Document:

ex10-20

 

Exhibit 10.20

ARBITRON INC.

EXECUTIVE RETENTION AGREEMENT

     THIS EXECUTIVE RETENTION AGREEMENT is entered into as of November 9, 2001
(the “Effective Date”), by and between Arbitron Inc., a Delaware corporation
(the “Company”), and        ***        (the
“Executive”).

     WHEREAS, the Executive is currently employed by the Company and is an
executive officer of the Company;

     WHEREAS, the Company has implemented a severance program for executive
officers and wishes to document under this Agreement the provisions applicable
to the Executive in the event of his or her termination of employment;

     WHEREAS, in addition, the Company recognizes that a Change of Control may
result in material alteration or diminishment of the Executive’s position and
responsibilities and substantially frustrate the purpose of Executive’s
commitment to the Company and forbearance of career options, and has determined
therefore to provide enhanced severance and other benefits in the event of a
Change of Control;

     WHEREAS, the parties wish to replace any and all prior agreements and
undertakings with respect to the Executive’s termination of employment and
Change of Control occurrences and compensation, other than the agreements
governing the Executive’s equity participation in the Company (as the same are
modified by Section 5 of this Agreement);

     NOW THEREFORE, in consideration of the Executive’s acceptance of and
continuance in Executive’s employment, the parties agree to be bound by the
terms contained in this agreement as follows:

     1.     “At-Will” Employment. The Company may terminate the Executive’s
employment at any time for any reason pursuant to a Notice of Termination. The
Executive may terminate his or her employment with the Company at any time for
any reason pursuant to a Notice of Termination. If the Executive dies while
still an employee of the Company, the Executive’s death shall be a termination
of employment from the Company. Any termination of the Executive’s employment
by the Company or the Executive (other than because of the Executive’s death)
shall be communicated by written Notice of Termination to the other party
hereto in accordance with Section 6.1 below. For purposes of this Agreement, a
“Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon, if any, and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive’s employment under the provision so
indicated. The Company’s notice shall be given in writing by the Chief
Executive Officer. Termination of the Executive’s employment shall take effect
on the Date of Employment Termination, the setting of which shall require the
minimum notice period described under the definition of “Date of Employment
Termination.”

     2.     Compensation Upon Termination.

          2.1      Death. Except as provided in Section 2.5, if the Executive’s
employment is terminated a result of the Executive’s death, the Company shall
pay to the Executive’s estate, or as may be directed by the legal representatives of such estate,
the Executive’s then current base salary through the Date of Employment
Termination and all other unpaid amounts, if any, to which

 

 

Executive is entitled as of the Date of Employment Termination. The payments
contemplated by this Section 2.1 shall be paid at the time they are due, and
the Company shall have no further obligations to the Executive or his or her
estate under this Agreement.

          2.2.      Disability. Except as provided in Section 2.5, if the Company
terminates the Executive’s employment because of the Executive’s Disability,
the Company shall pay the Executive the Executive’s then current base salary
through the Date of Employment Termination and all other unpaid amounts, if
any, to which Executive is entitled as of the Date of Employment Termination.
The payments contemplated by this Section 2.2 shall be paid at the time they
are due, and the Company shall have no further obligations to the Executive
under this Agreement; provided, however, that the base salary shall be reduced
by the amount of any disability benefit payments made to the Executive during a
period of Disability from any insurance or other policies provided by the
Company.

          2.3      By the Company for Cause or by the Executive. Except as provided in
Section 2.5, if the Executive’s employment with the Company is terminated in
accordance with this Section 2.3, the Company shall pay the Executive the
Executive’s then current base salary through the Date of Employment Termination
and all other unpaid amounts, if any, to which Executive is entitled as of the
Date of Employment Termination. The Executive’s termination is covered by this
Section 2.3, (i) if the Executive voluntarily terminates his or her employment
other than during the Window Period as described in Section 2.5, or (ii) if the
Company terminates the Executive’s employment for Cause. The payments
contemplated by this Section 2.3 shall be paid at the time such payments are
due, and the Company shall have no further obligations to the Executive under
this Agreement.

          2.4      By the Company other than for Cause. Except as provided in Section
2.5, if the Company terminates the Executive’s employment other than for Cause,
the Company shall pay the Executive the Executive’s then current base salary
through the Date of Employment Termination and all other unpaid amounts, if
any, to which the Executive is entitled as of the Date of Employment
Termination, plus the following amounts:

     (a)      Severance Amount. If the Executive has to his or her credit fewer
than 15 Years of Service, the Executive shall receive a severance payment equal
to 12 months of the Executive’s Reference Compensation. If the Executive has
to his or her credit 15 or more Years of Service, the Executive shall receive a
severance payment equal to 15 months of the Executive’s Reference Compensation.
This severance payment amount shall be paid in a lump sum, generally within
fifteen days of the Executive’s Date of Employment Termination; provided,
however, that the severance payment amount shall not be paid prior to the
Company’s receipt of a duly executed Waiver and Release Agreement that is not
revoked during the applicable regulatory revocation period.

     (b)      Health and Welfare Benefits Continuation; Outplacement. Commencing on
his or her date of employment termination, and except as next provided, for the
duration of the Benefits Continuation Period, the Executive shall be entitled
to receive from the Company the same or equivalent health, dental, accidental
death and dismemberment, short and long-term disability, life insurance
coverages, and all other insurance policies and health and welfare benefits
programs, policies or arrangements, at the same levels and coverages as
Executive was receiving on the day immediately prior to his or her Date of
Employment Termination. The Executive shall be required to pay no more for the
above-mentioned benefits than he or she paid as an active employee, or if
provided by the Company at no cost to the employee on the date immediately
prior to the Executive’s Date of Employment Termination, the benefits shall
continue to be made available to the Executive on this basis. In addition, the
Company shall provide or make available arrangements for reasonable
outplacement services for the Executive based on his or her level within the
Company. With respect to any particular benefit, the benefit’s continuation
described in this paragraph shall end earlier than the end of the Benefits
Continuation Period

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as of the date the Executive (or in the case of dependent coverage, the
Executive’s dependent), is eligible for the benefit under a plan program or
arrangement of a subsequent employer which provides a benefit that is
substantially equivalent to the benefit being terminated.

          2.5      Termination During Window Following a Change of Control Other than by
the Company for Cause. If the Executive’s employment with the Company
terminates following a Change of Control during the Window Period, other than
by a termination by the Company for Cause, the Executive shall be entitled to
payment of the Executive’s then current base salary through the Date of
Employment Termination and all other unpaid amounts, if any, to which the
Executive is entitled as of the Date of Employment Termination, plus the
following amounts:

     (a)      Severance Amount. If the Executive has to his or her credit fewer
than 15 Years of Service, the Executive shall receive a severance payment equal
to 18 months of the Executive’s Reference Compensation. If the Executive has
to his or her credit 15 or more Years of Service, the Executive shall receive a
severance payment equal to 21 months of the Executive’s Reference Compensation.
This severance payment amount shall be paid in a lump sum, generally within
fifteen days of the Executive’s Date of Employment Termination; provided,
however, that the severance payment amount shall not be paid prior to the
Company’s receipt of a duly executed Waiver and Release Agreement that is not
revoked during the applicable regulatory revocation period.

     (b)      Health and Welfare Benefits Continuation; Outplacement. Commencing on
his or her date of employment termination, and except as next provided, for the
duration of the Benefits Continuation Period, the Executive shall be entitled
to receive from the Company the same or equivalent health, dental, accidental
death and dismemberment, short and long-term disability, life insurance
coverages, and all other insurance policies and health and welfare benefits
programs, policies or arrangements, at the same levels and coverages as
Executive was receiving on the day immediately prior to his or her Date of
Employment Termination. The Executive shall be required to pay no more for the
above-mentioned benefits than he or she paid as an active employee, or if
provided by the Company at no cost to the employee on the date immediately
prior to the Executive’s Date of Employment Termination, the benefits shall
continue to be made available to the Executive on this basis. In addition, the
Company shall provide or make available arrangements for reasonable
outplacement services for the Executive based on his or her level within the
Company. With respect to any particular benefit, the benefit’s continuation
described in this paragraph shall end earlier than the end of the Benefits
Continuation Period as of the date the Executive (or in the case of dependent
coverage, the Executive’s dependent), is eligible for the benefit under a plan
program or arrangement of a subsequent employer which provides a benefit that
is substantially equivalent to the benefit being terminated.

     3.     Waiver and Release Agreement. In consideration of the severance
payments described in Section 2.4 or Section 2.5, to which severance payments
the Executive would otherwise not be entitled, and as a pre-condition to the
Executive becoming entitled to such severance payments under this Agreement,
the Executive agrees to execute at the time of Executive’s termination a Waiver
and Release Agreement in exactly the form provided to the Executive by the
Company without alteration or addition (the “Waiver and Release Agreement”),
attached hereto as Exhibit A, the terms and conditions of which are
specifically incorporated herein by reference.

     4.     Certain Additional Payments by the Company.

     (a)      Notwithstanding anything in this Agreement to the contrary and except
as set forth in this Section 4, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional

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payments required under this Section 4) (a “Payment”) would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then the Executive shall be entitled to
receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by the Executive of all taxes, including, without limitation, any
income taxes (and any interest and penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount
of the Gross-Up Payment equal to the Excise Tax (including any interest or
penalties imposed with respect to such taxes) imposed upon the Payments.

     (b)      Subject to the provisions of Section 4(c), all determinations required
to be made under this Section 4, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by the Company’s
external auditors (the “Accounting Firm”), which shall provide detailed
supporting calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by the Company. In the event
that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Executive
shall appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 4, shall be paid by the Company to the Executive
within five business days of the receipt of the Accounting Firm’s
determination. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
(“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 4(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

     (c)      The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which he or she gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:

		
	 	     (i)     give the Company any information reasonably requested by the
Company relating to such claim,
	 
	 	     (ii)     take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by attorneys reasonably selected by the Company,
	 
	 	     (iii)     cooperate with the Company in good faith in order effectively
to contest such claim, and

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	 	     (iv)     permit the Company to participate in any proceedings relating
to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 4(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; further provided, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and, further provided, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

     (d)      If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 4(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the
Company’s complying with the requirements of Section 4(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 4(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

5.     Stock Option Provisions in Connection with a Change of Control

          5.1      Special Vesting Rule. If there is a Change of Control, then,
notwithstanding the current Section 12.3 of the Arbitron Inc. 1999 Stock
Incentive Plan (the “Plan”) or any other provision of the Plan and
notwithstanding the current Section 3.3(b) of the Arbitron Inc. 1999 Stock
Incentive Plan Non-Qualified Stock Option Agreement (the “Option Agreement”) or
any other provision of the Option Agreement, the Executive’s Eligible Options
shall fully and immediately vest upon the consummation of the Change of
Control. This Section 5.1 shall not be changed or otherwise modified without
the written consent of the Executive.

          5.2      Special Stock-Based Payment. If there is a Change of Control, then,
notwithstanding any contrary provision in the option agreements covering the
Executive’s Eligible Options, upon consummation of the Change of Control, but
in no event more than 15 days following the Change of Control, the Company
shall provide the Executive with a cash payment equal to the sum of (i) the
in-the-money value of the Executive’s Eligible Options (i.e., the number of
unexercised option shares

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multiplied by the difference between the value per share of the consideration
received in the Change of Control and the exercise price per share), and (ii)
the Black-Scholes Termination Value of the Executive’s Eligible Options. Upon
payment of the cash amount just described, the Eligible Options shall expire,
and no longer shall be exercisable.

     6.     Miscellaneous.

          6.1      Notices. All notices, demands, requests or other communications
required or permitted to be given or made hereunder shall be in writing and
shall be delivered, telecopied or mailed by first class registered or certified
mail, postage prepaid, addressed as follows:

 

	  If to the Company:

  Arbitron Inc.

  142 W. 57th Street

  New York, NY 10019-3300

  Attention: Office of General Counsel	   with copy to:

  Hogan & Hartson L.L.P.

  555 Thirteenth Street, N.W.

  Washington, D.C. 20004-1109

  Attention: David Bonser

  Telecopy: (202) 637-5910

  Telephone: (202) 637-5868

      
         
         
       
If to the Executive:

         

	

         

	

         

	

or to such other address as may be designated by either party in a notice to
the other. Each notice, demand, request or other communication that shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes three days after it is deposited in the U.S. mail,
postage prepaid, or at such time as it is delivered to the addressee (with the
return receipt, the delivery receipt, the answer back or the affidavit of
messenger being deemed conclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.

     6.2.      Representations. The Executive agrees to execute any proper oath or
verify any proper document required to carry out the terms of this Agreement.
The Executive represents that performance of all the terms of this Agreement
and the Waiver and Release Agreement will not breach any similar agreement.
Executive has not entered into, and Executive agrees not to enter into, any
oral or written agreement in conflict herewith.

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

     6.4.      Survival. It is the express intention and agreement of the parties
hereto that the provisions of Section 2 hereof shall survive the termination of
employment of the Executive. In addition, all obligations of the Company to
make payments hereunder shall survive any termination of this Agreement on the
terms and conditions set forth herein.

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     6.5.      Assignment. The rights and obligations of the parties to this
Agreement shall not be assignable or delegable, except that (i) in the event of
the Executive’s death, the personal representative or legatees or distributees
of the Executive’s estate, as the case may be, shall have the right to receive
any amount owing and unpaid to the Executive hereunder and (ii) the rights and
obligations of the Company hereunder shall be assignable and delegable in
connection with any subsequent merger, consolidation, sale of all or
substantially all of the assets of the Company or similar reorganization to a
successor entity. In connection with a transaction described in item (ii) of
the preceding sentence under which the Executive’s employment is transferred to
a successor in the transaction, the Company’s failure to obtain the agreement
of its successor to perform the Company’s obligations under this Agreement
shall be treated as a termination by the Company without Cause and during the
Window Period following a Change of Control under Section 2.5 of this Agreement
and under the Executive’s Company equity agreements.

     6.6.      Binding Effect. Subject to any provisions hereof restricting
assignment, this Agreement shall be binding upon the parties hereto and shall
inure to the benefit of the parties and their respective heirs, devisees,
executors, administrators, legal representatives, successors and assigns.

     6.7.      Amendment; Waiver. This Agreement shall not be amended, altered or
modified except by an instrument in writing duly executed by the parties
hereto. Neither the waiver by either of the parties hereto of a breach of or a
default under any of the provisions of this Agreement, nor the failure of
either of the parties, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right or privilege hereunder,
shall thereafter be construed as a waiver of any subsequent breach or default
of a similar nature, or as a waiver of any such provisions, rights or
privileges hereunder.

     6.8.      Headings. Section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed
to be a part of this Agreement for any purpose, and shall not in any way define
or affect the meaning, construction or scope of any of the provisions hereof.

     6.9.      Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the State of Maryland (but not
including the choice of law rules thereof).

     6.10.      Entire Agreement. This Agreement, the Waiver and Release Agreement,
and any agreements entered into in connection with the Executive’s equity
participation in the Company (as modified by Section 5 of this Agreement)
constitute the entire agreement between the parties respecting the employment
of Executive, there being no representations, warranties or commitments except
as set forth herein.

     6.11.      Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.

     6.12.      No Right to Continued Employment. Nothing in this Agreement shall
be deemed to give the Executive the right to be retained in the employ of the
Company, or to interfere with the right of the Company to discharge the
Executive at any time and for any lawful reason, subject in all cases to the
terms of this Agreement.

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     6.13.      Definitions.

     “Benefit Continuation Period” means the applicable 12, 15, 18 or 21 month
period upon which the Executive’s severance payment under Section 2.4 or 2.5 is
based, treating the period as though it runs from the Date of Employment
Terminations.

     “Black-Scholes Termination Value” means, with respect to each of the
Executive’s Eligible Options, the difference between (i) the Black-Scholes
value of the Eligible Option had it continued for its entire term, such value
determined as of the date of the Change of Control, using (A) a share price
equal to the value per share of the consideration received in the Change of
Control transaction, (B) a volatility input equal to the measured daily
volatility for the 180 days ending on the Determination Date, and (C) an
interest rate equal to the rate on 10-year Treasury constant maturities (zero
coupon bonds) for the date of consummation of the Change of Control, as
published by the Federal Reserve, and (ii) the in-the-money amount of the
Eligible Option (i.e., the number of unexercised option shares multiplied by
the difference between the value per share of the consideration received in the
Change of Control and the exercise price per share).

     “Cause” means (i) fraud; (ii) misrepresentation; (iii) theft or
embezzlement of assets of the Company; (iv) intentional violations of law
involving moral turpitude; (v) failure to follow the Company’s conduct and
ethics policies; and/or (vi) the continued failure by the Executive to attempt
in good faith to perform his or her duties as reasonably assigned by the Chief
Executive Officer to the Executive for a period of 60 days after a written
demand for such performance which specifically identifies the manner in which
it is alleged the Executive has not attempted in good faith to perform such
duties.

     “Code” means the Internal Revenue Code of 1986, as amended from time to
time.

     “Change of Control” means any of the following events:

	 	(i)	 	a merger or consolidation to which the Company is
a party if the individuals and entities who were stockholders
of the Company immediately prior to the effective date of such
merger or consolidation have beneficial ownership (as defined
in Rule 13d-3 under the Exchange Act) of less than 50% of the
total combined voting power for election of directors of the
surviving Company immediately following the effective date of
such merger or consolidation;
	 
	 	(ii)	 	the direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) in the aggregate
of securities of the Company representing 51% or more of the
total combined voting power of the Company’s then issued and
outstanding securities by any person or entity, or group of
associated persons or entities acting in concert; provided,
however, that for purposes hereof, any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the
Company shall not constitute a Change of Control;
	 
	 	(iii)	 	the direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) in the aggregate
of securities of the Company representing 25% or more of the
total combined voting power of the Company’s then issued and
outstanding securities by any person or entity, or group of
associated persons or entities acting in concert if such
acquisition is not approved by the Board of Directors of the
Company prior to any such acquisition; provided, however, that

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	 	 	 	for purposes hereof, any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company shall not constitute a Change
of Control;
	 
	 	(iv)	 	the sale of the properties and assets of the
Company, substantially as an entirety, to any person or entity
which is not a wholly-owned subsidiary of the Company;
	 
	 	(v)	 	the stockholders of the Company approve any plan
or proposal for the liquidation of the Company; or
	 
	 	(vi)	 	a change in the composition of the Board at any
time during any consecutive 24 month period such that the
“Continuity Directors” cease for any reason to constitute at
least a 70% majority of the Board. For purposes of this
clause, “Continuity Directors” means those members of the
Board who either (A) were directors at the beginning of such
consecutive 24 month period, or (B) were elected by, or on the
nomination or recommendation of, at least a two-thirds
majority of the then-existing Board of Directors.

     “Date of Employment Termination” means (i) if the Executive’s employment
is terminated by the Executive’s death, the date of the Executive’s death; (ii)
if the Executive’s employment is terminated because of the Executive’s
Disability, 30 days after Notice of Termination, provided that the Executive
shall not have returned to the performance of the Executive’s duties on a
full-time basis during such 30-day period; (iii) if the Executive’s employment
is terminated by the Company for Cause, the date immediately following the
Notice of Termination; (iv) if the Executive’s employment is terminated by the
Company, 30 days after the Notice of Termination; or (v) if the Executive
voluntarily terminates his or her employment, the date 21 days after the Notice
of Termination.

     “Determination Date” means the earlier of the date one week after the date
on which Arbitron or the entity effecting the Change of Control first announces
to the public the existence of a definitive agreement leading to the Change of
Control or the date of commencement of a tender offer leading to the Change of
Control.

     “Disability” means the Executive’s inability to perform all of the
Executive’s duties hereunder by reason of illness, physical or mental
disability or other similar incapacity, as determined by the Chief Executive
Officer in his or her sole discretion, which inability shall continue for more
than three consecutive months; provided, however, that the Executive does not
hereby waive any rights under the Americans with Disabilities Act or other
applicable law.

     “Eligible Option” means the Company stock options held by the Executive
that were granted prior to January 1, 2003.

     “Reference Compensation” means the sum of the Executive’s annual salary
and annual bonus divided by twelve. For purposes of this definition, the
Executive’s annual salary is the greater of the annual rate of his or her base
salary from the Company and its subsidiaries in effect immediately prior to the
Date of Employment Termination, or the annual rate of the Executive’s base
salary from the Company and its subsidiaries in effect immediately prior to the
date of consummation of the Change of Control. For purposes of this
definition, annual bonus shall mean the greatest of (i) the average of the
three annual bonuses paid to the Executive prior to his or her Date of
Employment Termination, (ii) the average of the three annual bonuses paid to
the Executive prior to the date of consummation of the Change of Control (if
applicable, because termination occurs during a Window Period), or the
Executive’s target annual bonus under the Company’s annual incentive
compensation plan for the year that include his

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or her Date of Employment Termination. If the Executive receive fewer
than three bonuses prior to his or her Date of Employment Termination or the
date of consummation of the Change of Control, as applicable, the amounts
described in Clauses (i) and (ii) shall be calculated using the average of such
lesser number of annual bonuses. The term annual bonus does not include any
special or sign-on bonus that is not part of the Company’s regular and
recurring program of annual incentive compensation.

     “Window Period” means the one-year period commencing on the date of
consummation of a Change of Control. Furthermore, only the first Change of
Control shall be counted in determining whether there is a Window Period, and,
as a result, there shall not be multiple Window Periods under this Agreement.

     “Years of Service” means the number of whole years, i.e., completed
consecutive 12-month periods, in the period beginning on the date the Executive
first performed services as an employee of the Company (or its predecessor) and
ending on his or her Date of Employment Termination.

     IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or
have caused this Agreement to be duly executed on their behalf, as of the day
and year first herein above written.

	 	 
	 	ARBITRON INC
	 
	 	By:                        
                          
	 	Name:                    
                          
	 	Title:                      
                          
	 
	 	EXECUTIVE:
	 
	 
	 	                             
                 

	***	 	See the attached page for a list of the Executive Officers of Arbitron,
Inc. who signed an Executive Retention Agreement.

10

 

	***	 

        	The Executive Retention Agreements were executed by the following executive
of Arbitron, Inc.:

Pierre C. Bouvard

Dolores L. Cody

Owen Charlebois

Janice M. Giannini

Claire L. Kummer

David A. Lapovsky

Kathleen T. Ross

Marshall L. Snyder

11<PAGE>

                                                                   EXHIBIT 10.25

                               APACHE CORPORATION

                          2000 SHARE APPRECIATION PLAN
                                  "120 BY '04"

                   (AS AMENDED AND RESTATED FEBRUARY 6, 2002)

<PAGE>

                               APACHE CORPORATION
                          2000 SHARE APPRECIATION PLAN
                   (AS AMENDED AND RESTATED FEBRUARY 6, 2002)

                                    SECTION 1

                                  INTRODUCTION

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

1.2 Purposes. The primary purpose of this Plan is to focus the energies of the
Company's employees on significantly increasing shareholder wealth through stock
price appreciation to share prices of $91, $109 and $164 and a doubling of the
Company's currently projected oil and gas production per share for calendar year
2000 (as adjusted for the Company's ten-percent stock dividend, record date
December 31, 2001, payable January 21, 2002). The share price goals of this Plan
seek to increase shareholder wealth by approximately $5.2 to $7.8 billion
dollars with the Company's employees sharing in approximately three percent of
the additional shareholder value created. The production goal is designed to
inspire the Company's employees to significantly improve the one factor that is
most within the control of the Company, production, and that is involved in
determining the Company's earnings per share and cash flow per share. Additional
purposes of this Plan include the retention of existing key employees and as an
additional inducement in the recruitment of talented personnel in a competitive
environment.

                                    SECTION 2

                                   DEFINITIONS

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

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

                                       1
<PAGE>

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

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

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

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

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

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

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

         "Final Amount" means with regard to any:

                  (a) Category I Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals two (2) times
         such Participant's Base Salary divided by $164;

                                       2
<PAGE>

                  (b) Category II Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals one (1) times
         such Participant's Base Salary divided by $164; and

                  (c) Category III Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals 50 percent (.50)
         times such Participant's Base Salary divided by $164;

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

         "Final Price Threshold Date" means the last of any 10 trading days
(which need not be consecutive) during any period of 30 consecutive trading days
occurring prior to January 1, 2005, but not thereafter, on each of which 10 days
the closing price of the Stock as reported on the Composite Tape equaled or
exceeded $164 per share. If the above trading criteria are met more than once,
the first occurrence shall be deemed to be the Final Price Threshold Date.

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

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

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

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

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

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

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

                                       3
<PAGE>

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

         "Independent Production Goal Date" means the last day of any fiscal
quarter ending on or before December 31, 2004 during which fiscal quarter the
Company's average daily production (calculated on an annualized basis) equals or
exceeds 1.40 barrels of oil equivalent per outstanding share of Stock
(calculated on a fully diluted basis), as confirmed by the Company's independent
auditors. If the above production criterion is met more than once, the first
occurrence shall be deemed to be the Independent Production Goal Date.

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

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

         "Initial Amount" means with regard to any:

                  (a) Category I Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals one (1) times
         such Participant's Base Salary divided by $91;

                  (b) Category II Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals 50 percent (.50)
         times such Participant's Base Salary divided by $91; and

                  (c) Category III Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals 25 percent (.25)
         times such Participant's Base Salary divided by $91;

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

         "Initial Price Threshold Date" means the last of any 10 trading days
(which need not be consecutive) during any period of 30 consecutive trading days
occurring prior to January 1, 2005, but not thereafter, on each of which 10 days
the closing price of the Stock as reported on the Composite Tape equaled or
exceeded $91 per share. If the above trading criteria are met more than once,
the first occurrence shall be deemed to be the Initial Price Threshold Date.

                                       4
<PAGE>

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

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

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

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

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

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

         "Secondary Amount" means with regard to any:

                  (a) Category I Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals three (3) times
         such Participant's Base Salary divided by $109;

                  (b) Category II Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals one and one half
         (1.5) times such Participant's Base Salary divided by $109; and

                  (c) Category III Participant, such number of shares of Stock
         (rounded down to the nearest full share) which equals 75 percent (.75)
         times such Participant's Base Salary divided by $109;

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

                                       5
<PAGE>

         "Secondary Price Threshold Date" means the last of any 10 trading days
(which need not be consecutive) during any period of 30 consecutive trading days
occurring prior to January 1, 2005, but not thereafter, on each of which 10 days
the closing price of the Stock as reported on the Composite Tape equaled or
exceeded $109 per share. If the above trading criteria are met more than once,
the first occurrence shall be deemed to be the Secondary Price Threshold Date.

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

         "Stock" means the $1.25 par value Common Stock of the Company.

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

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

                                    SECTION 3

                               PLAN ADMINISTRATION

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

                                       6
<PAGE>

                                    SECTION 4

                            STOCK SUBJECT TO THE PLAN

4.1 Number of Shares. Subject to Sections 4.3 and Section 6.1 hereof, up to
three million eight hundred fifty thousand (3,850,000) shares of Stock are
authorized for issuance under the Plan upon conversion of any Plan Units in
accordance with the Plan's terms and subject to such restrictions or other
provisions as the Committee may from time to time deem necessary. Shares of
Stock which may be issued pursuant to the conversion of any Plan Units awarded
hereunder shall be applied to reduce the maximum number of shares of Stock
remaining available for use under the Plan. The Company shall at all times
during the term of the Plan and while any Plan Units are outstanding retain as
authorized and unissued Stock and/or Stock in the Company's treasury, at least
the number of shares from time to time required under the provisions of the
Plan, or otherwise assure itself of its ability to perform its obligations
hereunder.

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

4.3 Certain Adjustments. If the Company shall at any time increase or decrease
the number of its outstanding shares of Stock (other than by way of issuing
Stock in a public or private offering for cash or property) or change in any way
the rights and privileges of such shares by means of a Stock dividend or any
other distribution upon such shares payable in Stock, or through a Stock split,
subdivision, consolidation, combination, reclassification or recapitalization
involving the Stock or a subscription for shares of Stock that has the effect of
diluting the Company's capital (hereinafter a "capital restructuring"), then for
purposes of determining the entitlement to payments under Section 6, (i) the
number of shares authorized for issuance under this Section 4, and (ii) the $91
per share amount, $109 per share amount and $164 per share amount referenced in
Section 1 and contained in the definitions set forth in Section 2 hereof and the
amount of production required to attain the Independent Production Goal shall
be, in each case, equitably and proportionally adjusted to take into account any
capital restructuring. Any adjustment under this Section shall be made by the
Committee, whose determination with regard thereto, including whether any
adjustment is needed, shall be final and binding upon all parties.

                                       7
<PAGE>

                                    SECTION 5

                          REORGANIZATION OR LIQUIDATION

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

                                    SECTION 6

                               GRANT OF PLAN UNITS

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

                                       8
<PAGE>

this Section 6, as well as such other terms and conditions as the Committee may
consider appropriate.

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

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

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

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

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

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

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

                                       9
<PAGE>

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

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

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

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

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

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

                                       10
<PAGE>

and distribution. A failure of the Participant to comply with the undertaking of
clause (i) above shall void such Participant's right to payments hereunder.

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

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

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

                                       11
<PAGE>

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

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

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

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

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

                                       12
<PAGE>

the D&O Limitation, then the total number of shares of Stock issuable to such
Participants shall be reduced to a number equal to the D&O Limitation and the
number of shares of Stock issuable to each such Participant upon conversion of
any Plan Unit shall be reduced pro rata.

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

                                    SECTION 7

                                CHANGE OF CONTROL

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

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

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

                                       13
<PAGE>

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

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

                                    SECTION 8

                        RIGHTS OF EMPLOYEES, PARTICIPANTS

8.1 Employment. Neither anything contained in the Plan or any Grant Agreement
nor the granting of any Plan Units under the Plan shall confer upon any
Participant any right with respect to the continuation of his or her employment
by the Company or any Affiliated Corporation, or interfere in any way with the
right of the Company or any Affiliated Corporation, at any time to terminate
such employment or to increase or decrease the level of the Participant's
compensation from the level in existence at the time of the award of Plan Units.

8.2 Non-transferability. No right or interest of any Participant in a Plan Unit
granted pursuant to the Plan shall be assignable or transferable during the
lifetime of the Participant, either voluntarily or involuntarily, or subjected
to any lien, directly or indirectly, by operation of law, or otherwise,
including execution, levy, garnishment, attachment, pledge or bankruptcy. In the
event of a Participant's death, a Participant's rights and interests in any Plan
Unit shall, to the extent provided in Section 6.3 hereof, be transferable by
testamentary will or the laws of descent and distribution, and payment of any
entitlements due under the Plan shall be made to the Participant's legal
representatives, heirs or legatees. If in the opinion of the Committee a person
entitled to payments or to exercise rights with respect to the Plan is disabled
from caring for his or her affairs because of mental condition, physical
condition or age, payment due such

                                       14
<PAGE>

person may be made to, and such rights shall be exercised by, such person's
guardian, conservator or other legal personal representative upon furnishing the
Committee with evidence satisfactory to the Committee of such status.

                                    SECTION 9

                             OTHER EMPLOYEE BENEFITS

The amount of any income deemed to be received by a Participant as a result of
the payment upon conversion of a Plan Unit shall not constitute "earnings" or
"compensation" with respect to which any other employee benefits of such
Participant are determined, including without limitation benefits under any
pension, profit sharing, life insurance or salary continuation plan.

                                   SECTION 10

                  PLAN AMENDMENT, MODIFICATION AND TERMINATION

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

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

                                       15
<PAGE>

                                   SECTION 11

                               REQUIREMENTS OF LAW

11.1 Requirements of Law. The issuance of Stock and the payment of cash pursuant
to the Plan shall be subject to all applicable laws, rules and regulations,
including applicable federal and state securities laws. The Company may require
a Participant, as a condition of receiving payment upon conversion of a Plan
Unit, to give written assurances in substance and form satisfactory to the
Company and its counsel to such effect as the Company deems necessary or
appropriate in order to comply with federal and applicable state securities
laws.

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

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

                                   SECTION 12

                              DURATION OF THE PLAN

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

                                       16
<PAGE>

Dated:   February 6, 2002

                                              APACHE CORPORATION

ATTEST:

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

                                       17

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