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EXHIBIT 4.5
APACHE CORPORATION
2000 STOCK OPTION PLAN
(AS AMENDED AND RESTATED SEPTEMBER 14, 2000)
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APACHE CORPORATION
2000 STOCK OPTION PLAN
SECTION 1
INTRODUCTION
1.1 Establishment. Apache Corporation, a Delaware corporation (hereinafter
referred to, together with its Affiliated Corporations (as defined in Section
2.1 hereof) as the "Company" except where the context otherwise requires),
hereby establishes the Apache Corporation 2000 Stock Option Plan (the "Plan")
for Eligible Employees (as defined in Section 2.1 hereof). The Plan permits the
grant of stock options to Eligible Employees selected by the Committee (as
defined in Section 2.1 hereof).
1.2 Purposes. The purposes of the Plan are to provide the Eligible Employees
designated by the Committee 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 stockholder value, so
that the income of those employees is more closely aligned with the interests of
the Company's stockholders. The Plan is also designed to attract outstanding
individuals and to retain and motivate Eligible 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 February 10, 2000.
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) or any successor
section(s) 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: (i) Rule 16b-3 or any successor rule(s) promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and (ii) Section 162(m) or
any successor section(s) of the Internal Revenue Code and the regulations
promulgated thereunder.
(d) "Deferred Delivery Plan" means the Company's Deferred Delivery
Plan, effective as of February 10, 2000, 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) "Eligible Employees" means full-time employees (including, without
limitation, officers and directors who are also employees), and certain
part-time employees, of the Company or any division thereof.
(g) "Expiration Date" means the date on which the Option Period (as
defined in subsection 7.2(c) hereof) ends.
(h) "Fair Market Value" means the closing price of the Stock or
Depositary Shares, as applicable, as reported on the New York Stock Exchange,
Inc. Composite Transactions Reporting System for 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 422
or any successor section(s) 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)
hereof.
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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) "Reload Option" has the meaning set forth in subsection 7.4 hereof.
(n) "Stock" means the U.S. $1.25 par value Common Stock of the Company.
(o) "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 Headings; Gender and Number. The headings contained in the Plan are for
reference purposes only and shall not affect in any way the meaning or
interpretation of the Plan. 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
3.1 Administration by the Committee. The Plan shall 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, 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
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actions of the Committee pursuant to the provisions of the Plan shall be binding
and conclusive for all purposes and on all persons.
3.2 Compliance with Section 162(m). The Plan is intended to comply with the
requirements of Section 162(m) or any successor section(s) of the Internal
Revenue Code ("Section 162(m)") as to any "covered employee" as defined in
Section 162(m), and shall be administered, interpreted and construed
consistently therewith. In accordance with this intent, the amount of income a
Participant may receive from Options granted under the Plan shall be based
solely on an increase in the value of the Stock after the date of the grant of
the Option, or such other bases as may be permitted by applicable law. The
Committee is authorized to take such additional action, if any, that may be
required to ensure that the Plan satisfies the requirements of Section 162(m)
and the regulations promulgated or revenue rulings published thereunder.
SECTION 4
STOCK SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to Sections 7.1 and 7.4 hereof and to adjustment
pursuant to Section 4.3 hereof, one million (1,000,000) 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 the stockholders of the Company if, on the
advice of counsel for the Company, such stockholder 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 Stock in
the Company's treasury, 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, is forfeited, is cancelled, or for any reason is terminated
unexercised, and any shares of Stock that for any other reason are not issued to
a Participant or are forfeited shall automatically become available for use
under the Plan.
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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 and
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 hereof, 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
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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 or other securities, the aggregate Option
Price shall be increased by the amount of the price that is payable by the
Participant for such additional shares 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.
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
8 hereof 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
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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 shall be exercised within a specified number of
days of the date of such notice or such Options 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
the Company's 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, an Eligible Employee may be granted one or more
Options. Grants of Options under the Plan shall be made by the Committee. In no
event shall the exercise of
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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) hereof. During the duration of the Plan, no Eligible
Employee may be granted Options which in the aggregate cover in excess of 25
percent of the total shares of Stock authorized under the Plan.
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 "Stock Option
Agreement"), 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 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 Participant (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 subsections 7.2(d)(iv) and 7.4(a) hereof, each Option granted under the Plan
shall become exercisable in increments such that 25 percent of the Option
becomes exercisable on each of the four subsequent one-year anniversaries of the
date the Option is granted, provided that each such additional 25-percent
increment shall become exercisable only if the Participant has been continuously
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 Participant:
(i) If the employment of the Participant by the Company 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
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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)
shall be limited to determining the consequences of a termination and that
nothing in this subsection 7.2(d) shall restrict or otherwise interfere with the
Company's discretion with respect to the termination of any employee.
(ii) If the Participant retires from employment by the Company
on or after attaining age 65, the Option may be exercised by the Participant
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
Participant'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 Participant's retirement.
(iii) If the Participant becomes disabled (as determined
pursuant to the Company's Long-Term Disability Plan or any successor plan),
during the Option Period while still employed, or within the three-month period
referred to in subsection 7.2(d)(v) below, or within the 36-month period
referred to in subsection 7.2(d)(ii) above, the Option may be exercised by the
Participant or by his or her guardian or legal representative, within twelve
months following the Participant's disability, or within the 36-month period
referred to in subsection 7.2(d)(ii) above if applicable and if longer (provided
that such exercise must occur within the Option Period), but not thereafter. In
the event of the Participant's death during such twelve-month period, each
Option may be exercised by those entitled to do so in the manner referred to in
subsection 7.2(d)(iv) below. In any such case, the Option may be exercised only
as to the shares of Stock as to which the Option had become exercisable on or
before the date of the Participant's disability.
(iv) In the event of the Participant's death while still
employed by the Company, each Option of the deceased Participant may be
exercised by those entitled to do so under the Participant's will or under the
laws of descent and distribution within twelve months following the
Participant'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-percent increment of the Option, if
any, which has not yet become exercisable at the time of the Participant's
death. In the event of the Participant's death within the 36-month period
referred to in subsection 7.2(d)(ii) above or within the twelve-month period
referred to in subsection 7.2(d)(iii) above, each Option of the deceased
Participant that is exercisable at the time of death may be exercised by those
entitled to do so under the Participant's will or under the laws of
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descent and distribution within twelve months following the Participant's death
or within the 36-month period referred to in subsection 7.2(d)(ii) above, 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 Participant by the Company is
terminated (which for this purpose means that the Participant is no longer
employed by the Company or by an Affiliated Corporation) within the Option
Period for any reason other than cause, the Participant's retirement on or after
attaining age 65, the Participant's disability or death, the Option may be
exercised by the Participant 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 the Participant's employment.
(e) Transferability. Each Stock Option Agreement shall provide that the
Option granted therein is not transferable by the Participant except by will or
pursuant to the laws of descent and distribution, and that such Option is
exercisable during the Participant's lifetime only by him or her, or in the
event of the Participant's disability or incapacity, by his or her guardian or
legal representative.
(f) Agreement to Continue in Employment. Each Stock Option Agreement
shall contain the Participant'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 Office of
the Secretary of the Company of written notice specifying the number of shares
of Stock 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 Options (or portions thereof) which
are being exercised and the number of shares of Stock with respect to which the
Options are being exercised. The exercise of the Option shall be
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deemed effective on the date such notice is received by the Office of the
Secretary and payment is made to the Company of the aggregate Option Price (the
"Exercise Date"). If requested by the Company, such notice shall contain the
Participant'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 subsection 7.2(g)(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 subsection 7.2(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.
(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 personal, certified or cashier's check payable
in U.S. dollars to the order of the Company;
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(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 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 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
subsection 7.2(g)(iii)(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 Participant
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.
(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 and other tax laws, including payment of
such taxes as provided in Section 13 hereof.
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(j) Adjustment of Options. Subject to the provisions of Sections 4, 5,
7, 8 and 12 hereof, the Committee may make any adjustment in the number of
shares of Stock covered by, or the terms of an outstanding Option and a
subsequent granting of an Option, by amendment or by substitution for an
outstanding Option; however, except as provided in Sections 4, 5, 8 and 12
hereof, the Committee may not adjust the Option Price of any outstanding Option.
Such amendment or substitution may result in terms and conditions (including the
number of shares of Stock covered, vesting schedule or Option 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 grant of such amendment will be the
date of grant of the original Option.
7.3 Stockholder Privileges. No Participant shall have any rights as a
stockholder with respect to any shares of Stock covered by an Option until the
Participant becomes the holder of record of such Stock. Except as provided in
Section 4 hereof, no adjustments shall be made for dividends or other
distributions or other rights as to which there is a record date preceding the
date on which such Participant becomes the holder of record of such Stock.
7.4 Reload Provisions.
(a) The Committee shall have the authority, but not an obligation, to
include as a part of any Stock Option Agreement provisions under which the
Participant shall be granted a further option (a "Reload Option") when the
Participant exercises all or part of the Option represented by such Stock Option
Agreement and pays all or part of the aggregate Option Price and/or required or
excess tax withholding pursuant to subsections 7.2(g)(iii)(C), (D) or (E) and/or
subsections 13.2(a), (b) or (c) and/or subsections 13.3(a) or (b) hereof. Any
Option including such reload provisions shall become exercisable in increments
such that 25 percent of the Option becomes exercisable on the dates six months,
12 months, 18 months and 24 months following the date the Option is granted,
provided that each such additional 25-percent increment shall become exercisable
only if the Participant has been continuously employed by the Company from the
date the Option is granted through the date on which such additional 25-percent
increment becomes exercisable.
(b) Any shares of Stock issued to a Participant as a result of an
Option exercise which resulted in the grant of a Reload Option, may not be sold
or otherwise disposed of until the term of the original Option has expired or
the Participant is no longer employed
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by the Company or by an Affiliated Corporation. Any Stock Units acquired by a
Participant as a result of the deferral of income (pursuant to subsection
7.2(g)(ii) hereof) in connection with an Option exercise which resulted in the
grant of a Reload Option, may not be sold or otherwise disposed of until the
shares of Stock relating to such Stock Units are distributed under the terms of
the Deferred Delivery Plan.
(c) A Reload Option shall be granted, without further action of the
Committee or the Participant, if one or more of the payment provisions
referenced in subsection 7.4(a) above are used and if all of the following are
satisfied as of the date of exercise of the underlying Option:
(i) the Participant has not previously been granted a Reload
Option or there has been a period of more than six months since the Participant
was last granted a Reload Option;
(ii) no shares of Stock have been sold or otherwise disposed
of in breach of the provisions of subsection 7.4(b) above;
(iii) the Fair Market Value of the shares of Stock covered by
the original Option being exercised is at least ten percent greater than the
Option Price for such shares; and
(iv) there is a period of more than six months remaining in
the term of the original Option.
(d) Each Reload Option:
(i) shall cover that certain number of shares of Stock equal
to the shares or equivalent shares of Stock actually or constructively delivered
to the Company as referenced in subsection 7.4(a) above;
(ii) shall be deemed to be granted as of the date on which the
original Option is exercised and shall have an Option Price of 100 percent of
Fair Market Value on such date;
(iii) shall become exercisable six months after the date of
grant and shall have the same Expiration Date as the original Option; and
(iv) except as set forth in subsections 7.4(d)(i), (ii) and
(iii) above, shall have the same terms and conditions as those of the original
Option.
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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 hereof, then the Committee may, in its sole discretion, without
obtaining stockholder approval, to the extent permitted in Section 12 hereof,
take any or all of the following actions: (a) accelerate the dates on which any
outstanding Options become exercisable or make all such Options fully vested and
exercisable; (b) grant a cash bonus award to any Participant in an amount
necessary to pay the aggregate Option Price of all or any portion of the Options
then held by such Participant; (c) pay cash to any or all Participants in
exchange for the cancellation of their outstanding Options in an amount equal to
the difference between the Option 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
or any successor section(s) 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 or any successor section(s) 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 or any
successor plan which constitute a change in control within the meaning of such
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 level of the Participant's compensation from the level
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 hereof, 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 or her 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 of such status satisfactory to the Committee.
SECTION 10
GENERAL RESTRICTIONS
10.1 Investment Representations. The Company may require a Participant, as a
condition of exercising an 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
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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 of Stock 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 of Stock
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, qualification, consent or approval.
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 Participant 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 Company's
stockholders if stockholder 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 stockholder approval is otherwise necessary
or desirable.
No amendment, modification or termination of the Plan shall in any manner
adversely affect any Option theretofore granted under the Plan, without the
consent of the Participant holding such Option.
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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;
(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
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(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 months; 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.
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.
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14.2 Federal Securities Laws 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(s) promulgated under the 1934 Act, to qualify the Option for any
exception from the provisions of Section 16 available under such 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 Stock Option 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, 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
February 10, 2005. Any Options outstanding at the time of the Plan termination
shall continue to be exercisable in accordance with the Stock Option Agreement
pertaining to each such Option.
Dated: September 14, 2000
APACHE CORPORATION
ATTEST:
/s/ Cheri L. Peper By: /s/ Daniel L. Schaeffer
--------------------------------- -----------------------------------
Cheri L. Peper Daniel L. Schaeffer
Corporate Secretary Vice President
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