exv10w16



 





Exhibit 10.16




APACHE CORPORATION




401(k) SAVINGS PLAN




 









 





Table of Contents




	 	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	1.1 Account Owner
	 	 	1	 
	1.2 Accounts
	 	 	1	 
	1.3 Affiliated Entity
	 	 	1	 
	1.4 Alternate Payee
	 	 	1	 
	1.5 Annual Addition
	 	 	1	 
	1.6 Catch-Up Contributions
	 	 	2	 
	1.7 Code
	 	 	2	 
	1.8 Committee
	 	 	2	 
	1.9 Company
	 	 	2	 
	1.10 Company Contributions
	 	 	2	 
	1.11 Company Discretionary Contributions
	 	 	2	 
	1.12 Company Matching Contributions
	 	 	2	 
	1.13 Company Stock
	 	 	2	 
	1.14 Compensation
	 	 	2	 
	1.15 Covered Employee
	 	 	4	 
	1.16 Disability
	 	 	4	 
	1.17 Domestic Relations Order
	 	 	4	 
	1.18 Employee
	 	 	5	 
	1.19 ERISA
	 	 	5	 
	1.20 Five-Percent Owner
	 	 	5	 
	1.21 401(k) Contributions
	 	 	5	 
	1.22 Highly Compensated Employee
	 	 	5	 
	1.23 Key Employee
	 	 	6	 
	1.24 Lapse in Apache Employment
	 	 	6	 
	1.25 Limitation Year
	 	 	6	 
	1.26 Non-Highly Compensated Employee
	 	 	6	 
	1.27 Non-Key Employee
	 	 	6	 
	1.28 Normal Retirement Age
	 	 	6	 
	1.29 NQ Plan
	 	 	6	 
	1.30 Participant
	 	 	6	 
	1.31 Participant Contributions
	 	 	6	 
	1.32 Period of Service
	 	 	6	 
	1.33 Plan Year
	 	 	6	 
	1.34 QDRO
	 	 	6	 
	1.35 QMAC
	 	 	6	 
	1.36 QNECs
	 	 	6	 
	1.37 Required Beginning Date
	 	 	7	 
	1.38 Rollover Contribution
	 	 	7	 
	1.39 Spouse
	 	 	7	 
	1.40 Termination of Employment
	 	 	7	 
	1.41 Termination From Service Date
	 	 	7	 
	1.42 Valuation Date
	 	 	7	 
	 
	 	 	 	 
	ARTICLE II PARTICIPATION
	 	 	7	 
	 
	 	 	 	 
	2.1 Participation — Required Service
	 	 	7	 
	2.2 Enrollment Procedure
	 	 	8	 
	 
	 	 	 	 
	ARTICLE III CONTRIBUTIONS
	 	 	8	 
	 
	 	 	 	 
	3.1 Company Contributions
	 	 	8	 
	3.2 Participant Contributions
	 	 	9	 
	3.3 Return of Contributions
	 	 	12	 
	3.4 Limitation on Annual Additions
	 	 	12	 
	3.5 Contribution Limits for Highly Compensated Employees (ADP Test)
	 	 	13	 
	3.6 Contribution Limits for Highly Compensated Employees (ACP Test)
	 	 	14	 
	3.7 QNECs
	 	 	16	 
	3.8 QMACs
	 	 	16	 
	 
	 	 	 	 
	ARTICLE IV INTERESTS IN THE TRUST FUND
	 	 	17	 
	 
	 	 	 	 
	4.1 Participants’ Accounts
	 	 	17	 
	4.2 Valuation of Trust Fund
	 	 	17	 
	4.3 Allocation of Increase or Decrease in Net Worth
	 	 	18	 
	 
	 	 	 	 
	ARTICLE V AMOUNT OF BENEFITS
	 	 	18	 
	 
	 	 	 	 
	5.1 Vesting Schedule
	 	 	18	 
	5.2 Vesting After a Lapse in Apache Employment
	 	 	19	 
	5.3 Calculating Service
	 	 	19	 
	5.4 Forfeitures
	 	 	20	 
	5.5 Transfers — Portability
	 	 	21	 
	 
	 	 	 	 
	ARTICLE VI DISTRIBUTION OF BENEFITS
	 	 	21	 
	 
	 	 	 	 
	6.1 Beneficiaries
	 	 	21	 
	6.2 Consent
	 	 	22	 
	6.3 Distributable Amount
	 	 	22	 
	6.4 Manner of Distribution
	 	 	22	 
	6.5 In-Service Withdrawals
	 	 	23	 
	6.6 Time of Distribution
	 	 	24	 
	6.7 Direct Rollover Election
	 	 	25	 
	 
	 	 	 	 
	ARTICLE VII LOANS
	 	 	26	 
	 
	 	 	 	 
	7.1 Availability
	 	 	26	 
	7.2 Number of Loans
	 	 	26	 
	7.3 Loan Amount
	 	 	26	 
	7.4 Interest
	 	 	27	 
	7.5 Repayment
	 	 	27	 
	7.6 Default
	 	 	27	 
	7.7 Administration
	 	 	27	 
	 
	 	 	 	 
	ARTICLE VIII ALLOCATION OF RESPONSIBILITIES — NAMED FIDUCIARIES
	 	 	28	 
	 
	 	 	 	 
	8.1 No Joint Fiduciary Responsibilities
	 	 	28	 
	8.2 The Company
	 	 	28	 
	8.3 The Trustee
	 	 	28	 






i









 






	 	 	 	 	 
	8.4 The Committee — Plan Administrator
	 	 	28	 
	8.5 Committee to Construe Plan
	 	 	28	 
	8.6 Organization of Committee
	 	 	29	 
	8.7 Agent for Process
	 	 	29	 
	8.8 Indemnification of Committee Members
	 	 	29	 
	8.9 Conclusiveness of Action
	 	 	29	 
	8.10 Payment of Expenses
	 	 	29	 
	 
	 	 	 	 
	ARTICLE IX TRUST AGREEMENT – INVESTMENTS
	 	 	29	 
	 
	 	 	 	 
	9.1 Trust Agreement
	 	 	29	 
	9.2 Plan Expenses
	 	 	29	 
	9.3 Investments
	 	 	30	 
	 
	 	 	 	 
	ARTICLE X TERMINATION AND AMENDMENT
	 	 	30	 
	 
	 	 	 	 
	10.1 Termination of Plan or Discontinuance of Contributions
	 	 	30	 
	10.2 Allocations upon Termination or Discontinuance of Company Contributions
	 	 	30	 
	10.3 Procedure Upon Termination of Plan or Discontinuance of Contributions
	 	 	31	 
	10.4 Amendment by Apache
	 	 	31	 
	 
	 	 	 	 
	ARTICLE XI PLAN ADOPTION BY AFFILIATED ENTITIES
	 	 	32	 
	 
	 	 	 	 
	11.1 Adoption of Plan
	 	 	32	 
	11.2 Agent of Affiliated Entity
	 	 	32	 
	11.3 Disaffiliation and Withdrawal from Plan
	 	 	32	 
	11.4 Effect of Disaffiliation or Withdrawal
	 	 	32	 
	11.5 Actions Upon Disaffiliation or Withdrawal
	 	 	32	 
	 
	 	 	 	 
	ARTICLE XII TOP-HEAVY PROVISIONS
	 	 	33	 
	 
	 	 	 	 
	12.1 Application of Top-Heavy Provisions
	 	 	33	 
	12.2 Determination of Top-Heavy Status
	 	 	33	 
	12.3 Special Vesting Rule
	 	 	33	 
	12.4 Special Minimum Contribution
	 	 	33	 
	12.5 Change in Top-Heavy Status
	 	 	34	 
	 
	 	 	 	 
	ARTICLE XIII MISCELLANEOUS
	 	 	34	 
	 
	 	 	 	 
	13.1 Right To Dismiss Employees — No Employment Contract
	 	 	34	 
	13.2 Claims Procedure
	 	 	34	 
	13.3 Source of Benefits
	 	 	35	 
	13.4 Exclusive Benefit of Employees
	 	 	35	 
	13.5 Forms of Notices
	 	 	35	 
	13.6 Failure of Any Other Entity to Qualify
	 	 	36	 
	13.7 Notice of Adoption of the Plan
	 	 	36	 
	13.8 Plan Merger
	 	 	36	 
	13.9 Inalienability of Benefits — Domestic Relations Orders
	 	 	36	 
	13.10 Payments Due Minors or Incapacitated Individuals
	 	 	39	 
	13.11 Uniformity of Application
	 	 	39	 
	13.12 Disposition of Unclaimed Payments
	 	 	39	 
	13.13 Applicable Law
	 	 	39	 
	 
	 	 	 	 
	ARTICLE XIV MATTERS AFFECTING COMPANY STOCK
	 	 	39	 
	 
	 	 	 	 
	14.1 Voting,
Etc.
	 	 	39	 
	14.2 Notices
	 	 	40	 
	14.3 Retention/Sale of Company Stock and Other Securities
	 	 	40	 
	14.4 Tender Offers
	 	 	40	 
	14.5 Stock Rights
	 	 	40	 
	14.6 Other Rights Appurtenant to the Company Stock
	 	 	41	 
	14.7 Information to Trustee
	 	 	41	 
	14.8 Information to Account Owners
	 	 	41	 
	14.9 Expenses
	 	 	42	 
	14.10 Former Account Owners
	 	 	42	 
	14.11 No Recommendations
	 	 	42	 
	14.12 Trustee to Follow Instructions
	 	 	42	 
	14.13 Confidentiality
	 	 	43	 
	14.14 Investment of Proceeds
	 	 	43	 
	14.15 Independent Fiduciary
	 	 	43	 
	14.16 Method of Communications
	 	 	44	 
	 
	 	 	 	 
	ARTICLE XV UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT OF 1994
	 	 	44	 
	 
	 	 	 	 
	15.1 General
	 	 	44	 
	15.2 While a Serviceman
	 	 	44	 
	15.3 Expiration of USERRA Reemployment Rights
	 	 	45	 
	15.4 Return From Uniformed Service
	 	 	46	 
	 
	 	 	 	 
	Appendix A — Participating Companies
	 	 	 	 
	Appendix B — Hadson Energy Resources Company
	 	 	 	 
	Appendix C — Corporate Transactions
	 	 	 	 
	Appendix D —DEKALB Energy Company / Apache Canada Ltd
	 	 	 	 






ii









 






APACHE CORPORATION

401(k) SAVINGS PLAN




PREAMBLE



Apache Corporation, a Delaware corporation (“Apache”), maintains this profit sharing plan (the
“Plan”), which is intended to be qualified under Code §401(a), and which contains a cash or
deferred arrangement that is intended to be qualified under Code §401(k).



The Plan is hereby amended and restated as set forth below, effective January 1, 2007, except for
those provisions that have their own specific effective dates.



Each Appendix to this Plan is a part of the Plan document. It is intended that an Appendix will be
used to (1) describe which business entities are actively participating in the Plan, (2) describe
any special participation, eligibility, vesting, or other provisions that apply to the employees of
a business entity, (3) describe any special provisions that apply to Participants affected by a
designated corporation transaction, and (4) describe any special distribution rules that apply to
directly transferred benefits from other plans.




ARTICLE I




Definitions



The following words and phrases shall have the meaning set forth below:





	1.1	 	Account Owner
	 
	 	 	“Account Owner” means a Participant who has an Account balance, an Alternate Payee who has an
Account balance, or a beneficiary who has obtained an interest in the Account(s) of the
previous Account Owner because of the previous Account Owner’s death.
	 
	1.2	 	Accounts
	 
	 	 	“Accounts” means the various Participant accounts established pursuant to section 4.1.
	 
	1.3	 	Affiliated Entity
	 
	 	 	“Affiliated Entity” means:






	 	(a)	 	For all purposes of the Plan except those listed in subsection (b), the term
“Affiliated Entity” means any legal entity that is treated as a single employer with
Apache pursuant to Code §414(b), §414(c), §414(m), or §414(o).
	 
	 	(b)	 	For purposes of determining Annual Additions under section 1.5, limiting Annual
Additions to a Participant’s Account(s) under section 3.4, and construing the defined
terms as they are used in sections 1.5 and 3.4 (such as “ Compensation” and “Employee”),
the term “Affiliated Entity” means any legal entity that is treated as a single employer
with Apache pursuant to Code §414(m) or §414(o), and any legal entity that would be an
Affiliated Entity pursuant to Code §414(b) or §414(c) if the phrase “more than 50%” were
substituted for the phrase “at least 80%” each place it occurs in Code §1563(a)(1).






	1.4	 	Alternate Payee
	 
	 	 	“Alternate Payee” means a Participant’s Spouse, former spouse, child, or other dependent who
is recognized by a QDRO as having a right to receive all, or a portion of, the benefits
payable under this Plan with respect to such Participant.
	 
	1.5	 	Annual Addition
	 
	 	 	“Annual Addition” means the allocations to a Participant’s Account(s) for any Limitation Year,
as described in detail below.






	 	(a)	 	Annual Additions shall include: (i) Company Contributions (except as provided in
paragraphs (b)(iii) and (b)(v)) to this Plan and Company contributions to any other
defined contribution plan maintained by the Company or any Affiliated Entity, including
Company Matching Contributions forfeited to satisfy the ACP test of section 3.6, (ii)
after-tax contributions to any other defined contribution plan




Page 1 of 47 









 












	 	 	 	maintained by the Company or an Affiliated Entity; (iii) 401(k) Contributions to this
Plan and similar contributions to any other defined contribution plan maintained by the
Company or an Affiliated Entity, including any such contributions distributed to satisfy
the ADP test of section 3.5; (iv) forfeitures allocated to a Participant’s Account(s) in
this Plan and any other defined contribution plan maintained by the Company or any
Affiliated Entity (except as provided in paragraphs (b)(iii) and (b)(v) below); (v) all
amounts paid or accrued to a welfare benefit fund as defined in Code §419(e) and
allocated to the separate account (under the welfare benefit fund) of a Key Employee to
provide post-retirement medical benefits; and (vi) contributions allocated on the
Participant’s behalf to any individual medical account as defined in Code §415(l)(2).
	 
	 	(b)	 	Annual Additions shall not include: (i) Rollover Contributions to this Plan or
rollovers to any other defined contribution plan maintained by the Company or an
Affiliated Entity; (ii) repayments of loans made to a Participant from a qualified plan
maintained by the Company or any Affiliated Entity; (iii) repayments of forfeitures for
rehired Participants, as described in Code §411(a)(7)(B) and §411(a)(3)(D); (iv) direct
transfers of employee contributions from one qualified plan to any qualified defined
contribution plan maintained by the Company or any Affiliated Entity; (v) repayments of
forfeitures of missing individuals pursuant to section 13.12; or (vi) salary deferrals
within the meaning of Code §414(u)(2)(C) or §414(v)(6)(B).






	1.6	 	Catch-Up Contributions
	 
	 	 	“Catch-Up Contributions” means those contributions made to the Plan by the Company, at the
election of the Participant pursuant to subsection 3.2(b) that meet the requirements of Code
§414(v).
	 
	1.7	 	Code
	 
	 	 	“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the
regulations and rulings in effect thereunder from time to time.
	 
	1.8	 	Committee
	 
	 	 	“Committee” means the administrative committee provided for in section 8.4.
	 
	1.9	 	Company
	 
	 	 	“Company” means Apache, any successor thereto, and any Affiliated Entity that adopts the Plan
pursuant to Article XI. Each Company is listed in Appendix A.
	 
	1.10	 	Company Contributions
	 
	 	 	“Company Contributions” means all contributions to the Plan made by the Company pursuant to
section 3.1 for the Plan Year.
	 
	1.11	 	Company Discretionary Contributions
	 
	 	 	“Company Discretionary Contributions” means all contributions to the Plan made by the Company
pursuant to subsection 3.1(a) for the Plan Year.
	 
	1.12	 	Company Matching Contributions
	 
	 	 	“Company Matching Contributions” means all contributions to the Plan made by the Company
pursuant to subsection 3.1(b) for the Plan Year.
	 
	1.13	 	Company Stock
	 
	 	 	“Company Stock” means shares of the $0.625 par value common stock of Apache.
	 
	1.14	 	Compensation
	 
	 	 	“Compensation” means:






	 	(a)	 	Code §415 Compensation. For purposes of determining the limitation on
Annual Additions under section 3.4 and the minimum contribution under section 12.4 when
the Plan is top-heavy, Compensation shall mean those amounts reported as “wages, tips,
other compensation” on Form W-2 by the Company or an Affiliated Entity and elective
contributions that are not includable in the




Page 2 of 47 









 












	 	 	 	Employee’s income pursuant to Code §125, §132(f)(4), §402(e)(3), §402(h), §403(b),
§408(p), §414(u)(2)(C), §414(v)(6)(B), or §457. For purposes of section 3.4,
Compensation shall be measured over a Limitation Year. For purposes of section 12.4,
Compensation shall be measured over a Plan Year.
	 
	 	(b)	 	Code §414(q) Compensation. For purposes of identifying Highly Compensated
Employees and Key Employees, Compensation shall mean those amounts reported as “wages,
tips, other compensation” on Form W-2 by the Company or an Affiliated Entity, and
elective contributions that are not includable in the Employee’s income pursuant to Code
§125, §132(f)(4), §402(e)(3), §402(h), §403(b), §408(p), §414(u)(2)(C), §414(v)(6)(B), or
§457. Compensation shall be measured over a Plan Year. Compensation shall include only
amounts paid to the Employee, and shall not include any additional amounts accrued by the
Employee.
	 
	 	(c)	 	Code §414(s) Compensation. For purposes of the ADP and ACP tests under
sections 3.5 and 3.6, and for purposes of allocating QNECs under subsection 3.7(c) and
QMACs under subsection 3.8(c), Compensation shall mean any definition of compensation for
a Plan Year, as selected by the Committee, that satisfies the requirements of Code
§414(s) and the regulations promulgated thereunder. The definition of Compensation used
in one Plan Year may differ from the definition used in another Plan Year.
	 
	 	(d)	 	Benefit Compensation. For purposes of determining and allocating Company
Discretionary Contributions under subsection 3.1(a), Compensation shall generally mean
regular compensation paid by the Company.






	 	(i)	 	Specifically, Compensation shall include:






	 	(A)	 	Regular salary or wages,
	 
	 	(B)	 	Overtime pay,
	 
	 	(C)	 	The regular annual bonus (unless all or a portion is
excluded by the Committee before the regular annual bonus is paid) and any
other bonus designated by the Committee,
	 
	 	(D)	 	Salary reductions pursuant to this Plan,
	 
	 	(E)	 	Salary reductions that are excludable from an Employee’s
gross income pursuant to Code §125 or §132(f)(4), and
	 
	 	(F)	 	Amounts contributed as salary deferrals to the NQ Plan.






	 	(ii)	 	Compensation shall exclude:






	 	(A)	 	Commissions,
	 
	 	(B)	 	Severance pay,
	 
	 	(C)	 	Moving expenses,
	 
	 	(D)	 	Any gross-up of moving expenses to account for increased
income or employment taxes,
	 
	 	(E)	 	Foreign service premiums paid as an inducement to work
outside of the United States,
	 
	 	(F)	 	Credits or benefits under this Plan (except as provided in
subparagraph (i)(D)) and credits or benefits under the Apache Corporation
Money Purchase Retirement Plan,
	 
	 	(G)	 	Other contingent compensation,
	 
	 	(H)	 	Any amount relating to the granting of a stock option by
the Company or an Affiliated Entity, the exercise of such a stock option, or
the sale or deemed sale of any shares thereby acquired,
	 
	 	(I)	 	Contributions to any other fringe benefit plan (including,
but not limited to, overriding royalty payments or any other
exploration-related payments),




Page 3 of 47 









 












	 	(J)	 	Any bonus other than (1) a regular annual bonus not
otherwise excluded by the Committee and (2) a bonus specifically included as
Compensation by the Committee, in each case pursuant to subparagraph (i)(C),
and
	 
	 	(K)	 	Except as provided under subparagraph (i)(F), any benefit
accrued under, or any payment from, any nonqualified plan of deferred
compensation.






	 	(iii)	 	Compensation shall be measured over that portion of a Plan Year while
the Employee is a Covered Employee. Compensation shall include only amounts paid
to the Employee during the Plan Year, and shall not include any amounts accrued by
but not paid to the Employee during the Plan Year.






	 	(e)	 	Deferral Compensation. For purposes of determining Participant
Contributions under section 3.2 and for purposes of determining and allocating Company
Matching Contributions under subsection 3.1(b), Compensation shall mean Compensation as
defined in subsection (d), with the following modifications. Compensation shall be
measured over each pay period after the Employee has satisfied the eligibility
requirements of subsection 2.1(a). Compensation shall include only amounts paid while
the Employee is a Covered Employee. Compensation shall only include those amounts paid
in cash.
	 
	 	(f)	 	Limit on Compensation. For purposes of calculating the minimum
contribution required in top-heavy years under subsection (a), for all purposes of
subsections (c) and (d), and for purposes of determining the maximum allocation of
Company Matching Contributions under subsection (e), the Compensation taken into account
for the Plan Year shall not exceed the dollar limit specified in Code §401(a)(17) in
effect for the Plan Year.






	1.15	 	Covered Employee
	 
	 	 	“Covered Employee” means any Employee of the Company, with the following exceptions.






	 	(a)	 	Any individual directly employed by an entity other than the Company shall not be a
Covered Employee, even if such individual is considered a common-law employee of the
Company or is treated as an employee of the Company pursuant to Code §414(n).
	 
	 	(b)	 	An Employee shall not be a Covered Employee unless he is either based in the U.S.
or on the U.S. payroll.
	 
	 	(c)	 	An Employee included in a unit of Employees covered by a collective bargaining
agreement shall not be a Covered Employee unless the collective bargaining agreement
specifically provides for such Employee’s participation in the Plan.
	 
	 	(d)	 	An Employee whose job is classified as “temporary” shall be a Covered Employee only
after he has worked for the Company and Affiliated Entities for six consecutive months.
	 
	 	(e)	 	An Employee shall not be a Covered Employee while he is classified as an “intern,”
a “consultant,” or an “independent contractor.” An Employee may be classified as an
“intern” only if he is currently enrolled (or the Company expects him to be enrolled
within the next 12 months) in a high school, college, or university. An Employee may be
classified as an intern even if he does not receive academic course credit from his
school for this employment with the Company.
	 
	 	(f)	 	An individual who is employed pursuant to a written agreement with an agency or
other third party for a specific job assignment or project shall not be a Covered
Employee.






	1.16	 	Disability
	 
	 	 	“Disability” means a physical or mental condition that qualifies the Employee for long-term
disability payments under Apache’s Long-Term Disability Plan.
	 
	1.17	 	Domestic Relations Order
	 
	 	 	“Domestic Relations Order” means any judgment, decree, or order (including approval of a
property settlement agreement) issued by a court of competent jurisdiction that relates to the
provisions of child support, alimony or maintenance payments, or marital property rights to a
Participant’s Spouse, former spouse, child, or other dependent and is made pursuant to a state
domestic relations law (including a community property law).




Page 4 of 47 









 












	1.18	 	Employee
	 
	 	 	“Employee” means each individual who performs services for the Company or an Affiliated Entity
and whose wages are subject to withholding by the Company or an Affiliated Entity. The term
“Employee” includes only individuals currently performing services for the Company or an
Affiliated Entity, and excludes former Employees who are still being paid by the Company or an
Affiliated Entity (whether through the payroll system, through overriding royalty payments,
through exploration-related payments, severance, or otherwise). The term “Employee” also
includes any individual who provides services to the Company or an Affiliated Entity pursuant
to an agreement between the Company or an Affiliated Entity and a third party that employs the
individual, but only if the individual has performed such services for the Company or an
Affiliated Entity on a substantially full-time basis for at least one year and only if the
services are performed under the primary direction or control by the Company or an Affiliated
Entity; provided, however, that if the individuals included as Employees pursuant to the first
part of this sentence constitute 20% or less of the Non-Highly Compensated Employees of the
Company and Affiliated Entities, then any such individuals who are covered by a qualified plan
that is a money purchase pension plan that provides a nonintegrated employer contribution rate
for each participant of at least 10% of compensation, that provides for full and immediate
vesting, and that provides immediate participation for each employee of the third party (other
than those who perform substantially all of their services for the third party and other than
those whose compensation from the third party during each of the four preceding plan years was
less than $1000) shall not be considered an Employee.
	 
	1.19	 	ERISA
	 
	 	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and rulings in effect thereunder from time to time.
	 
	1.20	 	Five-Percent Owner
	 
	 	 	“Five-Percent Owner” means:






	 	(a)	 	With respect to a corporation, any individual who owns (either directly or
indirectly according to the rules of Code §318) more than 5% of the value of the
outstanding stock of the corporation or stock processing more than 5% of the total
combined voting power of all stock of the corporation.
	 
	 	(b)	 	With respect to a non-corporate entity, any individual who owns (either directly or
indirectly according to rules similar to those of Code §318) more than 5% of the capital
or profits interest in the entity.
	 
	 	(c)	 	An individual shall be a Five-Percent Owner for a particular year if such
individual is a Five-Percent Owner at any time during such year.






	1.21	 	401(k) Contributions
	 
	 	 	“401(k) Contributions” means those contributions made to the Plan by the Company, at the
election of the Participant pursuant to subsection 3.2(a), that are excludable from the
Participant’s gross income under Code §401(k) and §402(e)(3).
	 
	1.22	 	Highly Compensated Employee
	 
	 	 	“Highly Compensated Employee” means, for each Plan Year, an Employee who (a) was in the
“top-paid group” during the immediately preceding Plan Year and had Compensation of $80,000
(as adjusted by the Secretary of the Treasury) or more during the immediately preceding Plan
Year, or (b) is a Five-Percent Owner during the current Plan Year, or (c) was a Five-Percent
Owner during the immediately preceding Plan Year. The term “top-paid group” means the top 20%
of Employees when ranked on the basis of Compensation paid during the year. In determining
the number of Employees in the top-paid group, the Committee may elect to exclude Employees
with less than six (or some smaller number of) months of service at the end of the year,
Employees who normally work less than 171/2 (or some fewer number of) hours per week, Employees
who normally work less than six (or some fewer number of) months during any year, Employees
younger than 21 (or some younger age) on the last day of the year, and Employees who are
nonresident aliens who receive no earned income (within the meaning of Code §911(d)(2)) from
Apache or an Affiliated Entity that constitutes income from sources within the United States
(within the meaning of Code §861(a)(3)). Furthermore, an Employee who is a nonresident alien
who receives no earned income (within the meaning of Code §911(d)(2)) from Apache or an
Affiliated Entity that constitutes income from




Page 5 of 47 









 












	 	 	sources within the United States (within the meaning of Code §861(a)(3)) during the year shall
not be in the top-paid group for that year.
	 
	1.23	 	Key Employee
	 
	 	 	“Key Employee” means an individual described in Code §416(i)(1) and the regulations
promulgated thereunder.
	 
	1.24	 	Lapse in Apache Employment
	 
	 	 	“Lapse in Apache Employment” means a Lapse in Apache Employment as defined in subsection 5.3(c).
	 
	1.25	 	Limitation Year
	 
	 	 	“Limitation Year” means the calendar year.
	 
	1.26	 	Non-Highly Compensated Employee
	 
	 	 	“Non-Highly Compensated Employee” means an Employee who is not a Highly Compensated Employee.
	 
	1.27	 	Non-Key Employee
	 
	 	 	“Non-Key Employee” means an Employee who is not a Key Employee.
	 
	1.28	 	Normal Retirement Age
	 
	 	 	“Normal Retirement Age” means age 65.
	 
	1.29	 	NQ Plan
	 
	 	 	“NQ Plan” means the Non-Qualified Retirement/Savings Plan of Apache Corporation.
	 
	1.30	 	Participant
	 
	 	 	“Participant” means any individual with an account balance under the Plan except beneficiaries
and Alternate Payees. The term “Participant” shall also include any Covered Employee who has
satisfied the eligibility requirements of section 2.1, but who does not yet have an account
balance.
	 
	1.31	 	Participant Contributions
	 
	 	 	“Participant Contributions” means 401(k) Contributions and Catch-Up Contributions.
	 
	1.32	 	Period of Service
	 
	 	 	“Period of Service” means a Period of Service as defined in subsection 5.3(a).
	 
	1.33	 	Plan Year
	 
	 	 	“Plan Year” means the 12-month period on which the records of the Plan are kept, which shall
be the calendar year.
	 
	1.34	 	QDRO
	 
	 	 	“QDRO,” which is an acronym for qualified domestic relations order, means a Domestic Relations
Order that creates or recognizes the existence of an Alternate Payee’s right to, or assigns to
an Alternate Payee the right to, receive all or a portion of the benefits payable with respect
to a Participant under the Plan and with respect to which the requirements of Code §414(p) and
ERISA §206(d)(3) are met.
	 
	1.35	 	QMAC
	 
	 	 	“QMAC,” which is an acronym for qualified matching contribution, means any contribution to the
Plan made by the Company that the Company designates as a QMAC, or any portion of the
forfeitures designated as a QMAC under subsection 5.4(d). A QMAC must satisfy the
requirements of section 3.8.
	 
	1.36	 	QNECs
	 
	 	 	“QNEC,” which is an acronym for qualified non-elective contribution, means any contribution to
the Plan made by the Company that the Company designates as a QNEC, or any portion of the
forfeitures designated as a QNEC under subsection 5.4(d). A QNEC must satisfy the
requirements of section 3.7.




Page 6 of 47 









 












	1.37	 	Required Beginning Date
	 
	 	 	“Required Beginning Date” means:






	 	(a)	 	Excepted as provided in subsections (b), (c), and (d), Required Beginning Date
means April 1 of the calendar year following the later of (i) the calendar year in which
the Participant attains age 701/2, or (ii) the calendar year in which the Participant
terminates employment with Apache and all Affiliated Entities.
	 
	 	(b)	 	For a Participant who is both an Employee and a Five-Percent Owner of Apache or an
Affiliated Entity, the term “Required Beginning Date” means April 1 of the calendar year
following the calendar year in which the Five-Percent Owner attains age 701/2. If an
Employee older than 701/2 becomes a Five-Percent Owner, his Required Beginning Date shall
be April 1 of the calendar year following the calendar year in which he becomes a
Five-Percent Owner.
	 
	 	(c)	 	Before January 1, 1997, an Employee who was not a Five-Percent Owner may have had a
Required Beginning Date. Beginning January 1, 1997, such an Employee shall be treated as
if he has not yet had a Required Beginning Date, with the result that his minimum
required distributions under subsection 6.6(c) will be zero until his new Required
Beginning Date. His new Required Beginning Date shall be determined pursuant to
subsections (a) and (b).
	 
	 	(d)	 	If a Participant is rehired after his Required Beginning Date, and he is not a
Five-Percent Owner, he shall be treated upon rehire as if he has not yet had a Required
Beginning Date, with the result that his minimum required distributions under subsection
6.6(c) will be zero until his new Required Beginning Date. His new Required Beginning
Date shall be determined pursuant to subsection (a).






	1.38	 	Rollover Contribution
	 
	 	 	“Rollover Contribution” means any contribution that is rolled over to this Plan pursuant to
subsection 3.2(d).
	 
	1.39	 	Spouse
	 
	 	 	“Spouse” means the individual of the opposite sex to whom a Participant is lawfully married
according to the laws of the state of the Participant’s domicile.
	 
	1.40	 	Termination of Employment
	 
	 	 	“Termination of Employment” means a severance from employment within the meaning of Code
§401(k)(2)(b)(i)(I), and which therefore generally means the date a Participant ceases to be
an Employee.
	 
	1.41	 	Termination From Service Date
	 
	 	 	“Termination From Service Date” means the Termination From Service Date defined in subsection 5.3(b).
	 
	1.42	 	Valuation Date
	 
	 	 	“Valuation Date” means the last day of each Plan Year and any other dates as specified in
section 4.2 as of which the assets of the Trust Fund are valued at fair market value and as of
which the increase or decrease in the net worth of the Trust Fund is allocated among the
Participants’ Accounts.





ARTICLE II

Participation





	2.1	 	Participation — Required Service.






	 	(a)	 	Participant Contributions. A Covered Employee shall be eligible to begin
making Participant Contributions and receiving an allocation of Company Matching
Contributions as of the first day of the first pay period of the month that begins after
the day the Employee becomes a Covered Employee.
	 
	 	(b)	 	Company Discretionary Contributions. Each Covered Employee shall be
eligible to participate in the Plan with respect to the Company Discretionary
Contribution provided by subsection 3.1(a) on the day the Employee first becomes a
Covered Employee.




Page 7 of 47 









 












	2.2	 	Enrollment Procedure.
	 
	 	 	Notwithstanding section 2.1, a Covered Employee shall not be eligible to participate in the
Plan until after completing the enrollment procedures specified by the Committee. Such
enrollment procedures may, for example, require the Covered Employee to complete and sign an
enrollment form or to complete a voice-response telephone enrollment or an online enrollment.
The Covered Employee shall provide all information requested by the Committee, such as the
initial investment direction, the address and date of birth of the Employee, and the initial
rate of the Participant Contributions. An election to make Participant Contributions shall
not be effective until after the Covered Employee has properly completed the enrollment
procedures. The Committee may require that the enrollment procedure be completed a certain
number of days prior to the date that a Covered Employee actually begins to participate.





ARTICLE III

Contributions



The only contributions that can be made to the Plan are Company Contributions pursuant to
section 3.1, Plan expenses that are paid by the Company or Account Owner, Participant Contributions
and Rollover Contributions pursuant to section 3.2,, and loan repayments pursuant to Article VII.





	3.1	 	Company Contributions.






	 	(a)	 	Company Discretionary Contributions. For each Plan Year, the Company shall
contribute to the Trust Fund such amount of Company Discretionary Contributions that the
Company, in its sole discretion, determines to contribute. The Company may elect to
treat any available forfeitures as Company Discretionary Contributions, pursuant to
subsection 5.4(d). Company Discretionary Contributions shall be allocated to each
“eligible Participant” in proportion to the eligible Participant’s Compensation. For
purposes of this subsection, an “eligible Participant” is a Participant who was a Covered
Employee on one or more days during the Plan Year and who was employed by the Company or
an Affiliated Entity on the last business day of the Plan Year. Company Discretionary
Contributions shall be allocated to Company Contributions Accounts, except for those
Company Discretionary Contributions that are designated as QNECs pursuant to subsection
3.7(b), which shall be allocated to Participant Contributions Accounts.
	 
	 	(b)	 	Company Matching Contributions.






	 	(i)	 	Standard Match. As of the last day of the Plan Year, the
Committee shall make the final allocation of Company Matching Contributions
(including such forfeitures occurring during the Plan Year that are treated as
Company Matching Contributions pursuant to subsection 5.4(d)) to each Participant
who made Participant Contributions during the Plan Year as follows. Each
Participant’s allocation shall be equal to his Participant Contributions for the
Plan Year, up to a maximum allocation of 6% of his Compensation. The Committee may
make interim allocations of Company Matching Contributions during the Plan Year,
reflecting the allocation earned thus far in the Plan Year.
	 
	 	(ii)	 	Additional Match. If the nondiscrimination tests described in
sections 3.5 and 3.6 are not satisfied for a Plan Year, the Company may elect to
contribute an additional amount, or it may elect to use any forfeitures occurring
during the Plan Year, as an extra Company Matching Contribution for the Plan Year.
The extra Company Matching Contribution may be designated as a QMAC pursuant to
section 3.8. The extra Company Matching Contribution shall be allocated to all
“eligible Participants” in proportion to the Company Matching Contribution
allocated to such eligible Participants during the Plan Year under paragraph (i).
For purposes of this paragraph only, an “eligible Participant” is any Non-Highly
Compensated Employee who is a Covered Employee on the last day of the Plan Year.
	 
	 	(iii)	 	Coordination With Code §401(a)(17). Company Matching
Contributions in a Plan Year shall accrue only on Participant Contributions up to
6% of the Code §401(a)(17) limit for that Plan Year. Any Company Matching
Contributions allocated during the Plan Year in which they were accrued shall be
allocated on a temporary basis only; the allocation shall become final after the
Committee verifies that the allocation complies with the terms of the Plan,
including the limits




Page 8 of 47 









 












	 	 	 	of Code §401(a)(17). Any reduction in the allocation to comply with Code
§401(a)(17), adjusted to reflect investment experience, shall be used as specified
in subsection 5.4(d).
	 
	 	(iv)	 	Accounts. Company Matching Contributions shall be allocated to
Company Contributions Accounts, except for those Company Matching Contributions
that are designated as QMACs under section 3.8, which shall be allocated to
Participant Contributions Accounts.






	 	(c)	 	Miscellaneous Contributions.






	 	(i)	 	Forfeiture Restoration. The Company may make additional
contributions to the Plan to restore amounts forfeited from the Company
Contributions Accounts of certain rehired Participants, pursuant to section 5.4.
This additional contribution shall be required only when the available forfeitures
are insufficient to restore such forfeited amounts, as described in subsection
5.4(d). This contribution shall be allocated to the Participant’s Company
Contributions Account.
	 
	 	(ii)	 	Top Heavy Contribution. The Company may make additional
contributions to the Plan to satisfy the minimum contribution required by section
12.4. The Company may elect to use any available forfeitures for this purpose,
pursuant to subsection 5.4(d).
	 
	 	(iii)	 	Missing Individuals. The Company may make additional
contributions to the Plan to restore the forfeited benefit of any missing
individual, pursuant to section 13.12. This additional contribution shall be
required only when the available forfeitures are insufficient to restore such
forfeited amounts, as described in subsection 5.4(d).
	 
	 	(iv)	 	Non-Discrimination Testing. The Company may make QNECs to the
Plan to enable the Plan to satisfy the ADP and ACP tests of sections 3.5 and 3.6.
The Company may elect to treat any available forfeitures as QNECs, pursuant to
subsection 5.4(d). QNECs shall be allocated to Participant Contribution Accounts.
	 
	 	(v)	 	Returning Servicemen. The Company may make additional
contributions to the Plan to provide make-up contributions for returning
servicemen, pursuant to section 15.4.






	 	(d)	 	Contributions Contingent on Deductibility. The Company Contributions for a
Plan Year (excluding forfeitures and contributions pursuant to paragraph 3.1(c)(v) shall
not exceed the amount allowable as a deduction for Apache’s taxable year ending with or
within the Plan Year pursuant to Code §404. The amount allowable as a deduction under
Code §404 shall include carry forwards of unused deductions for prior years. If the Code
§404 deduction limit would be exceeded for any Plan Year, the Plan contributions shall be
reduced, in the following order, until the Plan contributions equal the Code §404
deduction limit: first, the Company Matching Contributions for those Highly Compensated
Employees who are eligible to participate in the NQ Plan; second, all but $1 of the
Company Discretionary Contributions for those Highly Compensated Employees who are
eligible to participate in the NQ Plan; third, any remaining Company Matching
Contribution; fourth, any remaining Company Discretionary Contributions. Company
Contributions other than QNECs, QMACs, and contributions pursuant to paragraph 3.1(c)(v)
shall be paid to the Trustee no later than the due date (including any extensions) for
filing the Company’s federal income tax return for such year; QNECs and QMACs shall be
paid to the Trustee no later than 12 months after the close of the Plan Year; and
contributions subject to paragraph 3.1(c)(v) shall be paid to the Trustee as specified in
section 15.4. Company Contributions may be made without regard to current or accumulated
earnings and profits; nevertheless, this Plan is intended to qualify as a “profit sharing
plan” as defined in Code §401(a). The Company may pay any contribution in the form of
Company Stock or cash, as the Company determines.






	3.2	 	Participant Contributions.






	 	(a)	 	401(k) Contributions.






	 	(i)	 	General Rules. A Participant may elect to defer the receipt of
a portion of his Compensation during the Plan Year and contribute such amounts to
the Plan as 401(k) Contributions. The Committee shall determine the maximum 401(k)
Contributions that a Participant may make and shall establish other administrative
rules governing the 401(k) Contributions; for example, the Committee may require
401(k) Contributions to be made in whole percentages of




Page 9 of 47 









 












	 	 	 	Compensation, the Committee may allow different contribution percentages from
bonuses than are allowed from regular pay, and the Committee may limit 401(k)
Contributions (for the year or for the pay period or for a bonus) to a percentage
of Compensation (for the year or for the pay period or for the bonus). The
Company shall pay the amount deducted from the Participant’s Compensation to the
Trustee promptly after the deduction is made. 401(k) Contributions shall be
allocated to Participant Contributions Accounts.
	 
	 	(ii)	 	Limitations on 401(k) Contributions.






	 	(A)	 	Limit for Apache Plans. The sum of 401(k)
Contributions to this Plan and elective deferrals (as defined in Code
§402(g)(3)) to any other plan maintained by the Company or an Affiliated
Entity shall not exceed the dollar limit in effect under Code §402(g)(1)(B)
in any calendar year. The Company shall inform the Committee if such limit
has been exceeded, and the excess amount allocated to this Plan. The excess
amount allocated to this Plan shall be reduced by any 401(k) Contributions
returned pursuant to any other provision of this Article. Any remaining
excess amount shall be recharacterized as a Catch-Up Contribution to the
extent possible, and any remaining excess amount shall be returned to the
Participant as soon as administratively possible, and in no event later than
April 15 of the calendar year after the calendar year in which the excess
occurred. Company Matching Contributions attributable to amounts returned
under this subparagraph shall be forfeited. Unmatched 401(k) Contributions
shall be returned first. The amount returned, recharacterized, or forfeited
shall be adjusted to reflect the net increase or decrease in the net value of
the Participant’s Account attributable thereto. The Committee may use any
reasonable method to allocate this adjustment.
	 
	 	(B)	 	Participant Limit. If the sum of the 401(k)
Contributions to this Plan and elective deferrals (as defined in Code
§402(g)(3)) to any other plan exceed the dollar limit in effect under Code
§402(g)(1)(B) in a calendar year, and the Participant is an Employee on the
last day of the Plan Year and informs the Committee of the amount of the
excess allocated to this Plan, then that amount will be reduced by any 401(k)
Contributions for that calendar year that were returned pursuant to any other
provision in this Article. Any remaining excess amount shall be
recharacterized as a Catch-Up Contribution to the extent possible, and any
remaining excess amount shall be returned to the Participant as soon as
administratively possible, and in no event later than April 15 of the
calendar year after the calendar year in which the excess occurred. Company
Matching Contributions attributable to amounts returned under this
subparagraph shall be forfeited. Unmatched 401(k) Contributions shall be
returned first. The amount returned, recharacterized, or forfeited shall be
adjusted to reflect the net increase or decrease in the net value of the
Participant’s Account attributable thereto. The Committee may use any
reasonable method to allocate this adjustment.






	 	(b)	 	Catch-Up Contributions.






	 	(i)	 	General Rules. A Participant whose 49th birthday occurred
before the first day of the Plan Year may elect to defer the receipt of a portion
of his Compensation during the Plan Year and contribute such amounts to the Plan as
Catch-Up Contributions. The Company shall pay the amount deducted from the
Participant’s Compensation to the Trustee promptly after the deduction is made.
The Committee shall determine after the end of each calendar year which Participant
Contributions were Catch-Up Contributions and which were 401(k) Contributions. See
sections 3.5 and 3.6 for instances in which Participant Contributions that would
normally be characterized as 401(k) Contributions are in fact characterized as
Catch-Up Contributions. Catch-Up Contributions shall be allocated to Participant
Contributions Accounts.
	 
	 	(ii)	 	Limitations on Catch-Up Contributions.






	 	(A)	 	Limit for Apache Plans. The sum of Catch-Up
Contributions to this Plan and similar deferrals under Code §414(v) to any
other plan maintained by the Company or an Affiliated Entity shall not exceed
the dollar limit in effect under Code §414(v)(2)(B)(i) in




Page 10 of 47 









 












	 	 	 	any calendar year. The Company shall inform the Committee if such limit has
been exceeded, and the excess amount allocated to this Plan. The excess
amount allocated to this Plan shall be reduced by any amounts returned
pursuant to any other provision of this Article. Any remaining excess
amount shall be returned to the Participant as soon as administratively
possible, and in no event later than April 15 of the calendar year after the
calendar year in which the excess occurred. Company Matching Contributions
attributable to amounts returned under this subparagraph shall be forfeited.
Unmatched Catch-Up Contributions shall be returned first. The amount
returned or forfeited shall be adjusted to reflect the net increase or
decrease in the net value of the Participant’s Account attributable thereto.
The Committee may use any reasonable method to allocate this adjustment.
	 
	 	(B)	 	Participant Limit. If the sum of the Catch-Up
Contributions to this Plan and similar deferrals under Code §414(v) to any
other plan exceed the dollar limit in effect under Code §414(v)(2)(B)(i) in a
calendar year, and the Participant is an Employee on the last day of the Plan
Year and informs the Committee of the amount of the excess allocated to this
Plan, then that amount will be reduced by any Catch-Up Contributions for that
calendar year that were returned pursuant to any other provision in this
Article and any remaining excess amount shall be returned to the Participant
as soon as administratively possible, and in no event later than April 15 of
the calendar year after the calendar year in which the excess occurred.
Company Matching Contributions attributable to amounts returned under this
subparagraph shall be forfeited. Unmatched Catch-Up Contributions shall be
returned first. The amount returned or forfeited shall be adjusted to
reflect the net increase or decrease in the net value of the Participant’s
Account attributable thereto. The Committee may use any reasonable method to
allocate this adjustment.






	 	(c)	 	Procedures. Participant Contributions shall be made according to rules
prescribed by the Committee that are consistent with the rules in this subsection.






	 	(i)	 	Authorization. Participant Contributions may only be made
after the Company has received authorization from a Participant to deduct such
contributions from his Compensation. Effective January 1, 2006, the Committee may
establish procedures whereby a new Participant will be automatically enrolled in
the Plan, and will make Participant Contributions at a certain level, unless he
affirmatively elects otherwise; the Participant shall be provided with a reasonable
opportunity of at least 30 days to elect a different rate of Participant
Contribution or no Participant Contribution. Any authorization or deemed
authorization may apply only to Compensation that is not then currently available
to the Participant. Such authorization or deemed authorization shall remain in
effect until revoked or changed by the Participant. If an Employee makes a
hardship withdrawal from his Participant Contributions Account under section 6.5,
his contribution rate shall be immediately reduced to 0%, and shall remain at 0%
for at least 6 months. To be effective, any authorization, change of
authorization, or notice of revocation must be filed with the Committee according
to such restrictions and requirements as the Committee prescribes. The Committee
shall establish procedures from time to time for Participants to change their
contribution elections, which procedures shall be communicated to Participants.
The Committee may establish different procedures for Participant Contributions from
different types of Compensation, such as bonuses. A Participant who also
participates in the NQ Plan may make a combined contribution election that applies
to both this Plan and the NQ Plan; once made, such combined elections are
irrevocable for the periods and the compensation described in the elections.
	 
	 	(ii)	 	Catch-Up Contributions. The Committee’s procedures for
Catch-Up Contributions shall allow all Participants who can make Catch-Up
Contributions the effective opportunity to make the same dollar amount of Catch-Up
Contributions for the calendar year.
	 
	 	(iii)	 	Inadequate Paycheck. If the amounts withheld from a
Participant’s paycheck (including, without limitation, loan repayments, Participant
Contributions, taxes, contributions to the NQ Plan, and premium payments for
various benefits) are greater than the paycheck, the Committee shall establish the
order in which the deductions shall be applied, with the result that 401(k)




Page 11 of 47 









 












	 	 	 	Contributions or Catch-Up Contributions may be reduced below what the Participant
had elected. The Committee’s procedures may also automatically increase a
Participant’s 401(k) Contributions or Catch-Up Contributions in subsequent pay
periods to make up for any missed contributions.






	 	(d)	 	Rollovers. The Plan may accept any rollover from or on behalf of a Covered
Employee, subject to the following rules. The Committee shall decide from time to time
which types of rollovers the Plan will accept, and the conditions under which the Plan
will accept them. A rollover may be comprised of a direct transfer of an eligible
rollover distribution from a qualified plan described in Code §401(a) (excluding
after-tax contributions), a qualified annuity plan described in Code §403(a) (excluding
after-tax contributions), an annuity contract described in Code §403(b) (excluding
after-tax contributions), or an eligible plan under Code §457(b) that is maintained by an
eligible employer described in Code §457(e)(1)(A) (which generally includes state or
local governments). A rollover may also be comprised of the portion of a distribution
from an individual retirement account or annuity described in Code §408(a) or §408(b)
that is eligible to be rolled over and that would otherwise be included in the Covered
Employee’s gross income. If the Plan accepts a contribution and subsequently determines
that the contribution did not satisfy the conditions for the Plan to accept it, the Plan
shall distribute such contribution, as well as the net increase or decrease in the net
value of the Trust Fund attributable to the contribution, to the Covered Employee as soon
as administratively practicable. All rollovers accepted under this subsection shall be
allocated to Rollover Accounts.






	3.3	 	Return of Contributions.






	 	(a)	 	Mistake of Fact. Upon the request of the Company, the Trustee shall return
to the Company, any Company Contribution made under a mistake of fact. The amount that
shall be returned shall not exceed the excess of the amount contributed (reduced to
reflect any decrease in the net worth of the appropriate Accounts attributable thereto)
over the amount that would have been contributed without the mistake of fact.
Appropriate reductions shall be made in the Accounts of Participants to reflect the
return of any contributions previously credited to such Accounts. If the Company so
requests, any contribution made under a mistake of fact shall be returned to the Company
within one year after the date of payment.
	 
	 	(b)	 	Non-Deductible Contributions. Upon the request of the Company, the Trustee
shall return to the Company, any Company Contribution or 401(k) Contribution that is not
deductible under Code §404. The Company shall pay any returned 401(k) Contribution to
the appropriate Participant or the Company’s NQ Plan, as appropriate, as soon as
administratively practicable, subject to any withholding. All contributions under the
Plan are expressly conditioned upon their deductibility for federal income tax purposes.
The amount that shall be returned shall be the excess of the amount contributed (reduced
to reflect any decrease in the net worth of the appropriate Accounts attributable
thereto) over the amount that would have been contributed if there had not been a mistake
in determining the deduction. Appropriate reductions shall be made in the Accounts of
Participants to reflect the return of any contributions previously credited to such
Accounts. Any contribution conditioned on its deductibility shall be returned within one
year after it is disallowed as a deduction.
	 
	 	(c)	 	Effect of Correction. A contribution shall be returned under this section
only to the extent that its return will not reduce the Account(s) of a Participant to an
amount less than the balance that would have been credited to the Participant’s
Account(s) had the contribution not been made.






	3.4	 	Limitation on Annual Additions.






	 	(a)	 	Limit. The Annual Additions to a Participant’s Account(s) in this Plan and
to his accounts in any other defined contribution plans maintained by the Company or an
Affiliated Entity for any Limitation Year shall not exceed in the aggregate the lesser of
(i) $40,000 (as adjusted by the Secretary of the Treasury), or (ii) 100% of the
Participant’s Compensation. The limit in clause (ii) shall not apply to any contribution
for medical benefits (within the meaning of Code §419A(f)(2)) after separation from
service that is treated as an Annual Addition.
	 
	 	(b)	 	Corrective Mechanism.




Page 12 of 47 









 












	 	(i)	 	Reduction in Annual Additions. A Participant’s Annual
Additions shall be reduced, to the extent necessary to satisfy the foregoing
limits, if the Annual Additions arose as a result of a reasonable error in
estimating Compensation, as a result of the allocation of forfeitures, or as a
result of other facts and circumstances as provided in the regulations under Code
§415.
	 
	 	(ii)	 	Order of Reduction, Multiple Plans. Apache also maintains the
Apache Corporation Money Purchase Retirement Plan, a money purchase pension plan.
The Participant’s Annual Additions shall be reduced, to the extent necessary, in
the following order. First, to the extent that the Annual Additions in a single
plan exceed the limits of subsection (a), the Annual Additions in that plan shall
be reduced, in the order specified in that plan, to the extent necessary to satisfy
the limits of subsection (a). Then, if the Participant has Annual Additions in more
than one plan and in the aggregate they exceed the limits of subsection (a), the
Annual Additions will be reduced as follows.






	 	(A)	 	If the Participant was eligible to participate in the NQ
Plan on the last day of the Plan Year in which the excess Annual Addition
occurred, the Annual Additions to the Apache Corporation Money Purchase
Pension Plan will be reduced before the Annual Additions to this Plan are
reduced.
	 
	 	(B)	 	If the Participant was not eligible to participate in the
NQ Plan on the last day of the Plan Year in which the excess Annual Addition
occurred, the Annual Additions to this Plan will be reduced before the Annual
Additions to the Apache Corporation Money Purchase Retirement Plan are
reduced.






	 	(iii)	 	Order of Reduction, This Plan. If the Participant was
eligible to participate in the NQ Plan on the last day of the Plan Year in which
the excess Annual Addition occurred, the Annual Additions to this Plan shall be
reduced in the following order: Company Discretionary Contributions; Company
Matching Contributions; 401(k) Contributions; then Catch-Up Contributions. If the
Participant was not eligible to participate in the NQ Plan on the last day of the
Plan Year in which the excess Annual Addition occurred, the Annual Additions to
this Plan shall be reduced in the following order: unmatched 401(k) Contributions;
unmatched Catch-Up Contributions; matched 401(k) Contributions and the
corresponding Company Matching Contributions; matched Catch-Up Contributions and
the corresponding Company Matching Contributions; then Company Discretionary
Contributions.
	 
	 	(iv)	 	Disposition of Excess Annual Additions. The Plan shall pay any
reduction in 401(k) Contributions (adjusted to reflect the net increase or decrease
in the net value of the Trust Fund attributable to the contributions) to the
Participant as soon as administratively practicable, subject to any withholding.
Any reduction of Company Contributions shall be placed in a suspense account in the
Trust Fund and used to reduce future Company Contributions to the Plan. The
following rules shall apply to such suspense account: (A) no further Company
Contributions may be made if the allocation thereof would be precluded by Code
§415; (B) any increase or decrease in the net value of the Trust Fund attributable
to the suspense account shall not be allocated to the suspense account, but shall
be allocated to the Accounts; and (C) all amounts held in the suspense account
shall be allocated as of each succeeding allocation date on which forfeitures may
be allocated pursuant to subsection 5.4(d) (and may be allocated more frequently if
the Committee so directs), until the suspense account is exhausted.






	3.5	 	Contribution Limits for Highly Compensated Employees (ADP Test).






	 	(a)	 	Limits on Contributions. Notwithstanding any provision in this Plan to the
contrary, the actual deferral percentage (“ADP”) test of Code §401(k)(3) shall be
satisfied. Code §401(k) and the regulations issued thereunder are hereby incorporated by
reference to the extent permitted by such regulations. In performing the ADP test for a
Plan Year, the Plan will use that Plan Year’s data for the Non-Highly Compensated
Employees.
	 
	 	(b)	 	Permissible Variations of the ADP Test. To the extent permitted by the
regulations under Code §401(m) and §401(k), 401(k) Contributions, QMACs, and QNECs may be
used to satisfy the ACP test of section 3.6 if they are not used to satisfy the ADP test.
The Committee may elect to exclude from




Page 13 of 47 









 












	 	 	 	the ADP test those Non-Highly Compensated Employees who, at the end of the Plan Year,
had not attained age 21 and/or whose Period of Service was less than one year.
	 
	 	(c)	 	Advanced Limitation on 401(k) Contributions or Company Matching
Contributions. The Committee may limit the 401(k) Contributions of any Highly
Compensated Employee (or any Employee expected to be a Highly Compensated Employee) at
any time during the Plan Year, with the result that his share of Company Matching
Contributions may be limited. This limitation may be made, if practicable, whenever the
Committee believes that the limits of this section or sections 3.4 or 3.6 will not be
satisfied for the Plan Year.
	 
	 	(d)	 	Corrections to Satisfy Test. If the ADP test is not satisfied for the Plan
Year, the Committee shall decide which one or more of the following methods shall be
employed to satisfy the ADP test. All corrections shall be accomplished if possible
before March 15 of the following Plan Year, and in no event later than 12 months after
the close of the Plan Year.






	 	(i)	 	The Committee may recommend to the Company and the Company may make
QNECs and/or QMACs to the Plan, pursuant to subsections 3.7(c) and 3.8(c).
	 
	 	(ii)	 	The Committee may recommend to the Company and the Company may
designate any Company Discretionary Contribution allocated to Non-Highly
Compensated Employees as QNECs, pursuant to subsection 3.7(b).
	 
	 	(iii)	 	The Committee may recommend to the Company and the Company may
designate any Company Matching Contributions allocated to Non-Highly Compensated
Employees as QMACs, pursuant to section 3.8(b).
	 
	 	(iv)	 	401(k) Contributions of Highly Compensated Employees may be
recharacterized as Catch-Up Contributions or returned to the Highly Compensated
Employee, without the consent of either the Highly Compensated Employee or his
Spouse, subject to the rules of subsection (f).






	 	(e)	 	Order of Correction. The method described in subsection (c) shall be
employed first, during the Plan Year. If that method is not used during the Plan Year,
or if the net effect of such method was insufficient for the ADP test to be satisfied,
the Company has the discretion to use any one or more of the methods described in
paragraphs (d)(i), (d)(ii), and (d)(iii). If the Company does not choose to make the
corrections described in paragraphs (d)(i), (d)(ii), and (d)(iii), or if such corrections
are insufficient to satisfy the ADP test, then the correction method described in
paragraph (d)(iv) shall be used.
	 
	 	(f)	 	Calculating the Amounts Returned or Recharacterized. If the ADP test is
not satisfied, and 401(k) Contributions are returned or recharacterized pursuant to
paragraph (d)(iv) above, the Committee shall determine the amount to be returned or
recharacterized and shall then allocate that amount among the Highly Compensated
Employees pursuant to Treasury Regulations. The correction for each Highly Compensated
Employee shall occur in the following order, to the extent necessary: 401(k)
Contributions shall be recharacterized as Catch-Up Contributions to the extent possible,
then unmatched 401(k) Contributions shall be returned to the Participant, then matched
401(k) Contributions shall be returned to the Participant and the corresponding Company
Matching Contribution shall be forfeited (unless the ACP test was performed before the
ADP test, and the Company Matching Contribution has already been returned to the
Participant pursuant to paragraph 3.6(c)(v)). The amount actually recharacterized or
returned to each Highly Compensated Employee shall be adjusted to reflect as nearly as
possible the actual increase or decrease in the net value of the Trust Fund attributable
to the correction through the business day immediately preceding the date as of which the
correction is processed.






	3.6	 	Contribution Limits for Highly Compensated Employees (ACP Test).






	 	(a)	 	Limits on Contributions. Notwithstanding any provision in this Plan to the
contrary, the actual contribution percentage (“ACP”) test of Code §401(m)(2) shall be
satisfied. Code §401(m) and the regulations issued thereunder are hereby incorporated by
reference to the extent permitted by such regulations. In performing the ACP test for a
Plan Year, the Plan will use that Plan Year’s data for the Non-Highly Compensated
Employees.




Page 14 of 47 









 












	 	(b)	 	Permissible Variations of the ACP Test. To the extent permitted by the
regulations under Code §401(m) and §401(k), 401(k) Contributions, QMACs, and QNECs may be
used to satisfy this test if not used to satisfy the ADP test of section 3.5. The
Committee may elect to exclude from the ACP test those Non-Highly Compensated Employees
who, at the end of the Plan Year, had not attained age 21 and/or whose Period of Service
was for less than one year.
	 
	 	(c)	 	Corrections to Satisfy Test. If the ACP test is not satisfied, the
Committee shall decide which one or more of the following methods shall be employed to
satisfy the ACP test. All corrections shall be accomplished if possible before March 15
of the following Plan Year, and in no event later than 12 months after the close of the
Plan Year.






	 	(i)	 	The Committee may recommend to the Company and the Company may make
QNECs or QMACs to the Plan, pursuant to subsections 3.7(c) and 3.8(c).
	 
	 	(ii)	 	The Committee may recommend to the Company and the Company may
designate any portion of its Company Discretionary Contributions as QNECs, pursuant
to subsection 3.7(b).
	 
	 	(iii)	 	The Committee may recommend to the Company and the Company may
designate any portion of its Company Matching Contributions as QMACs, pursuant to
subsection 3.8(b).
	 
	 	(iv)	 	The Committee may recommend to the Company and the Company may make
extra Company Matching Contributions to the Plan, pursuant to paragraph 3.1(b)(ii).
	 
	 	(v)	 	The non-vested Company Matching Contributions allocated to Highly
Compensated Employees as of any date during the Plan Year may be forfeited as of
the last day of the Plan Year, and the vested Company Matching Contributions
allocated to any Highly Compensated Employee for the Plan Year may be paid to such
Highly Compensated Employee, without the consent of either the Highly Compensated
Employee or his Spouse, subject to the rules of subsection (e).
	 
	 	(vi)	 	Those 401(k) Contributions that are taken into account for this ACP
test for any Highly Compensated Employee may be returned to such Highly Compensated
Employee, without the consent of either the Highly Compensated Employee or his
Spouse, subject to the rules of subsection (e).






	 	(d)	 	Order of Correction. The method described in subsection 3.5(c) shall be
employed first, during the Plan Year. If that method is not used during the Plan Year,
or if the net effect of such method was insufficient for the ACP test to be satisfied,
the Company has the discretion to use any one or more of the methods described in
paragraphs (c)(i), (c)(ii), (c)(iii) and (c)(iv). If the Company does not choose to make
the corrections described in paragraphs (c)(i), (c)(ii), (c)(iii), and (c)(iv) or if such
corrections are insufficient to satisfy the ACP test, then the correction methods
described in paragraphs (c)(v) and (c)(vi) shall be used, as described in subsection (e).
	 
	 	(e)	 	Calculating the Corrective Reduction. If the correction methods described
in paragraphs (c)(v) and (c)(vi) are to be used, the Committee shall determine the amount
of the correction and then allocate that amount among the Highly Compensated Employees
pursuant to Treasury Regulations. The correction under paragraph (c)(v) shall be
accomplished by returning all of that Plan Year’s vested Company Matching Contributions
to the Highly Compensated Employee before any unvested Company Matching Contributions are
forfeited. The correction under paragraph (c)(vi) shall be accomplished in the following
order, to the extent necessary: 401(k) Contributions shall be recharacterized as
Catch-Up Contributions to the extent possible, then unmatched 401(k) Contributions shall
be returned to the Participant, then matched 401(k) Contributions shall be returned to
the Participant and the corresponding Company Matching Contribution shall be returned to
the Participant if vested and forfeited if not vested. If the corrections under
paragraphs (c)(v) and (c)(vi) are done in tandem, the correction shall be accomplished in
the following order, to the extent necessary: 401(k) Contributions shall be
recharacterized as Catch-Up Contributions to the extent possible, then unmatched 401(k)
Contributions shall be returned to the Participant, then the vested Company Matching
Contribution shall be paid to the Participant, then matched 401(k) Contributions shall be
returned to the Participant and the corresponding unvested Company Matching Contribution
shall be forfeited. The amount of the correction shall be adjusted to reflect as nearly
as possible the actual




Page 15 of 47 









 












	 	 	 	increase or decrease in the net value of the Trust Fund attributable to the correction
through the business day immediately preceding the date as of which the correction is
processed.






	3.7	 	QNECs.






	 	(a)	 	Time of Payment. QNECs shall be paid to the Plan no later than 12 months
after the close of the Plan Year to which they relate.
	 
	 	(b)	 	Source. The Company may designate as a QNEC all or any portion of the
Company Discretionary Contribution that is allocated to Non-Highly Compensated Employees.
The designation of Company Contributions as QNECs shall be made before such
contributions are made to the Trust Fund. If the Company inadvertently designates any
Highly Compensated Employee’s allocation as a QNEC, the designation shall be ineffective.
	 
	 	(c)	 	Allocation. The Company may make a contribution to the Plan, in addition
to the Company Discretionary Contribution, that the Company designates as a QNEC. This
subsection applies to such contributions. As of the last day of each Plan Year, the
Committee shall allocate such QNECs for such Plan Year (including such forfeitures
occurring during such Plan Year that are treated as QNECs pursuant to subsection 5.4(d))
to the Participant Contributions Accounts of those Non-Highly Compensated Employees who
were Covered Employees on the last day of the Plan Year, as follows:






	 	(i)	 	QNECs shall be allocated to the Participant Contributions Account of
the Non-Highly Compensated Employee with the least Compensation, until either the
QNECs are exhausted or the Non-Highly Compensated Employee has received the maximum
QNEC allocation that can be taken into account in the ADP test or the ACP test,
whichever is applicable.
	 
	 	(ii)	 	Any remaining QNECs shall be allocated to the Participant Contributions
Account of the Non-Highly Compensated Employee with the next lowest Compensation,
until either the QNECs are exhausted or the Non-Highly Compensated Employee has
received the maximum QNEC allocation that can be taken into account in the ADP test
or the ACP test, whichever is applicable.
	 
	 	(iii)	 	The procedure in paragraph (ii) shall be repeated until all QNECs have
been allocated.






	 	(d)	 	Coordination with Top-Heavy Rules. All QNECs shall be treated in the same
manner as a Company Discretionary Contribution for purposes of section 12.4.






	3.8	 	QMACs.






	 	(a)	 	Time of Payment. QMACs shall be paid to the Plan no later than 12 months
after the close of the Plan Year to which they relate.
	 
	 	(b)	 	Source. The Company may designate as a QMAC all or any portion of the
Company Matching Contributions that is allocated to Non-Highly Compensated Employees.
The designation of Company Contributions as QMACs shall be made before such contributions
are made to the Trust Fund. If the Company inadvertently designates any Highly
Compensated Employee’s allocation as a QMAC, the designation shall be ineffective.
	 
	 	(c)	 	Allocation. The Company may make a contribution to the Plan, in addition
to the Company Matching Contribution, that the Company designates as a QMAC. This
subsection applies to such contributions. As of the last day of each Plan Year, the
Committee shall allocate such QMACs for such Plan Year (including such forfeitures
occurring during such Plan Year that are treated as QMACs pursuant to subsection 5.4(d))
to the Participant Contributions Accounts of those Non-Highly Compensated Employees who
were Covered Employees on the last day of the Plan Year and who made Participant
Contributions for the Plan Year, as follows:






	 	(i)	 	QMACs shall be allocated to the Participant Contributions Account of
the Non-Highly Compensated Employee with the least Compensation, until either the
QMACs are exhausted or the Non-Highly Compensated Employee has received the maximum
QMAC allocation that can be taken into account in the ADP test or the ACP test,
whichever is applicable.
	 
	 	(ii)	 	Any remaining QMACs shall be allocated to the Participant Contributions
Account of the Non-Highly Compensated Employee with the next lowest Compensation,
until either the QMACs are




Page 16 of 47 









 












	 	 	 	exhausted or the Non-Highly Compensated Employee has received the maximum QMAC
allocation that can be taken into account in the ADP test or the ACP test,
whichever is applicable.
	 
	 	(iii)	 	The procedure in paragraph (ii) shall be repeated until all QMACs have
been allocated.






	 	(d)	 	Coordination with Top-Heavy Rules. All QMACs shall be treated in the same
manner as a Company Discretionary Contribution for purposes of section 12.4.





ARTICLE IV

Interests in the Trust Fund





	4.1	 	Participants’ Accounts.
	 
	 	 	The Committee shall establish and maintain separate Accounts in the name of each Participant,
but the maintenance of such Accounts shall not require any segregation of assets of the Trust
Fund. Each Account shall contain the contributions specified below and the increase or
decrease in the net worth of the Trust Fund attributable to such contributions.






	 	(a)	 	Participant Contributions Account. A Participant Contributions Account
shall be established for each Participant who makes Participant Contributions or who
receives an allocation of QNECs or QMACs. The Committee may elect to establish
subaccounts for the different types of contributions allocated to this Account.
	 
	 	(b)	 	Company Contributions Account. A Company Contributions Account shall be
established for each Participant who receives an allocation of Company Discretionary
Contributions that are not designated as QNECs or an allocation of Company Matching
Contributions that are not designated as QMACs. The Committee may elect to establish
subaccounts for the different types of contributions allocated to this Account.
	 
	 	(c)	 	Rollover Account. A Rollover Account shall be established for each
Participant who makes a Rollover Contribution.






	4.2	 	Valuation of Trust Fund.






	 	(a)	 	General. The Trustee shall value the assets of the Trust Fund at least
annually as of the last day of the Plan Year, and as of any other dates determined by the
Committee, at their current fair market value and determine the net worth of the Trust
Fund. In addition, the Committee may direct the Trustee to have a special valuation of
the assets of the Trust Fund when the Committee determines, in its sole discretion, that
such valuation is necessary or appropriate or in the event of unusual market fluctuations
of such assets. Such special valuation shall not include any contributions made by
Participants since the preceding Valuation Date, any Company Contributions for the
current Plan Year, or any unallocated forfeitures. The Trustee shall allocate the
expenses of the Trust Fund occurring since the preceding Valuation Date, pursuant to
section 9.2, and then determine the increase or decrease in the net worth of the Trust
Fund that has occurred since the preceding Valuation Date. The Trustee shall determine
the share of the increase of decrease that is attributable to the non-separately
accounted for portion of the Trust Fund and to any amount separately accounted for, as
described in subsections (b) and (c).
	 
	 	(b)	 	Mandatory Separate Accounting. The Trustee shall separately account for
(i) any individually directed investments permitted under section 9.3, and (ii) amounts
subject to a Domestic Relations Order.
	 
	 	(c)	 	Permissible Separate Accounting. The Trustee may separately account for
the following amounts to provide a more equitable allocation of any increase or decrease
in the net worth of the Trust Fund:






	 	(i)	 	the distributable amount of a Participant, pursuant to section 6.7,
including any amount distributable to an Alternate Payee or to a beneficiary of a
deceased Participant; and
	 
	 	(ii)	 	Company Matching Contributions made since the preceding Valuation Date;
	 
	 	(iii)	 	Participant Contributions that were received by the Trustee since the
preceding Valuation Date;




Page 17 of 47 









 












	 	(iv)	 	Company Matching Contributions and 401(k) Contributions of Highly
Compensated Employees that may need to be distributed or forfeited to satisfy the
ADP and ACP tests of sections 3.5 or 3.6;
	 
	 	(v)	 	Rollovers that were received by the Trustee since the preceding
Valuation Date;
	 
	 	(vi)	 	Any other amounts for which separate accounting will provide a more
equitable allocation of the increase or decrease in the net worth of the Trust
Fund.






	4.3	 	Allocation of Increase or Decrease in Net Worth.
	 
	 	 	The Committee shall, as of each Valuation Date, allocate the increase or decrease in the net
worth of the Trust Fund that has occurred since the preceding Valuation Date between the
non-separately accounted for portion of the Trust Fund and the amounts separately accounted
for that are identified in subsections 4.2(b) and 4.2(c). The increase or decrease
attributable to the non-separately accounted for portion of the Trust Fund shall be allocated
among the appropriate Accounts in the ratio that the dollar value of each such Account bore to
the aggregate dollar value of all such Accounts on the preceding Valuation Date after all
allocations and credits made as of such date had been completed. The Committee shall then
allocate any amounts separately accounted for (including the increase or decrease in the net
worth of the Trust Fund attributable to such amounts) to the appropriate Account(s) if such
separate accounting is no longer necessary.





ARTICLE V

Amount of Benefits





	5.1	 	Vesting Schedule.
	 
	 	 	A Participant shall have a fully vested and nonforfeitable interest in all his Account(s) upon
his Normal Retirement Age if he is an Employee on such date, upon his death while an Employee
or while on an approved leave of absence from the Company or an Affiliated Entity, or upon his
termination of employment with the Company or an Affiliated Entity because of a Disability.
In all other instances a Participant’s vested interest shall be calculated according to the
following rules.






	 	(a)	 	Participant Contributions Account and Rollover Account. A Participant
shall be fully vested at all times in his Participant Contributions Account and his
Rollover Account.
	 
	 	(b)	 	Company Contributions Account. A Participant shall become fully vested in
his Company Contributions Account in accordance with the following schedule:





	 	 	 	 	 
	Period of Service	 	Vesting Percentage
	Less than 1 year
	 	 	0	%
	At least 1 year, but less than 2 years
	 	 	20	%
	At least 2 years, but less than 3 years
	 	 	40	%
	At least 3 years, but less than 4 years
	 	 	60	%
	At least 4 years, but less than 5 years
	 	 	80	%
	5 or more years
	 	 	100	%







	 	(c)	 	Change of Control. The Company Contributions Accounts of all Participants
shall be fully vested as of the effective date of a “change in control.” For purposes of
this subsection, a “change of control” shall mean the event occurring when a person,
partnership, or corporation, together with all persons, partnerships, or corporations
acting in concert with each person, partnership, or corporation, or any or all of them,
acquires more than 20% of Apache’s outstanding voting securities; provided that a change
of control shall not occur if such persons, partnerships, or corporations acquiring more
than 20% of Apache’s voting securities is solicited to do so by Apache’s board of
directors, upon its own initiative, and such persons, partnerships, or corporations have
not previously proposed to acquire more than 20% of Apache’s voting securities in an
unsolicited offer made either to Apache’s board of directors or directly to the
stockholders of Apache.
	 
	 	(d)	 	Plan Termination. A Company Contributions Account shall be fully vested as
described in section 10.1, which discusses the full or partial termination of the Plan or
the complete discontinuance of contributions.




Page 18 of 47 









 












	5.2	 	Vesting After a Lapse in Apache Employment.






	 	(a)	 	Separate Accounts. If a Participant is rehired before incurring a one-year
Lapse in Apache Employment, he shall have only one Company Contributions Account, and its
vested percentage shall be determined under section 5.1. If a Participant is rehired
after incurring a one-year Lapse in Apache Employment, he shall have two Company
Contribution Accounts, an “old” Company Contributions Account for the contributions from
his earlier episode of employment, and a “new” Company Contributions Account for his
later episode of employment. If both the old and new Company Contributions Accounts are
fully vested, they shall be combined into a single Company Contributions Account.
	 
	 	(b)	 	Vesting of New Account. This subsection is effective January 1, 2006. The
vested percentage of the new Company Contributions Account shall be determined based on
all the Participant’s Periods of Service.
	 
	 	(c)	 	Vesting of Old Account. If the Participant’s Lapse in Apache Employment
was for five years or longer, the vested percentage of the old Company Contributions
Account shall be based solely on the Participant’s Period of Service from his first
episode of employment. If the Participant’s Lapse in Apache Employment was for less than
five years, the vested percentage of the old Company Contributions Account shall be
determined by aggregating his Periods of Service from both episodes of employment.






	5.3	 	Calculating Service.






	 	(a)	 	Period of Service.






	 	(i)	 	General. A Participant’s Period of Service prior to January 1,
2005 shall be determined according to the provisions of the Plan in effect when the
service was rendered. A Participant’s Period of Service begins on the date he
first begins to perform duties as an Employee for which he is entitled to payment,
and ends on his Termination From Service Date. In addition, a Participant’s Period
of Service also includes the period between his Termination From Service Date and
the day he again begins to perform duties for the Company or an Affiliated Entity
for which he is entitled to payment, but only if such period is less than one year
in duration.
	 
	 	(ii)	 	Additional Rules. The service-crediting provisions in this
paragraph are more generous than required by the Code.






	 	(A)	 	Leased Employees. For vesting purposes only, the
Plan shall treat an individual as an Employee if he satisfies all the
requirements specified in Code §414(n)(2) for being a leased employee of
Apache’s or an Affiliated Entity’s, except for the requirement of having
performed such services for at least one year.
	 
	 	(B)	 	Approved Leave. If the Employee is absent from the
Company or Affiliated Entity for more than one year because of an approved
leave of absence (either with or without pay) for any reason (including, but
not limited to, jury duty) and the Employee returns to work at or prior to
the expiration of his leave of absence, no Termination From Service Date will
occur during the leave of absence.
	 
	 	(C)	 	Servicemen. See Article XV for special provisions
that apply to Servicemen.
	 
	 	(D)	 	Corporate Transactions. See Appendix C for
instances in which a new Employee’s Period of Service includes his prior
employment with another company.
	 
	 	(E)	 	Contractors. If an “eligible contractor” becomes
an Employee, his Period of Service shall include his previous continuous
service as an eligible contractor, excluding any service provided before
2003. An “eligible contractor” is an individual who (A) performed services
for Apache or an Affiliated Entity on a substantially full-time basis in the
capacity of an independent contractor (for federal income tax purposes); (B)
became an Employee within a month of ceasing to be an independent contractor
working full-time for Apache or an Affiliated Entity; and (C) notified the
Plan of his prior service as an independent contractor within two months of
becoming an Employee (or, if later, by February 28, 2006 or other deadline
established by the Committee).




Page 19 of 47 









 












	 	(b)	 	Termination From Service Date.






	 	(i)	 	Usual Rule. If the Employee quits, is discharged, retires, or
dies, his Termination From Service Date occurs on the last day the Employee
performs services for the Company or an Affiliated Entity, except for an Employee
who incurs a Disability, in which case his Termination From Service Date does not
occur, even if he quits, until the earlier of the one-year anniversary of the date
his Disability or the date he recovers from his Disability.
	 
	 	(ii)	 	Other Absences. If an Employee is absent from the Company and
Affiliated Entities for any reason other than a quit, discharge, or retirement, his
“Termination From Service Date” is the earlier of (A) the date he quits, is
discharged, retires, or dies, or (B) one year from the date the Employee is absent
from the Company or Affiliated Entity for any other reason (such as vacation,
holiday, sickness, disability, leave of absence, or temporary lay-off), with the
following exception. If the Employee is absent from the Company or Affiliated
Entity because of parental leave (which includes only the pregnancy of the
Employee, the birth of the Employee’s child, the placement of a child with the
Employee in connection with adoption of such child by the Employee, or the caring
for such child immediately following birth or placement) on the first anniversary
of the day the Employee was first absent, his Termination From Service Date does
not occur until the second anniversary of the day he was first absent (and the
period between the first and second anniversaries of the day he was first absent
shall not be counted in his Period of Service).






	 	(c)	 	Lapse in Apache Employment. A Lapse in Apache Employment means the period
commencing on an individual’s Termination from Service Date and ending on the date he
again begins to perform services as an Employee.






	5.4	 	Forfeitures.






	 	(a)	 	Exceptions to the Vesting Rules. The following rules supersede the vesting
rules of section 5.1.






	 	(i)	 	Excess Annual Additions. Annual Additions to a Participant’s
Accounts and any increase or decrease in the net worth of the Participant’s
Accounts attributable to such Annual Additions may be reduced to satisfy the limits
described in section 3.4. Any reduction shall be used as specified in section 3.4.
	 
	 	(ii)	 	Excess Participant Contribution. Company Matching
Contributions and any increase or decrease in the net worth of the Account(s)
attributable to such contributions may be forfeited as of the last day of the Plan
Year if the Participant Contribution that they matched was returned under paragraph
3.2(a)(ii) or 3.2(b)(ii) or subsection 3.5(d) or 3.6(c). Any such forfeiture shall
be used as specified in subsection (d).
	 
	 	(iii)	 	Missing Individuals. A missing individual’s vested Accounts
may be forfeited as of the last day of any Plan Year, as provided in section 13.12.
Any such forfeiture shall be used as specified in subsection (d).
	 
	 	(iv)	 	Excess Match. Company Matching Contributions that would
violate Code §401(a)(17), and any increase or decrease in the net worth of the
Account(s) attributable to such contributions, may be forfeited as specified in
subsection 3.1(b). Any such reduction shall be used as specified in subsection
3.1(b).






	 	(b)	 	Regular Forfeitures. A Participant’s non-vested interest in his Company
Contributions Account shall be forfeited at the end of the Plan Year in which he
terminates employment. Any such forfeiture shall be used as specified in subsection (d).
	 
	 	(c)	 	Restoration of Forfeitures.






	 	(i)	 	Missing Individuals. The forfeiture of a missing individual’s
Account(s), as described in section 13.12, shall be restored to such individual if
the individual makes a claim for such amount.
	 
	 	(ii)	 	Regular Forfeitures.




Page 20 of 47 









 












	 	(A)	 	Rehire Within 5 Years. If a Participant is rehired
before incurring a five-year Lapse in Apache Employment, and the Participant
has received a distribution of his entire vested interest in his Company
Contributions Account (with the result that the Participant forfeited his
non-vested interest in such Account), then the exact amount of the forfeiture
shall be restored to the Participant’s Account. All the rights, benefits,
and features available to the Participant when the forfeiture occurred shall
be available with respect to the restored forfeiture. If such a Participant
again terminates employment prior to becoming fully vested in his Company
Contributions Account, the vested portion of his Company Contributions
Account shall be determined by applying the vested percentage determined
under section 5.1 to the sum of (x) and (y), then subtracting (y) from such
sum, where: (x) is the value of the Participant’s Company Contributions
Account as of the Valuation Date immediately following his most recent
termination of employment; and (y) is the amount previously distributed to
the Participant on account of the prior termination of employment.
	 
	 	(B)	 	Rehire After 5 Years. If a Participant is rehired
after incurring a five-year Lapse in Apache Employment, then no amount
forfeited from his Company Contributions Account shall be restored to that
Account.






	 	(iii)	 	Method of Forfeiture Restoration. Forfeitures that are
restored shall be accomplished by an allocation of the forfeitures under subsection
(d) or by a special Company Contribution pursuant to paragraph 3.1(c)(i).






	 	(d)	 	Use of Forfeitures. The Committee shall decide how forfeitures are used.
Forfeitures may be used (i) to restore Accounts as described in subsection (c), (ii) to
pay those expenses of the Plan that are properly payable from the Trust Fund and that are
not paid by the Company or Account Owners or charged to Accounts, or (iii) as any Company
Contribution.






	5.5	 	Transfers — Portability.
	 
	 	 	If any other employer adopts this or a similar profit sharing plan and enters into a
reciprocal agreement with the Company that provides that (a) the transfer of a Participant
from such employer to the Company (or vice versa) shall not be deemed a termination of
employment for purposes of the plans, and (b) service with either or both employers shall be
credited for purposes of vesting under both plans, then the transferred Participant’s Account
shall be unaffected by the transfer, except, if deemed advisable by the Committee, it may be
transferred to the trustee of the other plan.





ARTICLE VI

Distribution of Benefits





	6.1	 	Beneficiaries.






	 	(a)	 	Designating Beneficiaries. Each Account Owner shall file with the
Committee a designation of the beneficiaries and contingent beneficiaries to whom the
distributable amount (determined pursuant to section 6.2) shall be paid in the event of
the Account Owner’s death. In the absence of an effective beneficiary designation as to
any portion of the distributable amount after a Participant dies, such amount shall be
paid to the Participant’s surviving Spouse, or, if none, to his estate. In the absence
of an effective beneficiary designation as to any portion of the distributable amount
after any non-Participant Account Owner dies, such amount shall be paid to the Account
Owner’s estate. The Account Owner may change a beneficiary designation at any time and
without the consent of any previously designated beneficiary.
	 
	 	(b)	 	Special Rule for Married Participants. If the Account Owner is a married
Participant, his Spouse shall be the sole beneficiary unless the Spouse has consented to
the designation of a different beneficiary. To be effective, the Spouse’s consent must
be in writing, witnessed by a notary public, and filed with the Committee. Any spousal
consent shall be effective only as to the Spouse who signed the consent.
	 
	 	(c)	 	Special Rule for Divorces. If an Account Owner has designated his spouse
as a primary or contingent beneficiary, and the Account Owner and spouse later divorce
(or their marriage is annulled), then the former spouse will be treated as having
pre-deceased the Account Owner for purposes of interpreting a




Page 21 of 47 









 












	 	 	 	beneficiary designation form completed prior to the divorce or annulment. This
subsection will apply only if the Committee is informed of the divorce or annulment
before payment to the former spouse is authorized.
	 
	 	(d)	 	Disclaimers. Any individual or legal entity who is a beneficiary may
disclaim all or any portion of his interest in the Plan, provided that the disclaimer
satisfies the requirements of Code §2518(b) and applicable state law. The legal guardian
of a minor or legally incompetent person may disclaim for such person. The personal
representative (or the individual or legal entity acting in the capacity of the personal
representative according to applicable state law) may disclaim on behalf of a beneficiary
who has died. The amount disclaimed shall be distributed as if the disclaimant had
predeceased the individual whose death caused the disclaimant to become a beneficiary.






	6.2	 	Consent.






	 	(a)	 	General. Except for distributions identified in subsection (b),
distributions may be made only after the appropriate consent has been obtained under this
subsection. Distributions to a Participant or to a beneficiary (other than a beneficiary
of a deceased Alternate Payee) shall be made only with the Participant’s or beneficiary’s
consent to the time of distribution. Distributions to an Alternate Payee or his
beneficiary shall be made as specified in the QDRO and in accordance with section 13.9.
To be effective, the consent must be filed with the Committee according to the procedures
adopted by the Committee, within 180 days before the distribution is to commence. A
consent once given shall be irrevocable after the distribution has been processed.
	 
	 	(b)	 	Exceptions to General Rule. Consent is not required for the following
distributions:






	 	(i)	 	Corrective distributions under Article III that are returned to the
Participant because the contribution is not deductible by the Company or because
the contribution would exceed the limits of Code §401(a)(17), §415(c)(1), §402(g),
§401(k)(3), §401(m)(2), §401(m)(9), §414(v)(2)(B)(i), or any other limitation of
the Code;
	 
	 	(ii)	 	Distributions required to comply with Code §401(a)(9);
	 
	 	(iii)	 	Cashouts of small Accounts, as described in subsection 6.6(d) or
paragraphs 6.6(e)(i) or 13.9(f)(ii);
	 
	 	(iv)	 	Distributions required to comply with Code §401(a)(14);
	 
	 	(v)	 	Distributions of invalid rollovers pursuant to subsection 3.2(d);
	 
	 	(vi)	 	Distributions upon Plan termination pursuant to section 10.3; and
	 
	 	(vii)	 	Distributions that must occur by a deadline specified in the Plan.






	6.3	 	Distributable Amount.
	 
	 	 	The distributable amount of an Account Owner’s Account(s) is the vested portion of the
Account(s) (as determined by Article V) as of the Valuation Date coincident with or next
preceding the date distribution is made, reduced by (a) any amount that is payable to an
Alternate Payee pursuant to section 13.9, (b) any amount withdrawn since such Valuation Date,
and (c) the outstanding balance of any loan under Article VII. Furthermore, the Committee
shall temporarily suspend or limit distributions (by reducing the distributable amount), as
explained in subsection 13.9, when the Committee is informed that a Domestic Relations Order
affecting the Participant’s Accounts is or may be in the process of becoming QDRO, while the
Committee has suspended withdrawals because it believes that the Plan may have a cause of
action against the Participant, or when the Plan has notice of a lien or other claim against
the Participant.
	 
	6.4	 	Manner of Distribution.






	 	(a)	 	General. The distributable amount shall be paid in a single payment,
except as otherwise provided in the remainder of this section. Distributions shall be in
the form of cash except to the extent that an Account is invested in a fund containing
primarily Company Stock, the distributee may elect to receive a distribution of whole shares of Company Stock. Fractional shares of Company Stock shall be converted to and
paid in cash.




Page 22 of 47 









 












	 	(b)	 	Partial Withdrawals and Installments. Withdrawals are available to
Employees as specified in section 6.5 and to those Employees over 701/2 who are
Five-Percent Owners, as described in paragraph 6.6(c)(ii). Annual installments are
available to beneficiaries as described in subsection 6.6(e).
	 
	 	(c)	 	Grandfather Rules. Installments were a distribution option under the Plan
until June 30, 2001. Any Account Owner who could receive a distribution before July 1,
2001 and who elected before July 1, 2001 to receive the distribution in the form of
installments shall receive the benefit so elected. An Account Owner who elected
installments may elect to accelerate any or all remaining installment payments.






	6.5	 	In-Service Withdrawals.
	 
	 	 	An Employee may withdraw amounts from his Accounts only as provided in this section. An
Employee may make withdrawals as follows.






	 	(a)	 	Withdrawals for Employees Age 591/2 or Older. An Employee who has attained
age 591/2 may at any time thereafter withdraw any portion of his Participant Contributions
Account and any vested portion of his Company Contributions Account. The minimum
withdrawal is $1,000 or the vested Account balance, whichever is less. Only two
withdrawals are permitted during each Plan Year under this subsection. If the Employee
is not fully vested in his Company Contributions Account at the time of a withdrawal
under this subsection, the rules of subparagraph 5.4(c)(ii)(A) shall be applied when
determining the vested portion of the Company Contributions Account at any time
thereafter.
	 
	 	(b)	 	Rollover Account. An Employee may withdraw all or any portion of his
Rollover Account at any time. The minimum withdrawal is $1,000 or the Rollover Account
balance, whichever is less. Only two withdrawals from the Rollover Account are permitted
during each Plan Year.
	 
	 	(c)	 	Participant Contributions Account. An Employee may withdraw all or any
portion of his Participant Contributions, provided that the Employee has an immediate and
heavy financial need, as defined in paragraph (i), the withdrawal is needed to satisfy
the financial need, as explained in paragraph (ii), and the amount of the withdrawal does
not exceed the limits in paragraph (iii).






	 	(i)	 	Financial Need. The following expenses constitute an immediate
and heavy financial need: (A) expenses for or necessary to obtain medical care
that would be deductible by the Employee under Code §213(d) (determined without
regard to whether the expenses exceed 7.5% of adjusted gross income); (B) costs
directly related to the purchase of a principal residence of the Employee
(excluding mortgage payments); (C) payment of tuition, related educational fees,
and room and board expenses for up to the next 12 months of post-secondary
education of the Employee or the Employee’s Spouse or the Employee’s children or
dependents (within the meaning of Code §152, without regard to Code §152(b)(1),
§152(b)(2), and §152(d)(1)(B)); (D) payments necessary to prevent the Employee from
being evicted from his or her principal residence; (E) payments necessary to
prevent the mortgage on the Employee’s principal residence from being foreclosed;
(F) payment of burial or funeral expenses for the Employee’s deceased parent,
Spouse, child or other dependent (within the meaning of Code §152, without regard
to Code §152(b)(1), §152(b)(2), and §152(d)(1)(B)); (G) expenses for the repair of
damage to the Employee’s principal residence that would qualify for the casualty
deduction under Code §165 (determined without regard to whether the loss exceeds
10% of adjusted gross income); and (H) any other expense that, under IRS guidance
of general applicability, is deemed to be on account of an immediate and heavy
financial need. In addition, the Committee may determine, based on a review of all
relevant facts and circumstances, that a particular expense or series of expenses
of the Employee constitutes an immediate and heavy financial need. In addition, if
any expense or series of expenses would constitute an immediate and heavy financial
need if it occurred with respect to the Participant’s Spouse or dependent (within
the meaning of Code §152), it shall constitute an immediate an immediate an heavy
financial need if it occurs with respect to the Participant’s beneficiary
(determined pursuant to section 6.1).
	 
	 	(ii)	 	Satisfaction of Need. The withdrawal is deemed to be needed to
satisfy the Employee’s financial need if (A) the Employee has obtained all
withdrawals and all non-taxable loans available from the Company’s and any
Affiliated Entities’ plans of deferred compensation, qualified plans, stock
options, stock purchase plans, and similar plans, and (B) for a period of at




Page 23 of 47 









 












	 	 	 	least 6 months from the date the Employee receives the withdrawal, he ceases to
make Participant Contributions and elective contributions to all plans of deferred
compensation, qualified plans, stock options, stock purchase plans, and similar
plans maintained by the Company or any Affiliated Entity.
	 
	 	(iii)	 	Maximum Withdrawal. An Employee may not withdraw more than
the sum of the amount needed to satisfy his financial need and any taxes and
penalties reasonably anticipated to result from the withdrawal. An Employee may
not withdraw any amount in excess of his Participant Contributions unless he has
attained age 591/2.






	 	(d)	 	Compliance with Code §401(a)(9). See paragraph 6.6(b)(ii) for the required
distributions to a Five-Percent Owner who is age 701/2 or older.
	 
	 	(e)	 	Form of Payment of Withdrawal. Withdrawals under subsection (c) shall be
in cash. Withdrawals under subsections (a) and (b) shall be in cash, except that any
portion of a Participant’s Accounts that is invested in Company Stock may, at the
election of the Participant made at the time that notice of withdrawal is made to the
Committee, be withdrawn in the form of whole shares of Company Stock.
	 
	 	(f)	 	Withdrawal Rules. An Employee may not withdraw any amount under this
section that has been borrowed or that is subject to a QDRO. The Committee shall
temporarily suspend or limit withdrawals under this section, as explained in section
13.9, when the Committee is informed that a QDRO affecting the Employee’s Accounts is in
process or may be in process. The Committee shall issue such rules as to the frequency
of withdrawals, and withdrawal procedures, as it deems appropriate. The Committee may
postpone the withdrawal until after the next Valuation Date. The Committee may have a
special valuation of the Trust Fund performed before a withdrawal is permitted. The Plan
may charge a fee for the withdrawal as well as a fee for having a special valuation
performed, as determined by the Committee in its sole discretion.






	6.6	 	Time of Distribution.






	 	(a)	 	Earliest Date of Distribution. Unless an earlier distribution is permitted
by section 6.5 (relating to in-service withdrawals), the earliest date that a Participant
may elect to receive a distribution is the date of his Termination of Employment or the
date he incurs a Disability. This provision will always result in a distribution date
that precedes the latest date of distribution specified in Code §401(a)(14). For
purposes of Code §401(a)(14), if a Participant does not affirmatively elect a
distribution, he shall be deemed to have elected to defer the distribution to a later
date.
	 
	 	(b)	 	Latest Date of Distribution.






	 	(i)	 	Former Employees. A Participant who is not an Employee shall
receive a single payment of his distributable amount by his Required Beginning
Date. If a Five-Percent Owner terminates employment after his Required Beginning
Date, the Plan shall distribute the entire distributable amount to him as soon as
administratively practicable after the termination of employment.
	 
	 	(ii)	 	Current Employees. An Employee who is not a Five-Percent Owner
is not required to receive any distributions under this subsection. An Employee
who is a Five-Percent Owner shall receive annual distributions of at least the
minimum amount required to be distributed pursuant to Code §401(a)(9), which shall
be calculated by using only the Participant’s life expectancy, which shall be
recalculated each year. A Five-Percent Owner may request that his first minimum
required distribution be distributed in the calendar year preceding his Required
Beginning Date; the Committee shall comply with this request if administrating
practicable to do so.






	 	(c)	 	Small Amounts.






	 	(i)	 	$1000 or Less. If the aggregate value of the nonforfeitable
portion of a Participant’s Accounts is $1,000 or less on any date after his
Termination of Employment, the Participant shall receive a single payment of the
distributable amount as soon as practicable, provided that the aggregate value is
$1,000 or less when the distribution is processed.
	 
	 	(ii)	 	$1000 to $5000. If paragraph (i) does not apply and the
aggregate value of the nonforfeitable portion of a Participant’s Accounts, ignoring
his Rollover Account, is $5,000 or less on any date




Page 24 of 47 









 












	 	 	 	after his Termination of Employment, then as soon as practicable the Plan shall
pay the distributable amount to an individual retirement account or annuity within
the meaning of Code §408(a) or §408(b) (collectively, an “IRA”) for the
Participant, unless the Participant affirmatively elects to receive the
distribution directly or to have it paid in a direct rollover under section 6.7.
The Committee shall select the trustee or custodian of the IRA as well as how the
IRA shall be invested initially. The Plan shall notify the Participant (A) that
the distribution has been made to an IRA and can be transferred to another IRA,
(B) of the identity and contact information of the trustee or custodian of the IRA
into which the distribution is made, and (C) of such other information as required
to comply with Code §401(a)(31)(B)(i).
	 
	 	(iii)	 	Date Account Valued. The Committee may elect to check the
value of the Participant’s Accounts on an occasional (rather than a daily) basis,
to determine whether to apply the provisions of this subsection.






	 	(d)	 	Distribution Upon Participant’s Death.






	 	(i)	 	Small Accounts. If the aggregate cash value of the
nonforfeitable portion of a Participant’s Accounts is $5,000 or less at any time
after the Participant’s death and before any beneficiary elects to receive a
distribution under this subsection, then each beneficiary shall each receive a
single payment of his share of the distributable amount as soon as administratively
practicable, provided that the aggregate value is $5,000 or less when the
distribution is processed. The Committee may elect to check the value of the
Participant’s Accounts on an occasional (rather than a daily) basis, to determine
whether to apply the provisions of this paragraph.
	 
	 	(ii)	 	Larger Accounts. If paragraph (i) does not apply, then each
beneficiary may elect to have his distributable amount distributed in a single
payment or in annual installments at any time after the Participant’s death, within
the following guidelines. No distribution shall be processed until the
beneficiary’s identity as a beneficiary is established. The entire distributable
amount shall be distributed by the last day of the calendar year containing the
fifth anniversary of the Participant’s death. A beneficiary who has elected
installments may elect to accelerate any or all remaining payments. If the
Participant was a Five-Percent Owner who began to receive the minimum required
distributions under paragraph (b)(ii), the distribution to each beneficiary must be
made at least as rapidly as required by the method used to calculate the minimum
required distributions that was in effect when the Five-Percent Owner died.






	 	(e)	 	Alternate Payee. Distributions to an Alternate Payee shall be made in
accordance with the provisions of the QDRO and pursuant to subsection 13.9.






	6.7	 	Direct Rollover Election.






	 	(a)	 	General Rule. A Participant, an Alternate Payee who is the Spouse or
former Spouse of the Participant, , or any individual who is treated as the designated
beneficiary of the Participant pursuant to Code §4014(a)(9)(E)) (collectively, the
“distributee”) may direct the Trustee to pay all or any portion of his “eligible rollover
distribution” to an “eligible retirement plan” in a “direct rollover.” This direct
rollover option is not available to other Account Owners (beneficiaries who are not
individuals and Alternate Payees who are not the Spouse or former Spouse of the
Participant). Within a reasonable period of time before an eligible rollover
distribution, the Committee shall inform the distributee of this direct rollover option,
the appropriate withholding rules, other rollover options, the options regarding income
taxation, and any other information required by Code §402(f). The distributee may waive
the usual 30-day waiting period before receiving a distribution, and elect to receive his
distribution as soon as administratively practicable after completing and filing his
distribution election.
	 
	 	(b)	 	Definition of Eligible Rollover Distribution. An eligible rollover
distribution is any distribution or in-service withdrawal other than (i) distributions
required under Code §401(a)(9), (ii) distributions of amounts that have already been
subject to federal income tax (such as defaulted loans or after-tax voluntary
contributions), other than a direct transfer to (A) another retirement plan that meets
the requirements of Code §401(a) or §403(a), or (B) an individual retirement account or
annuity described in Code §408(a) or §408(b), (iii) installment payments in a series of
substantially equal payments made at least annually and (A) made over a specified period
of ten or more years, (B) made for the life or life




Page 25 of 47 









 












	 	 	 	expectancy of the distributee, or (C) made for the joint life or joint life expectancy
of the distributee and his designated beneficiary, (iv) a distribution to satisfy the
limits of Code §415 or §402(g), (v) a deemed distribution of a defaulted loan from this
Plan, to the extent provided in the regulations, (vi) a distribution to satisfy the ADP
or ACP tests, (vii) any other actual or deemed distribution specified in the regulations
issued under Code §402(c), or (viii) any hardship withdrawal by an Employee.
	 
	 	(c)	 	Definition of Eligible Retirement Plan. For an individual who is treated
as the designated beneficiary of the Participant pursuant to Code §401(a)(9)(E), an
eligible retirement plan is an individual retirement account or annuity described in Code
§408(a) or §408(b) that is established for the purposes of receiving the distribution on
behalf of the beneficiary, and that is treated as an inherited individual retirement
account or annuity within the meaning of Code §408(d)(3)(C). For a Participant, an
Alternate Payee who is the Spouse or former Spouse of the Participant, or a surviving
Spouse of a deceased Participant, an eligible retirement plan is an individual retirement
account or annuity described in Code §408(a) or §408(b), an annuity plan described in
Code §403(a), an annuity contract described in Code §403(b), an eligible plan under Code
§457(b) that is maintained by an eligible employer described in Code §457(e)(1)(A) (which
generally includes state and local governments), or the qualified trust of a defined
contribution plan described in Code §401(a), that accepts eligible rollover
distributions.
	 
	 	(d)	 	Definition of Direct Rollover. A direct rollover is a payment by the
Trustee to the eligible retirement plan specified by the distributee.





ARTICLE VII

Loans



The Committee is authorized, as one of the Plan fiduciaries responsible for investing Plan
assets, to establish a loan program. The loan program shall become effective on the date
determined by the Committee. The Committee shall administer the Plan’s loan program in accordance
with the following rules.





	7.1	 	Availability
	 
	 	 	Loans are available only to Employees, Participants who are parties-in-interest (within the
meaning of ERISA §3(14)), and beneficiaries who are parties-in-interest (collectively referred
to in this section as “Borrowers”). The Committee shall temporarily reduce the amount a
Participant may borrow or temporarily prevent the Participant from borrowing when, as
described in section 13.9, the Committee is informed that a QDRO affecting the Participant’s
Accounts is in process or may be in process. Loans shall be temporarily unavailable to a
prospective Borrower while the Committee has suspended loans because the Committee believes
that the Plan may have a cause of action against the Participant, as explained in subsection
13.9(h).
	 
	7.2	 	Number of Loans
	 
	 	 	A Borrower may have no more than one loan outstanding. The Committee may change the maximum
number of outstanding loans allowed at any time.
	 
	7.3	 	Loan Amount
	 
	 	 	The Committee may establish a minimum loan amount of no more than $500. The Committee may
require loans to be made in increments of no more than $100. The amount that a Borrower may
borrow is subject to the following limits.






	 	(a)	 	A Borrower may not borrow more than the sum of the balance in his Participant
Contributions Account and the balance in his Rollover Account.
	 
	 	(b)	 	At the time the loan from this Plan is made, the aggregate outstanding balance of
all the Borrower’s loans from all qualified plans maintained by the Company and
Affiliated Entities, including the new loan from this Plan, shall not exceed 50% of the
Borrower’s vested interest in all qualified plans maintained by the Company and
Affiliated Entities.
	 
	 	(c)	 	For purposes of this paragraph, the term “one-year maximum” means the largest
aggregate outstanding balance, on any day in the one-year period ending on the day before
the new loan from this Plan is obtained, of all loans to the Borrower from all qualified
plans maintained by the Company and Affiliated Entities. For purposes of this paragraph,
the term “existing loans” means the aggregate




Page 26 of 47 









 












	 	 	 	outstanding balance, on the day the new loan is made to the Borrower, of all loans to
the Borrower from all qualified plans maintained by the Company and Affiliated Entities,
excluding the new loan from this Plan. If the existing loans are greater than or equal
to the one-year maximum, then the new loan from this Plan shall not exceed $50,000 minus
the existing loans. If the existing loans are less than the one-year maximum, then the
new loan from this Plan shall not exceed $50,000 minus the one-year maximum.






	 	 	For purposes of applying the above limits, the vested portion of the Borrower’s accounts under
this Plan and all other plans maintained by the Company and Affiliated Entities shall be
determined without regard to any accumulated deductible employee contributions (as defined in
Code §72(o)(5)(B)), and without regard to any amounts accrued while the Borrower was
ineligible to obtain a loan (as described in subsection (a)). Notwithstanding the foregoing,
the Committee may, in its sole discretion, establish lesser limits on the amounts that may be
borrowed, which limits shall be applied in a non-discriminatory manner. The Committee shall
temporarily reduce the amount a Participant may borrow or temporarily prevent the Participant
from borrowing, as described in section 13.9, when the Committee is informed that a QDRO
affecting the Participant’s Accounts is in process or may be in process. No loan shall be
made of amounts that are required to be distributed prior to the end of the term of the loan.
	 
	7.4	 	Interest
	 
	 	 	Each loan shall bear a reasonable rate of interest, which shall remain fixed for the duration
of the loan. The Committee or its agent shall determine the reasonable rate of interest on
the date the loan documents are prepared. The Committee shall have the authority to establish
procedures from time to time for determining the rate of interest. In the absence of
Committee action, the interest rate shall be equal to the prime lending rate, plus 1%, as
published in the Wall Street Journal on the first day that such newspaper is published during
the calendar quarter in which the loan documents are prepared.
	 
	7.5	 	Repayment. 
	 
	 	 	All loans shall be repaid, with interest, in substantially level amortized payments made not
less frequently than quarterly. The maximum term for a loan is four years; the minimum term
for a loan is one year. The Committee has the authority to decrease the minimum term for
future loans and the authority to increase the maximum term for future loans to no more than
five years. Loan repayments shall be accelerated, and all loans shall be payable in full on
the date the Borrower separates from service (if the Borrower is an Employee), the date the
Borrower becomes ineligible to borrow from the Plan under to section 7.1, and on any other
date or any other contingency as determined by the Committee. If the Borrower is an Employee,
loans shall be repaid through payroll withholding unless (a) the Employee is pre-paying his
loan, in which case the pre-payment need not be through payroll withholding, or (b) the
Employee is on an unpaid leave of absence, in which case he may pay any installment by
personal check. Partial pre-payments are accepted.
	 
	7.6	 	Default
	 
	 	 	A loan shall be in default if any installment is not paid by the end of the calendar quarter
following the calendar quarter in which the installment was due. Upon default, the Committee
may, in addition to all other remedies, apply the Borrower’s Plan accounts toward payment of
the loan; however, the Trustee may not exercise such right of set-off with respect to the
Borrower’s Participant Contributions Account until such account has become payable, pursuant
to section 6.5 or 6.6.
	 
	7.7	 	Administration
	 
	 	 	A Borrower shall apply for a loan by completing the application procedures specified by the
Committee. Until changed by the Committee, a Borrower shall apply for a loan by calling the
Trustee and completing a voice application. The loan shall be processed in accordance with
reasonable procedures adopted from time to time by the Committee. The Committee may impose a
loan application fee, a loan origination fee, a loan pre-payment fee, and loan maintenance
fees. All loans shall be evidenced by a promissory note and shall be fully secured. No
Borrower whose Plan accounts are so pledged may obtain distribution of any portion of the
accounts that have been pledged. The rights of the Trustee under such pledge shall have
priority over all claims of the Borrower, his beneficiaries, and creditors. Each loan shall
be treated as a directed investment. Any increase or decrease in the net worth of the Trust
Fund attributable to such loan shall be allocated solely to the Plan accounts of the Borrower.




Page 27 of 47 









 











ARTICLE VIII

Allocation of Responsibilities — Named Fiduciaries





	8.1	 	No Joint Fiduciary Responsibilities.
	 
	 	 	The Trustee(s) and the Committee shall be the named fiduciaries under the Plan and Trust
agreement and shall be the only named fiduciaries thereunder. The fiduciaries shall have only
the responsibilities specifically allocated to them herein or in the Trust agreement. Such
allocations are intended to be mutually exclusive and there shall be no sharing of fiduciary
responsibilities. Whenever one named fiduciary is required by the Plan or Trust agreement to
follow the directions of another named fiduciary, the two named fiduciaries shall not be
deemed to have been assigned a shared responsibility, but the responsibility of the named
fiduciary giving the directions shall be deemed his sole responsibility, and the
responsibility of the named fiduciary receiving those directions shall be to follow them
insofar as the instructions are on their face proper under applicable law.
	 
	8.2	 	The Company.
	 
	 	 	The Company shall be responsible for: (a) making Company Contributions; (b) certifying to the
Trustee the names and specimen signatures of the members of the Committee acting from time to
time; (c) keeping accurate books and records with respect to its Employees and the appropriate
components of each Employee’s Compensation and furnishing such data to the Committee; (d)
selecting agents and fiduciaries to operate and administer the Plan and Trust; (e) appointing
an investment manager if it determines that one should be appointed; and (f) reviewing
periodically the performance of such agents, managers, and fiduciaries.
	 
	8.3	 	The Trustee.
	 
	 	 	The Trustee shall be responsible for: (a) the investment of the Trust Fund to the extent and
in the manner provided in the Trust agreement; (b) the custody and preservation of Trust
assets delivered to it; and (c) the payment of such amounts from the Trust Fund as the
Committee shall direct.
	 
	8.4	 	The Committee — Plan Administrator.
	 
	 	 	The board of directors of Apache shall appoint an administrative Committee consisting of no
fewer than three individuals who may be, but need not be, Participants, officers, directors,
or Employees of the Company. If the board of directors does not appoint a Committee, Apache
shall act as the Committee under the Plan. The members of the Committee shall hold office at
the pleasure of the board of directors and shall service without compensation. The Committee
shall be the Plan’s “administrator” as defined in section 3(16)(A) of ERISA. It shall be
responsible for establishing and implementing a funding policy consistent with the objectives
of the Plan and with the requirements of ERISA. This responsibility shall include
establishing (and revising as necessary) short-term and long-term goals and requirements
pertaining to the financial condition of the Plan, communicating such goals and requirements
to the persons responsible for the various aspects of the Plan operations, and monitoring
periodically the implementation of such goals and requirements. The Committee shall publish
and file or cause to be published and filed or disclosed all reports and disclosures required
by federal or state laws.
	 
	8.5	 	Committee to Construe Plan.






	 	(a)	 	The Committee shall administer the Plan and shall have all discretion, power, and
authority necessary for that purpose, including, but not by way of limitation, the full
and absolute discretion and power to interpret the Plan, to determine the eligibility,
status, and rights of all individuals under the Plan, and in general to decide any
dispute and all questions arising in connection with the Plan. The Committee shall
direct the Trustee concerning all distributions from the Trust Fund, in accordance with
the provisions of the Plan, and shall have such other powers in the administration of the
Trust Fund as may be conferred upon it by the Trust agreement. The Committee shall
maintain all Plan records except records of the Trust Fund.
	 
	 	(b)	 	The Committee may adjust the Account(s) of any Participant, in order to correct
errors and rectify omissions, in such manner as the Committee believes will best result
in the equitable and nondiscriminatory administration of the Plan.




Page 28 of 47 









 












	8.6	 	Organization of Committee.
	 
	 	 	The Committee shall adopt such rules as it deems desirable for the conduct of its affairs and
for the administration of the Plan. It may appoint agents (who need not be members of the
Committee) to whom it may delegate such powers as it deems appropriate, except that any
dispute shall be determined by the Committee. The Committee may make its determinations with
or without meetings. It may authorize one or more of its members or agents to sign
instructions, notices and determinations on its behalf. If a Committee decision or action
affects a relatively small percentage of Plan Participants including a Committee member, such
Committee member shall not participate in the Committee decision or action. The action of a
majority of the disinterested Committee members shall constitute the action of the Committee.
	 
	8.7	 	Agent for Process.
	 
	 	 	Apache’s Vice President, General Counsel, and Secretary shall be the agents of the Plan for
service of all process.
	 
	8.8	 	Indemnification of Committee Members.
	 
	 	 	The Company shall indemnify and hold the members of the Committee, and each of them, harmless
from the effects and consequences of their acts, omissions, and conduct in their official
capacities, except to the extent that the effects and consequences thereof shall result from
their own willful misconduct, breach of good faith, or gross negligence in the performance of
their duties. The foregoing right of indemnification shall not be exclusive of the rights to
which each such member may be entitled as a matter of law.
	 
	8.9	 	Conclusiveness of Action.
	 
	 	 	Any action taken by the Committee on matters within the discretion of the Committee shall be
conclusive, final and binding upon all participants in the Plan and upon all persons claiming
any rights hereunder, including alternate payees and beneficiaries.
	 
	8.10	 	Payment of Expenses.
	 
	 	 	The members of the Committee shall serve without compensation but their reasonable expenses
shall be paid by the Company. The compensation or fees of accountants, counsel, and other
specialists and any other costs of administering the Plan or Trust Fund may be paid by the
Company or Account Owners or may be charged to the Trust Fund, to the extent permissible under
ERISA.





ARTICLE IX

Trust Agreement – Investments





	9.1	 	Trust Agreement.
	 
	 	 	Apache has entered into a Trust agreement to provide for the holding, investment, and
administration of the funds of the Plan. The Trust agreement shall be part of the Plan, and
the rights and duties of any individual under the Plan shall be subject to all terms and
provisions of the Trust agreement.
	 
	9.2	 	Plan Expenses.






	 	(a)	 	General. Except as provided in subsection (b), (i) all taxes upon or in
respect of the Plan and Trust shall be paid out of Plan assets, and all expenses of
administering the Plan and Trust shall be paid out of Plan assets, to the extent
permitted by law and to the extent such taxes and expenses are not paid by the Company or
an Account Owner, and (ii) the Committee shall have full discretion to determine how each
tax or expense that is not paid by the Company shall be paid and the Committee shall have
full discretion to determine how each tax or expense that is paid out of Plan assets
shall be allocated. No fiduciary shall receive any compensation for services rendered to
the Plan if the fiduciary is being compensated on a full time basis by the Company or an
Affiliated Entity.
	 
	 	(b)	 	Individual Expenses. To the extent not paid by the Company or an Account
Owner, all expenses of individually directed transactions, including without limitation
the Trustee’s transaction fee, brokerage commissions, transfer taxes, interest on
insurance policy loans, and any taxes and penalties that may be imposed as a result of an
individual’s investment direction, shall be assessed against the Account(s) of the
Account Owner directing such transactions.




Page 29 of 47 









 












	9.3	 	Investments.






	 	(a)	 	§404(c) Plan. The Plan is intended to be a plan described in ERISA
§404(c). To the extent that an Account Owner exercises control over the investment of
his Accounts, no person who is a fiduciary shall be liable for any loss, or by reason of
any breach, that is the direct and necessary result of the Account Owner’s exercise of
control.
	 
	 	(b)	 	Directed Investments. Accounts shall be invested, upon direction of each
Account Owner made in a manner acceptable to the Committee, in any one or more of a
series of investment funds designated by the Committee or to the extent permitted by the
Committee in a brokerage arrangement. One or more such funds may, at the sole discretion
of the Committee, consist primarily of shares of Company Stock. In addition, Company
Stock may be an available investment alternative. If so directed by Account Owners, up
to 100% of the Accounts under the Plan may be invested in Company Stock. To the extent
that any Account is invested in Company Stock or in an investment funds consisting
primarily of Company Stock, an Account Owner may sell such investment at any time,
subject to reasonable administrative delays and any blackout periods imposed by the
Committee (including blackout periods that apply to particular Participants to ensure
compliance with the securities laws). The funds available for investment and the
principal features thereof, including a general description of the investment objectives,
the risk and return characteristics, and the type and diversification of the investment
portfolio of each fund, shall be communicated to the Account Owners in the Plan from time
to time. Any changes in such funds shall be immediately communicated to all Account
Owners.
	 
	 	(c)	 	Absence of Directions. To the extent that an Account Owner fails to
affirmatively direct the investment of his Accounts, the Committee shall direct the
Trustee in writing concerning the investment of such Accounts. The Committee shall act
by majority vote. Any dissenting member of the Committee shall, having registered his
dissent in writing, thereafter cooperate to the extent necessary to implement the
decision of the Committee.
	 
	 	(d)	 	Change in Investment Directions. Account Owners may change their
investment directions, with respect to the investment of new contributions and with
respect to the investment of existing amounts allocated to Accounts, on any business day,
subject to any restrictions and limitations imposed by the Trustee, investment funds, or
brokerage arrangement. The Committee shall establish procedures for giving investment
directions, which shall be in writing and communicated to Account Owners.





ARTICLE X

Termination and Amendment





	10.1	 	Termination of Plan or Discontinuance of Contributions.
	 
	 	 	Apache expects to continue the Plan indefinitely, but the continuance of the Plan and the
payment of contributions are not assumed as contractual obligations. Apache may terminate the
Plan or discontinue contributions at any time. Upon the termination of the Plan or the
complete discontinuance of contributions, each Participant’s Accounts shall become fully
vested. Upon the partial termination of the Plan, the Accounts of all affected Participants
shall become fully vested. The only Participants who are affected by a partial termination
are those whose employment with the Company or Affiliated Entity is terminated as a result of
the corporate event causing the partial termination; Employees terminated for cause and those
who leave voluntarily are not affected by a partial termination.
	 
	10.2	 	Allocations upon Termination or Discontinuance of Company Contributions.
	 
	 	 	Upon the termination or partial termination of the Plan or upon the complete discontinuance of
contributions, the Committee shall promptly notify the Trustee of such termination or
discontinuance. The Trustee shall then determine, in the manner prescribed in section 4.2,
the net worth of the Trust Fund as of the close of the business day specified by the
Committee. The Trustee shall advise the Committee of any increase or decrease in such net
worth that has occurred since the preceding Valuation Date. After crediting to the
Participant Contributions Account of each Participant any amount contributed since the
preceding Valuation Date, the Committee shall thereupon allocate, in the manner described in
section 4.3, among the remaining Plan Accounts, in the manner described in Articles III, IV
and V, any Company Contributions or forfeitures occurring since the preceding Valuation Date.




Page 30 of 47 









 












	10.3	 	Procedure Upon Termination of Plan or Discontinuance of Contributions.
	 
	 	 	If the Plan has been terminated or partially terminated, or if a complete discontinuance of
contributions to the Plan has occurred, then after the allocations required under section 10.2
have been completed, the Trustee shall distribute or transfer the Account(s) of affected
Account Owners as follows.






	 	(a)	 	No Other Plan. If the Company and Affiliated Entities are not treated,
pursuant to the Treasury Regulations under Code §401(k), as maintaining another
“alternative defined contribution plan,” the Trustee shall distribute each Account
Owner’s entire Account in a single payment, after complying with the requirements of
section 6.7. For purposes of this section only, an “alternative defined contribution
plan” means a defined contribution plan that is not an employee stock ownership plan
within the meaning of Code §4975(e)(7) or §409(a)), a simplified employee pension within
the meaning of Code §408(k), a SIMPLE IRA within the meaning of Code §408(p), a plan or
contract that satisfies the requirements of Code §403(b), or a plan described in Code
§457(b) or §457(f).
	 
	 	(b)	 	Other Plan Maintained. If the Company and Affiliated Entities are treated,
pursuant to the Treasury Regulations under Code §401(k), as maintaining another
“alternative defined contribution plan,” the Trustee shall (i) distribute the Accounts of
each non-Participant Account Owner in a single payment, after complying with the
requirements of section 6.7, and (ii) transfer the Accounts of each Participant to an
alternative defined contribution plan. All the rights, benefits, features, and
distribution restrictions with respect to the transferred amounts shall continue to apply
to the transferred amounts unless a change is permitted pursuant to applicable IRS
guidance of general applicability.
	 
	 	(c)	 	Form of Payment. A transfer made pursuant to this section may be in cash,
in kind, or partly in cash and partly in kind. Any distribution made pursuant to this
section may be in cash, in shares of Company Stock to the extent an Account is invested
in Company Stock, or partly in cash and partly in shares of Company Stock. After all
such distributions or transfers have been made, the Trustee shall be discharged from all
obligation under the Trust; no Account Owner who has received any such distribution, or
for whom any such transfer has been made, shall have any further right or claim under the
Plan or Trust.






	10.4	 	Amendment by Apache.






	 	(a)	 	Amendment. Apache may at any time amend the Plan in any respect, without
prior notice, subject to the following limitations. No amendment shall be made that
would have the effect of vesting in the Company any part of the Trust Fund or of
diverting any part of the Trust Fund to purposes other than for the exclusive benefit of
Account Owners. The rights of any Account Owner with respect to contributions previously
made shall not be adversely affected by any amendment. No amendment shall reduce or
restrict, either directly or indirectly, the accrued benefit (within the meaning of Code
§411(d)(6)) provided to any Account Owner before the amendment, except as permitted by
the Code or IRS guidance of general applicability.
	 
	 	(b)	 	Amendment to Vesting Schedule. If the vesting schedule is amended, and it
has the potential to provide slower vesting for one or more Participants, each such
Participant with a three-year or longer Period of Service may elect to have his
nonforfeitable percentage computed under the Plan without regard to such amendment. The
period during which the election may be made shall commence with the date the amendment
is adopted and shall end on the latest of: (i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective; or (iii) 60 days after the
Participant is issued written notice of the amendment by the Company or Committee.
Furthermore, no amendment shall decrease the nonforfeitable percentage, measured as of
the later of the date the amendment is adopted or effective, of any Account Owner’s
Accounts.
	 
	 	(c)	 	Procedure. Each amendment shall be in writing. Each amendment shall be
approved by Apache’s board of directors or by an officer of Apache who has the authority
to amend the Plan. Each amendment shall be executed by an officer of Apache who has the
authority to execute the amendment.




Page 31 of 47 









 











ARTICLE XI

Plan Adoption by Affiliated Entities





	11.1	 	Adoption of Plan.
	 
	 	 	Apache may permit any Affiliated Entity to adopt the Plan and Trust for its Employees.
Thereafter, such Affiliated Entity shall deliver to the Trustee a certified copy of the
resolutions or other documents evidencing its adoption of the Plan and Trust. The Employees
of the Affiliated Entity adopting the Plan shall not be eligible to invest their Accounts in
Company Stock until compliance with the applicable registration and reporting requirements of
the securities laws.
	 
	11.2	 	Agent of Affiliated Entity.
	 
	 	 	By becoming a party to the Plan, each Affiliated Entity appoints Apache as its agent with
authority to act for the Affiliated Entity in all transactions in which Apache believes such
agency will facilitate the administration of the Plan. Apache shall have the sole authority
to amend and terminate the Plan.
	 
	11.3	 	Disaffiliation and Withdrawal from Plan.






	 	(a)	 	Disaffiliation. Any Affiliated Entity that has adopted the Plan and
thereafter ceases for any reason to be an Affiliated Entity shall forthwith cease to be a
party to the Plan.
	 
	 	(b)	 	Withdrawal. Any Affiliated Entity may, by appropriate action and written
notice thereof to Apache, provide for the discontinuance of its participation in the
Plan. Such withdrawal from the Plan shall not be effective until the end of the Plan
Year.






	11.4	 	Effect of Disaffiliation or Withdrawal.
	 
	 	 	If at the time of disaffiliation or withdrawal, the disaffiliating or withdrawing entity, by
appropriate action, adopts a substantially identical plan that provides for direct transfers
from this Plan, then, as to Account Owners associated with such entity, no plan termination
shall have occurred; the new plan shall be deemed a continuation of this Plan for such Account
Owners. In such case, the Trustee shall transfer to the trustee of the new plan all of the
assets held for the benefit of Account Owners associated with the disaffiliating or
withdrawing entity, and no forfeitures or acceleration of vesting shall occur solely by reason
of such action. Such payment shall operate as a complete discharge of the Trustee, and of all
organizations except the disaffiliating or withdrawing entity, of all obligations under this
Plan to Account Owners associated with the disaffiliating or withdrawing entity. A new plan
shall not be deemed substantially identical to this Plan if it provides slower vesting than
this Plan. Nothing in this section shall authorize the divesting of any vested portion of a
Participant’s Account(s).
	 
	11.5	 	Actions Upon Disaffiliation or Withdrawal.






	 	(a)	 	Distribution or Transfer. If an entity disaffiliates from Apache or
withdraws from the Plan and the provisions of section 11.4 are not followed, then the
following rules apply to the Account(s) of the Account Owners associated with the
disaffiliating or withdrawing entity. The Account Owner’s Accounts shall remain in this
Plan until a distribution is processed under the usual rules of Article VI, unless the
disaffiliating or withdrawing entity maintains another qualified plan that accepts direct
transfers from this Plan, in which case the Committee may transfer the Account Owner’s
Accounts to the disaffiliating or withdrawing entity’s plan without the consent of the
Account Owner.
	 
	 	(b)	 	Form of Transfer. A transfer made pursuant to this section may be in cash,
in kind, or partly in cash and partly in kind. Any distribution made pursuant to this
section may be in cash, in shares of Company Stock to the extent an Account is invested
in Company Stock, or partly in cash and partly in shares of Company Stock. After such
distribution or transfer has been made, no Account Owner who has received any such
distribution, or for whom any such transfer has been made, shall have any further right
or claim under the Plan or Trust.




Page 32 of 47 









 











ARTICLE XII

Top-Heavy Provisions





	12.1	 	Application of Top-Heavy Provisions.
	 
	 	 	The provisions of this Article XII shall be applicable only if the Plan becomes “top-heavy” as
defined below for any Plan Year. If the Plan becomes “top-heavy” for a Plan Year, the
provisions of this Article XII shall apply to the Plan effective as of the first day of such
Plan Year and shall continue to apply to the Plan until the Plan ceases to be “top-heavy” or
until the Plan is terminated or otherwise amended.
	 
	12.2	 	Determination of Top-Heavy Status.
	 
	 	 	The Plan shall be considered “top-heavy” for a Plan Year if, as of the last day of the prior
Plan Year, the aggregate of the Account balances (as calculated according to the regulations
under Code §416) of Key Employees under this Plan (and under all other plans required or
permitted to be aggregated with this Plan) exceeds 60% of the aggregate of the Account
balances (as calculated according to the regulations under Code §416) in this Plan (and under
all other plans required or permitted to be aggregated with this Plan) of all current
Employees and all former Employees who terminated employment within one year of the last day
of the prior Plan Year. This ratio shall be referred to as the “top-heavy ratio”. For
purposes of determining the account balance of any Participant, (a) the balance shall be
determined as of the last day of the prior Plan Year, (b) the balance shall also include any
distributions to the Participant during the one-year period ending on the last day of the
prior Plan Year, and (c) the balance shall also include, for distributions made for a reason
other than separation from service or death or disability, any distributions to the
Participant during the five-year period ending on the last day of the prior Plan Year. This
shall also apply to distributions under a terminated plan that, if it had not been terminated,
would have been required to be included in an aggregation group. The Account balances of a
Participant who had once been a Key Employee, but who is not a Key Employee during the Plan
Year, shall not be taken into account. The following plans must be aggregated with this Plan
for the top-heavy test: (a) a qualified plan maintained by the Company or an Affiliated
Entity in which a Key Employee participated during this Plan Year or during the previous four
Plan Years and (b) any other qualified plan maintained by the Company or an Affiliated Entity
that enables this Plan or any plan described in clause (a) to meet the requirements of Code
§401(a)(4) or §410. The following plans may be aggregated with this Plan for the top-heavy
test: any qualified plan maintained by the Company or an Affiliated Entity that, in
combination with the Plan or any plan required to be aggregated with this Plan when testing
this Plan for top-heaviness, would satisfy the requirements of Code §401(a)(4) and §410. If
one or more of the plans required or permitted to be aggregated with this Plan is a defined
benefit plan, a Participant’s “account balance” shall equal the present value of the
Participant’s accrued benefit. If the aggregation group includes more than one defined
benefit plan, the same actuarial assumptions shall be used with respect to each such defined
benefit plan. The foregoing top-heavy ratio shall be computed in accordance with the
provisions of Code §416(g), together with the regulations and rulings thereunder.
	 
	12.3	 	Special Vesting Rule.
	 
	 	 	Unless section 5.1 provides for faster vesting, the amount credited to the Participant’s
Company Contributions Account shall vest in accordance with the following schedule during any
top-heavy Plan Year:





	 	 	 	 	 
	Period of Service	 	Vesting Percentage
	Less than 2 years
	 	 	0	%
	At least 2 years, but less than 3 years
	 	 	20	%
	At least 3 years, but less than 4 years
	 	 	40	%
	At least 4 years, but less than 5 years
	 	 	60	%
	At least 5 years, but less than 6 years
	 	 	80	%
	6 or more years
	 	 	100	%







	12.4	 	Special Minimum Contribution.
	 
	 	 	Notwithstanding the provisions of section 3.1, in every top-heavy Plan Year, a minimum
allocation is required for each Non-Key Employee who both (a) performed one or more hours of
service as an Employee during the Plan Year as a Covered Employee after satisfying the
eligibility requirements of section 2.1, and (b) was an Employee on the last day of the Plan
Year. The minimum allocation shall be a percentage of each Non-Key Employee’s Compensation.
The percentage shall be the lesser of 3% or the largest percentage




Page 33 of 47 









 












	 	 	obtained for any Key Employee by dividing his Annual Additions (to this Plan and any other
plan aggregated with this Plan) for the Plan Year by his Compensation for the Plan Year. If
the Participant participates in both this Plan and the Apache Corporation Money Purchase
Retirement Plan, then the Participant’s minimum allocation shall be provided in the Apache
Corporation Money Purchase Retirement Plan. If this minimum allocation is not otherwise
satisfied for any Non-Key Employee, the Company shall contribute the additional amount needed
to satisfy this requirement to such Non-Key Employee’s Company Contributions Account.
	 
	12.5	 	Change in Top-Heavy Status.
	 
	 	 	If the Plan ceases to be a “top-heavy” plan as defined in this Article XII, and if any change
in the benefit structure, vesting schedule, or other component of a Participant’s accrued
benefit occurs as a result of such change in top-heavy status, the nonforfeitable portion of
each Participant’s benefit attributable to Company Contributions shall not be decreased as a
result of such change. In addition, each Participant with at least a three-year Period of
Service on the date of such change, may elect to have the nonforfeitable percentage computed
under the Plan without regard to such change in status. The period during which the election
may be made shall commence on the date the Plan ceases to be a top-heavy plan and shall end on
the later of (a) 60 days after the change in status occurs, (b) 60 days after the change in
status becomes effective, or (c) 60 days after the Participant is issued written notice of the
change by the Company or the Committee.





ARTICLE XIII

Miscellaneous





	13.1	 	Right To Dismiss Employees — No Employment Contract.
	 
	 	 	The Company and Affiliated Entities may terminate the employment of any employee as freely and
with the same effect as if this Plan were not in existence. Participation in this Plan by an
employee shall not constitute an express or implied contract of employment between the Company
or an Affiliated Entity and the employee.
	 
	13.2	 	Claims Procedure.






	 	(a)	 	General. Each claim for benefits shall be processed in accordance with the
procedures that are established by the Committee. The procedures shall comply with the
guidelines specified in this section. The Committee may delegate its duties under this
section.
	 
	 	(b)	 	Representatives. A claimant may appoint a representative to act on his
behalf. The Plan shall only recognize a representative if the Plan has received a
written authorization signed by the claimant and on a form prescribed by the Committee,
with the following exceptions. The Plan shall recognize a claimant’s legal
representative, once the Plan is provided with documentation of such representation. If
the claimant is a minor child, the Plan shall recognize the claimant’s parent or guardian
as the claimant’s representative. Once an authorized representative is appointed, the
Plan shall direct all information and notification regarding the claim to the authorized
representative and the claimant shall be copied on all notifications regarding decisions,
unless the claimant provides specific written direction otherwise.
	 
	 	(c)	 	Extension of Deadlines. The claimant may agree to an extension of any
deadline that is mentioned in this section that applies to the Plan. The Committee or
the relevant decision-maker may agree to an extension of any deadline that is mentioned
in this section that applies to the claimant.
	 
	 	(d)	 	Fees. The Plan may not charge any fees to a claimant for utilizing the
claims process described in this section.
	 
	 	(e)	 	Filing a Claim. A claim is made when the claimant files a claim in
accordance with the procedures specified by the Committee. Any communication regarding
benefits that is not made in accordance with the Plan’s procedures will not be treated as
a claim.
	 
	 	(f)	 	Initial Claims Decision. The Plan shall decide a claim within a reasonable
time up to 90 days after receiving the claim. The Plan shall have a 90-day extension,
but only if the Plan is unable to decide within 90 days for reasons beyond its control,
the Plan notifies the claimant of the special circumstances requiring the need for the
extension by the 90th day after receiving the claim, and the Plan notifies the claimant
of the date by which the Plan expects to make a decision.




Page 34 of 47 









 












	 	(g)	 	Notification of Initial Decision. The Plan shall provide the claimant with
written notification of the Plan’s full or partial denial of a claim, reduction of a
previously approved benefit, or termination of a benefit. The notification shall include
a statement of the reason(s) for the decision; references to the plan provision(s) on
which the decision was based; a description of any additional material or information
necessary to perfect the claim and why such information is needed; a description of the
procedures and deadlines for appeal; a description of the right to obtain information
about the appeal procedures; and a statement of the claimant’s right to sue.
	 
	 	(h)	 	Appeal. The claimant may appeal any adverse or partially adverse decision.
To appeal, the claimant must follow the procedures specified by the Committee. The
appeal must be filed within 60 days of the date the claimant received notice of the
initial decision. If the appeal is not timely and properly filed, the initial decision
shall be the final decision of the Plan. The claimant may submit documents, written
comments, and other information in support of the appeal. The claimant shall be given
reasonable access at no charge to, and copies of, all documents, records, and other
relevant information.
	 
	 	(i)	 	Appellate Decision. The Plan shall decide the appeal of a claim within a
reasonable time of no more than 60 days from the date the Plan receives the claimant’s
appeal. The 60-day deadline shall be extended by an additional 60 days, but only if the
Committee determines that special circumstances require an extension, the Plan notifies
the claimant of the special circumstances requiring the need for the extension by the
60th day after receiving the appeal, and the Plan notifies the claimant of the date by
which the Plan expects to make a decision. If an appeal is missing any information from
the claimant that is needed to decide the appeal, the Plan shall notify the claimant of
the missing information and grant the claimant a reasonable period to provide the missing
information. If the missing information is not timely provided, the Plan shall deny the
claim. If the missing information is timely provided, the 60-day deadline (or 120-day
deadline with the extension) for the Plan to make its decision shall be increased by the
length of time between the date the Plan requested the missing information and the date
the Plan received it.
	 
	 	(j)	 	Notification of Decision. The Plan shall provide the claimant with written
notification of the Plan’s appellate decision (positive or adverse). The notification of
any adverse or partially adverse decision shall include a statement of the reason(s) for
the decision; reference to the plan provision(s) on which the decision was based; a
statement of the claimant’s right to sue; and a statement that the claimant is entitled
to receive, free of charge and upon request, reasonable access to and copies of all
documents, records, and other information relevant to the claim.
	 
	 	(k)	 	Discretionary Authority. The Committee shall have total discretionary
authority to determine eligibility, status, and the rights of all individuals under the
Plan and to construe any and all terms of the Plan.






	13.3	 	Source of Benefits.
	 
	 	 	All benefits payable under the Plan shall be paid solely from the Trust Fund, and the Company
and Affiliated Entities assume no liability or responsibility therefor.
	 
	13.4	 	Exclusive Benefit of Employees.
	 
	 	 	It is the intention of the Company that no part of the Trust, other than as provided in
sections 3.3, 9.2, and 13.9 and Article VII hereof and the Trust Agreement, ever to be used
for or diverted for purposes other than for the exclusive benefit of Participants, Alternate
Payees, and their beneficiaries, and that this Plan shall be construed to follow the spirit
and intent of the Code and ERISA.
	 
	13.5	 	Forms of Notices.
	 
	 	 	Wherever provision is made in the Plan for the filing of any notice, election, or designation
by a Participant, Spouse, Alternate Payee, or beneficiary, the action of such individual may
be evidenced by the execution of such form as the Committee may prescribe for the purpose.
The Committee may also prescribe alternate methods for filing any notice, election, or
designation (such as telephone voice-response or e-mail).




Page 35 of 47 









 












	13.6	 	Failure of Any Other Entity to Qualify.
	 
	 	 	If any entity adopts this Plan but fails to obtain or retain the qualification of the Plan
under the applicable provisions of the Code, such entity shall withdraw from this Plan upon a
determination by the Internal Revenue Service that it has failed to obtain or retain such
qualification. Within 30 days after the date of such determination, the assets of the Trust
Fund held for the benefit of the Employees of such entity shall be separately accounted for
and disposed of in accordance with the Plan and Trust.
	 
	13.7	 	Notice of Adoption of the Plan.
	 
	 	 	The Company shall provide each of its Employees with notice of the adoption of this Plan,
notice of any amendments to the Plan, and notice of the salient provisions of the Plan prior
to the end of the first Plan Year. A complete copy of the Plan shall also be made available
for inspection by Employees or any other individual with an Account balance under the Plan.
	 
	13.8	 	Plan Merger.
	 
	 	 	If this Plan is merged or consolidated with, or its assets or liabilities are transferred to,
any other qualified plan of deferred compensation, each Participant shall be entitled to
receive a benefit immediately after the merger, consolidation, or transfer that is equal to or
greater than the benefit the Participant would have been entitled to receive immediately
before the merger, consolidation, or transfer if this Plan had then been terminated.
	 
	13.9	 	Inalienability of Benefits — Domestic Relations Orders.






	 	(a)	 	General. Except as provided in section 7.2, relating to Plan loans,
subsection 6.1(d) relating to disclaimers, and subsections (b), (g), and (h) below, no
Account Owner shall have any right to assign, alienate, transfer, or encumber his
interest in any benefits under this Plan, nor shall such benefits be subject to any legal
process to levy upon or attach the same for payment of any claim against any such Account
Owner.
	 
	 	(b)	 	QDRO Exception. Subsection (a) shall apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant pursuant to a
Domestic Relations Order unless such Domestic Relations Order is a QDRO, in which case
the Plan shall make payment of benefits in accordance with the applicable requirements of
any such QDRO.
	 
	 	(c)	 	QDRO Requirements. In order to be a QDRO, the Domestic Relations Order
must satisfy the requirements of Code §414(p) and ERISA §206(d)(3). In particular, the
Domestic Relations Order: (i) must specify the name and the last known mailing address
of the Participant; (ii) must specify the name and mailing address of each Alternate
Payee covered by the order; (iii) must specify either the amount or percentage of the
Participant’s benefits to be paid by the Plan to each such Alternate Payee, or the manner
in which such amount or percentage is to be determined; (iv) must specify the number of
payments or period to which such order applies; (v) must specify each plan to which such
order applies; (vi) may not require the Plan to provide any type or form of benefit, or
any option, not otherwise provided under the Plan, subject to the provisions of
subsection (f); (vii) may not require the Plan to provide increased benefits (determined
on the basis of actuarial value); and (viii) may not require the payment of benefits to
an Alternate Payee if such benefits have already been designated to be paid to another
Alternate Payee under another order previously determined to be a QDRO.
	 
	 	(d)	 	QDRO Payment Rules. In the case of any payment before an Employee has
separated from service, a Domestic Relations Order shall not be treated as failing to
meet the requirements of subsection (c) solely because such order requires that payment
of benefits be made to an Alternate Payee (i) on or after the dates specified in
subsection (f), (ii) as if the Employee had retired on the date on which such payment is
to begin under such order (but taking into account only the Account balance on such
date), and (iii) in any form in which such benefits may be paid under the Plan to the
Employee. For purposes of this subsection, the Account balance as of the date specified
in the QDRO shall be the vested portion of the Employee’s Account(s) on such date.
	 
	 	(e)	 	QDRO Review Procedures and Suspension of Benefits. The Committee shall
establish reasonable procedures to determine the qualified status of Domestic Relations
Orders and to administer distributions under QDROs. Such procedures shall be in writing
and shall permit an Alternate Payee




Page 36 of 47 









 












	 	 	 	to designate a representative to receive copies of notices. The Committee may
temporarily prevent the Participant from borrowing from his Accounts and shall
temporarily suspend distributions and withdrawals from the Participant’s Accounts,
except to the extent necessary to make the required minimum distributions under Code
§401(a)(9), when the Committee receives a Domestic Relations Order or a draft of such an
order that affects the Participant’s Accounts or when one or the following individuals
informs the Committee, orally or in writing, that a QDRO is in process or may be in
process: the Participant, a prospective Alternate Payee, or counsel for the Participant
or a prospective Alternate Payee. The Committee shall promulgate reasonable and
non-discriminatory rules regarding such suspensions, including but not limited to how
long such suspensions remain in effect. The procedures may allow the Participant to
borrow such amounts from the Plan, subject to the limits of Article VII, and the
Participant to receive such distributions and withdrawals from the Plan, subject to the
rules of Articles VI and VII, as are consented to in writing by all prospective
Alternate Payees identified in the Domestic Relations Order or, in the absence of a
Domestic Relations Order, as are consented to in writing by the prospective Alternate
Payee(s) who informed the Committee that a QDRO was in process or may be in process.
When the Committee receives a Domestic Relations Order it shall promptly notify the
Participant and each Alternate Payee of such receipt and provide them with copies of the
Plan’s procedures for determining the qualified status of the order. Within a
reasonable period after receipt of a Domestic Relations Order, the Committee shall
determine whether such order is a QDRO and notify the Participant and each Alternate
Payee of such determination. During any period in which the issue of whether a Domestic
Relations Order is a QDRO is being determined (by the Committee, by a court of competent
jurisdiction, or otherwise), the Committee shall separately account for the amounts
payable to the Alternate Payee if the order is determined to be a QDRO. If the order
(or modification thereof) is determined to be a QDRO within 18 months after the date the
first payment would have been required by such order, the Committee shall pay the
amounts separately accounted for (plus any interest thereon) to the individual(s)
entitled thereto. However, if the Committee determines that the order is not a QDRO, or
if the issue as to whether such order is a QDRO has not been resolved within 18 months
after the date of the first payment would have been required by such order, then the
Committee shall pay the amounts separately accounted for (plus any interest thereon) to
the individual(s) who would have been entitled to such amounts if there had been no
order. Any determination that an order is a QDRO that is made after the close of the
18-month period shall be applied prospectively only. If the Plan’s fiduciaries act in
accordance with fiduciary provision of ERISA in treating a Domestic Relations Order as
being (or not being) a QDRO or in taking action in accordance with this subsection, then
the Plan’s obligation to the Participant and each Alternate Payee shall be discharged to
the extent of any payment made pursuant to the acts of such fiduciaries.
	 
	 	(f)	 	Rights of Alternate Payee. The Alternate Payee shall have the following
rights under the Plan:






	 	(i)	 	Single Payment. The only form of payment available to an
Alternate Payee is a single payment of the distributable amount (measured at the
time the payment is processed). If the Alternate Payee is awarded more than the
distributable amount, the Alternate Payee shall initially receive a distribution of
the distributable amount, with additional payments made as soon as administratively
convenient after more of the amount awarded to the Alternate Payee becomes
distributable.
	 
	 	(ii)	 	Timing of Distribution. Subject to the limits imposed by this
paragraph, the Alternate Payee may choose (or the QDRO may specify) the date of the
distribution. If the value of the nonforfeitable portion of an Alternate Payee’s
Account (ignoring any portion of the Participant’s Rollover Account that was
assigned to the Alternate Payee) is $5,000 or less, the Alternate Payee shall
receive a single payment of the distributable amount as soon as practicable
(without the Alternate Payee’s consent), provided that the value is $5,000 or less
when the distribution is processed. Otherwise, the distribution to the Alternate
Payee may occur at any time after the Committee determines that the Domestic
Relations Order is a QDRO and before the Participant’s Required Beginning Date
(unless the order is determined to be a QDRO after the Participant’s Required
Beginning Date, in which case the distribution to the Alternate Payee shall be made
as soon as administratively practicable after the order is determined to be a
QDRO).




Page 37 of 47 









 












	 	(iii)	 	Death of Alternate Payee. The Alternate Payee may designate
one or more beneficiaries, as specified in section 6.1. When the Alternate Payee
dies, the Alternate Payee’s beneficiary shall receive a complete distribution of
the distributable amount in a single payment as soon as administratively
convenient.
	 
	 	(iv)	 	Investing. An Alternate Payee may direct the investment of his
Account pursuant to section 9.3.
	 
	 	(v)	 	Claims. The Alternate Payee may bring claims against the Plan
pursuant to section 13.2.






	 	(g)	 	Exception for Misconduct towards the Plan. Subsection (a) shall not apply
to any offset of a Participant’s benefits against an amount that the Participant is
ordered or required to pay to the Plan if the following conditions are met.






	 	(i)	 	The order or requirement to pay must arise (A) under a judgment of
conviction for a crime involving the Plan, (B) under a civil judgment (including a
consent order or decree) entered by a court in an action brought in connection with
a violation (or alleged violation) of part 4 of subtitle B of title I of ERISA, or
(iii) pursuant to a settlement agreement between the Secretary of Labor and the
Participant, or a settlement agreement between the Pension Benefit Guaranty
Corporation and the Participant, in connection with a violation (or alleged
violation) of part 4 of subtitle B of title I of ERISA by a fiduciary or any other
person.
	 
	 	(ii)	 	The judgment, order, decree, or settlement agreement must expressly
provide for the offset of all or part of the amount ordered or required to be paid
to the Plan against the Participant’s benefits provided under the Plan.
	 
	 	(iii)	 	To the extent that the survivor annuity requirements of Code
§401(a)(11) apply with respect to distributions from the Plan to the Participant,
if the Participant is married at the time at which the offset is to be made, (A)
either the Participant’s Spouse must have already waived his right to a qualified
preretirement survivor annuity and a qualified joint and survivor annuity or the
Participant’s Spouse must consent in writing to such offset with such consent
witnessed by a notary public or representative of the Plan (or it is established to
the satisfaction of a Plan representative that such consent may not be obtained by
reason of circumstances described in Code §417(a)(2)(B)), or (B) the Participant’s
Spouse is ordered or required in such judgment, order, decree, or settlement to pay
an amount to the Plan in connection with a violation of part 4 of subtitle B of
title I of ERISA, or (C) in such judgment, order, decree, or settlement, the
Participant’s Spouse retains the right to receive a survivor annuity under a
qualified joint and survivor annuity pursuant to Code §401(a)(11)(A)(i) and under a
qualified preretirement survivor annuity provided pursuant to Code
§401(a)(11)(A)(ii). The value of the Spouse’s survivor annuity in subparagraph (C)
shall be determined as if the Participant terminated employment on the date of the
offset, there was no offset, the Plan permitted commencement of benefits only on or
after Normal Retirement Age, the Plan provided only the “minimum-required qualified
joint and survivor annuity,” and the amount of the qualified preretirement survivor
annuity under the Plan is equal to the amount of the survivor annuity payable under
the “minimum-required qualified joint and survivor annuity.” For purposes of this
paragraph only, the “minimum-required qualified joint and survivor annuity” is the
qualified joint and survivor annuity which is the actuarial equivalent of the
Participant’s accrued benefit (within the meaning of Code §411(a)(7)) and under
which the survivor annuity is 50% of the amount of the annuity which is payable
during the joint lives of the Participant and his Spouse.






	 	 	 	The Committee shall temporarily prevent the Account Owner from borrowing from his
Accounts and shall temporarily suspend distributions and withdrawals from his Accounts,
except to the extent necessary to make the required minimum distributions under Code
§401(a)(9), when the Committee has reason to believe that the Plan may be entitled to an
offset of the Participant’s benefits described in this subsection. The Committee shall
promulgate reasonable and non-discriminatory rules regarding such suspensions, including
but not limited to how long such suspensions remain in effect
	 
	 	(h)	 	Exception for Federal Liens. Subsection (a) shall not apply to the
enforcement of a federal tax levy made pursuant to Code §6331, the collection by the
United States on a judgment resulting from an unpaid tax assessment, or any debt or
obligation that is permitted to be collected from the Plan under federal law (such as the
Federal Debt Collection Procedures Act of 1977). The Committee may




Page 38 of 47 









 












	 	 	 	temporarily suspend distributions and withdrawals from an Account, except to the extent
necessary to make the required minimum distributions under Code §401(a)(9), when the
Committee has reason to believe that such a federal tax levy or other obligation has or
will be received. The Committee shall promulgate reasonable and non-discriminatory
rules regarding such suspensions, including but not limited to how long such suspensions
remain in effect.






	13.10	 	Payments Due Minors or Incapacitated Individuals.
	 
	 	 	If any individual entitled to payment under the Plan is a minor, the Committee shall cause the
payment to be made to the custodian or representative who, under the state law of the minor’s
domicile, is authorized to receive funds on behalf of the minor. If any individual entitled
to payment under this Plan has been legally adjudicated to be mentally incompetent or
incapacitated, the Committee shall cause the payment to be made to the custodian or
representative who, under the state law of the incapacitated individual’s domicile, is
authorized to receive funds on behalf of the incapacitated individual. Payments made pursuant
to such power shall operate as a complete discharge of the Trust Fund, the Trustee, and the
Committee.
	 
	13.11	 	Uniformity of Application.
	 
	 	 	The provisions of this Plan shall be applied in a uniform and non-discriminatory manner in
accordance with rules adopted by the Committee, which rules shall be systematically followed
and consistently applied so that all individuals similarly situated shall be treated alike.
	 
	13.12	 	Disposition of Unclaimed Payments.
	 
	 	 	Each Participant, Alternate Payee, or beneficiary with an Account balance in this Plan must
file with the Committee from time to time in writing his address, the address of each
beneficiary (if applicable), and each change of address. Any communication, statement, or
notice addressed to such individual at the last address filed with the Committee (or if no
address is filed with the Committee then at the last address as shown on the Company’s
records) will be binding on such individual for all purposes of the Plan. Neither the
Committee nor the Trustee shall be required to search for or locate any missing individual.
If the Committee notifies an individual that he is entitled to a distribution and also
notifies him that a failure to respond may result in a forfeiture of benefits, and the
individual fails to claim his benefits under the Plan or make his address known to the
Committee within a reasonable period of time after the notification, then the benefits under
the Plan of such individual shall be forfeited. Any amount forfeited pursuant to this section
shall be allocated pursuant to subsection 5.4(d). If the individual should later make a claim
for this forfeited amount, the Company shall, if the Plan is still in existence, make a
special contribution to the Plan equal to the forfeiture, and such amount shall be distributed
to the individual; if the Plan is not then in existence, the Company shall pay the amount of
the forfeiture to the individual.
	 
	13.13	 	Applicable Law.
	 
	 	 	This Plan shall be construed and regulated by ERISA, the Code, and, unless otherwise specified
herein and to the extent applicable, the laws of the State of Texas excluding any
conflicts-of-law provisions.





ARTICLE XIV

Matters Affecting Company Stock





	14.1	 	Voting, Etc.
	 
	 	 	The shares of Company Stock in Accounts, whether or not vested, may be voted by the Account
Owner to the same extent as if duly registered in the Account Owner’s name. The Trustee or
its nominee in which the shares are registered shall vote the shares solely as agent of the
Account Owner and in accordance with the instructions of the Account Owner. If no
instructions are received, the Trustee shall vote the shares of Company Stock for which it has
received no voting instructions in the same proportions as the Account Owners affirmatively
directed their shares of Company Stock to be voted unless the Trustee determines that a pro
rata vote would be inconsistent with its fiduciary duties under ERISA. If the Trustee makes
such a determination, the Trustee shall vote the Company Stock as it determines to be
consistent with its fiduciary duties under ERISA. Each Account Owner who has Company Stock
allocated to his Accounts shall direct the Trustee concerning the tender (as provided below)
and the exercise of any other rights appurtenant to the Company Stock. The Trustee shall
follow the directions of the Account Owner with respect to the tender.




Page 39 of 47 









 












	14.2	 	Notices.
	 
	 	 	Apache shall cause to be mailed or delivered to each Account Owner copies of all notices and
other communications sent to the Apache shareholders at the same times so mailed or delivered
by Apache to its other shareholders.
	 
	14.3	 	Retention/Sale of Company Stock and Other Securities.
	 
	 	 	The Trustee is authorized and directed to retain the Company Stock and any other Apache
securities acquired by the Trust except as follows:






	 	(a)	 	In the normal course of Plan administration, the Trustee shall sell Company Stock
to satisfy Plan administration and distribution requirements as directed by the Committee
or in accordance with provisions of the Plan specifically authorizing such sales.
	 
	 	(b)	 	In the event of a transaction involving the Company Stock evidenced by the filing
of Schedule 14D-1 with the Securities and Exchange Commission (“SEC”) or any other
similar transaction by which any person or entity seeks to acquire beneficial ownership
of 50% or more of the shares of Company Stock outstanding and authorized to be issued
from time to time under Apache’s articles of incorporation (“tender offer”), the Trustee
shall sell, convey, or transfer Company Stock pursuant to written instructions of Account
Owners delivered to the Trustee in accordance with the following sections 14.4 through
14.15. For purposes of such provisions, the term “filing date” means the date relevant
documents concerning a tender offer are filed with the SEC or, if such filing is not
required, the date the Trustee receives actual notice that a tender offer has commenced.
	 
	 	(c)	 	If Apache makes any distribution of Apache securities with respect to the shares of
Company Stock held in the Plan, other than additional shares of Company Stock (any such
securities are hereafter referred to as “stock rights”), the Trustee shall sell, convey,
transfer, or exercise such stock rights pursuant to written instructions of Account
Owners delivered to the Trustee in accordance with the following sections of this
Article.






	14.4	 	Tender Offers.






	 	(a)	 	Allocated Stock. In the event of any tender offer, each Account Owner
shall have the right to instruct the Trustee to tender any or all shares of Company
Stock, whether or not vested, that are allocated to his Accounts under the Plan on or
before the filing date. The Trustee shall follow the instructions of the Account Owner.
The Trustee shall not tender any Company Stock for which no instructions are received.
	 
	 	(b)	 	Unallocated Stock. The Trustee shall tender all shares of Company Stock
that are not allocated to Accounts in the same proportion as the Account Owners directed
the tender of Company Stock allocated to their Accounts unless the Trustee determines
that a pro rata tender would be inconsistent with its fiduciary duties under ERISA. If
the Trustee makes such a determination, the Trustee shall tender or not tender the
unallocated Company Stock as it determines to be consistent with its fiduciary duties
under ERISA.
	 
	 	(c)	 	Suspension of Share Purchases. In the event of a tender offer, the Trustee
shall suspend all purchases of Company Stock pursuant to the Plan unless the Committee
otherwise directs. Until the termination of such tender offer and pending such Committee
direction, the Trustee shall invest available cash pursuant to the applicable provisions
of the Plan and the Trust Agreement.
	 
	 	(d)	 	Temporary Suspension of Certain Cash Distributions. Notwithstanding
anything in the Plan to the contrary, no option to receive cash in lieu of Company Stock
shall be honored during the pendency of a tender offer unless the Committee otherwise
directs.






	14.5	 	Stock Rights.






	 	(a)	 	General. If Apache makes a distribution of stock rights with respect to
the Company Stock held in the Plan and if the stock rights become exercisable or
transferable (the date on which the stock rights become exercisable or transferable shall
be referred to as the “exercise date”), each Account Owner shall determine whether to
exercise the stock rights, sell the stock rights, or hold the stock rights allocated to
his Accounts. The provisions of this section shall apply to all stock rights received
with




Page 40 of 47 









 












	 	 	 	respect to Company Stock held in Accounts, whether or not the Company Stock with respect
to which the stock rights were issued are vested.
	 
	 	(b)	 	Independent Fiduciary. The Independent Fiduciary provided for in this
section 14.15 below shall act with respect to the stock rights. All Account Owner
directions concerning the exercise or disposition of the stock rights shall be given to
the Independent Fiduciary, who shall have the sole responsibility of assuring that the
Account Owners’ directions are followed.
	 
	 	(c)	 	Exercise of Stock Rights. If, on or after the exercise date, an Account
Owner wishes to exercise all or a portion of the stock rights allocated to his Accounts,
the Independent Fiduciary shall follow the Account Owner’s direction to the extent that
there is cash or other liquid assets available in his Accounts to exercise the stock
rights. Notwithstanding any other provision of the Plan, each Account Owner who has
stock rights allocated to his Accounts shall have a period of five business days
following the exercise date in which he may give instructions to the Committee to
liquidate any of the assets held in his Accounts (except shares of Company Stock or
assets such as guaranteed investment contracts or similar investments), but only if he
does not have sufficient cash or other liquid assets in his Accounts to exercise the
stock rights. The liquidation of any necessary investments pursuant to an Account
Owner’s direction shall be accomplished as soon as reasonably practicable, taking into
account any timing restrictions with respect to the investment funds involved. The cash
obtained shall be used to exercise the stock rights, as the Account Owner directs. Any
cash that is not so used shall be invested in a cash equivalent until the next date on
which the Account Owner may change his investment directions under the Plan.
	 
	 	(d)	 	Sale of Stock Rights. On and after the exercise date, the Independent
Fiduciary shall sell all or a portion of the stock rights allocated to Accounts, as the
Account Owner shall direct.






	14.6	 	Other Rights Appurtenant to the Company Stock.
	 
	 	 	If there are any rights appurtenant to the Company Stock, other than voting, tender, or stock
rights, each Account Owner shall exercise or take other appropriate action concerning such
rights with respect to the Company Stock, whether or not vested, that is allocated to their
Accounts in the same manner as the other holders of the Company Stock, by giving written
instructions to the Trustee. The Trustee shall follow all such instructions, but shall take
no action with respect to allocated Company Stock for which no instructions are received. The
Trustee shall exercise or take other appropriate action concerning any such rights appurtenant
to unallocated Company Stock.
	 
	14.7	 	Information to Trustee.
	 
	 	 	Promptly after the filing date, the exercise date, or any other event that requires action
with respect to the Company Stock, the Committee shall deliver or cause to be delivered to the
Trustee or the Independent Fiduciary, as appropriate, a list of the names and addresses of
Account Owners showing (i) the number of shares of Company Stock allocated to each Account
Owner’s Accounts under the Plan, (ii) each Account Owner’s pro rata portion of any unallocated
Company Stock, and (iii) each Account Owner’s share of any stock rights distributed by Apache.
The Committee shall date and certify the accuracy of such information, and such information
shall be updated periodically by the Committee to reflect changes in the shares of Company
Stock and other assets allocated to Accounts.
	 
	14.8	 	Information to Account Owners.
	 
	 	 	The Trustee or the Independent Fiduciary, as appropriate, shall distribute and/or make
available to each affected Account Owner the following materials:






	 	(a)	 	A copy of the description of the terms and conditions of any tender offer filed
with the SEC on Schedule 14D-1, or any similar materials if such filing is not required,
any material distributed to shareholders generally with respect to the stock rights, and
any proxy statements and any other material distributed to shareholders generally with
respect to any action to be taken with respect to the Company Stock.
	 
	 	(b)	 	If requested by Apache, a statement from Apache’s management setting forth its
position with respect to a tender offer that is filed with the SEC on Schedule 14D-9
and/or a communication from Apache




Page 41 of 47 









 












	 	 	 	given pursuant to 17 C.F.R. 240.14d-9(e), or any similar materials if such filing or
communications are not required.
	 
	 	(c)	 	An instruction form prepared by Apache and approved by the Trustee or the
Independent Fiduciary, to be used by an Account Owner who wishes to instruct the Trustee
to tender Company Stock in response to the tender offer, to instruct the Independent
Fiduciary to sell or exercise stock rights, or to instruct the Trustee or Independent
Fiduciary with respect to any other action to be taken with respect to the Company Stock.
The instruction form shall state that (i) if the Account Owner fails to return an
instruction form to the Trustee by the indicated deadline, the Trustee will not tender
any shares of Company Stock the Account Owner is otherwise entitled to tender, (ii) the
Independent Fiduciary will not sell or exercise any right allocated to the Account except
upon the written direction of the Account Owner, (iii) the Trustee or Independent
Fiduciary will not take any other action that the Account Owner could have directed, and
(iv) Apache acknowledges and agrees to honor the confidentiality of the Account Owner’s
directions to the Trustee.
	 
	 	(d)	 	Such additional material or information as the Trustee or the Independent Fiduciary
may consider necessary to assist the Account Owner in making an informed decision and in
completing or delivering the instruction form (and any amendments thereto) to the Trustee
or the Fiduciary on a timely basis.






	14.9	 	Expenses.
	 
	 	 	The Trustee and the Independent Fiduciary shall have the right to require payment in advance
by Apache and the party making the tender offer of all reasonably anticipated expenses of the
Trustee and the Independent Fiduciary, respectively, in connection with the distribution of
information to and the processing of instructions received from Account Owners.
	 
	14.10	 	Former Account Owners.
	 
	 	 	Apache shall furnish former Account Owners who have received distributions of Company Stock so
recently as to not be shareholders of record with the information furnished pursuant to
section 14.8. The Trustee and the Independent Fiduciary are hereby authorized to take action
with respect to the Company Stock distributed to such former Account Owners in accordance with
appropriate instructions from them. If the Trustee does not receive appropriate instructions,
it shall take no action with respect to the distributed Company Stock.
	 
	14.11	 	No Recommendations.
	 
	 	 	Neither the Committee, the Committee Fiduciary, the Trustee, nor the Independent Fiduciary
shall express any opinion or give any advice or recommendation to any Account Owner concerning
voting the Company Stock, any tender offer, stock rights, or the exercise of any other rights
appurtenant to the Company Stock, nor shall they have any authority or responsibility to do
so. Neither the Trustee nor the Independent Fiduciary has any duty to monitor or police the
party making a tender offer or Apache in promoting or resisting a tender offer; provided,
however, that if the Trustee or the Independent Fiduciary becomes aware of activity that on
its face reasonably appears to the Trustee or Independent Fiduciary to be materially false,
misleading, or coercive, the Trustee or the Independent Fiduciary, as the case may be, shall
promptly demand that the offending party take appropriate corrective action. If the offending
party fails or refuses to take appropriate corrective action, the Trustee or the Independent
Fiduciary, as the case may be, shall communicate with affected Account Owners in such manner
as it deems advisable.
	 
	14.12	 	Trustee to Follow Instructions.






	 	(a)	 	So long as the Trustee and the Independent Fiduciary, as the case may be, have
determined that the Plan is in compliance with ERISA §404(c), the Trustee or the
Independent Fiduciary shall tender, deal with stock rights, and act with respect to any
other rights appurtenant to the Company Stock, pursuant to the terms and conditions of
the particular transaction or event, and in accordance with instructions received from
Account Owners. Except for voting, the Trustee or the Independent Fiduciary shall take
no action with respect to Company Stock, stock rights, or other appurtenant rights for
which no instructions are received, and such Company Stock, stock rights, or other
appurtenant rights shall be treated like all other Company Stock, stock rights, or other
appurtenant rights for which no instructions are received. The Trustee, or if an
Independent Fiduciary has been appointed, the Independent Fiduciary, shall vote the
allocated Company Stock that an Account Owner does not vote as specified in section 14.1.




Page 42 of 47 









 












	 	(b)	 	If the Trustee or Independent Fiduciary determines that the Plan does not satisfy
the requirements of ERISA §404(c), the Trustee or Independent Fiduciary shall follow the
instructions of the Account Owner with respect to voting, tender, stock rights, or other
rights appurtenant to the Company Stock unless the Trustee or Independent Fiduciary
determines that to do so would be inconsistent with its fiduciary duties under ERISA. In
such case, the Trustee or the Independent Fiduciary shall take such action as it
determines to be consistent with its fiduciary duties under ERISA.






	14.13	 	Confidentiality.






	 	(a)	 	The Committee shall designate one of its members (the “Committee Fiduciary”) to
receive investment directions and to transmit such directions to the Trustee or
Independent Fiduciary, as the case may be. The Committee Fiduciary shall also receive
all Account Owner instructions concerning voting, tender, stock rights, and other rights
appurtenant to the Company Stock. The Committee Fiduciary shall communicate the
instructions to the Trustee or the Fiduciary, as appropriate.
	 
	 	(b)	 	Neither the Committee Fiduciary, the Trustee, nor the Independent Fiduciary shall
reveal or release any instructions received from Account Owners concerning the Company
Stock to Apache, an Affiliated Entity, or the officers, directors, employees, agents, or
representatives of Apache and Affiliated Entities, except to the extent necessary to
comply with Federal or state law not preempted by ERISA. If disclosure is required by
Federal or state law, the information shall be disclosed to the extent possible in the
aggregate rather than on an individual basis.
	 
	 	(c)	 	The Committee Fiduciary shall be responsible for reviewing the confidentiality
procedures from time to time to determine their adequacy. The Committee Fiduciary shall
ensure that the confidentiality procedures are followed. The Committee Fiduciary shall
also ensure that the Independent Fiduciary provided for in section 14.15 is appointed.
	 
	 	(d)	 	Apache, with the Trustee’s cooperation, shall take such action as is necessary to
maintain the confidentiality of Account records including, without limitation,
establishment of security systems and procedures which restrict access to Account records
and retention of an independent agent to maintain such records. If an independent
recordkeeping agent is retained, such agent must agree, as a condition of its retention
by Apache, not to disclose the composition of any Accounts to Apache, an Affiliated
Entity or an officer, director, employee, or representative of Apache or an Affiliated
Entity.
	 
	 	(e)	 	Apache acknowledges and agrees to honor the confidentiality of the Account Owners’
instructions to the Committee Fiduciary, the Trustee, and the Independent Fiduciary. If
Apache, by it own act or omission, breaches the confidentiality of Account Owner
instructions, Apache agrees to indemnify and hold harmless the Committee Fiduciary, the
Trustee, or the Independent Fiduciary, as the case may be, against and from all
liabilities, claims and demands, damages, costs, and expenses, including reasonable
attorneys’ fees, that the Committee Fiduciary, the Trustee, or the Independent Fiduciary
may incur as a result thereof.






	14.14	 	Investment of Proceeds.
	 
	 	 	If Company Stock or the rights are sold pursuant to the tender offer or the provisions of the
rights, the proceeds of such sale shall be invested in accordance with the provisions of the
Plan and the Trust Agreement.
	 
	14.15	 	Independent Fiduciary.
	 
	 	 	Apache shall appoint a fiduciary (the “Independent Fiduciary”) to act solely with respect to
the Company Stock in situations which the Committee Fiduciary determines involve a potential
for undue influence by Apache in connection with the Company Stock and the exercise of any
rights appurtenant to the Company Stock. If the Committee Fiduciary so determines, it shall
give written notice to the Independent Fiduciary, which shall have sole responsibility for
assuring that Account Owners receive the information necessary to make informed decisions
concerning the Company Stock, are free from undue influence or coercion, and that their
instructions are followed to the extent proper under ERISA. The Independent Fiduciary shall
act until it receives written notice to the contrary from the Committee Fiduciary.




Page 43 of 47 









 












	14.16	 	Method of Communications.
	 
	 	 	Several provisions in this Article specify that various communications to or from an Account
Owner must be in writing. The Committee, the Committee Fiduciary, the Independent Fiduciary,
the Company, and the Trustee, as appropriate, shall each have full authority to treat other
forms of communication, such as electronic mail or telephone voice-response, as satisfying any
“written” requirement specified in this Article, but only to the extent permitted by the IRS,
the Department of Labor, and the Securities Exchange Commission, as appropriate.





ARTICLE XV

Uniformed Services Employment and Reemployment Rights Act of 1994





	15.1	 	General.






	 	(a)	 	Scope. The Uniformed Services Employment and Reemployment Rights Act of
1994 (the “USERRA”), which is codified at 38 USCA §§4301-4318, confers certain rights on
individuals who leave civilian employment to perform certain services in the Armed
Forces, the National Guard, the commissioned corps of the Public Health Service, or in
any other category designated by the President of the United States in time of war or
emergency (collectively, the “Uniformed Services”). An Employee who joins the Uniformed
Services shall be referred to as a “Serviceman” in this Article. This Article shall be
interpreted to provide such individuals with all the benefits required by the USERRA but
no greater benefits than those required by the USERRA. This Article shall supersede any
contrary provisions in the remainder of the Plan.
	 
	 	(b)	 	Rights of Servicemen. When a Serviceman leaves the Uniformed Services, he
may have reemployment rights with the Company or Affiliated Entities, depending on many
factors, including the length of his stay in the Uniformed Services and the type of
discharge he received. When this Article speaks of the date a Serviceman’s potential
USERRA reemployment rights expire, it means the date on which the Serviceman fails to
qualify for reemployment rights (if, for example, he is dishonorably discharged, or
remains in the Uniformed Services for more than 5 years) or, if the Serviceman obtains
reemployment rights, the date his reemployment rights lapse because the Serviceman failed
to timely exercise those rights.






	15.2	 	While a Serviceman.
	 
	 	 	In general, a Serviceman shall be treated as an Employee while he continues to receive wages
from the Company or an Affiliated Entity, and once the Serviceman’s wages from the Company or
Affiliated Entity cease, the Serviceman shall be treated as if he were on an approved, unpaid
leave of absence.






	 	(a)	 	Participant Contributions. For purposes of making Participant
Contributions under section 3.2, if the Serviceman was a Covered Employee when he became
a Serviceman, he shall continue to be treated as a Covered Employee while he continues to
receive wages from the Company. As a consequence, (i) if he was a Covered Employee who
had satisfied the requirements of Article II when he became a Serviceman, he may continue
to make Participant Contributions from his wages from the Company, and (ii) if he had not
satisfied the requirements of section 2.1 when he became a Serviceman, his service in the
Uniformed Services shall be treated as service with the Company in determining when he
will be able to begin making Participant Contributions under section 2.1, and if his
wages from the Company continue beyond that eligibility date, the Serviceman may begin to
make Participant Contributions on such date. A Serviceman may change his rate of
contributions in the same manner as an Employee. A Serviceman’s Participant
Contributions shall cease when his wages from the Company cease.
	 
	 	(b)	 	Company Contributions. Wages paid by the Company to a Serviceman shall be
included in his Compensation as if the Serviceman were an Employee. A Serviceman’s
Participant Contributions shall be matched according to the formula in paragraph
3.1(b)(i). If the Employee was a Covered Employee when he became a Serviceman and his
wages continue through the last business day of a Plan Year, then (i) the Serviceman
shall be treated as an “eligible Participant” under subsection 3.1(a) for that Plan Year
(and shall therefore receive an allocation of any Company Discretionary Contribution);
(ii) the Serviceman shall be treated as an “eligible Participant” under paragraph
3.1(b)(ii) for that Plan Year (and shall therefore receive an allocation of any
additional match provided




Page 44 of 47 









 












	 	 	 	under such paragraph); (iii) if he was a Non-Highly Compensated Employee when he became
a Serviceman, he shall be eligible to receive an allocation of any QNECs and QMACs
provided under subsections 3.7(c) and 3.8(c); and (iv) he shall be treated as an
Employee under subsection 12.4(a) (and, if he is a Non-Key Employee, he shall therefore
receive any minimum required allocation if the Plan is top-heavy).
	 
	 	(c)	 	Investments. If the Serviceman has an account balance in the Plan, he is
an Account Owner and may therefore direct the investment of his Accounts pursuant to
section 9.3 and Article XIV.
	 
	 	(d)	 	Loans. For purposes of borrowing from the Plan under Article VII, a
Serviceman shall be treated as an Employee until the day on which his potential USERRA
reemployment rights expire. If a Serviceman with an outstanding loan continues to
receive wages from the Company or an Affiliated Entity after joining the Uniformed
Services, his loan payments shall continue to be deducted from those wages. Once the
Serviceman’s wages cease, his loan payments shall be suspended until the earlier of (i)
his reemployment with the Company or an Affiliated Entity or (ii) the day on which his
potential USERRA reemployment rights expire. The Serviceman may repay all or part of his
loan at any time during the suspension. During the payment suspension, interest shall
accrue on the unpaid balance of the loan. See subsections 15.3(b) and 15.4(c) for the
resumption of loan payments for a reemployed Serviceman, and subsection 15.3(a) for the
timing of the loan’s default if the Serviceman is not reemployed.
	 
	 	(e)	 	Distributions and Withdrawals. For purposes of Article VI (relating to
distributions and in-service withdrawals), the Serviceman shall be treated as an Employee
until the day on which his potential USERRA reemployment rights expire. See section 15.3
once his potential USERRA rights expire.
	 
	 	(f)	 	QDROs. QDROs shall be processed while the Participant is a Serviceman.
The Committee has the discretion to establish special procedures under subsection 13.9(e)
for Servicemen, by, for example, extending the usual deadlines to accommodate any
practical difficulties encountered by the Serviceman that are attributable to his service
in the Uniformed Services.
	 
	 	(g)	 	Rollovers. If the Serviceman was a Covered Employee when he became a
Serviceman, the Serviceman may make Rollover Contributions pursuant to subsection 3.2(d)
until the day on which his potential USERRA reemployment rights expire.






	15.3	 	Expiration of USERRA Reemployment Rights.






	 	(a)	 	Consequences. If a Serviceman is not reemployed before his potential
USERRA reemployment rights expire, the Committee shall determine his Termination From
Service Date by treating his service in the Uniformed Services as an approved leave of
absence but treating the expiration of his potential USERRA reemployment rights as the
failure to timely return from his leave of absence, with the consequence that his
Termination From Service Date will generally be the date his potential USERRA rights
expired. Once his Termination From Service Date has been determined, the Committee shall
determine his vested percentage. For purposes of Article VI (relating to distributions),
the day the Serviceman’s potential USERRA reemployment rights expired shall be treated as
the day of his Termination from Service. For purposes of subsection 5.4(b) (relating to
the timing of forfeitures), the Serviceman’s last day of employment shall be the day his
potential USERRA reemployment rights expired. If the Serviceman has an outstanding loan
from this Plan when his potential USERRA reemployment rights expire, his loan shall go
into default on the last day of the calendar quarter after the calendar quarter in which
his potential USERRA reemployment rights expired, unless, before the loan goes into
default, he repays the loan or is rehired pursuant to subsection (b).
	 
	 	(b)	 	Rehire after Expiration of Reemployment Rights. If the Company or an
Affiliated Company hires a former Serviceman after his potential USERRA reemployment
rights have expired, he shall be treated like any other former employee who is rehired.
If he had an outstanding loan and is reemployed before the loan goes into default
pursuant to subsection (a), his loan payments shall be recalculated and the Company or
Affiliated Entity shall immediately resume withholding the revised loan payments from his
pay. The term of the loan when payments resume shall be equal to the remaining term of
the loan when payments were suspended.




Page 45 of 47 









 












	15.4	 	Return From Uniformed Service.
	 
	 	 	This section applies solely to a Serviceman who returns to employment with the Company or an
Affiliated Entity because he exercised his reemployment rights under the USERRA.






	 	(a)	 	Credit for Service. A Serviceman’s length of time in the Uniformed
Services shall be treated as service with the Company for purposes of vesting and
determining his eligibility to participate in the Plan upon reemployment.
	 
	 	(b)	 	Participation. If the Serviceman satisfies the eligibility requirements of
section 2.1 before his reemployment, and he is a Covered Employee upon his reemployment,
he may participate in the Plan immediately upon his return.
	 
	 	(c)	 	Loans. If the Serviceman’s loan payments were suspended under subsection
15.2(d) during his time in the Uniformed Services, his loan payments shall be
recalculated and the Company or Affiliated Entity shall immediately resume withholding
the revised loan payments from his pay. The term of the loan when payments resume shall
be equal to the remaining term of the loan when payments were suspended.
	 
	 	(d)	 	Make-Up Participant Contributions. In addition to his regular Participant
Contributions, a returning Serviceman shall be permitted to make additional contributions
up to the amount of Participant Contributions he could have made if, instead of becoming
a Serviceman, he had remained employed by the Company or Affiliated Entity and been paid
his Deemed Compensation during that time. See subsection (h) for guidance on applying
the various limits contained in the Code to the calculation of the maximum additional
contribution the returning Serviceman may make. Such additional contributions may only
be made within a period that begins on his reemployment date and whose duration is the
lesser of five years or three times his length of time in the Uniformed Services. The
additional contributions shall be withheld from his Compensation pursuant to the
Serviceman’s election. The Committee shall establish administrative procedures for such
elections. The additional contributions shall be allocated to Participant Contributions
Accounts.
	 
	 	(e)	 	Make-Up Match. For each additional contribution that the Serviceman
contributes pursuant to subsection (d), the Company shall promptly contribute to his
Accounts an additional matching contribution. The additional matching contribution shall
be equal to the Company Matching Contribution (including forfeitures treated as Company
Matching Contributions) that he would have received if (i) his additional contributions
were Participant Contributions made during his time in the Uniformed Services, and (ii)
he was paid his Deemed Compensation during his time in the Uniformed Services. The
Serviceman’s additional contributions shall be spread over the pay periods in which they
could have occurred in such a way as to maximize the additional matching contribution.
See subsection (h) for guidance on applying the various limits contained in the Code to
the calculation of the additional matching contribution. The additional matching
contribution shall be allocated to the Participant’s Company Contributions Account unless
the additional matching contribution would have been designated a QMAC, in which case it
shall be allocated to his Participant Contributions Account.
	 
	 	(f)	 	Make-Up Company Discretionary Contribution. The Company shall contribute
an additional contribution to a Serviceman’s Accounts equal to the Company Discretionary
Contribution (including any forfeitures treated as Company Discretionary Contributions)
that would have been allocated to such Accounts if the Serviceman had remained employed
during his time in the Uniformed Services, and had earned his Deemed Compensation during
that time. See subsection (h) for guidance on applying the various limits contained in
the Code to the calculation of the additional discretionary contribution. The additional
discretionary contribution shall be allocated to the Participant’s Company Contributions
Account unless the additional discretionary contribution would have been designated a
QNEC, in which case it shall be allocated to his Participant Contributions Account.
	 
	 	(g)	 	Make-Up Miscellaneous Contributions. The Company shall contribute to the
Serviceman’s Accounts any QNECs and QMACs that the Serviceman would have received
pursuant to subsection 3.7(c) or 3.8(c), and any top-heavy minimum contribution he would
have received pursuant to section 12.4, (including any forfeitures treated as QNECs,
QMACs, or top-heavy minimum contributions) if he had remained employed during his time in
the Uniformed Services, and had earned Deemed Compensation during that time. See
subsection (h) for guidance on applying the various limits contained in the Code




Page 46 of 47 









 












	 	 	 	to the calculation of the QNECs, QMACs, and top-heavy minimum contribution. These
additional top-heavy minimum contributions shall be allocated to Company Contributions
Accounts. The additional QNECs and QMACs shall be allocated to Participant
Contributions Accounts.
	 
	 	(h)	 	Application of Limitations.






	 	(i)	 	The make-up contributions under subsections (d), (e), (f), and (g) (the
“Make-Up Contributions”) shall be ignored for purposes of determining the Company’s
maximum contribution under subsection 3.1(d), the limits on Participant
Contributions under paragraphs 3.2(a)(ii) and 3.2(b)(ii), the limits on Annual
Additions under section 3.4, the ADP test of section 3.5, the ACP test of section
3.6, the non-discrimination requirements of Code §401(a)(4), and (if the Serviceman
is a Key Employee) calculating the minimum required top-heavy contribution under
section 12.4.
	 
	 	(ii)	 	In order to determine the maximum Make-Up Contributions, the following
limitations shall apply.






	 	(A)	 	The Serviceman’s “Aggregate Compensation” for each year
shall be calculated. His Aggregate Compensation shall be equal to his actual
Compensation, plus his Deemed Compensation that would have been paid during
that year. Each type of Aggregate Compensation (for benefit purposes,
deferral purposes, etc.) shall be determined separately.
	 
	 	(B)	 	The Serviceman’s Aggregate Compensation each Plan Year
shall be limited to the dollar limit in effect for that Plan Year under Code
§401(a)(17), for the purposes and in the manner specified in subsection
1.14(f).
	 
	 	(C)	 	The limits of subsection 3.1(d) (relating to the maximum
contribution by the Company to the Plan) for each Plan Year shall be
calculated by using the Serviceman’s Aggregate Compensation for that Plan
Year, and by treating the Make-Up Contributions that are attributable to that
Plan Year’s Deemed Compensation as having been made during that Plan Year.
	 
	 	(D)	 	The limits of paragraph 3.2(a)(ii) (relating to the maximum
401(k) Contributions) and paragraph 3.2(b)(ii) (relating to the maximum
Catch-Up Contributions) for each calendar year shall be calculated by
treating as 401(k) and Catch-Up Contributions his additional contributions
pursuant to subsection (d) that are attributable to that calendar year’s
Deemed Compensation.
	 
	 	(E)	 	The limits of section 3.4 (relating to the maximum Annual
Additions to a Participant’s Accounts) shall be calculated for each
Limitation Year by using the Serviceman’s Aggregate Compensation for that
Limitation Year, and by treating as Annual Additions all the Make-Up
Contributions that are attributable to that Limitation Year’s Deemed
Compensation.
	 
	 	(F)	 	The Serviceman’s maximum Make-Up Contributions shall not be
limited by the results of the Plan’s ADP test or ACP test for any Plan Year
in which the Serviceman has Deemed Compensation, even if the Serviceman is
treated as a Highly Compensated Employee (using his Aggregate Compensation)
for that Plan Year.






	 	(i)	 	Deemed Compensation. A Serviceman’s Deemed Compensation is the
Compensation that he would have received (including raises) had he remained employed by
the Company or Affiliated Entity during his time in the Uniformed Services, unless it is
not reasonably certain what his Compensation would have been, in which case his Deemed
Compensation shall be based on his average rate of compensation during the 12 months (or,
if shorter, his period of employment with the Company and Affiliated Entities)
immediately before he entered the Uniformed Services. A Serviceman’s Deemed Compensation
shall be reduced by any Compensation actually paid to him during his time in the
Uniformed Services (such as vacation pay). Deemed Compensation shall cease when the
Serviceman’s potential USERRA reemployment rights expire. Each type of Deemed
Compensation (for benefit purposes, deferral purposes, etc.) shall be determined
separately.




Page 47 of 47 









 











	 	 	 	 	 	 	 	 	 
	 	 	 	 	APACHE CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 






Page 48 of 47 









 






APPENDIX A




Participating Companies



The following Affiliated Entities were actively participating in the Plan as of the following
dates:




	 	 	 	 	 
	 	 	Participation	 	Participation
	Business	 	Began As Of	 	Ended As Of
	Apache International, Inc.

	 	September 22, 1987
	 	N/A
	 
	 	 	 	 
	Apache Energy Resources
Corporation (Known as Hadson
Energy Resources Corporation
before January 1, 1995)

	 	January 1, 1994
	 	December 31, 1995
	 
	 	 	 	 
	Apache Canada Ltd.

	 	May 17, 1995
	 	N/A






— END OF APPENDIX A —




 A-1




 









 








APPENDIX B




Hadson Energy Resources Corporation




Introduction



Apache acquired Hadson Energy Resources Corporation (“HERC”) as of November 12, 1993. HERC
and its wholly owned subsidiary, Hadson Energy Limited (“HEL”), maintained the Hadson Energy
Resources Corporation Employee 401(k) Plan (the “HERC Plan”), a profit sharing plan containing a
cash or deferred arrangement. The HERC Plan was terminated as of December 31, 1993, and amounts
were transferred from the HERC Plan to this Plan.



The transferred amounts that are subject to the distribution restrictions of Code §401(k) shall be
placed in the Participant Contributions Accounts. Any remaining transferred amounts that represent
after-tax contributions, rollovers, or the associated investment earnings shall be placed in the
Rollover Account. All remaining transferred amounts shall be placed in the Company Contributions
Account.




— END OF APPENDIX B —




 B-1




 









 








APPENDIX C




Corporate Transactions



Over the years, Apache and its Affiliated Entities have engaged in numerous corporate
transactions, both acquisitions and sales. This Appendix contains any special provisions that
apply to employees affected by the corporate transaction, including both those who become Employees
and those who cease to be Employees.




Sales



For an Employee who transferred to Natural Gas Clearinghouse (“NGC”) pursuant to the terms of the
Employee Benefits Agreement effective April 1, 1990 between Apache and NGC, a Period of Service
shall be calculated by treating as employment with Apache any period(s) of employment after April
1, 1990 with NGC or any business that is then treated as a single employer with NGC pursuant to
Code §414(b), §414(c), §414(m), or §414(o).



Employees terminated in connection with the summer 1995 sale of certain properties to Citation 1994
Investment Limited Partnership are fully vested in their Plan Accounts as of September 1, 1995.



An Employee who transferred to Producers Energy Marketing LLC (“ProEnergy”) in the first half of
1996 is fully vested in his Plan Accounts as of the date of transfer. If such an individual
becomes an Employee again, all new contributions to his Plan Accounts shall vest according to the
regular rules.




Acquisitions



A Period of Service for vesting purposes for a New Employee (listed below) shall be determined by
treating all periods of employment with the Former Employer Controlled Group as periods of
employment with Apache. The “Former Employer Controlled Group” means the Former Employer (listed
below), its predecessor company/ies, and any business while such business was treated as a single
employer with the Former Employer or predecessor company pursuant to Code §414(b), §414(c),
§414(m), or §414(o).




[Remainder of Page Intentionally Left Blank]




 C-1




 









 







The following individuals are “New Employees” and the following companies are “Former Employers”:




	 	 	 
	Former Employer	 	New Employees
	Amoco Production Company (“Amoco”)

	 	All individuals who became
an Employee of the Company
pursuant to the provisions
of the Stock Purchase
Agreement effective June
30, 1991, between Amoco
Production Company,
Apache, and others.
	 
	 	 
	Hadson Energy Resources Corporation (“HERC”)
and Hadson Energy Limited (“HEL”)

	 	All individuals employed
by HERC or HEL on November
12, 1993.
	 
	 	 
	Crystal Oil Company (“Crystal”)

	 	All individuals hired from
Crystal or related
companies within a week of
the closing date on an
asset purchase that was
originally scheduled to
close on December 31,
1994.
	 
	 	 
	Texaco Exploration & Production, Inc. (“TEPI”)

	 	All individuals hired from
TEPI or related companies
in late February and early
March 1995 in connection
with an acquisition of
assets from TEPI at that
time.
	 
	 	 
	DEKALB Energy Company (“DEKALB”)

	 	All individuals who became
an employee of Apache on
or after May 17, 1995 —
their Period of Service
shall include any periods
of employment with DEKALB
before May 17, 1995
	 
	 	 
	The Phoenix Resource Companies, Inc.
(“Phoenix”)

	 	All individuals hired by
Apache in 1996 who were
Phoenix employees on May
20, 1996.
	 
	 	 
	Crescendo Resources, L.P. (“Crescendo”)

	 	All individuals hired from
April 30, 2000 through
June 1, 2000 from
Crescendo and related
companies in connection
with an April 30, 2000
asset acquisition from
Crescendo.
	 
	 	 
	Collins & Ware (“C&W”) and Longhorn Disposal,
Inc. (“Longhorn”)

	 	All individuals hired from
C&W and Longhorn and
related companies in
connection with a May 23,
2000 asset acquisition
from C&W and Longhorn.
	 
	 	 
	Occidental Petroleum Corporation (“Oxy”)

	 	All individuals hired from
Oxy and related companies
in connection with an
August 2000 asset
acquisition from an Oxy
subsidiary.
	 
	 	 
	Private company (“Private”)

	 	All individuals hired in
January 2003 from Private
and related companies in
connection with an asset
acquisition of certain
property in Louisiana
effective as of December
1, 2002.






—END OF APPENDIX C—




 C-2




 









 








APPENDIX D




DEKALB Energy Company / Apache Canada Ltd.




Introduction



Through a merger effective as of May 17, 1995, Apache then held 100% of the stock of DEKALB Energy
Company (which has been renamed Apache Canada Ltd.). Apache Canada Ltd. has adopted this Plan, and
Apache has approved its adoption, as of May 17, 1995, for the eligible employees of Apache Canada
Ltd.



Capitalized terms in this Appendix have the same meanings as those given to them in the Plan. The
regular terms of the Plan shall apply to the employees of Apache Canada Ltd., except as provided
below.




Eligibility to Participate



Notwithstanding the definition of “Covered Employee,” an employee of Apache Canada Ltd. shall be a
Covered Employee only if (1) he is either a U.S. citizen or a U.S. resident, and (2) he was
employed by Apache or another Company immediately before becoming an employee of Apache Canada Ltd.




Compensation



If the payroll of the Apache Canada Ltd. employee is handled in the United States, then the
definitions of Compensation the main body of the Plan apply. To the extent that the payroll of the
Apache Canada Ltd. employee is handled outside of the United States, the following definitions of
Compensation shall apply in lieu of the definitions found in the main body of the Plan:





	 	(a)	 	Code §415 Compensation. For purposes of determining the limitation on
Annual Additions under section 3.4 and the minimum contribution under section 12.4 when
the Plan is top-heavy, Compensation shall mean foreign earned income (within the meaning
of Code §911(b)) paid by the Company or an Affiliated Entity, and shall also include
elective contributions that are not includable in the Employee’s income pursuant to Code
§125, §132(f)(4), §402(e)(3), §402(h), §403(b), §408(p), §414(u)(2)(C), §414(v)(6)(B), or
§457. For purposes of section 3.4, Compensation shall be measured over a Limitation
Year. For purposes of section 12.4, Compensation shall be measured over a Plan Year.
	 
	 	(j)	 	Code §414(q) Compensation. For purposes of identifying Highly Compensated
Employees and Key Employees, Compensation shall have the same meaning as in paragraph
(a), except that Compensation shall be measured over a Plan Year and shall not include
any amounts accrued by, but not paid to, the Employee during the Plan Year.





— END OF APPENDIX D —




 D-1