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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Commission File Number 1-13884
COOPER CAMERON CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 76-0451843
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
515 Post Oak Boulevard
Suite 1200
Houston, Texas
(Address of principal 77027
executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 513-3300
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of Each Exchange on
Title of Each Class Which Registered
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Common Stock, Par Value $0.01 Per Share New York Stock Exchange
Junior Participating Preferred Stock New York Stock Exchange
Purchase Rights
Par Value $0.01 Per Share
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in a definitive proxy or information
statement incorporated by reference in Part III of this Form 10-K of any
amendment to this Form 10-K. [ ]
The number of shares of Common Stock, par value $.01 per share,
outstanding as of March 20, 1998 was 52,465,009. The aggregate market value of
the Common Stock, par value $0.01 per share, held by non-affiliates of
Registrant as of March 20, 1998 was approximately $3,242,993,369. For the
purposes of the determination of the above statement amount only, all directors
and executive officers of the Registrant are presumed to be affiliates.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant's Annual Report to Stockholders for 1997 are
incorporated by reference into Part II. Portions of Registrant's
1998 Proxy Statement for the Annual Meeting of Stockholders to be
held May 14, 1998 are incorporated by reference into Part III.
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TABLE OF CONTENTS
PAGE
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1997 1997 MARCH 25, 1998
ITEM FORM 10-K ANNUAL REPORT PROXY STATEMENT
PART I
1. BUSINESS ................................................................. 1 - -
Markets and Products ................................................. 2 - -
Aftermarket Services ................................................. 8 - -
Market Issues ........................................................ 9 - -
New Product Development .............................................. 9 - -
Competition .......................................................... 11 - -
Manufacturing ........................................................ 12 - -
Backlog .............................................................. 13 - -
Patents, Trademarks and Other Intellectual Property .................. 13 - -
Employees ............................................................ 13 - -
2. PROPERTIES ............................................................... 14 - -
3. LEGAL PROCEEDINGS ........................................................ 14 - -
Environmental Matters ................................................ 14 - -
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ...................... 16 - -
PART II
5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS .................................................. 16 - -
6. SELECTED FINANCIAL DATA .................................................. 17 51 -
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS ................................................ 17 21-27 -
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA .............................. 17 28-50
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE ............................................. 18 - -
PART III
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ....................... 18 - 3-5,25
11. EXECUTIVE COMPENSATION ................................................... 19 - 17-20
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT ........................................................... 19 - 2,15-16
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ........................... 20 - -
PART IV
14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K ............................................................. 20 - -
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PART I
ITEM 1. BUSINESS.
Cooper Cameron Corporation ("Cooper Cameron" or the "Company") is a
leading international manufacturer of oil and gas pressure control equipment,
including valves, wellheads, chokes, blowout preventers and assembled systems
for oil and gas drilling, production and transmission used in onshore, offshore
and subsea applications. Cooper Cameron is also a leading manufacturer of gas
turbines, centrifugal gas and air compressors, integral and separable
reciprocating engines, compressors and turbochargers.
Cooper Cameron, a Delaware corporation, was incorporated on November
10, 1994. The Company operated as a wholly-owned subsidiary of Cooper
Industries, Inc. ("Cooper") until June 30, 1995, the effective date of the
completion of an exchange offer with Cooper's stockholders resulting in the
Company becoming a separate stand-alone company. The common stock of Cooper
Cameron is trading on the New York Stock Exchange under the symbol "RON".
In June 1996, Cooper Cameron purchased the assets and assumed certain
operating liabilities of Ingram Cactus Company for approximately $100 million in
cash. The business acquired manufactures and sells wellheads, surface systems,
valves and actuators used primarily in onshore oil and gas production
operations, and owned manufacturing facilities in Oklahoma City, Oklahoma and
Broussard, Louisiana, as well as in the United Kingdom and Austria. The
Company also acquired interests in the Ingram Cactus joint ventures in
Venezuela and Malaysia. The operations have now been integrated into those of
the Cameron division.
In October 1996, Cooper Cameron acquired for its Cameron division
certain assets and assumed certain liabilities of Tundra Valve & Wellhead Corp.,
a Canadian manufacturer of wellheads, trees and valves, for approximately
Canadian $9.8 million. Also during October 1996, Cooper Cameron acquired for its
Cooper Energy Services division, for approximately $6.1 million, certain assets
of ENOX Technologies, Inc., a developer and provider of ignition systems for gas
engines, particularly those used in large-scale gas transmission installations.
During 1997, the Company's Petroleum Production Equipment segment made
three small product line acquisitions totaling $6.3 million and, in February
1998, announced the acquisition of Orbit Valve International, Inc. ("Orbit") for
approximately $100 million in cash and notes. Orbit will become part of the
Cooper Cameron Valves organization upon close of the acquisition which is
expected during the second quarter of 1998. Orbit manufactures and sells
high-performance valves and actuators for the oil and gas and petrochemical
industries. Orbit's primary manufacturing facility is located in Little Rock,
Arkansas with a sales, marketing, assembly, test and warehousing base at
Ashchurch, Gloucestershire in the United Kingdom.
Cooper Cameron's business of manufacturing petroleum production
equipment and compression and power equipment began in the mid-1800's with the
manufacture of steam engines that provided power for plants and textile or
rolling mills. By 1900, with the discovery of oil and gas, Cooper Cameron moved
into the production of natural gas internal combustion
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engines and gas compressors. The Company added to its product offering through
various acquisitions, in particular the acquisitions of The Bessemer Gas Engine
Company (gas engines and compressors); Pennsylvania Pump and Compressor
(reciprocating air and gas compressors); Ajax Iron Works (compressors); Superior
(engines and compressors); Joy Petroleum Equipment Group (valves, couplings and
wellheads); Joy Industrial Compressor Group (compressors); and Cameron Iron
Works (blowout preventers, ball valves, control equipment and McEvoy-Willis
wellhead equipment and choke valves).
BUSINESS SEGMENTS
MARKETS AND PRODUCTS
The Company operates in two industry segments, petroleum production
equipment and compression and power equipment.
For additional industry segment information for each of the three years
in the three-year period ended December 31, 1997, see Note 15 of the Notes to
Consolidated Financial Statements, which Notes are incorporated herein by
reference in Part II, Item 8 hereof ("Notes to Consolidated Financial
Statements.")
Petroleum Production Equipment Segment
The Company manufactures pressure control equipment used at the
wellhead in the drilling for and production and transmission of oil and gas,
both onshore and offshore. The primary products include wellheads, gate valves
and ball valves, blowout preventers ("BOPs") and control systems and are
marketed under the well-known brand names Cameron(R), W-K-M(R), McEvoy(R),
Demco(R), Willis(TM), Ingram Cactus(R), Foster(R) and Thornhill Craver(TM). The
equipment is manufactured in a variety of sizes and to various specifications
with working pressure ratings up to 30,000 pounds per square inch ("p.s.i.").
The wellhead equipment is designed to support the casing and production tubulars
and includes casing head housings, casing heads and tubing heads. Valves of
different sizes and design are assembled with other components into an assembly
known as a "christmas tree," which is mounted on the wellhead equipment and is
used to control the flow of oil and gas from a producing well. Most christmas
trees are custom designed to meet individual customer requirements.
The Company also manufactures subsea production systems, which consist
of equipment used to complete an oil or gas well on the sea floor. Subsea
systems tend to be sophisticated and generally require a high degree of
technological innovation.
In 1993, the Company introduced its patented SpoolTree(TM) subsea
production system for use in oil and gas fields with subsea completions that
require frequent retrieval of downhole equipment. With the SpoolTree(TM) system,
well completion and workover activities can be performed without a workover
riser and removal of the christmas tree and under conventional blowout preventer
control, thereby reducing the time and equipment needed to perform such
activities.
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Cooper Cameron's drilling-related equipment includes ram and annular
BOPs. The drilling of an oil or gas well is done through BOPs located under the
rig floor and on top of the wellhead. The primary function of a BOP is to
maintain well control under all conditions. Ram-type preventers have two
hydraulically actuated steel rams with rubber inserts that are designed to close
around the drill pipe, sealing off the space below or, in the case of blind
rams, to close off the open hole. The annular-type BOP is attached above the ram
BOPs and is used to close off the well-bore using a donut-shaped rubber packer
with steel inserts that are compressed together by a hydraulically actuated
piston. The workover-type preventer is attached to the top of completed oil or
gas wells to control pressures when a variety of work is being performed through
christmas trees. Cooper Cameron manufactures BOPs to meet pressure requirements
of up to 25,000 p.s.i. and in diameters from 4 1/16 to 26 3/4 inches. Cooper
Cameron has experienced a dramatic increase in its BOP sales over the past two
years due to an increased market focus on and improving fundamentals in the
drilling business.
Cooper Cameron also produces other drilling-related equipment, the most
important of which are choke manifolds, drilling risers and control systems.
Choke manifolds are arrangements of piping, valves and special valves, called
chokes, which control pressures during drilling and, in the event of BOP
closure, bleed off excessive pressures. Control systems monitor well pressures
and activate the chokes, valves and BOPs.
Cooper Cameron also manufactures ball valves and underwater pipeline
tie-in and pipeline repair equipment. A ball valve consists of a spherical plug,
or ball, with a hole running axially through it to allow the passage of gas or
liquids. Sealing surfaces are arranged so that a 90-degree turn of the plug will
shut off the flow. Ball valve sizes range from 1/4 inch to 60 inches in diameter
with working pressures of up to 5,000 p.s.i. Large diameter valves are used
primarily in natural gas transmission lines. Smaller valves are used in oil and
gas gathering and processing systems and in various types of industrial
processes in refineries and petrochemical plants. Subsea pipeline tie-in systems
are used in the connection of subsea pipelines to one another and to offshore
platforms. Pipeline repair systems are used in the repair of subsea pipelines.
Cooper Cameron manufactures gate valves and butterfly valves for use in
oil and gas gathering and processing systems such as refineries and
petrochemical plants. Sizes range from 2 to 56 inches and pressures range up to
5,000 p.s.i. Cooper Cameron recently introduced the Cameron(R) Hi-Lo Trip
Mechanical Pilot for Emergency Shutdown valves that are designed for use in oil
and gas production, pipelines, plants and other areas where emergency shutdown
is required.
The Cameron Willis Chokes business was formed in late 1997 to focus
resources on the choke product line with the goal of enhancing Cameron's
performance in this product line. Cooper Cameron manufactures production chokes,
control valves, drilling choke systems, actuators, and pigging and production
automation systems. A choke is a type of valve which restricts and regulates the
flow of a product through a flowline or pipeline. Designs include a multiple
orifice valve, needle and seat chokes, cage style control chokes, rotary chokes
and
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subsea chokes and actuators. The unique multiple orifice valve design uses
two adjacent discs, each with a pair of openings. Cage style control chokes are
used to solve erosion problems while improving the precision of flow control. In
1995, Cooper Cameron introduced its new Willis(TM) Stepping Linear Control
Actuator, which is designed to provide remote operation of certain Willis(TM)
control chokes. Cooper Cameron produces subsea chokes and actuators used on
subsea production equipment, including state-of-the-art subsea retrievable
chokes. Choke sizes range from 1 inch to 6 inches in diameter with working
pressures of up to 20,000 p.s.i. Cooper Cameron recently introduced two new
actuators, the Cameron(R) AP and Compact Modular Actuators, designed for use on
its line of subsea gate valves. These valves are fail-close hydraulically
activated and are manufactured for operating pressures between 1,500 p.s.i. and
3,000 p.s.i.
Cooper Cameron provides complete integrated elastomer research,
development and manufacturing. These products are used in pressure and flow
control equipment in the Petroleum Production Equipment segment. This technology
also supports the petroleum, petrochemical, rubber molding and plastics
industries in the development and testing of elastomer and plastic products.
The Cameron Controls business was created in late 1996 with a primary
goal of expanding Cameron's role as a provider of controls equipment. Drilling
and production equipment used on the ocean floor operates from a platform or
other remote location through hydraulic or electronic connections that allow the
operator to measure and control the pressures and throughput associated with
these installations.
Cooper Cameron markets in excess of 90% of its petroleum production
equipment products directly to end-users through a worldwide network of sales
and marketing employees, supported by agents in some international locations.
Due to the extremely technical nature of many of the products, the marketing
effort is further supported by a staff of engineering employees. The balance of
Cooper Cameron's products are sold through established independent distributors.
The Petroleum Production Equipment segment's primary customers include
major oil and gas exploration and production companies, independent oil and gas
exploration and production companies, foreign national oil and gas companies,
engineering and construction companies, pipeline companies, drilling contractors
and rental equipment companies. Some valves are sold to various types of process
plants, such as refining and petrochemical, chemical and power generation.
Compression and Power Equipment Segment
Cooper Cameron's Compression and Power Equipment segment provides
products and services to the oil and gas production and transmission,
industrial, process and non-utility power generation markets. The primary
products include engines, reciprocating compressors, centrifugal air and gas
compressors, gas turbines, turbochargers, control systems and aftermarket parts
and service. Cooper Cameron markets its products worldwide under the well-known
brand
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names Ajax(R), Superior(R), Cooper-Bessemer(R), Coberra(R), C-B Turbocharger(R),
Pennsylvania Process(TM), Enterprise (TM), En-Tronic(R) ENOX(R), MSG(R), Service
Solutions(TM), Texcentric(R), TurboAir(R) and Joy(R).
Manufactured under the Cooper-Bessemer(R), Ajax(R) and Superior(R)
brand names, Cooper Cameron's reciprocating products include both "integral" and
"separable" units. The integral gas engine-compressor concept, pioneered by the
Company in the 1930s, is a unique two-cycle design that combines the unit's
engine and compressor on a single crankshaft. Integral engine-compressors can
accommodate wide swings in gas transmission pressure conditions and are
frequently used in single-stage transmission, multiple-stage boosting or gas
injection/withdrawal applications. Cooper Cameron's Cooper-Bessemer(R) and
Ajax(R) integral units range in power from 150 to 30,000 horsepower. Over the
past 50 years, more than 4,400 Cooper-Bessemer(R) integral engine-compressors,
totaling over 6,500,000 horsepower, have been installed in 35 countries
worldwide.
Cooper Cameron manufactures four-cycle reciprocating power engines
ranging from small, six-cylinder "in-line" units, to large, 16-cylinder "V"
configuration models. They are available in spark-ignited (gas-fueled), diesel
and dual-fuel (gas and diesel-fueled) versions. Marketed under the
Cooper-Bessemer(R) and Superior(R) brand names, Cooper Cameron power engines are
used to drive reciprocating separable compressors in natural gas gathering,
boosting, injecting, processing and storage/withdrawal applications. Cooper
Cameron's four-cycle engines range in power from 500 to 3,200 horsepower. Cooper
Cameron also manufactures its own lines of Superior(R) and Pennsylvania
Process(TM) reciprocating separable gas compressors. In addition, Cooper Cameron
power engines drive electric generators in industrial, commercial, municipal and
government-operated independent power (non-utility) applications, and pumps in
both oil and gas related services. In 1988, the Company acquired the
Enterprise(TM) engine aftermarket product line from IMO Delaval Inc., and today
provides parts, maintenance, overhaul and engineering services for previously
installed Enterprise(TM) power engines in nuclear, oil and gas, marine and
municipal power applications.
During 1997, Cooper Cameron introduced a new line of rotary screw
compressor packages. Ranging in power from 95 to 1,200 horsepower, the new
packages feature a compact and portable design for quick installation and
economical operation in well head gas boosting, vapor recovery, gas gathering,
air drilling, fuel gas boosting, air injection storage/withdrawal and helium
production services.
All Cooper Cameron integral gas engine-compressors and power engines
are available with state-of-the-art technology designed for reduced emissions to
meet or exceed government-regulated clean air standards. The CleanBurn(TM)
concept features a pre-ignition firing chamber to reduce engine exhaust
emissions without sacrificing fuel economy. CleanBurn(TM) "conversion kits" are
also available to enable Cooper Cameron customers to maximize their original
equipment investment by incorporating these latest technological advancements
into their previously installed Ajax(R), Cooper-Bessemer(R), Enterprise(TM) and
Superior(R) engines.
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In July 1996, Cooper Cameron announced the discontinuation of
development work related to new designs of the large Cooper-Bessemer(R)
reciprocating power engines and integral engine-compressors. This decision was
made due to the long-term decline in demand in this market segment caused by the
advent of aeroderivative gas turbines and centrifugal compressors. By February
1997, the Grove City, Pennsylvania, business unit was restructured to be a
component supplier for other Cooper Energy Services products and a parts
manufacturing facility focused on the profitable aftermarket business for the
large installed base of Cooper-Bessemer(R) reciprocating equipment. As a result,
all assembly operations were eliminated and engineering resources were
reallocated to other product lines.
For natural gas applications, Cooper Cameron manufactures two types of
rotating gas compressors under the Cooper-Bessemer(R) brand name: pipeline
centrifugal compressors, which handle pressures up to 2,250 p.s.i.; and
multi-stage barrel compressors, designed for pressures to 6,500 p.s.i. The
Cooper-Bessemer(R) pipeline centrifugal compressor is recognized worldwide as
one of the most efficient high-flow compressors in gas transmission service.
Cooper-Bessemer(R) multi-stage barrel compressors are vertically split and sized
to meet a wide combination of flow and pressure requirements at continuous,
full-load operation in natural gas gathering, production, storage, artificial
lift and re-injection applications.
Cooper Cameron provides gas turbines and gas turbine-driven compression
and power generation packages to the worldwide oil and gas related markets
through Cooper Rolls, its joint venture company with Rolls-Royce plc of London,
England. Marketed under the Coberra(R) brand name, Cooper Rolls(TM) gas turbines
combine a Rolls-Royce jet engine gas generator and a Cooper-Bessemer(R) power
turbine to provide a compact, aero-derivative power source with high
horsepower-to-weight ratios. With over 30,000,000 hours of operating experience,
Coberra(R) gas turbines are one of the world market leaders in their size range
for oil and gas related applications. They provide up to 42,600 horsepower with
high, simple-cycle thermal efficiencies and are commonly installed both onshore
and offshore as drivers for Cooper-Bessemer(R) rotating gas compressors, water
and oil pumps and electric generators. Cooper Rolls also markets gas turbines
featuring the Rolls-Royce Trent areoderivative industrial gas generator. These
largest Cooper Rolls units feature horsepowers to 70,000. The newest Cooper
Rolls(TM) product offering, Allison engine-powered gas turbines, extend the
company's product offering to the smaller 5,500 to 11,000 horsepower range. The
Allison Engine Company is owned by Rolls-Royce plc.
In 1997, Cooper Cameron announced a 50/50 joint venture company with
the Russian aero engine company, Lyulka-Saturn, Inc. The new company,
Lyulka-Cooper, will incorporate Cooper Cameron product packaging and compressor
technology, in combination with the Lyulka Rolls Royce AL31ST industrial
aeroderivative gas turbine, to produce power and compression units for the
global oil, gas and power generation industries.
Cooper Cameron manufactures turbochargers under the Cooper-Bessemer(R)
brand name for new Cooper Cameron reciprocating engines and also provides
factory repair of its own and other manufacturers' turbochargers in a dedicated
facility. High performance turbochargers are necessary to achieve required
exhaust emissions while maintaining desired efficiency and
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operations flexibility. Cooper Cameron is one of the few engine manufacturers to
design, produce and repair turbochargers.
Cooper Cameron manufactures En-Tronic(R) control and analysis equipment
for many of its compression and power products, as well as for products produced
by other manufacturers. En-Tronic(R) controls provide state-of-the-art solutions
to advanced system requirements such as calculating and controlling low
emissions on gas turbines and engines, and all-electronic fuel control of gas
turbine and engine packages. En-Tronic(R) products use advanced, field-proven
hardware and software technology, to optimize equipment reliability, safety and
efficiency.
Cooper Cameron also markets technology acquired from ENOX Technologies,
Inc. ENOX(R) technology provides patented electrical plasma discharge ignition
systems and engine management systems for large internal combustion engines
used, for example, in the natural gas pipeline industry.
Cooper Cameron manufactures integrally geared centrifugal air
compressors from its acquisition of the Joy Industrial Compressor Group. The
compressors are used by industrial plants as a source of power for the operation
of hand tools, actuation of control devices and to power automatic and
semi-automatic production equipment. These compressors are used in industries
such as automotive, container, textile, chemical, food and beverage and general
manufacturing. Cooper Cameron serves the plant air market with two product lines
of compressors. The C-8 series covers the 300 to 1,250 horsepower range at
discharge pressures from 50 to 125 p.s.i. The Turbo-Air(R) 2000, was introduced
in 1994. This machine provides the advantages of centrifugal compressor
technology at lower horsepower than ever before. These advantages include higher
efficiency, minimal maintenance with reliable and unattended operation. The
Turbo-Air 2000 covers the 150 to 350 horsepower range at discharge pressures
from 50 to 150 p s i. The larger Turbo-Air(R) series covers a range from 350 to
6,000 horsepower and is for plant air applications above 1,250 horsepower or
where the customer requires greater customization to meet particular
specifications. All components of the Turbo-Air(R) and C-8 series machines,
including the compressor, driver, lubrication system, control system and
intercoolers, are grouped on a common base into a ready-to-install package. This
configuration provides easy installation on a simple slab foundation at the
customer's plant location.
Cooper Cameron's Compression and Power Equipment segment manufactures
integral gear centrifugal compressors for process applications where the air is
used for its content of oxygen, nitrogen, argon or other elements. In these
cases, the compressor is an integral part of the manufacturing process in
industries such as air separation, pharmaceutical, fermentation, petrochemical,
refining and synthetic fuel. Cooper Cameron services the process air market with
two product lines of centrifugal compressors. The MSG(R) or Multi Stage
Geared(TM) series covers a range of 700 to 25,000 horsepower, handling air or
nitrogen to pressures up to 1,100 p.s.i.g. and volume flows up to 70,000 cubic
feet per minute. The MSG(R) series is a flexible modular design that can be
customized in aerodynamic components, materials of construction and packaging
scope, thereby providing an optimized compressor to meet a customer's unique
requirements. The Turbo-Air(R) series is a fully packaged unit that uses the
modular and customizing concepts of the MSG(R) series in the process air market
from 350 to 6,000 horsepower.
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The process and plant air centrifugal compressors manufactured by
Cooper Cameron deliver oil-free compressed air to the customer, thus preventing
oil contamination of the manufactured products. Industrial markets worldwide
increasingly prefer oil-free air for safety, operational and environmental
reasons.
Cooper Cameron primarily sells its compression and power equipment
direct to end-users through a worldwide network of sales and marketing employees
supported by agents in some international locations. Due to the extremely
technical nature of many of the products, the marketing effort is further
supported by a staff of engineers. In addition, Ajax(R) integral
engine-compressor units are sold through independent distributors in North
America and to rental companies. Superior(R) engines and compressors are sold to
independent packagers and distributors in North America. Some Turbo-Air(R)
industrial compressors are sold through sales representatives and independent
distributors.
Cooper Cameron's primary customers for compression and power equipment
include the major oil and gas companies, large independent oil and gas
producers, gas transmission companies, equipment leasing companies,
petrochemical and refining divisions of oil companies independent power
producers and chemical companies. Industrial and process compressors are sold to
durable goods manufacturers and process industries.
AFTERMARKET SERVICES
The Petroleum Production Equipment segment has established an
Aftermarket business unit with a comprehensive worldwide aftermarket
organization that provides replacement parts, field service, major repairs and
overhauls, unit installation assistance and Total Vendor Management contracts.
Customer requirements are satisfied around the clock through a worldwide network
of service and repair centers and parts warehouses. As customers have
drastically reduced their staffing and shifted more responsibility to vendors,
Total Vendor Management contracts have become increasingly popular and the
Aftermarket business has responded. All maintenance services for a customer's
equipment in a particular area are provided from one service center. Cooper
Cameron also provides an inventory of repair parts, service personnel, planning
services and inventory and storage of customers' idle equipment.
The CES Division has established the Customer Integrated Services
business group (CIS) to enhance strategic growth, product development, technical
support and operational focus for all of the aftermarket product offerings
related to its worldwide power and compression markets. CIS controls its own
marketing and business strategy, along with the service shops, parts
manufacturing facilities, warehouses, and service resources associated with
aftermarket activities. The goal of this new organization is to promote the
speed and agility required to satisfy customer requirements for aftermarket
services while providing the quality of an original equipment manufacturer.
Within CIS, the Compression Services Business Unit provides complete
operations and maintenance service contracts, principally to oil and natural gas
production and transmission
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companies. Service contracts can include equipment installation, scheduled and
unscheduled maintenance, minor and major overhauls, integration of customer
personnel, assimilation of customer inventory and inventory management.
To meet changing customer equipment requirements, the CIS business
group offers several innovative programs. Included are remanufactured equipment
and unit and parts exchange programs that provide customers with cost-effective
alternatives to new equipment purchases. In 1998, the group also introduced a
state-of-the-art gas turbine repair facility specifically dedicated to the
overhaul and repair of Allison engine-powered gas turbines.
Cooper Cameron's large population of installed equipment results in
aftermarket services constituting approximately 29% of Cooper Cameron's total
revenues in 1997.
MARKET ISSUES
Cooper Cameron is one of the market leaders in the global market for
petroleum production equipment. Cooper Cameron believes that it is well
positioned to serve these markets. Plant and service center facilities around
the world in major oil producing regions provide a broad, global breadth of
market coverage.
The international market is expected to be a major source of growth for
the Cooper Cameron Compression and Power Equipment segment. The desire of both
the developed and the developing countries to expand their respective oil and
gas transmission capacity for both economic and political reasons will be one of
the primary factors affecting market demand. Additional establishment of
industrial infrastructure in the developing countries will necessitate the
growth of basic industries that require process compression equipment for air
separation facilities. Production and service facilities in North and South
America, Europe and the Far East provide this business segment with the ability
to serve the global marketplace.
In both of Cooper Cameron's business segments, a large population of
installed engines, compression, and gas and oil production equipment exists in
both the U.S. and international market segments. The rugged, long-lived nature
of the equipment that exists in the field provides a predictable and profitable
repair parts and service business. The Company expects that as increasing
quantities of new units are sold into the international markets, there should be
a continuing growth in market demand for aftermarket parts and service.
NEW PRODUCT DEVELOPMENT
As petroleum exploration activities have increasingly been focused on
subsea locations, Cooper Cameron's Petroleum Production Equipment segment has
directed much of its new product development efforts toward this market. In
subsea exploration, customers are particularly concerned about safety,
environmental protection and ease of installation and maintenance. Cooper
Cameron's reputation for high quality and high dependability has given it a
competitive advantage in the areas of safety and environmental protection. A
patented subsea production system called the SpoolTree(TM), which was introduced
in 1993, offers substantial cost
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reduction to the customer as it is based upon a novel concept that eliminates
the need for a workover riser or removal of the christmas tree during workover.
Cooper Cameron has pioneered this concept and has developed similar products for
land and platform applications, which significantly reduce customer costs.
Cooper Cameron has also introduced the MOSAIC (Modular Subsea And
Integrated Completions) system. MOSAIC includes a suite of pre-engineered
elements with standard interfaces that can be combined in a fashion to allow
customers to configure a system to meet their specific needs. Cooper Cameron
believes that it has chosen to standardize components at a level low enough to
give customers the required customization while providing engineering and
manufacturing efficiencies. Cooper Cameron has realigned its engineering and
marketing resources to further develop and market the MOSAIC subsea system and
other stand-alone standardized subsea products, such as christmas trees and
wellheads.
Several new drilling products will be introduced in 1998. These include
the 3.5 million-pound load capacity "LoadKing" riser system, which will set the
industry standard for drilling in 10,000-foot water depths; a new lightweight
and lower-cost locking mechanism for subsea BOPs; and a new generation of
variable-bore ram packers.
In May 1998, Cameron will open a new Research Center in Houston, Texas.
The 55,000 sq. ft. Research Center will be one of the largest product
development facilities in the oil service sector. The facility will have 10
specially designed test bays to test and evaluate Cameron's products under
realistic conditions. These include environmental test chambers to simulate
extreme pressures and temperatures, high-strength fixtures for the application
of multi-million pound tensile and bending loads, high pressure gas compressors
and test enclosures, a hyperbaric chamber to simulate the external pressures of
deep water environments, and two circulation loops for erosion and flow testing.
This Research Center will be instrumental in providing Cameron's customers with
innovative and cost-effective products.
In 1997, Cameron Controls successfully launched a new electro-hydraulic
drilling control system that is being favorably received in the market. A new
subsea production control system is also being developed and will be launched in
1998. Cooper Cameron believes that a successful product launch will
significantly enhance the subsea systems offerings for the company.
In the Compression and Power Equipment segment, Cooper Cameron has
developed a number of new products to serve the oil and gas transmission market
and the industrial air compression market.
Cooper Rolls will ship its first Allison 501 and 601 power turbines in
1998. These products extend the company's gas turbine product line into a lower
horsepower range suitable for small pipeline compression and power generation
applications both on and offshore, and floating production storage and
offloading vessels.
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In 1998, the Lyulka-Cooper joint venture will finalize a demonstrator
unit equipped with Dry Low Emission gas turbine combustors, a Cooper-Bessemer(R)
pipeline compressor and an En-Tronics(R) engine controls management system. The
unit will be installed at a gas compression station near Moscow. Manufacturing
of the unit will start in mid-1998, with delivery scheduled for mid-1999.
An area of increasing importance in the oil and gas transmission market
is the reduction of environmentally harmful emissions from engines and turbines
that drive compression equipment. Building on its experience with its
CleanBurn(TM) technology, and in conjunction with Rolls-Royce plc, Cooper
Cameron is marketing new Dry Low Emissions gas turbines, as well as conversion
kits for existing Cooper Rolls(TM) units in the field. This technology
significantly reduces the level of emissions produced by gas turbine drivers.
Additionally, in 1995, a new line of En-Tronic(R) performance and monitoring
control systems was introduced to aid in optimizing the performance and emission
parameters of engines and turbines. Over the past three years, Cooper Cameron
has also introduced new high speed reciprocating engines and compressors with
improved reliability, fuel efficiency and emissions performance. These new units
utilize En-Tronic(R) state-of-the-art CleanBurn(TM) III microprocessor-based
control systems.
Cooper Cameron added two new models, the Turbo-Air(R) 3000 and the
TAS-70, to its centrifugal air compressor product line in 1997. The Turbo-Air(R)
3000 builds off of the success of the Turbo-Air(R) 2000 as a pre-engineered,
neatly packaged air compressor for plant air applications. The Turbo-Air(R) 3000
will be used in 400 to 800 horsepower applications with discharge pressures from
50 to 150 p s i, while the Turbo-Air(R) 2000 serves the 150 to 350 horsepower
range. The value-engineered design utilizing state-of-the-art technology
delivers low energy consumption, low cost package installation and maintenance,
ease of automation and environmentally friendly oil-free air. The Turbo-Air(R)
3000 should aid Cooper Cameron in continuing its share growth in the plant air
market. The TAS-70 extends the standard plant air line to nearly 10,000 cfm.
COMPETITION
Cooper Cameron competes in all areas of its operations with a number of
other companies, some of which have financial and other resources comparable to
or greater than those of Cooper Cameron.
Cooper Cameron believes it has a leading position in the petroleum
production equipment markets, particularly with respect to its high-pressure
products. In these markets, Cooper Cameron competes principally with Vetco Gray
Inc. (a subsidiary of Asea Brown Boveri), Kvaerner Oil and Gas, Dril-Quip, Inc.,
Dresser Industries, Inc., Varco International, Inc., Hydril Company, and FMC
Corp. The principal competitive factors in the petroleum production equipment
markets are technology, quality, service and price. Cooper Cameron believes that
several factors give it a strong competitive position in these markets. Most
significant are Cooper Cameron's broad product offering, its worldwide presence
and reputation, its service and repair capabilities, its expertise in high
pressure technology and its experience in alliance and partnership arrangements
with customers and other suppliers.
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Cooper Cameron believes it also has a leading position in the
compression and power equipment markets. In these markets, Cooper Cameron
competes principally with Nuovo Pignone, Dresser-Rand Company, European Gas
Turbines Inc., Ariel Corporation, Caterpillar Inc., Waukesha Engine Division of
Dresser Industries, Atlas-Copco AB, Mannesmann Demag AG and Ingersoll-Rand
Company. The principal competitive factors in the compression and power
equipment markets are engineering and design capabilities, product performance,
reliability and quality, service and price. Cooper Cameron believes that its
competitive position is based on several factors. Cooper Cameron has a broad
product offering and, unlike many of its competitors, manufactures and sells
both engines and compressors (both as separate units and packaged together as a
single unit). Cooper Cameron led the industry in the introduction of low engine
emission technology and continues today as an industry leader in this
technology. Cooper Cameron has a highly competent engineering staff and skilled
technical and service representatives, with service centers located throughout
the world.
In all of its markets, Cooper Cameron has strong brand recognition and
an established reputation for quality and service. Cooper Cameron has a
significant base of previously-installed products, which provides a strong
demand for aftermarket parts and service. Cooper Cameron has modern
manufacturing facilities and state-of-the-art testing capabilities.
MANUFACTURING
Cooper Cameron has manufacturing facilities worldwide that conduct a
broad variety of processes, including machining, fabrication, assembly and
testing using a variety of forged and cast alloyed steels and stainless steel as
the primary raw materials. In recent years, Cooper Cameron has rationalized
plants and products, closed six manufacturing facilities, moved product lines to
achieve economies of scale, and upgraded the remaining facilities. Manufacturing
processes have been improved and significant capital expenditures have been made
since 1991. Cooper Cameron maintains advanced manufacturing, quality assurance
and testing equipment geared to the specific products that it manufactures and
uses extensive process automation in its manufacturing operations. The
manufacturing facilities utilize computer aided numerical control tools and
manufacturing techniques that concentrate the equipment necessary to produce
similar products in one area of the plant in a configuration commonly known as a
manufacturing cell. One operator in a manufacturing cell can monitor and operate
several machines, as well as assemble and test products made by such machines,
thereby improving operating efficiency and product quality while reducing the
amount of work-in-process and finished product inventories.
Cooper Cameron believes that its test capabilities are critical to its
overall process. Cooper Cameron has capabilities to test most equipment at full
load, measuring all operating parameters, efficiency and emissions. All process
compressors for air separation and all plant air compressors are given a
mechanical and aerodynamic test in a dedicated test center prior to shipment.
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All of Cooper Cameron's European manufacturing plants are ISO certified
and API licensed. Most of the U.S. plants are ISO certified or, if not, such
certification is in process. ISO is an internationally recognized verification
system for quality management.
BACKLOG
Cooper Cameron's backlog was approximately $786 million at December 31,
1997, as compared to $728 million at December 31, 1996 and $588 million at
December 31, 1995. Backlog consists of firm customer orders for which a purchase
order has been received, satisfactory credit or financing arrangements exist and
delivery is scheduled.
PATENTS, TRADEMARKS AND OTHER INTELLECTUAL PROPERTY
Cooper Cameron believes that the success of its business depends more
on the technical competence, creativity and marketing abilities of its employees
than on any individual patent, trademark or copyright. Nevertheless, as part of
its ongoing research, development and manufacturing activities, Cooper Cameron
has a policy of seeking patents when appropriate on inventions concerning new
products and product improvements. Cooper Cameron owns 382 unexpired United
States patents and 707 unexpired foreign patents.
Although in the aggregate these patents and Cooper Cameron's trademarks
are of considerable importance to the manufacturing and marketing of many of its
products, Cooper Cameron does not consider any single patent or trademark or
group of patents or trademarks to be material to its business as a whole, except
the Cameron(R), Cooper-Bessemer(R), Coberra(R) and Cooper Rolls(TM) trademarks.
Other important trademarks used by Cooper Cameron include Ajax(R), Superior(R),
C-B Turbocharger(R), En-Tronic(R), Enterprise(TM), ENOX(R), Enterprise(TM),
Texcentric(R), Service Solutions(TM), W-K-M(R), McEvoy(R), Willis(TM), Demco(R),
Pennsylvania Process(TM), Thornhill Craver(TM), Ingram Cactus(R) and Foster(R).
Cooper Cameron has the right to use the trademark Joy(R) on aftermarket parts
until November 2027. Cooper Cameron has registered its trademarks in the
countries where such registration is deemed material.
Cooper Cameron also relies on trade secret protection for its
confidential and proprietary information. Cooper Cameron routinely enters into
confidentiality agreements with its employees and suppliers. There can be no
assurance, however, that others will not independently obtain similar
information or otherwise gain access to Cooper Cameron's trade secrets.
EMPLOYEES
As of December 31, 1997, Cooper Cameron had approximately 9,600
employees, of which approximately 2,478 were represented by labor unions. Cooper
Cameron believes its current relations with employees are good. The only
significant labor contracts expiring during 1998 cover employees at the Cameron
plant in Brookshire, Texas (July) and the Cooper Energy Services plant in Grove
City, Pennsylvania (September).
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ITEM 2. PROPERTIES
The Company operates manufacturing plants ranging in size from
approximately 14,000 square feet to approximately 858,000 square feet of
manufacturing space. The Company also owns and leases warehouses, distribution
centers, aftermarket and storage facilities, and sales offices. The Company
leases its corporate headquarters and Cameron division headquarters office space
in Houston, Texas.
The Company manufactures, markets and sells its products and provides
services throughout the world, operating facilities in over 30 countries. On
December 31, 1997, the significant facilities used by Cooper Cameron throughout
the world for manufacturing, distribution, aftermarket services, machining,
storage and warehousing contained an aggregate of approximately 6,676,100 square
feet of space, of which approximately 6,022,900 square feet (90%) was owned and
653,200 (10%) was leased. Of this total, approximately 4,834,082 square feet
(72%) are located in the United States and 1,395,400 square feet (21%) are
located in Europe. The table below lists the significant manufacturing,
warehouse and distribution facilities by industry segment and geographic area.
Asia/Pacific
Western Eastern and
Hemisphere Hemisphere Mideast Total
---------- ---------- ------- -----
Petroleum Production Equipment 14 9 3 26
Compression and Power Equipment 16 3 0 19
Cooper Cameron believes its facilities are suitable for their present
and intended purposes and are adequate for the Company's current and anticipated
level of operations.
ITEM 3. LEGAL PROCEEDINGS
Cooper Cameron is a party to various legal proceedings and
administrative actions, including certain environmental matters discussed below,
all of which are of an ordinary or routine nature incidental to the operations
of Cooper Cameron. In the opinion of Cooper Cameron's management, such
proceedings and actions should not, individually or in the aggregate, have a
material adverse effect on Cooper Cameron's results of operations or financial
condition.
Environmental Matters
Cooper Cameron is subject to numerous federal, state, local and foreign
laws and regulations relating to the storage, handling, emission and discharge
of materials into the environment, including the Comprehensive Environmental
Response Compensation and
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Liability Act ("CERCLA"), the Clean Water Act, the Clean Air Act (including the
1990 Amendments) and the Resource Conservation and Recovery Act. Cooper Cameron
believes that its existing environmental control procedures are adequate and it
has no current plans for substantial capital expenditures in this area. Cooper
Cameron has an active environmental management program aimed at compliance with
existing environmental regulations and elimination or significant reduction in
the generation of pollutants in its manufacturing processes. Cooper Cameron
management intends to continue these policies and programs.
Cooper Cameron has been identified as a potentially responsible party
("PRP") with respect to five sites designated for cleanup under CERCLA or
similar state laws, which impose liability for cleanup of certain waste sites
and for related natural resource damages without regard to fault or the legality
of waste generation or disposal. Persons liable for such costs and damages
generally include the site owner or operator and persons that disposed or
arranged for the disposal of hazardous substances found at those sites. Although
CERCLA imposes joint and several liability on all PRPs, in application, the PRPs
typically allocate the investigation and cleanup costs based upon the volume of
waste contributed by each PRP. Settlements often can be achieved through
negotiations with the appropriate environmental agency or the other PRPs. PRPs
that contributed less than one percent of the waste are often given the
opportunity to settle as a "de minimis" party, resolving liability for a
particular site.
Cooper Cameron does not own any of the sites with respect to which it
has been identified as a PRP; in each case, Cooper Cameron is identified as a
party that disposed of waste at the site. With respect to three of the sites,
Cooper Cameron's share of the waste volume is estimated to be less than one
percent. At one site, Cooper Cameron's share is still to be determined, but is
believed to be less than ten percent. Cooper Cameron is the major PRP at one
site which it operates, the Osborne Landfill in Grove City, Pennsylvania. Cooper
Cameron's facility in Grove City disposed of wastes at the Osborne Landfill from
the early 1950s until 1978. The EPA issued an order in 1991 and remediation is
now in process. Cooper Cameron has responsibility for the remediation compliance
with the EPA order.
Cooper Cameron has accruals in its balance sheet to the extent costs
are known for the five sites. Although estimates of the cleanup costs have not
yet been made for certain of these sites, Cooper Cameron believes, based on its
preliminary review and other factors, that the costs to Cooper Cameron relating
to these sites will not have a material adverse effect on its results of
operations, financial condition or liquidity. However, no assurance can be given
that the actual costs will not exceed the estimates of the cleanup costs once
determined.
Cooper Cameron does not currently anticipate any material adverse
effect on its results of operations, financial condition or competitive position
as a result of compliance with Federal, state, local or foreign environmental
laws or regulations or cleanup costs of the sites discussed above. However, some
risk of environmental liability and other costs is inherent in the nature of
Cooper Cameron's business, and there can be no assurance that material
environmental costs will not arise. Moreover, it is possible that future
developments, such as promulgation of regulations implementing the
1990 amendments to the Clean Air Act and other increasingly strict
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requirements of environmental laws and enforcement policies thereunder, could
lead to material costs of environmental compliance and cleanup by Cooper
Cameron.
The cost of environmental remediation and compliance generally has not
been an item of material expense for Cooper Cameron during any of the periods
presented, other than with respect to the Osborne Landfill described above.
Cooper Cameron's balance sheet at December 31, 1997, includes accruals totaling
approximately $4.6 million for environmental remediation activities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
the fourth quarter of 1997.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The common stock of Cooper Cameron, par value $.01 per share (together
with the associated Rights to Purchase Series A Junior Participating Preferred
Stock), is traded on The New York Stock Exchange ("NYSE"). A 2-for-1 split of
the Company's common stock in the form of a stock dividend was paid effective
June 13, 1997. No other dividends were paid during 1997.
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The following table indicates the range of trading prices on the NYSE from
January 2 through December 31, 1997.
Price Range
---------------------------------------
High Low Last
---- --- ----
First Quarter....................................$37 15/16 30 1/4 34 1/4
Second Quarter...................................$48 31 13/16 46 3/4
Third Quarter....................................$72 5/8 44 1/4 71 13/16
Fourth Quarter...................................$81 3/4 52 1/8 61
The approximate number of holders of Cooper Cameron common stock was 35,000 as
of March 20, 1998. The number of record holders as of the same date was 1,903.
ITEM 6. SELECTED FINANCIAL DATA
The information set forth under the caption "Selected Consolidated
Historical Financial Data of Cooper Cameron Corporation" on page 51 in the 1997
Annual Report to Stockholders is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The information set forth under the caption "Management's Discussion
and Analysis of Results of Operations and Financial Condition of Cooper Cameron
Corporation" on pages 21-27 in the 1997 Annual Report to Stockholders is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following consolidated financial statements of the Company and the
independent auditors' report set forth on pages 28-50 in the 1997 Annual Report
to Stockholders are incorporated herein by reference:
Report of Independent Auditors.
Consolidated Results of Operations for each of the three years in the
period ended December 31, 1997.
Consolidated Balance Sheets as of December 31, 1997 and 1996.
Consolidated Cash Flows for each of the three years in the period ended
December 31, 1997.
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Consolidated Changes in Stockholders' Equity for the period from June
30, 1995 to December 31, 1995, and the two years ended December 31,
1997.
Notes to Consolidated Financial Statements.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information on Directors of the Company is set forth in the section
entitled "Election of Directors" on pages 3-5 in the Proxy Statement of the
Company for the Annual Meeting of Stockholders to be held May 14, 1998, which
section is incorporated herein by reference. Information regarding executive
officers of the Company is set forth below. There was no failure by an insider
to file a report required by Section 16 of the Exchange Act.
There are no family relationships among the officers listed, and there
are no arrangements or understandings pursuant to which any of them were elected
as officers. Officers are appointed or elected annually by the Board of
Directors at its first meeting following the Annual Meeting of Stockholders,
each to hold office until the corresponding meeting of the Board in the next
year or until a successor shall have been elected, appointed or shall have
qualified.
Section 16(a) Beneficial Ownership Reporting Compliance
The information concerning compliance with Section 16(a) is set forth
in the section entitled "Compliance with Section 16 of the Exchange Act" on page
25 in the Proxy Statement of the Company for the Annual Meeting of Stockholders
to be held on May 14, 1998, which section is incorporated herein by reference.
CURRENT EXECUTIVE OFFICERS OF THE REGISTRANT
Present Principal Position and Other Material Positions
Name and Age Held During Last Five Years
- ------------ -------------------------------------------------------
Sheldon R. Erikson (56) President and Chief Executive Officer since January 1995. 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.
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Thomas R. Hix (50) Senior Vice President of Finance and Chief Financial Officer since January 1995. Senior Vice
President of Finance, Treasurer and Chief Financial Officer of The Western Company of North
America from 1993 to 1995. Executive Vice President and Chief Financial Officer from 1992 to
1993 and Vice President, Finance and Chief Financial Officer from 1986 to 1992 of Oceaneering
International.
Franklin Myers (45) Senior Vice President, General Counsel and Secretary since April 1995. Vice President
and General Counsel from 1988 to 1994, Secretary from 1988 to 1992, and Senior Vice President
and General Counsel from 1994 to April 1995 of Baker Hughes Incorporated.
Joseph D. Chamberlain (51) Vice President and Corporate Controller since April 1995. Controller - Financial Reporting from
1994 to 1995, Assistant Controller and Manager-Financial Reporting from 1979 to 1994 of Cooper
Industries, Inc.
Michael L. Grimes (47) Vice President since November 1996. President, Cooper Energy Services Division since April 1996.
General Manager, Quality and Information Management of GE Power Systems from 1995 to 1996,
General Manager, Apparatus Service Department from 1994 to 1995, General Manager, Power
Generation Services Department from 1993 to 1994 and General Manager of Marketing, GE Power
Generation from 1992 to 1993 of General Electric Company.
E. Fred Minter (62) Vice President since November 1996. President, Cooper Turbocompressor since 1988.
ITEM 11. EXECUTIVE COMPENSATION.
The information for this item is set forth in the section entitled
"Director and Executive Management Compensation" on pages 17-20 in the Proxy
Statement of the Company for the Annual Meeting of Stockholders to be held May
14, 1998, which section is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.
The information concerning security ownership of certain beneficial
owners and management is set forth in the sections entitled "Voting Securities
and Principal Holders Thereof" on page 2 and "Security Ownership of Management"
on pages 15-16 in the Proxy Statement of the Company for the Annual Meeting of
Stockholders to be held May 14, 1998, which sections are incorporated herein by
reference.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K.
(a) THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS REPORT:
(1) FINANCIAL STATEMENTS:
All financial statements of the Registrant as set forth under
Item 8 of this Annual Report on Form 10-K.
(2) FINANCIAL STATEMENT SCHEDULES:
Financial statement schedules are omitted because of the
absence of conditions under which they are required or because
all material information required to be reported is included
in the consolidated financial statements and notes thereto.
(3) EXHIBITS:
3.1 Amended and Restated Certificate of Incorporation of
Cooper Cameron Corporation, dated June 30, 1995,
filed as Exhibit 4.2 to the Registration Statement on
Form S-8 of Cooper Cameron Corporation (Commission
File No. 33-94948), and incorporated herein by
reference.
3.2 First Amended and Restated Bylaws of Cooper Cameron
Corporation, as amended December 12, 1996, filed as
Exhibit 3.2 to the Annual Report on Form 10-K for
1996 of Cooper Cameron Corporation, and incorporated
herein by reference.
4.1 Form of Rights Agreement, dated as of May 1, 1995,
between Cooper Cameron Corporation and First Chicago
Trust Company of New York, as Rights Agent, filed as
Exhibit 4.1 to the Registration Statement on Form S-8
of Cooper Cameron Corporation (Commission File No.
33-94948), and incorporated herein by reference.
4.2 First Amendment to Rights Agreement between Cooper
Cameron Corporation and First Chicago Trust Company
of New York, as Rights Agent, dated November 1, 1997.
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10.1 Cooper Cameron Corporation Long-Term Incentive Plan
(Registration Statement No. 33-95004), incorporated
herein by reference.
10.2 Amended and Restated Cooper Cameron Corporation
Long-Term Incentive Plan, as amended, incorporated
herein by reference to the Cooper Cameron Corporation
Proxy Statement for the Annual Meeting of
Stockholders held on May 8, 1997.
10.3 Cooper Cameron Corporation Amended and Restated 1995
Stock Option Plan for Non-Employee Directors
(Registration Statement No. 33-95000), incorporated
herein by reference.
10.4 First Amendment to the Cooper Cameron Corporation
Amended and Restated 1995 Stock Option Plan for
Non-Employee Directors, incorporated herein by
reference to the Cooper Cameron Corporation Proxy
Statement for the Annual Meeting of Stockholders held
on May 8, 1997.
10.5 Second Amendment to the Cooper Cameron Corporation
Amended and Restated 1995 Stock Option Plan for
Non-Employee Directors, filed as Exhibit 10.3 to the
Annual Report on Form 10-K for 1996 of Cooper Cameron
Corporation, and incorporated herein by reference.
10.6 Third Amendment to the Cooper Cameron Corporation
Amended and Restated 1995 Stock Option Plan for
Non-Employee Directors.
10.7 Fourth Amendment to the Cooper Cameron Corporation
Amended and Restated 1995 Stock Option Plan for
Non-Employee Directors.
10.8 Fifth Amendment to the Cooper Cameron Corporation
Amended and Restated 1995 Stock Option Plan for
Non-Employee Directors.
10.9 Cooper Cameron Corporation Retirement Savings Plan
(Registration Statement No. 33-95002), incorporated
herein by reference.
10.10 Cooper Cameron Corporation Retirement Savings Plan,
as Amended and Restated, effective April 1, 1996.
10.11 Cooper Cameron Corporation Employee Stock Purchase
Plan (Registration Statement No. 33-94948),
incorporated herein by reference.
10.12 Cooper Cameron Corporation Supplemental Excess
Defined Benefit Plan, filed as Exhibit 10.4 to the
Registration Statement on Form S-4 of Cooper Cameron
Corporation (Commission File No. 33-90288), and
incorporated herein by reference.
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10.13 First Amendment to Cooper Cameron Corporation
Supplemental Excess Defined Benefit Plan, effective
as of January 1, 1996, filed as Exhibit 10.7 to the
Annual Report on Form 10-K for 1996 of Cooper Cameron
Corporation, and incorporated herein by reference.
10.14 Cooper Cameron Corporation Supplemental Excess
Defined Contribution Plan, filed as Exhibit 10.5 to
the Registration Statement on Form S-4 of Cooper
Cameron Corporation (Commission File No. 33-90288),
and incorporated herein by reference.
10.15 First Amendment to Cooper Cameron Corporation
Supplemental Excess Defined Contribution Plan,
effective April 1, 1996, filed as Exhibit 10.9 to the
Annual Report on Form 10-K for 1996 of Cooper Cameron
Corporation, and incorporated herein by reference.
10.16 Cooper Cameron Corporation Compensation Deferral Plan
(formerly the Cooper Cameron Corporation Management
Incentive Compensation Deferral Plan), effective
January 1, 1996, filed as Exhibit 10.10 to the Annual
Report on Form 10-K for 1996 of Cooper Cameron
Corporation, and incorporated herein by reference.
10.17 Cooper Cameron Corporation Directors Deferred
Compensation Plan, filed as Exhibit 10.7 to the
Registration Statement on Form S-4 of Cooper Cameron
Corporation (Commission File No. 33-90288), and
incorporated herein by reference.
10.18 Employment Agreement by and between Sheldon R.
Erikson and Cooper Cameron Corporation, effective as
of November 30, 1995, filed as Exhibit 10.9 to the
Annual Report on Form 10-K for 1995 of Cooper Cameron
Corporation, and incorporated herein by reference.
10.19 Employment Agreement by and between Thomas R. Hix and
Cooper Cameron Corporation, effective as of November
30, 1995, filed as Exhibit 10.10 to the Annual Report
on Form 10-K for 1995 of Cooper Cameron Corporation,
and incorporated herein by reference.
10.20 Employment Agreement by and between Franklin Myers
and Cooper Cameron Corporation, effective as of
November 30, 1995, filed as Exhibit 10.11 to the
Annual Report on Form 10-K for 1995 of Cooper Cameron
Corporation, and incorporated herein by reference.
10.21 1995 Management Incentive Compensation Plan of Cooper
Cameron Corporation, dated as of November 14, 1995,
as amended, filed as Exhibit 10.15 to the Annual
Report on Form 10-K for 1996 of Cooper Cameron
Corporation, and incorporated herein by reference.
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10.22 1996 Management Incentive Compensation Plan of Cooper
Cameron Corporation, dated as of February 19, 1996,
filed as Exhibit 10.16 to the Annual Report on Form
10-K for 1996 of Cooper Cameron Corporation, and
incorporated herein by reference.
10.23 1997 Management Incentive Compensation Plan of Cooper
Cameron Corporation, dated as of December 9, 1996,
filed as Exhibit 10.17 to the Annual Report on Form
10-K for 1996 of Cooper Cameron Corporation, and
incorporated herein by reference.
10.24 Cooper Cameron Corporation Management Incentive
Compensation Plan, as amended, incorporated herein by
reference to the Cooper Cameron Corporation Proxy
Statement for the Annual Meeting of Stockholders held
on May 8, 1997.
10.25 1998 Management Incentive Compensation Plan for
Cooper Cameron Corporation, dated as of January 1,
1998.
10.26 Change in Control Policy of Cooper Cameron
Corporation, approved February 19, 1996, filed as
Exhibit 10.18 to the Annual Report on Form 10-K for
1996 of Cooper Cameron Corporation, and incorporated
herein by reference.
10.27 Executive Severance Program of Cooper Cameron
Corporation, approved February 19, 1996, filed as
Exhibit 10.19 to the Annual Report on Form 10-K for
1996 of Cooper Cameron Corporation, and incorporated
herein by reference.
10.28 Credit Agreement, dated as of June 30, 1995, among
Cooper Cameron Corporation and certain of its
subsidiaries and the banks named therein and First
National Bank of Chicago, as agent, filed as Exhibit
4.5 to the Registration Statement on Form S-8 of
Cooper Cameron Corporation (Commission File No.
33-94948), and incorporated herein by reference.
10.29 Amended and Restated Credit Agreement dated as of
March 20, 1997, among Cooper Cameron Corporation and
certain of its subsidiaries and the banks named
therein and First National Bank of Chicago, as agent,
filed as Exhibit 10.21 to the Annual Report on Form
10-K for 1996 of Cooper Cameron Corporation, and
incorporated herein by reference.
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13.1 Portions of the 1997 Annual Report to Stockholders
are included as an exhibit to this report and have
been specifically incorporated by reference elsewhere
herein.
21 Subsidiaries of registrant.
23 Consent of Independent Auditors.
27 Financial Data Schedule.
27.l Restated Financial Data Schedule for the three months
ended March 31, 1997.
27.2 Restated Financial Data Schedule for the six months
ended June 30, 1997.
27.3 Restated Financial Data Schedule for the nine months
ended September 30, 1997.
27.4 Restated Financial Data Schedule for the year ended
December 31, 1996.
27.5 Restated Financial Data Schedule for the three months
ended March 31, 1996.
27.6 Restated Financial Data Schedule for the six months
ended June 30, 1996.
27.7 Restated Financial Data Schedule for the nine months
ended September 30, 1996.
(b) REPORTS ON FORM 8-K
The Company filed no reports on Form 8-K during the fourth quarter of
1997 and through March 20, 1998.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON THIS 27TH DAY OF
MARCH, 1998.
COOPER CAMERON CORPORATION
REGISTRANT
BY: /s/ JOSEPH D. CHAMBERLAIN
----------------------------------------
(JOSEPH D. CHAMBERLAIN)
Vice President and Corporate Controller
(Principal Accounting Officer)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED ON THIS 27TH DAY OF MARCH, 1998, BELOW BY THE
FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES INDICATED.
SIGNATURE TITLE
--------- -----
/s/ C. BAKER CUNNINGHAM Director
- ----------------------------------------
(C. Baker Cunningham)
/s/ GRANT A. DOVE Director
- ----------------------------------------
(Grant A. Dove)
/s/ SHELDON R. ERIKSON Chairman, President and Chief Executive
- ---------------------------------------- Officer (principal executive officer)
(Sheldon R. Erikson)
/s/ MICHAEL E. PATRICK Director
- ----------------------------------------
(Michael E. Patrick)
/s/ DAVID ROSS III Director
- ----------------------------------------
(David Ross III)
/s/ MICHAEL J. SEBASTIAN Director
- ----------------------------------------
(Michael J. Sebastian)
/s/ THOMAS R. HIX Senior Vice President of Finance and
- ---------------------------------------- Chief Financial Officer
(Thomas R. Hix) (principal financial officer)
25
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EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ------ ---------------------------------------------------------------------------------------- --------
3.1 Amended and Restated Certificate of Incorporation of Cooper Cameron Corporation,
dated June 30, 1995, filed as Exhibit 4.2 to the Registration Statement on Form S-8
of Cooper Cameron Corporation (Commission File No. 33-94948), and incorporated herein
by reference.
3.2 First Amended and Restated Bylaws of Cooper Cameron Corporation, as amended December
12, 1996, filed as Exhibit 3.2 to the Annual Report on Form 10-K for 1996 of Cooper
Cameron Corporation, and incorporated herein by reference.
4.1 Form of Rights Agreement, dated as of May 1, 1995, between Cooper Cameron Corporation
and First Chicago Trust Company of New York, as Rights Agent, filed as Exhibit 4.1
to the Registration Statement on Form S-8 of Cooper Cameron Corporation (Commission
File No. 33-94948), and incorporated herein by reference.
4.2 First Amendment to Rights Agreement between Cooper Cameron Corporation and First
Chicago Trust Company of New York, as Rights Agent, dated November 1, 1997.
10.1 Cooper Cameron Corporation Long-Term Incentive Plan (Registration Statement No.
33-95004), incorporated herein by reference.
10.2 Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan, as amended,
incorporated herein by reference to the Cooper Cameron Corporation Proxy Statement
for the Annual Meeting of Stockholders held on May 8, 1997.
10.3 Cooper Cameron Corporation Amended and Restated Stock Option Plan for Non-Employee
Directors (Registration Statement No. 33-95000), incorporated herein by reference.
10.4 First Amendment to the Cooper Cameron Corporation Amended and Restated 1995 Stock
Option Plan for Non-Employee Directors, incorporated herein by reference to the
Cooper Cameron Corporation Proxy Statement for the Annual Meeting of Stockholders
held on May 8, 1997.
10.5 Second Amendment to the Cooper Cameron Corporation Amended and Restated 1995 Stock
Option Plan for Non-Employee Directors, filed as Exhibit 10.3 to the Annual Report on
Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by
reference.
29
10.6 Third Amendment to the Cooper Cameron Corporation Amended and Restated 1995 Stock
Option Plan for Non-Employee Directors.
10.7 Fourth Amendment to the Cooper Cameron Corporation Amended and Restated 1995 Stock
Option Plan for Non-Employee Directors.
10.8 Fifth Amendment to the Cooper Cameron Corporation Amended and Restated 1995 Stock
Option Plan for Non-Employee Directors.
10.9 Cooper Cameron Corporation Retirement Savings Plan (Registration Statement No.
33-95002), incorporated herein by reference.
10.10 Cooper Cameron Corporation Retirement Savings Plan, as Amended and Restated,
effective April 1, 1996.
10.11 Cooper Cameron Corporation Employee Stock Purchase Plan (Registration Statement No.
33-94948), incorporated herein by reference.
10.12 Cooper Cameron Corporation Supplemental Excess Defined Benefit Plan, filed as Exhibit
10.4 to the Registration Statement on Form S-4 of Cooper Cameron Corporation
(Commission File No. 33-90288), and incorporated herein by reference.
10.13 First Amendment to Cooper Cameron Corporation Supplemental Excess Defined Benefit
Plan, effective as of January 1, 1996, filed as Exhibit 10.7 to the Annual Report on
Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by
reference.
10.14 Cooper Cameron Corporation Supplemental Excess Defined Contribution Plan, filed as
Exhibit 10.5 to the Registration Statement on Form S-4 of Cooper Cameron Corporation
(Commission File No. 33-90288), and incorporated herein by reference.
10.15 First Amendment to Cooper Cameron Corporation Supplemental Excess Defined
Contribution Plan, effective April 1, 1996, filed as Exhibit 10.9 to the Annual
Report on Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein
by reference.
30
10.16 Cooper Cameron Corporation Compensation Deferral Plan (formerly the Cooper Cameron
Corporation Management Incentive Compensation Deferral Plan), effective January 1,
1996, filed as Exhibit 10.10 to the Annual Report on Form 10-K for 1996 of Cooper
Cameron Corporation, and incorporated herein by reference.
10.17 Cooper Cameron Corporation Directors Deferred Compensation Plan, filed as Exhibit
10.7 to the Registration Statement on Form S-4 of Cooper Cameron Corporation
(Commission File No. 33-90288), and incorporated herein by reference.
10.18 Employment Agreement by and between Sheldon R. Erikson and Cooper Cameron
Corporation, effective as of November 30, 1995, filed as Exhibit 10.9 to the Annual
Report on Form 10-K for 1995 of Cooper Cameron Corporation, and incorporated herein
by reference.
10.19 Employment Agreement by and between Thomas R. Hix and Cooper Cameron Corporation,
effective as of November 30, 1995, filed as Exhibit 10.10 to the Annual Report on
Form 10-K for 1995 of Cooper Cameron Corporation, and incorporated herein by
reference.
10.20 Employment Agreement by and between Franklin Myers and Cooper Cameron Corporation,
effective as of November 30, 1995, filed as Exhibit 10.11 to the Annual Report on
Form 10-K for 1995 of Cooper Cameron Corporation, and incorporated herein by
reference.
10.21 1995 Management Incentive Compensation Plan of Cooper Cameron Corporation, dated as
of November 14, 1995, as amended, filed as Exhibit 10.15 to the Annual Report on Form
10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by reference.
10.22 1996 Management Incentive Compensation Plan of Cooper Cameron Corporation, dated as
of February 19, 1996, filed as Exhibit 10.16 to the Annual Report on Form 10-K for
1996 of Cooper Cameron Corporation, and incorporated herein by reference.
10.23 1997 Management Incentive Compensation Plan of Cooper Cameron Corporation, dated as
of December 9, 1996, filed as Exhibit 10.17 to the Annual Report on Form 10-K for
1996 of Cooper Cameron Corporation, and incorporated herein by reference.
31
10.24 Cooper Cameron Corporation Management Incentive Compensation Plan, as amended,
incorporated herein by reference to the Cooper Cameron Corporation Proxy Statement
for the Annual Meeting of Stockholders held on May 8, 1997.
10.25 1998 Management Incentive Compensation Plan for Cooper Cameron Corporation, dated as
of January 1, 1998.
10.26 Change in Control Policy of Cooper Cameron Corporation, approved February 19, 1996,
filed as Exhibit 10.18 to the Annual Report on Form 10-K for 1996 of Cooper Cameron
Corporation, and incorporated herein by reference.
10.27 Executive Severance Program of Cooper Cameron Corporation, approved February 19,
1996, filed as Exhibit 10.19 to the Annual Report on Form 10-K for 1996 of Cooper
Cameron Corporation, and incorporated herein by reference.
10.28 Credit Agreement, dated as of June 30, 1995, among Cooper Cameron Corporation and
certain of its subsidiaries and the banks named therein and First National Bank of
Chicago, as agent, filed as Exhibit 4.5 to the Registration Statement on Form S-8 of
Cooper Cameron Corporation (Commission File No. 33-94948), and incorporated herein by
reference.
10.29 Amended and Restated Credit Agreement dated as of March 20, 1997, among Cooper
Cameron Corporation and certain of its subsidiaries and the banks named therein and
First National Bank of Chicago, as agent, filed as Exhibit 10.21 to the Annual Report
on Form 10-K for 1996 of Cooper Cameron Corporation, and incorporated herein by
reference.
13.1 Portions of the 1997 Annual Report to Stockholders are included as an exhibit to this
report and have been specifically incorporated by reference elsewhere herein.
21 Subsidiaries of registrant.
23 Consent of Independent Auditors.
27 Financial Data Schedule.
32
27.l Restated Financial Data Schedule for the three months ended March 31, 1997.
27.2 Restated Financial Data Schedule for the six months ended June 30, 1997.
27.3 Restated Financial Data Schedule for the nine months ended September 30, 1997.
27.4 Restated Financial Data Schedule for the year ended December 31, 1996.
27.5 Restated Financial Data Schedule for the three months ended March 31, 1996.
27.6 Restated Financial Data Schedule for the six months ended June 30, 1996.
27.7 Restated Financial Data Schedule for the nine months ended September 30, 1996.