Form of Stock Option Agreement - 1999 Stock Incentive Plan (non-executive)

EXHIBIT 10.3 November, 2005 ANADARKO PETROLEUM CORPORATION NON-EXECUTIVE
1999 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
(Seven-Year Term) 1. To the extent that the right to exercise Options has accrued hereunder, the Options, or any part thereof, may be exercised in whole or in part by filing a written notice with the Corporate Secretary of the Company at its corporate headquarters. Such notice shall be in the form specified by the Committee. If no form has been specified, such notice shall specify the number of Options that the Participant wants to exercise and the method of exercise. Payments of all amounts due shall be made by check payable to the Company. Except as otherwise provided by the Committee before an Option is exercised: (i) all or a portion of the Exercise Price may be paid by delivery of Mature Shares having an aggregate Fair Market Value (valued as of the date of exercise) that is equal to the amount of cash that would otherwise be required; and (ii) the Participant may pay the Exercise Price by authorizing a third party to sell Shares (or a sufficient portion of the Shares) acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire Exercise Price and any tax withholding resulting from such exercise. No Shares shall be issued or delivered until full payment therefor has been made. 2. The Options may not be exercised unless the Participant is at the time of such exercise an employee of the Company, or an Affiliate, and shall have been continuously employed by the Company, or an Affiliate, since the date the Options were granted; provided, however, that the Options shall be exercisable following the termination of the Participant' s employment during the term of the Options as provided in sections (i) through (v) below. Options, which are not and do not become exercisable at the time of the Participants termination of employment shall, coincident therewith, terminate and be of no further force or effect. (i) Retirement . If the Participant shall cease to be an employee of the Company, or an Affiliate, by reason of retirement pursuant to a pension or retirement plan of the Company, or of a subsidiary, the Participant (or, in the event of Participant' s death, the Participant' s legal representative) may, within a period of not more than thirty-six (36) months after the date of cessation of employment, exercise the Options if and to the extent they were exercisable on the date of cessation. In no event may the Options be exercised more than seven (7) years from the date of grant. (ii) Death or Disability of Participant . In the event of the death of the Participant while an active employee of the Company, or an Affiliate, or if the Participant shall cease to be an employee of the Company, or an Affiliate, by reason of total disability, as defined in the Company' s Disability Plan, any outstanding Options granted to the


Participant shall vest and be immediately exercisable with respect to all or any part of the Options which remain unexercised. In the event of the death of the Participant, the Participant' s legal representative or other person or persons to whom the Participant' s rights under the Options shall pass by the Participant' s will or the laws ...