Document:

exv10w17

Exhibit 10.17

APACHE CORPORATION

2007 Omnibus Equity Compensation Plan

As amended and restated effective December 31, 2009

Section 1

Introduction

1.1 Establishment. Apache Corporation, a Delaware corporation (hereinafter referred to,
together with its Affiliates (as defined below) as the “Company” except where the context otherwise
requires), hereby establishes the Apache Corporation 2007 Omnibus Equity Compensation Plan (the
“Plan”).

1.2 Purpose. The purpose of the Plan is to provide Eligible Persons designated by the
Committee for participation in the Plan with equity-based incentives to: (i) encourage such
individuals to continue in the long-term service of the Company and its Affiliates, (ii) create in
such individuals a more direct interest in the future success of the operations of the Company,
(iii) attract outstanding individuals, and (iv) retain and motivate such individuals. The Plan is
intended to provide eligible individuals with the opportunity to invest in the Company, thereby
relating incentive compensation to increases in stockholder value and more closely aligning the
compensation of such individuals with the interests of the Company’s stockholders.

Accordingly, this Plan provides for the granting of Incentive Stock Options, Non-Qualified Stock
Options, Performance Awards, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights or
any combination of the foregoing, as the Committee determines is best suited to the circumstances
of the particular individual as provided herein.

1.3 Effective Date. The Effective Date of the Plan (the “Effective Date”) is May 2, 2007.
This amendment and restatement is effective as of December 31, 2009.

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 subsections 3.1(h) and 3.4 hereof.

(b) “Affiliate” means any entity other than the Company that is affiliated with the Company
through stock or equity ownership or otherwise and is designated as an Affiliate for purposes of
the Plan by the Committee; provided, however, that,

1

 

notwithstanding any other provisions of the Plan to the contrary, for purposes of NQSOs and SARs,
if an individual who otherwise qualifies as an Eligible Person provides services to such an entity
and not to the Company, such entity may only be designated an Affiliate if the Company qualifies as
a “service recipient,” within the meaning of Internal Revenue Code Section 409A, with respect to
such individual; provided further that such definition of “service recipient” shall
be determined by (a) applying Internal Revenue Code Section 1563(a)(1), (2), and (3), for purposes
of determining a controlled group of corporations under Internal Revenue Code Section 414(b), using
the language “at least 50 percent” instead of “at least 80 percent” each place it appears in
Internal Revenue Code Section 1563(a)(1), (2), and (3), and by applying Treasury Regulations
Section 1.414(c)-2, for purposes of determining trades or businesses (whether or not incorporated)
that are under common control for purposes of Internal Revenue Code Section 414(c), using the
language “at least 50 percent” instead of “at least 80 percent” each place it appears in Treasury
Regulations Section 1.414(c)-2, and (b) where the use of Shares with respect to the grant of an
Option or SAR to such an individual is based upon legitimate business criteria, by applying
Internal Revenue Code Section 1563(a)(1), (2), and (3), for purposes of determining a controlled
group of corporations under Internal Revenue Code Section 414(b), using the language “at least 20
percent” instead of “at least 80 percent” at each place it appears in Internal Revenue Code Section
1563(a)(1), (2), and (3), and by applying Treasury Regulations Section 1.414(c)-2, for purposes of
determining trades or businesses (whether or not incorporated) that are under common control for
purposes of Internal Revenue Code Section 414(c), using the language “at least 20 percent” instead
of “at least 80 percent” at each place it appears in Treasury Regulations Section 1.414(c)-2;
provided further that for purposes of ISOs, “Affiliate” shall mean any present or future
corporation which is or would be a “subsidiary corporation” of the Company as the term is defined
in Section 424(f) of the Internal Revenue Code.

(c) “Award” means any Stock Option, Stock Appreciation Right, Restricted Stock, Restricted
Stock Unit, Performance Award, Dividend Equivalent or any other stock-based award granted to a
Participant under the Plan.

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

(e) “Change of Control” shall have the meaning assigned to such term in the Company’s
Income Continuance Plan as in effect on the Effective Date.

(f) “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 Exchange Act) and “outside directors” (as defined in Treasury
Regulations Section 1.162-27 (e)(3)) and to satisfy such additional regulatory or listing
requirements as the Board may determine to be applicable or appropriate.

(g) “Deferred Delivery Plan” means the Company’s Deferred Delivery Plan, as it has been or
may be amended from time to time, or any successor plan.

2

 

(h) “Dividend Equivalent” means a right, granted to an Eligible Person to receive cash,
Stock, other Awards or other property equal in value to dividends paid with respect to a specified
number of shares of Stock, or other periodic payments.

(i) “Eligible Persons” means those employees of the Company or of any Affiliates, members
of the Board, and members of the board of directors of any Affiliates who are designated as
Eligible Persons by the Committee. Notwithstanding the foregoing, grants of Incentive Stock
Options may not be granted to anyone who is not an employee of the Company or an Affiliate.

(j) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(k) “Exercise Date” means the date of exercise determined in accordance with subsection
6.2(g) hereof.

(l) “Fair Market Value” means the per share closing price of the Stock as reported on The
New York Stock Exchange, Inc. Composite Transactions Reporting System for a particular date or, if
the Stock is not so listed on such date, as reported on NASDAQ or on such other exchange or
electronic trading system which, on the date in question, reports the largest number of traded
shares of Stock, provided, however, that if on the date Fair Market Value is to be
determined there are no transactions in the Stock, Fair Market Value shall be determined as of the
immediately preceding date on which there were transactions in the Stock; provided
further, however, that if the foregoing provisions are not applicable, the fair
market value of a share of the Stock as determined by the Committee by the reasonable application
of such reasonable valuation method, consistently applied, as the Committee deems appropriate;
provided further, however, that, with respect to ISOs, such Fair Market
Value shall be determined subject to Section 422(c)(7) of the Internal Revenue Code.

(m) “Incentive Stock Option” or “ISO” means any Option intended to be and
designated as an incentive stock option and which satisfies the requirements of Section 422 of the
Internal Revenue Code or any successor provision thereto.

(n) “Internal Revenue Code” means the Internal Revenue Code of 1986, as it may be amended
from time to time, and any successor thereto. Any reference to a section of the Internal Revenue
Code or Treasury Regulation shall be treated as a reference to any successor section.

(o) “Non-Qualified Stock Option” or “NQSO” means any Option that is not intended to
qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code.

(p) “Option” means an option to purchase a number of shares of Stock granted pursuant to
subsection 6.1.

3

 

(q) “Option Price” means the price at which shares of Stock subject to an option may be
purchased, determined in accordance with subsection 6.2(b) hereof.

(r) “Participant” means an Eligible Person designated by the Committee, from time to time
during the term of the Plan to receive one or more Awards under the Plan.

(s) “Performance Award” is a right to either a number of shares of Stock or SARs
(“Performance Shares”) determined (in either case) in accordance with subsection 9.1 of this Plan
based on the extent to which the applicable Performance Goals are achieved. A Performance Share
shall be of no value to a Participant unless and until earned in accordance with subsection 9.2
hereof.

(t) “Performance Goals” are the performance conditions, if any, established pursuant to
subsection 9.1 by the Committee in connection with an Award.

(u) “Performance Period” with respect to a Performance Award is a period not less than one
calendar year or one fiscal year of the Company, beginning not earlier than the year in which such
Performance Award is granted, which may be referred to herein and by the Committee by use of the
calendar of fiscal year in which a particular Performance Period commences.

(v) “Prior Plans” means the Company’s 2005 Stock Option Plan and the Executive Restricted
Stock Plan.

(w) “Restricted Stock” means Stock granted to an Eligible Person under Section 8 hereof,
that is subject to certain restrictions and to a risk of forfeiture.

(x) “Restricted Stock Unit” means a right, granted to an Eligible Person under Section 8
hereof, to receive Stock, cash or a combination thereof at the end of a specified vesting period.

(y) “Restriction Period” shall have the meaning assigned to such term in subsection 8.1.

(z) “Stock” means the $0.625 par value common stock of the Company and or any security into
which such common stock is converted or exchanged upon merger, consolidation, or any capital
restructuring (within the meaning of Section 13) of the Company.

(aa) “Stock Appreciation Right” or “SAR” means a right granted to an Eligible
Person to receive an amount in cash, Stock, or other property 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. Stock Appreciation Rights may be
granted in tandem with Options or other Awards or may be freestanding.

4

 

(bb) “SAR Price” means the price at which the Stock Appreciation Right was granted, which
shall be determined in the same manner as the Option Price of an Option in accordance with
subsection 6.2 hereof.

(cc) “Involuntary Termination” means the termination of employment of the Participant by the
Company or its successor for any reason on or after a Change of Control; provided, that the
termination does not result from an act of the Participant that (i) constitutes common-law fraud, a
felony, or a gross malfeasance of duty, or (ii) is materially detrimental to the best interests of
the Company or its successor.

(dd) “Voluntary Termination with Cause” occurs upon a Participant’s separation from service of his
own volition and one or more of the following conditions occurs without the Participant’s consent
on or after a Change of Control:

(i) There is a material diminution in the Participant’s base compensation, compared
to his rate of base compensation on the date of the Change of Control.

(ii) There is a material diminution in the Participant’s authority, duties or
responsibilities.

(iii) There is a material diminution in the authority, duties or responsibilities
of the Participant’s supervisor, such as a requirement that the Participant (or his
supervisor) report to a corporate officer or employee instead of reporting directly
to the board of directors.

(iv) There is a material diminution in the budget over which the Participant
retains authority.

(v) There is a material change in the geographic location at which the Participant
must perform his service, including, for example the assignment of the Participant
to a regular workplace that is more than 50 miles from his regular workplace on the
date of the Change of Control.

The Participant must notify the Company of the existence of one or more adverse conditions
specified in clauses (i) through (v) above within 90 days of the initial existence of the adverse
condition. The notice must be provided in writing to Apache Corporation’s Vice President, Human
Resources or her delegate. The notice may be provided by personal delivery or it may be sent by
email, inter-office mail, regular mail (whether or not certified), fax, or any similar method.
Apache Corporation’s Vice President, Human Resources or her delegate shall acknowledge receipt of
the notice within 5 business days; the acknowledgement shall be sent to the Participant by
certified mail. Notwithstanding the foregoing provisions of this definition, if the Company
remedies the adverse condition within 30 days of being notified of the adverse condition, no
Voluntary Termination with Cause shall occur.

5

 

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. 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, the
authority to:

	 	(a)	 	Grant Awards;
	 
	 	(b)	 	Select the Eligible Persons and the time or times at which Awards shall be granted;
	 
	 	(c)	 	Determine the type and number of Awards to be granted, the number of shares of Stock
to which an Award may relate and the terms, conditions, restrictions, and Performance
Goals relating to any Award;
	 
	 	(d)	 	Determine whether, to what extent, and under what circumstances an Award may be
settled, canceled, forfeited, exchanged, or surrendered;
	 
	 	(e)	 	Construe and interpret the Plan and any Award;
	 
	 	(f)	 	Prescribe, amend, and rescind rules and procedures relating to the Plan;
	 
	 	(g)	 	Determine the terms and provisions of agreements;
	 
	 	(h)	 	Appoint 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
	 
	 	(i)	 	Make all other determinations deemed necessary or advisable for the administration of
the Plan.

3.2 The Committee shall, in its absolute discretion, and without amendment to the Plan, have the
power to accelerate, waive or modify, at any time, any term or condition of an Award that is not
mandatory under this Plan; provided, however, that the Committee shall not have any discretion to
accelerate, waive or modify any term or condition of an

6

 

Award that is intended to qualify as “performance-based compensation” for purposes of Section
162(m) of the Internal Revenue Code if such discretion would cause the Award to not so qualify. In
the event of a Change of Control, the provisions of Section 12 hereof shall be mandatory and shall
govern the vesting and exercisability schedule of any Award granted hereunder.

3.3 No member of the Committee shall be liable for any action, omission, or determination made in
good faith. The Company shall indemnify (to the extent permitted under Delaware law) and hold
harmless each member of the Committee and each other director or employee of the Company to whom
any duty or power relating to the administration or interpretation of the Plan has been delegated
against any cost or expense (including counsel fees) or liability (including any sum paid in
settlement of a claim with the approval of the Committee) arising out of any action, omission or
determination relating to the Plan, unless, in either case, such action, omission or determination
was taken or made by such member, director or employee in bad faith and without reasonable belief
that it was in the best interests of the Company. 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.

3.4 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 inconsistency.

3.5 Compliance with Section 162(m). Except as expressly otherwise stated in any resolution
of the Committee, the Plan is intended to comply with the requirements of Section 162(m) or any
successor section(s) of the Internal Revenue Code (“Section 162(m)”) as to any “covered employee”
as defined in Section 162(m), and shall be administered, interpreted, and construed consistently
therewith. The Committee is authorized to take such additional action, if any, that may be
required to ensure that the Plan and any Award under the Plan satisfy the requirements of Section
162(m), taking into account any regulations or other guidance issued by the Internal Revenue
Service.

7

 

Section 4

Stock Subject to the Plan

4.1 Number of Shares. Subject to adjustments pursuant to Section 4.4 hereof, up to 15,000,000
shares of Stock, plus any shares of Stock available for issuance under the Prior Plans but not
underlying outstanding stock options or other awards under the Prior Plans or which shares are
allocable to any outstanding stock options or other awards under the Prior Plans to the extent such
stock options or other awards expire, are forfeited or otherwise terminate unexercised, are
authorized for issuance under the Plan 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. Of such
total number of shares of Stock so authorized, not more than 10,000,000 may be designated for
Restricted Stock, Restricted Stock Units, and Performance Awards. During the duration of the Plan,
no Eligible Person may be granted Options which in the aggregate cover in excess of 10 percent of
the total shares of Stock authorized under the Plan. No Award may be granted under the Plan on or
after the 10-year anniversary of the Effective Date. The foregoing to the contrary
notwithstanding, the total number of shares of Stock that may be issued pursuant to ISOs granted
under the Plan shall be equal to 5,000,000, subject to adjustments pursuant to Section 4.4 hereof.

4.2 Availability of Shares Not Issued under Awards. If shares of Stock which may be issued
pursuant to the terms of the Plan awarded hereunder are forfeited, cancelled, exchanged or
surrendered or if an Award otherwise terminates or expires without a distribution of shares to the
holder of such Award, the shares of Stock with respect to such Award shall, to the extent of any
such forfeiture, cancellation, exchange, surrender, termination or expiration, again be available
for Awards under the Plan.

4.3 Stock Offered. The Company shall at all times during the term of the Plan 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.

4.4 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 rights to acquire Stock, or through a Stock
split, reverse Stock split, subdivision, consolidation, combination, reclassification or
recapitalization involving the Stock (any of the foregoing being herein called a “capital
restructuring”), then in relation to the Stock that is affected 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
number and kind of shares of Stock or other property (including cash) that may thereafter be issued
pursuant to subsections 4.1 and 4.10, (ii) the number and kind of shares of Stock or other property
(including cash) issued or issuable in respect of outstanding Awards; and (iii) the exercise price,
grant price, or

8

 

purchase price relating to any Award; provided that, with respect to Incentive Stock Options, such
adjustment shall be made in accordance with Section 424(h) of the Internal Revenue Code; (iv) the
Performance Goals, and (v) the individual limitations applicable to Awards.

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

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

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

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

4.9 Code Section 409A. For any Award that is not subject to Internal Revenue Code Section
409A before the adjustments identified in the preceding sections of this Section 4, no adjustment
shall be made that would cause the Award to become subject to Internal Revenue Code Section 409A.
For an Award that is subject to Internal Revenue Code Section 409A before the adjustments
identified in the preceding sections of this Section

9

 

4, no adjustment shall cause the Award to violate Internal Revenue Code Section 409A, without the
prior written consent of both the Participant and the Committee.

4.10 Award Limits. The following limits shall apply to grants of all Awards under
the Plan:

     (a) Options: The maximum aggregate number of shares of Stock that may be
subject to Options granted in any calendar year to any one Participant shall be 250,000
shares.

     (b) SARs: The maximum aggregate number of shares that may be subject to Stock
Appreciation Rights granted in any calendar year to any one Participant shall be 250,000
shares. Any shares covered by Options which include tandem SARs granted to one Participant
in any calendar year shall reduce this limit on the number of shares subject to SARs that
can be granted to such Participant in such calendar year.

     (c) Restricted Stock or Restricted Stock Units: The maximum aggregate number
of shares of Stock that may be subject to Awards of Restricted Stock or Restricted Stock
Units granted in any calendar year to any one Participant shall be 250,000 shares.

     (d) Performance Awards: The maximum aggregate grant with respect to
Performance Awards granted in any calendar year to any one Participant shall be 250,000
shares (or SARs based on the value of such number of shares).

To the extent required by Section 162(m) of the Code, shares subject to Options or SARs which are
canceled shall continue to be counted against the limits set forth in paragraphs (a) and (b)
immediately preceding.

Section 5

Granting of Awards to Participants

5.1 Participation. Participants in the Plan shall be those Eligible Persons 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
Affiliate, and significantly contribute, or are expected to significantly contribute, to the
achievement of the Company’s long-term corporate economic objectives. Participants may be granted
from time to time one or more Awards; provided, however, that the grant of each such Award shall be
separately approved by the Committee, and receipt of one such Award shall not result in automatic
receipt of any other Award. Upon determination by the Committee that an Award is to be granted to
a Participant, as soon as practicable, 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

10

 

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. Awards 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.

Awards granted to members of the Board shall be recommended to the full Board by the Management
Development and Compensation Committee and approved by the full Board.

5.2 Notification to Participants and Delivery of Documents. As soon as practicable after
such determinations have been made, each Participant shall be notified of (a) his/her designation
as a Participant, (b) the date of grant, (c) the number and type of Awards granted to the
Participant, (d) in the case of Performance Awards, the Performance Period and Performance Goals,
(e) in the case of Restricted Stock or Restricted Stock Units, the Restriction Period (as defined
in subsection 8.1), and (f) any other terms or conditions imposed by the Committee with respect to
the Award.

5.3 Delivery of Award Agreement. This requirement for delivery of a written Award
agreement is satisfied by electronic delivery of such agreement provided that evidence of the
Participant’s receipt of such electronic delivery is available to the Company and such delivery is
not prohibited by applicable laws and regulations.

Section 6

Stock Options

6.1 Grant of Stock Options. Coincident with or following designation for participation in
the Plan, an Eligible Person may be granted one or more Options. Grants of Options under the Plan
shall be made by the Committee. In no event shall the exercise of one Option affect the right to
exercise any other Option or affect the number of shares of Stock for which any other Option may be
exercised, except as provided in subsection 6.2(j) hereof.

6.2 Stock Option Agreements. Each Option granted under the Plan shall be identified as
either an Incentive Stock Option or a Non-Qualified Stock Option (or, if no such identification is
made, then it shall be a Non-Qualified Stock Option) and evidenced by a written agreement which
shall be entered into by the Company and the Participant to whom the Option is granted, and which
shall contain the following terms and conditions set out in this subsection 6.2, as well as such
other terms and conditions, not inconsistent therewith, as the Committee may consider appropriate.

11

 

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

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

     (c) No Backdating. There shall be no backdating of Options, and each Option shall be
dated the actual date that the Committee adopts the resolution awarding the grant of such Option.

     (d) Limitations on Incentive Stock Options. No Incentive Stock Option may be granted
to an individual if, at the time of the proposed grant, such individual owns (or is attributed to
own by virtue of the Internal Revenue Code) Stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company or any Affiliate unless (i) the
exercise price of such Incentive Stock Option is at least 110 percent of the Fair Market Value of a
share of Stock at the time such Incentive Stock Option is granted and (ii) such Incentive Stock
Option is not exercisable after the expiration of five years from the date such Incentive Stock
Option is granted.

     To the extent that the aggregate Fair Market Value of Stock of the Company with respect to
which Incentive Stock Options are exercisable for the first time by a Participant during any
calendar year under the Plan and any other option plan of the Company (or any Affiliate) shall
exceed $100,000, such Options shall be treated as Non-Qualified Stock Options. Such Fair Market
Value shall be determined as of the date on which each such Incentive Stock Option is granted.

     (e) Duration of Options. Each Stock Option agreement shall state the period of time,
determined by the Committee, within which the Option may be exercised by the Participant (the
“Option Period”). The Option Period must end, in all cases, not more than ten years from the date
an Option is granted.

     (f) Termination of Options. During the lifetime of a Participant to whom a Stock
Option is granted, the Stock Option may be exercised only by such Participant or, in the case of
disability (as determined pursuant to the Company’s Long-Term Disability Plan or any successor
plan) by the Participant’s designated legal representative, except to the extent such exercise
would cause any Award intended to qualify as an ISO not to so qualify. Once a
Participant to whom a Stock Option was granted dies, the Stock Option may be exercised only by the
personal representative of the Participant’s estate. Unless the Stock Option agreement shall
specify a longer or shorter period, at the discretion of the Committee, then the Participant (or
representative) may exercise the Stock Option for a period of up to three months after such
Participant terminates employment or ceases to be a member of the Board.

12

 

     (g) Exercise, Payments, Etc.

          (i) Each Stock Option agreement shall provide that the method for exercising the Option
granted therein shall be by delivery to the Office of the Secretary of the Company or to the
Administrative Agent of written notice specifying the number of shares of Stock with respect to
which such Option is exercised and payment to the Company of the aggregate Option Price. Such
notice shall be in a form satisfactory to the Committee and shall specify the particular Options
(or portions thereof) which are being exercised and the number of shares of Stock with respect to
which the Options are being exercised. The Participant’s obligation to deliver written notice of
exercise is satisfied by electronic delivery of such notice through means satisfactory to the
Committee and prescribed by the Company. The exercise of the Option shall be deemed effective on
the date such notice is received by the Office of the Secretary or by the Administrative Agent and
payment is made to the Company of the aggregate Option Price (the “Exercise Date”); however, if
payment of the aggregate Option Price is made pursuant to a sale of shares of Stock as contemplated
by subsection 6.2(g)(iv)(E) below, the Exercise Date shall be deemed to be the date of such sale.
If requested by the Company, such notice shall contain the Participant’s representation that he or
she is purchasing the Stock for investment purposes only and his or her agreement not to sell any
Stock so purchased in any manner that is in violation of the Exchange Act or any applicable state
law, and such restriction, or notice thereof, shall be placed on the certificates representing the
Stock so purchased. The purchase of such Stock shall take place upon delivery of such notice to
the Office of the Secretary of the Company or to the Administrative Agent, at which time the
aggregate Option Price shall be paid in full to the Company by any of the methods or any
combination of the methods set forth in subsection 6.2(g)(iv) below.

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

          (iii) The Company’s obligation to deliver the shares of Stock to which the Participant is
entitled as a result of the exercise of the Option shall be subject to the payment in full to the
Company of the aggregate Option Price and the required tax withholding.

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

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

13

 

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

               (C) by delivery to the Company or the Administrative Agent of certificates representing a
number of shares of Stock then owned by the Participant, the aggregate Fair Market Value of which
(as of the Exercise Date) is equal to the aggregate Option Price of the Option being exercised,
properly endorsed for transfer to the Company, provided that the shares of Stock used for this
purpose must have been owned by the Participant for a period of at least six months;

               D) by certification or attestation to the Company or the Administrative Agent of the
Participant’s ownership (as of the Exercise Date) of a number of shares of Stock, the aggregate
Fair Market Value of which (as of the Exercise Date) is not greater than the aggregate Option Price
of the Option being exercised, provided that the shares of Stock used for this purpose have been
owned by the Participant for a period of at least six months; or

               (E) by delivery to the Company or the Administrative Agent of a properly executed notice of
exercise together with irrevocable instructions to a broker to promptly deliver to the Company, by
wire transfer or check as noted in subsection 6.2(g)(iv)(A) and (B) above, the amount of the
proceeds of the sale of all or a portion of the Stock or of a loan from the broker to the
Participant necessary to pay the aggregate Option Price.

     (h) Tax Withholding. Each Stock Option agreement shall provide that, upon exercise of
the Option, the Participant shall make appropriate arrangements with the Company to provide for not
less than the minimum amount of tax withholding required by law, including without limitation
Sections 3102 and 3402 or any successor section(s) of the Internal Revenue Code and applicable
state and local income and other tax laws, by payment of such taxes in cash (including wire
transfer), by check, or as provided in Section 11 hereof.

     (i) Repricing Prohibited. Subject to Sections 4, 6, 12, 13, and 16, outstanding Stock
Options granted under this Plan shall not be repriced without approval by the Company’s
stockholders. In particular, neither the Board nor the Committee may take any action: (1) to
amend the terms of an outstanding Option or SAR to reduce the Option Price or grant price thereof,
cancel an Option or SAR and replace it with a new Option or SAR with a lower Option Price or grant
price, or that has an economic effect that is the same as any such reduction or cancellation or (2)
to cancel an outstanding Option or SAR having an Option Price or grant price above the then-current
Fair Market Value of the Stock in exchange for the grant of another type of Award, without, in each
such case, first obtaining approval of the stockholders of the Company of such action.

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

14

 

there is a record date preceding the date on which such Participant becomes the holder of
record of such Stock.

     (k) Section 409A Avoidance. Once granted, no Stock Option shall be modified,
extended, or renewed in any way that would cause the Stock Option to be subject to Internal Revenue
Code Section 409A. The Option Period shall not be extended to any date that would cause the Stock
Option to become subject to Internal Revenue Code Section 409A. The Option Price shall not be
adjusted to reflect any dividends declared and paid on the Stock between the date of grant and the
date the Stock Option is exercised; however, the right to one or more dividends declared and paid
on the Stock between the date of grant and the date the Option is exercised may be set forth in a
separate arrangement.

Section 7

7.1 Stock Appreciation Rights. The Committee is authorized to grant SARs to Participants
either alone (“freestanding”) or in tandem with other Awards, including Performance Awards,
Options, and Restricted Stock. Stock Appreciation Rights granted in tandem with any Award must be
granted at the same time as the Award is granted. Stock Appreciation Rights granted in tandem with
Options shall terminate and no longer be exercisable upon the termination or exercise of the
related Stock Options Options granted in tandem with Stock Appreciation Rights shall terminate
and no longer be exercisable upon the termination or exercise of the related Stock Appreciation
Rights. The Committee shall establish the terms and conditions applicable to any Stock
Appreciation Rights, which terms and conditions need not be uniform but may not be inconsistent
with the terms of the Plan. Freestanding Stock Appreciation Rights shall generally be subject to
terms and conditions substantially similar to those described in Section 4 and subsection 6.2 for
Options, including, but not limited to, the requirements of subsections 6.2(b), (d), and (i) and
subsection 4.7 regarding general adjustment rules, minimum price, duration, and prohibition on
repricing.

7.2 Section 409A Avoidance. The SAR Price may be fixed on the date it is granted or the
SAR Price may vary according to an objective formula specified by the Committee at the time of
grant. However, the SAR Price can never be less than the Fair Market Value of the Stock on the
date of grant. The SAR grant must specify the number of shares to which it applies, which must be
fixed at the date of grant (subject to adjustment pursuant to Sections 4, 6, and 11). Once
granted, no SAR shall be modified, extended, or renewed in any way that would cause the SAR to be
subject to Internal Revenue Code Section 409A. The period during which the SAR may be exercised
shall not be extended to any date that would cause the SAR to become subject to Internal Revenue
Code Section 409A. The value of the SAR shall not be adjusted to reflect any dividends declared
and paid on the Stock between the date of grant and the date the SAR is exercised; however, the
right to one or more dividends declared and paid on the Stock between the date of grant and the
date the SAR is exercised may be set forth in a separate arrangement.

15

 

Section 8

Restricted Stock and Restricted Stock Units

8.1 Restriction Period. At the time an Award of Restricted Stock or Restricted Stock Units
is made, the Committee shall establish the terms and conditions applicable to such Award, including
the period of time (the “Restriction Period”) and attainment of performance goals during which
certain restrictions established by the Committee shall apply to the Award. Each such Award, and
designated portions of the same Award, may have a different Restriction Period, at the discretion
of the Committee. Except as permitted or pursuant to Sections 12 and 13 hereof, the Restriction
Period applicable to a particular Award shall not be changed. Restricted Stock or Restricted Stock
Units may or may not be subject to Internal Revenue Code Section 409A. If they are subject to
Internal Revenue Code Section 409A, the grant of the Restricted Stock or Restricted Stock Units
must contain the provisions needed to comply with the requirements of Internal Revenue Code Section
409A, including but not limited to (i) the timing of any election to defer receipt of the
Restricted Stock or Restricted Stock Units beyond the date of vesting, (ii) the timing of any
payout election, and (iii) the timing of the settlement of Restricted Stock or a Restricted Stock
Unit. Restricted Stock or Restricted Stock Units that are subject to Internal Revenue Code Section
409A may be adjusted to reflect any dividends declared and paid on the Stock between the date of
grant and the date the Restricted Stock or Restricted Stock Unit vests, but only to the extent
permitted in IRS guidance of general applicability.

8.2 Certificates for Stock. Restricted Stock shall be evidenced in such manner as the
Committee shall determine. If certificates representing Restricted Stock are registered in the
name of the Participant, the Committee may require that such certificates bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock,
that the Company retain physical possession of the certificates, and that the Participant deliver a
stock power to the Company, endorsed in blank, relating to the Restricted Stock represented by a
stock certificate registered in the name of the Participant.

8.3 Restricted Stock Terms and Conditions. Participants shall have the right to enjoy
all shareholder rights during the Restriction Period except that:

	 	(a)	 	The Participant shall not be entitled to delivery of the Stock certificate until the
Restriction Period shall have expired.
	 
	 	(b)	 	The Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise
dispose of the Stock during the Restriction Period.
	 
	 	(c)	 	A breach of the terms and conditions established by the Committee with respect to the
Restricted Stock shall cause a forfeiture of the Restricted Stock and any dividends
withheld thereon.
	 
	 	(d)	 	Dividends and Splits. As a condition to the grant of an Award of Restricted Stock,
the Committee may specify whether any cash dividends paid on a share of Restricted Stock
be automatically reinvested in additional shares of Restricted Stock or applied to the
purchase of additional Awards under this

16

 

	 	 	 	Plan. Unless otherwise determined by the Committee, Stock distributed in connection
with a Stock split or Stock dividend, and other property distributed as a dividend,
shall be subject to restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which such Stock or other property has been
distributed.

8.4 Restricted Stock Units. The Committee is authorized to grant Restricted Stock Units to
Participants, which are rights to receive Stock at the end of a specified deferral period, subject
to the following terms and conditions:

Award and Restrictions. Settlement of an Award of Restricted Stock Units shall occur upon
expiration of the deferral period specified for such Restricted Stock Unit by the Committee
(or, if permitted by the Committee, as elected by the Participant). In addition, Restricted
Stock Units shall be subject to such restrictions (which may include a risk of forfeiture) as
the Committee may impose, if any, which restrictions may lapse at the expiration of the
deferral period or at earlier specified times (including based on achievement of performance
goals and/or future service requirements), separately or in combination, in installments or
otherwise, as the Committee may determine. Restricted Stock Units shall be satisfied by the
delivery of cash or Stock in the amount equal to the Fair Market Value of the specified number
of shares of Stock covered by the Restricted Stock Units, or a combination thereof, as
determined by the Committee at the date of grant or thereafter.

8.5 Deferral of Receipt of Restricted Stock Units. With the consent of the Committee, a
Participant who has been granted a Restricted Stock Unit may by compliance with the then applicable
procedures under the Plan irrevocably elect in writing to defer receipt of all or any part of any
distribution associated with that Restricted Stock Unit Award in accordance with either the terms
and conditions of the Deferred Delivery Plan or the terms and conditions specified under the grant
agreement and related documents. The terms and conditions of any such deferral, including, but not
limited to, the period of time for, and form of, election; the manner and method of payout; and the
use and form of Dividend Equivalents in respect of stock-based units resulting from such deferral,
shall be as determined by the Committee. The Committee may, at any time and from time to time, but
prospectively only except as hereinafter provided, amend, modify, change, suspend, or cancel any
and all of the rights, procedures, mechanics, and timing parameters relating to such deferrals. In
addition, the Committee may, in its sole discretion, accelerate the pay out of such deferrals (and
any earnings thereon), or any portion thereof, either in a lump sum or in a series of payments, but
only to the extent that the payment or the change in timing of the payment will not cause a
violation of Internal Revenue Code Section 409A.

8.6 Bonus Stock and Awards in Lieu of Obligations. The Committee is authorized to grant
Stock as a bonus, or to grant Stock or other Awards in lieu of obligations to pay cash or deliver
other property under this Plan or under plans or compensatory arrangements, provided that, in the
case of Participants subject to Section 16 of the Exchange Act, the amount of such grants remains
within the discretion of the Committee

17

 

to the extent necessary to ensure that acquisitions of Stock or other Awards are exempt from
liability under Section 16(b) of the Exchange Act. Stock or Awards granted hereunder shall be
subject to such other terms as shall be determined by the Committee. In the case of any grant of
Stock to an officer of the Company or an Affiliate in lieu of salary or other cash compensation,
the number of shares granted in place of such compensation shall be reasonable, as determined by
the Committee.

8.7 Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to a
Participant, entitling the Participant to receive cash, Stock, other Awards, or other property
equal in value to dividends paid with respect to a specified number of shares of Stock, or other
periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connection
with another Award. The Committee may provide that Dividend Equivalents shall be paid or
distributed when accrued or shall be deemed to have been reinvested in additional Stock, Awards, or
other investment vehicles, and subject to risk of forfeiture, as the Committee may specify.

Section 9

Performance Awards

9.1 Establishment of Performance Goals for Company. Performance Goals applicable to a
Performance Award shall be established by the Committee in its absolute discretion on or before the
date of grant and within the time period prescribed by, and shall otherwise comply with the
requirements of, Code Section 162(m)(4)(C), or any successor provision thereto, and the regulations
thereunder, for performance-based compensation. Such Performance Goals may include or be based
upon any of the following criteria, either in absolute amount, per share, or per barrel of oil
equivalent (boe): pretax income or after tax income, operating profit, return on equity, capital
or investment, earnings, book value, increase in cash flow return, sales or revenues, operating
expenses (including, but not limited to, lease operating expenses, severance taxes and other
production taxes, gathering and transportation, general and administrative costs, and other
components of operating expenses), stock price appreciation, implementation or completion of
critical projects or processes, production growth, reserve growth, and/or corporate acquisition
goals based on value of assets acquired or similar objective measures.

Where applicable, the Performance Goals may be expressed in terms of attaining a specified level of
a particular criteria or attaining a percentage increase or decrease in a particular criteria, and
may be applied relative to internal goals or levels attained in prior years or related to other
companies or indices or as ratios expressing relationship between Performance Goals, or any
combination thereof, as determined by the Committee.

The Performance Goals may include a threshold level of performance below which no vesting will
occur, levels of performance at which specified vesting will occur, and a maximum level of
performance at which full vesting will occur.

18

 

The Committee may in its discretion classify Participants into as many groups as it determines, and
as to any Participant relate his/her Performance Goals partially, or entirely, to the measured
performance, either absolutely or relatively, of an identified subsidiary, division, operating
company, test strategy, or new venture of the Company and/or its Affiliates.

Notwithstanding any other provision of the Plan, payment or vesting of any Performance Award shall
not be made until the applicable Performance Goals have been satisfied and any other material terms
of such Award were in fact satisfied. The Committee shall certify in writing the attainment of
each Performance Goal. Notwithstanding any provision of the Plan to the contrary, with respect to
any Performance Award, (a) the Committee may not adjust, downwards or upwards, any amount payable,
or other benefits granted, issued, retained, and/or vested pursuant to such an Award on account of
satisfaction of the applicable Performance Goals and (b) the Committee may not waive the
achievement of the applicable Performance Goals, except in the case of the Participant’s death or
disability, or a Change of Control.

9.2 Levels of Performance Required to Earn Performance Awards. At or about the same time
that Performance Goals are established for a specific period, the Committee shall in its absolute
discretion establish the percentage of the Performance Awards granted for such Performance Period
which shall be earned by the Participant for various levels of performance measured in relation to
achievement of Performance Goals for such Performance Period.

9.3 Other Restrictions. The Committee shall determine the terms and conditions applicable
to any Performance Award, which may include restrictions on the delivery of Stock payable in
connection with the Performance Award and restrictions that could result in the future forfeiture
of all or part of any Stock earned. The Committee may provide that shares of Stock issued in
connection with a Performance Award be held in escrow and/or legended. Performance Awards may or
may not be subject to Internal Revenue Code Section 409A. If a Performance Award is subject to
Internal Revenue Code Section 409A, the Performance Award grant agreement shall contain the terms
and conditions needed to comply with the requirements of Internal Revenue Code Section 409A,
including but not limited to (i) the timing of any election to defer receipt of the Performance
Award, (ii) the timing of any payout election, and (iii) the timing of the actual payment of the
Performance Award. Performance Awards that are subject to Internal Revenue Code Section 409A may
be adjusted to reflect any dividends declared and paid on the Stock between the date of grant and
the date the Performance Award is paid, but only to the extent permitted in IRS guidance of general
applicability.

9.4 Notification to Participants. Promptly after the Committee has established the
Performance Goals with respect to a Performance Award, the Participant shall be provided with
written notice of the Performance Goals so established.

19

 

9.5 Measurement of Performance against Performance Goals. The Committee shall, as soon as
practicable after the close of a Performance Period, determine (a) the extent to which the
Performance Goals for such Performance Period have been achieved and (b) the percentage of the
Performance Awards earned as a result.

These determinations shall be absolute and final as to the facts and conclusions therein made and
be binding on all parties. Promptly after the Committee has made the foregoing determination, each
Participant who has earned Performance Awards shall be notified. For all purposes of this Plan,
notice shall be deemed to have been given the date action is taken by the Committee making the
determination. Participants may not sell, transfer, pledge, exchange, hypothecate, or otherwise
dispose of all or any portion of their Performance Awards during the Performance Period.

9.6 Treatment of Performance Awards Earned. Upon the Committee’s determination that a
percentage of any Performance Award has been earned for a Performance Period, Participants to whom
such earned Performance Awards have been granted and who have been in the employ of the Company or
Affiliates continuously from the date of grant until the end of the Performance Period, subject to
the exceptions set forth in the Performance Award agreement and in Sections 10 and 12 hereof, shall
be entitled, subject to the other conditions of this Plan, to payment in accordance with the terms
and conditions of the Performance Awards. Performance Awards shall under no circumstances become
earned or have any value whatsoever for any Participant who is not in the employ of the Company or
its Affiliates continuously during the entire Performance Period for which such Performance Award
was granted, except as provided in Sections 10 and 12.

9.7 Subsequent Performance Award Grants. Following the grant of Performance Awards with
respect to a Performance Period, additional Participants may be designated by the Committee for
grant of Performance Awards for such Performance Period subject to the same terms and conditions
set forth for the initial grants, except that the Committee, in its sole discretion, may reduce the
value of the amounts to which subsequent Participants may become entitled, prorated according to
reduced time spent during the Performance Period, and the applicable Performance Award agreement
shall be modified to reflect such reduction.

9.8 Stockholder Privileges. No Participant shall have any rights as a stockholder with
respect to any shares of Stock covered by a Performance Award until the Participant becomes the
holder of record of such Stock.

Section 10

Termination of Employment, Death, Disability, etc.

10.1 Termination of Employment. Except as provided herein, the treatment of an Award upon
a termination of employment or any other service relationship by and

20

 

between a Participant and the Company or an Affiliate shall be specified in the agreement
controlling such Award.

10.2 Termination for Cause. If the employment of the Participant by the Company is
terminated for cause, as determined by the Committee, all Awards to such Participant shall
thereafter be void for all purposes. As used in subsections 9.1, 10.2, and 10.3 hereof, “cause”
shall mean a gross violation, as determined by the Committee, of the Company’s established policies
and procedures, provided that the effect of this subsection 10.2 shall be limited to determining
the consequences of a termination and that nothing in this subsection 10.2 shall restrict or
otherwise interfere with the Company’s discretion with respect to the termination of any employee.

10.3 Performance Awards. Except as set forth below, each Performance Award shall state
that each such Award shall be subject to the condition that the Participant has remained an
Eligible Person from the date of grant until the applicable vesting date as follows:

     (a) If the Participant voluntarily leaves the employment of the Company or an Affiliates, or
if the employment of the Participant is terminated by the Company for cause or otherwise, any
Performance Award to such Participant not previously vested shall thereafter be void and forfeited
for all purposes.

     (b) A Participant shall become vested in all Performance Awards that have met the Performance
Goals within the Performance Period on the date the Participant retires from employment with the
Company on or after attaining retirement age (which for all purposes of this Plan is determined to
be age 65, unless otherwise designated by the Committee at the time the Award is granted), on the
date the Participant dies while employed by the Company, or on the date the Participant terminates
service with the Company and the Affiliates due to permanent disability (as determined pursuant to
the Company’s Long-Term Disability Plan or any successor plan, unless the Performance award is
subject to Internal Revenue Code Section 409A, in which case “permanent disability” must also fall
within the meaning specified in Internal Revenue Code Section 409A(a)(2)(C) or a more restrictive
meaning established by the Committee) while employed by the Company. Such Participant shall not
become entitled to any payment which may arise due to the occurrence of a Performance Goal after
the Participant dies, terminates service due to permanent disability, or retires. Payment shall
occur as soon as administratively convenient following the date the Participant dies, terminates
service due to permanent disability, or retires, but in no event shall the payment occur later than
March 15 in the calendar year immediately following the calendar year in which the Participant
died, so terminates service, or retired. If the Participant dies before receiving payment, the
payment shall be made to those entitled under the Participant’s will or, if there is no will, to
the Participant’s estate.

10.4 Forfeiture Provisions. Subject to Sections 12 and 14, in the event a Participant
terminates employment during a Restriction Period for the Participant’s Restricted Stock or
Restricted Stock Units, such Awards will be forfeited; provided, however, that the

21

 

Committee may provide for proration or full payout in the event of (a) death, (b) permanent
disability, or (c) any other circumstances the Committee may determine.

Section 11

Tax Withholding

11.1 Withholding Requirement. The Company and any Affiliate is authorized to withhold from
any Award granted, or any payment relating to an Award under this Plan, including from a
distribution of Stock, amounts of withholding and other taxes or social security payments due or
potentially payable in connection with any transaction involving an Award, and to take such other
action as the Committee may deem advisable to enable the Company and Participants to satisfy
obligations for the payment of withholding taxes and other tax or social security obligations
relating to any Award. This authority shall include authority to withhold or receive Stock or
other property and to make cash payments in respect thereof, in satisfaction of a Participant’s tax
obligations, either on a mandatory or elective basis at the discretion of the Committee.

11.2 Withholding Requirement – Stock Options and SARs. The Company’s obligations to
deliver shares of Stock upon the exercise of an Option or SAR shall be subject to the Participant’s
satisfaction of all applicable federal, state, and local income and other tax and social security
withholding requirements.

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

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

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

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

22

 

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

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

11.4 Restricted Stock and Performance Award Payment and Tax Withholding. Each Restricted
Stock and Performance Award agreement shall provide that, upon payment of any entitlement under
such an Award, the Participant shall make appropriate arrangements with the Company to provide for
the amount of minimum tax and social security withholding required by law, including without
limitation Sections 3102 and 3402 or any successor section(s) of the Internal Revenue Code and
applicable state and local income and other tax and social security laws. The withholding may be
deducted from the Award. Any payment under such an Award 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 shall be
based on the Fair Market Value of the shares of Stock on the applicable date of vesting to which
such tax withholding relates. Such cash portion shall be withheld by the Company to satisfy
applicable tax and social security withholding requirements.

Section 12

Change of Control

12.1 In General. In the event of the occurrence of a Change of Control of the Company:

	 	(a)	 	Without further action by the Committee or the Board,

(i) all outstanding Options granted on or prior to December 31, 2009 shall
automatically vest so as to make all such Options fully vested and exercisable as
of the date of such Change of Control;

(ii) all outstanding Options granted on or after January 1, 2010 shall fully vest
upon the Participant’s Involuntary Termination or Voluntary Termination with Cause
occurring on or after a Change of Control. Such newly vested Options shall be
fully exercisable as of the date of the Involuntary Termination or Voluntary
Termination with Cause on or after a Change of Control occurs.

23

 

	 	(b)	 	without further action by the Committee or the Board,

(i) all unvested Restricted Stock Awards and Restricted Stock Units granted on or
prior to December 31, 2009 shall automatically vest. Such newly vested Restricted
Stock Units shall be converted to Stock and the Participant shall be issued the
requisite number of shares, after any withholding under Section 11, as soon as
administratively practicable after the Change of Control occurs, unless the
Participant had elected to defer Restricted Stock Units to the Deferred Delivery
Plan in which case the Participant’s account in the Deferred Delivery Plan shall be
credited with deferred Restricted Stock Units as of the date of the Change of
Control;

(ii) all unvested Restricted Stock Awards and Restricted Stock Units granted on or
after January 1, 2010 shall fully vest upon the Participant’s Involuntary
Termination or Voluntary Termination with Cause occurring on or after a Change of
Control. Such newly vested Restricted Stock Units shall be converted to Stock and
the Participant shall be issued the requisite number of shares, after any
withholding under Section 11, as soon as administratively practicable after the
Involuntary Termination or Voluntary Termination with Cause on or after a Change of
Control occurs, unless the Participant had elected to defer Restricted Stock Units
to the Deferred Delivery Plan in which case the Participant’s account in the
Deferred Delivery Plan shall be credited with deferred Restricted Stock Units as of
the date of the Involuntary Termination or Voluntary Termination with Cause on or
after the Change of Control occurs.

(c) assuming the achievement of a Performance Goal, the entitlement to receive cash and
Stock under any outstanding Performance Award grants shall vest automatically, without
further action by the Committee or the Board, and shall become payable as follows:

(i) For Performance Awards granted on or prior to December 31, 2009, if such Change
of Control occurs subsequent to the achievement of a Performance Goal, any
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 subsection 12.1 hereof.

(ii) For Performance Awards granted on or prior to December 31, 2009, if the
achievement of a Performance Goal occurs subsequent to the date of a Change of
Control, the applicable payout amount shall vest in full for which the Performance
Period has not yet ended and shall be paid by the Company to the Participant within
thirty (30) days after the Performance Goal is reached. The payment will occur
only if the Participant is employed at the time that the Performance Goal is
reached

24

 

or if the Performance Goal is reached after the Participant was terminated for any
reason (or without reason) after the Change of Control.

      (iii) For Performance Awards granted on or after January 1, 2010, if such
Change of Control occurs subsequent to the achievement of a Performance Goal, any
remainder of such payout amount shall vest as of the date of the Participant’s
Involuntary Termination or Voluntary Termination with Cause occurring on or after
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 Involuntary Termination or
Voluntary Termination with Cause which occurs on or after the date of the Change of
Control in the manner set out in subsection 12.1 hereof.

(iv) For Performance Awards granted on or after January 1, 2010, if the achievement
of a Performance Goal occurs subsequent to the date of a Change of Control, the
applicable payout amount shall vest in full for which the Performance Period has
not yet ended as of the date of the Participant’s Involuntary Termination or
Voluntary Termination with Cause occurring on or after such Change of Control and
shall be paid by the Company to the Participant within thirty (30) days after the
later of (1) the date of the Participant’s Involuntary Termination or Voluntary
Termination with Cause or (2) the date that the Performance Goal is reached. The
payment will occur only if the Participant is employed at the time that the
Performance Goal is reached or if the Performance Goal is reached after the
Participant’s Involuntary Termination or Voluntary Termination with Cause occurring
on or after the Change of Control.

(d) Notwithstanding subsections (a), (b), and (c), if any Award is subject to Internal
Revenue Code Section 409A, vesting shall occur as of the Change of Control, but payment
shall not occur until the earlier of (x) the date payment would have been due if the Change
of Control had not occurred or (y) the date that the Change of Control constitutes a
“change in the ownership or effective control of the corporation, or in the ownership of a
substantial portion of the assets of the corporation” within the meaning of Internal
Revenue Code Section 409A(a)(2)(A)(v).

Section 13

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,

25

 

then the Committee, or the board of directors of any corporation assuming the obligations of the
Company, shall, as to the Plan and outstanding Awards 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 Awards 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. Additionally, upon the occurrence of such an event and
provided that a Performance Goal 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 Awards so that all such existing entitlements are paid prior to any such event.
If a Performance Goal has not yet been attained, the Committee in its discretion may make equitable
payment or adjustment.

In its discretion, and on such terms and conditions as it deems appropriate, the Committee may
provide, either by the terms of an agreement applicable to any Award or by resolution adopted prior
to the occurrence of a Change of Control or an event described in this Section 13, that any
outstanding Award (or portion thereof) shall be converted into a right to receive cash, on or as
soon as practicable following the closing date or expiration date of the transaction resulting in
the Change of Control or such event in an amount equal to the highest value of the consideration to
be received in connection with such transaction for one share of Stock, or, if higher, the highest
Fair Market Value of a share of Stock during the thirty (30) consecutive business days immediately
prior to the closing date or expiration date of such transaction, less the per-share Option Price
or grant price of SARs, as applicable to the Award, multiplied by the number of shares subject to
such Award, or the applicable portion thereof.

Section 14

Rights of Employees and Participants

14.1 Employment. Neither anything contained in the Plan or any agreement nor the granting
of any Award 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 Affiliate, or interfere in any way with
the right of the Company or any Affiliate, 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.

An Eligible Person who has been granted an Award in one year shall not necessarily be entitled to
be granted Awards in subsequent years.

14.2 Non-transferability. Except as otherwise determined at any time by the Committee as
to any Awards other than ISOs, no right or interest of any Participant in an Award 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,

26

 

attachment, pledge, bankruptcy, or court order; provided that the Committee may permit
further transferability of Awards other than ISOs, on a general or a specific basis, and may impose
conditions and limitations on any permitted transferability, subject to any applicable Restriction
Period; provided further, however, that no Award may be transferred for
value or other consideration without first obtaining approval thereof by the stockholders of the
Company. In the event of a Participant’s death, a Participant’s rights and interests in any Award
as set forth in an Award agreement, shall 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. If any individual entitled to payment or to exercise rights with
respect to the Plan is a minor, the Committee shall cause the payment to be made to (or the right
to be exercised by) the custodian or representative who, under the state law of the minor’s
domicile, is authorized to act on behalf of the minor or is authorized to receive funds on behalf
of the minor. With respect to those Awards, if any, that are permitted to be transferred to
another individual, references in the Plan to exercise or payment related to such Awards by or to
the Participant shall be deemed to include, as determined by the Committee, the Participant’s
permitted transferee. A Participant’s unexercised Option or SAR, or amounts due but remaining
unpaid to such Participant, at the Participant’s death, shall be exercised or paid as designated by
the Participant by will or by the laws of descent and distribution. In the event any Award is
exercised by or otherwise paid to the executors, administrators, heirs or distributees of the
estate of a deceased Participant, or the transferee of an Award, in any such case, pursuant to the
terms and conditions of the Plan and the applicable Award agreement and in accordance with such
terms and conditions as may be specified from time to time by the Committee, the Company shall be
under no obligation to issue shares of Stock thereunder unless and until the Company is satisfied,
as determined in the discretion of the Committee, that the person or persons exercising such Award,
or to receive such payment, are the duly appointed legal representative of the deceased
Participant’s estate or the proper legatees or distributees thereof, or the valid transferee of
such Award, as applicable. Any purported assignment, transfer or encumbrance of an Award that does
not comply with this Section 14.2 shall be void and unenforceable against the Company.

14.3 Noncompliance with Internal Revenue Code Section 409A. If an Award is subject to the
requirements of Internal Revenue Code Section 409A, to the extent that the Company or an Affiliate
takes any action that causes a violation of Internal Revenue Code Section 409A or fails to take
reasonable actions required to comply with Internal Revenue Code Section 409A, in each case as
determined by the Committee, the Company shall pay an additional amount to the Participant (or
beneficiary) equal to the additional income tax imposed pursuant to Internal Revenue Code Section
409A on the Participant as a result of such violation, plus any taxes imposed on this additional
payment.

27

 

Section 15

Other Employee Benefits

The amount of any income deemed to be received by a Participant as a result of the payment under an
Award or 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 16

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, and the Committee or the Board may, to the extent permitted by the Plan, from time to time
amend or modify the terms of any Award theretofore granted, including any Award agreement, in each
case, retroactively or prospectively; provided, however, that no amendment or
modification of the Plan may become effective without approval of the amendment or modification by
the Company’s stockholders if stockholder approval is required to enable the Plan to satisfy an
applicable statutory or regulatory requirements, unless the Company, on the advice of outside
counsel, determines that stockholder approval is not necessary.

Notwithstanding any other provision of this Plan, no amendment, modification, or termination of the
Plan or any Award shall adversely affect the previously accrued material rights or benefits of a
Participant under any outstanding Award theretofore awarded under the Plan, without the consent of
such Participant holding such Award, except to the extent necessary to avoid a violation of
Internal Revenue Code Section 409A or the Board or the Committee determines, on advice of outside
counsel or the Company’s independent accountants, that such amendment or modification is required
for the Company, the Plan, or the Award to satisfy, comply with, or meet the requirements of any
law, regulation, listing rule, or accounting standard applicable to the Company.

The Committee shall have the authority to adopt (without the necessity for further stockholder
approval) 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.

28

 

Section 17

Requirements of Law

17.1 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 under an Award, 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.

17.2 Section 16 Requirements. If a Participant is an officer or director of the Company
within the meaning of Section 16 of the Exchange Act, Awards granted hereunder shall be subject to
all conditions required under Rule 16b-3, or any successor rule(s) promulgated under the Exchange
Act, to qualify the Award 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 Award.

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

Section 18

Duration of the Plan

The Plan shall terminate on the ten year anniversary of the Effective Date. No grants shall be
awarded after such termination; however, the terms of the Plan shall continue to apply to all
Awards outstanding when the Plan terminates.

Dated: November 18, 2009; Effective December 31, 2009.

	 	 	 	 	 
	 	 	APACHE CORPORATION
	 
	 	 	 	 
	ATTEST:
	 	 	 	 
	 
	 	 	 	 
	Cheri L. Peper

	 	By:
	 	Margery M. Harris
	 

	 	 	 	 
	Cheri L. Peper	 	Margery M. Harris
	Corporate Secretary	 	Vice President, Human Resources

29exv10w37

Exhibit 10.37

Restricted Stock Unit Award Agreement

Schedule A

Notice of Restricted Stock Unit Award

	 	 	 
	Company:

	 	Apache Corporation
	 
	 	 
	Participant:

	 	Michael S. Bahorich
	 
	 	 
	Notice:

	 	You have been granted an Award of Restricted Stock Units in accordance with the terms of
the Plan and the attached Restricted Stock Unit Award Agreement.
	 
	 	 
	Type of Award:

	 	Restricted Stock Units 
	 
	 	 
	Number of Units:

	 	20,000
	 
	 	 
	Restriction:

	 	Except as set forth in Section 3 of the attached Restricted Stock Award Agreement, the Shares received in settlement of Restricted Stock Units pursuant
to this Award are not eligible for sale by the Participant until such time as the Participant retires from his duties as Executive Vice President.
	 
	 	 
	Vesting:

	 	4,000 on December 31, 2010
	 

	 	4,000 on November 18, 2011
	 

	 	4,000 on November 19, 2012
	 

	 	4,000 on November 18, 2013
	 

	 	4,000 on November 18, 2014
	 
	 	 
	Plan:

	 	Apache Corporation 2007 Omnibus Equity Compensation Plan
	 
	 	 
	Award Date:

	 	November 18, 2009
	 
	 	 
	Acceptance:

	 	Please execute the attached Restricted Stock Unit Award Agreement. By accepting your Restricted Stock Unit Award, you will have agreed to the terms and
conditions set forth in this Agreement and the Plan. If you do not accept your Award by executing this Agreement, you will be unable to receive your
shares. 

1

 

Restricted Stock Unit Award Agreement

               This Restricted Stock Unit Award Agreement (this “Agreement”), dated as of the Award Date set
forth in the Notice of Restricted Stock Unit Award attached as Schedule A hereto (the
“Award Notice”) is made between Apache Corporation (the “Company”) and the Participant named in the
Award Notice. The Award Notice is included in and made part of this Agreement.

Definitions

               All capitalized terms contained in this Agreement shall have the meanings assigned to those
terms by the Plan, unless otherwise indicated herein.

Terms

               1. Award of Restricted Stock Units. Subject to the provisions of this Agreement and
the provisions of the Apache Corporation 2007 Omnibus Equity Compensation Plan (the “Plan”), the
Company hereby awards to the Participant, pursuant to the Plan, a right to receive the number of
shares of $0.625 par value Common Stock of the Company (“Shares”) set forth in the Award Notice.

               2. Evidence of Units. The Participant’s right to receive the Restricted Stock Units
shall be evidenced by book entry registration (or by such other manner as the Committee may
determine).

               3. Restrictions. 2,400 of the Shares vesting each year pursuant to this Agreement and
the Plan shall be subject to the restriction that none of such shares shall be eligible to be sold
by the Participant until such time as the Participant retires or otherwise terminates employment
with the Company. The remaining 1,600 Shares vesting each year shall vest free of restrictions,
except those, if any, required by applicable securities laws, and may be sold at any time to pay
taxes or for other reasons. Certificates representing the restricted 2,400 Shares issued each year
will bear all legends required by law or by the Company or its counsel as necessary or advisable to
effectuate the provisions of the Plan and this Award including the following restrictive legend:

	 	 	 	THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
RESTRICTIONS CONTAINED IN A RESTRICTED STOCK UNIT AWARD AGREEMENT
DATED AS OF NOVEMBER 18, 2009, BY AND BETWEEN APACHE CORPORATION AND
MICHAEL S. BAHORICH, A COPY OF WHICH IS ON FILE AT THE OFFICE OF THE
CORPORATE SECRETARY OF THE COMPANY.

               4. Certificates. The Company may place a “stop transfer” order against shares of the
Common Stock issued pursuant to this Award until all restrictions and conditions set forth in the
Plan or this Agreement and in the legends referred to in Section 3 have been complied with. The
stock transfer records of the Company will reflect stock transfer instructions with respect to such
shares.

2

 

               5. Custody. Any stock certificates issued pursuant to this Agreement shall be held by
the Corporate Secretary of the Company until all restrictions thereon have lapsed or until the
Committee authorizes the release.

               6. Vesting and Settlement. Subject to earlier settlement or forfeiture as provided in
Section 9 and any deferral election under Section 8, Restricted Stock Units awarded hereunder shall
vest in accordance with the following table.

	 	 	 	 	 
	Tranche	 	Number of Units	 	Vesting Date
	I
	 	4,000
	 	December 31, 2010
	II
	 	4,000
	 	November 18, 2011
	III
	 	4,000
	 	November 19, 2012
	IV
	 	4,000
	 	November 18, 2013
	V
	 	4,000
	 	November 18, 2014

The Restricted Stock Units shall be settled in an equivalent number of shares of Common Stock on
the date on which such Restricted Stock Units vest. The Company shall not be obligated to deliver
any shares of Common Stock if counsel to the Company determines that such sale or delivery would
violate any applicable law or any rule or regulation of any governmental authority or any rule or
regulation of, or agreement of the Company with, any securities exchange or association upon which
the Common Stock is listed or quoted. The Company shall in no event be obligated to take any
affirmative action in order to cause the delivery of shares of Common Stock to comply with any such
law, rule, regulation or agreement.

               7. Dividend Equivalent Payments. The company will pay to the Participant an amount
equivalent to any cash dividends declared on the Common Stock as soon as administratively
practicable after the payment date for such dividend, in proportion to the number of unvested
Restricted Stock Units as of the record date for such dividend, with the following exception. Any
such payments that would be made before December 18, 2010 shall instead be accumulated and paid as
soon as administratively practicable after the earliest of the following dates, but only if the
Participant is still employed by the Company on such date: December 18, 2010; the date of the
Participant’s death; the date the Committee determines the Participant is Disabled; or the date of
a Change of Control that is described in Section 409A(a)(2)(A)(v) of the Internal Revenue Code. If
the participant is not employed by the Company on such date, the accumulated payments shall be
forfeited.

               8. Deferral Election. The Participant may, within 30 days of the Award Date and in
accordance with the terms and conditions of the Deferred Delivery Plan, elect to defer
receipt of Shares that would otherwise be issued on a Vesting Date in settlement of all or any part
of a Tranche of Restricted Stock Units. If the Participant makes such an election, effective as of
the applicable Vesting Date, each Restricted Stock Unit so deferred shall thereafter be a Stock
Unit (as defined in the Deferred Delivery Plan) and settlement of the Stock Units shall be in
accordance with the Deferred Delivery Plan except that the restrictions in Section 3 shall

3

 

continue
to apply to any shares of Common Stock issued in settlement of the Stock Units until such
restrictions would have expired had such shares been issued in settlement of the Restricted Stock
Units. Any such deferral of less than 100 percent of the Shares shall apply on a pro rata basis to
both Shares subject to the restriction against sales and those Shares not subject to restriction.

               9. Termination of Employment, Death, Disability, etc. Except as set forth below, this
Agreement and each Award shall be subject to the condition that the Participant has remained an
Eligible Employee from the initial award of an Award until the applicable Vesting Date as follows:

               (a) If the Participant voluntarily leaves the employment of the Company (but not
for Good Reason) or is terminated by the Company for Cause before an applicable Vesting
Date, all Restricted Stock Units not already vested shall be immediately cancelled.

               (b) If the Participant dies or becomes Disabled before an applicable Vesting Date, the
Restricted Stock Units that would have vested at the next Vesting Date shall thereupon vest,
the restrictions in Section 3 shall lapse and the then vested Restricted Stock Units shall
be settled as soon as administratively practicable following the date the Participant dies
or becomes Disabled. Any Restricted Stock Units not already vested or vested by reason of
death or Disability shall be immediately cancelled. If the Participant dies before
settlement, settlement shall be made to the beneficiary designated for this purpose in the
manner prescribed by the Committee, or, if there is no such beneficiary, to the estate of
the Participant.

               (c) If, before December 18, 2010, the Participant is terminated by the Company without
Cause and not by reason of becoming Disabled or if the Participant terminates his employment
for Good Reason, then all unvested Restricted Stock Units shall be cancelled. If, after
December 17, 2010, the Participant is terminated by the Company without Cause and not by
reason of becoming Disabled or if the Participant terminates his employment for Good Reason,
then all Restricted Stock Units shall thereupon vest, the restrictions in Section 3 shall
lapse, and, subject to the terms of the Deferred Delivery Plan, if applicable, the
Restricted Stock Units shall be settled as soon as administratively practicable following
the date the Participant’s employment is terminated.

               (d) Notwithstanding Section 12 of the Plan or subsections 9(a), 9(b), or 9(c), if the
Participant is employed by the Company when a Change of Control that is described in Section
409A(a)(2)(A)(v) of the Internal Revenue Code occurs, any unvested Restricted Stock Units
shall vest, the restrictions in Section 3 shall lapse, and settlement of the newly vested
Restricted Stock Units shall occur on the date of such Change of Control or as soon
thereafter as is administratively practicable.

For purposes of this Agreement,

               “Cause” means the Participant’s willful failure to perform his duties after a demand for
performance is delivered to him by the Company’s board of directors that specifically states the
manner in which the board believes the Participant has not performed his

4

 

duties; the Participant’s
willful gross misconduct materially injurious to the Company; or the Participant’s violation of a
direct order of the board of directors or the executive committee of the board. An
act or omission is “willful” if it is done in bad faith or without reasonable belief that the act
or omission was in the Company’s interests.

               “Disabled” means the Participant is expected by the Committee to both (i) become entitled to
long-term disability payments under the Company’s long-term disability plan then in effect and (ii)
be unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that is expected to result in death or is expected to last for a
continuous period of at least one year.

               “Good Reason” means a material diminution in the Participant’s responsibilities or duties or a
material diminution in the Participant’s base compensation unless the base compensation of other
senior officers of the Company is also reduced proportionately.

               Payment and Tax Withholding. The Committee may make such provisions as it may deem
appropriate for the withholding of any taxes that it determines is required in connection with this
Award. The Participant may pay all or any portion of the taxes required to be withheld by the
Company or paid by the Participant in connection with all or any portion of this Award by
delivering cash or by electing to have the Company withhold shares of Common Stock that would have
otherwise been delivered to Participant having a Fair Market Value determined by the Committee in
accordance with the Plan, equal to the amount required to be withheld or paid.

               10. Payment of Tax and Withholding. The Committee may make such provisions as it may
deem appropriate for the withholding of any taxes that it determines is required in connection with
this Award. The Participant may pay all or any portion of the taxes required to be withheld by the
Company or paid by the Participant in connection with all or any portion of this Award by
delivering cash or by electing to have the Company withhold shares of Common Stock that would have
otherwise been delivered to Participant having a Fair Market Value determined by the Committee in
accordance with the plan, equal to the amount required to be withheld or paid.

               11. No Ownership Rights Prior to Issuance of Shares. Neither the Participant nor any
other person shall become the beneficial owner of the Shares underlying the Restricted Stock Units,
nor have any rights of a shareholder (including, without limitation, dividend and voting rights)
with respect to any such Shares, unless and until and after such Shares have vested.

               12. Non-Transferability of Restricted Stock Units. Subject to the conditions and
exceptions set forth in Deferred Delivery Plan, if elected, and Section 14.2 of the Plan, the
Restricted Stock Units (and, while subject to the restrictions in Section 3, the Shares) shall not
be transferable otherwise than by will or the laws of descent and distribution or to a trust for
estate planning purposes or a family partnership.

               13. No Right to Continued Employment. Neither the Restricted Stock Units nor any
terms contained in this Agreement shall confer upon the Participant any express or implied right to
be retained in the employment or service of the Company or any Affiliate for any period, nor
restrict in any way the right of the Company or any Affiliate, which right is hereby expressly
reserved, to terminate the Participant’s employment or service at any time for

5

 

any reason. The
Participant acknowledges and agrees that any right to have restrictions on the Restricted Stock
Units lapse is earned only by continuing as an employee of the Company or an Affiliate at the will
of the Company or such Affiliate, or satisfaction of any other applicable terms and conditions
contained in the Plan and this Agreement, and not through the act of being hired, being Awarded the
Restricted Stock Units or acquiring Shares hereunder.

               14. The Plan. In consideration for this award of Restricted Stock Units, the
Participant agrees to comply with the terms of the Plan and this Agreement. This Agreement is
subject to all the terms, provisions and conditions of the Plan, a copy of which is attached hereto
and incorporated herein by reference, and to such regulations and administrative interpretations
thereunder as may from time to time be adopted by the Committee. Unless defined herein,
capitalized terms are used herein as defined in the Plan. In the event of any conflict between the
provisions of the Plan and this Agreement, the provisions of the Plan shall control, and this
Agreement shall be deemed to be modified accordingly.

               15. Notices. All notices by the Participant or the Participant’s assignees may be
made only in the following manner, using such forms as the Company may from time to time provide:

               (e) by first class registered or certified United States mail, postage prepaid,
to Apache Corporation, Attn: Corporate Secretary, 2000 Post Oak Boulevard, Suite 100,
Houston, Texas 77056;

               (f) by hand delivery to or Apache Corporation, Attn: Corporate Secretary, 2000 Post Oak
Boulevard, Suite 100, Houston, Texas 77056; or

               (g) by such other means, including by electronic means or by facsimile, as provided by
the Committee.

               All notices to the Participant shall be addressed to the Participant at the Participant’s
address in the Company’s records.

               Any notices provided for in this Agreement or in the Plan shall be deemed effectively
delivered or given upon receipt of such notice.

               16. Other Plans. The Participant acknowledges that any income derived from the
Restricted Stock Units shall not affect the Participant’s participation in, or benefits under, any
other benefit plan or other contract or arrangement maintained by the Company or any Affiliate.

               17. Terms of Employment. The Plan is a discretionary plan. The Participant hereby
acknowledges that neither the Plan nor this Agreement forms part of his terms of employment and
nothing in the Plan may be construed as imposing on the Company or any Affiliate a contractual
obligation to offer participation in the Plan to any employee of the Company or any Affiliate.
The Company or any Affiliate is under no obligation to award further Shares to any Participant
under the Plan.

               18. Section 409A of the Internal Revenue Code. Notwithstanding any provision of this
Agreement to the contrary, this Agreement is intended to provide for a grant of deferred
compensation that is exempt from or compliant with Section 409A of the Internal

6

 

Revenue Code and
related regulations and United States Department of the Treasury pronouncements (“Section 409A”).
Any ambiguous provisions will be construed in a manner so that this Award is either compliant with
or exempt from the application of Section 409A. If a provision of this Agreement would result in
the imposition of an applicable tax under Section 409A, such provision may be reformed to avoid
imposition of the applicable tax.

               IN
WITNESS WHEREOF, the Company and Participant have executed this Agreement on the ___ day
of November 2009. The Agreement is effective as of November 18, 2009.

	 	 	 	 	 	 	 
	Attest:

	 	 	 	APACHE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 
	 

Cheri L. Peper

	 	 
	 	 

Margery M. Harris
	 	 
	Corporate Secretary

	 	 	 	Vice President, Human Resources	 	 
	 
	 	 	 	 	 	 
	 
	 

	 	 	 	PARTICIPANT:	 	 
	 
	 	 	 	 	 	 
	 
	 

	 	 	 	 

Michael S. Bahorich
	 	 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00169-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00169-of-00352.parquet"}]]