NON-EXECUTIVE 1999 STOCK INCENTIVE PLAN STOCK OPTION AGREEMENT (Seven-Year Term)
EXHIBIT 10.3
November, 2005
ANADARKO PETROLEUM CORPORATION
1. To the extent that the right to exercise Options has accrued hereunder, the Options, or any
part thereof, may be exercised in whole or in part by filing a written notice with the Corporate
Secretary of the Company at its corporate headquarters. Such notice shall be in the form specified
by the Committee. If no form has been specified, such notice shall specify the number of Options
that the Participant wants to exercise and the method of exercise. Payments of all amounts due
shall be made by check payable to the Company. Except as otherwise provided by the Committee
before an Option is exercised: (i) all or a portion of the Exercise Price may be paid by delivery
of Mature Shares having an aggregate Fair Market Value (valued as of the date of exercise) that is
equal to the amount of cash that would otherwise be required; and (ii) the Participant may pay the
Exercise Price by authorizing a third party to sell Shares (or a sufficient portion of the Shares)
acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale
proceeds to pay the entire Exercise Price and any tax withholding resulting from such exercise. No
Shares shall be issued or delivered until full payment therefor has been made.
2. The Options may not be exercised unless the Participant is at the time of such exercise an
employee of the Company, or an Affiliate, and shall have been continuously employed by the Company,
or an Affiliate, since the date the Options were granted; provided, however, that the Options shall
be exercisable following the termination of the Participant’s employment during the term of the
Options as provided in sections (i) through (v) below. Options, which are not and do not become
exercisable at the time of the Participants termination of employment shall, coincident therewith,
terminate and be of no further force or effect.
(i) Retirement. If the Participant shall cease to be an employee of the
Company, or an Affiliate, by reason of retirement pursuant to a pension or retirement plan
of the Company, or of a subsidiary, the Participant (or, in the event of Participant’s
death, the Participant’s legal representative) may, within a period of not more than
thirty-six (36) months after the date of cessation of employment, exercise the Options if
and to the extent they were exercisable on the date of cessation. In no event may the
Options be exercised more than seven (7) years from the date of grant.
(ii) Death or Disability of Participant. In the event of the death of the
Participant while an active employee of the Company, or an Affiliate, or if the Participant
shall cease to be an employee of the Company, or an Affiliate, by
reason of total disability, as defined in the Company’s Disability Plan, any
outstanding Options granted to the
Participant shall vest and be immediately exercisable
with respect to all or any part of the Options which remain unexercised. In the event of
the death of the Participant, the Participant’s legal representative or other person or
persons to whom the Participant’s rights under the Options shall pass by the Participant’s
will or the laws of descent and distribution, may, within a period of not more than twelve
(12) months after the date of death, exercise the Options. In the event of the total
disability of the Participant, the Participant (or, in the event of Participant’s death,
the Participant’s legal representative) may, within a period of not more than thirty-six
(36) months after the date of cessation of employment, exercise the Options. In no event
may the Options be exercised more than seven (7) years from the date of grant.
(iii) Termination Without Cause. If the Participant’s employment with the
Company, or an Affiliate, is terminated by the Company or an Affiliate due to a reduction
in force, job abolishment, or at the convenience of the Company, or an Affiliate as
determined by the Company, the Participant (or, in the event of the Participant’s death,
the Participant’s legal representative) may, within a period of not more than three (3)
months after such cessation of employment, exercise the Options if and to the extent they
were exercisable at the date of such cessation. In no event may the Options be exercised
more than seven (7) years from the date of grant.
(iv) Termination following Change of Control. If the Participant’s employment
with the Company, or an Affiliate, is terminated following Change of Control and the
Participant received a benefit under the Key Employee Change of Control Contract or the
Change of Control Severance Pay Plan, the Participant (or, in the event of the
Participant’s death, the Participant’s legal representative) may, within a period of not
more than three (3) months after such cessation of employment, exercise the Options if and
to the extent they were exercisable at the date of such cessation. In no event may the
Options be exercised more than seven (7) years from the date of grant.
(v) Voluntary Termination. If the Participant voluntarily terminates his or
her employment with the Company, or an Affiliate, the Participant (or, in the event of the
Participant’s death, the Participant’s legal representative) may, within a period of not
more than three (3) months after such cessation of employment, exercise the Options if and
to the extent they were exercisable at the date of such cessation. In no event may the
Options be exercised more than seven (7) years from the date of grant.
Notwithstanding anything to the contrary, if the Participant is terminated by the Company, or an
Affiliate, as provided in (iii), (iv) and (v) above and the Participant qualifies for retirement
under the Company’s retirement plan, the Participant shall be deemed to have terminated because of
retirement.
3. If the Participant’s employment with the Company, or an Affiliate, is terminated by the
Company or an Affiliate due to a reduction in force, job abolishment, or at the convenience of the
Company, or an Affiliate, any and all unvested Options granted hereunder will vest and become fully
exercisable on the date of termination.
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4. The Options granted hereunder are not transferable by the Participant except by will or the
laws of descent and distribution. Options are exercisable, during the Participant’s lifetime, only
by the Participant. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose
of the Options, or of any right or privilege conferred hereby, contrary to the provisions hereof,
or upon the levy of any attachment or similar process upon the Options or any right or privilege
conferred hereby, the Options and the right and privilege conferred hereby shall immediately become
null and void.
5. The Options may be adjusted or required to be surrendered pursuant to the provisions of the
1999 Stock Incentive Plan.
6. The Participant shall have no rights as a stockholder with respect to any Shares subject to
the Options prior to the date of issuance to the Participant of a certificate or certificates for
such Shares.
7. The Participant shall be considered to be in the employment of the Company, or an
Affiliate, as long as the Participant remains an employee of either the Company, or an Affiliate,
or a corporation or a parent or subsidiary of a corporation assuming or substituting a new option
for this Option. Any question as to whether and when there has been a termination of such
employment, and the cause of such termination, shall be determined either by the Committee or the
Board of Directors of the employing corporation, and its determination shall be final. Nothing
herein contained shall confer upon the Participant any right with respect to continuance of
employment by the Company, or an Affiliate, or interfere in any way with the right of the Company,
or an Affiliate, to terminate the Participant’s service, responsibilities, duties and authority to
represent the Company or such Affiliate at any time, in its sole discretion and with or without
cause subject to applicable law.
8. If at any time the Company shall determine in its discretion that the listing or
qualification of Shares subject hereto under any securities exchange requirements or under any
applicable state or federal law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting of the Options or the
issue of Shares hereunder, the Options may not be exercised in whole or in part unless such
listing, qualification, consent or approval shall have been effected or obtained free of any
conditions not acceptable to the Company.
9. All distributions under this Agreement are subject to withholding of all applicable taxes.
At the election of the Participant, and subject to such rules as may be established by the
Committee, such withholding obligations may be satisfied through the surrender of Shares which the
Participant already owns, or to which the Participant is otherwise entitled to under the Plan.
10. This Agreement shall be binding upon and inure to the benefit of the parties hereto and
their successors, but neither this Agreement nor any rights hereunder shall be assignable by the
Participant except as specifically provided for herein.
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11. Unless otherwise specifically defined herein, each term used herein which is defined in
the 1999 Stock Incentive Plan shall have the meaning assigned such term in the 1999 Stock Incentive
Plan.
12. This Agreement may be amended by agreement of the Participant and the Company, without the
consent of any other person.
13. This Agreement shall be governed by, and construed in accordance with the laws of the
State of Texas.
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