<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
Anadarko Petroleum Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE> 2
[Anadarko Logo]
P. O. BOX 1330
HOUSTON, TEXAS 77251-1330
March 27, 2000
TO THE STOCKHOLDERS:
You are cordially invited to attend the Annual Meeting of Stockholders of
the Company. The meeting will be held in The Wyndham Hotel, Greenspoint, 12400
Greenspoint Drive, Houston, Texas, on Thursday, April 27, 2000, at 9:30 a.m.
The attached Notice of the Annual Meeting and Proxy Statement provides
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 value your opinions and encourage you to participate in this year's
Annual Meeting by VOTING your proxy. You may VOTE either by internet or
telephone using the instructions on the proxy card or by signing your proxy card
and returning it in the enclosed envelope.
Very truly yours,
/s/ ROBERT J. ALLISON, JR.
ROBERT J. ALLISON, JR.
Chairman and Chief Executive Officer
<PAGE> 3
[Anadarko Logo]
P. O. BOX 1330
HOUSTON, TEXAS 77251-1330
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Anadarko Petroleum Corporation will
be held in The Wyndham Hotel, Greenspoint, 12400 Greenspoint Drive, Houston,
Texas, on Thursday, April 27, 2000, at 9:30 a.m., for the purpose of:
(1) Electing three directors; and
(2) Transacting any other business appropriate to the meeting.
RECORD DATE
March 1, 2000, has been fixed as the record date. If you are a record
holder of Common Stock at the close of business on the record date, you are
entitled to receive notice of and to vote at the meeting.
Whether or not you expect to be present at the meeting, please VOTE. You
may VOTE either by internet or telephone using the instructions on the proxy
card or by signing your proxy card and returning it in the enclosed envelope.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ SUZANNE SUTER
SUZANNE SUTER
Corporate Secretary
Dated: March 27, 2000
Houston, Texas
<PAGE> 4
[Anadarko Logo]
P. O. BOX 1330
HOUSTON, TEXAS 77251-1330
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 2000
YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the Annual
Meeting, please take the time to VOTE by following the internet or telephone
voting instructions on the proxy card or completing and mailing the enclosed
proxy card. A postage-prepaid envelope has been provided for your convenience if
you wish to VOTE by mail.
If you VOTE by mail and your proxy card is returned unsigned, your VOTE
cannot be counted. If you VOTE by mail and the returned proxy card is signed and
dated without indicating how you want to VOTE, your proxy will be voted as
recommended by the Board of Directors.
REVOKING YOUR PROXY
You may revoke your proxy at any time prior to the meeting by:
- sending a written statement to the Corporate Secretary of the Company;
- submitting a valid proxy with a later date either by internet, by
telephone or in writing; or
- voting in person at the annual meeting.
VOTE REQUIRED AND METHOD OF COUNTING VOTES
Number of Shares Outstanding. At the close of business on the record date,
March 1, 2000, there were 128,048,126 shares of Common Stock outstanding which
are entitled to vote at the meeting.
Quorum. A quorum is present if at least a majority of the outstanding
shares of Common Stock on the record date are present in person or by proxy.
Vote Required. A director is elected if the number of votes cast for the
director exceeds the number of votes cast against the director.
1
<PAGE> 5
ANADARKO BOARD OF DIRECTORS
STRUCTURE
The Board is divided into three classes of directors for purposes of
election. One class of directors is elected at each annual meeting of
stockholders to serve for a three-year term.
At the 2000 meeting, the terms of three directors are expiring. Each
director elected at this annual meeting will hold office until the expiration of
his term in 2003. Those directors not up for election this year will continue in
office for the remainder of their terms.
If a nominee is unavailable for election, the proxies will be voted for the
election of another nominee proposed by the Board or, as an alternative, the
Board may reduce the number of directors to be elected at the meeting.
ITEM 1 -- ELECTION OF DIRECTORS
DIRECTORS NOMINATED THIS YEAR FOR TERMS EXPIRING IN 2003
Conrad P. Albert (54) -- Mr. Albert resides in Bedford, New York and is
engaged in private investments. Mr. Albert was a director of Deep Tech
International until August 1998. He has been a director of the Company since
1986.
Robert J. Allison, Jr. (61) -- Mr. Allison has been Chairman of the Board
and Chief Executive Officer of the Company since October 1986. Mr. Allison has
been a director of the Company since 1985.
John N. Seitz (49) -- Mr. Seitz was elected President and Chief Operating
Officer of the Company in 1999. He was named Executive Vice President,
Exploration and Production of the Company in 1997. He was elected Senior Vice
President, Exploration in 1995. He has worked for the Company since 1977. Mr.
Seitz has been a director of the Company since 1997.
DIRECTORS UP FOR ELECTION IN 2001
Larry Barcus (62) -- Mr. Barcus is Chairman of L. G. Barcus and Sons, Inc.,
Kansas City, Kansas, a general contractor with operations nationwide. Mr. Barcus
has been a director of the Company since 1986.
James L. Bryan (64) -- Mr. Bryan is Executive Vice President of Newpark
Drilling Fluids, an oilfield services firm headquartered in Houston, Texas. He
retired as Senior Vice President of Dresser Industries, Inc. in 1998. He had
been a Vice President of Dresser since 1990. Mr. Bryan has been a director of
the Company since 1986.
DIRECTORS UP FOR ELECTION IN 2002
Ronald Brown (67) -- Mr. Brown resides in Rancho Santa Fe, California. He
retired as a bank executive in 1992. Mr. Brown has been a director of the
Company since 1986.
John R. Butler, Jr. (61) -- Mr. Butler is Chairman of J. R. Butler and
Company, a reservoir engineering company in Houston, Texas. He is also Chairman
and former President and CEO of the Houston Advanced Research Center, a
501(c)(3) corporation. Formerly, he was Chairman and Chief Executive Officer of
GeoQuest International Holdings, Inc., Chairman of Petroleum Information Corp.
and Vice Chairman of Petroleum Information/Dwights, L.L.C. Mr. Butler has been a
director of the Company since 1996.
John R. Gordon (52) -- Mr. Gordon has been President of Deltec Asset
Management Corporation, a New York investment management company, since 1988.
Deltec Asset Management Corporation's executive office is in New York, New York.
Mr. Gordon has been a director of the Company since 1988.
2
<PAGE> 6
BOARD MEETINGS AND COMMITTEES
During 1999, the Board met four times. The Board also has an Executive
Committee that may take action with respect to the conduct of the business of
the Company between board meetings. The Executive Committee met twice during
1999. During 1999, each incumbent director of the Company attended all the
meetings of the Board.
The Board has an Audit Committee and Compensation and Benefits Committee.
Membership on these two committees is limited to non-employee directors.
Audit Committee. The Audit Committee met three times in 1999. The primary
responsibilities of the Audit Committee are to establish and review the
activities of the independent auditors and the internal auditors, review
recommendations of the independent auditors and responses of management, and
review the annual financial statements issued by the Company. Messrs. Albert,
Barcus and Butler are members of the Audit Committee and each attended all of
the committee meetings in 1999.
Compensation and Benefits Committee. The Compensation and Benefits
Committee met six times in 1999. The primary responsibilities of the
Compensation and Benefits Committee are to establish base salaries and determine
any bonus awards for the Company's executive officers, consider and make
recommendations on executive and director compensation plans and grant stock
options, restricted stock and other stock-based awards. Messrs. Brown, Bryan and
Gordon are members of the Compensation and Benefits Committee and each attended
all of the committee meetings in 1999.
DIRECTOR COMPENSATION
Directors that are not employees of Anadarko receive compensation for Board
and committee service. Directors who are employees of Anadarko receive no
compensation for their service on the Board. The principal components of
director compensation, which a director may elect to receive in cash, Common
Stock or a combination of both, are as follows:
1. an annual Board retainer of $40,000;
2. a fee of $1,250 for each Board or committee meeting attended plus
expenses related to attendance;
3. an annual committee membership retainer of $3,000; and,
4. an additional annual committee retainer of $3,000 for serving as
committee chair.
1998 Director Stock Plan. Under this plan, the directors may grant
stock-based awards to non-employee directors. In October 1999, the directors
granted each non-employee director an option to purchase 5,000 shares of Common
Stock. The option price is the fair market value on the date of grant. The
options will vest 50% one year from the date of grant and the remaining 50% two
years from the date of grant. The options granted will expire 10 years from the
date of grant.
Phantom Stock Units. In January 2000, each current non-employee director
received phantom stock units equal to $14,500 to be held until the director
terminates service from the Board. The phantom stock units will accrue dividend
equivalents until the director terminates. Directors may receive additional
phantom stock units in future years.
Director Deferred Compensation Plan. This plan was eliminated in 1990
although previously deferred amounts continue to accrue interest. Under the
plan, non-employee directors could elect to defer all or part of their annual
retainer. The plan provides benefit payments based upon the amount of
compensation deferred, age of the director at the time the compensation was
deferred and accrued interest at 20% per annum. Payments are made under the plan
to the director while he is a member of the Board and upon retirement, death,
disability or the attainment of age 65.
3
<PAGE> 7
STOCK OWNERSHIP
The information provided below summarizes the beneficial ownership of
officers and directors of the Company and owners of more than 5% of outstanding
Common Stock. In general, "beneficial ownership" includes those shares of Common
Stock someone has the power to vote, sell or acquire within 60 days. It includes
Common Stock that is held directly and also shares held indirectly through a
relationship, a position as a trustee or under a contract or understanding.
DIRECTORS AND EXECUTIVE OFFICERS
On February 26, 2000, the directors and executive officers of Anadarko
beneficially owned, in the aggregate, 5,174,412 shares of Anadarko Common Stock
(approximately 4% of the outstanding shares entitled to vote). Except for Mr.
Allison, no director, nominee for director or officer of the Company owns or has
the right to acquire more than 1% of the outstanding Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
---------------------------------------------
SHARES
NUMBER OF SHARES EXERCISABLE TOTAL
NAME OF BENEFICIALLY WITHIN BENEFICIAL PERCENT
BENEFICIAL OWNER OWNED(1) 60 DAYS OWNERSHIP OF CLASS
- ---------------- ------------------ ----------- ---------- --------
<S> <C> <C> <C> <C>
Robert J. Allison, Jr. ....................... 613,288 1,200,000 1,813,288 1.4
John N. Seitz................................. 62,933 338,000 400,933 *
Michael E. Rose............................... 36,975 150,000 186,975(2) *
Charles G. Manley............................. 76,933 294,000 370,933 *
William D. Sullivan........................... 32,112 84,000 116,112 *
Conrad P. Albert.............................. 39,000 58,500 97,500(3) *
Larry Barcus.................................. 19,365 82,500 101,865 *
Ronald Brown.................................. 6,444 82,500 88,944(4) *
James L. Bryan................................ 12,875 82,500 95,375 *
John R. Butler, Jr. .......................... 33,730 32,500 66,230 *
John R. Gordon................................ 48,902 82,500 131,402 *
All directors and executive officers as a
group, (24 persons)......................... 1,409,829 3,774,000 5,183,829 4.0
</TABLE>
- ---------------
* Less than one percent.
(1) This 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
26, 2000.
(2) Includes shares held in his wife's name.
(3) Mr. Albert disclaims beneficial ownership of the 9,573 shares held in his
wife's name and his children's names.
(4) Mr. Brown disclaims beneficial ownership of the 100 shares held in his
wife's name.
OWNERS OF MORE THAN FIVE PERCENT OF ANADARKO STOCK
The following table shows, as of December 31, 1999, the beneficial owners
of more than 5% of Anadarko Common Stock. This information is based on reports
(Schedule 13G) filed with the Securities and Exchange
4
<PAGE> 8
Commission by each of the firms listed in the table below. If you wish, you may
obtain copies of these reports from the SEC.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
- -------------- ------------------- ---------- --------
<S> <C> <C> <C>
Common Stock....................... FMR Corp. 15,681,295 12.3%
82 Devonshire Street
Boston, Massachusetts 02109
Common Stock....................... Sonatrach Petroleum Investment 12,161,287 9.5%
(B.V.I.) Corporation
10, rue du Sahara
16035, Algiers, Algeria
Common Stock....................... American Express Financial 8,137,351 6.4%
IDS Tower 10
Minneapolis, Minnesota 55440
</TABLE>
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Anadarko Algeria Corporation, a wholly-owned subsidiary of the Company, has
an agreement with Sonatrach, the national oil and gas enterprise of Algeria,
which gives Anadarko Algeria the right to develop and produce liquid
hydrocarbons in Algeria. Sonatrach is wholly-owned by the People's Democratic
Republic of Algeria. Sonatrach Petroleum Investment (B.V.I.) Corporation is
controlled by Sonatrach. In 1999, approximately $15,174,000 was paid to
Sonatrach primarily for purchases and transportation of crude oil. During 1999,
$21,197,000 was received and $22,837,000 was included in accounts receivable as
of December 31, 1999 from Sonatrach for joint interest billings of development
costs in Algeria.
Anadarko and partners have two engineering, procurement and construction
contracts with Brown & Root-Condor, a company jointly owned by Brown & Root and
affiliates of Sonatrach. In 1999, approximately $43,189,000 was paid to Brown &
Root-Condor under the contracts.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Forms 3, 4 and 5 furnished to the Company
during and with respect to its most recently completed fiscal year, the Company
believes that all transactions by reporting persons during the most recent
fiscal year and the prior fiscal year were reported on a timely basis except for
those disclosed in this report. During 1999, reports for the sale of Common
Stock for the payment of taxes on the vesting of restricted stock were filed
late for Messrs. Alman and Cochran. During 1998, the following reports were
filed late: Mr. Allison's appointment as trustee of a trust which contains a
small number of shares of Anadarko Common Stock, Mr. Gordon's receipt of stock
in lieu of board compensation and Mr. Brown's sale of Common Stock at the same
time he exercised stock options.
COMPENSATION AND BENEFITS COMMITTEE REPORT
ON 1999 EXECUTIVE COMPENSATION
The Compensation and Benefits Committee, discussed on page 3, is
responsible for establishing and administering the executive compensation
programs of the Company. This report describes the compensation decisions made
by the Committee during 1999 with respect to Anadarko's executive officers.
COMPENSATION PHILOSOPHY OF THE COMPANY
Anadarko's executive compensation programs consist primarily of base
salary, performance-based annual bonus and long-term stock incentive plans which
the Company considers essential to attract, retain and reward
5
<PAGE> 9
key personnel. Collectively, these programs are designed to promote the
strategic objectives that are critical to the long-term success of the Company.
The Committee utilizes an outside compensation consultant to review
executive compensation and benefit programs and the total compensation levels
provided to executive officers. Anadarko's compensation programs provide
executives the opportunity to earn compensation levels within the top quartile
of a select peer group of oil and gas companies to the extent that Company and
executive performance on a combined and individual basis so warrants. The peer
group consists of energy companies similar in business operations to Anadarko.
Most of these energy companies are also included in the Dow Jones Oil-Secondary
index used for stock price performance comparison on the Performance Graph. The
Dow Jones Oil-Secondary index is comprised of specific energy companies
representing most facets of the industry including independent oil and gas
companies as well as those having integrated operations. Not all companies
included in the index are considered comparable to Anadarko with respect to
analyzing executive compensation and benefit levels. This index does, however,
provide a meaningful comparison of total stockholder return against a consistent
representation of oil and gas companies with whom Anadarko competes for
investment dollars.
In designing the Company's compensation programs, the Committee's primary
consideration is Anadarko's achievement of strategic business goals that serve
to enhance shareholder value. Consideration is also given to competitive
practice and market conditions. Section 162(m) of the Internal Revenue Code, as
amended (the "Code"), limits a company's ability to deduct compensation paid in
excess of $1 million during any fiscal year to the Chief Executive Officer and
the next four highest paid officers, unless the compensation meets shareholder
approved performance-based requirements. The Annual Incentive Bonus Plan (the
"Incentive Plan") and the 1993 and 1999 Stock Incentive Plans (collectively the
"Stock Plans") meet the performance-based requirements under section 162(m). The
Committee is committed to making awards that qualify as deductible compensation
under section 162(m) of the Code whenever possible. However, where granting
awards is consistent with the strategic business goals of the Company, the
Committee reserves the right to make awards that are non-deductible where it
feels it is in the best interest of the Company.
BASE SALARY
Anadarko structures its compensation programs to match pay with
performance. Individual base salaries are determined based on a subjective
evaluation considering peer-company market data, the executive's performance and
the length of time the executive has been in the position. Base compensation is
reviewed annually by the Committee and adjusted accordingly to reflect each
executive officer's contribution to the performance of the Company.
In early 1999, the Committee reviewed the competitive market data presented
by the outside consultant and elected not to increase Mr. Allison's base salary.
ANNUAL INCENTIVE BONUS
The Incentive Plan puts a significant portion of compensation at risk by
linking potential annual compensation to the Company's achievement of specific
performance goals. These goals are established by the Committee at the beginning
of each calendar year and for 1999 included:
(1) Operational criteria including comparisons of Anadarko's five-year
worldwide reserve replacement measured against an internal
objective and Anadarko's five-year worldwide cost of finding
measured against defined performance levels based on the most
recently available industry five-year worldwide cost of finding
for a select group of companies;
(2) Financial criteria of net income and cash flow, both of which are
measured against internal objectives; and
(3) Stock performance criteria comparing Anadarko's total stockholder
return for a three-year period against the total stockholder
return of a select group of peer companies for the same period.
6
<PAGE> 10
Each performance goal and its specific criteria are weighted based upon the
relative importance of the goal as determined by the Committee.
Under the Incentive Plan, a bonus target is established for each executive
officer based upon individual position, level of responsibility and ability to
impact the Company's success. These targets range up to a maximum of 100% of
base salary for the Chief Executive Officer. Bonus targets are adjusted based on
the Company's achievement of the performance goals. Individuals may receive up
to 200% of their bonus target if the Company significantly exceeds the specified
goals and, conversely, no bonus or a reduced bonus payment if the Company does
not attain specified levels of performance.
During the year, Anadarko continued to aggressively replace reserves at low
finding costs while at the same time increasing production of oil and gas to
record-setting levels for the Company. Anadarko's reserve replacement of 213%
for 1999 extended the Company's record of replacing annual production volumes
for the 18th consecutive year. In addition, the Company's financial performance
met the 1999 objectives and stock price performance exceeded targeted
objectives. The Committee reviewed Anadarko's actual performance against the
select performance criteria and, based on the outstanding results, approved a
bonus to Mr. Allison representing 200% of his individual bonus target.
STOCK PLANS
The Company makes certain stock-based awards under the Stock Plans to align
the interests of executive officers with those of stockholders. To support this
alignment, Anadarko has established stock ownership guidelines for executive
officers ranging from two and one-half times base salary for Vice Presidents up
to five times base salary for the Chief Executive Officer.
The Committee annually reviews competitive market data to determine
appropriate stock awards based on the executive's position and the market value
of the stock. In addition, the Committee considers previous stock grants when
determining grant size for executive officers. Under the Stock Plans, the
Committee has made annual and multi-year grants of stock options at the fair
market value of the Common Stock on the date of grant. In addition, restricted
stock may be granted in recognition of special individual performance or used
for retention purposes on a select basis.
In 1996, the Committee awarded Mr. Allison a performance share grant of
200,000 shares, with a maximum potential payout of 300,000 shares, for the
four-year performance period beginning January 1, 1996, and ending December 31,
1999. Based on the terms of the Performance Share Agreement (the "Agreement")
approved by shareholders, payout of the performance shares would be determined
by comparing Anadarko's average total shareholder return ("TSR") over the
performance period to the TSR of a select group of peer companies determined at
the time of grant. At the end of the performance period, the Company and the
peer companies would be ranked based on their average TSR for the period. The
Agreement provided that Mr. Allison would receive the maximum payout of 300,000
shares if Anadarko's TSR was in the top 25% of the overall ranking. The
Company's TSR for the performance period was in the top 25% of the ranking and,
as a result, the Committee approved the maximum payout to Mr. Allison shown in
the Summary Compensation Table on page 9.
In 1999, the Committee awarded Mr. Allison the stock option listed in the
Summary Compensation Table in lieu of another performance share grant. This
award is intended to be a multi-year grant and directly aligns Mr. Allison's
compensation opportunity with that of shareholders since the option will only
produce value through the appreciation of the stock.
SUMMARY
Anadarko's compensation strategy is to provide total compensation
commensurate with the achievement of specific short-term and long-term
operational, financial and strategic objectives. Accordingly, Mr. Allison's
total compensation for 1999 was within the top quartile of the peer companies as
a result of Anadarko's excellent overall performance.
7
<PAGE> 11
The Committee believes the design of the Company's total executive
compensation program provides executives the incentive to maximize long-term
operational performance using sound financial controls and high standards of
integrity. It is the Committee's belief that this focus will ultimately be
reflected in Anadarko's stock price and stockholder return.
Mr. Ronald Brown, Chairman
Mr. James L. Bryan
Mr. John R. Gordon
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, 1999, exceeded $100,000:
8
<PAGE> 12
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------
OTHER
ANNUAL
COMPEN-
SALARY BONUS SATION
NAME PRINCIPAL POSITION YEAR ($) ($) ($)
- ---- ------------------ ---- --------- --------- -------
<S> <C> <C> <C> <C> <C>
Robert J. Allison,
Jr................ Chairman and Chief Executive Officer 1999 1,000,000 2,000,000 0
Chairman, President and Chief
Executive Officer 1998 1,000,000 1,350,000(5) 0
Chairman, President and Chief
Executive Officer 1997 1,000,000 1,200,000 60,253
John N. Seitz...... President and Chief Operating Officer 1999 475,000 800,000 0
Executive Vice President, Exploration
& Production 1998 425,000 400,000 0
Executive Vice President, Exploration
& Production 1997 387,083 325,000 0
Michael E. Rose.... Senior Vice President, Finance 1999 370,000 333,000 0
Senior Vice President, Finance 1998 370,000 207,000 0
Senior Vice President, Finance 1997 350,000 186,000 0
Charles G.
Manley............ Senior Vice President, Administration 1999 355,000 320,000 0
Senior Vice President, Administration 1998 355,000 199,000 0
Senior Vice President, Administration 1997 345,000 183,000 0
William D. Vice President, International
Sullivan.......... Operations 1999 270,000 216,000 55,080(7)
Vice President, International
Operations 1998 270,000 135,000 233,805
Vice President, Algeria 1997 250,000 113,000 126,083
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------
AWARDS
------------------------
SECURITIES
UNDERLYING ALL OTHER
RESTRICTED OPTIONS(1)/ LTIP COMPEN-
STOCK SARS(2) PAYOUTS(3) SATION(4)
NAME ($) (#) ($) ($)
- ---- ---------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Robert J. Allison,
Jr................ 0 650,000 10,312,500 316,615
0 0 0 383,013
0 0 0 349,812
John N. Seitz...... 0 0 0 98,564
244,219(6) 280,000 0 132,046
0 80,000 0 83,778
Michael E. Rose.... 0 0 0 94,747
0 186,000 0 133,789
0 54,000 0 96,398
Charles G.
Manley............ 0 0 0 95,831
0 186,000 0 136,515
0 48,000 0 103,179
William D.
Sullivan.......... 0 0 0 48,546
0 128,000 0 271,850
0 48,000 0 229,277
</TABLE>
- ---------------
(1) Adjusted for 2-for-1 stock split, effective July 1, 1998.
(2) No SARs are outstanding.
(3) Represents long-term incentive plan payout of 300,000 shares pursuant to
performance shares awarded in 1996 under the Company's 1993 Stock Incentive
Plan for the performance period which began January 1, 1996 and ended on
December 31, 1999. Under the terms of the Performance Share Agreement with
Mr. Allison, this payment is equal to the maximum number of performance
shares provided under the Agreement multiplied by the average of the high
and low stock price on January 26, 2000, the date on which the Committee
approved payout of the award.
(4) This column includes (a) Company contributions to the Anadarko Employee
Savings Plan and Savings Restoration Plan; (b) interest earned above 120% of
the applicable federal rate on deferred compensation under the Executive
Deferred Compensation Plan; (c) payments under the Annual Override Bonus
Plan ("ORRI") and (d) the value of Company paid split-dollar insurance. The
1999 amounts for items (a), (b), (c) and (d) for each of the individuals
named in the table are for Mr. Allison, $141,000, $49,655, $30,796 and
$93,230; Mr. Seitz, $52,500, $8,054, $7,662 and $30,348; Mr. Rose, $34,620,
$23,153, $6,272 and $30,702; Mr. Manley, $33,240, $24,155, $6,411 and
$32,025; and Mr. Sullivan, $24,300, $0, $4,844 and $14,591, respectively. In
addition, Mr. Allison's amount includes $1,934 attributable to the annual
cost of term life insurance available to Mr. Allison under a policy
purchased by the Company. At the end of 1998, Anadarko entered into an
agreement with Mr. Allison pursuant to which Mr. Allison relinquished $5.7
million of his supplemental pension benefit in exchange for a term life
insurance policy. Upon the death of both Mr. and Mrs. Allison, their
beneficiaries will receive the term life insurance proceeds, and Anadarko
will receive cash under the policy sufficient to compensate the Company for
the premium paid. The balance of the proceeds, if any, will be paid to Mr.
and Mrs. Allison's designees. Additionally, Mr. Sullivan's amount includes
$4,811 applicable to relocation payments associated with his repatriation to
the U.S. in 1998 from foreign assignment. 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 recipients in accordance with the provisions
of the plan.
(5) Includes $1,000,000 paid under the Incentive Plan for 1998 performance and a
special bonus of $350,000, the payment of which is deferred until Mr.
Allison's retirement from the Company.
9
<PAGE> 13
(6) As of December 31, 1999, Mr. Seitz held 5,625 restricted shares valued at
the year-end close of $191,953. The restricted stock awarded to Mr. Seitz in
1998 vests 25% per year. Dividends will be paid on unvested shares.
(7) Represents certain perquisites, including $17,218 for financial counseling
services and $37,862 attributable to the net payment of taxes by the Company
on Mr. Sullivan's behalf associated with his foreign assignment that ended
in 1998. None of the other four individuals listed above had total
perquisites exceeding $50,000 or 10% of annual compensation for 1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------ POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS/SARS EXERCISE OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO OR BASE FOR OPTION TERM(3)
OPTIONS/SARS EMPLOYEES IN PRICE(2) EXPIRATION --------------------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) DATE 0%($) 5%($) 10%($)
- ---- --------------- ------------- -------- ---------- ----- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert J. Allison,
Jr. ................ 650,000 57% $30.66 11/02/06 $0 $8,112,112 $18,904,671
John N. Seitz......... 0 0% n/a n/a $0 $ 0 $ 0
Michael E. Rose....... 0 0% n/a n/a $0 $ 0 $ 0
Charles G. Manley..... 0 0% n/a n/a $0 $ 0 $ 0
William D. Sullivan... 0 0% n/a n/a $0 $ 0 $ 0
</TABLE>
- ---------------
(1) No SARs were granted in 1999. Stock options granted on November 2, 1999,
were granted under the Company's 1999 Stock Incentive Plan. Twenty-five
percent (25%) of the options become exercisable each year on the anniversary
date of the date of grant beginning on November 2, 2000. In the event of a
change of control, any outstanding options will automatically vest. The
Board may also take any one or more of the following actions: (i) provide
for the purchase of any outstanding awards by the Company; (ii) make
adjustments to any outstanding awards; or (iii) allow for the substitution
of any outstanding awards by the acquiring company's stock.
(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 SEC 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 volatility factors.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SHARES SECURITIES VALUE OF UNEXERCISED
ACQUIRED UNDERLYING UNEXERCISED IN-THE-MONEY
ON VALUE OPTIONS/SARS AT OPTIONS/SARS AT
EXERCISE REALIZED FISCAL YEAR-END (#) FISCAL YEAR-END ($)
NAME (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE*
- ---- -------- ---------- ------------------------- --------------------------
<S> <C> <C> <C> <C>
Robert J. Allison, Jr. .... 0 $ 0 1,080,000/1,130,000 $11,542,500/$5,408,125
John N. Seitz.............. 24,000 $ 622,017 338,000/280,000 $ 3,067,125/$ 0
Michael E. Rose............ 0 $ 0 150,000/186,000 $ 582,000/$ 0
Charles G. Manley.......... 0 $ 0 294,000/186,000 $ 2,663,625/$ 0
William D. Sullivan........ 108,000 $1,859,870 84,000/128,000 $ 77,625/$ 0
</TABLE>
- ---------------
* Computed based upon the difference between aggregate fair market value on
December 31, 1999 ($33.96875 per share) and aggregate exercise price.
10
<PAGE> 14
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 last five years. The graph assumes that the value of the investment in
the Company's Common Stock and each index was $100 at December 31, 1994 and that
all dividends were reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
ANADARKO PETROLEUM CORP, DOW JONES OIL -- SECONDARY AND S&P 500
[PERF. GRAPH]
FISCAL YEAR ENDED DECEMBER 31
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Anadarko Petroleum Corporation 100 142 170 160 164 182
Dow Jones Oil -- Secondary 100 116 143 151 111 125
S&P 500 Index 100 138 169 226 290 351
</TABLE>
Assumes $100 Invested on December 31, 1994.
* Total Return Assumes Reinvestment of Dividends
Total Return Data Provided by S&P's Institutional Market Services and Dow Jones
& Company Inc.
11
<PAGE> 15
PENSION PLAN TABLE
The Company has a defined benefit retirement plan covering all United
States employees that does not require employee contributions. The Retirement
Plan provides benefits based on a formula which considers length of service and
final average pay. For this purpose, "pay" generally includes the amounts shown
in the Salary and Bonus columns of the Summary Compensation Table. The following
table reflects the estimated single life annuity payable annually at normal
retirement at age 65 in specified remuneration and years-of-service
classifications, based on the benefit formula in effect on December 31, 1999.
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 250,000 $ 66,000 $ 87,000 $ 109,000 $ 131,000 $ 153,000
300,000 79,000 105,000 132,000 158,000 184,000
400,000 106,000 141,000 177,000 212,000 247,000
500,000 133,000 177,000 222,000 266,000 310,000
600,000 160,000 213,000 267,000 320,000 373,000
700,000 187,000 249,000 312,000 374,000 436,000
800,000 214,000 285,000 357,000 428,000 499,000
900,000 241,000 321,000 402,000 482,000 562,000
1,000,000 268,000 357,000 447,000 536,000 625,000
1,100,000 295,000 393,000 492,000 590,000 688,000
1,200,000 322,000 429,000 537,000 644,000 751,000
1,300,000 349,000 465,000 582,000 698,000 814,000
1,400,000 376,000 501,000 627,000 752,000 877,000
1,500,000 403,000 537,000 672,000 806,000 940,000
1,600,000 430,000 573,000 717,000 860,000 1,003,000
1,700,000 457,000 609,000 762,000 914,000 1,066,000
1,800,000 484,000 645,000 807,000 968,000 1,129,000
1,900,000 511,000 681,000 852,000 1,022,000 1,192,000
2,000,000 538,000 717,000 897,000 1,076,000 1,255,000
2,100,000 565,000 753,000 942,000 1,130,000 1,318,000
2,200,000 592,000 789,000 987,000 1,184,000 1,381,000
2,300,000 619,000 825,000 1,032,000 1,238,000 1,444,000
2,400,000 646,000 861,000 1,077,000 1,292,000 1,507,000
2,500,000 673,000 897,000 1,122,000 1,346,000 1,570,000
2,600,000 700,000 933,000 1,167,000 1,400,000 1,633,000
2,700,000 727,000 969,000 1,212,000 1,454,000 1,696,000
2,800,000 754,000 1,005,000 1,257,000 1,508,000 1,759,000
2,900,000 781,000 1,041,000 1,302,000 1,562,000 1,822,000
3,000,000 808,000 1,077,000 1,347,000 1,616,000 1,885,000
3,100,000 835,000 1,113,000 1,392,000 1,670,000 1,948,000
3,200,000 862,000 1,149,000 1,437,000 1,724,000 2,011,000
3,300,000 889,000 1,185,000 1,482,000 1,778,000 2,074,000
3,400,000 916,000 1,221,000 1,527,000 1,832,000 2,137,000
3,500,000 943,000 1,257,000 1,572,000 1,886,000 2,200,000
3,600,000 970,000 1,293,000 1,617,000 1,940,000 2,263,000
</TABLE>
Messrs. Allison, Seitz, Rose, Manley, and Sullivan, respectively, have 26,
22, 22, 26 and 18 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.
A portion of the benefits shown in the table may be paid from the Company's
supplemental retirement restoration plan, rather than from the Retirement Plan,
due to limitations imposed by the Code which restrict the amount of benefits
payable under tax-qualified plans.
12
<PAGE> 16
CHANGE OF CONTROL ARRANGEMENTS
The Company has entered into key employee change of control contracts with
each of the named executive officers and with certain other key executives.
These severance contracts have an initial three-year term which is automatically
extended for one year upon each anniversary, unless a notice not to extend is
given by the Company. If a change of control of the Company (as defined below)
occurs during the term of the severance contract, then the contract becomes
operative for a fixed three-year period. The severance contracts generally
provide that the executive's terms and conditions of employment (including
position, work location, compensation and benefits) will not be adversely
changed during the three-year period after a change of control of the Company.
If the Company terminates the executive's employment (other than for cause,
death or disability), the executive terminates for good reason during such
three-year period, or the executive terminates employment for any reason during
the 30-day period following the first anniversary of the change of control, and
upon certain terminations prior to a change of control or in connection with or
in anticipation of a change of control, the executive is generally entitled to
receive the following payment and benefits:
(i) earned but unpaid compensation;
(ii) up to 2.9 times the executive's base salary plus annual bonus
(based on historic annual bonus);
(iii) the Company matching contributions which would have been made
had the executive continued to participate in the Anadarko
Employee Savings Plan and the Savings Restoration Plan for up to
an additional three years;
(iv) the value of any investments credited to the executive under the
Savings Restoration Plan;
(v) the present value of the accrued retirement benefit under the
Retirement Restoration Plan and the additional retirement benefit
which would have been received had the executive continued service
for up to an additional three years; and,
(vi) the present value of the amounts of deferred compensation and
interest, if any, under the Executive Deferred Compensation Plan
which would have been received had the executive continued
service through age 65.
In addition, the severance contract provides for a continuation of various
medical, dental, disability and life insurance plans and financial counseling
for a period of up to three years, outplacement services and the payment of all
legal fees and expenses incurred by the executive in enforcing any right or
benefit provided by the severance contracts. The severance contract provides
that the executive is entitled to receive a payment in an amount sufficient to
make the executive whole for any excise tax on excess parachute payments imposed
under Section 4999 of the Code.
As a condition to receipt of these severance benefits, the executive must
remain in the employ of the Company and render services commensurate with his
position. The executive must also agree to retain in confidence any and all
confidential information known to him concerning the Company and its business so
long as the information is not otherwise publicly disclosed. As of the date of
the Proxy, no amounts have been paid under the severance contracts.
In addition, pursuant to the Company's Stock Plans, upon a change of
control of the Company (as defined below):
- Outstanding options and stock appreciation rights that are not vested and
exercisable become fully vested and exercisable.
- The restrictions on restricted stock lapse.
- Performance-based restricted stock awards become fully vested and the
performance goals are deemed to be earned unless otherwise provided in
the participant's award agreement.
13
<PAGE> 17
For purposes of the severance contracts and the Company's Stock Plans, a
change of control is generally defined as:
(1) Any individual, entity or group acquiring beneficial ownership of
20% or more of either the outstanding shares of the Company's Common Stock
or the combined voting power of the outstanding voting securities of the
Company entitled to vote generally for the election of directors;
(2) Individuals who constitute the Board on the date hereof cease to
constitute a majority of the board, provided that an individual whose
election or nomination as a director is approved by a vote of at least a
majority of the directors as of the date hereof will be deemed a member of
the incumbent Board;
(3) Approval by the Company's stockholders of a reorganization, merger
or consolidation or sale or other disposition of all or substantially all
of the assets of the Company or the acquisition of assets of another
entity, unless following the business combination:
(a) all or substantially all of the beneficial owners of the
Company's outstanding Common Stock prior to the business combination own
more than 60% of the outstanding Common Stock of the corporation
resulting from the business combination;
(b) no person, entity or group owns 20% or more of the outstanding
voting securities of the corporation resulting from the business
combination; and,
(c) at least a majority of the board of the corporation resulting
from the business combination were members of the Company's Board prior
to the business combination; or
(4) Approval by the Company's stockholders of a complete liquidation
or dissolution of the Company.
INDEPENDENT AUDITORS
KPMG LLP served as the Company's independent auditors during 1999 and was
appointed by the Board to serve in that capacity for 2000. Representatives of
KPMG LLP will be present at the meeting to respond to appropriate questions from
stockholders.
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 the
proxy in accordance with their judgment on such matters.
STOCKHOLDER PROPOSALS
An eligible stockholder who wants to have a qualified proposal considered
for inclusion in the proxy statement for the 2001 Annual Meeting must notify the
Corporate Secretary of the Company. The proposal must be received no later than
November 28, 2000.
14
<PAGE> 18
PROXY SOLICITATION
The Company pays for the cost of preparing, assembling and mailing the
material in connection with the solicitation of proxies. 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 without additional compensation. The Company pays all costs of
solicitation, including certain expenses of brokers and nominees who mail proxy
material to their customers or principals. In addition, the Company has engaged
ChaseMellon Shareholder Services, L.L.C. to assist in the solicitation of
proxies for this Annual Meeting at an estimated fee of $5,000 plus
disbursements.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ SUZANNE SUTER
SUZANNE SUTER
Corporate Secretary
Dated: March 27, 2000
Houston, Texas
SEE ENCLOSED PROXY CARD -- PLEASE VOTE PROMPTLY.
15
<PAGE> 19
PROXY
ANADARKO PETROLEUM CORPORATION
SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 2000
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 2000 Annual Meeting of
Stockholders of Anadarko Petroleum Corporation to be held on Thursday, April 27,
2000 at 9:30 A.M. or any adjournment thereof.
PLEASE VOTE ON ANY ITEM AS INDICATED ON THE REVERSE SIDE. 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.
(Continued, and to be marked, dated and signed, on the other side)
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF THREE WAYS:
1. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
OR
2. Call TOLL FREE 1-800-840-1208 on a Touch Tone telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
OR
3. To Vote by Internet at our Internet Address: http://www.aproxy.com/apc
PLEASE VOTE
<PAGE> 20
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1. PLEASE MARK [X]
YOUR VOTE
LIKE THIS
WITHHELD
FOR FOR ALL PLEASE VOTE YOUR PROXY
ITEM 1 - ELECTION OF DIRECTORS [ ] [ ]
(01) Conrad P. Albert
(02) Robert J. Allison, Jr.
(03) John N. Seitz
WITHHELD FOR: (Write that nominee's name in the space provided below).
- -----------------------------------
Signature Signature Date
----------------------- ---------------------- -----------
Please sign as your name appears above. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE AND READ THE REVERSE SIDE o
[GRAPHIC] VOTE BY TELEPHONE OR INTERNET [GRAPHIC]
QUICK *** EASY *** IMMEDIATE
YOUR VOTE IS IMPORTANT! - YOU CAN VOTE IN ONE OF THREE WAYS:
1. TO VOTE BY PHONE: Call toll-free 18008401208 on a touch tone telephone 24
hours a day 7 days a week
THERE IS NO CHARGE TO YOU FOR THIS CALL. - HAVE YOUR PROXY CARD IN HAND.
You will be asked to enter a Control Number, which is located in the box in the
lower right hand corner of this form.
- --------------------------------------------------------------------------------
OPTION 1: To vote as the Board of Directors recommends on the proposal, press 1
- --------------------------------------------------------------------------------
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1,
OR
2. VOTE BY INTERNET: Follow the instructions at our Website Address:
http://www.eproxy.com/apc
OR
3. VOTE BY PROXY CARD: Mark, sign and date your proxy card and return promptly
in the enclosed envelope.
NOTE: IF YOU VOTE BY INTERNET OR TELEPHONE, THERE IS NO NEED TO MAIL BACK YOUR
PROXY CARD.
THANK YOU FOR VOTING.
<PAGE> 21
<TABLE>
<S> <C> <C>
Two additional ways to vote
========================================================== o =========================================================
VOTE BY TELEPHONE o VOTE BY INTERNET
========================================================== o =========================================================
o
It's fast, convenient, and your vote is immediately o It's fast, convenient, and your vote is immediately
confirmed and posted. o confirmed and posted and you can get all future
o materials by Internet.
Using a touch-tone phone call the toll-free number o
1-800-454-8683. o WWW.PROXYVOTE.COM
o
Just follow these 4 easy steps: o Just follow these 4 easy steps:
o
1. Read the accompanying Proxy Statement and o 1. Read the accompanying Proxy Statement and
voting instruction form. o voting instruction form.
o
2. Call the toll-free number 1-800-454-8683. o 2. Go to website WWW.PROXYVOTE.COM.
o
3. Enter your 12 DIGIT CONTROL NUMBER located o 3. Enter your 12 DIGIT CONTROL NUMBER located
on your voting instruction form. o on your voting instruction form.
o
4. Follow the simple recorded instructions. o 4. Follow the simple instructions.
o
YOUR VOTE IS IMPORTANT! o YOUR VOTE IS IMPORTANT!
o
Call 1-800-454-8683 o Go to WWW.PROXYVOTE.COM
</TABLE>
Do not return Voting Form if you are voting by either telephone or Internet
