Contents:
Employment Agreement  Hackett
Change of Control Contract  Hackett
 
 
 
 EMPLOYMENT AGREEMENT
 
 THIS EMPLOYMENT AGREEMENT ("Agreement") is made by and between Anadarko
Petroleum Corporation, a Delaware corporation (the "Company"), and James T.
Hackett (the "Executive"), as of February 5, 2004.
 
 WITNESSETH:
 
 WHEREAS, the Company is desirous of employing the Executive in an
executive capacity on the terms and conditions, and for the consideration,
hereinafter set forth, and the Executive is desirous of being employed by the
Company on such terms and conditions and for such consideration;
 
 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 December 3, 2003 (the "Effective Date") and continuing for the period of time
set forth in Article 2 of this Agreement, subject to the terms and conditions of
this Agreement.
 
 1.2 Positions. Effective as of the Effective Date, the Company shall
cause the Executive to be appointed as President and Chief Executive Officer of
the Company. The Company shall maintain the Executive in such positions, and/or
in such other positions as the parties mutually may agree, for the full term of
the Executive's employment hereunder. In addition, effective as of the Effective
Date, the Company shall cause the Executive to be appointed as a member of the
Board of Directors of the Company (the "Board of Directors"), and shall nominate
the Executive for election and re-election to the Board of Directors as and when
his term expires while he remains employed under this Agreement.
 
 1.3 Duties and Services. The Executive agrees to serve in the
position(s) referred to in paragraph 1.2 and to perform diligently and to the
best of his abilities the duties and services appertaining to such offices, as
well as such additional duties and services appropriate to such offices upon
which the parties mutually may agree from time to time. The Executive's
employment shall also be subject to the policies maintained and established by
the Company, as the same may be amended from time to time.
 
 1.4 Other Interests. The Executive agrees, during the period of his
employment by the Company, to devote his primary business time, energy and best
efforts to the business and affairs of the Company and its affiliates and not to
engage, directly or indirectly, in any other business or businesses, whether or
not similar to that of the Company, except with the consent of the Board of
Directors. The foregoing notwithstanding, the parties recognize and agree that
the Executive may engage in passive personal investments and other civic and
charitable activities
 
that do not conflict with the business and affairs of the Company or interfere
with the Executive's performance of his duties hereunder without the necessity
of obtaining the consent of the Board of Directors. Notwithstanding the
foregoing, the Company acknowledges that the Executive may continue to serve as
a member of board of directors of the Federal Reserve Bank of Dallas, Houston
Branch, Fluor Corporation, and Temple-Inland Inc., and the Executive agrees that
if the Board of Directors determines that continued service with one or more of
these entities is inconsistent with the Executive's duties hereunder and gives
written notice of such to the Executive, the Executive will resign from such
position(s).
 
 1.5 Duty of Loyalty. The Executive acknowledges and agrees that the
Executive owes a fiduciary duty of loyalty, fidelity, and allegiance to use his
reasonable best efforts to act at all times in the best interests of the
Company. In keeping with these duties, the Executive shall make full disclosure
to the Company of all business opportunities pertaining to the Company's
business and shall not appropriate for the Executive's own benefit business
opportunities concerning the subject matter of the fiduciary relationship.
 
 1.6 Stock Ownership Requirement. The Executive shall generally be
expected to maintain ownership of shares of the Company's common stock
("Shares") having a value equal to five times his annual base salary as in
effect from time to time. Unvested shares of restricted stock (including without
limitation the Initial Restricted Stock, as defined in paragraph 3.5 below) will
be credited towards this requirement. The Executive shall be required to obtain
the prior approval of the Board of Directors before selling Shares, if the sale
would reduce his ownership below this required level, except to the extent the
sale is necessary in order to cover the exercise price for exercise of options
to acquire Shares ("Options") or taxes due on such exercise or on the vesting of
restricted Shares or other awards based on Shares.
 
 ARTICLE 2
 TERM AND TERMINATION OF EMPLOYMENT
 
 2.1 Term. Unless sooner terminated pursuant to other provisions hereof,
the Company agrees to employ the Executive for the period beginning on the
Effective Date and ending on the third anniversary of the Effective Date. Except
as otherwise provided in paragraph 2.4, beginning with the first anniversary of
the Effective Date, said term of employment shall be extended automatically for
an additional successive one-year period as of each anniversary date of the
Effective Date that occurs while this Agreement is in effect; provided, however,
that if, at any time prior to any such anniversary date of the Effective Date,
either party shall give written notice to the other that no such automatic
extension shall occur, then the Executive's employment shall terminate on the
last day of the two-year period beginning on the anniversary date of the
Effective Date that next occurs after such notice is given.
 
 2.2 Company's Right to Terminate. Notwithstanding the provisions of
paragraph 2.1, the Company shall have the right to terminate the Executive's
employment under this Agreement at any time before the expiration of the term
provided for in paragraph 2.1, for any of the following reasons:
 
 (i) upon the Executive's death;
 
 (ii) upon the Executive's becoming incapacitated by accident,
 sickness or other circumstance which renders him mentally or physically
 incapable of performing the duties and services required of him
 hereunder on a full-time basis with reasonable accommodation for a
 period of at least 120 consecutive days or for a period of 180 business
 days during any twelve-month period ("Disability");
 
 (iii) for "Cause," which for purposes of this Agreement shall
 mean (A) the Executive's gross negligence, gross neglect or willful
 misconduct in the performance of the duties required of him hereunder,
 (B) the Executive's commission of a felony that is expected to result
 in a material adverse effect on the Company, or (C) the Executive's
 material breach of any material provision of this Agreement; or
 
 (iv) for any other reason whatsoever, in the sole discretion
 of the Board of Directors.
 
A termination of the Executive's employment by the Company pursuant to clause
(iv) above is referred to as a "Without Cause Termination." The termination of
the Executive's employment by the Company pursuant to subclause (A) or (C) of
clause (iii) above shall not be deemed to be for Cause, and will be treated as a
Without Cause Termination, unless the Company has first provided written notice
to the Executive specifically identifying the conduct on which the termination
is based, and the Executive has failed to cure such conduct within 10 business
days after such notice is given. Any termination of the Executive's employment
by the Company for Cause shall be effective only upon delivery to the Executive
of a certified copy of a resolution of the Board of Directors, adopted by the
affirmative vote of a majority of the entire membership of the Board of
Directors (excluding the Executive) following a meeting at which the Executive
was given an opportunity to be heard on at least five business days' advance
notice, finding that the Executive was guilty of the conduct constituting Cause,
and specifying the particulars thereof.
 
 2.3 Executive's Right to Terminate. Notwithstanding the provisions of
paragraph 2.1, the Executive shall have the right to terminate his employment
under this Agreement at any time before the expiration of the term provided for
in paragraph 2.1, for any of the following reasons:
 
 (i) for (A) the Company's assignment to the Executive of any
 duties inconsistent in any material respect with the positions of
 President and Chief Executive Officer, or any other action by the
 Company that results in a material diminution of the Executive's
 position, duties, or authority, (B) the Company's failure to appoint or
 reappoint the Executive to the positions of President and Chief
 Executive Officer or to nominate him for election or re-election to the
 Board as required by paragraph 1.2, (C) the Company's material breach
 of any other material provision of this Agreement; (D) the Company's
 requiring the Executive to be based at any office outside the
 Woodlands, Texas and Houston, Texas metropolitan areas; or (E) the
 Company's giving a notice of nonrenewal of the term of employment
 pursuant to paragraph 2.1 before the Executive's attainment of age 55;
 provided, however, that, prior to the Executive's termination of
 employment under any of clauses (A) through (D) of this paragraph
 2.3(i), the Executive must give written notice to the Company of any
 such breach, assignment or failure and
 
 such breach, assignment or failure must remain uncorrected for 10
 business days following such written notice; or
 
 (ii) for any other reason whatsoever, in the sole discretion
 of the Executive.
 
A termination of the Executive's employment by the Executive pursuant to clause
(i) above is referred to as a "Good Reason Termination."
 
 2.4 Notice of Termination. If the Company or the Executive desires to
terminate the Executive's employment hereunder at any time prior to expiration
of the term of employment as provided in paragraph 2.1, 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 hereunder 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 Article 4 hereof. No further renewals of the term
of employment under this Agreement shall occur pursuant to paragraph 2.1 after
the giving of any such notice.
 
 2.5 Resignations. Notwithstanding any other provision of this
Agreement, upon the termination of the Executive's employment for any reason,
unless otherwise requested by the Board of Directors, he shall immediately
resign from the Board of Directors and from all boards of directors of
subsidiaries and affiliates of the Company of which he may be a member. The
Executive hereby agrees to execute any and all documentation of such
resignations upon request by the Company, but he shall be treated for all
purposes as having so resigned upon termination of his employment, regardless of
when or whether he executes any such documentation.
 
 ARTICLE 3
 COMPENSATION AND BENEFITS
 
 3.1 Base Salary. During his employment hereunder, the Executive shall
receive a minimum annual base salary of $1,100,000. The Compensation Committee
of the Board of Directors (the "Compensation Committee") shall review the
Executive's annual base salary on an annual basis and may, in its sole
discretion, increase, but not decrease, the Executive's annual base salary. The
Executive's annual base salary shall be paid in equal installments in accordance
with the Company's standard policy regarding payment of compensation to
executives but no less frequently than monthly.
 
 3.2 Signing Bonus. On January 2, 2004, the Company shall pay the
Executive a signing bonus in the amount of $1,000,000.
 
 3.3 Annual Bonuses. For the 2004 calendar year and subsequent calendar
years ending during his employment hereunder, the Executive shall be eligible to
receive an annual cash bonus under the Company's Annual Incentive Bonus Plan or
a successor plan (the "Bonus Plan"), in an amount determined by the Compensation
Committee, based on performance goals established by the Compensation Committee
in accordance with the terms of the Plan, and with a target (the "Incentive
Target") of not less than 120% of the Executive's annual base salary as in
effect at the beginning of the calendar year, but subject to a maximum annual
cash bonus of 200% of the Incentive Target (that is, 240% of the annual base
salary) for the year.
 
 3.4 Initial Stock Option. On the Effective Date, the Company shall
grant the Executive a non-qualified Option (the "Initial Option") to purchase
250,000 Shares pursuant to the Company's 1999 Stock Incentive Plan (the "SIP").
The purchase price for each Share subject to the Initial Option shall be equal
to the Fair Market Value (as such term is defined in the SIP) of a Share as of
the Effective Date. Subject to the terms of the SIP and paragraphs 7.2 and 7.3
of this Agreement, the Initial Option shall (i) have a ten-year term, (ii)
become exercisable as to half of the Shares subject thereto on the second
anniversary of the Effective Date, and as to the remaining Shares subject
thereto on the fourth anniversary of the Effective Date, provided in each case
that the Executive remains employed by the Company on such anniversary, and
(iii) have other terms and conditions consistent with the normal terms and
conditions on which the Company grants stock options under the SIP to its senior
executives.
 
 3.5 Initial Restricted Stock Awards. The Company shall grant the
Executive a restricted stock award under the SIP covering 200,000 Shares (the
"Initial Restricted Stock") under the SIP. Subject to the terms of the SIP and
paragraphs 7.2 and 7.3 of this Agreement, the Initial Restricted Stock shall
vest in four equal installments on each of the first four anniversaries of the
Effective Date, provided in each case that the Executive remains employed by the
Company on such anniversary.
 
 3.6 Performance Unit Awards. As soon as reasonably practicable after
the Effective Date, subject to the approval of of the Compensation Committee,
the Executive shall be granted performance units under the SIP (the "Performance
Units" and, together with the Initial Option and the Initial Restricted Stock,
the "Initial Equity Awards") with the terms and conditions set forth below in
this paragraph 3.6 and such other terms and conditions as the Compensation
Committee shall approve. The Performance Units shall represent the opportunity
to receive 80,000 Shares at the target level of performance, and 160,000 Shares
at the maximum level of performance, with half of such amounts to be earned (or
forfeited) based upon the Company's total shareholder return from the Effective
Date through the second anniversary of the Effective Date and the remaining half
to be earned (or forfeited) based upon the Company's total shareholder return
from the Effective Date through the fourth anniversary thereof (these two
periods being referred to as the "Performance Periods"), provided that the
Executive remains employed by the Company through the end of the applicable
Performance Period. If the Executive's employment is terminated in a Without
Cause Termination or a Good Reason Termination before the end of either or both
of the Performance Periods, he shall receive a pro-rata number of Shares, at the
target level, in full settlement of the Performance Units for the incomplete
Performance Period(s). If a Change of Control, as defined in the SIP, occurs
during either or both of the Performance Periods, the Executive shall receive
the maximum number of Shares in full settlement of the Performance Units for the
incomplete Performance Period(s).
 
 3.7 Adjustments to Initial Equity Awards. Notwithstanding the
provisions of paragraphs 3.4, 3.5 and 3.6, if, before the grant of any of the
Initial Equity Awards, there occurs an event that results in an adjustment to
equity awards generally pursuant Section 4(d) of the SIP, the foregoing
requirements for such Initial Equity Awards (including without limitation the
number of Shares subject thereto) shall be adjusted accordingly.
 
 3.8 Subsequent Equity Awards. The Initial Equity Awards are intended to
represent the Executive's equity awards for the initial two years of his
employment by the Company.
 
Thereafter during his employment hereunder, the Executive shall be eligible for
equity awards in accordance with normal competitive pay practices, on a basis no
less favorable than the Company's other senior executives, as determined by the
Compensation Committee.
 
 3.9 Special Compensation. In recognition of the loss of his entitlement
to certain payments from his prior employer that would have become payable to
him as of May 1, 2004, the Company will pay the Executive the sum of $5,700,000
(the "Special Payment") on May 1, 2004; provided, that if the Executive's
employment is terminated before May 1, 2004 in a Without Cause Termination or a
Good Reason Termination or as a result of his death or Disability, the Company
shall pay the Special Payment to him or his estate, as applicable, as soon as
practicable thereafter; and provided, further, that in the event the Executive's
employment terminates for any other reason before May 1, 2004, he will forfeit
his right to the Special Payment.
 
 3.10 Special Pension Service Crediting. If the Executive remains
employed by the Company at least until the fifth anniversary of the Effective
Date, the Executive shall be entitled to a special pension benefit from the
Company, such that his aggregate benefits under the Company's Retirement Plan
and Retirement Restoration Plan and any successors thereto (collectively, the
"Pension Plans"), plus the special pension benefit under this paragraph 3.10,
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 (but not his age)
were increased by five plus the number of his actual years of service with the
Company in excess of five (if any). The special pension benefit payable under
this paragraph 3.10 shall be paid at the same time or times as the Executive's
benefit under the Pension Plans.
 
 3.11 Other Benefits. During his employment hereunder, the Executive
shall be afforded the following benefits as incidences of his employment:
 
 (i) Business and Entertainment Expenses. Subject to the
 Company's standard policies and procedures with respect to expense
 reimbursement as applied to its executive employees generally, the
 Company shall reimburse the Executive for, or pay on behalf of the
 Executive, reasonable and appropriate expenses incurred by the
 Executive for business related purposes, including dues and fees to
 industry and professional organizations and costs of entertainment and
 business development.
 
 (ii) Vacation. During each year of his employment, the
 Executive shall be entitled to five weeks of paid vacation in
 accordance with the Company's vacation policy, as in effect from time
 to time.
 
 (iii) Employee and Executive Benefits Generally. The Executive
 shall be eligible for participation in all employee and executive
 benefits, including without limitation qualified and supplemental
 retirement, savings and deferred compensation plans, medical and life
 insurance plans, and other fringe benefits, as in effect from time to
 time for the Company's most senior executives.
 
 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 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 14 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.
 
 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
 NONCOMPETITION AND 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 noncompetition and
the nonsolicitation obligations hereunder.
 
 5.2 Noncompetition. 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:
 
 (i) engage in any business competitive with the oil and gas
 exploration and production business activity conducted by the Company
 and its affiliates (the "Business"); or
 
 (ii) render advice or services to, or otherwise assist, any
 other person, association, or entity who is engaged, directly or
 indirectly, in any business competitive with the Business.
 
For these purposes, if less than 33% of the revenues of any business is derived
from activities competitive with the Business, the first business shall not be
considered to be competitive with the Business. These noncompetition obligations
shall apply (A) during the period that the Executive is employed by the Company,
(B) except as provided in the next sentence, during the one-year period after a
Without Cause Termination or a Good Reason Termination, and (C) if the Executive
terminates his employment with the Company other than in a Good Reason
Termination within two years after the Effective Date, during the one-year
period commencing on the date of the Executive's termination of employment. If
there occurs a Without Cause Termination or a Good Reason Termination and the
Executive provides the Company with a written waiver of his right to receive the
Severance Payment and the Pension Credit provided for as part of his Termination
Benefits (as those terms are defined in paragraph 7.2), then these
noncompetition obligations shall immediately cease to apply.
 
 5.3 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 5.3
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.
 
 5.4 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, including without limitation, the recovery of damages from the
Executive and the Executive's agents involved in such breach and remedies
available to the Company pursuant to this and other agreements with the
Executive.
 
 5.5 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 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
 STATEMENTS CONCERNING COMPANY
 
 
 
 6.1 In General. The Executive and the Company and its affiliates shall
refrain from any criticisms or disparaging comments about each other or in any
way relating to the Executive's employment or separation from employment;
provided, however, that nothing in this Agreement shall apply to or restrict in
any way the communication of information by the Company or any of its affiliates
or the Executive to any state or federal law enforcement agency or require
notice to the Company or the Executive thereof, and none of the Executive, the
Company or any of its affiliates will be in breach of the covenant contained
above solely by reason of testimony or disclosure which is compelled by
applicable law or regulation or process of law. A violation or threatened
violation of this prohibition may be enjoined by the courts. The rights afforded
under this provision are in addition to any and all rights and remedies
otherwise afforded by law.
 
 ARTICLE 7
 EFFECT OF TERMINATION ON COMPENSATION
 
 7.1 By Expiration. If the Executive's employment hereunder shall
terminate upon expiration of the term provided in paragraph 2.1 hereof, then all
compensation and all benefits to the Executive hereunder shall terminate
contemporaneously with termination of his employment except to the extent this
Agreement or any plan or arrangement of the Company provides for vested benefits
or continuation of benefits beyond termination of employment.
 
 7.2 By the Company. If the Executive's employment hereunder shall be
terminated by the Company prior to expiration of the term provided in paragraph
2.1, then, upon such termination, regardless of the reason therefor, all
compensation and benefits to the Executive hereunder shall terminate
contemporaneously with the termination of such employment, except to the extent
this Agreement or any plan or arrangement of the Company provides for vested
benefits or continuation of benefits beyond termination of employment; provided,
however, that in the event of a Without Cause Termination, the Company shall
provide the Executive with the Termination Benefits, except as provided in the
last sentence of paragraph 5.2. For purposes of this Agreement, the term
"Termination Benefits" shall mean the following: (i) the Company shall pay the
Executive, in a single lump sum in cash (the "Severance Payment") within five
business days after the date of the termination of his employment, the base
salary, at the rate then in effect pursuant to paragraph 3.1, that he would have
been entitled to receive if he had remained employed for the unexpired portion
of the term set forth in paragraph 2.1, as in effect immediately before the
Executive's termination (the "Remaining Term"); (ii) the Initial Option and any
other Options that may have been granted to the Executive, to the extent then
outstanding, shall be vested in full upon the Executive's termination of
employment and shall remain exercisable thereafter for the period provided
pursuant to the terms thereof, which period shall not be less than twelve months
(but in no event shall any Option be exercisable after the expiration of its
full original term); (iii) any portion of the Initial Restricted Stock and any
other restricted Shares that may have been granted to the Executive that have
not yet vested shall vest in full upon the Executive's termination of
employment; (iv) within five business days after the date of the Executive's
termination of employment, the Company shall pay to the Executive a lump sum
cash payment equal to the product of the Executive's Incentive Target set forth
in
 
paragraph 3.3 multiplied by the Executive's annual base salary at the time of
such termination prorated for the number of months in the performance year of
the Executive's termination of employment that have elapsed prior to such
termination; (v) the Executive shall be treated, for purposes of determining his
years of service for, and his right to receive (but not the timing of his
receipt of) his special pension benefit under paragraph 3.10, as having remained
employed for the Remaining Term (the "Pension Credit"); and (vi) during the
period, if any (but in no event for more than 18 months after the date of the
Executive's termination of employment), that the Executive elects to continue
coverage for himself and any of his eligible dependents under the Company's
group health plans pursuant to the continuation of coverage provisions contained
in Sections 601 through 608 of the Employee Retirement Income Security Act of
1974, as amended, the Executive's premiums for such coverage shall be no greater
than that charged by the Company generally to its active executive employees for
coverage under such plans.
 
 7.3 By Executive. If the Executive's employment hereunder shall be
terminated by the Executive prior to expiration of the term provided in
paragraph 2.1, then, upon such termination, regardless of the reason therefor,
all compensation and benefits to the Executive hereunder shall terminate
contemporaneously with the termination of such employment, except to the extent
this Agreement or any plan or arrangement of the Company provides for vested
benefits or continuation of benefits beyond termination of employment; provided,
however, that if such termination shall be a Good Reason Termination, then the
Company shall provide the Executive with the Termination Benefits, except as
provided in the last sentence of paragraph 5.2.
 
 7.4 No Duty to Mitigate Losses. The Executive shall have no duty to
find new employment following the termination of his employment under
circumstances which require the Company to provide the Termination Benefits to
the Executive pursuant to this Article 7. Any salary or remuneration received by
the Executive from a third party for the providing of personal services (whether
by employment or by functioning as an independent contractor) following the
termination of his employment shall not reduce the Company's obligation (if any)
to provide the Termination Benefits (or the amount of such benefits) pursuant to
the terms of this Article 7. Notwithstanding the preceding sentence, if, and to
the extent that, following the termination of his employment under circumstances
pursuant to which this Article 7 apply, the Executive becomes entitled to
receive benefits from a third party that are comparable to the Termination
Benefits set forth in paragraph 7.2(vi), the Company's obligation to provide
such Termination Benefits to the Executive shall cease.
 
 7.5 Liquidated Damages. In light of the difficulties in estimating the
damages for an early termination of this Agreement, the Company and the
Executive hereby agree that the Termination Benefits, if any, to be received by
the Executive pursuant to this Article 7 shall be received by the Executive as
liquidated damages.
 
 7.6 Incentive and Deferred Compensation. This Agreement governs the
rights and obligations of the Executive and the Company with respect to the
Executive's base salary and certain perquisites of employment. Except as
expressly provided herein, the Executive's rights and obligations both during
the term of his employment and thereafter with respect to stock options,
restricted stock, incentive and deferred compensation, life insurance policies
insuring the life of the Executive, and other benefits under the plans and
programs maintained by the
 
Company shall be governed by the separate agreements, plans and other documents
and instruments governing such matters. Without limiting the scope of the
preceding sentence, the Executive acknowledges that he has no right to grants of
stock options or restricted stock either under the stock plans maintained by the
Company or otherwise other than (i) as provided in paragraphs 3.4, 3.5, 3.6, 3.7
and 3.8 hereof or (ii) in the discretion of the Compensation Committee or the
Board of Directors.
 
 ARTICLE 8
 MISCELLANEOUS
 
 8.1 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: James T. Hackett
 Houston, Texas 77019
 
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.
 
 8.2 Applicable Law. This Agreement is entered into under, and shall be
governed for all purposes by, the laws of the State of Texas.
 
 8.3 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, except as specifically provided in the last sentence of paragraph 5.2.
 
 8.4 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.
 
 8.5 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.
 
 8.6 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.
 
 8.7 Headings. The paragraph headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.
 
 8.8 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.
 
 8.9 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.
 
 8.10 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.
 
 8.11 Term. Except as provided in paragraphs 8.13 and 8.15 below: (a)
this Agreement has a term co-extensive with the term of employment provided in
paragraph 2.1; (b) termination of this Agreement shall not affect any right or
obligation of any party which is accrued or vested prior to such termination;
and (c) without limiting the scope of the foregoing clause (b), the provisions
of Articles 4, 5, 6 and 7 shall survive any termination of the employment
relationship and/or of this Agreement.
 
 8.12 Entire Agreement. Except as provided in paragraph 8.13 below, 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 further force and effect.
 
 8.13 Change of Control Agreement. As soon as practicable after the
execution of this Agreement, the Company and the Executive shall enter into a
Key Employee Change of Control Agreement (the "Change of Control Agreement"),
which shall be in the Company's standard form thereof except that it shall
incorporate the provisions of paragraphs 3.6, 3.9, 3.10 and 8.15 hereof and the
severance benefits thereunder shall include those described in clauses (ii),
(iii) and (v) of the definition of Termination Benefits contained in paragraph
7.2 hereof. Notwithstanding any other provision of this Agreement, this
Agreement shall terminate and be of no further force or effect upon the
Effective Date of the Change of Control Agreement.
 
 
 12
<PAGE>
 
 8.14 Representation By Executive. The Executive hereby represents and
warrants to the Company that, as of the Effective Date and as of the date of
execution of this Agreement, he is not a party to any employment or other
agreement with any third party which would preclude him from accepting
employment with the Company and performing his obligations under this Agreement.
 
 8.15 Indemnification. The Company agrees to indemnify the Executive
with respect to any acts or omissions he may commit during the period during
which he is an officer, director and/or employee of the Company or any affiliate
thereof, and to provide him with coverage under any directors' and officers'
liability insurance policies, in each case on terms not less favorable than
those provided to any of its other directors and officers as in effect from time
to time.
 
 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:
 ----------------------------------
 Name: Richard A. Lewis
 Title: Vice President, Human Resources
 
 
 
 
 --------------------------------------
 James T. Hackett
 
 
Back to Top
 
 KEY EMPLOYEE CHANGE OF
 CONTROL CONTRACT
 
 AGREEMENT by and between Anadarko Petroleum Corporation, a Delaware
corporation (the "Company") and James T. Hackett (the "Executive"), dated as of
the 5th day of February, 2004.
 
 The Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company. The Board believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control and
to encourage the Executive's full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change of Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement.
 
 NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
 
 1. Certain Definitions. (a) The "Effective Date" shall mean the first
date during the Change of Control Period (as defined in Section 1(b)) on which a
Change of Control (as defined in Section 2) occurs. Anything in this Agreement
to the contrary notwithstanding, if a Change of Control occurs and if the
Executive's employment with the Company is terminated
 
prior to the date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Executive that such termination of employment (i) was at the
request of a third party who has taken steps reasonably calculated to effect a
Change of Control or (ii) otherwise arose in connection with or anticipation of
a Change of Control, then for all purposes of this Agreement the "Effective
Date" shall mean the date immediately prior to the date of such termination of
employment.
 
 (b) The "Change of Control Period" shall mean the period commencing on
the date hereof and ending on the third anniversary of the date hereof;
provided, however, that commencing on the date one year after the date hereof,
and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the "Renewal Date"),
unless previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three years from such Renewal Date,
unless at least 90 days prior to the Renewal Date the Company shall give notice
to the Executive that the Change of Control Period shall not be so extended.
 
 2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:
 
 (a) The acquisition by any individual, entity or group (within
 the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
 Act of 1934, as amended (the "Exchange Act")) (a "Person") of
 beneficial ownership (within the meaning of Rule 13d-3 promulgated
 under the Exchange Act) of 20% or more of either (i) the then
 outstanding shares of common stock of the Company (the "Outstanding
 Company Common Stock") or (ii) the combined voting power of the then
 outstanding voting securities of the
 
 Company entitled to vote generally in the election of directors (the
 "Outstanding Company Voting Securities"); provided, however, that for
 purposes of this subsection (a), the following acquisitions shall not
 constitute a Change of Control: (i) any acquisition directly from the
 Company, (ii) any acquisition by the Company, (iii) any acquisition by
 any employee benefit plan (or related trust) sponsored or maintained by
 the Company or any corporation controlled by the Company or (iv) any
 acquisition pursuant to a transaction which complies with clauses (i),
 (ii) and (iii) of subsection (c) of this Section 2; or
 
 (b) Individuals who, as of the date hereof, constitute the
 Board (the "Incumbent Board") cease for any reason to constitute at
 least a majority of the Board; provided, however, that any individual
 becoming a director subsequent to the date hereof whose election, or
 nomination for election by the Company's shareholders, was approved by
 a vote of at least a majority of the directors then comprising the
 Incumbent Board shall be considered as though such individual were a
 member of the Incumbent Board, but excluding, for this purpose, any
 such individual whose initial assumption of office occurs as a result
 of an actual or threatened election contest with respect to the
 election or removal of directors or other actual or threatened
 solicitation of proxies or consents by or on behalf of a Person other
 than the Board; or
 
 (c) Consummation by the Company 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 (a "Business Combination"), in each case, unless, following such
 Business Combination, (i) all or substantially all of the individuals
 and entities who were the beneficial owners, respectively, of the
 Outstanding Company Common Stock and Outstanding Company Voting
 Securities immediately prior to such
 
 Business Combination beneficially own, directly or indirectly, more
 than 60% of, respectively, the then outstanding shares of common stock
 and the combined voting power of the then outstanding voting securities
 entitled to vote generally in the election of directors, as the case
 may be, of the corporation resulting from such Business Combination
 (including, without limitation, a corporation which as a result of such
 transaction owns the Company or all or substantially all of the
 Company's assets either directly or through one or more subsidiaries)
 in substantially the same proportions as their ownership, immediately
 prior to such Business Combination of the Outstanding Company Common
 Stock and Outstanding Company Voting Securities, as the case may be,
 (ii) no Person (excluding any employee benefit plan (or related trust)
 of the Company or such corporation resulting from such Business
 Combination) beneficially owns, directly or indirectly, 20% or more of,
 respectively, the then outstanding shares of common stock of the
 corporation resulting from such Business Combination or the combined
 voting power of the then outstanding voting securities of such
 corporation except to the extent that such ownership existed prior to
 the Business Combination and (iii) at least a majority of the members
 of the board of directors of the corporation resulting from such
 Business Combination were members of the Incumbent Board at the time of
 the execution of the initial agreement, or of the action of the Board,
 providing for such Business Combination; or
 
 (d) Approval by the shareholders of the Company of a complete
 liquidation or dissolution of the Company.
 
 3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company
 
subject to the terms and conditions of this Agreement, for the period commencing
on the Effective Date and ending on the third anniversary of such date (the
"Employment Period").
 
 4. Terms of Employment. (a) Position and Duties. (i) During the
Employment Period, (A) the Executive's position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall
be at least commensurate in all material respects with the most significant of
those held, exercised and assigned to the Executive at any time during the
120-day period immediately preceding the Effective Date and (B) the Executive's
services shall be performed at the location where the Executive was employed
immediately preceding the Effective Date or any office or location less than 35
miles from such location.
 
 (ii) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours to
the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date
 
shall not thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Company.
 
 (b) Compensation. (i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has been
earned but deferred, to the Executive by the Company and its affiliated
companies in respect of the twelve-month period immediately preceding the month
in which the Effective Date occurs. During the Employment Period, the Annual
Base Salary shall be reviewed no more than 12 months after the last salary
increase awarded to the Executive prior to the Effective Date and thereafter at
least annually. Any increase in Annual Base Salary shall not serve to limit or
reduce any other obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base Salary as so
increased. As used in this Agreement, the term "affiliated companies" shall
include any company controlled by, controlling or under common control with the
Company.
 
 (ii) Annual Bonus. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the Employment
Period, an annual bonus (the "Annual Bonus") in cash at least equal to the
Executive's target annual bonus under the Company's Annual Incentive Bonus Plan,
or any comparable bonus under any predecessor or successor plan, for the fiscal
year in which the Effective Date occurs, which shall be calculated as follows:
(A) the target bonus percentage as established by the Board prior to the
Effective Date for the fiscal year in which the Effective Date occurs,
multiplied by (B) the Executive's Annual Base Salary (the "Recent Annual
Bonus"). In the event that, prior to the Effective Date,
 
the Executive's target bonus percentage has not been established by the Board
under the Annual Incentive Bonus Plan or any comparable bonus under any
predecessor or successor plan, then for purposes of this Agreement, the
Executive's Recent Annual Bonus shall be calculated by using the target bonus
percentage for the other executives in the Executive's peer group (determined
based on title, responsibilities and duties) who are parties to a Key Employee
Change of Control Contract. Such Annual Bonus shall be paid no later than
January 31 of the fiscal year next following the fiscal year for which the
Annual Bonus is awarded, unless the Executive shall elect to defer the receipt
of such Annual Bonus.
 
 (iii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with respect to
regular, annual incentive opportunities, including stock options, restricted
stock and/or performance units, savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than the most
favorable of those provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in effect at any
time during (i) with respect to regular, annual incentive opportunities,
including stock options, restricted stock and/or performance units, the one year
period immediately preceding the Effective Date and (ii) with respect to all
other items, the 120-day period immediately preceding the Effective Date or if
more favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.
 
 (iv) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent applicable generally
to other peer executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of the Company and
its affiliated companies.
 
 (v) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and its affiliated companies in effect
for the Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies.
 
 (vi) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without limitation,
tax and financial planning services, payment of club dues, and, if applicable,
use of an automobile and payment of related expenses, in accordance with the
most favorable plans, practices, programs and policies of the
 
Company and its affiliated companies in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies.
 
 (vii) Office and Support Staff. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company and its affiliated companies at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies.
 
 (viii) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.
 
 (ix) Employment Agreement Provisions. Without limiting the
generality of the foregoing, the following provisions of the Employment
Agreement between the Company and the Executive dated as of February 5, 2004
(the "Employment Agreement") shall continue in effect following the Effective
Date to the extent the Company's obligations thereunder have not previously been
satisfied in full: Section 3.6 (providing for the grant of certain
 
performance units); Section 3.9 (providing for special compensation); Section
3.10 (providing for special pension service crediting) and Section 8.15
(providing for indemnification).
 
 5. Termination of Employment. (a) Death or Disability. The Executive's
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written
notice in accordance with Section 12(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. 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.
 
 (b) Retirement. The Executive's employment shall terminate
automatically upon the Executive's Retirement. For purposes of this Agreement,
"Retirement" shall mean termination of the Executive's employment by the Company
for any reason on or after the first day of the month next following the
Executive's 65th birthday (the "Normal Retirement Date") or termination by the
Executive upon the satisfaction of the requirements for early retirement (the
"Early Retirement Date") under the early retirement provisions of the Company's
Retirement Plan (the "Retirement Plan"). Notwithstanding anything to the
contrary, if the Executive
 
terminates employment for Good Reason, such termination shall not be deemed to
be a Retirement for purposes of this Agreement despite the fact that the
Executive may qualify for early retirement under the Company's Retirement Plan.
 
 (c) Cause. The Company may terminate the Executive's employment during
the Employment Period for Cause. For purposes of this Agreement, "Cause" shall
mean:
 
 (i) 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 Chief Executive Officer of the Company which specifically
 identifies the manner in which the Board or Chief Executive Officer
 believes that the Executive has not substantially performed the
 Executive's duties, or
 
 (ii) the willful engaging by the Executive in illegal conduct
 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 constitute grounds for "Cause" unless such act or failure to
act would also have constituted "Cause" under the Employment Agreement, and 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 Chief Executive Officer 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. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of
 
the Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying the particulars
thereof in detail.
 
 (d) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, Good Reason shall
mean:
 
 (i) the assignment to the Executive of any duties inconsistent
 in any respect with the Executive's position (including status,
 offices, titles and reporting requirements), authority, duties or
 responsibilities as contemplated by Section 4(a) of this Agreement, or
 any other action by the Company which results in a diminution in such
 position, authority, duties or responsibilities, excluding for this
 purpose an isolated, insubstantial and inadvertent action not taken in
 bad faith and which is remedied by the Company promptly after receipt
 of notice thereof given by the Executive;
 
 (ii) any failure by the Company to comply with any of the
 provisions of Section 4(b) of this Agreement, other than an isolated,
 insubstantial and inadvertent failure not occurring in bad faith and
 which is remedied by the Company promptly after receipt of notice
 thereof given by the Executive;
 
 (iii) the Company's requiring the Executive to be based at any
 office or location other than as provided in Section 4(a)(i)(B) hereof
 or the Company's requiring the Executive to travel on Company business
 to a substantially greater extent than required immediately prior to
 the Effective Date;
 
 (iv) any purported termination by the Company of the
 Executive's employment otherwise than as expressly permitted by this
 Agreement;
 
 (v) any failure by the Company to comply with and satisfy
 Section 11(c) of this Agreement; or
 
 (vi) any action or inaction not described in clauses (i)
 through (v) above but which would have constituted "Good Reason" under
 the Employment Agreement.
 
For purposes of this Section 5(d), any good faith determination of "Good Reason"
made by the Executive shall be conclusive. Anything in this Agreement to the
contrary notwithstanding, a
 
termination by the Executive for any reason during the 30-day period immediately
following the first anniversary of the Effective Date (unless such Effective
Date is attributable to the consummation by the Company of a Business
Combination which constitutes a Change of Control and as set out in Section
2(c)(iii), at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination) shall be deemed to
be a termination for Good Reason for all purposes of this Agreement.
 
 (e) Notice of Termination. Any termination by the Company for Cause, or
by the Executive for Good Reason, shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 12(b) of this
Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
 
 (f) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
date on which the Company notifies the Executive of such termination, (iii) if
the Executive's employment is terminated by reason of Retirement, either the
date on which the Company notifies the Executive of such termination (on or
after the Normal Retirement Date) or the date on which the Executive ceases
employment with the Company (on or after the Executive's Early Retirement Date),
as the case may be, and (iv) if the Executive's employment is terminated by
reason of death or Disability, the date of death of the Executive or the
Disability Effective Date, as the case may be.
 
 6. Obligations of the Company upon Termination. (a) Good Reason; Other
Than for Cause, Retirement, Death or Disability. If, during the Employment
Period, the Company shall terminate the Executive's employment other than for
Cause, Retirement or Disability or the Executive shall terminate employment for
Good Reason, the Company shall provide the Executive with the following
compensation and benefits; provided, that in the event that the Termination
Benefits under Article 7 of the Employment Agreement, together with the Other
Benefits and any accrued and unpaid Annual Base Salary and vacation pay, would
have been in the aggregate more favorable to the Executive, the Company shall
instead provide the Executive with such Termination Benefits, Other Benefits and
any accrued and unpaid Annual Base Salary and vacation pay.
 
 (i) The Company shall pay to the Executive in a lump sum in
cash within 20 days after the Date of Termination the aggregate of the following
amounts:
 
 A. the sum of (1) the Executive's Annual Base Salary through
 the Date of Termination to the extent not theretofore paid, (2) the
 product of (x) the higher of (I) the highest annual bonus earned by the
 Executive for the last three fiscal years prior to the Effective Date
 and (II) the Annual Bonus paid or payable for the most recently
 completed fiscal year during the Employment Period, in each case,
 including any bonus or portion thereof which has been earned but
 deferred (and annualized for any fiscal year consisting of less than
 twelve full months or during which the Executive was employed for less
 than twelve full months) (such higher amount being referred to as the
 "Highest Annual Bonus") and (y) a fraction, the numerator of which is
 the number of days in the current fiscal year through the Date of
 Termination, and the denominator of which is 365 (the "Pro-Ration
 Fraction") and (3) any accrued vacation pay, to the extent not
 theretofore paid (the sum of the amounts described in clauses (1), (2),
 and (3) shall be hereinafter referred to as the "Accrued Obligations");
 and
 
 B. an amount equal to the product of (1) the lesser of (x) 2.9
 and (y) the number of years (with partial years expressed as a fraction
 thereof) remaining until the Executive reaches the Normal Retirement
 Date and (2) the sum of (x) the Executive's Annual Base Salary and (y)
 the Highest Annual Bonus; and
 
 C. an amount equal to the total value of the Executive's
 Restoration Account (as defined in the Company's Savings Restoration
 Plan (the "SRP")), with such amount being the higher of (1) the value
 of the Executive's Restoration Account on the Executive's Date of
 Termination or (2) the value of the Executive's Restoration Account on
 the date of the Change of Control, in each case with "value" determined
 under the applicable change of control provisions in the SRP; and
 
 D. an amount equal to the additional Company matching
 contributions which would have been made on the Executive's behalf in
 the Company's Employee Savings Plan (the "ESP") (assuming continued
 participation on the same basis as immediately prior to the Effective
 Date), plus the additional amount of any benefit the Executive would
 have accrued under the SRP as a result of contribution limitations in
 the ESP, until the earliest to occur of (1) the expiration of the
 36-month period following the Date of Termination and (2) the
 Executive's Normal Retirement Date (with the Company's matching
 contributions being determined pursuant to the applicable provisions of
 the ESP and the SRP and based upon the Executive's compensation
 (including any amounts deferred pursuant to any deferred compensation
 program) in effect for the 12-month period immediately prior to the
 Effective Date); and
 
 E. an amount equal to the sum of the present values, as of the
 Date of Termination, of (1) the accrued retirement benefit payable
 under the Company's Retirement Restoration Plan (the "RRP") and (2) the
 additional retirement benefits that the Executive would have accrued
 under the Retirement Plan and the RRP (taking into account the special
 pension service crediting
 
 provided for in Section 3.10 of the Employment Agreement) if the
 Executive had continued employment until the earliest to occur of (a)
 the expiration of the three year period following the Date of
 Termination and (b) the Executive's Normal Retirement Date (assuming
 that the Executive's compensation in each of the additional years is
 that required by Section 4(b)(i) and Section 4(b)(ii) hereof), with the
 present values being computed by discounting to the Date of Termination
 the accrued benefit and the additional retirement benefits payable as
 lump sums at an assumed benefit commencement date of the later of (i)
 the date the Executive attains age 55 and (ii) the date three years
 after the Date of Termination (but in no event later than Normal
 Retirement Date), at the rate of interest used for valuing lump-sum
 payments in excess of $25,000 for participants with retirement benefits
 commencing immediately under the Retirement Plan, as in effect as of
 the Effective Date; and
 
 (ii) The Company shall, at its sole expense as incurred,
provide the Executive with (A) financial planning services until the third
anniversary of the Date of Termination on the same basis as was provided
immediately prior to the Date of Termination, and (B) outplacement services at a
cost to the Company not to exceed $30,000, the scope and provider of which shall
be selected by the Executive in the Executive's sole discretion; and
 
 (iii) Until the earlier of (A) the third anniversary of the
Date of Termination and (B) the Executive's reaching the Normal Retirement Date,
the Company shall maintain in full force and effect for the Executive all life,
accident, disability, medical and health care benefit plans and programs or
arrangements in which the Executive was entitled to participate, at the same
levels and rates, in which the Executive was participating immediately prior to
the Effective Date, provided that the Executive's continued participation is
possible under the general terms and provisions of such plans and programs,
provided, however, that if the Executive becomes reemployed with another
employer and is eligible to receive medical or other welfare benefits under
another employer-provided plan, the medical and other welfare benefits described
herein shall be secondary to those provided under such other plan during such
applicable period of eligibility. In the event that the Executive's
participation in any such plan or program is barred due to the eligibility and
participation requirements of such plan or program as then in effect, the
Company shall arrange to provide benefits substantially similar to those to
which the Executive was entitled to receive under such plans and programs of the
Company prior to the Effective Date. In such event, appropriate adjustments
shall be made so that the after-tax value thereof to the Executive is similar to
the after-tax value of the benefit plans in which participation is barred.
Benefits provided pursuant to this paragraph are contractual only and are not to
be considered a continuation of coverage as provided under Section 601 et seq.
of ERISA and Section 4980B of the Code. For purposes of determining the
Executive's eligibility (but not the time of commencement of benefits) for
retiree benefits pursuant to such plans and programs, the Executive shall be
considered to have remained employed until three years after the Date of
Termination and to have retired on the last day of such period, and, if the
Executive satisfies the eligibility requirements, such benefits shall commence
no later than the expiration of the three year continuation period provided in
clause (A) of this Section 6(a)(iii); and
 
 (iv) the Initial Option (as defined in the Employment
 Agreement) and any other Options (as defined in the Employment
 Agreement) that may have been granted to the Executive, to the extent
 then outstanding, shall be vested in full upon the Date of Termination
 and shall remain exercisable thereafter for the period provided
 pursuant to the terms thereof, which period shall not be less than
 twelve months (but in no event shall any Option be exercisable after
 the expiration of its full original term), and any portion of the
 Initial Restricted Stock (as defined in the Employment Agreement) and
 any other restricted Shares (as defined in the Employment Agreement)
 that may have been granted to the Executive that have not yet vested
 shall vest in full upon the Date of Termination; and
 
 (v) To the extent not theretofore paid or provided, the
 Company shall timely pay or provide to the Executive any other amounts
 or benefits required to be paid or provided or which the Executive is
 eligible to receive under Sections 3.6, 3.9, 3.10 or 8.15 of the
 Employment Agreement or any other plan, program, policy or practice or
 contract or agreement of the Company and its affiliated companies (such
 other amounts and benefits shall be hereinafter referred to as the
 "Other Benefits").
 
 (b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive's legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
20 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(b) shall
include, without limitation, and the Executive's estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Company and affiliated companies to the estates and
beneficiaries of peer executives of the Company and such affiliated companies
under such plans, programs, practices and policies relating to death benefits,
if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive's estate and/or the
Executive's beneficiaries, as in effect on the date of the Executive's death
with respect to other peer executives of the Company and its affiliated
companies and their beneficiaries.
 
 (c) Disability. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
20 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(c) shall
include, and the Executive shall be entitled after the Disability Effective Date
to receive, disability and other benefits at least equal to the most favorable
of those generally provided by the Company and its affiliated companies to
disabled executives and/or their families in accordance with such plans,
programs, practices and policies relating to disability, if any, as in effect
generally with respect to other peer executives and their families at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive's family, as in effect at any
time thereafter generally with respect to other peer executives of the Company
and its affiliated companies and their families.
 
 (d) Retirement. If the Executive voluntarily terminates his employment
by reason of Retirement, this Agreement shall terminate without further
obligations to the Executive other than for Accrued Obligations and the timely
payment or provision of Other Benefits. In such case, all Accrued Obligations
shall be paid to the Executive in a lump sum in cash within 20 days of the Date
of Termination. If the Company shall terminate the Executive's employment for
Retirement, the Company shall provide the Executive with the Termination
Benefits described in Article 7 of the Employment Agreement, together with the
Other Benefits and any accrued and unpaid Annual Base Salary and vacation pay.
 
 (e) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive (i) the Annual Base Salary through the Date of
Termination, (ii) the amount of any compensation previously deferred by the
Executive, and (iii) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations
and the timely payment or provision of Other Benefits. In such case, all Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 20 days
of the Date of Termination.
 
 7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor, subject to Section
12(f), shall anything herein limit or otherwise affect such rights as the
Executive may have under any contract or agreement with the Company or any of
its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of its
affiliated companies, including, but not limited to, the Company's Management
Life Insurance Plan and Override Pool Bonus Plan, at or subsequent to the Date
of Termination shall be payable in accordance with such plan, policy, practice
or program or contract or agreement except as explicitly modified by this
Agreement. Without limiting the generality of the foregoing, there shall be no
duplication of any of the payments or benefits described in Section 6 hereof,
and payments under paragraphs C, E and F of Section 6(a)(i) shall be in full
 
satisfaction of the amounts otherwise payable under the SRP, the RRP and the
Executive Deferred Compensation Plans, respectively.
 
 8. Full Settlement; Legal Fees. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and except as
specifically provided in Section 6(a)(iii), such amounts shall not be reduced
whether or not the Executive obtains other employment. The Company agrees to pay
as incurred, to the full extent permitted by law, all legal fees and expenses
which the Executive may reasonably incur as a result of any contest (regardless
of the outcome thereof) by the Company, the Executive or others of the validity
or enforceability of, or liability or entitlement under, any provision of this
Agreement or any guarantee of performance thereof (whether such contest is
between the Company and the Executive or between either of them and any third
party, and including as a result of any contest by the Executive about the
amount of any payment pursuant to this Agreement), plus in each case interest on
any delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
 
 9. Certain Additional Payments by the Company.
 
 (a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the Company to
or for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this
 
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 9) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any corresponding provisions of state or
local tax laws, or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
 
 (b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by KPMG LLP or
such other certified public accounting firm as may be designated by the
Executive (the "Accounting Firm"), which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change of Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up
 
Payment, as determined pursuant to this Section 9, shall be paid by the Company
to the Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 9(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
 
 (c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which the Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
 
 (i) give the Company any information reasonably requested by
 the Company relating to such claim,
 
 (ii) take such action in connection with contesting such claim
 as the Company shall reasonably request in writing from time to time,
 including, without limitation, accepting legal representation with
 respect to such claim by an attorney reasonably selected by the
 Company,
 
 (iii) cooperate with the Company in good faith in order
 effectively to contest such claim, and
 
 (iv) permit the Company to participate in any proceedings
 relating to such claim;
 
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 9(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either pay the
tax claimed and direct the Executive to sue for a refund or contest the claim in
any permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company pays such claim and directs
the Executive to sue for a refund, the Company shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such payment or with respect to any imputed income with respect to such payment;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount.
 
Furthermore, the Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.
 
 
 (d) If, after the payment of any amount by the Company pursuant to
Section 9(c), the Executive becomes entitled to receive any refund with respect
to such claim, the Executive shall (subject to the Company's complying with the
requirements of Section 9(c)) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the payment by the Company of any amount pursuant
to Section 9(c), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then the amount of
such payment shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
 
 10. 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 affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies 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). After termination of the Executive's employment with the Company,
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 information, knowledge or data to anyone other than the
 
Company and those designated by it. In no event shall an asserted violation of
the provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this Agreement.
 
 
 11. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
 
 (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
 
 (c) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
 
 12. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without reference
to principles of conflict of laws. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect. This Agreement may
not be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
 
 (b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed, in the
case of the Executive, to the Executive's home address registered with the
Company or, if to the Company, to the attention of the General Counsel at the
Company's home office address or to such other address as either party shall
have furnished to the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the addressee.
 
 (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
 
 (d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
 
 (e) The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
 
 (f) The Executive and the Company acknowledge that before the Effective
Date, the Employment Agreement, rather than this Agreement, shall govern the
terms and conditions of the Executive's employment, and if the Executive's
employment terminates before the Effective Date, this Agreement shall
immediately terminate and the Executive shall have no
 
rights under this Agreement. From and after the Effective Date, this Agreement
shall supersede the Employment Agreement, except to the extent the provisions
thereof are specifically incorporated herein.
 
 IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.
 
 
 
 
 
 
 ------------------------------------
 James T. Hackett
 
 
 
 
 ANADARKO PETROLEUM CORPORATION
 
 
 
 
 By:
 --------------------------------
 Richard A Lewis
 Vice President, Human Resources
 

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