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EXHIBIT 10.20
APACHE CORPORATION
1990 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED DECEMBER 14, 2000;
EFFECTIVE AS OF MARCH 1, 2001)
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APACHE CORPORATION
1990 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED DECEMBER 14, 2000;
EFFECTIVE AS OF MARCH 1, 2001)
SECTION 1
INTRODUCTION
1.1 Establishment. Apache Corporation, a Delaware corporation (hereinafter
referred to, together with its Affiliated Corporations (as defined in subsection
2.1(a)) as the "Company" except where the context otherwise requires), hereby
establishes the Apache Corporation 1990 Stock Incentive Plan (the "Plan") for
certain key employees of the Company. The Plan permits the grant of stock
options to certain key employees of the Company.
1.2 Purposes. The purposes of the Plan are to provide the key management
employees selected for participation in the Plan with added incentives to
continue in the long-term service of the Company and to create in such employees
a more direct interest in the future success of the operations of the Company by
relating incentive compensation to increases in shareholder value, so that the
income of the key management employees is more closely aligned with the income
of the Company's shareholders. The Plan is also designed to attract key
employees and to retain and motivate participating employees by providing an
opportunity for investment in the Company.
1.3 Effective Date. The Effective Date of the Plan (the "Effective Date") is
September 19, 1990. This Plan and each option granted hereunder is conditioned
on and shall be of no force or effect until approval of the Plan by the holders
of the shares of voting stock of the Company unless the Company, on the advice
of counsel, determines that shareholder approval is not necessary.
SECTION 2
DEFINITIONS
2.1 Definitions. The following terms shall have the meanings set forth below:
(a) "Administrative Agent" means any designee or agent that may be
appointed by the Committee pursuant to Section 3.1(b) hereof.
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(b) "Affiliated Corporation" means any corporation or other entity
(including but not limited to a partnership) which is affiliated with Apache
Corporation through stock ownership or otherwise and is treated as a common
employer under the provisions of Sections 414(b) and (c) of the Internal Revenue
Code.
(c) "Board" means the Board of Directors of the Company.
(d) "Committee" means the Stock Option Plan Committee of the Board
which is empowered hereunder to take actions in the administration of the Plan.
The Committee shall be constituted at all times as to permit the Plan to comply
with Rule 16b-3 or any successor rule promulgated under the Securities Exchange
Act of 1934 (the "1934 Act"). Members of the Committee shall be appointed from
time to time by the Board, shall serve at the pleasure of the Board and may
resign at any time upon written notice to the Board.
(e) "Deferred Delivery Plan" means the Company's Deferred Delivery
Plan, effective as of February 10, 2000 and as it may be amended from time to
time, or any successor plan.
(f) "Depositary Shares" means the Depositary shares representing the
Company's preferred stock convertible into Stock.
(g) "Effective Date" means the effective date of the Plan, September
19, 1990.
(h) "Eligible Employees" means those full-time key employees
(including, without limitation, officers and directors who are also employees)
of the Company or any division thereof, upon whose judgment, initiative and
efforts the Company is, or will become, largely dependent for the successful
conduct of its business.
(i) "Fair Market Value" means the per share closing price of the Stock
or Depositary Shares, as applicable, on the composite tape on a particular date.
If on such date there are no transactions in the Stock or Depositary Shares, as
applicable, the Fair Market Value shall be determined as of the immediately
preceding date on which there were transactions in the Stock or Depositary
Shares, as applicable.
(j) "Internal Revenue Code" means the Internal Revenue Code of 1986, as
it may be amended from time to time.
(k) "Option" means a right to purchase shares of Stock at a stated
price for a specified period of time. All Options granted under the Plan shall
be Options which are not "incentive stock options" as described in Section 422A
of the Internal Revenue Code.
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(l) "Option Price" means the price at which shares of Stock subject to
an Option may be purchased, determined in accordance with subsection 7.2(b).
(m) "Participant" means an Eligible Employee designated by the
Committee from time to time during the term of the Plan to receive one or more
Options under the Plan.
(n) "Stock" means the $1.25 par value Common Stock of the Company.
(o) "Stock Units" means investment units under the Deferred Delivery
Plan, each of which is deemed to be equivalent to one share of Stock.
2.2 Gender and Number. Except when otherwise indicated by the context, the
masculine gender shall also include the feminine gender, and the definition of
any term herein in the singular shall also include the plural.
SECTION 3
PLAN ADMINISTRATION
3.1 Administration by the Committee.
(a) The Plan shall also be administered by the Committee. In accordance
with the provisions of the Plan, the Committee shall, in its sole discretion,
select the Participants from among the Eligible Employees, determine the Options
to be granted pursuant to the Plan, the number of shares of Stock to be issued
thereunder and the time at which such Options are to be granted, fix the Option
Price, and establish such other terms and requirements as the Committee may deem
necessary or desirable and consistent with the terms of the Plan. The Committee
shall determine the form or forms of the agreements with Participants which
shall evidence the particular provisions, terms, conditions, rights and duties
of the Company and the Participants with respect to Options granted pursuant to
the Plan, which provisions need not be identical except as may be provided
herein.
(b) The Committee may from time to time adopt such rules and
regulations for carrying out the purposes of the Plan as it may deem proper and
in the best interests of the Company. The Committee may appoint an
Administrative Agent, who need not be a member of the Committee or an employee
of the Company, to assist the Committee in administration of the Plan and to
whom it may delegate such powers as the Committee deems appropriate, except that
the Committee shall determine any dispute. The Committee may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or in any
agreement entered into hereunder in the manner and to the extent it
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shall deem expedient and it shall be the sole and final judge of such
expediency. No member of the Committee shall be liable for any action or
determination made in good faith. The determination, interpretations and other
actions of the committee pursuant to the provisions of the Plan shall be binding
and conclusive for all purposes and on all persons.
SECTION 4
STOCK SUBJECT TO THE PLAN
4.1 Number of Shares. Two Million Fifty Thousand (2,050,000) shares of Stock are
authorized for issuance under the Plan in accordance with the provisions of the
Plan and subject to such restrictions or other provisions as the Committee may
from time to time deem necessary. This authorization may be increased from time
to time by approval of the Board and by the shareholders of the Company if, on
the advice of counsel for the Company, such shareholder approval is required.
Shares of Stock which may be issued upon exercise of Options shall be applied to
reduce the maximum number of shares of Stock remaining available for use under
the Plan. The Company shall at all times during the term of the Plan and while
any Options are outstanding retain as authorized and unissued Stock, or as
treasury Stock, at least the number of shares from time to time required under
the provisions of the Plan, or otherwise assure itself of its ability to perform
its obligations hereunder.
4.2 Other Shares of Stock. Any shares of Stock that are subject to an Option
which expires or for any reason is terminated unexercised, and any shares of
Stock that for any other reason are not issued to an Eligible Employee or are
forfeited shall automatically become available for use under the Plan.
4.3 Adjustments for Stock Split, Stock Dividend, Etc. If the Company shall at
any time increase or decrease the number of its outstanding shares of Stock or
change in any way the rights and privileges of such shares by means of the
payment of a stock dividend or any other distribution upon such shares payable
in Stock, or through a stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Stock, then in relation to
the Stock that is affected by one or more of the above events, the numbers,
rights and privileges of the following shall be increased, decreased or changed
in like manner as if they had been issued and outstanding, fully paid in
nonassessable at the time of such occurrence: (i) the shares of Stock as to
which Options may be granted under the Plan; and (ii) the shares of the Stock
then included in each outstanding Option granted hereunder.
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4.4 Dividend Payable in Stock of Another Corporation, Etc. If the Company shall
at any time pay or make any dividend or other distribution upon the Stock
payable in securities or other property (except money or Stock), a proportionate
part of such securities or other property shall be set aside and delivered to
any Participant then holding an Option for the particular type of Stock for
which the dividend or other distribution was made, upon exercise thereof. Prior
to the time that any such securities or other property are delivered to a
Participant in accordance with the foregoing, the Company shall be the owner of
such securities or other property and shall have the right to vote the
securities, receive any dividends payable on such securities, and in all other
respects shall be treated as the owner. If securities or other property which
have been set aside by the Company in accordance with this Section are not
delivered to a Participant because an Option is not exercised, then such
securities or other property shall remain the property of the Company and shall
be dealt with by the Company as it shall determine in its sole discretion.
4.5 Other Changes in Stock. In the event there shall be any change, other than
as specified in Sections 4.3 and 4.4, in the number or kind of outstanding
shares of Stock or of any stock or other securities into which the Stock shall
be changed or for which it shall have been exchanged, and if the Committee shall
in its discretion determine that such change equitably requires an adjustment in
the number or kind of shares subject to outstanding Options or which have been
reserved for issuance pursuant to the Plan but are not then subject to an
Option, then such adjustments shall be made by the Committee and shall be
effective for all purposes of the Plan and on each outstanding Option that
involves the particular type of stock for which a change was effected.
4.6 Rights to Subscribe. If the Company shall at any time grant to the holders
of its Stock rights to subscribe pro rata for additional shares thereof or for
any other securities of the Company or of any other corporation, there shall be
reserved with respect to the shares then under Option to any Participant of the
particular class of Stock involved the Stock or other securities which the
Participant would have been entitled to subscribe for if immediately prior to
such grant the Participant had exercised his entire Option. If, upon exercise of
any such Option, the Participant subscribes for the additional shares of other
securities, the aggregate Option Price shall be increased by the amount of the
price that is payable by the Participant for such Stock or other securities.
4.7 General Adjustment Rules. No adjustment or substitution provided for in this
Section 4 shall require the Company to sell a fractional share of Stock under
any Option, or otherwise issue a fractional share of Stock, and the total
substitution or adjustment with respect to each Option shall be limited by
deleting any fractional share. In the case of any such substitution or
adjustment, the aggregate Option Price for the shares of Stock then subject to
the Option shall remain unchanged but the Option Price per share under each such
Option shall be equitably adjusted by the Committee to reflect the greater or
lesser
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number of shares of Stock or other securities into which the Stock subject to
the Option may have been changed.
4.8 Determination by the Committee, Etc. Adjustments under this Section 4 shall
be made by the Committee, whose determinations with regard thereto shall be
final and binding upon all parties.
SECTION 5
REORGANIZATION OR LIQUIDATION
In the event that the Company is merged or consolidated with another corporation
and the Company is not the surviving corporation, or if all or substantially all
of the assets or more than 20 percent of the outstanding voting stock of the
Company is acquired by any other corporation, business entity or person, or in
case of a reorganization (other than a reorganization under the United States
Bankruptcy Code) or liquidation of the Company, and if the provisions of Section
9 do not apply, the Committee, or the board of directors of any corporation
assuming the obligations of the Company, shall, as to the Plan and outstanding
Options either (i) make appropriate provision for the adoption and continuation
of the Plan by the acquiring or successor corporation and for the protection of
any such outstanding Options by the substitution on an equitable basis of
appropriate stock of the Company or of the merged, consolidated or otherwise
reorganized corporation which will be issuable with respect to the Stock,
provided that no additional benefits shall be conferred upon the Participants
holding such Options as a result of such substitution, and the excess of the
aggregate Fair Market Value of the shares subject to the Options immediately
after such substitution over the aggregate Option Price thereof is not more than
the excess of the aggregate Fair Market Value of the shares subject to such
Options immediately before such substitution over the aggregate Option Price
thereof, or (ii) upon written notice to the Participants, provide that all
unexercised Options must be exercised within a specified number of days of the
date of such notice or they will be terminated. In the latter event, the
Committee shall accelerate the vesting dates of outstanding Options so that all
Options become fully vested and exercisable prior to any such event.
SECTION 6
PARTICIPATION
Participants in the Plan shall be those Eligible Employees who, in the judgment
of the Committee, are performing, or during the term of their incentive
arrangement will perform, vital services in the management, operation and
development of the Company or
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an Affiliated Corporation, and significantly contribute, or are expected to
significantly contribute, to the achievement of long-term corporate economic
objectives. Participants may be granted from time to time one or more Options;
provided, however, that the grant of each such Option shall be separately
approved by the Committee, and receipt of one such Option shall not result in
automatic receipt of any other Option. Upon determination by the Committee that
an Option is to be granted to a Participant, written notice shall be given to
such person, specifying the terms, conditions, rights and duties related
thereto. Each Participant shall, if required by the Committee, enter into an
agreement with the Company, in such form as the Committee shall determine and
which is consistent with the provisions of the Plan, specifying such terms,
conditions, rights and duties. Options shall be deemed to be granted as of the
date specified in the grant resolution of the Committee, which date shall be the
date of any related agreement with the Participant. In the event of any
inconsistency between the provisions of the Plan and any such agreement entered
into hereunder, the provisions of the Plan shall govern.
SECTION 7
STOCK OPTIONS
7.1 Grant of Stock Options. Coincident with or following designation for
participation in the Plan, a Participant may be granted one or more Options. In
no event shall the exercise of one Option affect the right to exercise any other
Option or affect the number of shares of Stock for which any other Option may be
exercised, except as provided in subsection 7.2(j).
7.2 Stock Option Agreements. Each Option granted under the Plan shall be
evidenced by a written stock option agreement which shall be entered into by the
Company and the Participant to whom the Option is granted (the "Option Holder"),
and which shall contain the following terms and conditions, as well as such
other terms and conditions, not inconsistent therewith, as the Committee may
consider appropriate in each case.
(a) Number of Shares. Each stock option agreement shall state that it
covers a specified number of shares of the Stock, as determined by the
Committee.
(b) Price. The price at which each share of Stock covered by an Option
may be purchased shall be determined in each case by the Committee and set forth
in the stock option agreement, but in no event shall the price be less than the
Fair Market Value of the Stock on the date the Option is granted.
(c) Duration of Options; Employment Required For Exercise. Each stock
option agreement shall state the period of time, determined by the Committee,
within
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which the Option may be exercised by the Option Holder (the "Option Period").
The Option Period must end, in all cases, not more than ten years from the date
an Option is granted. Except as otherwise provided in Sections 5 and 8 and
subsection 7.2(d)(iv) hereof, each Option granted under the Plan shall become
exercisable in increments such that 25 percent of the Option will become
exercisable on each of the four subsequent one-year anniversaries of the date
the Option is granted, but each such additional 25 percent increment shall
become exercisable only if the Option Holder has been continuously employed by
the Company from the date the Option is granted through the date on which each
such additional 25 percent increment becomes exercisable.
(d) Termination of Employment, Death, Disability, Etc. Each stock
option agreement shall provide as follows with respect to the exercise of the
Option upon termination of the employment or the death of the Option Holder:
(i) If the employment of the Option Holder is terminated
within the Option Period for cause, as determined by the Company, the Option
shall thereafter be void for all purposes. As used in this subsection 7.2(d),
"cause" shall mean a gross violation, as determined by the Company, of the
Company's established policies and procedures, provided that the effect of this
subsection 7.2(d) (i) shall be limited to determining the consequences of a
termination and that nothing in this subsection 7.2(d) (i) shall restrict or
otherwise interfere with the Company's discretion with respect to the
termination of any employee.
(ii) If the Option Holder retires from employment by the
Company or its affiliates on or after attaining age 65, the Option may be
exercised by the Option Holder within 36 months following his or her retirement
(provided that such exercise must occur within the Option Period), but not
thereafter. In the event of the Option Holder's death during such 36-month
period, each Option may be exercised by those entitled to do so in the manner
referred to in (iv) below. In any such case, the Option may be exercised only as
to the shares as to which the Option had become exercisable on or before the
date of the Option Holder's retirement.
(iii) If the Option Holder becomes disabled (as determined
pursuant to the Company's Long-Term Disability Plan), during the Option Period
while still employed, or within the three-month period referred to in (v) below,
or within the 36-month period referred to in (ii) above, the Option may be
exercised by the Option Holder or by his or her guardian or legal
representative, within twelve months following the Option Holder's disability,
or within the 36-month period referred to in (ii) if applicable and if longer
(provided that such exercise must occur within the Option Period), but not
thereafter. In the event of the Option Holder's death during such twelve-month
period, each Option may be exercised by those entitled to do so in the manner
referred to in (iv) below. In any
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such case, the Option may be exercised only as to the shares as to which the
Option had become exercisable on or before the date of the Option Holder's
disability.
(iv) In the event of the Option Holder's death while still
employed by the Company, each Option of the deceased Option Holder may be
exercised by those entitled to do so under the Option Holder's will or under the
laws of descent and distribution within twelve months following the Option
Holder's death (provided that in any event such exercise must occur within the
Option Period), but not thereafter, as to all shares of Stock which are subject
to such Option, including each 25 percent increment of the Option, if any, which
has not yet become exercisable at the time of the Option Holder's death. In the
event of the Option Holder's death within the 36-month period referred to in
(ii) above or within the twelve-month period referred to in (iii) above, each
Option of the deceased Option Holder that is exercisable at the time of death
may be exercised by those entitled to do so under the Option Holder's will or
under the laws of descent and distribution within twelve months following the
Option Holder's death or within the 36-month period referred to in (ii), if
applicable and if longer (provided that in any event such exercise must occur
within the Option Period). The provisions of this paragraph (iv) of subsection
7.2(d) shall be applicable to each Stock Option Agreement as if set forth
therein word for word. Each Stock Option Agreement executed by the Company prior
to the adoption of this provision shall be deemed amended to include the
provisions of this paragraph and all Options granted pursuant to such Stock
Option Agreements shall be exercisable as provided herein.
(v) If the employment of the Option Holder by the Company is
terminated (which for this purpose means that the Option Holder is no longer
employed by the Company or by an Affiliated Corporation) within the Option
Period for any reason other than cause, retirement on or after attaining age 65,
disability or the Option Holder's death, the Option may be exercised by the
Option Holder within three months following the date of such termination
(provided that such exercise must occur within the Option Period), but not
thereafter. In any such case, the Option may be exercised only as to the shares
as to which the Option had become exercisable on or before the date of
termination of employment.
(e) Transferability. Each stock option agreement shall provide that the
Option granted therein is not transferable by the Option Holder except by will
or pursuant to the laws of descent and distribution, and that such Option is
exercisable during the Option Holder's lifetime only by him or her, or in the
event of disability or incapacity, by his or her guardian or legal
representative.
(f) Agreement to Continue in Employment. Each stock option agreement
shall contain the Option Holder's agreement to remain in the employment of the
Company, at
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the pleasure of the Company, for a continuous period of at least one year after
the date of such stock option agreement, at the salary rate in effect on the
date of such agreement or at such changed rate as may be fixed, from time to
time, by the Company.
(g) Exercise, Payments, Etc.
(i) Each stock option agreement shall provide that the method
for exercising the Option granted therein shall be by delivery to the Office of
the Secretary of the Company or to the Administrative Agent of written notice
specifying the number of shares of Stock with respect to which such Option is
exercised and payment to the Company of the aggregate Option Price. Such notice
shall be in a form satisfactory to the Committee and shall specify the
particular Option (or portion thereof) which is being exercised and the number
of shares of Stock with respect to which the Option is being exercised. The
exercise of the Option shall be deemed effective upon receipt of such notice by
the Office of the Secretary or by the Administrative Agent and payment is made
to the Company of the aggregate Option Price (the "Exercise Date"); however, if
payment of the aggregate Option Price is made pursuant to a sale of shares of
Stock as contemplated by subsection 7.2(g)(iii)(F) below, the Exercise Date
shall be deemed to be the date of such sale. If requested by the Company, such
notice shall contain the Participant's representation that he or she is
purchasing the Stock for investment purposes only and his or her agreement not
to sell any stock so purchased in any manner that is in violation of the
Securities Act of 1933, as amended, or any applicable state law, and such
restriction, or notice thereof, shall be placed on the certificates representing
the Stock so purchased. The purchase of such Stock shall take place upon
delivery of such notice to the Office of the Secretary of the Company or to the
Administrative Agent, at which time the aggregate Option Price shall be paid in
full to the Company by any of the methods or any combination of the methods set
forth in 7.2(g)(iii) below.
(ii) Except as referenced below in connection with the
Deferred Delivery Plan, the shares of Stock to which the Participant is entitled
as a result of the exercise of the Option shall be issued by the Company and (A)
delivered by electronic means to an account designated by the Participant, or
(B) delivered to the Participant in the form of a properly executed certificate
or certificates representing such shares of Stock. If shares of Stock and/or
Depositary Shares are used to pay all or part of the aggregate Option Price, the
Company shall issue and deliver to the Participant the additional shares of
Stock, in excess of the aggregate Option Price or portion thereof paid using
shares of Stock or Depositary Shares, to which the Participant is entitled as a
result of the Option exercise. If the Participant exercising an Option (x) is
eligible for participation in the Deferred Delivery Plan, (y) pays the aggregate
Option Price pursuant to 7(g)(iii)(A), (B), (C), (D) or (E) below, and (z) has
made an irrevocable election at least six months prior to the Exercise Date as
required under the Deferred Delivery Plan, the income resulting from
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the Option exercise shall be deferred into the Participant's Deferred Delivery
Plan account and no additional shares of Stock shall be delivered to the
Participant.
(iii) the aggregate Option Price shall be paid by any of the
following methods or any combination of the following methods:
(A) in cash, including the wire transfer of funds in
U.S. dollars to one of the Company's bank accounts located in the United States,
with such bank account to be designated from time to time by the Company;
(B) by personal, certified or cashier's check payable
in U.S. dollars to the order of the Company;
(C) by delivery to the Company or the Administrative
Agent of certificates representing a number of shares of Stock then owned by the
Participant, the aggregate Fair Market Value of which (as of the Exercise Date)
is not greater than the aggregate Option Price of the Option being exercised,
properly endorsed for transfer to the Company; provided that the shares of Stock
used for this purpose must have been owned by the Participant for a period of at
least six months;
(D) by certification or attestation to the Company or
the Administrative Agent of the Participant's ownership (as of the Exercise
Date) of the number of shares of Stock and/or Depositary Shares, the aggregate
Fair Market Value of which (as of the Exercise Date) is not greater than the
aggregate Option Price of the Option being exercised, provided that the shares
of Stock and/or Depositary Shares used for this purpose have been owned by the
Participant for a period of at least six months;
(E) if the income resulting from the Option exercise
is to be deferred into the Participant's Deferred Delivery Plan account, by
certification or attestation to the Company or the Administrative Agent of the
Participant's ownership (as of the Exercise Date) of a number of vested Stock
Units held in the Participant's Deferred Delivery Plan account, the equivalent
aggregate Fair Market Value of which (as of the Exercise Date) is not greater
than the aggregate Option Price of the Option being exercised, provided that the
Stock Units used for this purpose were vested as of the Exercise Date; or
(F) by delivery to the Company or the Administrative
Agent of a properly executed notice of exercise together with irrevocable
instructions to a broker to promptly deliver to the Company, by wire transfer or
check as noted in (A) and (B) above, the amount of the proceeds of the sale of
all or a portion of the Stock or of a loan from the broker to the Option Holder
necessary to pay the aggregate Option Price.
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(iv) For purposes of the Plan, the income resulting from an
Option exercise shall be based on the Fair Market Value of the Stock for the
Exercise Date; however, if payment of the aggregate Option Price is made
pursuant to a sale of shares of Stock as contemplated by subsection
7.2(g)(iii)(F) hereof, the Fair Market Value shall be deemed to be the per share
sale price and the Exercise Date shall be deemed to be the date of such sale.
(h) Date of Grant. An option shall be considered as having been granted
on the date specified in the grant resolution of the Committee.
(i) Tax Withholding. Each Stock Option Agreement shall provide that,
upon exercise of the Option, the Participant shall make appropriate arrangements
with the Company to provide for the amount of tax withholding required by
Sections 3102 and 3402 or any successor section(s) of the Internal Revenue Code
and applicable state and local income tax laws, including payment of such taxes
in cash, by check or as provided in Section 13.2 hereof.
(j) Adjustment of Options. Subject to the provisions of Sections 4, 5,
7, 8 and 12, the Committee may make any adjustment in the number of shares
covered by, or the terms of an outstanding Option and a subsequent granting of
an Option, by amendment or by substitution of an outstanding Option; however,
except as provided in Sections 4, 5, 8 and 12 hereof, the Committee may not
adjust the exercise price of any outstanding Option. Such amendment or
substitution may result in terms and conditions (including the number of shares
covered, vesting schedule or exercise period) that differ from the terms and
conditions of the original Option. The Committee may not, however, adversely
affect the rights of any Participant to previously granted Options without the
consent of such Participant. If such action is effected by amendment, the
effective date of such amendment will be the date of the original grant.
7.3 Shareholder Privileges. No Option Holder shall have any rights as a
shareholder with respect to any shares of Stock covered by an Option until the
Option Holder becomes the holder of record of such Stock, and no adjustments
shall be made for dividends or other distributions or other rights as to which
there is a record date preceding the date such Option Holder becomes the holder
of record of such Stock, except as provided in Section 4.
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SECTION 8
CHANGE IN CONTROL
8.1 In General. In the event of a change in control of the Company as defined in
Section 8.3, then the Committee may, in its sole discretion, without obtaining
shareholder approval, to the extent permitted in Section 12, take any or all of
the following actions: (a) accelerate the exercise dates of any outstanding
Options or make all such Options fully vested and exercisable; (b) grant a cash
bonus award to any Option Holder in an amount necessary to pay the aggregate
Option Price of all or any portion of the Options then held by such Option
Holder; (c) pay cash to any or all Option Holders in exchange for the
cancellation of their outstanding Options in an amount equal to the difference
between the exercise price of such Options and the greater of the tender offer
price for the underlying Stock or the Fair Market Value of the Stock on the date
of the cancellation of the Options; and (d) make any other adjustments or
amendments to the outstanding Options.
8.2 Limitation on Payments. If the provisions of this Section 8 would result in
the receipt by any Participant of a payment within the meaning of Section 280G
of the Internal Revenue Code and the regulations promulgated thereunder and if
the receipt of such payment by any Participant would, in the opinion of
independent tax counsel of recognized standing selected by the Company, result
in the payment by such Participant of any excise tax provided for in Sections
280G and 4999 of the Internal Revenue Code, then the amount of such payment
shall be reduced to the extent required, in the opinion of independent tax
counsel, to prevent the imposition of such excise tax; provided, however, that
the Committee, in its sole discretion, may authorize the payment of all or any
portion of the amount of such reduction to the Participant.
8.3 Definition. For purposes of the Plan, a "change in control" shall mean any
of the events specified in the Company's Income Continuance Plan which
constitute a change in control within the meaning of that Plan.
SECTION 9
RIGHTS OF EMPLOYEES, PARTICIPANTS
9.1 Employment. Nothing contained in the Plan or in any Option granted under the
Plan shall confer upon any Participant any right with respect to the
continuation of his or her employment by the Company or any Affiliated
Corporation, or interfere in any way with the right of the Company or any
Affiliated Corporation, subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such
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employment or to increase or decrease the compensation of the Participant from
the rate in existence at the time of the grant of an Option. Whether an
authorized leave of absence, or absence in military or government service, shall
constitute a termination of employment shall be determined by the Committee at
the time.
9.2 Nontransferability. No right or interest of any Participant in an Option
granted pursuant to the Plan shall be assignable or transferable during the
lifetime of the Participant, either voluntarily or involuntarily, or subjected
to any lien, directly or indirectly, by operation of law, or otherwise,
including execution, levy, garnishment, attachment, pledge or bankruptcy. In the
event of a Participant's death, a Participant's rights and interests in Options
shall, to the extent provided in Section 7, be transferable by testamentary will
or the laws of descent and distribution, and payment of any amounts due under
the Plan shall be made to, and exercise of any Options may be made by, the
Participant's legal representatives, heirs or legatees. If, in the opinion of
the Committee, a person entitled to payments or to exercise rights with respect
to the Plan is disabled from caring for his affairs because of mental condition,
physical condition or age, payment due such person may be made to, and such
rights shall be exercised by, such person's guardian, conservator or other legal
personal representative upon furnishing the Committee with evidence of such
status satisfactory to the Committee.
SECTION 10
GENERAL RESTRICTIONS
10.1 Investment Representations. The Company may require any person to whom an
Option is granted, as a condition of exercising such Option, to give written
assurances in substance and form satisfactory to the Company and its counsel to
the effect that such person is acquiring the Stock subject to the Option for his
own account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with Federal and applicable state
securities laws.
10.2 Compliance with Securities Laws. Each Option shall be subject to the
requirement that, if at any time counsel to the Company shall determine that the
listing, registration or qualification of the shares subject to such Option upon
any securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, is necessary as a condition of,
or in connection with, the issuance or purchase of shares thereunder, such
Option may not be accepted or exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions acceptable to the Committee. Nothing herein shall be
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deemed to require the Company to apply for or to obtain such listing,
registration or qualification.
SECTION 11
OTHER EMPLOYEE BENEFITS
The amount of any income deemed to be received by a Participant as a result of
an Option exercise shall not constitute "earnings" or "compensation" with
respect to which any other employee benefits of such employee are determined
including, without limitation benefits under any pension, profit sharing, life
insurance or salary continuation plan.
SECTION 12
PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate, and from time to time may amend or modify
the Plan provided, however, that no amendment or modification may become
effective without approval of the amendment or modification by the shareholders
if shareholder approval is required to enable the Plan to satisfy any applicable
statutory or regulatory requirements unless the Company, on the advice of
counsel, determines that shareholder approval is otherwise necessary or
desirable.
No amendment, modification or termination of the Plan shall in any manner
adversely affect any Options theretofore granted under the Plan, without the
consent of the Participant holding such Options.
The Committee shall have the authority to adopt such modifications, procedures
and subplans as may be necessary or desirable to comply with the provisions of
the laws (including, but not limited to, tax laws and regulations) of countries
other than the United States in which the Company may operate, so as to assure
the viability of the benefits of the Plan to Participants employed in such
countries.
SECTION 13
WITHHOLDING
13.1 Withholding Requirement. The Company's obligations to deliver shares of
Stock upon the exercise of an Option, or to defer income resulting from an
Option exercise into the Deferred Delivery Plan, shall be subject to the
Participant's satisfaction of all applicable federal, state and local income and
other tax withholding requirements.
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13.2 Satisfaction of Required Withholding. At the time the Committee grants an
Option, it may, in its sole discretion, grant the Participant an election to pay
all such amounts of required tax withholding, or any part thereof:
(a) by the delivery to the Company or the Administrative Agent of a
number of shares of Stock then owned by the Participant, the aggregate Fair
Market Value of which (as of the Exercise Date) is not greater than the amount
required to be withheld, provided that such shares have been held by the
Participant for a period of at least six months;
(b) by certification or attestation to the Company or the
Administrative Agent of the Participant's ownership (as of the Exercise Date) of
a number of shares of Stock and/or Depositary Shares, the aggregate Fair Market
Value of which (as of the Exercise Date) is not greater than the amount required
to be withheld, provided that such shares of Stock and/or Depositary Shares have
been owned by the Participant for a period of at least six months;
(c) if the income resulting from the Option exercise is to be deferred
into the Participant's Deferred Delivery Plan account, by certification or
attestation to the Company or the Administrative Agent of the Participant's
ownership (as of the Exercise Date) of a number of vested Stock Units held in
the Participant's Deferred Delivery Plan account, the equivalent aggregate Fair
Market Value of which (as of the Exercise Date) is not greater than the amount
required to be withheld, provided that such Stock Units were vested as of the
Exercise Date; or
(d) by the Company or the Administrative Agent withholding from the
shares of Stock otherwise issuable to the Participant upon exercise of the
Option, a number of shares of Stock, the aggregate Fair Market Value of which
(as of the Exercise Date) is not greater than the amount required to be
withheld. Any such elections by Participants to have shares of Stock withheld
for this purpose will be subject to the following restrictions:
(i) all elections shall be made on or prior to the Exercise Date;
and
(ii) all elections shall be irrevocable.
13.3 Excess Withholding. At the time the Committee grants an Option, it may, in
its sole discretion, grant the Participant an election to pay additional or
excess amounts of tax withholding, beyond the required amounts and up to the
Participant's marginal tax rate:
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(a) by delivery to the Company or the Administrative Agent of a number
of Shares of Stock then owned by the Participant, the aggregate Fair Market
Value of which (as of the Exercise Date) is not greater than such excess
withholding amount, provided that such shares of Stock have been owned by the
Participant for a period of at least six month; or
(b) by certification or attestation to the Company or the
Administrative Agent of the Participant's ownership (as of the Exercise Date) of
a number of shares of Stock and/or Depositary Shares, the aggregate Fair Market
Value of which (as of the Exercise Date) is not greater than such excess
withholding amount, provided that such shares of Stock and/or Depositary Shares
have been owned by the Participant for a period of at least six months.
13.4 Section 16 Requirements. If the Participant is an officer or director of
the Company within the meaning of Section 16 or any successor section(s) of the
1934 Act ("Section 16"), the Participant must satisfy the requirements of such
Section 16 and any applicable rules and regulations thereunder with respect to
the use of shares of Stock, Depositary Shares and/or Stock Units to satisfy such
tax withholding obligation.
SECTION 14
REQUIREMENTS OF LAW
14.1 Requirements of Law. The issuance of stock and the payment of cash pursuant
to the Plan shall be subject to all applicable laws, rules and regulations.
14.2 Federal Securities Law Requirements. If a Participant is an officer or
director of the Company within the meaning of Section 16, Options granted
hereunder shall be subject to all conditions required under Rule 16b-3, or any
successor rule promulgated under the 1934 Act, to qualify the Option for any
exception from the provisions of Section 16(b) of the 1934 Act available under
that Rule. Such conditions are hereby incorporated herein by reference and shall
be set forth in the Stock Option Agreement with the Participant which describes
the Option.
14.3 Governing Law. The Plan and all agreements hereunder shall be construed in
accordance with and governed by the laws of the State of Texas.
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SECTION 15
DURATION OF THE PLAN
The Plan shall terminate at such time as may be determined by the Board of
Directors, and no Option shall be granted after such termination. If not sooner
terminated under the preceding sentence, the Plan shall fully cease and expire
at midnight on September 18, 1995. Options outstanding at the time of the Plan
termination may continue to be exercisable in accordance with the Stock Option
Agreement pertaining to each such Option.
Dated: December 14, 2000
APACHE CORPORATION
ATTEST:
/s/ Cheri L. Peper By: /s/ Jeffrey M. Bender
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Cheri L. Peper Jeffrey M. Bender
Corporate Secretary Vice President, Human Resources
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