1
Exhibit 10.26
APACHE CORPORATION
EQUITY COMPENSATION PLAN FOR
NON-EMPLOYEE DIRECTORS
Apache Corporation, a Delaware corporation (the "Company"), hereby
establishes the Apache Corporation Equity Compensation Plan for Non- Employee
Directors (the "Plan") for those directors of the Company who are neither
officers nor employees of the Company (the "Directors") and hereby authorizes a
maximum of 50,000 shares of the Company's common stock, par value $1.25 per
share (the "Common Stock") for issuance thereunder during the term of the Plan,
which shares shall consist entirely of treasury stock. Each Director shall
receive automatic and non- discretionary grants of restricted stock
("Restricted Stock Awards") on the terms and conditions set forth under the
Plan. Each Director receiving a Restricted Stock Award shall enter into an
agreement (a "Restricted Stock Agreement") in such form as the Board of
Directors of the Company (the "Board") or a duly authorized committee of the
Board (the "Committee") shall determine to be consistent with the provisions of
the Plan and which may contain additional terms and conditions relating to the
Restricted Stock Awards. In the event of any inconsistency between the
provisions of the Plan and any Restricted Stock Agreement, the provisions of
the Plan shall govern.
The Committee shall be responsible for the administration of the Plan.
However, the Committee shall have no authority, discretion or power to (i)
select the Directors who will receive Restricted Stock Awards, (ii) determine
the terms of the Restricted Stock Awards to be granted pursuant to the Plan,
the number of shares of Common Stock to be issued thereunder or the time at
which such Restricted Stock Awards are to be granted, (iii) establish the
duration and nature of Restricted Stock Awards, or (iv) alter any other terms
or conditions specified in the Plan, except to administer the Plan in
accordance with its terms. Subject to the foregoing limitations, the Committee
is authorized to (A) interpret the Plan, (B) prescribe, amend and rescind rules
and regulations relating to the Plan, (C) provide for conditions and assurances
deemed necessary or advisable to protect the interests of the Company, and (D)
make all other determinations necessary or advisable for the administration of
the Plan, but only to the extent not contrary to the express provisions of the
Plan. The Committee's authority shall include, but not be limited to, the
right to make equitable adjustments in the number or kind of shares subject to
outstanding Restricted Stock Awards, or which have been reserved for issuance
pursuant to the Plan but are not then subject to Restricted Stock Awards, to
reflect changes in the number or kind of outstanding shares of Common Stock due
to any stock dividend, stock split, merger, recapitalization or other
extraordinary or unusual event.
Beginning on July 1, 1994, and on July 1 of each fifth year thereafter
through and including July 1, 2009 (each, an "Award Date"), each Director shall
receive a Restricted Stock Award of 1,000 shares of Common Stock. Any Director
elected to the Board of Directors subsequent to an Award Date shall receive a
Restricted Stock Award of 1,000 shares of Common Stock on the next July 1
following the date of such election (a "Special Award Date"); provided,
however, that if such July 1 is an Award Date, such Award Date will constitute
such Director's Special Award Date. No Restricted Stock Awards shall be
granted to any Director subsequent to July 1, 2009.
2
Restricted Stock Awards shall vest at the rate of 20 percent per year
on each of the first through the fifth anniversaries of each Award Date or
Special Award Date, as the case may be. Restricted Stock Awards, whether
vested or unvested, may not be sold, assigned, pledged, hypothecated,
transferred or otherwise disposed of as long as a Director is serving as a
member of the Board. All restrictions on Restricted Stock Awards shall lapse
on the first business day following the date on which a Director ceases to be a
member of the Board; provided, however, that the unvested portion of any
Restricted Stock Award shall be automatically forfeited at such time.
Certificates issued pursuant to Restricted Stock Awards shall be
registered in the name of the recipient Director and shall bear an appropriate
restrictive legend referring to the terms, conditions and restrictions
applicable to such award. Certificates issued pursuant to Restricted Stock
Awards shall be held by the Corporate Secretary of the Company until the award,
or portion thereof, has vested and all applicable restrictions thereon shall
have lapsed. As a condition of any Restricted Stock Award, each Director shall
have delivered to the Corporate Secretary of the Company a stock power,
endorsed in blank, relating to the Common Stock issued pursuant to a Restricted
Stock Award. A Director shall have all voting, dividend, liquidation and other
rights of a stockholder of the Company with respect to the shares of Common
Stock issued pursuant to any Restricted Stock Award, notwithstanding that all
or a portion of such award shall be unvested, subject to the restrictions
described in the preceding paragraph.
The Board may at any time terminate, and from time to time may amend
or modify the Plan; provided, however, that no amendment or modification may
become effective without approval of such amendment or modification by the
stockholders of the Company, if stockholder approval is required to enable the
Plan to satisfy any applicable statutory or regulatory requirements, or if the
Company, on the advice of counsel, determines that stockholder approval is
otherwise necessary or desirable. Notwithstanding the foregoing, the Plan
shall not be amended or modified more than once every six months, other than to
comport with changes in the Internal Revenue Code, the Employment Retirement
Income Security Act, or the rules and regulations promulgated thereunder. The
Plan is expressly intended to comport with Rule 16b-3(c)(2)(ii) (or any
successor provision) as promulgated under the Securities Exchange Act of 1934,
as amended, and any ambiguities in the construction of the Plan or any
Restricted Stock Agreement shall be resolved so as to effectuate such intent.
2
3
APACHE CORPORATION
EQUITY COMPENSATION PLAN FOR
NON-EMPLOYEE DIRECTORS
RESTRICTED STOCK AWARD AGREEMENT
This Agreement is made as of the 1st day of July, 1994, between Apache
Corporation, a Delaware corporation (the "Company"), and _______________
("Director").
1. Grant of Restricted Stock. Pursuant to the Apache Corporation
Equity Compensation Plan for Non-Employee Directors (the "Plan"), the Company
hereby grants to Director, as of the grant date specified above, a restricted
stock award (a "Restricted Stock Award") of 1,000 shares of the Company's
common stock, par value $1.25 per share (the "Common Stock"), which number of
shares may be adjusted pursuant to Paragraph 6 below, subject to the terms and
conditions set forth in this Agreement and in the Plan.
2. Director Bound by Plan. Attached is a copy of the Plan which
is incorporated herein by reference and made a part hereof. Director
acknowledges receipt of a copy of the Plan and agrees to be bound by all the
terms and provisions thereof. Capitalized terms used but not defined herein
shall have the meanings ascribed to them in the Plan.
3. Restrictions. This Restricted Stock Award shall be subject to
the following restrictions:
(a) Shares of Common Stock issued pursuant to this
Restricted Stock Award may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of by Director until the first business day
following the date on which Director ceases to be a member of the Board. The
Common Stock will only be transferable to the extent such shares are vested and
not forfeited in accordance with Paragraphs 3(b) and 3(c) below.
(b) This Restricted Stock Award shall vest in accordance
with the following schedule as long as Director shall continue to serve as a
member of the Board:
Cumulative
Date Shares Vested
---- -------------
Prior to July 1, 1995 0
After July 1, 1995 and prior to July 1, 1996 200
After July 1, 1996 and prior to July 1, 1997 400
After July 1, 1997 and prior to July 1, 1998 600
After July 1, 1998 and prior to July 1, 1999 800
After July 1, 1999 1,000
(c) Any unvested portion of this Restricted Stock Award
shall be forfeited automatically when Director ceases to be a member of the
Board.
4
4. Enforcement of Restrictions.
(a) Each stock certificate issued in the name of Director
pursuant to this Restricted Stock Award shall bear the following restrictive
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
RESTRICTIONS CONTAINED IN A RESTRICTED STOCK AGREEMENT DATED
AS OF JULY 1, 1994 BY AND BETWEEN APACHE CORPORATION AND
_______________________, A COPY OF WHICH IS ON FILE AT THE
OFFICE OF THE CORPORATE SECRETARY OF THE COMPANY.
(b) Director shall not be entitled to delivery of the
stock certificate which shall be held by the Corporate Secretary of the Company
until all restrictions thereon have lapsed.
(c) Director hereby agrees to execute a blank stock power
with respect to the stock certificate representing the shares of Common Stock
issued pursuant to this Restricted Stock Award, and to deliver such stock power
to the Corporate Secretary of the Company.
5. Privileges of a Stockholder. Director shall have all voting,
dividend, liquidation and other rights of a stockholder of the Company with
respect to the Common Stock issued pursuant to this Restricted Stock Award,
notwithstanding that all or a portion of such award shall be unvested, subject
to the restrictions set forth in Paragraph 3(a) above.
6. Adjustments. If the Company shall at any time increase or
decrease the number of outstanding shares of Common 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 Common Stock, or
through a stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Common Stock, then in
relation to the Common Stock that is affected by one or more of the above
events, the numbers, rights and privileges of the shares of the Common Stock
issued pursuant to this Restricted Stock Award shall be increased, decreased or
changed in like manner as if they had been issued and outstanding, fully paid
and nonassessable at the time of such occurrence. In the event there shall be
any other change in the number or kind of outstanding shares of Common Stock,
or of any stock or other securities into which the Common 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 issued pursuant to this Restricted Stock Award,
then such adjustments shall be made by the Committee and shall be effective for
all purposes of the Plan and this Restricted Stock Award. Adjustments under
this Section 6 shall be made by the Committee, whose determinations with regard
thereto shall be final and binding upon Director.
2
5
7. Withholding of Tax. To the extent required by applicable law
and regulation, each Director must arrange with the Company for the payment of
any federal, state or local income or other tax applicable to the shares of
Common Stock issued pursuant to this Restricted Stock Award before the Company
shall be required to deliver to Director a certificate for such Common Stock
free and clear of all restrictions under the Plan.
8. Plan Amendment, Modification and Termination. The Board may
at any time terminate, and from time to time may amend or modify the Plan;
provided however, that no amendment or modification may become effective
without approval of the amendment or modification by the stockholders of the
Company, if stockholder approval is required to enable the Plan to satisfy any
applicable statutory or regulatory requirements, or if the Company, on the
advice of counsel, determines that stockholder approval is otherwise necessary
or desirable. Notwithstanding the foregoing, the Plan shall not be amended or
modified more than once every six months, other than to comport with changes in
the Internal Revenue Code, the Employment Retirement Income Security Act, or
the rules and regulations promulgated thereunder. No amendment, modification
or termination of the Plan shall in any manner materially adversely affect the
Restricted Stock Award granted pursuant to this Agreement without the consent
of Director.
9. Administration. Any action taken or decision made by the
Company, the Board, or the Committee or its delegates arising out of or in
connection with the construction, interpretation or effect of the Plan or this
Agreement shall lie within its sole and absolute discretion, as the case may
be, and shall be final, conclusive and binding on Director and all persons
claiming under or through Director. By accepting this Restricted Stock Award,
Director and all persons claiming under or through Director shall be
conclusively deemed to have indicated acceptance and ratification of, and
consent to, any action taken under the Plan by the Company, the Board, or the
Committee or its delegates.
10. Investment Representation. Director hereby acknowledges that
the shares of Common Stock issued pursuant to this Restricted Stock Award shall
be acquired for investment without a view to distribution, within the meaning
of the Securities Act of 1933, as amended (the "Act"), and shall not be sold,
transferred, assigned, pledged or hypothecated in the absence of an effective
registration statement under the Act or an applicable exemption from the
registration requirements of the Act and any applicable state securities laws.
11. Listing and Registration of Common Stock. This Restricted
Stock Award shall be subject to the requirement that, if at any time counsel to
the Company shall determine that the listing, registration or qualification of
the shares of Common Stock issued pursuant to this Restricted Stock Award upon
any securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, is necessary as a condition
of, or in connection with, the issuance of shares of Common Stock thereunder,
this Restricted Stock Award may not be accepted in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained on conditions acceptable to the Committee. Nothing herein
shall be deemed to require the Company to apply for or to obtain such listing,
registration or qualification.
3
6
12. No Right to Continue as Director. Nothing contained in the
Plan or in this Agreement shall interfere with or limit in any way the right of
the stockholders of the Company to remove Director from the Board pursuant to
the Bylaws or the Certificate of Incorporation of the Company, nor confers upon
Director any right to continue in the service of the Company.
13. Designation of Beneficiary. Director may name a beneficiary
or beneficiaries to receive any vested portion of this Restricted Stock Award,
which he would be otherwise entitled to receive pursuant to this Agreement in
the event of his death while serving as a member of the Board, on a written
form to be provided by and filed with the Corporate Secretary of the Company,
and in a manner determined by the Committee in its discretion. The Committee
reserves the right to review and approve beneficiary designations. Director
may change his beneficiary or beneficiaries from time to time in the same
manner, unless he has made an irrevocable designation. Any designation of
beneficiary under the Plan and this Agreement (to the extent it is valid and
enforceable under applicable law) shall be controlling over any other
disposition, testamentary or otherwise, as determined by the Committee in its
discretion. If no designated beneficiary survives Director and is living on
the date on which any vested part of this Restricted Stock Award becomes
payable to Director's beneficiary, such award will be made to the legal
representatives of the Director's estate, and the term "beneficiary" shall be
deemed to include such person or persons.
14. Notices. Any notice hereunder to the Company shall be
addressed to: Apache Corporation, One Post Oak Central, 2000 Post Oak
Boulevard, Suite 100, Houston, Texas 77056-4400, Attention: Corporate
Secretary, and any notice to Director shall be addressed to Director at
Director's last address on the records of the Company, subject to the right of
either party to designate at any time hereafter in writing some other address.
Any notice shall be deemed to have been duly given when delivered personally or
enclosed in a properly sealed envelope, addressed as set forth above, and
deposited (with first class postage prepaid) with the United States Postal
Service.
15. Counterparts. This Agreement may be executed in one or
several counterparts, each of which shall constitute one and the same
instrument.
16. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons lawfully
claiming under or through Director.
17. Governing Law. The validity, construction, interpretation,
administration and effect of the Plan, and of its rules and regulations, and
rights relating to the Plan and to this Agreement, shall be governed by the
substantive laws, but not the choice of law rules, of the State of Texas.
4
7
IN WITNESS WHEREOF, the Company and Director have executed this
Agreement as of the 1st day of July, 1994.
APACHE CORPORATION
By: ________________________________
Its: ________________________________
DIRECTOR
_________________________________________
Signature
_________________________________________
Printed Name
_________________________________________
Social Security Number
5