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SCHEDULE 14A
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INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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Anadarko Petroleum Corporation
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[Anadarko LOGO]
P. O. BOX 1330
HOUSTON, TEXAS 77251-1330
March 26, 2001
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 26, 2001, at 9:30 a.m.
(CDT).
The attached Notice of the Annual Meeting and Proxy Statement 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 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
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[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 26, 2001, at 9:30 a.m. (CDT) for the purpose of:
(1) Electing four directors; and
(2) Transacting any other business as may properly be brought before the
meeting and any adjournments or postponements thereof.
RECORD DATE
March 1, 2001, 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 Annual Meeting.
Please take the time to vote by following the Internet or telephone voting
instructions on the enclosed proxy card or by completing and mailing the proxy
card. A postage-prepaid envelope has been provided for your convenience if you
wish to vote by mail. You may revoke your proxy at any time before the vote is
taken by sending to the Corporate Secretary of Anadarko a proxy with a later
date or voting again by Internet or telephone. Alternatively, you may revoke
your proxy by delivering to the Corporate Secretary of Anadarko a written
revocation prior to the Annual Meeting or by voting in person at the Annual
Meeting.
REGARDLESS OF THE NUMBER OF ANADARKO COMMON SHARES YOU HOLD, YOUR VOTE IS VERY
IMPORTANT.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ SUZANNE SUTTER
SUZANNE SUTER
Corporate Secretary
Dated: March 26, 2001
Houston, Texas
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[Anadarko LOGO]
P. O. BOX 1330
HOUSTON, TEXAS 77251-1330
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 26, 2001
YOUR VOTE IS VERY IMPORTANT. Please take the time to vote by following the
Internet or telephone voting instructions on the enclosed proxy card or by
completing and mailing the 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, 2001, there were 251,518,637 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.
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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 2001 meeting, the terms of four directors are expiring. Each
director elected at this Annual Meeting will hold office until the expiration of
his term in 2004. 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 2004
Larry Barcus (63) -- Mr. Barcus is Chairman of L. G. Barcus and Sons, Inc.,
Kansas City, Kansas, a general contractor. Mr. Barcus has been a director of the
Company since 1986.
James L. Bryan (65) -- Mr. Bryan has been Executive Vice President of
Newpark Drilling Fluids since 1999. Newpark Drilling Fluids is 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.
George Lindahl III (55) -- Mr. Lindahl was elected Vice Chairman of the
Board of the Company in 2000. He had been Chairman, President and Chief
Executive Officer of Union Pacific Resources Group Inc. ("UPRG") from July 1999
until the Anadarko/UPRG merger transaction. Mr. Lindahl was President and Chief
Operating Officer of UPRG from 1996 until 1999. Mr. Lindahl was elected as a
director of the Company in July 2000.
Jeff D. Sandefer (40) -- Mr. Sandefer is President of Sandefer Capital
Partners, L.P., an oil and gas investment firm with offices in Austin, Texas. He
has held that position since 1995. Mr. Sandefer also serves on the faculty of
the University of Texas Graduate School of Business. Mr. Sandefer was elected as
a director of the Company in July 2000. He had been a director of UPRG prior to
the merger in 2000.
DIRECTORS UP FOR ELECTION IN 2002
Ronald Brown (68) -- 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. (62) -- Mr. Butler has been Chairman of J. R. Butler
and Company, a reservoir engineering company in Houston, Texas, since 1976. He
is also currently a board member and former Chairman, President and CEO of the
Houston Advanced Research Center, a 501(c)(3) corporation. He was Chairman and
Chief Executive Officer of GeoQuest International Holdings, Inc., Senior
Chairman of Petroleum Information Corp. and Vice Chairman of Petroleum
Information/Dwights, L.L.C. until 1997. Mr. Butler has been a director of the
Company since 1996. He is currently on the Board of Directors of Kelman
Technology, Inc. of Calgary, Alberta, Canada, a Toronto Stock Exchange company.
He is also Chairman of the Society of Exploration Geophysicists (SEG)
Foundation.
Preston M. Geren III (49) -- Mr. Geren has been an Attorney in Fort Worth,
Texas since 1998. From January 1997 through August 1997, he was a public policy
consultant for Public Strategies, Inc. He was a Congressman for the Texas
Twelfth Congressional District from 1989 to 1997. He had been a director of UPRG
since 1997 until the merger in 2000. He was elected as a director of the Company
in July 2000. Mr. Geren is also a director of the Texas New Mexico Power Co.
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John R. Gordon (53) -- Mr. Gordon is Senior Managing Director of Deltec
Asset Management LLC, a New York limited liability company. He had been
President of Deltec Asset Management Corporation since 1988 before it was
converted into a limited liability company. Deltec Asset Management's executive
office is in New York, New York. Mr. Gordon has been a director of the Company
since 1988.
Lawrence M. Jones (69) -- Mr. Jones retired as Chairman and Chief Executive
Officer of The Coleman Company, Inc., a manufacturer of home and recreational
products in Wichita, Kansas, in 1994. He had been a director of UPRG from 1995
until the merger. He was elected as a director of the Company in July 2000.
DIRECTORS UP FOR ELECTION IN 2003
Conrad P. Albert (55) -- 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. (62) -- 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. He was elected as a director of
Freeport McMoran Copper and Gold Inc. located in New Orleans, Louisiana in
February 2001.
John W. Poduska, Sr. (63) -- Mr. Poduska has been Chairman of Advanced
Visual Systems, Inc., a provider of visualization software in Boston,
Massachusetts, since 1992. He had been a director of UPRG from 1995 until the
merger. He was elected as a director of the Company in July 2000. He is also a
director of Cambridge Technology Partners (Massachusetts), Inc., Safeguard
Scientific, Inc., XLVision, Inc., and MultiGen, Inc.
John N. Seitz (50) -- 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.
BOARD MEETINGS AND COMMITTEES
During 2000, the Board met seven 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 did not meet in
2000. During 2000, each incumbent director of the Company attended at least 75%
of all of the meetings of the Board during the time he was a director.
The Board has an Audit Committee and Compensation and Benefits Committee.
Membership on these two committees is limited to non-employee directors.
Audit Committee. Messrs. Albert, Barcus, Butler, Jones and Sandefer are
members of the Audit Committee. The Audit Committee met five times in 2000. Each
member attended all of the committee meetings during the time he was on the
committee. See Attachment A for a copy of the Audit Committee charter.
Compensation and Benefits Committee. The Compensation and Benefits
Committee met six times in 2000. Messrs. Brown, Bryan, Geren, Gordon and Poduska
are members of the Compensation and Benefits Committee. Each member attended all
of the committee meetings during the time he was on the committee. The primary
responsibilities of the Compensation and Benefits Committee are establishing and
administrating director and executive compensation and benefit programs. The
Committee also has general oversight responsibilities of the Company's qualified
benefit plans.
DIRECTOR COMPENSATION
Directors who 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
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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. On July 31, 2000, 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 February 2001, 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.
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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 March 1, 2001, the directors and executive officers of Anadarko
beneficially owned, in the aggregate, 5,517,756 shares of Anadarko Common Stock
(approximately 2% of the outstanding shares entitled to vote). 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.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
---------------------------------------------
SHARES
NUMBER OF SHARES EXERCISABLE TOTAL
BENEFICIALLY WITHIN BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER OWNED(1) 60 DAYS OWNERSHIP OF CLASS
- ------------------------ ------------------ ----------- ---------- --------
Robert J. Allison, Jr. ....................... 632,055 762,500 1,397,555 *
John N. Seitz................................. 189,118 558,000 747,118 *
George Lindahl III............................ 213,030 334,705 547,735 *
Michael E. Rose............................... 73,749 0 73,749(2) *
Charles G. Manley............................. 100,090 186,000 286,090 *
Conrad P. Albert.............................. 45,000 50,000 95,000(3) *
Larry Barcus.................................. 25,000 80,000 105,000 *
Ronald Brown.................................. 7,444 75,000 82,444(4) *
James L. Bryan................................ 16,947 80,000 96,947 *
John R. Butler, Jr. .......................... 19,859 40,000 59,947 *
Preston M. Geren III.......................... 5,635 25,799 31,434 *
John R. Gordon................................ 35,014 80,000 115,014 *
Lawrence M. Jones............................. 2,772 2,139 4,911 *
John W. Poduska, Sr. ......................... 13,833 33,762 47,595 *
Jeff D. Sandefer.............................. 0 0 0 *
All directors and executive officers as a
group, (31 persons)......................... 1,993,756 3,524,000 5,517,756 2%
- ---------------
* 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, 2001.
(2) Includes shares held in his wife's name.
(3) Mr. Albert disclaims beneficial ownership of the 11,573 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.
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OWNERS OF MORE THAN FIVE PERCENT OF ANADARKO STOCK
The following table shows, as of March 1, 2001, the beneficial owners of
more than 5% of Anadarko Common Stock. This information is based on a report
(Schedule 13G) filed with the Securities and Exchange Commission by the firm
listed below. If you wish, you may obtain copies of this report from the SEC.
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
- -------------- ------------------- ---------- --------
Common Stock....................... Janus Capital Corporation 17,204,074 6.8%
100 Fillmore Street
Denver, Colorado 80206-4923
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 2000 and 1999 were
reported on a timely basis except for those disclosed in this report. During
2000, Form 4s on behalf of Messrs. Butler, Gordon and Taylor were filed late. In
1999, Form 4s were filed late for Messrs. Alman and Cochran.
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AUDIT COMMITTEE REPORT
The following report of the audit committee of Anadarko Petroleum
Corporation (the "Company") shall not be deemed to be "soliciting material" or
to be "filed" with the Securities and Exchange Commission, nor shall this report
be incorporated by reference into any filing made by the Company under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.
The Audit Committee of the Board is responsible for providing independent,
objective oversight of the Company's accounting functions and internal controls.
The Audit Committee is composed of five directors, each of whom is independent
as defined by the New York Stock Exchange listing standards. The Audit Committee
operates under a written charter approved by the Board of Directors. A copy of
the charter is attached to this Proxy Statement as Attachment A.
Management is responsible for the Company's internal controls and financial
reporting process. The independent accountants are responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and issuing a report
thereon. The Audit Committee's responsibility is to monitor and oversee these
processes.
In connection with these responsibilities, the Audit Committee met with
management and the independent accountants to review and discuss the December
31, 2000, financial statements. The Audit Committee also discussed with the
independent accountants the matters required by Statement on Auditing Standards
No. 61 (Communication with Audit Committees).
The Audit Committee also received written disclosures from the independent
accountants required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) and the Audit Committee
discussed with the independent accountants that firm's independence. The Company
paid the following fees to the independent accountants for the audit of the
consolidated financial statements and for other services provided in the year
ended December 31, 2000.
Annual Audit Fees........................................ $1,117,000
All Other Fees........................................... $3,354,000
Total Fees............................................... $4,471,000
Fees for services other than the annual audit were primarily related to the
business integration consulting and other advisory fees associated with the
merger with UPRG. The Audit committee has concluded that the provision of
non-audit services is compatible with maintaining the accountants' independence.
Based upon the Audit Committee's discussions with management and the
independent accountants, and the Audit Committee's review of the representations
of management and the independent accountants, the Audit Committee recommended
that the Board of Directors include the audited consolidated financial
statements in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000, to be filed with the Securities and Exchange Commission.
THE AUDIT COMMITTEE
Larry Barcus, Chairman
Conrad P. Albert
John R. Butler, Jr.
Lawrence M. Jones
Jeff D. Sandefer
COMPENSATION AND BENEFITS COMMITTEE REPORT
ON 2000 EXECUTIVE COMPENSATION
The Compensation Committee, listed 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
Compensation Committee during 2000 with respect to Anadarko's executive
officers.
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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 key personnel.
Collectively, these programs are designed to promote the strategic objectives
that are critical to the long-term success of the Company.
The Compensation Committee utilizes an outside compensation consultant to
review executive compensation and benefit programs as well as 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 Compensation
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, market economics and other factors. 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
1999 Stock Incentive Plan (the "Stock Incentive Plan") satisfy the
performance-based requirements under Section 162(m). The Compensation 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 goals of the Company, the Compensation Committee
reserves the right to make awards that are non-deductible when it believes it is
in the best interest of the Company. In 2000, in recognition of the results
associated with the merger of Anadarko and UPRG, the Committee elected to make
some bonus awards that were non-deductible.
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 Compensation Committee and adjusted accordingly to
reflect each executive officer's contribution to the performance of the Company.
Following the successful closing of the Anadarko/UPRG merger, the
Compensation Committee requested the outside compensation consultant to conduct
a competitive market review of executive salaries within specified energy
companies reflective of Anadarko's post-merger size. Based on the data presented
by the consultant, the Compensation Committee elected to increase the base
salaries of the executive officers, including Mr. Allison, whose base salary was
adjusted to $1,300,000. Mr. Allison's last base salary increase was in January
1997.
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ANNUAL INCENTIVE BONUS
The Incentive Plan puts a significant portion of total compensation at risk
by linking potential annual compensation to the Company's achievement of
specific performance goals. These goals are established by the Compensation
Committee at the beginning of each calendar year and for 2000 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 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.
Each performance goal and its specific criteria are weighted based upon the
relative importance of the goal as determined by the Compensation Committee.
Under the Incentive Plan, a bonus target is established for each executive
officer based upon a review of the competitive data for that position, level of
responsibility and ability to impact the Company's success. These individual
targets range up to 100% of base salary for the Chief Executive Officer. Actual
bonus awards are based on the Company's achievement of the performance goals.
Individuals may receive up to 200% of their individual 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 predefined levels of
performance.
The Compensation Committee reviewed Anadarko's actual performance for 2000
and based on the outstanding operational, financial and stock performance of the
Company and in recognition of the successful Anadarko/UPRG merger integration,
approved a bonus of 200% of individual bonus target for Mr. Allison and the
executive officers. The amount for Mr. Allison is reflected in the Summary
Compensation Table.
STOCK PLANS
The Company makes certain stock-based awards under the Stock Incentive Plan
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 five times base salary for Vice Presidents up to
ten times base salary for the Chief Executive Officer.
The Compensation 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 Compensation Committee considers
previous stock grants when determining grant size for executive officers. Under
the Stock Incentive Plan, the Compensation 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 2000, coincident with the Anadarko/UPRG merger, the Compensation
Committee awarded all executive officers, including Mr. Allison, stock options.
These awards are intended to be multi-year grants. The Compensation Committee
believes stock options directly align the executive officers' compensation
opportunity with that of shareholders since the options will only produce value
through the appreciation of the stock. The number of options granted Mr. Allison
is listed in the Summary Compensation Table.
SETTLEMENT AMOUNTS
Upon the close of the merger between the Company and UPRG, all of
Anadarko's executive officers were entitled to receive certain rights under the
key employee change of control contracts. The Board of Directors determined that
it was in the best interest of the Company and its stockholders for each
executive officer to remain with the Company following the merger to ensure
continuity of the current management team. As a result, the Board elected to
offer each executive officer a settlement amount payable in stock in exchange
for their agreement to waive any and all rights, benefits or payments to which
they might otherwise have been
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entitled to as a result of the merger with UPRG. The amount of settlement for
Mr. Allison is reported in the Summary Compensation Table.
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 2000 was within the top quartile of the peer companies as
a result of Anadarko's excellent overall performance.
The Compensation 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 Compensation Committee's belief that this
focus will continue to be reflected in Anadarko's stock price and return to
shareholders.
Mr. Ronald Brown, Chairman
Mr. James L. Bryan
Mr. Preston M. Geren III
Mr. John R. Gordon
Mr. John W. Poduska, Sr.
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, 2000 exceeded $100,000:
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
--------------------------------
OTHER
ANNUAL
COMPEN-
SALARY BONUS SATION
NAME PRINCIPAL POSITION YEAR ($) ($) ($)
- ---- ------------------ ---- --------- --------- -------
Robert J. Allison,
Jr................ Chairman and Chief Executive Officer 2000 1,125,000 2,600,000 0
Chairman and Chief Executive Officer 1999 1,000,000 2,000,000 0
Chairman, President and Chief
Executive 1998 1,000,000 1,350,000(7) 0
Officer
John N. Seitz...... President and Chief Operating
Officer 2000 639,583 1,440,000 0
President and Chief Operating
Officer 1999 475,000 800,000 0
Executive Vice President,
Exploration 1998 425,000 400,000 0
& Production
George Lindahl
III............... Vice Chairman 2000 366,667(8) 1,440,000 208,559(9)
Michael E. Rose.... Executive Vice President, Finance 2000 441,667 650,000 0
Senior Vice President, Finance 1999 370,000 333,000 0
Senior Vice President, Finance 1998 370,000 207,000 0
Charles G. Executive Vice President,
Manley............ Administration 2000 423,417 624,000 0
Senior Vice President,
Administration 1999 355,000 320,000 0
Senior Vice President,
Administration 1998 355,000 199,000 0
LONG-TERM COMPENSATION
-------------------------------------
AWARDS
------------------------
SECURITIES ALL
UNDERLYING OTHER
RESTRICTED OPTIONS(2)/ LTIP COMPEN-
STOCK(1) SARS(3) PAYOUTS(4) SATION
NAME ($) (#) ($) ($)
- ---- ---------- ----------- ---------- ---------
Robert J. Allison,
Jr................ 0 750,000 0 1,648,619(5)(6)
0 650,000 10,312,500 316,615
0 0 0 383,013
John N. Seitz......
0 500,000 0 5,668,216(5)(6)
0 0 0 98,564
244,219 280,000 0 132,046
George Lindahl
III............... 6,187,500 500,000 0 6,209,500(10)
Michael E. Rose.... 0 300,000 0 5,019,886(5)(6)
0 0 0 94,747
0 186,000 0 133,789
Charles G.
Manley............ 0 300,000 0 4,246,151(5)(6)
0 0 0 95,831
0 186,000 0 136,515
- ---------------
(1) As of December 31, 2000, Mr. Lindahl held 125,000 restricted shares valued
at $8,884,766 based on the year-end closing stock price. The restricted
stock awarded to Mr. Lindahl in 2000 vests 33% per year each July 14
beginning in 2001. Dividends will be paid on unvested shares. The
restricted stock awarded to Mr. Seitz in 1998 vested fully in 2000
coincident with the Anadarko/UPRG merger.
(2) Adjusted for 2-for-1 stock split, effective July 1, 1998.
(3) No SARs are outstanding.
(4) Represents long-term incentive plan payout of 300,000 shares based on the
average of the high and low stock price on the payment date. The
performance shares were awarded to Mr. Allison in 1996 under the
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Company's 1993 Stock Incentive Plan for the performance period January 1, 1996,
through December 31, 1999.
(5) Includes (a) Company contributions to the Anadarko Employee Savings Plan
and Savings Restoration Plan; (b) continuing payments under the Annual
Override Bonus Plan ("ORRI," this plan was discontinued after 1986) and (c)
the value of Company paid split-dollar insurance. The 2000 amounts for
items (a), (b) and (c) are for Mr. Allison, $187,500, $41,316 and $56,546;
for Mr. Seitz, $86,375, $10,000 and $25,752; for Mr. Rose, $46,480, $8,298
and $25,098 and for Mr. Manley, $44,605, $8,434 and $25,214. In addition,
Mr. Allison's amount includes $3,191 attributable to the annual cost of
term life insurance under the Estate Enhancement Option Program (the
"Enhancement Program") available to Mr. Allison under a policy purchased by
the Company. At the end of 1998, Anadarko entered into the Enhancement
Program with Mr. Allison pursuant to which Mr. Allison relinquished $5.7
million of his existing 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.
(6) Upon the close of the merger between the Company and UPRG, all of
Anadarko's executive officers were entitled to receive certain rights under
the key employee change of control contracts. The Board of Directors
determined that it was in the best interest of the Company and its
stockholders for each executive officer to remain with the Company
following the merger to ensure continuity of the current management team.
As a result, the Board elected to offer each executive officer a settlement
amount payable in stock in exchange for their agreement to waive any and
all rights, benefits or payments to which they might otherwise be entitled
to as a result of the merger. Additionally, as a result of changes in the
federal tax law, the Company elected to terminate the Executive Deferred
Compensation Plan (the "EDCP") for all active participants prior to the
effective date of the Anadarko/UPRG merger. Each Plan participant received
the value of their accrued benefit plus the present value of the benefit
they would have received if they had continued in the employment of the
Company until age 65. The Company's total future liability under the EDCP
was $20,696,505 to six active executive officers, including those
identified in the Summary Compensation Table. As a result of the EDCP
termination, the Company paid a total of $8,051,151 to these six
individuals to fully satisfy the EDCP obligation. The amounts attributable
to (a) the settlement agreement (paid in stock) and (b) the present value
payment related to termination of the EDCP, including interest earned on
the accrued benefit in 2000 above 120% of the applicable federal rate are
for Mr. Allison, $0 and $1,360,066; for Mr. Seitz, $4,813,867 and $732,222;
for Mr. Rose, $2,731,297 and $2,208,713 and for Mr. Manley, $2,655,150 and
$1,512,748. In lieu of the settlement amount, the Company agreed to pay a
premium of $10,000,000 to purchase additional life insurance under the
Enhancement Program for Mr. Allison, which is approximately equal to the
value of the settlement amount he would have received.
(7) 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.
(8) Mr. Lindahl was formerly Chairman, President and CEO of UPRG and was hired
as an executive officer of the Company in 2000 following the Anadarko/UPRG
merger transaction.
(9) Represents certain perquisites, including $199,545 for relocation payments
made to or on behalf of Mr. Lindahl with respect to his relocation to
Houston. None of the other four individuals listed above had total
perquisites exceeding $50,000 or 10% of annual compensation in 2000.
(10) Includes 125,000 shares valued at the closing stock price on July 14, 2000,
granted to Mr. Lindahl under his employment agreement as a result of the
Anadarko/UPRG merger and $22,000 for Company matching contributions to the
UPRG Supplemental Thrift Plan.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS/SARS EXERCISE OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO OR BASE FOR OPTION TERM(3)
OPTIONS/SARS EMPLOYEES IN PRICE(2) EXPIRATION ---------------------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) DATE 0%($) 5%($) 10%($)
- ---- ------------- ------------ -------- ---------- ----- ----------- -----------
All Stockholders'
Stock Appreciation..... N/A N/A N/A N/A $0 $ 5 Billion $12 Billion
Robert J. Allison,
Jr. ................... 750,000 10% $48.53 7/14/07 $0 $14,817,819 $34,531,820
John N. Seitz............ 500,000 7% $48.53 7/14/07 $0 $ 9,878,546 $23,021,213
George Lindahl III....... 500,000 7% $48.53 7/14/07 $0 $ 9,878,546 $23,021,213
Michael E. Rose.......... 300,000 4% $48.53 7/14/07 $0 $ 5,927,128 $13,812,728
Charles G. Manley........ 300,000 4% $48.53 7/14/07 $0 $ 5,927,128 $13,812,728
- ---------------
(1) No SARs were granted in 2000. Stock options granted on July 14, 2000, were
granted under the Company's 1999 Stock Incentive Plan. Except for the
options granted to Mr. Lindahl, 50% of the options become exercisable each
year on the anniversary date of the date of grant beginning on July 14,
2001. Mr. Lindahl's options vest 33.3% each year on the anniversary date of
the date of grant beginning on July 14, 2001. In the event of a change of
control, any outstanding options will automatically vest. The Board may also
take any one or more of the following actions: (i) provide for the purchase
of any outstanding awards by the Company; (ii) make adjustments to any
outstanding awards; or (iii) allow for the substitution of any outstanding
awards by the acquiring company's stock.
(2) The exercise price equals the fair market value of the Common Stock on the
date of grant.
(3) The dollar amounts under these columns are the results of calculation at the
0% , 5% and 10% rates set by the SEC and are not intended to forecast
possible future appreciation, if any, of the Company's stock price. The
Company did not use an alternative formula for a grant date valuation as the
Company is not aware of any formula which will determine with reasonable
accuracy a present value based on future unknown or volatility factors.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
NUMBER OF SECURITIES
SHARES UNDERLYING VALUE OF UNEXERCISED IN-THE-
ACQUIRED UNEXERCISED OPTIONS/SARS MONEY OPTIONS/SARS AT
ON EXERCISE VALUE AT FISCAL YEAR-END (#) FISCAL YEAR-END ($)
NAME (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE*
- ---- ----------- ------------ ------------------------- ----------------------------
Robert J. Allison,
Jr. ................. 600,000 $25,257,318 1,610,000/750,000 $71,060,688/$18,145,313
John N. Seitz.......... 60,000 $ 2,711,250 558,000/500,000 $22,801,863/$12,096,875
George Lindahl III..... 182,030 $ 7,282,513 334,705/538,675 $10,537,337/$13,462,103
Michael E. Rose........ 336,000 $ 8,572,275 0/300,000 $ 0/$7,258,125
Charles G. Manley...... 294,000 $12,678,463 186,000/300,000 $ 6,842,475/$7,258,125
- ---------------
* Computed based upon the difference between aggregate fair market value on
December 29, 2000, ($72.725 per share) and aggregate exercise price.
12
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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, 1995, 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
- ----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
- ----------------------------------------------------------------------------------------------------------------
Anadarko Petroleum Corporation... 100 120 113 116 129 270
Dow Jones Oil -- Secondary....... 100 127 126 87 100 160
S&P 500 Index.................... 100 123 164 211 255 232
Assumes $100 Invested on December 31, 1995.
* Total Return Assumes Reinvestment of Dividends
Total Return Data Provided by S&P's Institutional Market Services and Dow Jones
& Company Inc.
13
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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 that 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, 2000.
YEARS OF SERVICE
----------------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ ---------- ---------- ---------- ---------- ----------
$1,000,000 $ 268,000 $ 357,000 $ 446,000 $ 536,000 $ 625,000
1,250,000 335,000 447,000 559,000 671,000 783,000
1,500,000 403,000 429,000 537,000 644,000 751,000
1,750,000 470,000 465,000 582,000 698,000 814,000
2,000,000 538,000 717,000 896,000 1,076,000 1,255,000
2,250,000 605,000 807,000 1,009,000 1,211,000 1,413,000
2,500,000 673,000 897,000 1,121,000 1,346,000 1,570,000
2,750,000 740,000 987,000 1,234,000 1,481,000 1,728,000
3,000,000 808,000 1,077,000 1,346,000 1,616,000 1,885,000
3,250,000 875,000 1,167,000 1,459,000 1,751,000 2,043,000
3,500,000 943,000 1,257,000 1,571,000 1,886,000 2,200,000
3,750,000 1,010,000 1,347,000 1,684,000 2,021,000 2,358,000
4,000,000 1,078,000 1,437,000 1,796,000 2,156,000 2,515,000
4,250,000 1,145,000 1,527,000 1,909,000 2,291,000 2,673,000
4,500,000 1,213,000 1,617,000 2,021,000 2,246,000 2,830,000
4,750,000 1,280,000 1,707,000 2,134,000 2,561,000 2,988,000
Messrs. Allison, Seitz, Rose and Manley, respectively, have 27, 23, 23 and
27 years of accrued service under the Plan. Mr. Lindahl's pension is provided
for under the terms of his employment agreement described below. 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.
TRANSACTIONS WITH MANAGEMENT
EMPLOYMENT AGREEMENT
As a condition of the merger with UPRG in July 2000, the Company entered
into a three-year employment agreement with Mr. Lindahl. The principal terms of
the employment agreement with Mr. Lindahl include the following: (a) guaranteed
annual cash compensation of at least $1,500,000; (b) an equity grant of 125,000
Anadarko shares of restricted stock that vests over the term of the agreement,
125,000 unrestricted Anadarko common shares, and options to acquire 500,000
Anadarko common shares at fair market value on the date of grant, which vest
over the term of the agreement; (c) retirement benefits determined under the
Anadarko Retirement Restoration Plan based on termination of employment at age
57 with 17 years of credited service and a minimum final average pay of
$1,500,000, with such benefit offset by certain amounts payable under other
retirement plans; and (d) severance and other benefits in the event of Mr.
Lindahl's separation from service with Anadarko in connection with a change of
control of Anadarko. As part of the agreement, Mr. Lindahl agreed not to compete
with Anadarko for the shorter of one year following the date of his termination
or three years following the effective date of the agreement. In addition, in
the event Anadarko terminates Mr. Lindahl's employment without cause or if Mr.
Lindahl resigns for good
14
18
reason, Anadarko has agreed to make Mr. Lindahl whole for any excise tax imposed
with respect to any payment or distribution made under the agreement.
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 that 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; and,
(v) the present value of the accrued retirement benefit under the
Retirement Restoration Plan and the additional retirement benefits,
including retiree medical, which would have been received had the
executive continued service for up to an additional three years.
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 contract. The severance contract also 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 any outstanding restricted stock lapse.
- If any performance-based restricted stock awards are outstanding, they
become fully vested and the performance goals are deemed to be earned
unless otherwise provided in the participant's award agreement.
15
19
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.
All of the Company's executive officers were entitled to receive certain
rights under the key employee change of control contracts upon the close of the
merger between the Company and UPRG. The Board of Directors of the Company
determined that it was in the best interest of the Company and its stockholders
for each executive officer to remain with the Company after the merger. The 20
executive officers that agreed to waive any and all rights, benefits or payments
to which they might otherwise have been entitled to as a result of the merger
received an aggregate of $39,513,261 which was paid primarily in stock. A small
portion was paid in cash in order to provide funds for taxes due as a result of
the receipt of the shares. The settlement amounts received by Messrs. Seitz,
Rose and Manley are detailed in the Summary Compensation Table on page 10. In
lieu of a settlement payment, the Company agreed to pay a premium of $10,000,000
to purchase additional life insurance under the Enhancement Program for Mr.
Allison (as reported in the Summary Compensation Table) which is approximately
equal to the value of the settlement amount he was entitled to receive.
INDEPENDENT AUDITORS
KPMG LLP served as the Company's independent auditors during 2000 and was
appointed by the Board to serve in that capacity for 2001. 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.
16
20
STOCKHOLDER PROPOSALS
An eligible stockholder who wants to have a qualified proposal considered
for inclusion in the proxy statement for the 2002 Annual Meeting must notify the
Corporate Secretary of the Company. The proposal must be received no later than
November 27, 2001.
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
Mellon Investor Services, LLC 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 26, 2001
Houston, Texas
SEE ENCLOSED PROXY CARD -- PLEASE VOTE PROMPTLY.
17
21
ATTACHMENT A
AUDIT COMMITTEE CHARTER
AS ADOPTED BY THE BOARD OF DIRECTORS APRIL 27, 2000
The Audit Committee (Committee) is appointed by the Board of Directors
(Board) to assist the Board in monitoring the (1) integrity of the financial
statements of the Company, (2) compliance by the Company with legal and
regulatory requirements and (3) independence and performance of the Company's
internal and external auditors.
The Committee shall be comprised of three or more directors as determined
by the Board. Each Committee member shall be free from any relationship that, in
the opinion of the Board, would interfere with the exercise of his independent
judgment as a member of the Committee and shall meet the independence
requirement of the New York Stock Exchange. All members of the Committee shall
have a working familiarity with basic finance and accounting practices, and at
least one member of the Committee shall have accounting or related financial
management expertise as determined in the judgment of the Board.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board and shall serve until their successors shall
be duly elected and qualified. Unless a Chair is elected by the full Board, the
members of the Committee may designate a Chair by majority vote of the full
Committee membership.
The Committee shall have the authority to retain special legal, accounting
or other consultants to advise the Committee. The Committee may request any
officer or employee of the Company or the Company's outside counsel or
independent auditor to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee.
The Committee shall meet at least four times annually, or more frequently
as circumstances dictate, and shall make regular reports to the Board. The
Committee shall meet at least annually with the Chief Financial Officer, the
senior internal auditing executive and the independent auditor in separate
executive sessions.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval.
2. Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to
monitor and control such exposures.
3. Meet with the independent auditor prior to the audit to review the
planning and staffing of the audit including the responsibilities and
staffing of the Company's internal audit department personnel who
will assist in the audit.
4. Discuss at least annually with the independent auditor the matters
required to be discussed by Statement on Auditing Standards No. 61.
5. Review with management and the independent auditor any management
letter provided by the auditor and the Company's response to that
letter.
6. Receive at least annually a report from the independent auditor
regarding the auditor's independence, discuss such reports with the
auditor, and if so determined by the Committee, recommend that the
Board take appropriate action to insure the independence of the
auditor.
7. Receive at least annually from the independent auditor confirmation
of whether the auditor has issued any reports required by Section 10A
of the Private Securities Litigation Reform Act of 1995. If such a
report has been issued, confirm with management and the independent
auditor that the appropriate notification has been made to the
Securities and Exchange Commission.
A-1
22
8. Review with the Company's General Counsel legal matters that may have
a material impact on the financial statements, the Company's
compliance policies, including but not limited to the Foreign Corrupt
Practices Act, and any material reports or inquiries received from
regulators or governmental agencies.
9. Review and discuss the annual audited financial statements with
management and the independent auditor, including major issues
regarding accounting and auditing principles and practices as well as
the adequacy of internal controls that could significantly affect the
Company's financial statements. Based on this review and the
discussion in Item 4, recommend inclusion of the financial statements
in the Annual Report on Form 10-K to the Board.
10. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy
statement.
11. Review with management and the independent auditors the Company's
quarterly financial results and earnings release prior to the
release of earnings or filing of Form 10-Q, whichever comes first.
12. Evaluate together with the Board the performance of the independent
auditor and recommend to the Board annually the appointment of an
independent auditor, or replacement of the previously appointed
independent auditor at an interim date if the Committee determines
that circumstances warrant replacement, which firm is ultimately
accountable to the Audit Committee and the Board.
13. Approve the fees to be paid to the independent auditor for the
annual audit.
14. Review major changes to the Company's auditing and accounting
principles and practices as suggested by the independent auditor,
internal auditors or management.
15. Advise the Board with respect to the Company's policies and
procedures regarding compliance with applicable laws and
regulations.
16. Review the appointment and replacement of the senior internal
auditing executive.
17. Review the activities and organizational structure of the internal
auditing department and the significant reports to management
prepared by the internal auditing department and management's
responses.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are presented
fairly in all material respects in accordance with generally accepted accounting
principles in the United States of America. This is the responsibility of
management and the independent auditor. Nor is it the duty of the Audit
Committee to conduct investigations, to resolve disagreements, if any, between
management and the independent auditor or to assure compliance with laws and
regulations and the Company's policies and procedures.
A-2
23
ANADARKO PETROLEUM CORPORATION PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
APRIL 26, 2001
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
2001 Annual Meeting of Stockholders of Anadarko Petroleum Corporation to be
held on Thursday, April 26, 2001 at 9:30 a.m. (CDT) or any adjournment thereof.
_______________________________________________________________________________
o FOLD AND DETACH HERE o
24
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 [ ] [ ]
NOMINEES:
(01) Larry Barcus
(02) James L. Bryan
(03) George Lindahl III
(04) Jeff D. Sandefer
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
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http://wws.proxyvoting.com/apc 1-800-840-1208
Use the Internet to vote your Use any touch-tone Mark, sign and date
proxy. Have your proxy card in telephone to vote your proxy card
hand when you access the web your proxy. Have your and
site. You will be prompted to OR proxy card in hand when OR return it in the
enter your control number, you call. you will be enclosed postage-paid
located in the box below, to prompted to enter your envelope.
create and submit an control number, located
electronic ballot. in the box below, and then
follow the directions given.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
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