Item 3. Legal Proceedings
On April 2, 1992, the company's subsidiary, Kerr-McGee Coal Corporation, received a Complaint, Compliance Order, and Notice of Opportunity for Hearing from the U.S. Environmental Protection Agency (EPA) for alleged violations at the Jacobs Ranch Mine in northern Wyoming. Included in the EPA order are provisions for fines totaling more than $2.9 million. The company and its subsidiary continue to take all necessary steps to resolve this matter.
In 1991, the California Department of Toxic Substance Control (DTSC) issued a Report of Violation outlining certain violations of the California Health and Safety Code alleged to have occurred during operation by a subsidiary of the company of the former Searles Valley chemical facilities. The DTSC and the company's subsidiary are negotiating an agreement to resolve this matter which, if it is adopted in its current form, would result in a settlement of less than $1.5 million.
The company continues its efforts to obtain the necessary approvals to decommission a facility located in West Chicago, Illinois, which processed thorium ores and was closed in 1973. Currently, the State of Illinois has jurisdiction of this site and the company has agreed to offsite disposal of the waste material.
For a discussion of contingencies, including a detailed discussion of the West Chicago matter, reference is made to the Financial Condition section of Management's Discussion and Analysis and Note 11 to the Consolidated Financial Statements on pages 27 and 39 respectively, of the 1993 Annual Report to Stockholders, which discussion and note are incorporated by reference in Item 7 and Item 8, respectively.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
None submitted during the fourth quarter of 1993.
Executive Officers of the Registrant
The following is a list of executive officers, their ages, and their positions and offices as of January 1, 1994:
Name Age Office
Frank A. McPherson 60 Chairman of the Board and Chief Executive Officer since May 1983.
Luke R. Corbett 46 Group Vice President since May 1992. President of Kerr-McGee Canada Ltd. since July 1989. President of Kerr- McGee Oil (U.K.) PLC since August 1987. Senior Vice President from March 1991 until May 1992. Vice President, Oil and Gas Exploration from August 1987 until March 1991.
C. C. Stewart, Jr. 50 Group Vice President since May 1992. President of Southwestern Refining Company, Inc. since November 1992. Senior Vice President from March 1991 until May 1992. Vice President, Oil and Gas Operations from February 1990 until March 1991. Senior Vice President, Technical for Hamilton Brothers Oil and Gas Ltd. from July 1988 until January 1990.
George R. Hennigan 58 Senior Vice President since October 1991. President of Kerr-McGee Chemical Corporation since October 1991. Executive Vice President, Kerr-McGee Chemical Corporation from October 1984 until October 1991.
John C. Linehan 54 Senior Vice President and Chief Financial Officer since October 1987.
Tom J. McDaniel 55 Senior Vice President since June 1986 and Secretary since March 1989.
L. V. McGuire 51 Senior Vice President since December 1993. Senior Vice President, Production, Exploration and Production Division since May 1992. Vice President and Managing Director, Kerr-McGee Oil (U.K.) PLC since February 1992. Vice President, Production from July 1992 to December 1993. Vice President, Gulf Coast Production Operations, Exploration and Production Division from January 1991 until February 1992. Vice President, Production for Hamilton Brothers Oil and Gas Ltd. from July 1990 until January 1991. Vice President, Operations for Hamilton Brothers Oil and Gas Ltd. from June 1988 until July 1990.
Robert C. Scharp 46 Senior Vice President since October 1991. President of Kerr-McGee Coal Corporation since October 1991. Vice President of Operations for Kerr-McGee Coal Corporation from June 1990 until October 1991. General Manager of Galatia Mine for Kerr-McGee Coal Corporation from May 1988 until June 1990.
Michael G. Webb 46 Senior Vice President since December 1993. Senior Vice President, Exploration, Exploration and Production Division since May 1992. Vice President, Exploration from July 1992 to December 1993. Vice President, North American Onshore Exploration from May 1991 until May 1992. Exploration Manager, Kerr-McGee Canada Ltd. from November 1988 until May 1991.
R. G. Horner, Jr. 54 Vice President and General Counsel since June 1986.
J. Michael Rauh 44 Vice President and Controller since October 1987.
Kenneth J. Richards 61 Vice President, Technology since May 1986. President, Technology and Engineering Division since September 1984.
Thomas B. Stephens 49 Vice President and Treasurer since January 1985.
Edwin T. Still 58 Vice President, Environment and Health Management since June 1990. Vice President and Director of Environment and Health Management Division since September 1984.
Jean B. Wallace 39 Vice President, Human Resources since November 1989. Director of Human Resources from May 1988 until November 1989.
Dale E. Warfield 50 Vice President, Materials Management and Transportation since April 1991. Director of Purchasing and Materials Management from March 1990 until April 1991. Director of Purchasing from July 1985 until March 1990.
Ray A. Freels 65 President, Kerr-McGee Refining Corporation since July 1993. Independent consultant from October 1992 until July 1993. Senior Vice President, Kerr-McGee Corporation from January 1986 until he retired in October 1992. President, Kerr-McGee Refining Corporation from December 1985 until October 1992.
There is no family relationship between any of the executive officers.
PART II
Item 5.
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
Information relative to the market on which the company's common stock is traded, the high and low sales prices of the common stock by quarters for the past two years, and the approximate number of holders of common stock is furnished in Note 30 to the Consolidated Financial Statements on page 56 of the 1993 Annual Report to Stockholders, which note is incorporated by reference in Item 8.
Quarterly dividends declared totaled $1.52 per share for each of the years 1993 and 1992 and $1.50 per share for the year 1991. Cash dividends have been paid continuously since 1941 and totaled $73 million in each of the years 1993 and 1992 and $72 million in 1991.
Item 6.
Item 6. Selected Financial Data
Information regarding selected financial data required in this item is presented in the schedule captioned "Six-Year Financial Summary" on page 57 of the 1993 Annual Report to Stockholders and is incorporated herein by reference.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
"Management's Discussion and Analysis" on pages 25 through 29 of the 1993 Annual Report to Stockholders is incorporated herein by reference.
Item 8.
Item 8. Financial Statements and Supplementary Data
The following financial statements and supplementary data included in the 1993 Annual Report to Stockholders are incorporated herein by reference:
Annual Report Item Page No.
Report of Independent Public Accountants 30
Consolidated Statement of Income 31
Consolidated Statement of Retained Earnings 31
Consolidated Balance Sheet 32
Consolidated Statement of Cash Flows 33
Notes to Financial Statements 34-56
Item 9.
Item 9. Change in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
(a) Identification of directors -
For information required under this section, reference is made to the "Election of Directors" section of the company's proxy statement for 1994 made in connection with its Annual Stockholders' Meeting to be held on May 3, 1994.
(b) Identification of executive officers -
The information required under this section is set forth in the caption "Executive Officers of the Registrant" on pages 24 through 26 of this Form 10-K pursuant to Instruction 3 to Item 401(b) of Regulation S-K and General Instruction G(3) to Form 10-K.
(c) Compliance with Section 16(a) of the 1934 Act -
For information required under this section, reference is made to the "Compliance with Section 16(a) of the Securities Exchange Act of 1934" section of the company's proxy statement for 1994 made in connection with its Annual Stockholders' Meeting to be held on May 3, 1994.
Item 11.
Item 11. Executive Compensation
For information required under this section, reference is made to the "Executive Compensation" section of the company's proxy statement for 1994 made in connection with its Annual Stockholders' Meeting to be held on May 3, 1994.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
For information required under this section, reference is made to the "Security Ownership" section of the company's proxy statement for 1994 made in connection with its Annual Stockholders' Meeting to be held on May 3, 1994.
Item 13.
Item 13. Certain Relationships and Related Transactions
For information required under this section, reference is made to the "Election of Directors" section of the company's proxy statement for 1994 made in connection with its Annual Stockholders' Meeting to be held on May 3, 1994.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. Financial Statements -
The following consolidated financial statements of Kerr- McGee Corporation and its subsidiary companies, included in the company's 1993 Annual Report to Stockholders, are incorporated by reference in Item 8:
Report of Independent Public Accountants Consolidated Statement of Income for the Years Ended December 31, 1993, 1992, and 1991 Consolidated Statement of Retained Earnings for the Years Ended December 31, 1993, 1992, and 1991 Consolidated Balance Sheet at December 31, 1993 and 1992 Consolidated Statement of Cash Flows for the Years Ended December 31, 1993, 1992, and 1991 Notes to Financial Statements
(a) 2. Financial Statement Schedules - Page Report of Independent Public Accountants on Finan- cial Statement Schedules 34 Schedule V - Property, Plant, and Equipment for the Years Ended December 31, 1993, 1992, and 1991 35 Schedule VI - Reserves for Depreciation, Depletion, and Amortization for the Years Ended December 31, 1993, 1992, and 1991 36
Schedule VIII - Valuation Accounts and Reserves for the Years Ended December 31, 1993, 1992, and 1991 37 Schedule X - Supplementary Income Statement Informa- tion for the Years Ended December 31, 1993, 1992, and 1991 38
Schedules I, II, III, IV, VII, XI, XII, and XIII are omitted as the subject matter thereof is either not present or is not present in amounts sufficient to require submission of the schedules in accordance with instructions contained in Regulation S-X. Schedule IX is omitted as the subject matter thereof is included in Note 10 to the Consolidated Financial Statements on page 38 of the 1993 Annual Report to Stockholders, which note is incorporated by reference in Item 8.
(a) 3. Exhibits -
Exhibit No.
3.1 Restated Certificate of Incorporation of Kerr-McGee Corporation, filed as Exhibit 3.1 to the report on Form 10-Q for the quarter ended June 30, 1987, and incorporated herein by reference.
3.2 Bylaws of Kerr-McGee Corporation, as amended, filed as Exhibit 3(b) to the report on Form 10-K for the year ended December 31, 1986, and incorporated herein by reference.
4.1 Amended and Restated Rights Agreement dated as of July 11, 1989, filed as Exhibit 1 to the report on Form 8-K dated July 13, 1989, and incorporated herein by reference.
4.2 The company agrees to furnish to the Securities and Exchange Commission, upon request, copies of each of the following instruments defining the rights of the holders of certain long-term debt of the company: the Indenture dated as of June 1, 1976, between the company and Citibank, N.A., as trustee, relating to the company's 8-1/2% Sinking Fund Debentures due June 1, 2006; the Indenture dated as of November 1, 1981, between the company and United States Trust Company of New York, as trustee, relating to the company's 7% Debentures due November 1, 2011; the Note Agreement dated as of November 29, 1989, among the Kerr-McGee Corporation Employee Stock Ownership Plan Trust (the Trust) and several lenders, providing for a loan guaranteed by the company of $125 million to the Trust; the $300 million Credit Agreement dated as of August 15, 1990, providing for a five-year revolving credit facility with a bullet maturity on the fifth anniversary of the execution of the Credit Agreement; the Facilities Agreement dated March 3, 1991, providing for borrowings of up to $65 million through September 3, 1993, by National Titanium Dioxide Company Limited (Cristal), a Saudi Arabian limited liability company (owned 25% by a wholly owned subsidiary of the company), and several banks with 25% of the loans guaranteed on a several basis by the company's subsidiary; and the Revolving Credit Agreement dated as of October 16, 1992, among Kerr-McGee Corporation, Kerr- McGee Oil (U.K.) PLC, and several banks providing for revolving credit of up to $230 million through October 16, 1997. The total amount of securities authorized under each of such instruments does not exceed 10% of the total assets of the company and its subsidiaries on a consolidated basis.
4.2 Kerr-McGee Corporation Direct Purchase and Dividend Reinvestment Plan filed on Form S-3 effective August 19, 1993, Registration No. 33-66112, and incorporated herein by reference.
10.1 Deferred Compensation Plan for Non- Employee Directors as amended and restated effective October 1, 1990, filed as Exhibit 10(1) to the report filed on Form 10-K for the year ended December 31, 1990, and incorporated herein by reference.
10.2 Kerr-McGee Corporation Stock Deferred Compensation Plan for Non-Employee Directors effective October 1, 1988, filed as Exhibit 10(2) to the report filed on Form 10-K for the year ended December 31, 1988, and incorporated herein by reference.
10.3 Description of the company's Annual Incentive Compensation Plan, filed as Exhibit 10(3) to the report filed on Form 10-K for the year ended December 31, 1989, and incorporated herein by reference.
10.4 The 1984 Employee Stock Option Plan filed as Exhibit 4.2 to Form S-8 Registration No. 2-90981 and incorporated herein by reference.
10.5 The Long Term Incentive Program effective July 1, 1987, filed as Exhibit 4.1 to Form S-8 Registration No. 33-24274 and incorporated herein by reference.
10.6 Benefits Restoration Plan as amended and restated effective September 13, 1989, filed as Exhibit 10(6) to the report on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10.7 Kerr-McGee Corporation Executive Deferred Compensation Plan effective January 1, 1991, filed as Exhibit 10(7) to the report on Form 10-K for the year ended December 31, 1990, and incorporated herein by reference.
10.8 Kerr-McGee Corporation Supplemental Executive Retirement Plan effective January 1, 1991, filed as Exhibit 10(8) to the report on Form 10-K for the year ended December 31, 1990, and incorporated herein by reference.
10.9 Amended and restated Agreement, restated as of December 31, 1992, between the company and Frank A. McPherson filed as Exhibit 10(9) on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10.10 Amended and restated Agreement, restated as of December 31, 1992, between the company and John C. Linehan filed as Exhibit 10(10) on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10.11 Amended and restated Agreement, restated as of December 31, 1992, between the company and Luke R. Corbett filed as Exhibit 10(11) on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
10.12 Agreement, effective January 2, 1990, between the company and C. C. Stewart, Jr., filed as Exhibit "A" within Exhibit 10(14) to the report on Form 10-K for the year ended December 31, 1991, and incorporated herein by reference.
10.13 Amended and restated Agreement, restated as of December 31, 1992, between the company and George R. Hennigan.
10.14 Form of agreement, amended and restated as of December 31, 1992, between the company and certain executive officers not named in the Summary Compensation Table contained in the company's definitive Proxy Statement for the 1994 Annual Meeting of Stockholders, filed as Exhibit 10(14) on Form 10-K for the year ended December 31, 1992, and incorporated herein by reference.
12 Computations of ratio of earnings to fixed charges.
13 1993 Annual Report to Stockholders.
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen & Co.
24 Powers of attorney.
(b) Reports on Form 8-K -
No reports on Form 8-K were filed by the Registrant during the quarter ended December 31, 1993.
Report of Independent Public Accountants On Financial Statement Schedules
To Kerr-McGee Corporation:
We have audited in accordance with generally accepted auditing standards, the consolidated financial statements included in Kerr- McGee Corporation's 1993 Annual Report to Stockholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 18, 1994. Our report on the consolidated financial statements includes an explanatory paragraph with respect to changes in accounting for postretirement benefits other than pensions and income taxes in 1992 as discussed in Note 2 to the financial statements. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The financial statement schedules V, VI, VIII, and X are the responsibility of the company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic consolidated financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole.
(Arthur Andersen & Co.) ARTHUR ANDERSEN & CO.
Oklahoma City, Oklahoma, February 18, 1994
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
KERR-McGEE CORPORATION
March 28, 1994 By: (Frank A. McPherson) Date Frank A. McPherson, Chairman of the Board and Chief Executive Officer
March 28, 1994 By: (John C. Linehan) Date John C. Linehan, Senior Vice President and Chief Financial Officer
March 28, 1994 By: (J. Michael Rauh) Date J. Michael Rauh, Vice President and Controller and Chief Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities and on the date indicated.
By: Bennett E. Bidwell* Bennett E. Bidwell, Director
By: E. H. Clark, Jr.* E. H. Clark, Jr., Director
By: Richard D. Harrison* Richard D. Harrison, Director
By: Martin C. Jischke* Martin C. Jischke, Director
March 28, 1994 By: Robert S. Kerr, Jr.* Date Robert S. Kerr, Jr., Director
By: Frank A. McPherson* Frank A. McPherson, Director
By: William C. Morris* William C. Morris, Director
By: John J. Murphy* John J. Murphy, Director
By: John J. Nevin* John J. Nevin, Director
By: Farah M. Walters* Farah M. Walters, Director
* By his signature set forth below, John C. Linehan has signed this Annual Report on Form 10-K as attorney-in-fact for the directors noted above, pursuant to power of attorney filed with the Securities and Exchange Commission.
By: (John C. Linehan) John C. Linehan
Exhibit Index
The following exhibits are filed with this document:
Exhibit 10.13 Exhibit 12 Exhibit 21 Exhibit 23 Exhibit 24