Document:

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                                                                    EXHIBIT 10.1

                            MICHAEL BAKER CORPORATION
                        2005 INCENTIVE COMPENSATION PLAN

     Section 1. Purpose. The purpose of the Michael Baker Corporation 2005
Incentive Compensation Plan (the "Plan") is to provide for an incentive payment
opportunity to employees of Michael Baker Corporation (the "Company") and its
subsidiaries, which may be earned upon the achievement of established
performance goals. By providing an incentive payment opportunity based upon
market-based performance goals, the Company will establish a clear line of sight
between the overall performance of the Company and the individual contribution
of each employee.

     Section 2. Effective Date. The effective date of this Plan is January 1,
2005. The Plan will remain in effect from year to year (each calendar year shall
be referred to herein as a "Plan Year") until formally amended or terminated in
writing by the Company's Board of Directors (the "Board").

     Section 3. Administration of the Plan.

          Section 3.01. Committee. Full power and authority to administer,
construe and interpret the Plan, and any incentive program described within the
Plan (any "Incentive Program") shall be vested in the Compensation Committee of
the Board (the "Committee"). The Committee may delegate to any agent as it deems
appropriate to assist it with the administration of the Plan. Any determination,
action or records of the Committee shall be final, conclusive and binding on all
Plan Participants, as defined in Section 3.04 of the Plan, and their
beneficiaries, heirs, personal representatives, executors and administrators,
and upon the Company and all other persons having or claiming to have any right
or interest in or under the Plan.

          Section 3.02. Rules and Regulations. The Committee may, from time to
time, establish rules, forms and procedures of general application for the
administration of the Plan and each Incentive Program. The Committee shall
determine the Incentive Targets and Incentive Awards, as defined in Sections
5.01 and 5.02 of the Plan, designate the employees who are to participate in the
Plan and determine the Group to which a Participant is assigned, as defined in
Section 4.02 of the Plan.

          Section 3.03. Quorum. A majority of the members of the Committee shall
constitute a quorum for purposes of transacting business relating to the Plan.
The acts of a majority of the members present (in person, or by conference
telephone) at any meeting of the Committee at which there is a quorum, or acts
reduced to and approved unanimously in writing by all of the Committee members,
shall be valid acts of the Committee.

          Section 3.04. Notice of Participation. Each employee shall receive
notice informing the employee of the Plan and specifying the group in which the
employee is designated to participate. Designation of participation does not
guarantee a participant (a "Participant") that an Incentive Award will be
earned, or that such Participant will continue to participate in the same group
for the current Plan Year (based upon the achievement of Group qualification
metrics) or for future Plan Years.

     Section 4. Eligibility, Groups and Incentive Programs.

          Section 4.01. Eligibility. Any employee of the Company or any
wholly-owned subsidiary of the Company shall be eligible to participate in the
Plan upon written designation by

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the Committee as provided in Section 3.04, excluding employees who are covered
under a foreign government regulated bonus plan.

          Section 4.02. Designation of Groups. Any employee who is designated by
the Committee as a Participant for a Plan Year shall be a member of one of the
following Groups:

          Group 1. Participants in Group 1 shall be the Company's executive
               officers, including Divisional Managers.

          Group 2. Participants in Group 2 shall be the Engineering Project
               Managers, the Energy Project Managers, the Sales Managers and the
               Office Managers.

          Group 3. Participants in Group 3 shall be any employee who is
               designated as a Participant in the Plan and who is not otherwise
               a member of Group 1 or 2.

With respect to a Participant who moves to or from a Group during a Plan Year,
such Participant shall be treated as a member of each Group for the period of
time in that Group during the Plan Year, and the actual achievement of any
Performance Goals, as defined in Section 5.03 of the Plan, established with
respect to participation in each Group shall be used to calculate the pro-rated
Incentive Award applicable for the period of time in each Group.

          Section 4.03. Incentive Programs. The following Incentive Programs
shall be administered under the Plan:

          -    The Corporate Incentive Program;

          -    The Project Manager Incentive Program;

          -    The Sales Manager Incentive Program;

          -    The Office Manager Incentive Program; and

          -    The Discretionary Incentive Program.

All Group 1 Participants shall participate in the Corporate Incentive Program.
All Group 2 Participants who are Engineering Project Managers or Energy Project
Managers shall participate in the Project Manager Incentive Plan. All Group 2
Participants who are Sales Managers shall participate in the Sales Manager
Incentive Program. All Group 2 Participants who are Office Managers shall
participate in the Office Manager Incentive Program. All Group 3 Participants
shall participate in the Discretionary Incentive Program.

          Section 4.04. Termination of Employment.

               (a) Except as provided in Section 4.05 of the Plan, a Participant
whose employment with the Company and all subsidiaries is terminated, either
voluntarily, by mutual agreement or by involuntary termination for cause
following the end of a Plan Year but prior to the payment of an Incentive Award
for such Plan Year will forfeit all right to such unpaid Incentive Awards,
except as otherwise determined by the Committee or its delegate; provided
further that a Participant whose employment is terminated by the Company and all
subsidiaries involuntarily other than for cause following the end of a Plan Year
shall not forfeit all right to such unpaid Incentive Awards.

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               (b) Except as provided in Section 4.05 of the Plan, a Participant
whose employment with the Company and all subsidiaries is terminated
voluntarily, by mutual agreement or involuntarily for cause at any time during a
Plan Year shall forfeit all rights to any Incentive Awards for the Plan Year
during which termination occurs. A Participant whose employment is terminated by
the Company and all subsidiaries involuntarily other than for cause on or before
June 30 of any Plan Year shall forfeit all rights to any Incentive Awards for
the Plan Year during which termination occurs; provided further that a
Participant whose employment is terminated by the Company and all subsidiaries
involuntarily other than for cause after June 30 of a Plan Year shall be
entitled to a pro-rated Incentive Award for the period of employment, subject to
the other terms and conditions of the Plan and the achievement of the applicable
Performance Goals.

          Section 4.05. Death, Disability or Retirement. If, during a Plan Year,
a Participant dies or becomes disabled, within the meaning of Section 22(e)(3)
of the Internal Revenue Code of 1986, as amended, or retires after attainment of
at least age 55 and with at least 10 years of service with the Company and/or
its subsidiaries, the Committee may, in its discretion or under such rules as it
may prescribe, make a partial or full Incentive Award to the Participant for the
Plan Year provided that the applicable Performance Goals were achieved.

          Section 4.06. New Participants. New employees of the Company or any
wholly-owned subsidiary of the Company hired after June 30 of a Plan Year and
designated for participation will become a Group 3 Participant during such Plan
Year. New employees hired on or before June 30 and designated for participation
may participate (on a pro-rated basis) in any Group during such Plan Year based
upon achievement of Group qualification metrics.

     Section 5. Incentive Targets, Incentive Awards and Performance Goals.

          Section 5.01. Incentive Targets. Each Participant under the Plan shall
be assigned an incentive target (an "Incentive Target") that shall be determined
based on market competitive levels, and which may be expressed as a percentage
of the Participant's base salary or a percentage of project profits, as related
to the level of achievement attained. Incentive Targets shall be determined
within 30 days after the commencement of each Plan Year and approved by the
Committee. The Incentive Targets for the current Plan Year are attached hereto
as Attachment A.

          Section 5.02. Incentive Awards. No incentive award payment ("Incentive
Award") may exceed the Participant's Incentive Target. Payment of any Incentive
Award under the Plan shall be contingent upon (i) the achievement of the Main
Company Performance Goals (measured at target), as defined in Section 5.03(a) of
the Plan, for the Plan Year, (ii) the achievement of the applicable Participant
Performance Goals, as defined in Section 5.03 of the Plan, for the particular
Incentive Program in which the Participant is a member for the Plan Year, (iii)
the Participant's receiving an overall "Meets Expectations" rating on the
values/work standards portion of his or her Company performance review form for
the Plan Year and (iv) the determination of the amount payable under Section
5.05 of the Plan.

          Section 5.03. Performance Goals.

               (a) Company Performance Goals. Within 30 days after the
commencement of the Plan Year, the Committee shall establish specific
performance goals for the Company ("Company Performance Goals"), which may be
based upon one or more of the following objective performance measures and
expressed in either, or a combination of, absolute values or rates of change:
earnings per share, earnings per share growth rates, return on total capital,
stock price, revenues, costs, net income, operating income, income before taxes,
operating margin, cash flow, market share, return on equity, return on assets
and total

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shareholder return. The Committee shall designate one or more of such
Performance Goals as the main Company Performance Goals (the "Main Company
Performance Goals") and the weighting among the various Performance Goals
established. The Company Performance Goals are attached hereto as Attachment B.
In order for any Incentive Awards to be paid to Participants in any Incentive
Program with respect to a Plan Year, the Main Company Performance Goals
established by the Committee for such Plan Year (measured at target) must be
achieved.

               (b) Divisional Performance Goals. Within 30 days after the
commencement of a Plan Year, the Committee shall establish specific performance
goals for the Company's divisions ("Divisional Performance Goals"), which may be
based upon one or more of the following objective performance measures and
expressed in either, or a combination of, absolute values or rates of change:
revenues, costs, net income, operating income, income before taxes, operating
margin, cash flow, market share, return on equity or return on assets. The
Divisional Performance Goals are attached hereto as Attachment C.

               (c) Sales Manager Performance Goals. Within 30 days after the
commencement of a Plan Year, the Committee shall establish specific performance
goals for the Company's Sales Managers ("Sales Manager Performance Goals"),
which may be based upon one or more of the following objective performance
measures and expressed in either, or a combination of, absolute values or rates
of change: revenues. The Sales Manager Performance Goals are attached hereto as
Attachment D.

               (d) Office Manager Performance Goals. Within 30 days after the
commencement of a Plan Year, the Committee shall establish specific performance
goals for the Company's Office Managers ("Office Manager Performance Goals"),
which may be based upon one or more of the following objective performance
measures and expressed in either, or a combination of, absolute values or rates
of change: revenues, expenses. The Office Manager Performance Goals are attached
hereto as Attachment E.

               (e) Participants' Performance Goals. Within 90 days after the
commencement of the Plan Year, the Committee shall establish performance goals
for the Participants in each of the Incentive Programs ("Participant Performance
Goals") as follows:

               (i)  Corporate Incentive Program. The Participant Performance
                    Goals for all Participants in the Corporate Incentive
                    Program shall be the Company Performance Goals and, in the
                    case of Group 1 Participants who are Divisional Managers,
                    Divisional Performance Goals, weighted per Attachment F.

               (ii) Project Manager Incentive Program. The Participant
                    Performance Goals for each Group 2 Participant in the
                    Project Manager Incentive Program shall be (x) the Main
                    Company Performance Goals and (y) the level of achievement
                    of budgeted project profits measured for the Plan Year on
                    those particular projects for which the Participant is
                    primarily responsible, weighted per Attachment F.

               (iii) Sales Manager Incentive Program. The Participant
                    Performance Goals for each Group 2 Participant in the Sales
                    Manager Incentive Program shall be (x) the Main Company
                    Performance Goals and (y) the Sales Manager Performance
                    Goals, weighted per Attachment F.

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               (iv) Office Manager Incentive Program. The Participant
                    Performance Goals for each Group 2 Participant in the Office
                    Manager Incentive Program shall be (x) the Main Company
                    Performance Goals and (y) the Office Manager Performance
                    Goals, weighted per Attachment F.

               (v)  Discretionary Incentive Program. The Participant Performance
                    Goals for the Participants in the Discretionary Incentive
                    Program shall be (x) the Main Company Performance Goals and
                    (y) other goals as established by the Committee in its
                    discretion, weighted per Attachment F.

               (d) When the Participant Performance Goals are established, the
Committee shall also specify the manner in which the level of achievement of
such Participant Performance Goals shall be calculated. The Committee may
determine that unusual items or certain specified events or occurrences,
including changes in accounting standards or tax laws, shall be excluded from
the calculation, or may within their discretion adjust the performance goals.

          Section 5.04. Discretion. The Committee shall have no discretion to
increase any Incentive Target or Incentive Award payable that would otherwise be
due upon attainment of the Performance Goals, but the Committee may in its
discretion reduce or eliminate such Incentive Target or Incentive Award.

          Section 5.05. Determination of Incentive Award. The amount of a
Participant's Incentive Award for a Plan Year, if any, shall be determined by
the Committee or its delegate in accordance with the level of achievement of the
applicable Participant Performance Goals, the Participant's Incentive Target for
such level of achievement, and the other terms of the Plan. Provided the
conditions set forth in Section 5.02 are achieved for any Plan Year, Incentive
Awards payable shall be calculated as a percentage of each of the respective
Incentive Targets, such percentage being equal to (i) 80% of the extent, if any,
to which the Company's income before taxes exceeds the Company Performance Goal
target for such item, as identified on Attachment B, divided by (ii) the
cumulative total of all Incentive Targets, expressed in terms of dollar amounts,
assigned under the Plan for such Plan Year.

          Section 5.06. Determination of Other Bonuses. The Committee may grant,
from time to time in its sole discretion, a bonus to any Participant based on
any criteria it determines. Such bonus, if specifically designated by the
Committee as payable under this Plan, shall be subject to such provisions of the
Plan as it shall specify.

     Section 6. Payment to Participants.

          Section 6.01. Timing of Payment. Any Incentive Award for a Plan Year
shall be paid to the Participant, or in the case of death to the Participant's
beneficiary, on or before March 15th of the following year.

          Section 6.02. Beneficiary Designation. The deemed beneficiary of a
Participant for this Plan will be the beneficiary elected by the Participant
under the Company's Life Insurance Plan; provided that a Participant may elect a
different beneficiary by filing a completed designation of beneficiary form with
the Committee or its delegate in the form prescribed. Such designation may be
made, revoked or changed by the Participant at any time before death but such
designation of beneficiary will not be effective and supersede all prior
designations until it is received and acknowledged by the Committee or its
delegate. If the Committee has any doubt as to the proper beneficiary to receive
payments hereunder, the

                                       -5-

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Committee shall have the right to withhold such payments until the matter is
finally adjudicated. However, any payment made in good faith shall fully
discharge the Committee, the Company, its subsidiaries and the Board from all
further obligations with respect to that payment.

          Section 6.03. Tax Withholding. All Incentive Awards and bonuses shall
be subject to Federal income, FICA, and other tax withholding as required by
applicable law.

     Section 7. Miscellaneous.

          Section 7.01. No Recourse. If the actual level of achievement of any
Performance Goal taken into account for determination of an Incentive Award is
found to be incorrect by the Company's independent certified public accountants
and was more than the correct amount, there shall be no recourse by the Company
against any person or estate. However, the Company shall have the right to
correct such error by reducing any subsequent payments yet to be made under the
Plan for current and future Plan Years by the entire excess amount of any
Incentive Awards paid over the correct amounts.

          Section 7.02. Merger or Consolidation. All obligations for amounts
earned but not yet paid under the Plan shall survive any merger, consolidation
or sale of all or substantially all of the Company's or a subsidiary's assets to
any entity, and be the liability of the successor to the merger or consolidation
or the purchaser of assets, unless otherwise agreed to by the parties thereto.

          Section 7.03. Gender and Number. The masculine pronoun whenever used
in the Plan shall include the feminine and vice versa. The singular shall
include the plural and the plural shall include the singular whenever used
herein unless the context requires otherwise.

          Section 7.04. Construction. The provisions of the Plan shall be
construed, administered and governed by the laws of the Commonwealth of
Pennsylvania, including its statute of limitations provisions, but without
reference to conflicts of law principles. Titles of Sections of the Plan are for
convenience of reference only and are not to be taken into account when
construing and interpreting the provisions of the Plan.

          Section 7.05. Non-alienation. Except as may be required by law,
neither the Participant nor any beneficiary shall have the right to, directly or
indirectly, alienate, assign, transfer, pledge, anticipate or encumber (except
by reason of death) any amount that is or may be payable hereunder, including in
respect of any liability of a Participant or beneficiary for alimony or other
payments for the support of a spouse, former spouse, child or other dependent,
prior to actually being received by the Participant or beneficiary hereunder,
nor shall the Participant's or beneficiary's rights to benefit payments under
the Plan be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of the
Participant or beneficiary or to the debts, contracts, liabilities, engagements,
or torts of any Participant or beneficiary, or transfer by operation of law in
the event of bankruptcy or insolvency of the Participant or any beneficiary, or
any legal process.

          Section 7.06. No Employment Rights. Neither the adoption of the Plan
nor any provision of the Plan shall be construed as a contract of employment
between the Company or a subsidiary and any employee or Participant, or as a
guarantee or right of any employee or Participant to future or continued
employment with the Company or a subsidiary, or as a limitation on the right of
the Company or a subsidiary to discharge any of its employees with or without
cause. Specifically, designation as a Participant does not create any rights,
and no rights are created under the Plan, with respect to continued or future
employment or conditions of employment.

                                       -6-

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          Section 7.07. Minor or Incompetent. If the Committee determines that
any Participant or beneficiary entitled to a payment under the Plan is a minor
or incompetent by reason of physical or mental disability, it may, in its sole
discretion, cause any payment thereafter becoming due to such person to be made
to any other person for his benefit, without responsibility to follow
application of amounts so paid. Payments made pursuant to this provision shall
completely discharge the Company, its subsidiaries, the Plan, the Committee and
the Board.

          Section 7.08. Illegal or Invalid Provision. In case any provision of
the Plan shall be held illegal or invalid for any reason, such illegal or
invalid provision shall not affect the remaining parts of the Plan, but the Plan
shall be construed and enforced without regard to such.

          Section 7.09. Amendment or Termination of this Plan. The Board shall
have the right to amend or terminate the Plan at any time, provided that any
amendment or termination shall not affect any Incentive Awards earned but
unpaid. No employee or Participant shall have any vested right to payment of any
Incentive Award hereunder prior to its payment. The Company shall notify
affected employees in writing of any amendment or Plan termination.

          Section 7.10. Unsecured Creditor. The Plan constitutes a mere promise
by the Company or a subsidiary to make benefit payments in the future. The
Company's and the subsidiaries' obligations under the Plan shall be unfunded and
unsecured promises to pay. The Company and the subsidiaries shall not be
obligated under any circumstance to fund their respective financial obligations
under the Plan. Any of them may, in its discretion, set aside funds in a trust
or other vehicle, subject to the claims of its creditors, in order to assist it
in meeting its obligations under the Plan, if such arrangement will not cause
the Plan to be considered a funded deferred compensation plan. To the extent
that any Participant or beneficiary or other person acquires a right to receive
payments under the Plan, such right shall be no greater than the right, and each
Participant and beneficiary shall at all times have the status, of a general
unsecured creditor of the Company or a subsidiary.

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Exhibit 10.1

RETENTION AGREEMENT

     THIS RETENTION AGREEMENT (“Agreement”) is made by and between Anadarko Petroleum
Corporation, a Delaware corporation (the “Company”), and Charles A. Meloy (the “Executive”), as of
August 10, 2006.

     WHEREAS, the Company and Kerr McGee Corporation (“KMG”), the current employer of the
Executive, shall consummate a transaction after which KMG shall be wholly owned by the Company (the
“Transaction”);

W I T N E S S E T H:

     WHEREAS, after the Transaction, the Company wishes to retain the Executive as an executive of
the Company, and the Executive wishes to be retained;

     NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations
contained herein, the Company and the Executive agree as follows:

ARTICLE 1

EMPLOYMENT AND DUTIES

     1.1 Employment; Effective Date. The Company agrees to employ the Executive and
the Executive agrees to be employed by the Company, beginning as of August 10, 2006 (the
“Effective Date”).

     1.2 Position. Effective as of the Effective Date, the Company shall cause the
Executive to be appointed as Senior Vice President, Gulf of Mexico and International
Operations, of the Company.

     1.3 Duties and Services. The Executive agrees to serve in the position referred
to in paragraph 1.2 and to perform diligently and to the best of his abilities the duties and
services appertaining to such office. The Executive shall report to the Chief Executive
Officer of the Company (“CEO”) or such other senior officer that reports to the CEO as is
designated by the CEO.

ARTICLE 2

TERM AND TERMINATION OF EMPLOYMENT

     2.1 Term. The Company agrees to employ the Executive for the period beginning on
the Effective Date. The Executive’s employment shall be “at-will” and may be terminated by the
Executive or the Company at any time, provided that termination is in compliance with paragraph
2.2.

     2.2 Notice of Termination. If the either party desires to terminate the
Executive’s employment, it or he shall do so by giving written notice to the other party that
it or he has elected to terminate the Executive’s employment and stating the effective date and
reason for such termination, provided that no such action shall alter or amend any other
provisions hereof or rights arising hereunder, including, without limitation, the provisions of
Articles 4 and 5 hereof.

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ARTICLE 3

COMPENSATION AND BENEFITS

     3.1 Base Salary. During his employment hereunder, the Executive shall receive a
base salary and be eligible for bonuses at the discretion of the Compensation Committee of the
Board (the “Compensation Committee”). The Executive shall be eligible for the same plans as
similarly situated executives provided that the Executive meets each plan’s respective
eligibility requirements.

     3.2 Retention Bonus. Except as provided herein and provided that the Executive
remains employed with the Company on each of the 1st and 2nd
anniversaries of the Effective Date, the Executive shall receive on each such anniversary a
cash payment of $575,000 within 10 days of each such anniversary.

     3.3 Restricted Stock Award. On the Effective Date, the Company shall grant the
Executive a restricted stock award of 25,000 shares of the Company’s common stock (the “Initial
Grant”) from the Company’s Stock Incentive Plan (“SIP”). This Initial Grant is subject to the
terms, conditions, and provisions of the SIP and Initial Grant agreement. Except as provided
herein, and provided that the Executive remains employed with the Company on each of the
1st and 2nd anniversaries of the Effective Date, the forfeiture
restrictions on 50% of the Initial Grant will lapse on each anniversary date.

     3.4 Special Pension Credit.

     (i) If the Executive remains employed by the Company or its affiliates at least until
the third anniversary of the Effective Date, the Executive shall be entitled to a special
pension benefit from the Company, such that the aggregate benefits under the qualified
defined benefit pension plan and the applicable restoration plan and any successors thereto
in which the Executive participates (the “Pension Plans”), plus the special benefits under
this paragraph 3.4(i), are equal to the aggregate benefits to which he would have been
entitled under the Pension Plans if his years of service with the Company and his age were
increased by five.

     (ii) If the Executive’s employment terminates by reason of the Executive’s death or
Disability, or if the Company terminates the Executive without Cause prior to the third
anniversary of the Effective Date, the Executive shall be entitled to a special pension
benefit from the Company, such that the aggregate benefits under the Pension Plans, plus the
special benefits under this paragraph 3.4(ii) are equal to the aggregate benefits to which he
would have been entitled under the Pension Plans if his years of service and age were
increased by the number that is the difference between 52 and his age on the date of
termination. If the Executive’s employment is terminated without Cause in connection with a
Change of Control, as defined in the form Key Employee Change of Control Contract (the
“Change of Control Contract”) prior to the third anniversary of the Effective Date, the
Executive shall not be entitled to any pension enhancement provided under the Change of
Control Contract and shall only be entitled to the age and service credit under this
paragraph 3.4(ii).

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     (iii) The special pension benefit payable under this paragraph 3.4 shall be paid at the
same time or times as the Executive’s benefits under the Pension Plans.

     (iv) For purposes of this Agreement, Disability shall mean the absence of the Executive
from the Executive’s duties with the Company on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness which is determined
to be total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative.

     (v) For purposes of this Agreement, termination for “Cause,” shall mean (A) the willful
and continued failure of the Executive to perform substantially the Executive’s duties with
the Company or one of its affiliates (other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for substantial performance is
delivered to the Executive by the Board or the CEO which specifically identifies the manner
in which the Board or the CEO believes that the Executive has not substantially performed the
Executive’s duties; or (B) the willful engaging by the Executive in illegal or gross
misconduct which is materially and demonstrably injurious to the Company. For purposes of
this provision, no act or failure to act, on the part of the Executive, shall be considered
“willful” unless it is done, or omitted to be done, by the Executive in bad faith or without
reasonable belief that the Executive’s action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the CEO or a senior officer of the
Company or based upon the advice of counsel for the Company shall be conclusively presumed to
be done, or omitted to be done, by the Executive in good faith and in the best interests of
the Company.

ARTICLE 4

PROTECTION OF INFORMATION

     4.1 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 the Executive during the 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 the Executive or representatives of the Executive in violation of this
Agreement) (referred to herein as “Confidential Information”). Following the termination of
the Executive’s employment with the Company for any reason, the 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. In no event shall an asserted violation of the provisions
of this paragraph 4.1 constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement. Also, within 5 days after the termination of
Executive’s employment for any reason, the Executive shall return to Company all documents and
other tangible items containing Company information which are in the Executive’s possession,
custody or control.

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     4.2 Remedies. The Executive acknowledges that money damages would not be
sufficient remedy for any breach of this Article by the 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 Article, but shall be in addition to all remedies available at law or in equity to the
Company, including the recovery of damages from the Executive and his agents involved in such
breach and remedies available to the Company pursuant to this and other agreements with the
Executive.

ARTICLE 5

NONSOLICITATION

     5.1 In General. As part of the consideration for the compensation and benefits to
be paid to the Executive hereunder; to protect the trade secrets and confidential information
of the Company and its affiliates that have been and will in the future be disclosed or
entrusted to the Executive, the business good will of the Company and its affiliates that has
been and will in the future be developed in the Executive, or the business opportunities that
have been and will in the future be disclosed or entrusted to the Executive by the Company and
its affiliates; and as an additional incentive for the Company to enter into this Agreement,
the Company and the Executive agree to the nonsolicitation obligations hereunder.

     5.2 Nonsolicitation. The Executive shall not, directly or indirectly for the
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 the
Executive is employed by the Company and during the one-year period commencing on the date of
the Executive’s termination of employment for any reason. Notwithstanding the foregoing, the
provisions of this paragraph 5.2 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
the Executive to participate in any such actions in his capacity as an officer of the Company.

     5.3 Enforcement and Remedies. The Executive acknowledges that money damages would
not be sufficient remedy for any breach of this Article by the 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 Article, but shall be in addition to all remedies available at law or in equity to the
Company.

     5.4 Reformation. It is expressly understood and agreed that the Company and the
Executive consider the restrictions contained in this Article to be reasonable and necessary to
protect the proprietary information of the Company. Nevertheless, if any of the

4

 

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 therein 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.

ARTICLE 6

EFFECT OF TERMINATION ON COMPENSATION

     6.1 Termination Benefits. If the Executive’s employment hereunder shall be
terminated by reason of the Executive’s death or Disability, or by the Company without Cause:
(i) any unvested portion of the Initial Grant shall vest upon the Executive’s termination of
employment and shall be immediately paid to the Executive; (ii) the Executive shall receive any
unpaid portion of the retention bonus provided pursuant to paragraph 3.2 hereof; and (iii) the
Executive shall be entitled to the Special Pension Credit provided pursuant to paragraph 3.4
hereof. For avoidance of doubt, if the Executive terminates his employment voluntarily for any
reason or if the Company terminates the Executive’s employment for Cause, the Executive shall
not receive any unvested benefits provided pursuant to this paragraph 6.1.

ARTICLE 7

MISCELLANEOUS

     7.1 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, 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: Vice President, General Counsel
	 
	 	 	 	 
	 

	 	If to the Executive to:
	 	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.

     7.2 Applicable Law. This Agreement is entered into under, and shall be governed
for all purposes by, the laws of the State of Texas.

     7.3 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.

5

 

     7.4 Severability. If a court of competent jurisdiction determines that any
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.

     7.5 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.

     7.6 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.

     7.7 Headings. The paragraph headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.

     7.8 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.

     7.9 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.

     7.10 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.

     7.11 Term. This Agreement has a term co-extensive with the term of employment.
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 Articles 4, 5 and 6 shall survive any termination of the employment
relationship and/or of this Agreement.

     7.12 Entire Agreement. Except as provided in the written benefit plans and
programs and agreements referenced in Article 3 or any signed written agreement
contemporaneously or hereafter executed by the Company and the Executive, this Agreement
constitutes the entire agreement of the parties with regard to the subject matter hereof, and
contains all the covenants, promises, representations, warranties and agreements between the
parties with respect to employment of the Executive by the Company. 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

6

 

further force and effect including, but not limited to, the Continuity Agreement between
KMG and the Executive, dated as of May 22, 2006 (“Continuity Agreement”). Further, in
consideration of the undertakings by Company in this Agreement, the Executive hereby releases
KMG (and KMG’s subsidiaries, affiliates, and benefits plans) of all obligations contained in
the Continuity Agreement and all claims against KMG (and KMG’s subsidiaries, affiliates, and
benefits plans) related to such Continuity Agreement or his employment with KMG prior to the
Effective Date. The foregoing sentence, however, does not apply to Section 6 “Excess Parachute
Payments” of the Continuity Agreement; Employee may seek enforcement of the obligations
contained in Section 6 against KMG or the Company in the event KMG is dissolved.

     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/ Preston Johnson
 	 
	 	 	Name:  	Preston Johnson 	 
	 	 	Title:  	Vice President, Human Resources 	 
	 
	 	 	 
	 	                                  /s/ Charles A. Meloy
 	 
	 	Charles A. Meloy 	 
	 	 	 
	 

7

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