exv10w6







Exhibit 10.6




APACHE CORPORATION

2005 STOCK OPTION PLAN

(Amended and Restated August 14, 2008)




Section 1

Introduction



1.1 Establishment. Apache Corporation, a Delaware corporation (hereinafter referred to,
together with its Affiliated Corporations (as defined in Section 2.1 hereof) as the “Company”
except where the context otherwise requires), hereby establishes the Apache Corporation 2005 Stock
Option Plan (the “Plan”) for Eligible Employees (as defined in Section 2.1 hereof). The Plan
permits the grant of stock options to Eligible Employees selected by the Committee (as defined in
Section 2.1 hereof).



1.2 Purposes. The purposes of the Plan are to provide the Eligible Employees designated by
the Committee for participation in the Plan with added incentives to continue in the long-term
service of the Company and to create in such employees a more direct interest in the future success
of the operations of the Company by relating incentive compensation to increases in stockholder
value, so that the income of those employees is more closely aligned with the interests of the
Company’s stockholders. The Plan is also designed to attract outstanding individuals and to retain
and motivate Eligible Employees by providing an opportunity for investment in the Company.



1.3 Effective Date. The Effective Date of the Plan (the “Effective Date”) is February 3,
2005. This Plan and each Option (as defined in Section 2.1 hereof) granted hereunder is
conditioned on and shall be of no force or effect until the Plan is approved by the stockholders of
the Company. The Committee may grant Options, the exercise of which shall be expressly subject to
the condition that the Plan shall have been approved by the stockholders of the Company.




Section 2

Definitions



2.1 Definitions. The following terms shall have the meanings set forth below:




     (a) “Administrative Agent” means any designee or agent that may be appointed by the
Committee pursuant to Section 3.1(b) hereof.



     (b) “Affiliated Corporation” means any corporation or other entity (including but not
limited to a partnership) which is affiliated with Apache



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Corporation through stock ownership or otherwise and is treated as a common employer under the
provisions of Sections 414(b) and (c) or any successor section(s) of the Internal Revenue Code.



     (c) “Board” means the Board of Directors of the Company.



     (d) “Committee” means the Stock Option Plan Committee of the Board, which is empowered
hereunder to take actions in the administration of the Plan. The Committee shall be constituted at
all times as to permit the Plan to comply with Rule 16b-3 or any successor rule(s) promulgated
under the Securities Exchange Act of 1934, as amended (the “1934 Act”).



     (e) “Eligible Employees” means full-time employees (including, without limitation,
officers and directors who are also employees), and certain part-time employees, of the Company or
any division thereof.



     (f) “Expiration Date” means the date on which the Option Period (as defined in
subsection 7.2(c) hereof) ends.



     (g) “Fair Market Value” means the per share closing price of the Stock as reported on
The New York Stock Exchange, Inc. Composite Transactions Reporting System for a particular date or,
if the Stock is not so listed on such date, as reported on NASDAQ or on such other exchange or
electronic trading system which, on the date in question, reports the largest number of traded
shares of Stock, provided, however, that if on the date Fair Market Value is to be
determined there are no transactions in the Stock, Fair Market Value shall be determined as of the
immediately preceding date on which there were transactions in the Stock; provided
further, however, that if the foregoing provisions are not applicable, the fair
market value of a share of the Stock as determined by the Committee by the reasonable application
of such reasonable valuation method, consistently applied, as the Committee deems appropriate.



     (h) “Internal Revenue Code” means the Internal Revenue Code of 1986, as it may be
amended from time to time, and any successor thereto.



     (i) “Option” means a right to purchase shares of Stock at a stated price for a
specified period of time. All Options granted under the Plan shall be Options which are not
“incentive stock options” as described in Section 422 or any successor section(s) of the Internal
Revenue Code.



     (j) “Option Price” means the price at which shares of Stock subject to an Option may
be purchased, determined in accordance with subsection 7.2(b) hereof.



     (k) “Participant” means an Eligible Employee designated by the Committee from time to
time during the term of the Plan to receive one or more Options under the Plan.



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     (l) “Stock” means the U.S. $0.625 par value Common Stock of the Company or any
security into which such Common Stock is converted or exchanged upon merger, consolidation, or any
capital restructuring (within the meaning of Section 4.3) of the Company.


2.2 Headings; Gender and Number. The headings contained in the Plan are for reference
purposes only and shall not affect in any way the meaning or interpretation of the Plan. Except
when otherwise indicated by the context, the masculine gender shall also include the feminine
gender, and the definition of any term herein in the singular shall also include the plural.




Section 3




Plan Administration



3.1 Administration by the Committee.




     (a) The Plan shall be administered by the Committee. In accordance with the provisions of the
Plan, the Committee shall, in its sole discretion, select the Participants from among the Eligible
Employees, determine the Options to be granted pursuant to the Plan, the number of shares of Stock
to be issued thereunder, the time at which such Options are to be granted, fix the Option Price,
and establish such other terms and requirements as the Committee may deem necessary or desirable
and consistent with the terms of the Plan. The Committee shall determine the form or forms of the
agreements with Participants which shall evidence the particular provisions, terms, conditions,
rights and duties of the Company and the Participants with respect to Options granted pursuant to
the Plan, which provisions need not be identical except as may be provided herein.



     (b) The Committee may from time to time adopt such rules and regulations for carrying out the
purposes of the Plan as it may deem proper and in the best interests of the Company. The Committee
may appoint an Administrative Agent, who need not be a member of the Committee or an employee of
the Company, to assist the Committee in administration of the Plan and to whom it may delegate such
powers as the Committee deems appropriate, except that the Committee shall determine any dispute.
The Committee may correct any defect, supply any omission or reconcile any inconsistency in the
Plan, or in any agreement entered into hereunder, in the manner and to the extent it shall deem
expedient and it shall be the sole and final judge of such expediency. No member of the Committee
shall be liable for any action or determination made in good faith. The determination,
interpretations and other actions of the Committee pursuant to the provisions of the Plan shall be
binding and conclusive for all purposes and on all persons.



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3.2 Compliance with Section 162(m). The Plan is intended to comply with the requirements
of Section 162(m) or any successor section(s) of the Internal Revenue Code (“Section 162(m)”) as to
any “covered employee” as defined in
Section 162(m), and shall be administered, interpreted and construed consistently therewith. In
accordance with this intent, the amount of income a Participant may receive from Options granted
under the Plan shall be based solely on an increase in the value of the Stock after the date of the
grant of the Option, or such other bases as may be permitted by applicable law. The Committee is
authorized to take such additional action, if any, that may be required to ensure that the Plan and
any Option granted under the Plan satisfy the requirements of Section 162(m), taking into account
any regulations or other guidance issued by the Internal Revenue Service.




Section 4




Stock Subject to the Plan



4.1 Number of Shares. Subject to Section 7.1 hereof and to adjustment pursuant to Section
4.3 hereof, five million (5,000,000) shares of Stock are authorized for issuance under the Plan in
accordance with the provisions of the Plan and subject to such restrictions or other provisions as
the Committee may from time to time deem necessary. This authorization may be increased from time
to time by approval of the Board and the stockholders of the Company if, on the advice of counsel
for the Company, such stockholder approval is required. Shares of Stock which may be issued upon
exercise of Options shall be applied to reduce the maximum number of shares of Stock remaining
available for use under the Plan. The Company shall at all times during the term of the Plan and
while any Options are outstanding retain as authorized and unissued Stock, or as Stock in the
Company’s treasury, at least the number of shares from time to time required under the provisions
of the Plan, or otherwise assure itself of its ability to perform its obligations hereunder.



4.2 Other Shares of Stock. Any shares of Stock that are subject to an Option which
expires, is forfeited, is cancelled, or for any reason is terminated unexercised, and any shares of
Stock that for any other reason are not issued to a Participant or are forfeited shall
automatically become available for use under the Plan.



4.3 Adjustments for Stock Split, Stock Dividend, Etc. If the Company shall at any time
increase or decrease the number of its outstanding shares of Stock or change in any way the rights
and privileges of such shares by means of the payment of a Stock dividend or any other
distribution upon such shares payable in Stock, or through a Stock split, subdivision,
consolidation, combination, reclassification or recapitalization involving the Stock (any of the
foregoing being herein called a “capital restructuring”),
then in relation to the Stock that is affected


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 by one or more of the above events, the numbers, rights and privileges of the following
shall be, in each case, equitably and proportionally adjusted to take into account the occurrence
of any of the above events, (i) the shares of Stock as to which Options may be granted under the
Plan; (ii) the shares of Stock then
included in each outstanding Option granted hereunder; and (iii) the Option Price for each
outstanding Option granted hereunder.



4.4 Dividend Payable in Stock of Another Corporation, Etc. If the Company shall at any
time pay or make any dividend or other distribution upon the Stock payable in securities or other
property (except money or Stock), a proportionate part of such securities or other property shall
be set aside and delivered to any Participant then holding an Option for the particular type of
Stock for which the dividend or other distribution was made, upon exercise thereof. Prior to the
time that any such securities or other property are delivered to a Participant in accordance with
the foregoing, the Company shall be the owner of such securities or other property and shall have
the right to vote the securities, receive any dividends payable on such securities, and in all
other respects shall be treated as the owner. If securities or other property which have been set
aside by the Company in accordance with this Section are not delivered to a Participant because an
Option is not exercised, then such securities or other property shall remain the property of the
Company and shall be dealt with by the Company as it shall determine in its sole discretion.



4.5 Other Changes in Stock. In the event there shall be any change, other than as
specified in Sections 4.3 and 4.4 hereof, in the number or kind of outstanding shares of Stock or
of any stock or other securities into which the Stock shall be changed or for which it shall have
been exchanged, and if the Committee shall in its discretion determine that such change equitably
requires an adjustment in the number or kind of shares subject to outstanding Options or which have
been reserved for issuance pursuant to the Plan but are not then subject to an Option, then such
adjustments shall be made by the Committee and shall be effective for all purposes of the Plan and
on each outstanding Option that involves the particular type of stock for which a change was
effected.




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4.6 Rights to Subscribe. If the Company shall at any time grant to the holders of its
Stock rights to subscribe pro rata for additional shares thereof or for any other
securities of the Company or of any other corporation, there shall be reserved with respect to the
shares then under Option to any Participant of the particular class of Stock involved the Stock or
other securities which the Participant would have been entitled to subscribe for if immediately
prior to such grant the Participant had exercised his entire Option. If, upon exercise of any such
Option, the Participant subscribes for the additional shares or other securities, the aggregate
Option Price shall be increased by the amount of the price that is payable by the Participant for
such additional shares or other securities.



4.7 General Adjustment Rules. No adjustment or substitution provided for in this Section 4
shall require the Company to sell a fractional share of Stock under any Option, or otherwise issue
a fractional share of Stock, and the total
substitution or adjustment with respect to each Option shall be limited by deleting any fractional
share. In the case of any such substitution or adjustment, the aggregate Option Price for the
shares of Stock then subject to the Option shall remain unchanged but the Option Price per share
under each such Option shall be equitably adjusted by the Committee to reflect the greater or
lesser number of shares of Stock or other securities into which the Stock subject to the Option may
have been changed.



4.8 Determination by the Committee, Etc. Adjustments under this Section 4 shall be made by
the Committee, whose determinations with regard thereto shall be final and binding upon all
parties.




Section 5




Reorganization or Liquidation



In the event that the Company is merged or consolidated with another corporation and the Company is
not the surviving corporation, or if all or substantially all of the assets or more than 20 percent
of the outstanding voting stock of the Company is acquired by any other corporation, business
entity or person, or in case of a reorganization (other than a reorganization under the United
States Bankruptcy Code) or liquidation of the Company, and if the provisions of Section 8 hereof do
not apply, the Committee, or the board of directors of any corporation assuming the obligations of
the Company, shall, as to the Plan and outstanding Options make appropriate provision for the
adoption and continuation of the Plan by the acquiring or successor corporation and for the
protection of any such outstanding Options by the substitution on an equitable basis of appropriate
stock of the Company or of the merged, consolidated or otherwise reorganized corporation which will
be issuable with


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 respect to the Stock, provided that no additional benefits shall be conferred upon
the Participants holding such Options as a result of such substitution, and the excess of the
aggregate Fair Market Value of the shares subject to the Options immediately after such
substitution over the aggregate Option Price thereof is not more than the excess of the aggregate
Fair Market Value of the shares subject to such Options immediately before such substitution over
the aggregate Option Price thereof. Additionally, upon the occurrence of such an event and upon
written notice to the Participants, the Committee may provide that all unexercised Options shall be
exercised within a specified number of days of the date of such notice or such Options will be
terminated. In the latter event, the Committee shall accelerate the vesting dates of outstanding
Options so that all Options become fully vested and exercisable prior to any such event.




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Section 6




Participation



Participants in the Plan shall be those Eligible Employees who, in the judgment of the Committee,
are performing, or during the term of their incentive arrangement will perform, vital services in
the management, operation and development of the Company or an Affiliated Corporation, and
significantly contribute, or are expected to significantly contribute, to the achievement of the
Company’s long-term corporate economic objectives. Participants may be granted from time to time
one or more Options; provided, however, that the grant of each such Option shall be separately
approved by the Committee, and receipt of one such Option shall not result in automatic receipt of
any other Option. Upon determination by the Committee that an Option is to be granted to a
Participant, written notice shall be given to such person, specifying the terms, conditions, rights
and duties related thereto. Each Participant shall, if required by the Committee, enter into an
agreement with the Company, in such form as the Committee shall determine and which is consistent
with the provisions of the Plan, specifying such terms, conditions, rights and duties. Options
shall be deemed to be granted as of the date specified in the grant resolution of the Committee,
which date shall be the date of any related agreement with the Participant. In the event of any
inconsistency between the provisions of the Plan and any such agreement entered into hereunder, the
provisions of the Plan shall govern.




Section 7




Stock Options



7.1 Grant of Stock Options. Coincident with or following designation for participation in
the Plan, an Eligible Employee may be granted one or more Options. Grants of Options under the
Plan shall be made by the Committee. In no event shall the exercise of one Option affect the right
to exercise any other Option or affect the number of shares of Stock for which any other Option may
be exercised, except as provided in subsection 7.2(j) hereof. During the duration of the Plan, no
Eligible Employee may be granted Options which in the aggregate cover in excess of 25 percent of
the total shares of Stock authorized under the Plan.



7.2 Stock Option Agreements. Each Option granted under the Plan shall be evidenced by a
written stock option agreement which shall be entered into by the Company and the Participant to
whom the Option is granted (the “Stock Option Agreement”), and which shall contain the following
terms and conditions set out in this Section 7.2, as well as such other terms and conditions, not
inconsistent therewith, as the Committee may consider appropriate. This requirement for


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delivery of
a written Stock Option Agreement is satisfied by electronic
delivery of
such agreement provided that evidence of the Participant’s receipt of such electronic delivery is
available to the Company and all applicable laws and regulations permit such delivery.




     (a) Number of Shares. Each Stock Option Agreement shall state that it covers a
specified number of shares of Stock, as determined by the Committee.



     (b) Price. The price at which each share of Stock covered by an Option may be
purchased shall be determined in each case by the Committee and set forth in the Stock Option
Agreement, but in no event shall the price be less than the Fair Market Value of the Stock on the
date the Option is granted.



     (c) Duration of Options; Employment Required For Exercise. Each Stock Option
Agreement shall state the period of time, determined by the Committee, within which the Option may
be exercised by the Participant (the “Option Period”). The Option Period must end, in all cases,
not more than ten years from the date an Option is granted. Except as otherwise provided in
Sections 5 and 8 and subsection 7.2(d)(iv) hereof, each Option granted under the Plan shall become
exercisable in increments such that 25 percent of the Option becomes exercisable on each of the
four subsequent one-year anniversaries of the date the Option is granted, provided that each such
additional 25-percent increment shall become exercisable only if the Participant has been
continuously employed by the Company from the date the Option is granted through the date on which
each such additional 25-percent increment becomes exercisable.



     (d) Termination of Employment, Death, Disability, Etc. Each Stock Option Agreement
shall provide as follows with respect to the exercise of the Option upon termination of the
employment or the death or disability of the Participant:



          (i) If the employment of the Participant by the Company is terminated within the Option
Period for cause, as determined by the Company, the Option shall thereafter be void for all
purposes. As used in this subsection 7.2(d), “cause” shall mean a gross violation, as determined
by the Company, of the Company’s established policies and procedures, provided that the effect of
this subsection 7.2(d) shall be limited to determining the consequences of a termination and that
nothing in this subsection 7.2(d) shall restrict or otherwise interfere with the Company’s
discretion with respect to the termination of any employee.




          (ii) If the Participant retires from employment by the Company on or after attaining age 60,
the Option may be exercised by the Participant within 36 months following his or her retirement
(provided that such exercise must occur




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within the Option Period), but not thereafter. In the
event of the Participant’s death during such 36-month period, each Option may be exercised by those
entitled to do so in the manner referred to in (iv) below. In any such case, the
Option may be exercised only as to the shares as to which the Option had become exercisable on or
before the date of the Participant’s retirement.




          (iii) If the Participant becomes disabled (as determined pursuant to the Company’s Long-Term
Disability Plan or any successor plan), during the Option Period while still employed, or within
the three-month period referred to in subsection 7.2(d)(v) below, or within the 36-month period
referred to in subsection 7.2(d)(ii) above, the Option may be exercised by the Participant or by
his or her guardian or legal representative, within twelve months following the Participant’s
disability, or within the 36-month period referred to in subsection 7.2(d)(ii) above if applicable
and if longer (provided that such exercise must occur within the Option Period), but not
thereafter. In the event of the Participant’s death during such twelve-month period, each Option
may be exercised by those entitled to do so in the manner referred to in subsection 7.2(d)(iv)
below. In any such case, the Option may be exercised only as to the shares of Stock as to which
the Option had become exercisable on or before the date of the Participant’s disability.




          (iv) In the event of the Participant’s death while still employed by the Company, each Option
of the deceased Participant may be exercised by those entitled to do so under the Participant’s
will or under the laws of descent and distribution within twelve months following the Participant’s
death (provided that in any event such exercise must occur within the Option Period), but not
thereafter, as to all shares of Stock which are subject to such Option, including each 25-percent
increment of the Option, if any, which has not yet become exercisable at the time of the
Participant’s death. In the event of the Participant’s death within the 36-month period referred
to in subsection 7.2(d)(ii) above or within the twelve-month period referred to in subsection
7.2(d)(iii) above, each Option of the deceased Participant that is exercisable at the time of death
may be exercised by those entitled to do so under the Participant’s will or under the laws of
descent and distribution within twelve months following the Participant’s death or within the
36-month period referred to in subsection 7.2(d)(ii) above, if applicable and if longer (provided
that in any event such exercise must occur within the Option Period). The provisions of this
paragraph (iv) of subsection 7.2(d) shall be applicable to each Stock Option Agreement as if set
forth therein word for word. Each Stock Option Agreement executed by the Company prior to the
adoption of this provision shall be deemed amended to include the provisions of this paragraph and
all Options granted pursuant to such Stock Option Agreements shall be exercisable as provided
herein.




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          (v) If the employment of the Participant by the Company is terminated (which for this purpose
means that the Participant is no longer employed by the Company or by an Affiliated Corporation)
within the Option Period for any reason other than cause, the Participant’s retirement on or after
attaining age 60, or the Participant’s disability or death, the Option may be
exercised by the Participant within three months following the date of such termination (provided
that such exercise must occur within the Option Period), but not thereafter. In any such case, the
Option may be exercised only as to the shares as to which the Option had become exercisable on or
before the date of termination of the Participant’s employment.




     (e) Transferability. Each Stock Option Agreement shall provide that the Option
granted therein is not transferable by the Participant except by will or pursuant to the laws of
descent and distribution, and that such Option is exercisable during the Participant’s lifetime
only by him or her, or in the event of the Participant’s disability or incapacity, by his or her
guardian or legal representative.



     (f) Agreement to Continue in Employment. Each Stock Option Agreement shall contain
the Participant’s agreement to remain in the employment of the Company, at the pleasure of the
Company, for a continuous period of at least one year after the date of such Stock Option
Agreement, at the salary rate in effect on the date of such agreement or at such changed rate as
may be fixed, from time to time, by the Company. Termination of the Stock Option Agreement and all
unvested Options granted under such Stock Option Agreement shall be the Company’s sole and
exclusive remedy for an employee’s breach of this Section 7.2(f).



     (g) Exercise, Payments, Etc.



          (i) Each Stock Option Agreement shall provide that the method for exercising the Option
granted therein shall be by delivery to the Office of the Secretary of the Company or to the
Administrative Agent of written notice specifying the number of shares of Stock with respect to
which such Option is exercised and payment to the Company of the aggregate Option Price. Such
notice shall be in a form satisfactory to the Committee and shall specify the particular Options
(or portions thereof) which are being exercised and the number of shares of Stock with respect to
which the Options are being exercised. The Participant’s obligation to deliver written notice of
exercise is satisfied by electronic delivery of such notice through means satisfactory to the
Committee and prescribed by the Company. The exercise of the Option shall be deemed effective on
the date such notice is received by the Office of the Secretary or by the Administrative Agent and
payment is made to the Company of the aggregate Option Price (the “Exercise Date”); however, if
payment of the aggregate Option Price is made pursuant to a sale of shares of Stock as contemplated
by




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subsection 7.2(g)(iii)(E) below, the Exercise Date shall be deemed to be the date of such sale.
If requested by the Company, such notice shall contain the Participant’s representation that he or
she is purchasing the Stock for investment purposes only and his or her agreement not to sell any
Stock so purchased in any manner that is in violation of the Securities Act of 1933, as amended, or
any applicable state law, and such restriction, or notice thereof, shall be placed on the
certificates representing the Stock so purchased. The purchase of such Stock shall take place upon
delivery of such notice to the Office of the Secretary of the Company or to the Administrative
Agent, at which time the aggregate Option Price shall be paid in full to the Company by any of the
methods or any combination of the methods set forth in subsection 7.2(g)(iii) below.




          (ii) The shares of Stock to which the Participant is entitled as a result of the exercise of
the Option shall be issued by the Company and (A) delivered by electronic means to an account
designated by the Participant, or (B) delivered to the Participant in the form of a properly
executed certificate or certificates representing such shares of Stock. If shares of Stock are
used to pay all or part of the aggregate Option Price, the Company shall issue and deliver to the
Participant the additional shares of Stock, in excess of the aggregate Option Price or portion
thereof paid using shares of Stock, to which the Participant is entitled as a result of the Option
exercise. The Company’s obligation to deliver the shares of Stock to which the Participant is
entitled as a result of the exercise of the Option shall be subject to the payment in full to the
Company of the aggregate Option Price and the required tax withholding.




          (iii) The aggregate Option Price shall be paid by any of the following methods or any
combination of the following methods:




               (A) in cash, including the wire transfer of funds in U.S. dollars to one of the Company’s
bank accounts located in the United States, with such bank account to be designated from time to
time by the Company;



               (B) by personal, certified or cashier’s check payable in U.S. dollars to the order of the
Company;



               (C) by delivery to the Company or the Administrative Agent of certificates representing a
number of shares of Stock then owned by the Participant, the aggregate Fair Market Value of which
(as of the Exercise Date) is not greater than the aggregate Option Price of the Option being
exercised, properly endorsed for transfer to the Company, provided that the shares of Stock used
for this purpose must have been owned by the Participant for a period of at least six months;



               (D) by certification or attestation to the Company or the Administrative Agent of the
Participant’s ownership (as of the Exercise Date) of a number of shares of Stock, the aggregate
Fair Market Value of which (as of the Exercise Date) is not greater than the aggregate Option Price
of the Option being



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exercised, provided that the shares of Stock used for this purpose have been
owned by the Participant for a period of at least six months; or




               (E) by delivery to the Company or the Administrative Agent of a properly executed notice of
exercise together with irrevocable instructions to a broker to promptly deliver to the Company, by
wire transfer or check as noted in subsection 7.2(g)(iii)(A) and (B) above, the amount of the
proceeds of the sale of
all or a portion of the Stock or of a loan from the broker to the Participant necessary to pay the
aggregate Option Price.



          (iv) For purposes of the Plan, the income resulting from an Option exercise shall be based on
the Fair Market Value of the Stock for the Exercise Date; however, if payment of the aggregate
Option Price is made pursuant to a sale of shares of Stock as contemplated by subsection
7.2(g)(iii)(E) hereof, the Fair Market Value shall be deemed to be the per share sale price and the
Exercise Date shall be deemed to be the date of such sale.




     (h) Date of Grant. An Option shall be considered as having been granted on the date
specified in the grant resolution of the Committee.



     (i) Tax Withholding. Each Stock Option Agreement shall provide that, upon exercise of
the Option, the Participant shall make appropriate arrangements with the Company to provide for the
minimum amount of tax withholding required by law, including without limitation Sections 3102 and
3402 or any successor section(s) of the Internal Revenue Code and applicable state and local income
and other tax laws, by payment of such taxes in cash (including wire transfer), by check, or as
provided in Section 13.2 hereof.



     (j) Adjustment of Options. Subject to the provisions of Sections 4, 5, 7, 8 and 12
hereof, the Committee may make any adjustment in the number of shares of Stock covered by, or the
terms of an outstanding Option and a subsequent granting of an Option, by amendment or by
substitution for an outstanding Option; however, except as provided in Sections 4, 5, 8 and 12
hereof, the Committee may not adjust the Option Price of any outstanding Option. Such amendment or
substitution may result in terms and conditions (including the number of shares of Stock covered,
vesting schedule or Option Period) that differ from the terms and conditions of the original
Option. The Committee may not, however, adversely affect the rights of any Participant to
previously granted Options without the consent of such Participant. If such action is effected by
amendment, the effective date of such amendment will be the date of grant of the original Option.


7.3 Stockholder Privileges. No Participant shall have any rights as a stockholder with
respect to any shares of Stock covered by an Option until the Participant becomes the holder of
record of such Stock. Except as provided in Section 4 hereof, no adjustments shall be made for
dividends or other distributions or other rights as to which there is a record date preceding the
date on which such Participant becomes the holder of record of such Stock.




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Section 8




Change of Control



8.1 In General. In the event of the occurrence of a change of control of the Company, as
defined in Section 8.3 hereof, all outstanding Options shall become automatically vested, without
further action by the Committee or the Board, so as to make all such Options fully vested and
exercisable as of the date of such change of control.



8.2 Limitation on Payments. If the provisions of this Section 8 would result in the
receipt by any Participant of a payment within the meaning of Section 280G or any successor
section(s) of the Internal Revenue Code, and the regulations promulgated thereunder, and if the
receipt of such accelerated vesting or payment by any Participant would, in the opinion of
independent tax counsel of recognized standing selected by the Company, result in the payment by
such Participant of any excise tax provided for in Sections 280G and 4999 or any successor
section(s) of the Internal Revenue Code, then the amount of such accelerated vesting or payment
shall be reduced to the extent required, in the opinion of independent tax counsel, to prevent the
imposition of such excise tax; provided, however, that any payment or vesting of any Options shall
occur as otherwise provided herein to the fullest extent possible without triggering such excise
tax.



8.3 Definition. For purposes of the Plan, a “change of control” shall mean any of the
events specified in the Company’s Income Continuance Plan or any successor plan which constitute a
change of control within the meaning of such plan.




Section 9




Rights of Employees, Participants



9.1 Employment. Nothing contained in the Plan or in any Option granted under the Plan
shall confer upon any Participant any right with respect to the continuation of his or her
employment by the Company or any Affiliated Corporation, or interfere in any way with the right of
the Company or any Affiliated Corporation, subject to the terms of any separate employment
agreement to the contrary, at any time, to terminate such employment or to increase or decrease the
level of the Participant’s compensation from the level in existence at the time of the grant of an
Option. Whether an authorized leave of absence, or absence in military or government service,
shall constitute a termination of employment shall be determined by the Committee at the time.




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9.2 Nontransferability. No right or interest of any Participant in an Option granted
pursuant to the Plan shall be assignable or transferable during the lifetime of the Participant,
either voluntarily or involuntarily, or subjected to any lien, directly or indirectly, by operation
of law, or otherwise, including execution, levy, garnishment, attachment, pledge or bankruptcy. In
the event of a Participant’s death, a Participant’s rights and interests in Options shall, to the
extent provided in Section 7 hereof, be transferable by testamentary will or the laws of descent
and distribution, and payment of any amounts due under the Plan shall be made to, and exercise of
any Options may be made by, the Participant’s legal representatives, heirs or legatees. If, in the
opinion of the Committee, a person entitled to payments or to exercise rights with respect to the
Plan is disabled from caring for his or her affairs because of mental condition, physical condition
or age, payment due such person may be made to, and such rights shall be exercised by, such
person’s guardian, conservator or other legal personal representative upon furnishing the Committee
with evidence of such status satisfactory to the Committee.




Section 10




General Restrictions



10.1 Investment Representations. The Company may require a Participant, as a condition of
exercising an Option, to give written assurances in substance and form satisfactory to the Company
and its counsel to the effect that such person is acquiring the Stock subject to the Option for his
own account for investment and not with any present intention of selling or otherwise distributing
the same, and to such other effects as the Company deems necessary or appropriate in order to
comply with federal and applicable state securities laws.



10.2 Compliance with Securities Laws. Each Option shall be subject to the requirement
that, if at any time counsel to the Company shall determine that the listing, registration or
qualification of the shares of Stock subject to such Option upon any securities exchange or under
any state or federal law, or the consent or approval of any governmental or regulatory body, is
necessary as a condition of, or in connection with, the issuance or purchase of shares of Stock
thereunder, such Option may not be accepted or exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or obtained on conditions
acceptable to the Committee. Nothing herein shall be deemed to require the Company to apply for or
to obtain such listing, registration, qualification, consent or approval.




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Section 11




Other Employee Benefits



The amount of any income deemed to be received by a Participant as a result of an Option exercise
shall not constitute “earnings” or “compensation” with respect to which any other employee benefits
of such Participant are determined including, without limitation, benefits under any pension,
profit sharing, life insurance or salary continuation plan.




Section 12




Plan Amendment, Modification and Termination



The Board may at any time terminate, and from time to time may amend or modify the Plan provided,
however, that no amendment or modification may become effective without approval of the amendment
or modification by the Company’s stockholders if stockholder approval is required to enable the
Plan to satisfy any applicable statutory or regulatory requirements unless the Company, on the
advice of counsel, determines that stockholder approval is otherwise necessary or desirable.



No amendment, modification or termination of the Plan shall in any manner adversely affect any
Option theretofore granted under the Plan, without the consent of the Participant holding such
Option.



The Committee shall have the authority to adopt such modifications, procedures and subplans as may
be necessary or desirable to comply with the provisions of the laws (including, but not limited to,
tax laws and regulations) of countries other than the United States in which the Company may
operate, so as to assure the viability of the benefits of the Plan to Participants employed in such
countries.




Section 13




Withholding



13.1 Withholding Requirement. The Company’s obligations to deliver shares of Stock upon
the exercise of an Option shall be subject to the Participant’s satisfaction of all applicable
federal, state and local income and other tax withholding requirements.



13.2 Satisfaction of Required Withholding. At the time the Committee grants an Option, it
may, in its sole discretion, grant the Participant an election to pay all such amounts of required
tax withholding, or any part thereof:




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     (a) by the delivery to the Company or the Administrative Agent of a number of shares of Stock
then owned by the Participant, the aggregate Fair Market Value of which (as of the Exercise Date)
is not greater than the amount required to be withheld, provided that such shares have been held by
the Participant for a period of at least six months;



     (b) by certification or attestation to the Company or the Administrative Agent of the
Participant’s ownership (as of the Exercise Date) of a number of shares of Stock, the aggregate
Fair Market Value of which (as of the Exercise Date) is not greater than the amount required to be
withheld, provided that such shares of Stock have been owned by the Participant for a period of at
least six months; or



     (c) by the Company or the Administrative Agent withholding from the shares of Stock otherwise
issuable to the Participant upon exercise of the Option, a number of shares of Stock, the aggregate
Fair Market Value of which (as of the Exercise Date) is not greater than the amount required to be
withheld. Any such elections by Participants to have shares of Stock withheld for this purpose
will be subject to the following restrictions:



          (i) all elections shall be made on or prior to the Exercise Date; and




          (ii) all elections shall be irrevocable.



13.3 Section 16 Requirements. If the Participant is an officer or director of the Company
within the meaning of Section 16 or any successor section(s) of the 1934 Act (“Section 16”), the
Participant must satisfy the requirements of such Section 16 and any applicable rules and
regulations thereunder with respect to the use of shares of Stock to satisfy such tax withholding
obligation.




Section 14




Requirements of Law



14.1 Requirements of Law. The issuance of Stock and the payment of cash pursuant to the
Plan shall be subject to all applicable laws, rules and regulations.



14.2 Federal Securities Laws Requirements. If a Participant is an officer or director of
the Company within the meaning of Section 16, Options granted hereunder shall be subject to all
conditions required under Rule 16b-3, or any successor rule(s) promulgated under the 1934 Act, to
qualify the Option for any exception from the provisions of Section 16 available under such Rule. Such


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 conditions are hereby incorporated herein by reference and shall be set forth in the Stock
Option Agreement with the Participant which describes the Option.



14.3 Governing Law. The Plan and all Stock Option Agreements hereunder shall be construed
in accordance with and governed by the laws of the State of Texas.




Section 15

Duration of the Plan



The Plan shall terminate effective as of May 2, 2007, and no Option shall be granted on or after
termination date. Any Options outstanding at the time of the Plan termination shall continue to be
exercisable in accordance with the Stock Option Agreement pertaining to each such Option.




Dated: August 14, 2008




	 	 	 	 	 	 	 	 	 
	 	 	 	 	APACHE CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	ATTEST:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Cheri L. Peper
 

Cheri L. Peper

	 	 	 	By:
	 	/s/ Margery M. Harris
 

Margery M. Harris
	 	 
	Corporate Secretary

	 	 	 	 	 	Vice President, Human Resources	 	 






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