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EXHIBIT 10.24
APACHE CORPORATION
1998 STOCK OPTION PLAN
(AS AMENDED AND RESTATED DECEMBER 14, 2000;
EFFECTIVE AS OF MARCH 1, 2001)
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APACHE CORPORATION
1998 STOCK OPTION 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 Section
2.1 hereof) as the "Company" except where the context otherwise requires),
hereby establishes the Apache Corporation 1998 Stock Option Plan (the "Plan")
for Eligible Employees (as defined in Section 2.1 hereof). The Plan permits the
grant of stock options to Eligible Employees selected by the Committee (as
defined in Section 2.1 hereof).
1.2 Purposes. The purposes of the Plan are to provide the Eligible
Employees designated by the Committee 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 stockholder
value, so that the income of those employees is more closely aligned with the
interests of the Company's stockholders. The Plan is also designed to attract
outstanding individuals and to retain and motivate Eligible Employees by
providing an opportunity for investment in the Company.
1.3 Effective Date. The Effective Date of the Plan (the "Effective Date")
is February 6, 1998. 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 stockholder approval is not necessary. The Committee
may grant options the exercise of which shall be expressly subject to the
condition that the Plan shall have been approved by the stockholders of the
Company.
SECTION 2
DEFINITIONS
2.1 Definitions. The following terms shall have the meanings set forth
below:
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(a) "Administrative Agent" means any designee or agent that may be
appointed by the Committee pursuant to Section 3.1(b) hereof.
(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) or any successor
section(s) 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: (i) Rule 16b-3 or any successor rule(s) promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and (ii) Section 162(m) or
any successor sections(s) of the Internal Revenue Code and the regulations
promulgated thereunder.
(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) "Eligible Employees" means full-time employees (including, without
limitation, officers and directors who are also employees), and certain
part-time employees, of the Company or any division thereof.
(h) "Fair Market Value" means the per share closing price of the Stock
or Depositary Shares, as applicable, as reported on the New York Stock Exchange,
Inc. Composite Transactions Reporting System for 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.
(i) "Internal Revenue Code" means the Internal Revenue Code of 1986, as
it may be amended from time to time.
(j) "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
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not "incentive stock options" as described in Section 422 or any successor
section(s) of the Internal Revenue Code.
(k) "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)
hereof.
(l) "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.
(m) "Stock" means the $1.25 par value Common Stock of the Company.
(n) "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 Headings; Gender and Number. The headings contained in the Plan are for
reference purposes only and shall not affect in any way the meaning or
interpretation of the Plan. 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 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, 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
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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 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.
3.2 Compliance with Section 162(m).
The Plan is intended to comply with the requirements of Section 162(m) or any
successor section(s) of the Internal Revenue Code ("Section 162(m)") as to any
"covered employee" as defined in Section 162(m), and shall be administered,
interpreted and construed consistently therewith. In accordance with this
intent, the amount of income a Participant may receive from Options granted
under the Plan shall be based solely on an increase in the value of the Stock
after the date of the grant of the Option, or such other bases as may be
permitted by applicable law. The Committee is authorized to take such additional
action, if any, that may be required to ensure that the Plan satisfies the
requirements of Section 162(m) and the regulations promulgated or revenue
rulings published thereunder.
SECTION 4
STOCK SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to Section 7.1 and to adjustment pursuant to
Section 4.3 hereof, two million five hundred thousand (2,500,000) 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 the stockholders of the
Company if, on the advice of counsel for the Company, such stockholder 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 Stock in the Company's treasury, 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.
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4.2 Other Shares of Stock. Any shares of Stock that are subject to an
Option which expires, is forfeited, is cancelled, or for any reason is
terminated unexercised, and any shares of Stock that for any other reason are
not issued to a Participant 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 and
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.
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 hereof, 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.
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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 or other securities, the aggregate Option Price shall be
increased by the amount of the price that is payable by the Participant for such
additional shares 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 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
8 hereof 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
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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 shall be exercised within a
specified number of days of the date of such notice or such Options 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 an Affiliated Corporation, and significantly
contribute, or are expected to significantly contribute, to the achievement of
the Company's 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, an Eligible Employee may be granted one or more
Options. Grants of Options under the Plan shall be made by the Committee. In no
event shall the exercise of one Option affect the right to exercise any other
Option or affect the number of shares of
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Stock for which any other Option may be exercised, except as provided in
subsection 7.2(j) hereof. During the life of the Plan, no Eligible Employee may
be granted Options which in the aggregate pertain to in excess of 25 percent of
the total shares of Stock authorized under the Plan.
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 "Stock Option
Agreement"), 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 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 which the Option may be exercised by the Participant (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 Participant 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 Participant:
(i) If the employment of the Participant by the Company 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) shall be limited to
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determining the consequences of a termination and that nothing in this
subsection 7.2(d) shall restrict or otherwise interfere with the Company's
discretion with respect to the termination of any employee.
(ii) If the Participant retires from employment by the Company on
or after attaining age 65, the Option may be exercised by the Participant 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
Participant'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 Participant's retirement.
(iii) If the Participant becomes disabled (as determined pursuant
to the Company's Long-Term Disability Plan or any successor 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 Participant or by his or her guardian or legal
representative, within twelve months following the Participant's disability, or
within the 36-month period referred to in (ii) above if applicable and if longer
(provided that such exercise must occur within the Option Period), but not
thereafter. In the event of the Participant'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 such case, the Option may be exercised only as
to the shares of Stock as to which the Option had become exercisable on or
before the date of the Participant's disability.
(iv) In the event of the Participant's death while still employed
by the Company, each Option of the deceased Participant may be exercised by
those entitled to do so under the Participant's will or under the laws of
descent and distribution within twelve months following the Participant'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 Participant's death. In the event of the
Participant'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 Participant that is exercisable at the time of death may be exercised
by those entitled to do so under the Participant's will or under the laws of
descent and distribution within twelve months following the Participant's death
or within the 36-month period referred to in (ii) above, 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
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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 Participant by the Company is
terminated (which for this purpose means that the Participant is no longer
employed by the Company or by an Affiliated Corporation) within the Option
Period for any reason other than cause, the Participant's retirement on or after
attaining age 65, the Participant's disability or death, the Option may be
exercised by the Participant 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 the Participant's employment.
(e) Transferability. Each Stock Option Agreement shall provide that the
Option granted therein is not transferable by the Participant except by will or
pursuant to the laws of descent and distribution, and that such Option is
exercisable during the Participant's lifetime only by him or her, or in the
event of the Participant's disability or incapacity, by his or her guardian or
legal representative.
(f) Agreement to Continue in Employment. Each Stock Option Agreement
shall contain the Participant's agreement to remain in the employment of the
Company, at 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 Options (or portions thereof) which are being exercised and the
number of shares of Stock with respect to which the Options are being exercised.
The exercise of the Option shall be deemed effective on the date such notice is
received 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
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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 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 7.2(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 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
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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
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 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 Participant necessary to pay
the aggregate Option Price.
(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.
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(j) Adjustment of Options. Subject to the provisions of Sections 4, 5,
7, 8 and 12 hereof, the Committee may make any adjustment in the number of
shares of Stock covered by, or the terms of an outstanding Option and a
subsequent granting of an Option, by amendment or by substitution for an
outstanding Option; however, except as provided in Sections 4, 5, 8 and 12
hereof, the Committee may not adjust the Option Price of any outstanding Option.
Such amendment or substitution may result in terms and conditions (including the
number of shares of Stock covered, vesting schedule or Option 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
grant of the original Option.
7.3 Stockholder Privileges. No Participant shall have any rights
as a stockholder with respect to any shares of Stock covered by an Option until
the Participant becomes the holder of record of such Stock. Except as provided
in Section 4 hereof, no adjustments shall be made for dividends or other
distributions or other rights as to which there is a record date preceding the
date on which such Participant becomes the holder of record of such Stock.
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 hereof, then the Committee may, in its sole discretion,
without obtaining stockholder approval, to the extent permitted in Section 12
hereof, take any or all of the following actions: (a) accelerate the dates on
which any outstanding Options become exercisable or make all such Options fully
vested and exercisable; (b) grant a cash bonus award to any Participant in an
amount necessary to pay the aggregate Option Price of all or any portion of the
Options then held by such Participant; (c) pay cash to any or all Participants
in exchange for the cancellation of their outstanding Options in an amount equal
to the difference between the Option 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 or any successor section(s) 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
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payment by such Participant of any excise tax provided for in Sections 280G and
4999 or any successor section(s) 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 or any
successor plan which constitute a change in control within the meaning of such
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 employment or to
increase or decrease the level of the Participant's compensation from the level
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 hereof, 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 or
her 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.
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SECTION 10
GENERAL RESTRICTIONS
10.1 Investment Representations. The Company may require a Participant, as a
condition of exercising an 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 of Stock 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 of Stock
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 deemed to require the Company to apply for or to obtain such
listing, registration, qualification, consent or approval.
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 Participant 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 Company's
stockholders if stockholder approval is required to enable the Plan to satisfy
any applicable statutory or
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regulatory requirements unless the Company, on the advice of counsel, determines
that stockholder approval is otherwise necessary or desirable.
No amendment, modification or termination of the Plan shall in any manner
adversely affect any Option theretofore granted under the Plan, without the
consent of the Participant holding such Option.
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.
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
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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:
(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 months; 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.
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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 Laws 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(s) promulgated under the 1934 Act, to qualify the Option for any
exception from the provisions of Section 16 available under such 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 Stock Option Agreements hereunder shall
be construed in accordance with and governed by the laws of the State of Texas.
SECTION 15
DURATION OF THE PLAN
The Plan shall terminate at such time as may be determined by the Board, 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
February 6, 2003. Options outstanding at the time of the Plan termination shall
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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