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EXHIBIT 10.19
APACHE CORPORATION
1990 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED FEBRUARY 9, 1996)
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TABLE OF CONTENTS
PAGE
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Section 1 - Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Establishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2 - Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 3 - Plan Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4 - Stock Subject to the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.1 Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.2 Other Shares of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.3 Adjustments for Stock Split, Stock Dividend, Etc . . . . . . . . . . . . . . . . . 4
4.4 Dividend Payable in Stock of Another Corporation, Etc . . . . . . . . . . . . . . 4
4.5 Other Changes in Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.6 Rights to Subscribe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.7 General Adjustment Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.8 Determination by the Committee, Etc . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5 - Reorganization or Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 6 - Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 7 - Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.1 Grant of Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.2 Stock Option Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.3 Shareholder Privileges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 8 - Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.2 Limitation on Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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8.3 Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 9 - Rights of Employees; Participants . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9.1 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9.2 Nontransferability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 10 - General Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10.1 Investment Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10.2 Compliance with Securities Laws . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 11 - Other Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 12 - Plan Amendment, Modification and Termination . . . . . . . . . . . . . . . . . . . . 13
Section 13 - Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
13.1 Withholding Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
13.2 Withholding With Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 14 - Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
14.1 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
14.2 Federal Securities Law Requirements . . . . . . . . . . . . . . . . . . . . . . 14
14.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 15 - Duration of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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APACHE CORPORATION
1990 STOCK INCENTIVE PLAN
SECTION 1
INTRODUCTION
1.1 Establishment. Apache Corporation, a Delaware corporation
(hereinafter referred to, together with its Affiliated Corporations (as defined
in subsection 2.1(a)) as the "Company" except where the context otherwise
requires), hereby establishes the Apache Corporation 1990 Stock Incentive Plan
(the "Plan") for certain key employees of the Company. The Plan permits the
grant of stock options to certain key employees of the Company.
1.2 Purposes. The purposes of the Plan are to provide the key management
employees selected for participation in the Plan with added incentives to
continue in the long-term service of the Company and to create in such
employees a more direct interest in the future success of the operations of the
Company by relating incentive compensation to increases in shareholder value,
so that the income of the key management employees is more closely aligned with
the income of the Company's shareholders. The Plan is also designed to attract
key employees and to retain and motivate participating employees by providing
an opportunity for investment in the Company.
1.3 Effective Date. The Effective Date of the Plan (the "Effective Date")
shall be September 19, 1990. This Plan and each option granted hereunder is
conditioned on and shall be of no force or effect until approval of the Plan by
the holders of the shares of voting stock of the Company unless the Company, on
the advice of counsel, determines that shareholder approval is not necessary.
SECTION 2
DEFINITIONS
2.1 Definitions. The following terms shall have the meanings set forth
below:
(a) "Affiliated Corporation" means any corporation or other entity
(including but not limited to a partnership) which is affiliated with Apache
Corporation through stock ownership or otherwise and is treated as a common
employer under the provisions of Sections 414(b) and (c) of the Internal
Revenue Code.
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(b) "Board" means the Board of Directors of the Company.
(c) "Committee" means a committee consisting of members of the
Board who are empowered hereunder to take actions in the administration of the
Plan. The Committee shall be constituted at all times as to permit the Plan to
comply with Rule 16b-3 or any successor rule promulgated under the Securities
Exchange Act of 1934 (the "1934 Act"). Members of the Committee shall be
appointed from time to time by the Board, shall serve at the pleasure of the
Board and may resign at any time upon written notice to the Board.
(d) "Effective Date" means the effective date of the Plan,
September 19, 1990.
(e) "Eligible Employees" means those full-time key employees
(including, without limitation, officers and directors who are also employees)
of the Company or any division thereof, upon whose judgment, initiative and
efforts the Company is, or will become, largely dependent for the successful
conduct of its business.
(f) "Fair Market Value" means the closing price of the Stock on
the composite tape on 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.
(g) "Internal Revenue Code" means the Internal Revenue Code of
1986, as it may be amended from time to time.
(h) "Option" means a right to purchase Stock at a stated price for
a specified period of time. All Options granted under the Plan shall be
Options which are not "incentive stock options" as described in Section 422A of
the Internal Revenue Code.
(i) "Option Price" means the price at which shares of Stock
subject to an Option may be purchased, determined in accordance with subsection
7.2(b).
(j) "Participant" means an Eligible Employee designated by the
Committee from time to time during the term of the Plan to receive one or more
Options under the Plan.
(k) "Stock" means the $1.25 par value Common Stock of the Company.
2.2 Gender and Number. 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.
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SECTION 3
PLAN ADMINISTRATION
The Plan shall also be administered by the Committee. In accordance with the
provisions of the Plan, the Committee shall, in its sole discretion, select the
Participants from among the Eligible Employees, determine the Options to be
granted pursuant to the Plan, the number of shares of Stock to be issued
thereunder and the time at which such Options are to be granted, fix the Option
Price, and establish such other terms and requirements as the Committee may
deem necessary or desirable and consistent with the terms of the Plan. The
Committee shall determine the form or forms of the agreements with Participants
which shall evidence the particular provisions, terms, conditions, rights and
duties of the Company and the Participants with respect to Options granted
pursuant to the Plan, which provisions need not be identical except as may be
provided herein. The Committee may from time to time adopt such rules and
regulations for carrying out the purposes of the Plan as it may deem proper and
in the best interests of the Company. The Committee may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or in any
agreement entered into hereunder in the manner and to the extent it shall deem
expedient and it shall be the sole and final judge of such expediency. No
member of the Committee shall be liable for any action or determination made in
good faith. The determination, interpretations and other actions of the
committee pursuant to the provisions of the Plan shall be binding and
conclusive for all purposes and on all persons.
SECTION 4
STOCK SUBJECT TO THE PLAN
4.1 Number of Shares. Two Million Fifty Thousand (2,050,000) 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 by the shareholders of
the Company if, in the opinion of counsel for the Company, such shareholder
approval is required. Shares of Stock which may be issued upon exercise of
Options shall be applied to reduce the maximum number of shares of Stock
remaining available for use under the Plan. The Company shall at all times
during the term of the Plan and while any Options are outstanding retain as
authorized and unissued Stock, or as treasury Stock, 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.
4.2 Other Shares of Stock. Any shares of Stock that are subject to an
Option which expires or for any reason is terminated unexercised, and any
shares of Stock that for any
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other reason are not issued to an Eligible Employee or are forfeited shall
automatically become available for use under the Plan.
4.3 Adjustments for Stock Split, Stock Dividend, Etc. If the Company
shall at any time increase or decrease the number of its outstanding shares of
Stock or change in any way the rights and privileges of such shares by means of
the payment of a stock dividend or any other distribution upon such shares
payable in Stock, or through a stock split, subdivision, consolidation,
combination, reclassification or recapitalization involving the Stock, then in
relation to the Stock that is affected by one or more of the above events, the
numbers, rights and privileges of the following shall be increased, decreased
or changed in like manner as if they had been issued and outstanding, fully
paid in nonassessable at the time of such occurrence: (i) the shares of Stock
as to which Options may be granted under the Plan; and (ii) the shares of the
Stock then included in each outstanding Option granted hereunder.
4.4 Dividend Payable in Stock of Another Corporation, Etc. If the Company
shall at any time pay or make any dividend or other distribution upon the Stock
payable in securities or other property (except money or Stock), a
proportionate part of such securities or other property shall be set aside and
delivered to any Participant then holding an Option for the particular type of
Stock for which the dividend or other distribution was made, upon exercise
thereof. Prior to the time that any such securities or other property are
delivered to a Participant in accordance with the foregoing, the Company shall
be the owner of such securities or other property and shall have the right to
vote the securities, receive any dividends payable on such securities, and in
all other respects shall be treated as the owner. If securities or other
property which have been set aside by the Company in accordance with this
Section are not delivered to a Participant because an Option is not exercised,
then such securities or other property shall remain the property of the Company
and shall be dealt with by the Company as it shall determine in its sole
discretion.
4.5 Other Changes in Stock. In the event there shall be any change, other
than as specified in Sections 4.3 and 4.4, in the number or kind of outstanding
shares of Stock or of any stock or other securities into which the Stock shall
be changed or for which it shall have been exchanged, and if the Committee
shall in its discretion determine that such change equitably requires an
adjustment in the number or kind of shares subject to outstanding Options or
which have been reserved for issuance pursuant to the Plan but are not then
subject to an Option, then such adjustments shall be made by the Committee and
shall be effective for all purposes of the Plan and on each outstanding Option
that involves the particular type of stock for which a change was effected.
4.6 Rights to Subscribe. If the Company shall at any time grant to the
holders of its Stock rights to subscribe pro rata for additional shares thereof
or for any other securities of the Company or of any other corporation, there
shall be reserved with respect to the
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shares then under Option to any Participant of the particular class of Stock
involved the Stock or other securities which the Participant would have been
entitled to subscribe for if immediately prior to such grant the Participant
had exercised his entire Option. If, upon exercise of any such Option, the
Participant subscribes for the additional shares of other securities, the
Option Price shall be increased by the amount of the price that is payable by
the Participant for such Stock or other securities.
4.7 General Adjustment Rules. No adjustment or substitution provided for
in this Section 4 shall require the Company to sell a fractional share of Stock
under any Option, or otherwise issue a fractional share of Stock, and the total
substitution or adjustment with respect to each Option shall be limited by
deleting any fractional share. In the case of any such substitution or
adjustment, the total Option Price for the shares of Stock then subject to the
Option shall remain unchanged but the Option Price per share under each such
Option shall be equitably adjusted by the Committee to reflect the greater or
lesser number of shares of Stock or other securities into which the Stock
subject to the Option may have been changed.
4.8 Determination by the Committee, Etc. Adjustments under this Section 4
shall be made by the Committee, whose determinations with regard thereto shall
be final and binding upon all parties thereto.
SECTION 5
REORGANIZATION OR LIQUIDATION
In the event that the Company is merged or consolidated with another
corporation and the Company is not the surviving corporation, or if all or
substantially all of the assets or more than 20% of the outstanding voting
stock of the Company is acquired by any other corporation, business entity or
person, or in case of a reorganization (other than a reorganization under the
United States Bankruptcy Code) or liquidation of the Company, and if the
provisions of Section 9 do not apply, the Committee, or the board of directors
of any corporation assuming the obligations of the Company, shall, as to the
Plan and outstanding Options either (i) make appropriate provision for the
adoption and continuation of the Plan by the acquiring or successor corporation
and for the protection of any such outstanding Options by the substitution on
an equitable basis of appropriate stock of the Company or of the merged,
consolidated or otherwise reorganized corporation which will be issuable with
respect to the Stock, provided that no additional benefits shall be conferred
upon the Participants holding such Options as a result of such substitution,
and the excess of the aggregate Fair Market Value of the shares subject to the
Options immediately after such substitution over the Option Price thereof is
not more than the excess of the aggregate Fair Market Value of the shares
subject to such Options immediately before such substitution over the Option
Price thereof, or (ii) upon written
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notice to the Participants, provide that all unexercised Options must be
exercised within a specified number of days of the date of such notice or they
will be terminated. In the latter event, the Committee shall accelerate the
exercise dates of outstanding Options so that all Options become fully vested
prior to any such event.
SECTION 6
PARTICIPATION
Participants in the Plan shall be those Eligible Employees who, in the judgment
of the Committee, are performing, or during the term of their incentive
arrangement will perform, vital services in the management, operation and
development of the Company or an Affiliated Corporation, and significantly
contribute, or are expected to significantly contribute, to the achievement of
long-term corporate economic objectives. Participants may be granted from time
to time one or more Options; provided, however, that the grant of each such
Option shall be separately approved by the Committee, and receipt of one such
Option shall not result in automatic receipt of any other Option. Upon
determination by the Committee that an Option is to be granted to a
Participant, written notice shall be given to such person, specifying the
terms, conditions, rights and duties related thereto. Each Participant shall,
if required by the Committee, enter into an agreement with the Company, in such
form as the Committee shall determine and which is consistent with the
provisions of the Plan, specifying such terms, conditions, rights and duties.
Options shall be deemed to be granted as of the date specified in the grant
resolution of the Committee, which date shall be the date of any related
agreement with the Participant. In the event of any inconsistency between the
provisions of the Plan and any such agreement entered into hereunder, the
provisions of the Plan shall govern.
SECTION 7
STOCK OPTIONS
7.1 Grant of Stock Options. Coincident with or following designation for
participation in the Plan, a Participant may be granted one or more Options.
In no event shall the exercise of one Option affect the right to exercise any
other Option or affect the number of shares of Stock for which any other Option
may be exercised, except as provided in subsection 7.2(j).
7.2 Stock Option Agreements. Each Option granted under the Plan shall be
evidenced by a written stock option agreement which shall be entered into by
the Company and the Participant to whom the Option is granted (the "Option
Holder"), and which shall contain the following terms and conditions, as well
as such other terms and conditions, not inconsistent therewith, as the
Committee may consider appropriate in each case.
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(a) Number of Shares. Each stock option agreement shall state
that it covers a specified number of shares of the Stock, as determined by the
Committee.
(b) Price. The price at which each share of Stock covered by an
Option may be purchased shall be determined in each case by the Committee and
set forth in the stock option agreement, but in no event shall the price be
less than the Fair Market Value of the Stock on the date the Option is granted.
(c) Duration of Options; Employment Required For Exercise. Each
stock option agreement shall state the period of time, determined by the
Committee, within which the Option may be exercised by the Option Holder (the
"Option Period"). The Option Period must end, in all cases, not more than ten
years from the date an Option is granted. Except as otherwise provided in
Sections 5 and 8 and subsection 7.2(d)(iv) hereof, each Option granted under
the Plan shall become exercisable in increments such that 25% of the Option
will become exercisable on each of the four subsequent one- year anniversaries
of the date the Option is granted, but each such additional 25% increment shall
become exercisable only if the Option Holder has been continuously employed by
the Company from the date the Option is granted through the date on which each
such additional 25% increment becomes exercisable.
(d) Termination of Employment, Death, Disability, Etc. Each stock
option agreement shall provide as follows with respect to the exercise of the
Option upon termination of the employment or the death of the Option Holder:
(i) If the employment of the Option Holder is terminated
within the Option Period for cause, as determined by the Company, the Option
shall thereafter be void for all purposes. As used in this subsection 7.2(d),
"cause" shall mean a gross violation, as determined by the Company, of the
Company's established policies and procedures, provided that the effect of this
subsection 7.2(d) (i) shall be limited to determining the consequences of a
termination and that nothing in this subsection 7.2(d) (i) shall restrict or
otherwise interfere with the Company's discretion with respect to the
termination of any employee.
(ii) If the Option Holder retires from employment by the
Company or its affiliates on or after attaining age 65, the Option may be
exercised by the Option Holder within 36 months following his or her retirement
(provided that such exercise must occur within the Option Period), but not
thereafter. In the event of the Option Holder's death during such 36-month
period, each Option may be exercised by those entitled to do so in the manner
referred to in (iv) below. In any such case, the Option may be exercised only
as to the shares as to which the Option had become exercisable on or before the
date of the Option Holder's retirement.
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(iii) If the Option Holder becomes disabled (as determined
pursuant to the Company's Long-Term Disability Plan), during the Option Period
while still employed, or within the three-month period referred to in (v)
below, or within the 36-month period referred to in (ii) above, the Option may
be exercised by the Option Holder or by his or her guardian or legal
representative, within twelve months following the Option Holder's disability,
or within the 36-month period referred to in (ii) if applicable and if longer
(provided that such exercise must occur within the Option Period), but not
thereafter. In the event of the Option Holder's death during such twelve-month
period, each Option may be exercised by those entitled to do so in the manner
referred to in (iv) below. In any such case, the Option may be exercised only
as to the shares as to which the Option had become exercisable on or before the
date of the Option Holder's disability.
(iv) In the event of the Option Holder's death while still
employed by the Company, each Option of the deceased Option Holder may be
exercised by those entitled to do so under the Option Holder's will or under
the laws of descent and distribution within twelve months following the Option
Holder's death (provided that in any event such exercise must occur within the
Option Period), but not thereafter, as to all shares of Stock which are subject
to such Option, including each 25% increment of the Option, if any, which has
not yet become exercisable at the time of the Option Holder's death. In the
event of the Option Holder's death within the 36-month period referred to in
(ii) above or within the twelve-month period referred to in (iii) above, each
Option of the deceased Option Holder that is exercisable at the time of death
may be exercised by those entitled to do so under the Option Holder's will or
under the laws of descent and distribution within twelve months following the
Option Holder's death or within the 36-month period referred to in (ii), if
applicable and if longer (provided that in any event such exercise must occur
within the Option Period). The provisions of this paragraph (iv) of subsection
7.2(d) shall be applicable to each Stock Option Agreement as if set forth
therein word for word. Each Stock Option Agreement executed by the Company
prior to the adoption of this provision shall be deemed amended to include the
provisions of this paragraph and all Options granted pursuant to such Stock
Option Agreements shall be exercisable as provided herein.
(v) If the employment of the Option Holder by the Company is
terminated (which for this purpose means that the Option Holder is no longer
employed by the Company or by an Affiliated Corporation) within the Option
Period for any reason other than cause, retirement on or after attaining age
65, disability or the Option Holder's death, the Option may be exercised by the
Option Holder within three months following the date of such termination
(provided that such exercise must occur within the Option Period), but not
thereafter. In any such case, the Option may be exercised only as to the
shares as to which the Option had become exercisable on or before the date of
termination of employment.
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(e) Transferability. Each stock option agreement shall provide
that the Option granted therein is not transferable by the Option Holder except
by will or pursuant to the laws of descent and distribution, and that such
Option is exercisable during the Option Holder's lifetime only by him or her,
or in the event of disability or incapacity, by his or her guardian or legal
representative.
(f) Agreement to Continue in Employment. Each stock option
agreement shall contain the Option Holder's agreement to remain in the
employment of the Company, at the pleasure of the Company, for a continuous
period of at least one year after the date of such stock option agreement, at
the salary rate in effect on the date of such agreement or at such changed rate
as may be fixed, from time to time, by the Company.
(g) Exercise, Payments, Etc.
(i) Each stock option agreement shall provide that the method
for exercising the Option granted therein shall be by delivery to the Corporate
Secretary of the Company of written notice specifying the number of shares with
respect to which such Option is exercised and payment of the Option Price.
Such notice shall be in a form satisfactory to the Committee and shall specify
the particular Option (or portion thereof) which is being exercised and the
number of shares with respect to which the Option is being exercised. The
exercise of the Stock Option shall be deemed effective upon receipt of such
notice by the Corporate Secretary and payment to the Company. If requested by
the Company, such notice shall contain the Option Holder's representation that
he or she is purchasing the Stock for investment purposes only and his or her
agreement not to sell any stock so purchased in any manner that is in violation
of the Securities Act of 1933, as amended, or any applicable state law. Such
restriction, or notice thereof, shall be placed on the certificates
representing the Stock so purchased. The purchase of such Stock shall take
place at the principal offices of the Company upon delivery of such notice, at
which time the purchase price of the Stock shall be paid in full by any of the
methods or any combination of the methods set forth in (ii) below. A properly
executed certificate or certificates representing the Stock shall be issued by
the Company and delivered to the Option Holder. If certificates representing
Stock are used to pay all or part of the exercise price, separate certificates
for the same number of shares of Stock shall be issued by the Company and
delivered to the Option Holder representing each certificate used to pay the
Option Price, and an additional certificate shall be issued by the Company and
delivered to the Option Holder representing the additional shares, in excess of
the Option Price, to which the Option Holder is entitled as a result of the
exercise of the Option.
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(ii) the exercise price shall be paid by any of the following
methods or any combination of the following methods:
(A) in cash;
(B) by certified or cashier's check payable to the
order of the Company;
(C) by delivery to the Company of certificates
representing the number of shares then owned by the Option Holder, the Fair
Market Value of which equals the purchase price of the Stock purchased pursuant
to the Option, properly endorsed for transfer to the Company; provided however,
that shares of Stock used for this purpose must have been held by the Option
Holder for such minimum period of time as may be established from time to time
by the Committee; for purposes of this Plan, the Fair Market Value of any
shares of Stock delivered in payment of the purchase price upon exercise of the
Option shall be the Fair Market Value as of the exercise date; the exercise
date shall be the day of delivery of the certificates for the Stock used as
payment of the Option Price; or
(D) by delivery to the Company of a properly
executed notice of exercise together with irrevocable instructions to a broker
to deliver to the Company promptly the amount of the proceeds of the sale of
all or a portion of the Stock or of a loan from the broker to the Option Holder
necessary to pay the exercise price.
(h) Date of Grant. An option shall be considered as having been
granted on the date specified in the grant resolution of the Committee.
(i) Withholding. Each stock option agreement shall provide that,
upon exercise of the Option, the Option Holder shall make appropriate
arrangements with the Company to provide for the Amount of additional
withholding required by Sections 3102 and 3402 of the Internal Revenue Code and
applicable state income tax laws, including payment of such taxes through
delivery of shares of Stock or by withholding Stock to be issued under the
Option, as provided in Section 13.
(j) Adjustment of Options. Subject to the limitations contained
in Sections 7 and 12, the Committee may make any adjustment in the exercise
price, the number of shares subject to, or the terms of an outstanding Option
and a subsequent granting of an Option by amendment or by substitution of an
outstanding Option. Such amendment, substitution, or regrant may result in
terms and conditions (including exercise price, number of shares covered,
vesting schedule or exercise period) that differ from the terms and conditions
of the original Option. The Committee may not, however, adversely affect the
rights of any Participant to previously granted Options without the consent of
such
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Participant. If such action is effected by amendment, the effective date of
such amendment will be the date of the original grant.
7.3 Shareholder Privileges. No Option Holder shall have any rights as a
shareholder with respect to any shares of Stock covered by an Option until the
Option Holder becomes the holder of record of such Stock, and no adjustments
shall be made for dividends or other distributions or other rights as to which
there is a record date preceding the date such Option Holder becomes the holder
of record of such Stock, except as provided in Section 4.
SECTION 8
CHANGE IN CONTROL
8.1 In General. In the event of a change in control of the Company as
defined in Section 8.3, then the Committee may, in its sole discretion, without
obtaining shareholder approval, to the extent permitted in Section 12, take any
or all of the following actions: (a) accelerate the exercise dates of any
outstanding Options or make all such Options fully vested and exercisable; (b)
grant a cash bonus award to any Option Holder in an amount necessary to pay the
exercise price of all or any portion of the Options then held by such Option
Holder; (c) pay cash to any or all Option Holders in exchange for the
cancellation of their outstanding Options in an amount equal to the difference
between the exercise price of such Options and the greater of the tender offer
price for the underlying Stock or the Fair Market Value of the Stock on the
date of the cancellation of the Options; and (d) make any other adjustments or
amendments to the outstanding Options.
8.2 Limitation on Payments. If the provisions of this Section 8 would
result in the receipt by any Participant of a payment within the meaning of
Section 280G of the Internal Revenue Code and the regulations promulgated
thereunder and if the receipt of such payment by any Participant would, in the
opinion of independent tax counsel of recognized standing selected by the
Company, result in the payment by such Participant of any excise tax provided
for in Sections 280G and 4999 of the Internal Revenue Code, then the amount of
such payment shall be reduced to the extent required, in the opinion of
independent tax counsel, to prevent the imposition of such excise tax;
provided, however, that the Committee, in its sole discretion, may authorize
the payment of all or any portion of the amount of such reduction to the
Participant.
8.3 Definition. For purposes of the Plan, a "change in control" shall
mean any of the events specified in the Company's Income Continuance Plan which
constitute a change in control within the meaning of that Plan.
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SECTION 9
RIGHTS OF EMPLOYEES, PARTICIPANTS
9.1 Employment. Nothing contained in the Plan or in any Option granted
under the Plan shall confer upon any Participant any right with respect to the
continuation of his or her employment by the Company or any Affiliated
Corporation, or interfere in any way with the right of the Company or any
Affiliated Corporation, subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such employment or to
increase or decrease the compensation of the Participant from the rate in
existence at the time of the grant of an Option. Whether an authorized leave
of absence, or absence in military or government service, shall constitute a
termination of employment shall be determined by the Committee at the time.
9.2 Nontransferability. No right or interest of any Participant in an
Option granted pursuant to the Plan shall be assignable or transferable during
the lifetime of the Participant, either voluntarily or involuntarily, or
subjected to any lien, directly or indirectly, by operation of law, or
otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy. In the event of a Participant's death, a Participant's rights and
interests in Options shall, to the extent provided in Section 7, be
transferable by testamentary will or the laws of descent and distribution, and
payment of any amounts due under the Plan shall be made to, and exercise of any
Options may be made by, the Participant's legal representatives, heirs or
legatees. If in the opinion of the Committee a person entitled to payments or
to exercise rights with respect to the Plan is disabled from caring for his
affairs because of mental condition, physical condition or age, payment due
such person may be made to, and such rights shall be exercised by, such
person's guardian, conservator or other legal personal representative upon
furnishing the Committee with evidence satisfactory to the Committee of such
status.
SECTION 10
GENERAL RESTRICTIONS
10.1 Investment Representations. The Company may require any person to
whom an Option is granted, as a condition of exercising such Option, to give
written assurances in substance and form satisfactory to the Company and its
counsel to the effect that such person is acquiring the Stock subject to the
Option for his own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate in order to comply with Federal and
applicable state securities laws.
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10.2 Compliance with Securities Laws. Each Option shall be subject to the
requirement that, if at any time counsel to the Company shall determine that
the listing, registration or qualification of the shares subject to such Option
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, is necessary as a condition
of, or in connection with, the issuance or purchase of shares thereunder, such
Option may not be accepted or exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained on conditions acceptable to the Committee. Nothing herein
shall be deemed to require the Company to apply for or to obtain such listing,
registration or qualification.
SECTION 11
OTHER EMPLOYEE BENEFITS
The amount of any compensation deemed to be received by a Participant as a
result of the exercise of an Option shall not constitute "earnings" with
respect to which any other employee benefits of such employee are determined,
including without limitation benefits under any pension, profit sharing, life
insurance or salary continuation plan.
SECTION 12
PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate, and from time to time may amend or modify
the Plan provided, however, that no amendment or modification may become
effective without approval of the amendment or modification by the shareholders
if shareholder 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 shareholder approval is otherwise necessary
or desirable.
No amendment, modification or termination of the Plan shall in any manner
adversely affect any Options theretofore granted under the Plan, without the
consent of the Participant holding such Options.
SECTION 13
WITHHOLDING
13.1 Withholding Requirement. The Company's obligations to deliver shares
of Stock upon the exercise of an Option shall be subject to the Participant's
satisfaction of all applicable federal, state and local income and other tax
withholding requirements.
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13.2 Withholding With Stock. At the time the Committee grants an Option,
it may, in its sole discretion, grant the Participant an election to pay all
such amounts of tax withholding, or any part thereof, by electing to transfer
to the Company, or to have the Company withhold from shares otherwise issuable
to the Participant, shares of Stock having a value equal to the amount required
to be withheld or such lesser amount as may be elected by the Participant. All
elections shall be subject to the approval or disapproval of the Committee.
The value of shares of Stock to be withheld shall be based on the Fair Market
Value of the Stock on the date that the amount of tax to be withheld is to be
determined (the "Tax Date"). Any such elections by Participants to have shares
of Stock withheld for this purpose will be subject to the following
restrictions:
(a) All elections must be made prior to the Tax Date.
(b) All elections shall be irrevocable.
(c) If the Participant is an officer or director of the Company
within the meaning of Section 16 of the 1934 Act ("Section 16"), the
Participant must satisfy the requirements of such Section 16 and any applicable
Rules thereunder with respect to the use of Stock to satisfy such tax
withholding obligation.
SECTION 14
REQUIREMENTS OF LAW
14.1 Requirements of Law. The issuance of stock and the payment of cash
pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
14.2 Federal Securities Law Requirements. If a Participant is an officer
or director of the Company within the meaning of Section 16, Options granted
hereunder shall be subject to all conditions required under Rule 16b-3, or any
successor rule promulgated under the 1934 Act, to qualify the Option for any
exception from the provisions of Section 16(b) of the 1934 Act available under
that Rule. Such conditions are hereby incorporated herein by reference and
shall be set forth in the agreement with the Participant which describes the
Option.
14.3 Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the State of Colorado.
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SECTION 15
DURATION OF THE PLAN
The Plan shall terminate at such time as may be determined by the Board of
Directors, and no Option shall be granted after such termination. If not
sooner terminated under the preceding sentence, the Plan shall fully cease and
expire at midnight on September 18, 1995. Options outstanding at the time of
the Plan termination may continue to be exercised in accordance with their
terms.
Dated: February 9, 1996
APACHE CORPORATION
ATTEST:
/s/ Cheri L. Peper By: /s/ Roger B. Rice
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Cheri L. Peper Roger B. Rice
Corporate Secretary Vice President
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