote the long-term financial interests of the Company, including
its growth and performance, by encouraging employees of the Company and its
subsidiaries and divisions to acquire an ownership position in the Company,
enhancing the ability of the Company to attract and retain employees of
outstanding ability, and providing employees with an interest in the Company
parallel to that of the Company's stockholders. The Plan initially authorized
the issuance of up to 2,500,000 shares of the Company's Common Stock, pursuant
to incentive awards under the Plan. Of the 2,500,000 shares previously available
for use under the Plan, no shares presently remain available for future grants.
Certain key employees of the Company and its subsidiaries or divisions are
eligible to participate in the Plan. Currently 121 employees have received
grants under the Plan. The maximum number of shares of Common Stock

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<PAGE> 11

subject to awards granted during any calendar year to any individual who is an
Executive Officer is limited to not more than 500,000 shares. Unless the Plan is
terminated sooner, no awards will be made or options granted under the Plan
after May 3, 2005. It is not possible to determine at this time the number of
shares of Common Stock covered by options that may be granted in the future
under the Plan to any employee.

Administration.

The Plan is administered by the Compensation Committee, which is composed
of directors of the Company who are not employees and who are not eligible to
participate in the Plan. Subject to the provisions of the Plan, the Compensation
Committee has the authority in its sole discretion to select the participants
who will receive the Awards, to determine the type and terms of the Awards to be
granted, and to interpret and administer the Plan.

Eligibility for Participation.

Officers and key employees of the Company or its subsidiaries will be
eligible to receive certain awards under the Plan.

Term of the Plan.

The Plan will terminate on May 3, 2005, after which time no additional
awards may be made under the Plan.

SUMMARY OF AWARDS UNDER THE PLAN

Types of Awards.

The Plan would permit the granting of any or all of the following types of
awards ("Awards"): (i) stock options and SARs, including incentive stock
options; (ii) stock appreciation rights; (iii) restricted stock; and (iv)
performance awards.

Stock Options and SARs.

Options granted under the Plan may be either incentive stock options or
non-qualified stock options, or a combination of both.

An option is exercisable in whole or in such installments and at such times
and upon such terms as may be determined by the Committee; provided, however,
that no stock option will be exercisable more than ten years after the date of
grant thereof. The option exercise price will equal the fair market value on the
date of the stock option's grant. Upon exercise, a participant may pay the
option exercise price of a stock option in cash, shares of Common Stock, stock
appreciation rights or a combination of the foregoing, or such other
consideration as the Committee may deem appropriate.

Awards may be granted in the form of SARs. SARs will entitle the recipient
to receive a payment, in cash or shares of Common Stock or a combination of
both, equal to the appreciation in market value of a stated number of shares of
Common Stock from the price stated in the award agreement to the fair market
value on the date of exercise or surrender. The price stated in the award
agreement will be not less than the fair market value on the date of the SAR's
grant, except that if an SAR is granted retroactively in tandem with or in
substitution for a stock option, the designated fair market value set forth in
the award agreement will be not less than the fair market value of a share for
such tandem or replaced stock option. An SAR may be granted in tandem with all
or a portion of a related stock option under the Plan ("Tandem SARs"), or may be
granted separately ("Freestanding SARs"). A Tandem SAR may be granted either at
the time of the grant of the related stock option or at any time thereafter
during the term of the stock option. A Tandem SAR will be exercisable to the
extent, and only to the extent, that the related stock option is exercisable.
Upon exercise of a Tandem SAR as to some or all of the shares covered in an
Award, the related stock option will be canceled automatically to the extent of
the number of SARs exercised, and such shares will not thereafter be eligible
for grant.

9
<PAGE> 12

Restricted Stock.

Awards may be granted in the form of restricted stock ("Restricted Stock
Awards"). Restricted Stock Awards will be awarded in such numbers and at such
times as the Committee will determine. Restricted Stock Awards will be subject
to such terms, conditions or restrictions as the Committee deems appropriate,
including, but not limited to, restrictions on transferability, requirements of
continued employment, individual performance or the financial performance of the
Company. The period of vesting and the forfeiture restrictions will be
established by the Committee at the time of grant. During the period in which
any restricted shares of Common Stock are subject to forfeiture restrictions
imposed under the preceding paragraph, the Committee may, in its discretion,
grant to the Participant to whom such restricted shares have been awarded, all
or any of the rights of a stockholder with respect to such shares, including,
but not limited to, the right to vote such shares and to receive dividends.

Performance Awards.

Awards may be granted in the form of shares of Common Stock that are earned
only after the attainment of predetermined performance goals during a
performance period as established by the Committee ("Performance Shares") or in
the form of performance awards payable in cash ("Performance Units"). The
Committee may grant an Award of Performance Shares or Performance Units to
Participants as of the first day of each Performance Period. A Performance
Target will be established at the beginning of each Performance Period. At the
end of the Performance Period, the Performance Shares or Performance Units, as
the case may be, will be converted into Common Stock (or cash or a combination
of Common Stock and cash, as determined by the Award Agreement) and distributed
to Participants based upon such entitlement. Performance criteria used in
performance goals governing Performance Share and Performance Unit Awards to
Executive Officers may include any or all of the following: (i) the Company's
return on equity, assets, capital or investment, (ii) pre-tax or after-tax
profit levels of the Company or any subsidiary or business segment of the
Company, or any combination of the foregoing, (iii) cash flow or similar
measure, (iv) total stockholder return, (v) changes in the market price of the
Common Stock, or (vi) market share. The performance goals established by the
Committee for each Performance Share Award will specify achievement targets with
respect to each applicable performance criterion (including a threshold level of
performance below which no amount will become payable with respect to such
Award). No Executive Officer may receive a Performance Share or Performance Unit
payment with respect to any calendar year which exceeds $2,000,000 or, if
greater, the fair market value of 500,000 shares of Common Stock as of the
payment date of such Awards. If a Performance Period is longer than one year,
the Performance Share or Performance Unit payment with respect to any calendar
year which is partially or wholly included in the Performance Period will be
deemed to be a pro-rated portion of the Performance Share or Performance Unit
payment with respect to the complete Performance Period. If two or more
Performance Periods run concurrently during any calendar year, the Performance
Share or Performance Unit payment with respect to such calendar year will be
deemed to be the aggregate of the allocable Performance Share payments with
respect to each such Performance Period.

Federal Income Tax Consequences.

The following is a brief description of the federal income tax consequences
generally arising with respect to grants of options under the Plan. This
discussion is intended for the information of stockholders considering how to
vote at the Annual Meeting of Stockholders and not as tax guidance to employees
who participate in the Plan. The optionee generally does not recognize income at
either the date of grant or exercise of an incentive stock option. Upon a
taxable disposition of shares acquired by the optionee upon the exercise of an
incentive stock option, the optionee receives long-term capital gain or loss
treatment for the difference between the sales price and the option price,
provided the shares are held for two years after the option is granted and one
year after the date of exercise. The Company will be entitled to claim a tax
deduction for compensation paid equal to the amount the optionee recognizes as
income in a disqualifying disposition. The grant of a non-qualified option will
create no tax consequences for the optionee. Upon exercise of a non-qualified
option, the optionee must generally recognize ordinary income at the time of the
exercise measured by the excess of the then fair market value of the shares over
the option price. The Company will be entitled to

10
<PAGE> 13

claim a tax deduction for compensation paid equal to the amount the optionee
recognizes as ordinary income. Upon a taxable disposition of shares acquired by
the optionee upon the exercise of a non-qualified option, any amount received by
the optionee in excess of the sum of (i) the option price of the shares as of
the date of exercise and (ii) the amount includable in income with respect to
such option, if any (such sum being his or her "basis" in the shares), will, in
general, be treated as long- or short-term capital gain, depending upon the
holding period of the shares. If upon disposition the optionee receives less
than his or her basis in the shares, the loss will be treated as a long- or
short-term capital loss, depending upon the holding period of the shares.

Change in Control.

The Compensation Committee has the discretion, exercisable at any time
before a Change of Control, to provide for the acceleration of vesting and for
settlement, including cash payment, of an Award granted under the Plan upon or
immediately before such event is effective. However, the granting of Awards
under the Plan will in no way affect the right of the Company to adjust,
reclassify, reorganize, or otherwise change its capital or business structure,
or to merge, consolidate, dissolve, liquidate, sell or transfer all or any
portion of its businesses or assets.

New Plan Benefits Table.

The following table sets forth, as to the executive officers of the Company
named in the Summary Compensation Table, all current officers as a group and all
other employees as a group, the number of shares covered by outstanding options
granted, as of December 31, 1996, under the Plan that will be amended if this
Proposal 3 is approved. Such options were granted with one-year, four-year and
three-year vesting periods at exercise prices that were the fair market value of
the Common Stock at the time of grant and range from $16.657 to $70.50 per
share. On March 10, 1997, the reported closing price of the Company's Common
Stock in New York Stock Exchange Composite Transactions was $68.50 per share.

PLAN BENEFITS
LONG-TERM INCENTIVE PLAN

<TABLE>
<CAPTION>
NUMBER OF
NAME POSITION OPTIONS(1)
---- -------- ----------
<S> <C> <C>
Sheldon R. Erikson............ Chairman of the Board, President and CEO 664,770
Thomas R. Hix................. Senior Vice President of Finance & CFO 295,074
Franklin Myers................ Senior Vice President, General Counsel & Secretary 260,571
Michael L. Grimes............. Vice President & President, Cooper Energy Services 38,578
E. Fred Minter................ Vice President & President, Cooper Turbocompressor 30,017
Executive Officer Group (6 persons)........................................................ 1,343,517
Non-Executive Employee Group (115 persons)(2).............................................. 1,116,698
</TABLE>

- ---------------

(1) For information on options granted in 1996 under the Plan, see Table 2,
"Option Grants in Last Fiscal Year."

(2) Directors are not eligible for participation in the Plan.

11
<PAGE> 14

- --------------------------------------------------------------------------------
PROPOSAL 4: APPROVAL OF AMENDMENT TO THE COOPER CAMERON
CORPORATION MANAGEMENT INCENTIVE COMPENSATION PLAN, AS AMENDED
- --------------------------------------------------------------------------------

The Board of Directors has adopted, subject to stockholder approval, the
Cooper Cameron Corporation Management Incentive Compensation Plan, as amended
(the "Plan") to provide for the annual award of incentive cash bonuses to key
employees of the Company and its subsidiaries based on the position of the
individual within the Company and pre-established objective measures of Company
performance.

VOTE REQUIRED.

THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST WILL BE REQUIRED TO
APPROVE THE PLAN, PROVIDED SUCH AFFIRMATIVE VOTE ALSO CONSTITUTES A MAJORITY OF
THE QUORUM.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE COOPER CAMERON
CORPORATION MANAGEMENT INCENTIVE COMPENSATION PLAN.

BACKGROUND AND REASONS FOR ADOPTION

Under section 162(m) of the Internal Revenue Code, the federal income tax
deductibility of compensation paid to the Company's Chief Executive Officer and
to each of its four other most highly compensated executive officers may be
limited to the extent that such compensation exceeds $1 million in any one year.
Under section 162(m), the Company may deduct compensation in excess of that
amount if it qualifies as "performance-based compensation," as defined in
section 162(m). The Plan is designed to qualify payments thereunder as
performance-based compensation. Stockholder approval of the Plan will allow the
Company to continue to receive a federal income tax deduction for the payment of
incentive bonuses to its executives.

DESCRIPTION OF THE PLAN

Purpose.

The purpose of the Plan is to motivate and reward key management employees
whose efforts impact the performance of the Company and its subsidiaries through
the achievement of specific company financial and/or individual goals.

Administration.

The Plan is administered by the Compensation Committee of the Board of
Directors of the Company in accordance with (1) the express provisions of the
Plan, and (2) the requirements of section 162(m). For each fiscal year of the
Company, the Committee will determine (i) the eligible employees who will
participate in the Plan, (ii) the award opportunities for each participant,
(iii) the company financial performance targets for such year, and (iv) whether
performance goals have been achieved.

Award Criteria and Payment.

Payments under the Plan are determined by the Compensation Committee based
upon achievement of one or more predetermined financial goals. These financial
goals generally will be based on earnings before interest, taxes, depreciation
and amortization (EBITDA) with a target return on equity. In addition, up to 25%
of an individual's award may, at the recommendation of the individual's
immediate manager, be based on individual objectives. A target award percentage
is established for each position of those eligible to participate in the Plan.
Target awards may range from 10% to 75% of the participant's base pay at January
1 each year (or pay at the time of becoming a participant, if later).

12
<PAGE> 15

For fiscal 1997, the Committee has established minimum, target and maximum
performance objectives based on EBITDA and return on equity and has approved 221
employees to participate in the Plan.

Termination of Employment.

Employees terminating prior to the end of the fiscal year are not eligible
for payment of any award under the Plan unless termination is due to retirement,
death, disability, or economic reduction in force or termination by the Company
without cause. In such cases, any award payment will be prorated to the date of
termination and determined on the basis of awards actually paid to similarly
situated employees.

----------------------------------------------------------------------------
INFORMATION ABOUT MANAGEMENT AND ORGANIZATION
OF THE BOARD OF DIRECTORS
----------------------------------------------------------------------------

EXECUTIVE OFFICERS

The following sets forth information with respect to Cooper Cameron's
present executive officers. All executive officers are elected to terms that
expire at the meeting of the Board of Directors which follows the Annual Meeting
of Stockholders. All executive officers were first elected in 1995, except for
Mr. Minter who was elected in February 1996 and Mr. Grimes who was elected in
April 1996. Mr. Grimes and Mr. Minter were elected as officers of Cooper Cameron
in November 1996.

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
Sheldon R. Erikson................................. 55 Chairman of the Board, President and Chief
Executive Officer, President of the
Cameron Division
Thomas R. Hix...................................... 49 Senior Vice President of Finance and Chief
Financial Officer
Franklin Myers..................................... 44 Senior Vice President, General Counsel and
Secretary
Joseph D. Chamberlain.............................. 50 Vice President and Corporate Controller
Michael L. Grimes.................................. 46 Vice President, President of the Cooper
Energy Services Division
E. Fred Minter..................................... 61 Vice President, President of the Cooper
Turbocompressor Division
</TABLE>

13
<PAGE> 16

SECURITY OWNERSHIP OF MANAGEMENT

The following table indicates the total number of shares of Common Stock of
the Company beneficially owned, or as described below, as of March 10, 1997, by
each director or nominee for director, each executive officer named in the
Summary Compensation Table and all officers, directors and nominees for director
as a group.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
--------------------------------------------
SOLE
VOTING
AND OPTIONS TOTAL
INVESTMENT EXERCISABLE BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER POWER WITHIN 60 DAYS OWNERSHIP CLASS
------------------------ ---------- -------------- ---------- ----------
<S> <C> <C> <C> <C>
Nathan M. Avery(4).......................... 0 19,148(3) 19,148 *
C. Baker Cunningham......................... 4,423 0 4,423 *
Grant A. Dove............................... 0 19,148(3) 19,148 *
Sheldon R. Erikson.......................... 48,197(1) 187,005(3) 235,202 *
Michael E. Patrick.......................... 0 0 0 *
David Ross III.............................. 4,000 19,148(3) 23,148 *
Michael J. Sebastian........................ 2,987(2) 17,148(3) 20,135 *
Thomas R. Hix............................... 10,173(1) 88,641(3) 98,814 *
Franklin Myers.............................. 12,297(1) 54,138(3) 66,435 *
Michael L. Grimes........................... 362(1) 10,000 10,362 *
E. Fred Minter.............................. 328(1) 5,002 5,330 *
All Directors, Advisory Director and
Executive Officers as a Group (12
persons).................................. 511,512 2.0%
</TABLE>

- ---------------

* Indicates ownership of less than one percent of Common Stock outstanding.

(1) Includes shares held in the Cooper Cameron Corporation Retirement Savings
Plan as of December 31, 1996.

(2) Includes shares held in the Cooper Industries, Inc. Savings and Stock
Ownership Plan as of December 31, 1996.

(3) Includes shares under option that have been earned pursuant to either (i)
waiver of directors' fees by the directors or (ii) waiver of salary by
certain executive officers. Such options are not forfeitable or cancelable,
expire five years from date of grant and become exercisable one year from
date of grant. Also includes shares subject to stockholder approval of the
First Amendment to the Directors Plan described in this Proxy Statement.

(4) Mr. Avery is an Advisory Director.

COMMITTEES AND BOARD MEETINGS

The Board of Directors has established two standing committees: the Audit
Committee and the Compensation Committee. The Audit and Compensation Committees
are comprised of directors who are not officers or employees of the Company.

Audit Committee

The Audit Committee consists of two non-employee directors: Messrs. Michael
J. Sebastian (Chairman) and Michael E. Patrick. The principal functions of the
Audit Committee include recommending the annual engagement of the Company's
independent accountants; reviewing non-audit consulting services performed by
the independent accountants and related fees; reviewing with management and the
independent accountants the scope and results of the annual financial statement
audit; reviewing the charter and scope of the internal audit function; reviewing
the scope and adequacy of the Company's internal accounting controls and record-
keeping systems; reviewing legal and regulatory matters that may impact the
financial statements, related company compliance policies, and programs and
reports received from regulators; reviewing compliance with

14
<PAGE> 17

the Company's conflicts of interest and ethical conduct policy (Standards of
Conduct Policy); and conferring independently with the internal auditors and the
independent accountants.

Compensation Committee

The Compensation Committee consists of three non-employee directors:
Messrs. Grant A. Dove (Chairman), C. Baker Cunningham and David Ross III. The
principal functions of the Compensation Committee include reviewing the
Company's overall compensation policy, including compensation philosophy and
strategy, short- and long-term incentive plans and programs, stock ownership
plans, employee benefit plans and employee welfare plans; reviewing and
recommending to the Board the compensation and benefits to be paid or provided
to the Board of Directors; reviewing the performance and compensation of the
Chief Executive Officer and senior executives of the Company; and reviewing and
recommending to the Board employment agreements, termination agreements and
severance policies and agreements.

Since January 1996, the Board held four (4) meetings, the Audit Committee
held two (2) meetings and the Compensation Committee held four (4) meetings. Six
of the directors attended 100 percent of the meetings of the Board and the
committee of the Board on which they served. One director was unable to attend
one meeting; therefore, his attendance was approximately 75%.

CERTAIN TRANSACTIONS

During 1996, the Company's Cameron and Cooper Energy Services divisions, in
the ordinary course of business, purchased wire products for amounts totaling
approximately $97,000 from Belden Inc. Mr. Cunningham is a director of the
Company and is the Chairman, President and Chief Executive Officer of Belden
Inc.
------------------------------------------------------------------------------

DIRECTOR AND EXECUTIVE MANAGEMENT COMPENSATION
------------------------------------------------------------------------------

COMPENSATION OF DIRECTORS

Non-employee directors each receive an annual cash retainer of $30,000, or
an option for 9,000 shares of Common Stock in lieu of the annual cash retainer,
or a combination of cash and options, under the Directors Plan, which is
described on page 6 of this Proxy Statement. Directors also received under the
Directors Plan an initial grant of Common Stock of 3,000 shares on May 2, 1996
and will receive annual grants of 3,000 shares of Common Stock on the first
trading date following the Annual Meeting of Stockholders. These options are
subject to the approval by the Company's stockholders of the amendment to the
Directors Plan described on page 7 of this Proxy Statement.

Any options elected in lieu of cash will be granted on the first trading
date following the Company's Annual Meeting of Stockholders. Options granted to
non-employee directors become fully exercisable on the first anniversary of the
date of grant of the option, and will expire five years and one day after the
date of grant, subject to prior termination pursuant to the terms of the
Directors Plan.

In addition, non-employee directors are paid meeting attendance fees of
$1,000 for each Board meeting of the Company they attend and $500 for each
committee meeting that is not held in conjunction with a Board meeting. All
directors are reimbursed for expenses incurred in connection with attending
Board and committee meetings.

The maximum number of shares to be issued under the Directors Plan and the
number of shares subject to each option are subject to adjustment in the event
of stock splits or other changes in the Cooper Cameron capital structure.

In 1996, all directors elected to receive their entire retainer in stock
options through May 1997. Thus, during 1996, options for a total of 73,000
shares of Cooper Cameron Common Stock were granted pursuant to the Directors
Plan, all of which are subject to stockholder approval of the amendment to the
Directors Plan, described on page 7 of this Proxy Statement. Likewise in 1997,
each non-employee director elected to receive

15
<PAGE> 18

all of his annual retainer in stock options. In 1995, Messrs. Avery, Dove, Ross
and Sebastian were each granted 7,148 stock option shares.

STOCK OWNERSHIP GUIDELINES

In 1996, the Board of Directors of the Company adopted stock ownership
guidelines to encourage ownership of common stock by officers and certain key
employees of the Company, as well as directors. Such guidelines set forth that
by the 1999 Annual Meeting of Stockholders, directors should each own $100,000
worth of common stock of the Company. Further, the officers of the Company and
certain key employees, a total of 31 persons, are expected to own by such date
between one times and five times their base salary in common stock of the
Company, depending on their job category. The Board of Directors believes that
aligning the economic interest of the key managers of the Company with those of
the stockholders will further focus the future direction of the Company to one
of enhancing stockholder value.

COMPENSATION OF EXECUTIVE MANAGEMENT

Table 1 "Summary Compensation Table" presents information concerning
compensation paid to, or accrued for services by, the Chief Executive Officer
and the four other most highly compensated executive officers of Cooper Cameron
during fiscal year 1996.

Table 2 "Option Grants in Last Fiscal Year" presents information concerning
the grant of options during fiscal year 1996 to the Chief Executive Officer and
the four other most highly compensated executive officers of Cooper Cameron to
acquire the Company's Common Stock under the Company's Long-Term Incentive Plan.
No stock appreciation rights were granted during 1996.

Table 3 "Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values" presents information concerning the unexercised stock
options held by the Chief Executive Officer and the four other most highly
compensated executive officers of Cooper Cameron at the end of fiscal year 1996.

Table 4 "Pension Plan Table" sets forth the estimated annual retirement
benefits payable to the Chief Executive Officer and the four other most highly
compensated executive officers of Cooper Cameron under the Cooper Cameron
Corporation Salaried Employees' Retirement Plan upon retirement at age 65, based
on an employee's assumed average annual compensation for the five-year period
preceding retirement.

16
<PAGE> 19

TABLE 1

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
----------------------------------------- ------------
(a) (b) (c) (d) (e) (g) (i)
securities
SALARY OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR $(1) BONUS $ COMPENSATION $(2) OPTIONS # COMPENSATION $(5)
--------------------------- ---- ----------- ------- ----------------- ------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
Sheldon R. Erikson............. 1996 -0- 562,550 146,131(7)(8) 221,617 11,131
Chairman, President 1995 250,000 250,000 -- 443,153 70,472(6)
and Chief Executive Officer
Thomas R. Hix.................. 1996 -0- 180,050 64,382(8) 106,375 16,615(6)
Senior Vice President of 1995 120,000 100,000 -- 188,699 5,997
Finance and Chief Financial
Officer
Franklin Myers................. 1996 -0- 180,050 58,138(8) 106,375 10,832(6)
Senior Vice President, 1995 60,000 200,000 -- 188,699 11,908
General Counsel and Secretary
Michael Grimes(3).............. 1996 138,718 146,717 -- 38,578 10,098
Vice President, President, 1995 -- -- -- -- --
Cooper Energy Services
E. Fred Minter................. 1996 177,500 101,438 -- -0- 14,452
Vice President, President, 1995 170,000 94,248 -- 30,017 14,490
Cooper Turbocompressor
</TABLE>

- ---------------

(1) Certain of the named executive officers were granted non-qualified stock
options in lieu of salary for the periods July 1, 1995 through June 30,
1996, July 1, 1996 through June 30, 1997, and July 1, 1997 through December
31, 1997, under the Cooper Cameron Stock Options in Lieu of Salary Program
approved by the Cooper Cameron Board of Directors. Under the Program,
certain officers and key management were given the opportunity to elect a
percentage of base pay to be converted to non-qualified stock options under
the Company's Long-Term Incentive Plan. The terms of the Stock Options are
explained in Table 2 "Option Grants in Last Fiscal Year". For 1995, prior to
the split-off, Mr. Erikson, Mr. Hix and Mr. Myers received salaries of
$250,000, $120,000 and $60,000, respectively. For the period following the
split-off, Mr. Erikson, Mr. Hix and Mr. Myers elected to have $250,000,
$120,000 and $120,000 in base salary, respectively, converted to stock
options. This program was extended through the remainder of 1997. See Table
2 "Option Grants in Last Fiscal Year."

(2) Perquisites and other personal benefits paid or distributed during 1995 (and
during 1996 where no amounts are indicated for Messrs. Grimes and Minter) to
the persons listed in the compensation table above did not exceed, with
respect to any individual, the lesser of $50,000 or 10 percent of such
individual's total salary and bonus.

(3) Mr. Grimes joined the Company on April 22, 1996.

(4) Columns (f) "Restricted Stock Awards" and (h) "LTIP Payouts" have been
omitted since no restricted stock awards or LTIP payouts were awarded to the
named executives.

(5) The figures in this column for 1995 and 1996 include the Company's
contributions to the Cooper Cameron Corporation Retirement Savings Plan, the
Cooper Cameron Corporation Supplemental Excess Defined Contribution Plan and
amounts paid by the Company for excess life insurance, respectively, as
follows:

S. Erikson $6,750, $8,250 and $5,472 for 1995, and $4,081, zero and $7,050
for 1996
T. Hix $4,500, zero and $1,497 for 1995, and $2,618, zero and $1,497 for
1996
F. Myers $6,750, $4,500 and $658 for 1995 and $2,618, zero and $714 for 1996
M. Grimes $6,750, $2,717 and $631 for 1996.
F. Minter $6,750, $2,250 and $5,490 for 1995, and $6,742, $5,468 and $2,242
for 1996
(Footnotes continued on the next page.)

17
<PAGE> 20

(6) Included in this amount is reimbursement ($50,000 for Mr. Erikson, $12,500
for Mr. Hix and $7,500 for Mr. Myers) for the purchase of country club
memberships.

(7) Includes Executive Long Term Disability (LTD) Premium payment, spouse travel
expense and tax gross up of LTD Premium and spouse travel.

(8) Includes cash payment for loss of benefits due to participation in the
Options in Lieu of Salary Program.

TABLE 2

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
INDIVIDUAL STOCK PRICE APPRECIATION FOR
GRANTS OPTION TERM
- -------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED EXERCISE
UNDERLYING TO OR BASE
OPTIONS EMPLOYEES PRICE EXPIRATION
GRANTED IN FISCAL ($/SHARE) DATE
NAME (#) YEAR (2) (3) 5%($) 10%($)
---- ---------- ---------- ---------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sheldon R. Erikson..... 142,979(1) 21% $44.875 7/1/01 $1,838,614 $4,080,315
75,064(1)(3) 65.625 7/1/02 1,527,879 3,424,026
3,574(4) 65.625 1/1/02 65,401 144,674
Thomas R. Hix.......... 68,630(1)(3) 10% $44.875 7/1/01 882,536 1,958,554
36,030(1)(3) 65.625 7/1/02 733,367 1,643,500
1,715(4) 65.625 1/1/02 31,383 69,422
Franklin Myers......... 68,630(1) 10% $44.875 7/1/01 882,536 1,958,554
36,030(1)(3) 65.625 7/1/02 733,367 1,643,500
1,715(4) 65.625 1/1/02 31,383 69,422
Michael Grimes......... 30,000 4% $44.875 4/22/06 846,649 2,145,575
8,578(1)(3) 65.625 7/1/02 174,600 391,283
E. Fred Minter......... 0 0% -- -- -- --
</TABLE>

- ---------------

(1) These Shares were granted under the Options in Lieu of Salary Program,
explained in footnote 1 to the Summary Compensation Table.

(2) The exercise price of each option is equal to the fair market value of the
Company's shares on the date of grant of the option. The exercise price may
be paid in cash, or, in certain instances, by tendering already owned Cooper
Cameron Common Stock having a fair market value on the date of exercise
equal to the exercise price.

(3) Options expiring in July 2001 were issued pursuant to the Options in Lieu of
Salary Program and vest in full in July 1997. The Options expiring in 2002
were issued pursuant to the Options in Lieu of Salary Program and, except
for those options referred to in footnote 4 below, vest in full in January
1998.

(4) Options were issued pursuant to the Options in Lieu of Salary Program in
lieu of increases in annual base salary for 1997, and vest in full in July
1997.

18
<PAGE> 21

TABLE 3
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR (1)
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT DECEMBER 31, MONEY OPTIONS AT
1996(#) DECEMBER 31, 1996($)(1)
--------------------------- -----------------------------
(a) (b) (c) (d) (e)
SHARES
ACQUIRED ON VALUE
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- ----------- ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Sheldon R. Erikson.... -0- -0- 193,008 471,762 $11,550,178 $20,346,326
Thomas R. Hix......... -0- -0- 88,641 206,433 $ 5,304,543 8,568,672
Franklin Myers........ 34,503 $1,312,243 54,138 206,433 $ 3,239,780 8,568,672
Michael L. Grimes..... -0- -0- -0- 38,578 $ -0- 1,042,036
E. Fred Minter........ -0- -0- 5,002 25,015 $ 299,335 1,496,973
</TABLE>

- ---------------

(1) Values are based on the difference between option prices and the closing
price of $76.50 per share of Common Stock on the New York Stock Exchange on
the last trading day of 1996.

TABLE 4
PENSION PLAN TABLE

<TABLE>
<CAPTION>
YEAR ANNUAL
CREDITED INDIVIDUAL ESTIMATED
SERVICE AS OF REACHES BENEFIT AT
JANUARY 1, 1997 AGE 65 AGE 65
--------------- ---------- ----------
<S> <C> <C> <C>
Sheldon R. Erikson....................................... 2.0 2006 $117,552
Thomas R. Hix............................................ 2.0 2012 83,796
Franklin Myers........................................... 1.8 2017 129,528
Michael L. Grimes........................................ 0.7 2015 62,712
E. Fred Minter........................................... 9.1 2000 27,252
</TABLE>

For each of the individuals shown in the Summary Compensation Table, the
table above shows current credited years of service, the year each attains age
65, and the projected annual pension benefit at age 65. The projected annual
pension benefit is based on the following assumptions: benefits paid on a
straight-life annuity basis; continued compensation at the 1996 levels; and an
interest credit rate of 5.25%. Amounts under the Cooper Cameron Corporation
Supplemental Excess Defined Benefit Plan are included in the Annual Estimated
Benefit.

19
<PAGE> 22

STOCKHOLDER RETURN PERFORMANCE GRAPH

Set forth below is a line graph showing the cumulative total stockholder
return on Company Common Stock from July 5, 1995 to December 31, 1996, and
comparing it with the cumulative total return over the same period of the
Standard & Poor's Composite-500 Stock Index and the S & P Oil & Gas (Drilling &
Equipment) Index. In each case, cumulative total return is calculated assuming a
fixed investment of $100 on July 5, 1995.

<TABLE>
<CAPTION>
S&P OIL & GAS
MEASUREMENT PERIOD (DRILLING &
(FISCAL YEAR COVERED) COOPER CAMERON S&P 500 EQUIPMENT)
<S> <C> <C> <C>
JULY 5, 1995 100.0 100.0 100.0
DECEMBER 29, 1995 176.40 112.55 116.02
DECEMBER 31, 1996 380.12 135.35 161.48
</TABLE>

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

General

The Compensation Committee of the Board of Directors (the "Committee")
administers the compensation of the Company's executive officers, including its
Chief Executive Officer. Since January 1996, the Committee has been comprised of
two directors, Messrs. Grant A. Dove and David Ross III, who are neither
officers nor employees of the Company. Mr. Cunningham was appointed to the
Compensation Committee in November 1996. The principal functions of the
Committee are set forth on page 14 under the heading "Committees and Board
Meetings."

The Company's primary objective is to maximize stockholder value over time.
To accomplish this objective, the overall goal of the Committee is to develop
executive compensation policies which are consistent with and linked to the
Company's strategic business objectives. It is the policy of the Committee to
compensate executive officers based on their responsibilities and experience,
the achievement of specific business objectives and established goals and the
Company's long-term performance. The Committee has received advice from a
compensation consulting firm as to comparable compensation for executives
similarly situated as part of the Committee's analysis. The compensation of the
Chief Executive Officer and the other executive officers consists of a base
salary, an annual bonus opportunity and stock option awards.

20
<PAGE> 23

Base Salary and Annual Incentive Awards

Each of the Company's executive officers receives a base salary and has an
opportunity to earn a bonus under Cooper Cameron's Management Incentive
Compensation Plan (the "MICP"). Decisions regarding base salaries are made based
upon individual performance, job responsibilities, experience and competitive
practice determined by compensation surveys. The Compensation Committee's policy
is to pay base salaries at or below peer industry medians with a significant
portion of targeted total annual compensation at risk tied to performance-based
MICP objectives. The MICP is designed to motivate and reward key management
employees whose efforts impact the performance of the Company and its
subsidiaries and divisions through the achievement of financial performance
targets and, in some instances, individual performance objectives. The Committee
is responsible for approving the financial performance targets that are used to
determine awards made under the MICP. Performance targets are based upon
proposals submitted to the Committee by the Chief Executive Officer which, in
turn, reflect the annual operating plan prepared for the Board of Directors. The
basic measure of financial performance is earnings before interest, taxes,
depreciation and amortization with a target return on equity to also be
achieved. A target award percentage is established for each position eligible to
participate in the MICP. Annual incentives were awarded to 209 employees for
1996 performance. The Committee is mindful of the unusual variances that occur
in today's financial arena in running corporations such as the Company. The
Committee will take into account unusual items when applying the MICP targets to
the actual results. Such items may include acquisitions, divestitures,
recapitalizations, restructurings and other similar unforeseeable events. The
Committee also evaluates performance taking into account industry-wide market
conditions and peer performance.

Long-Term Incentives

It is the policy of the Committee to provide incentives to executives that
are tied to the long-term performance of the Company. For this purpose, the
Committee has granted stock options to the named executive officers or other key
management personnel pursuant to the Cooper Cameron Corporation Long-Term
Incentive Plan. In May 1996, the Board granted stock options to certain
employees other than executive officers and key management personnel who
received grants in 1995. The Committee determined the number of options granted
to each individual based on actual compensation and assumptions relating to
stock price. The stock options were granted with an exercise price equal to fair
market value on the date of grant. These options have a ten-year expiration date
and become one-third exercisable one year after the date of grant, two-thirds
exercisable two years after the date of grant, and fully exercisable three years
after the date of grant. Certain of the named executive officers elected to
receive stock options in lieu of salary for all or a portion of their annual
salary for one and one-half years, beginning in July 1996. The options granted
in lieu of salary are fully exercisable one year after the date of grant, are
vested pro rata in the event employees terminate their employment before vesting
and have a five-year expiration date. The Committee will review whether any such
employees should be reimbursed for benefits lost pursuant to their participation
in this program.

The Committee believes that the stock option program ties the individual
executive's compensation to the Company's performance and directly links the
executive's personal interests to the interests of the Company and its
stockholders. The Options in Lieu of Salary Program provides increased capital
appreciation opportunities for executive officers in a manner directly linked to
stockholder value while causing the executive officers to substantially invest
in the stock's performance.

Compensation of the CEO

Mr. Erikson currently has a base salary of $525,000, based on a review of
the compensation levels of chief executive officers of companies of comparable
size and in similar businesses. He also received a bonus in the amount of
$250,000 for 1995 and $562,550 for 1996. Mr. Erikson's target bonus opportunity
for 1997 is 75 percent of his base salary. Mr. Erikson elected to convert the
equivalent of one year's base salary to stock options under the Options in Lieu
of Salary Program for each of the years beginning July 1, 1995 and July 1, 1996,
and for the six months beginning July 1, 1997. The number of options granted to
Mr. Erikson under this program was 364,596. These options become fully
exercisable on the first anniversary date of the grant.

21
<PAGE> 24

The Committee believes that the total options awarded to Mr. Erikson under
the Long-Term Incentive Plan (excluding those he was awarded in lieu of salary)
are competitive with options granted to CEOs of comparable companies. Through
the stock option award and the options awarded in lieu of salary, a large
percentage of Mr. Erikson's compensation is tied directly to corporate
performance and return to stockholders.

Summary

The Committee believes that the total executive compensation program should
link compensation to corporate and individual performance. The Committee will
continue to review the compensation of the CEO and other executive officers on
an annual basis.

Compensation Committee,

Grant A. Dove, Chairman
C. Baker Cunningham
David Ross III

EMPLOYMENT, TERMINATION AND CHANGE OF CONTROL ARRANGEMENTS

The Company has entered into employment agreements containing certain
termination and/or severance provisions with Messrs. Erikson, Hix and Myers (the
"Agreements"). The Agreements provide for specific terms of employment,
including base salary, bonus and benefits over specified periods of time. The
Agreements also provide severance pay and continuation of certain benefits
should a Change of Control, as herein defined, occur. Entry into the Agreements
was unanimously approved by the independent members of the Board of Directors.

The Agreement between the Company and Mr. Erikson has a term of three
years, which is automatically extended on a monthly basis. The Agreement
provides that Mr. Erikson will receive a salary of not less than $500,000 a
year, a bonus as provided under the Company's Management Incentive Compensation
Plan or any other plan adopted by the Board of Directors; will participate in
the Cooper Cameron Corporation Salaried Employees' Retirement Plan (a defined
benefit plan) and the Long-Term Incentive Plan; and will be eligible to
participate in the Cooper Cameron Corporation Retirement Savings Plan (a defined
contribution plan), the Employee Stock Purchase Plan and any other plans
generally available to employees of the Company during his employment. The
Agreements between the Company and each of Messrs. Hix and Myers are
substantially the same as Mr. Erikson's, except the Agreements with Messrs. Hix
and Myers have terms of two years, which end November 30, 1998, and the
Agreements are automatically extended for one year on an annual basis if they
are then employees of the Company. The Agreements provide that Messrs. Hix and
Myers each will receive a salary of not less than $240,000 per year.

The Agreements with Messrs. Erikson, Hix and Myers also provide for
severance arrangements in the event of a Change of Control. A Change of Control
of the Company will occur for purposes of these Agreements if (i) any person is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's
outstanding voting securities, other than through the purchase of voting
securities directly from the Company through a private placement; (ii) the
current members of the Board, or their nominees, no longer comprise a majority
of the Board; (iii) the Company is merged or consolidated with another
corporation or entity and the Company's stockholders own less than 80% of the
outstanding voting securities of the surviving or resulting corporation or
entity; (iv) a tender offer or exchange offer is made and consummated by a
person other than the Company for the ownership of 20% or more of the Company's
voting securities; or (v) there has been a disposition of all or substantially
all of the Company's assets.

If the executive terminates due to death, retirement, disability or without
Good Reason, as defined below, or is terminated by the Company for cause, no
salary or other benefits are payable under the Agreements. However, if
termination occurs without cause prior to or after a Change of Control or by Mr.
Erikson with

22
<PAGE> 25

Good Reason prior to or after a Change of Control, Mr. Erikson is entitled to an
amount equal to three times the highest base pay (or its equivalent if paid in
compensation other than cash) and cash incentive compensation he received during
any of the three preceding years, and certain other payments relating to benefit
plans applicable to all employees. If termination occurs without cause prior to
a Change of Control or by the employee with Good Reason prior to a Change of
Control, Messrs. Hix and Myers each are entitled to an amount equal to two times
the highest base pay (or its equivalent if paid in compensation other than cash)
and cash incentive compensation they received during any of the three preceding
years and certain other payments relating to benefit plans applicable to
employees. If termination occurs without cause after a Change of Control, or
resignation for Good Reason after a Change of Control, Messrs. Hix and Myers
each are entitled to an amount equal to three times the highest base pay and
cash incentive compensation they received during the preceding three years and
certain other payments relating to benefit plans. "Good Reason" for termination
includes any of the following events which occur without employee consent: a
change in status, title(s) or position(s) as an officer of the Company which
does not represent a promotion, a reduction in base salary, termination of
participation in an ongoing compensation plan, relocation, failure of a
successor to assume the Agreement, termination by the Company other than as
provided in the Agreement, prohibition from engaging in outside activities, or
any continuing material default by the Company in the performance of its
obligations under the Agreement, whether before or after a Change of Control.

The Company has adopted an Executive Severance Policy and Change in Control
Policy which set forth certain salary and benefit obligations in the event of
the termination of designated key employees of the Company, including Mr. Grimes
and Mr. Minter. The Executive Severance Policy provides for compensation
continuation of 15 months for each of Messrs. Grimes and Minter if their
employment with the Company is terminated for any reason except cause. Each of
Messrs. Grimes and Minter would receive an additional 9 months of compensation
continuation if such termination occurred subsequent to a "change in control" of
the Company, as defined in the Change in Control Policy. Both policies are
subject to future amendment, modification or cancellation at the discretion of
the Board of Directors.

-----------------------------------

STOCKHOLDER PROPOSALS
-----------------------------------

Stockholders' proposals intended to be presented at the 1998 Annual Meeting
should be sent by certified mail, return receipt requested, and must be received
by the Secretary of the Company at its principal executive offices on or before
January 1, 1998, for inclusion in the proxy statement and the form of proxy for
that meeting. Such proposals may be made only by persons who are stockholders,
beneficially or of record, on the date the proposal is submitted and who
continue in such capacity through the meeting date, of at least 1% or $1,000 in
market value of securities entitled to be voted at the meeting, and have held
such securities for at least one year prior to submission of the proposal.

---------------------------------------

INDEPENDENT ACCOUNTANTS
---------------------------------------

During the year ended December 31, 1996, Ernst & Young LLP was employed
principally to perform the annual audit and to render other services.

Representatives of Ernst & Young will be present at the meeting and will be
available to answer questions and discuss matters pertaining to the Report of
Independent Auditors contained in the financial statements incorporated by
reference in the Company's Form 10-K. Representatives of Ernst & Young will have
the opportunity to make a statement, if they desire to do so.

Selection of the Company's independent accountants each year is done at the
November meeting of the Board of Directors for such year.

23
<PAGE> 26

-------------------------------------------------------------------------

COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
-------------------------------------------------------------------------

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires Cooper Cameron's executive officers and directors, and persons who own
more than 10% of the Company's Common Stock, to file reports of ownership and
changes in ownership with the SEC and the New York Stock Exchange. Based on its
review of the copies of such reports, or written representations from certain
reporting persons that no Forms 5 were required for those persons, the Company
believes that during 1996, its executive officers, directors and greater than
ten percent stockholders complied with all applicable filing requirements.

----------------------

OTHER BUSINESS
----------------------

The management of Cooper Cameron has no knowledge of any business to be
presented for consideration at the meeting other than that described above. If
any other business should properly come before the meeting, it is intended that
the shares represented by proxies will be voted with respect thereto in
accordance with the judgment of the persons named in such proxies.

COPIES OF COOPER CAMERON'S ANNUAL REPORT TO STOCKHOLDERS OR ITS ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, ARE AVAILABLE WITHOUT CHARGE TO STOCKHOLDERS
UPON REQUEST TO THE INVESTOR RELATIONS DEPARTMENT, COOPER CAMERON CORPORATION,
515 POST OAK BOULEVARD, SUITE 1200, HOUSTON, TEXAS 77027.

By order of the Board of Directors,

/s/ FRANKLIN MYERS

Franklin Myers
Senior Vice President, General Counsel
and Secretary

March 24, 1997

24
<PAGE> 27

APPENDIX A

FIRST AMENDMENT TO
COOPER CAMERON CORPORATION
AMENDED AND RESTATED 1995 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

WHEREAS, COOPER CAMERON CORPORATION (the "Company") has heretofore adopted
the COOPER CAMERON CORPORATION AMENDED AND RESTATED 1995 STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS (the "Plan"); and

WHEREAS, The Company desires to amend the Plan in certain respects;

NOW, THEREFORE, the Plan shall be amended as follows, effective as of May
2, 1996:

1. The first sentence of Section 1 of the Plan shall be deleted and the
following shall be substituted therefor:

"The purpose of this Cooper Cameron Corporation ("Company") amended
and restated 1995 Stock Option Plan for Non-Employee Directors ("Plan") is
to increase stockholder value and to advance the interests of the Company
by strengthening its ability to attract and retain the services of
experienced and knowledgeable directors and by causing each non-employee
director to acquire an equity interest in the Company issuing stock options
("Options") pursuant to the terms of the Plan."

2. Sections 5 and 6 of the Plan shall be deleted and the following shall be
substituted therefor:

"5. Automatic Options. An Eligible Director shall receive Options in
accordance with the provisions of this Section 5. An initial Option grant
for 3,000 shares of Common Stock shall be made to an Eligible Director on
the first trading date on which such individual becomes an Eligible
Director. An additional Option for 3,000 shares of Common Stock shall be
granted to Eligible Directors in each subsequent year during the term of
the Plan on the first trading date following the Annual Meeting of Company
stockholders. Notwithstanding the foregoing, if the Company has a
non-executive (non-full time employed) Chairman of the Board of Directors,
in lieu of the Option grants set forth above, such Chairman shall receive
an initial Option grant for 10,000 shares of Common Stock on the first
trading date such individual becomes Chairman and an additional Option
grant for 10,000 shares of Common Stock in each subsequent year during the
term of the Plan on the first trading date following the Annual Meeting of
Company stockholders. Except as provided in Sections 7 and 8 below with
respect to the exercisability of an Option, no adjustment shall be made to
such Option to reflect a termination of service as an Eligible Director.

"6. Elective Options. In addition to the Options granted under Section
5 above, an Eligible Director may make an annual election to receive either
the Eligible Director's annual cash retainer or one of (a) an Option for
9,000 shares of Common Stock under this Section 6 (on the same dates as the
Options granted under Section 5) in lieu of all of the Eligible Director's
annual cash retainer, (b) an Option for 6,000 shares in lieu of two-thirds
of the Eligible Director's annual cash retainer, or (c) an Option for 3,000
shares in lieu of one-third of the Eligible Director's annual cash
retainer, otherwise payable during the period beginning on the Option grant
date and ending on the next subsequent Option grant date. Each such annual
election under this Section 6 shall be in writing and filed with the
Secretary of the Company, shall be irrevocable, and shall be made at least
six months prior to the date as of which it is to become effective. No such
Option shall be granted if the Eligible Director ceases to be an Eligible
Director after the date of his or her annual Option election but prior to
the date as of which the Option is granted."

3. Section 7(a) of the Plan shall be deleted and the following shall be
substituted therefor:

"(a) the exercise price per share of each Option shall be equal to the
greater of the par value or the Fair Market Value of a share of Common
Stock on the date as of which the Option is granted."

A-1
<PAGE> 28

4. The first sentence of Section 10 of the Plan shall be deleted and the
following shall be substituted therefor:

"Awards granted under the Plan shall not be transferable or assignable
other than: (i) by will or the laws of descent and distribution, (ii)
pursuant to a qualified domestic relations order (as defined by the
Internal Revenue Code); or (iii) with respect to Awards of nonqualified
stock options, by transfer by an Eligible Director to a member of the
Eligible Director's immediate family, which includes the Eligible
Director's spouse, children or grandchildren (including adopted and step
children and grandchildren) ("Immediate Family"), to a trust solely for the
benefit of the Eligible Director and his Immediate Family, or to a
partnership or limited liability company whose only partners or
shareholders are the Eligible Director and members of his Immediate Family.

5. As amended hereby, the Plan is specifically ratified and reaffirmed.

A-2
<PAGE> 29

APPENDIX B

AMENDED AND RESTATED
COOPER CAMERON CORPORATION
LONG-TERM INCENTIVE PLAN

1. PURPOSE

The purpose of the Cooper Cameron Corporation Long-Term Incentive Plan (the
"Plan") is to promote the long-term financial interests of Cooper Cameron
Corporation (the "Company"), including its growth and performance, by
encouraging employees of the Company and its subsidiaries to acquire an
ownership position in the Company, enhancing the ability of the Company to
attract and retain employees of outstanding ability, and providing employees
with an interest in the Company parallel to that of the Company's stockholders.
By encouraging Plan participants to achieve stated business objectives and
become stockholders of the Company and by providing actual ownership through
certain Plan awards, it is also intended that participants will view the Company
from an ownership perspective and consider that their interests are aligned with
those of the Company.

2. DEFINITIONS

2.1 "Award" means any form of stock option, stock appreciation right,
restricted stock award, performance share, performance award payable in stock or
cash or cash granted under the Plan, whether singly, in combination, or in
tandem, to a Participant by the Committee pursuant to such terms, conditions,
restrictions and limitations, if any, as the Committee may establish by the
Award Agreement or otherwise. Shares reserved for issuance under the Plan may
also be used for awards under other incentive or award plans for the Company.

2.2 "Award Agreement" means a written agreement with respect to an Award
between the Company and a Participant establishing the terms, conditions,
restrictions and limitations applicable to an Award. To the extent an Award
Agreement is inconsistent with the terms of the Plan, the Plan shall govern the
rights of the Participant thereunder.

2.3 "Board" shall mean the Board of Directors of the Company.

2.4 "Change of Control" means a change in control of the Company (other
than the initial distribution of Common Stock by Cooper Industries, Inc.
("Cooper") of a nature that would be required to be reported (assuming such
event has not been "previously reported") in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Exchange Act; provided that, without
limitation, a Change of Control shall be deemed to have occurred at such time as
(i) any "person" within the meaning of Section 14(d) of the Exchange Act is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the Company's
then outstanding securities, or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board cease for
any reason to constitute at least a majority thereof unless the election, or the
nomination for election by the Company's shareholders, of each new director was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period.

2.5 "Change of Control Price" means the higher of (i) the Fair Market
Value on the date of determination of the Change of Control or (ii) the highest
price per share actually paid for the Common Stock in connection with the Change
of Control of the Company.

2.6 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

2.7 "Committee" means the Compensation Committee of the Board, or such
other committee designated by the Board to administer the Plan, provided that
the Committee shall consist of two or more persons each of whom is an "outside
director" within the meaning of Section 162(m) of the Code and a "disinterested
person" within the meaning of Rule 16b-3 under the Exchange Act.

B-1
<PAGE> 30

2.8 "Common Stock" means the Common Stock, par value $.01 per share, of
the Company.

2.9 "Exchange Act" means the Securities Exchange Act of 1934, as amended.

2.10 "Executive Officer" means an executive officer as set forth in Rule
3b-7 promulgated under the Exchange Act.

2.11 "Fair Market Value" of a share of Common Stock, as of any date, means
the average of the high and low sales prices of a share of Common Stock as
reported on the Stock Exchange composite tape on the applicable date, provided
that if no sales of Common Stock were made on the Stock Exchange on that date,
the average of the high and low prices as reported on the composite tape for the
preceding day on which sales of Common Stock were made. Notwithstanding the
foregoing, Fair Market Value for the initial grants of options issued in
connection with the consummation of the Exchange Offer made by Cooper, for
shares of Common Stock of the Company shall be a price per share equal to the
average market price per share of Cooper Common Stock on the New York Stock
Exchange during the pendency of the Exchange Offer multiplied by a fraction the
numerator of which is one and the denominator of which is the number of shares
of Common Stock to be received for each share of Cooper Common Stock in the
Exchange Offer.

2.12 "Immediate Family" means, with respect to a Participant, the
Participant's spouse, children or grandchildren (including adopted and step
children and grandchildren).

2.13 "Participant" means an officer or key employee of the Company or its
subsidiaries who is selected by the Committee to participate in the Plan.

2.14 "Section 162(m)" means Section 162(m) of the Code and the regulations
promulgated thereunder.

2.15 "Stock Exchange" means the New York Stock Exchange ("NYSE") or, if
the Common Stock is no longer included on the NYSE, then such other market price
reporting system on which the Common Stock is traded or quoted designated by the
Committee after it determines that such other exchange is both reliable and
reasonably accessible.

3. ADMINISTRATION

3.1 The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of a majority of a quorum
shall be the acts of the Committee.

3.2 Subject to the provisions of the Plan, the Committee shall have the
authority in its sole discretion to administer the Plan and to exercise all the
powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including, without
limitation, the authority to select the Participants; to determine the type of
Awards to be made to Participants; to determine the shares, share units or units
or cash subject to any Award and the terms, conditions and restrictions relating
to any Award; to determine whether and to what extent, and under what
circumstances any Award may be settled, cancelled, forfeited, exchanged, or
surrendered; to waive or modify any condition applicable to an Award (other than
a Performance Share or Performance Unit Award to Executive Officers if
inconsistent with Section 162(m)); to make adjustments in the performance goals
of an Award (i) in recognition of unusual or non-recurring events affecting the
Company or the financial statements of the Company (with respect to Awards made
to Executive Officers, to the extent in accordance with Section 162(m), if
applicable), or (ii) in response to changes in applicable laws, regulations, or
accounting principles; to interpret the Plan, to establish, amend, and rescind
any Administrative Policies; to determine the terms and provisions of any
agreements entered into hereunder; and, to make all other determinations
necessary or advisable for the administration of the Plan. The Committee may
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or in any Award in the manner and to the extent it shall deem desirable to
carry it into effect. The determinations of the Committee in the administration
of the Plan, as described herein, shall be final and conclusive; provided,
however, that no action shall be taken which will prevent the options granted
under Section 11 or any Award granted under the Plan from meeting the
requirements for exemption from Section 16(b) of the Exchange Act, or subsequent
comparable statute, as set forth in Rule 16b-3 under the

B-2
<PAGE> 31

Exchange Act or any subsequent comparable rule; and, provided further, that no
action shall be taken which will prevent Awards hereunder which are intended to
provide "performance-based compensation," within the meaning of Section 162(m)
of the Code, from doing so.

3.3 In order to enable Participants who are foreign nationals or employed
outside the United States, or both, to receive Awards under the Plan, the
Committee may adopt such amendments, subplans and the like as are necessary or
advisable, in the opinion of the Committee, to effectuate the purposes of the
Plan.

3.4 No member of the Committee shall be liable for any action, omission or
determination relating to the Plan, and the Company shall indemnify and hold
harmless each member of the Committee and each other director and employee of
the company to whom any duty or power relating to the administration or
interpretation of the Plan has been delegated against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Committee) arising out of any action, omission or
determination relating to the Plan, unless such action, omission or
determination was taken or made by such member, director or employee in bad
faith and without reasonable belief that it was in the best interests of the
Company.

4. SHARES SUBJECT TO THE PLAN

4.1 There shall be available for Awards granted wholly or partly in Common
Stock (including rights or options which may be exercised for or settled in
Common Stock) during the term of this Plan an aggregate of 4,000,000 shares of
Common Stock, subject to the adjustments provided for in Section 15 hereof.
Shares of Common Stock available for issuance under the Plan may be authorized
and unissued shares or treasury shares, as the Company may from time to time
determine. The Board of Directors and the appropriate officers of the Company
shall from time to time take whatever actions are necessary to file required
documents with governmental authorities and the Stock Exchange to make shares of
Common Stock available for issuance pursuant to Awards. Common Stock related to
Awards that are forfeited or terminated, expire unexercised, are settled in cash
in lieu of Stock or in a manner such that all or some of the shares covered by
an Award are not issued to a Participant, or are exchanged for Awards that do
not involve Common Stock, shall immediately become available for Awards
hereunder. The Committee may from time to time adopt and observe such procedures
concerning the counting of shares against the Plan maximum as it may deem
appropriate under Rule 16b-3 issued pursuant to the Exchange Act. Common Stock
related to Awards of stock options (i) for which the option exercise price is
paid in shares of Common Stock, or (ii) for which the option exercise price is
paid in cash which is then used by the Company to repurchase shares of Common
Stock in the market, shall also immediately become available for Awards
hereunder; provided, however, once the 4,000,000 share aggregate plan limit is
reached, incentive stock options within the meaning of section 422 of the Code
may not be awarded under the Plan on the basis of such Common Stock which has so
become available.

4.2 The maximum number of shares of Common Stock subject to Awards granted
during any calendar year to any individual who is an Executive Officer shall not
exceed 500,000 shares. Determinations under the preceding sentence shall be made
in a manner that is consistent with Section 162(m) of the Code.

5. AWARDS

Awards under the Plan may consist of: stock options (either incentive stock
options within the meaning of Section 422 of the Code or nonstatutory stock
options), stock appreciation rights, restricted stock grants, performance
shares, performance awards payable in cash or cash. Awards of restricted stock
and performance shares may provide the Participant with dividends and voting
rights or dividend equivalents prior to vesting (whether based on a period of
time or based on attainment of specified performance conditions). The terms,
conditions and restrictions of each Award shall be set forth in an Award
Agreement.

6. STOCK OPTIONS

6.1 Grants. Awards may be granted in the form of stock options. Stock
options may be incentive stock options within the meaning of Section 422 of the
Code or nonqualified stock options (i.e., stock options which

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are not incentive stock options), or a combination of both, or any particular
type of tax advantaged option authorized by the Code from time to time.

6.2 Terms and Conditions of Options. An option shall be exercisable in
whole or in such installments and at such times and upon such terms as may be
determined by the Committee; provided, however, that no stock option shall be
exercisable more than 10 years after the date of grant thereof. The option
exercise price shall be established by the Committee, but such price shall not
be less than the greater of par value or Fair Market Value on the date of the
stock option's grant subject to adjustment as provided in Section 14 hereof.

6.3 Restrictions Relating to Incentive Stock Options. Stock options issued
in the form of incentive stock options shall, in addition to being subject to
all applicable terms, conditions, restrictions and limitations established by
the Committee, comply with Section 422 of the Code.

6.4 Payment. Upon exercise, a Participant may pay the option exercise
price of a stock option in cash, shares of Common Stock, stock appreciation
rights or a combination of the foregoing, or such other consideration as the
Committee may deem appropriate. The Committee shall establish appropriate
methods for accepting Common Stock and may impose such conditions as it deems
appropriate on the use of Common Stock or stock appreciation rights to exercise
a stock option. The Committee may provide in an Award Agreement respecting a
nonqualified stock option that, if a Participant pays the option exercise price
in shares of Common Stock, upon the date of such payment a new option shall be
granted and the number of shares of Common Stock subject to such new option
shall be equal to the number of shares of Common Stock tendered in payment;
provided that such new option shall not be exercisable in any event after the
original term of the exercised option.

6.5 Additional Terms and Conditions. The Committee may, by way of the
Award Agreement or otherwise, establish such other terms, conditions or
restrictions, if any, on any stock option award, provided they are consistent
with the Plan. The Committee may condition the vesting of stock options on the
achievement of financial performance criteria established by the Committee at
the time of grant.

7. STOCK APPRECIATION RIGHTS

7.1 Grants. Awards may be granted in the form of stock appreciation rights
("SARs"). SARs shall entitle the recipient to receive a payment, in cash or
shares of Common Stock or a combination of both, equal to the appreciation in
market value of a stated number of shares of Common Stock from the price stated
in the Award Agreement to the Fair Market Value on the date of exercise or
surrender. The price stated in the Award Agreement shall be not less than the
Fair Market Value on the date of the SARs grant, except that if an SAR is
granted retroactively in tandem with or in substitution for a stock option, the
designated Fair Market Value set forth in the Award Agreement shall be not less
than the Fair Market Value of a share for such tandem or replaced stock option.
An SAR may be granted in tandem with all or a portion of a related stock option
under the Plan ("Tandem SARs"), or may be granted separately ("Freestanding
SAR's"). A Tandem SAR may be granted either at the time of the grant of the
related stock option or at any time thereafter during the term of the stock
option.

7.2 Terms and Conditions of Tandem SARs. A Tandem SAR shall be exercisable
to the extent, and only to the extent, that the related stock option is
exercisable. Upon exercise of a Tandem SAR as to some or all of the shares
covered in an Award, the related stock option shall be cancelled automatically
to the extent of the number of SAR's exercised, and such shares shall not
thereafter be eligible for grant under Section 5 hereof.

7.3 Terms and Conditions of Freestanding SARs. Freestanding SARs shall be
exercisable in whole or in such installments and at such times as may be
determined by the Committee. The base price of a Freestanding SAR shall be
determined by the Committee; provided, however, that such price shall not be
less than the Fair Market Value on the date of the award of the Freestanding
SAR.

7.4 Deemed Exercise. The Committee may provide that an SAR shall be deemed
to be exercised at the close of business on the scheduled expiration date of
such SAR, if at such time the SAR by its terms is otherwise exercisable and, if
so exercised, would result in a payment to the Participant.

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7.5 Additional Terms and Conditions. The Committee may, by way of Award
Agreement or otherwise, determine such other terms, conditions and restrictions,
if any, on any SAR Award, provided they are not inconsistent with the Plan.

8. RESTRICTED STOCK AWARDS

8.1 Grants. Awards may be granted in the form of restricted stock
("Restricted Stock Awards"). Restricted Stock Awards shall be awarded in such
numbers and at such times as the Committee shall determine.

8.2 Award Restrictions. Restricted Stock Awards shall be subject to such
terms, conditions or restrictions as the Committee deems appropriate including,
but not limited to, restrictions on transferability, requirements of continued
employment, individual performance or the financial performance of the Company.
The period of vesting and the forfeiture restrictions shall be established by
the Committee at the time of grant.

8.3 Rights as Shareholders. During the period in which any restricted
shares of Common Stock are subject to forfeiture restrictions imposed under the
preceding paragraph, the Committee may, in its discretion, grant to the
Participant to whom such restricted shares have been awarded, all or any of the
rights of a shareholder with respect to such shares, including, but not limited
to, the right to vote such shares and to receive dividends.

8.4 Evidence of Award. Any Restricted Stock Award granted under the Plan
may be evidenced in such manner as the Committee deems appropriate, including,
without limitation, book entry registration or issuance of a stock certificate
or certificates.

9. PERFORMANCE AWARDS

9.1 Grants. Awards may be granted in the form of shares of Common Stock
that are earned only after the attainment of predetermined performance goals
during a performance period as established by the Committee ("Performance
Shares") or in the form of performance awards payable in shares or cash
("Performance Units").

9.2 Performance Criteria. The Committee may grant an Award of Performance
Shares or Performance Units to Participants as of the first day of each
Performance Period. As used herein, the term "Performance Period" means the
period during which a Performance Target is measured and the term "Performance
Target" means the predetermined goals established by the Committee. A
Performance Target will be established at the beginning of each Performance
Period. At the end of the Performance Period, the Performance Shares or
Performance Units, as the case may be, shall be converted into Common Stock (or
cash or a combination of Common Stock and cash, as determined by the Award
Agreement) and distributed to Participants based upon such entitlement. Award
payments in respect of Performance Shares made in cash rather than the issuance
of Common Stock shall not, by reason of such payment in cash, result in
additional shares being available for reissuance pursuant to Section 4 hereof.

9.3 Performance Shares or Performance Units for Executive
Officers. Notwithstanding anything to the contrary contained in this Section 9,
Performance Share or Performance Unit Awards shall be made to, and administered
for, Executive Officers only in compliance with Section 162(m) of the Code.
Performance criteria used in performance goals governing Performance Share and
Performance Unit Awards to Executive Officers may include any or all of the
following: (i) the Company's return on equity, assets, capital or investment,
(ii) pre-tax or after-tax profit levels of the Company or any subsidiary or
business segment of the Company, or any combination of the foregoing, (iii) cash
flow or similar measure; (iv) total stockholder return; (v) changes in the
market price of the Common Stock; or (vi) market share. The performance goals
established by the Committee for each Performance Share or Performance Unit
Award will specify achievement targets with respect to each applicable
performance criterion. To the extent applicable, any such performance goal shall
be determined in accordance with generally accepted accounting principles and
reported upon by the Company's independent accountants. Each Award will specify
the amount payable, or the formula for determining the amount payable, upon
achievement of the various applicable performance

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targets. The performance goals established by the Compensation Committee may be
(but need not be) different for each Performance Period and different goals may
be applicable to Awards to different Executive Officers. Payment shall be made
with respect to a Performance Share or Performance Unit Award to an Executive
Officer only after the attainment of the applicable performance goals has been
certified by the Committee.

No Executive Officer may receive a Performance Share or Performance Unit
payment with respect to any calendar year which exceeds $2,000,000 or, if
greater, the Fair Market Value of 500,000 shares of Common Stock as of the
payment date of such awards. If a Performance Period is longer than one year,
the Performance Share or Performance Unit payment with respect to any calendar
year which is partially or wholly included in the Performance Period shall be
deemed to be a prorated portion of the Performance Share or Performance Unit
payment with respect to the complete Performance Period. If two or more
Performance Periods run concurrently during any calendar year, the Performance
Share or Performance Unit payment with respect to such calendar year shall be
deemed to be the aggregate of the allocable Performance Share payments with
respect to each such Performance Period.

9.4 Additional Terms and Conditions. The Committee may, by way of the Award
Agreement or otherwise, determine the manner of payment of Awards of Performance
Shares and Performance Units and other terms, conditions or restrictions, if
any, on any Award of Performance Shares and Performance Units, provided they are
consistent with the Plan.

10. DIVIDENDS AND DIVIDEND EQUIVALENTS

The Committee may provide that any Awards under the Plan earn dividends or
dividend equivalents. Such dividends or dividend equivalents may be paid
currently or may be credited to a Participant's account. Any crediting of
dividends or dividend equivalents may be subject to such restrictions and
conditions as the Committee may establish, including reinvestment in additional
shares or share equivalents.

11. DEFERRALS AND SETTLEMENTS

The Committee may require or permit participants to elect to defer the
issuance of shares or the settlement of Awards in cash under such Administrative
Policies as it may establish under the Plan. It also may provide that deferred
settlements include the payment or crediting of interest on the deferral
amounts, or the payment or crediting of dividend equivalents where the deferral
amounts are denominated in shares.

12. TERMINATION OF EMPLOYMENT

Upon the termination of employment by a Participant, any unexercised,
deferred or unpaid Awards shall be treated as provided in the specific Award
Agreement evidencing the Award. Except as provided in Section 3.2 or 9.3, in the
event of such a termination, the Committee may, in its discretion, provide for
the extension of the exercisability of an Award, accelerate the vesting or
exercisability of an Award, eliminate or make less restrictive any restrictions
contained in an Award, waive any restriction or other provision of this Plan or
an Award or otherwise amend or modify the Award in any manner that is either (i)
not adverse to such Participant or (ii) consented to by such Participant.

13. TRANSFERABILITY AND EXERCISABILITY

Awards granted under the Plan shall not be transferable or assignable other
than: (i) by will or the laws of descent and distribution; or (ii) pursuant to a
qualified domestic relations order (as defined by the Code); or (iii) with
respect to Awards of nonqualified stock options, by transfer by a Participant to
a member of the Participant's Immediate Family, to a trust solely for the
benefit of the Participant and his Immediate Family, or to a partnership or
limited liability company whose only partners or shareholders are the
Participant and members of his Immediate Family. However, any Award so
transferred shall continue to be subject to all the terms and conditions
contained in the Award Agreement.

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In the event that a Participant terminates employment with the Company to
assume a position with a governmental, charitable, educational or other
nonprofit institution, the Committee may subsequently authorize a third party,
including but not limited to a "blind" trust, to act on behalf of and for the
benefit of such Participant regarding any outstanding Awards held by the
Participant subsequent to such termination of employment. If so permitted by the
Committee, a Participant may designate a beneficiary or beneficiaries to
exercise the rights of the Participant and receive any distribution under the
Plan upon the death of the Participant.

14. ADJUSTMENTS

14.1 The existence of outstanding Awards shall not affect in any manner
the right or power of the Company or its stockholders to make or authorize any
or all adjustments, recapitalizations, reorganizations or other changes in the
capital stock of the Company or its business or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock (whether or not such issue is prior to, on a parity with or junior to the
Common Stock) or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding of any kind, whether or not of a character similar to that of
the acts or proceedings enumerated above.

14.2 In the event of any subdivision or consolidation of outstanding
shares of Common Stock or declaration of a dividend payable in shares of Common
Stock or other stock split, then (i) the number of shares of Common Stock
issuable pursuant to each Award, (ii) the total number of shares reserved under
the Plan, and (iii) the per share exercise price of the Awards shall each be
proportionately adjusted to reflect such transaction. In the event of any other
recapitalization or capital reorganization of the Company, any consolidation or
merger of the Company with another corporation or entity, the adoption by the
Company of a plan of exchange affecting the Common Stock or any distribution to
holders of Common Stock of securities or property (other than normal cash
dividends or dividends payable in Common Stock), the Board of Directors shall
make appropriate adjustments to (1) the number of shares of Common Stock
issuable pursuant to each Award and (2) the per share exercise price of the
Awards to reflect such transaction. In the event of a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation, the Board of Directors shall be authorized to issue or assume stock
options by means of substitution of new options for previously issued options or
an assumption of previously issued options as a part of such adjustment.

15. WITHHOLDING TAXES

The Company shall have the right to deduct from any payment to be made
pursuant to the Plan the amount of any taxes required by law to be withheld
therefrom, or to require a Participant to pay to the Company such amount
required to be withheld prior to the issuance or delivery of any shares of Stock
or the payment of cash under the Plan. The Committee may, in its discretion,
permit a Participant to elect to satisfy such withholding obligation by (i)
having the Company retain the number of shares of Common Stock or (ii) tendering
the number of shares of Common Stock, in either case, whose Fair Market Value
equals the amount required to be withheld. Any fraction of a share of Common
Stock required to satisfy such obligation shall be disregarded and the amount
due shall instead be paid in cash, to or by the Participant, as the case may be.

16. REGULATORY APPROVALS AND LISTINGS

Notwithstanding anything contained in this Plan to the contrary, the
Company shall have no obligation to issue or deliver certificates of Common
Stock evidencing Restricted Stock Awards or any other Award payable in Common
Stock prior to (i) the obtaining of any approval from any governmental agency
which the Company shall, in its sole discretion, determine to be necessary or
advisable, (ii) the admission of such shares to listing on the Stock Exchange,
and (iii) the completion of any registration or other qualification of said
shares under any state or federal law or ruling of any governmental body which
the Company shall, in its sole discretion, determine to be necessary or
advisable.

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17. NO RIGHT TO CONTINUED EMPLOYMENT OR GRANTS

No person shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed as giving a Participant the right to be
retained in the employ of the Company or its subsidiaries. Further, the company
and its subsidiaries expressly reserve the right at any time to dismiss a
Participant free from any liability, or any claim under the Plan, except as
provided herein or in any Award Agreement entered into hereunder.

18. CHANGE OF CONTROL

The Committee shall have the discretion, exercisable at any time before a
Change of Control to provide for the acceleration of vesting and for settlement,
including cash payment, of an Award granted under the Plan upon or immediately
before such event is effective. However, the granting of Awards under the Plan
shall in no way affect the right of the Company to adjust, reclassify,
reorganize, or otherwise change its capital or business structure, or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any portion of its
businesses or assets.

19. AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION

The Board may amend, modify, suspend or terminate this Plan for any purpose
except that (i) no amendment or alteration that would impair the rights of any
Participant under any Award previously granted to such Participant shall be made
without such Participant's consent and (ii) no amendment or alteration shall be
effective prior to approval by the Company's stockholders to the extent such
approval is then required (a) pursuant to Rule 16b-3 in order to preserve the
applicability of any exemption provided by such rule to any Award then
outstanding (unless the holder of such Award consents); or (b) otherwise
required by applicable legal requirements.

20. GOVERNING LAW

The validity, construction and effect of the Plan and any actions taken or
relating to the Plan shall be determined in accordance with the laws of the
State of Delaware and applicable Federal law.

21. RIGHTS AS SHAREHOLDER

Except as otherwise provided in the Award Agreement, a Participant shall
have no rights as a shareholder until he or she becomes the holder of record. To
the extent any person acquires a right to receive payments from the Company
under this Plan, such rights shall be no greater than the rights of an unsecured
creditor of the Company.

22. OTHER BENEFIT AND COMPENSATION PROGRAMS

Unless otherwise specifically provided to the contrary in the relevant
plan, program or practice, settlements of Awards received by Participants under
the Plan shall not be deemed a part of a Participant's regular, recurring
compensation for purposes of calculating payments or benefits from any Company
benefit plan, program or practice or any severance pay law of any country.
Further, the Company may adopt other compensation programs, plans or
arrangements as it deems appropriate or necessary.

23. UNFUNDED PLAN

Unless otherwise determined by the Committee, the Plan shall be unfunded
and shall not create (or be construed to create) a trust or a separate fund or
funds. The Plan shall not establish any fiduciary relationship between the
Company and any Participant or other person. To the extent any person holds any
rights by virtue of an Award granted under the Plan, such rights (unless
otherwise determined by the Committee) shall be no greater than the rights
(unless otherwise determined by the Committee) of an unsecured general creditor
of the Company.

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24. USE OF PROCEEDS

The cash or proceeds received by the Company from the issuance of shares
pursuant to awards under the Plan shall constitute general funds of the Company.

25. SUCCESSORS AND ASSIGNS

The Plan shall be binding on all successors and assigns of a Participant,
including, without limitation, the estate of such Participant and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Participant's creditors.

26. EFFECTIVE DATE

This Plan, prior to amendment and restatement, was effective as of the date
it was approved by the Board of Directors of the Company. Further, this Plan was
approved by the sole stockholder of the Company prior to July 1, 1995. This
Plan, as amended and restated, shall be effective as of the date first approved
by the Board of Directors of the Company, subject to the approval of the holders
of a majority of shares of Common Stock present, or represented, and entitled to
vote at the first meeting of the Company's stockholders at which directors are
to be elected held after December 31, 1996. If the stockholders of the Company
shall fail so to approve this Plan prior to December 31, 1997, this Plan shall
terminate and cease to be of any further force or effect and all grants of
Awards after such date shall be null and void. Subject to earlier termination
pursuant to Section 19, the Plan shall have a term of 10 years from its
effective date. After termination of the Plan, no future Awards may be granted,
but previously granted Awards shall remain outstanding in accordance with their
applicable terms and conditions and the terms and conditions of the Plan.

27. INTERPRETATION

The Plan as applicable to certain employees is designed and intended to
comply with Rule 16b-3 promulgated under the Exchange Act and with Section
162(m) of the Code, and all provisions hereof shall be construed in a manner to
so comply with respect to such employees.

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APPENDIX C

COOPER CAMERON CORPORATION
MANAGEMENT INCENTIVE COMPENSATION PLAN

I. PURPOSE

The Cooper Cameron Corporation Management Incentive Compensation Plan, as
amended (the "Plan"), has been designed to motivate and reward Key Management
Employees whose efforts impact the performance of Cooper Cameron Corporation
(the "Company") and its subsidiaries through the achievement of pre-established
financial and individual objectives.

Performance under the Plan is measured on the fiscal (calendar) year and
payments under the Plan are made annually.

II. DEFINITIONS

Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the defined meaning is intended, the term is capitalized:

(a) "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of
the Company.

(b) "COMMITTEE" means the Compensation Committee of the Board or any
other committee appointed by the Board to administer the Plan. The
membership of the Committee shall in all cases be comprised solely of two
or more outside directors (within the meaning of Section 162(m)).

(d) "COVERED EMPLOYEE" means the Company's chief executive officer and
the other four highest compensated officers.

(e) "KEY MANAGEMENT EMPLOYEE" means an employee of the Company, or any
of its subsidiaries, who, in the opinion of the Chief Executive Officer of
the Company, is in a position to significantly contribute to the growth and
profitability of the Company.

(f) "PARTICIPANT" means a Key Employee who is nominated for
participation by the Chief Executive Officer of the Company and then is
selected by the Committee to participate in the Plan.

(g) "PLAN YEAR" means the Company's fiscal year commencing January 1
and ending December 31.

(h) "SECTION 162(M)" means section 162(m) (or any successor provision)
of the Internal Revenue Code of 1986, as amended, and applicable
interpretive authority thereunder.

III. ELIGIBILITY

Key Management Employees may be eligible to participate in the Plan, upon
the recommendation of their manager and approval by the Chief Executive Officer
of the Company. An employee who is eligible to participate in any other cash
incentive plan of the Company is not eligible to participate in this Plan. The
Committee will select the Participants for each Plan Year.

IV. AWARD CRITERIA

Performance objectives for operating units below the corporate level will
be recommended by the appropriate manager subject to approval of the Chief
Executive Officer. Performance objectives at the corporate level will be
recommended by the Chief Executive Officer. The Committee is responsible for
establishing the Company performance objectives that are used to determine
awards paid for Company

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objectives under this Plan. All performance objectives for a Plan Year will be
established by the Committee prior to the ninetieth day following January 1 of
such Plan Year.

The basic measures of financial performance under this Plan will be
earnings before interest, income taxes, depreciation and amortization ("EBITDA")
from the Company's financial statements as prepared in accordance with generally
accepted accounting principles and a specified return on equity ("ROE"), which
must be attained before awards are paid. The Committee may, from time to time,
change the basic measures to some other financial goal or goals.

In addition, up to 25% of an individual's award may, at the recommendation
of the individual's immediate manager, be based on individual objectives
(without regard to such basic measures.)

V. TARGET AWARDS

A target award percentage will be established each Plan Year for each
position respecting Participants in the Plan. Target awards may range from 10%
to 75% of a Participant's January 1 base pay (or base pay at the time of
becoming a Participant, if later), depending on position.

VI. AWARD CATEGORIES

A Participant may have Company Objectives, Division Objectives, Business
Unit Objectives and/or Individual Objectives, each of which is recommended by
the Participant's immediate manager and weighted in determining the target award
for each Plan Year.

VII. PERFORMANCE MEASUREMENT

Performance measurement will be determined each Plan Year in three
categories.

1) Minimum: This is the lowest level of performance at which an award
will be generated. The award paid for performance at the minimum level is a
percentage of the target award as established by the Committee. There will
be no payment for performance below the minimum level.

2) Target Performance. This is the expected level of performance based
on the current year's financial plan.

3) Maximum. This is the performance level for which the maximum award
under the Plan will be paid. The maximum award under the Plan is limited to
two times the target award.

VIII. AWARD CALCULATION

Attainment of the financial objectives of the Plan is measured based on
actual results versus Plan targets, with performance above or below Plan targets
prorated up or down to the maximum or minimum levels established for each
financial objective.

IX. DISCRETIONARY AWARDS

There may be unusual situations where a manager feels that the award
generated under the Plan does not properly reflect the contribution of the
Participant. In this situation, the Participant's immediate manager has the
right to recommend an adjustment either up or down, of up to 25% of the
Participant's target award. Notwithstanding the foregoing, an upward adjustment
will not be permitted with respect to a Participant who is a Covered Employee.

X. INDIVIDUAL OBJECTIVES

A Participant's immediate manager may recommend individual objectives as
part of the Participant's performance criteria under the Plan. The use of
individual objectives is subject to the following requirements:

1) The manager must specify the weighting of the individual objectives
in the overall target award, not to exceed 25% of the total award.

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2) Individual objectives must be specifically identified and must be
quantifiable in terms of both the targeted achievement and the time frame
in which the objective is to be completed.

3) The portion of the award generated from individual objectives may
be adjusted up or down based on the manager's assessment of the
Participant's results. Notwithstanding the foregoing, an upward adjustment
shall not be permitted with respect to a Participant who is a Covered
Employee.

XI. ALTERNATIVE CALCULATIONS

There may be circumstances under which the financial performance of the
Company does not generate an award under the Plan. The nature and scope of the
Company's operations are such that at times unanticipated economic and market
conditions may render pre-established financial objectives unattainable in any
given Plan Year. If, in the opinion of the Committee, such circumstances should
arise, an alternative award calculation may be performed. Such calculation will
rank the Company's EBITDA against a pre-established peer group of companies. If
the Company's performance is at or above the 60th percentile, then an award
payment equal to 50% of the target award may be paid. Notwithstanding the
foregoing, this alternative award calculation will not be applicable to a
Participant who is a Covered Employee.

XII. MODIFICATIONS

If, during a Plan Year, there has occurred or should occur, in the opinion
of the Company, a significant beneficial or adverse change in economic
conditions, the indicators of growth or recession in the Company's business
segments, the nature of the operations of the Company, or applicable laws,
regulations or accounting practices, or other matters which were not anticipated
by the Company when it approved Company and division objectives for the Plan
Year and which, in the Company's judgment, had or have or are expected to have a
substantial positive or negative effect on the performance of the Company as a
whole, the Committee, subject to ratification by the Board, may modify or revise
the performance objectives for the Plan Year in such manner as it may deem
appropriate in its sole judgment. By way of illustration, and not limitation,
such significant changes might result from sales of assets, or mergers,
acquisitions, divestitures, or spin-offs. Notwithstanding the foregoing, any
such modification of performance objectives which results in an upward award
adjustment will not be applicable to a Participant who is a Covered Employee.

XIII. PAYMENT

Any awards generated under the Plan for a Plan Year must be certified in
writing and approved by the Committee following the close of the Plan Year.
Employees voluntarily terminating or terminated for cause prior to the end of
the Plan Year are not eligible for payment of any award under this Plan. If the
termination is due to retirement, death, disability, economic reduction in force
or other termination without cause, any award payment will be determined on the
basis of awards actually paid to similarly situated employees based upon
satisfaction of performance objectives, but prorated to the date of termination.
For this purpose, cause means the willful and continued failure by a Participant
to substantially perform his/her duties (other than any such failure resulting
from the Participant's disability.)

XIV. EFFECTIVE DATE

The Plan is effective as of January 1, 1997, subject to approval of the
Board, and subject to the approval of the holders of a majority of the shares of
the Company's Common Stock present, or represented, and entitled to vote at a
meeting of the Company's stockholders held on or before December 31, 1997. If
the stockholders of the Company fail to so approve the Plan prior to such date,
the Plan shall terminate and cease to be of any further force or effect and all
awards hereunder shall be null and void.

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COOPER CAMERON CORPORATION

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 8, 1997
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
The undersigned stockholder of Cooper Cameron Corporation ("Cooper
R Cameron") appoints Sheldon R. Erikson and Franklin Myers, or either of
them, proxies, with full power of substitution, to vote all shares of
O stock which the stockholder would be entitled to vote if present at the
Annual Meeting of Stockholders of Cooper Cameron on Thursday, May 8,
X 1997, at 10:00 a.m. (central time) in the Ballroom, Doubletree Hotel at
Post Oak, 2001 Post Oak Boulevard, Houston, Texas, and at any
Y adjournments thereof, with all powers the stockholder would possess if
present. The stockholder hereby revokes any proxies previously given
with respect to such meeting.

THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE, BUT IF NO
SPECIFICATION IS MADE, IT WILL BE VOTED FOR THE NOMINEES FOR DIRECTOR
(C. BAKER CUNNINGHAM AND SHELDON R. ERIKSON), WILL BE VOTED FOR
PROPOSALS 2, 3 AND 4 AND IN THE DISCRETION OF THE PROXIES ON OTHER
MATTERS AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.

This card also constitutes voting instructions for any shares held for
the stockholder in the Cooper Cameron Retirement Savings Plan, as
described in the Notice of Meeting and Proxy Statement.
|
| Comments: (Please sign and date on the reverse side of this card.)
|
____________________________________________
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____________________________________________ | SEE REVERSE |
(If you have written in the above space, please mark the | SIDE |
"comments" box on the reverse side of this card.) ---------------

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o FOLD AND DETACH HERE o

[LOGO] COOPER
CAMERON

A telephone response center is available at Cooper Cameron's transfer agent,
First Chicago Trust, to provide stockholders personal assistance with:

o Verifying the number of Cooper Cameron shares in your account.
o Lost or stolen stock certificates.
o Name changes on stock registration in the event of marriage, death and estate
transfers, gifts of stock to minors in custodial accounts... any transfer of
ownership.
o Any stockholder inquiries concerning Cooper Cameron common stock will be
answered courteously and promptly.

Call First Chicago Trust Company of New York at (201) 324-1225, or write:

First Chicago Trust Company of New York
P.O. Box 2500
Jersey City, NJ 07303-2500
<PAGE> 42
[ X ] PLEASE MARK YOUR |
VOTES AS IN THIS | 5973
EXAMPLE |________

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES.

FOR WITHHELD
[ ] [ ] Election of Directors Comments [ ]
Nominees: C. Baker Cunningham (see reverse)
1. Sheldon R. Erikson
To withhold your vote for any
nominee(s), write the name(s) here. I plan to attend [ ]
the meeting.
___________________________________________

2. To approve an amendment to the Amended and Restated 1995 Stock Option
Plan for Non-Employee Directors;

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

3. To approve the Amended and Restated Cooper Cameron Corporation Long-
Term Incentive Plan;

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. To approve the Cooper Cameron Corporation Management Incentive
Compensation Plan;

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

5. To transact such other business as may properly come before the meeting
and any adjournments thereof.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

Please sign exactly as name appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.

_____________________________________

_____________________________________
SIGNATURE(S) DATE

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o FOLD AND DETACH HERE o

COOPER CAMERON CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
10:00 A.M.
MAY 8, 1997

DOUBLETREE HOTEL AT POST OAK
2001 POST OAK BOULEVARD
HOUSTON, TEXAS 77056

________________________________________________________________________________

Agenda
o Call to order
o Introduction of Directors and Officers
o Nomination and Voting for Directors
o Voting for proposals 2, 3 and 4
o Chairman's Report
o General Question and Answer Period
________________________________________________________________________________

THIS IS YOUR PROXY. YOUR VOTE IS IMPORTANT. IT IS IMPORTANT THAT YOUR
SHARES ARE REPRESENTED AT THIS MEETING, WHETHER OR NOT YOU ATTEND THE
MEETING IN PERSON. TO MAKE SURE YOUR SHARES ARE REPRESENTED, WE URGE YOU
TO COMPLETE AND MAIL THE PROXY CARD ABOVE.
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