Document:

exv10w4

Exhibit 10.4

DATE

NAME

ADDRESS

ADDRESS

     Re: Change-In-Control Agreement

Dear                     :

     Global Industries, Ltd. (the “Company”) considers it essential to the best interest of the
Company and its shareholders that its management and key employees be encouraged to remain with the
Company and to continue to devote full attention to the Company’s business in the event of a change
in control of the Company, whether through a tender offer, a negotiated merger or sale of the
Company’s business or otherwise. In this connection, the Company recognizes that the possibility
of a change in control and the uncertainty and questions which it may raise among management may
result in the departure or distraction of management personnel and key employees to the detriment
of the Company and its shareholders. Accordingly, the Company’s Board of Directors (the “Board”)
has determined that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company’s management, including yourself, to their
assigned duties without distraction in the face of the potentially disturbing circumstances arising
from the possibility of a change in control of the Company under the circumstances described below.

     In order to induce you to remain in the employ of the Company, this letter agreement
(“Agreement”) sets forth the severance benefits which the Company agrees will be provided to you in
the event your employment with the Company is terminated subsequent to a Change in Control of the
Company under the circumstances described below.

     Nothing herein shall be construed to prevent either you or the Company from terminating your
employment at any time, for cause or otherwise, subject only to the specific payment and other
provisions hereinafter provided for under certain circumstances in the event a Change in Control of
the Company shall have occurred prior to the date your termination becomes effective.

     1. CONTINUED EMPLOYMENT.

     This confirms that you have advised the Company that, in consideration of, among other things,
the Company’s entering into this Agreement with you, it is your present intention to remain in the
employ of the Company unless and until there occurs a Change in Control of the Company. This
Agreement shall commence on the date hereof and shall continue until December 31, 2009; provided,
however, that commencing on January 1, 2010 and each

 

 

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January 1st thereafter, the term of this Agreement shall automatically be extended for one
additional year unless at least 30 days prior to such January 1st date, the Company shall have
given notice that it does not wish to extend this Agreement. Notwithstanding anything to the
contrary contained in this paragraph 1, (a) it is agreed that if a Change in Control occurs while
this Agreement is in effect, then the term of this Agreement shall be automatically extended and
shall remain in effect for two years after such Change in Control, and if within such two-year
period any termination occurs that would entitle you to the benefits hereunder, this Agreement
shall remain in effect in accordance with its terms, and (b) the Company may terminate this
Agreement at any time upon your Total Disability (as defined in paragraph 2). In the event that
your employment with the Company terminates for any reason prior to the occurrence of a Change in
Control, this Agreement shall automatically terminate as of the date of your termination, and no
benefits shall be payable to you hereunder.

     2. DEFINITIONS.

     For purposes of this Agreement, the following terms have the meanings set forth below:

     “Bonus Incentive Plan” shall mean the Company’s Management Incentive Plan or, if that
plan is no longer maintained, any cash bonus plan maintained by the Company for similarly situated
active executives of the Company.

     “Cause” shall mean only (a) if termination shall have been the result of an act or
acts of dishonesty on your part constituting a felony and resulting, or intending to result,
directly or indirectly, in gain or personal enrichment at the expense of the Company or (b) upon
the willful and continued failure by you to substantially perform your duties with the Company
(other than any such failure resulting from your incapacity due to mental or physical illness)
after a demand in writing for substantial performance is delivered to you by the Board, which
demand specifically identifies the manner in which the Board believes that you have not
substantially performed your duties, and such failure to perform your duties results in
demonstrably material injury to the Company. Your employment shall in no event be considered to
have been terminated by the Company for Cause if such termination took place as the result of
(i) bad judgment or negligence on your part, or (ii) any act or omission without intent of gaining
therefrom, directly or indirectly, a profit to which you were not legally entitled, or (iii) any
act or omission believed by you in good faith to have been in or not opposed to the interest of the
Company, or (iv) any act or omission in respect of which a determination is made that you met the
applicable standard of conduct prescribed for indemnification or reimbursement or payment of
expenses under the by-laws of the Company or the laws of the State of Louisiana or the directors
and officers liability insurance of the Company, in each case as in effect at the time of such act
or omission. You shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to you a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting called and held for the
purpose (after reasonable notice to you and an opportunity for you, together with your counsel, to
be heard before the Board), finding that in the good faith opinion of the Board you were guilty of
conduct set forth above in clauses (a) or (b) of the first sentence of this definition and
specifying the particulars thereof in detail.

 

 

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     “Change in Control” shall mean (i) any merger, consolidation or other reorganization
in which the Company shall not be the surviving entity (or survives only as a subsidiary of an
entity other than a previously wholly-owned subsidiary of the Company), (ii) the dissolution or
liquidation of the Company; (iii) the sale, lease or exchange or agreement to sell, lease or
exchange all or substantially all of the assets of the Company to any other person or entity (other
than a wholly-owned subsidiary of the Company); (iv) the acquisition, directly or indirectly, of
the beneficial ownership of more than 50% of the issued and outstanding shares of the common stock
of the Company by any individual or entity, including a “group” as contemplated by Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended, except an underwriter or similar entity in
connection with a public offering of common stock, alone or in concert with others; or (v) as a
result of or in connection with a contested election of directors, the persons who were directors
of the Company before such election shall cease to constitute a majority of the Board.

     “Code” shall mean the Internal Revenue Code of 1996, as amended.

     “Committee” shall mean the Compensation Committee of the Board of Directors of Global
Industries, Ltd.

     “Company” shall mean Global Industries, Ltd., and, except where the context indicates
otherwise, after the occurrence of a Change in Control, “Company” shall mean any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of Global Industries, Ltd.

     “Date of Termination” shall mean the date on which you have a “separation from
service” as defined in Section 409A of the Code.

     “Good Reason” shall mean:

(a) without your express written consent, the assignment to you of any duties inconsistent
with your positions, duties, responsibilities and status with the Company immediately prior
to a Change in Control, or a change in your reporting responsibilities, titles or offices as
in effect immediately prior to a Change in Control, or any removal of you from or any
failure to re-elect you to any of such positions, except in connection with the termination
of your employment for Cause, Total Disability or as a result of your death or by you other
than for Good Reason;

(b) a reduction by the Company in your base salary or total compensation for the fiscal year
in which the Change in Control occurred from your base salary or total compensation in the
fiscal year immediately preceding the year in which the Change in Control occurred (assuming
for purposes of determining whether a reduction of total compensation has occurred that
total compensation in the year preceding the fiscal year in which the Change in Control
occurred consisted of your base salary for that year plus payment under the Bonus Incentive
Plan in an amount equal to the highest payment under the Bonus Incentive Plan you received
in any of the three years immediately preceding

 

 

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the year in which the Change in Control occurred) or the failure by the Company to increase
your total salary and payment under the Bonus Incentive Plan (based on actual salary and
payment under the Bonus Incentive Plan) each year after a Change in Control by an amount
which at least equals, on a percentage basis, the mean average percentage increase in total
compensation for all officers of the Company during the three full fiscal years immediately
preceding a Change in Control of the Company;

(c) a failure by the Company to continue the Bonus Incentive Plan substantially on the basis
in effect prior to the Change in Control, or a failure by the Company to continue you as a
participant on at least the same basis as your participation for the fiscal year immediately
preceding a Change in Control;

(d) a permanent relocation of your principal place of employment with the Company from the
city in which you were serving immediately prior to the date on which a Change in Control
occurs to a place which is more than 30 miles away from such location;

(e) the failure by the Company to continue in effect any benefit or compensation plan in
addition to the bonus or incentive compensation plan, including its retirement plans, life
insurance plan, health and accident plan or disability plan in which you are participating
at the time of a Change in Control of the Company (or plans providing you with substantially
similar benefits) and stock option and stock purchase plans providing you with substantially
similar benefits as the Company plans in existence immediately before the Change in Control,
or the taking of any action by the Company which would adversely affect your participation
in or materially reduce your benefits under any of such plans or deprive you of any material
fringe benefit enjoyed by you at the time of the Change in Control, or the failure by the
Company to provide you with the number of paid vacation days to which you are then entitled
on the basis of years of service with the Company in accordance with the Company’s normal
vacation policy in effect immediately prior to the Change in Control;

(f) the failure of the Company to obtain an assumption of this Agreement by any successor as
contemplated in paragraph 7 hereof; or

(g) any purported termination of your employment which is not effected pursuant to a Notice
of Termination satisfying the requirements set forth in the definition thereof (and, if
applicable, the requirements set forth in the definition of Cause).

     “Incentive Compensation” shall mean the greater of (i) the highest annual award earned
under the Bonus Incentive Plan during any one of the five fiscal years immediately preceding the
fiscal year which includes the Date of Termination, or (ii) the Target Award.

     “Notice of Termination” shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of your employment under the
provisions so indicated. With respect to termination by you for Good Reason, the Notice of

 

 

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Termination shall state that you have made a good faith determination that, due to a Change in
Control, you are not able effectively to discharge your duties. The Notice of Termination shall be
delivered no less than 30 days prior to the Date of Termination, or (i) such longer period required
by contract between you and the Company or (ii) such shorter period as agreed by you and the
Company by mutual consent. Any purported termination of your employment which is not effected
pursuant to a Notice of Termination shall be deemed ineffective.

     “Stock Incentive Plan” shall mean the Global Industries, Ltd. 1998 Equity Incentive
Plan, the Global Industries, Ltd. 2005 Stock Incentive Plan and/or any future plan under which the
Company awards long-term incentive compensation.

     “Target Award” shall mean the higher of the target award level under the Bonus
Incentive Plan (i) at the time of a Change in Control or (ii) on the Date of Termination; in each
case expressed as a dollar amount based on the base salary then in effect.

     “Total Disability” shall mean that, as a result of your incapacity due to physical or
mental illness, you are suffering from “total disability” as defined in any long-term disability
plan maintained by the Company, and shall be deemed to occur on the first date as of which you are
entitled to commence receipt of benefits thereunder.

     3. COMPENSATION DURING DISABILITY.

     If at any time during the term of this Agreement after a Change in Control you are entitled to
benefits under the Company’s short-term disability plan, this Agreement shall remain in effect and
you shall (i) continue to receive your full base salary at the rate in effect when you became
entitled to benefits under the short-term disability plan and (ii) be entitled to continue to
participate in the Bonus Incentive Plan at an award level comparable to the award level in effect
when you became entitled to benefits under the short-term disability plan. If and as of the date
you are determined to have a Total Disability, this Agreement shall be automatically terminated and
no benefits shall be payable to you hereunder. Thereafter, your benefits shall be determined in
accordance with the Company’s long-term disability plan, or a substitute plan then in effect.

     4. TREATMENT OF EQUITY UPON A CHANGE IN CONTROL.

     (a) Options held by you granted under a Stock Incentive Plan shall fully vest upon the date of
a Change in Control. Unless the Committee has determined to make an equitable adjustment or
substitution of stock options pursuant to the terms of the applicable Stock Incentive Plan, all
options held by you granted under a Stock Incentive Plan shall be surrendered to the Company by you
and such options shall be canceled by the Company, in exchange for a cash payment by the Company
within ten days after the Change in Control in an amount equal to the number of shares of the
Company’s common stock subject to your option multiplied by the difference between (x) and (y)
where (x) equals the closing sale price of a share of common stock on any exchange on which such
shares are traded or quoted as of the date immediately prior to the Change in Control and (y)
equals the purchase price per share covered by the option.

 

 

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     (b) In the event of a Change in Control, restricted stock held by you granted under a Stock
Incentive Plan shall immediately vest, and all forfeiture restrictions shall immediately expire, as
of the date of the Change in Control.

     (c) In the event of a Change in Control, performance units held by you granted under a Stock
Incentive Plan for which the performance period has not expired as of the date of a Change in
Control shall be deemed to be earned at the target performance level. Unless the Committee
determines otherwise, you shall have the right to receive the same form of equity or other
consideration as all other shareholders with respect to the common stock subject to the earned
performance units. The common stock or other property subject to the earned performance units
shall be delivered to you within ten days of the date of the Change in Control. Notwithstanding
the foregoing, if the performance units are non-qualified deferred compensation under Section 409A
of the Code, the performance units shall vest only if the Change in Control satisfies the
requirements of Treasury Regulations Section 1.409A-3(i)(5).

     5. COMPENSATION UPON TERMINATION AFTER A CHANGE IN CONTROL.

     No benefits shall be payable under this Agreement unless a Change in Control shall have
occurred. If your employment by the Company is terminated within two years after a Change in
Control, then the Company will, as additional compensation for services rendered to the Company,
pay to you the following amounts (subject to any applicable payroll or other taxes required to be
withheld and employee benefit premiums):

	 	(a)	 	If your employment is terminated for Cause or if you voluntarily terminate your
employment without Good Reason, the Company shall pay your full base salary through the
Date of Termination at the rate in effect at the time Notice of Termination is given
and your Target Award (pro-rated for full months of service during the year in which
your Date of Termination occurs), and the Company shall have no further obligations to
you under this Agreement.
	 
	 	(b)	 	If the Company terminates your employment other than due to death, Total
Disability or for Cause or if you terminate your employment for Good Reason, then the
Company will pay to you in a lump sum on the Date of Termination (subject to paragraph
13 hereof and except as set forth in item (iv) below), the following amounts:

	 	(i)	 	(A) your full base salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given and (B) an amount
equal to your Incentive Compensation times a fraction, the numerator of which
is the number of days elapsed in the fiscal year to and including the Date of
Termination and the denominator of which is 365;
	 
	 	(ii)	 	in lieu of any further salary payments to you for periods
subsequent to the Date of Termination, an amount equal to                      times (A) your
annual

 

 

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	 	 	 	base salary plus (B) your Incentive Compensation as of the date of the
Notice of Termination;
	 
	 	(iii)	 	an amount equal to the difference between the amount you are
entitled to receive under the Company’s retirement plans in a lump sum upon
termination of employment and the amount you would be entitled to receive in a
lump sum as of the Date of Termination if you had a 100% vested interest in
your accounts on the Date of Termination; and
	 
	 	(iv)	 	the Company shall also pay all legal fees and expenses incurred
by you as a result of such termination (including all such fees and expenses,
if any, incurred in contesting or disputing any such termination or in seeking
to obtain or enforce any right or benefit provided by this Agreement). Any
reimbursement provided hereunder during one calendar year shall not affect the
amount or availability of reimbursements in another calendar year. Any
reimbursement provided hereunder shall be paid no later than the earlier of (i)
the time prescribed under the Company’s applicable policies and procedures, or
(ii) the last day of the calendar year following the calendar year in which
your Date of Termination occurs.
	 
	 	(v)	 	in the event that you relocated at the request of the Company
within two years prior to the Date of Termination, the Company hereby agrees in
the event you should desire to relocate back to your point of origin within one
year after the Date of Termination, to apply all terms of its relocation policy
then in effect for internal transfers and to indemnify you in connection with
any loss you may sustain in the sale of your residence. Any reimbursements
provided hereunder shall be only for expenses actually incurred and shall be
made prior to the last day of your second taxable year after your Date of
Termination.

	 	(c)	 	Unless you are terminated as a result of death, Total Disability or for Cause,
the Company shall cause you to continue to be covered, without any cost to you in
excess of the cost borne by you prior to the Change in Control, under health, medical
and dental benefits and life insurance comparable to those in effect immediately prior
to the Change in Control including, but not limited to, medical, dental and life
insurance. Such continuation shall (i) also apply to your dependents who would
otherwise be eligible to participate under the terms of such plans and (ii) apply for
two years after the Date of Termination.
	 
	 	(d)	 	Upon your termination of employment for any reason, all country club
memberships, luncheon clubs and other memberships, which the Company was providing for
your use at the time Notice of Termination was given, to the extent possible shall be
transferred to you, at no cost to you (other than taxes), the cost of transfer, if any,
to be borne by the Company.

 

 

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	 	(e)	 	Notwithstanding any contrary provisions in any plan, program or policy of the
Company, if all or any portion of the benefits payable under the Agreement, either
alone or together with other payments and benefits which you receive or are entitled to
receive from the Company, would constitute a “parachute payment” within the meaning of
Section 280G of the Code, the Company shall reduce the payments and benefits payable to
you under the Agreement to the extent necessary so that no portion thereof shall be
subject to the excise tax imposed by Section 4999 of the Code, but only if, by reason
of such reduction, the net after-tax benefit shall exceed the net after-tax benefit if
such reduction were not made. “Net after-tax benefit” for these purposes shall mean
the sum of (i) the total amount payable to you under the Agreement, plus (ii) all other
payments and benefits which you receive or are then entitled to receive from the
Company that, alone or in combination with the payments and benefits payable under the
Agreement, would constitute a “parachute payment” within the meaning of Section 280G of
the Code, less (iii) the amount of federal income taxes payable with respect to the
foregoing calculated at the maximum marginal income tax rate for each year in which the
foregoing shall be paid to you (based upon the rate in effect for such year as set
forth in the Code at the time of the payment under the Agreement), less (iv) the amount
of excise taxes imposed with respect to the payments and benefits described in (i) and
(ii) above by Section 4999 of the Code. Any reduction, pursuant to this paragraph, of
amounts payable to you shall be made in a manner such that you receive the best
economic benefit, and to the extent economically equivalent, such reduction shall be
made on a pro-rata basis among all amounts payable under this Agreement.
	 
	 	(f)	 	If you are a party to an employment agreement with the Company, in the event of
any termination of your employment to which this Agreement would apply by its terms,
you shall have all of the benefits provided under either this Agreement or such other
agreement, whichever one (in its entirety) provides the greater total benefit, but not
under both agreements, and the agreement providing the lower total benefit shall be
superseded in its entirety and shall be of no further force or effect, and neither
party shall have any obligation to the other thereunder.

     6. PAYMENT OBLIGATION ABSOLUTE.

     The Company’s obligation to pay you the amounts and to make the arrangements provided herein
shall be absolute and unconditional and shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company
may have against you or anyone else. All amounts payable by the Company shall be paid without
notice or demand. You shall not be required to mitigate the amount of any payment or benefit
provided for you herein by seeking other employment or otherwise, nor shall the amount of any
payment or benefit provided for herein be reduced by any compensation earned by you as a result of
employment by another employer after the Date of Termination, or otherwise.

 

 

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     7. SUCCESSORS, BINDING AGREEMENT.

     The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place.
This Agreement shall inure to the benefit of and be enforceable by your personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
If you should die while any amount would still be payable to you hereunder if you had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee, or other designee or, if there be no such
designee, to your estate.

     8. NOTICE.

     Any termination by the Company shall be communicated by written Notice of Termination to the
other party thereto. Notices and all other communications provided for in this Agreement shall be
in writing and shall be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the respective addresses
set forth on the first page of this Agreement, provided that all notices to the Company shall be
directed to the attention of the Secretary of the Company, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.

     9. MISCELLANEOUS.

     This Agreement supersedes any and all prior agreements between you and the Company concerning
the subject matter hereof except an employment agreement between you and the Company which provides
for benefits upon termination after a change in control as defined in such other agreement. No
provisions of this Agreement may be modified, waived or discharged unless such modification, waiver
or discharge is agreed to in writing signed by you and such officer as may be specifically
designated by the Board (which shall in any event include the Company’s Chief Executive Officer).
No waiver by either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Texas. Except as contemplated in paragraph
4 hereof, the obligation to pay amounts under this Agreement is an unfunded obligation of the
Company, and no such obligation shall create a trust or be deemed to be secured by any pledge or
encumbrance on any property of the Company.

     This Agreement shall not be deemed to constitute a contract of employment, nor shall any
provision hereof restrict the right of the Company to discharge you at will. Nothing herein

 

 

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shall be construed to preclude the transfer of your employment to a subsidiary or affiliate of
the Company and such a transfer shall not be considered a termination of your employment hereunder.
For purposes of this Agreement, “Company” includes all subsidiaries and affiliates of the Company
to the extent such subsidiary and/or affiliate is carrying on any portion of the business of the
Company or a business similar to that being conducted by the Company.

     10. VALIDITY.

     The invalidity or unenforceability of any one or more provisions of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement, which shall remain
in full force and effect.

     11. COUNTERPARTS.

     This Agreement may be executed in counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the same instrument.

     12. ARBITRATION.

     Any dispute or controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration in Houston, Texas in accordance with the rules of the American
Arbitration Association then in effect; provided that all arbitration expenses shall be borne by
the Company. Notwithstanding the pendency of any dispute or controversy concerning termination or
the effects thereof, the Company will continue to pay your base salary, retroactive to the Date of
Termination, if applicable, in effect immediately before any Notice of Termination giving rise to
the dispute was given and continue you as a participant in all compensation, benefit and insurance
plans in which you were then participating, until the dispute is finally resolved. Subject only to
item (e) of paragraph 5, amounts paid under this paragraph are in addition to all other amounts due
under this Agreement and shall not be offset against or reduce any other amounts due under this
Agreement. Judgment may be entered on the arbitrators’ award in any court having jurisdiction;
provided, however, that you shall be entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any dispute or controversy arising under or in
connection with this Agreement.

     13. SECTION 409A.

     (a) This Agreement is intended to comply with Section 409A of the Code and accompanying
Treasury regulations and guidance (“Section 409A”) and any ambiguous provision will be construed in
a manner that is compliant with or exempt from the application of Section 409A.

     (b) Notwithstanding any provision in this Agreement to the contrary, if the payment of any
compensation or benefit hereunder (including, without limitation, any severance benefit) would be
subject to additional taxes and interest under Section 409A because the timing of such payment is
not delayed as provided in Section 409A(a)(2)(B) of the Code, then any such

 

 

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payment or benefit that you would otherwise be entitled to during the first six months
following the Date of Termination shall be accumulated and paid or provided, as applicable, on the
date that is one day (or if such date does not fall on a business day of the Company, the next
following business day of the Company) after the earlier of (i) the date of your death, (ii) six
months after the Date of Termination, or (iii) such earlier date upon which such amount can be paid
or provided under Section 409A without being subject to such additional taxes and interest. In the
event that a payment is delayed under this paragraph 13, the Company shall pay to you, as of the
date it pays the delayed payment, interest on the delayed payment amount at the semi-annual,
short-term applicable federal rate in effect on the Date of Termination, as provided in Section
1274(d) of the Code, plus 2%, based on the number of days the payment was delayed beyond the Date
of Termination.

     If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign
and return to the Company the enclosed copy of this letter which will then constitute our agreement
on this subject.

	 	 	 	 	 
	 	 	Sincerely,
	 
	 	 	 	 
	 	 	Global Industries, Ltd.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

AGREED TO THIS                      DAY

OF                                         , 200_

	 	 	 	 	 
	Name:

	 	 	 	 
	 

	 	 	 	 
	Title:exv10w1

Exhibit 10.1

APACHE CORPORATION

1995 STOCK OPTION PLAN

(Amended and Restated August 14, 2008)

Section 1

Introduction

1.1 Establishment. Apache Corporation, a Delaware corporation (hereinafter referred to,
together with its Affiliated Corporations (as defined in Section 2.1 hereof) as the “Company”
except where the context otherwise requires), hereby establishes the Apache Corporation 1995 Stock
Option Plan (the “Plan”) for certain key employees of the Company. The Plan permits the grant of
stock options to certain key employees of the Company.

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

1.3 Effective Date. The Effective Date of the Plan (the “Effective Date”) is May 4, 1995.
This Plan and each option granted hereunder is conditioned on and shall be of no force or effect
until approval of the Plan by the holders of the shares of voting stock of the Company unless the
Company, on the advice of counsel, determines that stockholder approval is not necessary. The
Committee (as defined in Section 2.1 hereof) may grant options the exercise of which shall be
expressly subject to the condition that the Plan shall have been approved by the stockholders of
the Company.

Section 2

Definitions

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

1

 

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

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

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

     (d) “Committee” means the Stock Option Plan Committee of the Board, which is empowered
hereunder to take actions in the administration of the Plan. The Committee shall be constituted at
all times as to permit the Plan to comply with: (i) Rule 16b-3 or any successor rule(s) promulgated
under the Securities Exchange Act of 1934, as amended (the “1934 Act”), and (ii) Section 162(m) or
any successor section(s) of the Internal Revenue Code and the regulations promulgated thereunder.

     (e) “Deferred Delivery Plan” means the Company’s Deferred Delivery Plan, effective as
of February 10, 2000 and as it may be amended from time to time, or any successor plan.

     (f) “Depositary Shares” means the depositary shares representing the Company’s
preferred stock convertible into Stock.

     (g) “Eligible Employees” means those full-time key employees (including, without
limitation, officers and directors who are also employees) of the Company or any division thereof,
upon whose judgment, initiative and efforts the Company is, or will become, largely dependent for
the successful conduct of its business.

     (h) “Fair Market Value” means the per share closing price of the Stock as reported on
The New York Stock Exchange, Inc. Composite Transactions Reporting System for a particular date 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.

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     (i) “Internal Revenue Code” means the Internal Revenue Code of 1986, as it may be
amended from time to time.

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

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

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

     (m) “Stock” means the $0.625 par value Common Stock of the Company.

     (n) “Stock Units” means investment units under the Deferred Delivery Plan, each of
which is deemed to be equivalent to one share of Stock.

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

Section 3

Plan Administration

3.1 Administration by the Committee.

     (a) The Plan shall be administered by the Committee. In accordance with the provisions of the
Plan, the Committee shall, in its sole discretion, select the Participants from among the Eligible
Employees, determine the Options to be granted pursuant to the Plan, the number of shares of Stock
to be issued thereunder, the time at which such Options are to be granted, fix the Option Price,
and establish such other terms and requirements as the Committee may deem necessary, or desirable
and consistent with the terms of the Plan. The Committee shall determine the form or forms of the
agreements with Participants which shall evidence the particular provisions, terms, conditions,
rights and

3

 

duties of the Company and the Participants with respect to Options granted pursuant to
the Plan, which provisions need not be identical except as may be provided herein.

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

3.2 Compliance with Section 162(m).

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

Section 4

Stock Subject to the Plan

4.1 Number of Shares. Subject to Section 7.1 and to adjustment pursuant to Section 4.3
hereof, 2,500,000 shares of Stock (adjusted to 5,775,000 shares of Stock for (i) the Company’s
ten-percent stock dividend, record date December 31, 2001, paid January 21, 2002, (ii) the
Company’s five-percent stock dividend, record date March 12, 2003, paid April 2, 2003, and (iii)
the Company’s two-for-one stock split, record date December 31, 2003, distributed January 14, 2004)
are authorized for issuance under the Plan in accordance with the provisions of the Plan and
subject to such restrictions or other provisions as the Committee may from time to time deem
necessary. This authorization may

4

 

be increased from time to time by approval of the Board and the
stockholders of the Company if, on the advice of counsel for the Company, such stockholder approval is required. Shares of
Stock which may be issued upon exercise of Options shall be applied to reduce the maximum number of
shares of Stock remaining available for use under the Plan. The Company shall at all times during
the term of the Plan and while any Options are outstanding retain as authorized and unissued Stock,
or as Stock in the Company’s treasury, at least the number of shares from time to time required
under the provisions of the Plan, or otherwise assure itself of its ability to perform its
obligations hereunder.

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

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

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

5

 

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

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

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

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

Section 5

Reorganization or Liquidation

In the event that the Company is merged or consolidated with another corporation and the Company is
not the surviving corporation, or if all or substantially all of the assets or more than 20 percent
of the outstanding voting

6

 

stock of the Company is acquired by any other corporation, business entity or person, or in case of a
reorganization (other than a reorganization under the United States Bankruptcy Code) or liquidation
of the Company, and if the provisions of Section 8 hereof do not apply, the Committee, or the board
of directors of any corporation assuming the obligations of the Company, shall, as to the Plan and
outstanding Options either (i) make appropriate provision for the adoption and continuation of the
Plan by the acquiring or successor corporation and for the protection of any such outstanding
Options by the substitution on an equitable basis of appropriate stock of the Company or of the
merged, consolidated or otherwise reorganized corporation which will be issuable with respect to
the Stock, provided that no additional benefits shall be conferred upon the Participants holding
such Options as a result of such substitution, and the excess of the aggregate Fair Market Value of
the shares subject to the Options immediately after such substitution over the aggregate Option
Price thereof is not more than the excess of the aggregate Fair Market Value of the shares subject
to such Options immediately before such substitution over the aggregate Option Price thereof, or
(ii) upon written notice to the Participants, provide that all unexercised Options shall be
exercised within a specified number of days of the date of such notice or such Options will be
terminated. In the latter event, the Committee shall accelerate the vesting dates of outstanding
Options so that all Options become fully vested and exercisable prior to any such event.

Section 6

Participation

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

7

 

Section 7

Stock Options

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

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

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

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

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

8

 

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

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

          (ii) If the Participant retires from employment by the Company on or after attaining age 60,
the Option may be exercised by the Participant within 36 months following his or her retirement
(provided that such exercise must occur within the Option Period), but not thereafter. In the
event of the Participant’s death during such 36-month period, each Option may be exercised by those
entitled to do so in the manner referred to in (iv) below. In any such case, the Option may be
exercised only as to the shares as to which the Option had become exercisable on or before the date
of the Participant’s retirement.

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

          (iv) In the event of the Participant’s death while still employed by the Company, each Option
of the deceased Participant may be exercised by those entitled to do so under the Participant’s
will or under the laws of descent and distribution within twelve months following the Participant’s
death (provided that in any event such exercise must occur within the Option Period), but not
thereafter, as to all shares of Stock which are subject to such Option, including each 25-percent
increment of the Option, if any, which has not yet become exercisable at the time of the
Participant’s death. In the event of the Participant’s

9

 

death within the 36-month period referred
to in (ii) above or within the twelve-month period referred to in (iii) above, each Option of the
deceased Participant that is exercisable at the time of death may be exercised by those entitled to
do so under the Participant’s will or under the laws of descent and distribution within twelve months
following the Participant’s death or within the 36-month period referred to in (ii), if applicable
and if longer (provided that in any event such exercise must occur within the Option Period). The
provisions of this paragraph (iv) of subsection 7.2(d) shall be applicable to each Stock Option
Agreement as if set forth therein word for word. Each Stock Option Agreement executed by the
Company prior to the adoption of this provision shall be deemed amended to include the provisions
of this paragraph and all Options granted pursuant to such Stock Option Agreements shall be
exercisable as provided herein.

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

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

     (f) Agreement to Continue in Employment. Each Stock Option Agreement shall contain
the Participant’s agreement to remain in the employment of the Company, at the pleasure of the
Company, for a continuous period of at least one year after the date of such Stock Option
Agreement, at the salary rate in effect on the date of such agreement or at such changed rate as
may be fixed, from time to time, by the Company.

     (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

10

 

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

          (ii) Except as referenced below in connection with the Deferred Delivery Plan, the shares of
Stock to which the Participant is entitled as a result of the exercise of the Option shall be
issued by the Company and (A) delivered by electronic means to an account designated by the
Participant, or (B) delivered to the Participant in the form of a properly executed certificate or
certificates representing such shares of Stock. If shares of Stock and/or Depositary Shares 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 or Depositary Shares, to which the Participant is entitled as a
result of the Option exercise. If the Participant exercising an Option (x) is eligible for
participation in the Deferred Delivery Plan, (y) pays the aggregate Option Price pursuant to
7.2(g)(iii)(A), (B), (C), (D) or (E) below, and (z) has made an irrevocable election at least six
months prior to the Exercise Date as required under the Deferred Delivery Plan, the income
resulting from the Option exercise shall be deferred into the Participant’s Deferred Delivery Plan
account and no additional shares of Stock shall be delivered to the Participant. The income
resulting from the Option exercise may not be deferred into the Participant’s Deferred Delivery
Plan account except to the extent that the Option was vested by December 31, 2004, the deferral
election was made by December 31, 2004, and the deferral into the Deferred Delivery Plan occurs
before January 1, 2006.

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

11

 

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

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

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

               (D) by certification or attestation to the Company or the Administrative Agent of the
Participant’s ownership as of the Exercise Date of the number of shares of Stock and/or Depositary
Shares, 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 and/or
Depositary Shares used for this purpose have been owned by the Participant for a period of at least
six months;

               (E) if the income resulting from the Option exercise is to be deferred into the Participant’s
Deferred Delivery Plan account, 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 vested
Stock Units held in the Participant’s Deferred Delivery Plan account, the equivalent 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 Stock Units used for this purpose were vested as of
the Exercise Date; or

               (F) 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 (A) and (B) above, the amount of the proceeds of the sale of all
or a portion of the Stock or of a loan from the broker to the Participant necessary to pay the
aggregate Option Price.

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

12

 

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

     (i) Tax Withholding. Each Stock Option Agreement shall provide that, upon exercise of
the Option, the Participant shall make appropriate arrangements with the Company to provide for the
amount of tax withholding required by Sections 3102 and 3402 or any successor section(s) of the
Internal Revenue Code and applicable state and local income tax laws, including payment of such
taxes in cash, by check or as provided in Section 13.2 hereof.

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

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

Section 8

Change of Control

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

8.2 Limitation on Payments. If the provisions of this Section 8 would result in the
receipt by any Participant of a payment within the meaning of Section 280G or any successor
section(s) of the Internal Revenue Code, and the regulations

13

 

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

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

Section 9

Rights of Employees, Participants

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

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

14

 

personal representative upon furnishing the Committee
with evidence of such status satisfactory to the Committee.

Section 10

General Restrictions

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

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

Section 11

Other Employee Benefits

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

Section 12

Plan Amendment, Modification and Termination

The Board may at any time terminate, and from time to time may amend or modify the Plan provided,
however, that no amendment or modification may become effective without approval of the amendment
or modification by the Company’s stockholders if stockholder approval is required to enable the
Plan to

15

 

satisfy any applicable statutory or regulatory requirements unless the Company, on the
advice of counsel, determines that stockholder approval is otherwise necessary or desirable.

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

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

Section 13

Withholding

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

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

     (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 and/or Depositary
Shares, 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 and/or Depositary Shares have
been owned by the Participant for a period of at least six months;

     (c) if the income resulting from the Option exercise is to be deferred into the Participant’s
Deferred Delivery Plan account, 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 vested
Stock Units held in the Participant’s

16

 

Deferred Delivery Plan account, the equivalent aggregate Fair
Market Value of which (as of the Exercise Date) is not greater than the amount required to be
withheld, provided that such Stock Units were vested as of the Exercise Date; or

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

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

          (ii) all elections shall be irrevocable.

13.3 Excess Withholding. At the time the Committee grants an Option, it may, in its sole
discretion, grant the Participant an election to pay additional or excess amounts of tax
withholding, beyond the required amounts and up to the Participant’s marginal tax rate:

     (a) by 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 such excess withholding amount, provided that such shares of Stock have been
owned by the Participant for a period of at least six months; or

     (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 and/or Depositary
Shares, the aggregate Fair Market Value of which (as of the Exercise Date) is not greater than such
excess withholding amount, provided that such shares of Stock and/or Depositary Shares have been
owned by the Participant for a period of at least six months.

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

Section 14

Requirements of Law

17

 

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

14.2 Federal Securities Laws Requirements. If a Participant is an officer or director of
the Company within the meaning of Section 16, Options granted hereunder shall be subject to all
conditions required under Rule 16b-3, or any successor rule(s) promulgated under the 1934 Act, to
qualify the Option for any exception from the provisions of Section 16 available under such Rule.
Such conditions are hereby incorporated herein by reference and shall be set forth in the Stock
Option Agreement with the Participant which describes the Option.

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

Section 15

Duration of the Plan

The Plan shall terminate at such time as may be determined by the Board, and no Option shall be
granted after such termination. If not sooner terminated under the preceding sentence, the Plan
shall fully cease and expire at midnight on May 4, 2000. Options outstanding at the time of the
Plan termination shall continue to be exercisable in accordance with the Stock Option Agreement
pertaining to each such Option, as such Stock Option Agreement may be modified pursuant to Section
12.

Dated: August 14, 2008

	 	 	 	 	 	 	 	 	 
	 	 	 	 	APACHE CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	ATTEST:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Cheri L. Peper
 

Cheri L. Peper

	 	 	 	By:
	 	/s/ Margery M. Harris
 

Margery M. Harris
	 	 
	Corporate Secretary

	 	 	 	 	 	Vice President, Human Resources	 	 

18

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