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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 Section 240.14a-11(c) or Section 240.14a-12
Cooper Cameron Corporation
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(Name of Registrant as Specified In Its Charter)
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(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[Cooper Cameron Logo]
2000 Proxy Statement and
Notice of Annual Meeting
of Stockholders
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COOPER CAMERON CORPORATION
[Cooper Cameron Logo] 515 Post Oak Blvd., Suite 1200
Houston, Texas 77027
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Time 10:00 a.m. on May 11, 2000
Place Omni Houston Hotel, Four Riverway, Houston, Texas
Items of Business 1. Elect three members to Class II of the Board of
Directors
2. Approve the Company's Amended and Restated
Management Incentive Compensation Plan.
3. Approve an Amendment to the Company's Amended and
Restated Long-Term Incentive Plan.
4. Transact such other business as may properly come
before the Meeting or any adjournment thereof.
Record Date Stockholders of record at the close of business on
March 15, 2000, are entitled to notice of and to vote
at the Annual Meeting or any adjournment thereof.
List of Stockholders A list of stockholders of record will be available
for examination at the Company's office during
ordinary business hours for a period of ten days
prior to the Annual Meeting.
Annual Report The Annual Report for the year ended December 31,
1999, which is not a part of the proxy solicitation
material, has been mailed along with this Notice and
accompanying Proxy Statement.
Proxy Voting It is important that your shares be represented and
voted at the Annual Meeting. Stockholders of record
may appoint proxies and vote their shares in one of
three ways:
. signing, dating and mailing the enclosed proxy card
in the envelope provided,
. calling the toll-free number on the enclosed proxy
card, or
. via the internet pursuant to the instructions on
the proxy card.
Stockholders whose shares are held by a bank, broker
or other financial intermediary may appoint proxies
and vote as provided by the intermediary.
Any proxy may be revoked in the manner described in
the accompanying Proxy Statement at any time prior to
its exercise at the meeting.
By Order of the Board of Directors,
/s/ William C. Lemmer
William C. Lemmer
Vice President, General Counsel and
Secretary
March 25, 2000
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TABLE OF CONTENTS
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CONTENTS PAGE
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General Information For Stockholders 3
Voting Securities 3
Voting Procedures 3
Method of Counting Votes 3
Votes Required 4
Revoking a Proxy 4
Proposals 4
Election of Directors--Proposal Number 1 on the Proxy Card 4
Nominees 4
Approval of the Company's Amended and Restated Management Incentive
Compensation Plan--Proposal Number 2 on the Proxy Card 4
Description of the Plan 5
Approval of an Amendment to the Company's Amended and Restated Long-Term
Incentive Plan--Proposal Number 3 on the Proxy Card 5
Description of the Plan 6
Information Concerning the Board of Directors 9
The Role of the Board 9
Board and Committee Meeting Attendance 9
Board Committees 9
Stock Ownership Guidelines 10
Directors' Compensation 10
The Nominees and Continuing Directors 11
Security Ownership of Management 12
Executive Compensation 13
Compensation Committee Report on Executive Compensation 13
Stockholder Return Performance Graph 16
Executive Compensation Tables 17
Summary Compensation Table 17
Option/SAR Grants in 1999 Table 19
Aggregated Option/SAR Exercises in 1999 and 12/31/99 Option/SAR Values
Table 20
Pension Plan Table 20
Employment, Termination and Change of Control Arrangements 21
Other Business 22
Other Information 23
Security Ownership of Certain Beneficial Owners 23
Section 16(a) Beneficial Ownership Reporting Compliance 24
Independent Accountants 24
Stockholder Nominations and Proposals for the 2000 Annual Meeting 24
Stockholder Proposals for Inclusion in the 2001 Proxy Statement 25
Solicitation of Proxies 25
Annual Report to Stockholders and Annual Report on Form 10-K 26
Cooper Cameron Corporation Amended and Restated Management Incentive
Compensation Plan A-1
Third Amendment to Amended and Restated Cooper Cameron Corporation Long-
Term Incentive Plan B-1
</TABLE>
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COOPER CAMERON CORPORATION
PROXY STATEMENT
for the
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 11, 2000
This Proxy Statement and the accompanying proxy/voting instruction card
("proxy card") are being furnished to stockholders of record of Cooper Cameron
Corporation ("Company") by the Company's Board of Directors ("Board") in
connection with its solicitation of proxies to be used at the 2000 Annual
Meeting of Stockholders, scheduled to be held on May 11, 2000, or any
adjournments thereof ("Meeting"). This Proxy Statement and the accompanying
proxy card will be mailed to stockholders beginning March 25, 2000.
GENERAL INFORMATION FOR STOCKHOLDERS
----------------------------
Voting Securities
The Company's only outstanding voting security is its common stock ("Common
Stock"). The Board has fixed the close of business on March 15, 2000, as the
record date for identifying stockholders entitled to vote at the Meeting and,
at that time, there were 51,711,412 shares of Common Stock outstanding and
entitled to be voted at the Meeting. Each such share of Common Stock is
entitled to one vote.
Voting Procedures
The accompanying proxy card allows record holders to appoint proxies and
vote the shares they own, and participants in the Cooper Cameron Corporation
Retirement Savings Plan and the Company sponsored Individual Account
Retirement Plans (collectively, "Retirement Plans") to give voting
instructions to the Retirement Plan trustees with respect to the number of
equivalent shares credited to their account. The proxy card also contains
instructions on how to appoint proxies and vote by telephone or by the
internet. Shares of Common Stock will be voted as specified by a properly
signed and returned proxy card or by a telephonic or electronic communication
made in accordance with the proxy card instructions.
If a properly signed and returned proxy card does not specify how the shares
are to be voted with respect to any of the Proposals to be voted on
("Proposal"), the shares, other than those held in the Retirement Plans, will
be voted as recommended by the Board with respect to that Proposal, and shares
held in the Retirement Plans will be voted, in accordance with the terms of
the Retirement Plans, by the Retirement Plans' trustees in the same proportion
as the shares for which instructions have been received from other Retirement
Plan participants.
Method of Counting Votes
Stockholders who return properly signed proxy cards, or who otherwise
authorize a proxy to vote, will have the number of shares of Common Stock
represented by such proxy counted as "present" for purposes of establishing a
quorum and determining the number of votes needed for approval of any Proposal
before the Meeting other than election of directors. Any stockholder who does
not desire to vote on any Proposal may abstain from voting by marking the
appropriate space on the proxy card or by following the telephone or internet
instructions. However, shares voted as abstaining and shares with respect to
which there are "broker non-votes" will be counted as present for both the
purpose of establishing a quorum and the purpose of determining the number of
votes needed for approval of any Proposal before the Meeting other than the
election of directors. A "broker non-vote" occurs when a beneficial owner of
stock held by a bank, broker or other financial intermediary does not give
instructions to such intermediary on how the shares should be voted and the
intermediary exercises its discretionary authority under the rules of the New
York Stock Exchange to vote on one or more, but not all, of the Proposals.
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Votes Required
A majority of the shares of Common Stock entitled to be voted at the Meeting
must be present at the Meeting, whether present in person or represented by
proxy, in order to constitute a quorum. Abstentions and broker non-votes will
be counted in determining whether a quorum is present.
Directors are elected by a plurality of the votes cast by the shares
entitled to vote present at the Meeting. Therefore, the three nominees
receiving the highest number of votes will be elected directors, and
abstentions, broker non-votes and shares not voted will have no effect,
provided a quorum is present.
All other matters brought before the Meeting will be decided by a majority
of the votes cast by the shares entitled to vote which are present.
Abstentions and broker non-votes will have the effect of a negative vote since
all matters other than the election of directors require the affirmative vote
of a majority of shares entitled to vote which are present to be approved.
Revoking a Proxy
Any stockholder giving a proxy may revoke it at any time before it is voted
by communicating such revocation in writing to the Secretary of the Company or
by executing and delivering a later-dated proxy. Attendance at the Meeting
will not be effective to revoke the proxy unless written notice of revocation
also has been given to the Secretary of the Meeting before the voting.
PROPOSALS
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Election of Directors--Proposal Number 1 on the Proxy Card
The Company's Certificate of Incorporation provides for a Board of Directors
of between five and fifteen members (with seven being the number currently
authorized) divided into three classes. One class is elected each year for a
term of three years, so that approximately one-third of the Board is elected
each year. The term of the Class II directors expires at this year's Meeting.
The current Class II directors are: Nathan M. Avery, C. Baker Cunningham and
Sheldon R. Erikson.
Nominees
The Board has nominated Messrs. Avery, Cunningham and Erikson for re-
election as Class II directors for a three-year term expiring at the Annual
Meeting of Stockholders in 2003, or when their successors are elected and
qualified.
If any of the nominees is unable to serve, which is not anticipated, the
remaining Board members may elect a substitute, nominate another person, or,
alternatively, may reduce the size of the Board, all in accordance with the
Company's Certificate of Incorporation.
The Board recommends that stockholders vote FOR each of the nominees.
Approval of the Company's Amended and Restated Management Incentive
Compensation Plan--Proposal Number 2 on Proxy Card
The Board has adopted, and stockholders are being asked to approve, an
amended and restated Management Incentive Compensation Plan ("Plan" or
"MICP"). The Plan has been amended to replace the method by which the maximum
award payable under the Plan to any one employee for any year is calculated
and to expand the basic measures of financial performance the Compensation
Committee can use when establishing performance objectives. The maximum award
payable under the Plan had been stated as a formula based on multiples of a
participant's base pay. Under the Plan, as amended, the formula is replaced by
a stated dollar amount, and the maximum award payable to any one individual
for any year is $5 million. The basic measures of financial
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performance had been limited to earnings before interest, taxes, depreciation
and amortization ("EBITDA") and return on equity ("ROE"), with the
Compensation Committee having the ability to, "from time to time, change the
basic measures to some other financial goal or goals." Under the Plan, as
amended, the only performance measures which can be used by the Committee are
expressly listed. The basic measures of financial performance authorized under
the Plan, as amended, are EBITDA, EBITDA return on sales, EBITDA return on
capital, EBITDA return on equity, ROE, cash flow, earnings, bookings,
revenues, return on net capital employed ("RONCE"), stock price performance
and economic value added ("EVA").
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 A to this Proxy Statement.
The Plan was approved by the stockholders at the 1997 Annual Meeting. Its
purpose was and is to motivate and reward key management employees whose
efforts impact the performance of the Company through the achievement of
specific company financial and/or individual goals. Awards were made to 237
employees for 1999 performance under the Plan prior to the amendment for which
approval is being sought.
The Plan is administered by the Compensation Committee of the Board in
accordance with the express provisions of the Plan. For each fiscal year of
the Company, the Committee approves (i) the eligible employees who will
participate in the Plan, (ii) the award opportunities for each participant,
(iii) the Company financial performance objectives for the year, and (iv) the
measurement of actual results versus these objectives. The financial
objectives can be based on any or all of the following: EBITDA, EBITDA return
on sales, EBITDA return on capital, EBITDA return on equity, ROE, cash flow,
earnings, bookings, revenues, RONCE, stock price performance or EVA. A
percentage of the participant's base salary at January 1 each year (or pay at
the time of becoming a participant, if later) is established as a target
award.
Payments under the Plan are determined by the Compensation Committee based
upon the degree of success achieved with respect to the predetermined
financial objectives. The maximum payout under the Plan may not exceed $5
million for any participant for any fiscal year. The Compensation Committee
has the discretion to adjust the award calculated under the Plan, except that,
in the case of the Chief Executive Officer and the other four most highly
compensated officers, the Committee may exercise only negative discretion.
A description of the Compensation Committee's use and administration of the
Plan can be found in the Compensation Committee Report on Executive
Compensation on page 13 of this Proxy Statement.
The Board recommends a vote FOR approval of the Company's Amended and
Restated Management Incentive Compensation Plan.
Approval of an Amendment to the Company's Amended and Restated Long-Term
Incentive Plan--Proposal Number 3 on the Proxy Card
The Board has approved, and stockholders are being asked to approve, an
amendment to the Company's Amended and Restated Long-Term Incentive Plan
("Incentive Plan," "LTIP" or "Plan") to increase by 2,000,000 the number of
authorized shares available under the Incentive Plan. The Incentive Plan
provides for long-term compensation and incentive opportunities for executives
and key employees of the Company and its subsidiaries. As of March 15, 2000,
there were 6,338,563 shares reserved for issuance upon the exercise of
existing option grants under the Incentive Plan and 686,092 shares remaining
available for future grants. The Board believes that the number of shares
reserved for issuance under the Incentive Plan should be increased from the
current authorized level of 11,000,000 to 13,000,000 shares in order to ensure
that sufficient shares are available under the Incentive Plan to reward and
motivate existing employees and attract new employees. The Board believes that
the future success of the Company is dependent upon the quality and continuity
of management, and that compensation programs, such as stock option grants and
options in lieu of salary, are important in attracting and retaining
individuals of superior ability and in motivating their efforts on behalf of
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the Company. The Company's options in lieu of salary program allows executive
officers and key employees the election to receive stock options in lieu of
salary for all or a portion of their annual salary.
While grants have been made under the Incentive Plan and its predecessor
plan since 1995, the number of shares of Common Stock outstanding has remained
at approximately the same level (adjusted for the June, 1997 two-for-one stock
split) as were outstanding at the Company's creation in June 1995.
Description of the Plan
The following summary describes briefly the principal features of the
Incentive Plan. The Plan was approved by the stockholders at the 1997 Annual
Meeting and amended by the stockholders at the 1998 Annual Meeting.
General Terms
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, by enhancing the ability of the Company to attract
and retain employees of outstanding ability, and by providing employees with
an interest in the Company parallel to that of the Company's stockholders.
Currently, 370 employees have received grants under the Plan. The maximum
number of shares of Common Stock which may be granted during any calendar year
to any individual who is an Executive Officer is limited to not more than
1,000,000 shares. 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, its subsidiaries and divisions
are eligible to receive 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 or options granted 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, including incentive stock options; (ii)
stock appreciation rights ("SARs"); (iii) restricted stock; and (iv)
performance awards. Since the inception of the Plan, the only type of awards
granted under the Incentive Plan has been stock options.
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 is exercisable more than ten years after the date of
grant. The option exercise price will not be less than the "fair market value"
on the date of the stock option's grant. The fair market value is the average
of the high and low sales price of a share of Common Stock on the applicable
date, and if not a trading date the average for the preceding day on which
sales of Common Stock were made. The fair market value on March 15, 2000 was
$61.1875 per share. 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.
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Awards may be granted in the form of SARs. SARs 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 not be 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 not be less than the fair market value of the 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 is 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.
Restricted Stock
Awards may be granted in the form of restricted stock ("Restricted Stock
Award"). Restricted Stock Awards may be awarded in such numbers and at such
times as the Committee may 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,
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
1,000,000 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.
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Reload Feature
The Plan permits award agreements for nonqualified stock options to provide
that if an optionee pays the option exercise price in shares of Common Stock
owned for at least six months a new, or reloaded, option will be granted for
the same number of shares as are tendered in payment. The new, or reloaded,
option will have a term equal to the remaining term of the option exercised.
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, although the excess of the fair market value of the shares over the
option price will increase the alternative minimum taxable income of the
optionee, which may cause the optionee to incur alternative minimum tax. Upon
a disposition of shares acquired by the optionee through the exercise of an
incentive stock option, to the extent the disposition is otherwise taxable,
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 from a
disposition which does not qualify for long-term capital gain or loss
treatment. 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 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 of Control
The Compensation Committee has the discretion, exercisable at any time
before a Change of Control, as defined in the Plan, 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. In addition, upon a Change of Control an optionee has the right to
exchange an existing option to acquire shares of the Company's Common Stock
for an option to acquire the successor company's common stock. The exercise
price and number of shares of the new option are derived by a formula designed
to yield the same economic value as the existing option at the higher of
either the acquisition price or the highest price paid for a share of Common
Stock during the 12 months prior to the Change of Control. The new option
would have a term equal to that of the old option and would be immediately
exercisable. Certain agreements described in the Employment, Termination and
Change of Control Agreements section of "Executive Compensation" on page 21
provide for acceleration of vesting upon Change of Control, as defined in the
agreements. The granting of Awards under the Plan, however, 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.
The Board recommends a vote FOR approval of the Amendment to the Company's
Amended and Restated Long-Term Incentive Plan.
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INFORMATION CONCERNING THE BOARD OF DIRECTORS
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The Role of the Board
The business and affairs of the Company are governed in accordance with the
provisions of the Delaware General Corporation Law and the Company's
Certificate of Incorporation and Bylaws, and are managed under the direction
of the Board. The directors are informed of the Company's business and affairs
through Board and Board Committee meetings, background and informational
presentation materials provided them on a regular basis, meetings with
officers and employees of the Company, and outside advisors.
Board and Committee Meeting Attendance
During 1999, the Board held four meetings and the Committees, described
below, held a total of seven meetings. Attendance for all such meetings was
100 percent.
Board Committees
There are two permanent Committees of the Board. Each of the Committees is
composed entirely of independent directors. An "independent director," as the
term is used here, and as it is used by the Securities and Exchange Commission
and the New York Stock Exchange, means a director who is not a present or
former employee of the Company and who has no meaningful financial or personal
tie to the Company or its management other than through share ownership or his
position as a director. Membership of the Committees is as follows:
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AUDIT COMPENSATION
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Nathan M. Avery C. Baker Cunningham
Michael E. Patrick Grant A. Dove*
Michael J. Sebastian* David Ross III
</TABLE>
* Chair
Audit Committee. The Audit Committee was created by the Board to provide
assistance to the directors in fulfilling their responsibilities relating to
corporate accounting, reporting practices, and the quality and integrity of
the financial reports of the Company. The Committee monitors the adequacy and
effectiveness of the Company's accounting processes, financial controls,
reporting systems and compliance program. The principal functions of the
Committee include:
. recommending the selection of independent accountants and approving the
scope, timing and fees of the annual audit;
. meeting with management and with the independent accountants to review
the scope, procedures and results of the audit, the appropriateness of
accounting principles and disclosure practices, and the adequacy of the
Company's financial and auditing personnel and resources;
. reviewing the scope and character of the internal audit function, plans
and significant findings, and the Company's internal controls, including
computerized information systems control and security;
. reviewing the Company's financial statements, earnings releases and
public filings prior to filing;
. reviewing significant changes in accounting standards, legal and
regulatory matters that may impact the financial statements, compliance
policies and programs, including the Company's conflict of interest and
ethical conduct policy (Standards of Conduct Policy), and the insurance
program and coverages; and
. conferring independently with the internal auditors and the independent
accountants in carrying out the functions.
During 1999, the Committee held three meetings.
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Compensation Committee. The Compensation Committee supervises and
administers the compensation and benefits policies, practices and plans of the
Company. The principal functions of the 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, and employee benefit 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.
The Compensation Committee Report on Executive Compensation can be found on
page 13 of this Proxy Statement. During 1999, the Committee held four
meetings.
Stock Ownership Guidelines
The Company established stock ownership guidelines for its directors,
officers and certain key employees in 1996. The Board adopted these guidelines
in order to align the economic interests of the directors, officers and key
employees of the Company with those of the stockholders and further focus the
future direction of the Company on enhancing stockholder value. Under these
guidelines, within three years of their election, outside directors are
expected to own $100,000 worth of the Company's Common Stock and officers and
certain key employees, a total of 38 persons, are expected to own Common Stock
having a market value between one and five times their base salary, depending
on their job category. These guidelines have been met or exceeded by 100% of
the directors and 95% of the officers and key employees.
Directors' Compensation
The following table displays the components of outside director
compensation. Employee directors receive no compensation for serving on the
Board or its Committees. The Company provides no pension or medical benefits
to outside directors.
<TABLE>
<CAPTION>
COMPENSATION AMOUNT/NUMBER
- --------------------------------------------------------------------------------
<S> <C>
Annual Board Retainer........................................... $30,000
Annual Option Grant............................................. 6,000 shares
Board/Committee Meeting Fee..................................... $1,000
</TABLE>
Under the provisions of the Second Amended and Restated 1995 Stock Option
Plan for Non-Employee Directors (the "Directors' Plan") approved at the 1999
Annual Meeting of Stockholders, in lieu of the Annual Board Retainer,
directors may elect to receive stock options, or a combination of cash and
options. All of the directors elected to receive stock options in lieu of all
their cash retainers through the year 2000. As a result, during 1998, options
for 5,800 shares per director were granted in lieu of retainer for 1998, and
options for 4,290 shares per director were granted for the year 1999. During
1999, directors were granted options for 4,290 shares each in lieu of retainer
for the year 2000. During 1999, options for a total of 61,740 shares of
Company Common Stock were granted pursuant to the Directors' Plan.
Options granted to non-employee directors become fully exercisable on the
first anniversary of the date of grant of the option, and expire five years
after the date of grant, subject to prior termination pursuant to the terms of
the Directors' Plan.
The maximum number of shares to be issued under the Directors' Plan and the
number of shares subject to option are subject to adjustment in the event of
stock splits or other changes in the Cooper Cameron capital structure.
10
<PAGE>
The Nominees and Continuing Directors
The nominees for director and all continuing directors are described below,
in order of their classification.
CLASS II -- TERM ENDS 2003 (IF ELECTED)
NATHAN M. AVERY
Director since 1995. Age 65. Chairman of the Board and Chief Executive
Officer of TransCoastal Marine Services, Inc., a marine construction company,
since 1998. He also has been Chairman of the Board and Chief Executive Officer
of Galveston-Houston Company, a company specializing in the manufacturing of
products to serve the oilfield industry since 1977. He was Chairman of the
Board of Directors of Bettis Corporation, an actuator company, until 1996,
when Bettis Corporation merged with Daniel Industries, Inc., and was a
director and member of the Executive Committee of Daniel Industries until June
1999, when Daniel Industries merged with Emerson Electric Co.
C. BAKER CUNNINGHAM
Director since 1996. Age 58. Chairman of the Board, President and Chief
Executive Officer of Belden Inc., a wire, cable and cord products
manufacturing company, since 1993. He served in positions of increasing
responsibility with Cooper Industries, Inc., a diversified manufacturer,
marketer and seller of electrical products, tools and hardware from 1970 to
1993, including Executive Vice President, Operations from 1982 to 1993.
SHELDON R. ERIKSON
Chairman of the Board of the Company since 1996, President and Chief
Executive Officer and director since 1995. Age 58. 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. He is a director of Triton Energy Corporation,
Spinnaker Exploration Company and Layne Christensen Co. He also serves on the
board of directors of the National Ocean Industries Association and the
Petroleum Equipment Suppliers Association.
CLASS III -- TERM ENDING 2001
MICHAEL E. PATRICK
Director since 1996. Age 56. 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, Chief Financial Officer and a director of Lomas Financial
Corporation, as well as President and Chief Operating Officer of two Lomas
subsidiaries, Lomas Mortgage USA and Lomas Information Systems, Inc., from
1992 through 1993. The Lomas companies were engaged in mortgage banking,
information systems and real estate. Lomas Financial Corporation and Lomas
Mortgage USA filed for bankruptcy protection in October 1995. 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
Director since 1994. Age 69. Retired Executive Vice President, Operations of
Cooper Industries, Inc. from 1982 to 1995, responsible for Cooper's former
Petroleum & Industrial Equipment segment. He is a director of Gardner Denver
Machinery Inc. and Quanex Corporation.
11
<PAGE>
CLASS I -- TERM ENDING 2002
GRANT A. DOVE
Director since 1995. Age 71. Managing Partner of Technology Strategies and
Alliances, which performs strategic planning and investment banking services,
since 1991. He was Chief Executive Officer of Microelectronics and Computer
Technology Corporation from 1987 to 1991. From 1982 until 1987 he was
Executive Vice President of Texas Instruments Incorporated and previously
served as Senior Vice President. He is a director of Inet Technologies, Inc.,
Intervoice Brite, Inc., Media One Group and Netpliance, Inc.
DAVID ROSS III
Director since 1995. Age 59. Adjunct professor and member of the Board of
Overseers of the Jesse H. Jones Graduate School of Administration at Rice
University since 1979. From 1987 until 1993, he was Chairman and Chief
Executive Officer of the Sterling Consulting Group, a firm providing
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 engaged 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. He is a director of Nuevo
Energy Company.
SECURITY OWNERSHIP OF MANAGEMENT
---------------------------------
The following table sets forth, as of December 31, 1999, the number of
shares of Common Stock beneficially owned (as defined by the Securities and
Exchange Commission ("SEC")) by each current director, by each executive
officer named in the Summary Compensation Table included herein who is not
also a director, and by all directors and executive officers as a group. For
information regarding the Company's stock ownership guidelines for directors
and executive officers, see "Information Concerning the Board of Directors--
Stock Ownership Guidelines."
<TABLE>
<CAPTION>
Number of Shares That
Number of May Be Acquired By Percent
Shares of Options Exercisable of
Name Common Stock Within 60 Days (1)(2) Class
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Directors
Nathan M. Avery................... 2,296(3) 40,090 *
C. Baker Cunningham............... 8,846 55,090 *
Grant A. Dove..................... 14,296 64,090 *
Sheldon R. Erikson................ 473,846(4) 993,656 2.9
Michael E. Patrick................ 0 24,790 *
David Ross III.................... 9,796 64,090 *
Michael J. Sebastian.............. 24,296 40,090 *
Executive Officers Named in the
Summary Compensation Table Other
Than Those Listed Above:
A. John Chapman................... 29,755(4) 70,360 *
Thomas R. Hix..................... 72,966(4) 362,154 *
Franklin Myers.................... 28,417(4) 173,334 *
Dalton L. Thomas.................. 37,280(4) 152,959 *
All directors and executive
officers as a group (18 persons
including those named above)..... 834,673(4) 2,360,602 6.3
</TABLE>
* Indicates ownership of less than one percent of Common Stock outstanding.
12
<PAGE>
(1) As defined by the SEC, securities beneficially owned include securities
that the persons named above have the right to acquire at any time within
60 days after December 31, 1999.
(2) 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
executive officers. Such options are not forfeitable or cancelable, expire
five years from the effective date and become exercisable one year from
effective date.
(3) Includes 2,170 shares owned by family members as to which beneficial
ownership is disclaimed.
(4) Includes shares held in the Cooper Cameron Corporation Retirement Savings
Plan as of December 31, 1999.
EXECUTIVE COMPENSATION
-----------------------------------------------
COMPENSATION COMMITTEE REPORT 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. The Committee is comprised of three directors,
Messrs. C. Baker Cunningham, Grant A. Dove and David Ross III, who are neither
officers nor employees of the Company. The principal functions of the
Committee are listed on page 10 under the heading "Board Committees."
The Company's primary objective is to increase 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.
Base Salary and Annual Incentive Awards
Each of the Company's executive officers receives a base salary, or in the
alternative, receives options in lieu of a target salary and has an
opportunity to earn a bonus under the Company'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 or target 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. The basic measure of financial
performance has been earnings before interest, taxes, depreciation and
amortization (EBITDA) and return on equity (ROE). The stockholders are being
asked to vote on a proposal at this Meeting to expand the list of measures, as
described on page 5 of this Proxy Statement. A target award percentage is
established for each position eligible to participate in the MICP. Annual
incentives were awarded to 237 employees for 1999 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.
13
<PAGE>
Long-Term Incentives
It is the policy of the Board to provide executives with incentives 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 Company's Long-Term Incentive Plan.
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. The options have a ten-year expiration date and become
one-third exercisable one year after the grant date, two-thirds exercisable
two years after the grant date and fully exercisable three years after the
grant date. In addition, 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 the year ending December 31, 1999. The options granted in lieu of
salary are fully exercisable at the end of each respective year, are vested
pro rata in the event employees terminate their employment before vesting and
have a four-year exercise period thereafter. The Committee reviews each year
whether employees who elect to receive stock options in lieu of salary 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 has provided 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. The Committee will continue
to review the Options in Lieu of Salary Program and recommend to the Board the
degree, if any, to which it will be modified.
Compensation of the CEO
Mr. Erikson currently has a base salary of $525,000, which the Committee,
based on a review of the compensation levels of chief executive officers of
companies of comparable size in similar businesses, believes to be below the
median salary level of such executives. Mr. Erikson's base salary has remained
constant since 1997. He also received a bonus in the amount of $792,099 for
1999. Mr. Erikson's target bonus opportunity for 2000 is 90 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 from 1995 through 1999. The number of options granted to Mr.
Erikson under this program for 1999 was 75,000. These options became fully
exercisable at the end of the year in which they were earned.
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.
Tax Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended, places a
limit of $1 million on the amount of annual compensation that may be deducted
by the Company in any year with respect to the Company's Chief Executive
Officer and its other four most highly compensated executive officers. Certain
performance-based compensation approved by stockholders is not subject to this
deduction limitation, and is, therefore, deductible.
Options granted under the Company's Amended and Restated Long-Term Incentive
Plan and bonuses paid pursuant to the Management Incentive Compensation Plan
generally will qualify as performance-based compensation and should be
deductible. The Company intends to maximize the deductibility of executive
compensation while retaining the discretion necessary to compensate executive
officers in a manner commensurate with performance and the competitive market
for executive talent, and, therefore, the Committee
14
<PAGE>
and/or the Board may from time to time, in circumstances it deems appropriate,
award compensation in addition to these option grants and bonus payments that
may not be deductible.
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
15
<PAGE>
Stockholder Return Performance Graph
Set forth below is a line graph showing the cumulative total stockholder
return on Company Common Stock from June 30, 1995 to December 31, 1999, 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 June 30, 1995.
[Graph]
<TABLE>
<CAPTION>
June 30, Dec. 29, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1995 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Cooper Cameron.......... 100.0 213.11 459.24 732.38 294.15 587.56
S&P 500................. 100.0 113.07 135.98 178.14 225.65 269.71
S&P Oil & Gas (Drilling
& Equipment)........... 100.0 115.37 160.57 244.08 137.70 185.43
</TABLE>
16
<PAGE>
Executive Compensation Tables
The following table presents information concerning compensation paid to, or
accrued for, the Chief Executive Officer and the other four most highly
compensated executive officers of the Company (collectively, the "other named
executive officers") for the last three years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation Awards (1)
--------------------------------- ---------------------------------
Securities
Name and Principal Salary Other Annual Underlying All Other
Position Year $ (2) Bonus $ Compensation $ Options/SARs # Compensation $ (3)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sheldon R. Erikson 1999 -0- 792,099 90,775(4) 330,452 15,315
Chairman, President and 1998 -0- 196,875 62,931(4) 459,096 41,380
Chief Executive Officer 1997 -0- 787,500 150,720(4) 550,000 34,291
Thomas R. Hix 1999 -0- 235,123(5) 44,960(4) 46,383 5,838
Senior Vice President 1998 -0- 63,000 19,987(4) 135,875 12,504
of Finance and Chief 1997 -0- 252,100 78,917(4) 232,000 12,468
Financial Officer
Franklin Myers 1999 -0- 187,115(5) 34,603(4) 50,165 5,510
President, Cooper 1998 -0- 63,000 19,987(4) 138,161 12,942
Energy Services 1997 -0- 252,100 72,485(4) 232,000 12,008
Division
Dalton L. Thomas (6) 1999 -0- 211,200 32,206(4) 44,000 5,845
President, Cameron 1998 55,000 90,988 361,403(4)(7) 129,329 42,101(8)
Division
A. John Chapman (9) 1999 175,000 90,000 *(10) 35,000 8,937
President, Cooper 1998 185,000 128,871 *(10) 42,539 15,757
Cameron Valves Division
</TABLE>
(1) Columns dealing with "Restricted Stock Awards" and "LTIP Payouts" have
been omitted since no restricted stock awards or LTIP payouts were
awarded to the named executives.
(2) Certain of the named executive officers were granted non-qualified stock
options in lieu of salary for the periods July 1, 1996 through June 30,
1997, July 1, 1997 through December 31, 1997, January 1, 1998 through
December 31, 1998, and January 1, 1999 through December 31, 1999 under
the Cooper Cameron Stock Options in Lieu of Salary Program approved by
the Board. Under the Program, certain officers and key management elected
to receive a percentage of base pay in non-qualified stock options under
the Company's Amended and Restated Long-Term Incentive Plan ("LTIP"). The
options granted in lieu of 1999 salary were granted in 1998 and reported
in the Company's Proxy Statement for the Annual Meeting of Stockholders
held on May 13, 1999 and have, therefore, not been included. The terms of
the Stock Options are explained in the "Option/SAR Grants in 1999" Table
on page 19.
(3) The figures in this column for 1997, 1998, and 1999 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: Mr. Erikson $6,750, $23,266 and $4,275 for 1997
and $7,200, $29,905 and $4,275 for 1998 and $7,200, $4,752, and $3,363
for 1999; Mr. Hix $6,750, $4,554 and $1,164 for 1997 and $7,200, $4,140
and $1,164 for 1998 and $585, $4,392, and $861 for 1999; Mr. Myers
$4,865, $6,440 and $703 for 1997 and $7,200, $5,039 and $703 for 1998 and
$585, $4,392, and $533 for 1999; Mr. Thomas $4,500, $3,093 and $539 for
1998 and $942, $4,094, and $809 for 1999; and Mr. Chapman $4,556, $9,986
and $1,215 for 1998 and $4,500, $3,375, and $1,062 for 1999.
17
<PAGE>
(4) Includes cash or deferred payment for loss of benefits due to
participation in the Options in Lieu of Salary Program.
(5) Included in this amount is a merit bonus award of $13,000.
(6) Mr. Thomas was elected an officer of the Company in July 1998.
(7) Mr. Thomas was Vice President, Eastern Hemisphere for Cameron until July
1998 and was located in the United Kingdom. As a result of his overseas
assignment, the Company was obligated to reimburse him for certain
foreign and U.S. income taxes. Included in this amount is reimbursement
for foreign and U.S. taxes of $306,167.
(8) Included in this amount is reimbursement for relocation expenses of
$33,969.
(9) Mr. Chapman was elected an officer of the Company in May 1998.
(10) Perquisites and other personal benefits paid or distributed did not
exceed the lesser of $50,000 or 10 percent of this individual's total
salary and bonus.
18
<PAGE>
The following table presents information concerning the grant of options
during 1999 to the Chief Executive Officer and the other named executive
officers.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN 1999
Individual Grants
------------------------------------------------- Potential Realizable
Number of Percent Value at Assumed
Securities of Total Annual Rates of
Underlying Options Stock Price
Options/SARs Granted Appreciation for
Granted to Exercise or Option Term (4)
(number of Employees Base Price Expiration ----------------------
Name shares) in 1999 Per Share (1) Date 5 Percent 10 Percent
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sheldon R. Erikson...... 141,500(2) 8.6 42.6875 11/11/09 3,789,700 9,626,652
38,866(3) 2.4 40.0000 7/4/05 512,912 1,158,810
150,086(3) 9.1 40.0000 7/1/01 562,480 1,147,798
Thomas R. Hix........... 44,000(2) 2.7 42.6875 11/11/09 1,181,221 2,993,446
2,383(3) .1 42.3125 7/4/05 32,604 71,762
Franklin Myers.......... 44,000(2) 2.7 42.6875 11/11/09 1,181,221 2,993,446
6,165(3) .4 40.6875 7/4/05 90,626 197,527
Dalton L. Thomas........ 44,000(2) 2.7 42.6875 11/11/09 1,181,221 2,993,446
A. John Chapman......... 35,000(2) 2.1 42.6875 11/11/09 939,607 2,381,150
</TABLE>
(1) 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.
(2) These shares were granted under the Company's Long-Term Incentive Plan.
(3) These shares were granted under the reload feature of the Amended and
Restated Long-Term Incentive Plan and vested in full on the date of grant.
(4) These columns show the gains option holders could realize if the Company's
stock appreciates at a 5% and a 10% rate above the Exercise Price for each
grant. These growth rates are arbitrary assumptions specified by the U.S.
Securities and Exchange Commission, not the Company's predictions. For the
shares granted under the Long-Term Incentive Plan during 1999, other than
those granted under the reload feature, a 5% growth rate over the option
term would yield a market price per share of $69.53 and a 10% growth rate
would yield a market price of $110.72.
19
<PAGE>
The following table presents information concerning exercises of stock
options during 1999 and the unexercised options held at the end of 1999 by the
Chief Executive Officer and the other four named executive officers.
AGGREGATED OPTION/SAR EXERCISES IN 1999
AND 12/31/99 OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Options/SARs at In-the-Money Options/SARs
on Value 12/31/99 (#) at 12/31/99 ($) (1)
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sheldon R. Erikson...... 317,496 6,943,310.95 923,656 498,168 12,138,810 7,681,387
Thomas R. Hix........... 5,500 186,909.25 292,154 224,668 6,779,064 3,043,312
Franklin Myers.......... 37,086 1,125,718.84 103,334 193,962 1,407,870 2,549,649
Dalton L. Thomas........ 9,006 291,302.52 88,674 158,953 1,198,299 2,068,462
A. John Chapman......... 8,026 216,569.57 63,789 80,906 1,291,937 1,063,470
</TABLE>
(1) Values are based on the difference between the exercise price and the
closing price of $48.9375 per share of Common Stock on the New York Stock
Exchange on the last trading day of 1999.
The following table presents information concerning the estimated annual
retirement benefits payable to the Chief Executive Officer and the other four
named executive officers under the Cooper Cameron Corporation Retirement Plan
upon retirement at age 65.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Year Annual
Individual Estimated
Reaches Benefit at
Name Age 65 Age 65 ($)
- --------------------------------------------------------------------------------
<S> <C> <C>
Sheldon R. Erikson...................................... 2006 127,080
Thomas R. Hix........................................... 2012 88,128
Franklin Myers.......................................... 2017 135,444
Dalton L. Thomas........................................ 2014 72,948
A. John Chapman......................................... 2006 48,396
</TABLE>
For each of the individuals shown in the Summary Compensation Table, the
table above shows the year each attains age 65, and the projected annual
pension benefit at age 65. The formula for calculating the projected annual
pension benefits is 4% of the executive's average annual compensation up to
the Social Security Wage Base and 8% thereafter for the five-year period
preceding retirement. The calculation is based on the following assumptions:
benefits paid on a straight-life annuity basis; continued compensation at the
1999 levels; and an interest crediting rate of 5.0%. Amounts under the Cooper
Cameron Corporation Supplemental Excess Defined Benefit Plan are included in
the Annual Estimated Benefit. Since the formula is based on annual
compensation over the five-year period preceding retirement and the
calculation assumes continued compensation at the same level as the most
recent year, the estimated benefit will vary from year to year as the annual
compensation, which includes bonus, varies from year to year.
20
<PAGE>
Employment, Termination and Change of Control Arrangements
The Company has employment agreements containing certain termination and/or
severance provisions with Messrs. Erikson, Hix and Myers. The Company also has
an Executive Severance Policy for and Change of Control Agreements with other
executive officers including Messrs. Thomas and Chapman.
The agreements with Messrs. Erikson, Hix and Myers provide for specific
terms of employment, including base salary, bonus and benefits over specified
periods of time and for severance benefits and certain benefits should a
Change of Control, as defined below, occur. The agreements were 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 $525,000 a year and a
bonus as provided under the Company's Management Incentive Compensation Plan
or any other bonus plan adopted by the Board of Directors for executive
officers; 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 Messrs. Hix and Myers have substantially the same terms as those
described above for Mr. Erikson, except that these agreements have terms of
one year, which are automatically extended on a yearly basis. The agreements
provide that Messrs. Hix and Myers each will receive a salary of not less than
$265,000 per year.
If any of these executives 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 by discharge without cause or by the executive with Good
Reason, Mr. Erikson is entitled to an amount equal to three times the sum of:
the highest base pay during any of the last three years (or its equivalent if
paid in compensation other than cash); the higher of maximum bonus award that
he could earn during the current year and the highest bonus he received during
any of the three preceding years; and, the value at the time of grant of the
highest stock option award he received during any of the five preceding years.
Messrs. Hix and Myers are entitled to two times base salary and bonus
calculated in the same manner as in Mr. Erikson's agreement. Each of them is
also entitled to certain other payments relating to benefit plans applicable
to all employees. "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 is not 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 permitted by the agreement; or any continuing material
default by the Company in the performance of its obligations under the
agreement.
The agreements with Messrs. Erikson, Hix and Myers also provide for certain
benefits in the event of a Change of Control. If Messrs. Hix and Myers are
discharged without cause or resign for Good Reason in conjunction with a
Change of Control, they are, in lieu of their termination benefits summarized
above, entitled to a severance package which includes a payout equal to three
times their base pay, bonus, and option grant, each calculated in accordance
with the same provisions as found in Mr. Erikson's agreement described above.
All three of these officers would also be entitled to accelerated vesting of
options granted under the Company's Long-Term Incentive Program and the right
to tender shares of Common Stock to the Company, including those acquired by
the exercise of stock options following an accelerated vesting, in proportion
to the total number of shares actually tendered and at the tender offer price
or fair market value of any exchange security. These agreements also provide
that if any payments made to the executive officer would cause the executive
officer to be subject to an excise tax because the payment is a "parachute
payment" (as defined in the Internal Revenue Code), then the Company will pay
the executive officer an excise tax premium in a sufficient amount to make the
executive officer whole with respect to any additional tax that would not have
been payable but for the excise tax provision. A "Change of Control" of the
Company will occur for purposes of these Agreements if (i) any
21
<PAGE>
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 subsequent members approved by two-thirds
of the current members, 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.
The Executive Severance Policy for other senior level executives, including
Mr. Thomas and Mr. Chapman, sets forth certain salary and benefit rights in
the event of the termination of employment. The Executive Severance Policy
provides for salary and benefit continuation of between 9 and 15 months for
the executive depending upon the classification of the position and is 12
months in the case of Messrs. Chapman and Thomas, if their employment with the
Company is terminated by the Company for any reason other than cause.
The Change of Control agreements are with the nine executive officers of the
Company other than Messrs. Erikson, Hix and Myers. They entitle the executive,
but only in the event of a termination of employment by the Company without
cause or by the executive for Good Reason within two years of a Change of
Control, to substantially the same benefits provided to Messrs. Hix and Myers
under their employment agreements in the event of a Change of Control, except
that under these agreements a Change of Control resulting from a merger or
consolidation does not occur unless the Company's stockholders own less than
60% of the outstanding voting securities of the surviving or resulting
corporation or entity.
OTHER BUSINESS
-----------------------------------------------------------
The Board does not know of any business that will properly come before 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 in accordance with the judgment of the persons named in the
proxies.
22
<PAGE>
OTHER INFORMATION
------------------------------------------------------
Security Ownership of Certain Beneficial Owners
The following table lists the stockholders known by the Company to have been
the beneficial owners of more than five percent of the Common Stock
outstanding and entitled to be voted at the Meeting as of December 31, 1999:
<TABLE>
<CAPTION>
Shares of Percent of
Common Common
Name and Address of Beneficial Owner Stock Stock
- --------------------------------------------------------------------------------
<S> <C> <C>
FMR Corp. (1)............................................ 6,685,820 12.4
82 Devonshire Street
Boston, MA 02109-3614
AMVESCAP PLC (2)......................................... 4,399,775 8.2
11 Devonshire Square
London EC2M 4YR England
J.P. Morgan & Co., Incorporated (3)...................... 4,032,375 7.5
60 Wall Street
New York, NY 10260
Massachusetts Financial Services Company (4)............. 3,589,505 6.7
500 Boylston Street
Boston, MA 02116
</TABLE>
(1) According to a Schedule 13G/A filed with the Securities and Exchange
Commission (the "SEC") by FMR Corp., as of December 31, 1999, Fidelity
Management & Research Company (Fidelity), a wholly-owned subsidiary of FMR
Corp. and an investment adviser registered under Section 203 of the
Investment Advisers Act of 1940, is the beneficial owner of 6,627,500
shares or 12.289% of Common Stock. Edward C. Johnson 3d, FMR Corp.,
through its control of Fidelity, and the funds each has sole power to
dispose of the 6,627,500 shares owned by the Funds, but neither has the
sole power to vote or direct the voting of the shares. Fidelity carries
out the voting of the shares under written guidelines established by the
Funds' Boards of Trustees. Fidelity Management Trust Company, a wholly-
owned subsidiary of FMR Corp., and a bank as defined in Section 3(a) (6)
of the Securities Exchange Act of 1934, is the beneficial owner of 42,900
shares or 0.079% of Common Stock, and Fidelity International Limited (FIL)
is the beneficial owner of 15,420 shares. Edward C. Johnson 3d and FMR
Corp., through its control of Fidelity Management Trust Company, each has
sole dispositive power over 42,900 shares and sole power to vote or to
direct the voting of 42,900 shares. FIL has sole power to vote and the
sole power to dispose of 15,420 shares.
(2) According to a Schedule 13G filed with the SEC, dated February 3, 2000, by
AMVESCAP, PLC, a Parent Holding Company, AMVESCAP and its subsidiaries had
shared voting power over 4,399,775 shares and shared dispositive power
over 4,399,775 shares of Common Stock.
(3) According to a Schedule 13G filed with the SEC by J.P. Morgan, as of
December 31, 1999, J.P. Morgan had sole voting power over 3,361,935
shares, shared voting power over 6,668 shares, sole power to dispose of
4,009,093 shares and shared power to dispose of 7,730 shares.
(4) According to a Schedule 13G filed with the SEC, dated February 11, 2000,
Massachusetts Financial Services Company had sole voting power over
3,434,405 shares of common stock and sole dispositive power over 3,589,505
shares of Common Stock.
23
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act of 1934 requires directors and officers of
the Company, and persons who own more than ten percent of the Company's Common
Stock, to file with the SEC and the New York Stock Exchange initial reports of
beneficial ownership on Form 3 and changes in such ownership on Forms 4 and 5.
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 1999, its executive officers,
directors and stockholders with holdings greater than ten percent complied
with all applicable filing requirements, with the exception of the following:
Mr. Franklin Myers, Senior Vice President and President of the Cooper Energy
Services division, reported a sale of 15,000 shares of Cooper Cameron common
stock on a Form 5 filed with the SEC on February 11, 2000, which was due on
May 10, 1999. Mr. Dalton L. Thomas, Vice President and President of the
Cameron division, reported the exercise of a Cooper Cameron stock option for
7,004 shares of common stock on a Form 5 filed with the SEC on February 11,
2000, which was due on September 10, 1999.
Independent Accountants
During the year ended December 31, 1999, Ernst & Young LLP was employed 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.
Stockholder Nominations and Proposals for the 2000 Annual Meeting
In order for a stockholder to be eligible to submit a nomination or proposal
to the Meeting the stockholder must (1) be a stockholder of record when
submitting a nomination or proposal and on the record date, and (2) comply
with the Company Bylaw provisions on timely notice and proper form.
The Bylaws, in their pertinent parts, provide:
To be timely, a stockholder's notice to the Secretary must be delivered
to or mailed and received at the principal executive offices of the
Corporation not less than sixty (60) days nor more than ninety (90) days
prior to the anniversary date of the immediately preceding annual meeting
of stockholders [May 13, 1999]..., [and]
To be in proper written form, a stockholder's notice to the Secretary [of
a director nomination] must set forth (a) as to each person whom the
stockholder proposes to nominate for election as a director (i) the name,
age, business address and residence address of the person, (ii) the
principal occupation or employment of the person, (iii) the class or series
and number of shares of capital stock of the Corporation which are owned
beneficially and of record by the person and (iv) any other information
relating to the person that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations promulgated thereunder;
and (b) as to the stockholder giving the notice (i) the name and record
address of such stockholder, (ii) the class or series and number of shares
of capital stock of the Corporation which are owned beneficially or of
record by such stockholder, (iii) a description of all arrangements or
understandings between such stockholder and each proposed nominee and any
other person or persons (including their names) pursuant to which the
nomination(s) are to be made by such stockholder, (iv) a representation
that such stockholder
24
<PAGE>
intends to appear in person or by proxy at the annual meeting to nominate
the persons named in its notice and (v) any other information relating to
such stockholder that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14
of the Exchange Act and the rules and regulations promulgated thereunder.
Such notice must be accompanied by a written consent of each proposed
nominee to being named as a nominee and to serve as a director if elected.
To be in proper written form, a stockholder's notice [of a proposal] to
the Secretary must set forth as to each matter such stockholder proposes to
bring before the annual meeting (i) a brief description of the business
desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (ii) the name and record
address of such stockholder, (iii) the class or series and number of shares
of capital stock of the Corporation which are owned beneficially and of
record by such stockholder, (iv) a description of all arrangements or
understandings between such stockholder and any other person or persons
(including their names) in connection with the proposal of such business by
such stockholder and any material interest of such stockholder in such
business, and (v) a representation that such stockholder intends to appear
in person or by proxy at the annual meeting to bring such business before
the meeting.
Stockholder Proposals for Inclusion in the 2001 Proxy Statement
Stockholders' proposals intended to be included in the Company's 2001 Proxy
Statement and presented at the 2001 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 November 25, 2000, in
order to be considered for inclusion in the Company's proxy statement and form
of proxy for that meeting. In order to be eligible to submit a proposal, you
must have continuously held at least $2,000 in market value, or 1%, of the
Company's securities, beneficially or of record, entitled to be voted on the
proposal at the meeting for at least one year by the date you submit the
proposal. You must continue to hold those securities through the date of the
meeting. Additionally, your proposal must meet the requirements for
stockholder proposals set out in the preceding section and the proxy rules of
the Securities and Exchange Commission.
SOLICITATION OF PROXIES
-------------------------------------------------
The Company has provided proxy materials to banks, brokers, and other
financial fiduciaries and requested that such materials be promptly forwarded
to the beneficial owners of Common Stock. In addition, solicitation of proxies
may be made by directors, officers or employees of the Company. Corporate
Investor Communications has been retained to assist in the distribution to and
solicitation of proxies from stockholders and from banks, brokers, and other
nominees for a base fee of $5,500 plus reasonable out-of-pocket expenses. The
cost of soliciting proxies and related services will be borne by the Company.
25
<PAGE>
ANNUAL REPORT TO STOCKHOLDERS AND ANNUAL REPORT ON
FORM 10-K
-------------------------------------------------------------------
Copies of Cooper Cameron's Annual Report to Stockholders and its Annual
Report on Form 10-K for the year ended December 31, 1999, 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/ WILLIAM C. LEMMER
------------------------------------
William C. Lemmer
Vice President, General Counsel and
Secretary
March 25, 2000
26
<PAGE>
APPENDIX A
COOPER CAMERON CORPORATION
AMENDED AND RESTATED
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)).
(c) "Company" means Cooper Cameron Corporation, a Delaware corporation,
and any successor thereto.
(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 Management 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
approving the
A-1
<PAGE>
Company performance objectives that are used to determine awards paid for
Company objectives under this Plan. All performance objectives for a Plan Year
will be established and approved 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, taxes, depreciation and amortization ("EBITDA") from the
Company's financial statements as prepared in accordance with generally
accepted accounting principles, EBITDA return on sales, EBITDA return on
capital, EBITDA return on equity, return on equity ("ROE"), cash flow,
earnings, bookings, revenues, return on net capital employed ("RONCE"), stock
price performance, or economic value added ("EVA").
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 are a percentage
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 except as otherwise
provided for herein.
(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 that may be
awarded to any Participant for any Plan Year is limited to $5 million.
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 and a downward adjustment will have no
limitation with respect to a Participant who is a Covered Employee.
A-2
<PAGE>
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.
(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, 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, as amended and restated, is effective as of January 1, 2000,
subject to the approval of the stockholders of the Company at the Company's
Annual Meeting of Stockholders held on May 11, 2000, or any adjournment
thereof.
A-3
<PAGE>
APPENDIX B
THIRD AMENDMENT TO AMENDED AND RESTATED
COOPER CAMERON CORPORATION LONG-TERM INCENTIVE PLAN
WHEREAS, COOPER CAMERON CORPORATION (the "Company") has heretofore adopted
the AMENDED AND RESTATED COOPER CAMERON CORPORATION LONG-TERM INCENTIVE PLAN
(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 11,
2000;
1. The number "13,000,000" shall be substituted for the number
"11,000,000" in the first and last sentences of Section 4.1 of the Plan.
2. As amended hereby, the Plan is specifically ratified and reaffirmed.
B-1
<PAGE>
COOPER CAMERON CORPORATION
Proxy for Annual Meeting of Stockholders
May 11, 2000
Solicited on Behalf of the Board of Directors
P The undersigned stockholder of Cooper Cameron Corporation ("Cooper
R Cameron") appoints each of Sheldon R. Erikson and William C. Lemmar,
O proxy, with full power of substitution, to vote all shares of stock which
X the stockholder would be entitled to vote if present at the Annual Meeting
Y of Stockholders of Cooper Cameron on Thursday, May 11, 2000, at 10:00 a.m.
(central time) at the Omni Houston Hotel, Four Riverway, Houston, Texas,
and at any adjustments 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
(NATHAN M. AVERY, C. BAKER CUNNINGHAM AND SHELDON R. ERIKSON), WILL BE
VOTED FOR PROPOSALS 2 AND 3 AND IN THE DISCRETION OF THE PROXY 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 and Cooper
Cameron sponsored Individual Account Retirement Plans, as described in the
Notice of Meeting and Proxy Statement.
Comments: (Please sign and date on the reverse side)
---------------------------------
--------------------------------- ____________
(If you have written in the above space, please mark the |SEE REVERSE|
"comments" box on the reverse side of this card.) | SIDE |
_____________
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
COOPER CAMERON CORPORATION
Annual Meeting of Stockholders
10:00 a.m.
May 11, 2000
The Omni Houston Hotel
Four Riverway
Houston, Texas
Agenda
. Call to order
. Introduction of Directors and Officers
. Nomination and Voting for Directors
. Voting for proposals 2 and 3
. Chairman's Report
. 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.
<PAGE>
X Please mark your
votes as in this
example.
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR all nominees.
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FOR WITHELD FOR AGAINST ABSTAIN
2. To approve the Company's
Election of Directors Comments Amended and Restated
Nomminees 01. Nathan M. Avery (see reverse) Management Incentive
02. C. Baker Cunningham Compensation Plan.
03. Sheldon R. Erikson
1. I plan to attend 3. To approve an Amendment to
To withhold your vote for any nominee(s), the meeting. the Company's Amended and
write the name(s) here: Restated Long-Term Incentive
Plan.
4. To transact such other
business as may properly
come before the meeting and
any adjournments thereof.
Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor, ad-
ministrator, trustee or guardian, please give full title
as such.
-------------------------------------------------------
-------------------------------------------------------
SIGNATURE(S) DATE
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
FOLD AND DETACH HERE
[COOPER CAMERON LOGO APPEARS HERE]
TELEPHONE AND INTERNET VOTING INSTRUCTIONS
You may use the telephone or internet to vote your shares electronically,
24 hours per day, 7 days a week. To access the telephone or internet
voting system, you must use the control number printed in the box above.
To Vote by Phone:
Using a touch-tone telephone, call 1-877-PRX-VOTE (1-877-779-8683).
Shareholders residing outside the United States, Canada and Puerto Rico
should call 1-201-536-8073. Use the Control Number located in the box
above. Follow the recorded instructions.
To Vote by Internet:
Log on to http://www.eproxyvote.com/cam. Follow the instructions on
the screen.
