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EXHIBIT 10.1
APACHE CORPORATION
1990 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED SEPTEMBER 14, 2000)
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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 the Stock Option Plan Committee of the Board which is
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) "Deferred Delivery Plan" means the Company's Deferred Delivery Plan,
effective as of February 10, 2000 and as it may be amended from time to time, or
any successor plan.
(e) "Depositary Shares" means the Depositary shares representing the
Company's preferred stock convertible into Stock.
(f) "Effective Date" means the effective date of the Plan, September 19,
1990.
(g) "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.
(h) "Fair Market Value" means the closing price of the Stock or Depositary
Shares, as applicable, on the composite tape on a particular date. If on such
date there are no transactions in the Stock or Depositary Shares, as applicable,
the Fair Market Value shall be determined as of the immediately preceding date
on which there were transactions in the Stock or Depositary Shares, as
applicable.
(i) "Internal Revenue Code" means the Internal Revenue Code of 1986, as it
may be amended from time to time.
(j) "Option" means a right to purchase shares of 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.
(k) "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).
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(l) "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.
(m) "Stock" means the $1.25 par value Common Stock of the Company.
(n) "Stock Units" means investment units under the Deferred Delivery Plan,
each of which is deemed to be equivalent to one share of Stock.
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.
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.
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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, on
the advice 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 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
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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 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 aggregate 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 aggregate 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.
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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 percent 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 aggregate 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 aggregate Option Price
thereof, or (ii) upon written 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 vesting dates of outstanding Options so that all
Options become fully vested and exercisable 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.
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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.
(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 percent 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 percent increment shall
become exercisable only if the Option Holder has been continuously
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employed by the Company from the date the Option is granted through the date on
which each such additional 25 percent 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.
(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
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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 percent
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.
(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.
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(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 aggregate 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 is made to the Company of the
aggregate Option Price. 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, and 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 aggregate Option Price shall be
paid in full by any of the methods or any combination of the methods set forth
in (iii) below.
(ii) Except as referenced below in connection with the Deferred
Delivery Plan, the shares of Stock to which the Participant is entitled as a
result of the exercise of the Option shall be issued by the Company and (A)
delivered by electronic means to an account designated by the Participant, or
(B) delivered to the Participant in the form of a properly executed certificate
or certificates representing such shares of Stock. If shares of Stock and/or
Depositary Shares are used to pay all or part of the aggregate Option Price, the
Company shall issue and deliver to the Participant the additional shares of
Stock, in excess of the aggregate Option Price or portion thereof paid using
shares of Stock or Depositary Shares, to which the Participant is entitled as a
result of the Option exercise. If the Participant exercising an Option (x) is
eligible for participation in the Deferred Delivery Plan, (y) pays the aggregate
Option Price pursuant to 7(g)(iii)(A), (B), (C), (D) or (E) below, and (z) has
made an irrevocable election at least six months prior to the Exercise Date as
required under the Deferred Delivery Plan, the income resulting from the Option
exercise shall be deferred into the Participant's Deferred Delivery Plan account
and no additional shares of Stock shall be delivered to the Participant.
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(iii) the aggregate Option Price shall be paid by any of the following
methods or any combination of the following methods:
(A) in cash, including the wire transfer of funds in U.S. dollars to
one of the Company's bank accounts located in the United States, with such bank
account to be designated from time to time by the Company;
(B) by certified or cashier's check payable in U.S. dollars to the
order of the Company;
(C) by delivery to the Company of certificates representing a number of
shares of Stock then owned by the Participant, the aggregate Fair Market Value
of which (as of the Exercise Date) is not greater than the aggregate Option
Price of the Option being exercised, properly endorsed for transfer to the
Company; provided that the shares of Stock used for this purpose must have been
owned by the Participant for a period of at least six months;
(D) by certification or attestation to the Company of the Participant's
ownership (as of the Exercise Date) of the number of shares of Stock and/or
Depositary Shares, the aggregate Fair Market Value of which (as of the Exercise
Date) is not greater than the aggregate Option Price of the Option being
exercised, provided that the shares of Stock and/or Depositary Shares used for
this purpose have been owned by the Participant for a period of at least six
months;
(E) if the income resulting from the Option exercise is to be deferred
into the Participant's Deferred Delivery Plan account, by certification or
attestation to the Company of the Participant's ownership (as of the Exercise
Date) of a number of vested Stock Units held in the Participant's Deferred
Delivery Plan account, the equivalent aggregate Fair Market Value of which (as
of the Exercise Date) is not greater than the aggregate Option Price of the
Option being exercised, provided that the Stock Units used for this purpose were
vested as of the Exercise Date; or
(F) by delivery to the Company of a properly executed notice of
exercise together with irrevocable instructions to a broker to promptly deliver
to the Company, by wire transfer or check as noted in (A) and (B) above, 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 aggregate Option
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.
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(i) Tax Withholding. Each Stock Option Agreement shall provide that, upon
exercise of the Option, the Participant shall make appropriate arrangements with
the Company to provide for the amount of tax withholding required by Sections
3102 and 3402 or any successor section(s) of the Internal Revenue Code and
applicable state and local income tax laws, including payment of such taxes as
provided in Section 13 hereof.
(j) Adjustment of Options. Subject to the provisions of Sections 4, 5, 7, 8
and 12, the Committee may make any adjustment in the number of shares covered
by, or the terms of an outstanding Option and a subsequent granting of an
Option, by amendment or by substitution of an outstanding Option; however,
except as provided in Sections 4, 5, 8 and 12 hereof, the Committee may not
adjust the exercise price of any outstanding Option. Such amendment or
substitution may result in terms and conditions (including the 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 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 aggregate
Option 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.
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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.
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
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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 of such status satisfactory to the Committee.
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.
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 income deemed to be received by a Participant as a result of
the exercise of an Option shall not constitute "earnings" or "compensation" 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.
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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 unless 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.
The Committee shall have the authority to adopt such modifications, procedures
and subplans as may be necessary or desirable to comply with the provisions of
the laws (including, but not limited to, tax laws and regulations) of countries
other than the United States in which the Company may operate, so as to assure
the viability of the benefits of the Plan to Participants employed in such
countries.
SECTION 13
WITHHOLDING
13.1 Withholding Requirement. The Company's obligations to deliver shares of
Stock upon the exercise of an Option, or to defer income resulting from an
Option exercise into the Deferred Delivery Plan, shall be subject to the
Participant's satisfaction of all applicable federal, state and local income and
other tax withholding requirements.
13.2 Satisfaction of Required Withholding. 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 required tax withholding, or any part thereof:
(a) by the delivery to the Company of a number of shares of Stock then
owned by the Participant, the aggregate Fair Market Value of which (as of the
Exercise Date) is not greater than the amount required to be withheld, provided
that such shares have been held by the Participant for a period of at least six
months;
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(b) by certification or attestation to the Company of the Participant's
ownership (as of the Exercise Date) of a number of shares of Stock and/or
Depositary Shares, the aggregate Fair Market Value of which (as of the Exercise
Date) is not greater than the amount required to be withheld, provided that such
shares of Stock and/or Depositary Shares have been owned by the Participant for
a period of at least six months;
(c) if the income resulting from the Option exercise is to be deferred into
the Participant's Deferred Delivery Plan account, by certification or
attestation to the Company of the Participant's ownership (as of the Exercise
Date) of a number of vested Stock Units held in the Participant's Deferred
Delivery Plan account, the equivalent aggregate Fair Market Value of which (as
of the Exercise Date) is not greater than the amount required to be withheld,
provided that such Stock Units were vested as of the Exercise Date; or
(d) by the Company withholding from the shares of Stock otherwise issuable
to the Participant upon exercise of the Option, a number of shares of Stock, the
aggregate Fair Market Value of which (as of the Exercise Date) is not greater
than the amount required to be withheld. Any such elections by Participants to
have shares of Stock withheld for this purpose will be subject to the following
restrictions:
(i) all elections shall be made on or prior to the Exercise Date; and
(ii) all elections shall be irrevocable.
13.3 Excess Withholding. At the time the Committee grants an Option, it may, in
its sole discretion, grant the Participant an election to pay additional or
excess amounts of tax withholding, beyond the required amounts and up to the
Participant's marginal tax rate:
(a) by delivery to the Company of a number of Shares of Stock then owned by
the Participant, the aggregate Fair Market Value of which (as of the Exercise
Date) is not greater than such excess withholding amount, provided that such
shares of Stock have been owned by the Participant for a period of at least six
month; or
(b) by certification or attestation to the Company of the Participant's
ownership (as of the Exercise Date) of a number of shares of Stock and/or
Depositary Shares, the aggregate Fair Market Value of which (as of the Exercise
Date) is not greater than such excess withholding amount, provided that such
shares of Stock and/or Depositary Shares have been owned by the Participant for
a period of at least six months.
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13.4 Section 16 Requirements. If the Participant is an officer or director of
the Company within the meaning of Section 16 or any successor section(s) of the
1934 Act ("Section 16"), the Participant must satisfy the requirements of such
Section 16 and any applicable rules and regulations thereunder with respect to
the use of shares of Stock, Depositary Shares and/or Stock Units 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 Stock Option 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 Texas.
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 exercisable in accordance with the Stock Option
Agreement pertaining to each such Option.
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Dated: September 14, 2000
APACHE CORPORATION
ATTEST:
/s/ Cheri L. Peper By: /s/ Daniel L. Schaeffer
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Cheri L. Peper Daniel L. Schaeffer
Corporate Secretary Vice President
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