EXHIBIT 10.1
APACHE CORPORATION
DEFERRED DELIVERY PLAN
As Amended and Restated July 17, 2002
TABLE OF CONTENTS
<Table>
ARTICLE I - Definitions...........................................................................................1
1.01 Definitions.....................................................................................1
1.02 Headings; Gender and Number.....................................................................3
ARTICLE II - Eligibility and Participation........................................................................3
2.01 Eligibility and Participation...................................................................3
2.02 Election........................................................................................4
2.03 Failure of Eligibility..........................................................................4
ARTICLE III - Contribution Deferrals..............................................................................4
3.01 Participant Deferrals...........................................................................4
3.02 Company Match...................................................................................6
3.03 Deferral of Deferred Restricted Units...........................................................6
ARTICLE IV - Investment of Deferrals and Accounting; Voting.......................................................6
4.01 Investments.....................................................................................6
4.02 Voting..........................................................................................7
ARTICLE V - Distributions.........................................................................................7
5.01 Vesting.........................................................................................7
5.02 Distribution During Employment..................................................................8
5.03 Distribution After Employment...................................................................9
5.04 Distribution After Participant's Death.........................................................10
5.05 Withholding....................................................................................10
ARTICLE VI - Administration......................................................................................11
6.01 Committee to Administer and Interpret Plan.....................................................11
6.02 Organization of Committee......................................................................11
6.03 Agent for Process..............................................................................11
6.04 Determination of Committee Final...............................................................11
ARTICLE VII - Trust..............................................................................................11
7.01 Trust Agreement................................................................................11
7.02 Expenses of Trust..............................................................................12
</Table>
i
<Table>
ARTICLE VIII - Amendment and Termination.........................................................................12
8.01 Amendment......................................................................................12
8.02 Successors and Assigns; Termination of Plan.....................................................12
ARTICLE IX - Stock Subject to the Plan...........................................................................13
9.01 Number of Shares...............................................................................13
9.02 Other Shares of Stock..........................................................................13
9.03 Adjustments for Stock Split, Stock Dividend, Etc...............................................13
9.04 Dividend Payable in Stock of Another Corporation, Etc..........................................14
9.05 Other Changes in Stock.........................................................................14
9.06 Rights to Subscribe............................................................................14
9.07 Change of Control..............................................................................15
9.08 General Adjustment Rules.......................................................................15
9.09 Determination by the Committee, Etc............................................................15
ARTICLE X - Reorganization and Liquidation.......................................................................15
ARTICLE XI - Miscellaneous.......................................................................................16
11.01 Funding of Benefits - No Fiduciary Relationship...............................................16
11.02 Right to Terminate Employment.................................................................16
11.03 Inalienability of Benefits....................................................................16
11.04 Claims Procedure..............................................................................17
11.05 Disposition of Unclaimed Distributions........................................................17
11.06 Distributions Due Infants or Incompetents.....................................................18
11.07 Governing Law.................................................................................18
Annex A - Stock Bonus Award Provisions..........................................................................A-1
</Table>
ii
APACHE CORPORATION
DEFERRED DELIVERY PLAN
AS AMENDED AND RESTATED JULY 17, 2002
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
1.01 Definitions
Defined terms used in this Plan shall have the meanings set forth
below:
(a) "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, all Deferred Restricted Units, and
all adjustments thereto.
(b) "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.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Stock Option Plan Committee of Apache's
Board of Directors. The Committee shall be constituted at all
times so as to permit the plan to be administered by
"non-employee directors" (as
1
defined in Rule 16b-3 of the Securities Exchange Act of 1934,
as amended).
(e) "Company Match" means the allocations to a Participant's
Account made pursuant to Section 3.02.
(f) "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.
(g) "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.
(h) "Deferred Restricted Units" means those units deferred into
the Plan from the Restricted Stock Plan and any related units
from dividend amounts. Each Deferred Restricted Stock Unit is
deemed to be equivalent to one share of Stock.
(i) "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.
(j) "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.
(k) "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.
(l) "Participant" means any eligible employee selected to
participate in the Plan pursuant to Section 2.01.
(m) "Plan" means the Apache Corporation Deferred Delivery Plan
(including Annex A), as it has been amended from time to time,
or any successor plan.
2
(n) "Plan Year" means the period during which the Plan records are
kept. The Plan Year shall be the calendar year.
(o) "Restricted Stock Plan" means the Apache Corporation Pilot
Executive Restricted Stock Plan as it may be amended from time
to time, or any successor plan.
(p) "Stock" means the $1.25 par value common stock of Apache.
(q) "Stock Bonus Award" means any grant of Stock Units made
pursuant to Annex A.
(r) "Stock Units" means investment units and any related units
from dividend amounts. Each Stock Unit is deemed to be
equivalent to one share of Stock.
(s) "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.
(t) "Trust Agreement" means the written instrument pursuant to
which each separate Trust is created.
(u) "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.
1.02 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
3
among a select group of key employees; however, any Participant in the
Restricted Stock Plan shall be a Participant in the Plan without
further action by the Committee.
2.02 Election
Participants shall complete the election procedure specified by the
Committee. The election procedure may include form(s) for the
Participant 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, no Deferred Restricted Units deferred into
the Plan from the Restricted Stock Plan, 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.
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
4
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.
(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.
5
(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.
3.03 Deferral of Deferred Restricted Units
Pursuant to the terms of the Restricted Stock Plan, Deferred Restricted
Units (a) are deferred into the Plan for an initial deferral period of
five years and (b) shall be credited to the Participants' Accounts as
set forth in Subsection 4.01(b) hereof. Participants may elect an
additional deferral period with respect to Deferred Restricted Units as
set forth in Subsection 5.02(d) hereof.
ARTICLE IV
INVESTMENT OF DEFERRALS AND ACCOUNTING; VOTING
4.01 Investments
(a) Except as provided in Subsection 4.01(b), 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.
(b) All Deferred Restricted Units deferred into the Plan shall be
credited to the Participant's Account as of the date of
vesting under the Restricted Stock Plan. Amounts equal to any
cash dividends declared on the Stock shall be credited to the
Participant's Account for such dividend in proportion to the
number of Deferred Restricted Units in the Participant's
Account as of the record date for such dividend. Such dividend
amounts shall be invested in Deferred Restricted Units with
the number of Deferred
6
Restricted Units determined using the Fair Market Value of the
Stock on the dividend payment date, and such Deferred
Restricted Units shall be fully vested.
(c) 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 or Deferred
Restricted Units prior to the date on which such Stock Units or
Deferred Restricted 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,
related to the deferral of income from stock option exercises
and/or related to Deferred Restricted Units 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 further vesting shall occur subsequent to
the date of retirement or disability and all unvested portions
of the Participant's Account shall be forfeited immediately.
7
(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 below), no further vesting of unvested
portions of the Participant's Account shall occur and all
unvested portions thereof shall be forfeited immediately.
(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 and/or Deferred
Restricted Units) 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 pursuant to the terms of an
applicable Election Agreement electing a deferral (i) for a
five-year period or (ii) until termination of employment with
the Company. 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 termination date of the applicable deferral
period, and each subsequent installment shall be delivered
within 90 days after the first business day of the following
calendar year.
(c) If a Participant remains employed by the Company, a
Participant may elect to further defer distribution of his or
her Stock Units (i) for one additional five-year period or
(ii) until termination of employment with the Company by
executing a new Election Agreement at least one year prior to
the first installment due pursuant to the Participant's
previous election.
8
(d) With regard to any Deferred Restricted Units, a Participant
may elect to further defer such Deferred Restricted Units
beyond the initial deferral period (i) for one additional
five-year period or (ii) until termination of employment with
the Company, provided that such election is made at least one
year prior to the end of the initial deferral period.
(e) All distributions made pursuant to this Section 5.02 shall be
subject to Subsection 5.03 (a) hereof.
5.03 Distributions After Employment
Distributions after the Participant's death shall be made pursuant to
Section 5.04 hereof. All other distributions after employment shall be
made as set forth below:
(a) All deferral periods shall terminate automatically effective
as of the date the Participant terminates employment with the
Company, regardless of the length of time remaining in any
such deferral period.
(b) Timing. The Participant's vested Account shall be distributed
after the Participant terminates employment with the Company
and the distribution shall be made in the number of
installments designated in the Participant's Election
Agreement(s). If the Participant has not made any such
distribution election, 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. If a Participant has elected to take his
distribution in installments, the first installment shall be
delivered within 90 days after the Participant's termination
date and each subsequent installment shall be delivered within
90 days after the first business day of the following calendar
year.
(c) 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.
(d) 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, regardless of any distribution
election made by the Participant, and such distribution shall
be made within 90 days of the Participant's termination date.
(e) 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
9
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. A Beneficiary designation made under the
terms of the Plan shall be filed with the Committee's designee
and shall remain in effect unless and until changed pursuant
to Subsection 5.04(b) hereof. 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 any distribution election made by the Participant, 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 vesting and distribution, as applicable, 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.
10
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 General Counsel and Apache's Corporate Secretary shall each be
an agent of the Plan for service of all process.
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
11
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.
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.
12
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, three hundred fifty thousand (350,000) 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 and Deferred Restricted 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 (a) 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 or (b) by any
Deferred Restricted Units deferred from the Restricted Stock Plan shall
retain their authorization under the applicable stock option plan,
under such Other Approved Plan, or under the Restricted Stock 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 and/or Deferred
Restricted 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 or any Deferred
Restricted Units from dividend amounts that are forfeited, and any
shares of Stock that for any other reason are not issued to a
Participant or are forfeited, shall again 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 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
13
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 and Deferred
Restricted 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 and Deferred
Restricted 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
and/or Deferred Restricted 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 and Deferred Restricted 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 and Deferred Restricted 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 and Deferred Restricted Units had been
issued
14
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 shares or other securities shall be withheld from such
distribution pursuant to Section 5.05 hereof.
9.07 Change of Control
(a) In the event of the occurrence of a change of control of
Apache, as defined below, all unvested Stock Units credited to
Participants' Accounts shall become automatically vested,
without further action by the Committee or the Board, so that
such unvested Stock Units become fully vested and payable as
of the date of such change of control. All Stock Units and
Deferred Restricted Units credited to Participants' Accounts
shall be distributed in one lump sum as soon as
administratively possible after the date of such change of
control, regardless of any distribution election made by the
Participant.
(b) For purposes of this Plan, a "change of control" shall mean
any of the events specified in Apache's Income Continuance
Plan or any successor plan which constitute a change of
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 and Deferred Restricted Units credited to
15
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 and Deferred
Restricted 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 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 and Deferred
Restricted 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 (a) all such Stock Units become fully
vested and (b) all Stock Units and Deferred Restricted Units are 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
16
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 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
17
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 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.
July 17, 2002
ATTEST: APACHE CORPORATION
/s/ Cheri L. Peper /s/ Jeffrey M. Bender
- ---------------------------------- ----------------------------------
Cheri L. Peper Jeffrey M. Bender
Corporate Secretary Vice President, Human Resources
18
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:
- specify the date of grant and number of Stock Units granted;
- designate the vesting provisions; and
- 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