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EXHIBIT 10.33
APACHE CORPORATION
CONDITIONAL STOCK GRANT AGREEMENT
THIS AGREEMENT is made as of December 17, 1998 between APACHE
CORPORATION, a Delaware corporation (the "Company"), and G. Steven Farris
("Grantee")
1. GRANT. Subject to the terms of this Agreement, the Company hereby
grants to Grantee a conditional stock award of up to 100,000 shares (the
"Award") of the Company's common stock, par value $1.25 per share (the "Common
Stock").
2. RESTRICTIONS. The Award granted hereunder is subject to the
following terms, conditions, restrictions and risks of forfeiture:
(a) Shares of Common Stock to be issued pursuant to this Award
may not be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of by Grantee until vested and paid in accordance with paragraph 2(b)
and not otherwise forfeited in accordance with the terms hereof.
(b) Subject to the other provisions of this Agreement, the
Award shall be payable to Grantee in periodic installments ( each an
"Installment"), on the fifth anniversary of each commencement date (each a
"Commencement Date") as set out below for each applicable Installment (each a
"Vesting Date"):
INSTALLMENT COMMENCEMENT DATE VESTING DATE
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(in shares of Common Stock)
6,667 January 1, 1999 January 1, 2004
13,333 January 1, 2000 January 1, 2005
20,000 January, 1, 2001 January 1, 2006
26,667 January 1, 2002 January 1, 2007
33,333 January 1, 2003 January 1, 2008
Each Installment shall be paid to Grantee within five (5) business days of the
applicable Vesting Date for such Installment as follows: 60% of the value of the
Installment shall be in the form of shares of Common Stock and 40% of the value
of the Installment (inclusive of withholding of any required income tax
withholding) shall be in the form of cash. The value of each applicable
Installment shall be the product of (i) the number of shares for such
Installment as set out in the above table, and (ii) the closing price of the
shares of Common Stock on The New York Stock Exchange, Inc. Composite
Transactions Reporting System ("NYSE") on the Vesting Date or, if the Vesting
Date is not a day on which the NYSE is open for trading, the last business day
preceding the
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Vesting Date when the NYSE is open for trading. Except as otherwise provided in
subparagraph (d) through (e) below, Grantee shall not be entitled to any payment
with respect to any Installment unless Grantee is employed by the Company on the
applicable Vesting Date.
(c) If, prior to any Vesting Date, Grantee elects to
discontinue his employment with the Company, or his employment with the Company
is terminated for cause, as defined in that certain Employment Agreement between
Grantee and the Company dated June 6, 1988, then Grantee shall forfeit all
Installments of the Award for which a Vesting Date has not occurred as of the
date of termination as provided above.
(d) If, prior to any Vesting Date, the Company elects to
terminate Grantee's employment with the Company other than for cause as defined
in subparagraph (c) above, or Grantee dies or becomes totally disabled, then
Grantee (or his beneficiary, as stated below in the case of death) shall be
entitled to receive payment, as provided in this subparagraph (d), for the value
of all Installments for which a Commencement Date has occurred on or prior to
the date of termination, death or total disability, as applicable. The payment
for the value of such Installment(s) shall be made to Grantee within thirty (30)
days of the date of termination, death or disability, as applicable, shall be
solely in cash, with the value of such Installment(s) being the product of (i)
the number of shares for such Installment or Installments as set out in the
above table, and (ii) the closing price of the shares of Common Stock on the
NYSE on the date of termination, death or disability, as applicable, or, if such
date is not a day on which the NYSE is open for trading, the last business day
preceding such date when the NYSE is open for trading. Grantee may name a
beneficiary or beneficiaries to receive any payment which he would otherwise be
entitled to hereunder in the event of his death while in the employ of the
Company. Such designation shall be made on a form to be provided by and filed
with the Corporate Secretary of the Company. If Grantee fails to designate a
beneficiary or no designated beneficiary survives Grantee, such payment shall be
made to the legal representative of Grantee's estate. Grantee shall not be
entitled to receive payment under this subparagraph (d) for any Installment for
which a Commencement Date has not occurred as of the date of termination, death
or disability, as applicable.
(e) If, prior to any Vesting Date, an individual other than
Grantee or the current Chief Executive Officer of the Company, becomes the Chief
Executive Officer of the Company (which, for purposes of this subparagraph,
shall include any entity which comes to control the Company), then Grantee, upon
written request to the Company, is entitled to receive payment, as provided in
this subparagraph (e), for the value of all Installments for which a
Commencement Date has occurred on or prior to the date of the written request
The payment for such Installment(s) shall be made to Grantee within thirty (30)
days of receipt of Grantee's notice, shall be solely in cash, with the value of
such Installment(s) being the product of (i) the number of shares for such
Installment or Installments as set out in the above table, and (ii) the closing
price of the shares of Common Stock on the NYSE on the date of such written
request or if such date is not a day on which the NYSE is open for trading, the
last business day preceding such date when the NYSE is open for trading.
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(f) The shares of Common Stock issuable in accordance with
this Agreement have not be registered under the Securities Act of 1933, as
amended (the "Act"), and are subject to the restrictions contained in paragraph
8 of this Agreement.
3. ENFORCEMENT OF RESTRICTIONS.
(a) Each stock certificate issued in the name of Grantee
pursuant to this Agreement shall bear the following restrictive legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
RESTRICTIONS CONTAINED IN A CONDITIONAL STOCK GRANT AGREEMENT
DATED AS OF DECEMBER 17, 1998, BY AND BETWEEN APACHE
CORPORATION AND G. STEVEN FARRIS, A COPY OF WHICH IS ON FILE
AT THE OFFICE OF THE CORPORATE SECRETARY OF THE COMPANY.
(b) Grantee shall not be entitled to delivery of the stock
certificate for the share portion of any Installment of the Award until such
Installment has vested in Grantee and been paid by the Company in accordance
with paragraph 2(a). Prior to the Vesting Date for any Installment, all stock
certificates shall be held by the Corporate Secretary and Grantee hereby agrees
to execute a blank stock power with respect to the stock certificate
representing the share portion of any Installment.
4. PRIVILEGES OF A STOCKHOLDER. Upon the occurrence of a Commencement
Date and subject to the restrictions of paragraph 2, Grantee shall have all
voting, dividend and liquidation rights of a stockholder of the Company with
respect to the shares of Common Stock subject to the applicable Installment,
notwithstanding that such Installment is unvested.
5. ADMINISTRATION. This Agreement shall be administered by the Board of
Directors of Apache Corporation (the "Board of Directors") or any committee
thereof as may be empowered by the Board of Directors. Any action taken or
decision made by the Company, the Board of Directors, or its delegates arising
out of or in connection with the construction, interpretation or effect of this
Agreement shall lie within its sole and absolute discretion, and shall be final,
conclusive and binding on Grantee and all persons claiming under or through
Grantee. By accepting this Agreement, Grantee and all persons claiming under or
through Grantee shall be conclusively deemed to have indicated acceptance and
ratification of, and consent to, any action taken under this Agreement by the
Company, the Board of Directors, or its delegates.
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6. ADJUSTMENTS.
(a) If the Company shall at any time increase or decrease the
number of its outstanding shares of Common Stock or change in any way the rights
and privileges of such shares by means of a stock dividend or any other
distribution upon such shares payable in shares of Common Stock, or through a
stock split, subdivision, consolidation, combination, reclassification or
recapitalization involving the outstanding shares of Common Stock (hereinafter a
"capital restructuring"), then upon the occurrence of a capital restructuring,
the number of shares of Common Stock of each unvested Installment shall be
appropriately increased, decreased or changed in like manner as if the number of
shares of Common Stock of each unvested Installment had been issued,
outstanding, fully paid and non-assessable at the record date for the capital
restructuring.
(b) 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 50 percent of the
outstanding shares of Common 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 subparagraph (c) hereof do not apply, the
Board of Directors, or the board of directors of any corporation assuming the
obligations of the Company, shall either (i) make appropriate provision for the
adoption and continuation of this Agreement by the acquiring or successor
corporation and for the protection of Grantee 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 any outstanding Installment, provided that no additional benefits
shall be conferred upon Grantee as a result of such substitution, or (ii) upon
written notice to Grantee, the Board of Directors, in its sole discretion, if it
so elects, may accelerate the vesting of any unvested Installment so that all
unvested Installments are fully vested and payable prior to any such event.
(c) In the event of a change in control of the Company as
defined below, then the Board of Directors may, in its sole discretion, if it so
elects, take any of the following actions: (i) accelerate the vesting of the
unvested Installments so that the unvested Installments become fully vested and
payable, which acceleration may be conditional upon the occurrence of subsequent
events including, without limitation, a change in control, and may be made
irrevocable, either conditionally or unconditionally; and (ii) make any other
adjustments or amendments to the unvested Installments as the Board of Directors
deems appropriate.
(d) For purposes of this Agreement, a "change in control"
shall mean any of the events specified in the Company's Income Continuance Plan
or any successor plan which constitute a change in control within the meaning of
such plan.
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(e) Any adjustments under this paragraph shall be made by the
Board of Directors whose determination with regard thereto shall be final and
binding on all parties.
7. WITHHOLDING OF TAX. The Grantee hereby agrees that the Company is
entitled to make any required income tax withholding from any payments made
under paragraph 2.
8. INVESTMENT REPRESENTATION. Grantee hereby acknowledges that any
shares of Common Stock issued pursuant to this Agreement are acquired for
investment without a view to distribution, within the meaning of 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 and the following legend shall be imprinted on any stock
certificate.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, OFFERRED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
APPLICABLE SECURITIES LAWS OR AN OPINION FROM COUNSEL
ACCEPTABLE TO THE COMPANY STATING THAT SUCH REGISTRATION IS
NOT REQUIRED.
9. LISTING AND REGISTRATION OF COMMON STOCK. This Agreement 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 Agreement 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 the shares hereunder, this Agreement 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 Board of
Directors. Nothing herein shall be deemed to require the Company to apply for or
to obtain such listing, registration or qualification.
10. NO RIGHT TO CONTINUE AS DIRECTOR OR EMPLOYEE. Nothing contained in
this Agreement shall interfere with or limit in any way the right of the
stockholders of the Company to remove Grantee from the Board of Directors
pursuant to the Bylaws or the
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Restated Certificate of Incorporation of the Company, nor confer upon Grantee
any right to continue in the employment of the Company.
11. 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
Grantee shall be addressed to Grantee at Grantee'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.
12. 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 Grantee.
13. GOVERNING LAW. The validity, construction, interpretation,
administration and effect of this Agreement, shall be governed by the
substantive laws, but not the choice of law rules, of the State of Texas.
IN WITNESS WHEREOF, the Company and Grantee have executed this
Agreement as of the date first written above.
APACHE CORPORATION
/s/ Daniel L. Schaeffer
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By: Daniel L. Schaeffer
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Its: Vice President
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GRANTEE
/s/ G. Steven Farris
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G. Steven Farris
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Printed Name
[Social Security Number]
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Social Security Number
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