Document:

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                                                                   EXHIBIT 10.27

                               APACHE CORPORATION

                          2000 SHARE APPRECIATION PLAN
                                  "120 BY '04"

                   (AS AMENDED AND RESTATED FEBRUARY 5, 2004)

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                                TABLE OF CONTENTS

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Section 1 - Introduction.............................................................................         1

         1.1      Establishment......................................................................         1
         1.2      Purposes...........................................................................         1

Section 2 - Definitions..............................................................................       1-6

         2.1      Definitions........................................................................       1-6
         2.2      Headings; Gender and Number........................................................         6

Section 3 - Plan Administration......................................................................         6

Section 4 - Stock Subject to the Plan................................................................         7

         4.1      Number of Shares...................................................................         7
         4.2      Other Shares of Stock..............................................................         7
         4.3      Certain Adjustments................................................................         7

Section 5 - Reorganization or Liquidation............................................................         8

Section 6 - Grant of Plan Units......................................................................      8-12

         6.1      Grants.............................................................................         8
         6.2      Grant Agreements...................................................................         9

                  6.2.1    Grant Terms...............................................................         9
                  6.2.2    Payment of Payout Amounts.................................................      9-10

         6.3      Termination of Employment, Death, Disability, etc..................................     10-11
         6.4      Payment and Tax Withholding........................................................     11-12
         6.5      Subsequent Grant Agreements........................................................        12
         6.6      Stockholder Privileges.............................................................        12
         6.7      Limitations on Stock Issuable to Officers and Directors............................        12
         6.8      Deferral of Income.................................................................        12
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Section 7 - Change of Control........................................................................        13

         7.1      In General.........................................................................        13
         7.2      Limitation on Payments.............................................................        13
         7.3      Definition.........................................................................        13

Section 8 - Rights of Employees, Participants........................................................        14

         8.1      Employment.........................................................................        14
         8.2      Non-transferability................................................................        14

Section 9 - Other Employee Benefits..................................................................        14

Section 10 - Plan Amendment, Modification and Termination............................................        15

Section 11 - Requirements of Law.....................................................................        15

         11.1     Requirements of Law................................................................        15
         11.2     Section 16 Requirements............................................................        15
         11.3     Governing Law......................................................................        15

Section 12 - Duration of the Plan....................................................................        16
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                               APACHE CORPORATION
                          2000 SHARE APPRECIATION PLAN
                   (AS AMENDED AND RESTATED FEBRUARY 5, 2004)

                                    SECTION 1

                                  INTRODUCTION

1.1      Establishment. Apache Corporation, a Delaware corporation (hereinafter
referred to, together with its Affiliated Corporations (as defined below) as the
"Company" except where the context otherwise requires), hereby established the
Apache Corporation 2000 Share Appreciation Plan (the "Plan"), effective as of
October 12, 2000.

1.2      Purposes. The primary purpose of this Plan is to focus the energies of
the Company's employees on significantly increasing shareholder wealth through
stock price appreciation to share prices of $100, $120 and $180 (adjusted to
$43.29, $51.95 and $77.92, respectively, for (i) the Company's ten-percent stock
dividend, record date December 31, 2001, paid January 21, 2002, (ii) the
Company's five-percent stock dividend, record date March 12, 2003, paid April 2,
2003, and (iii) the Company's two-for-one stock split, record date December 31,
2003, distributed January 14, 2004) and a doubling of the Company's oil and gas
production per share for calendar year 2000 (also adjusted for the stock
dividends and stock split). The share price goals of this Plan seek to increase
shareholder wealth by approximately $5.2 to $7.8 billion dollars with the
Company's employees sharing in approximately three percent of the additional
shareholder value created. The production goal is designed to inspire the
Company's employees to significantly improve the one factor that is most within
the control of the Company, production, and that is involved in determining the
Company's earnings per share and cash flow per share. Additional purposes of
this Plan include the retention of existing key employees and as an additional
inducement in the recruitment of talented personnel in a competitive
environment.

                                    SECTION 2

                                   DEFINITIONS

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

         "Affiliated Corporation" means any corporation or other entity
(including but not limited to a partnership) which is affiliated with Apache
Corporation through stock ownership or otherwise and is treated as a common
employer under the provisions of Sections 414(b) and (c) or any successor
section(s) of the Internal Revenue Code.

                                        1
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         "Base Salary" means, with regard to any Participant, such Participant's
base compensation as an employee of the Company at the date of award of a Plan
Unit (except for the calculation of the Independent Production Goal Amount, in
which case the date shall be the Independent Production Goal Date), without
regard to any bonus, pension, profit sharing, stock option, life insurance or
salary continuation plan which the Participant either receives or is otherwise
entitled to have paid on his behalf.

         "Board" means the Board of Directors of the Company.

         "Category" means one of the three groupings of Participants in the Plan
whose Plan Units represent the right to receive the same multiple of their base
salary for each Payout Amount.

         "Committee" means the Stock Option Plan Committee of the Board or such
other Committee of the Board that is empowered hereunder to administer the Plan.
The Committee shall be constituted at all times so as to permit the Plan to be
administered by "non-employee directors" (as defined in Rule 16b-3 of the
Securities Exchange Act of 1934, as amended).

         "Deferred Delivery Plan" means the Company's Deferred Delivery Plan,
effective as of February 10, 2000, as it may be amended from time to time, or
any successor plan.

         "Eligible Employees" means those full-time employees (including,
without limitation, the Company's executive officers), and certain part-time
employees, of the Company.

         "Fair Market Value" means the closing price of the Stock as reported on
The New York Stock Exchange, Inc. Composite Transactions Reporting System
("Composite Tape") for a particular date. If there are no Stock transactions on
such date, the Fair Market Value shall be determined as of the immediately
preceding date on which there were Stock transactions.

         "Final Amount" means with regard to any:

                  (a) Category I Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals two (2) times
         such Participant's Base Salary divided by $180 (adjusted to $77.92 for
         the stock dividends and stock split);

                  (b) Category II Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals one (1) times
         such Participant's Base Salary divided by $180 (adjusted to $77.92 for
         the stock dividends and stock split); and

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                  (c) Category III Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals 50 percent (.50)
         times such Participant's Base Salary divided by $180 (adjusted to
         $77.92 for the stock dividends and stock split);

         which amount, in each case, shall be fixed and not subject to
         adjustment due to market fluctuation.

         "Final Price Threshold Date" means the last of any 10 trading days
(which need not be consecutive) during any period of 30 consecutive trading days
occurring prior to January 1, 2005, but not thereafter, on each of which 10 days
the closing price of the Stock as reported on the Composite Tape equaled or
exceeded $180 per share (adjusted to $77.92 per share for the stock dividends
and stock split). If the above trading criteria are met more than once, the
first occurrence shall be deemed to be the Final Price Threshold Date.

         "Final Plan Unit" means an investment unit convertible into the
applicable Final Amount for a Participant upon occurrence of the Final Price
Threshold Date.

         "Grant" has the meaning set forth in Section 6 hereof.

         "Grant Agreement" has the meaning set forth in Section 6 hereof.

         "Independent Production Goal Amount" means with regard to any:

                  (a) Category I Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals one and one half
         (1.5) times such Participant's Base Salary divided by the Independent
         Production Goal Price;

                  (b) Category II Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals 75 percent (.75)
         times such Participant's Base Salary divided by the Independent
         Production Goal Price; and

                  (c) Category III Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals 37.5 percent
         (.375) times such Participant's Base Salary divided by the Independent
         Production Goal Price;

         which amount, in each case, shall be fixed and not subject to
         adjustment due to market fluctuation.

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         "Independent Production Goal Date" means the last day of any fiscal
quarter ending on or before December 31, 2004 during which fiscal quarter the
Company's average daily production (calculated on an annualized basis) equals or
exceeds 1.54 barrels of oil equivalent per outstanding share of Stock
(calculated on a fully diluted basis and adjusted to 0.67 barrels per share for
the stock dividends and stock split), as confirmed by the Company's independent
auditors. If the above production criterion is met more than once, the first
occurrence shall be deemed to be the Independent Production Goal Date.

         "Independent Production Goal Price" means the average daily closing
price of the Stock as reported on the Composite Tape for the quarter ending on
the Independent Production Goal Date.

         "Independent Production Goal Plan Unit" means an investment unit
convertible into the applicable Independent Production Goal Amount for a
Participant upon occurrence of the Independent Production Goal Date.

         "Initial Amount" means with regard to any:

                  (a) Category I Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals one (1) times
         such Participant's Base Salary divided by $100 (adjusted to $43.29 for
         the stock dividends and stock split);

                  (b) Category II Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals 50 percent (.50)
         times such Participant's Base Salary divided by $100 (adjusted to
         $43.29 for the stock dividends and stock split); and

                  (c) Category III Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals 25 percent (.25)
         times such Participant's Base Salary divided by $100 (adjusted to
         $43.29 for the stock dividends and stock split);

         which amount, in each case, shall be fixed and not subject to
         adjustment due to market fluctuation.

         "Initial Price Threshold Date" means the last of any 10 trading days
(which need not be consecutive) during any period of 30 consecutive trading days
occurring prior to January 1, 2005, but not thereafter, on each of which 10 days
the closing price of the Stock as reported on the Composite Tape equaled or
exceeded $100 per share (adjusted to $43.29 per share for the stock dividends
and stock split). If the above trading criteria are met more than once, the
first occurrence shall be deemed to be the Initial Price Threshold Date.

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         "Initial Plan Unit" means an investment unit convertible into the
applicable Initial Amount for a Participant upon occurrence of the Initial Price
Threshold Date.

         "Internal Revenue Code" means the Internal Revenue Code of 1986, as it
may be amended from time to time.

         "Participant" means an Eligible Employee designated by the Committee
from time to time during the term of the Plan to receive one or more grants of
Plan Units under the Plan.

         "Payout Amounts" means the Initial Amount, the Secondary Amount, the
Final Amount and/or the Independent Production Goal Amount.

         "Plan Units" means each of the Initial Plan Units, Secondary Plan
Units, Final Plan Units and/or Independent Production Goal Plan Units.

         "Price Threshold Date" means the Initial Price Threshold Date, the
Secondary Price Threshold Date, the Final Price Threshold Date and/or the
Independent Production Goal Date, as the context may require.

         "Secondary Amount" means with regard to any:

                  (a) Category I Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals three (3) times
         such Participant's Base Salary divided by $120 (adjusted to $51.95 for
         the stock dividends and stock split);

                  (b) Category II Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals one and one half
         (1.5) times such Participant's Base Salary divided by $120 (adjusted to
         $51.95 for the stock dividends and stock split); and

                  (c) Category III Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals 75 percent (.75)
         times such Participant's Base Salary divided by $120 (adjusted to
         $51.95 for the stock dividends and stock split);

         which amount, in each case, shall be fixed and not subject to
         adjustment due to market fluctuation.

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         "Secondary Price Threshold Date" means the last of any 10 trading days
(which need not be consecutive) during any period of 30 consecutive trading days
occurring prior to January 1, 2005, but not thereafter, on each of which 10 days
the closing price of the Stock as reported on the Composite Tape equaled or
exceeded $120 per share (adjusted to $51.95 per share for the stock dividends
and stock split). If the above trading criteria are met more than once, the
first occurrence shall be deemed to be the Secondary Price Threshold Date.

         "Secondary Plan Unit" means an investment unit convertible into the
applicable Secondary Amount for a Participant upon occurrence of the Secondary
Price Threshold Date.

         "Stock" means the $0.625 par value Common Stock of the Company.

         "Stock Units" means investment units under the Deferred Delivery Plan,
each of which is deemed to be equivalent to one share of Stock.

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

                                    SECTION 3

                               PLAN ADMINISTRATION

The Plan shall be administered by the Committee. In accordance with the
provisions of the Plan, the Committee shall, in its sole discretion, adopt rules
and regulations for carrying out the purposes of the Plan, including, without
limitation, selecting the Participants from among the Eligible Employees and the
Category of participation for each Participant, appointing designees or agents
(who need not be members of the Committee or employees of the Company) to assist
the Committee with the administration of the Plan, and establish such other
terms and requirements as the Committee may deem necessary or desirable and
consistent with the terms of the Plan. No member of the Committee shall be
liable for any action or determination made in good faith. The determinations,
interpretations and other actions of the Committee pursuant to the provisions of
the Plan shall be binding and conclusive for all purposes and on all persons.

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                                    SECTION 4

                            STOCK SUBJECT TO THE PLAN

4.1      Number of Shares. Subject to Sections 4.3 and Section 6.1 hereof, up to
3,500,000 shares of Stock (adjusted to 8,085,000 shares for the stock dividends
and stock split) are authorized for issuance under the Plan upon conversion of
any Plan Units in accordance with the Plan's terms and subject to such
restrictions or other provisions as the Committee may from time to time deem
necessary. Shares of Stock which may be issued pursuant to the conversion of any
Plan Units awarded hereunder 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 Plan Units are outstanding
retain as authorized and unissued Stock and/or 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 issuance
upon conversion of a Plan Unit which expires, is forfeited, is cancelled, or for
any reason is terminated, 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      Certain Adjustments. If the Company shall at any time increase or
decrease the number of its outstanding shares of Stock (other than by way of
issuing Stock in a public or private offering for cash or property) or change in
any way the rights and privileges of such shares by means 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 or a subscription for shares of Stock that
has the effect of diluting the Company's capital (hereinafter a "capital
restructuring"), then for purposes of determining the entitlement to payments
under Section 6, (i) the number of shares authorized for issuance under this
Section 4, and (ii) the per share amounts referenced in Section 1 and contained
in the definitions set forth in Section 2 hereof and the amount of production
required to attain the Independent Production Goal shall be, in each case,
equitably and proportionally adjusted to take into account any capital
restructuring. Any adjustment under this Section shall be made by the Committee,
whose determination with regard thereto, including whether any adjustment is
needed, shall be final and binding upon all parties.

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                                    SECTION 5

                          REORGANIZATION OR LIQUIDATION

In the event that the Company is merged or consolidated with another corporation
and the Company is not the surviving corporation, or if all or substantially all
of the assets or more than 20 percent of the outstanding voting stock of the
Company is acquired by any other corporation, business entity or person, or in
case of a reorganization (other than a reorganization under the United States
Bankruptcy Code) or liquidation of the Company, and if the provisions of Section
7 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 Plan Units either (i) make appropriate provision for the adoption
and continuation of the Plan by the acquiring or successor corporation and for
the protection of any holders of such outstanding Plan Units by the substitution
on an equitable basis of appropriate stock of the Company or of the merged,
consolidated or otherwise reorganized corporation which will be issuable with
respect to the Stock, provided that no additional benefits shall be conferred
upon the Participants holding such Plan Units as a result of such substitution,
or (ii) provided that a Price Threshold Date has occurred, upon written notice
to the Participants, the Committee may accelerate the vesting and payment dates
of the entitlement to receive cash and Stock under outstanding Plan Units so
that all such existing entitlements are paid prior to any such event. In the
latter event, such acceleration shall only apply to entitlements to cash and
Stock payable as the result of the occurrence of the most recent Price Threshold
Date and shall not by such acceleration, deem the occurrence of a Price
Threshold Date that has not occurred by the date of the notice.

                                    SECTION 6

                               GRANT OF PLAN UNITS

6.1      Grants. Each Participant may be awarded an initial grant (a "Grant") of
Plan Units under this Plan by the Committee, which Grant shall be composed of
one Initial Plan Unit, Secondary Plan Unit, Final Plan Unit and Independent
Production Goal Unit. The Committee, in its sole discretion, may award
additional Grants to any Participant in connection with such Participant's
receiving a significant increase in salary and/or a promotion within the
Company. Each Grant awarded by the Committee shall be evidenced by a written
agreement entered into by the Company and the Participant to whom the Grant is
awarded (the "Grant Agreement"), which shall contain the terms and conditions
set out in this Section 6, as well as such other terms and conditions as the
Committee may consider appropriate.

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6.2      Grant Agreements. Each Grant Agreement entered into by the Company and
each Participant shall specify which Category applies for such Participant and
contain at least the following terms and conditions. In the event of any
inconsistency between the provisions of the Plan and any Grant Agreement, the
provisions of the Plan shall govern.

         6.2.1    Grant Terms. Each Grant Agreement shall evidence the Grant of
Plan Units and entitle the Participant to receive the indicated Plan Units which
shall convert into the right to receive a conditional payment of cash and
issuance of Stock upon the occurrence of one or more of the Price Threshold
Dates, all as set forth below.

         (a)      If at any time prior to January 1, 2005, the Initial Price
Threshold Date occurs, the Participant may become entitled to receive a portion
or all of the Initial Amount payable to Participants in such Category, as
specified in the applicable Grant Agreement, in accordance with the payment
schedule and as otherwise set out in Section 6.2.2.

         (b)      If at any time prior to January 1, 2005, the Secondary Price
Threshold Date occurs, the Participant may become entitled to receive a portion
or all of the Secondary Amount payable to Participants in such Category, as
specified in the applicable Grant Agreement, in accordance with the payment
schedule and as otherwise set out in Section 6.2.2.

         (c)      If at any time prior to January 1, 2005, the Final Price
Threshold Date occurs, the Participant may become entitled to receive a portion
or all of the Final Amount payable to Participants in such Category, as
specified in the applicable Grant Agreement, in accordance with the payment
schedule and as otherwise set out in Section 6.2.2.

         (d)      If at any time prior to January 1, 2005, the Independent
Production Goal Date occurs, the Participant may become entitled to receive a
portion or all of the Independent Production Goal Amount payable to Participants
in the same Category, as specified in the applicable Grant Agreement, in
accordance with the payment schedule and as otherwise set out in Section 6.2.2.

         6.2.2    Payment of Payout Amounts. Subject to the provisions of
Section 6.3, the Payout Amounts shall be payable in increments strictly in
accordance with the following schedule:

         (a)      The entitlement to receive the first one-third (1/3) of any
Payout Amount shall vest on the applicable Price Threshold Date and shall be
paid by the Company to the Participant within thirty (30) days of the applicable
Price Threshold Date in the manner set out in Section 6.4 below.

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         (b)      The entitlement to receive the remainder of any Payout Amount
shall vest and become payable in equal parts on the dates occurring,
respectively, 12 months and 24 months after the applicable Price Threshold Date,
in the same proportions and amounts as set forth in Section 6.4 below, and shall
be paid by the Company to the Participant within thirty (30) days of such date.
If any of the above dates is not a business day during which the Company is open
for business, such date of vesting or payment shall be the first business date
occurring immediately thereafter.

         (c)      No Payout Amount or portion thereof shall be payable under
this Section 6.2.2 if the applicable Price Threshold Date has not occurred prior
to January 1, 2005.

6.3      Termination of Employment, Death, Disability, etc. Except as set forth
below, each Grant Agreement shall state that each Grant, the Plan Units received
thereunder and the right to receive any payment thereunder upon conversion of
the Plan Units shall be subject to the condition that the Participant has
remained an Eligible Employee from the initial award of a Grant until the
applicable vesting date as follows:

         (a)      If the Participant voluntarily leaves the employment of the
Company, or if the employment of the Participant is terminated by the Company
for cause or otherwise, any Plan Units not previously converted and the right to
receive any Payout Amounts not yet paid in accordance with Section 6.2.2 shall
thereafter be void and forfeited for all purposes.

         (b)      If the Participant retires from employment with the Company on
or after attaining age 60, the retired Participant shall be entitled to receive
the payments in Stock and cash in accordance with Section 6.2.2, provided that
(i) such Participant has certified in writing to the Committee his commitment
not to enter into full-time employment or a consulting arrangement with a
competitor of the Company, and (ii) the applicable Price Threshold Date has
occurred prior to the Participant's last day of employment with the Company.
Such retired Participant shall not be entitled to any payment which may arise
due to the occurrence of a Price Threshold Date after the effective date of such
Participant's retirement. If the retired Participant dies before receiving all
of the payments to which he or she is entitled under this Section 6.3(b), such
payments shall be made to those entitled under the retired Participant's will or
by the laws of descent and distribution. A failure of the Participant to comply
with the undertaking of clause (i) above shall void such Participant's right to
payments hereunder.

                                       10
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         (c)      If the Participant dies, or if the Participant becomes
disabled (as determined pursuant to the Company's Long-Term Disability Plan or
any successor plan), while still employed, payment in Stock and cash in
accordance with Section 6.2.2 shall be made to the disabled Participant or to
those entitled under the Participant's will or by the laws of descent and
distribution, provided that the applicable Price Threshold Date has occurred
prior to the earlier of such Participant's disability or death. There shall be
no entitlement to any payment, which may arise due to the occurrence of a Price
Threshold Date after the earlier of such Participant's disability or death.

6.4      Payment and Tax Withholding. Each Grant Agreement shall provide that,
upon payment of any entitlement upon conversion of any Plan Units, the
Participant shall make appropriate arrangements with the Company to provide for
the amount of minimum tax withholding required by Sections 3102 and 3402 or any
successor section(s) of the Internal Revenue Code and applicable state and local
income and other tax laws, as follows:

         (a) If upon the achievement of a Threshold Date the credit rating of
the Company's long term, unsecured debt is at or above investment grade, then
each payment of the related Payout Amount shall be made in a proportion of cash
and shares of Stock, determined by the Committee, such that the cash portion
shall be sufficient to cover the withholding amount required by this Section.
The cash portion of any payment of a Payout Amount shall be based on the Fair
Market Value of the shares of Stock on the business day immediately preceding
the payment date. Such cash portion shall be withheld by the Company to satisfy
applicable tax withholding requirements.

         (b) If upon the achievement of a Threshold Date the Company's long
term, unsecured debt has a credit rating below investment grade, the Committee,
in its sole discretion, may either (i) provide for the payment of the
withholding amount required by this Section as set forth in Subsection (a) above
or (ii) specify that each payment of the related Payout Amount to a Participant
be made only after the Participant has made funds available to the Company
sufficient to cover the withholding amount required by this Section. The funds
required by this Subsection (b) may be obtained by the Participant by means of a
loan from a securities broker or dealer, in which case the Participant may
satisfy the requirements hereof by delivering to the Company an irrevocable
instruction to such broker or dealer to promptly deliver to the Company, by wire
transfer or certified or cashier's check, the funds necessary to meet the
Participant's obligations hereunder and such delivery instructions for the
shares issuable to the Participant as the broker or dealer may require. The
calculation of the funds to be provided by the Participant under this paragraph
shall be based on the Fair Market Value of the shares of Stock to be issued to
the Participant, on the business day immediately preceding the payment date.

                                       11
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         (c) Upon a request made to the Committee by a Participant, the
proportion of cash and Stock as set forth in Subsection (a) above may be, but
need not be, changed by the Committee, in its sole discretion, to provide for,
among other things, special or additional tax burdens on a Participant but, in
no event, shall the cash portion of any payment exceed fifty percent (50%).

6.5      Subsequent Grant Agreements. Following the award of Grants in 2000,
additional Participants may be designated by the Committee for grants of Plan
Units thereafter subject to the same terms and conditions set forth above for
initial grants except that the Committee, in its sole discretion, may reduce the
value of the Initial Amount, Secondary Amount, Final Amount or Independent
Production Goal Amount to which subsequent Participants may become entitled and
the applicable Grant Agreement shall be modified to reflect such reduction.

6.6      Stockholder Privileges. No Participant shall have any rights as a
stockholder with respect to any shares of Stock into which a Plan Unit is
convertible until the Participant becomes the holder of record of such Stock.

6.7      Limitations on Stock Issuable to Officers and Directors. Any provision
of the Plan notwithstanding, the total number of shares of Stock issuable to
Participants who are directors or officers of the Company (as defined for the
purposes of Section 16 of the Securities Exchange Act of 1934, as amended) shall
not exceed 49 percent of the total shares issuable under the Plan (the "D&O
Limitation"). If the total number of shares of Stock issuable to all of the
Company's directors and officers who are Participants in the Plan shall exceed
the D&O Limitation, then the total number of shares of Stock issuable to such
Participants shall be reduced to a number equal to the D&O Limitation and the
number of shares of Stock issuable to each such Participant upon conversion of
any Plan Unit shall be reduced pro rata.

6.8      Deferral of Income. For Participants eligible for participation in the
Deferred Delivery Plan, all or a portion of the income resulting from the
conversion of Plan Units into Payout Amounts is subject to deferral into the
Participant's Deferred Delivery Plan account, if the Participant has made an
irrevocable election to make such a deferral, as follows: (a) with respect to
the first payment to be made upon the occurrence of a Price Threshold Date, no
more than 30 days after the Participant executes the applicable Grant Agreement
and/or (b) with respect to any other payment to be made after the occurrence of
a Price Threshold Date, at least six months prior to the date such payment is to
be made by the Company. If the Participant has complied with the above
requirements, all or a portion of the income resulting from any payment upon the
conversion of Plan Units into Payout Amounts shall be deferred into the
Participant's Deferred Delivery Plan account and no additional cash or shares of
Stock shall be delivered to the Participant.

                                       12
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                                    SECTION 7

                                CHANGE OF CONTROL

7.1      In General. In the event of the occurrence of a change of control of
the Company as defined in Section 7.3 hereof, and assuming the occurrence of a
Price Threshold Date, the entitlement to receive cash and Stock upon conversion
of any Plan Units shall vest automatically, without further action by the
Committee or the Board, and shall become payable as follows:

         (a)      If such change of control occurs subsequent to the occurrence
of a Price Threshold Date, (i) the first one-third (1/3) of the applicable
Payout Amount shall vest and be paid pursuant to Section 6.2.2(a) hereof, and
(ii) the remainder of such Payout Amount shall vest as of the date of such
change of control and shall be paid by the Company to the Participant within
thirty (30) days of the date of such change of control in the manner set out in
Section 6.4 hereof.

         (b)      If the occurrence of a Price Threshold Date occurs subsequent
to the date of a change of control, the applicable Payout Amount shall vest in
full as of such Price Threshold Date and shall be paid by the Company to the
Participant within thirty (30) days of such Price Threshold Date in the manner
set out in Section 6.4 hereof.

7.2      Limitation on Payments. If the provisions of this Section 7 would
result in the receipt by any Participant of a payment within the meaning of
Section 280G or any successor section(s) of the Internal Revenue Code, and the
regulations promulgated thereunder, and if the receipt of such payment by any
Participant would, in the opinion of independent tax counsel of recognized
standing selected by the Company, result in the payment by such Participant of
any excise tax provided for in Sections 280G and 4999 or any successor
section(s) of the Internal Revenue Code, then the amount of such payment shall
be reduced to the extent required, in the opinion of independent tax counsel, to
prevent the imposition of such excise tax; provided, however, that the
Committee, in its sole discretion, may authorize the payment of all or any
portion of the amount of such reduction to the Participant.

7.3      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.

                                       13
<PAGE>

                                    SECTION 8

                        RIGHTS OF EMPLOYEES, PARTICIPANTS

8.1      Employment. Neither anything contained in the Plan or any Grant
Agreement nor the granting of any Plan Units 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, 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 award
of Plan Units.

8.2      Non-transferability. No right or interest of any Participant in a Plan
Unit 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 any Plan
Unit shall, to the extent provided in Section 6.3 hereof, be transferable by
testamentary will or the laws of descent and distribution, and payment of any
entitlements due under the Plan shall be made to 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 satisfactory to the
Committee of such status.

                                    SECTION 9

                             OTHER EMPLOYEE BENEFITS

The amount of any income deemed to be received by a Participant as a result of
the payment upon conversion of a Plan Unit 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.

                                       14
<PAGE>

                                   SECTION 10

                  PLAN AMENDMENT, MODIFICATION AND TERMINATION

The Committee or the Board may at any time terminate, and from time to time may
amend or modify the Plan. No amendment, modification or termination of the Plan
shall in any manner adversely affect any Plan Unit theretofore awarded under the
Plan, without the consent of the Participant holding such Plan Unit.

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 11

                               REQUIREMENTS OF LAW

11.1     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, including applicable federal and state securities laws. The Company
may require a Participant, as a condition of receiving payment upon conversion
of a Plan Unit, to give written assurances in substance and form satisfactory to
the Company and its counsel to such effect as the Company deems necessary or
appropriate in order to comply with federal and applicable state securities
laws.

11.2     Section 16 Requirements. If a Participant is an officer or director of
the Company within the meaning of Section 16, Grants awarded hereunder shall be
subject to all conditions required under Rule 16b-3, or any successor rule(s)
promulgated under the Securities Exchange Act of 1934, as amended, to qualify
the Plan Units for any exemption from the provisions of Section 16 available
under such Rule. Such conditions are hereby incorporated herein by reference and
shall be set forth in the agreement with the Participant, which describes the
Grant.

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

                                       15
<PAGE>

                                   SECTION 12

                              DURATION OF THE PLAN

The Plan shall terminate at such time as may be determined by the Committee, and
no Plan Units shall be awarded after such termination. If not sooner terminated
under the preceding sentence, the Plan shall fully cease and expire at midnight
on December 31, 2004. Payout Amounts for which one or more of the Price
Threshold Dates has occurred and which remain outstanding at the time of the
Plan termination shall continue in accordance with the Grant Agreement
pertaining to such Plan Units.

Dated: February 5, 2004

                                             APACHE CORPORATION

ATTEST:

/s/ Cheri L. Peper                           By: /s/ Jeffrey M. Bender
------------------                               ---------------------
Cheri L. Peper                                   Jeffrey M. Bender
Corporate Secretary                              Vice President

                                       16<PAGE>

                                                                   EXHIBIT 10.31

                               APACHE CORPORATION

                       2003 STOCK APPRECIATION RIGHTS PLAN

                           EFFECTIVE AS OF MAY 1, 2003

<PAGE>

                               APACHE CORPORATION
                       2003 STOCK APPRECIATION RIGHTS PLAN

                                    SECTION 1

                                  INTRODUCTION

1.1      Establishment. Apache Corporation, a Delaware corporation (hereinafter
referred to, together with its Affiliated Corporations (as defined in Section
2.1 hereof) as the "Company" except where the context otherwise requires),
hereby establishes the Apache Corporation 2003 Stock Appreciation Rights Plan
(the "Plan") for Eligible Employees (as defined in Section 2.1 hereof). The Plan
permits the grant of stock appreciation rights 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 retain and
motivate Eligible Employees and attract talented personnel in a competitive
environment.

1.3      Effective Date. The effective date of the Plan (the "Effective Date")
is May 1, 2003.

                                    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
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.

                                        1
<PAGE>

         (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)      "Exercise Date" means the date of exercise determined in
accordance with subsection 7.2(g) hereof.

         (g)      "Expiration Date" means the date on which the Stock
Appreciation Right Period (as defined in subsection 7.2(c) hereof) ends.

         (h)      "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. If there are no Stock transactions on
such date, the Fair Market Value shall be determined as of the immediately
preceding date on which there were Stock transactions.

         (i)      "Grant Date" means the date of grant determined in accordance
with subsection 7.2(h) hereof.

         (j)      "Internal Revenue Code" means the Internal Revenue Code of
1986, as it may be amended from time to time.

         (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
Stock Appreciation Rights under the Plan.

         (l)      "Stock Appreciation Right" means to receive an amount equal to
the excess of the Fair Market Value as of the Exercise Date of one share of
Stock over the SAR Price times the number of shares of Stock to which the Stock
Appreciation Right relates.

         (m)      "SAR Price" means the price at which the Stock Appreciation
Right was granted determined in accordance with subsection 7.2(b) hereof.

                                        2
<PAGE>

         (n)      "Stock" means the U.S. $1.25 par value Common Stock 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 Stock
Appreciation Rights to be granted pursuant to the Plan, the number of shares of
Stock to which each Stock Appreciation Right relates, the time at which such
Stock Appreciation Rights are to be granted, fix the SAR 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 Stock Appreciation Rights 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

                                        3
<PAGE>

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.

                                    SECTION 4

                    ADJUSTMENTS TO OR OTHER CHANGES IN STOCK

4.1      Adjustments for Stock Split, Stock Dividend, etc. If the Company shall
at any time increase or decrease the number of its outstanding shares of Stock
or change in any way the rights and privileges of such shares by means of the
payment of a Stock dividend or any other distribution upon such shares payable
in Stock, or through a Stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Stock then in relation to the
Stock that is affected by one or more of the above events, the numbers, rights
and privileges of the following shall be, in each case, equitably and
proportionally adjusted to take into account the occurrence of any of the above
events, (i) the shares of Stock to which each outstanding Stock Appreciation
Right relates; and (iii) the SAR Price for each outstanding Stock Appreciation
Right granted hereunder.

4.2      Other Changes in Stock. In the event there shall be any change, other
than as specified in Section 4.1 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 to which outstanding Stock Appreciation Rights
relate, then such adjustments shall be made by the Committee and shall be
effective for all purposes of the Plan and for each outstanding Stock
Appreciation Right that involves the particular type of stock for which a change
was effected.

4.3      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.

                                        4
<PAGE>

                                    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 Stock Appreciation Rights either (i) make appropriate provision for
the adoption and continuation of the Plan by the acquiring or successor
corporation and for the protection of any such outstanding Stock Appreciation
Rights by the substitution on an equitable basis of appropriate stock of the
Company or of the merged, consolidated or otherwise reorganized corporation
which will be issuable with respect to the Stock, provided that no additional
benefits shall be conferred upon the Participants holding such Stock
Appreciation Rights as a result of such substitution, and the excess of the
aggregate Fair Market Value of the shares of Stock to which the Stock
Appreciation Rights relate immediately after such substitution over the
aggregate SAR Price thereof is not more than the excess of the aggregate Fair
Market Value of the shares of Stock to which such Stock Appreciation Rights
relate immediately before such substitution over the aggregate Unit Price
thereof, or (ii) upon written notice to the Participants, provide that all
unexercised Stock Appreciation Rights shall be exercised within a specified
number of days of the date of such notice or such Stock Appreciation Rights will
be terminated. In the latter event, the Committee shall accelerate the vesting
dates of outstanding Stock Appreciation Rights so that all Stock Appreciation
Rights become fully vested and exercisable prior to any such event.

                                    SECTION 6

                                  PARTICIPATION

Participants in the Plan shall be those Eligible Employees who, in the judgment
of the Committee, are performing, or during the term of their incentive
arrangement will perform, vital services in the management, operation and
development of the Company or an Affiliated Corporation, and significantly
contribute, or are expected to significantly contribute, to the achievement of
the Company's long-term corporate economic objectives. Participants may be
granted from time to

                                        5
<PAGE>

time one or more Stock Appreciation Rights; provided, however, that the grant of
each such Stock Appreciation Right shall be separately approved by the
Committee, and receipt of one such Stock Appreciation Right shall not result in
automatic receipt of any other Stock Appreciation Right. Upon determination by
the Committee that a Stock Appreciation Right 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. Stock Appreciation
Rights 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 APPRECIATION RIGHTS

7.1      Grant of Stock Appreciation Rights. Coincident with or following
designation for participation in the Plan, an Eligible Employee may be granted
one or more Stock Appreciation Rights. Grants of Stock Appreciation Rights under
the Plan shall be made by the Committee. In no event shall the exercise of one
Stock Appreciation Right affect the right to exercise any other Stock
Appreciation Right or affect the number of shares of Stock to which any other
Share Appreciation Right relates, except as provided in subsection 7.2(j)
hereof.

7.2      Stock Appreciation Right Agreements. Each Stock Appreciation Right
granted under the Plan shall be evidenced by a written agreement which shall be
entered into by the Company and the Participant to whom the Stock Appreciation
Right is granted (the "Stock Appreciation Right Agreement"), and which shall
contain the following terms and conditions, as well as such other terms and
conditions, not inconsistent therewith, as the Committee may consider
appropriate in each case:

         (a)      Number of Shares. Each Stock Appreciation Right Agreement
shall state that it relates to a specified number of shares of Stock, as
determined by the Committee.

                                        6
<PAGE>

         (b)      SAR Price. The price shall be determined in each case by the
Committee at the time of grant and set forth in the Stock Appreciation Right
Agreement, but in no event shall the SAR Price be less than the Fair Market
Value of the Stock on the Grant Date.

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

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

                  (i)      If the employment of the Participant by the Company
is terminated within the Stock Appreciation Right Period for cause, as
determined by the Company, the Stock Appreciation Right 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 Stock Appreciation Right may be
exercised by the Participant within 36 months following his or her retirement
(provided that such exercise must occur within the Stock Appreciation Right
Period), but not thereafter. In the event of the Participant's death during such
36-month period, each Stock Appreciation Right may be exercised by those
entitled to do so in the manner referred to in (iv) below. In any such case, the
Stock Appreciation Right

                                        7
<PAGE>

may be exercised only as to the increment(s) of the Stock Appreciation Right
that have 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 Stock Appreciation Right 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 Stock
Appreciation Right 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 Stock Appreciation Right Period), but not thereafter. In the event of the
Participant's death during such twelve-month period, each Stock Appreciation
Right 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 Stock Appreciation Right may
be exercised only as to the increment(s) of the Stock Appreciation Right that
have 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 Stock Appreciation Right 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 Stock Appreciation Right Period), but not thereafter, as to all
increments of each Stock Appreciation Right, including each 25-percent increment
of the Stock Appreciation Right, 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, the
increment(s) of or within the twelve-month period referred to in subsection
7.2(d)(iii) above, the increment(s) of each Stock Appreciation Right of the
deceased Participant that are 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 Stock Appreciation Right Period).

                  (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 Stock
Appreciation Right 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

                                        8
<PAGE>

Stock Appreciation Right may be exercised by the Participant within three months
following the date of such termination (provided that such exercise must occur
within the Stock Appreciation Right Period), but not thereafter. In any such
case, the Stock Appreciation Right may be exercised only as to the increment(s)
of the Stock Appreciation Right that have become exercisable on or before the
date of termination of the Participant's employment.

         (e)      Transferability. Each Stock Appreciation Right Agreement shall
provide that the Stock Appreciation Right granted therein is not transferable by
the Participant except by will or pursuant to the laws of descent and
distribution, and that such Stock Appreciation Right 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 Appreciation
Right 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 Appreciation Right
Agreement, at the salary rate in effect on the date of such agreement or at such
changed rate as may be fixed, from time to time, by the Company.

         (g)      Exercise, Payments, Etc.

                  (i)      Each Stock Appreciation Right Agreement shall provide
that the method for exercising the Stock Appreciation Right granted therein
shall be by delivery to the Administrative Agent or to the Office of the
Secretary of the Company of written notice specifying the number of shares of
Stock that relate to the Stock Appreciation Right being exercised. Such notice
shall be in a form satisfactory to the Committee and shall specify the
particular Stock Appreciation Rights (or portions thereof) which are being
exercised and the number of shares of Stock that relate to the Stock
Appreciation Rights being exercised. The exercise of the Stock Appreciation
Right shall be deemed effective on the date such notice is received by the
Administrative Agent or by the Office of the Secretary (the "Exercise Date").

                  (ii)     Subject to subsection 7.2(i) and Section 12.1 hereof,
the amount to which the Participant is entitled as a result of the exercise of
the Stock Appreciation Right shall be paid through the Company's payroll system,
as part of the payroll cycle next following the Exercise Date.

                                        9
<PAGE>

                  (iii)    For purposes of the Plan, the income resulting from a
Stock Appreciation Right exercise shall be based on the Fair Market Value of the
Stock for the Exercise Date.

         (h)      Grant Date. A Stock Appreciation Right shall be considered as
having been granted on the date specified in the grant resolution of the
Committee.

         (i)      Tax Withholding. Each Stock Appreciation Right Agreement shall
provide that, upon exercise of a Stock Appreciation Right, minimum tax
withholding required by Sections 3102 and 3402 or any successor section(s) of
the Internal Revenue Code and applicable state and local income and other tax
laws shall be deducted from the amount payable to the Participant.

         (j)      Adjustment of Stock Appreciation Rights. Subject to the
provisions of Sections 4, 5, 7, 8 and 11 hereof, the Committee may make any
adjustment in the number of shares of Stock to which an outstanding Stock
Appreciation Right relates, or the terms of an outstanding Stock Appreciation
Right and a subsequent granting of a Stock Appreciation Right, by amendment or
by substitution for an outstanding Stock Appreciation Right; however, except as
provided in Sections 4, 5, 8 and 11 hereof, the Committee may not adjust the SAR
Price of any outstanding Stock Appreciation Right. Such amendment or
substitution may result in terms and conditions (including the number of shares
of Stock to which the Stock Appreciation Right relates, vesting schedule or
Stock Appreciation Right Period) that differ from the terms and conditions of
the original Stock Appreciation Right. The Committee may not, however, adversely
affect the rights of any Participant to previously granted Stock Appreciation
Rights 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 Stock Appreciation Right.

7.3      Stockholder Privileges. No Participant shall have any rights as a
stockholder with respect to any shares of Stock to which a Stock Appreciation
Right relates.

                                       10
<PAGE>

                                    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 Stock
Appreciation Rights shall become automatically vested, without further action by
the Committee or the Board, so as to make all such Stock Appreciation Rights
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 payment by any
Participant would, in the opinion of independent tax counsel of recognized
standing selected by the Company, result in the payment by such Participant of
any excise tax provided for in Sections 280G and 4999 or any successor
section(s) of the Internal Revenue Code, then the amount of such payment shall
be reduced to the extent required, in the opinion of independent tax counsel, to
prevent the imposition of such excise tax; provided, however, that the
Committee, in its sole discretion, may authorize the payment of all or any
portion of the amount of such reduction to the Participant.

8.3      Definition. For purposes of the Plan, a "change 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 Stock Appreciation
Right 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 Stock Appreciation Right. Whether an

                                       11
<PAGE>

authorized leave of absence, or absence in military or government service, shall
constitute a termination of employment shall be determined by the Committee at
the time.

9.2      Nontransferability. No right or interest of any Participant in an Stock
Appreciation Right 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 any Stock Appreciation Right 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 Stock Appreciation Right 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

                             OTHER EMPLOYEE BENEFITS

The amount of any income deemed to be received by a Participant as a result of a
Stock Appreciation Right 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 11

                  PLAN AMENDMENT, MODIFICATION AND TERMINATION

The Committee or 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

                                       12
<PAGE>

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 Stock Appreciation Right theretofore granted under the
Plan, without the consent of the Participant holding such Stock Appreciation
Right.

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 12

                                   WITHHOLDING

12.1     Withholding Requirement. The Company's obligations to deliver the
amounts payable to the Participant for the exercise of a Stock Appreciation
Right, shall be subject to the Participant's satisfaction of all applicable
federal, state and local income and other tax withholding requirements.

12.2     Excess Withholding. At the time the Committee grants a Stock
Appreciation Right, it may, in its sole discretion, grant the Participant an
election to pay additional or excess amounts of tax withholding, beyond the
required amounts and up to the Participant's marginal tax rate. Such election
must be specified in the written notice of exercise given in accordance with
subsection 7.2(g) hereof.

                                   SECTION 13

                               REQUIREMENTS OF LAW

13.1     Requirements of Law. The payment of amounts pursuant to the Plan shall
be subject to all applicable laws, rules and regulations.

13.2     Federal Securities Laws Requirements. If a Participant is an officer or
director of the Company within the meaning of Section 16 of the 1934 Act, Stock
Appreciation Rights granted hereunder shall be subject to all conditions
required

                                       13
<PAGE>

under Rule 16b-3, or any successor rule(s) promulgated under the 1934 Act, to
qualify the Stock Appreciation Right for any exception from the provisions of
Section 16 available under such rule. Such conditions are hereby incorporated
herein by reference and shall be set forth in the Stock Appreciation Right
Agreement with the Participant which describes the Stock Appreciation Right.

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

                                   SECTION 14

                              DURATION OF THE PLAN

The Plan shall terminate at such time as may be determined by the Board, and no
Stock Appreciation Right shall be granted after such termination. If not sooner
terminated under the preceding sentence, the Plan shall fully cease and expire
at midnight on May 1, 2008. Any Stock Appreciation Rights outstanding at the
time of the Plan termination shall continue to be exercisable in accordance with
the Stock Appreciation Right Agreement pertaining to each such Stock
Appreciation Right.

Dated: May 1, 2003

                                        APACHE CORPORATION

ATTEST:

/s/ Cheri L. Peper                      By: /s/ Jeffrey M. Bender
----------------------------------          ---------------------------------
Cheri L. Peper                              Jeffrey M. Bender
Corporate Secretary                         Vice President, Human Resources

                                       14

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