EXHIBIT 10.1
AMENDMENT
TO
APACHE CORPORATION 401(k) SAVINGS PLAN
Apache Corporation ("Apache") sponsors the Apache Corporation 401(k)
Savings Plan (the "Plan"). In section 10.4 of the Plan, Apache reserved the
right to amend the Plan from time to time. Apache hereby exercises the right to
amend the Plan by making the following changes to the Plan, effective January 1,
2002.
REVISED MATCHING FORMULA
SECTION 3.1(b)(i) SHALL BE REPLACED IN ITS ENTIRETY WITH THE FOLLOWING.
(i) Standard Match. As of the last day of the Plan
Year, the Committee shall make the final allocation of Company
Matching Contributions (including such forfeitures occurring
during the pay period that are treated as Company Matching
Contributions pursuant to section 5.5) to each Participant who
made Participant Before-Tax Contributions during the Plan Year
as follows. Each Participant's allocation shall be equal to
his Participant Before-Tax Contributions for the Plan Year, up
to a maximum allocation of 6% of his Compensation. The
Committee may make interim allocations of Company Matching
Contributions during the Plan Year, reflecting the allocation
earned thus far in the Plan Year.
REVISED LOAN RULES
SECTION 7.2(a) SHALL BE REPLACED IN ITS ENTIRETY WITH THE FOLLOWING.
(a) Availability. Loans are available only to Employees,
Participants who are parties-in-interest (within the meaning of ERISA
section 3(14)), and beneficiaries who are parties-in-interest
(collectively referred to in this section as "Borrowers"). The
Committee shall temporarily reduce the amount a Participant may borrow
or temporarily prevent the Participant from borrowing when, as
described in section 13.9, the Committee is informed that a QDRO
affecting the Participant's Accounts is in process or may be in
process. Loans shall be temporarily unavailable to a prospective
Borrower while the Committee has suspended loans because the Committee
believes that the Plan may have a cause of action against the
Participant, as explained in subsection 13.9(h).
NEW RULES FOR ROLLOVERS
SECTION 1.5(b)(i) SHALL BE REPLACED IN ITS ENTIRETY BY THE FOLLOWING.
(i) Rollover Contributions to any defined
contribution plan maintained by the Company or an Affiliated
Entity;
THE FOLLOWING SECTION 1.39A SHALL BE ADDED TO THE PLAN.
1.39A "Rollover Contribution" means the following.
(a) Direct Transfers. A Rollover Contribution includes a
direct transfer to a defined contribution plan by a Covered Employee of
an eligible rollover distribution from:
(i) a qualified plan described in Code section 401(a)
(including after-tax contributions),
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(ii) a qualified annuity plan described in Code
section 403(a) (including after-tax contributions),
(iii) an annuity contract described in Code section
403(b) (including after-tax contributions), or
(iv) an eligible plan under Code section 457(b) that
is maintained by an eligible employer described in Code
section 457(e)(1)(A) (which generally includes state or local
governments).
(b) Regular Rollovers. A Rollover Contribution includes a
contribution to a defined contribution plan by a Covered Employee of an
eligible rollover distribution from:
(i) a qualified plan described in Code section 401(a)
(excluding after-tax contributions),
(ii) a qualified annuity plan described in Code
section 403(a) (excluding after-tax contributions),
(iii) an annuity contract described in Code section
403(b) (excluding after-tax contributions), or
(iv) an eligible plan under Code section 457(b) that
is maintained by an eligible employer described in Code
section 457(e)(1)(A) (which generally includes state and local
governments).
(c) Rollovers from IRAs. A Rollover Contribution includes a
contribution to a defined contribution plan by a Covered Employee of
the portion of a distribution from an individual retirement account or
annuity described in Code section 408(a) or 408(b) that is eligible to
be rolled over and that would otherwise be included in the Covered
Employee's gross income.
THE INTRODUCTORY PARAGRAPH TO ARTICLE III SHALL BE AMENDED BY REPLACING THE WORD
"ROLLOVERS" WITH "ROLLOVER CONTRIBUTIONS."
SECTION 3.2(b) SHALL BE REPLACED IN ITS ENTIRETY BY THE FOLLOWING SECTION
3.2(d). [NOTE: A NEW 3.2(b) AND 3.2(c) ARE BEING ADDED TO THE PLAN.]
(d) Rollovers. The Plan may accept any Rollover Contribution
from a Covered Employee, with the following limitations. The Committee
shall decide from time to time which types of Rollover Contributions
the Plan will accept, and the conditions under which the Plan will
accept them. The Plan shall not accept any Rollover Contribution to the
extent that it is a direct transfer of an amount that would, if not
rolled over, be excluded from the Covered Employee's gross income
(i.e., the Plan won't accept rollovers of after-tax contributions). If
the Plan accepts a contribution and subsequently determines that the
contribution did not qualify as a Rollover Contribution, the Plan shall
distribute such contribution, as well as the net increase or decrease
in the net value of the Trust Fund attributable to the contribution, to
the Covered Employee as soon as administratively practicable. Rollover
Contributions shall be allocated to Rollover Accounts.
SECTION 4.1(c) SHALL BE REPLACED IN ITS ENTIRETY WITH THE FOLLOWING.
(c) Rollover Account. A Rollover Account shall be established
for each Participant who makes a Rollover Contribution to this Plan
pursuant to subsection 3.2(d).
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SECTION 6.6 SHALL BE REPLACED IN ITS ENTIRETY WITH THE FOLLOWING.
6.6 Direct Rollover Election.
(a) General Rule. A Participant, an Alternate Payee who is the
Spouse or former Spouse of the Participant, or a surviving Spouse of a
deceased Participant (collectively, the "distributee") may direct the
Trustee to pay all or any portion of his "eligible rollover
distribution" to an "eligible retirement plan" in a "direct rollover."
This direct rollover option is not available to other Account Owners
(non-Spouse beneficiaries and Alternate Payees who are not the Spouse
or former Spouse of the Participant). Within a reasonable period of
time before an eligible rollover distribution, the Committee shall
inform the distributee of this direct rollover option, the appropriate
withholding rules, other rollover options, the options regarding income
taxation, and any other information required by Code section 402(f).
The distributee may waive the usual 30-day waiting period before
receiving a distribution, and elect to receive his distribution as soon
as administratively practicable after completing and filing his
distribution election.
(b) Definition of Eligible Rollover Distribution. An eligible
rollover distribution is any distribution or in-service withdrawal
other than (i) distributions required under Code section 401(a)(9),
(ii) distributions of amounts that have already been subject to federal
income tax (such as defaulted loans or after-tax voluntary
contributions), other than a direct transfer to (A) another retirement
plan that meets the requirements of Code sections 401(a) or 403(a), or
(B) an individual retirement account or annuity described in Code
section 408(a) or 408(b), (iii) installment payments in a series of
substantially equal payments made at least annually and (A) made over a
specified period of ten or more years, (B) made for the life or life
expectancy of the distributee, or (C) made for the joint life or joint
life expectancy of the distributee and his designated beneficiary, (iv)
a distribution to satisfy the limits of Code section 415 or 402(g), (v)
a deemed distribution of a defaulted loan from this Plan, to the extent
provided in the regulations, (vi) a distribution to satisfy the ADP or
ACP tests, (vii) any other actual or deemed distribution specified in
the regulations issued under Code section 402(c), or (viii) any
hardship withdrawal by an Employee.
(c) Definition of Eligible Retirement Plan. An eligible
retirement plan is an individual retirement account or annuity
described in Code section 408(a) or 408(b), an annuity plan described
in Code section 403(a), an annuity contract described in Code section
403(b), an eligible plan under Code section 457(b) that is maintained
by an eligible employer described in Code section 457(e)(1)(A) (which
generally includes state and local governments), or the qualified trust
of a defined contribution plan described in Code section 401(a), that
accepts eligible rollover distributions.
(d) Definition of Direct Rollover. A direct rollover is a
payment by the Trustee to the eligible retirement plan specified by the
distributee.
SECTION 15.2(g) SHALL BE REPLACED IN ITS ENTIRETY BY THE FOLLOWING.
(g) Rollovers. If the Serviceman was a Covered Employee when
he or she became a Serviceman, the Serviceman may make Rollover
Contributions pursuant to subsection 3.2(d) until the day on which his
or her potential USERRA reemployment rights expire.
REPEAL OF THE MULTIPLE-USE TEST
SECTION 3.7 SHALL BE DELETED IN ITS ENTIRETY, BUT SECTIONS 3.8 AND 3.9 SHALL NOT
BE RE-NUMBERED.
ALL REFERENCES TO THE MULTIPLE-USE TEST OR TO SECTION 3.7 SHALL BE DELETED FROM
SECTIONS 1.13(c), 3.1(b)(ii), 3.1(c)(iv), 4.2(c)(iv), 5.2(b), 15.4(h)(i), AND
15.4(h)(ii)(F).
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CHANGE TO THE LIMIT IN CODE SECTION 415
SECTION 3.4(a) SHALL BE REPLACED IN ITS ENTIRETY BY THE FOLLOWING.
(a) The Annual Additions to a Participant's Account(s) in this
Plan and to his or her accounts in any other defined contribution plans
maintained by the Company or an Affiliated Entity for any Limitation
Year shall not exceed in the aggregate the lesser of (i) $40,000 (as
adjusted by the Secretary of the Treasury), or (ii) 100% of the
Participant's Compensation. The limit in paragraph (ii) shall not apply
to any contribution for medical benefits (within the meaning of Code
section 419A(f)(2)) after separation from service that is treated as an
Annual Addition.
ADDITIONAL INVOLUNTARY DISTRIBUTIONS PERMITTED
SECTION 6.5(d) SHALL BE REPLACED IN ITS ENTIRETY BY THE FOLLOWING.
(d) Small Amounts. If the aggregate value of the
nonforfeitable portion of a Participant's Accounts other than his
Rollover Account is $5,000 or less on any date after the Participant
ceases to be an Employee, then the Participant shall receive a single
payment of the distributable amount as soon as practicable, provided
that the aggregate value is $5,000 or less when the distribution is
processed. The Committee may elect to check the value of the
Participant's Accounts on an occasional (rather than a daily) basis, to
determine whether to apply the provisions of this subsection.
THE SECOND SENTENCE OF SECTION 13.9(f)(ii) SHALL BE REPLACED BY THE FOLLOWING
SENTENCE.
If the value of the nonforfeitable portion of an Alternate
Payee's Account (ignoring any portion of the Participant's Rollover
Account that was assigned to the Alternate Payee) is $5,000 or less,
the Alternate Payee shall receive a single payment of the distributable
amount as soon as practicable (without the Alternate Payee's consent),
provided that the value is $5,000 or less when the distribution is
processed.
ELIMINATION OF THE SAME-DESK RULE
THE SECOND SENTENCE OF SECTION 6.5(a)(i) SHALL BE ELIMINATED.
SECTION 15.3(a) SHALL BE REPLACED IN ITS ENTIRETY BY THE FOLLOWING.
(a) If a Serviceman is not reemployed before his or her
potential USERRA reemployment rights expire, the Committee shall
determine his or her Termination from Service Date by treating his or
her service in the Uniformed Services as an approved leave of absence
but treating the expiration of his or her potential USERRA reemployment
rights as the failure to timely return from his or her leave of
absence, with the consequence that his or her Termination from Service
Date will generally be the date his or her potential USERRA rights
expired. Once his or her Termination from Service Date has been
determined, the Committee shall determine his or her vested percentage.
For purposes of Article VI and section 7.1 (relating to distributions),
the day the Serviceman's potential USERRA reemployment rights expired
shall be treated as the day he or she terminated employment with the
Company and Affiliated Entities. For purposes of subsection 5.2(d)
(relating to the timing of forfeitures), the Serviceman's last day of
employment shall be the day his or her potential USERRA reemployment
rights expired. If the Serviceman has an outstanding loan from this
Plan when his or her potential USERRA reemployment rights expire, his
or her loan shall go into default on the last day of the calendar
quarter after the calendar quarter in which his or her potential USERRA
reemployment rights expired, unless, before the loan goes into default,
he or she repays the loan or is rehired pursuant to subsection (b).
APPENDICES D AND F SHALL BE ELIMINATED, AND APPENDIX E SHALL BE RE-DESIGNATED AS
APPENDIX D.
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APPENDIX C SHALL BE AMENDED BY REPLACING BOTH THE INTRODUCTORY PARAGRAPH AND THE
"SALES" PARAGRAPH WITH THE FOLLOWING PARAGRAPHS.
Over the years, Apache and its Affiliated Entities have engaged in
numerous corporate transactions, both acquisitions and sales. This
Appendix contains any special provisions that apply to employees
affected by the corporate transaction, including both those who become
Employees and those who cease to be Employees.
Sales
For an Employee who transferred to Natural Gas Clearinghouse ("NGC")
pursuant to the terms of the Employee Benefits Agreement effective
April 1, 1990 between Apache and NGC, a Period of Service shall be
calculated by treating as employment with Apache any period(s) of
employment after April 1, 1990 with NGC or any business that is then
treated as a single employer with NGC pursuant to Code section 414(b),
414(c), 414(m), or 414(o).
Employees terminated in connection with the summer 1995 sale of certain
properties to Citation 1994 Investment Limited Partnership are fully
vested in their Plan Accounts as of September 1, 1995.
An Employee who transferred to Producers Energy Marketing LLC
("ProEnergy") in the first half of 1996 is fully vested in his or her
Plan Accounts as of the date of transfer. If such an individual becomes
an Employee again, all new contributions to his or her Plan Accounts
shall vest according to the regular rules.
SHORTENING THE SUSPENSION PERIOD AFTER HARDSHIP WITHDRAWALS
THE THIRD-FROM-THE-LAST SENTENCE OF SECTION 3.2(a)(iii) SHALL BE REPLACED WITH
THE FOLLOWING.
If an Employee makes a hardship withdrawal from his Before-Tax Account
under section 7.1 after 2001, his contribution rate shall be
immediately reduced to 0%, and shall remain at 0% for at least 6
months.
SECTION 7.1(c)(ii) SHALL BE REPLACED IN ITS ENTIRETY BY THE FOLLOWING.
(ii) Satisfaction of Need. The withdrawal is deemed
to be needed to satisfy the Employee's financial need if (A)
the Employee has obtained all withdrawals and all non-taxable
loans available from the Company's and any Affiliated
Entities' qualified plans, and (B) for a period of at least 6
months from the date the Employee receives the withdrawal, he
or she ceases to make Participant Before-Tax Contributions and
elective contributions to all qualified and non-qualified
plans maintained by the Company or any Affiliated Entity.
CHANGE IN TOP-HEAVY RULES
THE FIRST SENTENCE OF SECTION 12.2 SHALL BE AMENDED BY REPLACING THE PHRASE "WHO
TERMINATED EMPLOYMENT WITHIN FIVE YEARS OF THE DETERMINATION DATE" WITH THE
PHRASE "WHO TERMINATED EMPLOYMENT WITHIN ONE YEAR OF THE DETERMINATION DATE."
THE THIRD SENTENCE OF SECTION 12.2 SHALL BE REPLACED BY THE FOLLOWING.
For purposes of determining the account balance of any Participant, (a)
the balance shall be determined as of the Determination Date, (b) the
balance shall also include any distributions to the Participant during
the one-year period ending on the Determination Date, and (c) the
balance shall also include, for distributions made for a reason other
than separation from service or death or disability, any distributions
to the Participant during the five-year period ending on the
Determination Date.
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THE THIRD-FROM-THE-LAST SENTENCE OF SECTION 12.2 SHALL BE REPLACED BY THE
FOLLOWING.
If one or more of the plans required or permitted to be aggregated with
this Plan is a defined benefit plan, a Participant's "account balance"
shall mean the present value of the Participant's accrued benefit.
THE LAST SENTENCE OF SECTION 12.4 SHALL BE REPLACED WITH THE FOLLOWING.
If the minimum allocation is not otherwise satisfied for any Non-Key
Employee, the Company shall contribute the additional amount needed to
satisfy this requirement to such Non-Key Employee's Company
Contributions Account.
EXTRA CONTRIBUTIONS FOR THOSE 50 AND OLDER
THE FOLLOWING SECTION SHALL BE ADDED TO THE PLAN.
1.5A "Catch-Up Contributions" means those contributions made to the
Plan by the Company, at the election of the Participant pursuant to
subsection 3.2(b) that meet the requirements of Code section 414(v).
THE FOLLOWING SECTION SHALL BE ADDED TO THE PLAN.
1.21A "401(k) Contributions" means those contributions made to the Plan
by the Company, at the election of the Participant pursuant to
subsection 3.2(a), that are excludable from the Participant's gross
income under Code sections 401(k) and 402(e)(3).
SECTION 1.32 SHALL BE REPLACED IN ITS ENTIRETY BY THE FOLLOWING.
1.32 "Participant Before-Tax Contributions" means 401(k) Contributions
and Catch-Up Contributions.
THE TERM "PARTICIPANT BEFORE-TAX CONTRIBUTION" SHALL BE REPLACED, IN THE
FOLLOWING SECTIONS, BY THE TERM "401(k) CONTRIBUTIONS": 1.5(a)(iii), 3.1(d),
3.3(b), 3.4(b)(iii), 3.4(b)(iv), 4.2(c)(iv), AND 5.2(b).
SECTION 3.2(a) SHALL BE REPLACED IN ITS ENTIRETY BY THE FOLLOWING SECTIONS
3.2(a) AND 3.2(b).
(a) 401(k) Contributions.
(i) General Rules. A Participant may elect to defer
the receipt of a portion of his or her Compensation during the
Plan Year and contribute such amounts to the Plan as 401(k)
Contributions. The Committee shall determine the maximum
401(k) Contributions that a Participant may make and shall
establish other administrative rules governing the 401(k)
Contributions; for example, the Committee may require 401(k)
Contributions to be made in whole percentages of Compensation,
the Committee may allow different contribution percentages
from bonuses than are allowed from regular pay, and the
Committee may limit 401(k) Contributions (for the year or for
the pay period or for a bonus) to a percentage of Compensation
(for the year or for the pay period or for the bonus). The
Company shall pay the amount deducted from the Participant's
Compensation to the Trustee promptly after the deduction is
made. 401(k) Contributions shall be allocated to Participant
Before-Tax Contributions Accounts.
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(ii) Limitations on 401(k) Contributions.
(A) Limit for Apache Plans. The sum of
401(k) Contributions to this Plan and elective
deferrals (as defined in Code section 402(g)(3)) to
any other plan maintained by the Company or an
Affiliated Entity shall not exceed the dollar limit
in effect under Code section 402(g)(1) in any
calendar year. The Company shall inform the Committee
if such limit has been exceeded, and the excess
amount allocated to this Plan. The excess amount
allocated to this Plan shall be reduced by any 401(k)
Contributions returned pursuant to any other
provision of this Article. Any remaining excess
amount shall be recharacterized as a Catch-Up
Contribution to the extent possible, and any
remaining excess amount shall be returned to the
Participant as soon as administratively possible, and
in no event later than April 15 of the calendar year
after the calendar year in which the excess occurred.
Company Matching Contributions attributable to
amounts returned under this subparagraph shall be
forfeited. Unmatched 401(k) Contributions shall be
returned first. The amount returned, recharacterized
or forfeited shall be adjusted to reflect the net
increase or decrease in the net worth of the
Participant's Account attributable thereto for the
Plan Year. The Committee may use any reasonable
method to allocate this adjustment.
(B) Participant Limit. If the sum of the
401(k) Contributions to this Plan and elective
deferrals (as defined in Code section 402(g)(3)) to
any other plan exceed the dollar limit in effect
under Code section 402(g)(1) in a calendar year, and
the Participant is an Employee on the last day of the
Plan Year and informs the Committee of the amount of
the excess allocated to this Plan, then that amount
will be reduced by any 401(k) Contributions for that
calendar year that were returned pursuant to any
other provision in this Article. Any remaining excess
amount shall be recharacterized as a Catch-Up
Contribution to the extent possible, and any
remaining excess amount shall be returned to the
Participant as soon as administratively possible, and
in no event later than April 15 of the calendar year
after the calendar year in which the excess occurred.
Company Matching Contributions attributable to
amounts returned under this subparagraph shall be
forfeited. Unmatched 401(k) Contributions shall be
returned first. The amount returned, recharacterized,
or forfeited shall be adjusted to reflect the net
increase or decrease in the net worth of the
Participant's Account attributable thereto for the
Plan Year. The Committee may use any reasonable
method to allocate this adjustment.
(b) Catch-Up Contributions.
(i) General Rules. A Participant whose 49th birthday
occurred before the first day of the Plan Year may elect to
defer the receipt of a portion of his or her Compensation
during the Plan Year and contribute such amounts to the Plan
as Catch-Up Contributions. The Company shall pay the amount
deducted from the Participant's Compensation to the Trustee
promptly after the deduction is made. The Committee shall
determine after the end of each calendar year which
Participant Before-Tax Contributions were Catch-Up
Contributions and which were 401(k) Contributions. See
sections 3.5 and 3.6 for instances in which Participant
Before-Tax Contributions that would normally be
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characterized as 401(k) Contributions are in fact
characterized as Catch-Up Contributions. Catch-Up
Contributions shall be allocated to Participant Before-Tax
Contributions Accounts.
(ii) Limitations on Catch-Up Contributions.
(A) Limit for Apache Plans. The sum of
Catch-Up Contributions to this Plan and similar
deferrals under Code section 414(v) to any other plan
maintained by the Company or an Affiliated Entity
shall not exceed the dollar limit in effect under
Code section 414(v)(2) in any calendar year. The
Company shall inform the Committee if such limit has
been exceeded, and the excess amount allocated to
this Plan. The excess amount allocated to this Plan
shall be reduced by any amounts returned pursuant to
any other provision of this Article. Any remaining
excess amount shall be returned to the Participant as
soon as administratively possible, and in no event
later than April 15 of the calendar year after the
calendar year in which the excess occurred. Company
Matching Contributions attributable to amounts
returned under this subparagraph shall be forfeited.
Unmatched Catch-Up Contributions shall be returned
first. The amount returned or forfeited shall be
adjusted to reflect the net increase or decrease in
the net worth of the Participant's Account
attributable thereto for the Plan Year. The Committee
may use any reasonable method to allocate this
adjustment.
(B) Participant Limit. If the sum of the
Catch-Up Contributions to this Plan and similar
deferrals under Code section 414(v) to any other plan
exceed the dollar limit in effect under Code section
414(v)(2) in a calendar year, and the Participant is
an Employee on the last day of the Plan Year and
informs the Committee of the amount of the excess
allocated to this Plan, then that amount will be
reduced by any Catch-Up Contributions for that
calendar year that were returned pursuant to any
other provision in this Article and any remaining
excess amount shall be returned to the Participant as
soon as administratively possible, and in no event
later than April 15 of the calendar year after the
calendar year in which the excess occurred. Company
Matching Contributions attributable to amounts
returned under this subparagraph shall be forfeited.
Unmatched Catch-Up Contributions shall be returned
first. The amount returned or forfeited shall be
adjusted to reflect the net increase or decrease in
the net worth of the Participant's Account
attributable thereto for the Plan Year. The Committee
may use any reasonable method to allocate this
adjustment.
(c) Procedures. Participant Before-Tax Contributions shall be
made according to rules prescribed by the Committee, and may only be
made after the Company has received authorization from a Participant to
deduct such contributions from his or her Compensation. Such
authorization shall remain in effect until revoked or changed by the
Participant. The Participant may change his or her authorization as of
the first day of any pay period by filing an election no later than the
last day of the pay period. To be effective, any authorization, change
of authorization, or notice of revocation must be filed with the
Committee according to such restrictions and requirements as the
Committee prescribes. The Committee shall establish procedures from
time to time for Participants to change their contribution elections,
which procedures shall be communicated to Participants. The Committee
may establish different procedures for Participant Before-Tax
Contributions from different types of Compensation, such as bonuses.
The Committee's procedures for
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Catch-Up Contributions shall allow all Participants who can make
Catch-Up Contributions the effective opportunity to make the same
dollar amount of Catch-Up Contributions for the calendar year.
THE FOLLOWING NEW PHRASE SHALL BE ADDED TO THE END OF THE LAST SENTENCE OF
SECTION 1.5(b), AND THE WORD "OR" IMMEDIATELY PRECEDING SECTION 1.5(b)(v) SHALL
BE DELETED.
, or (vi) salary deferrals within the meaning of Code sections
414(u)(2)(C) or 414(v)(6)(B).
THE PHRASE "CODE SECTIONS 125, 132(f)(4), 402(e)(3), 402(h), 403(b), 408(p), OR
457" IN SECTION 1.13(a) AND 1.13(b) SHALL BE REPLACED BY THE PHRASE "CODE
SECTIONS 125, 132(f)(4), 402(e)(3), 402(h), 403(b), 408(p), 414(u)(2)(C),
414(v)(6)(B), OR 457."
THE LAST SENTENCE OF PARAGRAPH 3.1(c)(II) SHALL BE ELIMINATED.
SECTION 3.1(d) SHALL BE REPLACED IN ITS ENTIRETY WITH THE FOLLOWING.
(d) Contributions Contingent on Deductibility. The Company
Contributions for a Plan Year (excluding forfeitures, contributions
pursuant to paragraph 3.1(c)(v), and Catch-Up Contributions), when
combined with Participant Before-Tax Contributions for the Plan Year,
shall not exceed the amount allowable as a deduction for Apache's
taxable year ending with or within the Plan Year pursuant to Code
section 404. The amount allowable as a deduction under Code section 404
shall include carry forwards of unused deductions for prior years. If
the Code section 404 deduction limit would be exceeded for any Plan
Year, the Plan contributions shall be reduced, in the following order,
until the Plan contributions equal the Code section 404 deduction
limit: first, the Company Matching Contributions for those Highly
Compensated Employees who are eligible to participate in the Company's
Nonqualified Retirement/Savings Plan; second, the Participant
Before-Tax Contributions for those Highly Compensated Employees who are
eligible to participate in the Company's Nonqualified
Retirement/Savings Plan; third, all but $1 of the Company Discretionary
Contributions for those Highly Compensated Employees who are eligible
to participate in the Company's Nonqualified Retirement/Savings Plan;
fourth, any remaining unmatched Participant Before-Tax Contributions;
fifth, any remaining matched Participant Before-Tax Contributions, and
the corresponding Company Matching Contribution; sixth, any remaining
Company Discretionary Contributions. Company Contributions other than
QNECs, QMACs, and contributions pursuant to paragraph 3.1(c)(iv) shall
be paid to the Trustee no later than the due date (including any
extensions) for filing the Company's federal income tax return for such
year; QNECs and QMACs shall be paid to the Trustee no later than 12
months after the close of the Plan Year; and contributions subject to
paragraph 3.1(c)(iv) shall be paid to the Trustee as specified in
section 15.4. Company Contributions may be made without regard to
current or accumulated earnings and profits; nevertheless, this Plan is
intended to qualify as a "profit sharing plan" as defined in Code
section 401(a). The appropriate contribution of the Company to the
Trust Fund may be paid by the Company in the form of Company Stock,
cash, other assets of any character, or in any combination of the
foregoing, as determined by the Company.
SECTION 3.5 SHALL BE REPLACED IN ITS ENTIRETY BY THE FOLLOWING.
3.5 Contribution Limits for Highly Compensated Employees (ADP Test).
(a) Limits on Contributions. Notwithstanding any provision in
this Plan to the contrary, the actual deferral percentage ("ADP") test
of Code section 401(k)(3) shall be satisfied. Code section 401(k) and
the regulations issued thereunder are hereby incorporated by reference
to the extent permitted by such regulations. In performing the ADP test
for a Plan Year, the Plan will use that Plan Year's data for the
Non-Highly Compensated Employees.
(b) Permissible Variations of the ADP Test. To the extent
permitted by the regulations under Code sections 401(m) and 401(k),
401(k) Contributions, QMACs, and QNECs may be used to satisfy the ACP
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test of section 3.6 if they are not used to satisfy the ADP test. The
Committee may elect to exclude from the ADP test those Non-Highly
Compensated Employees who, at the end of the Plan Year, had not
attained age 21 and/or whose Period of Service was for less than one
year.
(c) Advanced Limitation on 401(k) Contributions or Company
Matching Contributions. The Committee may limit the 401(k)
Contributions of any Highly Compensated Employee (or any Employee
expected to be a Highly Compensated Employee) at any time during the
Plan Year (with the result that his or her share of Company Matching
Contributions may be limited). This limitation may be made, if
practicable, whenever the Committee believes that the limits of this
section or sections 3.4 or 3.6 will not be satisfied for the Plan Year.
(d) Corrections to Satisfy Test. If the ADP test is not
satisfied for the Plan Year, the Committee shall decide which one or
more of the following methods shall be employed to satisfy the ADP
test. All corrections shall be accomplished if possible before March 15
of the following Plan Year, and in no event later than 12 months after
the close of the Plan Year.
(i) The Committee may recommend to the Company and
the Company may make QNECs to the Plan, pursuant to subsection
3.8(c).
(ii) The Committee may recommend to the Company and
the Company may designate some or all of the Company
Discretionary Contributions allocated to Non-Highly
Compensated Employees as QNECs, pursuant to subsection 3.8(b).
(iii) The Committee may recommend to the Company and
the Company may designate any Company Matching Contributions
to the Plan as QMACs, pursuant to section 3.9.
(iv) 401(k) Contributions of Highly Compensated
Employees may be recharacterized as Catch-Up Contributions or
returned to the Highly Compensated Employee, without the
consent of either the Highly Compensated Employee or his or
her Spouse, subject to the rules of subsection (f).
(e) Order of Correction. The method described in subsection
(c) shall be employed first, during the Plan Year. If that method is
not used during the Plan Year, or if the net effect of such method was
insufficient for the ADP test to be satisfied, the Company has the
discretion to use any one or more of the methods described in
paragraphs (d)(i), (d)(ii), and (d)(iii). If the Company does not
choose to make the corrections described in paragraphs (d)(i), (d)(ii),
and (d)(iii), or if such corrections are insufficient to satisfy the
ADP test, then the correction method described in paragraph (d)(iv)
shall be used.
(f) Calculating the Amounts Returned or Recharacterized. If
the ADP test is not satisfied, and 401(k) Contributions are returned or
recharacterized pursuant to paragraph (d)(iv) above, the Committee
shall determine the amount to be returned or recharacterized pursuant
to paragraph (i) below, and shall then allocate that amount among the
Highly Compensated Employees pursuant to paragraph (ii) below in the
order specified in paragraph (iii) below. The amount actually
recharacterized or returned to each Highly Compensated Employee shall
be adjusted to reflect as nearly as possible the actual investment
gains or losses thereon for the Plan Year, determined pursuant to
Article IV, but shall not be adjusted to reflect any subsequent gains
or losses.
(i) Calculation of Amount of Excess Contributions.
The amount of 401(k) Contributions to be recharacterized or
returned to the group of Highly Compensated Employees as a
whole (the "excess contributions") shall be equal to the
hypothetical reduction in the 401(k) Contributions that are
subject to the ADP test pursuant to subsection (b) (the
"relevant 401(k) Contributions") that would be made under the
Page 10 of 14
following procedure. The Highly Compensated Employee(s) with
the highest "actual deferral ratio" has an amount
hypothetically reduced until his or her actual deferral ratio
is reduced to the actual deferral ratio of the Highly
Compensated Employee with the next highest actual deferral
ratio; this process is repeated to the extent necessary for
the ADP test to be satisfied. The term "actual deferral ratio"
is a fraction, the denominator of which is equal to the
Participant's Compensation, and the numerator of which is
equal to (A)+(B)+(C)-(D)-(E), where
(A) is equal to the Participant's 401(k)
Contributions for the Plan Year.
(B) is equal to that portion of the Participant's
QNECs and QMACs that are allocated to the Participant
as of any date within the Plan Year, but only to the
extent that the Committee elects to include them in
the ADP test.
(C) is equal to zero for a Non-Highly Compensated
Employee, and, for each Highly Compensated Employee
who participates in a cash or deferred arrangement
sponsored by the Company or an Affiliated Entity that
is permitted to be aggregated with this Plan, is
equal to the contributions to the other plan that are
subject to that plan's ADP test.
(D) is equal to any of the amounts in (A) that are
used in the ACP test pursuant to subsection (b).
(E) is equal to any of the amounts in (A) or (B) or
(C) that have been removed from the Participant's
Accounts pursuant to any other corrective mechanisms
described in this Article.
(ii) Allocation of Excess Contributions. The excess
contributions shall be allocated among the Highly Compensated
Employees as follows. The Highly Compensated Employee(s) with
the largest relevant 401(k) Contributions shall have an amount
recharacterized or returned until his or her remaining
relevant 401(k) Contributions are equal to those of the Highly
Compensated Employee with the next largest relevant 401(k)
Contributions. This process is repeated until the excess
contributions have been completely recharacterized or returned
to the Highly Compensated Employees.
(iii) Ordering. For each Highly Compensated Employee
allocated an excess contribution, the Plan shall take the
following steps, in the following order.
(A) Recharacterize matched 401(k)
Contributions as Catch-Up Contributions to the extent
possible.
(B) Recharacterize unmatched 401(k)
Contributions as Catch-Up Contributions to the extent
possible.
(C) Return unmatched 401(k) Contributions.
(D) Return matched 401(k) Contributions and
forfeit the corresponding Company Matching
Contribution (unless it was returned to the
Participant pursuant to paragraph 3.6(c)(iv)).
Page 11 of 14
SECTION 3.6 SHALL BE REPLACED IN ITS ENTIRETY WITH THE FOLLOWING:
3.6 Contribution Limits for Highly Compensated Employees (ACP Test).
(a) Limits on Contributions. Notwithstanding any provision in
this Plan to the contrary, the actual contribution percentage ("ACP")
test of Code section 401(m)(2) shall be satisfied. Code section 401(m)
and the regulations issued thereunder are hereby incorporated by
reference to the extent permitted by such regulations. In performing
the ACP test for a Plan Year, the Plan will use that Plan Year's data
for the Non-Highly Compensated Employees.
(b) Permissible Variations of the ACP Test. To the extent
permitted by the regulations under Code sections 401(m) and 401(k),
401(k) Contributions, QMACs, and QNECs may be used to satisfy this test
if not used to satisfy the ADP test of section 3.5. The Committee may
elect to exclude from the ACP test those Non-Highly Compensated
Employees who, at the end of the Plan Year, had not attained age 21
and/or whose Period of Service was for less than one year.
(c) Corrections to Satisfy Test. If the ACP test is not
satisfied, the Committee shall decide which one or more of the
following methods shall be employed to satisfy the ACP test. All
corrections shall be accomplished if possible before March 15 of the
following Plan Year, and in no event later than 12 months after the
close of the Plan Year.
(i) The Committee may recommend to the Company and
the Company may make QNECs to the Plan, pursuant to subsection
3.8(c).
(ii) The Committee may recommend to the Company and
the Company may designate any portion of its Company
Discretionary Contribution as a QNEC, pursuant to subsection
3.8(b).
(iii) The Committee may recommend to the Company and
the Company may make extra Company Matching Contributions to
the Plan, pursuant to paragraph 3.1(b)(ii).
(iv) The non-vested Company Matching Contributions
allocated to Highly Compensated Employees as of any date
during the Plan Year may be forfeited as of the last day of
the Plan Year, and the vested Company Matching Contributions
allocated to any Highly Compensated Employee for the Plan Year
may be paid to such Highly Compensated Employee, without the
consent of either the Highly Compensated Employee or his or
her Spouse, subject to the rules of subsection (e).
(v) Those 401(k) Contributions that are taken into
account for this ACP test for any Highly Compensated Employee
may be returned to such Highly Compensated Employee, without
the consent of either the Highly Compensated Employee or his
or her Spouse, subject to the rules of subsection (e).
(d) Order of Correction. The method described in subsection
3.5(c) shall be employed first, during the Plan Year. If that method is
not used during the Plan Year, or if the net effect of such method was
insufficient for the ACP test to be satisfied, the Company has the
discretion to use any one or more of the methods described in
paragraphs (c)(i), (c)(ii), and (c)(iii). If the Company does not
choose to make the corrections described in paragraphs (c)(i), (c)(ii),
and (c)(iii), or if such corrections are insufficient to satisfy the
ACP test, then the correction methods described in paragraphs (c)(iv)
and (c)(v) shall be used, as described in subsection (e).
Page 12 of 14
(e) Calculating the Corrective Reduction in Participants'
Accounts. If the ACP test is not satisfied, and the correction methods
described in paragraphs (c)(iv) and (c)(v) are to be used, the
Committee shall determine the amount of the correction pursuant to
paragraph (i) below, and shall then allocate that amount among the
Highly Compensated Employees pursuant to paragraph (ii) below in the
order specified in paragraph (iii). The amount of the correction shall
be adjusted to reflect as nearly as possible the actual investment
gains or losses thereon for the Plan Year, determined pursuant to
Article IV, but shall not be adjusted to reflect any subsequent gains
or losses.
(i) Calculation of Amount of Excess Aggregate
Contributions. The term "aggregate contributions" means those
401(k) Contributions and Company Matching Contributions that
are taken into account for the ACP test pursuant to subsection
(b). The amount of the excess aggregate contributions shall be
equal to the hypothetical reduction in the aggregate
contributions that would be made under the following
procedure. The Highly Compensated Employee(s) with the highest
"actual contribution ratio" has his or her aggregate
contributions hypothetically reduced until his or her actual
contribution ratio is lowered to the actual contribution ratio
of the Highly Compensated Employee with the next highest
actual contribution ratio; this process is repeated to the
extent necessary for the ACP test to be satisfied. The term
"actual contribution ratio" is a fraction, the denominator of
which is equal to the Participant's Compensation, and the
numerator of which is equal to (A)+(B)+(C)+(D)-(E), where
(A) is equal to the Participant's Company Matching
Contributions for the Plan Year.
(B) is equal to the Participant's 401(k)
Contributions that are used in the ACP test pursuant
to subsection (b).
(C) is equal to that portion of the Participant's
QNECs and QMACs that are allocated to the Participant
as of any date within the Plan Year, but only to the
extent that the Committee elects to include them in
the ACP test.
(D) is equal to zero for a Non-Highly Compensated
Employee, and, for each Highly Compensated Employee
who participates in a cash or deferred arrangement
sponsored by the Company or an Affiliated Entity that
is permitted to be aggregated with this Plan, is
equal to the contributions to the other plan that are
subject to that plan's ACP test.
(E) is equal to any of the amounts in (A) or (B) or
(C) or (D) that have been removed from the
Participant's Accounts pursuant to any other
corrective mechanisms described in this Article.
(ii) Allocation of Excess Aggregate Contributions.
The excess aggregate contributions shall be allocated among
the Highly Compensated Employees as follows. The Highly
Compensated Employee(s) with the largest aggregate
contributions shall have his or her aggregate contributions
reduced until his or her remaining aggregate contributions are
equal to those of the Highly Compensated Employee with the
next largest aggregate contributions. This process is repeated
until the excess aggregate contributions have been eliminated.
(iii) Ordering. For each Highly Compensated Employee
allocated an excess aggregate contribution, the Plan shall
take the following steps, in the following order.
Page 13 of 14
(A) Recharacterize matched 401(k)
Contributions as Catch-Up Contributions to the extent
possible.
(B) Recharacterize unmatched 401(k)
Contributions as Catch-Up Contributions to the extent
possible.
(C) Return unmatched 401(k) Contributions.
(D) Pay the vested Company matching
Contribution for the Plan Year to the Participant.
(E) Return matched 401(k) Contributions and
forfeit the corresponding Company Matching
Contribution (unless it was returned to the
Participant pursuant to paragraph 3.6(c)(iv)).
(F) Forfeit the unvested Company Matching
Contribution for the Plan Year.
SECTION 9.2(a) SHALL BE REPLACED IN ITS ENTIRETY BY THE FOLLOWING.
(a) Except as provided in subsection (b) below, (i) all taxes
upon or in respect of the Trust shall be paid by the Trustee out of the
Trust assets, and all expenses of administering the Plan and Trust
shall be paid out of the Trust assets, to the extent permitted by law
and to the extent such taxes and expenses are not paid by the Company
or the Account Owner, and (ii) the Committee shall have full discretion
to determine how to allocate taxes and expenses among Accounts. No
fiduciary shall receive any compensation for services rendered to the
Plan if the fiduciary is being compensated on a full time basis by the
Company.
SECTION 15.1(c) SHALL BE DELETED.
SECTION 15.4(h)(ii)(D) SHALL BE REPLACED IN ITS ENTIRETY BY THE FOLLOWING.
(D) The limits of paragraph 3.2(a)(ii)
(relating to the maximum 401(k) Contributions) and
paragraph 3.2(b)(ii) (relating to the maximum
Catch-Up Contributions) for each calendar year shall
be calculated by treating as 401(k) and Catch-Up
Contributions his or her additional contributions
pursuant to subsection (d) that are attributable to
that calendar year's Deemed Compensation.
EXECUTED this 27th day of December, 2001.
APACHE CORPORATION
By: /s/ Jeffrey M. Bender
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Title: Vice President, Human Resources
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Page 14 of 14