1
EXHIBIT 10.13
CORPORATE INCENTIVE COMPENSATION PLAN "A"
(SENIOR OFFICERS' PLAN)
1. Purpose of the Plan
Apache Corporation (the "Company") adopts this Corporate Incentive
Compensation Plan "A" (the "Plan") effective January 1, 1998. The
purpose of this Plan is to provide incentive to certain senior officers
of the Company to achieve certain financial and operational objectives
of the financial plan of the Company. Senior Officers are in a unique
position to shape the company's strategic direction and to put in place
the tools -incentives, capital, etc., to support it's development or
endorse the company's long range strategy, and have the power and
authority to allocate resources and measure and reward goal
achievement. The Corporate IC Plan "A" is intended to incentivize
results that will:
o Enhance shareholder value,
o Enhance the Company's financial position, and
o Create interaction and involvement through the management of the
Corporate IC Plan "B".
2. Administration
The Plan shall be administered by the Company's Board of Directors (the
"Board"), except to the extent that the Plan delegates authority to the
Management Development and Compensation Committee (the "Committee") of
the Board, and except to the extent that the Board otherwise delegates
or provides.
The Committee shall administer the Plan and make recommendations to the
Board concerning selection of employees eligible to participate in the
Plan (the "Participants") and the funding of the Plan.
All actions, decisions, and determinations of the Committee concerning
the Plan and its administration shall be subject only to review by the
Board to the extent the Board deems review appropriate, and shall
otherwise be final, conclusive and binding upon the Company, its
shareholders, subsidiaries, affiliates, employees and officers, and
upon all Participants and all other affected persons.
3. Eligible Participants
The Committee will designate certain senior officers of the Company as
Participants, but will include the Chairman/CEO and COO/President.
2
4. Assessment
Assessment of the performance of the Participants and subsequent
recommendations for payment of incentive compensation will rest with
the Committee. The recommendation will be made to the Board for final
approval.
The Committee's assessment will include the following areas:
1. Comparison of company's performance for one year against that of
a defined peer group of "tier one independents." (Attachment I)
2. Assessment of Participant's strategic management as evidenced by
selection of and achievement of the tasks identified as the
annual component of the strategic plan.
3. Other factors, such as participant's individual objectives which
are deemed by the committee and the Board to bear on the annual
incentive opportunity for the Participants.
Comprehensive comparative information on defined peer group to be made
available to the Committee by Management.
5. Distribution
Awards under the Plan shall be determined as follows:
a) Eligible salary equal to 50% of base compensation,
b) Up to 75% of eligible salary be recommended by achievement as
reviewed and approved by the Committee, and
c) Up to 25% of eligible percent of salary be recommended by
achievement of personal objectives.
Distribution of a Participant's award, if any, shall be made on or
before 90 days after the end of the Plan year (the "Distribution
Date".) A portion(s) of the award may be deferred to future years
dependent upon the payout/funding mechanism as recommended annually by
the Committee.
6. Miscellaneous Provisions
Neither the Plan nor any action taken hereunder shall be construed as
giving any Participant any right to be retained in the employ of the
Company or interfere in any way with the right of the Company to
determine a Participant's compensation or any other terms of
employment.
A Participant's rights and interests under this Plan may not be
assigned, transferred, attached, pledged, mortgaged or hypothecated.
The Company has the right to offset from a Participant's award any
amounts due from the Participant to the Company.
3
A Participant shall be entitled to an award under the Plan only if the
Participant is employed by the Company or an affiliated company on the
Distribution Date for the applicable Plan year. If a Participant dies,
retires, or suffers a disability after receiving an award allocation,
but prior to the Distribution Date, special provisions may be granted
for that Participant by the Committee.
This Plan, in combination with the Corporate Incentive Plan "B",
supercedes and replaces the Company's Corporate Administrative Group
Incentive Plan, as amended effective January 1, 1990.
7. Amendment and Termination
The Board, upon recommendation by the Committee, may at any time
suspend, amend, modify or terminate the Plan; provided that no
suspension, amendment, modification, or termination shall alter or
impair any rights or obligations to any award distributed previously
under the Plan. If this Plan is terminated during any incentive period
for which Participants have been selected to participate, the Board
may, in its sole discretion, make provision for payment of awards as it
deems appropriate.
8. Governing Law
The Plan shall be construed in accordance with and governed by the laws
of the State of Texas.
4
Dated this 16th day of July, 1998.
Attest:
/s/ Cheri L. Peper /s/ Raymond Plank
- ----------------------------------- -----------------------------------------
CORPORATE SECRETARY RAYMOND PLANK
CHAIRMAN & CHIEF EXECUTIVE OFFICER
/s/ Cheri L. Peper /s/ G. Steven Farris
- ----------------------------------- -----------------------------------------
CORPORATE SECRETARY G. STEVEN FARRIS
PRESIDENT & CHIEF OPERATING OFFICER
/s/ Cheri L. Peper /s/ Daniel L. Schaeffer
- ----------------------------------- -----------------------------------------
CORPORATE SECRETARY DANIEL L. SCHAEFFER
VICE PRESIDENT, HUMAN RESOURCES
5
ATTACHMENT "I"
LISTING OF PEER COMPANIES FOR
COMPARATIVE ASSESSMENT
NOBLE AFFILIATES, INC.
VASTAR RESOURCES, INC.
ANADARKO PETROLEUM CORPORATION
ENRON OIL & GAS COMPANY
BURLINGTON RESOURCES, INC.
ORYX ENERGY COMPANY
PENNZOIL COMPANY
UNION PACIFIC RESOURCES GROUP, INC.