2003 Committee Charter : APC

ANADARKO PETROLEUM CORPORATION
COMPENSATION AND BENEFITS COMMITTEE CHARTER
Adopted by the Board of Directors January 30, 2003
Purpose
The Compensation and Benefits Committee (the "Committee") is appointed by the Board
to discharge the Board's responsibilities relating to compensation of the Company's
directors and officers. The Committee has overall responsibility for approving and
evaluating the director and officer compensation plans, policies and programs of the
Company. The Committee is also responsible for producing an annual report on
executive compensation for inclusion in the Company's proxy statement.
Committee Membership
The Committee shall consist of no fewer than three members. The members of the
Committee shall meet the independence requirements adopted by the Board of Directors
in accordance with the requirements of the New York Stock Exchange and the Securities
and Exchange Commission and shall be outside directors within the meaning of section
162(m) of the Internal Revenue Code of 1986.
The members of the Committee shall be directors of the Company and shall be nominated
by the Nominating and Corporate Governance Committee and elected by the Board of
Directors. Committee members shall serve for a period of one year unless such member
resigns or is replaced by the Board of Directors and their successor appointed.
Committee members may be removed by a majority vote of the full Board.
Meetings
The Committee shall meet as often as necessary to carry out its responsibilities.
Meetings can be called by any member of the Committee. Reports of actions of the
Committee shall be made to the Board of Directors at its next regularly scheduled
meeting following the Committee meeting.
Committee Authority and Responsibilities
1. The Committee shall have the sole authority to retain and terminate any legal
counsel or compensation or other consultant to be used to assist in the evaluation of
director or executive compensation and shall have sole authority to approve the
consultant's fees and other retention terms. The Committee shall also have authority to
obtain advice and assistance from internal or external legal, accounting or other advisors
and the sole authority to approve the payment of the advisor's fees and other retention
items. All fees and other retention items for compensation consultants, internal or
external legal, accounting or other advisors shall be paid by the Company.
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2. Chairman and/or the Chief Executive Officer. The Committee shall set corporate
goals and objectives relevant to the Chairman's and/or the Chief Executive Officer's
compensation. In determining the long-term incentive component of the Chairman and/or
the Chief Executive Officer compensation, the Committee should consider the
Company's performance and relative shareholder return, the value of similar incentive
awards to chairmen and/or the chief executive officers at comparable companies, and the
awards given to the Company's Chairman and/or the Chief Executive Officer in past
years. The Committee shall annually review and evaluate, including a written evaluation,
the Chairman's and/or the Chief Executive Officer's performance in light of those goals
and objectives. The Committee shall have the sole authority to approve, amend or
terminate for the Chairman and/or the Chief Executive Officer of the Company the
following compensation levels based on this evaluation: (a) annual base salary level, (b)
annual incentive opportunity level, (c) long-term incentive opportunity level, (d)
employment agreements or severance arrangements, and (e) any special or supplemental
benefits except as provided in Paragraph 6 of this Charter.
3. Other Executives. The Committee shall annually review and have the sole
authority to approve, amend or terminate for the executives of the Company, other than
the Chairman and/or the Chief Executive Officer, (a) the annual base salary level, (b) the
annual incentive opportunity level, (c) the long-term incentive opportunity level, (d)
employment agreements or severance arrangements, and (e) any special or supplemental
benefits except as provided in Paragraph 6 below.
4. Directors. The Committee shall have the sole authority to approve, amend or
terminate for directors (a) the annual compensation, and (b) any additional compensation
for service on committees of the Board, service as a committee chairman, service as
presiding director of the executive sessions of the Board, meeting fees or any other
benefit payable by virtue of the director's position as a member of the Board of Directors,
except as provided in Paragraph 6 below.
5. Compensation and Benefit Plans. The Committee shall have the sole authority to
approve, amend or terminate incentive-compensation plans and any qualified equitybased
plans, including the approval, amendment or termination of any tax-qualified plan
or section 125 plan, except as provided in Paragraph 6 of this Charter. The Committee
shall have the sole authority to appoint and remove various plan Trustees, appoint and
remove members of the Administrative Committee; and to appoint and remove the Plan
Administrator.
6. Ratification Required by the Board. The following shall be presented as a
recommendation to the full Board and approved by the full Board (i) any action,
including, but not limited to, the adoption or amendment of any non-qualified equity
compensation plan, that is required by law or regulation to be submitted to the
shareholders of the Company for approval, and (ii) any approval, amendment or
termination of change in control agreements/provisions related to the directors or officers
of the Company. In the event the recommendation of the Committee is not approved by
the Board, the recommended action must be returned to the Committee for further
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consideration. Any future Committee recommendation regarding such item must, again,
be presented to the Board for its approval.
For the purpose of this Charter, a "non-qualified equity compensation plan" shall
mean any plan that does not meet the requirements of Section 401(a) or 423 of the
Internal Revenue Code, as amended or the definition of an "excess benefit plan within the
meaning of Section 3(36) of the Employee Retirement Security Act.
7. Annual Report. The Committee shall produce an annual report on executive
compensation for inclusion in the Company's proxy statement.
8. Competitive Compensation Position. The Committee shall annually review
market data to assess the Company's competitive position for each component of
executive compensation (especially base salary, annual incentives, long-term incentives,
and supplemental executive benefit programs) by reviewing market data for appropriate
peer companies.
9. Cash Effect. The Committee shall monitor the cumulative cash effect on the
Company caused by bonus and other cash-based incentive plans of the Company,
especially in relation to the Company's net income for the applicable year(s).
10. Stock Ownership Policy. The Committee shall establish and monitor the stock
ownership policy with regard to the officers and directors of the Company and monitor
compliance with this policy.
11. Executive Session. The Committee shall determine which officers of the
Company or other visitors to invite to the Committee's meetings. In the sole discretion of
the Committee, the Committee may meet in executive session at any time.
12. Report to the Board. Following each action by the Committee, the Committee
shall make a report to the full Board at the next regularly scheduled meeting of the full
Board.
13. Charter Review. The Committee shall review and reassess the adequacy of this
Charter annually and recommend any proposed changes to the Board for approval. The
Committee shall annually review its own performance by distributing to its members a
written self-assessment. The results of such self-assessment shall be presented to the
Board of Directors at its next meeting.
14. Delegation/Written Consent. The Committee may form and delegate authority to
subcommittees when it determines that such action is appropriate under the
circumstances; and the Committee may take action in the absence of a meeting by
unanimous written consent of all members.
15. Additional Activities. The Committee shall perform any other activities consistent
with this Charter, the Company's By-laws and applicable law, as the Committee deems
appropriate to carry out its assigned duties or as requested by the Board.