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EXHIBIT 10.26
APACHE CORPORATION
NON-EMPLOYEE DIRECTORS' COMPENSATION PLAN
As Amended and Restated December 17, 1998
PURPOSE
The purpose of the Non-Employee Directors' Compensation Plan (the
"PLAN") is to set forth certain of the compensation arrangements for members of
the board of directors (the "BOARD") of Apache Corporation ("APACHE") who are
not also employees of Apache ("NON-EMPLOYEE DIRECTORS"). The Plan supersedes the
Directors' Deferred Compensation Plan; however, all elections previously made
thereunder, until terminated or modified, shall remain in effect in respect of
the Plan. The Plan does not supersede or amend in any way any other arrangements
relating to Non-Employee Directors including specifically, without limitation,
the Equity Compensation Plan for Non-Employee Directors, the Outside Directors'
Retirement Plan, indemnification provisions of Apache's charter or bylaws, or
policies with respect to reimbursement of expenses.
PLAN PROVISIONS
1. BOARD RETAINER. Each Non-Employee Director shall be paid, as
soon as practicable following accrual, the Board retainer fees set forth below:
(a) $5,000.00 shall be paid to each Non-Employee Director at
the end of each calendar quarter during which such Non-Employee
Director served as a member of Apache's Board ("CASH RETAINER Fee");
(b) $2,500.00 in value of Apache common stock, par value $1.25
per share ("STOCK"), shall be paid from Apache's treasury shares to
each Non-Employee Director at the end of each calendar quarter during
which such Non-Employee Director served as a member of Apache's Board
("STOCK RETAINER FEE"). The number of shares of Stock shall be
determined by dividing $2,500.00 by the per share closing price of the
Stock as reported on The New York Stock Exchange, Inc. Composite
Transactions Reporting System (the "Composite Tape") as of the trading
day prior to the last trading day of the relevant calendar quarter,
with any fractional shares to be paid to the director in cash; and
(c) In the event that a Non-Employee Director serves as a
member of Apache's Board for less than an entire calendar quarter, the
fees payable pursuant to Sections 1 (a) and (b) hereof shall be
prorated on the basis of the number of weeks served during such
calendar quarter.
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2. COMMITTEE RETAINERS. Each Non-Employee Director serving on any
committee of Apache's Board shall be paid, as soon as practicable, the committee
retainer fee ("COMMITTEE RETAINER FEE") set forth below:
(a) $500.00 shall be paid to each Non-Employee Director at the
end of each calendar quarter in respect of each committee on which such
Non-Employee Director served during such quarter;
(b) $1,000.00 shall be paid to each Non-Employee Director at
the end of each calendar quarter in respect of each committee on which
such Non-Employee Director served as chairperson during such quarter;
and
(c) In the event that a Non-Employee Director serves on any
committee of Apache's Board and/or as chairperson of any committee of
Apache's board for less than an entire calendar quarter, the fees
payable pursuant to Sections 2 (a) and (b) hereof shall be prorated on
the basis of number of weeks served during such calendar quarter.
3. ATTENDANCE FEES. Each Non-Employee Director shall receive an
attendance fee ("ATTENDANCE FEE") of $1,000.00 for each meeting of the Board and
of any committee thereof attended, such fee to be paid at each such meeting or
as soon thereafter as practicable.
4. OPTIONAL DEFERRAL OF FEES.
(a) DEFERRABLE FEES. A Non-Employee Director may defer all or
any portion of any unpaid Cash Retainer Fee, Stock Retainer Fee,
Committee Retainer Fee, and Attendance Fee, all of which are paid to
Non-Employee Directors with respect to their services performed as a
director on the Board ("DEFERRABLE FEES"). No other payments to
Non-Employee Directors may be deferred including, without limitation,
any expense reimbursement, any award under Apache's Equity Compensation
Plan for Non-Employee Directors or benefits payable under Outside
Directors' Retirement Plan.
(b) FORM OF DEFERRAL. Any Cash Retainer Fees and Committee
Retainer Fees may be deferred in the form of cash or in the form of
Stock. Any Stock Retainer Fees may be deferred only in the form of
Stock. Any Attendance Fees may be deferred only in the form of cash,
except as set forth in Section 4(e) hereof. Any Cash Retainer Fees,
Stock Retainer Fees and/or Committee Retainer Fees which are deferred
in the form of Stock by a Non-Employee Director shall not be issued
until such deferral is terminated; however, Apache shall at all times
have reserved from its treasury shares for issuance pursuant hereto to
deferring Non-Employee Directors a number of shares at least equal to
the number of shares of Stock issuable pursuant to the terms of the
Plan.
(c) NUMBER OF SHARES. For any Cash Retainer Fees, Stock
Retainer Fees and/or Committee Retainer Fees deferred in the form of
Stock, the number of shares of Stock shall be determined by dividing
the amount of such fees by the per share closing price of the Stock as
reported on the Composite Tape as of the trading day prior to the last
trading day of the relevant calendar quarter, with any fractional
shares to be deferred in the form of cash.
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(d) ELECTION TO DEFER. A Non-Employee Director's election
to defer ("ELECTION") all or any portion of Deferrable Fees shall be
effected by execution of a Directors' Deferred Compensation Agreement
between the participating director and Apache ("AGREEMENT"), a copy of
the form of which is attached hereto as Exhibit A. An Agreement must be
executed by the deferring Non-Employee Director and provided to
Apache's Corporate Secretary on or before December 31 of the year prior
to the year for which deferral is elected. Once executed, an Agreement
shall be irrevocable with respect to the year made, the form of
deferral, and the Deferrable Fees designated for deferral (the
"DEFERRED Compensation"), and shall remain in effect with respect to
all subsequent years until the Agreement is terminated or amended. All
elections to defer Deferrable Fees previously made in respect of the
Directors' Deferred Compensation Plan shall constitute valid Elections
in respect of the Plan. Upon full or partial termination of deferral by
a Non-Employee Director, the cash and/or Stock shall be paid and/or
issued to such Non-Employee Director pursuant to the terms of such
Non-Employee Director's Agreement.
(e) ELECTION TO SWITCH FORM OF DEFERRED COMPENSATION.
(i) With respect to the year-end balance of Deferred
Compensation in the form of cash ("Year-End Cash Balance") in his or
her Memorandum Account (as defined below), a Non-Employee Director may
make an annual election to switch all or any portion of his or her
Year-End Cash Balance to the form of Stock, effective as of the first
business day of the following year. Such election shall be made by
executing a new Agreement and providing it to Apache's Corporate
Secretary on or before December 31 of the year prior to the year for
which the election is to be effective. Once executed, an Agreement
shall be irrevocable with respect to the portion of the Non-Employee
Director's Year-End Cash Balance to be switched. Such election shall
pertain only to the Year-End Cash Balance for the year stated in the
new Agreement. To make such an election for any subsequent Year-End
Cash Balance, the Non-Employee Director shall execute another new
Agreement as set forth above.
(ii) The number of shares of Stock shall be
determined by dividing the portion of the Non-Employee Director's
Year-End Cash Balance to be switched by the per share closing price of
the Stock as reported on the Composite Tape for the first trading day
of the year for which the election is effective, with any fractional
shares remaining in the form of cash. Such shares of Stock shall be
maintained in the Non-Employee Director's Memorandum account and shall
accrue dividends pursuant to Section 4(g) hereof.
(iii) Non-Employee Directors may not switch Deferred
Compensation in the form of Stock to the form of cash.
(f) TERMINATION OR MODIFICATION OF ELECTION. Any
termination of an Election shall be made in writing and provided to
Apache's Corporate Secretary on or before December 31 of the year prior
to the year for which the termination is to be effective. Any
modification or amendment of an Election shall be made by executing a
new Agreement which shall supersede any previous Agreement. Such new
Agreement must be executed by the deferring Non-Employee Director and
provided to Apache's Corporate Secretary on or before December 31 of
the year prior to the year for which the amended Election is to be
effective. Upon termination or modification of an Election, all
Deferred Compensation payable to the Non-Employee
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Director terminating or modifying the Election shall be paid in
accordance with the provisions of such Non-Employee Director's then
effective Agreement, as modified or amended.
(g) DIVIDENDS AND INTEREST; NO VOTING. All Deferrable Fees
deferred by a Non-Employee Director in the form of and payable in
Stock, and any portion of a Non-Employee Director's Year-End Cash
Balance switched to the form of Stock, shall accrue dividends
denominated in the cash value thereof as if such Stock were issued and
outstanding as and when dividends are payable in respect of such Stock.
All Deferrable Fees deferred by a Non-Employee Director in the form of
and payable in cash, plus all previously accrued dividends and
interest, shall accrue interest at the end of each calendar quarter or
as of and through the date of payment of Deferred Compensation, as
appropriate. The rate of interest per annum shall equal (i) the annual
rate of interest earned by Apache's short-term marketable securities
portfolio, or (ii) an equivalent index or market rate for similar
investments in short-term marketable securities, divided by the number
of days elapsed in the relevant period. Non-Employee Directors shall
have no right to vote any Stock which constitutes Deferred Compensation
prior to the date on which share certificates representing such Stock
are issued.
(h) MEMORANDUM ACCOUNT. Apache will maintain a separate
Deferred Compensation memorandum account ("MEMORANDUM ACCOUNT") for
each deferring Non-Employee Director. All Deferred Compensation and
accrued dividends and interest accumulated in each Memorandum Account
will be classified in the same category as other unsecured creditors
and accounts payable of Apache, and neither the deferring Non-Employee
Director nor his or her beneficiary or estate shall have any property
interest whatsoever in any specific assets of Apache. All distributions
from a Memorandum Account of Deferred Compensation deferred in the form
of cash, and of accrued interest and dividends, shall be paid in cash.
All distributions from a Memorandum Account of Deferred Compensation
deferred in the form of Stock, and any portion of a Non-Employee
Director's Year-End Cash Balance switched to the form of Stock, shall
be made by issuance of shares of Stock.
(i) TERMINATION OF DIRECTORSHIP. Upon retirement or other
termination of a Non-Employee Director's directorship with Apache, or
on a date specifically designated in a Non-Employee Director's
Agreement, any balance in such Non-Employee Director's Memorandum
Account shall be paid in cash and/or Stock, as applicable, (a) in a
lump sum, or (b) in annual installments over a ten-year period (or over
such shorter period as designated in the deferring Non-Employee
Director's Agreement) beginning with the first business day of the
calendar year immediately following retirement or other termination of
such Non-Employee Director's directorship.
(j) ASSIGNMENT AND TRANSFER. The right of the deferring
Non-Employee Director or any other person to receive payments under the
Plan shall not be assigned, transferred, pledged or encumbered, except
by will or by the laws of descent and distribution. Upon the death of a
deferring Non-Employee Director, any balance remaining in such
Non-Employee Director's Memorandum Account at the time of death shall
be paid in cash and/or Stock, as applicable, in a lump sum to his or
her designated beneficiary or, if there is no designated beneficiary,
to his or her estate as soon as practicable after such Non-Employee
Director's death.
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(k) ADJUSTMENTS IN STOCK. In the event of any merger,
consolidation, liquidation, dissolution, recapitalization or
reorganization of Apache, split, subdivision or consolidation of shares
of Stock, the payment of a stock dividend, or any other material change
in Apache's capital structure, the number of shares of Stock shown in
each deferring Non-Employee Director's Memorandum Account shall be
adjusted to reflect that number of shares of Stock or such cash,
securities or other property to which such Non-Employee Director would
have been entitled if, immediately prior thereto, such Non-Employee
Director had been the holder of record of the number of shares of Stock
shown in the Memorandum Account. Notwithstanding the foregoing, the
issuance by Apache of Stock, rights, options or warrants to acquire
Stock, or securities convertible or exchangeable into Stock in
consideration of cash, property, labor or services, whether or not for
fair value, shall not result in an adjustment pursuant to this
paragraph.
5. AMENDMENT OF PLAN. The Plan may be amended from time to time or
terminated by vote of the Board. Upon such amendment or termination,
Non-Employee Directors shall not be entitled to receive pursuant to the Plan any
compensation or other rights or benefits not accrued hereunder prior to the time
of amendment or termination hereof; provided, however, that no such Plan
amendment or termination shall impair any rights of Non-Employee Directors to
amounts previously accrued pursuant to the Plan or accumulated in such
Non-Employee Director's Memorandum Account.
6. SUCCESSORS AND ASSIGNS. The Plan is binding upon Apache and its
successors and assigns. The Plan shall continue in effect from year to year
unless and until revoked by the Board. Any such revocation shall operate only
prospectively and shall not affect the rights and obligations under elections
previously made.
7. DEFINED TERMS. Except when otherwise indicated by the context,
the definition of any term herein in the singular shall also include the plural,
and the masculine gender shall also include the feminine gender.
8. GOVERNING LAW. The Plan and all Agreements hereunder shall be
construed in accordance with and governed by the laws of the State of Texas.
December 17, 1998
ATTEST: APACHE CORPORATION
/s/ Cheri L. Peper /s/ Daniel L. Schaeffer
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Cheri L. Peper Daniel L. Schaeffer
Corporate Secretary Vice President, Human Resources
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