exv10w38






Exhibit 10.38




APACHE CORPORATION

NON-EMPLOYEE DIRECTORS’ COMPENSATION PLAN




As Amended and Restated November 20, 2008; Effective as of January 1, 2009




PURPOSE



The purpose of the Non-Employee Directors’ Compensation Plan (the “Plan”) is to set forth certain
of the compensation arrangements for members of the board of directors (the “Board”) of Apache
Corporation (“Apache”) who are not also employees of Apache (“Non-Employee Directors”). The Plan
does not supersede or amend in any way any other arrangements relating to Non-Employee Directors
including specifically, without limitation, the Outside Directors’ Retirement Plan, the 2007
Omnibus Equity Compensation Plan, indemnification provisions of Apache’s charter or bylaws, or
policies with respect to reimbursement of expenses.



It is Apache’s express intention that this Plan comply with the requirements of Code §409A, and the
Plan shall be interpreted in that light.




PLAN PROVISIONS



1. Board Retainer. Each Non-Employee Director shall be paid $37,500 at the end of each
calendar quarter (or as soon thereafter as is administratively practicable) during which he or she
served as a member of Apache’s Board (“Cash Retainer Fee”). If a Non-Employee Director serves as a
member of Apache’s Board for less than an entire calendar quarter, the Cash Retainer Fee for that
quarter shall be prorated on the basis of the number of weeks served during that calendar quarter.



2. Committee Chairperson Retainers. Each Non-Employee Director serving as chairperson of
any committee of Apache’s Board shall be paid $3,750 at the end of each calendar quarter (or as
soon thereafter as is administratively practicable) (“Committee Chairperson Retainer Fee”). If a
Non-Employee Director serves as chairperson of any committee of Apache’s Board for less than an
entire calendar quarter, the Committee Chairperson Retainer Fee for that quarter shall be prorated
on the basis of the number of weeks as chairperson during that calendar quarter.



3. Attendance Fees. No attendance fee shall be paid to any Non-Employee Director for
any meeting of the Board or any committee thereof attended in person or by teleconference,
video conference, or other similar means.



4. Optional Deferral of Fees.





(a) Deferrable Fees. A Non-Employee Director may defer all or any portion of any
unpaid Cash Retainer Fees and Committee Chairperson Retainer Fees (“Deferrable Fees”).



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(b) Election to Defer. A Non-Employee Director’s election to defer all or any
portion of Deferrable Fees (“Deferral Election”) shall be effected by the completion of a
Deferral Election form. A Deferral Election form must be executed by the deferring
Non-Employee Director and received by Apache on or before December 31 of the year prior to
the year in which the Deferrable Fees are earned, except that a new Non-Employee Director
may enter into a Deferral Election within 30 days of becoming a Non-Employee Director. A
Deferral Election shall apply only to Deferrable Fees paid for services rendered after the
date of the Deferral Election. Each December 31, a Deferral Election made for the following
year shall become irrevocable. A new Deferral Election must be made each year for the
upcoming year.




(c) Memorandum Account. Apache shall maintain a separate account (“Memorandum
Account”) for each deferring Non-Employee Director. Each Memorandum Account shall be
subdivided into a “Cash Account” and a “Stock Account.” The Memorandum Accounts are merely
for recordkeeping purposes, and do not represent any actual property that has been set aside
for Non-Employee Directors. Nothing contained in this Plan shall be construed to require
Apache to fund any Memorandum Account. Neither the deferring Non-Employee Director nor his
or her Beneficiary shall have any property interest whatsoever in any specific assets of
Apache. A Non-Employee Director shall have no ownership rights with respect to any balance
in his or her Memorandum Account, and thus shall have no right to vote any Stock in his or
her Stock Account.




(d) Crediting of Cash Accounts. Any deferred Cash Retainer Fees and deferred
Committee Chairperson Retainer Fees shall be credited to the Cash Account. Any dividends
paid on Stock in the Stock Accounts shall be credited to the Cash Account. All amounts
credited to a Cash Account shall be credited with investment earnings at the rate of
interest earned by Apache’s short-term marketable securities portfolio or an equivalent
index or market rate for similar investments in short-term marketable securities.




(e) Crediting of Stock Accounts. No deferrals shall be credited to a Stock Account;
however, see section 4(f) for transfers from the Cash Account to the Stock Account. All
amounts credited to a Stock Account shall be treated as if such amounts were invested in
Stock. Apache shall at all times have reserved from its treasury shares for issuance under
this Plan a number of shares at least equal to the number of shares of Stock in the Stock
Accounts.




(f) Transfers from Cash Account to Stock Account. Each year, a Non-Employee
Director may elect to transfer all or a portion of his or her Cash Account to his or her
Stock Account (but only in whole-share increments) by completing an election form that must
be received by Apache on or before December 31. Any such transfer shall be made as of the
first trading day of the following year, and shall be based on the per share closing price
of the Stock as reported on the Composite Tape for the first trading day of the year.
Transfers are not permitted from a Stock Account to a Cash Account.




(g) Payout Elections. If a Non-Employee Director’s directorship terminated before
January 1, 2005, his or her benefit payments shall be determined under the terms of the Plan
on December 31, 2004 and the payout elections in effect at the



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time his or her directorship terminated. If a Non-Employee Director had a Separation from
Service after December 31, 2004 and before January 1, 2009, his or her benefits shall be
determined under the terms of the Plan in effect at the time of his or her Separation from
Service (defined in paragraph (v) below). The remainder of this section 4(g) shall only
apply to individuals who continue as Non-Employee Directors after December 31, 2008, or who
become Non-Employee Directors after December 31, 2008.




(i) Election. Each individual who is Non-Employee Director on January 1,
2009 has made a payout election for his or her Memorandum Account, which specified
both the timing and form of distribution. A new Non-Employee Director shall make a
payout election at the same time that he or she makes his or her first Deferral
Election. If no payout election is timely made, the Non-Employee Director shall be
deemed to have elected to be paid a single lump-sum payment in January after his or
her Separation from Service. The payout election with respect to a Memorandum
Account is irrevocable after the deadline for making the payout election. The payout
election will not apply if there is a change of control (see section 4(h)) or the
Non-Employee Director dies (see section 4(i)).




(ii) Form of Payout. A Non-Employee Director may elect to be paid out in a
single lump-sum payment or in two to ten annual installments. Each installment from
a Stock Account shall be equal to the number of shares in the Stock Account on the
second trading day of that year, divided by the number of remaining installments,
rounded down to the nearest whole share. For example, the first installment from a
Stock Account payable in seven installments beginning in 2010 shall be one-seventh of
the shares in the account on the second trading day of 2010; the second installment
shall be one-sixth of the shares in the account on the second trading date of 2011;
etc. Each installment from a Cash Account shall be equal to the balance of the Cash
Account on the second trading day of the year, divided by the number of remaining
installments, except that the last installment shall equal the balance of the Cash
Account at the time the distribution is processed. Distributions from the Stock
Account shall be paid in whole shares of Stock. Distributions from the Cash Account
shall be paid in cash.




(iii) Timing of Payment(s). A Non-Employee Director may select a specific
year in which the single lump-sum payment is made or the installment payments begin
(“In-Service Distribution”), in which case the payment will be made as soon as
administratively practicable in January of the earlier of the selected year or the
year after the Non-Employee Director’s Separation from Service. Alternatively, a
Non-Employee Director may elect for his or her single lump-sum payment or first
installment to be paid as soon as administratively practicable in the January after
his or her Separation from Service. Subsequent installment payments shall be made in
January of each year, beginning with the year after the first installment was paid.




(iv) Special Rules Where Payments Begin While Still a Director. This
paragraph (iv) applies to a Non-Employee Director who elected an In-Service
Distribution. A second Memorandum Account shall be established for the Non-Employee
Director for any amounts deferred into the Plan during or after the



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year in which the In-Service Distribution is scheduled to begin. Distributions
from the second Memorandum Account shall be subject to the rules specified in this
section 4(g), except that a Non-Employee Director must complete a payout election for
the second Memorandum Account by the December 31 that immediately precedes the year
in which amounts are first deferred into the second Memorandum Account.




(v) Definition of Separation from Service. The term “Separation from
Service” has the same meaning as the term “separation from service” in Code
§409A(a)(2)(A)(i), determined using the default rules in the regulations and other
guidance of general applicability issued pursuant to Code §409A, including the
special rules for members of a board of directors found in Treasury Regulation
§1.409A-1(h)(5) and §1.409A-1(c)(2)(ii). In general, a Separation from Service will
occur when a Non-Employee Director ceases to be a member of the Board.




(vi) Special Rules for Specified Employees.




If a Non-Employee Director is a Specified Employee, (A) any payments under paragraph
(iii) above that are triggered by his or her Separation from Service and scheduled to
occur within six months after the Separation from Service shall be delayed and paid
six months after the Separation from Service, and (B) section 4(h) is modified for a
Non-Employee Director whose Separation from Service preceded a change of control by
less than six months to provide that the lump sum payment will not occur until six
months after the Separation from Service.




The term “Specified Employee” has the same meaning as the term “specified employee”
in Code §409A(a)(2)(B)(i), and is determined using the default rules in the
regulations and other guidance of general applicability issued pursuant to Code
§409A.




(h) Change of Control. If there is a change of control of Apache that is described
in section 409A(a)(2)(A)(v) of the Code, each Memorandum Account shall be paid to the
appropriate Non-Employee Director (or to the Beneficiary of a deceased Non-Employee
Director) in a single lump-sum payment made on the date of the change of control or as soon
thereafter as is administratively practicable.




(i) Beneficiaries. If a Non-Employee Director dies while there is still a balance
in his or her Memorandum Account, that amount shall be paid to his or her Beneficiary in a
single lump-sum payment that is made as soon as administratively convenient four months
after the Non-Employee Director’s death, which provides the Beneficiary with an opportunity
to disclaim, except that no payment shall be made until Apache has been furnished with proof
of death and such other information as it may reasonably require.




(i) Designation. Each Non-Employee Director shall designate one or more
persons, trusts, or other entities as his or her beneficiary (“Beneficiary”). In the
absence of an effective Beneficiary designation as to part or all of a Memorandum
Account, such amount shall be distributed to the Non-Employee Director’s surviving
Spouse, if any, otherwise to the Non-Employee Director’s



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estate. Unless the Non-Employee Director’s Beneficiary designation form specifies
otherwise, if a Beneficiary dies after the Non-Employee Director but before being
paid by the Plan, the Plan shall pay the Beneficiary’s estate.




(ii) Changing Beneficiaries. A Beneficiary designation may be changed by the
Non-Employee Director at any time and without the consent of any previously
designated Beneficiary. However, if the Non-Employee Director is married, the
Non-Employee Director’s Spouse shall be the Beneficiary unless the Spouse has
consented to the designation of a different Beneficiary. To be effective, the
Spouse’s consent must have been made before January 1, 2005 or, if made on or after
January 1, 2005, the Spouse’s consent must be in writing, witnessed by a notary
public, and filed with Apache. If the Non-Employee Director has designated his or
her Spouse as a primary or contingent Beneficiary, and the Non-Employee Director and
Spouse later divorce (or their marriage is annulled), then the former Spouse will be
treated as having pre-deceased the Non-Employee Director for purposes of interpreting
a Beneficiary designation form completed prior to the divorce or annulment; this
provision will apply only if Apache is notified of the divorce or annulment before
payment to the former Spouse is made.




(iii) “Spouse” shall mean the individual to whom a Non-Employee Director is lawfully
married according to the laws of the state of the Non-Employee Director’s domicile.




(iv) Disclaimers. Any individual or legal entity who is a Beneficiary may
disclaim all or any portion of his or her 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.




(j) Adjustments in Stock. In the event of any merger, consolidation, liquidation,
dissolution, recapitalization, or reorganization of Apache, split, subdivision, or
consolidation of shares of Stock, the payment of a stock dividend, or any other material
change in Apache’s capital structure, the number of shares of Stock shown in each deferring
Non-Employee Director’s Stock Account shall be adjusted to reflect that number of shares of
Stock or such cash, securities, or other property to which such Non-Employee Director would
have been entitled if, immediately prior thereto, such Non-Employee Director had been the
holder of record of the number of shares of Stock shown in the Stock Account.
Notwithstanding the foregoing, the issuance by Apache of Stock, rights, options, or warrants
to acquire Stock, or securities convertible or exchangeable into Stock in consideration of
cash, property, labor, or services, whether or not for fair value, shall not result in an
adjustment pursuant to this section 4(j).


5. Assignment and Transfer. The right of the Non-Employee Director or any other person to
receive payments under the Plan shall not be assigned, transferred, pledged, or encumbered.




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6. Amendment of Plan. The Plan may be amended from time to time or terminated by vote of
the Board. Upon such amendment or termination, Non-Employee Directors shall not be entitled to
receive pursuant to the Plan any compensation or other rights or benefits not accrued hereunder
prior to the time of amendment or termination hereof; provided, however, that no such Plan
amendment or termination shall impair any rights of Non-Employee Directors to amounts previously
accrued pursuant to the Plan or accumulated in such Non-Employee Director’s Memorandum Account. A
Plan termination shall not affect the timing of any benefit payments from a Memorandum Account;
payment may occur substantially after the Plan is terminated.



7. Successors and Assigns. The Plan is binding upon Apache and its successors and assigns.
The Plan shall continue in effect until terminated by the Board. Any such termination shall
operate only prospectively and shall not affect the rights and obligations under elections
previously made.



8. Administrative Delays. The Committee may delay any payment from this Plan for as short
a period as is administratively necessary. For example, a delay may be imposed upon all payments
from the Plan when there is a change of recordkeeper, and a delay may be imposed on payments to any
recipient until they have provided the information needed for tax withholding and tax reporting, as
well as any other information reasonably requested by the Committee.



9. 409A Noncompliance. To the extent that Apache or the Committee takes any action that
causes a violation of Code §409A or fails to take reasonable actions required to comply with Code
§409A, Apache shall pay an additional amount (the “gross-up”) to the individual(s) who are subject
to the penalty tax under Code §409A(a)(1) that is sufficient to put the individual in the same
after-tax position he or she would have been in had there been no violation of Code §409A. Apache
shall not pay a gross-up if the cause of the violation of Code §409A is the recipient’s failure to
take reasonable actions (such as failing to timely provide the information required for tax
withholding or failing to timely provide other information reasonably requested by the Committee —
with the result that the delay in payment violates Code §409A). Any gross-up will be made as soon
as administratively convenient after the Committee determines the gross-up is owed, and no later
than the end of the calendar year immediately following the calendar year in which the additional
taxes are remitted. However, if the gross-up is due to a tax audit or litigation addressing the
existence or amount of a tax liability, the gross-up will be paid as soon as administratively
convenient after the litigation or audit is completed, and no later than the end of the calendar
year following the calendar year in which the audit is completed or there is a final and
non-appealable settlement or other resolution of the litigation.



10. Notices. Any notice, form, or election required or permitted to be given under the
Plan shall be in writing and shall be given by first class mail, by Federal Express, UPS, or other
carrier, by fax or other electronic means, or by personal delivery to the appropriate party,
addressed:





(a) If to Apache, to Apache Corporation at its principal place of business at 2000 Post Oak
Boulevard, Suite 100, Houston, Texas 77056-4400 (Attention: Corporate Secretary) or at such
other address as may have been furnished in writing by Apache to a Non-Employee Director; or



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(b) If to a Non-Employee Director or Spouse, at the address the Non-Employee Director has
furnished to Apache in writing.




(c) If to a Beneficiary, at the address the Non-Employee Director has furnished to Apache in
writing for such Beneficiary, unless the Beneficiary has furnished his or her own address in
writing to Apache.


Any such notice to a Non-Employee Director, Spouse, or Beneficiary shall be deemed to have been
given as of the third day after deposit in the United States Postal Service, postage prepaid,
properly addressed as set forth above, in the case of a mailed notice, or as of the date delivered
in the case of any other method of delivery.



11. Gender. Any term used herein in the singular shall also include the plural, and the
masculine gender shall also include the feminine gender, and vice versa.



12. Statutory References. Any reference to a specific section of the Code shall be deemed
to refer to that section or to the appropriate successor section.



13. Governing Law. The Plan shall be governed by the laws of the State of Texas, ignoring
any conflicts-of-law provisions.




Dated: November 20, 2008; Effective as of January 1, 2009




	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	APACHE CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Cheri L. Peper

	 	 
	 	By:
	 	/s/ Margery M. Harris
	 	 
	 

	 	 	 	 	 	 	 	 
	Cheri L. Peper

Corporate Secretary

	 	 	 	 	 	Margery M. Harris

Vice President, Human Resources	 	 







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