EXHIBIT 10(b)
ANADARKO PETROLEUM CORPORATION
1993 STOCK INCENTIVE PLAN
PERFORMANCE SHARE AGREEMENT
THIS AGREEMENT, dated the 26th day of February, 1996, between
Anadarko Petroleum Corporation (the "Company") and Robert J.
Allison, Jr. ("Employee").
W I T N E S S E T H:
1. Grant. Pursuant to the Company's 1993 Stock Incentive Plan
(the "Plan"), the Company hereby grants to Employee, subject to the
terms and conditions of the Plan, and subject further to the terms
and conditions herein set forth, 100,000 shares of the $0.10 par
value common stock of the Company ("Performance Shares"), to be
issued as hereinafter provided in Employee's name upon the
Company's achievement of pre-determined objectives for a specified
performance period. In no event shall Employee be issued more than
150,000 Performance Shares pursuant to this Agreement.
2. Pre-determined Provisions.
(a) Performance Period. The period beginning on January 1,
1996 and ending December 31, 1999 will be the initial performance
period (the "4-Year Period"). The period beginning January 1, 1996
and ending December 31, 2003 will be the second performance period
(the "8-Year Period").
(b) Peer Companies. The following companies are the peer
companies ("Peer Companies") to be used in the award determination.
Any Peer Company that ceases to be a publically traded entity on a
recognized stock exchange during the 4-Year Period or 8-Year Period
will be removed from the Peer Company list. No companies may be
added to the list during the 4-Year Period or 8-Year Period.
Apache Corporation
Burlington Resource Inc.
Enron Oil and Gas Company
Louisiana Land and Exploration Company
Noble Affiliates, Inc.
Oryx Energy Company
Sante Fe Energy Resources, Inc.
Union Pacific Resources Group, Inc.
Union Texas Petroleum Holdings, Inc.
Vastar Resources, Inc.
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(c) Performance Objectives. The number of Performance Shares
to be issued to Employee will be determined at the end of each the
4-Year Period and the 8-Year Period by comparing the Company's
annualized average quarterly total shareholder return ("TSR") over
the 4-Year Period or the 8-Year Period, as the case may be, to each
of the Peer Companies' annualized average quarterly TSR for the
same period.
TSR is calculated over the 4-Year Period by totaling the TSR's
for each of the 16 fiscal quarters in the period and dividing by 4.
TSR is calculated over the 8-Year Period by totaling the TSR's for
each of the 32 fiscal quarters in the period and dividing by 8.
Each quarter's TSR, expressed as a percentage, shall be calculated
as follows:
The closing stock price at the end of the fiscal quarter
plus
Dividends paid during the fiscal quarter
divided by
The closing stock price at the end of the previous fiscal quarter
(d) Award Determination. At the end of each the 4-Year
Period and 8-Year Period, the Peer Companies and the Company shall
be ranked based on their TSR for the period from the highest TSR
being number 1 to the lowest TSR being number 11. If the Company's
TSR is in the first quartile of the ranked companies, Employee will
be issued 150 percent of the Performance Shares. If the Company's
TSR is in the second quartile of the ranked companies, Employee
will be issued 100 percent of the Performance Shares. If the
Company's TSR is below the second quartile of the ranked companies,
Employee will not be issued any Performance Shares. In the event
the calculation for determining the quartile ends in a fraction,
the calculation will be "rounded" to include the next ranked
company in the quartile (see Exhibit A).
Performance Shares issued based on the 4-Year Period will be
subtracted from any Performance Shares to be issued at the end of
the 8-Year Period. In no event may Employee by issued more than an
aggregate of 150,000 shares for the 4-Year Period and 8-Year Period
combined.
(e) Disability or Death. If Employee's employment with the
Company is terminated as a result of (i)disability within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended or (ii)death of Employee, TSR shall be calculated for
the Company and the Peer Companies using the closing stock price on
the date employment ceases. The number of Performance Shares to be
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issued to Employee shall be pro-rated for the actual number of
calendar quarters completed plus a full quarter credit for the
quarter in which the termination occurred.
(f) Change of Control. Upon termination of employment of
Employee as a result of any Change of Control as defined in the
Plan, TSR shall be calculated for the Company and the Peer
Companies using the closing stock price on the date of the Change
of Control. The number of Performance Shares to be issued to
Employee shall be pro-rated for the actual number of calendar
quarters completed, plus a full quarter credit for the quarter in
which the Change of Control occurred.
3. Tax Withholding. Employee may be required to pay to the
Company, and the Company shall have the right and is hereby
authorized to withhold from any payment made under this Agreement
or from any other compensation or other amount owing to Employee,
the amount (in cash, Performance Shares, other securities, other
Awards or other property) of any applicable withholding taxes due
in connection any Performance Shares granted hereunder 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. In the
case of payments made hereunder in the form of Performance Shares,
at the Committee's discretion Employee may be required to pay to
the Company the amount of any taxes required to be withheld with
respect to such Shares or, in lieu thereof, the Company shall have
the right to retain (or Employee may be offered the opportunity to
elect to tender in accordance with rules established by the
Committee) the number of Performance Shares whose aggregate Fair
Market Value equals the amount required to be withheld.
4. Limits on Transfer of Performance Shares. Unless otherwise
determined by the Committee no Performance Shares may be assigned,
alienated, pledged, attached, sold or otherwise transferred or
encumbered by Employee other than, in the case of Performance
Shares which are not forfeited upon the death of Employee, by will
or by laws of descent and distribution and any such purported
assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company.
5. Ownership and Possession. Employee shall not have any rights
as a stockholder with respect to any Performance Shares granted
hereunder.
6. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of any successor to the Company and all persons
lawfully claiming under Employee.
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7. No Rights to continued Employment. Neither this Agreement nor
the Plan shall be construed as giving Employee any right to
continue in the employ of the Company or any of its Affiliates.
8. Governing Law. This Agreement and the legal relations between
the parties shall be governed by and construed in accordance with
the laws of the State of Texas and applicable Federal law.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
duly executed by an officer thereunder duly authorized, and
Employee has executed this Agreement, all as of the date first
above written.
ANADARKO PETROLEUM CORPORATION
By
Charles G. Manley
Senior Vice President,
Administration
Robert J. Allison, Jr.
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EXHIBIT A
No. of Companies Company Company
(including APC) Ranking Ranking
Top 25% 50-75%
11 (3) 1,2,3 (6) 4,5,6
10 (2.75) 1,2,3 (5.5) 4,5,6
9 (2.5) 1,2,3 (5) 4,5
8 (2.25) 1,2,3 (4.5) 4,5
7 (2) 1,2 (4) 3,4
6 (1.75) 1,2 (3.5) 3,4
5 (1.5) 1,2 (3) 3
4 (1.25) 1,2 (2.5) 3