1
EXHIBIT 10.28
APACHE CORPORATION
DEFERRED DELIVERY PLAN
As Amended and Restated December 14, 2000
2
APACHE CORPORATION
DEFERRED DELIVERY PLAN
AS AMENDED AND RESTATED DECEMBER 14, 2000
Apache Corporation ("Apache"), a Delaware corporation (hereinafter
referred to, together with its Affiliated Entities (as defined below), as the
"Company" except where the context otherwise requires), established the Apache
Corporation Deferred Delivery Plan effective as of February 10, 2000. The Plan
(as defined below) provides Participants (as defined below) with an opportunity
to defer income and permits the grant of Stock Bonus Awards (as defined below)
to Participants selected by the Committee (as defined below), in consideration
of the valuable past services provided by Participants to the Company.
The Plan is intended to provide Participants with added incentives and
to induce them to remain in the employ of the Company. The Company intends that
the Plan shall not be treated as a "funded" plan for purposes of either the Code
or the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
ARTICLE I
DEFINITIONS
Defined terms used in this Plan shall have the meanings set forth
below:
1.01 Account
"Account" means the memorandum account maintained for each Participant
to which shall be credited all Deferred Amounts (including any Stock
Bonus Award), all Company Match made on behalf of a Participant, and
all adjustments thereto.
1.02 Affiliated Entity
"Affiliated Entity" means any corporation or other legal entity
(including but not limited to a partnership) which is affiliated with
Apache through stock ownership or otherwise and is treated as a common
employer under the provisions of Sections 414(b) and (c) or any
successor sections of the Code.
1.03 Code
"Code" means the Internal Revenue Code of 1986, as amended.
1
3
1.04 Committee
"Committee" means the Stock Option Plan Committee of Apache's Board of
Directors.
1.05 Company Match
"Company Match" means the allocations to a Participant's Account made
pursuant to Section 3.02.
1.06 Compensation
"Compensation" shall mean the one-time 1999 discretionary award and/or
income from (a) any Stock Bonus Award, (b) exercises of non-qualified
employee stock options granted to the Participants pursuant to Apache's
1990 Stock Incentive Plan, 1995 Stock Option Plan, 1998 Stock Option
Plan, 2000 Stock Option Plan or any future plan under which employee
stock options may be granted, and/or (c) any Other Approved Plan. The
Committee and/or the Board of Directors may from time to time designate
other forms of remuneration that are available for deferral into the
Plan.
1.07 Deferred Amounts
"Deferred Amounts" means the amounts of a Participant's Compensation,
which are deferred and credited to the Participant's Account pursuant
to Section 3.01.
1.08 Election Agreement
"Election Agreement" means an application for participation in the
Plan, execution of which by an eligible employee is required under
Article II for the Participant to elect or acknowledge Deferred
Amounts.
1.09 Fair Market Value
"Fair Market Value" means the per share closing price of the Stock as
reported on The New York Stock Exchange, Inc. Composite Transactions
Reporting System for a particular date. If there are no Stock
transactions on such date, the Fair Market Value shall be determined as
of the immediately preceding date on which there were Stock
transactions.
1.10 Other Approved Plan
"Other Approved Plan" means the 2000 Share Appreciation Plan and any
other compensation or benefit plan which may from time to time be
designated by the Committee and/or the Board of Directors.
2
4
1.11 Participant
"Participant" means any eligible employee selected to participate in
this Plan pursuant to Section 2.01.
1.12 Plan
"Plan" means the Apache Corporation Deferred Delivery Plan as set forth
herein, including Annex A.
1.13 Plan Year
"Plan Year" means the period during which the Plan records are kept.
The Plan Year shall be the calendar year.
1.14 Stock
"Stock" means the $1.25 par value common stock of Apache.
1.15 Stock Bonus Award
"Stock Bonus Award" means any grant of Stock Units made pursuant to
Annex A.
1.16 Stock Units
"Stock Units" means investment units, each of which is deemed to be
equivalent to one share of Stock.
1.17 Trust
"Trust" means the trust or trusts, if any, created by the Company to
provide funding for the distribution of benefits in accordance with the
provisions of the Plan. The assets of any such Trust shall remain
subject to the claims of the Company's general creditors in the event
of the Company's insolvency.
1.18 Trust Agreement
"Trust Agreement" means the written instrument pursuant to which each
separate Trust is created.
3
5
1.19 Trustee
"Trustee" means one or more banks, trust companies or insurance
companies designated by the Company to hold the Trust fund and to pay
benefits and expenses as authorized by the Committee in accordance with
the terms and provisions of the Trust Agreement.
1.20 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.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01 Eligibility and Participation
The Committee shall from time to time in its sole discretion select
those employees of the Company who are eligible to participate in the
Plan from among a select group of key employees.
2.02 Election
Employees who have been selected by the Committee to participate in the
Plan shall complete the election procedure specified by the Committee.
The election procedure may include form(s) for the employee to (a)
designate a beneficiary (pursuant to Article V), (b) elect or
acknowledge Deferred Amounts by entering into an Election Agreement
with the Company (pursuant to Section 3.01), (c) select a payment
option for the eventual distribution of his Account (pursuant to
Article V), and (d) provide such other information as the Committee may
reasonably require.
2.03 Failure of Eligibility
The Committee shall have the authority to determine that a Participant
is no longer eligible to participate in the Plan. No Company Match or
Stock Bonus Award shall be made, no Deferred Amounts withheld from a
Participant's Compensation, and no dividend amounts credited to a
Participant's Account after he ceases to be eligible to participate in
the Plan. The determination of the Committee with respect to the
termination of participation in the Plan shall be final and binding on
all parties affected thereby. Except as provided in Section 5.01, any
benefits vested hereunder, at the time the Participant becomes
ineligible to continue participation, shall be distributable in
accordance with the provisions of the Plan.
4
6
ARTICLE III
CONTRIBUTION DEFERRALS
3.01 Participant Deferrals
(a) General. A Participant may elect to defer a portion of his
Compensation and/or acknowledge the deferral of income from
the grant of a Stock Bonus Award by filing the appropriate
Election Agreement with the Committee's designee. Deferred
Amounts related to the one-time 1999 discretionary award, and
to such other remuneration as may be designated from time to
time, shall be deducted through payroll withholding from the
Participant's cash Compensation payable by the Company, and
shall be credited to the Participant's Account on or about the
date the amounts are deducted. Deferred Amounts from the
deferral of income from the exercise of non-qualified stock
option grants, from the grant of a Stock Bonus Award or from
any Other Approved Plan shall be credited to the Participant's
Account on or about the date of the stock option exercise, the
grant date of the Stock Bonus Award or the date the income
would have been otherwise paid or distributed from such Other
Approved Plan, respectively.
(b) Initial Enrollment. When an employee first is selected to
participate in the Plan, pursuant to Section 2.01, the
Committee's designee shall provide him with an election form,
which, when properly completed and timely returned to the
Committee's designee shall constitute an Election Agreement.
To be effective, the Election Agreement must be completed and
returned to the Committee's designee by the deadline
established by the Committee. The employee may elect to defer
(i) up to 100 percent of the one-time 1999 discretionary
award, and (ii) such percentage up to 100 percent of income
from stock options exercised in the Plan Year indicated or
from any Other Approved Plan, divisible into such increments
as may be designated by the Committee; however, 100 percent of
income from the grant of any Stock Bonus Award shall be
deferred. The Election Agreement shall be effective
immediately upon receipt by the Committee's designee; however,
(i) Election Agreements related to the deferral of income from
stock option exercises must be completed and returned not less
than six months in advance of the Participant's intended
exercise date on which income is to be deferred, and (ii)
Election Agreements related to the deferral of income from any
Other Approved Plan must be completed and returned pursuant to
the provisions of such Other Approved Plan. Each Election
Agreement shall be irrevocable for the deferral of the
one-time 1999 discretionary award, or the deferral of income
(i) from stock options exercised in the Plan Year indicated,
(ii) from the grant of any Stock Bonus Award, or (iii) from
any Other Approved Plan.
5
7
(c) Continuing Election. A Participant shall enter into a separate
Election Agreement for (i) the deferral of income from stock
options exercises in the Plan Year indicated, (ii) the
deferral of income from the grant of any Stock Bonus Award
(iii) the deferral of income from any Other Approved Plan, or
(iv) any other deferral opportunity offered by the Committee.
To be effective, the Election Agreement must be completed and
returned to the Committee's designee by the deadline
established by the Committee; however, (i) Election Agreements
related to the deferral of income from stock option exercises
must be completed and returned not less than six months in
advance of the Participant's intended exercise date on which
income is to be deferred, and (ii) Election Agreements related
to the deferral of income from any Other Approved Plan must be
completed and returned pursuant to the provisions of such
Other Approved Plan. Each Election Agreement shall be
irrevocable.
(d) Participant Becomes Ineligible. A Participant's Election
Agreement(s) shall be canceled immediately if and when the
Participant becomes ineligible to participate in the Plan.
3.02 Company Match
The Company shall credit to a Participant's Account matching
contributions equal to the Participant's Deferred Amount related to the
1999 one-time discretionary award. The Committee may from time to time
in its sole discretion designate such other forms of remuneration that
are available for deferral into the Plan, as well as such other
matching contributions as the Committee deems appropriate. The Company
Match shall be invested as specified in Article IV.
ARTICLE IV
INVESTMENT OF DEFERRALS AND ACCOUNTING; VOTING
4.01 Investments
(a) All amounts credited to a Participant's Account shall be
invested in Stock Units, with the number of Stock Units
determined using the Fair Market Value of the Stock for the
date on which the amount is credited to the Participant's
Account. Amounts equal to any cash dividends declared on the
Stock shall be credited to the Participant's Account as of the
payment date for such dividend in proportion to the number of
Stock Units in the Participant's Account as of the record date
for such dividend. Such dividend amounts shall be invested in
Stock Units, with the number of Stock Units determined using
the Fair Market Value of the Stock on the dividend payment
date, and such Stock Units shall vest pursuant to Section
5.01.
6
8
(b) Nothing contained in this Section shall be construed to give
any Participant any power or control to make investment
decisions or otherwise influence in any manner the investment
and reinvestment of assets contained within any investment
alternative, such control being at all times retained in the
full discretion of the Committee. Nothing contained in this
Section shall be construed to require the Company or the
Committee to fund any Participant's Account.
4.02 Voting
Participants shall have no right to vote any Stock Units prior to the
date on which such Stock Units are subject to distribution and shares
of Stock are issued therefor.
ARTICLE V
DISTRIBUTIONS
5.01 Vesting
(a) The portion of a Participant's Account attributable to
Deferred Amounts from the one-time 1999 discretionary award
and/or related to the deferral of income from stock option
exercises shall be fully vested; however, the portion of a
Participant's Account (i) attributable to Deferred Amounts
related to the grant of any Stock Bonus Award or to such other
remuneration as may be designated from time to time and/or
(ii) related to the deferral of income from any Other Approved
Plan, shall vest on such terms as may be determined by the
Committee.
(b) A Participant shall vest in the portion of his Account that is
attributable to the Company Match for the 1999 one-time
discretionary award as follows: 50 percent on the date six
months following the date of deferral and the remaining 50
percent on the date twelve months following the date of
deferral.
(c) If a Participant retires or becomes disabled (as defined by
the Company's Long Term Disability Plan) while still employed
by the Company, no vesting occurs subsequent to the date of
retirement or disability and all unvested portions of the
Participant's Account shall be forfeited immediately.
(d) If a Participant dies while still employed by the Company, any
unvested portion of the Participant's Account shall be
immediately vested.
(e) If a Participant's employment is terminated other than for
cause as defined herein, no further vesting of unvested
portions of the Participant's Account shall occur and all
unvested portions thereof shall be forfeited immediately.
7
9
(f) If the employment of the Participant is terminated for cause
as determined by the Company, the Participant's entire Account
balance (including any Deferred Amounts) shall be forfeited
immediately. As used in this subsection, "cause" shall mean a
gross violation, as determined by the Company, of the
Company's established policies and procedures. The effect of
this subsection shall be limited to determining the
consequences of a termination and nothing in this subsection
shall restrict or otherwise interfere with Company's
discretion with respect to termination of any employee.
(g) Stock Units attributable to dividend amounts credited to a
Participant's Account pursuant to Section 4.01 shall vest as
the corresponding Stock Units vest. As used in this
subsection, "corresponding Stock Units" shall mean those Stock
Units on which the dividend amounts are calculated.
5.02 Distribution During Employment
(a) While a Participant is employed by the Company, the only
available distribution is a distribution pursuant to the terms
of the applicable Election Agreement beginning five years
after the date of deferral pursuant to the Election
Agreement(s) on file for the Participant. Any distribution
shall be paid in whole shares of Stock, delivered in the
number of installments designated by the Participant in the
applicable Election Agreement and, coincident with delivery of
the last such installment, any fractional shares shall be paid
in cash.
(b) If a Participant has elected to take his distribution in
installments, the first installment shall be delivered within
90 days after the corresponding date five years after the date
of deferral, and each subsequent installment shall be
delivered not later than March 31st of the following calendar
year.
(c) If a Participant remains employed by the Company, a
Participant may elect to further defer for an additional five
years his distribution by executing a new Election Agreement
at least six months prior to the first installment due
pursuant to the Participant's previous election.
5.03 Distributions After Employment
Distributions after the Participant's death are discussed in Section
5.04. All other distributions after employment shall be made as set
forth below:
(a) Timing. The Participant's vested Account shall be distributed
after the Participant terminates employment with the Company
and the distribution shall be made pursuant to the
Participant's Election Agreement(s). If a Participant has
elected to take his distribution in installments, the first
installment shall be delivered within
8
10
90 days after the Participant's termination date and each
subsequent installment shall be delivered not later than March
31st of the following calendar year.
(b) Form of Distribution. The Participant's entire vested Account
shall be paid in whole shares of Stock, delivered in the
number of installments designated pursuant to the Election
Agreement(s) executed by the Participant and, coincident with
delivery of the last such installment, any fractional shares
shall be paid in cash.
(c) Minimum Distribution. If, as of the Participant's termination
date, the value of his entire vested Account is $50,000 or
less, the Participant's vested Account balance shall be
distributed in one lump sum and such distribution shall be
made within 90 days of the Participant's termination date.
(d) Reemployment. If a Participant is reemployed by the Company
before his entire vested Account balance is paid, installments
from the Plan shall be suspended. Installments will resume
after the Participant again terminates employment. The number
of remaining installments shall be the number of annual
installments originally designated pursuant to the Election
Agreement(s) executed by the Participant, less the number of
installments received before the Participant was re-employed.
If the Participant dies before receiving all installments,
Section 5.04 shall apply.
5.04 Distributions After Participant's Death
(a) Each Participant shall designate one or more persons, trusts
or other entities as his beneficiary (the "Beneficiary") to
receive any amounts distributable hereunder at the time of the
Participant's death. In the absence of an effective
Beneficiary designation as to part or all of a Participant's
interest in the Plan, such amount shall be distributed to the
Participant's surviving spouse, if any, otherwise to the
personal representative of the Participant's estate.
(b) A Beneficiary designation may be changed by the Participant at
any time and without the consent of any previously designated
Beneficiary. However, if the Participant is married, his
spouse shall be his Beneficiary unless such spouse has
consented to the designation of a different Beneficiary. To be
effective, the spouse's consent must be in writing, witnessed
by a notary public, and filed with the Committee's designee.
If a Participant has designated his spouse as a Beneficiary or
as a contingent Beneficiary, and the Participant and that
spouse subsequently divorce, then such Beneficiary designation
shall be void and of no effect with respect to such spouse on
and after the day such divorce is final.
(c) When a Participant dies, his remaining vested Account balance
shall be distributed to his Beneficiary in one lump sum as
soon as administratively possible after his death, regardless
of the payment schedule the Participant
9
11
elected, and regardless of whether installment payments had
begun. Such distribution shall be paid in whole shares of
Stock, with any fractional shares paid in cash.
5.05 Withholding
At the time of distribution, the Plan shall withhold from such
distribution any taxes or other amounts that are required to be
withheld pursuant to any applicable law or such greater amount as
requested by the Participant. The Committee may direct the Company to
withhold additional amounts from any payment to repay the Participant's
debt or obligation to the Company or at the request of the Participant.
ARTICLE VI
ADMINISTRATION
6.01 Committee to Administer and Interpret Plan
The Plan shall be administered by the Committee. The Committee shall
have all discretion and powers necessary for administering the Plan,
including, but not by way of limitation, full discretion and power to
interpret the Plan, to determine the eligibility, status and rights of
all persons under the Plan and, in general, to decide any dispute. The
Committee shall direct the Company, the Trustee, or both, as the case
may be, concerning distributions in accordance with the provisions of
the Plan. The Committee's designee shall maintain all Plan records
except records of any Trust.
6.02 Organization of Committee
The Committee shall adopt such rules as it deems desirable for the
conduct of its affairs and for the administration of the Plan. The
Committee may appoint a designee and/or 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 make its determinations with
or without meetings. The Committee may authorize one or more of its
members, designees or agents to sign instructions, notices and
determinations on its behalf. The action of a majority of the
Committee's members shall constitute the action of the Committee.
6.03 Agent for Process
Apache's Vice President and General Counsel and Apache's Corporate
Secretary shall each be an agent of the Plan for service of all
process.
10
12
6.04 Determination of Committee Final
The decisions made by the Committee shall be final and conclusive on
all persons.
ARTICLE VII
TRUST
7.01 Trust Agreement
The Company may, but shall not be required to, adopt a separate Trust
Agreement for the holding and administration of the funds contributed
to Accounts under the Plan. The Trustee shall maintain and allocate
assets to a separate account for each Participant under the Plan. The
assets of any such Trust shall remain subject to the claims of the
Company's general creditors in the event of the Company's insolvency.
7.02 Expenses of Trust
The parties expect that any Trust created pursuant to Section 7.01 will
be treated as a "grantor" trust for federal and state income tax
purposes and that, as a consequence, such Trust will not be subject to
income tax with respect to its income. However, if the Trust should be
taxable, the Trustee shall pay all such taxes out of the Trust. All
expenses of administering any such Trust shall be a charge against and
shall be paid from the assets of such Trust.
ARTICLE VIII
AMENDMENT AND TERMINATION
8.01 Amendment
(a) The Plan may be amended at any time and from time to time,
retroactively or otherwise; however, no amendment shall reduce
any vested benefit that has accrued on the effective date of
such amendment. Each Plan amendment shall be in writing and
shall be approved by the Committee and/or Apache's Board of
Directors. An officer of Apache to whom the Committee and/or
Apache's Board of Directors has delegated the authority to
execute Plan amendments shall execute each such amendment or
the Plan document restated to include all such Plan
amendment(s).
(b) 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.
11
13
8.02 Successors and Assigns; Termination of Plan
The Plan is binding upon Apache and its successors and assigns. The
Plan shall continue in effect from year to year unless and until
terminated by Apache's Board of Directors. Any such termination shall
operate only prospectively and shall not reduce any vested benefit that
has accrued on the effective date of such termination.
ARTICLE IX
STOCK SUBJECT TO THE PLAN
9.01 Number of Shares
Subject to Section 4.01 and Annex A, and to adjustment pursuant to
Section 9.03 hereof, one million (1,000,000) 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 Apache if, in the opinion of counsel for
the Company, such stockholder approval is required. Shares of Stock
distributed under the terms of the Plan and shares of Stock equal to
the number of Stock Units credited to Participants' Accounts maintained
under the Plan shall be applied to reduce the maximum number of shares
of Stock remaining available for use under the Plan; however, shares of
Stock represented by any Stock Units related to the deferral of income
(i) from the exercise of stock options and/or (ii) from any Other
Approved Plan shall retain their authorization under the applicable
stock option plan or under such Other Approved Plan, and shall not be
applied to reduce the number of shares of Stock remaining available for
use under the Plan. Apache, at all times during the existence of the
Plan and while any Stock Units are credited to Participants' Accounts
maintained under the Plan, shall retain as Stock in Apache'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.
9.02 Other Shares of Stock
The shares of Stock represented by any Stock Units that are forfeited,
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.
9.03 Adjustments for Stock Split, Stock Dividend, Etc.
If Apache 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
12
14
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 remaining available for use under the Plan; and (ii)
the shares of Stock then represented by Stock Units credited to
Participants' Accounts maintained under the Plan.
9.04 Dividend Payable in Stock of Another Corporation, Etc.
If Apache shall at any time pay or make any dividend or other
distribution upon the Stock payable in securities or other property
(except cash or Stock), a proportionate part of such securities or
other property shall be set aside for Stock Units credited to
Participants' Accounts maintained under the Plan and delivered to any
Participant upon distribution pursuant to the terms of the Plan. Prior
to the time that any such securities or other property are delivered to
a Participant in accordance with the foregoing, Apache 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 Apache in accordance
with this Section are not delivered to a Participant because all or
part of his Stock Units are forfeited pursuant to the terms of the
Plan, then the applicable portion of such securities or other property
shall remain the property of Apache and shall be dealt with by Apache
as it shall determine in its sole discretion.
9.05 Other Changes in Stock
In the event there shall be any change, other than as specified in
Sections 9.03 and 9.04 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 (i)
remaining available for use under the Plan and/or (ii) represented by
Stock Units credited to Participants' Accounts maintained under the
Plan, then such adjustments shall be made by the Committee and shall be
effective for all purposes of the Plan.
9.06 Rights to Subscribe
If Apache 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 Apache or of any other corporation, there shall be
reserved with respect to the Stock Units credited to Participants'
Accounts maintained under the Plan the Stock or other securities which
the Participant would have been entitled to subscribe for if
immediately prior to such grant the shares of Stock represented by such
Stock Units had been issued and outstanding. If, at the time of
distribution under the terms of the Plan, the Participant subscribes
for the additional shares or other securities, the price that is
payable by the Participant for such additional
13
15
shares or other securities shall be withheld from such distribution
pursuant to Section 5.05 hereof.
9.07 Change in Control
(a) In the event of a change in control of Apache as defined
below, then the Committee may, in its sole discretion, if it
so elects, take any of the following actions: (i) accelerate
the vesting of all unvested Stock Units credited to
Participants' Accounts so that such unvested Stock Units
become fully vested and payable, which acceleration may be
conditional upon the occurrence of subsequent events
including, without limitation, a change in control, and may be
irrevocable, either conditionally or unconditionally; and (ii)
make any other adjustments or amendments to the unvested Stock
Units as the Committee deems appropriate.
(b) For purposes of this Plan, a "change in control" shall mean
any of the events specified in Apache's Income Continuance
Plan or any successor plan which constitute a change in
control within the meaning of such plan.
9.08 General Adjustment Rules
No adjustment or substitution provided for in this Article IX shall
require Apache to sell or otherwise issue a fractional share of Stock.
All benefits payable under the Plan shall be distributed in whole
shares of Stock, with any fractional shares paid in cash.
9.09 Determination by the Committee, Etc.
Adjustments under this Article IX shall be made by the Committee, whose
determinations with regard thereto shall be final and binding upon all
parties thereto.
ARTICLE X
REORGANIZATION OR LIQUIDATION
In the event that Apache is merged or consolidated with another corporation and
Apache 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 Apache 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 9.07
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 any Stock
Units credited to Participants' Accounts maintained under the Plan, 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 Stock Units
credited to Participants' Accounts maintained under the Plan by the substitution
on a equitable basis of appropriate stock of Apache or of the merged,
consolidated or otherwise
14
16
reorganized corporation which will be issuable with respect to the Stock,
provided that no additional benefits shall be conferred upon the Participants
with respect to such Stock Units as a result of such substitution or (ii) upon
written notice to the Participants, provide that all distributions from the Plan
shall be made within a specified number of days of the date of such notice. In
the latter event, the Committee shall accelerate the vesting of all unvested
Stock Units credited to Participants' Accounts so that all such Stock Units
become fully vested and payable prior to any such event.
ARTICLE XI
MISCELLANEOUS
11.01 Funding of Benefits -- No Fiduciary Relationship
Benefits shall be paid either out of the Trust or, if no Trust is in
existence or if the assets in the Trust are insufficient to provide
fully for such benefits, then such benefits shall be distributed by the
Company out of its general assets. Nothing contained in the Plan shall
be deemed to create any fiduciary relationship between the Company and
the Participants. Notwithstanding anything herein to the contrary, to
the extent that any person acquires a right to receive benefits under
the Plan, such right shall be no greater than the right of any
unsecured general creditor of the Company, except to the extent
provided in the Trust Agreement, if any.
11.02 Right to Terminate Employment
The Company may terminate the employment of any Participant as freely
and with the same effect as if the Plan were not in existence.
11.03 Inalienability of Benefits
No Participant shall have the right to assign, transfer, hypothecate,
encumber or anticipate his interest in any benefits under the Plan, nor
shall the benefits under the Plan be subject to any legal process to
levy upon or attach the benefits for payment for any claim against the
Participant or his spouse. If, notwithstanding the foregoing provision,
any Participant's benefits are garnished or attached by the order of
any court, the Company may bring an action for declaratory judgment in
a court of competent jurisdiction to determine the proper recipient of
the benefits to be distributed pursuant to the Plan. During the
pendency of the action, any benefits that become distributable shall be
paid into the court, as they become distributable, to be distributed by
the court to the recipient it deems proper at the conclusion of the
action.
11.04 Claims Procedure
(a) The Participant, his spouse or the authorized representative
of the claimant shall file all claims in writing, by
completing such procedures as the Committee shall
15
17
require. Such procedures shall be reasonable and may include
the completion of forms and the submission of documents and
additional information.
(b) If a claim is denied, notice of denial shall be furnished by
the Committee to the claimant within 90 days after the receipt
of the claim by the Committee, unless special circumstances
require an extension of time for processing the claim, in
which event notification of the extension shall be provided to
the Participant or beneficiary and the extension shall not
exceed 90 days.
(c) The Committee shall provide adequate notice, in writing, to
any claimant whose claim as been denied, setting forth the
specific reasons for such denial, specific reference to
pertinent Plan provisions, a description of any additional
material or information necessary for the claimant to perfect
his claims and an explanation of why such material or
information is necessary, all written in a manner calculated
to be understood by the claimant. Such notice shall include
appropriate information as to the steps to be taken if the
claimant wishes to submit his claim for review. The claimant
or the claimant's authorized representative may request such
review within the reasonable period of time prescribed by the
Committee. In no event shall such a period of time be less
than 60 days. A decision on review shall be made not later
than 60 days after the Committee's receipt of the request for
review. If special circumstances require a further extension
of time for processing, a decision shall be rendered not later
than 120 days following the Committee's receipt of the request
for review. If such an extension of time for review is
required, written notice of the extension shall be furnished
to the claimant prior to the commencement of the extension.
The decision on review shall be furnished to the claimant.
Such decision shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be
understood by the claimant, as well as specific references to
the pertinent Plan provisions on which the decision is based.
11.05 Disposition of Unclaimed Distributions
Each Participant must file with the Company from time to time in
writing his post office address and each change of post office address.
Any communication, statement or notice addressed to a Participant at
his last post office address on file with the Company, or if no address
is filed with the Company, then at his last post office address as
shown on the Company's records, will be binding on the Participant and
his spouse for all purposes of the Plan. The Company shall not be
required to search for or locate a Participant or his spouse.
11.06 Distributions Due Infants or Incompetents
If any person entitled to a distribution under the Plan is an infant,
or if the Committee determines that any such person is incompetent by
reason of physical or mental disability, whether or not legally
adjudicated an incompetent, the Committee shall have the power to
16
18
cause the distributions becoming due to such person to be made to
another for his benefit, without responsibility of the Committee to see
to the application of such distributions. Distributions made pursuant
to such power shall operate as a complete discharge of the Company, the
Trustee, if any, and the Committee.
11.07 Governing Law
The Plan and all Election Agreements shall be construed in accordance
with the Code and, to the extent applicable, the laws of the State of
Texas excluding any conflicts-of-law provisions.
December 14, 2000
ATTEST: APACHE CORPORATION
/s/ Cheri L. Peper /s/ Jeffrey M. Bender
- --------------------------------- -------------------------------
Cheri L. Peper Jeffrey M. Bender
Corporate Secretary Vice President, Human Resources
17
19
ANNEX A
APACHE CORPORATION DEFERRED DELIVERY PLAN
STOCK BONUS AWARD PROVISIONS
From time to time, grants of stock bonus awards for specified numbers of Stock
Units (each a "Stock Bonus Award") may be made to Participants under the terms
of the Plan. Capitalized terms used in this Annex A shall have the meaning set
forth in the Plan or herein, as the case may be.
Grants of Stock Bonus Awards shall be made by the Committee. The Stock Units
covered by each Stock Bonus Award shall be credited to the Participant's Account
maintained under the Plan.
In accordance with the provisions of the Plan, the Committee shall, in its sole
discretion, select the Participants to receive Stock Bonus Awards. For each
stock Bonus Award, the Committee shall:
o specify the date of grant and number of Stock Units granted;
o designate the vesting provisions; and
o establish such other terms and requirements as deemed
necessary or desirable and consistent with the Plan.
Each Stock Bonus Award shall be evidenced by a written agreement containing the
particular provisions of such award and in such form as the Committee shall
determine.
Upon the grant and/or vesting of each Stock Bonus Award, the Participant shall
make appropriate arrangements with the Company to provide for the amount of all
applicable federal, state and local income and other tax withholding
requirements. As used in the Plan, the phrase "income from the grant of a Stock
Bonus Award" shall mean the amount calculated by multiplying (a) the number of
Stock Units covered by the Stock Bonus Award, times (b) the Fair Market Value of
the Stock for the date of grant.
Except as set forth in this Annex A and/or in the applicable written agreement,
each Stock Bonus Award and the Stock Units related thereto shall be subject to
all other terms and conditions set forth in the Plan.
A-1