<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ANADARKO PETROLEUM CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
ANADARKO PETROLEUM CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2
ANADARKO PETROLEUM CORPORATION
P. O. BOX 1330
HOUSTON, TEXAS 77251-1330
March 21, 1994
TO THE STOCKHOLDERS:
You are cordially invited to attend the Annual Meeting of Stockholders of
the Company which will be held in The Wyndham Hotel, Greenspoint, 12400
Greenspoint Drive, Houston, Texas, on Thursday, April 28, 1994, at 9:30 A.M.
The Notice of the Annual Meeting and Proxy Statement, which are attached,
provide information concerning the matters to be considered at the meeting. In
addition, the general operations of the Company will be discussed and
stockholders will be afforded the opportunity to ask questions.
We would appreciate your signing and returning your proxy in the enclosed
envelope as soon as possible, whether or not you plan to attend the meeting.
Please sign, date and return the enclosed proxy in the self-addressed,
postage-paid return envelope. If you do not return the signed proxy, your proxy
cannot be counted. We value your opinions and encourage you to participate in
this year's Annual Meeting by voting your proxy.
Very truly yours,
/s/ ROBERT J. ALLISON, JR.
-----------------------------------
ROBERT J. ALLISON, JR.
Chairman, President and Chief
Executive Officer
<PAGE> 3
ANADARKO PETROLEUM CORPORATION
P. O. BOX 1330
HOUSTON, TEXAS 77251-1330
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 28, 1994
Notice is hereby given that the Annual Meeting of Stockholders of Anadarko
Petroleum Corporation, a Delaware corporation (the "Company"), will be held in
The Wyndham Hotel, Greenspoint, 12400 Greens-
point Drive, Houston, Texas, on Thursday, April 28, 1994, at 9:30 A.M., for the
purpose of:
(1) Electing three Class II directors for terms of three years, each
to hold office until the expiration of his term and until his successor
shall have been elected and shall have qualified;
(2) Approving amendments to the 1988 Stock Option Plan for
Non-employee Directors;
(3) Approving the Annual Incentive Bonus Plan;
(4) Approving the 1993 Stock Incentive Plan; and
(5) Transacting such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
A record date of March 4, 1994, has been fixed for determining stockholders
entitled to notice of, and to vote at, the Annual Meeting of Stockholders, and
only holders of Common Stock of record at the close of business on the record
date will be entitled to receive notice of, and to vote at, such meeting or any
adjournment or adjournments thereof.
Whether or not you expect to be present at the meeting, please sign, date
and return the enclosed proxy in the enclosed addressed envelope, which requires
no postage if mailed in the United States.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ SUZANNE SUTER
----------------------------------
SUZANNE SUTER
Corporate Secretary
Dated: March 21, 1994
Houston, Texas
<PAGE> 4
ANADARKO PETROLEUM CORPORATION
P. O. BOX 1330
HOUSTON, TEXAS 77251-1330
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 1994
---------------------
GENERAL INFORMATION
This statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of Anadarko Petroleum Corporation, a Delaware
corporation (the "Company" or "Anadarko"), of proxies for use at its Annual
Meeting of Stockholders to be held in The Wyndham Hotel, Greenspoint, 12400
Greenspoint Drive, Houston, Texas, on Thursday, April 28, 1994, at 9:30 A.M.,
for the purposes set forth in the accompanying notice of the meeting. Proxy
material is being mailed to holders of the Company's common stock, par value
$0.10 per share ("Common Stock"), on or about March 21, 1994.
A stockholder may, at any time prior to the meeting, revoke a proxy by
giving written notice of such revocation addressed to the Corporate Secretary of
the Company at P. O. Box 1330, Houston, Texas 77251-1330. Unless revoked prior
to its exercise, any proxy given pursuant to this solicitation will be voted at
the meeting. Also, a stockholder may attend the meeting and vote in person
whether or not he has previously given a proxy.
RECORD DATE AND VOTING AT THE MEETING
On March 4, 1994, the record date for the determination of stockholders
entitled to vote at the meeting, the Company had 58,700,520 shares of Common
Stock outstanding, each of which will be entitled to one vote at the meeting.
Votes cast by proxy or in person at the meeting will be tabulated by the
election inspectors appointed for the meeting. The holders of a majority of the
shares entitled to vote at the meeting, whether present in person or represented
by proxy, will constitute a quorum for the transaction of business at the
meeting. Proxy cards that are not signed or that are not returned are treated as
not voted for any purpose.
All elections for directors shall be decided by a plurality of the votes
cast in respect thereof. If no voting direction is indicated on the proxy card,
the shares will be considered votes for the nominee. In accordance with Delaware
law, a stockholder entitled to vote for the election of directors can withhold
authority to vote for all nominees for directors or can withhold authority to
vote for certain nominees for director.
Abstentions from proposal are treated as votes against the particular
proposal. If a broker indicates on a proxy that it does not have discretionary
authority as to certain shares to vote on a particular proposal, those shares
will not be considered as present and entitled to vote with respect to that
proposal.
<PAGE> 5
ELECTION OF DIRECTORS
(PROPOSAL NO. 1 ON PROXY CARD)
The Board is divided into three classes of directors serving staggered
three-year terms. Class I and Class III each have two directors and Class II has
three directors.
At the meeting, the three Class II directors are to be elected for terms of
three years, each to hold office until the expiration of his term in 1997 and
until his successor shall have been elected and shall have qualified. It is the
intention of the persons named in the accompanying form of proxy to vote such
proxy, unless otherwise instructed, for the election of Messrs. Conrad P.
Albert, Robert J. Allison, Jr. and Charles M. Simmons for terms of three years.
If any one of these nominees should be unable to serve, the proxies will be
voted for the election of such other persons as shall be determined by the
persons named in the proxy, in accordance with their judgment.
Messrs. Larry Barcus and James L. Bryan, Class III directors, were elected
by the stockholders in 1992 for terms of three years. Messrs. Ronald Brown and
John R. Gordon, Class I directors, were elected by the stockholders in 1993 to
each serve a three-year term.
NOMINEES FOR ELECTION
CONRAD P. ALBERT -- Mr. Albert resides in New York and is engaged in
personal investments. He was Executive Vice President of Manufacturers Hanover
Trust Company, a banking corporation, New York, New York, from September 1983
through 1991.
<TABLE>
<CAPTION>
AGE AT END BECAME A PROPOSED
OF 1994 DIRECTOR TERM EXPIRES
- ----------- ---------- -------------
<S> <C> <C>
48 1986 1997
</TABLE>
ROBERT J. ALLISON, JR. -- Mr. Allison has been Chairman of the Board and
Chief Executive Officer of the Company since October 1, 1986. Mr. Allison was
elected President of the Company in January 1993.
<TABLE>
<CAPTION>
AGE AT END BECAME A PROPOSED
OF 1994 DIRECTOR TERM EXPIRES
- ----------- ---------- -------------
<S> <C> <C>
55 1985 1997
</TABLE>
CHARLES M. SIMMONS -- Mr. Simmons resides in Fort Worth, Texas. He retired
from The Western Company of North America in September 1985.
<TABLE>
<CAPTION>
AGE AT END BECAME A PROPOSED
OF 1994 DIRECTOR TERM EXPIRES
- ----------- ---------- -------------
<S> <C> <C>
68 1986 1997
</TABLE>
DIRECTORS CONTINUING IN OFFICE
LARRY BARCUS -- Mr. Barcus is Chairman of L. G. Barcus and Sons, Inc.,
Kansas City, Kansas, a general contractor with operations nationwide. He is also
Chairman of the Board of First American Bancshares, Inc. and Klear Vision, Inc.
<TABLE>
<CAPTION>
AGE AT END BECAME A PRESENT
OF 1994 DIRECTOR TERM EXPIRES
- ----------- ---------- -------------
<S> <C> <C>
57 1986 1995
</TABLE>
RONALD BROWN -- Mr. Brown resides in Rancho Santa Fe, California. He
retired as Executive Vice President of Compass Bank, Houston, Texas in 1992. He
had served in that position since 1991 when River
2
<PAGE> 6
Oaks Bank was acquired by Compass Bank. Prior to 1991, he was Vice Chairman and
President of River Oaks Bank, a banking association.
<TABLE>
<CAPTION>
AGE AT END BECAME A PRESENT
OF 1994 DIRECTOR TERM EXPIRES
- ----------- ---------- -------------
<S> <C> <C>
61 1986 1996
</TABLE>
JAMES L. BRYAN -- Mr. Bryan was elected Senior Vice President Operations of
Dresser Industries, Inc. ("Dresser"), an oil field services company with
executive offices in Dallas, Texas, in February 1994. In May 1990, Mr. Bryan was
elected Vice President -- Operations of Dresser. Mr. Bryan was President and
Chief Executive Officer of M-I Drilling Fluids Co., a Dresser/Halliburton
company from 1986 until May 1990.
<TABLE>
<CAPTION>
AGE AT END BECAME A PRESENT
OF 1994 DIRECTOR TERM EXPIRES
- ----------- ---------- -------------
<S> <C> <C>
58 1986 1995
</TABLE>
JOHN R. GORDON -- Mr. Gordon has been President of Deltec Asset Management
Corporation, a New York, New York investment management company, since January
1988. Prior to joining Deltec, Mr. Gordon was a Managing Director of Kidder,
Peabody & Co. Inc. in New York since January 1986.
<TABLE>
<CAPTION>
AGE AT END BECAME A PRESENT
OF 1994 DIRECTOR TERM EXPIRES
- ----------- ---------- -------------
<S> <C> <C>
46 1988 1996
</TABLE>
COMMITTEES OF THE BOARD
The Board has a standing Executive Committee, Audit Committee and
Compensation and Benefits Committee (the "Compensation Committee"). Mr. Allison
is Chairman and Messrs. Brown and Bryan are members of the Executive Committee.
Mr. Bryan is Chairman and Messrs. Albert and Barcus are members of the Audit
Committee. Mr. Gordon is Chairman and Messrs. Brown and Simmons are members of
the Compensation Committee. During 1993, the Executive Committee met one time;
the Audit Committee met three times; and the Compensation Committee met four
times.
The Executive Committee reviews and, where appropriate, approves corporate
action with respect to the conduct of the business of the Company between Board
meetings. Actions taken by the Executive Committee are regularly submitted to
the Board at its next meeting, for review by the full Board.
The Audit Committee recommends to the Board each year the appointment of
independent auditors for the following year. The Audit Committee considers the
independence of such auditors; reviews the fees for audit and nonaudit services;
reviews the plan, scope and results of the independent audit; reviews the
recommendations resulting from such audit and the responses of management to
such recommendations; reviews the plan, scope and results of the Company's
internal audit group's activities; reviews the recommendations resulting from
internal audits; and reviews the accounting controls of the Company that the
Audit Committee or the Board may deem necessary or desirable. This Committee
also reviews the annual financial statements issued by the Company to its
security holders and makes recommendations as to accounting and auditing
policies which, in its judgment, should receive the attention of the Board.
The Compensation Committee considers and approves certain remuneration
arrangements between the Company and its officers, including executive officers'
salaries; adopts or makes recommendations to the Board regarding the adoption of
compensation and employee benefit plans in which officers and certain key
employees of the Company and certain subsidiaries are eligible to participate;
and grants bonuses, stock options, restricted stock and other benefits pursuant
to Company plans. This Committee also reviews and makes recommendations with
respect to the election of officers of the Company, and when appropriate,
recommends the election to the Board of a Chief Executive Officer.
3
<PAGE> 7
MEETINGS
During 1993, the Board met four times. Each incumbent director of the
Company, during his term as a director in 1993, attended at least 75% of the
total number of meetings of the Company's Board and at least 75% of the total
number of meetings of the Committees of which he was a member.
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the number of shares of Common Stock beneficially
owned, or as to which there is a right to acquire beneficial ownership within 60
days of February 28, 1994, by each continuing director, each nominee for
director, and all directors and executive officers of the Company as a group as
of February 28, 1994. No director, nominee for director or officer of the
Company owns and has the right to acquire more than 1% of the outstanding Common
Stock. All directors and officers of the Company as a group own beneficially and
have the right to acquire, within 60 days of February 28, 1994, approximately
2.2% of the outstanding Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP
---------------------------------
NUMBER
OF OPTIONS
SHARES EXERCISABLE TOTAL PERCENT
TITLE NAME OF BENEFICIALLY WITHIN BENEFICIAL OF
OF CLASS BENEFICIAL OWNER OWNED(1) 60 DAYS OWNERSHIP CLASS
- --------------------- ------------------------------- ------- ------- --------- -----
<S> <C> <C> <C> <C> <C>
Common Stock......... Robert J. Allison, Jr. 204,901 280,000 484,901 *
Common Stock......... Charles G. Manley 36,423 43,500 79,923 *
Common Stock......... Michael E. Rose 30,853 43,500 74,353 *
Common Stock......... Charles K. Abernathy 29,981 64,500 94,481 *
Common Stock......... John N. Seitz 17,678 55,100 72,778 *
Common Stock......... Conrad P. Albert 11,000 10,000 21,000 *
Common Stock......... Larry Barcus 1,000 30,000 31,000 *
Common Stock......... Ronald Brown 1,222 30,000 31,222 *
Common Stock......... James L. Bryan 1,000 30,000 31,000 *
Common Stock......... John R. Gordon 10,000 30,000 40,000 *
Common Stock......... Charles M. Simmons 10,000 30,000 40,000 *
All directors and executive
Common Stock......... officers
as a group, including the
above-named (17 persons) 446,554 821,100 1,267,654 2.2%
</TABLE>
- ---------------
* Less than one percent.
(1) The directors and officers have sole voting and dispositive power of all
shares beneficially owned. Included are beneficially owned and undistributed
shares of Common Stock held in the Anadarko Employee Savings Plan. The
number does not include shares of Common Stock which the directors or
officers of the Company have the right to acquire within 60 days of February
28, 1994.
4
<PAGE> 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to persons known to be the
beneficial owner of more than 5% of the Company's outstanding Common Stock:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS
- ------------------------ ----------------------------------------- ------------ -----
<S> <C> <C> <C>
Common Stock............ FMR Corp. 7,364,835(1) 12.5%
82 Devonshire Street
Boston, MA 02109
Common Stock............ Sonatrach Petroleum Investment 6,000,000(2) 10.2%
Corporation
(Ireland) Limited
10, rue du Sahara
Hydra, Algiers, Algeria
</TABLE>
- ---------------
(1) According to information contained in a Schedule 13G filed with the
Commission, dated February 11, 1994.
(2) According to information contained in a Schedule 13D filed with the
Securities and Exchange Commission (the "Commission"), dated May 11, 1993.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The Company purchases oil field services from a number of companies
including Dresser Industries, Inc. and its affiliates and subsidiaries. In 1993,
the aggregate amount paid to Dresser Industries, Inc. and its affiliates and
subsidiaries was approximately $641,000. Mr. Bryan, a director of the Company,
is Senior Vice President Operations of Dresser Industries, Inc.
Approximately $155,000 was paid to L. G. Barcus and Sons, Inc. in
connection with the construction in 1993 of facilities to be used by the
Company. Mr. Barcus, a director of the Company, is the Chairman of L. G. Barcus
and Sons, Inc., a general contractor with operations nationwide.
During 1989, Anadarko Algeria Corporation ("Anadarko Algeria"), a
wholly-owned subsidiary of the Company, entered into an agreement with
Sonatrach, an Algerian entreprise nationale ("Sonatrach"), which is wholly-owned
by the People's Democratic Republic of Algeria and which owns 99.9% of the
capital stock of Sonatrach Petroleum Investment Corporation (Ireland) Limited,
which gives Anadarko Algeria the right to explore for and produce liquid
hydrocarbons in Algeria. The agreement provides for a commitment from Anadarko
Algeria of a minimum of $100,000,000 of exploration costs, including the cost of
certain assets, over a 10-year period, subject to certain provisions. Liquid
hydrocarbons discovered and produced will be shared by Anadarko Algeria and
Sonatrach in accordance with the terms of the agreement. Anadarko Algeria has
obtained two partners to participate in the project and share in the exploration
cost commitment. As of December 31, 1993, a total of approximately $72,408,000
in exploration costs had been incurred by Anadarko Algeria of which
approximately $26,964,000 was incurred in 1993.
5
<PAGE> 9
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive an annual retainer
of $30,000 for serving on the Board, plus $1,250 for attendance at each meeting
of the Board. In addition, non-employee directors receive an annual retainer of
$3,000 for serving on a committee, plus $1,250 for each committee meeting
attended. Non-employee directors who serve as a Chairman of a committee receive
an additional annual retainer of $3,000. All directors are reimbursed for
expenses incurred in attending Board and committee meetings. Employees of the
Company who are also directors do not receive a retainer or fees for Board and
committee meetings attended.
The Company has a stock option plan for directors who are not employees of
the Company. Under the Anadarko Petroleum Corporation 1988 Stock Option Plan for
Non-Employee Directors (the "1988 Plan"), each non-employee director receives an
initial grant of 10,000 options which vest equally over a two-year period. In
addition, on October 27th of each year, each non-employee director is granted an
option to purchase 5,000 shares of Common Stock at the fair market value on such
date. All outstanding options granted under the 1988 Plan are options which do
not constitute incentive stock options ("IS0s") within the meaning of the
Internal Revenue Code of 1986, as amended (the "Code") ("NQOs"). All outstanding
options under the 1988 Plan are exercisable no earlier than one year from the
date of grant and expire ten years from the date of grant. Options may not be
awarded or granted after October 26, 1998, or the earlier termination of the
1988 Plan. The Company is proposing to amend the 1988 Plan to add the ability
for non-employee directors to receive a portion of their retainer and/or meeting
fees in shares of Common Stock. See "Approval of Amendments to the 1988 Stock
Option Plan For Non-Employee Directors" below.
The Company has a Director Retirement Income Plan for its non-employee
directors. Directors having ten or more years of service on the Board and having
attained age 65 will be eligible to receive retirement income equal to 60% of
the director's annual retainer fee in effect as of the director's retirement
date from the Board. Directors having less than ten years of service will accrue
a benefit of 6% per year of service of the director's annual retainer fee in
effect as of such director's retirement. Such retirement income will become
payable on the later of the director's retirement date or age 65 and will be
payable in equal installments on a monthly basis during the life of the director
with 120 months of payments guaranteed.
The Company has a Director Deferred Compensation Plan (the "Director
Deferred Plan") which allows non-employee directors to defer all or part of
their director annual retainer fee and provides unfunded benefit payments in
amounts related to the amount of compensation deferred, age of the director at
the time the compensation is deferred and accrued interest. Amounts previously
deferred accrue interest at 20% per annum. The Director Deferred Plan may
provide in-service payments during the time the director is a member of the
Board. Upon retirement, death, disability or the attainment of age 65, the
participant will receive annual payments, over a ten-year period, or in certain
cases on an accelerated or lump sum basis. There have been no deferrals under
the Director Deferred Plan since 1990.
6
<PAGE> 10
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the Chief
Executive Officer and the four most highly compensated executive officers of the
Company as to whom the total annual salary and bonus for the fiscal year ended
December 31, 1993, exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS
------------------------------ -------------------------
OTHER UNDERLYING PAYOUTS ALL
ANNUAL RESTRICTED SECURITIES ---------- OTHER
COMPENSA- STOCK OPTIONS/ LTIP COMPENSA-
NAME PRINCIPAL POSITION YEAR SALARY($) BONUS($) TION($)(1) AWARDS($)(2) SARS(#)(3) PAYOUTS($) TION($)(4)
- --------------------- ------------------ ---- ------- ------- ---------- ------------ ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Robert J. Allison, Jr. Chairman, 1993 750,000 675,000 0 0 60,000 0 219,371
President and
Chief Executive
Officer
Chairman and Chief 1992 675,000 338,000 0 0 40,000 0 182,475
Executive
Officer
Chairman and Chief 1991 675,000 338,000 0 0 40,000 0 173,790
Executive
Officer
Charles G. Manley Senior Vice 1993 245,000 130,000 0 593,438 24,000 0 80,726
President,
Administration
Vice Pres. 1992 204,000 61,000 0 0 15,000 0 72,901
Administration
& Employee
Relations
Vice Pres. 1991 204,000 51,000 0 0 12,000 0 65,752
Administration
& Employee
Relations
Michael E. Rose Senior Vice 1993 245,000 130,000 0 593,438 24,000 0 78,911
President,
Finance/Chief
Financial
Officer
Vice Pres. 1992 208,000 62,000 0 0 15,000 0 72,325
Finance/Chief
Financial
Officer
Vice Pres. 1991 208,000 52,000 0 0 12,000 0 64,972
Finance/Chief
Financial
Officer
Charles K. Abernathy Vice Pres. 1993 218,000 82,000 0 395,625 18,000 0 63,170
Operations-
International/Gulf
of Mexico
Vice Pres. 1992 205,000 60,000 0 0 15,000 0 58,306
Operations-
International/Gulf
of Mexico
Vice Pres. & 1991 205,000 60,000 0 0 15,000 0 54,964
General
Manager-International
John N. Seitz Vice Pres. 1993 220,000 100,000 0 395,625 18,000 0 42,894
Exploration
Vice Pres. 1992 190,000 57,000 0 0 15,000 0 35,696
Exploration
Vice Pres. & 1991 190,000 60,000 0 0 15,000 0 34,838
General
Manager-Houston
Region
</TABLE>
- ---------------
(1) No executive officer had perquisites in excess of $50,000 or 10% of salary
plus bonus.
(2) As of December 31, 1993, the number of restricted shares held by each
executive officer and corresponding value on December 31, 1993 was for Mr.
Manley, 12,000 shares valued at $544,500; Mr. Rose, 12,000 shares valued at
$544,500; Mr. Abernathy, 8,000 shares valued at $363,000; and Mr. Seitz,
8,000 shares valued at $363,000. Dividends will be paid on unvested shares.
The restricted stock awarded in 1993 vested 20% on May 10, 1993 and will
vest 20% per year each May 10th thereafter.
(3) No SARs are outstanding.
(4) This column includes (a) Company contributions to the Anadarko Employee
Savings Plan and Executive Benefit Equalization Plan; (b) interest earned
above 120% of the applicable federal rate on deferred compensation under the
Executive Deferred Compensation Plan; and (c) payments under the Annual
Override Bonus Plan ("ORRI"). The 1993 amounts for items (a), (b) and (c)
for each of the individuals named in the table are for Mr. Allison,
$104,160, $71,440 and $43,771; Mr. Manley, $25,670, $45,481 and $9,575; Mr.
Rose, $25,721, $44,050 and $9,140; and Mr. Abernathy, $21,108, $27,477 and
$14,585; and Mr. Seitz, $22,164, $9,497 and $11,233, respectively. No
deferrals have been made under the Executive Deferred Compensation Plan
since 1990. Grants under the ORRI were discontinued after 1986; however,
awards that were previously made will continue to produce payments to the
recipients over the lifetime of the wells in the pool.
7
<PAGE> 11
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------
% OF TOTAL
OPTIONS/SARS POTENTIAL REALIZABLE VALUE
GRANTED AT ASSUMED
NUMBER OF TO EXERCISE ANNUAL RATES
SECURITIES EMPLOYEES OR OF STOCK PRICE APPRECIATION
UNDERLYING IN BASE FOR OPTION TERM(3)
OPTIONS/SARS FISCAL PRICE(2) EXPIRATION -------------------------------------------
NAME GRANTED(#)(1) YEAR ($/SH) DATE 0%($) 5%($) 10%($)
---- ------------- ------ -------- ---------- ----- --------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert J. Allison, Jr...... 60,000 15.1% $47.00 10/28/03 $ 0 $ 1,773,483 $ 4,494,354
Charles G. Manley.......... 24,000 6.0% $47.00 10/28/03 $ 0 $ 709,393 $ 1,797,742
Michael E. Rose............ 24,000 6.0% $47.00 10/28/03 $ 0 $ 709,393 $ 1,797,742
Charles K. Abernathy....... 18,000 4.5% $47.00 10/28/03 $ 0 $ 532,045 $ 1,348,306
John N. Seitz.............. 18,000 4.5% $47.00 10/28/03 $ 0 $ 532,045 $ 1,348,306
Above Optionees Gain as %
of all Stockholders
Gain..................... N/A N/A N/A N/A N/A 0.2% 0.2%
All Stockholders(4)........ 58,668,407 $ 0 $1,660,315,918 $4,207,698,150
</TABLE>
- ---------------
(1) No SARs were granted in 1993. Stock options granted on October 28, 1993 were
granted under the Company's 1987 Stock Option Plan. Fifty percent of the
options become fully exercisable on October 28, 1994 and 50 percent become
fully exercisable on October 28, 1995. In the event of a "Change of
Control" (as defined by the Plan) all outstanding options granted at least
six months prior to the date of the "Change of Control" shall be
surrendered to the Company and the optionee shall receive a cash payment in
an amount equal to the number of shares of Common Stock subject to the
options multiplied by the difference between the fair market value of a
share of Common Stock on the date determined to be the date of cancellation
and surrender of such options and the option price.
(2) The exercise price equals the fair market value of the Common Stock on the
date of grant.
(3) The dollar amounts under these columns are the results of calculation at 0%
and at the 5% and 10% rates set by the Commission and are not intended to
forecast possible future appreciation, if any, of the Company's stock
price. The Company did not use an alternative formula for a grant date
valuation, as the Company is not aware of any formula which will determine
with reasonable accuracy a present value based on future unknown or
volatile factors.
(4) Total shares owned by all stockholders on December 31, 1993. No gain to
optionee is possible without an increase in stock appreciation which will
benefit all stockholders commensurately. A zero percent gain in stock price
appreciation will result in no appreciation for the optionee.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END AT FY-END
SHARES (#) ($)
ACQUIRED VALUE -------------- -------------------
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) NON-EXERCISABLE NON-EXERCISABLE*
- ------------------------------ ----------- ----------- -------------- -------------------
<S> <C> <C> <C> <C>
Robert J. Allison, Jr......... 74,000 $ 1,398,305 280,000/80,000 $4,751,250/$303,750
Charles G. Manley............. 64,200 $ 1,132,367 43,500/31,500 $ 538,406/$113,906
Michael E. Rose............... 12,000 $ 174,000 43,500/31,500 $ 538,406/$113,906
Charles K. Abernathy.......... 4,500 $ 122,659 64,500/25,500 $ 900,503/$113,906
John N. Seitz................. -- $ -- 55,100/25,500 $ 721,043/$113,906
</TABLE>
- ---------------
* Computed based upon the difference between aggregate fair market value on
December 31, 1993 ($45.00) and aggregate exercise price.
8
<PAGE> 12
PENSION PLAN TABLE
The Company has a defined-benefit Retirement Income Plan, (the "Retirement
Plan"), covering all United States employees of the Company. The following table
shows the estimated single life annuity payable upon normal retirement at age 65
at various levels of compensation based on the Retirement Plan benefit formula
in effect on December 31, 1993.
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ---------------------------------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
$ 250,000........................ $ 66,000 $ 88,000 $110,000 $132,000 $ 154,000
300,000........................ 80,000 106,000 133,000 159,000 186,000
400,000........................ 107,000 142,000 178,000 213,000 249,000
500,000........................ 134,000 178,000 223,000 267,000 312,000
600,000........................ 161,000 214,000 268,000 321,000 375,000
700,000........................ 188,000 250,000 313,000 375,000 438,000
800,000........................ 215,000 286,000 358,000 429,000 501,000
900,000........................ 242,000 322,000 403,000 483,000 564,000
1,000,000........................ 269,000 358,000 448,000 537,000 627,000
1,100,000........................ 296,000 394,000 493,000 591,000 690,000
1,200,000........................ 323,000 430,000 538,000 645,000 753,000
1,300,000........................ 350,000 466,000 583,000 699,000 816,000
1,400,000........................ 377,000 502,000 628,000 753,000 879,000
1,500,000........................ 404,000 538,000 673,000 807,000 942,000
1,600,000........................ 431,000 574,000 718,000 861,000 1,005,000
1,700,000........................ 458,000 610,000 763,000 915,000 1,068,000
</TABLE>
The Retirement Plan provides benefits based on a length of service and a
final average pay formula including amounts set forth in the Salary and Bonus
columns of the Summary Compensation Table. Messrs. Allison, Manley, Rose,
Abernathy and Seitz, respectively, have 20, 19, 16, 19 and 15 years of accrued
service under the Plan. An employee becomes vested in his benefit under the
Retirement Plan at completion of five years of vesting service, as defined in
the Retirement Plan.
The benefits payable under the Retirement Plan are subject to certain
limitations under the Code, but are not subject to any deduction for Social
Security or other offset amounts. For certain employees who may be affected by
such limits the Company has an Executive Benefit Equalization Plan (the
"Equalization Plan") to maintain total benefits upon retirement at approximately
the levels shown in the table above. The supplemental benefits provided under
the Equalization Plan will not be accorded certain of the favorable tax
treatments that apply to benefits paid under the existing Retirement Plan.
Benefits under the Equalization Plan are unfunded and payable solely from the
general assets of the Company.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
The Company has Key Employee Change of Control Contracts (the "Contracts")
with all current executive officers. The Contracts provide that in the event of
a change in control such individuals will receive certain benefits in the event
of the termination of their employment within five years of the effective date
of such change in control. A "change of control" will occur if (i) any third
person or entity acquires or gains control of 20% or more of the voting stock of
the Company, (ii) as a result of, or in connection with, a contested election of
directors, a majority of the Board before such election cease to be members of
the Board or (iii) a person or entity owning more than 4% of the outstanding
shares of the Company proposes a business combination with or purchase of the
Company or a substantial part of its assets. Such benefits are provided unless
such termination of employment is (i) because of the death or retirement, except
in certain circumstances, of the executive, (ii) by the Company for cause or
disability, or (iii) by the executive other than for good reason (as defined in
the Contracts). Generally, benefits payable under the terms of the Contracts
include a lump-sum cash payment equal to (i) 2.9 times the highest total
annualized compensation
9
<PAGE> 13
paid during the three years ending with the year of such participant's
termination from the Company (including base salary and the amount or value of
any bonuses); (ii) the amount of Company matching contributions which would have
been made on the participant's behalf had he continued to participate in the
Anadarko Employee Savings Plan and the Equalization Plan for up to an additional
three years; (iii) the present value of the additional normal retirement benefit
which would have been received by the employee based on continued service
through normal retirement date and assuming an annual 6% increase in base
salary; (iv) the present value of the amounts of deferred compensation which
would have been received by the employee based on continued service through age
65 under each deferred compensation agreement to which the participant was a
party; and (v) the value of any investments credited to the employee under the
Equalization Plan. In addition, the Contracts provide for a continuation of
various health care, disability and life insurance plans and certain other
benefits for a period of up to three years; and the payment of all legal fees
and expenses incurred by the employee in obtaining or enforcing any right or
benefit provided by the Contracts. The Contracts also obligate the Company to
pay an employee such cash amount as may be necessary to restore any benefit
diminution resulting directly or indirectly from the assessment of any special
excise taxes under Section 280G of the Code in respect to benefits provided
under the Contracts. In consideration of these benefits the employee agrees, in
the event a person seeks to effect a change in control, not to leave the employ
of the Company and to render services commensurate with his position until such
person has abandoned or terminated his efforts or the change in control has
occurred. The employee also agrees to retain, in confidence, any and all
confidential information known to him concerning the Company and its business so
long as such information is not otherwise publicly disclosed. No amounts have
been paid under the Contracts.
The Employee Severance Pay Plan (the "Severance Plan") covers all of the
Company employees who are not covered by the Contracts. The Severance Plan
provides that, in the event of a change in control, employees will have certain
benefits provided to them in the event of the termination of their employment
within three years after the effective date of such change in control. A "change
of control" will occur if (i) any third person or entity acquires or gains
ownership or control of 30% or more of the voting stock of the Company or (ii)
as a result of, or in connection with, a contested election of directors, a
majority of the Board before such election cease to be members of the Board.
Benefits are provided unless termination of employment is (i) because of the
death or retirement, except in certain circumstances, of the employee, (ii) by
the Company for cause or disability, or (iii) by the employee other than for
good reason, as defined in the Severance Plan. The Severance Plan provides
benefits that include a lump sum cash payment based on salary and service
ranging from a minimum of three months to a maximum of two years' salary; and a
continuation of employees' medical and dental insurance for six months. No
amounts have been paid under the Severance Plan.
In the event of a "Change of Control", under the terms of the Company's
existing stockholder approved stock option plans, all outstanding options which
were granted at least six months prior to the date of the "Change of Control"
shall be surrendered to the Company and the optionee shall receive a cash
payment in an amount equal to the number of shares of Common Stock subject to
the options multiplied by the difference between the fair market value of a
share of Common Stock on the date determined to be the date of cancellation and
surrender of such options and the option price. A "Change of Control" will occur
if (i) any third person or entity acquires or gains ownership or control of 30%
or more of the voting stock of the Company or (ii) as a result of, or in
connection with, a contested election of directors, a majority of the Board
before such election cease to be members of the Board. See "Approval of the 1993
Stock Incentive Plan -- Change of Control" below for a description of the Change
of Control provisions contained in that plan.
10
<PAGE> 14
COMPENSATION AND BENEFITS COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Anadarko's compensation strategy is to provide total compensation
commensurate with the Company's achievement of specific operational, financial
and strategic objectives and the long-term appreciation of Anadarko's stock
price. The Company believes a significant portion of executive compensation
should be directly and materially linked to the creation of value for our
shareholders. The Compensation Committee believes the design of the Company's
total executive compensation program provides executives the incentive to
maximize long-term operational performance consistent with sound financial
controls and high standards of integrity. It is the Compensation Committee's
belief that this focus will ultimately be reflected in Anadarko's stock price
and stockholder return.
The key elements of Anadarko's total executive compensation program include
base salary, annual incentives and long-term stock ownership plans. These plans
are designed to attract, reward and retain key personnel critical to the
long-term success of the Company through compensation programs that are
competitive within the oil and gas industry. The Compensation Committee annually
reviews the total compensation and stock ownership of our executive officers as
compared to a select peer group of comparable public oil and gas companies.
Anadarko's compensation programs are designed to provide executive officers
total compensation levels above the average of our competitive market with the
opportunity to be within the top quartile of the select peer group, to the
extent that executive performance on an individual and collective basis so
warrants. In 1993, Mr. Allison's total compensation was within the top quartile
of the select peer group.
The Performance Graph, contained in this proxy statement on page 14,
compares Anadarko's stock price performance against a published index for the
oil and gas industry. The index provides a meaningful comparison of Anadarko's
total shareholder return against a consistent representation of companies within
the oil and gas industry. The executive compensation analysis focuses on those
companies that are considered potential competitors for the Company's executive
talent and includes the majority of the companies in the published index.
BASE SALARY
Anadarko strives to be the best managed company within the oil and gas
industry, and structures its compensation programs to match pay with
performance. In this context, Anadarko's base salaries are targeted to be above
industry average, taking into account scope of responsibilities and internal
relationships. Individual base salaries are determined by the Compensation
Committee based on the scope of the executive's responsibilities, a subjective
evaluation of the executive's performance and the length of time the executive
has been in the position. Base compensation is reviewed annually by the
Compensation Committee and adjusted accordingly to reflect each executive
officer's contribution to the performance of the Company. In addition, the
Compensation Committee monitors the aggregate number of executive officers in an
effort to insure that the organization continues to be managed on an efficient,
cost-effective basis.
Mr. Allison's annual base salary for 1993, shown in the Summary
Compensation Table, was increased by the Compensation Committee as a result of
his contribution to the Company's outstanding reserve replacement, lower than
industry cost of finding and higher than budgeted net income and cash flow for
1992. In determining Mr. Allison's base compensation against his comparable
peers, the Compensation Committee also considered Mr. Allison's 15 years as
Anadarko's Chief Executive Officer, his assumption of the duties of Chief
Operating Officer and his role within the industry as a leader and spokesperson.
ANNUAL BONUS
In 1993, executive officers were eligible to receive annual bonus
incentives under the Company's Management Incentive Plan (the "MI Plan") and the
Annual Performance Bonus Plan (the "APB Plan"), (combined the "Bonus Plans").
The Bonus Plans put a portion of the executive's compensation at risk by linking
their compensation to the Company's achievement of certain operational and
financial performance objectives for the year.
11
<PAGE> 15
Under the Bonus Plans, a total bonus target is established for each
individual executive officer and other key employees, which in 1993 ranged from
15% of base salary up to 60% of base salary. This target is based upon the
individual's position, level of responsibility and ability to impact the
Company's success. The individual target is adjusted by a performance rating,
approved by the Compensation Committee, based on Company performance for the
year. Individuals may receive up to 150% of their bonus target if the Company
exceeds performance objectives and, conversely, if Company performance does not
meet performance objectives, individuals may receive a reduced bonus or no bonus
payment. The amount of any award to an individual under the Bonus Plans may be
adjusted by the Compensation Committee based on individual performance.
The Compensation Committee established specific financial and operational
objectives for 1993 considered critical to increasing shareholder value. The
financial objectives that were measured included net income, cash flow, return
on assets and return on capital. The Compensation Committee also set operational
objectives of reserve replacement and cost of finding to be measured over a
five-year period. At the end of the year, the Compensation Committee assessed
the Company's performance against the financial and operational objectives to
determine overall performance. In addition, the Compensation Committee
considered relative stock price performance in reviewing annual performance.
In 1993, the Company had a very successful exploration program, highlighted
by the significant discovery in the sub-salt play in the Gulf of Mexico. The
Company replaced its annual production volume with proved reserves on an energy
equivalent barrels (EEB) basis for the 12th consecutive year. Reserve
replacement, which is key to Anadarko's growth, was 162% in a year where the
Company was producing at record levels. In addition, the Company's U.S. average
five-year cost of finding was $4.16 per EEB, which continues to be better than
the industry five-year average. Anadarko's overall financial results exceeded
budgeted projections with the Company attaining record revenues and cash flow.
The Company ended the year with the strongest balance sheet since 1980, reducing
the debt to equity ratio from 50% in 1992 to 39% for 1993. During 1993, Anadarko
recorded a record high stock price of $51.75 per share. The 1993 year-end stock
price was up 54.5% from year-end 1992. The Compensation Committee, based on the
Company's performance in 1993, approved the bonus amount for Mr. Allison
reflected in the Summary Compensation Table, which represents 150% of his 60%
bonus target.
STOCK PLANS
The Company believes equity-based programs encourage long-term strategic
management and enhancement of shareholder value. To align the interests of
executive officers with those of shareholders, the Company may grant stock
options and restricted stock under the 1987 Stock Option Plan. Anadarko has
established stock ownership guidelines for executive officers of two and
one-half times base salary for Vice Presidents, three times base salary for
Senior Vice Presidents and five times base salary for the Chief Executive
Officer. The Compensation Committee believes stock ownership is important to
place executive officers in the same position as shareholders with a commitment
to the long-term success of Anadarko.
The Compensation Committee periodically reviews competitive market data to
determine stock awards based on the executive's position and the market value of
the stock. In addition, the Compensation Committee considers previous grants
when determining grant size for executive officers. Stock options are granted
annually and restricted stock is granted on an occasional basis. All grants are
made at the fair market value of the Common Stock on the date of grant. The
Compensation Committee emphasizes stock options to insure the interests of
executives and shareholders are aligned. Stock options only produce value for
the executive if there is an increase in stock price which results in a
corresponding increase in value to the shareholder. The stock option awards made
in 1993 to the executive officers reflect individual promotions and additional
accountability resulting from the restructuring of senior management following
the retirement of the President and Chief Operating Officer in December, 1992.
Mr. Allison traditionally has received 40,000 stock options per year since
1987. Since that time the stock price has more than doubled. In 1993, the
Compensation Committee reviewed the competitive market data for Mr. Allison's
position taking into account his assumption of the additional duties of Chief
Operating
12
<PAGE> 16
Officer. Based on that data, the Compensation Committee granted Mr. Allison
60,000 stock options which will position his total compensation potential to be
in the top quartile, provided there is appreciation in the stock price.
The Compensation Committee feels that consistent leadership by the senior
management team is critical to the long-term success of the Company. To
encourage retention of executive officers, the Compensation Committee granted
restricted stock in 1993. This grant was made to executive officers below the
Chief Executive Officer and ranged from approximately 2.0 to 2.5 times annual
base salary. Mr. Allison received a restricted stock grant in 1987 and did not
receive a grant in 1993.
EXECUTIVE COMPENSATION DEDUCTIBILITY
The Compensation Committee has reviewed the compensation plans of the
Company in response to recently enacted legislation limiting deductibility of
executive compensation above $1,000,000. It is Anadarko's intent that amounts
paid pursuant to the Company's compensation plans will generally be deductible
compensation expense. Accordingly, Anadarko has adopted the Annual Incentive
Bonus Plan, effective as of January 1, 1994, and intends to pay any individual
who is covered or is likely to be covered under Section 162(m) of the Code
("162(m)") (a "Covered Employee") according to such Plan. Anadarko believes the
proposed criteria under the Annual Incentive Bonus Plan should qualify any
future bonus payments made under this plan for exemption from the $1,000,000
limit upon the plan's approval by stockholders as sought in this proxy
statement. In addition, the Company believes the language contained in the
proposed 1993 Stock Incentive Plan satisfies the requirements for exempting
compensation arising upon the exercise of stock options from the limit.
The Compensation and Benefits Committee of the Board of Directors:
Mr. John R. Gordon
Mr. Ronald Brown
Mr. Charles M. Simmons
13
<PAGE> 17
PERFORMANCE GRAPH
The following performance graph compares the performance of the Company's
Common Stock to the S&P 500 Index and to the Dow Jones Oil -- Secondary Index
for the Company's last five fiscal years. The graph assumes that the value of
the investment in the Company's Common Stock and each index was $100 at December
31, 1988 and that all dividends were reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Fiscal Year Ended December 31
--------------------------------------------
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
Anadarko Petroleum Corporation 100 146 117 96 119 186
Dow Jones Oil -- Secondary 100 136 113 111 112 124
S&P 500 Index 100 132 128 166 179 197
14
<PAGE> 18
APPROVAL OF AMENDMENTS TO THE 1988 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
(PROPOSAL NO. 2 ON THE PROXY)
The Board recommends the approval of the amendments to the Anadarko
Petroleum Corporation 1988 Plan which is described under "Compensation of
Directors" above. The amendments to the 1988 Plan do not increase the number of
shares of Common Stock subject to the Plan previously approved by the
stockholders. The full text of the amended and restated 1988 Plan is set forth
in Attachment A to this proxy statement. The essential features of the
amendments to the 1988 Plan are summarized below, but such summary is qualified
in its entirety by reference to the full text of the 1988 Plan. Approval by
affirmative votes of holders of a majority of shares of Common Stock present, or
represented, and entitled to vote is required for the 1988 Plan to be amended.
As adopted by the Board, the amendments permit non-employee directors to
elect to receive all or a portion (the "Elected Percentage") of their quarterly
retainer and/or meeting and committee fees less any amounts deferred pursuant to
the Director Deferred Plan (the "Quarterly Retainer") in shares of Common Stock.
Elections under the amendments to the 1988 Plan will take effect on the last day
of the first quarter ending more than six months after the date of such
election. The initial election of any director will be irrevocable, except that
a director will be permitted to change an irrevocable election to the extent
permitted by Section 16(b) of the Securities Exchange Act of 1934, as amended
and Rule 16b-3 promulgated thereunder, as such Section and Rule may be amended
from time to time.
If a non-employee director so elects, shares of Common Stock will be issued
to such director as soon as is practicable following the last business day of
each relevant fiscal quarter (such last business day, the "Share Issuance Date")
and would be equal to the nearest number of whole shares determined in
accordance with the following formula:
(Elected Percentage)(Quarterly Retainer)
------------------------------------------------------------
fair market value per share
where fair market value refers to the Fair Market Value (as defined in the 1988
Plan) of a share of Common Stock on the Share Issuance Date.
Because the Elected Percentage and the fair market value of the Common
Stock on future Share Issuance Dates are unknown variables, the number and the
dollar value of the shares of Common Stock that will be received by or allocated
to each non-employee director under the amendments to the 1988 Plan are not
determinable.
TAX CONSEQUENCES
When a non-employee director receives shares of Common Stock in lieu of
cash compensation, the fair market value of the shares of Common Stock will be
ordinary income to the director and generally will be allowed as a deduction for
federal income tax purposes to the Company. Any gain or loss realized by a
director on disposition of the Common Stock so acquired generally will be
capital gain or loss to such director, long-term or short-term depending on the
holding period, and will not result in any additional tax consequences to the
Company. The director's basis in the shares of Common Stock for determining gain
or loss on the disposition will generally be the fair market value of such
Common Stock on the Share Issuance Date.
The foregoing discussion summarizes the federal income tax consequences of
the amendments to the 1988 Plan based on current provisions of the Code which
are subject to change. This summary does not cover any state or local tax
consequences of participation in the 1988 Plan.
15
<PAGE> 19
APPROVAL OF THE ANNUAL INCENTIVE BONUS PLAN
(PROPOSAL NO. 3 ON THE PROXY)
The Board recommends the approval of the Annual Incentive Bonus Plan (the
"Incentive Plan"). The Incentive Plan is intended to attract and retain
employees, to encourage employees to devote their best efforts to the Company
and to recognize employees for their contributions to the overall success of the
Company.
In the Revenue Reconciliation Act of 1993, Congress enacted 162(m) which
limits to $1,000,000 per year the tax deduction available to public companies
for certain compensation paid to Covered Employees, subject to exceptions for
compensation which is "performance-based". On December 15, 1993, the IRS
proposed a set of regulations in connection with 162(m) which provides guidance
on this exception for "performance-based compensation". Generally, the
"performance-based compensation" exception to the 162(m) deduction limit is
available with respect to compensation which is conditioned upon and only paid
upon satisfaction (i) of the attainment of certain performance business goals
and (ii) that such goals and the maximum amount of compensation which may be
paid, provided such performance goals are attained, are disclosed to and
approved by stockholders. The Board is seeking stockholder approval of the
Incentive Plan to insure that payments made under the Incentive Plan qualify for
this exception under 162(m). Approval by affirmative votes of holders of a
majority of shares of Common Stock present, or represented, and entitled to vote
is required for the Incentive Plan to be approved.
The full text of the Incentive Plan is set forth in Attachment B to this
proxy statement. The essential features of the Incentive Plan are summarized
below, but such summary is qualified in its entirety by reference to the full
text of the Incentive Plan.
ADMINISTRATION AND DETERMINATION OF BONUSES
The Incentive Plan will be administered by the Compensation Committee,
composed of disinterested, outside directors appointed by the Board. All
decisions made by the Compensation Committee in designating employees eligible
to receive bonuses, determining performance objectives, determining types of
bonuses to be paid, determining bonus amounts, determining how and when bonuses
will be paid and construing the provisions of the Incentive Plan shall be final.
Bonuses paid to individuals, other than Covered Employees, will be paid at the
discretion of the Compensation Committee.
The specific performance goals for 1994 will be established prior to April
1994 as required by 162(m). All employees, including Covered Employees, are
eligible to participate in the Incentive Plan. The amount and time of bonus
payments have not been determined at this time.
PERFORMANCE-BASED COMPENSATION EXCEPTION
For any Covered Employee, the Compensation Committee will establish
performance goals under which a bonus can be paid to the Covered Employee. The
Compensation Committee will establish, in writing, for each calendar year
beginning with 1994, the bonus opportunity for each Covered Employee, the
performance goals, the specific performance criteria and the appropriate weight
of each performance criteria and the performance target or range of targets to
measure satisfaction, in whole or in part, of the performance goals. The
Compensation Committee shall select from one or more of the following
performance criteria in establishing performance goals: (i) net income, cash
flow and/or reserve replacement measured against internally established targets;
and (ii) cost of finding of energy equivalent barrels and/or stock price
performance, in either case compared against industry or a select peer group.
At the end of the performance period, the Compensation Committee will
evaluate the Company's performance based upon the achievement of the
pre-established performance goals and certify, in writing, the extent to which
the specific performance criteria were attained. Individual awards will be
determined based on performance against the pre-established goals resulting in
bonuses to covered individuals ranging from 0% to a maximum of 150% of such
individual's January 1 base salary.
16
<PAGE> 20
PAYMENT IN EVENT OF TERMINATION
In the event an employee terminates employment with the Company for any
reason, including death, disability and retirement, prior to the date a bonus is
paid, the Compensation Committee, in its sole discretion, may pay such bonus to
the employee or his beneficiary, as the case may be. The amount of the bonus
award, if any, will be at the discretion of the Compensation Committee.
TERMINATION AND AMENDMENT
The Board may alter, amend or terminate the Incentive Plan. Neither the
Incentive Plan nor any provision thereof shall preclude the Company from
adopting or continuing other compensation arrangements, which arrangements may
be either generally applicable or applicable only in specific cases.
TAX CONSEQUENCES
When a participant receives a cash bonus, the amount of the cash bonus will
be ordinary income to the participant and generally will be allowed as a
deduction for federal income tax purposes to the Company based on the
requirements of the proposed regulations.
APPROVAL OF THE 1993 STOCK INCENTIVE PLAN
(PROPOSAL NO. 4 ON THE PROXY)
The Board recommends the approval of the 1993 Stock Incentive Plan (the
"1993 Plan") which authorizes the grant of various stock and stock-related
awards. The 1993 Plan was adopted by the Board on October 28, 1993 contingent
upon approval by the stockholders. The Board believes the Company's success and
long-term progress are dependent upon attracting and retaining executive
personnel and other key employees of the Company and its subsidiaries.
The Company first adopted a stock option plan in 1986 and has periodically
submitted each successive program to the stockholders for approval. No future
stock options will be granted under stock option plans which have previously
been approved by stockholders. The 1993 Plan is intended to allow the
Compensation Committee continued flexibility to use stock and stock-related
awards in the Company's overall compensation program.
The full text of the 1993 Plan is set forth in Attachment C to this proxy
statement. The essential features of the 1993 Plan are summarized below, but
such summary is qualified in its entirety by reference to the full text of the
1993 Plan. Approval by affirmative votes of holders of a majority of shares of
Common Stock present, or represented, and entitled to vote is required for the
1993 Plan to be adopted.
TYPES OF AWARDS
The 1993 Plan would permit the granting of any or all of the following
types of awards: (1) stock options, including ISOs; (2) stock appreciation
rights ("SARs"), in tandem with stock options or freestanding; (3) restricted
stock; (4) performance awards; (5) stock compensation awards; and (6) other
stock-based awards.
ELIGIBILITY FOR PARTICIPATION
In addition to employee directors and officers, all key employees of the
Company or any affiliate of the Company will be eligible for participation under
the 1993 Plan. While the concept of "key employee" eligible to participate in
the 1993 Plan is necessarily flexible, approximately 150 employees (including a
total of 11 executive officers) are considered to fall within this category.
ADMINISTRATION
The 1993 Plan will be administered by the Compensation Committee, composed
of disinterested, outside directors appointed by the Board. The Compensation
Committee will select the participants who will receive
17
<PAGE> 21
awards, determine the type and terms of awards to be granted, and interpret and
administer the Plan. Unless otherwise expressly provided in the 1993 Plan, all
decisions under or with respect to the 1993 Plan shall be within the sole
discretion of the Compensation Committee and are final.
AMENDMENT AND TERMINATION
The Board may terminate or amend the 1993 Plan without stockholder
approval, except that stockholder approval is required for any amendment which
would increase the number of shares available for grant, decrease the minimum
exercise price or otherwise cause the 1993 Plan to cease to qualify for any tax
or regulatory exemption, status or requirement.
TERM OF THE PROGRAM
The 1993 Plan will terminate on October 28, 2003, after which time no
additional awards may be made under the 1993 Plan.
SHARES SUBJECT TO PROGRAM
Subject to adjustment as described more fully below, 4,000,000 shares of
Common Stock may be awarded under the 1993 Plan, provided, however, that no more
than 800,000 shares of the shares specified shall be issued as restricted stock.
The maximum aggregate number of shares available for options and SARs to any
executive officer during the term of the 1993 Plan is 20 percent of the number
of shares with respect to which awards may be granted under the 1993 Plan.
STOCK OPTIONS
Stock options granted under the 1993 Plan will be subject to the terms and
conditions determined by the Compensation Committee, except that (i) no options
may be granted after the termination of the 1993 Plan; (ii) the option exercise
price cannot be less than 100 percent of fair market value of a share of Common
Stock at the time the option is granted; and (iii) no option may be exercised
more than ten years after it is granted. ISOs may be granted provided they meet
the requirements of the Code.
The Compensation Committee shall determine the form in which payment of the
exercise price may be made, including cash, shares of Common Stock, other
securities or other property, or any combination thereof, having a fair market
value on the exercise date equal to the relevant exercise price.
When an optionee exercises an NQO, the difference between the option price
and any higher fair market value of the underlying shares of Common Stock,
generally on the date of exercise, will be ordinary income to the optionee. The
Company believes the 1993 Plan will meet the "performance-based exemption" under
162(m) and the amount of ordinary income to the optionee generally will be
allowed as a deduction for federal income tax purposes to the Company. Any gain
or loss realized by an optionee on disposition of the Common Stock so acquired
generally will be capital gain or loss to such optionee, long-term or short-term
depending on the holding period, and will not result in any additional tax
consequences to the Company. The optionee's basis in the shares of Common Stock
for determining gain or loss on the disposition will generally be the fair
market value of such Common Stock on the date of exercise of the option.
In the case of ISOs, although no compensation income is realized upon
exercise, generally the excess of the fair market value on the date of exercise
over the option price is included in alternative minimum taxable income for
alternative minimum tax purposes.
STOCK APPRECIATION RIGHTS
An SAR may be granted in tandem with another award, in addition to another
award, or freestanding and unrelated to another award. The grant price of an SAR
shall not be less than 100 percent of fair market value of a share of Common
Stock at the time the SAR is granted. The Compensation Committee may impose such
conditions or restrictions on the exercise of any SAR as it shall deem
appropriate.
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In the case of SARs granted either freestanding or in tandem with an
option, the participant will not realize any compensation income at the time of
grant. However, the fair market value of Common Stock or cash delivered to the
participant pursuant to the exercise of such SAR will be treated as ordinary
income to the participant at the time of exercise. The Company believes the 1993
Plan will meet the "performance-based exemption" under 162(m) and the amount of
ordinary income to the participant generally will be allowed as a deduction for
federal income tax purposes to the Company.
RESTRICTED STOCK
The Compensation Committee shall determine the employees to whom Restricted
Stock shall be granted, the number of shares of Restricted Stock to be granted
to each participant, the duration of the restriction period, the conditions
under which the Restricted Stock may be forfeited to the Company and other terms
and conditions of awards of Restricted Stock. Restricted Stock may not be
disposed of by the participant until the restrictions specified in the award
expire. The participant will have, with respect to Restricted Stock, the right
to vote the shares and receive any cash dividends. Except as otherwise
determined by the Compensation Committee, upon termination of a participant's
employment for any reason during the restriction period, all Restricted Stock
shall be forfeited by the participant.
The participant will generally realize ordinary income in an amount equal
to the fair market value of the shares of Restricted Stock less any amount paid
for such shares at the time when the participant's rights with respect to such
shares are no longer subject to a substantial risk of forfeiture. The
participant may otherwise elect, pursuant to a special election provided in the
Code, to be taxed on such amount calculated at the time of grant rather than on
the date of expiration of the restrictions. Dividends paid to the participant
during the restriction period will be taxable as ordinary income unless such
election has been made. The Company generally will be allowed a deduction,
subject to certain limitations, for federal income tax purposes equal to the
amount of ordinary income that is realized by the participant.
PERFORMANCE AWARDS
Performance Awards may be granted which shall consist of a right payable in
cash, shares of Common Stock, other securities or other property upon the
achievement of performance goals. The Compensation Committee shall determine the
performance goals to be achieved during any performance period, the length of
any performance period, the amount of any Performance Award and the amount of
any payment or transfer to be made pursuant to any Performance Award.
Performance Awards may be paid in accordance with procedures established by the
Compensation Committee.
When a participant receives a Performance Award, the participant will
realize ordinary income in an amount equal to the fair market value of such
award less any amount paid for such award at the time when the participant's
rights with respect to such award are no longer subject to a substantial risk of
forfeiture. The participant may otherwise elect, pursuant to a special election
provided in the Code, to be taxed on such amount calculated at the time of
grant. The Company generally will be allowed a deduction, subject to certain
limitations, for federal income tax purposes equal to the amount of ordinary
income that is realized by the participant.
STOCK COMPENSATION
The Compensation Committee shall have the authority to pay all or a portion
of any amounts payable under any compensation program of the Company in shares
of Common Stock. The number and type of shares to be distributed in lieu of the
cash compensation, as well as the terms and conditions of any such stock
compensation, shall be determined by the Compensation Committee.
When a participant receives shares of Common Stock in lieu of cash
compensation, the fair market value of the shares of Common Stock will be
ordinary income to the participant and generally will be allowed as a deduction
for federal income tax purposes to the Company, if the cash compensation meets
the requirements of 162(m). Any gain or loss realized by a participant on
disposition of the Common Stock so acquired generally will be capital gain or
loss to such participant, long-term or short-term depending on the holding
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<PAGE> 23
period, and will not result in any additional tax consequences to the Company.
The participant's basis in the shares of Common Stock for determining gain or
loss on the disposition will generally be the fair market value of such Common
Stock on the date the shares are issued.
OTHER STOCK-BASED AWARDS
The Compensation Committee may grant other forms of awards based on,
payable in, or otherwise related in whole or in part to Common Stock under the
1993 Plan. Subject to the terms of the 1993 Plan, the Compensation Committee
shall determine the terms and conditions of any such other stock-based awards.
CHANGE OF CONTROL
In the event of a "Change of Control" as defined in the 1993 Plan, the
Compensation Committee may take any one or more of the following actions in
connection with any awards made under the 1993 Plan: (i) accelerate the exercise
or vesting date; (ii) provide for the purchase, in cash, of such award; (iii)
make adjustments to such award; or (iv) cause any outstanding award to be
assumed, or a new right substituted therefor, by the acquiring or surviving
corporation.
ADJUSTMENTS
In the event the Compensation Committee determines that any dividend or
other distribution, recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of shares of Common Stock or other similar corporate
transaction or event affects the Common Stock such that an adjustment is
determined by the Compensation Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended under the
1993 Plan, then the Compensation Committee shall adjust any or all of the
awards.
No grants have been made to any executive officers under the 1993 Plan at
this time.
INDEPENDENT AUDITORS
KPMG Peat Marwick served as the Company's independent auditors during 1993
and was appointed by the Board to serve in that capacity for 1994.
Representatives of KPMG Peat Marwick will be present at the meeting to respond
to appropriate questions from stockholders and to make a statement if they
desire to do so.
OTHER MATTERS
It is not expected that any other matters will come before the meeting.
However, if any other matters properly come before the meeting, it is the
intention of the persons named in the accompanying form of proxy to vote such
proxy in accordance with their judgment on such matters.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder may desire to present to the 1995 Annual
Meeting of Stockholders must be received by the Company on, or prior to,
November 22, 1994.
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PROXY SOLICITATION
The cost of preparing, assembling and mailing the material in connection
with the solicitation of proxies will be borne by the Company. It is expected
that the solicitation of proxies will be primarily by mail but solicitations may
also be made personally or by telephone or telegraph by officers and other
employees of the Company. In addition, the Company has engaged Chemical Bank,
450 West 33rd Street, New York, New York 10001 to assist in such solicitation at
an estimated fee of $5,000 plus disbursements.
It is important that the proxies be returned promptly. All stockholders,
whether or not they expect to attend in person, are urged to sign, date and
return the accompanying form of proxy in the enclosed addressed envelope, which
requires no postage if mailed in the United States.
BY ORDER OF THE BOARD OF DIRECTORS
SUZANNE SUTER
----------------------------------
SUZANNE SUTER
Corporate Secretary
Dated: March 21, 1994
Houston, Texas
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ATTACHMENT A
ANADARKO PETROLEUM CORPORATION
AMENDED AND RESTATED
1988 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Anadarko Petroleum Corporation, a Delaware corporation (the "Company"),
hereby amends and restates in its entirety the Anadarko Petroleum Corporation
1988 Stock Option Plan for Non-Employee Directors (as amended and restated, the
"Plan") as follows:
1. Purpose. The purpose of the Plan is to attract and retain experienced
and knowledgeable nonemployee directors for the benefit of the Company and its
stockholders, and for such directors to acquire a proprietary interest in the
Company, and to continue to work for the best interests of the Company and its
stockholders.
2. Administration. The Plan shall be administered by the Compensation and
Benefits Committee (the "Committee") of the Board of Directors of the Company
(the "Board"). The Committee is authorized to interpret the Plan and may from
time to time adopt such rules and regulations, not inconsistent with the
provisions of the Plan, as it may deem advisable to carry out the Plan;
provided, however, that the Committee shall have no discretion with respect to
the selection of directors to receive stock options ("Options") under Paragraph
6 of the Plan, the number of shares of Common Stock subject to any Options or
the purchase price thereunder or the selection of directors to receive shares of
$0.10 par value common stock of the Company ("Common Stock") under Paragraph 7
of the Plan. All decisions made by the Committee in construing the provisions of
the Plan shall be final.
3. Eligibility. Each director of the Company, who is not an employee of the
Company, shall be eligible to participate under the Plan (an "Eligible
Director").
Only non-qualified stock options (options which do not qualify as
"incentive stock options" under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code")) shall be granted under Paragraph 6 of the Plan.
4. Shares Subject to the Plan. Subject to adjustment as provided in
Paragraph 8, not more than 450,000 shares of Common Stock may be issued in
respect to Options granted under Paragraph 6 of the Plan or shares of Common
Stock issued under Paragraph 7 of the Plan. Such shares may be either authorized
and unissued shares or issued shares which are reacquired by the Company and
held in its treasury. Shares of Common Stock subject to an Option shall, upon
the expiration or termination of such Option, to the extent unexercised, again
be available for grant under the Plan.
5. Grant of Options.
Non-Qualified Stock Options shall be granted pursuant to the Plan as
follows:
(a) Each Eligible Director of the Company who served in such capacity
on October 27, 1988, shall be, and hereby is granted, as of October 27,
1988, an Option to purchase 10,000 shares of the Company's Common Stock
(subject to adjustment as provided in Paragraph 8, the "Initial Grant").
(b) Each Eligible Director, on the date of his initial election to the
Board, whether such election was by the Board or by the Company's
stockholders, shall be granted an Initial Grant, provided that such
Eligible Director has not received an Initial Grant on some previous date
nor has the Eligible Director received an award under any other Company
stock plan;
(c) Commencing on October 27, 1989, and on each October 27 thereafter
during the term of the Plan, each Eligible Director shall be granted an
option to purchase 5,000 shares of the Company's Common Stock (subject to
adjustment as provided in Paragraph 8, the "Annual Grant").
6. Terms and Conditions of Options.
(a) The purchase price per share of Common Stock deliverable upon the
exercise of an Option shall be one hundred percent (100%) of the fair
market value of the Common Stock on the date the Option is
<PAGE> 26
granted. Such fair market value shall be the mean of the high and low per
share prices of Common Stock traded on the date of grant, as reported on
The New York Stock Exchange, Inc. Composite Transactions Reporting System
(the "NYSE"); provided that if the date of grant is not a date on which
shares of Common Stock are traded, the fair market value shall be the mean
of the high and low per share prices of Common Stock traded on the next
preceding date on which shares of Common Stock are traded, as reported on
the NYSE.
(b) Options granted pursuant to the Plan shall become exercisable as
follows:
(i) Options granted pursuant to an Initial Grant shall become
exercisable with respect to 50% of the options on the first anniversary of
the date of grant and with respect to the remaining 50% on the second
anniversary of the date of grant.
(ii) Options granted pursuant to an Annual Grant shall become
exercisable commencing on the first anniversary of the date of grant.
In no case may an Option be exercised as to less than ten shares at
any one time (or the remaining shares covered by the Option if less than
ten) during the term of the Option. Options shall not be exercisable after
the expiration of ten years from the date of grant thereof.
(c) The Options may not be exercised unless the Eligible Director is
at the time of such exercise a director of the Company and shall have
continuously been a director of the Company since the date of grant
thereof; provided, however, that the Options shall be exercisable following
the termination or expiration of the Eligible Director's position as a
director of the Company during the term of the Option as follows:
(i) If the Eligible Director shall cease to be a director of the
Company by reason of (a) Retirement (as defined below), or (b) disability
within the meaning of Section 105(d)(4) of the Code, the Eligible Director
(or, in the event of the Eligible Director's death, the Eligible Director's
legal representative) may within a period of not more than 24 months after
such cessation of employment, exercise the Option if and to the extent it
was exercisable on the date of such cessation. In no event may the Options
be exercised more than ten years from the date of grant thereof.
"Retirement", for purposes hereof, is defined as (i) 10 years of service as
a director of the Company, (ii) attainment of age 55 and five years of
services as a director of the Company, or (iii) attainment of age 65.
(ii) Notwithstanding Subparagraph (b), in the event of the death of
the Eligible Director while a director of the Company, any Option granted
to the Eligible Director shall vest and be immediately exercisable, with
respect to all or any part of the shares as to which such Option remains
unexercised, by the Eligible Director's legal representative or other
person or persons to whom the Eligible Director's rights under the Option
shall pass by the Eligible Director's will or the laws of descent and
distribution, but only before the expiration of ten years from the date of
grant thereof or of the twelve-month period after the Eligible Director's
death, whichever event first occurs.
(d) To the extent that Options have become exercisable hereunder, the
Options, or any part thereof, may be exercised by giving written notice of
exercise to the Corporate Secretary of the Company specifying the number of
shares of Common Stock to be purchased and by paying in cash (including
check, bank draft or money order), Common Stock, or a combination of Common
Stock and cash, the aggregate Option price of the number of shares of
Common Stock purchased. The fair market value of any Common Stock so
delivered shall be the mean of the high and low prices of shares of Common
Stock on the date of exercise as reported on the NYSE. Date of exercise
shall be deemed to be the date set forth on the notice of exercise. Such
exercise shall be subject to payment and such approval as may be required
under policies and procedures established by the Board. No shares of Common
Stock shall be issued or delivered until full payment therefor has been
made.
(e) The Options and all rights granted thereunder shall not be
transferable other than by will or the laws of descent and distribution,
and shall be exercisable during the Eligible Director's lifetime only by
the Eligible Director or the Eligible Director's guardian or legal
representative. Upon any attempt to
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<PAGE> 27
transfer, assign, pledge, hypothecate or otherwise dispose of the Options,
or of any right or privilege conferred thereby, contrary to the provisions
thereof, or upon the levy of any attachment or similar process upon the
Options or any right or privilege conferred thereby, the Options and the
right and privilege conferred thereby shall immediately become null and
void.
(f) The Eligible Director shall have none of the rights of a
stockholder with respect to any shares of Common Stock subject to the
Options prior to the date of issuance to the Eligible Director of a
certificate or certificates for such shares.
(g) The Company may require any Eligible Director to furnish to the
Company at the time of any exercise of any Option a written representation
(in form satisfactory to the Board) that the Eligible Director is acquiring
the shares of Common Stock resulting from such exercise with the intention
of holding the same for investment and not for public distribution.
(h) Upon the exercise of an Option, the Company shall have the right
to retain sufficient shares of Common Stock to cover the amount of any tax
required by any government to be withheld or otherwise deducted and paid
with respect to the exercise of the Options; provided, that the Eligible
Director does not deliver to the Company cash and/or shares of Common Stock
in an amount determined by the Company to be sufficient to satisfy any such
tax. The fair market value of any Common Stock so retained or delivered
shall be the mean of the high and low per share prices of Common Stock on
the date of exercise as reported on the NYSE.
7. Shares in Lieu of Cash Compensation. Shares of Common Stock may be
granted to an Eligible Director in lieu of the cash compensation that such
Eligible Director would be entitled to receive for serving as a director during
a fiscal quarter (including fees paid in connection with service as Chairman, as
a member of the Board and as a member of any committee of the Board, attendance
at meetings and any other services provided to the Company but excluding any
amounts an Eligible Director has elected to defer under the Company's Director
Deferred Compensation Plan, the "Quarterly Retainer") as follows:
(a) Subject to Subparagraph (c) below, shares of Common Stock shall be
issued automatically to any Eligible Director who files with the Corporate
Secretary of the Company an irrevocable election to receive shares of
Common Stock in lieu of all or a portion, expressed as a fraction, (the
"Elected Percentage") of his or her Quarterly Retainer. As soon as is
practicable following the last business day of the relevant fiscal quarter
(such last business day, the "Share Issuance Date"), each Eligible Director
making such an election under this Subparagraph (a) shall be issued shares
of Common Stock as determined under Subparagraph (b) below; provided that
no such election shall be given effect on any Share Issuance Date occurring
before six months has elapsed from the date of such election.
(b) The number of shares of Common Stock issued on a Share Issuance
Date under this Paragraph 7 shall be equal to the nearest number of whole
shares determined in accordance with the following formula:
(Elected Percentage)(Quarterly Retainer)
----------------------------------------
fair market value per share
where fair market value shall mean the mean of the high and low per share
prices of Common Stock on the Share Issuance Date as reported on the NYSE.
(c) In the event that permitting an Eligible Director to make
subsequent elections to receive Shares in lieu of the Quarterly Retainer
shall not result in the loss of exemptive relief from Section 16(b) of the
Securities Exchange Act of 1934, as amended, for the Plan or any other
stock-based compensation plan of the Company, the Eligible Director may
make additional irrevocable elections, which shall supersede any previous
election made under Paragraph 7(a) and such subsequent elections shall take
effect at such times as are permitted by Rule 16b-3 of the Securities
Exchange Act of 1934, as amended.
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(d) The Eligible Director shall have none of the rights of a
stockholder with respect to any shares of Common Stock acquired pursuant to
this Paragraph 7 prior to the date of issuance to the Eligible Director of
a certificate or certificates for such shares.
(e) The Company may require any Eligible Director to furnish to the
Company on any Share Issuance Date a written representation (in a form
satisfactory to the Board) that the Eligible Director is acquiring the
shares of Common Stock to be acquired on such Share Issuance Date with the
intention of holding the same for investment and not for public
distribution.
(f) The Company shall have the right to retain sufficient shares of
Common Stock to cover the amount of any tax required by any government to
be withheld or otherwise deducted and paid with respect to the issuance of
shares of Common Stock pursuant to this Paragraph 7; provided, that the
Eligible Director does not deliver to the Company cash and/or shares of
Common Stock in an amount determined by the Company to be sufficient to
satisfy any such tax. The fair market value of any Common Stock so retained
or delivered shall be the mean of the high and low per share prices of
Common Stock on the Share Issuance Date as reported on the NYSE; provided
that if the Share Issuance Date is not a date on which shares of Common
Stock are traded, the fair market value shall be the mean of the high and
low per share prices of Common Stock traded on the next preceding date on
which shares of Common Stock are traded, as reported on the NYSE.
8. Recapitalization or Reorganization.
(a) The existence of the Plan, the Options granted pursuant to
Paragraph 6 hereunder and the shares of Common Stock issued pursuant to
Paragraph 7 hereunder shall not affect in any way the right or power of the
Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the
Company's capital structure or its business, any merger or consolidation of
the Company, any issuance of bonds, preferred or prior preference stocks
ahead of or affecting Common Stock or the rights thereof, the dissolution
or liquidation of the Company or any sale or transfer of all or any part of
the assets or business, or any other corporate act or proceeding.
(b) The shares with respect to which Options may be granted are shares
of Common Stock as presently constituted, but if, and whenever, prior to
the issuance of all shares available for issuance hereunder or prior to
expiration of an Option theretofore granted, the Company shall effect a
subdivision or consolidation of shares of Common Stock or the payment of a
stock dividend on Common Stock without receipt of consideration by the
Company, the number of shares of Common Stock remaining available for
issuance under Paragraph 4, the number of shares constituting an Initial
Grant and an Annual Grant and the number of shares of Common Stock with
respect to which any outstanding Option may thereafter be exercised (1) in
the event of an increase in the number of outstanding shares, shall be
proportionately increased, and the purchase price per share of an
outstanding Option shall be proportionately reduced (but not to less than
the par value thereof), and (2) in the event of a reduction in the number
of outstanding shares, shall be proportionately reduced, and the purchase
price per share of an outstanding Option shall be proportionately
increased.
(c) If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise of an Option theretofore granted,
the Eligible Director shall be entitled to purchase under such Option, in
lieu of the number of shares of Common Stock as to which such Option shall
then be exercisable, the number and class of shares of stock and securities
or other property to which the Eligible Director would have been entitled
pursuant to the terms of such recapitalization if, immediately prior to
such recapitalization, the Eligible Director had been holder of record of
the number of shares of Common Stock as to which such Option is then
exercisable. If (1) the Company merges or consolidates with any other
entity (other than a wholly owned subsidiary) and is not surviving entity
(or survives only as the subsidiary of another entity), (2) the Company
sells all or substantially all of its assets to any other person or entity
(other than a wholly owned subsidiary), (3) the Company is liquidated or
dissolved, or (4) any third person or entity, including a "group" as
contemplated by section 13(d)(3) of the Securities Exchange Act of 1934,
acquires or gains ownership or control of (including, without limitation,
the power to vote) shares of capital stock of the Company having 30% or
more of the number of votes that may be
4
<PAGE> 29
cast for the election of directors of the Company, or, as a result of or in
connection with a contested election of directors, a number of directors
equal to a majority of the Board before such election cease to be members
of the Board (such an acquisition or election being referred to herein as a
"change of control"), then as of a date specified by the Board (which for
purposes of this Paragraph 8(c) in the event of a change of control shall
be the Board as constituted prior to such change of control) which is
within thirty days of the first to occur of (a) the approval by the
stockholders of the Company of such merger, consolidation, sale of assets
or dissolution or (b) the occurrence of such change of control, all
outstanding Options which have been held for at least six months,
irrespective of whether such Options are then otherwise exercisable, shall
be surrendered to the Company by each Eligible Director of such Options and
such Options shall thereupon be canceled by the Company, and the Eligible
Director shall receive a cash payment by the Company in an amount equal to
the number of shares of Common Stock subject to the Option held by such
Eligible Director multiplied by the difference between (x) and (y) where
(y) equals the purchase price per share of Common Stock covered by the
Option and (x) equals the fair market value of a share of the Common Stock
as reported on the NYSE on the date determined by the Board to be the date
of cancellation and surrender of such Options. In the event that the
consideration offered to stockholders of the Company in any transaction
described in this Paragraph 8(c) consists of anything other than cash, the
Board shall determine the fair cash equivalent of the portion of the
consideration offered which is other than cash.
(d) Any adjustment provided for in Subparagraphs (b) and (c) above
shall be subject to any required stockholder action.
(e) Except as hereinbefore expressly provided, the issuance by the
Company of shares of stock of any class or securities convertible into
shares of stock of any class, for cash, property, labor or services, upon
direct sale, upon the exercise of rights or warrants to subscribe therefor,
or upon conversion of shares or obligations of the Company convertible into
such shares or other securities, and in any case whether or not for fair
value, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number of shares of Common Stock subject to Options
theretofore granted pursuant to Paragraph 6, the number of shares of Common
Stock theretofore subject to issuance pursuant to Paragraph 7 or the
purchase price per share.
9. Compliance with Applicable Laws and Regulations and Requirements of
Stock Exchanges. No Option shall be granted and no shares shall be issued
pursuant to an Option or pursuant to Paragraph 7 prior to compliance with
requirements under applicable laws and regulations and agreements with stock
exchanges.
10. Duration; Amendment; Termination. The Plan shall be effective upon the
date the amendment and restatement thereof is approved by the vote of the
holders of a majority of the outstanding shares of Common Stock at a meeting of
the stockholders held within 12 months after the date of adoption of the
amendment and restatement thereof by the Board. Except with respect to Options
then outstanding, if not sooner terminated under the provisions hereof, the Plan
shall terminate upon and no further Options shall be granted after October 26,
1998. Options shall not be awarded or granted after October 26, 1998 or the
earlier termination of the Plan, but Options theretofore granted shall continue
after the date unless terminated in accordance with the terms of the Plan. The
Board in its discretion may terminate the Plan at any time with respect to any
shares for which Options have not theretofore been granted subject to
limitations, if any, imposed by Section 16 and Rule 16b-3 of the Securities
Exchange Act of 1934, as amended, on the termination of irrevocable elections
under Paragraph 7. The Board shall have the right to alter or amend the Plan or
any part thereof from time to time, provided, that no change in any Option
theretofore granted may be made which would impair the rights of the Eligible
Director without the consent of such Eligible Director; and provided, further,
that the Board may not make any alteration or amendment which would materially
increase the benefits accruing to participants under the Plan, increase the
aggregate number of shares of Common Stock which may be issued pursuant to the
provisions of the Plan, or extend the term of the Plan, without the approval of
the stockholders of the Company; and provided further, that Paragraphs 5 and
6(a) may not be amended more often than every six months (except for changes to
comply with the Internal Revenue Code of 1986, as amended, or The Employee
Retirement Income Security Act of 1974, as amended).
5
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ATTACHMENT B
ANADARKO PETROLEUM CORPORATION
ANNUAL INCENTIVE BONUS PLAN
EFFECTIVE JANUARY 1, 1994
1. Purpose of the Plan. The ANNUAL INCENTIVE BONUS PLAN (the "Plan") is
intended to provide a method for attracting and retaining employees of ANADARKO
PETROLEUM CORPORATION and participating subsidiaries (the "Company"), to
encourage these individuals to remain with the Company and to devote their best
efforts to its affairs and to recognize employees for their contributions to the
overall success of the Company.
2. Administration of the Plan. The Plan shall be administered by the
Compensation and Benefits Committee (the "Committee") of the Board of Directors
(the "Board") of the Company and shall operate on the basis of the calendar
year. The Committee is authorized to interpret the Plan and from time to time
may adopt such rules, regulations, definitions and forms consistent with the
provisions of the Plan as it may deem advisable to carry out the Plan.
3. Determinations of Bonuses. The Committee shall have full power and
authority to (i) designate those employees who may be eligible for bonuses under
the Plan for a calendar year; (ii) determine performance objectives which must
be satisfied as a condition to earning a bonus under the Plan for a calendar
year (which objectives may differ as among employees or classes of employees);
(iii) determine the types of bonuses to be paid under the Plan for a calendar
year; (iv) determine the extent to which performance objectives applicable to a
given bonus have been achieved; (v) determine the amounts of bonuses (which may
differ among employees or classes of employees) and (vi) determine the form and
time of payment of bonuses. All decisions made by the Committee shall be final.
4. Section 162(m) Conditions. In the case of any employee whose
compensation is or, in the opinion of the Committee, is potentially subject to
the compensation deduction limits of section 162(m) of the Internal Revenue Code
of 1986, as amended ("162(m)") for a calendar year, the Committee shall
establish, in writing, with respect to each calendar year beginning with the
1994 calendar year (i) objective performance goals and the appropriate weighting
of such goals from among the performance criteria described below; (ii)
performance targets or range of targets to measure satisfaction in whole or in
part of such performance goals or combination of goals and (iii) a bonus
opportunity target percentage of such employee's base salary which will be used
to establish the amount of bonus to be paid to such employee depending upon the
degree of satisfaction of the performance goals. A bonus amount shall be paid
under the Plan for a calendar year to an employee whose compensation is or, in
the opinion of the Committee, is potentially subject to 162(m) if and only if
the performance goal or combination of performance goals established by the
Committee with respect to such employee have been attained (based upon the
degree of satisfaction of the performance target or range of targets). The
Committee shall certify the attainment of such performance goals in writing.
Bonuses paid pursuant to this section shall not exceed an amount equal to 150%
of such employee's base salary for such calendar year to be determined as of the
beginning of the calendar year. The Committee shall establish performance goals
from one or more of the following performance criteria for those individuals
subject to this section: (i) net income, cash flow and/or reserve replacement
measured against internally established targets; and (ii) cost of finding of
energy equivalent barrels and/or stock price performance, in either case
compared against industry or a select peer group.
5. Payments in Event of Termination. In the event an employee terminates
employment with the Company for any reason including death, disability and
retirement prior to the date of payment of a bonus award, the Committee may, in
its sole discretion, pay to such employee or his beneficiary, as the case may
be, a bonus award. The amount of the bonus award, if any, will be at the sole
discretion of the Committee.
6. Prohibition Against Assignment or Encumbrance. The Plan, and the rights,
interests and benefits hereunder, shall not be assigned, transferred, pledged,
sold, conveyed, or encumbered in any way by an employee, and shall not be
subject to execution, attachment or similar process. Any attempted sale,
<PAGE> 31
conveyance, transfer, assignment, pledge or encumbrance of the rights, interests
or benefits provided pursuant to the terms of the Plan, contrary to the terms of
the foregoing sentence, or the levy of any attachment or similar process
thereupon, shall be null and void and without effect.
7. Nature of the Plan. The Plan shall constitute an unfunded, unsecured
obligation of the Company to make bonus payments in accordance with the
provisions of the Plan. The establishment of the Plan shall not be deemed to
create a trust. No participant shall have any security or other interest in any
assets of the Company.
8. Employment Relationship. Employee shall be considered to be in the
employment of the Company as long as he or she remains an employee of the
Company, any subsidiary of the Company or any enterprise which acquires all or
substantially all of the assets and business of the Company. Nothing in the
adoption or implementation of the Plan shall confer on any employee any right to
continued employment by the Company or affect in any way the right of the
Company to terminate his employment at any time. Any question as to whether and
when there has been a termination of an employee's employment and the cause of
such termination shall be determined by the Committee and its determination
shall be final.
9. Company Not Liable for Interest. If the Company for any reason fails to
make any payment provided for in the Plan at the time same becomes payable, the
Company shall not be liable for interest or other charges thereon.
10. Termination and Amendment of Plan. The Committee shall have the right,
without the necessity of shareholder or employee approval, to alter, amend or
terminate the Plan at any time.
11. Adjustments to Performance Factors. If any performance goal, criterion
or target for any year shall have been affected by special factors (including
material changes in accounting policies or practices, material acquisitions or
dispositions of property, or other unusual items) which in the Committee's
judgment should or should not be taken into account, in whole or in part, in the
equitable administration of the Plan, the Committee may, for any purpose of the
Plan, adjust such goal, criterion or target, as the case may be, for such year
(and subsequent years as appropriate), or any combination of them, and make
credits, payments and reductions accordingly under the Plan; provided, however,
that the Committee shall not have the authority to make any such adjustments
with respect to awards paid to any participant who is at such time a covered
employee under Section 4 of the Plan.
12. Rights of Company. Nothing contained in the Plan shall prevent the
Company or any subsidiary from adopting or continuing in effect other
compensation arrangements, which arrangements may be either generally applicable
or applicable only in specific cases.
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ATTACHMENT C
ANADARKO PETROLEUM CORPORATION
1993 STOCK INCENTIVE PLAN
SECTION 1. PURPOSE.
The purposes of this 1993 Stock Incentive Plan (the "Plan") are to promote
the interests of Anadarko Petroleum Corporation (together with any successor
thereto, the "Company") and its stockholders by (i) attracting and retaining
executive personnel and other key employees of the Company and its affiliates;
(ii) motivating such employees by means of performance-related incentives to
achieve longer-range performance goals; and (iii) enabling such employees to
participate in the long-term growth and financial success of the Company.
SECTION 2. DEFINITIONS.
As used in the Plan, the following terms shall have the meanings set forth
below:
"Affiliate" shall mean (i) any entity that, directly or through one or
more intermediaries, is controlled by the Company and (ii) any entity in
which the Company has a significant equity interest, as determined by the
Committee.
"Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock, Performance Award, Stock Compensation Award or Other Stock-Based
Award.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Committee" shall mean the Compensation and Benefits Committee of the
Board.
"Employee" shall mean any employee of the Company or of any Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean the fair market value of the property
or other item being valued, as determined by the Committee.
"Incentive Stock Option" shall mean an option granted under Section
6(a) of the Plan that is intended to meet the requirements of Section 422
of the Code or any successor provision thereto.
"Non-Qualified Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
"Other Stock-Based Award" shall mean any right granted under Section
6(f) of the Plan.
"Participant" shall mean any Employee granted an Award under the Plan.
"Performance Award" shall mean any right granted under Section 6(d) of
the Plan.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization,
government or political subdivision thereof or other entity.
"Restricted Stock" shall mean any Share, prior to the lapse of
restrictions thereon, granted under Section 6(c) of the Plan.
<PAGE> 33
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the
Exchange Act, or any successor rule or regulation thereto as in effect from
time to time.
"SEC" shall mean the Securities and Exchange Commission, or any
successor thereto.
"Shares" shall mean the common shares of the Company, $0.10 par value,
and such other securities or property as may become the subject of Awards
or become subject to Awards pursuant to an adjustment made under Section
4(b) of the Plan.
"Stock Appreciation Right" shall mean any right granted under Section
6(b) of the Plan.
"Stock Compensation" shall mean any right granted under Section 6(e)
of the Plan.
"Substitute Awards" shall mean Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by (i) a company
acquired by the Company or one or more of its Affiliates, or (ii) a company
with which the Company or one or more of its Affiliates combines.
SECTION 3. ADMINISTRATION.
The Plan shall be administered by the Committee. Subject to the terms of
the Plan and applicable law, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii) determine the type
or types of Awards to be granted to an eligible Employee; (iii) determine the
number of Shares to be covered by, or with respect to which payments, rights, or
other matters are to be calculated in connection with, Awards; (iv) determine
the terms and conditions of any Award; (v) determine whether, to what extent,
and under what circumstances Awards may be settled or exercised in cash, Shares,
other securities, other Awards or other property, or cancelled, forfeited, or
suspended and the method or methods by which Awards may be settled, exercised,
cancelled, forfeited, or suspended; (vi) determine whether, to what extent, and
under what circumstances cash, Shares, other securities, other Awards, other
property, and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the holder thereof or of the
Committee; (vii) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan; (viii) establish, amend,
suspend, or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; and (ix) make any
other determination and take any other action that the Committee deems necessary
or desirable for the administration of the Plan. Unless otherwise expressly
provided in the Plan, all designations, determinations, interpretations, and
other decisions under or with respect to the Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time and shall be
final, conclusive, and binding upon all Persons, including the Company, any
Affiliate, any Participant, any holder or beneficiary of any Award, any
shareholder and any Employee.
SECTION 4. SHARES AVAILABLE FOR AWARDS.
(a) Shares Available. Subject to adjustment as provided in Section 4(c),
the number of Shares with respect to which Awards may be granted under the Plan
shall be 4,000,000. If, after the effective date of the Plan, any Shares covered
by an Award granted under the Plan, or to which such an Award relates, are
forfeited, or if an Award otherwise terminates or is cancelled without the
delivery of Shares or of other consideration, then the Shares covered by such
Award, or to which such Award relates, or the number of Shares otherwise counted
against the aggregate number of Shares with respect to which Awards may be
granted, to the extent of any such forfeiture, termination or cancellation,
shall again be, or shall become, to the extent permissible under Rule 16b-3,
Shares with respect to which Awards may be granted. In the event that any Option
or other Award granted hereunder is exercised through the delivery of Shares,
the number of Shares available for Awards under the Plan shall be increased by
the number of Shares surrendered, to the extent permissible under Rule 16b-3.
Notwithstanding the foregoing no more than twenty percent (20%) of the Shares
available for Awards shall be issued as Restricted Stock. The maximum aggregate
number of Shares available for Options and Stock Appreciation Rights to any
executive officer during the ten year period beginning on the date the Plan is
approved by the Board is equal to twenty percent (20%) of the number of
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<PAGE> 34
Shares with respect to which Awards may be granted under the Plan specified
above, which determination should be made in accordance with Section 162(m) of
the Code and the rules promulgated thereunder.
(b) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.
(c) Adjustments. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such
that an adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee shall, in such manner as
it may deem equitable, adjust any or all of (i) the number and type of Shares
(or other securities or property) with respect to which Awards may be granted,
(ii) the number and type of Shares (or other securities or property) subject to
outstanding Awards, and (iii) the grant or exercise price with respect to any
Award or, if deemed appropriate, make provision for a cash payment to the holder
of an outstanding Award; provided, in each case, that with respect to Awards of
Incentive Stock Options and awards intended to qualify as performance based
compensation under Section 162(m)(4)(C) of the Code, no such adjustment shall be
authorized to the extent that such authority would cause the Plan to violate
Section 422(b)(1) of the Code or would cause such award to fail to so qualify
under Section 162(m) of the Code, as the case may be, or any successor
provisions thereto; and provided further, that the number of Shares subject to
any Award denominated in Shares shall always be a whole number.
(d) Substitute Awards. Any Shares underlying Substitute Awards shall not,
except in the case of Shares with respect to which Substitute Awards are granted
to Employees who are officers or directors of the Company for purposes of
Section 16 of the Exchange Act or any successor section thereto, be counted
against the Shares available for Awards under the Plan.
SECTION 5. ELIGIBILITY.
Any Employee who is not a member of the Committee, including any officer or
employee-director of the Company or any affiliate, shall be eligible to be
designated a Participant.
SECTION 6. AWARDS.
(a) Options. Subject to the provisions of the Plan, the Committee shall
have authority to determine the Employees to whom Options shall be granted, the
number of Shares to be covered by each Option, the purchase price therefore and
the conditions and limitations applicable to the exercise of the Option
including the following terms and conditions and such additional terms and
conditions, as the Committee shall determine are not inconsistent with the
provisions of the Plan.
(i) Exercise Price. The purchase price per Share purchasable under an
Option shall be determined by the Committee at the time each Option is
granted; provided, however, that the purchase price per Share shall not be
less than 100% of Fair Market Value on the date of grant, except in the
case of Options that are Substitute Awards.
(ii) Time and Method of Exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part, and
the method or methods by which, and the form or forms (which may include,
without limitation, cash, Shares, outstanding Awards, other securities or
other property, or any combination thereof, having a Fair Market Value on
the exercise date equal to the relevant exercise price) in which payment of
the exercise price with respect thereto may be made or deemed to have been
made. Pursuant to Section 7(b) of the Plan, the Committee may, at its
discretion, accelerate the time at which Options may be exercised and
otherwise modify the time or methods of exercise of the Options.
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<PAGE> 35
(iii) Incentive Stock Options. The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the provisions of
Section 422 of the Code, or any successor provision, and any regulations
promulgated thereunder.
(b) Stock Appreciation Rights. Subject to the provisions of the Plan, the
Committee shall have authority to determine the Employees to whom Stock
Appreciation Rights shall be granted, the number of Shares to be covered by each
Stock Appreciation Right Award, the grant price thereof and the conditions and
limitations applicable to the exercise thereof. A Stock Appreciation Right may
be granted in tandem with another Award, in addition to another Award, or
freestanding and unrelated to another Award. A Stock Appreciation Right granted
in tandem with or in addition to another Award may be granted either at the same
time as such other Award or at a later time.
(i) Grant Price. The grant price of a Stock Appreciation Right shall
be determined by the Committee; provided, however, that the grant price
shall not be less than 100% of Fair Market Value on the date of grant or on
the date of original grant of any related Award.
(ii) Other Terms and Conditions. Subject to the terms of the Plan and
any applicable Award Agreement, the Committee shall determine, at or after
the grant of a Stock Appreciation Right, the term, methods of exercise,
methods of settlement, and any other terms and conditions of any Stock
Appreciation Right. Any such determination by the Committee may be changed
by the Committee from time to time and may govern the exercise of Stock
Appreciation Rights granted or exercised prior to such determination as
well as Stock Appreciation Rights granted or exercised thereafter. The
Committee may impose such conditions or restrictions on the exercise of any
Stock Appreciation Right as it shall deem appropriate.
(c) Restricted Stock. Subject to the provisions of the Plan, the Committee
shall have authority to determine the Employees to whom Restricted Stock shall
be granted, the number of Shares of Restricted Stock to be granted to each such
Participant, the duration of the Restricted Period during which, and the
conditions under which, the Restricted Stock may be forfeited to the Company,
and the other terms and conditions of such Awards.
(i) Dividends. Unless otherwise determined by the Committee,
Restricted Stock Awards shall provide for the payment of dividends during
the Restricted Period. Dividends paid on Restricted Stock may be paid
directly to the Participant, may be subject to risk of forfeiture and/or
transfer restrictions during any period established by the Committee, all
as determined by the Committee in its discretion.
(ii) Registration. Any Restricted Stock may be evidenced in such
manner as the Committee shall deem appropriate, including, without
limitation, book-entry registration or issuance of a stock certificate or
certificates. In the event any stock certificate is issued in respect of
Restricted stock granted under the Plan, such certificate shall be
registered in the name of the Participant and shall bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to
such Restricted Stock.
(iii) Forfeiture. Except as otherwise determined by the Committee,
upon termination of a Participant's employment (as determined under
criteria established by the Committee) for any reason during the applicable
restriction period, all Restricted Stock shall be forfeited by the
Participant and re-acquired by the Company. The Committee may, when it
finds that a waiver would be in the best interests of the Company, waive in
whole or in part any or all remaining restrictions with respect to such
Participant's Restricted Stock. Unrestricted Shares, evidenced in such
manner as the Committee shall deem appropriate, shall be issued to the
holder of Restricted Stock promptly after the applicable restrictions have
lapsed or otherwise been satisfied.
(iv) Transfer Restrictions. During the Restricted Period, Restricted
Stock will be subject to the limitations on transfer as provided in Section
6(g)(iii).
(d) Performance Awards. The Committee shall have authority to determine the
Employees who shall receive a Performance Award, which shall consist of a right,
(A) denominated or payable in cash, Shares, other securities or other property
(including, without limitation, Restricted Stock), and (B) which shall
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<PAGE> 36
confer on the holder thereof rights valued as determined by the Committee and
payable to, or exercisable by, such holder, in whole or in part, upon the
achievement of such performance goals during such performance periods as the
Committee shall establish.
(i) Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the performance
goals to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award and the amount of
any payment or transfer to be made pursuant to any Performance Award.
(ii) Payment of Performance Awards. Performance Awards may be paid in
a lump sum or in installments following the close of the performance period
or, in accordance with procedures established by the Committee, on a
deferred basis.
(e) Stock Compensation. The Committee shall have authority to pay in Shares
all, or such portion as it shall determine, of amounts payable under any
compensation program of the Company. The number and type of Shares to be
distributed in lieu of the cash compensation to which an Employee would
otherwise be entitled, as well as the terms and conditions of any such bonus
awards, shall be determined by the Committee.
(f) Other Stock-Based Awards. The Committee is hereby authorized to grant
to eligible Employees an "Other Stock-Based Award", which shall consist of a
right (i) which is not an Award or right described in Section 6(a), (b), (c),
(d), or (e) above and (ii) which is denominated or payable in, valued in whole
or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purposes of the Plan;
provided, that any such rights must comply, to the extent deemed desirable by
the Committee, with Rule 16b-3 and applicable law. Subject to the terms of the
Plan and any applicable Award Agreement, the Committee shall determine the terms
and conditions of any such Other Stock-Based Award.
(g) General.
(i) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in substitution for any other Award granted under the Plan
or any award granted under any other plan of the Company or any Affiliate.
Awards granted in addition to or in tandem with other Awards or awards
granted under any other plan of the Company or any Affiliate may be granted
either at the same time as or at a different time from the grant of such
other Awards or awards.
(ii) Forms of Payment by Company Under Awards. Subject to the terms of
the Plan and of any applicable Award Agreement, payments or transfers to be
made by the Company or an Affiliate upon the grant, exercise or payment of
an Award may be made in such form or forms as the Committee shall
determine, including, without limitation, cash, Shares, other securities,
other Awards or other property, or any combination thereof, and may be made
in a single payment or transfer, in installments, or on a deferred basis,
in each case in accordance with rules and procedures established by the
Committee. Such rules and procedures may include, without limitation,
provisions for the payment or crediting of reasonable interest on
installment or deferred payments.
(iii) Limits on Transfer of Awards.
(A) Each Award, and each right under any Award, shall be
exercisable only by the Participant during the Participant's lifetime,
or, if permissible under applicable law, by the Participant's guardian
or legal representative or by a transferee receiving such Award pursuant
to a qualified domestic relations order (a "QDRO") as determined by the
Committee.
(B) No Award and no right under any such Award may be assigned,
alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant otherwise than by will or by the laws of
descent and distribution (or, in the case of Restricted Stock, to the
Company) or pursuant to a QDRO and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be
void and unenforceable against the Company or any Affiliate.
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<PAGE> 37
(iv) Term of Awards. The term of each Award shall be for such period
as may be determined by the Committee; provided, that in no event shall the
term of any Incentive Stock Option exceed a period of ten years from the
date of its grant.
(v) Share Certificates. All certificates for Shares or other
securities of the Company or any Affiliate delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such stop
transfer orders and other restrictions as the Committee may deem advisable
under the Plan or the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which such
Shares or other securities are then listed, and any applicable Federal or
state laws, and the Committee may cause a legend or legends to be put on
any such certificates to make appropriate reference to such restrictions.
(vi) Consideration for Grants. Awards may be granted for no cash
consideration or for such consideration as the Committee determines
including, without limitation, such minimal cash consideration as may be
required by applicable law.
(vii) Delivery of Shares or other Securities and Payment by
Participant of Consideration. No Shares or other securities shall be
delivered pursuant to any Award until payment in full of any amount
required to be paid pursuant to the Plan or the applicable Award Agreement
is received by the Company. Such payment may be made by such method or
methods and in such form or forms as the Committee shall determine,
including, without limitation, cash, Shares, other securities, other Awards
or other property, or any combination thereof; provided that the combined
value, as determined by the Committee, of all cash and cash equivalents and
the Fair Market Value of any such Shares or other property so tendered to
the Company, as of the date of such tender, is at least equal to the full
amount required to be paid pursuant to the Plan or the applicable Award
Agreement to the Company.
SECTION 7. AMENDMENT AND TERMINATION.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan without the consent of any shareholder,
Participant, other holder or beneficiary of an Award, or other Person;
provided that notwithstanding any other provision of the Plan or any Award
Agreement, without the approval of the shareholders of the Company no such
amendment, alteration, suspension, discontinuation, or termination shall be
made that would:
(i) increase the total number of Shares available for Awards under
the Plan, except as provided in Section 4 of the Plan;
(ii) permit Awards encompassing rights to purchase Shares to be
granted with per Share grant, exercise or purchase prices of less than
the Fair Market Value of a Share on the date of grant thereof, except to
the extent permitted under Sections 6(a)(i), 6(b)(i) and 6(g)(vii) of
the Plan; or
(iii) otherwise cause the Plan to cease to qualify for or comply
with any tax or regulatory exemption, status or requirement, including
for these purposes any approval or other requirement which is a
prerequisite for exemptive relief from Section 16(b) of the Exchange
Act.
(b) Amendments to Awards. The Committee may waive any conditions or
rights under, amend any terms of, or alter any Award theretofore granted,
provided no change in any Award shall reduce the benefit to Participant
without the consent of such Participant.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee is hereby authorized to make adjustments
in the terms and conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events (including, without
limitation, the events described in Section 4(c) of the Plan) affecting the
Company, any Affiliate, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations, or accounting
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<PAGE> 38
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
Notwithstanding the foregoing, with respect to any award intended to
qualify as performance-based compensation under Section 162(m) of the Code,
no adjustment shall be authorized to the extent such adjustment would cause
the award to fail to so qualify.
SECTION 8. CHANGE IN CONTROL.
(a) In addition to the Committee's authority set forth in Section 7(c) of
the Plan, in order to maintain the Participants' rights in the event of any
Change in Control, as hereinafter defined, the Committee, as constituted before
such Change in Control, is hereby authorized, and has sole discretion, as to any
Award, either at the time such Award is made hereunder or any time thereafter,
to take any one or more of the following actions: (i) provide for the
acceleration of any time periods relating to the exercise or realization of such
Award so that such Award may be exercised or realized in full on or before a
date fixed by the Committee; (ii) provide for the purchase of any such Award,
upon the Participant's request, for an amount of cash equal to the amount that
could have been attained upon the exercise of such Award or realization of the
Participant's rights had such Award been currently exercisable or payable; (iii)
make such adjustment to any such Award then outstanding as the Committee deems
appropriate to reflect such Change in Control; or (iv) cause any such Award then
outstanding to be assumed, or new rights substituted therefor, by the acquiring
or surviving corporation after such Change in Control. The Committee may, in its
discretion, include such further provisions and limitations in any Award
Agreement as it may deem equitable and in the best interests of the Company.
(b) A "Change in Control" shall be deemed to occur if (i) the Company
merges or consolidates with any other Person (other than a wholly owned
subsidiary) and is not the surviving entity (or survives only as the subsidiary
of another entity); (ii) the Company sells all or substantially all of its
assets to any other Person (other than a wholly owned subsidiary); (iii) the
Company is liquidated or dissolved; (iv) any "person" or "group" (as such terms
are used in Section 13(d) and 14(d) of the Exchange Act), is or becomes the
"beneficial owner" (as such term is used in Rule 13d-3 of the Exchange Act as in
effect on the effective date of the Plan, except that a person shall be deemed
to be the beneficial owner of all shares that any such person has the right to
acquire pursuant to any agreement or arrangement or upon exercise of conversion
rights, warrants, options or otherwise without regard to the sixty-day period
referred to in such Rule), directly or indirectly of securities representing 30%
or more of the combined voting power of the Company's then outstanding
securities or, (v) as a result of or in connection with a contested election of
directors, a number of directors equal to a majority of the Board before such
election cease to be members of the Board.
SECTION 9. GENERAL PROVISIONS.
(a) No Rights to Awards. No Employee, Participant or other Person shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with respect
to each recipient.
(b) Delegation. Subject to the terms of the Plan and applicable law, the
Committee may delegate to one or more officers or managers of the Company or any
Affiliate, or to a committee of such officers or managers, the authority,
subject to such terms and limitations as the Committee shall determine, to grant
Awards to, or to cancel, modify or waive rights with respect to, or to alter,
discontinue, suspend, or terminate Awards held by, Employees who are not
officers or directors of the Company for purposes of Section 16 of the Exchange
Act, or any successor Section thereto, or who are otherwise not subject to such
Section.
(c) Withholding. The Company or any Affiliate is hereby authorized to
withhold from any Award, from any payment due or transfer made under any Award
or under the Plan or from any compensation or other amount owing to a
Participant the amount (in cash, Shares, other securities, other Awards or other
property) of any applicable withholding taxes in respect of an Award, its
exercise, the lapse of restrictions thereon, or any
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payment or transfer under an Award or under the Plan and to take such other
action as may be necessary in the opinion of the Company to satisfy all
obligations for the payment of such taxes.
(d) No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Company or any Affiliate from adopting or continuing in
effect other compensation arrangements (subject to shareholder approval of such
other arrangement, if such approval is required), and such arrangements may be
either generally applicable or applicable only in specific cases.
(e) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate. Further, the Company or an Affiliate may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.
(f) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Texas and applicable Federal law.
(g) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to applicable laws, or if it cannot be construed or deemed
amended without, in the determination of the Committee, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, Person or Award and the remainder of the Plan and any such Award
shall remain in full force and effect.
(h) Other Laws. The Committee may refuse to issue or transfer any Shares or
other consideration under an Award if, acting in its sole discretion, it
determines that the issuance of transfer or such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.
(i) No Trust or Fund Created. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company or any
Affiliate.
(j) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Shares or whether such fractional Shares or any rights thereto
shall be cancelled, terminated, or otherwise eliminated.
(k) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
SECTION 10. EFFECTIVE DATE OF THE PLAN.
The Plan shall be effective as of the date of its approval by the Board.
SECTION 11. TERM OF THE PLAN.
No Award shall be granted under the Plan ten years after approval by the
Board. However, unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award theretofore granted may, and the authority
of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or
terminate any such Award or to waive any conditions or rights under any such
Award shall, extend beyond such date.
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<PAGE> 40
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ANADARKO PETROLEUM CORPORATION PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 1994
The undersigned stockholder hereby appoints ROBERT J. ALLISON, JR. AND
SUZANNE SUTER, and any one of them, with power of substitution and
revocation, the attorneys of the undersigned to vote all shares
registered in the name of the undersigned for the election of
directors, unless such authority is withheld, and on all other matters
which may come before the 1994 Annual Meeting of Stockholders of
Anadarko Petroleum Corporation or any adjournment or adjournments
thereof.
PLEASE MARK THIS PROXY AS INDICATED ON THE REVERSE SIDE TO VOTE ON ANY
ITEM. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED
BY THE STOCKHOLDER. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD
OF DIRECTORS' RECOMMENDATIONS, PLEASE SIGN THE REVERSE SIDE; NO BOXES
NEED TO BE CHECKED.
THE PROXY MUST BE SIGNED AND RETURNED TO BE COUNTED.
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<PAGE> 41
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2, 3 AND 4.
Item 1 -- Election of Class II directors Conrad P. Albert, Robert J.
Allison, Jr. and Charles M. Simmons.
For Withheld (To withhold authority to vote for any individual
All as to all nominee, write that nominee's name in the space
/ / / / provided below.)
_________________________________________________
Item 2 -- Approval of Amendments to the 1988 Stock Option Plan for
Non-Employee Directors.
FOR / / AGAINST / / ABSTAIN / /
Item 3 -- Approval of the Annual Incentive Bonus Plan.
FOR / / AGAINST / / ABSTAIN / /
Item 4 -- Approval of the 1993 Stock Incentive Plan.
FOR / / AGAINST / / ABSTAIN / /
Date , 1994
------------------------------
Signature
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Signature (if held jointly)
PLEASE MARK, DATE AND SIGN AS
your name appears above and
return in the enclosed
envelope. If shares are held
jointly, each stockholder
named should sign.
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