exv10w3






Exhibit 10.3




                    , 200_




Director Name

Address

Address




Dear Name:



It is my pleasure to confirm to you that on                     , you were granted ___deferred shares of
Anadarko common stock and non-qualified stock options to purchase ___shares of Anadarko common
stock pursuant to the provisions of the Company’s 2008 Director Compensation Plan (the “Plan”). A
copy of the Plan is attached for your reference.



Your deferred shares will become payable to you within 30 days after the date you cease to be a
director of the Company for any reason (including your retirement from the Board). The deferred
shares will not be issued in your name, but will be held by the Company, either in book-entry form
or by the Company’s Executives and Directors Benefits Trust (the “Trust”), until they become
transferable to you. Although you will not have beneficial ownership of the deferred shares until
they are actually transferred to you, will have the opportunity to direct the voting of your
deferred shares (which voting instructions the Trustee of the Trust may not follow, in its sole
discretion) and such deferred shares will be counted toward your stock ownership requirements. You
will also receive a cash payment equal to the cash dividends that are paid on the Company’s common
stock each quarter, with such cash amount to be paid within 30 days after the date that such
dividends are paid to the Company’s regular stockholders. You should note that the deferred shares
held in the Trust are considered an unsecured obligation of the Company and any and all assets held
in the Trust are subject to the general creditors of the Company. Your deferred shares are subject
to the terms of the Plan (including the restrictions on transfer, assignment and pledge) and this
letter.



Your options will vest at the rate of 100% on                      and have an exercise price equal to the
closing stock price on                      of $___. Any unexercised stock options shall expire ten years from
the date of grant, or on                     . Your stock options are subject to the terms of the Plan and
this letter.



Upon vesting, the Options may be exercised in whole or in part by filing a written notice with the
Company’s Corporate Secretary at its corporate headquarters. Such notice shall be in the form
specified by the Company. Payments of all amounts due (e.g., Exercise Price and applicable
withholding taxes) may be made either (i) in cash; (ii) in Common Stock (by either actual delivery
of Common Stock or by attestation presenting satisfactory proof of beneficial ownership of such
Common Stock) already owned; or (iii) any combination of cash and Common Stock. The Fair Market
Value of such Common Stock as delivered shall be valued as of the closing sales price at which
Common Stock is sold on the date of exercise, as reported in the NYSE-Composite Transactions by The
Wall Street Journal. No Shares shall be issued or delivered until full payment of the Exercise
Price and applicable withholding taxes, if any, has been made.




 









 









Unexercised Options shall expire and be forfeited (without value) in the event you cease to be a
director of the Company, unless otherwise provided below (provided that in no event may the
options be exercised more than ten (10) years from the date of grant):




     (i) Retirement. If you cease to be a director of the Company by reason of
Retirement (as defined below), all unvested Options shall be forfeited and you (or, in the
event of your death, your legal representative) may, within a period of not more than
twenty-four (24) months after the date of such cessation, exercise vested Options if and to
the extent they were exercisable on the date of cessation. “Retirement” for purposes hereof
is defined as (i) 10 years of service as a director of the Company (ii) attainment of age 55
and five years service as a director of the Company, or (iii) attainment of age 65.




     (ii) Death. If you cease to be a director of the Company by reason of death,
any outstanding Options granted to you shall vest and be immediately exercisable with
respect to all or any part of the Options which remain unexercised. Your legal
representative or other person or persons to whom your rights under the Options shall pass
to by 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 your death
after your cessation as a director, your legal representative will have the remaining
exercise period awarded to you by your reason of cessation as provided in this letter or the
Plan.




     (iii) Permanent Disability. If you cease to be a director of the Company by
reason of Permanent Disability (as defined below), any outstanding Options granted to you
shall vest and be immediately exercisable with respect to all or any part of the Options
which remain unexercised. You (or, in the event of your death, your legal representative)
may, within a period of not more than twenty-four (24) months after the date of your
cessation as a director, exercise the Options. You shall be deemed to have become
“Permanently Disabled” if you (i) are unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not less than
twelve (12) months, or (ii) are, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, receiving income replacement benefits
for a period of not less than three (3) months under an accident and health plan of the
Company.




     (iv) Resignation from the Board of Directors. If you resign from the Company’s
Board of Directors, all unvested Options shall be forfeited and you (or, in the event of
your death, your legal representative) may, within a period of not more than three (3)
months after the effective date of such resignation, exercise vested Options.


The Options granted hereunder are not transferable except by will or the laws of descent and
distribution. Options are exercisable, during your lifetime, only by you. 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.



You shall have no rights as a stockholder with respect to any shares of common stock subject to the
Options prior to the date you are issued a certificate or certificates for such shares, or until
such shares are recorded on the books of the Company’s stock transfer agent.



Please note that this letter serves as your notice of award and is for your personal files. You
are not required to sign and return any documents.



For your personal records, we have enclosed a summary of all your stock option and deferred share
grants as of                     .



If you have any questions or concerns, please contact                                          or        
                                 .




Sincerely,