Document:

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                                                                   EXHIBIT 10.07

                               APACHE CORPORATION
                             DEFERRED DELIVERY PLAN

                       As Amended and Restated May 3, 2001

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                               APACHE CORPORATION
                             DEFERRED DELIVERY PLAN
                       AS AMENDED AND RESTATED MAY 3, 2001

         Apache Corporation ("Apache"), a Delaware corporation (hereinafter
referred to, together with its Affiliated Entities (as defined below), as the
"Company" except where the context otherwise requires), established the Apache
Corporation Deferred Delivery Plan effective as of February 10, 2000. The Plan
(as defined below) provides Participants (as defined below) with an opportunity
to defer income and permits the grant of Stock Bonus Awards (as defined below)
to Participants selected by the Committee (as defined below), in consideration
of the valuable past services provided by Participants to the Company.

         The Plan is intended to provide Participants with added incentives and
to induce them to remain in the employ of the Company. The Company intends that
the Plan shall not be treated as a "funded" plan for purposes of either the Code
or the Employee Retirement Income Security Act of 1974, as amended ("ERISA").

                                    ARTICLE I
                                   DEFINITIONS

         Defined terms used in this Plan shall have the meanings set forth
below:

1.01     Account

         "Account" means the memorandum account maintained for each Participant
         to which shall be credited all Deferred Amounts (including any Stock
         Bonus Award), all Company Match made on behalf of a Participant, and
         all adjustments thereto.

1.02     Affiliated Entity

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

1.03     Code

         "Code" means the Internal Revenue Code of 1986, as amended.

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1.04     Committee

         "Committee" means the Stock Option Plan Committee of Apache's Board of
         Directors.

1.05     Company Match

         "Company Match" means the allocations to a Participant's Account made
         pursuant to Section 3.02.

1.06     Compensation

         "Compensation" shall mean the one-time 1999 discretionary award and/or
         income from (a) any Stock Bonus Award, (b) exercises of non-qualified
         employee stock options granted to the Participants pursuant to Apache's
         1990 Stock Incentive Plan, 1995 Stock Option Plan, 1998 Stock Option
         Plan, 2000 Stock Option Plan or any future plan under which employee
         stock options may be granted, and/or (c) any Other Approved Plan. The
         Committee and/or the Board of Directors may from time to time designate
         other forms of remuneration that are available for deferral into the
         Plan.

1.07     Deferred Amounts

         "Deferred Amounts" means the amounts of a Participant's Compensation,
         which are deferred and credited to the Participant's Account pursuant
         to Section 3.01.

1.08     Election Agreement

         "Election Agreement" means an application for participation in the
         Plan, execution of which by an eligible employee is required under
         Article II for the Participant to elect or acknowledge Deferred
         Amounts.

1.09     Fair Market Value

         "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.

1.10     Other Approved Plan

         "Other Approved Plan" means the 2000 Share Appreciation Plan and any
         other compensation or benefit plan which may from time to time be
         designated by the Committee and/or the Board of Directors.

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1.11     Participant

         "Participant" means any eligible employee selected to participate in
         this Plan pursuant to Section 2.01.

1.12     Plan

         "Plan" means the Apache Corporation Deferred Delivery Plan as set forth
         herein, including Annex A.

1.13     Plan Year

         "Plan Year" means the period during which the Plan records are kept.
         The Plan Year shall be the calendar year.

1.14     Stock

         "Stock" means the $1.25 par value common stock of Apache.

1.15     Stock Bonus Award

         "Stock Bonus Award" means any grant of Stock Units made pursuant to
         Annex A.

1.16     Stock Units

         "Stock Units" means investment units, each of which is deemed to be
         equivalent to one share of Stock.

1.17     Trust

         "Trust" means the trust or trusts, if any, created by the Company to
         provide funding for the distribution of benefits in accordance with the
         provisions of the Plan. The assets of any such Trust shall remain
         subject to the claims of the Company's general creditors in the event
         of the Company's insolvency.

1.18     Trust Agreement

         "Trust Agreement" means the written instrument pursuant to which each
         separate Trust is created.

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1.19     Trustee

         "Trustee" means one or more banks, trust companies or insurance
         companies designated by the Company to hold the Trust fund and to pay
         benefits and expenses as authorized by the Committee in accordance with
         the terms and provisions of the Trust Agreement.

1.20     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.

                                   ARTICLE II
                          ELIGIBILITY AND PARTICIPATION

2.01     Eligibility and Participation

         The Committee shall from time to time in its sole discretion select
         those employees of the Company who are eligible to participate in the
         Plan from among a select group of key employees.

2.02     Election

         Employees who have been selected by the Committee to participate in the
         Plan shall complete the election procedure specified by the Committee.
         The election procedure may include form(s) for the employee to (a)
         designate a beneficiary (pursuant to Article V), (b) elect or
         acknowledge Deferred Amounts by entering into an Election Agreement
         with the Company (pursuant to Section 3.01), (c) select a payment
         option for the eventual distribution of his Account (pursuant to
         Article V), and (d) provide such other information as the Committee may
         reasonably require.

2.03     Failure of Eligibility

         The Committee shall have the authority to determine that a Participant
         is no longer eligible to participate in the Plan. No Company Match or
         Stock Bonus Award shall be made, no Deferred Amounts withheld from a
         Participant's Compensation, and no dividend amounts credited to a
         Participant's Account after he ceases to be eligible to participate in
         the Plan. The determination of the Committee with respect to the
         termination of participation in the Plan shall be final and binding on
         all parties affected thereby. Except as provided in Section

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         5.01, any benefits vested hereunder, at the time the Participant
         becomes ineligible to continue participation, shall be distributable in
         accordance with the provisions of the Plan.

                                   ARTICLE III
                             CONTRIBUTION DEFERRALS

3.01     Participant Deferrals

         (a)      General. A Participant may elect to defer a portion of his
                  Compensation and/or acknowledge the deferral of income from
                  the grant of a Stock Bonus Award by filing the appropriate
                  Election Agreement with the Committee's designee. Deferred
                  Amounts related to the one-time 1999 discretionary award, and
                  to such other remuneration as may be designated from time to
                  time, shall be deducted through payroll withholding from the
                  Participant's cash Compensation payable by the Company, and
                  shall be credited to the Participant's Account on or about the
                  date the amounts are deducted. Deferred Amounts from the
                  deferral of income from the exercise of non-qualified stock
                  option grants, from the grant of a Stock Bonus Award or from
                  any Other Approved Plan shall be credited to the Participant's
                  Account on or about the date of the stock option exercise, the
                  grant date of the Stock Bonus Award or the date the income
                  would have been otherwise paid or distributed from such Other
                  Approved Plan, respectively.

         (b)      Initial Enrollment. When an employee first is selected to
                  participate in the Plan, pursuant to Section 2.01, the
                  Committee's designee shall provide him with an election form,
                  which, when properly completed and timely returned to the
                  Committee's designee shall constitute an Election Agreement.
                  To be effective, the Election Agreement must be completed and
                  returned to the Committee's designee by the deadline
                  established by the Committee. The employee may elect to defer
                  (i) up to 100 percent of the one-time 1999 discretionary
                  award, and (ii) such percentage up to 100 percent of income
                  from stock options exercised in the Plan Year indicated or
                  from any Other Approved Plan, divisible into such increments
                  as may be designated by the Committee; however, 100 percent of
                  income from the grant of any Stock Bonus Award shall be
                  deferred. The Election Agreement shall be effective
                  immediately upon receipt by the Committee's designee; however,
                  (i) Election Agreements related to the deferral of income from
                  stock option exercises must be completed and returned not less
                  than six months in advance of the Participant's intended
                  exercise date on which income is to be deferred, and (ii)
                  Election Agreements related to the deferral of income from any
                  Other Approved Plan must be completed and returned pursuant to
                  the provisions of such Other

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                  Approved Plan. Each Election Agreement shall be irrevocable
                  for the deferral of the one-time 1999 discretionary award, or
                  the deferral of income (i) from stock options exercised in the
                  Plan Year indicated, (ii) from the grant of any Stock Bonus
                  Award, or (iii) from any Other Approved Plan.

         (c)      Continuing Election. A Participant shall enter into a separate
                  Election Agreement for (i) the deferral of income from stock
                  options exercises in the Plan Year indicated, (ii) the
                  deferral of income from the grant of any Stock Bonus Award
                  (iii) the deferral of income from any Other Approved Plan, or
                  (iv) any other deferral opportunity offered by the Committee.
                  To be effective, the Election Agreement must be completed and
                  returned to the Committee's designee by the deadline
                  established by the Committee; however, (i) Election Agreements
                  related to the deferral of income from stock option exercises
                  must be completed and returned not less than six months in
                  advance of the Participant's intended exercise date on which
                  income is to be deferred, and (ii) Election Agreements related
                  to the deferral of income from any Other Approved Plan must be
                  completed and returned pursuant to the provisions of such
                  Other Approved Plan. Each Election Agreement shall be
                  irrevocable.

         (d)      Participant Becomes Ineligible. A Participant's Election
                  Agreement(s) shall be canceled immediately if and when the
                  Participant becomes ineligible to participate in the Plan.

3.02     Company Match

         The Company shall credit to a Participant's Account matching
         contributions equal to the Participant's Deferred Amount related to the
         1999 one-time discretionary award. The Committee may from time to time
         in its sole discretion designate such other forms of remuneration that
         are available for deferral into the Plan, as well as such other
         matching contributions as the Committee deems appropriate. The Company
         Match shall be invested as specified in Article IV.

                                   ARTICLE IV
                 INVESTMENT OF DEFERRALS AND ACCOUNTING; VOTING

4.01     Investments

         (a)      All amounts credited to a Participant's Account shall be
                  invested in Stock Units, with the number of Stock Units
                  determined using the Fair Market Value of the Stock for the
                  date on which the amount is credited to the Participant's
                  Account. Amounts equal to any cash dividends declared on the
                  Stock shall be credited to the Participant's Account as of the
                  payment

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                  date for such dividend in proportion to the number of Stock
                  Units in the Participant's Account as of the record date for
                  such dividend. Such dividend amounts shall be invested in
                  Stock Units, with the number of Stock Units determined using
                  the Fair Market Value of the Stock on the dividend payment
                  date, and such Stock Units shall vest pursuant to Section
                  5.01.

         (b)      Nothing contained in this Section shall be construed to give
                  any Participant any power or control to make investment
                  decisions or otherwise influence in any manner the investment
                  and reinvestment of assets contained within any investment
                  alternative, such control being at all times retained in the
                  full discretion of the Committee. Nothing contained in this
                  Section shall be construed to require the Company or the
                  Committee to fund any Participant's Account.

4.02     Voting

         Participants shall have no right to vote any Stock Units prior to the
         date on which such Stock Units are subject to distribution and shares
         of Stock are issued therefor.

                                    ARTICLE V
                                  DISTRIBUTIONS

5.01     Vesting

         (a)      The portion of a Participant's Account attributable to
                  Deferred Amounts from the one-time 1999 discretionary award
                  and/or related to the deferral of income from stock option
                  exercises shall be fully vested; however, the portion of a
                  Participant's Account (i) attributable to Deferred Amounts
                  related to the grant of any Stock Bonus Award or to such other
                  remuneration as may be designated from time to time and/or
                  (ii) related to the deferral of income from any Other Approved
                  Plan, shall vest on such terms as may be determined by the
                  Committee.

         (b)      A Participant shall vest in the portion of his Account that is
                  attributable to the Company Match for the 1999 one-time
                  discretionary award as follows: 50 percent on the date six
                  months following the date of deferral and the remaining 50
                  percent on the date twelve months following the date of
                  deferral.

         (c)      If a Participant retires or becomes disabled (as defined by
                  the Company's Long Term Disability Plan) while still employed
                  by the Company, no vesting occurs subsequent to the date of
                  retirement or disability and all

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                  unvested portions of the Participant's Account shall be
                  forfeited immediately.

         (d)      If a Participant dies while still employed by the Company, any
                  unvested portion of the Participant's Account shall be
                  immediately vested.

         (e)      If a Participant's employment is terminated other than for
                  cause as defined herein, no further vesting of unvested
                  portions of the Participant's Account shall occur and all
                  unvested portions thereof shall be forfeited immediately.

         (f)      If the employment of the Participant is terminated for cause
                  as determined by the Company, the Participant's entire Account
                  balance (including any Deferred Amounts) shall be forfeited
                  immediately. As used in this subsection, "cause" shall mean a
                  gross violation, as determined by the Company, of the
                  Company's established policies and procedures. The effect of
                  this subsection shall be limited to determining the
                  consequences of a termination and nothing in this subsection
                  shall restrict or otherwise interfere with Company's
                  discretion with respect to termination of any employee.

         (g)      Stock Units attributable to dividend amounts credited to a
                  Participant's Account pursuant to Section 4.01 shall vest as
                  the corresponding Stock Units vest. As used in this
                  subsection, "corresponding Stock Units" shall mean those Stock
                  Units on which the dividend amounts are calculated.

5.02     Distribution During Employment

         (a)      While a Participant is employed by the Company, the only
                  available distribution is a distribution pursuant to the terms
                  of the applicable Election Agreement beginning five years
                  after the date of deferral pursuant to the Election
                  Agreement(s) on file for the Participant. Any distribution
                  shall be paid in whole shares of Stock, delivered in the
                  number of installments designated by the Participant in the
                  applicable Election Agreement and, coincident with delivery of
                  the last such installment, any fractional shares shall be paid
                  in cash.

         (b)      If a Participant has elected to take his distribution in
                  installments, the first installment shall be delivered within
                  90 days after the corresponding date five years after the date
                  of deferral, and each subsequent installment shall be
                  delivered not later than March 31st of the following calendar
                  year.

         (c)      If a Participant remains employed by the Company, a
                  Participant may elect to further defer for an additional five
                  years his distribution by

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                  executing a new Election Agreement at least six months prior
                  to the first installment due pursuant to the Participant's
                  previous election.

5.03     Distributions After Employment

         Distributions after the Participant's death are discussed in Section
         5.04. All other distributions after employment shall be made as set
         forth below:

         (a)      Timing. The Participant's vested Account shall be distributed
                  after the Participant terminates employment with the Company
                  and the distribution shall be made pursuant to the
                  Participant's Election Agreement(s). If a Participant has
                  elected to take his distribution in installments, the first
                  installment shall be delivered within 90 days after the
                  Participant's termination date and each subsequent installment
                  shall be delivered not later than March 31st of the following
                  calendar year.

         (b)      Form of Distribution. The Participant's entire vested Account
                  shall be paid in whole shares of Stock, delivered in the
                  number of installments designated pursuant to the Election
                  Agreement(s) executed by the Participant and, coincident with
                  delivery of the last such installment, any fractional shares
                  shall be paid in cash.

         (c)      Minimum Distribution. If, as of the Participant's termination
                  date, the value of his entire vested Account is $50,000 or
                  less, the Participant's vested Account balance shall be
                  distributed in one lump sum and such distribution shall be
                  made within 90 days of the Participant's termination date.

         (d)      Reemployment. If a Participant is reemployed by the Company
                  before his entire vested Account balance is paid, installments
                  from the Plan shall be suspended. Installments will resume
                  after the Participant again terminates employment. The number
                  of remaining installments shall be the number of annual
                  installments originally designated pursuant to the Election
                  Agreement(s) executed by the Participant, less the number of
                  installments received before the Participant was re-employed.
                  If the Participant dies before receiving all installments,
                  Section 5.04 shall apply.

5.04     Distributions After Participant's Death

         (a)      Each Participant shall designate one or more persons, trusts
                  or other entities as his beneficiary (the "Beneficiary") to
                  receive any amounts distributable hereunder at the time of the
                  Participant's death. In the absence of an effective
                  Beneficiary designation as to part or all of a Participant's
                  interest in the Plan, such amount shall be distributed to the

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                  Participant's surviving spouse, if any, otherwise to the
                  personal representative of the Participant's estate.

         (b)      A Beneficiary designation may be changed by the Participant at
                  any time and without the consent of any previously designated
                  Beneficiary. However, if the Participant is married, his
                  spouse shall be his Beneficiary unless such spouse has
                  consented to the designation of a different Beneficiary. To be
                  effective, the spouse's consent must be in writing, witnessed
                  by a notary public, and filed with the Committee's designee.
                  If a Participant has designated his spouse as a Beneficiary or
                  as a contingent Beneficiary, and the Participant and that
                  spouse subsequently divorce, then such Beneficiary designation
                  shall be void and of no effect with respect to such spouse on
                  and after the day such divorce is final.

         (c)      When a Participant dies, his remaining vested Account balance
                  shall be distributed to his Beneficiary in one lump sum as
                  soon as administratively possible after his death, regardless
                  of the payment schedule the Participant elected, and
                  regardless of whether installment payments had begun. Such
                  distribution shall be paid in whole shares of Stock, with any
                  fractional shares paid in cash.

5.05     Withholding

         At the time of distribution, the Plan shall withhold from such
         distribution any taxes or other amounts that are required to be
         withheld pursuant to any applicable law or such greater amount as
         requested by the Participant. The Committee may direct the Company to
         withhold additional amounts from any payment to repay the Participant's
         debt or obligation to the Company or at the request of the Participant.

                                   ARTICLE VI
                                 ADMINISTRATION

6.01     Committee to Administer and Interpret Plan

         The Plan shall be administered by the Committee. The Committee shall
         have all discretion and powers necessary for administering the Plan,
         including, but not by way of limitation, full discretion and power to
         interpret the Plan, to determine the eligibility, status and rights of
         all persons under the Plan and, in general, to decide any dispute. The
         Committee shall direct the Company, the Trustee, or both, as the case
         may be, concerning distributions in accordance with the provisions of
         the Plan. The Committee's designee shall maintain all Plan records
         except records of any Trust.

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6.02     Organization of Committee

         The Committee shall adopt such rules as it deems desirable for the
         conduct of its affairs and for the administration of the Plan. The
         Committee may appoint a designee and/or 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 make its determinations with
         or without meetings. The Committee may authorize one or more of its
         members, designees or agents to sign instructions, notices and
         determinations on its behalf. The action of a majority of the
         Committee's members shall constitute the action of the Committee.

6.03     Agent for Process

         Apache's Vice President and General Counsel and Apache's Corporate
         Secretary shall each be an agent of the Plan for service of all
         process.

6.04     Determination of Committee Final

         The decisions made by the Committee shall be final and conclusive on
         all persons.

                                   ARTICLE VII
                                      TRUST

7.01     Trust Agreement

         The Company may, but shall not be required to, adopt a separate Trust
         Agreement for the holding and administration of the funds contributed
         to Accounts under the Plan. The Trustee shall maintain and allocate
         assets to a separate account for each Participant under the Plan. The
         assets of any such Trust shall remain subject to the claims of the
         Company's general creditors in the event of the Company's insolvency.

7.02     Expenses of Trust

         The parties expect that any Trust created pursuant to Section 7.01 will
         be treated as a "grantor" trust for federal and state income tax
         purposes and that, as a consequence, such Trust will not be subject to
         income tax with respect to its income. However, if the Trust should be
         taxable, the Trustee shall pay all such taxes out of the Trust. All
         expenses of administering any such Trust shall be a charge against and
         shall be paid from the assets of such Trust.

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                                  ARTICLE VIII
                            AMENDMENT AND TERMINATION

8.01     Amendment

         (a)      The Plan may be amended at any time and from time to time,
                  retroactively or otherwise; however, no amendment shall reduce
                  any vested benefit that has accrued on the effective date of
                  such amendment. Each Plan amendment shall be in writing and
                  shall be approved by the Committee and/or Apache's Board of
                  Directors. An officer of Apache to whom the Committee and/or
                  Apache's Board of Directors has delegated the authority to
                  execute Plan amendments shall execute each such amendment or
                  the Plan document restated to include all such Plan
                  amendment(s).

         (b)      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.

8.02     Successors and Assigns; Termination of Plan

         The Plan is binding upon Apache and its successors and assigns. The
         Plan shall continue in effect from year to year unless and until
         terminated by Apache's Board of Directors. Any such termination shall
         operate only prospectively and shall not reduce any vested benefit that
         has accrued on the effective date of such termination.

                                   ARTICLE IX
                            STOCK SUBJECT TO THE PLAN

9.01     Number of Shares

         Subject to Section 4.01 and Annex A, and to adjustment pursuant to
         Section 9.03 hereof, five hundred thousand (500,000) 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 Apache if, in the opinion of counsel for
         the Company, such stockholder approval is required. Shares of Stock
         distributed under the terms of the Plan and shares of Stock equal to
         the number of Stock Units credited to Participants' Accounts maintained
         under the

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         Plan shall be applied to reduce the maximum number of shares of Stock
         remaining available for use under the Plan; however, shares of Stock
         represented by any Stock Units related to the deferral of income (i)
         from the exercise of stock options and/or (ii) from any Other Approved
         Plan shall retain their authorization under the applicable stock option
         plan or under such Other Approved Plan, and shall not be applied to
         reduce the number of shares of Stock remaining available for use under
         the Plan. Apache, at all times during the existence of the Plan and
         while any Stock Units are credited to Participants' Accounts maintained
         under the Plan, shall retain as Stock in Apache'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.

9.02     Other Shares of Stock

         The shares of Stock represented by any Stock Units that are forfeited,
         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.

9.03     Adjustments for Stock Split, Stock Dividend, Etc.

         If Apache shall at any time increase or decrease the number of its
         outstanding shares of Stock or change in any way the rights and
         privileges of such shares by means of the payment of a Stock dividend
         or any other distribution upon such shares payable in Stock, or through
         a Stock split, subdivision, consolidation, combination,
         reclassification or recapitalization involving the Stock, then in
         relation to the Stock that is affected by one or more of the above
         events, the numbers, rights and privileges of the following shall be
         increased, decreased or changed in like manner as if they had been
         issued and outstanding, fully paid and nonassessable at the time of
         such occurrence: (i) the shares of Stock remaining available for use
         under the Plan; and (ii) the shares of Stock then represented by Stock
         Units credited to Participants' Accounts maintained under the Plan.

9.04     Dividend Payable in Stock of Another Corporation, Etc.

         If Apache shall at any time pay or make any dividend or other
         distribution upon the Stock payable in securities or other property
         (except cash or Stock), a proportionate part of such securities or
         other property shall be set aside for Stock Units credited to
         Participants' Accounts maintained under the Plan and delivered to any
         Participant upon distribution pursuant to the terms of the Plan. Prior
         to the time that any such securities or other property are delivered to
         a Participant in accordance with the foregoing, Apache shall be the
         owner of such securities

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         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 Apache in accordance with this Section are
         not delivered to a Participant because all or part of his Stock Units
         are forfeited pursuant to the terms of the Plan, then the applicable
         portion of such securities or other property shall remain the property
         of Apache and shall be dealt with by Apache as it shall determine in
         its sole discretion.

9.05     Other Changes in Stock

         In the event there shall be any change, other than as specified in
         Sections 9.03 and 9.04 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 (i)
         remaining available for use under the Plan and/or (ii) represented by
         Stock Units credited to Participants' Accounts maintained under the
         Plan, then such adjustments shall be made by the Committee and shall be
         effective for all purposes of the Plan.

9.06     Rights to Subscribe

         If Apache 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 Apache or of any other corporation, there shall be
         reserved with respect to the Stock Units credited to Participants'
         Accounts maintained under the Plan the Stock or other securities which
         the Participant would have been entitled to subscribe for if
         immediately prior to such grant the shares of Stock represented by such
         Stock Units had been issued and outstanding. If, at the time of
         distribution under the terms of the Plan, the Participant subscribes
         for the additional shares or other securities, the price that is
         payable by the Participant for such additional shares or other
         securities shall be withheld from such distribution pursuant to Section
         5.05 hereof.

9.07     Change of Control

         (a)      In the event of the occurrence of a change of control of
                  Apache, as defined below, all unvested Stock Units credited to
                  Participants' Accounts shall become automatically vested,
                  without further action by the Committee or the Board, so that
                  such unvested Stock Units become fully vested and payable as
                  of the date of such change of control.

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         (b)      For purposes of this Plan, a "change of control" shall mean
                  any of the events specified in Apache's Income Continuance
                  Plan or any successor plan which constitute a change of
                  control within the meaning of such plan.

9.08     General Adjustment Rules

         No adjustment or substitution provided for in this Article IX shall
         require Apache to sell or otherwise issue a fractional share of Stock.
         All benefits payable under the Plan shall be distributed in whole
         shares of Stock, with any fractional shares paid in cash.

9.09     Determination by the Committee, Etc.

         Adjustments under this Article IX shall be made by the Committee, whose
         determinations with regard thereto shall be final and binding upon all
         parties thereto.

                                    ARTICLE X
                          REORGANIZATION OR LIQUIDATION

In the event that Apache is merged or consolidated with another corporation and
Apache 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 Apache 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 9.07
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 any Stock
Units credited to Participants' Accounts maintained under the Plan, 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 Stock Units
credited to Participants' Accounts maintained under the Plan by the substitution
on a equitable basis of appropriate stock of Apache 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 with respect to such Stock Units as a result of such
substitution or (ii) upon written notice to the Participants, provide that all
distributions from the Plan shall be made within a specified number of days of
the date of such notice. In the latter event, the Committee shall accelerate the
vesting of all unvested Stock Units credited to Participants' Accounts so that
all such Stock Units become fully vested and payable prior to any such event.

                                       15
<PAGE>   17

                                   ARTICLE XI
                                  MISCELLANEOUS

11.01    Funding of Benefits -- No Fiduciary Relationship

         Benefits shall be paid either out of the Trust or, if no Trust is in
         existence or if the assets in the Trust are insufficient to provide
         fully for such benefits, then such benefits shall be distributed by the
         Company out of its general assets. Nothing contained in the Plan shall
         be deemed to create any fiduciary relationship between the Company and
         the Participants. Notwithstanding anything herein to the contrary, to
         the extent that any person acquires a right to receive benefits under
         the Plan, such right shall be no greater than the right of any
         unsecured general creditor of the Company, except to the extent
         provided in the Trust Agreement, if any.

11.02    Right to Terminate Employment

         The Company may terminate the employment of any Participant as freely
         and with the same effect as if the Plan were not in existence.

11.03    Inalienability of Benefits

         No Participant shall have the right to assign, transfer, hypothecate,
         encumber or anticipate his interest in any benefits under the Plan, nor
         shall the benefits under the Plan be subject to any legal process to
         levy upon or attach the benefits for payment for any claim against the
         Participant or his spouse. If, notwithstanding the foregoing provision,
         any Participant's benefits are garnished or attached by the order of
         any court, the Company may bring an action for declaratory judgment in
         a court of competent jurisdiction to determine the proper recipient of
         the benefits to be distributed pursuant to the Plan. During the
         pendency of the action, any benefits that become distributable shall be
         paid into the court, as they become distributable, to be distributed by
         the court to the recipient it deems proper at the conclusion of the
         action.

11.04    Claims Procedure

         (a)      The Participant, his spouse or the authorized representative
                  of the claimant shall file all claims in writing, by
                  completing such procedures as the Committee shall require.
                  Such procedures shall be reasonable and may include the
                  completion of forms and the submission of documents and
                  additional information.

         (b)      If a claim is denied, notice of denial shall be furnished by
                  the Committee to the claimant within 90 days after the receipt
                  of the claim by the Committee, unless special circumstances
                  require an extension of time for

                                       16
<PAGE>   18

                  processing the claim, in which event notification of the
                  extension shall be provided to the Participant or beneficiary
                  and the extension shall not exceed 90 days.

         (c)      The Committee shall provide adequate notice, in writing, to
                  any claimant whose claim as been denied, setting forth the
                  specific reasons for such denial, specific reference to
                  pertinent Plan provisions, a description of any additional
                  material or information necessary for the claimant to perfect
                  his claims and an explanation of why such material or
                  information is necessary, all written in a manner calculated
                  to be understood by the claimant. Such notice shall include
                  appropriate information as to the steps to be taken if the
                  claimant wishes to submit his claim for review. The claimant
                  or the claimant's authorized representative may request such
                  review within the reasonable period of time prescribed by the
                  Committee. In no event shall such a period of time be less
                  than 60 days. A decision on review shall be made not later
                  than 60 days after the Committee's receipt of the request for
                  review. If special circumstances require a further extension
                  of time for processing, a decision shall be rendered not later
                  than 120 days following the Committee's receipt of the request
                  for review. If such an extension of time for review is
                  required, written notice of the extension shall be furnished
                  to the claimant prior to the commencement of the extension.
                  The decision on review shall be furnished to the claimant.
                  Such decision shall be in writing and shall include specific
                  reasons for the decision, written in a manner calculated to be
                  understood by the claimant, as well as specific references to
                  the pertinent Plan provisions on which the decision is based.

11.05    Disposition of Unclaimed Distributions

         Each Participant must file with the Company from time to time in
         writing his post office address and each change of post office address.
         Any communication, statement or notice addressed to a Participant at
         his last post office address on file with the Company, or if no address
         is filed with the Company, then at his last post office address as
         shown on the Company's records, will be binding on the Participant and
         his spouse for all purposes of the Plan. The Company shall not be
         required to search for or locate a Participant or his spouse.

11.06    Distributions Due Infants or Incompetents

         If any person entitled to a distribution under the Plan is an infant,
         or if the Committee determines that any such person is incompetent by
         reason of physical or mental disability, whether or not legally
         adjudicated an incompetent, the Committee shall have the power to cause
         the distributions becoming due to such person to be made to another for
         his benefit, without responsibility of the Committee to see to the
         application of such distributions. Distributions made

                                       17
<PAGE>   19

         pursuant to such power shall operate as a complete discharge of the
         Company, the Trustee, if any, and the Committee.

11.07    Governing Law

         The Plan and all Election Agreements shall be construed in accordance
         with the Code and, to the extent applicable, the laws of the State of
         Texas excluding any conflicts-of-law provisions.

May 3, 2001

ATTEST:                                   APACHE CORPORATION

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

                                       18
<PAGE>   20

                                     ANNEX A
                    APACHE CORPORATION DEFERRED DELIVERY PLAN
                          STOCK BONUS AWARD PROVISIONS

From time to time, grants of stock bonus awards for specified numbers of Stock
Units (each a "Stock Bonus Award") may be made to Participants under the terms
of the Plan. Capitalized terms used in this Annex A shall have the meaning set
forth in the Plan or herein, as the case may be.

Grants of Stock Bonus Awards shall be made by the Committee. The Stock Units
covered by each Stock Bonus Award shall be credited to the Participant's Account
maintained under the Plan.

In accordance with the provisions of the Plan, the Committee shall, in its sole
discretion, select the Participants to receive Stock Bonus Awards. For each
stock Bonus Award, the Committee shall:

         -        specify the date of grant and number of Stock Units granted;

         -        designate the vesting provisions; and

         -        establish such other terms and requirements as deemed
                  necessary or desirable and consistent with the Plan.

Each Stock Bonus Award shall be evidenced by a written agreement containing the
particular provisions of such award and in such form as the Committee shall
determine.

Upon the grant and/or vesting of each Stock Bonus Award, the Participant shall
make appropriate arrangements with the Company to provide for the amount of all
applicable federal, state and local income and other tax withholding
requirements. As used in the Plan, the phrase "income from the grant of a Stock
Bonus Award" shall mean the amount calculated by multiplying (a) the number of
Stock Units covered by the Stock Bonus Award, times (b) the Fair Market Value of
the Stock for the date of grant.

Except as set forth in this Annex A and/or in the applicable written agreement,
each Stock Bonus Award and the Stock Units related thereto shall be subject to
all other terms and conditions set forth in the Plan.

                                       A-1<PAGE>   1
                                                                   EXHIBIT 10.08

                               APACHE CORPORATION
                       OUTSIDE DIRECTORS' RETIREMENT PLAN
                      (As Amended and Restated May 3, 2001)

APACHE CORPORATION (the "Company") established the Apache Corporation Outside
Directors' Retirement Plan (the "Plan"), effective as of December 15, 1992 (the
"Effective Date"), to provide eligible non-employee Directors of the Company
("Outside Directors") with certain retirement and death payments. The purpose of
the Plan is to advance the interests of the Company, its subsidiaries, and its
stockholders by continuing to attract and retain outstanding individuals as
Outside Directors and to stimulate the efforts of such individuals by giving
suitable recognition to services which will contribute materially to the success
of the Company.

                                    ARTICLE I
                  ELIGIBILITY, PARTICIPATION AND CONTRIBUTIONS

1.1      Eligibility and Participation.

         (a) Each Outside Director on the Effective Date shall be eligible to
participate in the Plan on that date. Subsequently elected Outside Directors
shall be eligible to participate in the Plan as of the date their Service
begins. An eligible Outside Director shall become a participant ("Participant")
upon receipt by the Company of a completed Participation Agreement, the form of
which is attached hereto as Annex A.

         (b) At any time on or prior to the effective date of a Participant's
Retirement, but not thereafter, the Participant, by completion of a new
Participation Agreement, may:

                  (i)      change his or her Beneficiary Designation, with such
                           change becoming effective upon delivery to the
                           Company of such new Participation Agreement.

                  (ii)     change his or her Benefit Election, with such change
                           becoming effective on the date six months following
                           delivery to the Company of such new Participation
                           Agreement, provided that such change shall not become
                           effective if the Participant is not holding office as
                           an Outside Director on such effective date.

1.2      Contributions.

         All amounts payable under the Plan shall be paid from the general
assets of the Company. Nothing contained in the Plan shall be deemed to create
any fiduciary relationship between the Company and the Participant. Any rights
of the Participant under the Plan shall be no greater than the right of any
unsecured general creditor of the Company.

<PAGE>   2

                                   ARTICLE II
                               RETIREMENT PAYMENTS

2.1      Retirement Payments.

         (a) A Participant who Retires with four or more Quarters of Service
shall be entitled to receive payments under the Plan for a term of years equal
to the number of Quarters of Service credited to the Participant at Retirement
divided by 4, with any fraction (a "Service Fraction") rounded up to the next
whole number. The annual amount of such payments shall equal 66-2/3 percent of
the Participant's Annual Director's Retainer, except that the amount payable in
the final year of the term shall be determined by multiplying the Service
Fraction, if any, times 66-2/3 percent of the Participant's Annual Director's
Retainer.

         (b) "Annual Directors' Retainer" shall mean the aggregate annual amount
of an Outside Director's board retainer fee payable pursuant to Section 1 of the
Company's Non-Employee Directors' Compensation Plan (or comparable section of
any successor plan), whether or not all or a portion of such amount is deferred
or delayed. Such amount shall be determined as of the date a Participant Retires
or, in the case of payments pursuant to the provisions of Article III, as of the
date of the Participant's death.

         (c) "Quarter of Service" shall mean the aggregate total full months of
Service as an Outside Director divided by 3 and rounded up to the next whole
number but in no event shall any Participant's Quarters of Service exceed 40.

         (d) "Retirement, Retired or Retires" shall mean a Participant's ceasing
to hold office as an Outside Director, for any reason other than death, on or
after the attainment of age 60.

         (e) "Service" shall mean: the aggregate total, not to exceed 120, of
(i) the number of full months beginning on or after July 1, 1992 (whether or not
consecutive) that a Participant held office as an Outside Director, whether or
not a Participant at the time, and (ii) 1/2 the number of full months prior to
July 1, 1992 (whether or not consecutive) that a Participant held office as an
Outside Director; provided, however, that a Participant who, as of the Effective
Date, has held office as an Outside Director for an aggregate total of 15 years
shall automatically be credited with 120 full months of Service.

2.2      Retirement Payments Following Change of Control.

         In the event of the occurrence of a "change of control" of the Company,
as defined in the Company's Income Continuance Plan (as amended or any successor
plan which constitutes a change of control within such plan), any Participant
whose Service as an Outside Director terminates on or after the date of such
change of control

                                       2
<PAGE>   3

shall be deemed as of such date of termination, or if later, upon attainment of
age 60, to have Retired and shall be entitled to the payments provided
hereunder.

2.3      Method and Time of Payment.

         Unless a Participant elects the optional form of payment pursuant to
Section 2.4, payments hereunder shall be paid quarterly as of the last day of
March, June, September and December for the period determined in accordance with
Section 2.1(a). Quarterly payments to a Participant shall be paid in cash and
shall begin as of the payment date next following the date the Participant
Retires. If a Participant dies before completion of the payments for the period
determined in accordance with Section 2.1(a), death payments shall be made to
the Participant's Spouse or Beneficiary to the extent provided in Article III.

2.4      Optional Form of Payment.

         In lieu of the quarterly payments to which a Participant would
otherwise be entitled hereunder, a Participant may elect, at the time of signing
a Participation Agreement for the Plan, to receive a cash lump sum payment in an
amount which the Committee calculates as the net present value of the payments
to which the Participant would otherwise be entitled under the provisions of the
Plan determined using a series of annual payments and an annual interest rate
equal to the rate on ten-year treasury bonds/notes as reported in The Wall
Street Journal published on or most recently prior to the effective date of the
Participant's Retirement. Any such lump sum payment shall be made within 90 days
following the Participant's Retirement.

                                  ARTICLE III.
                                 DEATH PAYMENTS

3.1      Death Payments for Participants.

         (a) If a Participant, who has not elected a lump sum payment under
Section 2.4, dies after Retirement but prior to receiving all of the annual
payments to which the Participant would otherwise be entitled hereunder, and is
survived by a Spouse or Beneficiary, the Spouse or Beneficiary shall be entitled
to receive the remaining payments which would otherwise have been payable to the
Participant until the earlier of (i) the death of the Spouse or Beneficiary, or
(ii) the completion of such payments in accordance with the provisions of
Article II.

         (b) If a Participant dies while holding office as an Outside Director
and after attaining age 60 and after being credited with 40 Quarters of Service
pursuant to Article II, and is survived by a Spouse or Beneficiary, the Spouse
or Beneficiary shall be entitled to receive the payments which would otherwise
have been made to the Participant until the earlier of (i) the death of the
Spouse or Beneficiary, or (ii) the completion of such payments in accordance
with the provisions of Article II.

                                       3
<PAGE>   4

         (c) Payments to a Spouse or Beneficiary hereunder shall be made at the
same time as payments would have been made to the Participant.

         (d) "Spouse" shall mean the lawfully married spouse of a Participant at
the time of the Participant's death.

         (e) "Beneficiary" shall mean the individual designated by the
Participant in his or her Participation Agreement in effect at the time of the
Participant's death.

3.2      Lump Sum Death Payments.

         (a) If a Participant who has elected a lump sum payment dies after the
Participant's Retirement but before the receipt of such payment, the lump sum
shall be paid to the surviving Spouse or Beneficiary, or if none, to the estate
or the personal representative of the Participant.

         (b) If an Outside Director, who has not completed a Participation
Agreement, dies while holding office as an Outside Director and after attaining
age 60 and after being credited with 40 Quarters of Service pursuant to Article
II, and is not survived by a Spouse, the payments which would otherwise have
been made to the Outside Director if he or she had been a Participant shall be
paid to the estate or the personal representative of the Outside Director in a
lump sum calculated pursuant to Section 2.4 hereof.

                                   ARTICLE IV
                    ADMINISTRATION, AMENDMENT AND TERMINATION

4.1      The Management Development and Compensation Committee.

         The Plan shall be administered by the Management Development and
Compensation Committee (the "Committee") of the Company's Board of Directors.
All administrative duties, including but not limited to the power to interpret
the Plan and to decide any dispute, shall be carried out by the Committee, which
shall have full discretion and authority hereunder. All claims under the Plan
shall be filed with the Committee, and the decisions made by the Committee shall
be final and binding on all persons having or claiming to have rights under the
Plan.

4.2      Termination or Amendment of Plan.

         The Plan may be terminated or amended at any time through action of the
Company's Board of Directors. No termination or amendment, however, shall reduce
the payments (a) to a Participant or a Participant's Spouse or Beneficiary where
a Participant has already reached Retirement, (b) to which a Participant is or
may become entitled, based on such Participant's Service and Annual Director's
Retainer as determined on the effective date of such termination or amendment,
or (c) to which a Participant is or may become entitled pursuant to Section 2.2
hereof as a result of a change of control.

                                       4
<PAGE>   5

                                   ARTICLE V.
                                  MISCELLANEOUS

5.1      Inalienability of Payments.

         No Participant shall have the right to assign, transfer, hypothecate,
encumber or anticipate his or her interest in any payments under the Plan, nor
shall the payments under the Plan be subject to any legal process to levy upon
or attach such payments for any claim against the Participant or the
Participant's Spouse or Beneficiary.

5.2      Notices.

         Any notice required or permitted to be given under the Plan shall be in
writing and shall be given by first class registered or certified mail, postage
prepaid, or by personal delivery to the appropriate party, addressed:

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

         (b) If to a Participant, at the address indicated below the
Participant's signature on his or her Participation Agreement, or at such other
address as may have been furnished in writing by a Participant to Apache.

         Any such notice shall be deemed to have been given as of the second day
after deposit in the United States Postal Service, postage prepaid, properly
addressed as set forth above, in the case of mailed notice, or as of the date
delivered in the case of personal delivery.

5.3      Disposition of Unclaimed Payments.

         Any communication, statement or notice addressed to a Participant at
his or her last post office address, as provided to the Company under Section
5.2 hereof, will be binding on the Participant and the Participant's Spouse or
Beneficiary for all purposes of the Plan. If the Company cannot ascertain the
whereabouts of any person to whom a payment is due under the Plan within three
years from the date such payment is due, such payment shall be cancelled on the
records of the Plan and the amount thereof forfeited to the Company.

5.4      Governing Law.

         The Plan shall be governed by the laws of the State of Texas.

                                       5
<PAGE>   6

Dated:     May 3, 2001

                                            APACHE CORPORATION
ATTEST:

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

                                       6

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