Exhibit 10.1
RETENTION AGREEMENT
     THIS RETENTION AGREEMENT (this “Agreement”) is made by and between Anadarko
Petroleum Corporation, a Delaware corporation (the “Company”), and Charles A.
Meloy (“Executive”), as of August 2, 2010 (“Effective Date”).
     WHEREAS, the Company values the contributions of the Executive and desires
that the Executive continue his employment at least for a two-year period ending
on August 2, 2012 (“Retention Period”).
     NOW, THEREFORE, for and in consideration of the mutual promises, covenants
and obligations contained herein, the Company and the Executive agree as
follows:
     1. Retention Payment. The Company shall pay to Executive an amount in cash
equal to $5,000,000 (“Retention Payment”), less applicable taxes, within 15 days
of the Effective Date, subject to the terms and conditions set forth herein. The
Retention Payment shall not be treated, to the fullest extent permitted by law,
as salary or other compensation for purposes of increasing the amount of
benefits under any employee benefit plan or arrangement of the Company or any of
its affiliates, including, without limitation, the calculation of severance pay,
pension benefits, savings benefits, disability benefits and life insurance
benefits.
     2. Resignation without Good Reason; Terminable for Cause. In the event
Executive resigns (including retirement) without Good Reason (as defined below)
or is determined by the Board of Directors (“Board”) to be terminable by the
Company or any of its affiliates for Cause (as defined below) at any time during
the Retention Period, Executive shall return to the Company a portion of the
Retention Payment or otherwise pay to the Company an amount in cash as set forth
in the schedule below, with said amount (without any reduction for taxes paid by
Executive on said Retention Payment) to be due and payable to the Company within
30 days following such termination of employment.

     
If Executive resigns without Good Reason or is determined by the Board to be
terminable for Cause during the applicable period set forth below:
  Executive shall return or otherwise pay to the Company an amount equal to:
 
   
Effective Date to December 31, 2010
  100% of the Retention Payment, or $5,000,000
 
   
January 1, 2011 to June 30, 2011
  75% of the Retention Payment, or $3,750,000
 
   
July 1, 2011 to December 31, 2011
  50% of the Retention Payment, or $2,500,000
 
   
January 1, 2012 to last day of Retention Period
  25% of the Retention Payment, or $1,250,000

 

--------------------------------------------------------------------------------

 

a. For purposes of this Agreement, “Cause” shall have the same meaning as
“Cause” under Section 5(c) of the Key Employee Change of Control Contract (the
form of which has been filed with the Securities and Exchange Commission (“SEC”)
on March 18, 1998, with the first amendment filed with the SEC on November 13,
2000 and with the second amendment filed with the SEC on August 11, 2003) (“COC
Agreement”). In addition, “Cause” shall also mean fraud or embezzlement relating
to the Company or any of its affiliates, as determined by the same process as
provided in Section 5(c) of the COC Agreement.
b. For purposes of this Agreement, “Good Reason” shall be, in all circumstances
of this definition and only following a Change of Control (as defined in
Section 2 of the COC Agreement), the same meaning as “Good Reason” under
Section 5(d) of the COC Agreement.
     3. Other Terminations of Employment. In the event Executive’s employment
with the Company and its affiliates terminates during the Retention Period by
reason of Executive’s death, permanent and total disability (as determined for
purposes of eligibility for disability benefits under the Company’s long-term
disability plan applicable to Executive), or involuntary termination by the
Company without Cause, Executive shall not be required to return any portion of
the Retention Payment to the Company.
     4. Offset Against Severance Pay. In the event Executive is entitled during
the Retention Period to receive severance pay under any plan (including any
amounts that may be payable under Section 6 (a)(i)(A) and (B) of the COC
Agreement), agreement or established practice of the Company or any of its
affiliates, the amount of Retention Payment that Executive received and did not
return to the Company pursuant to Paragraphs 2 and 3 above shall be applied as
an offset against the amount of severance pay owed by the Company or any of its
affiliates and shall thereby reduce the amount of any such severance payment. In
the event the remaining Retention Payment amount is greater than the severance
payment, then any and all remaining repayment obligation under Paragraph 2 shall
terminate. Further, in the event the Executive is terminated whereby he would
otherwise be entitled to receive severance benefits but for the fact of the
offset described in this Paragraph, then Executive shall be required to comply
with the terms and conditions of such applicable severance arrangement,
including the execution of the applicable release (with the consideration under
this Agreement being due consideration for such release). Except for the
Company’s right to offset severance pay as set forth above, the Company shall
not otherwise be entitled to offset the amount of Retention Payment retained by
Executive against any other amounts owed by the Company or any of its affiliates
to Executive, including, without limitation, any amounts owed under the Anadarko
Petroleum Corporation Deferred Compensation Plan, Anadarko Petroleum Corporation
Savings Restoration Plan, Anadarko Retirement

2

--------------------------------------------------------------------------------

 

Restoration Plan, Kerr-McGee Corporation Benefits Restoration Plan, and/or any
similar deferred compensation or non-qualified retirement benefit plan or
agreement.
     5. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliates, and their
respective businesses, which shall have been obtained by Executive during
Executive’s employment by the Company, its predecessors, or any of its
affiliates and which shall not be or become public knowledge (other than by acts
by Executive or representatives of Executive in violation of this Agreement)
(referred to herein as “Confidential Information”). Following the termination of
Executive’s employment with the Company for any reason, Executive shall not,
without the prior written consent of the Company or as may otherwise be required
by law or legal process, communicate or divulge any such Confidential
Information to anyone other than the Company and those designated by it. Also,
within five (5) days after the termination of Executive’s employment for any
reason, Executive shall return to Company all documents and other tangible items
containing Company information which are in Executive’s possession, custody or
control.
     6. Nonsolicitation. As part of the consideration for the Retention Payment
to be paid to Executive hereunder; to protect the Confidential Information that
has been and will in the future be disclosed or entrusted to Executive, the
business good will of the Company and its affiliates that has been and will in
the future be developed in Executive, or the business opportunities that have
been and will in the future be disclosed or entrusted to Executive by the
Company and its affiliates; and as an additional incentive for the Company to
enter into this Agreement, the Company and Executive agree to the
nonsolicitation obligations herein. Executive shall not, directly or indirectly
for Executive or for others, in any geographic area or market where the Company
or any of its affiliates are conducting any business or have during the previous
twelve months conducted such business, induce any employee of the Company or any
of its affiliates to terminate his or her employment with the Company or such
affiliates, or hire or assist in the hiring of any such employee by any person,
association, or entity not affiliated with the Company, unless such employee has
terminated employment with the Company and its affiliates before such
solicitation. These nonsolicitation obligations shall apply during the period
that Executive is employed by the Company and during the one-year period
commencing on the date of Executive’s termination of employment for any reason.
Notwithstanding the foregoing, the provisions of this Paragraph 6 shall not
restrict the ability of the Company to take actions with respect to the
employment or the termination of employment of any of its employees, or for
Executive to participate in any such actions in his capacity as an officer of
the Company.
     7. Enforcement and Remedies. Executive acknowledges that money damages
would not be sufficient remedy for any breach of this Agreement by Executive,
and the Company shall be entitled to specific performance and injunctive relief
as remedies for such breach or any threatened breach. Such remedies shall not be
deemed the exclusive remedies for a breach of this Agreement, but shall be in
addition to all remedies available at law or in equity to the Company, including
the recovery of damages

3

--------------------------------------------------------------------------------

 

from Executive and his agents involved in such breach and remedies available to
the Company pursuant to this and other agreements with Executive.
     8. Reformation and Severability. It is expressly understood and agreed that
the Company and Executive consider the restrictions contained in Paragraphs 5, 6
and 7 to be reasonable and necessary to protect the proprietary information of
the Company. Nevertheless, if any of the aforesaid restrictions are found by a
court having jurisdiction to be unreasonable, or overly broad as to geographic
area or time, or otherwise unenforceable, the parties intend for the
restrictions herein set forth to be modified by such court so as to be
reasonable and enforceable and, as so modified by the court, to be fully
enforced. Further, if a court of competent jurisdiction determines that any
other provision of this Agreement is invalid or unenforceable, then the
invalidity or unenforceability of that provision shall not affect the validity
or enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect.
     9. No Right To Employment. Nothing in this Agreement provides or shall be
construed as proving Executive with any right to employment with the Company,
and Company may terminate the employment of Executive at any time.
     10. Notices. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered, when delivered by facsimile with
printed confirmation, via email with acknowledgement, or when mailed by United
States registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

     
If to the Company:
  Anadarko Petroleum Corporation
1201 Lake Robbins Drive
The Woodlands, Texas 77380
 
   
 
  Attention: Senior Vice President, General Counsel and Chief Administrative
Officer
 
   
If to the Executive:
  Charles A. Meloy
[                               ]
[                               ]

or to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices or changes of address shall be
effective only upon receipt.
     11. Applicable Law. This Agreement is entered into under, and shall be
governed for all purposes by, the laws of the State of Texas, without reference
to principles of conflict of laws.

4

--------------------------------------------------------------------------------

 

     12. No Waiver. No failure by either party hereto at any time to give notice
of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.
     13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
     14. Withholding of Taxes and Other Employee Deductions. The Company may
withhold from any benefits and payments made pursuant to this Agreement all
federal, state, city and other taxes as may be required pursuant to any law or
governmental regulation or ruling and all other normal employee deductions made
with respect to the Company’s employees generally.
     15. Headings. The paragraph headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.
     16. Gender and Plurals. Wherever the context so requires, the masculine
gender includes the feminine or neuter, and the singular number includes the
plural and conversely.
     17. Affiliate. As used in this Agreement, the term “affiliate” shall mean
any entity which owns or controls, is owned or controlled by, or is under common
ownership or control with, the Company.
     18. Assignment. This Agreement shall be binding upon and inure to the
benefit of the Company and any successor of the Company, by merger or otherwise.
Except as provided in the preceding sentence, this Agreement, and the rights and
obligations of the parties hereunder, are personal and neither this Agreement,
nor any right, benefit, or obligation of either party hereto, shall be subject
to voluntary or involuntary assignment, alienation or transfer, whether by
operation of law or otherwise, without the prior written consent of the other
party.
     19. Term. This Agreement has a term co-extensive with the Retention Period.
Termination of this Agreement shall not affect any right or obligation of any
party which is accrued or vested prior to such termination. Without limiting the
scope of the preceding sentence, the provisions of Paragraphs 4, 5, 6 and 7
shall survive any termination of the employment relationship and/or of this
Agreement.
     20. Entire Agreement. This Agreement constitutes the entire agreement of
the parties with regard to the subject matter hereof. Without limiting the scope
of the preceding sentence, all prior understandings and agreements among the
parties hereto relating to the subject matter hereof are hereby null and void
and of no further force and effect.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

5

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the year and date first above written, to be effective as of the Effective Date.

            ANADARKO PETROLEUM CORPORATION
      By:   /s/ R. A. Walker         Name:   R. A. Walker        Title:  
President & Chief Operating Officer              /s/ Charles A. Meloy      
Charles A. Meloy           

6