Document:

exv10w4

Exhibit 10.4

APACHE CORPORATION

2000 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 2000 Stock
Option Plan (the “Plan”) for Eligible Employees (as defined in Section 2.1 hereof). The Plan
permits the grant of stock options to Eligible Employees selected by the Committee (as defined in
Section 2.1 hereof).

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

1.3 Effective Date. The Effective Date of the Plan (the “Effective Date”) is February 10,
2000.

Section 2

Definitions

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

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

     (b) “Affiliated Corporation” means any corporation or other entity (including but not
limited to a partnership) which is affiliated with Apache Corporation through stock ownership or
otherwise and is treated as a common

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employer under the provisions of Sections 414(b) and (c) or any successor section(s) of the
Internal Revenue Code.

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

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

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

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

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

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

     (i) “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.

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

     (k) “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.

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     (l) “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.

     (m) “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.

     (n) “Reload Option” has the meaning set forth in subsection 7.4 hereof.

     (o) “Stock” means the U.S. $0.625 par value Common Stock of the Company.

     (p) “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 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.

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     (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.

Section 4

Stock Subject to the Plan

4.1 Number of Shares. Subject to Sections 7.1 and 7.4 hereof and to adjustment pursuant to
Section 4.3 hereof, 3,000,000 shares of Stock (adjusted to 6,300,000 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 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.

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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.

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

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

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

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

Section 5

Reorganization or Liquidation

In the event that the Company is merged or consolidated with another corporation and the Company is
not the surviving corporation, or if all or substantially all of the assets or more than 20 percent
of the outstanding voting stock of the Company is acquired by any other corporation, business
entity or person, or in case of a reorganization (other than a reorganization under the United
States Bankruptcy Code) or liquidation of the Company, and if the provisions of Section 8 hereof do
not apply, the Committee, or the board of directors of any corporation assuming the obligations of
the Company, shall, as to the Plan and outstanding Options 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

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respect to the Stock, provided that no
additional benefits shall be conferred upon the Participants holding such Options as a result of
such substitution, and the excess of the aggregate Fair Market Value of the shares subject to the
Options immediately after such substitution over the aggregate Option Price thereof is not more
than the excess of the aggregate Fair Market Value of the shares subject to such Options
immediately before such substitution over the aggregate Option Price thereof, 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.

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Section 7

Stock Options

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

7.2 Stock Option Agreements. Each Option granted under the Plan shall be evidenced by a
written stock option agreement which shall be entered into by the Company and the Participant to
whom the Option is granted (the “Stock Option Agreement”), and which shall contain the following
terms and conditions, 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 subsections 7.2(d)(iv) and 7.4(a) hereof, each Option granted under the Plan
shall become exercisable in increments such that 25 percent of the Option becomes exercisable on
each of the four subsequent one-year anniversaries of the date the Option is granted, provided that
each such additional 25-percent increment shall become exercisable only if the Participant has been
continuously employed by the Company from the date the Option is granted through the date on which
each such additional 25-percent increment becomes exercisable.

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

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

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

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

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

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

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     (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 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 subsection 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
subsection 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

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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:

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

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

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

               (D) by certification or attestation to the Company or the Administrative Agent of the
Participant’s ownership (as of the Exercise Date) of a number of shares of Stock 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 subsection 7.2(g)(iii)(A) and (B) above, the amount of the
proceeds of the sale of all or a portion of the Stock or of a loan from the broker to the
Participant necessary to pay the aggregate Option Price.

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          (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.

     (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 and other 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.

7.4 Reload Provisions.

     (a) The Committee shall have the authority, but not an obligation, to include as a part of any
Stock Option Agreement provisions under which the Participant shall be granted a further option (a
“Reload Option”) when the

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Participant exercises all or part of the Option represented by such Stock
Option
Agreement on or before February 10, 2005, and pays all or part of the aggregate Option Price
and/or required or excess tax withholding pursuant to subsections 7.2(g)(iii)(C) (D) or (E), and/or
subsections 13.2(a), (b) or (c), and/or subsections 13.3(a) or (b) hereof. Any Option including
such reload provisions shall become exercisable in increments such that 25 percent of the Option
becomes exercisable on the dates six months, 12 months, 18 months and 24 months following the date
the Option is granted, provided that each such additional 25-percent increment shall become
exercisable only if the Participant has been continuously employed by the Company from the date the
Option is granted through the date on which such additional 25-percent increment becomes
exercisable.

     (b) Any shares of Stock issued to a Participant as a result of an Option exercise which
resulted in the grant of a Reload Option, may not be sold or otherwise disposed of until the term
of the original Option has expired or the Participant is no longer employed by the Company or by an
Affiliated Corporation. Any Stock Units acquired by a Participant as a result of the deferral of
income (pursuant to subsection 7.2(g)(ii) hereof) in connection with an Option exercise which
resulted in the grant of a Reload Option, may not be sold or otherwise disposed of until the shares
of Stock relating to such Stock Units are distributed under the terms of the Deferred Delivery
Plan.

     (c) A Reload Option shall be granted, without further action of the Committee or the
Participant, if one or more of the payment provisions referenced in subsection 7.4(a) above are
used and if all of the following are satisfied as of the date of exercise of the underlying Option:

          (i) the Participant has not previously been granted a Reload Option or there has been a period
of more than six months since the Participant was last granted a Reload Option;

          (ii) no shares of Stock have been sold or otherwise disposed of in breach of the provisions of
subsection 7.4(b) above;

          (iii) the Fair Market Value of the shares of Stock covered by the original Option being
exercised is at least ten percent greater than the Option Price for such shares;

          (iv) the underlying Option is exercised on or before February 10, 2005; and

          (v) there is a period of more than six months remaining in the term of the original Option.

14

 

     (d) Each Reload Option:

          (i) shall cover that certain number of shares of Stock equal to the shares or equivalent
shares of Stock actually or constructively delivered to the Company as referenced in subsection
7.4(a) above;

          (ii) shall be deemed to be granted as of the date on which the original Option is exercised
and shall have an Option Price of 100 percent of Fair Market Value on such date;

          (iii) shall become exercisable six months after the date of grant and shall have the same
Expiration Date as the original Option; and

          (iv) except as set forth in subsections 7.4(d)(i), (ii) and (iii) above, and 7.4(e) below,
shall have the same terms and conditions as those of the original Option.

     (e) The Participant may not defer the income from the exercise of a Reload Option into the
Participant’s Deferred Delivery Plan account except to the extent that (i) the Reload Option was
vested by December 31, 2004; (ii) the deferral election was made by December 31, 2004; and (iii)
the deferral into the Deferred Delivery Plan occurs before January 1, 2006.

Section 8

Change of Control

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

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

15

 

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

16

 

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 satisfy any applicable statutory or regulatory requirements unless the Company,

17

 

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

18

 

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.

19

 

Section 14

Requirements of Law

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

14.2 Federal Securities Laws Requirements. If a Participant is an officer or director of
the Company within the meaning of Section 16, Options granted hereunder shall be subject to all
conditions required under Rule 16b-3, or any successor rule(s) promulgated under the 1934 Act, to
qualify the Option for any exception from the provisions of Section 16 available under such Rule.
Such 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 February 10, 2005. Any Options outstanding at the time
of the Plan termination shall continue to be exercisable in accordance with the Stock Option
Agreement pertaining to each such Option, 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	 	 

20exv10w5

Exhibit 10.5

APACHE CORPORATION

2003 Stock Appreciation Rights 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 2003 Stock
Appreciation Rights Plan (the “Plan”) for Eligible Employees (as defined in Section 2.1 hereof).
The Plan permits the grant of stock appreciation rights to Eligible Employees selected by the
Committee (as defined in Section 2.1 hereof).

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

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

Section 2

Definitions

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

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

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

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

1

 

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

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

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

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

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

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

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

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

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

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

     (n) “Stock” means the U.S. $1.25 par value Common Stock of the Company.

2

 

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

Section 3

Plan Administration

3.1 Administration by the Committee.

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

     (b) The Committee may from time to time adopt such rules and regulations for carrying out the
purposes of the Plan as it may deem proper and in the best interests of the Company. The Committee
may appoint an Administrative Agent, who need not be a member of the Committee or an employee of
the Company, to assist the Committee in administration of the Plan and to whom it may delegate such
powers as the Committee deems appropriate, except that the Committee shall determine any dispute.
The Committee may correct any defect, supply any omission or reconcile any inconsistency in the
Plan, or in any agreement entered into hereunder, in the manner and to the extent it shall deem
expedient and it shall be the sole and final judge of such 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

 

Section 4

Adjustments to or Other Changes in Stock 

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

4.2 Other Changes in Stock. In the event there shall be any change, other than as
specified in Section 4.1 hereof, in the number or kind of outstanding shares of Stock or of any
stock or other securities into which the Stock shall be changed or for which it shall have been
exchanged, and if the Committee shall in its discretion determine that such change equitably
requires an adjustment in the number or kind of shares to which outstanding Stock Appreciation
Rights relate, then such adjustments shall be made by the Committee and shall be effective for all
purposes of the Plan and for each outstanding Stock Appreciation Right that involves the particular
type of stock for which a change was effected.

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

Section 5

Reorganization or Liquidation

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

4

 

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

Section 6

Participation

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

Section 7

Stock Appreciation Rights

7.1 Grant of Stock Appreciation Rights. Coincident with or following designation for
participation in the Plan, an Eligible Employee may be granted one or more Stock Appreciation
Rights. Grants of Stock Appreciation Rights under the Plan shall be made by the Committee. In no
event shall the exercise of one Stock Appreciation Right affect the right to exercise any other
Stock Appreciation Right or affect the number of shares

5

 

of Stock to which any other Share Appreciation Right relates, except as provided in subsection
7.2(j) hereof.

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

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

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

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

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

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

          (ii) If the Participant retires from employment by the Company on or after attaining age 60,
the Stock Appreciation Right may be exercised by the Participant

6

 

within 36 months following his or
her retirement (provided that such exercise must occur within the Stock Appreciation Right Period),
but not thereafter. In the event of the Participant’s death during such 36-month period, each
Stock Appreciation Right may be exercised by those entitled to do so in the manner referred to in
(iv) below. In any such case, the Stock Appreciation Right may be exercised only as to the
increment(s) of the Stock Appreciation Right that have become exercisable on or before the date of
the Participant’s retirement.

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

          (iv) In the event of the Participant’s death while still employed by the Company, each Stock
Appreciation Right of the deceased Participant may be exercised by those entitled to do so under
the Participant’s will or under the laws of descent and distribution within twelve months following
the Participant’s death (provided that in any event such exercise must occur within the Stock
Appreciation Right Period), but not thereafter, as to all increments of each Stock Appreciation
Right, including each 25-percent increment of the Stock Appreciation Right, if any, which has not
yet become exercisable at the time of the Participant’s death. In the event of the Participant’s
death within the 36-month period referred to in subsection 7.2(d)(ii) above, the increment(s) of or
within the twelve-month period referred to in subsection 7.2(d)(iii) above, the increment(s) of
each Stock Appreciation Right of the deceased Participant that are exercisable at the time of death
may be exercised by those entitled to do so under the Participant’s will or under the laws of
descent and distribution within twelve months following the Participant’s death or within the
36-month period referred to in subsection 7.2(d)(ii) above, if applicable and if longer (provided
that in any event such exercise must occur within the Stock Appreciation Right Period).

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

7

 

increment(s) of the
Stock Appreciation Right that have become exercisable on or before the date of termination of the
Participant’s employment.

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

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

     (g) Exercise, Payments, Etc.

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

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

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

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

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

8

 

     (j) Adjustment of Stock Appreciation Rights. Subject to the provisions of Sections 4,
5, 7, 8 and 11 hereof, the Committee may make any adjustment in the number of shares of Stock to
which an outstanding Stock Appreciation Right relates, or the terms of an outstanding Stock
Appreciation Right and a subsequent granting of a Stock Appreciation Right, by amendment or by
substitution for an outstanding Stock Appreciation Right; however, except as provided in Sections
4, 5, 8 and 11 hereof, the Committee may not adjust the SAR Price of any outstanding Stock
Appreciation Right. Such amendment or substitution may result in terms and conditions (including
the number of shares of Stock to which the Stock Appreciation Right relates, vesting schedule or
Stock Appreciation Right Period) that differ from the terms and conditions of the original Stock
Appreciation Right. The Committee may not, however, adversely affect the rights of any Participant
to previously granted Stock Appreciation Rights without the consent of such Participant. If such
action is effected by amendment, the effective date of such amendment will be the date of grant of
the original Stock Appreciation Right.

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

Section 8

Change of Control

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

8.2 Limitation on Payments. If the provisions of this Section 8 would result in the
receipt by any Participant of a payment within the meaning of Section 280G or any successor
section(s) of the Internal Revenue Code, and the regulations promulgated thereunder, and if the
receipt of such payment by any Participant would, in the opinion of independent tax counsel of
recognized standing selected by the Company, result in the payment by such Participant of any
excise tax provided for in Sections 280G and 4999 or any successor section(s) of the Internal
Revenue Code, then the amount of such payment shall be reduced to the extent required, in the
opinion of independent tax counsel, to prevent the imposition of such excise tax; provided,
however, that the Committee, in its sole discretion, may authorize the payment of all or any
portion of the amount of such reduction to the Participant.

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

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Section 9

Rights of Employees, Participants

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

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

Section 10

Other Employee Benefits

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

10

 

Section 11

Plan Amendment, Modification and Termination

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

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

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

Section 12

Withholding

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

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

Section 13

Requirements of Law

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

13.2 Federal Securities Laws Requirements. If a Participant is an officer or director of
the Company within the meaning of Section 16 of the 1934 Act, Stock Appreciation

11

 

Rights 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 Stock Appreciation Right for any
exception from the provisions of Section 16 available under such rule. Such conditions are hereby
incorporated herein by reference and shall be set forth in the Stock Appreciation Right Agreement
with the Participant which describes the Stock Appreciation Right.

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

Section 14

Duration of the Plan

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

Dated: August 14, 2008

	 	 	 	 	 	 	 	 	 
	 	 	 	 	APACHE CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	ATTEST:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Cheri L. Peper
 

Cheri L. Peper

	 	 	 	By:
	 	/s/ Margery M. Harris
 

Margery M. Harris
	 	 
	Corporate Secretary

	 	 	 	 	 	Vice President, Human Resources	 	 

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