(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2008 | ||
OR | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware
(State or other jurisdiction of incorporation or organization) |
41-0747868
(I.R.S. Employer Identification No.) |
Name of Each Exchange
|
||
Title of Each Class
|
On Which Registered
|
|
Common Stock, $0.625 par value
|
New York Stock Exchange, | |
Chicago Stock Exchange and | ||
NASDAQ National Market | ||
Preferred Stock Purchase Rights
|
New York Stock Exchange and | |
Chicago Stock Exchange | ||
Apache Finance Canada Corporation
|
New York Stock Exchange | |
7.75% Notes Due 2029
|
||
Irrevocably and Unconditionally
|
||
Guaranteed by Apache Corporation
|
Large accelerated
filer
þ
|
Accelerated filer o |
Non-accelerated
filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
Aggregate market value of the voting and non-voting common
equity held by non-affiliates of registrant as of June 30,
2008
|
$ | 46,488,719,719 | ||
Number of shares of registrants common stock outstanding
as of January 31, 2009
|
334,753,638 |
ITEMS 1 AND 2. | BUSINESS AND PROPERTIES |
2
3
Percentage
|
2008
|
2008 Gross
|
||||||||||||||||||||||||||
Percentage
|
12/31/08
|
of Total
|
Gross
|
New
|
||||||||||||||||||||||||
of Total
|
2008
|
Estimated
|
Estimated
|
New
|
Productive
|
|||||||||||||||||||||||
2008
|
2008
|
Production
|
Proved
|
Proved
|
Wells
|
Wells
|
||||||||||||||||||||||
Production | Production | Revenue | Reserves | Reserves | Drilled | Drilled | ||||||||||||||||||||||
(In MMboe) | (In millions) | (In MMboe) | ||||||||||||||||||||||||||
Region/Country:
|
||||||||||||||||||||||||||||
Gulf Coast
|
43.1 | 22 | % | 3,076 | 334.8 | 14 | % | 116 | 90 | |||||||||||||||||||
Central
|
33.4 | 17 | 2,007 | 602.8 | 25 | 415 | 404 | |||||||||||||||||||||
Total U.S.
|
76.5 | 39 | 5,083 | 937.6 | 39 | 531 | 494 | |||||||||||||||||||||
Canada
|
28.6 | 15 | 1,651 | 523.0 | 22 | 484 | 471 | |||||||||||||||||||||
Total North America
|
105.1 | 54 | 6,734 | 1,460.6 | 61 | 1,015 | 965 | |||||||||||||||||||||
Egypt
|
40.5 | 21 | 2,739 | 342.9 | 14 | 260 | 236 | |||||||||||||||||||||
Australia
|
10.5 | 5 | 372 | 285.5 | 12 | 46 | 34 | |||||||||||||||||||||
North Sea
|
22.0 | 11 | 2,103 | 188.8 | 8 | 14 | 12 | |||||||||||||||||||||
Argentina
|
17.5 | 9 | 380 | 122.8 | 5 | 83 | 72 | |||||||||||||||||||||
Total International
|
90.5 | 46 | 5,594 | 940.0 | 39 | 403 | 354 | |||||||||||||||||||||
Total
|
195.6 | 100 | % | 12,328 | 2,400.6 | 100 | % | 1,418 | 1,319 | |||||||||||||||||||
4
5
6
7
8
9
10
Net Exploratory | Net Development | Total Net Wells | ||||||||||||||||||||||||||||||||||
Productive | Dry | Total | Productive | Dry | Total | Productive | Dry | Total | ||||||||||||||||||||||||||||
2008
|
||||||||||||||||||||||||||||||||||||
United States
|
4.5 | 6.6 | 11.1 | 334.8 | 25.3 | 360.1 | 339.3 | 31.9 | 371.2 | |||||||||||||||||||||||||||
Canada
|
3.9 | 5.0 | 8.9 | 328.0 | 10.1 | 338.1 | 331.9 | 15.1 | 347.0 | |||||||||||||||||||||||||||
Egypt
|
18.7 | 11.5 | 30.2 | 193.2 | 5.8 | 199.0 | 211.9 | 17.3 | 229.2 | |||||||||||||||||||||||||||
Australia
|
6.4 | 9.0 | 15.4 | 12.5 | | 12.5 | 18.9 | 9.0 | 27.9 | |||||||||||||||||||||||||||
North Sea
|
| | | 11.7 | | 11.7 | 11.7 | | 11.7 | |||||||||||||||||||||||||||
Argentina
|
7.5 | 2.0 | 9.5 | 54.4 | 6.2 | 60.6 | 61.9 | 8.2 | 70.1 | |||||||||||||||||||||||||||
Total
|
41.0 | 34.1 | 75.1 | 934.6 | 47.4 | 982.0 | 975.6 | 81.5 | 1,057.1 | |||||||||||||||||||||||||||
2007
|
||||||||||||||||||||||||||||||||||||
United States
|
3.0 | 3.1 | 6.1 | 264.9 | 16.5 | 281.4 | 267.9 | 19.6 | 287.5 | |||||||||||||||||||||||||||
Canada
|
9.5 | 15.5 | 25.0 | 206.0 | 35.4 | 241.4 | 215.5 | 50.9 | 266.4 | |||||||||||||||||||||||||||
Egypt
|
10.7 | 13.0 | 23.7 | 144.3 | 14.8 | 159.1 | 155.0 | 27.8 | 182.8 | |||||||||||||||||||||||||||
Australia
|
3.8 | 7.2 | 11.0 | 2.7 | | 2.7 | 6.5 | 7.2 | 13.7 | |||||||||||||||||||||||||||
North Sea
|
| 2.5 | 2.5 | 4.9 | 6.8 | 11.7 | 4.9 | 9.3 | 14.2 | |||||||||||||||||||||||||||
Argentina
|
2.0 | | 2.0 | 80.8 | 2.0 | 82.8 | 82.8 | 2.0 | 84.8 | |||||||||||||||||||||||||||
Total
|
29.0 | 41.3 | 70.3 | 703.6 | 75.5 | 779.1 | 732.6 | 116.8 | 849.4 | |||||||||||||||||||||||||||
2006
|
||||||||||||||||||||||||||||||||||||
United States
|
2.9 | 2.7 | 5.6 | 266.4 | 15.3 | 281.7 | 269.3 | 18.0 | 287.3 | |||||||||||||||||||||||||||
Canada
|
34.3 | 6.4 | 40.7 | 577.3 | 114.8 | 692.1 | 611.6 | 121.2 | 732.8 | |||||||||||||||||||||||||||
Egypt
|
11.8 | 8.9 | 20.7 | 122.7 | 10.4 | 133.1 | 134.5 | 19.4 | 153.9 | |||||||||||||||||||||||||||
Australia
|
1.2 | 9.3 | 10.5 | 1.0 | 1.3 | 2.3 | 2.2 | 10.6 | 12.8 | |||||||||||||||||||||||||||
North Sea
|
| 1.0 | 1.0 | 3.9 | | 3.9 | 3.9 | 1.0 | 4.9 | |||||||||||||||||||||||||||
Argentina
|
9.3 | 5.3 | 14.6 | 60.8 | 2.0 | 62.8 | 70.1 | 7.3 | 77.4 | |||||||||||||||||||||||||||
Other International
|
| | | 1.5 | | 1.5 | 1.5 | | 1.5 | |||||||||||||||||||||||||||
Total
|
59.5 | 33.6 | 93.1 | 1,033.6 | 143.8 | 1,177.4 | 1,093.1 | 177.5 | 1,270.6 | |||||||||||||||||||||||||||
Gas | Oil | Total | ||||||||||||||||||||||
Gross | Net | Gross | Net | Gross | Net | |||||||||||||||||||
Gulf Coast
|
835 | 675 | 885 | 640 | 1,720 | 1,315 | ||||||||||||||||||
Central
|
3,415 | 1,765 | 7,650 | 5,215 | 11,065 | 6,980 | ||||||||||||||||||
Canada
|
8,200 | 7,260 | 2,250 | 990 | 10,450 | 8,250 | ||||||||||||||||||
Egypt
|
42 | 42 | 618 | 589 | 660 | 631 | ||||||||||||||||||
Australia
|
10 | 6 | 37 | 22 | 47 | 28 | ||||||||||||||||||
North Sea
|
| | 65 | 63 | 65 | 63 | ||||||||||||||||||
Argentina
|
395 | 363 | 580 | 503 | 975 | 866 | ||||||||||||||||||
Total
|
12,897 | 10,111 | 12,085 | 8,022 | 24,982 | 18,133 | ||||||||||||||||||
11
Average Lease
|
||||||||||||||||||||||||||||
Production |
Operating Cost per
|
Average Sales Price | ||||||||||||||||||||||||||
Year Ended December 31, | Oil | NGLs | Gas | Boe | Oil | NGLs | Gas | |||||||||||||||||||||
(Mbbls) | (Mbbls) | (MMcf) | (Per bbl) | (Per bbl) | (Per Mcf) | |||||||||||||||||||||||
2008
|
||||||||||||||||||||||||||||
United States
|
32,866 | 2,191 | 248,835 | $ | 14.67 | $ | 83.70 | $ | 58.62 | $ | 8.86 | |||||||||||||||||
Canada
|
6,278 | 760 | 129,099 | 14.27 | 93.53 | 49.33 | 7.94 | |||||||||||||||||||||
Egypt
|
24,431 | | 96,518 | 6.47 | 91.37 | | 5.25 | |||||||||||||||||||||
Australia
|
3,019 | | 45,019 | 10.87 | 91.78 | | 2.10 | |||||||||||||||||||||
North Sea
|
21,775 | | 965 | 41.70 | 95.76 | | 18.78 | |||||||||||||||||||||
Argentina
|
4,542 | 1,056 | 71,609 | 6.58 | 49.46 | 37.83 | 1.61 | |||||||||||||||||||||
Total
|
92,911 | 4,007 | 592,045 | $ | 15.02 | $ | 87.80 | $ | 51.38 | $ | 6.70 | |||||||||||||||||
2007
|
||||||||||||||||||||||||||||
United States
|
33,127 | 2,811 | 280,903 | $ | 11.99 | $ | 66.48 | $ | 45.24 | $ | 7.04 | |||||||||||||||||
Canada
|
6,846 | 820 | 141,697 | 12.74 | 68.29 | 40.55 | 6.30 | |||||||||||||||||||||
Egypt
|
22,168 | | 87,883 | 5.16 | 72.51 | | 4.60 | |||||||||||||||||||||
Australia
|
5,029 | | 71,149 | 6.15 | 79.79 | | 1.89 | |||||||||||||||||||||
North Sea
|
19,576 | | 705 | 28.21 | 70.93 | | 15.03 | |||||||||||||||||||||
Argentina
|
4,175 | 1,022 | 73,330 | 4.81 | 45.99 | 37.78 | 1.17 | |||||||||||||||||||||
Total
|
90,921 | 4,653 | 655,667 | $ | 11.35 | $ | 68.84 | $ | 42.78 | $ | 5.34 | |||||||||||||||||
2006
|
||||||||||||||||||||||||||||
United States
|
24,394 | 2,915 | 243,442 | $ | 11.13 | $ | 54.22 | $ | 38.44 | $ | 6.54 | |||||||||||||||||
Canada
|
7,561 | 798 | 147,579 | 10.58 | 59.90 | 35.40 | 6.09 | |||||||||||||||||||||
Egypt
|
20,648 | | 79,424 | 4.68 | 63.60 | | 4.42 | |||||||||||||||||||||
Australia
|
4,341 | | 67,933 | 4.95 | 68.25 | | 1.65 | |||||||||||||||||||||
North Sea
|
21,368 | | 752 | 28.23 | 63.04 | | 10.64 | |||||||||||||||||||||
Argentina
|
2,503 | 561 | 40,878 | 4.47 | 42.79 | 36.64 | .97 | |||||||||||||||||||||
Other International
|
1,156 | | | 4.77 | 62.73 | | | |||||||||||||||||||||
Total
|
81,971 | 4,274 | 580,008 | $ | 10.92 | $ | 59.92 | $ | 37.70 | $ | 5.17 | |||||||||||||||||
12
Undeveloped Acreage | Developed Acreage | |||||||||||||||
Gross Acres | Net Acres | Gross Acres | Net Acres | |||||||||||||
United States
|
2,158,979 | 1,365,722 | 2,904,849 | 1,797,004 | ||||||||||||
Canada
|
3,138,067 | 2,225,462 | 3,325,289 | 2,652,939 | ||||||||||||
Egypt
|
13,969,530 | 8,488,721 | 1,316,195 | 1,211,734 | ||||||||||||
Australia
|
6,877,670 | 4,857,730 | 572,170 | 352,830 | ||||||||||||
North Sea
|
319,929 | 241,450 | 41,019 | 39,952 | ||||||||||||
Argentina
|
3,070,000 | 2,791,000 | 259,000 | 194,000 | ||||||||||||
Chile
|
1,203,137 | 1,034,436 | | | ||||||||||||
Total Company
|
30,737,312 | 21,004,521 | 8,418,522 | 6,248,459 | ||||||||||||
13
14
ITEM 1A. | RISK FACTORS |
15
| our production falls short of the hedged volumes; | |
| there is a widening of price basis differentials between delivery points for our production and the delivery point assumed in the hedge arrangement; | |
| the counterparties to our hedging or other price risk management contracts fail to perform under those arrangements; or | |
| a sudden unexpected event materially impacts oil and natural gas prices. |
16
| unexpected drilling conditions; | |
| pressure or irregularities in formations; | |
| equipment failures or accidents; | |
| fires, explosions, blowouts and surface cratering; | |
| marine risks such as capsizing, collisions and hurricanes; | |
| other adverse weather conditions; and | |
| increase in the cost of, or shortages or delays in the availability of, drilling rigs and equipment. |
17
| general strikes and civil unrest; | |
| the risk of war, acts of terrorism, expropriation, forced renegotiation or modification of existing contracts; | |
| import and export regulations; | |
| taxation policies, including royalty and tax increases and retroactive tax claims, and investment restrictions; | |
| price control; | |
| transportation regulations and tariffs; | |
| constrained natural gas markets dependent on demand in a single or limited geographical area; | |
| exchange controls, currency fluctuations, devaluation or other activities that limit or disrupt markets and restrict payments or the movement of funds; | |
| laws and policies of the United States affecting foreign trade, including trade sanctions; | |
| the possibility of being subject to exclusive jurisdiction of foreign courts in connection with legal disputes relating to licenses to operate and concession rights in countries where we currently operate; | |
| the possible inability to subject foreign persons to the jurisdiction of courts in the United States; and | |
| difficulties in enforcing our rights against a governmental agency because of the doctrine of sovereign immunity and foreign sovereignty over international operations. |
18
19
ITEM 1B. | UNRESOLVED SEC STAFF COMMENTS |
ITEM 3. | LEGAL PROCEEDINGS |
ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
20
33
ITEM 5.
MARKET
FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
2008
2007
Price Range
Dividends Per Share
Price Range
Dividends Per Share
High
Low
Declared
Paid
High
Low
Declared
Paid
$
122.34
$
84.52
$
.25
$
.15
$
73.44
$
63.01
$
.15
$
.15
149.23
117.65
.15
.25
87.82
70.53
.15
.15
145.00
94.82
.15
.15
91.25
73.41
.15
.15
103.17
57.11
.15
.15
109.32
87.44
.15
.15
21
Table of Contents
Among Apache Corporation, S&P 500 Index
and the Dow Jones US Exploration & Production
Index
*
$100 invested on 12/31/03 in stock including reinvestment of
dividends.
Fiscal year ending December 31.
2003
2004
2005
2006
2007
2008
$
100.00
$
125.41
$
170.91
$
166.97
$
272.02
$
189.80
100.00
110.88
116.33
134.70
142.10
89.53
100.00
141.87
234.54
247.14
355.06
212.61
22
Table of Contents
ITEM 6.
SELECTED
FINANCIAL DATA
As of or for the Year Ended December 31,
2008
2007
2006
2005
2004
(In thousands, except per share amounts)
$
12,389,750
$
9,999,752
$
8,309,131
$
7,584,244
$
5,332,577
706,274
2,806,678
2,546,771
2,618,050
1,663,074
2.11
8.45
7.72
7.96
5.10
2.09
8.39
7.64
7.84
5.03
.70
.60
.50
.36
.28
$
29,186,485
$
28,634,651
$
24,308,175
$
19,271,796
$
15,502,480
4,808,975
4,011,605
2,019,831
2,191,954
2,588,390
16,508,721
15,377,979
13,191,053
10,541,215
8,204,421
334,710
332,927
330,737
330,121
327,458
23
Table of Contents
ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
A drop in demand related to the slowing global economy caused
fourth-quarter oil and gas prices to drop sharply.
Two major uncontrollable events curtailed our production:
hurricanes in the Gulf of Mexico, and
an explosion on a pipeline that transports all of our gas
production in Australia.
A non-cash write-down of the carrying value of our U.S., U.K.
North Sea, Canadian and Argentine proved oil and gas properties,
necessitated by low commodity prices in effect at year-end
(discussed below).
U.S. production was affected by wells shut-in because of,
and damage caused by, Hurricanes Gustav and Ike. While we plan
to restore nearly all of the production during the second
quarter of 2009, the timing in many instances is pipeline
dependent and, therefore, beyond our control. See Operating
Highlights in this Item 7.
In June 2008, a pipeline explosion at the Varanus Island gas
processing and transportation hub offshore Western Australia
disrupted gas and oil sales, reducing 2008 production. We plan
to have all of the volumes restored in the first half of 2009.
See Operating Highlights in this Item 7.
24
Table of Contents
2008 Key Financial Indicators, by Quarter
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Full Year
(In thousands, except realized price)
$
3,177,949
$
3,904,118
$
3,368,882
$
1,876,890
$
12,327,839
$
89.25
$
110.32
$
101.04
$
50.69
$
87.80
$
6.42
$
8.09
$
7.43
$
4.76
$
6.70
$
1,020,093
$
1,443,809
$
1,189,405
$
*(2,947,033
)
$
*706,274
$
1,808,404
$
1,929,509
$
2,290,655
$
1,036,776
$
7,065,344
*
Includes a $3.6 billion (after-tax) non-cash write-down in
the carrying value of oil and gas properties.
25
Table of Contents
At Ewing Banks 826, we completed four wells during the first
half of 2008 and increased production to 6,315 b/d, up from 700
b/d at the beginning of the year. We own a 100 percent
working interest in the field.
In June 2008, we had a key discovery at the Geauxpher prospect
located on Garden Banks Block 462 in deepwater Gulf of
Mexico. Apache generated the prospect and has a 40-percent
working interest. Mariner Energy, Inc. is the designated
operator of the block with a 60-percent working interest. A
delineation well was drilled in December 2008, extending the
productive reservoir limits. We forecast the initial discovery
to be online in the second quarter of 2009. Additional potential
on the block is expected to be tested by further drilling.
During the third quarter of 2008, Hurricanes Gustav and Ike
damaged onshore and offshore production and transportation
facilities in our Gulf Coast region. Although most of our
offshore operated platforms escaped with minor damage, we did
lose four Apache-operated and two non-operated platforms. Our
ability to transport and process our crude oil and natural gas
production was also impacted by damages to third-party pipelines
and processing facilities. The impact of the hurricanes on 2008
operations and results follows:
26
Table of Contents
In the Khalda concession, two additional Salam gas processing
trains, trains three and four, and an associated Apache pipeline
compression project on the Western Desert Northern Gas Pipeline
are forecasted to add additional net production of
100 MMcf/d
and 5,000 b/d when fully operational in the second quarter of
2009. The third processing train commenced operation on
December 4, 2008. Commissioning with first gas from the
fourth processing train is projected to commence during the
first quarter of 2009.
We drilled 203 waterflood wells across several concessions
during 2008, increasing gross oil production from these
waterflood projects 55 percent or 27,000 b/d when compared
to 2007 production levels. Also, we believe that several
discoveries (discussed below) in a new area called the Heba
Ridge, which is adjacent to the Asala Ridge waterflood area in
the East Bahariya concession, will add significantly to our
inventory of waterflood projects in the concession.
During 2008, Apache announced that the Hydra-1X exploration well
in Egypts Western Desert test-flowed
76.6 MMcf/d
and 2,813 b/d from the Deep Jurassic and overlying AEB-6
formations. The Hydra 4X well appraised this discovery. Apache
has a 100-percent contractor interest in the Shushan
C concession and is in the process of negotiating a
Gas Sales Agreement with the Egyptian General Petroleum
Corporation (EGPC) and, when completed, will file to establish a
development lease.
On July 30, 2008, Apache announced that the
Heqet-2 well in the Greater Khalda area in Egypts
Western Desert tested 2,100 b/d from the Jurassic Safa formation
at a depth of 14,700 feet. We also announced that the
Umbarka-174 well tested 4,300 b/d in the main AEB field in
the north central portion of the Greater Khalda area. Both wells
are currently producing, and development of these fields
continues. In October 2008, we announced the WKAL-C-1X discovery
on the West Kalabsha concession. The well tested 4,746 b/d and
4.4 MMcf/d
in the Jurassic Safa formation. The WKAL-C-1X discovery
represents the westernmost oil ever
27
Table of Contents
discovered in Egypt, confirming our exploration model for this
area of the Faghur Basin. Apache has a 100 percent
contractor interest in both the Khalda and West Kalabsha
concessions.
During 2008, several new oil fields were discovered in the
Bahariya formation in the East Bahariya concession. The
EBAH-C-1X oil discovery identified a new area called the Heba
Ridge. The initial discovery and three additional development
wells were drilled in the EBAH-C field during 2008 and all were
producing at year-end. A total of 40 wells are planned to
fully develop the EBAH-C field. Three additional exploration
discoveries in the East Bahariya concession found Bahariya oil
pay in separate fields. The initial wells are expected to
commence production during early 2009. Each of these discoveries
will add significantly to our inventory of water-flood projects
in the concession.
Also in 2008, the Phiops-1X exploration well on the Kalabsha
development lease in the Khalda area encountered a potential 374
foot oil column with 173 feet of logged pay in a secondary
objective, the Cretaceous Alam El Bueib formation. The well will
be tested in early 2009 and is expected to provide a significant
oil reserve addition.
In early 2009, we formally announced three new December 2008
field discoveries in Egypts Western Desert that tested an
aggregate
80 MMcf/d
and 5,909 b/d. The Sultan-3X located on the Khalda Offset
Concession test-flowed 5,021 b/d and
11 MMcf/d
from three commingled intervals in the Safa formation. The two
other discoveries, the Adam-1X and the Maggie-1X, discovered new
gas-condensate fields on the Matruh development lease north of
the Sultan discovery. Apache has a 100-percent contractor
interest in both of the concessions. We anticipate completion of
Sultan-3X as an oil well prior to the end of first-quarter 2009,
and completion of Adam-1X and Maggie-1X by year-end 2009.
We have several large development projects underway in
Australia. The Van Gogh and Pyrenees developments remain on
schedule to deliver first production in 2009 and 2010,
respectively, each with projected net rates of 20,000 b/d. Our
Reindeer development program was reinstated following signing of
a gas-supply contract (discussed below) and is scheduled to
deliver approximately
60 MMcf/d
net to Apache in late 2011. Construction of pipeline and
processing infrastructure is scheduled to commence in 2009.
On January 6, 2009, the Company announced that it had
signed a contract to supply natural gas from the Reindeer field
to CITIC Pacifics Sino Iron project in Western Australia.
The terms call for Apache and its joint venture partner to
supply 154 billion cubic feet of gas over seven years
beginning in the second half of 2011. Apache owns a
55 percent interest in the field. The gas will be supplied
through a new
65-mile
offshore pipeline and a new onshore sales gas processing
facility at Devil Creek.
Appraisal of the Julimar-Brunello area on Australias
Northwest Shelf progressed with three appraisal wells. In
January 2008, we announced the Brulimar-1 discovery, which
encountered 113 feet of net pay in the Upper Triassic
Mungaroo sandstone. In April, we announced the Julimar
Southeast-1 discovery, which logged 195 feet of net pay
across five intervals of the Triassic Mungaroo sandstone. In
May, we announced the Julimar Northwest-1 discovery, which
logged 43 feet of net pay in the J-17 Triassic Mungaroo
sandstone. We have now drilled seven discoveries in the complex.
We plan to complete our appraisal program by mid-
28
Table of Contents
year and pursue a development strategy in the second half of
2009 after completing our assessment of commercial options. The
Julimar development will not require funding until we determine
which market is best suited for the asset. Apache is evaluating
LNG options as well as domestic-market options for Julimar gas.
Apache owns a 65 percent interest in and operates the
Julimar-Brunello complex.
In April, we announced the Halyard-1 discovery on
Australias WA-13-L block, which test-flowed
68 MMcf/d.
We are currently in the development design phase that includes
consideration of a sub-sea gathering line from Halyard to an
existing pipeline at our East Spar field, 10 miles to the
southeast, from which the gas can be transported to Varanus
Island for processing. Using our existing infrastructure would
accelerate development of the field and first sales. Apache
obtained governmental approval for the Halyard Field development
during the third quarter of 2008, and we are working toward
first production in 2010. Apache has a 55 percent interest
in and operates the block.
We are currently evaluating the results of wells drilled in 2008
and seismic information to assess the future potential in the
Gippsland basin. All six wells drilled in 2008 were either dry
or
non-commercial.
On June 3, 2008, subsidiaries of the Company reported a gas
pipeline explosion at the Varanus Island gas processing and
transportation hub offshore Western Australia, which shut-in
production at the John Brookes field and Harriet Joint Venture.
When fully operational, the Islands operations process
approximately 195 MMcf/d and 5,400 b/d, net to Apache
subsidiaries. On August 5, 2008, partial production was
reestablished from the John Brookes field, and by year-end was
at greater than 80 percent pre-incident levels. The Harriet
Joint Venture gas facilities are located adjacent to the
pipeline explosion and required more significant repairs to
restore operation. A portion of our gas production from the
Harriet Joint Venture was restored in December 2008 and is
projected to be fully restored in the first half of 2009.
Harriet Joint Venture oil production is projected to be fully
restored in the first quarter of 2009. The John Brookes field
accounted for approximately 60 percent and 25 percent
of the islands pre-incident natural gas and oil
production, respectively. Production from the Harriet Joint
Venture accounted for the remaining 40 percent and
75 percent of the islands pre-incident natural gas
and oil production, respectively. Company subsidiaries operate
the facilities and own a 68.5 percent interest in the
Harriet Joint Venture and a 55 percent interest in the John
Brookes field. Company subsidiaries maintain replacement cost
insurance, subject to a deductible of approximately
$7 million, with adequate limits to cover fully their share
of the estimated cost of restoring the Varanus Island facilities.
During 2008, the Company completed a total of seven horizontal
wells in the Ootla shale-gas play, located in northeast British
Columbia. December gross production averaged
2.5 MMcf/d.
Current plans for the Ootla development in 2009 include drilling
31 gross horizontal wells and construction of compression
and gathering infrastructure required to take the additional
production to existing processing facilities. Based on
information obtained from these wells, Apache expects to achieve
significant improvements in both production rate and reserves
per well. Apache has a 50 percent interest and operates
approximately one-half of its 400,000 gross acreage
position in the play.
29
Table of Contents
Apache continues to target shallow gas, including coal bed
methane (CBM), in areas such as Nevis, North Grant Lands and
Provost. Intermediate-depth drilling continued in the Kaybob,
West 5 and South Grant Land areas of central and southern
Alberta.
During 2008, we completed 12 new development wells in the
Forties field, which flowed at a combined rate of 18,900 b/d.
Investments in facility upgrades and integrity-related projects
over the past five years have significantly reduced platform
downtime. Coupled with production from new wells, these improved
platform operating efficiencies enabled the regions
fourth-quarter 2008 production to reach an average 61,740 b/d.
Annual production averaged 59,494 b/d, an 11 percent
increase from 2007.
Apache drilled 30 new wells in the Neuquén basin, with a
success rate of 100 percent, and continued to exploit two
new plays with an aggressive drilling and recompletion campaign.
In 2008, Apache completed a nearly 2,500 square kilometer
3-D
seismic
mega shoot in Tierra del Fuego. Twenty-nine wells were drilled
in Tierra del Fuego, resulting in a number of new exploration
discoveries and field extensions. Notable successes included the
completion of the first phase appraisal campaign in the 2008
Sección Baños block and the successful appraisal of
La Sara Norte. We also made exploration discoveries at Las
Flechas, Sección Veintinueve, Camino Real and Perla.
In the Cuyo basin, Apache was awarded the 4,710 square
kilometer CC&B-17 B block adjacent to and along a trend of
existing producing fields, which increased our Argentine acreage
portfolio by 34 percent.
During the third quarter of 2008, we commenced a seismic program
on the two exploration blocks acquired in 2008.
30
Table of Contents
Crude Oil
Natural Gas
NGLs
Total
(In thousands)
$
4,911,861
$
3,001,246
$
161,146
$
8,074,253
616,179
404,311
16,214
1,036,704
827,725
34,111
21,680
883,516
(96,640
)
64,149
(32,491
)
$
1,347,264
$
502,571
$
37,894
$
1,887,729
$
6,259,125
$
3,503,817
$
199,040
$
9,961,982
63
%
35
%
2
%
100
%
174,718
(426,055
)
(33,183
)
(284,520
)
2,174,202
894,818
40,025
3,109,045
(450,802
)
(7,866
)
(458,668
)
$
1,898,118
$
460,897
$
6,842
$
2,365,857
$
8,157,243
$
3,964,714
$
205,882
$
12,327,839
66
%
32
%
2
%
100
%
31
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32
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For the Year Ended December 31,
Increase
Increase
2008
(Decrease)
2007
(Decrease)
2006
$
8.86
25.85
%
$
7.04
7.65
%
$
6.54
7.94
26.03
%
6.30
3.45
%
6.09
5.25
14.13
%
4.60
4.07
%
4.42
2.10
11.11
%
1.89
14.55
%
1.65
18.78
24.95
%
15.03
41.26
%
10.64
1.61
37.61
%
1.17
20.62
%
.97
6.70
25.47
%
5.34
3.29
%
5.17
5,986
(22.28
)%
7,702
(3.54
)%
7,985
2,076
(7.57
)%
2,246
2.70
%
2,187
2,887
3.11
%
2,800
82.17
%
1,537
10,949
(14.11
)%
12,748
8.87
%
11,709
$
58.62
29.58
%
$
45.24
17.38
%
$
38.54
49.33
21.65
%
40.55
14.55
%
35.40
37.83
0.13
%
37.78
3.11
%
36.64
51.38
20.10
%
42.78
13.47
%
37.70
(1)
Approximately 19 percent of 2008 oil production was subject
to financial derivative hedges, compared to 17 percent in
2007 and nine percent in 2006.
(2)
Reflects
per-barrel
reductions of $4.85 in 2008, $1.06 in 2007 and $1.37 in 2006
from financial derivative hedging activities.
(3)
Approximately 20 percent of 2008 gas production was subject
to financial derivative hedges, compared to 17 percent in
2007 and eight percent in 2006.
(4)
Reflects
per-Mcf
reduction of $.01 in 2008, increase of $.10 in 2007 and
reduction of $.05 in 2006 from financial derivative hedging
activities.
Table of Contents
34
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35
Table of Contents
Year Ended December 31,
Year Ended December 31,
2008
2007
2006
2008
2007
2006
(In millions)
(Per boe)
$
2,358
$
2,208
$
1,699
$
12.06
$
10.78
$
9.29
5,334
27.27
158
140
118
.81
.68
.64
101
96
89
.52
.47
.48
1,909
1,653
1,323
9.76
8.07
7.23
157
137
120
.80
.67
.66
985
598
598
5.03
2.92
3.27
289
275
211
1.48
1.34
1.16
166
220
142
.85
1.07
.78
$
11,457
$
5,327
$
4,300
$
58.58
$
26.00
$
23.51
36
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Recurring DD&A
(In millions)
$
2,208
(127
)
277
$
2,358
Higher operating costs in all regions, including increased power
costs in the U.S. and Egypt along with increased labor
costs in the North Sea and Argentina, drove the rate up $.33.
Increased workover activity, primarily in the U.S. and
Egypt, resulted in an increase of $.29.
37
Table of Contents
Hurricane repairs in the U.S. contributed $.07 to increased
cost.
Repairs related to the pipeline explosion at Varanus Island in
Australia added $.03.
Non-recurring repairs and maintenance in Egypt, Australia, the
North Sea and Argentina increased $.07.
Overall production declines resulted in an increase of $.45,
with the impact from a combined 12 percent production
decline in the U.S., Canada and Australia partially offset by
increased production in Egypt, the North Sea and Argentina. The
main contributors were decreased production in Australia, $.30,
and production shut-in because of the hurricanes, $.29.
For the Year Ended
December 31,
2008
2007
(In millions)
$
39
$
38
64
54
28
27
21
15
5
3
$
157
$
137
$
.80
$
.67
38
Table of Contents
For the Year Ended
December 31,
2008
2007
(In millions)
$
695
$
346
168
142
71
56
51
54
$
985
$
598
$
5.03
$
2.92
39
Table of Contents
DD&A
(In millions)
$
1,699
210
299
$
2,208
40
Table of Contents
For the Year Ended
December 31,
2007
2006
(In millions)
$
38
$
32
54
50
27
26
15
11
3
1
$
137
$
120
$
.67
$
.66
For the Year Ended
December 31,
2007
2006
(In millions)
$
346
$
394
142
122
56
44
54
38
$
598
$
598
$
2.92
$
3.27
41
Table of Contents
42
Table of Contents
$
501,938
189,500
51,200
11,256
(13,635
)
(37,630
)
$
702,629
$
289,916
132,000
12,722
8,929
(1,511
)
(46,000
)
$
396,056
43
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Year Ended December 31,
2008
2007
2006
(In millions)
$
7,065
$
5,677
$
4,313
308
67
678
1,630
100
796
2,002
36
44
39
39
26
36
8,344
7,816
6,696
5,823
4,802
4,140
792
150
1,005
2,164
200
1,425
170
174
239
205
154
84
224
152
7,288
7,831
6,784
$
1,056
$
(15
)
$
(88
)
44
Table of Contents
Year Ended December 31,
2008
2007
2006
(In thousands)
$
2,183,473
$
1,630,776
$
1,532,959
705,066
650,676
1,056,614
852,802
605,115
454,892
879,680
516,054
179,892
459,239
537,868
329,498
317,490
287,047
115,570
27,457
12,288
5,425,207
4,227,536
3,681,713
149,838
1,024,956
2,428,432
513,891
439,368
390,612
94,164
75,748
61,301
659,248
473,481
248,589
$
6,842,348
$
6,241,089
$
6,810,647
45
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46
Table of Contents
At December 31,
2008
2007
2006
$
1,181
$
126
$
141
792
14
4,922
4,227
3,822
16,509
15,378
13,192
2,550
2,115
690
2
%
5
%
43
%
23
%
22
%
22
%
47
Table of Contents
48
Table of Contents
December
November
October
September
August
July
$
42.04
$
57.44
$
76.77
$
104.41
$
116.73
$
134.42
$
5.79
$
6.70
$
6.73
$
7.50
$
8.30
$
11.20
49
Table of Contents
Note
2015 &
Reference
Total
2009
2010-2012
2013-2014
Beyond
(In thousands)
Note 5
$
4,921,573
$
112,598
$
438,852
$
957,065
$
3,413,058
Note 5
5,112,221
299,485
875,455
471,595
3,465,686
Note 9
889,874
516,180
372,594
1,100
Note 9
371,279
370,720
559
Note 9
197,512
92,459
99,670
5,383
Note 9
223,153
26,541
81,234
55,496
59,882
Note 9
122,599
21,354
60,758
18,962
21,525
Note 9
472,980
77,122
125,676
59,304
210,878
3,840
3,840
$
12,315,031
$
1,520,299
$
2,054,798
$
1,568,905
$
7,171,029
(a)
This table does not include the estimated discounted liability
for dismantlement, abandonment and restoration costs of oil and
gas properties of $1.9 billion. See Note 4
Asset Retirement Obligation of Item 15 in this
Form 10-K
for further discussion.
(b)
This table does not include the Companys $212 million
asset for outstanding derivative instruments valued as of
December 31, 2008. See Note 3 Hedging and
Derivative Instruments of Item 15 in this Form 10K for
further discussion.
(c)
This table does not include the Companys pension or
postretirement benefit obligations. See Note 9
Commitments and Contingencies of Item 15 in this
Form 10-K
for further discussion.
(d)
This table does not include the Companys FIN 48
obligations. See Note 6 Income Taxes of
Item 15 in this
Form 10-K
for further discussion.
50
Table of Contents
51
Table of Contents
ITEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
52
Table of Contents
53
Table of Contents
the market prices of oil, natural gas, NGLs and other products
or services;
our commodity hedging arrangements;
the supply and demand for oil, natural gas, NGLs and other
products or services;
production and reserve levels;
drilling risks;
economic and competitive conditions;
the availability of capital resources;
capital expenditure and other contractual obligations;
currency exchange rates;
weather conditions;
inflation rates;
the availability of goods and services;
legislative or regulatory changes;
terrorism;
occurrence of property acquisitions or divestitures;
the securities or capital markets and related risks such as
general credit, liquidity, market and interest-rate
risks; and
other factors disclosed under Items 1 and 2
Business and Properties Estimated Proved
Reserves and Future Net Cash Flows,
Item 1A Risk Factors,
Item 7 Managements Discussion and
Analysis of Financial Condition and Results of Operations,
Item 7A Quantitative and Qualitative
Disclosures About Market Risk and elsewhere in this
Form 10-K.
54
Table of Contents
ITEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS
AND PROCEDURES
ITEM 9B.
OTHER
INFORMATION
55
Table of Contents
ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT |
ITEM 11. | EXECUTIVE COMPENSATION |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K |
(a) | Documents included in this report: |
56
Report of management
|
F-1 | |
Report of independent registered public accounting firm
|
F-2 | |
Report of independent registered public accounting firm
|
F-3 | |
Statement of consolidated operations for each of the three years
in the period ended December 31, 2008
|
F-4 | |
Statement of consolidated cash flows for each of the three years
in the period ended December 31, 2008
|
F-5 | |
Consolidated balance sheet as of December 31, 2008 and 2007
|
F-6 | |
Statement of consolidated shareholders equity for each of
the three years in the period ended December 31, 2008
|
F-7 | |
Notes to consolidated financial statements
|
F-8 |
Exhibit
|
||||||
No.
|
Description
|
|||||
2 | .1 | | Agreement and Plan of Merger among Registrant, YPY Acquisitions, Inc. and The Phoenix Resource Companies, Inc., dated March 27, 1996 (incorporated by reference to Exhibit 2.1 to Registrants Registration Statement on Form S-4, Registration No. 333-02305, filed April 5, 1996). | |||
2 | .2 | | Purchase and Sale Agreement by and between BP Exploration & Production Inc., as seller, and Registrant, as buyer, dated January 11, 2003 (incorporated by reference to Exhibit 2.1 to Registrants Current Report on Form 8-K, dated and filed January 13, 2003, SEC File No. 001-4300). | |||
2 | .3 | | Sale and Purchase Agreement by and between BP Exploration Operating Company Limited, as seller, and Apache North Sea Limited, as buyer, dated January 11, 2003 (incorporated by reference to Exhibit 2.2 to Registrants Current Report on Form 8-K, dated and filed January 13, 2003, SEC File No. 001-4300). | |||
3 | .1 | | Restated Certificate of Incorporation of Registrant, dated February 11, 2004, as filed with the Secretary of State of Delaware on February 12, 2004 (incorporated by reference to Exhibit 3.1 to Registrants Annual Report on Form 10-K for year ended December 31, 2003, SEC File No. 001-4300). | |||
3 | .2 | | Bylaws of Registrant, as amended December 14, 2006 (incorporated by reference to Exhibit 3.2 to Registrants Annual Report on Form 10-K for year ended December 31, 2006, SEC File No. 001-4300). | |||
4 | .1 | | Form of Certificate for Registrants Common Stock (incorporated by reference to Exhibit 4.1 to Registrants Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, SEC File No. 001-4300). | |||
4 | .2 | | Form of Certificate for Registrants 5.68% Cumulative Preferred Stock, Series B (incorporated by reference to Exhibit 4.2 to Amendment No. 2 on Form 8-K/A to Registrants Current Report on Form 8-K, dated and filed April 18, 1998, SEC File No. 001-4300). | |||
4 | .3 | | Rights Agreement, dated January 31, 1996, between Registrant and Norwest Bank Minnesota, N.A., rights agent, relating to the declaration of a rights dividend to Registrants common shareholders of record on January 31, 1996 (incorporated by reference to Exhibit (a) to Registrants Registration Statement on Form 8-A, dated January 24, 1996, SEC File No. 001-4300). |
57
Exhibit
|
||||||
No.
|
Description
|
|||||
4 | .4 | | Amendment No. 1, dated as of January 31, 2006, to the Rights Agreement dated as of December 31, 1996, between Apache Corporation, a Delaware corporation, and Wells Fargo Bank, N.A. (successor to Norwest Bank Minnesota, N.A.) (incorporated by reference to Exhibit 4.4 to Registrants Amendment No. 1 to Registration Statement on Form 8-A, dated January 31, 2006, SEC File No. 001-4300). | |||
4 | .5 | | Senior Indenture, dated February 15, 1996, between Registrant and JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank, as trustee, governing the senior debt securities and guarantees (incorporated by reference to Exhibit 4.6 to Registrants Registration Statement on Form S-3, dated May 23, 2003, Reg. No. 333-105536). | |||
4 | .6 | | First Supplemental Indenture to the Senior Indenture, dated as of November 5, 1996, between Registrant and JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank, as trustee, governing the senior debt securities and guarantees (incorporated by reference to Exhibit 4.7 to Registrants Registration Statement on Form S-3, dated May 23, 2003, Reg. No. 333-105536). | |||
4 | .7 | | Form of Indenture among Apache Finance Pty Ltd, Registrant and The Chase Manhattan Bank, as trustee, governing the debt securities and guarantees (incorporated by reference to Exhibit 4.1 to Registrants Registration Statement on Form S-3, dated November 12, 1997, Reg. No. 333-339973). | |||
4 | .8 | | Form of Indenture among Registrant, Apache Finance Canada Corporation and The Chase Manhattan Bank, as trustee, governing the debt securities and guarantees (incorporated by reference to Exhibit 4.1 to Amendment No. 1 to Registrants Registration Statement on Form S-3, dated November 12, 1999, Reg. No. 333-90147). | |||
10 | .1 | | Form of Amended and Restated Credit Agreement, dated as of May 9, 2006, among Registrant, the Lenders named therein, JPMorgan Chase Bank, as Administrative Agent, Citibank, N.A. and Bank of America, N.A., as Co-Syndication Agents, and BNP Paribas and UBS Loan Finance LLC, as Co-Documentation Agents (incorporated by reference to Exhibit 10.1 to Registrants Annual Report on Form 10-K for year ended December 31, 2006, SEC File No. 001-4300). | |||
10 | .2 | | Form of Request for Approval of Extension of Maturity Date and Amendment, dated as of April 5, 2007, among Registrant, the Lenders named therein, JPMorgan Chase Bank, as Administrative Agent, Citibank, N.A. and Bank of America, N.A., as Co-Syndication Agents, and BNP Paribas and UBS Loan Finance LLC, as Co-Documentation Agents (incorporated by reference to Exhibit 10.2 to Registrants Annual Report on Form 10-K for year ended December 31, 2007, SEC File No. 001-4300). | |||
10 | .3 | | Form of Request Form of Request for Approval of Extension of Maturity Date and Amendment, dated as of February 18, 2008, among Registrant, the Lenders named therein, JPMorgan Chase Bank, as Administrative Agent, Citibank, N.A. and Bank of America, N.A., as Co-Syndication Agents, and BNP Paribas and UBS Loan Finance LLC, as Co-Documentation Agents (incorporated by reference to Exhibit 10.1 to Registrants Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, SEC File No. 001-4300). | |||
10 | .4 | | Form of Credit Agreement, dated as of May 12, 2005, among Registrant, the Lenders named therein, JPMorgan Chase Bank, N.A., as Global Administrative Agent, J.P. Morgan Securities Inc. and Banc of America Securities, LLC, as Co-Lead Arrangers and Joint Bookrunners, Bank of America, N.A. and Citibank, N.A., as U.S. Co-Syndication Agents, and Calyon New York Branch and Société Générale, as U.S. Co-Documentation Agents (excluding exhibits and schedules) (incorporated by reference to Exhibit 10.01 to Registrants Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, SEC File No. 001-4300). | |||
10 | .5 | | Form of Credit Agreement, dated as of May 12, 2005, among Apache Canada Ltd, a wholly-owned subsidiary of Registrant, the Lenders named therein, JPMorgan Chase Bank, N.A., as Global Administrative Agent, RBC Capital Markets and BMO Nesbitt Burns, as Co-Lead Arrangers and Joint Bookrunners, Royal Bank of Canada, as Canadian Administrative Agent, Bank of Montreal and Union Bank of California, N.A., Canada Branch, as Canadian Co-Syndication Agents, and The Toronto-Dominion Bank and BNP Paribas (Canada), as Canadian Co-Documentation Agents (excluding exhibits and schedules) (incorporated by reference to Exhibit 10.02 to Registrants Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, SEC File No. 001-4300). |
58
Exhibit
|
||||||
No.
|
Description
|
|||||
10 | .6 | | Form of Credit Agreement, dated as of May 12, 2005, among Apache Energy Limited, a wholly-owned subsidiary of Registrant, the Lenders named therein, JPMorgan Chase Bank, N.A., as Global Administrative Agent, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc., as Co-Lead Arrangers and Joint Bookrunners, Citisecurities Limited, as Australian Administrative Agent, Deutsche Bank AG, Sydney Branch, and JPMorgan Chase Bank, as Australian Co-Syndication Agents, and Bank of America, N.A., Sydney Branch, and UBS AG, Australia Branch, as Australian Co-Documentation Agents (excluding exhibits and schedules) (incorporated by reference to Exhibit 10.03 to Registrants Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, SEC File No. 001-4300). | |||
10 | .7 | | Form of Request for Approval of Extension of Maturity Date and Amendment, dated April 5, 2007, among Registrant, Apache Canada Ltd., Apache Energy Limited, the Lenders named therein, JPMorgan Chase Bank, N.A., as Global Administrative Agent, and the other agents party thereto (incorporated by reference to Exhibit 10.6 to Registrants Annual Report on Form 10-K for year ended December 31, 2007, SEC File No. 001-4300). | |||
10 | .8 | | Form of Request for Approval of Extension of Maturity Date and Amendment, dated February 18, 2008, among Registrant, Apache Canada Ltd., Apache Energy Limited, the Lenders named therein, JPMorgan Chase Bank, N.A., as Global Administrative Agent, and the other agents party thereto (incorporated by reference to Exhibit 10.2 to Registrants Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, SEC File No. 001-4300). | |||
10 | .9 | | Concession Agreement for Petroleum Exploration and Exploitation in the Khalda Area in Western Desert of Egypt by and among Arab Republic of Egypt, the Egyptian General Petroleum Corporation and Phoenix Resources Company of Egypt, dated April 6, 1981 (incorporated by reference to Exhibit 19(g) to Phoenixs Annual Report on Form 10-K for year ended December 31, 1984, SEC File No. 1-547). | |||
10 | .10 | | Amendment, dated July 10, 1989, to Concession Agreement for Petroleum Exploration and Exploitation in the Khalda Area in Western Desert of Egypt by and among Arab Republic of Egypt, the Egyptian General Petroleum Corporation and Phoenix Resources Company of Egypt (incorporated by reference to Exhibit 10(d)(4) to Phoenixs Quarterly Report on Form 10-Q for quarter ended June 30, 1989, SEC File No. 1-547). | |||
10 | .11 | | Farmout Agreement, dated September 13, 1985 and relating to the Khalda Area Concession, by and between Phoenix Resources Company of Egypt and Conoco Khalda Inc. (incorporated by reference to Exhibit 10.1 to Phoenixs Registration Statement on Form S-1, Registration No. 33-1069, filed October 23, 1985). | |||
10 | .12 | | Amendment, dated March 30, 1989, to Farmout Agreement relating to the Khalda Area Concession, by and between Phoenix Resources Company of Egypt and Conoco Khalda Inc. (incorporated by reference to Exhibit 10(d)(5) to Phoenixs Quarterly Report on Form 10-Q for quarter ended June 30, 1989, SEC File No. 1-547). | |||
10 | .13 | | Amendment, dated May 21, 1995, to Concession Agreement for Petroleum Exploration and Exploitation in the Khalda Area in Western Desert of Egypt between Arab Republic of Egypt, the Egyptian General Petroleum Corporation, Repsol Exploration Egypt S.A., Phoenix Resources Company of Egypt and Samsung Corporation (incorporated by reference to Exhibit 10.12 to Registrants Annual Report on Form 10-K for year ended December 31, 1997, SEC File No. 001-4300). | |||
10 | .14 | | Concession Agreement for Petroleum Exploration and Exploitation in the Qarun Area in Western Desert of Egypt, between Arab Republic of Egypt, the Egyptian General Petroleum Corporation, Phoenix Resources Company of Qarun and Apache Oil Egypt, Inc., dated May 17, 1993 (incorporated by reference to Exhibit 10(b) to Phoenixs Annual Report on Form 10-K for year ended December 31, 1993, SEC File No. 1-547). |
59
Exhibit
|
||||||
No.
|
Description
|
|||||
10 | .15 | | Agreement for Amending the Gas Pricing Provisions under the Concession Agreement for Petroleum Exploration and Exploitation in the Qarun Area, effective June 16, 1994 (incorporated by reference to Exhibit 10.18 to Registrants Annual Report on Form 10-K for year ended December 31, 1996, SEC File No. 001-4300) | |||
10 | .16 | | Apache Corporation Corporate Incentive Compensation Plan A (Senior Officers Plan), dated July 16, 1998 (incorporated by reference to Exhibit 10.13 to Registrants Annual Report on Form 10-K for year ended December 31, 1998, SEC File No. 001-4300). | |||
*10 | .17 | | First Amendment to Apache Corporation Corporate Incentive Compensation Plan A, dated November 20, 2008, effective as of January 1, 2005. | |||
10 | .18 | | Apache Corporation Corporate Incentive Compensation Plan B (Strategic Objectives Format), dated July 16, 1998 (incorporated by reference to Exhibit 10.14 to Registrants Annual Report on Form 10-K for year ended December 31, 1998, SEC File No. 001-4300). | |||
*10 | .19 | | First Amendment to Apache Corporation Corporate Incentive Compensation Plan B, dated November 20, 2008, effective as of January 1, 2005 | |||
*10 | .20 | | Apache Corporation 401(k) Savings Plan, dated January 1, 2008 | |||
*10 | .21 | | Amendment to Apache Corporation 401(k) Savings Plan, dated January 29, 2009, effective as of January 1, 2009, except as otherwise specified | |||
*10 | .22 | | Apache Corporation Money Purchase Retirement Plan, dated January 1, 2008 | |||
*10 | .23 | | Amendment to Apache Corporation Money Purchase Retirement Plan, dated January 29, 2009, effective as of January 1, 2009, except as otherwise specified | |||
*10 | .24 | | Non-Qualified Retirement/Savings Plan of Apache Corporation, amended and restated as of January 1, 2009 | |||
*10 | .25 | | Apache Corporation 2007 Omnibus Equity Compensation Plan, as amended and restated November 19, 2008, effective as of May 2, 2007 | |||
10 | .26 | | Apache Corporation 1995 Stock Option Plan, as amended and restated August 14, 2008 (incorporated by reference to Exhibit 10.1 to Registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, SEC File No. 001-4300). | |||
10 | .27 | | Apache Corporation 2000 Share Appreciation Plan, as amended and restated September 15, 2005, effective as of January 1, 2005 (incorporated by reference to Exhibit 10.4 to Registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, SEC File No. 001-4300). | |||
10 | .28 | | Apache Corporation 1996 Performance Stock Option Plan, as amended and restated August 14, 2008 (incorporated by reference to Exhibit 10.02 to Registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, SEC File No. 001-4300). | |||
10 | .29 | | Apache Corporation 1998 Stock Option Plan, as amended and restated August 14, 2008 (incorporated by reference to Exhibit 10.3 to Registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, SEC File No. 001-4300). | |||
10 | .30 | | Apache Corporation 2000 Stock Option Plan, as amended and restated August 14, 2008 (incorporated by reference to Exhibit 10.4 to Registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, SEC File No. 001-4300). | |||
10 | .31 | | Apache Corporation 2003 Stock Appreciation Rights Plan, as amended and restated August 14, 2008 (incorporated by reference to Exhibit 10.5 to Registrants Quarterly Report on Form 10-Q for quarter ended September 30, 2008, SEC File No. 001-4300). | |||
10 | .32 | | Apache Corporation 2005 Stock Option Plan, as amended and restated August 14, 2008 (incorporated by reference to Exhibit 10.6 to Registrants Quarterly Report on Form 10-Q for quarter ended September 30, 2008, Commission File No. 001-4300). | |||
10 | .33 | | Apache Corporation 2005 Share Appreciation Plan, as amended and restated August 14, 2008 (incorporated by reference to Exhibit 10.7 to Registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, Commission File No. 001-4300). |
60
Exhibit
|
||||||
No.
|
Description
|
|||||
10 | .34 | | Apache Corporation 2008 Share Appreciation Program Specifications, pursuant to Apache Corporation 2007 Omnibus Equity Compensation Plan (incorporated by reference to Exhibit 10.3 to Registrants Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, SEC File No. 001-4300) | |||
*10 | .35 | | Apache Corporation Income Continuance Plan, as amended and restated November 20, 2008, effective as of January 1, 2005 | |||
*10 | .36 | | Apache Corporation Deferred Delivery Plan, as amended and restated November 19, 2008, effective as of January 1, 2009, except as otherwise specified | |||
*10 | .37 | | Apache Corporation Executive Restricted Stock Plan, as amended and restated November 19, 2008 | |||
*10 | .38 | | Apache Corporation Non-Employee Directors Compensation Plan, as amended and restated November 20, 2008, effective as of January 1, 2009 | |||
*10 | .39 | | Apache Corporation Outside Directors Retirement Plan, as amended and restated November 20, 2008, effective as of January 1, 2009 | |||
10 | .40 | | Apache Corporation Equity Compensation Plan for Non-Employee Directors, as amended and restated February 8, 2007 (incorporated by reference to Exhibit 10.2 to Registrants Quarterly Report on Form 10-Q for quarter ended March 31, 2007, SEC File No. 001-4300). | |||
10 | .41 | | Apache Corporation Non-Employee Directors Restricted Stock Units Program Specifications, dated August 14, 2008, pursuant to Apache Corporation 2007 Omnibus Equity Compensation Plan (incorporated by reference to Exhibit 10.9 to Registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, SEC File No. 001-4300). | |||
10 | .42 | | Restated Employment and Consulting Agreement, dated January 15, 2009, between Registrant and Raymond Plank (incorporated by reference to Exhibit 10.1 to Registrants Current Report on Form 8-K, dated January 15, 2009, filed January 16, 2009, SEC File No. 001-4300). | |||
10 | .43 | | Amended and Restated Employment Agreement, dated December 20, 1990, between Registrant and John A. Kocur (incorporated by reference to Exhibit 10.10 to Registrants Annual Report on Form 10-K for year ended December 31, 1990, SEC File No. 001-4300) | |||
*10 | .44 | | Employment Agreement between Registrant and G. Steven Farris, dated June 6, 1988, and First Amendment, dated November 20, 2008, effective as of January 1, 2005 | |||
10 | .45 | | Amended and Restated Conditional Stock Grant Agreement, dated September 15, 2005, effective January 1, 2005, between Registrant and G. Steven Farris (incorporated by reference to Exhibit 10.06 to Registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, SEC File No. 001-4300). | |||
10 | .46 | | Restricted Stock Unit Award Agreement, dated May 8, 2008, between Registrant and G. Steven Farris (incorporated by reference to Exhibit 10.4 to Registrants Quarterly Report on Form 10-Q for quarter ended March 31, 2008, SEC File No. 001-4300). | |||
10 | .47 | | Form of Restricted Stock Unit Award Agreement, dated February 12, 2009, between Registrant and each of John A. Crum, Rodney J. Eichler, and Roger B. Plank (incorporated by reference to Exhibit 10.1 to Registrants Current Report on Form 8-K, dated February 12, 2009, filed February 18, 2009, SEC File No. 001-4300). | |||
10 | .48 | | Amended and Restated Gas Purchase Agreement, effective July 1, 1998, by and among Registrant and MW Petroleum Corporation, as seller, and Producers Energy Marketing, LLC, as buyer (incorporated by reference to Exhibit 10.1 to Registrants Current Report on Form 8-K, dated June 18, 1998, filed June 23, 1998, SEC File No. 001-4300). | |||
10 | .49 | | Deed of Guaranty and Indemnity, dated January 11, 2003, made by Registrant in favor of BP Exploration Operating Company Limited (incorporated by reference to Registrants Current Report on Form 8-K, dated and filed January 13, 2003, SEC File No. 001-4300). | |||
*12 | .1 | | Statement of Computation of Ratios of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Stock Dividends. |
61
Exhibit
|
||||||
No.
|
Description
|
|||||
14 | .1 | | Code of Business Conduct (incorporated by reference to Exhibit 14.1 to Registrants Annual Report on Form 10-K for year ended December 31, 2003, SEC File No. 001-4300). | |||
*21 | .1 | | Subsidiaries of Registrant | |||
*23 | .1 | | Consent of Ernst & Young LLP | |||
*23 | .2 | | Consent of Ryder Scott Company L.P., Petroleum Consultants | |||
*24 | .1 | | Power of Attorney (included as a part of the signature pages to this report) | |||
*31 | .1 | | Certification of Principal Executive Officer | |||
*31 | .2 | | Certification of Principal Financial Officer | |||
*32 | .1 | | Certification of Principal Executive Officer and Principal Financial Officer |
* | Filed herewith. | |
| Management contracts or compensatory plans or arrangements required to be filed herewith pursuant to Item 15 hereof. |
62
Chairman of the Board and Chief Executive Officer
(principal executive officer)
February 27, 2009
President
(principal financial officer)
February 27, 2009
Vice President and Controller
(principal accounting officer)
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
63
Table of Contents
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
64
Table of Contents
Chairman of the Board and Chief Executive Officer
(principal executive officer)
President
(principal financial officer)
Vice President and Controller
(principal accounting officer)
F-1
Table of Contents
F-2
Table of Contents
F-3
Table of Contents
For the Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands, except per common share data) | ||||||||||||
REVENUES AND OTHER:
|
||||||||||||
Oil and gas production revenues
|
$ | 12,327,839 | $ | 9,961,982 | $ | 8,074,253 | ||||||
Gain on China divestiture
|
| | 173,545 | |||||||||
Other
|
61,911 | 37,770 | 61,333 | |||||||||
12,389,750 | 9,999,752 | 8,309,131 | ||||||||||
OPERATING EXPENSES:
|
||||||||||||
Depreciation, depletion and amortization
|
||||||||||||
Recurring
|
2,516,437 | 2,347,791 | 1,816,359 | |||||||||
Additional
|
5,333,821 | | | |||||||||
Asset retirement obligation accretion
|
101,348 | 96,438 | 88,931 | |||||||||
Lease operating expenses
|
1,909,625 | 1,652,855 | 1,322,562 | |||||||||
Gathering and transportation
|
156,491 | 137,407 | 120,537 | |||||||||
Taxes other than income
|
984,807 | 597,647 | 597,927 | |||||||||
General and administrative
|
288,794 | 275,065 | 211,334 | |||||||||
Financing costs, net
|
166,035 | 219,937 | 141,886 | |||||||||
11,457,358 | 5,327,140 | 4,299,536 | ||||||||||
INCOME BEFORE INCOME TAXES
|
932,392 | 4,672,612 | 4,009,595 | |||||||||
Current income tax provision
|
1,456,382 | 970,728 | 705,687 | |||||||||
Deferred income tax provision
|
(1,235,944 | ) | 889,526 | 751,457 | ||||||||
NET INCOME
|
711,954 | 2,812,358 | 2,552,451 | |||||||||
Preferred stock dividends
|
5,680 | 5,680 | 5,680 | |||||||||
INCOME ATTRIBUTABLE TO COMMON STOCK
|
$ | 706,274 | $ | 2,806,678 | $ | 2,546,771 | ||||||
NET INCOME PER COMMON SHARE:
|
||||||||||||
Basic
|
$ | 2.11 | $ | 8.45 | $ | 7.72 | ||||||
Diluted
|
$ | 2.09 | $ | 8.39 | $ | 7.64 | ||||||
F-4
For the Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands) | ||||||||||||
CASH FLOW FROM OPERATING ACTIVITIES:
|
||||||||||||
Net income
|
$ | 711,954 | $ | 2,812,358 | $ | 2,552,451 | ||||||
Adjustments to reconcile net income to net cash provided by
operating activities:
|
||||||||||||
Depreciation, depletion and amortization
|
7,850,258 | 2,347,791 | 1,816,359 | |||||||||
Provision (benefit) for deferred income taxes
|
(1,235,944 | ) | 889,527 | 751,457 | ||||||||
Asset retirement obligation accretion
|
101,348 | 96,438 | 88,931 | |||||||||
Gain on sale of China operations
|
| | (173,545 | ) | ||||||||
Other
|
(50,596 | ) | 48,966 | 32,380 | ||||||||
Changes in operating assets and liabilities, net of effects of
acquisitions:
|
||||||||||||
(Increase) decrease in receivables
|
570,592 | (261,962 | ) | (153,616 | ) | |||||||
(Increase) decrease in inventories
|
(22,295 | ) | 39,787 | 10,238 | ||||||||
(Increase) decrease in drilling advances and other
|
28,846 | (30,531 | ) | 66,323 | ||||||||
(Increase) decrease in deferred charges and other
|
(323,832 | ) | 12,368 | (126,869 | ) | |||||||
(Increase) decrease in accounts payable
|
(70,979 | ) | (38,923 | ) | (136,663 | ) | ||||||
(Increase) decrease in accrued expenses
|
(456,635 | ) | (169,087 | ) | (475,021 | ) | ||||||
(Increase) decrease in deferred credits and noncurrent
liabilities
|
(37,373 | ) | (69,299 | ) | 60,481 | |||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
7,065,344 | 5,677,433 | 4,312,906 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Additions to oil and gas property
|
(5,293,762 | ) | (4,322,469 | ) | (3,891,639 | ) | ||||||
Acquisition of BP plc properties
|
| | (833,820 | ) | ||||||||
Acquisition of Pioneers Argentine operations
|
| | (704,809 | ) | ||||||||
Acquisition of Amerada Hess properties
|
| | (229,134 | ) | ||||||||
Acquisition of Pan American properties
|
| | (396,056 | ) | ||||||||
Acquisition of Anadarko properties
|
| (1,004,593 | ) | | ||||||||
Proceeds from China divestiture
|
| | 264,081 | |||||||||
Proceeds from sale of Egypt properties
|
| | 409,203 | |||||||||
Additions to gathering, transmission and processing facilities
|
(679,084 | ) | (479,874 | ) | (248,589 | ) | ||||||
Restricted cash
|
(13,880 | ) | | | ||||||||
Proceeds from sales of oil and gas properties
|
307,974 | 67,483 | 4,740 | |||||||||
Other, net
|
(64,226 | ) | (206,476 | ) | (149,559 | ) | ||||||
NET CASH USED IN INVESTING ACTIVITIES
|
(5,742,978 | ) | (5,945,929 | ) | (5,775,582 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Commercial paper and bank loans, net
|
(99,803 | ) | (1,412,250 | ) | 1,629,257 | |||||||
Fixed-rate debt borrowings
|
796,315 | 1,992,290 | 714 | |||||||||
Payments on fixed-rate debt
|
(353 | ) | (173,000 | ) | (274 | ) | ||||||
Dividends paid
|
(239,358 | ) | (204,753 | ) | (154,143 | ) | ||||||
Common stock activity
|
31,513 | 29,682 | 31,963 | |||||||||
Treasury stock activity, net
|
4,498 | 14,279 | (166,907 | ) | ||||||||
Purchase of short-term investments
|
(791,999 | ) | | | ||||||||
Cost of debt and equity transactions
|
(7,050 | ) | (18,179 | ) | (2,061 | ) | ||||||
Other
|
39,498 | 25,726 | 35,791 | |||||||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
(266,739 | ) | 253,795 | 1,374,340 | ||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
1,055,627 | (14,701 | ) | (88,336 | ) | |||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
125,823 | 140,524 | 228,860 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$ | 1,181,450 | $ | 125,823 | $ | 140,524 | ||||||
SUPPLEMENTARY CASH FLOW DATA:
|
||||||||||||
Interest paid, net of capitalized interest
|
$ | 171,487 | $ | 181,138 | $ | 150,253 | ||||||
Income taxes paid, net of refunds
|
1,694,557 | 797,589 | 827,785 |
F-5
F-6
Accumulated
|
|||||||||||||||||||||||||||||||||
Series B
|
Other
|
Total
|
|||||||||||||||||||||||||||||||
Comprehensive
|
Preferred
|
Common
|
Paid-In
|
Retained
|
Treasury
|
Comprehensive
|
Shareholders
|
||||||||||||||||||||||||||
Income | Stock | Stock | Capital | Earnings | Stock | Income (Loss) | Equity | ||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2005
|
$ | 98,387 | $ | 210,623 | $ | 4,170,714 | $ | 6,516,863 | $ | (89,764 | ) | $ | (365,608 | ) | $ | 10,541,215 | |||||||||||||||||
Comprehensive income (loss):
|
|||||||||||||||||||||||||||||||||
Net income
|
$ | 2,552,451 | | | | 2,552,451 | | | 2,552,451 | ||||||||||||||||||||||||
Post retirement, net of income tax benefit of $2,816
|
(6,116 | ) | | | | | | (6,116 | ) | (6,116 | ) | ||||||||||||||||||||||
Commodity hedges, net of income tax expense of $187,162
|
340,392 | | | | | | 340,392 | 340,392 | |||||||||||||||||||||||||
Comprehensive income
|
$ | 2,886,727 | |||||||||||||||||||||||||||||||
Cash dividends:
|
|||||||||||||||||||||||||||||||||
Preferred
|
| | | (5,680 | ) | | | (5,680 | ) | ||||||||||||||||||||||||
Common ($.50 per share)
|
| | | (165,059 | ) | | | (165,059 | ) | ||||||||||||||||||||||||
Common shares issued
|
| 1,742 | 54,917 | | | | 56,659 | ||||||||||||||||||||||||||
Treasury shares purchased, net
|
| | 1,968 | | (166,967 | ) | | (164,999 | ) | ||||||||||||||||||||||||
Compensation expense
|
| | 42,085 | | | 42,085 | |||||||||||||||||||||||||||
Other
|
| | 111 | 2 | (8 | ) | | 105 | |||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2006
|
98,387 | 212,365 | 4,269,795 | 8,898,577 | (256,739 | ) | (31,332 | ) | 13,191,053 | ||||||||||||||||||||||||
Comprehensive income (loss):
|
|||||||||||||||||||||||||||||||||
Net income
|
$ | 2,812,358 | | | | 2,812,358 | | | 2,812,358 | ||||||||||||||||||||||||
Post retirement, net of income tax expense of $4,896
|
6,333 | | | | | | 6,333 | 6,333 | |||||||||||||||||||||||||
Commodity hedges, net of income tax benefit of $272,865
|
(495,212 | ) | | | | | | (495,212 | ) | (495,212 | ) | ||||||||||||||||||||||
Comprehensive income
|
$ | 2,323,479 | |||||||||||||||||||||||||||||||
Cash dividends:
|
|||||||||||||||||||||||||||||||||
Preferred
|
| | | (5,680 | ) | | | (5,680 | ) | ||||||||||||||||||||||||
Common ($.60 per share)
|
| | | (199,401 | ) | | | (199,401 | ) | ||||||||||||||||||||||||
Common shares issued
|
| 961 | 48,144 | | | | 49,105 | ||||||||||||||||||||||||||
Treasury shares purchased, net
|
| | 1,834 | | 18,475 | | 20,309 | ||||||||||||||||||||||||||
Compensation expense
|
| | 48,816 | | | | 48,816 | ||||||||||||||||||||||||||
FIN 48 adoption
|
| | | (48,502 | ) | | | (48,502 | ) | ||||||||||||||||||||||||
Other
|
| | (1,440 | ) | 240 | | | (1,200 | ) | ||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2007
|
98,387 | 213,326 | 4,367,149 | 11,457,592 | (238,264 | ) | (520,211 | ) | 15,377,979 | ||||||||||||||||||||||||
Comprehensive income (loss):
|
|||||||||||||||||||||||||||||||||
Net income
|
$ | 711,954 | | | | 711,954 | | | 711,954 | ||||||||||||||||||||||||
Post retirement, net of income tax benefit of $7,495
|
(7,530 | ) | | | | | | (7,530 | ) | (7,530 | ) | ||||||||||||||||||||||
Commodity hedges, net of income tax expense of $301,157
|
549,505 | | | | | | 549,505 | 549,505 | |||||||||||||||||||||||||
Comprehensive income
|
$ | 1,253,929 | |||||||||||||||||||||||||||||||
Cash dividends:
|
|||||||||||||||||||||||||||||||||
Preferred
|
| | | (5,680 | ) | | | (5,680 | ) | ||||||||||||||||||||||||
Common ($.70 per share)
|
| | | (233,952 | ) | | | (233,952 | ) | ||||||||||||||||||||||||
Common shares issued
|
| 895 | 36,722 | | | | 37,617 | ||||||||||||||||||||||||||
Treasury shares purchased, net
|
| | (442 | ) | | 9,960 | | 9,518 | |||||||||||||||||||||||||
Compensation expense
|
| | 93,762 | | | | 93,762 | ||||||||||||||||||||||||||
FIN 48
|
| | (23,663 | ) | | | (23,663 | ) | |||||||||||||||||||||||||
Other
|
| | (702 | ) | (87 | ) | | | (789 | ) | |||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2008
|
$ | 98,387 | $ | 214,221 | $ | 4,472,826 | $ | 11,929,827 | $ | (228,304 | ) | $ | 21,764 | $ | 16,508,721 | ||||||||||||||||||
F-7
1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
F-8
F-9
F-10
F-11
F-12
F-13
2. | SIGNIFICANT ACQUISITIONS AND DIVESTITURES |
F-14
Proved property
|
$ | 501,938 | ||
Unproved property
|
189,500 | |||
Gas Plants
|
51,200 | |||
Working capital acquired, net
|
11,256 | |||
Asset retirement obligation
|
(13,635 | ) | ||
Deferred income tax liability
|
(37,630 | ) | ||
Cash consideration
|
$ | 702,629 | ||
Proved property
|
$ | 289,916 | ||
Unproved property
|
132,000 | |||
Gas plants
|
12,722 | |||
Working capital acquired, net
|
8,929 | |||
Asset retirement obligation
|
(1,511 | ) | ||
Assumed obligation
|
(46,000 | ) | ||
Cash consideration
|
$ | 396,056 | ||
F-15
3. | HEDGING AND DERIVATIVE INSTRUMENTS |
Fixed-Price Swaps | Collars | Call Options | ||||||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
Weighted
|
|||||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||||||
Production Period
|
Mbbls | Fixed Price(1) | Mbbls | Floor Price(1) | Ceiling Price(1) | Mbbls | Strike Price(1) | |||||||||||||||||||||
2009
|
368 | $ | 67.95 | 9,321 | $ | 63.39 | $ | 80.14 | | $ | | |||||||||||||||||
2010
|
2,018 | 70.87 | 6,016 | 62.11 | 77.44 | 368 | 129.50 | |||||||||||||||||||||
2011
|
3,285 | 71.16 | 4,377 | 65.83 | 84.41 | 1,095 | 134.17 | |||||||||||||||||||||
2012
|
2,926 | 71.34 | 1,456 | 66.88 | 85.52 | 364 | 138.00 | |||||||||||||||||||||
2013
|
1,086 | 71.34 | | | | | |
(1) | Crude oil prices primarily represent a weighted average of NYMEX WTI Cushing Index and APPI Tapis prices on contracts entered into on a per barrel basis. |
Collars | ||||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||
MMBtu
|
GJ
|
Average
|
Average
|
|||||||||||||
Production Period
|
(in 000s) | (in 000;s) | Floor Price(1) | Ceiling Price(1) | ||||||||||||
2009
|
18,250 | | $ | 7.35 | $ | 10.19 | ||||||||||
2009
|
| 29,200 | 5.31 | 8.25 | ||||||||||||
2010
|
1,350 | | 7.17 | 10.58 |
(1) | U.S. natural gas prices represent a weighted average of several contracts entered into on a per million British thermal units (MMBtu) basis and are settled against NYMEX Henry Hub. The Canadian natural gas prices represent a weighted average of AECO Index prices. The Canadian gas collars are entered into on a per gigajoule (GJ) basis, are converted to U.S. dollars utilizing a December 31, 2008 exchange rate, and are settled against the AECO Index. |
December 31,
|
December 31,
|
|||||||
2008 | 2007 | |||||||
(In millions) | ||||||||
Current asset
|
$ | 154 | $ | 21 | ||||
Long-term asset
|
65 | 7 | ||||||
Current liability
|
| 286 | ||||||
Long-term liability
|
7 | 382 |
F-16
Before Tax | After Tax | |||||||
(In millions) | ||||||||
Unrealized loss on derivatives at December 31, 2007
|
$ | (639 | ) | $ | (412 | ) | ||
Realized amounts reclassified into earnings
|
436 | 282 | ||||||
Net change in derivative fair value
|
415 | 268 | ||||||
Unrealized gain on derivatives at December 31, 2008
|
$ | 212 | $ | 138 | ||||
4. | ASSET RETIREMENT OBLIGATION |
2008 | 2007 | |||||||
(In thousands) | ||||||||
Asset retirement obligation at beginning of year
|
$ | 1,866,686 | $ | 1,747,566 | ||||
Liabilities incurred
|
343,210 | 243,284 | ||||||
Liabilities settled
|
(587,246 | ) | (480,655 | ) | ||||
Accretion expense
|
101,348 | 96,438 | ||||||
Revisions in estimated liabilities
|
170,686 | 260,053 | ||||||
Asset retirement obligation at end of year
|
1,894,684 | 1,866,686 | ||||||
Less current portion
|
339,155 | 309,777 | ||||||
Asset retirement obligation, long-term
|
$ | 1,555,529 | $ | 1,556,909 | ||||
F-17
5. | DEBT |
December 31, | ||||||||
2008 | 2007 | |||||||
(In millions) | ||||||||
Apache:
|
||||||||
Money market lines of credit
|
$ | | $ | 4 | ||||
Commercial paper
|
| 135 | ||||||
6.25% debentures due 2012
|
400 | 400 | ||||||
5.25% notes due 2013
|
500 | 500 | ||||||
6.0% notes due 2013
|
400 | | ||||||
5.625% notes due 2017
|
500 | 500 | ||||||
6.9% notes due 2018
|
400 | | ||||||
7.0% notes due 2018
|
150 | 150 | ||||||
7.625% notes due 2019
|
150 | 150 | ||||||
7.7% notes due 2026
|
100 | 100 | ||||||
7.95% notes due 2026
|
180 | 180 | ||||||
6.0% notes due 2037
|
1,000 | 1,000 | ||||||
7.375% debentures due 2047
|
150 | 150 | ||||||
7.625% debentures due 2096
|
150 | 150 | ||||||
4,080 | 3,419 | |||||||
Subsidiary and other obligations:
|
||||||||
Argentina overdraft lines of credit
|
13 | 76 | ||||||
Apache PVG secured facility
|
100 | | ||||||
Notes due in 2016 and 2017
|
1 | 1 | ||||||
Apache Finance Australia 7.0% notes due 2009
|
100 | 100 | ||||||
Apache Finance Canada 4.375% notes due 2015
|
350 | 350 | ||||||
Apache Finance Canada 7.75% notes due 2029
|
300 | 300 | ||||||
864 | 827 | |||||||
Total debt
|
4,944 | 4,246 | ||||||
Less:
|
||||||||
Unamortized discount
|
(22 | ) | (19 | ) | ||||
Current maturities
|
(113 | ) | (215 | ) | ||||
Total long-term debt
|
$ | 4,809 | $ | 4,012 | ||||
F-18
F-19
F-20
(In millions) | ||||
2009
|
$ | 113 | ||
2010
|
| |||
2011
|
| |||
2012
|
439 | |||
2013
|
942 | |||
Thereafter
|
$ | 3,428 |
For the Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands) | ||||||||||||
Interest expense
|
$ | 280,457 | $ | 308,235 | $ | 217,454 | ||||||
Amortization of deferred loan costs
|
3,689 | 3,310 | 2,048 | |||||||||
Capitalized interest
|
(94,164 | ) | (75,748 | ) | (61,301 | ) | ||||||
Interest Income
|
(23,947 | ) | (15,860 | ) | (16,315 | ) | ||||||
Financing Costs
|
$ | 166,035 | $ | 219,937 | $ | 141,886 | ||||||
6. | INCOME TAXES |
For the Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands) | ||||||||||||
United States
|
$ | (349,405 | ) | $ | 1,728,441 | $ | 1,265,915 | |||||
Foreign
|
1,281,797 | 2,944,171 | 2,743,680 | |||||||||
Total
|
$ | 932,392 | $ | 4,672,612 | $ | 4,009,595 | ||||||
F-21
For the Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands) | ||||||||||||
Current taxes:
|
||||||||||||
Federal
|
$ | 127,801 | $ | 133,140 | $ | 65,068 | ||||||
State
|
1,613 | 5,162 | 4,069 | |||||||||
Foreign
|
1,326,968 | 832,426 | 633,513 | |||||||||
1,456,382 | 970,728 | 702,650 | ||||||||||
Deferred taxes:
|
||||||||||||
Federal
|
(413,731 | ) | 435,276 | 369,301 | ||||||||
State
|
3,014 | (1,073 | ) | 3,037 | ||||||||
Foreign
|
(825,227 | ) | 455,323 | 382,156 | ||||||||
(1,235,944 | ) | 889,526 | 754,494 | |||||||||
Total
|
$ | 220,438 | $ | 1,860,254 | $ | 1,457,144 | ||||||
For the Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands) | ||||||||||||
Income tax expense at U.S. statutory rate
|
$ | 326,337 | $ | 1,635,414 | $ | 1,403,358 | ||||||
State income tax, less federal benefit
|
3,008 | 2,658 | 24,191 | |||||||||
Taxes related to foreign operations
|
437,396 | 127,614 | 131,370 | |||||||||
Realized tax basis in investment
|
| | (4,387 | ) | ||||||||
Canadian tax rate reduction
|
| (145,398 | ) | (161,073 | ) | |||||||
United Kingdom tax rate increase
|
| | 63,395 | |||||||||
Current and deferred taxes related to currency fluctuations
|
(399,973 | ) | 227,671 | (4,891 | ) | |||||||
Domestic manufacturing deduction
|
(7,312 | ) | (6,656 | ) | (2,644 | ) | ||||||
Net change in tax contingencies
|
(139,590 | ) | | | ||||||||
Increase in valuation allowance
|
2,924 | 12,144 | | |||||||||
All other, net
|
2,352 | 6,807 | 7,825 | |||||||||
$ | 220,438 | $ | 1,860,254 | $ | 1,457,144 | |||||||
F-22
December 31, | ||||||||
2008 | 2007 | |||||||
(In thousands) | ||||||||
Deferred tax assets:
|
||||||||
Deferred income
|
$ | (18,327 | ) | $ | (15,312 | ) | ||
State net operating loss carryforwards
|
(14,420 | ) | (17,454 | ) | ||||
Foreign net operating loss carryforwards
|
(127,393 | ) | (27,275 | ) | ||||
Tax credits
|
(322,351 | ) | (285,493 | ) | ||||
Accrued expenses and liabilities
|
(80,684 | ) | (12,772 | ) | ||||
Other
|
(97,282 | ) | (94,673 | ) | ||||
Total deferred tax assets
|
(660,457 | ) | (452,979 | ) | ||||
Valuation allowance
|
15,068 | 12,144 | ||||||
Net deferred tax assets
|
(645,389 | ) | (440,835 | ) | ||||
Deferred tax liabilities:
|
||||||||
Depreciation, depletion and amortization
|
3,577,990 | 4,152,354 | ||||||
Total deferred tax liabilities
|
3,577,990 | 4,152,354 | ||||||
Net deferred income tax liability
|
$ | 2,932,601 | $ | 3,711,519 | ||||
F-23
Total | ||||
(In thousands) | ||||
Balance at January 1, 2008
|
$ | 508,475 | ||
Additions based on tax positions related to the current year
|
| |||
Additions for tax positions of prior years
|
48,131 | |||
Reductions for tax positions of prior years
|
(335,334 | ) | ||
Settlements
|
(6,037 | ) | ||
Balance at December 31, 2008
|
$ | 213,235 | ||
Jurisdiction
|
||||
United States
|
2004 | |||
Canada
|
2004 | |||
Egypt
|
1998 | |||
Australia
|
2001 | |||
United Kingdom
|
2003 | |||
Argentina
|
2002 |
F-24
7. | CAPITAL STOCK |
2008 | 2007 | 2006 | ||||||||||
Balance, beginning of year
|
332,927,143 | 330,737,425 | 330,121,230 | |||||||||
Treasury shares issued (acquired), net
|
350,895 | 651,022 | (2,170,144 | ) | ||||||||
Shares issued for:
|
||||||||||||
Stock-based compensation plans
|
1,432,026 | 1,538,696 | 2,786,339 | |||||||||
Balance, end of year
|
334,710,064 | 332,927,143 | 330,737,425 | |||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | Income | Shares | Per Share | ||||||||||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||||||||||||||
Basic:
|
||||||||||||||||||||||||||||||||||||
Income attributable to.. common stock
|
$ | 706,274 | 334,351 | $ | 2.11 | $ | 2,806,678 | 332,192 | $ | 8.45 | $ | 2,546,771 | 330,083 | $ | 7.72 | |||||||||||||||||||||
Effect of Dilutive Securities:
|
||||||||||||||||||||||||||||||||||||
Stock options and others
|
$ | | 2,840 | $ | | $ | | 2,404 | $ | | $ | | 3,128 | $ | | |||||||||||||||||||||
Diluted:
|
||||||||||||||||||||||||||||||||||||
Income attributable to common stock, including assumed
conversions
|
$ | 706,274 | 337,191 | $ | 2.09 | $ | 2,806,678 | 334,596 | $ | 8.39 | $ | 2,546,771 | 333,211 | $ | 7.64 | |||||||||||||||||||||
F-25
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Stock-based compensation expensed:
|
||||||||||||
General and administrative
|
$ | 34 | $ | 48 | $ | 22 | ||||||
Lease operating expenses
|
18 | 25 | 13 | |||||||||
Stock-based compensation capitalized
|
21 | 37 | 14 | |||||||||
$ | 73 | $ | 110 | $ | 49 | |||||||
F-26
2008 | 2007 | 2006 | ||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
Average
|
Shares
|
Average
|
Shares
|
Average
|
||||||||||||||||||||
Shares
|
Exercise
|
Under
|
Exercise
|
Under
|
Exercise
|
|||||||||||||||||||
Under Option | Price | Option | Price | Option | Price | |||||||||||||||||||
Outstanding, beginning of year
|
6,964 | $ | 58.31 | 6,971 | $ | 43.41 | $ | 7,480 | $ | 30.55 | ||||||||||||||
Granted
|
403 | 132.37 | 2,403 | 77.08 | 1,805 | 71.63 | ||||||||||||||||||
Exercised
|
(1,161 | ) | 38.79 | (1,976 | ) | 27.54 | (2,021 | ) | 18.99 | |||||||||||||||
Forfeited or expired
|
(238 | ) | 77.54 | (434 | ) | 63.04 | (293 | ) | 57.56 | |||||||||||||||
Outstanding, end of year(1)
|
5,968 | 66.34 | 6,964 | 58.31 | 6,971 | 43.41 | ||||||||||||||||||
Expected to vest(1)
|
2,716 | 80.82 | 3,773 | 71.38 | 3,024 | 59.50 | ||||||||||||||||||
Exercisable, end of year(1)
|
2,950 | 51.53 | 2,772 | 38.53 | 3,612 | 28.41 | ||||||||||||||||||
Available for grant, end of year
|
5,546 | 7,805 | 1,705 | |||||||||||||||||||||
Weighted average fair value of options granted during the year
|
$ | 39.78 | $ | 23.01 | $ | 24.38 | ||||||||||||||||||
(1) | As of December 31, 2008, the weighted average remaining contractual life for options outstanding, expected to vest, and exercisable is 6.8 years, 8.0 years and 5.5 years, respectively. The aggregate intrinsic value of options outstanding, expected to vest and exercisable at year-end was $78 million, $8 million and $70 million, respectively. |
2008 | 2007 | 2006 | ||||||||||
Expected volatility
|
27.93 | % | 24.60 | % | 27.79 | % | ||||||
Expected dividend yields
|
.53 | % | .79 | % | .57 | % | ||||||
Expected term (in years)
|
5.5 | 5.5 | 5.5 | |||||||||
Risk-free rate
|
3.04 | % | 4.51 | % | 4.98 | % |
F-27
Weighted-Average
|
||||||||
Grant-Date
|
||||||||
Restricted Stock
|
Shares | Fair Value | ||||||
Non-vested at January 1, 2008
|
584,850 | $ | 72.66 | |||||
Granted
|
806,396 | 135.46 | ||||||
Vested
|
(189,250 | ) | 70.45 | |||||
Forfeited
|
(38,624 | ) | 99.25 | |||||
Non-vested at December 31, 2008
|
1,163,372 | $ | 115.67 | |||||
F-28
| On May 7, 2008, the Stock Option Plan Committee of the Companys Board of Directors, pursuant to the Companys 2007 Omnibus Equity Compensation Plan, approved the 2008 Share Appreciation Program with a target to increase Apaches share price to $216 by the end of 2012, with an interim goal of $162 to be achieved by the end of 2010. Any awards under the plan would be payable in five equal annual installments. As of December 31, 2008, neither share price threshold had been met. | |
| On May 5, 2005, the Companys stockholders approved the 2005 Share Appreciation Plan with a target to increase Apaches share price to $108 by the end of 2008, with an interim goal of $81 to be achieved by the end of 2007. Awards under the plan are payable in four equal annual installments to eligible employees remaining with the Company. Apaches share price exceeded the interim $81 threshold for the 10-day requirement as of June 14, 2007, and the first and second installments were awarded in July of 2007 and 2008. Apaches share price exceeded the $108 threshold for the 10-day requirement as of February 29, 2008, and the first installment was awarded in March of 2008. | |
| In October 2000, the Company adopted the 2000 Share Appreciation Plan with goals to reach share price targets of $43.29, $51.95 and $77.92 prior to January 1, 2005. Any awards under the plan would be payable in three equal annual installments. The share price targets of $43.29 and $51.95 were met in 2004, and 3.2 million shares of common stock were issued to employees in equal installments in 2004, 2005 and 2006. The third share price target of $77.92 was not met and the related grants were cancelled as of December 31, 2004. |
F-29
Shares Subject to
|
||||||||||||
Conditional Grants | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands) | ||||||||||||
2008 Share Appreciation Program
|
||||||||||||
Outstanding, beginning of year
|
$ | | $ | | $ | | ||||||
Granted
|
2,929 | | | |||||||||
Issued
|
| | | |||||||||
Forfeited or cancelled
|
(115 | ) | | | ||||||||
Outstanding, end of year(1)
|
2,814 | | | |||||||||
Weighted-average fair value of conditional grants(2)
|
$ | 81.78 | $ | | $ | | ||||||
2005 Share Appreciation Plan
|
||||||||||||
Outstanding, beginning of year
|
$ | 2,965 | $ | 3,529 | $ | 3,438 | ||||||
Granted
|
| 171 | 447 | |||||||||
Issued
|
(805 | ) | (331 | ) | | |||||||
Forfeited or cancelled
|
(159 | ) | (404 | ) | (356 | ) | ||||||
Outstanding, end of year(3)
|
2,001 | 2,965 | 3,529 | |||||||||
Weighted-average fair value of conditional grants(4)
|
$ | 26.07 | $ | 26.07 | $ | 26.20 | ||||||
2000 Share Appreciation Plan
|
||||||||||||
Outstanding, beginning of year
|
$ | | $ | | $ | 1,442 | ||||||
Granted
|
| | | |||||||||
Issued
|
| | (1,398 | ) | ||||||||
Forfeited or cancelled
|
| | (44 | ) | ||||||||
Outstanding, end of year
|
$ | | $ | | $ | | ||||||
(1) | Represents shares issuable upon vesting of $216 and $162 per share price goals of 1,685,430 shares and 1,128,320 shares in 2008. | |
(2) | The fair value of each Share Price Goal conditional grant is estimated as of the date of grant using a Monte Carlo simulation with the following weighted-average assumptions used for grants in 2008 (i) risk-free interest rate of 3.01 percent; (ii) expected volatility of 27.89 percent; and (iii) expected dividend yield of .53 percent. | |
(3) | Represents shares issuable upon vesting of $81 and $108 per share price goals of 581,045 shares and 1,420,177 shares, respectively, in 2008, 933,780 shares and 2,031,522 shares, respectively, in 2007 and 1,395,030 shares and 2,134,100 shares, respectively, in 2006. | |
(4) | The fair value of each Share Price Goal conditional grant is estimated as of the date of grant using a Monte Carlo simulation with the following weighted-average assumptions used for grants in 2007 and 2006, respectively: (i) risk-free interest rate of 3.95 and 3.93 percent; (ii) expected volatility of 28.02 and 28.17 percent; and (iii) expected dividend yield of .57 and .56 percent. No grants were made in 2008. |
F-30
For the Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
2008 Share Appreciation Program
|
||||||||||||
Compensation expense
|
$ | 15.2 | $ | | $ | | ||||||
Compensation expense, net of tax
|
9.8 | | | |||||||||
Capitalized costs
|
8.3 | | | |||||||||
2005 Share Appreciation Plan
|
||||||||||||
Compensation expense
|
$ | 9.4 | $ | 10.6 | $ | 12.1 | ||||||
Compensation expense, net of tax
|
6.0 | 6.8 | 7.8 | |||||||||
Capitalized costs
|
4.8 | 5.4 | 6.2 | |||||||||
2000 Share Appreciation Plan
|
||||||||||||
Compensation expense
|
$ | | $ | | $ | 1.1 | ||||||
Compensation expense, net of tax
|
| | 0.7 | |||||||||
Capitalized costs
|
| | 0.6 |
F-31
For the Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands) | ||||||||||||
Currency translation adjustment(1)
|
$ | (108,750 | ) | $ | (108,750 | ) | $ | (108,750 | ) | |||
Unrealized gain (loss) on derivatives (Note 3)
|
137,827 | (411,678 | ) | 83,534 | ||||||||
Unfunded pension and post retirement benefit plan
|
(7,313 | ) | 217 | (6,116 | ) | |||||||
Accumulated other comprehensive loss
|
$ | 21,764 | $ | (520,211 | ) | $ | (31,332 | ) | ||||
(1) | Prior to October 1, 2002, the Companys Canadian subsidiaries functional currency was the Canadian dollar. Translation adjustments resulting from translating the Canadian subsidiaries financial statements into U.S. dollar equivalents were reported separately and accumulated in other comprehensive income (loss). Currency translation adjustments held in other comprehensive income on the balance sheet will remain there indefinitely unless there is a substantially complete liquidation of the Companys Canadian operations. |
F-32
8. | FINANCIAL INSTRUMENTS |
2008 | 2007 | |||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount | Value | Amount | Value | |||||||||||||
(In millions) | ||||||||||||||||
Long-term debt:
|
||||||||||||||||
Apache
|
||||||||||||||||
Money market lines of credit
|
$ | | $ | | $ | 4 | $ | 4 | ||||||||
Commercial paper
|
| | 135 | 135 | ||||||||||||
6.25% debentures due 2012
|
399 | 417 | 398 | 424 | ||||||||||||
5.25% notes due 2013
|
499 | 502 | 499 | 512 | ||||||||||||
6.0% notes due 2013
|
398 | 413 | | | ||||||||||||
5.625% notes due 2017
|
500 | 496 | 500 | 508 | ||||||||||||
6.9% notes due 2018
|
398 | 433 | | | ||||||||||||
7.0% notes due 2018
|
149 | 162 | 149 | 167 | ||||||||||||
7.625% notes due 2019
|
149 | 170 | 149 | 175 | ||||||||||||
7.7% notes due 2026
|
100 | 114 | 100 | 115 | ||||||||||||
7.95% notes due 2026
|
179 | 209 | 179 | 212 | ||||||||||||
6.0% notes due 2037
|
993 | 963 | 993 | 993 | ||||||||||||
7.375% debentures due 2047
|
148 | 167 | 148 | 171 | ||||||||||||
7.625% debentures due 2096
|
149 | 167 | 149 | 174 | ||||||||||||
Subsidiary and other obligations
|
||||||||||||||||
Argentina overdraft lines of credit
|
13 | 13 | 76 | 76 | ||||||||||||
Apache PVG secured facility
|
100 | 100 | | | ||||||||||||
Notes due in 2016 and 2017
|
1 | 1 | 1 | 1 | ||||||||||||
Apache Finance Australia 7.0% notes due 2009
|
100 | 100 | 100 | 103 | ||||||||||||
Apache Finance Canada 4.375% notes due 2015
|
350 | 325 | 350 | 329 | ||||||||||||
Apache Finance Canada 7.75% notes due 2029
|
297 | 340 | 297 | 353 |
9. | COMMITMENTS AND CONTINGENCIES |
F-33
F-34
F-35
F-36
F-37
2008 | 2007 | |||||||||||||||
Pension
|
Postretirement
|
Pension
|
Postretirement
|
|||||||||||||
Benefits | Benefits | Benefits | Benefits | |||||||||||||
(In thousands) | ||||||||||||||||
Change in Projected Benefit Obligation
|
||||||||||||||||
Projected benefit obligation beginning of period
|
$ | 129,883 | $ | 14,918 | $ | 125,627 | $ | 17,226 | ||||||||
Service cost
|
5,554 | 1,484 | 7,255 | 1,552 | ||||||||||||
Interest cost
|
6,705 | 977 | 6,508 | 978 | ||||||||||||
Foreign currency exchange rate changes
|
(37,602 | ) | | 2,131 | | |||||||||||
Amendments
|
| | | | ||||||||||||
Actuarial losses/(gains)
|
(1,619 | ) | 166 | (9,241 | ) | (4,770 | ) | |||||||||
Effect of curtailment and settlements
|
| | | | ||||||||||||
Benefits paid
|
(3,789 | ) | (284 | ) | (2,397 | ) | (180 | ) | ||||||||
Retiree contributions
|
| 138 | | 112 | ||||||||||||
Projected benefit obligation at end of year
|
99,132 | 17,399 | 129,883 | 14,918 | ||||||||||||
Change in Plan Assets
|
||||||||||||||||
Fair value of plan assets at beginning of period
|
122,233 | | 112,821 | | ||||||||||||
Actual return on plan assets
|
(13,337 | ) | | 4,704 | | |||||||||||
Foreign currency exchange rates
|
(32,309 | ) | | 1,881 | | |||||||||||
Employer contributions
|
9,811 | 146 | 5,224 | 68 | ||||||||||||
Benefits paid
|
(3,789 | ) | (284 | ) | (2,397 | ) | (180 | ) | ||||||||
Retiree contributions
|
| 138 | | 112 | ||||||||||||
Fair value of plan assets at end of year
|
82,609 | | 122,233 | | ||||||||||||
Funded status at end of year
|
(16,523 | ) | (17,399 | ) | (7,650 | ) | (14,918 | ) | ||||||||
Amounts recognized in Consolidated Balance Sheet
|
||||||||||||||||
Current liability
|
| (565 | ) | | (363 | ) | ||||||||||
Non current liability
|
(16,523 | ) | (16,834 | ) | (7,650 | ) | (14,555 | ) | ||||||||
(16,523 | ) | (17,399 | ) | (7,650 | ) | (14,918 | ) | |||||||||
Pretax Amounts Recognized in Accumulated Other Comprehensive
Income
|
||||||||||||||||
Accumulated gain (loss)
|
(13,854 | ) | (246 | ) | 1,049 | (80 | ) | |||||||||
Prior service cost
|
| | | | ||||||||||||
Transition asset (obligation)
|
| (353 | ) | | (397 | ) | ||||||||||
(13,854 | ) | (599 | ) | 1,049 | (477 | ) | ||||||||||
Weighted Average Assumptions used as of December 31
|
||||||||||||||||
Discount rate
|
5.50 | % | 6.03 | % | 5.60 | % | 6.01 | % | ||||||||
Salary increases
|
4.50 | % | N/A | 4.40 | % | N/A | ||||||||||
Expected return on assets
|
6.05 | % | N/A | 6.50 | % | N/A | ||||||||||
Healthcare cost trend
|
||||||||||||||||
Initial
|
N/A | 8.00 | % | N/A | 8.00 | % | ||||||||||
Ultimate in 2015
|
N/A | 5.00 | % | N/A | 5.00 | % |
F-38
Percentage of
|
||||||||||||
Plan Assets at
|
||||||||||||
Target Allocation
|
Year-End | |||||||||||
2008 | 2008 | 2007 | ||||||||||
Asset Category
|
||||||||||||
Equity securities
|
50 | % | 45 | % | 50 | % | ||||||
Debt securities
|
50 | 51 | 50 | |||||||||
Cash
|
| 4 | | |||||||||
Total
|
100 | % | 100 | % | 100 | % | ||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
Pension
|
Postretirement
|
Pension
|
Postretirement
|
Pension
|
Postretirement
|
|||||||||||||||||||
Benefits | Benefits | Benefits | Benefits | Benefits | Benefits | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Components of Net Periodic Benefit Costs
|
||||||||||||||||||||||||
Service cost
|
$ | 5,554 | $ | 1,484 | $ | 7,255 | $ | 1,552 | $ | 7,189 | $ | 1,517 | ||||||||||||
Interest cost
|
6,705 | 977 | 6,508 | 978 | 5,218 | 899 | ||||||||||||||||||
Expected return on assets
|
(7,479 | ) | | (7,632 | ) | | (5,750 | ) | | |||||||||||||||
Amortization of:
|
||||||||||||||||||||||||
Transition obligation
|
| 44 | | 44 | | 44 | ||||||||||||||||||
Actuarial (gain)/loss
|
| | | 139 | | 290 | ||||||||||||||||||
Net periodic benefit cost
|
$ | 4,780 | $ | 2,505 | $ | 6,131 | $ | 2,713 | $ | 6,657 | $ | 2,750 | ||||||||||||
Weighted Average Assumptions used to determine Net Periodic
Benefit Costs for the Years ended December 31
|
||||||||||||||||||||||||
Discount rate
|
5.60 | % | 6.01 | % | 5.10 | % | 5.77 | % | 4.70 | % | 5.50 | % | ||||||||||||
Salary increases
|
4.40 | % | N/A | 4.10 | % | N/A | 3.80 | % | N/A | |||||||||||||||
Expected return on assets
|
6.50 | % | N/A | 6.50 | % | N/A | 5.75 | % | N/A | |||||||||||||||
Healthcare cost trend
|
||||||||||||||||||||||||
Initial
|
N/A | 8.00 | % | N/A | 9.00 | % | N/A | 9.00 | % | |||||||||||||||
Ultimate in 2014
|
N/A | 5.00 | % | N/A | 5.00 | % | N/A | 5.00 | % |
F-39
Postretirement Benefits | ||||||||
1% Increase | 1% Decrease | |||||||
(In thousands) | ||||||||
Effect on service and interest cost components
|
$ | 316 | $ | (272 | ) | |||
Effect on postretirement benefit obligation
|
1,873 | (1,647 | ) |
Pension
|
Postretirement
|
|||||||
Benefits | Benefits | |||||||
(In thousands) | ||||||||
2009
|
$ | 1,454 | $ | 565 | ||||
2010
|
2,155 | 750 | ||||||
2011
|
3,761 | 936 | ||||||
2012
|
4,566 | 1,180 | ||||||
2013
|
3,190 | 1,447 | ||||||
Years 2014 2018
|
23,137 | 10,925 |
Net Minimum Commitments
|
Total | 2009 | 2010-2012 | 2013-2014 | 2015 & Beyond | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Drilling rig commitments
|
$ | 889,874 | $ | 516,180 | $ | 372,594 | $ | 1,100 | $ | | ||||||||||
Purchase obligations
|
371,279 | 370,720 | 559 | | | |||||||||||||||
E&D commitments
|
197,512 | 92,459 | 99,670 | 5,383 | | |||||||||||||||
Firm transportation agreements
|
223,153 | 26,541 | 81,234 | 55,496 | 59,882 | |||||||||||||||
Office and related equipment
|
122,599 | 21,354 | 60,758 | 18,962 | 21,525 | |||||||||||||||
Oil and gas operations equipment
|
472,980 | 77,122 | 125,676 | 59,304 | 210,878 | |||||||||||||||
Other
|
3,840 | 3,840 | | | | |||||||||||||||
Total Minimum Commitments
|
$ | 2,281,237 | $ | 1,108,216 | $ | 740,491 | $ | 140,245 | $ | 292,285 | ||||||||||
| Drilling rig commitments include dayrate and other contracts for use of drilling, completion and workover rigs. | |
| Purchase obligations include contractual obligations to buy or build oil and gas plants and facilities. | |
| E&D commitments generally consist of seismic and drilling work programs required to retain acreage, meet contractual obligations of international concessions, or to satisfy minimums associated with farm-in properties. | |
| Firm transportation agreements relate to contractual obligations for capacity rights on third-party pipelines. | |
| Office and related equipment leases include office and other buildings rentals and related equipment leases. | |
| Oil and gas operations equipment includes floating production storage and offloading (FPSOs), compressors, helicopters and boats. |
F-40
10. | FAIR VALUE |
As of December 31, 2008 | ||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||
Quoted Price
|
Significant
|
|||||||||||||||
in Active
|
Significant
|
Unobservable
|
||||||||||||||
Total Fair
|
Markets
|
Other Inputs
|
Inputs
|
|||||||||||||
Value | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
(In millions) | ||||||||||||||||
Assets:
|
||||||||||||||||
Crude Oil and Natural Gas Options
|
$ | 203 | $ | | $ | 203 | $ | | ||||||||
Fixed-Price Oil Swaps
|
16 | | 16 | | ||||||||||||
Liabilities:
|
||||||||||||||||
Crude Oil Swaps
|
$ | 7 | $ | | $ | 7 | $ | |
F-41
11. | MAJOR CUSTOMERS |
12. | BUSINESS SEGMENT INFORMATION |
F-42
Other
|
||||||||||||||||||||||||||||||||
United States | Canada | Egypt | Australia | North Sea | Argentina | International | Total | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
2008
|
||||||||||||||||||||||||||||||||
Oil and gas production revenues
|
$ | 5,083,397 | $ | 1,650,402 | $ | 2,739,246 | $ | 371,669 | $ | 2,103,283 | $ | 379,842 | $ | | $ | 12,327,839 | ||||||||||||||||
Operating Expenses:
|
||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization
|
||||||||||||||||||||||||||||||||
Recurring
|
1,112,989 | 416,880 | 397,573 | 134,926 | 262,787 | 191,282 | | 2,516,437 | ||||||||||||||||||||||||
Additional
|
2,667,440 | 1,689,392 | | | 568,450 | 408,539 | | 5,333,821 | ||||||||||||||||||||||||
Asset retirement obligation accretion
|
66,189 | 14,173 | | 5,921 | 13,215 | 1,850 | | 101,348 | ||||||||||||||||||||||||
Lease operating expenses
|
925,977 | 336,871 | 241,455 | 103,627 | 190,966 | 110,729 | | 1,909,625 | ||||||||||||||||||||||||
Gathering and transportation
|
39,739 | 62,848 | 20,896 | | 28,382 | 4,626 | | 156,491 | ||||||||||||||||||||||||
Taxes other than income
|
211,251 | 42,662 | 8,306 | 10,719 | 695,443 | 16,426 | | 984,807 | ||||||||||||||||||||||||
Operating Income (Loss)(1)
|
$ | 59,812 | $ | (912,424 | ) | $ | 2,071,016 | $ | 116,476 | $ | 344,040 | $ | (353,610 | ) | $ | | 1,325,310 | |||||||||||||||
Other Income (Expense):
|
||||||||||||||||||||||||||||||||
Other
|
61,911 | |||||||||||||||||||||||||||||||
General and administrative
|
(288,794 | ) | ||||||||||||||||||||||||||||||
Financing costs, net
|
(166,035 | ) | ||||||||||||||||||||||||||||||
Income Before Income Taxes
|
$ | 932,392 | ||||||||||||||||||||||||||||||
Net Property and Equipment
|
$ | 10,685,505 | $ | 4,500,040 | $ | 3,615,126 | $ | 2,393,894 | $ | 1,536,202 | $ | 1,200,294 | $ | 27,456 | $ | 23,958,517 | ||||||||||||||||
Total Assets
|
$ | 11,975,654 | $ | 5,846,269 | $ | 4,967,603 | $ | 2,626,588 | $ | 2,287,225 | $ | 1,445,864 | $ | 37,282 | $ | 29,186,485 | ||||||||||||||||
Additions to Net Property and Equipment
|
$ | 2,748,241 | $ | 871,521 | $ | 1,452,089 | $ | 937,875 | $ | 478,987 | $ | 363,018 | $ | 27,457 | $ | 6,879,188 | ||||||||||||||||
2007
|
||||||||||||||||||||||||||||||||
Oil and gas production revenues
|
$ | 4,306,108 | $ | 1,392,856 | $ | 2,011,796 | $ | 535,699 | $ | 1,399,201 | $ | 316,322 | $ | | $ | 9,961,982 | ||||||||||||||||
Operating Expenses:
|
||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization
|
1,074,669 | 413,074 | 306,084 | 190,606 | 196,888 | 166,470 | | 2,347,791 | ||||||||||||||||||||||||
Asset retirement obligation accretion
|
70,006 | 9,144 | | 3,684 | 12,511 | 1,093 | | 96,438 | ||||||||||||||||||||||||
Lease operating expenses
|
802,164 | 331,403 | 174,859 | 81,288 | 182,388 | 80,753 | | 1,652,855 | ||||||||||||||||||||||||
Gathering and transportation
|
38,086 | 54,412 | 15,242 | | 26,647 | 3,020 | | 137,407 | ||||||||||||||||||||||||
Taxes other than income
|
166,798 | 42,598 | 7,887 | 22,497 | 346,500 | 11,367 | | 597,647 | ||||||||||||||||||||||||
Operating Income (Loss)(1)
|
$ | 2,154,385 | $ | 542,225 | $ | 1,507,724 | $ | 237,624 | $ | 634,267 | $ | 53,619 | $ | | 5,129,844 | |||||||||||||||||
Other Income (Expense):
|
||||||||||||||||||||||||||||||||
Other
|
37,770 | |||||||||||||||||||||||||||||||
General and administrative
|
(275,065 | ) | ||||||||||||||||||||||||||||||
Financing costs, net
|
(219,937 | ) | ||||||||||||||||||||||||||||||
Income Before Income Taxes
|
$ | 4,672,612 | ||||||||||||||||||||||||||||||
Net Property and Equipment
|
$ | 11,919,013 | $ | 5,834,792 | $ | 2,560,609 | $ | 1,590,431 | $ | 1,889,651 | $ | 1,437,097 | $ | | $ | 25,231,593 | ||||||||||||||||
Total Assets
|
$ | 12,195,552 | $ | 7,289,118 | $ | 3,360,494 | $ | 1,884,443 | $ | 2,229,502 | $ | 1,664,462 | $ | 11,080 | $ | 28,634,651 | ||||||||||||||||
Additions to Net Property and Equipment
|
$ | 2,912,541 | $ | 836,547 | $ | 1,059,793 | $ | 603,174 | $ | 541,761 | $ | 344,818 | $ | | $ | 6,298,634 | ||||||||||||||||
(1) | Operating Income consists of oil and gas production revenues less depreciation, depletion and amortization, asset retirement obligation accretion, lease operating expenses, gathering and transportation costs, and taxes other than income. |
F-43
Other
|
||||||||||||||||||||||||||||||||
United States | Canada | Egypt | Australia | North Sea | Argentina | International | Total | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
2006
|
||||||||||||||||||||||||||||||||
Oil and gas production revenues
|
$ | 3,027,227 | $ | 1,379,626 | $ | 1,664,103 | $ | 408,453 | $ | 1,355,139 | $ | 167,195 | $ | 72,510 | $ | 8,074,253 | ||||||||||||||||
Operating Expenses:
|
||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization
|
765,564 | 365,369 | 247,354 | 147,413 | 179,625 | 93,025 | 18,009 | 1,816,359 | ||||||||||||||||||||||||
Asset retirement obligation accretion
|
65,357 | 8,506 | | 2,527 | 11,808 | 733 | | 88,931 | ||||||||||||||||||||||||
Lease operating expenses
|
592,281 | 292,576 | 147,656 | 57,942 | 185,902 | 40,807 | 5,398 | 1,322,562 | ||||||||||||||||||||||||
Gathering and transportation
|
31,810 | 50,461 | 10,995 | | 26,387 | 763 | 121 | 120,537 | ||||||||||||||||||||||||
Taxes other than income
|
143,689 | 32,999 | | 19,524 | 394,487 | 2,559 | 4,669 | 597,927 | ||||||||||||||||||||||||
Operating Income (Loss)(1)
|
$ | 1,428,526 | $ | 629,715 | $ | 1,258,098 | $ | 181,047 | $ | 556,930 | $ | 29,308 | $ | 44,313 | 4,127,937 | |||||||||||||||||
Other Income (Expense):
|
||||||||||||||||||||||||||||||||
Other
|
61,333 | |||||||||||||||||||||||||||||||
General and administrative
|
(211,334 | ) | ||||||||||||||||||||||||||||||
Gain on China divestiture
|
173,545 | |||||||||||||||||||||||||||||||
Financing costs, net
|
(141,886 | ) | ||||||||||||||||||||||||||||||
Income Before Income Taxes
|
$ | 4,009,595 | ||||||||||||||||||||||||||||||
Net Property and Equipment
|
$ | 10,139,918 | $ | 5,411,726 | $ | 1,806,901 | $ | 1,184,180 | $ | 1,544,778 | $ | 1,258,749 | $ | | $ | 21,346,252 | ||||||||||||||||
Total Assets
|
$ | 11,486,070 | $ | 5,821,685 | $ | 2,423,655 | $ | 1,322,501 | $ | 1,839,150 | $ | 1,404,382 | $ | 10,732 | $ | 24,308,175 | ||||||||||||||||
Additions to Property and Equipment
|
$ | 3,159,613 | $ | 1,250,355 | $ | 569,316 | $ | 218,345 | $ | 335,055 | $ | 1,311,804 | $ | 11,794 | $ | 6,856,282 | ||||||||||||||||
(1) | Operating Income consists of oil and gas production revenues less depreciation, depletion and amortization, asset retirement obligation accretion, lease operating expenses, gathering and transportation costs, and taxes other than income. |
F-44
13. | SUPPLEMENTAL OIL AND GAS DISCLOSOURES (Unaudited) |
Other
|
||||||||||||||||||||||||||||||||
United States | Canada | Egypt | Australia | North Sea | Argentina | International | Total | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
2008
|
||||||||||||||||||||||||||||||||
Oil and gas production revenues
|
$ | 5,083,397 | $ | 1,650,402 | $ | 2,739,246 | $ | 371,669 | $ | 2,103,283 | $ | 379,842 | $ | | $ | 12,327,839 | ||||||||||||||||
Operating cost:
|
||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization Recurring(1)
|
1,081,027 | 410,047 | 397,573 | 133,126 | 260,831 | 187,918 | | 2,470,522 | ||||||||||||||||||||||||
Additional
|
2,667,440 | 1,689,392 | | | 568,450 | 408,539 | | 5,333,821 | ||||||||||||||||||||||||
Asset retirement obligation accretion
|
66,189 | 14,173 | | 5,921 | 13,215 | 1,850 | | 101,348 | ||||||||||||||||||||||||
Lease operating expenses
|
925,977 | 336,871 | 241,455 | 103,627 | 190,966 | 110,729 | | 1,909,625 | ||||||||||||||||||||||||
Gathering and transportation
|
39,739 | 62,848 | 20,896 | | 28,382 | 4,626 | | 156,491 | ||||||||||||||||||||||||
Production taxes(2)
|
201,590 | 33,643 | | 10,719 | 695,443 | | | 941,395 | ||||||||||||||||||||||||
Income tax
|
36,009 | (215,536 | ) | 998,075 | 35,483 | 172,998 | (116,837 | ) | | 910,192 | ||||||||||||||||||||||
5,017,971 | 2,331,438 | 1,657,999 | 288,876 | 1,930,285 | 596,825 | | 11,823,394 | |||||||||||||||||||||||||
Results of operations
|
$ | 65,426 | $ | (681,036 | ) | $ | 1,081,247 | $ | 82,793 | $ | 172,998 | $ | (216,983 | ) | $ | | $ | 504,445 | ||||||||||||||
Amortization rate per boe
|
$ | 14.08 | $ | 13.11 | $ | 8.48 | $ | 11.26 | $ | 11.89 | $ | 10.49 | $ | | $ | 12.06 | ||||||||||||||||
2007
|
||||||||||||||||||||||||||||||||
Oil and gas production revenues
|
$ | 4,306,108 | $ | 1,392,856 | $ | 2,011,796 | $ | 535,699 | $ | 1,399,201 | $ | 316,322 | $ | | $ | 9,961,982 | ||||||||||||||||
Operating cost:
|
||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization(1)
|
1,048,213 | 400,630 | 306,084 | 189,208 | 196,054 | 163,557 | | 2,303,746 | ||||||||||||||||||||||||
Asset retirement obligation accretion
|
70,006 | 9,144 | | 3,684 | 12,511 | 1,093 | | 96,438 | ||||||||||||||||||||||||
Lease Operating expenses
|
802,164 | 331,403 | 174,859 | 81,288 | 182,388 | 80,753 | | 1,652,855 | ||||||||||||||||||||||||
Gathering and transportation
|
38,086 | 54,412 | 15,242 | | 26,647 | 3,020 | | 137,407 | ||||||||||||||||||||||||
Production taxes(2)
|
152,274 | 34,724 | | 22,497 | 346,500 | | | 555,995 | ||||||||||||||||||||||||
Income tax
|
779,355 | 168,763 | 727,493 | 81,267 | 317,551 | 23,765 | | 2,098,194 | ||||||||||||||||||||||||
2,890,098 | 999,076 | 1,223,678 | 377,944 | 1,081,651 | 272,188 | | 6,844,635 | |||||||||||||||||||||||||
Results of Operations
|
$ | 1,416,010 | $ | 393,780 | $ | 788,118 | $ | 157,755 | $ | 317,550 | $ | 44,134 | $ | | $ | 3,117,347 | ||||||||||||||||
Amortization rate per boe
|
$ | 12.62 | $ | 11.81 | $ | 7.15 | $ | 10.36 | $ | 9.96 | $ | 9.17 | $ | | $ | 10.78 | ||||||||||||||||
2006
|
||||||||||||||||||||||||||||||||
Oil and gas production revenues
|
$ | 3,027,227 | $ | 1,379,626 | $ | 1,664,103 | $ | 408,453 | $ | 1,355,139 | $ | 167,195 | $ | 72,510 | $ | 8,074,253 | ||||||||||||||||
Operating cost:
|
||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization(1)
|
742,981 | 355,446 | 247,354 | 146,406 | 178,682 | 91,562 | 17,991 | 1,780,422 | ||||||||||||||||||||||||
Asset retirement obligation accretion
|
65,357 | 8,506 | | 2,527 | 11,808 | 733 | | 88,931 | ||||||||||||||||||||||||
Lease Operating expenses
|
592,281 | 292,576 | 147,656 | 57,942 | 185,902 | 40,807 | 5,398 | 1,322,562 | ||||||||||||||||||||||||
Gathering and transportation
|
31,810 | 50,461 | 10,995 | | 26,387 | 763 | 121 | 120,537 | ||||||||||||||||||||||||
Production taxes(2)
|
131,600 | 25,867 | | 19,524 | 394,487 | 2,559 | | 574,037 | ||||||||||||||||||||||||
Income tax
|
519,435 | 208,583 | 603,887 | 61,898 | 278,937 | 10,770 | 16,170 | 1,699,680 | ||||||||||||||||||||||||
2,083,464 | 941,439 | 1,009,892 | 288,297 | 1,076,203 | 147,194 | 39,680 | 5,586,169 | |||||||||||||||||||||||||
Results of Operations
|
$ | 943,763 | $ | 438,187 | $ | 654,211 | $ | 120,156 | $ | 278,936 | $ | 20,001 | $ | 32,830 | $ | 2,488,084 | ||||||||||||||||
Amortization rate per boe
|
$ | 10.90 | $ | 9.97 | $ | 6.23 | $ | 8.48 | $ | 8.31 | $ | 9.08 | $ | 15.56 | $ | 9.29 | ||||||||||||||||
(1) | This amount only reflects DD&A of capitalized costs of oil and gas proved properties and, therefore, does not agree with DD&A reflected on Note 11 Business Segment Information. | |
(2) | This amount only reflects amounts directly related to oil and gas producing properties and, therefore, does not agree with taxes other than income reflected on Note 11 Business Segment Information. |
F-45
Other
|
||||||||||||||||||||||||||||||||
United States | Canada | Egypt | Australia | North Sea | Argentina | International | Total | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
2008
|
||||||||||||||||||||||||||||||||
Acquisitions:
|
||||||||||||||||||||||||||||||||
Proved
|
$ | 69,642 | $ | 4,938 | $ | | $ | (500 | ) | $ | | $ | | $ | | $ | 74,080 | |||||||||||||||
Unproved
|
75,437 | | | | | | | 75,437 | ||||||||||||||||||||||||
Exploration
|
382,019 | 253,940 | 192,588 | 293,031 | 107,338 | 256,068 | 27,457 | 1,512,441 | ||||||||||||||||||||||||
Development
|
2,200,910 | 580,406 | 667,860 | 588,539 | 364,421 | 98,074 | | 4,500,210 | ||||||||||||||||||||||||
Costs incurred(1)
|
$ | 2,728,008 | $ | 839,284 | $ | 860,448 | $ | 881,070 | $ | 471,759 | $ | 354,142 | $ | 27,457 | $ | 6,162,168 | ||||||||||||||||
(1) Includes capitalized interest and asset retirement costs as
follows:
|
||||||||||||||||||||||||||||||||
Capitalized interest
|
$ | 20,267 | $ | 12,313 | $ | 7,646 | $ | 8,636 | $ | 703 | $ | 23,988 | $ | | $ | 73,553 | ||||||||||||||||
Asset retirement costs
|
379,189 | 116,967 | | (6,746 | ) | 11,817 | 12,664 | | 513,891 | |||||||||||||||||||||||
2007
|
||||||||||||||||||||||||||||||||
Acquisitions:
|
||||||||||||||||||||||||||||||||
Proved
|
$ | 965,476 | $ | | $ | 19,261 | $ | 10,530 | $ | | $ | 9,259 | $ | | $ | 1,004,526 | ||||||||||||||||
Unproved
|
| 24,474 | | 20,511 | 507 | | | 45,492 | ||||||||||||||||||||||||
Exploration
|
139,092 | 187,312 | 131,552 | 323,553 | 229,946 | 223,865 | | 1,235,320 | ||||||||||||||||||||||||
Development
|
1,762,740 | 593,926 | 480,384 | 231,394 | 309,448 | 97,025 | | 3,474,917 | ||||||||||||||||||||||||
Costs incurred(1)
|
$ | 2,867,308 | $ | 805,712 | $ | 631,197 | $ | 585,988 | $ | 539,901 | $ | 330,149 | $ | | $ | 5,760,255 | ||||||||||||||||
(1) Includes capitalized interest and asset retirement costs as
follows:
|
||||||||||||||||||||||||||||||||
Capitalized interest
|
$ | 20,577 | $ | 13,106 | $ | 6,821 | $ | 6,447 | $ | 1,526 | $ | 20,980 | $ | | $ | 69,457 | ||||||||||||||||
Asset retirement costs
|
271,183 | 117,456 | | 37,866 | | 12,863 | | 439,368 | ||||||||||||||||||||||||
2006
|
||||||||||||||||||||||||||||||||
Acquisitions:
|
||||||||||||||||||||||||||||||||
Proved
|
$ | 1,246,748 | $ | 5,859 | $ | | $ | 23,981 | $ | | $ | 800,673 | $ | | $ | 2,077,261 | ||||||||||||||||
Unproved
|
71,260 | | | | 3,060 | 321,500 | | 395,820 | ||||||||||||||||||||||||
Exploration
|
102,711 | 212,700 | 84,404 | 127,246 | 110,465 | 76,503 | 2,028 | 716,057 | ||||||||||||||||||||||||
Development
|
1,660,523 | 891,008 | 376,877 | 58,573 | 219,033 | 39,067 | 10,260 | 3,255,341 | ||||||||||||||||||||||||
Costs incurred(1)
|
$ | 3,081,242 | $ | 1,109,567 | $ | 461,281 | $ | 209,800 | $ | 332,558 | $ | 1,237,743 | $ | 12,288 | $ | 6,444,479 | ||||||||||||||||
(1) Includes capitalized interest and asset retirement costs as
follows:
|
||||||||||||||||||||||||||||||||
Capitalized interests
|
$ | 29,300 | $ | 21,793 | $ | 6,839 | $ | 3,819 | $ | | $ | | $ | | $ | 61,301 | ||||||||||||||||
Asset retirement costs
|
348,057 | 25,301 | | 2,108 | | 15,146 | | 390,612 |
Other
|
||||||||||||||||||||||||||||||||
United States | Canada | Egypt | Australia | North Sea | Argentina | International | Total | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
2008
|
||||||||||||||||||||||||||||||||
Proved properties
|
$ | 21,275,814 | $ | 7,748,591 | $ | 3,638,368 | $ | 3,121,845 | $ | 3,099,916 | $ | 1,754,747 | $ | | $ | 40,639,281 | ||||||||||||||||
Unproved properties
|
381,258 | 312,616 | 231,169 | 110,348 | 15,724 | 221,775 | 27,457 | 1,300,347 | ||||||||||||||||||||||||
21,657,072 | 8,061,207 | 3,869,537 | 3,232,193 | 3,115,640 | 1,976,522 | 27,457 | 41,939,628 | |||||||||||||||||||||||||
Accumulated DD&A
|
(11,136,475 | ) | (3,970,016 | ) | (1,826,379 | ) | (1,071,364 | ) | (1,588,885 | ) | (856,380 | ) | 1,431 | (20,448,068 | ) | |||||||||||||||||
$ | 10,520,597 | $ | 4,091,191 | $ | 2,043,158 | $ | 2,160,829 | $ | 1,526,755 | $ | 1,120,142 | $ | 28,888 | $ | 21,491,560 | |||||||||||||||||
2007
|
||||||||||||||||||||||||||||||||
Proved properties
|
$ | 18,819,680 | $ | 7,009,747 | $ | 2,834,325 | $ | 2,148,882 | $ | 2,610,429 | $ | 1,222,215 | $ | 432 | $ | 34,645,710 | ||||||||||||||||
Unproved properties
|
315,000 | 312,903 | 174,764 | 202,243 | 34,651 | 400,165 | | 1,439,726 | ||||||||||||||||||||||||
19,134,680 | 7,322,650 | 3,009,089 | 2,351,125 | 2,645,080 | 1,622,380 | 432 | 36,085,436 | |||||||||||||||||||||||||
Accumulated DD&A
|
(7,391,442 | ) | (1,906,208 | ) | (1,482,923 | ) | (952,907 | ) | (759,604 | ) | (263,992 | ) | 999 | (12,756,077 | ) | |||||||||||||||||
$ | 11,743,238 | $ | 5,416,442 | $ | 1,526,166 | $ | 1,398,218 | $ | 1,885,476 | $ | 1,358,388 | $ | 1,431 | $ | 23,329,359 | |||||||||||||||||
F-46
2005
|
||||||||||||||||||||
Total | 2008 | 2007 | 2006 | and Prior | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Property acquisition costs
|
$ | 862,314 | $ | 225,796 | $ | 223,915 | $ | 270,590 | $ | 142,013 | ||||||||||
Exploration and development
|
378,842 | 380,168 | 25,193 | (39,420 | ) | 12,901 | ||||||||||||||
Capitalized interest
|
59,191 | 35,910 | 7,875 | 6,187 | 9,219 | |||||||||||||||
Total
|
$ | 1,300,347 | $ | 641,874 | $ | 256,983 | $ | 237,357 | $ | 164,133 | ||||||||||
F-47
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Thousands
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crude Oil, Condensate and Natural Gas Liquids | Natural Gas |
barrels
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Thousands of barrels) | (Millions of cubic feet) |
of
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
United
|
North
|
United
|
North
|
oil
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
States | Canada | Egypt | Australia | Sea | Argentina | China | Total | States | Canada | Egypt | Australia | Sea | Argentina | China | Total | equivalent) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Proved developed reserves:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2005
|
313,580 | 87,012 | 59,197 | 22,550 | 189,385 | 1,573 | 3,393 | 676,690 | 1,711,060 | 1,799,102 | 605,687 | 649,972 | 7,475 | 2,594 | | 4,775,890 | 1,472,672 | |||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2006
|
343,743 | 102,417 | 58,366 | 20,197 | 178,364 | 25,378 | | 728,464 | 1,840,105 | 1,591,157 | 664,818 | 584,236 | 6,840 | 438,391 | | 5,125,547 | 1,582,722 | |||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2007
|
394,960 | 94,090 | 74,315 | 19,948 | 186,706 | 24,535 | | 794,554 | 1,923,750 | 1,605,675 | 818,509 | 536,131 | 6,304 | 442,058 | | 5,332,427 | 1,683,292 | |||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2008
|
363,516 | 85,038 | 93,103 | 39,758 | 168,925 | 26,752 | | 777,092 | 1,866,988 | 1,594,782 | 1,010,102 | 713,290 | 5,585 | 487,980 | | 5,678,727 | 1,723,547 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total proved reserves:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2005
|
461,568 | 170,197 | 90,893 | 51,322 | 195,262 | 1,661 | 5,007 | 975,910 | 2,566,187 | 2,366,592 | 1,080,357 | 824,817 | 7,475 | 2,594 | | 6,848,022 | 2,117,248 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Extensions, discoveries and other additions
|
12,354 | 18,430 | 18,535 | 23,517 | 21,777 | 3,422 | 3,386 | 101,421 | 253,707 | 248,549 | 151,086 | 46,860 | 118 | 36,986 | | 737,306 | 224,305 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases of minerals in-place
|
53,853 | 643 | | | | 28,351 | | 82,847 | 195,552 | 1,500 | | | | 484,707 | | 681,759 | 196,473 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Revisions of previous estimates
|
(2,009 | ) | 63 | 31 | 24 | | 147 | (19 | ) | (1,763 | ) | (74,225 | ) | (102,922 | ) | 3,965 | 4 | | 1,858 | | (171,320 | ) | (30,317 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Production
|
(27,308 | ) | (8,359 | ) | (20,648 | ) | (4,341 | ) | (21,369 | ) | (3,064 | ) | (1,156 | ) | (86,245 | ) | (243,441 | ) | (147,579 | ) | (79,424 | ) | (67,934 | ) | (753 | ) | (40,878 | ) | | (580,009 | ) | (182,913 | ) | |||||||||||||||||||||||||||||||||||
Sales of properties
|
(3,187 | ) | | | | | (724 | ) | (7,218 | ) | (11,129 | ) | (2,418 | ) | (421 | ) | | | | | | (2,839 | ) | (11,602 | ) | |||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2006
|
495,271 | 180,974 | 88,811 | 70,522 | 195,670 | 29,793 | | 1,061,041 | 2,695,362 | 2,365,719 | 1,155,984 | 803,747 | 6,840 | 485,267 | | 7,512,919 | 2,313,194 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Extensions, discoveries and other additions
|
31,504 | 8,083 | 34,148 | 9,812 | 28,622 | 3,353 | | 115,521 | 217,560 | 122,745 | 178,978 | 414,896 | 169 | 91,236 | | 1,025,584 | 286,452 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases of minerals in-place
|
56,954 | 208 | 186 | 1,424 | | | | 58,772 | 79,532 | 4,179 | | | | | | 83,712 | 72,724 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Revisions of previous estimates
|
5,546 | (3,644 | ) | (6,369 | ) | | | 138 | | (4,328 | ) | 8,881 | (15,889 | ) | (64,196 | ) | | | 287 | | (70,917 | ) | (16,150 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Production
|
(35,938 | ) | (7,666 | ) | (22,168 | ) | (5,029 | ) | (19,575 | ) | (5,198 | ) | | (95,574 | ) | (280,902 | ) | (141,697 | ) | (87,883 | ) | (71,149 | ) | (705 | ) | (73,330 | ) | | (655,667 | ) | (204,850 | ) | ||||||||||||||||||||||||||||||||||||
Sales of properties
|
(1,722 | ) | | | | | | | (1,722 | ) | (21,385 | ) | (1,529 | ) | | | | | | (22,914 | ) | (5,541 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2007
|
551,615 | 177,955 | 94,608 | 76,729 | 204,717 | 28,086 | | 1,133,710 | 2,699,048 | 2,333,528 | 1,182,883 | 1,147,494 | 6,304 | 503,460 | | 7,872,717 | 2,445,829 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Extensions, discoveries and other additions
|
38,010 | 5,623 | 28,966 | 4,401 | 9,288 | 9,261 | | 95,549 | 247,100 | 192,974 | 109,488 | 151,308 | 362 | 114,852 | | 816,084 | 231,563 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases of minerals in-place
|
1,919 | 7 | | | | | | 1,926 | 27,551 | 1,757 | | | | | | 29,308 | 6,810 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Revisions of previous estimates
|
(31,540 | ) | (18,787 | ) | 15,264 | (1,576 | ) | (4,315 | ) | 30 | | (40,924 | ) | (175,834 | ) | (134,563 | ) | 175,125 | (238 | ) | (116 | ) | (330 | ) | | (135,956 | ) | (63,583 | ) | |||||||||||||||||||||||||||||||||||||||
Production
|
(35,057 | ) | (7,038 | ) | (24,432 | ) | (3,019 | ) | (21,775 | ) | (5,598 | ) | | (96,919 | ) | (248,835 | ) | (129,100 | ) | (96,518 | ) | (45,019 | ) | (965 | ) | (71,608 | ) | | (592,045 | ) | (195,593 | ) | ||||||||||||||||||||||||||||||||||||
Sales of properties
|
(10,183 | ) | (2,015 | ) | | | | | | (12,198 | ) | (11,848 | ) | (61,235 | ) | | | | | | (73,083 | ) | (24,378 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2008
|
514,764 | 155,745 | 114,406 | 76,535 | 187,915 | 31,779 | | 1,081,144 | 2,537,182 | 2,203,361 | 1,370,978 | 1,253,545 | 5,585 | 546,374 | | 7,917,025 | 2,400,648 | |||||||||||||||||||||||||||||||||||||||||||||||||||
F-48
United
|
||||||||||||||||||||||||||||
States | Canada(1) | Egypt | Australia | North Sea | Argentina | Total | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
2008
|
||||||||||||||||||||||||||||
Cash inflows
|
$ | 33,163,869 | $ | 19,176,850 | $ | 8,197,873 | $ | 8,081,114 | $ | 7,245,187 | $ | 2,189,600 | $ | 78,054,493 | ||||||||||||||
Production costs
|
(12,106,876 | ) | (10,816,837 | ) | (1,364,304 | ) | (2,484,538 | ) | (4,007,188 | ) | (815,453 | ) | (31,595,196 | ) | ||||||||||||||
Development costs
|
(3,315,013 | ) | (2,038,896 | ) | (1,452,228 | ) | (1,704,401 | ) | (1,100,321 | ) | (180,926 | ) | (9,791,785 | ) | ||||||||||||||
Income tax expense
|
(4,559,309 | ) | (3,685,399 | ) | (1,857,758 | ) | (893,348 | ) | (1,043,415 | ) | (270,928 | ) | (12,310,157 | ) | ||||||||||||||
Net cash flows
|
13,182,671 | 2,635,718 | 3,523,583 | 2,998,827 | 1,094,263 | 922,293 | 24,357,355 | |||||||||||||||||||||
10 percent discount rate
|
(6,660,164 | ) | (1,567,388 | ) | (1,168,561 | ) | (1,515,430 | ) | (230,793 | ) | (267,187 | ) | (11,409,523 | ) | ||||||||||||||
Discounted future net cash flows(2)
|
$ | 6,522,507 | $ | 1,068,330 | $ | 2,355,022 | $ | 1,483,397 | $ | 863,470 | $ | 655,106 | $ | 12,947,832 | ||||||||||||||
2007
|
||||||||||||||||||||||||||||
Cash inflows
|
$ | 65,709,496 | $ | 30,593,185 | $ | 13,218,300 | $ | 11,109,570 | $ | 18,804,621 | $ | 2,196,765 | $ | 141,631,937 | ||||||||||||||
Production costs
|
(14,756,624 | ) | (10,615,928 | ) | (1,441,370 | ) | (2,645,871 | ) | (10,712,341 | ) | (640,022 | ) | (40,812,156 | ) | ||||||||||||||
Development costs
|
(3,570,210 | ) | (2,484,076 | ) | (1,332,022 | ) | (1,861,987 | ) | (872,754 | ) | (144,569 | ) | (10,265,618 | ) | ||||||||||||||
Income tax expense
|
(15,112,020 | ) | (5,049,325 | ) | (3,988,962 | ) | (1,820,006 | ) | (3,586,735 | ) | (364,839 | ) | (29,921,887 | ) | ||||||||||||||
Net cash flows
|
32,270,642 | 12,443,856 | 6,455,946 | 4,781,706 | 3,632,791 | 1,047,335 | 60,632,276 | |||||||||||||||||||||
10 percent discount rate
|
(16,958,060 | ) | (6,987,602 | ) | (2,087,773 | ) | (2,218,830 | ) | (1,338,178 | ) | (294,095 | ) | (29,884,538 | ) | ||||||||||||||
Discounted future net cash flows(2)
|
$ | 15,312,582 | $ | 5,456,254 | $ | 4,368,173 | $ | 2,562,876 | $ | 2,294,613 | $ | 753,240 | $ | 30,747,738 | ||||||||||||||
2006
|
||||||||||||||||||||||||||||
Cash inflows
|
$ | 42,809,947 | $ | 22,835,940 | $ | 9,000,743 | $ | 5,747,306 | $ | 11,736,209 | $ | 1,775,939 | $ | 93,906,084 | ||||||||||||||
Production costs
|
(10,930,520 | ) | (7,602,015 | ) | (1,101,859 | ) | (1,804,495 | ) | (6,905,086 | ) | (427,363 | ) | (28,771,338 | ) | ||||||||||||||
Development costs
|
(3,207,033 | ) | (1,888,896 | ) | (1,554,931 | ) | (985,414 | ) | (672,059 | ) | (190,508 | ) | (8,498,841 | ) | ||||||||||||||
Income tax expense
|
(8,862,385 | ) | (5,049,325 | ) | (2,466,836 | ) | (883,814 | ) | (1,624,701 | ) | (298,424 | ) | (19,185,485 | ) | ||||||||||||||
Net cash flows
|
19,810,009 | 8,295,704 | 3,877,117 | 2,073,583 | 2,534,363 | 859,644 | 37,450,420 | |||||||||||||||||||||
10 percent discount rate
|
(9,910,108 | ) | (4,714,251 | ) | (1,404,781 | ) | (850,124 | ) | (923,183 | ) | (278,584 | ) | (18,081,031 | ) | ||||||||||||||
Discounted future net cash flows(2)
|
$ | 9,899,901 | $ | 3,581,453 | $ | 2,472,336 | $ | 1,223,459 | $ | 1,611,180 | $ | 581,060 | $ | 19,369,389 | ||||||||||||||
1) | Prior to 2007, Canadian provincial tax credits were included in the estimated future net cash flows. Effective January 1, 2007, the Alberta government eliminated the Royalty Tax Credit program. | |
2) | Estimated future net cash flows before income tax expense, discounted at 10 percent per annum, totaled approximately $19.8 billion, $47.5 billion and $29.6 billion as of December 31, 2008, 2007 and 2006, respectively. |
F-49
For the Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands) | ||||||||||||
Sales, net of production costs
|
$ | (9,725,306 | ) | $ | (7,967,797 | ) | $ | (6,192,148 | ) | |||
Net change in prices and production costs
|
(25,450,706 | ) | 15,869,295 | (5,765,792 | ) | |||||||
Discoveries and improved recovery, net of related costs
|
3,132,109 | 5,983,717 | 3,256,269 | |||||||||
Change in future development costs
|
1,335,971 | 289,764 | (665,840 | ) | ||||||||
Revision of quantities
|
214,797 | (546,938 | ) | (439,936 | ) | |||||||
Purchases of minerals in-place
|
1,675,599 | 1,842,457 | 2,161,922 | |||||||||
Accretion of discount
|
4,692,752 | 2,956,636 | 3,592,933 | |||||||||
Change in income taxes
|
7,820,734 | (5,848,139 | ) | 1,119,235 | ||||||||
Sales of properties
|
(653,782 | ) | (83,336 | ) | (73,817 | ) | ||||||
Change in production rates and other
|
(842,074 | ) | (1,117,310 | ) | (2,151,786 | ) | ||||||
$ | (17,799,906 | ) | $ | 11,378,349 | $ | (5,158,960 | ) | |||||
14. | SUPPLEMENTAL QUARTERLY FINANCIAL DATA (Unaudited) |
First | Second | Third | Fourth | Total | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||
2008
|
||||||||||||||||||||
Revenues
|
$ | 3,187,741 | $ | 3,900,191 | $ | 3,364,884 | $ | 1,936,934 | $ | 12,389,750 | ||||||||||
Expenses, net
|
2,166,228 | 2,454,962 | 2,174,059 | 4,882,547 | 11,677,796 | |||||||||||||||
Net income
|
$ | 1,021,513 | $ | 1,445,229 | $ | 1,190,825 | $ | (2,945,613 | ) | $ | 711,954 | |||||||||
Income attributable to common stock
|
$ | 1,020,093 | $ | 1,443,809 | $ | 1,189,405 | $ | (2,947,033 | ) | $ | 706,274 | |||||||||
Net income per common share(1):
|
||||||||||||||||||||
Basic
|
$ | 3.06 | $ | 4.32 | $ | 3.55 | $ | (8.80 | ) | $ | 2.11 | |||||||||
Diluted
|
$ | 3.03 | $ | 4.28 | $ | 3.52 | $ | (8.80 | ) | $ | 2.09 | |||||||||
2007
|
||||||||||||||||||||
Revenues
|
$ | 2,002,875 | $ | 2,472,544 | $ | 2,504,958 | $ | 3,019,375 | $ | 9,999,752 | ||||||||||
Expenses, net
|
1,509,926 | 1,839,006 | 1,891,610 | 1,946,852 | 7,187,394 | |||||||||||||||
Net income
|
$ | 492,949 | $ | 633,538 | $ | 613,348 | $ | 1,072,523 | $ | 2,812,358 | ||||||||||
Income attributable to common stock
|
$ | 491,529 | $ | 632,118 | $ | 611,928 | $ | 1,071,103 | $ | 2,806,678 | ||||||||||
Net income per common share(1):
|
||||||||||||||||||||
Basic
|
$ | 1.48 | $ | 1.91 | $ | 1.84 | $ | 3.22 | $ | 8.45 | ||||||||||
Diluted
|
$ | 1.47 | $ | 1.89 | $ | 1.83 | $ | 3.19 | $ | 8.39 | ||||||||||
(1) | The sum of the individual quarterly net income per common share amounts may not agree with year-to-date net income per common share as each quarterly computation is based on the weighted-average number of common shares outstanding during that period. All potentially dilutive securities were included in each quarterly computation of diluted net income per common share, as none were antidilutive. |
15. | SUPPLEMENTAL GUARANTOR INFORMATION |
F-50
F-51
All Other
|
||||||||||||||||||||||||||||
Subsidiaries
|
||||||||||||||||||||||||||||
Apache
|
Apache
|
Apache
|
Apache
|
of Apache
|
Reclassifications
|
|||||||||||||||||||||||
Corporation | North America | Finance Australia | Finance Canada | Corporation | & Eliminations | Consolidated | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
REVENUES AND OTHER:
|
||||||||||||||||||||||||||||
Oil and gas production revenues
|
$ | 4,552,515 | $ | | $ | | $ | | $ | 7,821,713 | $ | (46,389 | ) | $ | 12,327,839 | |||||||||||||
Equity in net income (loss) of affiliates
|
525,829 | 71,228 | 67,820 | (156,540 | ) | 88,407 | (596,744 | ) | | |||||||||||||||||||
Other
|
25,876 | (30,643 | ) | 30,542 | 58,832 | (19,006 | ) | (3,690 | ) | 61,911 | ||||||||||||||||||
5,104,220 | 40,585 | 98,362 | (97,708 | ) | 7,891,114 | (646,823 | ) | 12,389,750 | ||||||||||||||||||||
OPERATING EXPENSES:
|
||||||||||||||||||||||||||||
Depreciation, depletion and amortization
|
3,276,414 | | | | 4,573,844 | | 7,850,258 | |||||||||||||||||||||
Asset retirement obligation accretion
|
66,189 | | | | 35,159 | | 101,348 | |||||||||||||||||||||
Lease operating expenses
|
821,150 | | | | 1,088,475 | | 1,909,625 | |||||||||||||||||||||
Gathering and transportation
|
38,606 | | | | 164,274 | (46,389 | ) | 156,491 | ||||||||||||||||||||
Taxes other than income
|
169,061 | | | | 815,746 | | 984,807 | |||||||||||||||||||||
General and administrative
|
223,468 | | | | 69,016 | (3,690 | ) | 288,794 | ||||||||||||||||||||
Financing costs, net
|
150,202 | (11,050 | ) | 18,046 | (5,585 | ) | 14,422 | | 166,035 | |||||||||||||||||||
4,745,090 | (11,050 | ) | 18,046 | (5,585 | ) | 6,760,936 | (50,079 | ) | 11,457,358 | |||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
359,130 | 51,635 | 80,316 | (92,123 | ) | 1,130,178 | (596,744 | ) | 932,392 | |||||||||||||||||||
Provision (benefit) for income taxes
|
(352,823 | ) | (11,939 | ) | 9,088 | (28,236 | ) | 604,348 | | 220,438 | ||||||||||||||||||
NET INCOME
|
711,953 | 63,574 | 71,228 | (63,887 | ) | 525,830 | (596,744 | ) | 711,954 | |||||||||||||||||||
Preferred stock dividends
|
5,680 | | | | | | 5,680 | |||||||||||||||||||||
INCOME ATTRIBUTABLE TO COMMON STOCK
|
$ | 706,273 | $ | 63,574 | $ | 71,228 | $ | (63,887 | ) | $ | 525,830 | $ | (596,744 | ) | $ | 706,274 | ||||||||||||
F-52
All Other
|
||||||||||||||||||||||||||||
Subsidiaries
|
||||||||||||||||||||||||||||
Apache
|
Apache
|
Apache
|
Apache
|
of Apache
|
Reclassifications
|
|||||||||||||||||||||||
Corporation | North America | Finance Australia | Finance Canada | Corporation | & Eliminations | Consolidated | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
REVENUES AND OTHER:
|
||||||||||||||||||||||||||||
Oil and gas production revenues
|
$ | 4,243,362 | $ | | $ | | $ | | $ | 5,827,276 | $ | (108,656 | ) | $ | 9,961,982 | |||||||||||||
Equity in net income (loss) of affiliates
|
1,704,390 | 49,183 | 60,985 | 141,181 | | (1,955,739 | ) | | ||||||||||||||||||||
Other
|
13,000 | | (259 | ) | (59,160 | ) | 87,879 | (3,690 | ) | 37,770 | ||||||||||||||||||
5,960,752 | 49,183 | 60,726 | 82,021 | 5,915,155 | (2,068,085 | ) | 9,999,752 | |||||||||||||||||||||
OPERATING EXPENSES:
|
||||||||||||||||||||||||||||
Depreciation, depletion and amortization
|
1,070,058 | | | | 1,277,733 | | 2,347,791 | |||||||||||||||||||||
Asset retirement obligation accretion
|
70,005 | | | | 26,433 | | 96,438 | |||||||||||||||||||||
Lease operating expenses
|
801,937 | | | | 850,918 | | 1,652,855 | |||||||||||||||||||||
Gathering and transportation
|
38,084 | | | | 207,979 | (108,656 | ) | 137,407 | ||||||||||||||||||||
Taxes other than income
|
160,971 | | | | 436,676 | | 597,647 | |||||||||||||||||||||
General and administrative
|
223,229 | | | | 55,526 | (3,690 | ) | 275,065 | ||||||||||||||||||||
Financing costs, net
|
237,892 | | 18,076 | (2,711 | ) | (33,320 | ) | | 219,937 | |||||||||||||||||||
2,602,176 | | 18,076 | (2,711 | ) | 2,821,945 | (112,346 | ) | 5,327,140 | ||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
3,358,576 | 49,183 | 42,650 | 84,732 | 3,093,210 | (1,955,739 | ) | 4,672,612 | ||||||||||||||||||||
Provision (benefit) for income taxes
|
546,218 | | (6,533 | ) | (16,511 | ) | 1,337,080 | | 1,860,254 | |||||||||||||||||||
NET INCOME
|
2,812,358 | 49,183 | 49,183 | 101,243 | 1,756,130 | (1,955,739 | ) | 2,812,358 | ||||||||||||||||||||
Preferred stock dividends
|
5,680 | | | | | | 5,680 | |||||||||||||||||||||
INCOME ATTRIBUTABLE TO COMMON STOCK
|
$ | 2,806,678 | $ | 49,183 | $ | 49,183 | $ | 101,243 | $ | 1,756,130 | $ | (1,955,739 | ) | $ | 2,806,678 | |||||||||||||
F-53
All Other
|
||||||||||||||||||||||||||||
Subsidiaries
|
||||||||||||||||||||||||||||
Apache
|
Apache
|
Apache
|
Apache
|
of Apache
|
Reclassifications
|
|||||||||||||||||||||||
Corporation | North America | Finance Australia | Finance Canada | Corporation | & Eliminations | Consolidated | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
REVENUES AND OTHER:
|
||||||||||||||||||||||||||||
Oil and gas production revenues
|
$ | 2,920,731 | $ | | $ | | $ | | $ | 5,382,157 | $ | (228,635 | ) | $ | 8,074,253 | |||||||||||||
Equity in net income (loss) of affiliates
|
1,795,327 | 33,997 | 41,733 | 277,944 | (45,977 | ) | (2,103,024 | ) | | |||||||||||||||||||
Gain on China divestiture
|
| | | | 173,545 | | 173,545 | |||||||||||||||||||||
Other
|
94,369 | | (63 | ) | | (32,973 | ) | | 61,333 | |||||||||||||||||||
4,810,427 | 33,997 | 41,670 | 277,944 | 5,476,752 | (2,331,659 | ) | 8,309,131 | |||||||||||||||||||||
OPERATING EXPENSES:
|
||||||||||||||||||||||||||||
Depreciation, depletion and amortization
|
752,930 | | | | 1,063,429 | | 1,816,359 | |||||||||||||||||||||
Asset retirement obligation accretion
|
65,357 | | | | 23,574 | | 88,931 | |||||||||||||||||||||
Lease operating expenses
|
587,089 | | | | 964,108 | (228,635 | ) | 1,322,562 | ||||||||||||||||||||
Gathering and transportation
|
31,618 | | | | 88,919 | | 120,537 | |||||||||||||||||||||
Taxes other than income
|
135,257 | | | | 462,669 | | 597,927 | |||||||||||||||||||||
General and administrative
|
161,625 | | | | 49,709 | | 211,334 | |||||||||||||||||||||
Financing costs, net
|
118,429 | | 18,003 | 56,444 | (50,990 | ) | | 141,886 | ||||||||||||||||||||
1,852,306 | | 18,003 | 56,444 | 2,601,418 | (228,635 | ) | 4,299,536 | |||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
2,958,121 | 33,997 | 23,667 | 221,500 | 2,875,334 | (2,103,024 | ) | 4,009,595 | ||||||||||||||||||||
Provision (benefit) for income taxes
|
405,670 | | (10,330 | ) | (18,203 | ) | 1,080,007 | | 1,457,144 | |||||||||||||||||||
NET INCOME
|
2,552,451 | 33,997 | 33,997 | 239,703 | 1,795,327 | (2,103,024 | ) | 2,552,451 | ||||||||||||||||||||
Preferred stock dividends
|
5,680 | | | | | | 5,680 | |||||||||||||||||||||
INCOME ATTRIBUTABLE TO COMMON STOCK
|
$ | 2,546,771 | $ | 33,997 | $ | 33,997 | $ | 239,703 | $ | 1,795,327 | $ | (2,103,024 | ) | $ | 2,546,771 | |||||||||||||
F-54
All Other
|
||||||||||||||||||||||||||||
Subsidiaries
|
||||||||||||||||||||||||||||
Apache
|
Apache
|
Apache
|
Apache
|
of Apache
|
Reclassifications
|
|||||||||||||||||||||||
Corporation | North America | Finance Australia | Finance Canada | Corporation | & Eliminations | Consolidated | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
$ | 1,590,113 | $ | (1,038 | ) | $ | (12,239 | ) | $ | 3,255 | $ | 5,485,253 | $ | | $ | 7,065,344 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||||||||||||||||||
Additions to oil and gas property
|
(1,532,815 | ) | | | | (3,760,947 | ) | | (5,293,762 | ) | ||||||||||||||||||
Acquisition of Anadarko properties
|
| | | | | |||||||||||||||||||||||
Additions to gathering, transmission and processing facilities
|
(321 | ) | | | | (678,763 | ) | | (679,084 | ) | ||||||||||||||||||
Restricted cash
|
(13,880 | ) | | | | | | (13,880 | ) | |||||||||||||||||||
Proceeds from sales of oil and gas properties
|
206,047 | | | | 101,927 | | 307,974 | |||||||||||||||||||||
Investment in and advances to subsidiaries, net
|
(198,164 | ) | (12,977 | ) | | | | 211,141 | | |||||||||||||||||||
Other, net
|
384,782 | | | | (449,008 | ) | | (64,226 | ) | |||||||||||||||||||
NET CASH USED IN INVESTING ACTIVITIES
|
(1,154,351 | ) | (12,977 | ) | | | (4,786,791 | ) | 211,141 | (5,742,978 | ) | |||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||||||||||||||||||
Commercial paper and bank loan borrowings, net
|
(138,231 | ) | (6,872 | ) | (737 | ) | (2,202 | ) | 153,117 | (104,878 | ) | (99,803 | ) | |||||||||||||||
Fixed-rate debt borrowings, net
|
796,315 | | | | | | 796,315 | |||||||||||||||||||||
Payments on fixed-rate debt
|
| | | | (353 | ) | | (353 | ) | |||||||||||||||||||
Dividends paid
|
(239,358 | ) | | | | | | (239,358 | ) | |||||||||||||||||||
Common stock activity
|
31,513 | 19,977 | 12,977 | (1,090 | ) | 74,399 | (106,263 | ) | 31,513 | |||||||||||||||||||
Treasury stock activity, net
|
4,498 | | | | | | 4,498 | |||||||||||||||||||||
Purchase of short-term investing
|
(791,999 | ) | | | | | | (791,999 | ) | |||||||||||||||||||
Cost of debt and equity transactions
|
(7,050 | ) | | | | | | (7,050 | ) | |||||||||||||||||||
Other
|
46,951 | | | | (7,453 | ) | | 39,498 | ||||||||||||||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
(297,361 | ) | 13,105 | 12,240 | (3,292 | ) | 219,710 | (211,141 | ) | (266,739 | ) | |||||||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
138,401 | (910 | ) | 1 | (37 | ) | 918,172 | | 1,005,627 | |||||||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
3,626 | 484 | 1 | 1,751 | 119,961 | | 125,823 | |||||||||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$ | 142,027 | $ | (426 | ) | $ | 2 | $ | 1,714 | $ | 1,038,133 | $ | | $ | 1,181,450 | |||||||||||||
F-55
All Other
|
||||||||||||||||||||||||||||
Subsidiaries
|
||||||||||||||||||||||||||||
Apache
|
Apache
|
Apache
|
Apache
|
of Apache
|
Reclassifications
|
|||||||||||||||||||||||
Corporation | North America | Finance Australia | Finance Canada | Corporation | & Eliminations | Consolidated | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
$ | 3,536,130 | $ | | $ | (18,622 | ) | $ | (990,754 | ) | $ | 3,150,679 | $ | | $ | 5,677,433 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||||||||||||||||||
Additions to oil and gas property
|
(1,748,063 | ) | | | | (2,574,406 | ) | | (4,322,469 | ) | ||||||||||||||||||
Acquisition of Anadarko properties
|
(1,004,581 | ) | | | | (12 | ) | | (1,004,593 | ) | ||||||||||||||||||
Additions to gathering, transmission and processing facilities
|
(1,062 | ) | | | | (478,812 | ) | | (479,874 | ) | ||||||||||||||||||
Restricted cash
|
||||||||||||||||||||||||||||
Proceeds from sales of oil and gas properties
|
4,623 | | | | 62,860 | | 67,483 | |||||||||||||||||||||
Investment in and advances to subsidiaries, net
|
(1,123,148 | ) | (24,977 | ) | | | (1,181,454 | ) | 2,329,579 | | ||||||||||||||||||
Other, net
|
(71,752 | ) | | | | (134,724 | ) | | (206,476 | ) | ||||||||||||||||||
NET CASH USED IN INVESTING ACTIVITIES
|
(3,943,983 | ) | (24,977 | ) | | | (4,306,548 | ) | 2,329,579 | 5,945,929 | ||||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||||||||||||||||||
Commercial paper and bank loan borrowings, net
|
(1,431,714 | ) | | 163,645 | (377 | ) | 93,696 | (237,500 | ) | (1,412,250 | ) | |||||||||||||||||
Fixed-rate debt borrowings, net
|
1,992,290 | | | | | | 1,992,290 | |||||||||||||||||||||
Payments on fixed-rate debt
|
| | (170,000 | ) | | (3,000 | ) | | (173,000 | ) | ||||||||||||||||||
Dividends paid
|
(204,753 | ) | | | | | | (204,753 | ) | |||||||||||||||||||
Common stock activity
|
29,682 | 24,977 | 24,977 | 992,881 | 1,049,244 | (2,092,079 | ) | 29,682 | ||||||||||||||||||||
Treasury stock activity, net
|
14,279 | | | | | | 14,279 | |||||||||||||||||||||
Cost of debt and equity transactions
|
(18,179 | ) | | | | | | (18,179 | ) | |||||||||||||||||||
Other
|
25,726 | | | | | | 25,726 | |||||||||||||||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
407,331 | 24,977 | 18,622 | 992,504 | 1,139,940 | (2,329,579 | ) | 253,795 | ||||||||||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(522 | ) | | | 1,750 | (15,929 | ) | | (14,701 | ) | ||||||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
4,148 | | 1 | 1 | 136,374 | | 140,524 | |||||||||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$ | 3,626 | $ | | $ | 1 | $ | 1,751 | $ | 120,445 | $ | | $ | 125,823 | ||||||||||||||
F-56
All Other
|
||||||||||||||||||||||||||||
Subsidiaries
|
||||||||||||||||||||||||||||
Apache
|
Apache
|
Apache
|
Apache
|
of Apache
|
Reclassifications
|
|||||||||||||||||||||||
Corporation | North America | Finance Australia | Finance Canada | Corporation | & Eliminations | Consolidated | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
$ | 1,508,882 | | $ | (20,706 | ) | $ | (21,372 | ) | $ | 2,846,102 | $ | | $ | 4,312,906 | |||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||||||||||||||||||
Additions to oil and gas property
|
(1,834,732 | ) | | | | (2,056,907 | ) | | (3,891,639 | ) | ||||||||||||||||||
Acquisition of BP p.l.c. properties
|
(833,820 | ) | | | | | | (833,820 | ) | |||||||||||||||||||
Acquisition of Pioneers Argentine operations
|
| | | | (704,809 | ) | | (704,809 | ) | |||||||||||||||||||
Acquisition of Amerada Hess properties
|
(229,134 | ) | | | | | | (229,134 | ) | |||||||||||||||||||
Acquisitions of Pan American Fueguina S.R.L. properties
|
| | | | (396,056 | ) | | (396,056 | ) | |||||||||||||||||||
Additions to gathering, transmission and processing facilities
|
(53,656 | ) | | | | (194,933 | ) | | (248,589 | ) | ||||||||||||||||||
Proceeds from China divestiture
|
| | | | 264,081 | | 264,081 | |||||||||||||||||||||
Proceeds from sales of Egyptian properties
|
| | | | 409,203 | | 409,203 | |||||||||||||||||||||
Proceeds from sales of oil and gas properties
|
| | | | 4,740 | | 4,740 | |||||||||||||||||||||
Investment in and advances to subsidiaries, net
|
6,270 | (18,050 | ) | | | (41,333 | ) | 53,113 | | |||||||||||||||||||
Other, net
|
120,997 | | | | (270,556 | ) | | (149,559 | ) | |||||||||||||||||||
NET CASH USED IN INVESTING ACTIVITIES
|
(2,824,075 | ) | (18,050 | ) | | | (2,986,570 | ) | 53,113 | (5,775,582 | ) | |||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||||||||||||||||||
Debt borrowings
|
1,714,813 | | 2,654 | 1,651 | 21,685 | 39,160 | 1,779,963 | |||||||||||||||||||||
Payments on debt
|
(143,900 | ) | | | | (6,366 | ) | | (150,226 | ) | ||||||||||||||||||
Dividends paid
|
(154,143 | ) | | | | | | (154,143 | ) | |||||||||||||||||||
Common stock activity
|
31,963 | 18,050 | 18,050 | 19,721 | 36,452 | (92,273 | ) | 31,963 | ||||||||||||||||||||
Treasury stock activity, net
|
(166,907 | ) | | | | | | (166,907 | ) | |||||||||||||||||||
Cost of debt and equity transactions
|
(2,061 | ) | | | | | | (2,061 | ) | |||||||||||||||||||
Other
|
35,791 | | | | | | 35,791 | |||||||||||||||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
1,315,556 | 18,050 | 20,704 | 21,372 | 51,771 | (53,113 | ) | 1,374,340 | ||||||||||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
363 | | (2 | ) | | (88,697 | ) | | (88,336 | ) | ||||||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
3,785 | | 2 | 1 | 225,072 | | 228,860 | |||||||||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$ | 4,148 | $ | | $ | | $ | 1 | $ | 136,375 | $ | | $ | 140,524 | ||||||||||||||
F-57
F-58
F-59
(1) | Executive Committee | |
(2) | Audit Committee | |
(3) | Management Development and Compensation Committee | |
(4) | Corporate Governance and Nominating Committee | |
(5) | Stock Option Plan Committee |
Dividends
|
||||||||||||||||
Price Range | per Share | |||||||||||||||
High | Low | Declared | Paid | |||||||||||||
2008
|
||||||||||||||||
First Quarter
|
$ | 122.34 | $ | 84.52 | $ | .25 | $ | .15 | ||||||||
Second Quarter
|
149.23 | 117.65 | .15 | .25 | ||||||||||||
Third Quarter
|
145.00 | 94.82 | .15 | .15 | ||||||||||||
Fourth Quarter
|
103.17 | 57.11 | .15 | .15 | ||||||||||||
2007
|
||||||||||||||||
First Quarter
|
$ | 73.44 | $ | 63.01 | $ | .15 | $ | .15 | ||||||||
Second Quarter
|
87.82 | 70.53 | .15 | .15 | ||||||||||||
Third Quarter
|
91.25 | 73.41 | .15 | .15 | ||||||||||||
Fourth Quarter
|
109.32 | 87.44 | .15 | .15 |
| Apache Finance Canadas 7.75% notes, due 2029 (symbol APA29) |
Exhibit
2
.1
Agreement and Plan of Merger among Registrant, YPY Acquisitions,
Inc. and The Phoenix Resource Companies, Inc., dated
March 27, 1996 (incorporated by reference to
Exhibit 2.1 to Registrants Registration Statement on
Form S-4,
Registration
No. 333-02305,
filed April 5, 1996).
2
.2
Purchase and Sale Agreement by and between BP
Exploration & Production Inc., as seller, and
Registrant, as buyer, dated January 11, 2003 (incorporated
by reference to Exhibit 2.1 to Registrants Current
Report on
Form 8-K,
dated and filed January 13, 2003, SEC File
No. 001-4300).
2
.3
Sale and Purchase Agreement by and between BP Exploration
Operating Company Limited, as seller, and Apache North Sea
Limited, as buyer, dated January 11, 2003 (incorporated by
reference to Exhibit 2.2 to Registrants Current
Report on
Form 8-K,
dated and filed January 13, 2003, SEC File
No. 001-4300).
3
.1
Restated Certificate of Incorporation of Registrant, dated
February 11, 2004, as filed with the Secretary of State of
Delaware on February 12, 2004 (incorporated by reference to
Exhibit 3.1 to Registrants Annual Report on
Form 10-K
for year ended December 31, 2003, SEC File
No. 001-4300).
3
.2
Bylaws of Registrant, as amended December 14, 2006
(incorporated by reference to Exhibit 3.2 to
Registrants Annual Report on
Form 10-K
for year ended December 31, 2006, SEC File
No. 001-4300).
4
.1
Form of Certificate for Registrants Common Stock
(incorporated by reference to Exhibit 4.1 to
Registrants Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2004, SEC File
No. 001-4300).
4
.2
Form of Certificate for Registrants 5.68% Cumulative
Preferred Stock, Series B (incorporated by reference to
Exhibit 4.2 to Amendment No. 2 on
Form 8-K/A
to Registrants Current Report on
Form 8-K,
dated and filed April 18, 1998, SEC File
No. 001-4300).
4
.3
Rights Agreement, dated January 31, 1996, between
Registrant and Norwest Bank Minnesota, N.A., rights agent,
relating to the declaration of a rights dividend to
Registrants common shareholders of record on
January 31, 1996 (incorporated by reference to
Exhibit(a) to Registrants Registration Statement on
Form 8-A,
dated January 24, 1996, SEC File
No. 001-4300).
4
.4
Amendment No. 1, dated as of January 31, 2006, to the
Rights Agreement dated as of December 31, 1996, between
Apache Corporation, a Delaware corporation, and Wells Fargo
Bank, N.A. (successor to Norwest Bank Minnesota, N.A.)
(incorporated by reference to Exhibit 4.4 to
Registrants Amendment No. 1 to Registration Statement
on
Form 8-A,
dated January 31, 2006, SEC File
No. 001-4300).
4
.5
Senior Indenture, dated February 15, 1996, between
Registrant and JPMorgan Chase Bank, formerly known as The Chase
Manhattan Bank, as trustee, governing the senior debt securities
and guarantees (incorporated by reference to Exhibit 4.6 to
Registrants Registration Statement on
Form S-3,
dated May 23, 2003, Reg.
No. 333-105536).
4
.6
First Supplemental Indenture to the Senior Indenture, dated as
of November 5, 1996, between Registrant and JPMorgan Chase
Bank, formerly known as The Chase Manhattan Bank, as trustee,
governing the senior debt securities and guarantees
(incorporated by reference to Exhibit 4.7 to
Registrants Registration Statement on
Form S-3,
dated May 23, 2003, Reg.
No. 333-105536).
4
.7
Form of Indenture among Apache Finance Pty Ltd, Registrant and
The Chase Manhattan Bank, as trustee, governing the debt
securities and guarantees (incorporated by reference to
Exhibit 4.1 to Registrants Registration Statement on
Form S-3,
dated November 12, 1997, Reg.
No. 333-339973).
4
.8
Form of Indenture among Registrant, Apache Finance Canada
Corporation and The Chase Manhattan Bank, as trustee, governing
the debt securities and guarantees (incorporated by reference to
Exhibit 4.1 to Amendment No. 1 to Registrants
Registration Statement on
Form S-3,
dated November 12, 1999, Reg.
No. 333-90147).
10
.1
Form of Amended and Restated Credit Agreement, dated as of
May 9, 2006, among Registrant, the Lenders named therein,
JPMorgan Chase Bank, as Administrative Agent, Citibank, N.A. and
Bank of America, N.A., as Co-Syndication Agents, and BNP Paribas
and UBS Loan Finance LLC, as Co-Documentation Agents
(incorporated by reference to Exhibit 10.1 to
Registrants Annual Report on
Form 10-K
for year ended December 31, 2006, SEC File
No. 001-4300).
Table of Contents
Exhibit
10
.2
Form of Request for Approval of Extension of Maturity Date and
Amendment, dated as of April 5, 2007, among Registrant, the
Lenders named therein, JPMorgan Chase Bank, as Administrative
Agent, Citibank, N.A. and Bank of America, N.A., as
Co-Syndication Agents, and BNP Paribas and UBS Loan Finance LLC,
as Co-Documentation Agents (incorporated by reference to
Exhibit 10.2 to Registrants Annual Report on
Form 10-K
for year ended December 31, 2007, SEC File
No. 001-4300).
10
.3
Form of Request Form of Request for Approval of Extension of
Maturity Date and Amendment, dated as of February 18, 2008,
among Registrant, the Lenders named therein, JPMorgan Chase
Bank, as Administrative Agent, Citibank, N.A. and Bank of
America, N.A., as Co-Syndication Agents, and BNP Paribas and UBS
Loan Finance LLC, as Co-Documentation Agents (incorporated by
reference to Exhibit 10.1 to Registrants Quarterly
Report on
Form 10-Q
for the quarter ended March 31, 2008, SEC File
No. 001-4300).
10
.4
Form of Credit Agreement, dated as of May 12, 2005, among
Registrant, the Lenders named therein, JPMorgan Chase Bank,
N.A., as Global Administrative Agent, J.P. Morgan
Securities Inc. and Banc of America Securities, LLC, as Co-Lead
Arrangers and Joint Bookrunners, Bank of America, N.A. and
Citibank, N.A., as U.S. Co-Syndication Agents, and Calyon New
York Branch and Société Générale, as U.S.
Co-Documentation Agents (excluding exhibits and schedules)
(incorporated by reference to Exhibit 10.01 to
Registrants Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2005, SEC File
No. 001-4300).
10
.5
Form of Credit Agreement, dated as of May 12, 2005, among
Apache Canada Ltd, a wholly-owned subsidiary of Registrant, the
Lenders named therein, JPMorgan Chase Bank, N.A., as Global
Administrative Agent, RBC Capital Markets and BMO Nesbitt Burns,
as Co-Lead Arrangers and Joint Bookrunners, Royal Bank of
Canada, as Canadian Administrative Agent, Bank of Montreal and
Union Bank of California, N.A., Canada Branch, as Canadian
Co-Syndication Agents, and The Toronto-Dominion Bank and BNP
Paribas (Canada), as Canadian Co-Documentation Agents (excluding
exhibits and schedules) (incorporated by reference to
Exhibit 10.02 to Registrants Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2005, SEC File
No. 001-4300).
10
.6
Form of Credit Agreement, dated as of May 12, 2005, among
Apache Energy Limited, a wholly-owned subsidiary of Registrant,
the Lenders named therein, JPMorgan Chase Bank, N.A., as Global
Administrative Agent, Citigroup Global Markets Inc. and Deutsche
Bank Securities Inc., as Co-Lead Arrangers and Joint
Bookrunners, Citisecurities Limited, as Australian
Administrative Agent, Deutsche Bank AG, Sydney Branch, and
JPMorgan Chase Bank, as Australian Co-Syndication Agents, and
Bank of America, N.A., Sydney Branch, and UBS AG, Australia
Branch, as Australian Co-Documentation Agents (excluding
exhibits and schedules) (incorporated by reference to
Exhibit 10.03 to Registrants Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2005, SEC File
No. 001-4300).
10
.7
Form of Request for Approval of Extension of Maturity Date and
Amendment, dated April 5, 2007, among Registrant, Apache
Canada Ltd., Apache Energy Limited, the Lenders named therein,
JPMorgan Chase Bank, N.A., as Global Administrative Agent, and
the other agents party thereto (incorporated by reference to
Exhibit 10.6 to Registrants Annual Report on
Form 10-K
for year ended December 31, 2007, SEC File
No. 001-4300).
10
.8
Form of Request for Approval of Extension of Maturity Date and
Amendment, dated February 18, 2008, among Registrant,
Apache Canada Ltd., Apache Energy Limited, the Lenders named
therein, JPMorgan Chase Bank, N.A., as Global Administrative
Agent, and the other agents party thereto (incorporated by
reference to Exhibit 10.2 to Registrants Quarterly
Report on
Form 10-Q
for the quarter ended March 31, 2008, SEC File
No. 001-4300).
Table of Contents
Exhibit
10
.9
Concession Agreement for Petroleum Exploration and Exploitation
in the Khalda Area in Western Desert of Egypt by and among Arab
Republic of Egypt, the Egyptian General Petroleum Corporation
and Phoenix Resources Company of Egypt, dated April 6, 1981
(incorporated by reference to Exhibit 19(g) to
Phoenixs Annual Report on
Form 10-K
for year ended December 31, 1984, SEC File
No. 1-547).
10
.10
Amendment, dated July 10, 1989, to Concession Agreement for
Petroleum Exploration and Exploitation in the Khalda Area in
Western Desert of Egypt by and among Arab Republic of Egypt, the
Egyptian General Petroleum Corporation and Phoenix Resources
Company of Egypt (incorporated by reference to
Exhibit 10(d)(4) to Phoenixs Quarterly Report on
Form 10-Q
for quarter ended June 30, 1989, SEC File
No. 1-547).
10
.11
Farmout Agreement, dated September 13, 1985 and relating to
the Khalda Area Concession, by and between Phoenix Resources
Company of Egypt and Conoco Khalda Inc. (incorporated by
reference to Exhibit 10.1 to Phoenixs Registration
Statement on
Form S-1,
Registration
No. 33-1069,
filed October 23, 1985).
10
.12
Amendment, dated March 30, 1989, to Farmout Agreement
relating to the Khalda Area Concession, by and between Phoenix
Resources Company of Egypt and Conoco Khalda Inc. (incorporated
by reference to Exhibit 10(d)(5) to Phoenixs
Quarterly Report on
Form 10-Q
for quarter ended June 30, 1989, SEC File
No. 1-547).
10
.13
Amendment, dated May 21, 1995, to Concession Agreement for
Petroleum Exploration and Exploitation in the Khalda Area in
Western Desert of Egypt between Arab Republic of Egypt, the
Egyptian General Petroleum Corporation, Repsol Exploration Egypt
S.A., Phoenix Resources Company of Egypt and Samsung Corporation
(incorporated by reference to Exhibit 10.12 to
Registrants Annual Report on
Form 10-K
for year ended December 31, 1997, SEC File
No. 001-4300).
10
.14
Concession Agreement for Petroleum Exploration and Exploitation
in the Qarun Area in Western Desert of Egypt, between Arab
Republic of Egypt, the Egyptian General Petroleum Corporation,
Phoenix Resources Company of Qarun and Apache Oil Egypt, Inc.,
dated May 17, 1993 (incorporated by reference to
Exhibit 10(b) to Phoenixs Annual Report on
Form 10-K
for year ended December 31, 1993, SEC File
No. 1-547).
10
.15
Agreement for Amending the Gas Pricing Provisions under the
Concession Agreement for Petroleum Exploration and Exploitation
in the Qarun Area, effective June 16, 1994 (incorporated by
reference to Exhibit 10.18 to Registrants Annual
Report on
Form 10-K
for year ended December 31, 1996, SEC File
No. 001-4300).
10
.16
Apache Corporation Corporate Incentive Compensation Plan A
(Senior Officers Plan), dated July 16, 1998
(incorporated by reference to Exhibit 10.13 to
Registrants Annual Report on
Form 10-K
for year ended December 31, 1998, SEC File
No. 001-4300).
*10
.17
First Amendment to Apache Corporation Corporate Incentive
Compensation Plan A, dated November 20, 2008, effective as
of January 1, 2005.
10
.18
Apache Corporation Corporate Incentive Compensation Plan B
(Strategic Objectives Format), dated July 16, 1998
(incorporated by reference to Exhibit 10.14 to
Registrants Annual Report on
Form 10-K
for year ended December 31, 1998, SEC File
No. 001-4300).
*10
.19
First Amendment to Apache Corporation Corporate Incentive
Compensation Plan B, dated November 20, 2008, effective as
of January 1, 2005.
*10
.20
Apache Corporation 401(k) Savings Plan, dated January 1,
2008.
*10
.21
Amendment to Apache Corporation 401(k) Savings Plan, dated
January 29, 2009, effective as of January 1, 2009,
except as otherwise specified.
*10
.22
Apache Corporation Money Purchase Retirement Plan, dated
January 1, 2008.
*10
.23
Amendment to Apache Corporation Money Purchase Retirement Plan,
dated January 29, 2009, effective as of January 1,
2009, except as otherwise specified.
*10
.24
Non-Qualified Retirement/Savings Plan of Apache Corporation,
amended and restated as of January 1, 2009.
*10
.25
Apache Corporation 2007 Omnibus Equity Compensation Plan, as
amended and restated November 19, 2008, effective as of
May 2, 2007.
Table of Contents
Exhibit
10
.26
Apache Corporation 1995 Stock Option Plan, as amended and
restated August 14, 2008 (incorporated by reference to
Exhibit 10.1 to Registrants Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2008, SEC File
No. 001-4300).
10
.27
Apache Corporation 2000 Share Appreciation Plan, as amended
and restated September 15, 2005, effective as of
January 1, 2005 (incorporated by reference to
Exhibit 10.4 to Registrants Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2005, SEC File
No. 001-4300).
10
.28
Apache Corporation 1996 Performance Stock Option Plan, as
amended and restated August 14, 2008 (incorporated by
reference to Exhibit 10.02 to Registrants Quarterly
Report on
Form 10-Q
for the quarter ended September 30, 2008, SEC File
No. 001-4300).
10
.29
Apache Corporation 1998 Stock Option Plan, as amended and
restated August 14, 2008 (incorporated by reference to
Exhibit 10.3 to Registrants Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2008, SEC File
No. 001-4300).
10
.30
Apache Corporation 2000 Stock Option Plan, as amended and
restated August 14, 2008 (incorporated by reference to
Exhibit 10.4 to Registrants Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2008, SEC File
No. 001-4300).
10
.31
Apache Corporation 2003 Stock Appreciation Rights Plan, as
amended and restated August 14, 2008 (incorporated by
reference to Exhibit 10.5 to Registrants Quarterly
Report on
Form 10-Q
for quarter ended September 30, 2008, SEC File
No. 001-4300).
10
.32
Apache Corporation 2005 Stock Option Plan, as amended and
restated August 14, 2008 (incorporated by reference to
Exhibit 10.6 to Registrants Quarterly Report on
Form 10-Q
for quarter ended September 30, 2008, Commission File
No. 001-4300).
10
.33
Apache Corporation 2005 Share Appreciation Plan, as amended
and restated August 14, 2008 (incorporated by reference to
Exhibit 10.7 to Registrants Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2008, Commission File
No. 001-4300).
10
.34
Apache Corporation 2008 Share Appreciation Program
Specifications, pursuant to Apache Corporation 2007 Omnibus
Equity Compensation Plan (incorporated by reference to
Exhibit 10.3 to Registrants Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2008, SEC File
No. 001-4300).
*10
.35
Apache Corporation Income Continuance Plan, as amended and
restated November 20, 2008, effective as of January 1,
2005.
*10
.36
Apache Corporation Deferred Delivery Plan, as amended and
restated November 19, 2008, effective as of January 1,
2009, except as otherwise specified.
*10
.37
Apache Corporation Executive Restricted Stock Plan, as amended
and restated November 19, 2008.
*10
.38
Apache Corporation Non-Employee Directors Compensation
Plan, as amended and restated November 20, 2008, effective
as of January 1, 2009.
*10
.39
Apache Corporation Outside Directors Retirement Plan, as
amended and restated November 20, 2008, effective as of
January 1, 2009.
10
.40
Apache Corporation Equity Compensation Plan for Non-Employee
Directors, as amended and restated February 8, 2007
(incorporated by reference to Exhibit 10.2 to
Registrants Quarterly Report on
Form 10-Q
for quarter ended March 31, 2007, SEC File
No. 001-4300).
10
.41
Apache Corporation Non-Employee Directors Restricted Stock
Units Program Specifications, dated August 14, 2008,
pursuant to Apache Corporation 2007 Omnibus Equity Compensation
Plan (incorporated by reference to Exhibit 10.9 to
Registrants Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2008, SEC File
No. 001-4300).
10
.42
Restated Employment and Consulting Agreement, dated
January 15, 2009, between Registrant and Raymond Plank
(incorporated by reference to Exhibit 10.1 to
Registrants Current Report on
Form 8-K,
dated January 15, 2009, filed January 16, 2009, SEC
File
No. 001-4300).
10
.43
Amended and Restated Employment Agreement, dated
December 20, 1990, between Registrant and John A. Kocur
(incorporated by reference to Exhibit 10.10 to
Registrants Annual Report on
Form 10-K
for year ended December 31, 1990, SEC File
No. 001-4300).
*10
.44
Employment Agreement between Registrant and G. Steven Farris,
dated June 6, 1988, and First Amendment, dated
November 20, 2008, effective as of January 1, 2005.
Table of Contents
Exhibit
10
.45
Amended and Restated Conditional Stock Grant Agreement, dated
September 15, 2005, effective January 1, 2005, between
Registrant and G. Steven Farris (incorporated by reference to
Exhibit 10.06 to Registrants Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2005, SEC File
No. 001-4300).
10
.46
Restricted Stock Unit Award Agreement, dated May 8, 2008,
between Registrant and G. Steven Farris (incorporated by
reference to Exhibit 10.4 to Registrants Quarterly
Report on
Form 10-Q
for quarter ended March 31, 2008, SEC File
No. 001-4300).
10
.47
Form of Restricted Stock Unit Award Agreement, dated
February 12, 2009, between Registrant and each of John A.
Crum, Rodney J. Eichler, and Roger B. Plank (incorporated by
reference to Exhibit 10.1 to Registrants Current
Report on
Form 8-K,
dated February 12, 2009, filed February 18, 2009, SEC
File
No. 001-4300).
10
.48
Amended and Restated Gas Purchase Agreement, effective
July 1, 1998, by and among Registrant and MW Petroleum
Corporation, as seller, and Producers Energy Marketing, LLC, as
buyer (incorporated by reference to Exhibit 10.1 to
Registrants Current Report on
Form 8-K,
dated June 18, 1998, filed June 23, 1998, SEC File
No. 001-4300).
10
.49
Deed of Guaranty and Indemnity, dated January 11, 2003,
made by Registrant in favor of BP Exploration Operating Company
Limited (incorporated by reference to Registrants Current
Report on
Form 8-K,
dated and filed January 13, 2003, SEC File
No. 001-4300).
*12
.1
Statement of Computation of Ratios of Earnings to Fixed Charges
and Combined Fixed Charges and Preferred Stock Dividends.
14
.1
Code of Business Conduct (incorporated by reference to
Exhibit 14.1 to Registrants Annual Report on
Form 10-K
for year ended December 31, 2003, SEC File
No. 001-4300).
*21
.1
Subsidiaries of Registrant
*23
.1
Consent of Ernst & Young LLP
*23
.2
Consent of Ryder Scott Company L.P., Petroleum Consultants
*24
.1
Power of Attorney (included as a part of the signature pages to
this report).
*31
.1
Certification of Principal Executive Officer
*31
.2
Certification of Principal Financial Officer
*32
.1
Certification of Principal Executive Officer and Principal
Financial Officer
*
Filed herewith.
Management contracts or compensatory plans or arrangements
required to be filed herewith pursuant to Item 15 hereof.
November 20, 2008
|
||||
|
||||
ATTEST:
|
APACHE CORPORATION | |||
|
||||
/s/ Cheri L. Peper
|
By: | /s/ Margery M. Harris | ||
|
||||
Cheri L. Peper
Corporate Secretary |
Margery M. Harris
Vice President, Human Resources |
Page 1 of 1
November 20, 2008
|
||||
|
||||
ATTEST:
|
APACHE CORPORATION | |||
|
||||
/s/ Cheri L. Peper
|
By: | /s/ Margery M. Harris | ||
|
||||
Cheri L. Peper
Corporate Secretary |
Margery M. Harris
Vice President, Human Resources |
Page 1 of 1
Effective January 1, 2008 | Prepared December 4, 2007 |
ARTICLE I DEFINITIONS | 1 | |||||
|
||||||
1.1
|
Account Owner | 1 | ||||
1.2
|
Accounts | 1 | ||||
1.3
|
Affiliated Entity | 1 | ||||
1.4
|
Alternate Payee | 1 | ||||
1.5
|
Annual Addition | 1 | ||||
1.6
|
Catch-Up Contributions | 2 | ||||
1.7
|
Code | 2 | ||||
1.8
|
Committee | 2 | ||||
1.9
|
Company | 2 | ||||
1.10
|
Company Contributions | 2 | ||||
1.11
|
Company Discretionary Contributions | 2 | ||||
1.12
|
Company Matching Contributions | 2 | ||||
1.13
|
Company Stock | 2 | ||||
1.14
|
Compensation | 2 | ||||
1.15
|
Covered Employee | 4 | ||||
1.16
|
Disability | 5 | ||||
1.17
|
Domestic Relations Order | 5 | ||||
1.18
|
Employee | 5 | ||||
1.19
|
ERISA | 5 | ||||
1.20
|
Five-Percent Owner | 5 | ||||
1.21
|
401(k) Contributions | 5 | ||||
1.22
|
Highly Compensated Employee | 6 | ||||
1.23
|
Key Employee | 6 | ||||
1.24
|
Lapse in Apache Employment | 6 | ||||
1.25
|
Limitation Year | 6 | ||||
1.26
|
Non-Highly Compensated Employee | 6 | ||||
1.27
|
Non-Key Employee | 6 | ||||
1.28
|
Normal Retirement Age | 6 | ||||
1.29
|
NQ Plan | 6 | ||||
1.30
|
Participant | 6 | ||||
1.31
|
Participant Contributions | 6 | ||||
1.32
|
Period of Service | 6 | ||||
1.33
|
Plan Year | 6 | ||||
1.34
|
QDRO | 7 | ||||
1.35
|
QMAC | 7 | ||||
1.36
|
QNECs | 7 | ||||
1.37
|
Required Beginning Date | 7 | ||||
1.38
|
Rollover Contribution | 7 | ||||
1.39
|
Spouse | 7 | ||||
1.40
|
Termination of Employment | 7 | ||||
1.41
|
Termination From Service Date | 7 | ||||
1.42
|
Valuation Date | 8 | ||||
|
||||||
ARTICLE II PARTICIPATION | 8 | |||||
|
||||||
2.1
|
Participation Required Service | 8 | ||||
2.2
|
Enrollment Procedure | 8 | ||||
|
||||||
ARTICLE III CONTRIBUTIONS | 8 | |||||
|
||||||
3.1
|
Company Contributions | 8 | ||||
3.2
|
Participant Contributions | 10 | ||||
3.3
|
Return of Contributions | 12 | ||||
3.4
|
Limitation on Annual Additions | 13 | ||||
3.5
|
Contribution Limits for Highly Compensated Employees (ADP Test) | 14 | ||||
3.6
|
Contribution Limits for Highly Compensated Employees (ACP Test) | 15 | ||||
3.7
|
QNECs | 16 | ||||
3.8
|
QMACs | 16 | ||||
|
||||||
ARTICLE IV INTERESTS IN THE TRUST FUND | 17 | |||||
|
||||||
4.1
|
Participants Accounts | 17 | ||||
4.2
|
Valuation of Trust Fund. | 17 | ||||
4.3
|
Allocation of Increase or Decrease in Net Worth | 18 | ||||
|
||||||
ARTICLE V AMOUNT OF BENEFITS | 18 | |||||
|
||||||
5.1
|
Vesting Schedule | 18 | ||||
5.2
|
Vesting After a Lapse in Apache Employment | 19 | ||||
5.3
|
Calculating Service | 19 | ||||
5.4
|
Forfeitures | 20 | ||||
5.5
|
Transfers Portability | 21 | ||||
|
||||||
ARTICLE VI DISTRIBUTION OF BENEFITS | 21 | |||||
|
||||||
6.1
|
Beneficiaries | 21 | ||||
6.2
|
Consent | 22 | ||||
6.3
|
Distributable Amount | 22 | ||||
6.4
|
Manner of Distribution | 23 | ||||
6.5
|
In-Service Withdrawals | 23 | ||||
6.6
|
Time of Distribution | 24 | ||||
6.7
|
Direct Rollover Election | 25 | ||||
|
||||||
ARTICLE VII LOANS | 27 | |||||
|
||||||
7.1
|
Availability | 27 | ||||
7.2
|
Number of Loans | 27 | ||||
7.3
|
Loan Amount | 27 | ||||
7.4
|
Interest | 28 | ||||
7.5
|
Repayment | 28 | ||||
7.6
|
Default | 28 | ||||
7.7
|
Administration | 28 | ||||
|
||||||
ARTICLE VIII ALLOCATION OF RESPONSIBILITIES NAMED FIDUCIARIES | 28 | |||||
|
||||||
8.1
|
No Joint Fiduciary Responsibilities | 28 | ||||
8.2
|
The Company | 29 | ||||
8.3
|
The Trustee | 29 |
i | Prepared December 4, 2007 |
8.4
|
The Committee Plan Administrator | 29 | ||||
8.5
|
Committee to Construe Plan | 29 | ||||
8.6
|
Organization of Committee | 29 | ||||
8.7
|
Agent for Process | 29 | ||||
8.8
|
Indemnification of Committee Members | 30 | ||||
8.9
|
Conclusiveness of Action | 30 | ||||
8.10
|
Payment of Expenses | 30 | ||||
|
||||||
ARTICLE IX TRUST AGREEMENT INVESTMENTS | 30 | |||||
|
||||||
9.1
|
Trust Agreement | 30 | ||||
9.2
|
Plan Expenses | 30 | ||||
9.3
|
Investments | 30 | ||||
|
||||||
ARTICLE X TERMINATION AND AMENDMENT | 31 | |||||
|
||||||
10.1
|
Termination of Plan or Discontinuance of Contributions | 31 | ||||
10.2
|
Allocations upon Termination or Discontinuance of Company Contributions | 31 | ||||
10.3
|
Procedure Upon Termination of Plan or Discontinuance of Contributions | 31 | ||||
10.4
|
Amendment by Apache | 32 | ||||
|
||||||
ARTICLE XI PLAN ADOPTION BY AFFILIATED ENTITIES | 32 | |||||
|
||||||
11.1
|
Adoption of Plan | 32 | ||||
11.2
|
Agent of Affiliated Entity | 32 | ||||
11.3
|
Disaffiliation and Withdrawal from Plan | 33 | ||||
11.4
|
Effect of Disaffiliation or Withdrawal | 33 | ||||
11.5
|
Actions Upon Disaffiliation or Withdrawal | 33 | ||||
|
||||||
ARTICLE XII TOP-HEAVY PROVISIONS | 33 | |||||
|
||||||
12.1
|
Application of Top-Heavy Provisions | 33 | ||||
12.2
|
Determination of Top-Heavy Status | 33 | ||||
12.3
|
Special Vesting Rule | 34 | ||||
12.4
|
Special Minimum Contribution | 34 | ||||
12.5
|
Change in Top-Heavy Status | 34 | ||||
|
||||||
ARTICLE XIII MISCELLANEOUS | 35 | |||||
|
||||||
13.1
|
Right To Dismiss Employees No Employment Contract | 35 | ||||
13.2
|
Claims Procedure | 35 | ||||
13.3
|
Source of Benefits | 36 | ||||
13.4
|
Exclusive Benefit of Employees | 36 | ||||
13.5
|
Forms of Notices | 36 | ||||
13.6
|
Failure of Any Other Entity to Qualify | 36 | ||||
13.7
|
Notice of Adoption of the Plan | 36 | ||||
13.8
|
Plan Merger | 37 | ||||
13.9
|
Inalienability of Benefits Domestic Relations Orders | 37 | ||||
13.10
|
Payments Due Minors or Incapacitated Individuals | 39 | ||||
13.11
|
Uniformity of Application | 40 | ||||
13.12
|
Disposition of Unclaimed Payments | 40 | ||||
13.13
|
Applicable Law | 40 | ||||
|
||||||
ARTICLE XIV MATTERS AFFECTING COMPANY STOCK | 40 | |||||
|
||||||
14.1
|
Voting, Etc. | 40 | ||||
14.2
|
Notices | 40 | ||||
14.3
|
Retention/Sale of Company Stock and Other Securities | 40 | ||||
14.4
|
Tender Offers | 41 | ||||
14.5
|
Stock Rights | 41 | ||||
14.6
|
Other Rights Appurtenant to the Company Stock | 42 | ||||
14.7
|
Information to Trustee | 42 | ||||
14.8
|
Information to Account Owners | 42 | ||||
14.9
|
Expenses | 43 | ||||
14.10
|
Former Account Owners | 43 | ||||
14.11
|
No Recommendations | 43 | ||||
14.12
|
Trustee to Follow Instructions | 43 | ||||
14.13
|
Confidentiality | 43 | ||||
14.14
|
Investment of Proceeds | 44 | ||||
14.15
|
Independent Fiduciary | 44 | ||||
14.16
|
Method of Communications | 44 | ||||
|
||||||
ARTICLE XV UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT OF 1994 | 44 | |||||
|
||||||
15.1
|
General | 44 | ||||
15.2
|
While a Serviceman | 45 | ||||
15.3
|
Expiration of USERRA Reemployment Rights | 46 | ||||
15.4
|
Return From Uniformed Service | 46 |
ii | Prepared December 4, 2007 |
1.1 | Account Owner | |
Account Owner means a Participant who has an Account balance, an Alternate Payee who has an Account balance, or a beneficiary who has obtained an interest in the Account(s) of the previous Account Owner because of the previous Account Owners death. | ||
1.2 | Accounts | |
Accounts means the various Participant accounts established pursuant to section 4.1. | ||
1.3 | Affiliated Entity | |
Affiliated Entity means: |
(a) | For all purposes of the Plan except those listed in subsection (b), the term Affiliated Entity means any legal entity that is treated as a single employer with Apache pursuant to Code §414(b), §414(c), §414(m), or §414(o). | ||
(b) | For purposes of determining Annual Additions under section 1.5, limiting Annual Additions to a Participants Account(s) under section 3.4, and construing the defined terms as they are used in sections 1.5 and 3.4 (such as Compensation and Employee), the term Affiliated Entity means any legal entity that is treated as a single employer with Apache pursuant to Code §414(m) or §414(o), and any legal entity that would be an Affiliated Entity pursuant to Code §414(b) or §414(c) if the phrase more than 50% were substituted for the phrase at least 80% each place it occurs in Code §1563(a)(1). |
1.4 | Alternate Payee | |
Alternate Payee means a Participants Spouse, former spouse, child, or other dependent who is recognized by a QDRO as having a right to receive all, or a portion of, the benefits payable under this Plan with respect to such Participant. | ||
1.5 | Annual Addition | |
Annual Addition means the allocations to a Participants Account(s) for any Limitation Year, as described in detail below. |
(a) | Annual Additions shall include: (i) Company Contributions (except as provided in paragraphs (b)(iii) and (b)(v)) to this Plan and Company contributions to any other defined contribution plan maintained by the Company or any Affiliated Entity, including Company Matching Contributions forfeited to satisfy the ACP test of section 3.6, (ii) after-tax contributions to any other defined contribution plan |
Page 1 of 48 | Prepared December 4, 2007 |
maintained by the Company or an Affiliated Entity; (iii) 401(k) Contributions to this Plan and similar contributions to any other defined contribution plan maintained by the Company or an Affiliated Entity, including any such contributions distributed to satisfy the ADP test of section 3.5; (iv) forfeitures allocated to a Participants Account(s) in this Plan and any other defined contribution plan maintained by the Company or any Affiliated Entity (except as provided in paragraphs (b)(iii) and (b)(v) below); (v) all amounts paid or accrued to a welfare benefit fund as defined in Code §419(e) and allocated to the separate account (under the welfare benefit fund) of a Key Employee to provide post-retirement medical benefits; and (vi) contributions allocated on the Participants behalf to any individual medical account as defined in Code §415(l)(2). | |||
(b) | Annual Additions shall not include: (i) Rollover Contributions to this Plan or rollovers to any other defined contribution plan maintained by the Company or an Affiliated Entity; (ii) repayments of loans made to a Participant from a qualified plan maintained by the Company or any Affiliated Entity; (iii) repayments of forfeitures for rehired Participants, as described in Code §411(a)(7)(B) and §411(a)(3)(D); (iv) direct transfers of employee contributions from one qualified plan to any qualified defined contribution plan maintained by the Company or any Affiliated Entity; (v) repayments of forfeitures of missing individuals pursuant to section 13.12; or (vi) salary deferrals within the meaning of Code §414(u)(2)(C) or §414(v)(6)(B). |
(a) | Compensation for Annual Additions . |
(i) | Items Included . For purposes of determining the limitation on Annual Additions under section 3.4, Compensation means those amounts reported as wages, tips, other compensation on Form W-2 by Apache or an Affiliated Entity elective contributions that would have been reported as |
Page 2 of 48 | Prepared December 4, 2007 |
wages, tips, other compensation on Form W-2 by Apache or an Affiliated Entity but for an election under Code §125(a), §132(f)(4), §402(e)(3), §402(h)(1)(B), §402(k), or §457(b). The Plan shall ignore any rules that limit the remuneration included in wages, tips, other compensation based on the nature or location of the employment or the services performed. | |||
(ii) | Timing Restrictions . Compensation includes amounts that are paid or made available to the Participant during the Limitation Year. Compensation does not include amounts paid after a Participants termination of employment except that Compensation does include (A) amounts included in the final payment of his regular compensation for services provided before his termination (including regular pay, overtime, shift differential, commissions, bonuses, and similar payments), but only if the amounts are paid during the Limitation Year in which the termination occurred or, if later, within 2 1 / 2 months of his termination, (B) the cash-out of any paid time off that the former employee would have been able to use had his employment continued, but only if such amount is paid during the Limitation Year in which the termination occurs or, if later, within 2 1 / 2 months of his termination, and (C) payments from an unfunded nonqualified deferred compensation plan (1) that are includible in the Participants gross income (2) that are paid during the Limitation Year in which the termination occurred or, if later, within 2 1 / 2 months of the termination, and (3) that would have been paid on such date(s) if the Participant had continued in employment. |
(b) | Compensation for Top-Heavy Minimum Contributions and Identifying Highly Compensated Employees and Key Employees . For purposes of determining the minimum contribution under section 11.4 when the Plan is top-heavy, and for identifying Highly Compensated Employees and Key Employees, Compensation means the amounts that would included as Compensation under subsection (a) if every occurrence of the phrase Limitation Year were replaced by the phrase Plan Year. | ||
(c) | Code §414(s) Compensation . For purposes of the ADP and ACP tests under sections 3.5 and 3.6, and for purposes of allocating QNECs under subsection 3.7(c) and QMACs under subsection 3.8(c), Compensation means any definition of compensation for a Plan Year, as selected by the Committee, that satisfies the requirements of Code §414(s) and the regulations promulgated thereunder. The definition of Compensation used in one Plan Year may differ from the definition used in another Plan Year. | ||
(d) | Benefit Compensation . For purposes of determining and allocating Company Discretionary Contributions under subsection 3.1(a), Compensation generally means regular compensation paid by the Company. |
(i) | Inclusions . Specifically, Compensation includes: |
(A) | Regular salary or wages, | ||
(B) | Overtime pay, | ||
(C) | The regular annual bonus (unless all or a portion is excluded by the Committee before the regular annual bonus is paid) and any other bonus designated by the Committee, | ||
(D) | Salary reductions pursuant to this Plan, | ||
(E) | Salary reductions that are excludable from an Employees gross income pursuant to Code §125 or §132(f)(4), and | ||
(F) | Amounts contributed as salary deferrals to the NQ Plan. |
(ii) | Exclusions . Compensation excludes: |
(A) | Commissions, | ||
(B) | Severance pay, | ||
(C) | Moving expenses, | ||
(D) | Any gross-up of moving expenses to account for increased income or employment taxes, | ||
(E) | Foreign service premiums paid as an inducement to work outside of the United States, |
Page 3 of 48 | Prepared December 4, 2007 |
(F) | Credits or benefits under this Plan (except as provided in subparagraph (i)(D)) and credits or benefits under the Apache Corporation Money Purchase Retirement Plan, | ||
(G) | Other contingent compensation, | ||
(H) | Any amount relating to the granting of a stock option by the Company or an Affiliated Entity, the exercise of such a stock option, or the sale or deemed sale of any shares thereby acquired, | ||
(I) | Contributions to any other fringe benefit plan (including, but not limited to, overriding royalty payments or any other exploration-related payments), | ||
(J) | Any bonus other than a bonus described in subparagraph (i)(C), and | ||
(K) | Except as provided under subparagraph (i)(F), any benefit accrued under, or any payment from, any nonqualified plan of deferred compensation. |
(iii) | Timing Issues . Compensation includes amounts that are paid to the Employee during that portion of a Plan Year while the Employee is a Covered Employee. Compensation does not include amounts paid after an Employees termination of employment, except that Compensation does include (A) amounts included in the final payment of his regular compensation for services provided before his termination (including regular pay, overtime, shift differential, commissions, bonuses, and similar payments), but only if the amounts are paid during the Plan Year in which the termination occurred or, if later, within 2 1 / 2 months of his termination and (B) any cash-out of accrued vacation time that the former employee would have been able to use had he continued in employment that is paid to him during the Plan Year in which the termination occurred or, if later, within 2 1 / 2 months of his termination. |
(e) | Deferral Compensation . For purposes of determining Participant Contributions under section 3.2 and for purposes of determining and allocating Company Matching Contributions under subsection 3.1(b), Compensation means Compensation as defined in subsection (d), but only including amounts paid after the Employee has satisfied the eligibility requirements of subsection 2.1(a). | ||
(f) | Limit on Compensation . For all purposes of subsection (a), for purposes of calculating the minimum contribution required in top-heavy years under subsection (b), for all purposes of subsections (c) and (d), and for purposes of determining the allocation of Company Matching Contributions under subsection (e), the Compensation taken into account for the Limitation Year or Plan Year shall not exceed the dollar limit specified in Code §401(a)(17) in effect for the Limitation Year or Plan Year. |
1.15 | Covered Employee | |
Covered Employee means any Employee of the Company, with the following exceptions. |
(a) | Any individual directly employed by an entity other than the Company shall not be a Covered Employee, even if such individual is considered a common-law employee of the Company or is treated as an employee of the Company pursuant to Code §414(n). | ||
(b) | An Employee shall not be a Covered Employee unless he is either based in the U.S. or on the U.S. payroll. | ||
(c) | An Employee included in a unit of Employees covered by a collective bargaining agreement shall not be a Covered Employee unless the collective bargaining agreement specifically provides for such Employees participation in the Plan. | ||
(d) | An Employee whose job is classified as temporary shall be a Covered Employee only after he has worked for the Company and Affiliated Entities for six consecutive months. | ||
(e) | An Employee shall not be a Covered Employee while he is classified as an intern, a consultant, or an independent contractor. An Employee may be classified as an intern only if he is currently enrolled (or the Company expects him to be enrolled within the next 12 months) in a high school, college, or university. An Employee may be classified as an intern even if he does not receive academic course credit from his school for this employment with the Company. |
Page 4 of 48 | Prepared December 4, 2007 |
(f) | An individual who is employed pursuant to a written agreement with an agency or other third party for a specific job assignment or project shall not be a Covered Employee. |
(a) | With respect to a corporation, any individual who owns (either directly or indirectly according to the rules of Code §318) more than 5% of the value of the outstanding stock of the corporation or stock processing more than 5% of the total combined voting power of all stock of the corporation. | ||
(b) | With respect to a non-corporate entity, any individual who owns (either directly or indirectly according to rules similar to those of Code §318) more than 5% of the capital or profits interest in the entity. | ||
(c) | An individual shall be a Five-Percent Owner for a particular year if such individual is a Five-Percent Owner at any time during such year. |
1.21 | 401(k) Contributions | |
401(k) Contributions means those contributions made to the Plan by the Company, at the election of the Participant pursuant to subsection 3.2(a), that are excludable from the Participants gross income under Code §401(k) and §402(e)(3). |
Page 5 of 48 | Prepared December 4, 2007 |
1.22 | Highly Compensated Employee | |
Highly Compensated Employee means, for each Plan Year, an Employee who (a) was in the top-paid group during the immediately preceding Plan Year and had Compensation of $80,000 (as adjusted by the Secretary of the Treasury) or more during the immediately preceding Plan Year, or (b) is a Five-Percent Owner during the current Plan Year, or (c) was a Five-Percent Owner during the immediately preceding Plan Year. The term top-paid group means the top 20% of Employees when ranked on the basis of Compensation paid during the year. In determining the number of Employees in the top-paid group, the Committee may elect to exclude Employees with less than six (or some smaller number of) months of service at the end of the year, Employees who normally work less than 17 1 / 2 (or some fewer number of) hours per week, Employees who normally work less than six (or some fewer number of) months during any year, Employees younger than 21 (or some younger age) on the last day of the year, and Employees who are nonresident aliens who receive no earned income (within the meaning of Code §911(d)(2)) from Apache or an Affiliated Entity that constitutes income from sources within the United States (within the meaning of Code §861(a)(3)). Furthermore, an Employee who is a nonresident alien who receives no earned income (within the meaning of Code §911(d)(2)) from Apache or an Affiliated Entity that constitutes income from sources within the United States (within the meaning of Code §861(a)(3)) during the year shall not be in the top-paid group for that year. | ||
1.23 | Key Employee | |
Key Employee means an individual described in Code §416(i)(1) and the regulations promulgated thereunder. | ||
1.24 | Lapse in Apache Employment | |
Lapse in Apache Employment means a Lapse in Apache Employment as defined in subsection 5.3(c). | ||
1.25 | Limitation Year | |
Limitation Year means the calendar year. | ||
1.26 | Non-Highly Compensated Employee | |
Non-Highly Compensated Employee means an Employee who is not a Highly Compensated Employee. | ||
1.27 | Non-Key Employee | |
Non-Key Employee means an Employee who is not a Key Employee. | ||
1.28 | Normal Retirement Age | |
Normal Retirement Age means age 65. | ||
1.29 | NQ Plan | |
NQ Plan means the Non-Qualified Retirement/Savings Plan of Apache Corporation. | ||
1.30 | Participant | |
Participant means any individual with an account balance under the Plan except beneficiaries and Alternate Payees. The term Participant shall also include any Covered Employee who has satisfied the eligibility requirements of section 2.1, but who does not yet have an account balance. | ||
1.31 | Participant Contributions | |
Participant Contributions means 401(k) Contributions and Catch-Up Contributions. |
1.32 | Period of Service | |
Period of Service means a Period of Service as defined in subsection 5.3(a). | ||
1.33 | Plan Year | |
Plan Year means the 12-month period on which the records of the Plan are kept, which shall be the calendar year. |
Page 6 of 48 | Prepared December 4, 2007 |
1.34 | QDRO | |
QDRO, which is an acronym for qualified domestic relations order, means a Domestic Relations Order that creates or recognizes the existence of an Alternate Payees right to, or assigns to an Alternate Payee the right to, receive all or a portion of the benefits payable with respect to a Participant under the Plan and with respect to which the requirements of Code §414(p) and ERISA §206(d)(3) are met. | ||
1.35 | QMAC | |
QMAC, which is an acronym for qualified matching contribution, means any contribution to the Plan made by the Company that the Company designates as a QMAC, or any portion of the forfeitures designated as a QMAC under subsection 5.4(d). A QMAC must satisfy the requirements of section 3.8. | ||
1.36 | QNECs | |
QNEC, which is an acronym for qualified non-elective contribution, means any contribution to the Plan made by the Company that the Company designates as a QNEC, or any portion of the forfeitures designated as a QNEC under subsection 5.4(d). A QNEC must satisfy the requirements of section 3.7. | ||
1.37 | Required Beginning Date | |
Required Beginning Date means: |
(a) | Excepted as provided in subsections (b), (c), and (d), Required Beginning Date means April 1 of the calendar year following the later of (i) the calendar year in which the Participant attains age 70 1 / 2 , or (ii) the calendar year in which the Participant terminates employment with Apache and all Affiliated Entities. | ||
(b) | For a Participant who is both an Employee and a Five-Percent Owner of Apache or an Affiliated Entity, the term Required Beginning Date means April 1 of the calendar year following the calendar year in which the Five-Percent Owner attains age 70 1 / 2 . If an Employee older than 70 1 / 2 becomes a Five-Percent Owner, his Required Beginning Date shall be April 1 of the calendar year following the calendar year in which he becomes a Five-Percent Owner. | ||
(c) | Before January 1, 1997, an Employee who was not a Five-Percent Owner may have had a Required Beginning Date. Beginning January 1, 1997, such an Employee shall be treated as if he has not yet had a Required Beginning Date, with the result that his minimum required distributions under subsection 6.6(c) will be zero until his new Required Beginning Date. His new Required Beginning Date shall be determined pursuant to subsections (a) and (b). | ||
(d) | If a Participant is rehired after his Required Beginning Date, and he is not a Five-Percent Owner, he shall be treated upon rehire as if he has not yet had a Required Beginning Date, with the result that his minimum required distributions under subsection 6.6(c) will be zero until his new Required Beginning Date. His new Required Beginning Date shall be determined pursuant to subsection (a). |
1.38 | Rollover Contribution | |
Rollover Contribution means any contribution that is rolled over to this Plan pursuant to subsection 3.2(d). | ||
1.39 | Spouse | |
Spouse means the individual of the opposite sex to whom a Participant is lawfully married according to the laws of the state of the Participants domicile. | ||
1.40 | Termination of Employment | |
Termination of Employment means a severance from employment within the meaning of Code §401(k)(2)(b)(i)(I), and which therefore generally means the date a Participant ceases to be an Employee. | ||
1.41 | Termination From Service Date | |
Termination From Service Date means the Termination From Service Date defined in subsection 5.3(b). |
Page 7 of 48 | Prepared December 4, 2007 |
1.42 | Valuation Date | |
Valuation Date means the last day of each Plan Year and any other dates as specified in section 4.2 as of which the assets of the Trust Fund are valued at fair market value and as of which the increase or decrease in the net worth of the Trust Fund is allocated among the Participants Accounts. |
2.1 | Participation Required Service. |
(a) | Participant Contributions . A Covered Employee shall be eligible to begin making Participant Contributions and receiving an allocation of Company Matching Contributions as of the first day of the first pay period of the month that begins after the day the Employee becomes a Covered Employee. | ||
(b) | Company Discretionary Contributions . Each Covered Employee shall be eligible to participate in the Plan with respect to the Company Discretionary Contribution provided by subsection 3.1(a) on the day the Employee first becomes a Covered Employee. |
2.2 | Enrollment Procedure. | |
Notwithstanding section 2.1, a Covered Employee shall not be eligible to participate in the Plan until after completing the enrollment procedures specified by the Committee. Such enrollment procedures may, for example, require the Covered Employee to complete and sign an enrollment form or to complete a voice-response telephone enrollment or an online enrollment. The Covered Employee shall provide all information requested by the Committee, such as the initial investment direction, the address and date of birth of the Employee, and the initial rate of the Participant Contributions. An election to make Participant Contributions shall not be effective until after the Covered Employee has properly completed the enrollment procedures. The Committee may require that the enrollment procedure be completed a certain number of days prior to the date that a Covered Employee actually begins to participate. |
3.1 | Company Contributions. |
(a) | Company Discretionary Contributions . For each Plan Year, the Company shall contribute to the Trust Fund such amount of Company Discretionary Contributions that the Company, in its sole discretion, determines to contribute. The Company may elect to treat any available forfeitures as Company Discretionary Contributions, pursuant to subsection 5.4(d). Company Discretionary Contributions shall be allocated to each eligible Participant in proportion to the eligible Participants Compensation. For purposes of this subsection, an eligible Participant is a Participant who was a Covered Employee on one or more days during the Plan Year and who was employed by the Company or an Affiliated Entity on the last business day of the Plan Year. Company Discretionary Contributions shall be allocated to Company Contributions Accounts, except for those Company Discretionary Contributions that are designated as QNECs pursuant to subsection 3.7(b), which shall be allocated to Participant Contributions Accounts. | ||
(b) | Company Matching Contributions . |
(i) | Standard Match . As of the last day of the Plan Year, the Committee shall make the final allocation of Company Matching Contributions (including such forfeitures occurring during the Plan Year that are treated as Company Matching Contributions pursuant to subsection 5.4(d)) to each Participant who made Participant Contributions during the Plan Year as follows. Each Participants allocation shall be equal to his Participant Contributions for the Plan Year, up to a maximum allocation of 6% of his Compensation. The Committee may make interim allocations |
Page 8 of 48 | Prepared December 4, 2007 |
of Company Matching Contributions during the Plan Year, reflecting the allocation earned thus far in the Plan Year. | |||
(ii) | Additional Match . If the nondiscrimination tests described in sections 3.5 and 3.6 are not satisfied for a Plan Year, the Company may elect to contribute an additional amount, or it may elect to use any forfeitures occurring during the Plan Year, as an extra Company Matching Contribution for the Plan Year. The extra Company Matching Contribution may be designated as a QMAC pursuant to section 3.8. The extra Company Matching Contribution shall be allocated to all eligible Participants in proportion to the Company Matching Contribution allocated to such eligible Participants during the Plan Year under paragraph (i). For purposes of this paragraph only, an eligible Participant is any Non-Highly Compensated Employee who is a Covered Employee on the last day of the Plan Year. | ||
(iii) | Coordination With Code §401(a)(17) . Company Matching Contributions in a Plan Year shall accrue only on Participant Contributions up to 6% of the Code §401(a)(17) limit for that Plan Year. Any Company Matching Contributions allocated during the Plan Year in which they were accrued shall be allocated on a temporary basis only; the allocation shall become final after the Committee verifies that the allocation complies with the terms of the Plan, including the limits of Code §401(a)(17). Any reduction in the allocation to comply with Code §401(a)(17), adjusted to reflect investment experience, shall be used as specified in subsection 5.4(d). | ||
(iv) | Accounts . Company Matching Contributions shall be allocated to Company Contributions Accounts, except for those Company Matching Contributions that are designated as QMACs under section 3.8, which shall be allocated to Participant Contributions Accounts. |
(c) | Miscellaneous Contributions . |
(i) | Forfeiture Restoration . The Company may make additional contributions to the Plan to restore amounts forfeited from the Company Contributions Accounts of certain rehired Participants, pursuant to section 5.4. This additional contribution shall be required only when the available forfeitures are insufficient to restore such forfeited amounts, as described in subsection 5.4(d). This contribution shall be allocated to the Participants Company Contributions Account. | ||
(ii) | Top Heavy Contribution . The Company may make additional contributions to the Plan to satisfy the minimum contribution required by section 12.4. The Company may elect to use any available forfeitures for this purpose, pursuant to subsection 5.4(d). | ||
(iii) | Missing Individuals . The Company may make additional contributions to the Plan to restore the forfeited benefit of any missing individual, pursuant to section 13.12. This additional contribution shall be required only when the available forfeitures are insufficient to restore such forfeited amounts, as described in subsection 5.4(d). | ||
(iv) | Non-Discrimination Testing . The Company may make QNECs to the Plan to enable the Plan to satisfy the ADP and ACP tests of sections 3.5 and 3.6. The Company may elect to treat any available forfeitures as QNECs, pursuant to subsection 5.4(d). QNECs shall be allocated to Participant Contribution Accounts. | ||
(v) | Returning Servicemen . The Company may make additional contributions to the Plan to provide make-up contributions for returning servicemen, pursuant to section 15.4. |
(d) | Contributions Contingent on Deductibility . The Company Contributions for a Plan Year (excluding forfeitures and contributions pursuant to paragraph 3.1(c)(v) shall not exceed the amount allowable as a deduction for Apaches taxable year ending with or within the Plan Year pursuant to Code §404. The amount allowable as a deduction under Code §404 shall include carry forwards of unused deductions for prior years. If the Code §404 deduction limit would be exceeded for any Plan Year, the Plan contributions shall be reduced, in the following order, until the Plan contributions equal the Code §404 deduction limit: first, the Company Matching Contributions for those Highly Compensated Employees who are eligible to participate in the NQ Plan; second, all but $1 of the Company Discretionary Contributions for those Highly Compensated Employees who are eligible to participate in the NQ Plan; third, any remaining Company Matching Contribution; fourth, any remaining Company Discretionary Contributions. Company Contributions other than QNECs, QMACs, and |
Page 9 of 48 | Prepared December 4, 2007 |
contributions pursuant to paragraph 3.1(c)(v) shall be paid to the Trustee no later than the due date (including any extensions) for filing the Companys federal income tax return for such year; QNECs and QMACs shall be paid to the Trustee no later than 12 months after the close of the Plan Year; and contributions subject to paragraph 3.1(c)(v) shall be paid to the Trustee as specified in section 15.4. Company Contributions may be made without regard to current or accumulated earnings and profits; nevertheless, this Plan is intended to qualify as a profit sharing plan as defined in Code §401(a). The Company may pay any contribution in the form of Company Stock or cash, as the Company determines. |
3.2 | Participant Contributions. |
(a) | 401(k) Contributions . |
(i) | General Rules . A Participant may elect to defer the receipt of a portion of his Compensation during the Plan Year and contribute such amounts to the Plan as 401(k) Contributions. The Committee shall determine the maximum 401(k) Contributions that a Participant may make and shall establish other administrative rules governing the 401(k) Contributions; for example, the Committee may require 401(k) Contributions to be made in whole percentages of Compensation, the Committee may allow different contribution percentages from bonuses than are allowed from regular pay, and the Committee may limit 401(k) Contributions (for the year or for the pay period or for a bonus) to a percentage of Compensation (for the year or for the pay period or for the bonus). The Company shall pay the amount deducted from the Participants Compensation to the Trustee promptly after the deduction is made. 401(k) Contributions shall be allocated to Participant Contributions Accounts. | ||
(ii) | Limitations on 401(k) Contributions . |
(A) | Limit for Apache Plans . The sum of 401(k) Contributions to this Plan and elective deferrals (as defined in Code §402(g)(3)) to any other plan maintained by the Company or an Affiliated Entity shall not exceed the dollar limit in effect under Code §402(g)(1)(B) in any calendar year. The Company shall inform the Committee if such limit has been exceeded, and the excess amount allocated to this Plan. The excess amount allocated to this Plan shall be reduced by any 401(k) Contributions returned pursuant to any other provision of this Article. Any remaining excess amount shall be recharacterized as a Catch-Up Contribution to the extent possible, and any remaining excess amount shall be returned to the Participant as soon as administratively possible, and in no event later than April 15 of the calendar year after the calendar year in which the excess occurred. Company Matching Contributions attributable to amounts returned under this subparagraph shall be forfeited. Unmatched 401(k) Contributions shall be returned first. The amount returned, recharacterized, or forfeited shall be adjusted to reflect the net increase or decrease in the net value of the Participants Account attributable thereto. The Committee may use any reasonable method to allocate this adjustment. | ||
(B) | Participant Limit . If the sum of the 401(k) Contributions to this Plan and elective deferrals (as defined in Code §402(g)(3)) to any other plan exceed the dollar limit in effect under Code §402(g)(1)(B) in a calendar year, and the Participant is an Employee on the last day of the Plan Year and informs the Committee of the amount of the excess allocated to this Plan, then that amount will be reduced by any 401(k) Contributions for that calendar year that were returned pursuant to any other provision in this Article. Any remaining excess amount shall be recharacterized as a Catch-Up Contribution to the extent possible, and any remaining excess amount shall be returned to the Participant as soon as administratively possible, and in no event later than April 15 of the calendar year after the calendar year in which the excess occurred. Company Matching Contributions attributable to amounts returned under this subparagraph shall be forfeited. Unmatched 401(k) Contributions shall be returned first. The amount returned, recharacterized, or forfeited shall be adjusted to reflect the net increase or decrease in the net value of the Participants Account attributable thereto. The Committee may use any reasonable method to allocate this adjustment. |
Page 10 of 48 | Prepared December 4, 2007 |
(b) | Catch-Up Contributions . |
(i) | General Rules . A Participant whose 49th birthday occurred before the first day of the Plan Year may elect to defer the receipt of a portion of his Compensation during the Plan Year and contribute such amounts to the Plan as Catch-Up Contributions. The Company shall pay the amount deducted from the Participants Compensation to the Trustee promptly after the deduction is made. The Committee shall determine after the end of each calendar year which Participant Contributions were Catch-Up Contributions and which were 401(k) Contributions. See sections 3.5 and 3.6 for instances in which Participant Contributions that would normally be characterized as 401(k) Contributions are in fact characterized as Catch-Up Contributions. Catch-Up Contributions shall be allocated to Participant Contributions Accounts. | ||
(ii) | Limitations on Catch-Up Contributions . |
(A) | Limit for Apache Plans . The sum of Catch-Up Contributions to this Plan and similar deferrals under Code §414(v) to any other plan maintained by the Company or an Affiliated Entity shall not exceed the dollar limit in effect under Code §414(v)(2)(B)(i) in any calendar year. The Company shall inform the Committee if such limit has been exceeded, and the excess amount allocated to this Plan. The excess amount allocated to this Plan shall be reduced by any amounts returned pursuant to any other provision of this Article. Any remaining excess amount shall be returned to the Participant as soon as administratively possible, and in no event later than April 15 of the calendar year after the calendar year in which the excess occurred. Company Matching Contributions attributable to amounts returned under this subparagraph shall be forfeited. Unmatched Catch-Up Contributions shall be returned first. The amount returned or forfeited shall be adjusted to reflect the net increase or decrease in the net value of the Participants Account attributable thereto. The Committee may use any reasonable method to allocate this adjustment. | ||
(B) | Participant Limit . If the sum of the Catch-Up Contributions to this Plan and similar deferrals under Code §414(v) to any other plan exceed the dollar limit in effect under Code §414(v)(2)(B)(i) in a calendar year, and the Participant is an Employee on the last day of the Plan Year and informs the Committee of the amount of the excess allocated to this Plan, then that amount will be reduced by any Catch-Up Contributions for that calendar year that were returned pursuant to any other provision in this Article and any remaining excess amount shall be returned to the Participant as soon as administratively possible, and in no event later than April 15 of the calendar year after the calendar year in which the excess occurred. Company Matching Contributions attributable to amounts returned under this subparagraph shall be forfeited. Unmatched Catch-Up Contributions shall be returned first. The amount returned or forfeited shall be adjusted to reflect the net increase or decrease in the net value of the Participants Account attributable thereto. The Committee may use any reasonable method to allocate this adjustment. |
(c) | Procedures . Participant Contributions shall be made according to rules prescribed by the Committee that are consistent with the rules in this subsection. |
(i) | Authorization . Participant Contributions may only be made after the Company has received authorization from a Participant to deduct such contributions from his Compensation. Effective January 1, 2006, the Committee may establish procedures whereby a new Participant will be automatically enrolled in the Plan, and will make Participant Contributions at a certain level, unless he affirmatively elects otherwise; the Participant shall be provided with a reasonable opportunity of at least 30 days to elect a different rate of Participant Contribution or no Participant Contribution. Any authorization or deemed authorization may apply only to Compensation that is not then currently available to the Participant. Such authorization or deemed authorization shall remain in effect until revoked or changed by the Participant. If an Employee makes a hardship withdrawal from his Participant Contributions Account under section 6.5, his contribution rate shall be immediately reduced to 0%, and shall remain at 0% for at least 6 months. To be effective, any authorization, change of authorization, or notice of revocation must be filed with the Committee according to such restrictions and requirements as |
Page 11 of 48 | Prepared December 4, 2007 |
the Committee prescribes. The Committee shall establish procedures from time to time for Participants to change their contribution elections, which procedures shall be communicated to Participants. The Committee may establish different procedures for Participant Contributions from different types of Compensation, such as bonuses. A Participant who also participates in the NQ Plan may make a combined contribution election that applies to both this Plan and the NQ Plan; once made, such combined elections are irrevocable for the periods and the compensation described in the elections. | |||
(ii) | Catch-Up Contributions . The Committees procedures for Catch-Up Contributions shall allow all Participants who can make Catch-Up Contributions the effective opportunity to make the same dollar amount of Catch-Up Contributions for the calendar year. | ||
(iii) | Inadequate Paycheck . If the amounts withheld from a Participants paycheck (including, without limitation, loan repayments, Participant Contributions, taxes, contributions to the NQ Plan, and premium payments for various benefits) are greater than the paycheck, the Committee shall establish the order in which the deductions shall be applied, with the result that 401(k) Contributions or Catch-Up Contributions may be reduced below what the Participant had elected. The Committees procedures may also automatically increase a Participants 401(k) Contributions or Catch-Up Contributions in subsequent pay periods to make up for any missed contributions. |
(d) | Rollovers . The Plan may accept any rollover from or on behalf of a Covered Employee, subject to the following rules. The Committee shall decide from time to time which types of rollovers the Plan will accept, and the conditions under which the Plan will accept them. A rollover may be comprised of a direct transfer of an eligible rollover distribution from a qualified plan described in Code §401(a) (excluding after-tax contributions), a qualified annuity plan described in Code §403(a) (excluding after-tax contributions), an annuity contract described in Code §403(b) (excluding after-tax contributions), or an eligible plan under Code §457(b) that is maintained by an eligible employer described in Code §457(e)(1)(A) (which generally includes state or local governments). A rollover may also be comprised of the portion of a distribution from an individual retirement account or annuity described in Code §408(a) or §408(b) that is eligible to be rolled over and that would otherwise be included in the Covered Employees gross income. If the Plan accepts a contribution and subsequently determines that the contribution did not satisfy the conditions for the Plan to accept it, the Plan shall distribute such contribution, as well as the net increase or decrease in the net value of the Trust Fund attributable to the contribution, to the Covered Employee as soon as administratively practicable. All rollovers accepted under this subsection shall be allocated to Rollover Accounts. |
3.3 | Return of Contributions. |
(a) | Mistake of Fact . Upon the request of the Company, the Trustee shall return to the Company, any Company Contribution made under a mistake of fact. The amount that shall be returned shall not exceed the excess of the amount contributed (reduced to reflect any decrease in the net worth of the appropriate Accounts attributable thereto) over the amount that would have been contributed without the mistake of fact. Appropriate reductions shall be made in the Accounts of Participants to reflect the return of any contributions previously credited to such Accounts. If the Company so requests, any contribution made under a mistake of fact shall be returned to the Company within one year after the date of payment. | ||
(b) | Non-Deductible Contributions . Upon the request of the Company, the Trustee shall return to the Company, any Company Contribution or 401(k) Contribution that is not deductible under Code §404. The Company shall pay any returned 401(k) Contribution to the appropriate Participant or the Companys NQ Plan, as appropriate, as soon as administratively practicable, subject to any withholding. All contributions under the Plan are expressly conditioned upon their deductibility for federal income tax purposes. The amount that shall be returned shall be the excess of the amount contributed (reduced to reflect any decrease in the net worth of the appropriate Accounts attributable thereto) over the amount that would have been contributed if there had not been a mistake in determining the deduction. Appropriate reductions shall be made in the Accounts of Participants to reflect the return of any contributions previously credited to such Accounts. Any contribution conditioned on its deductibility shall be returned within one year after it is disallowed as a deduction. |
Page 12 of 48 | Prepared December 4, 2007 |
(c) | Effect of Correction . A contribution shall be returned under this section only to the extent that its return will not reduce the Account(s) of a Participant to an amount less than the balance that would have been credited to the Participants Account(s) had the contribution not been made. |
3.4 | Limitation on Annual Additions. |
(a) | Limit . The Annual Additions to a Participants Account(s) in this Plan and to his accounts in any other defined contribution plans maintained by the Company or an Affiliated Entity for any Limitation Year shall not exceed in the aggregate the lesser of (i) $40,000 (as adjusted by the Secretary of the Treasury), or (ii) 100% of the Participants Compensation. The limit in clause (ii) shall not apply to any contribution for medical benefits (within the meaning of Code §419A(f)(2)) after separation from service that is treated as an Annual Addition. | ||
(b) | Corrective Mechanism . |
(i) | Reduction in Annual Additions . A Participants Annual Additions shall be reduced, to the extent necessary to satisfy the foregoing limits, if the Annual Additions arose as a result of a reasonable error in estimating Compensation, as a result of the allocation of forfeitures, or as a result of other facts and circumstances as provided in the regulations under Code §415. | ||
(ii) | Order of Reduction, Multiple Plans . Apache also maintains the Apache Corporation Money Purchase Retirement Plan, a money purchase pension plan. The Participants Annual Additions shall be reduced, to the extent necessary, in the following order. First, to the extent that the Annual Additions in a single plan exceed the limits of subsection (a), the Annual Additions in that plan shall be reduced, in the order specified in that plan, to the extent necessary to satisfy the limits of subsection (a). Then, if the Participant has Annual Additions in more than one plan and in the aggregate they exceed the limits of subsection (a), the Annual Additions will be reduced as follows. |
(A) | If the Participant was eligible to participate in the NQ Plan on the last day of the Plan Year in which the excess Annual Addition occurred, the Annual Additions to the Apache Corporation Money Purchase Pension Plan will be reduced before the Annual Additions to this Plan are reduced. | ||
(B) | If the Participant was not eligible to participate in the NQ Plan on the last day of the Plan Year in which the excess Annual Addition occurred, the Annual Additions to this Plan will be reduced before the Annual Additions to the Apache Corporation Money Purchase Retirement Plan are reduced. |
(iii) | Order of Reduction, This Plan . If the Participant was eligible to participate in the NQ Plan on the last day of the Plan Year in which the excess Annual Addition occurred, the Annual Additions to this Plan shall be reduced in the following order: Company Discretionary Contributions; Company Matching Contributions; 401(k) Contributions; then Catch-Up Contributions. If the Participant was not eligible to participate in the NQ Plan on the last day of the Plan Year in which the excess Annual Addition occurred, the Annual Additions to this Plan shall be reduced in the following order: unmatched 401(k) Contributions; unmatched Catch-Up Contributions; matched 401(k) Contributions and the corresponding Company Matching Contributions; matched Catch-Up Contributions and the corresponding Company Matching Contributions; then Company Discretionary Contributions. | ||
(iv) | Disposition of Excess Annual Additions . The Plan shall pay any reduction in 401(k) Contributions (adjusted to reflect the net increase or decrease in the net value of the Trust Fund attributable to the contributions) to the Participant as soon as administratively practicable, subject to any withholding. Any reduction of Company Contributions shall be placed in a suspense account in the Trust Fund and used to reduce future Company Contributions to the Plan. The following rules shall apply to such suspense account: (A) no further Company Contributions may be made if the allocation thereof would be precluded by Code §415; (B) any increase or decrease in the net value of the Trust Fund attributable to the suspense account shall not be allocated to the suspense account, but shall be allocated to the Accounts; and (C) all amounts held in the suspense account shall be allocated as of each succeeding allocation date on |
Page 13 of 48 | Prepared December 4, 2007 |
which forfeitures may be allocated pursuant to subsection 5.4(d) (and may be allocated more frequently if the Committee so directs), until the suspense account is exhausted. |
3.5 | Contribution Limits for Highly Compensated Employees (ADP Test). |
(a) | Limits on Contributions . Notwithstanding any provision in this Plan to the contrary, the actual deferral percentage (ADP) test of Code §401(k)(3) shall be satisfied. Code §401(k) and the regulations issued thereunder are hereby incorporated by reference to the extent permitted by such regulations. In performing the ADP test for a Plan Year, the Plan will use that Plan Years data for the Non-Highly Compensated Employees. | ||
(b) | Permissible Variations of the ADP Test . To the extent permitted by the regulations under Code §401(m) and §401(k), 401(k) Contributions, QMACs, and QNECs may be used to satisfy the ACP test of section 3.6 if they are not used to satisfy the ADP test. The Committee may elect to exclude from the ADP test those Non-Highly Compensated Employees who, at the end of the Plan Year, had not attained age 21 and/or whose Period of Service was less than one year. | ||
(c) | Advanced Limitation on 401(k) Contributions or Company Matching Contributions . The Committee may limit the 401(k) Contributions of any Highly Compensated Employee (or any Employee expected to be a Highly Compensated Employee) at any time during the Plan Year, with the result that his share of Company Matching Contributions may be limited. This limitation may be made, if practicable, whenever the Committee believes that the limits of this section or sections 3.4 or 3.6 will not be satisfied for the Plan Year. | ||
(d) | Corrections to Satisfy Test . If the ADP test is not satisfied for the Plan Year, the Committee shall decide which one or more of the following methods shall be employed to satisfy the ADP test. All corrections shall be accomplished if possible before March 15 of the following Plan Year, and in no event later than 12 months after the close of the Plan Year. |
(i) | The Committee may recommend to the Company and the Company may make QNECs and/or QMACs to the Plan, pursuant to subsections 3.7(c) and 3.8(c). | ||
(ii) | The Committee may recommend to the Company and the Company may designate any Company Discretionary Contribution allocated to Non-Highly Compensated Employees as QNECs, pursuant to subsection 3.7(b). | ||
(iii) | The Committee may recommend to the Company and the Company may designate any Company Matching Contributions allocated to Non-Highly Compensated Employees as QMACs, pursuant to section 3.8(b). | ||
(iv) | 401(k) Contributions of Highly Compensated Employees may be recharacterized as Catch-Up Contributions or returned to the Highly Compensated Employee, without the consent of either the Highly Compensated Employee or his Spouse, subject to the rules of subsection (f). |
(e) | Order of Correction . The method described in subsection (c) shall be employed first, during the Plan Year. If that method is not used during the Plan Year, or if the net effect of such method was insufficient for the ADP test to be satisfied, the Company has the discretion to use any one or more of the methods described in paragraphs (d)(i), (d)(ii), and (d)(iii). If the Company does not choose to make the corrections described in paragraphs (d)(i), (d)(ii), and (d)(iii), or if such corrections are insufficient to satisfy the ADP test, then the correction method described in paragraph (d)(iv) shall be used. | ||
(f) | Calculating the Amounts Returned or Recharacterized . If the ADP test is not satisfied, and 401(k) Contributions are returned or recharacterized pursuant to paragraph (d)(iv) above, the Committee shall determine the amount to be returned or recharacterized and shall then allocate that amount among the Highly Compensated Employees pursuant to Treasury Regulations. The correction for each Highly Compensated Employee shall occur in the following order, to the extent necessary: 401(k) Contributions shall be recharacterized as Catch-Up Contributions to the extent possible, then unmatched 401(k) Contributions shall be returned to the Participant, then matched 401(k) Contributions shall be returned to the Participant and the corresponding Company Matching Contribution shall be forfeited (unless the ACP test was performed before the ADP test, and the |
Page 14 of 48 | Prepared December 4, 2007 |
Company Matching Contribution has already been returned to the Participant pursuant to paragraph 3.6(c)(v)). The amount actually recharacterized or returned to each Highly Compensated Employee shall be adjusted to reflect as nearly as possible the actual increase or decrease in the net value of the Trust Fund attributable to the correction through the business day immediately preceding the date as of which the correction is processed. |
3.6 | Contribution Limits for Highly Compensated Employees (ACP Test). |
(a) | Limits on Contributions . Notwithstanding any provision in this Plan to the contrary, the actual contribution percentage (ACP) test of Code §401(m)(2) shall be satisfied. Code §401(m) and the regulations issued thereunder are hereby incorporated by reference to the extent permitted by such regulations. In performing the ACP test for a Plan Year, the Plan will use that Plan Years data for the Non-Highly Compensated Employees. | ||
(b) | Permissible Variations of the ACP Test . To the extent permitted by the regulations under Code §401(m) and §401(k), 401(k) Contributions, QMACs, and QNECs may be used to satisfy this test if not used to satisfy the ADP test of section 3.5. The Committee may elect to exclude from the ACP test those Non-Highly Compensated Employees who, at the end of the Plan Year, had not attained age 21 and/or whose Period of Service was for less than one year. | ||
(c) | Corrections to Satisfy Test . If the ACP test is not satisfied, the Committee shall decide which one or more of the following methods shall be employed to satisfy the ACP test. All corrections shall be accomplished if possible before March 15 of the following Plan Year, and in no event later than 12 months after the close of the Plan Year. |
(i) | The Committee may recommend to the Company and the Company may make QNECs or QMACs to the Plan, pursuant to subsections 3.7(c) and 3.8(c). | ||
(ii) | The Committee may recommend to the Company and the Company may designate any portion of its Company Discretionary Contributions as QNECs, pursuant to subsection 3.7(b). | ||
(iii) | The Committee may recommend to the Company and the Company may designate any portion of its Company Matching Contributions as QMACs, pursuant to subsection 3.8(b). | ||
(iv) | The Committee may recommend to the Company and the Company may make extra Company Matching Contributions to the Plan, pursuant to paragraph 3.1(b)(ii). | ||
(v) | The non-vested Company Matching Contributions allocated to Highly Compensated Employees as of any date during the Plan Year may be forfeited as of the last day of the Plan Year, and the vested Company Matching Contributions allocated to any Highly Compensated Employee for the Plan Year may be paid to such Highly Compensated Employee, without the consent of either the Highly Compensated Employee or his Spouse, subject to the rules of subsection (e). | ||
(vi) | Those 401(k) Contributions that are taken into account for this ACP test for any Highly Compensated Employee may be returned to such Highly Compensated Employee, without the consent of either the Highly Compensated Employee or his Spouse, subject to the rules of subsection (e). |
(d) | Order of Correction . The method described in subsection 3.5(c) shall be employed first, during the Plan Year. If that method is not used during the Plan Year, or if the net effect of such method was insufficient for the ACP test to be satisfied, the Company has the discretion to use any one or more of the methods described in paragraphs (c)(i), (c)(ii), (c)(iii) and (c)(iv). If the Company does not choose to make the corrections described in paragraphs (c)(i), (c)(ii), (c)(iii), and (c)(iv) or if such corrections are insufficient to satisfy the ACP test, then the correction methods described in paragraphs (c)(v) and (c)(vi) shall be used, as described in subsection (e). | ||
(e) | Calculating the Corrective Reduction . If the correction methods described in paragraphs (c)(v) and (c)(vi) are to be used, the Committee shall determine the amount of the correction and then allocate that amount among the Highly Compensated Employees pursuant to Treasury Regulations. The correction under paragraph (c)(v) shall be accomplished by returning all of that Plan Years vested Company Matching Contributions to the Highly Compensated Employee before any unvested Company Matching Contributions are forfeited. The correction under paragraph (c)(vi) shall be |
Page 15 of 48 | Prepared December 4, 2007 |
accomplished in the following order, to the extent necessary: 401(k) Contributions shall be recharacterized as Catch-Up Contributions to the extent possible, then unmatched 401(k) Contributions shall be returned to the Participant, then matched 401(k) Contributions shall be returned to the Participant and the corresponding Company Matching Contribution shall be returned to the Participant if vested and forfeited if not vested. If the corrections under paragraphs (c)(v) and (c)(vi) are done in tandem, the correction shall be accomplished in the following order, to the extent necessary: 401(k) Contributions shall be recharacterized as Catch-Up Contributions to the extent possible, then unmatched 401(k) Contributions shall be returned to the Participant, then the vested Company Matching Contribution shall be paid to the Participant, then matched 401(k) Contributions shall be returned to the Participant and the corresponding unvested Company Matching Contribution shall be forfeited. The amount of the correction shall be adjusted to reflect as nearly as possible the actual increase or decrease in the net value of the Trust Fund attributable to the correction through the business day immediately preceding the date as of which the correction is processed. |
3.7 | QNECs. |
(a) | Time of Payment . QNECs shall be paid to the Plan no later than 12 months after the close of the Plan Year to which they relate. | ||
(b) | Source . The Company may designate as a QNEC all or any portion of the Company Discretionary Contribution that is allocated to Non-Highly Compensated Employees. The designation of Company Contributions as QNECs shall be made before such contributions are made to the Trust Fund. If the Company inadvertently designates any Highly Compensated Employees allocation as a QNEC, the designation shall be ineffective. | ||
(c) | Allocation . The Company may make a contribution to the Plan, in addition to the Company Discretionary Contribution, that the Company designates as a QNEC. This subsection applies to such contributions. As of the last day of each Plan Year, the Committee shall allocate such QNECs for such Plan Year (including such forfeitures occurring during such Plan Year that are treated as QNECs pursuant to subsection 5.4(d)) to the Participant Contributions Accounts of those Non-Highly Compensated Employees who were Covered Employees on the last day of the Plan Year, as follows: |
(i) | QNECs shall be allocated to the Participant Contributions Account of the Non-Highly Compensated Employee with the least Compensation, until either the QNECs are exhausted or the Non-Highly Compensated Employee has received the maximum QNEC allocation that can be taken into account in the ADP test or the ACP test, whichever is applicable. | ||
(ii) | Any remaining QNECs shall be allocated to the Participant Contributions Account of the Non-Highly Compensated Employee with the next lowest Compensation, until either the QNECs are exhausted or the Non-Highly Compensated Employee has received the maximum QNEC allocation that can be taken into account in the ADP test or the ACP test, whichever is applicable. | ||
(iii) | The procedure in paragraph (ii) shall be repeated until all QNECs have been allocated. |
(d) | Coordination with Top-Heavy Rules . All QNECs shall be treated in the same manner as a Company Discretionary Contribution for purposes of section 12.4. |
3.8 | QMACs. |
(a) | Time of Payment . QMACs shall be paid to the Plan no later than 12 months after the close of the Plan Year to which they relate. | ||
(b) | Source . The Company may designate as a QMAC all or any portion of the Company Matching Contributions that is allocated to Non-Highly Compensated Employees. The designation of Company Contributions as QMACs shall be made before such contributions are made to the Trust Fund. If the Company inadvertently designates any Highly Compensated Employees allocation as a QMAC, the designation shall be ineffective. | ||
(c) | Allocation . The Company may make a contribution to the Plan, in addition to the Company Matching Contribution, that the Company designates as a QMAC. This subsection applies to such contributions. As of the last day of each Plan Year, the Committee shall allocate such QMACs for such Plan Year |
Page 16 of 48 | Prepared December 4, 2007 |
(including such forfeitures occurring during such Plan Year that are treated as QMACs pursuant to subsection 5.4(d)) to the Participant Contributions Accounts of those Non-Highly Compensated Employees who were Covered Employees on the last day of the Plan Year and who made Participant Contributions for the Plan Year, as follows: |
(i) | QMACs shall be allocated to the Participant Contributions Account of the Non-Highly Compensated Employee with the least Compensation, until either the QMACs are exhausted or the Non-Highly Compensated Employee has received the maximum QMAC allocation that can be taken into account in the ADP test or the ACP test, whichever is applicable. | ||
(ii) | Any remaining QMACs shall be allocated to the Participant Contributions Account of the Non-Highly Compensated Employee with the next lowest Compensation, until either the QMACs are exhausted or the Non-Highly Compensated Employee has received the maximum QMAC allocation that can be taken into account in the ADP test or the ACP test, whichever is applicable. | ||
(iii) | The procedure in paragraph (ii) shall be repeated until all QMACs have been allocated. |
(d) | Coordination with Top-Heavy Rules . All QMACs shall be treated in the same manner as a Company Discretionary Contribution for purposes of section 12.4. |
4.1 | Participants Accounts. | |
The Committee shall establish and maintain separate Accounts in the name of each Participant, but the maintenance of such Accounts shall not require any segregation of assets of the Trust Fund. Each Account shall contain the contributions specified below and the increase or decrease in the net worth of the Trust Fund attributable to such contributions. |
(a) | Participant Contributions Account . A Participant Contributions Account shall be established for each Participant who makes Participant Contributions or who receives an allocation of QNECs or QMACs. The Committee may elect to establish subaccounts for the different types of contributions allocated to this Account. | ||
(b) | Company Contributions Account . A Company Contributions Account shall be established for each Participant who receives an allocation of Company Discretionary Contributions that are not designated as QNECs or an allocation of Company Matching Contributions that are not designated as QMACs. The Committee may elect to establish subaccounts for the different types of contributions allocated to this Account. | ||
(c) | Rollover Account . A Rollover Account shall be established for each Participant who makes a Rollover Contribution. |
4.2 | Valuation of Trust Fund. |
(a) | General . The Trustee shall value the assets of the Trust Fund at least annually as of the last day of the Plan Year, and as of any other dates determined by the Committee, at their current fair market value and determine the net worth of the Trust Fund. In addition, the Committee may direct the Trustee to have a special valuation of the assets of the Trust Fund when the Committee determines, in its sole discretion, that such valuation is necessary or appropriate or in the event of unusual market fluctuations of such assets. Such special valuation shall not include any contributions made by Participants since the preceding Valuation Date, any Company Contributions for the current Plan Year, or any unallocated forfeitures. The Trustee shall allocate the expenses of the Trust Fund occurring since the preceding Valuation Date, pursuant to section 9.2, and then determine the increase or decrease in the net worth of the Trust Fund that has occurred since the preceding Valuation Date. The Trustee shall determine the share of the increase of decrease that is attributable to the non-separately accounted for portion of the Trust Fund and to any amount separately accounted for, as described in subsections (b) and (c). |
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(b) | Mandatory Separate Accounting . The Trustee shall separately account for (i) any individually directed investments permitted under section 9.3, and (ii) amounts subject to a Domestic Relations Order. | ||
(c) | Permissible Separate Accounting . The Trustee may separately account for the following amounts to provide a more equitable allocation of any increase or decrease in the net worth of the Trust Fund: |
(i) | the distributable amount of a Participant, pursuant to section 6.7, including any amount distributable to an Alternate Payee or to a beneficiary of a deceased Participant; and | ||
(ii) | Company Matching Contributions made since the preceding Valuation Date; | ||
(iii) | Participant Contributions that were received by the Trustee since the preceding Valuation Date; | ||
(iv) | Company Matching Contributions and 401(k) Contributions of Highly Compensated Employees that may need to be distributed or forfeited to satisfy the ADP and ACP tests of sections 3.5 or 3.6; | ||
(v) | Rollovers that were received by the Trustee since the preceding Valuation Date; | ||
(vi) | Any other amounts for which separate accounting will provide a more equitable allocation of the increase or decrease in the net worth of the Trust Fund. |
4.3 | Allocation of Increase or Decrease in Net Worth. | |
The Committee shall, as of each Valuation Date, allocate the increase or decrease in the net worth of the Trust Fund that has occurred since the preceding Valuation Date between the non-separately accounted for portion of the Trust Fund and the amounts separately accounted for that are identified in subsections 4.2(b) and 4.2(c). The increase or decrease attributable to the non-separately accounted for portion of the Trust Fund shall be allocated among the appropriate Accounts in the ratio that the dollar value of each such Account bore to the aggregate dollar value of all such Accounts on the preceding Valuation Date after all allocations and credits made as of such date had been completed. The Committee shall then allocate any amounts separately accounted for (including the increase or decrease in the net worth of the Trust Fund attributable to such amounts) to the appropriate Account(s) if such separate accounting is no longer necessary. |
5.1 | Vesting Schedule. | |
A Participant shall have a fully vested and nonforfeitable interest in all his Account(s) upon his Normal Retirement Age if he is an Employee on such date, upon his death while an Employee or while on an approved leave of absence from the Company or an Affiliated Entity, or upon his termination of employment with the Company or an Affiliated Entity because of a Disability. In all other instances a Participants vested interest shall be calculated according to the following rules. |
(a) | Participant Contributions Account and Rollover Account . A Participant shall be fully vested at all times in his Participant Contributions Account and his Rollover Account. | ||
(b) | Company Contributions Account . A Participant shall become fully vested in his Company Contributions Account in accordance with the following schedule: |
Period of Service | Vesting Percentage | |||
Less than 1 year
|
0 | % | ||
At least 1 year, but less than 2 years
|
20 | % | ||
At least 2 years, but less than 3 years
|
40 | % | ||
At least 3 years, but less than 4 years
|
60 | % | ||
At least 4 years, but less than 5 years
|
80 | % | ||
5 or more years
|
100 | % |
(c) | Change of Control . The Company Contributions Accounts of all Participants shall be fully vested as of the effective date of a change in control. For purposes of this subsection, a change of control shall mean the event occurring when a person, partnership, or corporation, together with all persons, |
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partnerships, or corporations acting in concert with each person, partnership, or corporation, or any or all of them, acquires more than 20% of Apaches outstanding voting securities; provided that a change of control shall not occur if such persons, partnerships, or corporations acquiring more than 20% of Apaches voting securities is solicited to do so by Apaches board of directors, upon its own initiative, and such persons, partnerships, or corporations have not previously proposed to acquire more than 20% of Apaches voting securities in an unsolicited offer made either to Apaches board of directors or directly to the stockholders of Apache. | |||
(d) | Plan Termination . A Company Contributions Account shall be fully vested as described in section 10.1, which discusses the full or partial termination of the Plan or the complete discontinuance of contributions. |
5.2 | Vesting After a Lapse in Apache Employment. |
(a) | Separate Accounts . If a Participant is rehired before incurring a one-year Lapse in Apache Employment, he shall have only one Company Contributions Account, and its vested percentage shall be determined under section 5.1. If a Participant is rehired after incurring a one-year Lapse in Apache Employment, he shall have two Company Contribution Accounts, an old Company Contributions Account for the contributions from his earlier episode of employment, and a new Company Contributions Account for his later episode of employment. If both the old and new Company Contributions Accounts are fully vested, they shall be combined into a single Company Contributions Account. | ||
(b) | Vesting of New Account . This subsection is effective January 1, 2006. The vested percentage of the new Company Contributions Account shall be determined based on all the Participants Periods of Service. | ||
(c) | Vesting of Old Account . If the Participants Lapse in Apache Employment was for five years or longer, the vested percentage of the old Company Contributions Account shall be based solely on the Participants Period of Service from his first episode of employment. If the Participants Lapse in Apache Employment was for less than five years, the vested percentage of the old Company Contributions Account shall be determined by aggregating his Periods of Service from both episodes of employment. |
5.3 | Calculating Service. |
(a) | Period of Service . |
(i) | General . A Participants Period of Service prior to January 1, 2005 shall be determined according to the provisions of the Plan in effect when the service was rendered. A Participants Period of Service begins on the date he first begins to perform duties as an Employee for which he is entitled to payment, and ends on his Termination From Service Date. In addition, a Participants Period of Service also includes the period between his Termination From Service Date and the day he again begins to perform duties for the Company or an Affiliated Entity for which he is entitled to payment, but only if such period is less than one year in duration. | ||
(ii) | Additional Rules . The service-crediting provisions in this paragraph are more generous than required by the Code. |
(A) | Leased Employees . For vesting purposes only, the Plan shall treat an individual as an Employee if he satisfies all the requirements specified in Code §414(n)(2) for being a leased employee of Apaches or an Affiliated Entitys, except for the requirement of having performed such services for at least one year. | ||
(B) | Approved Leave . If the Employee is absent from the Company or Affiliated Entity for more than one year because of an approved leave of absence (either with or without pay) for any reason (including, but not limited to, jury duty) and the Employee returns to work at or prior to the expiration of his leave of absence, no Termination From Service Date will occur during the leave of absence. | ||
(C) | Servicemen . See Article XV for special provisions that apply to Servicemen. |
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(D) | Corporate Transactions . See Appendix C for instances in which a new Employees Period of Service includes his prior employment with another company. | ||
(E) | Contractors . If an eligible contractor becomes an Employee, his Period of Service shall include his previous continuous service as an eligible contractor, excluding any service provided before 2003. An eligible contractor is an individual who (A) performed services for Apache or an Affiliated Entity on a substantially full-time basis in the capacity of an independent contractor (for federal income tax purposes); (B) became an Employee within a month of ceasing to be an independent contractor working full-time for Apache or an Affiliated Entity; and (C) notified the Plan of his prior service as an independent contractor within two months of becoming an Employee (or, if later, by February 28, 2006 or other deadline established by the Committee). |
(b) | Termination From Service Date . |
(i) | Usual Rule . If the Employee quits, is discharged, retires, or dies, his Termination From Service Date occurs on the last day the Employee performs services for the Company or an Affiliated Entity, except for an Employee who incurs a Disability, in which case his Termination From Service Date does not occur, even if he quits, until the earlier of the one-year anniversary of the date his Disability or the date he recovers from his Disability. | ||
(ii) | Other Absences . If an Employee is absent from the Company and Affiliated Entities for any reason other than a quit, discharge, or retirement, his Termination From Service Date is the earlier of (A) the date he quits, is discharged, retires, or dies, or (B) one year from the date the Employee is absent from the Company or Affiliated Entity for any other reason (such as vacation, holiday, sickness, disability, leave of absence, or temporary lay-off), with the following exception. If the Employee is absent from the Company or Affiliated Entity because of parental leave (which includes only the pregnancy of the Employee, the birth of the Employees child, the placement of a child with the Employee in connection with adoption of such child by the Employee, or the caring for such child immediately following birth or placement) on the first anniversary of the day the Employee was first absent, his Termination From Service Date does not occur until the second anniversary of the day he was first absent (and the period between the first and second anniversaries of the day he was first absent shall not be counted in his Period of Service). |
(c) | Lapse in Apache Employment . A Lapse in Apache Employment means the period commencing on an individuals Termination from Service Date and ending on the date he again begins to perform services as an Employee. |
5.4 | Forfeitures. |
(a) | Exceptions to the Vesting Rules . The following rules supersede the vesting rules of section 5.1. |
(i) | Excess Annual Additions . Annual Additions to a Participants Accounts and any increase or decrease in the net worth of the Participants Accounts attributable to such Annual Additions may be reduced to satisfy the limits described in section 3.4. Any reduction shall be used as specified in section 3.4. | ||
(ii) | Excess Participant Contribution . Company Matching Contributions and any increase or decrease in the net worth of the Account(s) attributable to such contributions may be forfeited as of the last day of the Plan Year if the Participant Contribution that they matched was returned under paragraph 3.2(a)(ii) or 3.2(b)(ii) or subsection 3.5(d) or 3.6(c). Any such forfeiture shall be used as specified in subsection (d). | ||
(iii) | Missing Individuals . A missing individuals vested Accounts may be forfeited as of the last day of any Plan Year, as provided in section 13.12. Any such forfeiture shall be used as specified in subsection (d). | ||
(iv) | Excess Match . Company Matching Contributions that would violate Code §401(a)(17), and any increase or decrease in the net worth of the Account(s) attributable to such contributions, may |
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be forfeited as specified in subsection 3.1(b). Any such reduction shall be used as specified in subsection 3.1(b). |
(b) | Regular Forfeitures . A Participants non-vested interest in his Company Contributions Account shall be forfeited at the end of the Plan Year in which he terminates employment. Any such forfeiture shall be used as specified in subsection (d). | ||
(c) | Restoration of Forfeitures . |
(i) | Missing Individuals . The forfeiture of a missing individuals Account(s), as described in section 13.12, shall be restored to such individual if the individual makes a claim for such amount. | ||
(ii) | Regular Forfeitures . |
(A) | Rehire Within 5 Years . If a Participant is rehired before incurring a five-year Lapse in Apache Employment, and the Participant has received a distribution of his entire vested interest in his Company Contributions Account (with the result that the Participant forfeited his non-vested interest in such Account), then the exact amount of the forfeiture shall be restored to the Participants Account. All the rights, benefits, and features available to the Participant when the forfeiture occurred shall be available with respect to the restored forfeiture. If such a Participant again terminates employment prior to becoming fully vested in his Company Contributions Account, the vested portion of his Company Contributions Account shall be determined by applying the vested percentage determined under section 5.1 to the sum of (x) and (y), then subtracting (y) from such sum, where: (x) is the value of the Participants Company Contributions Account as of the Valuation Date immediately following his most recent termination of employment; and (y) is the amount previously distributed to the Participant on account of the prior termination of employment. | ||
(B) | Rehire After 5 Years . If a Participant is rehired after incurring a five-year Lapse in Apache Employment, then no amount forfeited from his Company Contributions Account shall be restored to that Account. |
(iii) | Method of Forfeiture Restoration . Forfeitures that are restored shall be accomplished by an allocation of the forfeitures under subsection (d) or by a special Company Contribution pursuant to paragraph 3.1(c)(i). |
(d) | Use of Forfeitures . The Committee shall decide how forfeitures are used. Forfeitures may be used (i) to restore Accounts as described in subsection (c), (ii) to pay those expenses of the Plan that are properly payable from the Trust Fund and that are not paid by the Company or Account Owners or charged to Accounts, or (iii) as any Company Contribution. |
5.5 | Transfers Portability. | |
If any other employer adopts this or a similar profit sharing plan and enters into a reciprocal agreement with the Company that provides that (a) the transfer of a Participant from such employer to the Company (or vice versa) shall not be deemed a termination of employment for purposes of the plans, and (b) service with either or both employers shall be credited for purposes of vesting under both plans, then the transferred Participants Account shall be unaffected by the transfer, except, if deemed advisable by the Committee, it may be transferred to the trustee of the other plan. |
6.1 | Beneficiaries. |
(a) | Designating Beneficiaries . Each Account Owner shall file with the Committee a designation of the beneficiaries and contingent beneficiaries to whom the distributable amount (determined pursuant to section 6.2) shall be paid in the event of the Account Owners death. In the absence of an effective beneficiary designation as to any portion of the distributable amount after a Participant dies, such amount shall be paid to the Participants surviving Spouse, or, if none, to his estate. In the absence of |
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an effective beneficiary designation as to any portion of the distributable amount after any non-Participant Account Owner dies, such amount shall be paid to the Account Owners estate. The Account Owner may change a beneficiary designation at any time and without the consent of any previously designated beneficiary. | |||
(b) | Special Rule for Married Participants . If the Account Owner is a married Participant, his Spouse shall be the sole beneficiary unless the Spouse has consented to the designation of a different beneficiary. To be effective, the Spouses consent must be in writing, witnessed by a notary public, and filed with the Committee. Any spousal consent shall be effective only as to the Spouse who signed the consent. | ||
(c) | Special Rule for Divorces . If an Account Owner has designated his spouse as a primary or contingent beneficiary, and the Account Owner and spouse later divorce (or their marriage is annulled), then the former spouse will be treated as having pre-deceased the Account Owner for purposes of interpreting a beneficiary designation form completed prior to the divorce or annulment. This subsection will apply only if the Committee is informed of the divorce or annulment before payment to the former spouse is authorized. | ||
(d) | Disclaimers . Any individual or legal entity who is a beneficiary may disclaim all or any portion of his interest in the Plan, provided that the disclaimer satisfies the requirements of Code §2518(b) and applicable state law. The legal guardian of a minor or legally incompetent person may disclaim for such person. The personal representative (or the individual or legal entity acting in the capacity of the personal representative according to applicable state law) may disclaim on behalf of a beneficiary who has died. The amount disclaimed shall be distributed as if the disclaimant had predeceased the individual whose death caused the disclaimant to become a beneficiary. |
6.2 | Consent. |
(a) | General . Except for distributions identified in subsection (b), distributions may be made only after the appropriate consent has been obtained under this subsection. Distributions to a Participant or to a beneficiary (other than a beneficiary of a deceased Alternate Payee) shall be made only with the Participants or beneficiarys consent to the time of distribution. Distributions to an Alternate Payee or his beneficiary shall be made as specified in the QDRO and in accordance with section 13.9. To be effective, the consent must be filed with the Committee according to the procedures adopted by the Committee, within 180 days before the distribution is to commence. A consent once given shall be irrevocable after the distribution has been processed. | ||
(b) | Exceptions to General Rule . Consent is not required for the following distributions: |
(i) | Corrective distributions under Article III that are returned to the Participant because the contribution is not deductible by the Company or because the contribution would exceed the limits of Code §401(a)(17), §415(c)(1), §402(g), §401(k)(3), §401(m)(2), §401(m)(9), §414(v)(2)(B)(i), or any other limitation of the Code; | ||
(ii) | Distributions required to comply with Code §401(a)(9); | ||
(iii) | Cashouts of small Accounts, as described in subsection 6.6(d) or paragraphs 6.6(e)(i) or 13.9(f)(ii); | ||
(iv) | Distributions required to comply with Code §401(a)(14); | ||
(v) | Distributions of invalid rollovers pursuant to subsection 3.2(d); | ||
(vi) | Distributions upon Plan termination pursuant to section 10.3; and | ||
(vii) | Distributions that must occur by a deadline specified in the Plan. |
6.3 | Distributable Amount. | |
The distributable amount of an Account Owners Account(s) is the vested portion of the Account(s) (as determined by Article V) as of the Valuation Date coincident with or next preceding the date distribution is made, reduced by (a) any amount that is payable to an Alternate Payee pursuant to section 13.9, (b) any amount withdrawn since such Valuation Date, and (c) the outstanding balance of any loan under Article VII. Furthermore, the Committee shall temporarily suspend or limit distributions (by reducing the distributable |
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amount), as explained in subsection 13.9, when the Committee is informed that a Domestic Relations Order affecting the Participants Accounts is or may be in the process of becoming QDRO, while the Committee has suspended withdrawals because it believes that the Plan may have a cause of action against the Participant, or when the Plan has notice of a lien or other claim against the Participant. | ||
6.4 | Manner of Distribution. |
(a) | General . The distributable amount shall be paid in a single payment, except as otherwise provided in the remainder of this section. Distributions shall be in the form of cash except to the extent that an Account is invested in a fund containing primarily Company Stock, the distributee may elect to receive a distribution of whole shares of Company Stock. Fractional shares of Company Stock shall be converted to and paid in cash. | ||
(b) | Partial Withdrawals and Installments . Withdrawals are available to Employees as specified in section 6.5 and to those Employees over 70 1 / 2 who are Five-Percent Owners, as described in paragraph 6.6(c)(ii). Annual installments are available to beneficiaries as described in subsection 6.6(e). | ||
(c) | Grandfather Rules . Installments were a distribution option under the Plan until June 30, 2001. Any Account Owner who could receive a distribution before July 1, 2001 and who elected before July 1, 2001 to receive the distribution in the form of installments shall receive the benefit so elected. An Account Owner who elected installments may elect to accelerate any or all remaining installment payments. |
6.5 | In-Service Withdrawals. | |
An Employee may withdraw amounts from his Accounts only as provided in this section. An Employee may make withdrawals as follows. |
(a) | Withdrawals for Employees Age 59 1 / 2 or Older . An Employee who has attained age 59 1 / 2 may at any time thereafter withdraw any portion of his Participant Contributions Account and any vested portion of his Company Contributions Account. The minimum withdrawal is $1,000 or the vested Account balance, whichever is less. Only two withdrawals are permitted during each Plan Year under this subsection. If the Employee is not fully vested in his Company Contributions Account at the time of a withdrawal under this subsection, the rules of subparagraph 5.4(c)(ii)(A) shall be applied when determining the vested portion of the Company Contributions Account at any time thereafter. | ||
(b) | Rollover Account . An Employee may withdraw all or any portion of his Rollover Account at any time. The minimum withdrawal is $1,000 or the Rollover Account balance, whichever is less. Only two withdrawals from the Rollover Account are permitted during each Plan Year. | ||
(c) | Participant Contributions Account . An Employee may withdraw all or any portion of his Participant Contributions, provided that the Employee has an immediate and heavy financial need, as defined in paragraph (i), the withdrawal is needed to satisfy the financial need, as explained in paragraph (ii), and the amount of the withdrawal does not exceed the limits in paragraph (iii). |
(i) | Financial Need . The following expenses constitute an immediate and heavy financial need: (A) expenses for or necessary to obtain medical care that would be deductible by the Employee under Code §213(d) (determined without regard to whether the expenses exceed 7.5% of adjusted gross income) or that apply to the Employees primary beneficiary (as determined pursuant to section 6.1); (B) costs directly related to the purchase of a principal residence of the Employee (excluding mortgage payments); (C) payment of tuition, related educational fees, and room and board expenses for up to the next 12 months of post-secondary education of the Employee, the Employees Spouse. the Employees children, the Employees dependents (within the meaning of Code §152, without regard to Code §152(b)(1), §152(b)(2), and §152(d)(1)(B)), or the Employees primary beneficiary (as determined pursuant to section 6.1); (D) payments necessary to prevent the Employee from being evicted from his or her principal residence; (E) payments necessary to prevent the mortgage on the Employees principal residence from being foreclosed; (F) payment of burial or funeral expenses for the Employees deceased parent, Spouse, child, other dependent (within the meaning of Code §152, without regard to Code §152(b)(1), §152(b)(2), and §152(d)(1)(B)), or primary beneficiary (as determined pursuant to section 6.1); (G) expenses for the repair of damage to the Employees |
Page 23 of 48 | Prepared December 4, 2007 |
principal residence that would qualify for the casualty deduction under Code §165 (determined without regard to whether the loss exceeds 10% of adjusted gross income); and (H) any other expense that, under IRS guidance of general applicability, is deemed to be on account of an immediate and heavy financial need. In addition, the Committee may determine, based on a review of all relevant facts and circumstances, that a particular expense or series of expenses of the Employee constitutes an immediate and heavy financial need. | |||
(ii) | Satisfaction of Need . The withdrawal is deemed to be needed to satisfy the Employees financial need if (A) the Employee has obtained all withdrawals and all non-taxable loans available from the Companys and any Affiliated Entities plans of deferred compensation, qualified plans, stock options, stock purchase plans, and similar plans, and (B) for a period of at least 6 months from the date the Employee receives the withdrawal, he ceases to make Participant Contributions and elective contributions to all plans of deferred compensation, qualified plans, stock options, stock purchase plans, and similar plans maintained by the Company or any Affiliated Entity. | ||
(iii) | Maximum Withdrawal . An Employee may not withdraw more than the sum of the amount needed to satisfy his financial need and any taxes and penalties reasonably anticipated to result from the withdrawal. An Employee may not withdraw any amount in excess of his Participant Contributions unless he has attained age 59 1 / 2 . |
(d) | Compliance with Code §401(a)(9) . See paragraph 6.6(b)(ii) for the required distributions to a Five-Percent Owner who is age 70 1 / 2 or older. | ||
(e) | Form of Payment of Withdrawal . Withdrawals under subsection (c) shall be in cash. Withdrawals under subsections (a) and (b) shall be in cash, except that any portion of a Participants Accounts that is invested in Company Stock may, at the election of the Participant made at the time that notice of withdrawal is made to the Committee, be withdrawn in the form of whole shares of Company Stock. | ||
(f) | Withdrawal Rules . An Employee may not withdraw any amount under this section that has been borrowed or that is subject to a QDRO. The Committee shall temporarily suspend or limit withdrawals under this section, as explained in section 13.9, when the Committee is informed that a QDRO affecting the Employees Accounts is in process or may be in process. The Committee shall issue such rules as to the frequency of withdrawals, and withdrawal procedures, as it deems appropriate. The Committee may postpone the withdrawal until after the next Valuation Date. The Committee may have a special valuation of the Trust Fund performed before a withdrawal is permitted. The Plan may charge a fee for the withdrawal as well as a fee for having a special valuation performed, as determined by the Committee in its sole discretion. |
6.6 | Time of Distribution. |
(a) | Earliest Date of Distribution . Unless an earlier distribution is permitted by section 6.5 (relating to in-service withdrawals), the earliest date that a Participant may elect to receive a distribution is the date of his Termination of Employment or the date he incurs a Disability. This provision will always result in a distribution date that precedes the latest date of distribution specified in Code §401(a)(14). For purposes of Code §401(a)(14), if a Participant does not affirmatively elect a distribution, he shall be deemed to have elected to defer the distribution to a later date. | ||
(b) | Latest Date of Distribution . |
(i) | Former Employees . A Participant who is not an Employee shall receive a single payment of his distributable amount by his Required Beginning Date. If a Five-Percent Owner terminates employment after his Required Beginning Date, the Plan shall distribute the entire distributable amount to him as soon as administratively practicable after the termination of employment. | ||
(ii) | Current Employees . An Employee who is not a Five-Percent Owner is not required to receive any distributions under this subsection. An Employee who is a Five-Percent Owner shall receive annual distributions of at least the minimum amount required to be distributed pursuant to Code §401(a)(9), which shall be calculated by using only the Participants life expectancy, which shall be recalculated each year. A Five-Percent Owner may request that his first minimum required distribution be distributed in the calendar year preceding his Required |
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Beginning Date; the Committee shall comply with this request if administrating practicable to do so. |
(c) | Small Amounts . |
(i) | $1000 or Less . If the aggregate value of the nonforfeitable portion of a Participants Accounts is $1,000 or less on any date after his Termination of Employment, the Participant shall receive a single payment of the distributable amount as soon as practicable, provided that the aggregate value is $1,000 or less when the distribution is processed. | ||
(ii) | $1000 to $5000 . If paragraph (i) does not apply and the aggregate value of the nonforfeitable portion of a Participants Accounts, ignoring his Rollover Account, is $5,000 or less on any date after his Termination of Employment, then as soon as practicable the Plan shall pay the distributable amount to an individual retirement account or annuity within the meaning of Code §408(a) or §408(b) (collectively, an IRA) for the Participant, unless the Participant affirmatively elects to receive the distribution directly or to have it paid in a direct rollover under section 6.7. The Committee shall select the trustee or custodian of the IRA as well as how the IRA shall be invested initially. The Plan shall notify the Participant (A) that the distribution has been made to an IRA and can be transferred to another IRA, (B) of the identity and contact information of the trustee or custodian of the IRA into which the distribution is made, and (C) of such other information as required to comply with Code §401(a)(31)(B)(i). | ||
(iii) | Date Account Valued . The Committee may elect to check the value of the Participants Accounts on an occasional (rather than a daily) basis, to determine whether to apply the provisions of this subsection. |
(d) | Distribution Upon Participants Death. |
(i) | Small Accounts . If the aggregate cash value of the nonforfeitable portion of a Participants Accounts is $5,000 or less at any time after the Participants death and before any beneficiary elects to receive a distribution under this subsection, then each beneficiary shall each receive a single payment of his share of the distributable amount as soon as administratively practicable, provided that the aggregate value is $5,000 or less when the distribution is processed. The Committee may elect to check the value of the Participants Accounts on an occasional (rather than a daily) basis, to determine whether to apply the provisions of this paragraph. | ||
(ii) | Larger Accounts . If paragraph (i) does not apply, then each beneficiary may elect to have his distributable amount distributed in a single payment or in annual installments at any time after the Participants death, within the following guidelines. No distribution shall be processed until the beneficiarys identity as a beneficiary is established. The entire distributable amount shall be distributed by the last day of the calendar year containing the fifth anniversary of the Participants death. A beneficiary who has elected installments may elect to accelerate any or all remaining payments. If the Participant was a Five-Percent Owner who began to receive the minimum required distributions under paragraph (b)(ii), the distribution to each beneficiary must be made at least as rapidly as required by the method used to calculate the minimum required distributions that was in effect when the Five-Percent Owner died. |
(e) | Alternate Payee . Distributions to an Alternate Payee shall be made in accordance with the provisions of the QDRO and pursuant to subsection 13.9. |
6.7 | Direct Rollover Election. | |
The amendments to this section have an effective date of January 1, 2007. |
(a) | General Rule . A Participant, an Alternate Payee who is the Spouse or former Spouse of the Participant, any individual who is treated as a designated beneficiary of the Participant pursuant to Code §401(a)(9)(E), or any trust to the extent that any beneficiary of the trust is treated as a designated beneficiary of the Participant pursuant to Code §401(a)(9)(E), (collectively, the distributee) may direct the Trustee to pay all or any portion of his eligible rollover distribution to an eligible retirement plan in a direct rollover. This direct rollover option is not available to other Account Owners. Within a reasonable period of time before an eligible rollover distribution, the Committee |
Page 25 of 48 | Prepared December 4, 2007 |
shall inform the distributee of this direct rollover option, the appropriate withholding rules, other rollover options, the options regarding income taxation, and any other information required by Code §402(f). The distributee may waive the usual 30-day waiting period before receiving a distribution, and elect to receive his distribution as soon as administratively practicable after completing and filing his distribution election. | |||
(b) | Definition of Eligible Rollover Distribution . An eligible rollover distribution is any distribution or in-service withdrawal other than (i) distributions required under Code §401(a)(9), (ii) distributions of amounts that have already been subject to federal income tax (such as defaulted loans or after-tax voluntary contributions), other than a direct transfer to (A) another retirement plan that meets the requirements of Code §401(a) or §403(a), or (B) an individual retirement account or annuity described in Code §408(a) or §408(b), (iii) installment payments in a series of substantially equal payments made at least annually and (A) made over a specified period of ten or more years, (B) made for the life or life expectancy of the distributee, or (C) made for the joint life or joint life expectancy of the distributee and his designated beneficiary, (iv) a distribution to satisfy the limits of Code §415 or §402(g), (v) a deemed distribution of a defaulted loan from this Plan, to the extent provided in the regulations, (vi) a distribution to satisfy the ADP or ACP tests, (vii) any other actual or deemed distribution specified in IRS guidance of general applicability, or (viii) any hardship withdrawal by an Employee. | ||
(c) | Definition of Eligible Retirement Plan . |
(i) | Participants, Spouses, and Alternate Payees . For a Participant, an Alternate Payee who is the Spouse or former Spouse of the Participant, or a surviving Spouse of a deceased Participant, an eligible retirement plan is an individual retirement account or annuity described in Code §408(a) or §408(b), an annuity plan described in Code §403(a), an annuity contract described in Code §403(b), an eligible plan under Code §457(b) that is maintained by an eligible employer described in Code §457(e)(1)(A) (which generally includes state and local governments), or the qualified trust of a defined contribution plan described in Code §401(a), that accepts eligible rollover distributions. | ||
(ii) | Other Distributees . For an individual who is treated as a designated beneficiary of the Participant pursuant to Code §401(a)(9)(E), and for any trust to the extent that a beneficiary of the trust is treated as a designated beneficiary of the Participant pursuant to Code §401(a)(9)(E), an eligible retirement plan is an individual retirement account or annuity described in Code §408(a) or §408(b) that is in existence or is established for the purposes of receiving the distribution on behalf of the beneficiary, and that, with respect to the beneficiary, is treated as an inherited individual retirement account or annuity within the meaning of Code §408(d)(3)(C). The designated beneficiary has two choices for receiving distributions that are to be paid in a direct rollover to such inherited individual retirement account or annuity. |
(A) | The designated beneficiary may elect to receive a single payment or installments from the Plan, pursuant to paragraph 6.6(d)(ii), during the calendar year in which the Participant died or in the following calendar year (or by such later date allowed pursuant to IRS guidance of general applicability or a private letter ruling obtained by the designated beneficiary). Each annual installment from the Plan must satisfy the requirements of Code §401(a)(9)(B)(iii) (which essentially means that each annual installment must be equal to at least the account balance standing to the credit of the deceased Plan Participant at the end of the previous year, divided by the designated beneficiarys life expectancy). In this case, distributions from the inherited individual retirement account or annuity may be made over the life expectancy of the designated beneficiary. | ||
(B) | If the requirements of subparagraph (A) are not satisfied, the designated beneficiary must receive, pursuant to paragraph 6.6(d)(ii), a full distribution from the Plan by the end of the calendar year containing the fifth anniversary of the Participants death. In this case, distributions from the inherited individual retirement account or annuity must generally be completed by the end of the calendar year containing the fifth anniversary of the Participants death. |
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(d) | Definition of Direct Rollover . A direct rollover is a payment by the Trustee to the eligible retirement plan specified by the distributee. |
7.1 | Availability | |
Loans are available only to Employees, Participants who are parties-in-interest (within the meaning of ERISA §3(14)), and beneficiaries who are parties-in-interest (collectively referred to in this section as Borrowers). The Committee shall temporarily reduce the amount a Participant may borrow or temporarily prevent the Participant from borrowing when, as described in section 13.9, the Committee is informed that a QDRO affecting the Participants Accounts is in process or may be in process. Loans shall be temporarily unavailable to a prospective Borrower while the Committee has suspended loans because the Committee believes that the Plan may have a cause of action against the Participant, as explained in subsection 13.9(h). | ||
7.2 | Number of Loans | |
A Borrower may have no more than one loan outstanding. The Committee may change the maximum number of outstanding loans allowed at any time. | ||
7.3 | Loan Amount | |
The Committee may establish a minimum loan amount of no more than $500. The Committee may require loans to be made in increments of no more than $100. The amount that a Borrower may borrow is subject to the following limits. |
(a) | A Borrower may not borrow more than the sum of the balance in his Participant Contributions Account and the balance in his Rollover Account. | ||
(b) | At the time the loan from this Plan is made, the aggregate outstanding balance of all the Borrowers loans from all qualified plans maintained by the Company and Affiliated Entities, including the new loan from this Plan, shall not exceed 50% of the Borrowers vested interest in all qualified plans maintained by the Company and Affiliated Entities. | ||
(c) | For purposes of this paragraph, the term one-year maximum means the largest aggregate outstanding balance, on any day in the one-year period ending on the day before the new loan from this Plan is obtained, of all loans to the Borrower from all qualified plans maintained by the Company and Affiliated Entities. For purposes of this paragraph, the term existing loans means the aggregate outstanding balance, on the day the new loan is made to the Borrower, of all loans to the Borrower from all qualified plans maintained by the Company and Affiliated Entities, excluding the new loan from this Plan. If the existing loans are greater than or equal to the one-year maximum, then the new loan from this Plan shall not exceed $50,000 minus the existing loans. If the existing loans are less than the one-year maximum, then the new loan from this Plan shall not exceed $50,000 minus the one-year maximum. |
For purposes of applying the above limits, the vested portion of the Borrowers accounts under this Plan and all other plans maintained by the Company and Affiliated Entities shall be determined without regard to any accumulated deductible employee contributions (as defined in Code §72(o)(5)(B)), and without regard to any amounts accrued while the Borrower was ineligible to obtain a loan (as described in subsection (a)). Notwithstanding the foregoing, the Committee may, in its sole discretion, establish lesser limits on the amounts that may be borrowed, which limits shall be applied in a non-discriminatory manner. The Committee shall temporarily reduce the amount a Participant may borrow or temporarily prevent the Participant from borrowing, as described in section 13.9, when the Committee is informed that a QDRO affecting the Participants Accounts is in process or may be in process. No loan shall be made of amounts that are required to be distributed prior to the end of the term of the loan. |
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7.4 | Interest | |
Each loan shall bear a reasonable rate of interest, which shall remain fixed for the duration of the loan. The Committee or its agent shall determine the reasonable rate of interest on the date the loan documents are prepared. The Committee shall have the authority to establish procedures from time to time for determining the rate of interest. In the absence of Committee action, the interest rate shall be equal to the prime lending rate, plus 1%, as published in the Wall Street Journal on the first day that such newspaper is published during the calendar quarter in which the loan documents are prepared. | ||
7.5 | Repayment. | |
All loans shall be repaid, with interest, in substantially level amortized payments made not less frequently than quarterly. The maximum term for a loan is four years; the minimum term for a loan is one year. The Committee has the authority to decrease the minimum term for future loans and the authority to increase the maximum term for future loans to no more than five years. Loan repayments shall be accelerated, and all loans shall be payable in full on the date the Borrower separates from service (if the Borrower is an Employee), the date the Borrower becomes ineligible to borrow from the Plan under to section 7.1, and on any other date or any other contingency as determined by the Committee. If the Borrower is an Employee, loans shall be repaid through payroll withholding unless (a) the Employee is pre-paying his loan, in which case the pre-payment need not be through payroll withholding, or (b) the Employee is on an unpaid leave of absence, in which case he may pay any installment by personal check. Partial pre-payments are accepted. | ||
7.6 | Default | |
A loan shall be in default if any installment is not paid by the end of the calendar quarter following the calendar quarter in which the installment was due. Upon default, the Committee may, in addition to all other remedies, apply the Borrowers Plan accounts toward payment of the loan; however, the Trustee may not exercise such right of set-off with respect to the Borrowers Participant Contributions Account until such account has become payable, pursuant to section 6.5 or 6.6. | ||
7.7 | Administration | |
A Borrower shall apply for a loan by completing the application procedures specified by the Committee. Until changed by the Committee, a Borrower shall apply for a loan by calling the Trustee and completing a voice application. The loan shall be processed in accordance with reasonable procedures adopted from time to time by the Committee. The Committee may impose a loan application fee, a loan origination fee, a loan pre-payment fee, and loan maintenance fees. All loans shall be evidenced by a promissory note and shall be fully secured. No Borrower whose Plan accounts are so pledged may obtain distribution of any portion of the accounts that have been pledged. The rights of the Trustee under such pledge shall have priority over all claims of the Borrower, his beneficiaries, and creditors. Each loan shall be treated as a directed investment. Any increase or decrease in the net worth of the Trust Fund attributable to such loan shall be allocated solely to the Plan accounts of the Borrower. |
8.1 | No Joint Fiduciary Responsibilities. | |
The Trustee(s) and the Committee shall be the named fiduciaries under the Plan and Trust agreement and shall be the only named fiduciaries thereunder. The fiduciaries shall have only the responsibilities specifically allocated to them herein or in the Trust agreement. Such allocations are intended to be mutually exclusive and there shall be no sharing of fiduciary responsibilities. Whenever one named fiduciary is required by the Plan or Trust agreement to follow the directions of another named fiduciary, the two named fiduciaries shall not be deemed to have been assigned a shared responsibility, but the responsibility of the named fiduciary giving the directions shall be deemed his sole responsibility, and the responsibility of the named fiduciary receiving those directions shall be to follow them insofar as the instructions are on their face proper under applicable law. |
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8.2 | The Company. | |
The Company shall be responsible for: (a) making Company Contributions; (b) certifying to the Trustee the names and specimen signatures of the members of the Committee acting from time to time; (c) keeping accurate books and records with respect to its Employees and the appropriate components of each Employees Compensation and furnishing such data to the Committee; (d) selecting agents and fiduciaries to operate and administer the Plan and Trust; (e) appointing an investment manager if it determines that one should be appointed; and (f) reviewing periodically the performance of such agents, managers, and fiduciaries. | ||
8.3 | The Trustee. | |
The Trustee shall be responsible for: (a) the investment of the Trust Fund to the extent and in the manner provided in the Trust agreement; (b) the custody and preservation of Trust assets delivered to it; and (c) the payment of such amounts from the Trust Fund as the Committee shall direct. | ||
8.4 | The Committee Plan Administrator. | |
The board of directors of Apache shall appoint an administrative Committee consisting of no fewer than three individuals who may be, but need not be, Participants, officers, directors, or Employees of the Company. If the board of directors does not appoint a Committee, Apache shall act as the Committee under the Plan. The members of the Committee shall hold office at the pleasure of the board of directors and shall service without compensation. The Committee shall be the Plans administrator as defined in section 3(16)(A) of ERISA. It shall be responsible for establishing and implementing a funding policy consistent with the objectives of the Plan and with the requirements of ERISA. This responsibility shall include establishing (and revising as necessary) short-term and long-term goals and requirements pertaining to the financial condition of the Plan, communicating such goals and requirements to the persons responsible for the various aspects of the Plan operations, and monitoring periodically the implementation of such goals and requirements. The Committee shall publish and file or cause to be published and filed or disclosed all reports and disclosures required by federal or state laws. | ||
8.5 | Committee to Construe Plan. |
(a) | The Committee shall administer the Plan and shall have all discretion, power, and authority necessary for that purpose, including, but not by way of limitation, the full and absolute discretion and power to interpret the Plan, to determine the eligibility, status, and rights of all individuals under the Plan, and in general to decide any dispute and all questions arising in connection with the Plan. The Committee shall direct the Trustee concerning all distributions from the Trust Fund, in accordance with the provisions of the Plan, and shall have such other powers in the administration of the Trust Fund as may be conferred upon it by the Trust agreement. The Committee shall maintain all Plan records except records of the Trust Fund. | ||
(b) | The Committee may adjust the Account(s) of any Participant, in order to correct errors and rectify omissions, in such manner as the Committee believes will best result in the equitable and nondiscriminatory administration of the Plan. |
8.6 | Organization of Committee. | |
The Committee shall adopt such rules as it deems desirable for the conduct of its affairs and for the administration of the Plan. It may appoint agents (who need not be members of the Committee) to whom it may delegate such powers as it deems appropriate, except that any dispute shall be determined by the Committee. The Committee may make its determinations with or without meetings. It may authorize one or more of its members or agents to sign instructions, notices and determinations on its behalf. If a Committee decision or action affects a relatively small percentage of Plan Participants including a Committee member, such Committee member shall not participate in the Committee decision or action. The action of a majority of the disinterested Committee members shall constitute the action of the Committee. | ||
8.7 | Agent for Process. | |
Apaches Vice President, General Counsel, and Secretary shall be the agents of the Plan for service of all process. |
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8.8 | Indemnification of Committee Members. | |
The Company shall indemnify and hold the members of the Committee, and each of them, harmless from the effects and consequences of their acts, omissions, and conduct in their official capacities, except to the extent that the effects and consequences thereof shall result from their own willful misconduct, breach of good faith, or gross negligence in the performance of their duties. The foregoing right of indemnification shall not be exclusive of the rights to which each such member may be entitled as a matter of law. | ||
8.9 | Conclusiveness of Action. | |
Any action taken by the Committee on matters within the discretion of the Committee shall be conclusive, final and binding upon all participants in the Plan and upon all persons claiming any rights hereunder, including alternate payees and beneficiaries. | ||
8.10 | Payment of Expenses. | |
The members of the Committee shall serve without compensation but their reasonable expenses shall be paid by the Company. The compensation or fees of accountants, counsel, and other specialists and any other costs of administering the Plan or Trust Fund may be paid by the Company or Account Owners or may be charged to the Trust Fund, to the extent permissible under ERISA. |
9.1 | Trust Agreement. | |
Apache has entered into a Trust agreement to provide for the holding, investment, and administration of the funds of the Plan. The Trust agreement shall be part of the Plan, and the rights and duties of any individual under the Plan shall be subject to all terms and provisions of the Trust agreement. | ||
9.2 | Plan Expenses. |
(a) | General . Except as provided in subsection (b), (i) all taxes upon or in respect of the Plan and Trust shall be paid out of Plan assets, and all expenses of administering the Plan and Trust shall be paid out of Plan assets, to the extent permitted by law and to the extent such taxes and expenses are not paid by the Company or an Account Owner, and (ii) the Committee shall have full discretion to determine how each tax or expense that is not paid by the Company shall be paid and the Committee shall have full discretion to determine how each tax or expense that is paid out of Plan assets shall be allocated. No fiduciary shall receive any compensation for services rendered to the Plan if the fiduciary is being compensated on a full time basis by the Company or an Affiliated Entity. | ||
(b) | Individual Expenses . To the extent not paid by the Company or an Account Owner, all expenses of individually directed transactions, including without limitation the Trustees transaction fee, brokerage commissions, transfer taxes, interest on insurance policy loans, and any taxes and penalties that may be imposed as a result of an individuals investment direction, shall be assessed against the Account(s) of the Account Owner directing such transactions. |
9.3 | Investments. |
(a) | §404(c) Plan . The Plan is intended to be a plan described in ERISA §404(c). To the extent that an Account Owner exercises control over the investment of his Accounts, no person who is a fiduciary shall be liable for any loss, or by reason of any breach, that is the direct and necessary result of the Account Owners exercise of control. | ||
(b) | Directed Investments . Accounts shall be invested, upon direction of each Account Owner made in a manner acceptable to the Committee, in any one or more of a series of investment funds designated by the Committee or to the extent permitted by the Committee in a brokerage arrangement. One or more such funds may, at the sole discretion of the Committee, consist primarily of shares of Company Stock. In addition, Company Stock may be an available investment alternative. If so directed by Account Owners, up to 100% of the Accounts under the Plan may be invested in Company Stock. To the extent that any Account is invested in Company Stock or in an investment funds consisting primarily of Company Stock, an Account Owner may sell such investment at any time, subject to reasonable |
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administrative delays and any blackout periods imposed by the Committee (including blackout periods that apply to particular Participants to ensure compliance with the securities laws). The funds available for investment and the principal features thereof, including a general description of the investment objectives, the risk and return characteristics, and the type and diversification of the investment portfolio of each fund, shall be communicated to the Account Owners in the Plan from time to time. Any changes in such funds shall be immediately communicated to all Account Owners. | |||
(c) | Absence of Directions . To the extent that an Account Owner fails to affirmatively direct the investment of his Accounts, the Committee shall direct the Trustee in writing concerning the investment of such Accounts. The Committee shall act by majority vote. Any dissenting member of the Committee shall, having registered his dissent in writing, thereafter cooperate to the extent necessary to implement the decision of the Committee. | ||
(d) | Change in Investment Directions . Account Owners may change their investment directions, with respect to the investment of new contributions and with respect to the investment of existing amounts allocated to Accounts, on any business day, subject to any restrictions and limitations imposed by the Trustee, investment funds, or brokerage arrangement. The Committee shall establish procedures for giving investment directions, which shall be in writing and communicated to Account Owners. |
10.1 | Termination of Plan or Discontinuance of Contributions. | |
Apache expects to continue the Plan indefinitely, but the continuance of the Plan and the payment of contributions are not assumed as contractual obligations. Apache may terminate the Plan or discontinue contributions at any time. Upon the termination of the Plan or the complete discontinuance of contributions, each Participants Accounts shall become fully vested. Upon the partial termination of the Plan, the Accounts of all affected Participants shall become fully vested. The only Participants who are affected by a partial termination are those whose employment with the Company or Affiliated Entity is terminated as a result of the corporate event causing the partial termination; Employees terminated for cause and those who leave voluntarily are not affected by a partial termination. | ||
10.2 | Allocations upon Termination or Discontinuance of Company Contributions. | |
Upon the termination or partial termination of the Plan or upon the complete discontinuance of contributions, the Committee shall promptly notify the Trustee of such termination or discontinuance. The Trustee shall then determine, in the manner prescribed in section 4.2, the net worth of the Trust Fund as of the close of the business day specified by the Committee. The Trustee shall advise the Committee of any increase or decrease in such net worth that has occurred since the preceding Valuation Date. After crediting to the Participant Contributions Account of each Participant any amount contributed since the preceding Valuation Date, the Committee shall thereupon allocate, in the manner described in section 4.3, among the remaining Plan Accounts, in the manner described in Articles III, IV and V, any Company Contributions or forfeitures occurring since the preceding Valuation Date. | ||
10.3 | Procedure upon Termination of Plan or Discontinuance of Contributions. | |
If the Plan has been terminated or partially terminated, or if a complete discontinuance of contributions to the Plan has occurred, then after the allocations required under section 10.2 have been completed, the Trustee shall distribute or transfer the Account(s) of affected Account Owners as follows. |
(a) | No Other Plan . If the Company and Affiliated Entities are not treated, pursuant to the Treasury Regulations under Code §401(k), as maintaining another alternative defined contribution plan, the Trustee shall distribute each Account Owners entire Account in a single payment, after complying with the requirements of section 6.7. For purposes of this section only, an alternative defined contribution plan means a defined contribution plan that is not an employee stock ownership plan within the meaning of Code §4975(e)(7) or §409(a)), a simplified employee pension within the meaning of Code §408(k), a SIMPLE IRA within the meaning of Code §408(p), a plan or contract that satisfies the requirements of Code §403(b), or a plan described in Code §457(b) or §457(f). |
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(b) | Other Plan Maintained . If the Company and Affiliated Entities are treated, pursuant to the Treasury Regulations under Code §401(k), as maintaining another alternative defined contribution plan, the Trustee shall (i) distribute the Accounts of each non-Participant Account Owner in a single payment, after complying with the requirements of section 6.7, and (ii) transfer the Accounts of each Participant to an alternative defined contribution plan. All the rights, benefits, features, and distribution restrictions with respect to the transferred amounts shall continue to apply to the transferred amounts unless a change is permitted pursuant to applicable IRS guidance of general applicability. | ||
(c) | Form of Payment . A transfer made pursuant to this section may be in cash, in kind, or partly in cash and partly in kind. Any distribution made pursuant to this section may be in cash, in shares of Company Stock to the extent an Account is invested in Company Stock, or partly in cash and partly in shares of Company Stock. After all such distributions or transfers have been made, the Trustee shall be discharged from all obligation under the Trust; no Account Owner who has received any such distribution, or for whom any such transfer has been made, shall have any further right or claim under the Plan or Trust. |
10.4 | Amendment by Apache. |
(a) | Amendment . Apache may at any time amend the Plan in any respect, without prior notice, subject to the following limitations. No amendment shall be made that would have the effect of vesting in the Company any part of the Trust Fund or of diverting any part of the Trust Fund to purposes other than for the exclusive benefit of Account Owners. The rights of any Account Owner with respect to contributions previously made shall not be adversely affected by any amendment. No amendment shall reduce or restrict, either directly or indirectly, the accrued benefit (within the meaning of Code §411(d)(6)) provided to any Account Owner before the amendment, except as permitted by the Code or IRS guidance of general applicability. | ||
(b) | Amendment to Vesting Schedule . If the vesting schedule is amended, and it has the potential to provide slower vesting for one or more Participants, each such Participant with a three-year or longer Period of Service may elect to have his nonforfeitable percentage computed under the Plan without regard to such amendment. The period during which the election may be made shall commence with the date the amendment is adopted and shall end on the latest of: (i) 60 days after the amendment is adopted; (ii) 60 days after the amendment becomes effective; or (iii) 60 days after the Participant is issued written notice of the amendment by the Company or Committee. Furthermore, no amendment shall decrease the nonforfeitable percentage, measured as of the later of the date the amendment is adopted or effective, of any Account Owners Accounts. | ||
(c) | Procedure . Each amendment shall be in writing. Each amendment shall be approved by Apaches board of directors or by an officer of Apache who has the authority to amend the Plan. Each amendment shall be executed by an officer of Apache who has the authority to execute the amendment. |
11.1 | Adoption of Plan. | |
Apache may permit any Affiliated Entity to adopt the Plan and Trust for its Employees. Thereafter, such Affiliated Entity shall deliver to the Trustee a certified copy of the resolutions or other documents evidencing its adoption of the Plan and Trust. The Employees of the Affiliated Entity adopting the Plan shall not be eligible to invest their Accounts in Company Stock until compliance with the applicable registration and reporting requirements of the securities laws. | ||
11.2 | Agent of Affiliated Entity. | |
By becoming a party to the Plan, each Affiliated Entity appoints Apache as its agent with authority to act for the Affiliated Entity in all transactions in which Apache believes such agency will facilitate the administration of the Plan. Apache shall have the sole authority to amend and terminate the Plan. |
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11.3 | Disaffiliation and Withdrawal from Plan. |
(a) | Disaffiliation . Any Affiliated Entity that has adopted the Plan and thereafter ceases for any reason to be an Affiliated Entity shall forthwith cease to be a party to the Plan. | ||
(b) | Withdrawal . Any Affiliated Entity may, by appropriate action and written notice thereof to Apache, provide for the discontinuance of its participation in the Plan. Such withdrawal from the Plan shall not be effective until the end of the Plan Year. |
11.4 | Effect of Disaffiliation or Withdrawal. | |
If at the time of disaffiliation or withdrawal, the disaffiliating or withdrawing entity, by appropriate action, adopts a substantially identical plan that provides for direct transfers from this Plan, then, as to Account Owners associated with such entity, no plan termination shall have occurred; the new plan shall be deemed a continuation of this Plan for such Account Owners. In such case, the Trustee shall transfer to the trustee of the new plan all of the assets held for the benefit of Account Owners associated with the disaffiliating or withdrawing entity, and no forfeitures or acceleration of vesting shall occur solely by reason of such action. Such payment shall operate as a complete discharge of the Trustee, and of all organizations except the disaffiliating or withdrawing entity, of all obligations under this Plan to Account Owners associated with the disaffiliating or withdrawing entity. A new plan shall not be deemed substantially identical to this Plan if it provides slower vesting than this Plan. Nothing in this section shall authorize the divesting of any vested portion of a Participants Account(s). | ||
11.5 | Actions upon Disaffiliation or Withdrawal. |
(a) | Distribution or Transfer . If an entity disaffiliates from Apache or withdraws from the Plan and the provisions of section 11.4 are not followed, then the following rules apply to the Account(s) of the Account Owners associated with the disaffiliating or withdrawing entity. The Account Owners Accounts shall remain in this Plan until a distribution is processed under the usual rules of Article VI, unless the disaffiliating or withdrawing entity maintains another qualified plan that accepts direct transfers from this Plan, in which case the Committee may transfer the Account Owners Accounts to the disaffiliating or withdrawing entitys plan without the consent of the Account Owner. | ||
(b) | Form of Transfer . A transfer made pursuant to this section may be in cash, in kind, or partly in cash and partly in kind. Any distribution made pursuant to this section may be in cash, in shares of Company Stock to the extent an Account is invested in Company Stock, or partly in cash and partly in shares of Company Stock. After such distribution or transfer has been made, no Account Owner who has received any such distribution, or for whom any such transfer has been made, shall have any further right or claim under the Plan or Trust. |
12.1 | Application of Top-Heavy Provisions. | |
The provisions of this Article XII shall be applicable only if the Plan becomes top-heavy as defined below for any Plan Year. If the Plan becomes top-heavy for a Plan Year, the provisions of this Article XII shall apply to the Plan effective as of the first day of such Plan Year and shall continue to apply to the Plan until the Plan ceases to be top-heavy or until the Plan is terminated or otherwise amended. | ||
12.2 | Determination of Top-Heavy Status. | |
The Plan shall be considered top-heavy for a Plan Year if, as of the last day of the prior Plan Year, the aggregate of the Account balances (as calculated according to the regulations under Code §416) of Key Employees under this Plan (and under all other plans required or permitted to be aggregated with this Plan) exceeds 60% of the aggregate of the Account balances (as calculated according to the regulations under Code §416) in this Plan (and under all other plans required or permitted to be aggregated with this Plan) of all current Employees and all former Employees who terminated employment within one year of the last day of the prior Plan Year. This ratio shall be referred to as the top-heavy ratio. For purposes of determining the account balance of any Participant, (a) the balance shall be determined as of the last day of the prior Plan Year, (b) the balance shall also include any distributions to the Participant during the one-year period ending |
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on the last day of the prior Plan Year, and (c) the balance shall also include, for distributions made for a reason other than separation from service or death or disability, any distributions to the Participant during the five-year period ending on the last day of the prior Plan Year. This shall also apply to distributions under a terminated plan that, if it had not been terminated, would have been required to be included in an aggregation group. The Account balances of a Participant who had once been a Key Employee, but who is not a Key Employee during the Plan Year, shall not be taken into account. The following plans must be aggregated with this Plan for the top-heavy test: (a) a qualified plan maintained by the Company or an Affiliated Entity in which a Key Employee participated during this Plan Year or during the previous four Plan Years and (b) any other qualified plan maintained by the Company or an Affiliated Entity that enables this Plan or any plan described in clause (a) to meet the requirements of Code §401(a)(4) or §410. The following plans may be aggregated with this Plan for the top-heavy test: any qualified plan maintained by the Company or an Affiliated Entity that, in combination with the Plan or any plan required to be aggregated with this Plan when testing this Plan for top-heaviness, would satisfy the requirements of Code §401(a)(4) and §410. If one or more of the plans required or permitted to be aggregated with this Plan is a defined benefit plan, a Participants account balance shall equal the present value of the Participants accrued benefit. If the aggregation group includes more than one defined benefit plan, the same actuarial assumptions shall be used with respect to each such defined benefit plan. The foregoing top-heavy ratio shall be computed in accordance with the provisions of Code §416(g), together with the regulations and rulings thereunder. | ||
12.3 | Special Vesting Rule. | |
Unless section 5.1 provides for faster vesting, the amount credited to the Participants Company Contributions Account shall vest in accordance with the following schedule during any top-heavy Plan Year: |
Period of Service | Vesting Percentage | |||
Less than 2 years
|
0 | % | ||
At least 2 years, but less than 3 years
|
20 | % | ||
At least 3 years, but less than 4 years
|
40 | % | ||
At least 4 years, but less than 5 years
|
60 | % | ||
At least 5 years, but less than 6 years
|
80 | % | ||
6 or more years
|
100 | % |
12.4 | Special Minimum Contribution. | |
Notwithstanding the provisions of section 3.1, in every top-heavy Plan Year, a minimum allocation is required for each Non-Key Employee who both (a) performed one or more hours of service as an Employee during the Plan Year as a Covered Employee after satisfying the eligibility requirements of section 2.1, and (b) was an Employee on the last day of the Plan Year. The minimum allocation shall be a percentage of each Non-Key Employees Compensation. The percentage shall be the lesser of 3% or the largest percentage obtained for any Key Employee by dividing his Annual Additions (to this Plan and any other plan aggregated with this Plan) for the Plan Year by his Compensation for the Plan Year. If the Participant participates in both this Plan and the Apache Corporation Money Purchase Retirement Plan, then the Participants minimum allocation shall be provided in the Apache Corporation Money Purchase Retirement Plan. If this minimum allocation is not otherwise satisfied for any Non-Key Employee, the Company shall contribute the additional amount needed to satisfy this requirement to such Non-Key Employees Company Contributions Account. | ||
12.5 | Change in Top-Heavy Status. | |
If the Plan ceases to be a top-heavy plan as defined in this Article XII, and if any change in the benefit structure, vesting schedule, or other component of a Participants accrued benefit occurs as a result of such change in top-heavy status, the nonforfeitable portion of each Participants benefit attributable to Company Contributions shall not be decreased as a result of such change. In addition, each Participant with at least a three-year Period of Service on the date of such change, may elect to have the nonforfeitable percentage computed under the Plan without regard to such change in status. The period during which the election may be made shall commence on the date the Plan ceases to be a top-heavy plan and shall end on the later of (a) 60 days after the change in status occurs, (b) 60 days after the change in status becomes effective, or (c) 60 days after the Participant is issued written notice of the change by the Company or the Committee. |
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13.1 | Right to Dismiss Employees No Employment Contract. | |
The Company and Affiliated Entities may terminate the employment of any employee as freely and with the same effect as if this Plan were not in existence. Participation in this Plan by an employee shall not constitute an express or implied contract of employment between the Company or an Affiliated Entity and the employee. | ||
13.2 | Claims Procedure. |
(a) | General . Each claim for benefits shall be processed in accordance with the procedures that are established by the Committee. The procedures shall comply with the guidelines specified in this section. The Committee may delegate its duties under this section. | ||
(b) | Representatives . A claimant may appoint a representative to act on his behalf. The Plan shall only recognize a representative if the Plan has received a written authorization signed by the claimant and on a form prescribed by the Committee, with the following exceptions. The Plan shall recognize a claimants legal representative, once the Plan is provided with documentation of such representation. If the claimant is a minor child, the Plan shall recognize the claimants parent or guardian as the claimants representative. Once an authorized representative is appointed, the Plan shall direct all information and notification regarding the claim to the authorized representative and the claimant shall be copied on all notifications regarding decisions, unless the claimant provides specific written direction otherwise. | ||
(c) | Extension of Deadlines . The claimant may agree to an extension of any deadline that is mentioned in this section that applies to the Plan. The Committee or the relevant decision-maker may agree to an extension of any deadline that is mentioned in this section that applies to the claimant. | ||
(d) | Fees . The Plan may not charge any fees to a claimant for utilizing the claims process described in this section. | ||
(e) | Filing a Claim . A claim is made when the claimant files a claim in accordance with the procedures specified by the Committee. Any communication regarding benefits that is not made in accordance with the Plans procedures will not be treated as a claim. | ||
(f) | Initial Claims Decision . The Plan shall decide a claim within a reasonable time up to 90 days after receiving the claim. The Plan shall have a 90-day extension, but only if the Plan is unable to decide within 90 days for reasons beyond its control, the Plan notifies the claimant of the special circumstances requiring the need for the extension by the 90th day after receiving the claim, and the Plan notifies the claimant of the date by which the Plan expects to make a decision. | ||
(g) | Notification of Initial Decision . The Plan shall provide the claimant with written notification of the Plans full or partial denial of a claim, reduction of a previously approved benefit, or termination of a benefit. The notification shall include a statement of the reason(s) for the decision; references to the plan provision(s) on which the decision was based; a description of any additional material or information necessary to perfect the claim and why such information is needed; a description of the procedures and deadlines for appeal; a description of the right to obtain information about the appeal procedures; and a statement of the claimants right to sue. | ||
(h) | Appeal . The claimant may appeal any adverse or partially adverse decision. To appeal, the claimant must follow the procedures specified by the Committee. The appeal must be filed within 60 days of the date the claimant received notice of the initial decision. If the appeal is not timely and properly filed, the initial decision shall be the final decision of the Plan. The claimant may submit documents, written comments, and other information in support of the appeal. The claimant shall be given reasonable access at no charge to, and copies of, all documents, records, and other relevant information. | ||
(i) | Appellate Decision . The Plan shall decide the appeal of a claim within a reasonable time of no more than 60 days from the date the Plan receives the claimants appeal. The 60-day deadline shall be |
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extended by an additional 60 days, but only if the Committee determines that special circumstances require an extension, the Plan notifies the claimant of the special circumstances requiring the need for the extension by the 60th day after receiving the appeal, and the Plan notifies the claimant of the date by which the Plan expects to make a decision. If an appeal is missing any information from the claimant that is needed to decide the appeal, the Plan shall notify the claimant of the missing information and grant the claimant a reasonable period to provide the missing information. If the missing information is not timely provided, the Plan shall deny the claim. If the missing information is timely provided, the 60-day deadline (or 120-day deadline with the extension) for the Plan to make its decision shall be increased by the length of time between the date the Plan requested the missing information and the date the Plan received it. | |||
(j) | Notification of Decision . The Plan shall provide the claimant with written notification of the Plans appellate decision (positive or adverse). The notification of any adverse or partially adverse decision shall include a statement of the reason(s) for the decision; reference to the plan provision(s) on which the decision was based; a statement of the claimants right to sue; and a statement that the claimant is entitled to receive, free of charge and upon request, reasonable access to and copies of all documents, records, and other information relevant to the claim. | ||
(k) | Limitations on Bringing Actions in Court . Once an appellate decision that is adverse or partially adverse to the claimant has been made, the claimant may file suit in court only if he does so by the earlier of the following dates: (i) the one-year anniversary of the date of the appellate decision, or (ii) the date on which the statute of limitations for such claim expires. | ||
(l) | Discretionary Authority . The Committee shall have total discretionary authority to determine eligibility, status, and the rights of all individuals under the Plan and to construe any and all terms of the Plan. |
13.3 | Source of Benefits. | |
All benefits payable under the Plan shall be paid solely from the Trust Fund, and the Company and Affiliated Entities assume no liability or responsibility therefor. | ||
13.4 | Exclusive Benefit of Employees. | |
It is the intention of the Company that no part of the Trust, other than as provided in sections 3.3, 9.2, and 13.9 and Article VII hereof and the Trust Agreement, ever to be used for or diverted for purposes other than for the exclusive benefit of Participants, Alternate Payees, and their beneficiaries, and that this Plan shall be construed to follow the spirit and intent of the Code and ERISA. | ||
13.5 | Forms of Notices. | |
Wherever provision is made in the Plan for the filing of any notice, election, or designation by a Participant, Spouse, Alternate Payee, or beneficiary, the action of such individual may be evidenced by the execution of such form as the Committee may prescribe for the purpose. The Committee may also prescribe alternate methods for filing any notice, election, or designation (such as telephone voice-response or e-mail). | ||
13.6 | Failure of Any Other Entity to Qualify. | |
If any entity adopts this Plan but fails to obtain or retain the qualification of the Plan under the applicable provisions of the Code, such entity shall withdraw from this Plan upon a determination by the Internal Revenue Service that it has failed to obtain or retain such qualification. Within 30 days after the date of such determination, the assets of the Trust Fund held for the benefit of the Employees of such entity shall be separately accounted for and disposed of in accordance with the Plan and Trust. | ||
13.7 | Notice of Adoption of the Plan. | |
The Company shall provide each of its Employees with notice of the adoption of this Plan, notice of any amendments to the Plan, and notice of the salient provisions of the Plan prior to the end of the first Plan Year. A complete copy of the Plan shall also be made available for inspection by Employees or any other individual with an Account balance under the Plan. |
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13.8 | Plan Merger. | |
If this Plan is merged or consolidated with, or its assets or liabilities are transferred to, any other qualified plan of deferred compensation, each Participant shall be entitled to receive a benefit immediately after the merger, consolidation, or transfer that is equal to or greater than the benefit the Participant would have been entitled to receive immediately before the merger, consolidation, or transfer if this Plan had then been terminated. | ||
13.9 | Inalienability of Benefits Domestic Relations Orders. |
(a) | General . Except as provided in section 7.2, relating to Plan loans, subsection 6.1(d) relating to disclaimers, and subsections (b), (g), and (h) below, no Account Owner shall have any right to assign, alienate, transfer, or encumber his interest in any benefits under this Plan, nor shall such benefits be subject to any legal process to levy upon or attach the same for payment of any claim against any such Account Owner. | ||
(b) | QDRO Exception . Subsection (a) shall apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a Participant pursuant to a Domestic Relations Order unless such Domestic Relations Order is a QDRO, in which case the Plan shall make payment of benefits in accordance with the applicable requirements of any such QDRO. | ||
(c) | QDRO Requirements . In order to be a QDRO, the Domestic Relations Order must satisfy the requirements of Code §414(p) and ERISA §206(d)(3). In particular, the Domestic Relations Order: (i) must specify the name and the last known mailing address of the Participant; (ii) must specify the name and mailing address of each Alternate Payee covered by the order; (iii) must specify either the amount or percentage of the Participants benefits to be paid by the Plan to each such Alternate Payee, or the manner in which such amount or percentage is to be determined; (iv) must specify the number of payments or period to which such order applies; (v) must specify each plan to which such order applies; (vi) may not require the Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan, subject to the provisions of subsection (f); (vii) may not require the Plan to provide increased benefits (determined on the basis of actuarial value); and (viii) may not require the payment of benefits to an Alternate Payee if such benefits have already been designated to be paid to another Alternate Payee under another order previously determined to be a QDRO. | ||
(d) | QDRO Payment Rules . In the case of any payment before an Employee has separated from service, a Domestic Relations Order shall not be treated as failing to meet the requirements of subsection (c) solely because such order requires that payment of benefits be made to an Alternate Payee (i) on or after the dates specified in subsection (f), (ii) as if the Employee had retired on the date on which such payment is to begin under such order (but taking into account only the Account balance on such date), and (iii) in any form in which such benefits may be paid under the Plan to the Employee. For purposes of this subsection, the Account balance as of the date specified in the QDRO shall be the vested portion of the Employees Account(s) on such date. | ||
(e) | QDRO Review Procedures and Suspension of Benefits . The Committee shall establish reasonable procedures to determine the qualified status of Domestic Relations Orders and to administer distributions under QDROs. Such procedures shall be in writing and shall permit an Alternate Payee to designate a representative to receive copies of notices. The Committee may temporarily prevent the Participant from borrowing from his Accounts and shall temporarily suspend distributions and withdrawals from the Participants Accounts, except to the extent necessary to make the required minimum distributions under Code §401(a)(9), when the Committee receives a Domestic Relations Order or a draft of such an order that affects the Participants Accounts or when one or the following individuals informs the Committee, orally or in writing, that a QDRO is in process or may be in process: the Participant, a prospective Alternate Payee, or counsel for the Participant or a prospective Alternate Payee. The Committee shall promulgate reasonable and non-discriminatory rules regarding such suspensions, including but not limited to how long such suspensions remain in effect. The procedures may allow the Participant to borrow such amounts from the Plan, subject to the limits of Article VII, and the Participant to receive such distributions and withdrawals from the Plan, subject to the rules of Articles VI and VII, as are consented to in writing by all prospective Alternate Payees identified in the Domestic Relations Order or, in the absence of a Domestic Relations Order, as are |
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consented to in writing by the prospective Alternate Payee(s) who informed the Committee that a QDRO was in process or may be in process. When the Committee receives a Domestic Relations Order it shall promptly notify the Participant and each Alternate Payee of such receipt and provide them with copies of the Plans procedures for determining the qualified status of the order. Within a reasonable period after receipt of a Domestic Relations Order, the Committee shall determine whether such order is a QDRO and notify the Participant and each Alternate Payee of such determination. During any period in which the issue of whether a Domestic Relations Order is a QDRO is being determined (by the Committee, by a court of competent jurisdiction, or otherwise), the Committee shall separately account for the amounts payable to the Alternate Payee if the order is determined to be a QDRO. If the order (or modification thereof) is determined to be a QDRO within 18 months after the date the first payment would have been required by such order, the Committee shall pay the amounts separately accounted for (plus any interest thereon) to the individual(s) entitled thereto. However, if the Committee determines that the order is not a QDRO, or if the issue as to whether such order is a QDRO has not been resolved within 18 months after the date of the first payment would have been required by such order, then the Committee shall pay the amounts separately accounted for (plus any interest thereon) to the individual(s) who would have been entitled to such amounts if there had been no order. Any determination that an order is a QDRO that is made after the close of the 18-month period shall be applied prospectively only. If the Plans fiduciaries act in accordance with fiduciary provision of ERISA in treating a Domestic Relations Order as being (or not being) a QDRO or in taking action in accordance with this subsection, then the Plans obligation to the Participant and each Alternate Payee shall be discharged to the extent of any payment made pursuant to the acts of such fiduciaries. | |||
(f) | Rights of Alternate Payee . The Alternate Payee shall have the following rights under the Plan: |
(i) | Single Payment . The only form of payment available to an Alternate Payee is a single payment of the distributable amount (measured at the time the payment is processed). If the Alternate Payee is awarded more than the distributable amount, the Alternate Payee shall initially receive a distribution of the distributable amount, with additional payments made as soon as administratively convenient after more of the amount awarded to the Alternate Payee becomes distributable. | ||
(ii) | Timing of Distribution . Subject to the limits imposed by this paragraph, the Alternate Payee may choose (or the QDRO may specify) the date of the distribution. If the value of the nonforfeitable portion of an Alternate Payees Account (ignoring any portion of the Participants Rollover Account that was assigned to the Alternate Payee) is $5,000 or less, the Alternate Payee shall receive a single payment of the distributable amount as soon as practicable (without the Alternate Payees consent), provided that the value is $5,000 or less when the distribution is processed. Otherwise, the distribution to the Alternate Payee may occur at any time after the Committee determines that the Domestic Relations Order is a QDRO and before the Participants Required Beginning Date (unless the order is determined to be a QDRO after the Participants Required Beginning Date, in which case the distribution to the Alternate Payee shall be made as soon as administratively practicable after the order is determined to be a QDRO). | ||
(iii) | Death of Alternate Payee . The Alternate Payee may designate one or more beneficiaries, as specified in section 6.1. When the Alternate Payee dies, the Alternate Payees beneficiary shall receive a complete distribution of the distributable amount in a single payment as soon as administratively convenient. | ||
(iv) | Investing . An Alternate Payee may direct the investment of his Account pursuant to section 9.3. | ||
(v) | Claims . The Alternate Payee may bring claims against the Plan pursuant to section 13.2. |
(g) | Exception for Misconduct towards the Plan . Subsection (a) shall not apply to any offset of a Participants benefits against an amount that the Participant is ordered or required to pay to the Plan if the following conditions are met. |
(i) | The order or requirement to pay must arise (A) under a judgment of conviction for a crime involving the Plan, (B) under a civil judgment (including a consent order or decree) entered by a |
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court in an action brought in connection with a violation (or alleged violation) of part 4 of subtitle B of title I of ERISA, or (iii) pursuant to a settlement agreement between the Secretary of Labor and the Participant, or a settlement agreement between the Pension Benefit Guaranty Corporation and the Participant, in connection with a violation (or alleged violation) of part 4 of subtitle B of title I of ERISA by a fiduciary or any other person. | |||
(ii) | The judgment, order, decree, or settlement agreement must expressly provide for the offset of all or part of the amount ordered or required to be paid to the Plan against the Participants benefits provided under the Plan. | ||
(iii) | To the extent that the survivor annuity requirements of Code §401(a)(11) apply with respect to distributions from the Plan to the Participant, if the Participant is married at the time at which the offset is to be made, (A) either the Participants Spouse must have already waived his right to a qualified preretirement survivor annuity and a qualified joint and survivor annuity or the Participants Spouse must consent in writing to such offset with such consent witnessed by a notary public or representative of the Plan (or it is established to the satisfaction of a Plan representative that such consent may not be obtained by reason of circumstances described in Code §417(a)(2)(B)), or (B) the Participants Spouse is ordered or required in such judgment, order, decree, or settlement to pay an amount to the Plan in connection with a violation of part 4 of subtitle B of title I of ERISA, or (C) in such judgment, order, decree, or settlement, the Participants Spouse retains the right to receive a survivor annuity under a qualified joint and survivor annuity pursuant to Code §401(a)(11)(A)(i) and under a qualified preretirement survivor annuity provided pursuant to Code §401(a)(11)(A)(ii). The value of the Spouses survivor annuity in subparagraph (C) shall be determined as if the Participant terminated employment on the date of the offset, there was no offset, the Plan permitted commencement of benefits only on or after Normal Retirement Age, the Plan provided only the minimum-required qualified joint and survivor annuity, and the amount of the qualified preretirement survivor annuity under the Plan is equal to the amount of the survivor annuity payable under the minimum-required qualified joint and survivor annuity. For purposes of this paragraph only, the minimum-required qualified joint and survivor annuity is the qualified joint and survivor annuity which is the actuarial equivalent of the Participants accrued benefit (within the meaning of Code §411(a)(7)) and under which the survivor annuity is 50% of the amount of the annuity which is payable during the joint lives of the Participant and his Spouse. |
The Committee shall temporarily prevent the Account Owner from borrowing from his Accounts and shall temporarily suspend distributions and withdrawals from his Accounts, except to the extent necessary to make the required minimum distributions under Code §401(a)(9), when the Committee has reason to believe that the Plan may be entitled to an offset of the Participants benefits described in this subsection. The Committee shall promulgate reasonable and non-discriminatory rules regarding such suspensions, including but not limited to how long such suspensions remain in effect | |||
(h) | Exception for Federal Liens . Subsection (a) shall not apply to the enforcement of a federal tax levy made pursuant to Code §6331, the collection by the United States on a judgment resulting from an unpaid tax assessment, or any debt or obligation that is permitted to be collected from the Plan under federal law (such as the Federal Debt Collection Procedures Act of 1977). The Committee may temporarily suspend distributions and withdrawals from an Account, except to the extent necessary to make the required minimum distributions under Code §401(a)(9), when the Committee has reason to believe that such a federal tax levy or other obligation has or will be received. The Committee shall promulgate reasonable and non-discriminatory rules regarding such suspensions, including but not limited to how long such suspensions remain in effect. |
13.10 | Payments due Minors or Incapacitated Individuals. | |
If any individual entitled to payment under the Plan is a minor, the Committee shall cause the payment to be made to the custodian or representative who, under the state law of the minors domicile, is authorized to receive funds on behalf of the minor. If any individual entitled to payment under this Plan has been legally adjudicated to be mentally incompetent or incapacitated, the Committee shall cause the payment to be made to the custodian or representative who, under the state law of the incapacitated individuals domicile, is |
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authorized to receive funds on behalf of the incapacitated individual. Payments made pursuant to such power shall operate as a complete discharge of the Trust Fund, the Trustee, and the Committee. | ||
13.11 | Uniformity of Application. | |
The provisions of this Plan shall be applied in a uniform and non-discriminatory manner in accordance with rules adopted by the Committee, which rules shall be systematically followed and consistently applied so that all individuals similarly situated shall be treated alike. | ||
13.12 | Disposition of Unclaimed Payments. | |
Each Participant, Alternate Payee, or beneficiary with an Account balance in this Plan must file with the Committee from time to time in writing his address, the address of each beneficiary (if applicable), and each change of address. Any communication, statement, or notice addressed to such individual at the last address filed with the Committee (or if no address is filed with the Committee then at the last address as shown on the Companys records) will be binding on such individual for all purposes of the Plan. Neither the Committee nor the Trustee shall be required to search for or locate any missing individual. If the Committee notifies an individual that he is entitled to a distribution and also notifies him that a failure to respond may result in a forfeiture of benefits, and the individual fails to claim his benefits under the Plan or make his address known to the Committee within a reasonable period of time after the notification, then the benefits under the Plan of such individual shall be forfeited. Any amount forfeited pursuant to this section shall be allocated pursuant to subsection 5.4(d). If the individual should later make a claim for this forfeited amount, the Company shall, if the Plan is still in existence, make a special contribution to the Plan equal to the forfeiture, and such amount shall be distributed to the individual; if the Plan is not then in existence, the Company shall pay the amount of the forfeiture to the individual. | ||
13.13 | Applicable Law. | |
This Plan shall be construed and regulated by ERISA, the Code, and, unless otherwise specified herein and to the extent applicable, the laws of the State of Texas excluding any conflicts-of-law provisions. |
14.1 | Voting, Etc. | |
The shares of Company Stock in Accounts, whether or not vested, may be voted by the Account Owner to the same extent as if duly registered in the Account Owners name. The Trustee or its nominee in which the shares are registered shall vote the shares solely as agent of the Account Owner and in accordance with the instructions of the Account Owner. If no instructions are received, the Trustee shall vote the shares of Company Stock for which it has received no voting instructions in the same proportions as the Account Owners affirmatively directed their shares of Company Stock to be voted unless the Trustee determines that a pro rata vote would be inconsistent with its fiduciary duties under ERISA. If the Trustee makes such a determination, the Trustee shall vote the Company Stock as it determines to be consistent with its fiduciary duties under ERISA. Each Account Owner who has Company Stock allocated to his Accounts shall direct the Trustee concerning the tender (as provided below) and the exercise of any other rights appurtenant to the Company Stock. The Trustee shall follow the directions of the Account Owner with respect to the tender. | ||
14.2 | Notices. | |
Apache shall cause to be mailed or delivered to each Account Owner copies of all notices and other communications sent to the Apache shareholders at the same times so mailed or delivered by Apache to its other shareholders. | ||
14.3 | Retention/Sale of Company Stock and Other Securities. | |
The Trustee is authorized and directed to retain the Company Stock and any other Apache securities acquired by the Trust except as follows: |
(a) | In the normal course of Plan administration, the Trustee shall sell Company Stock to satisfy Plan administration and distribution requirements as directed by the Committee or in accordance with provisions of the Plan specifically authorizing such sales. |
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(b) | In the event of a transaction involving the Company Stock evidenced by the filing of Schedule 14D-1 with the Securities and Exchange Commission (SEC) or any other similar transaction by which any person or entity seeks to acquire beneficial ownership of 50% or more of the shares of Company Stock outstanding and authorized to be issued from time to time under Apaches articles of incorporation (tender offer), the Trustee shall sell, convey, or transfer Company Stock pursuant to written instructions of Account Owners delivered to the Trustee in accordance with the following sections 14.4 through 14.15. For purposes of such provisions, the term filing date means the date relevant documents concerning a tender offer are filed with the SEC or, if such filing is not required, the date the Trustee receives actual notice that a tender offer has commenced. | ||
(c) | If Apache makes any distribution of Apache securities with respect to the shares of Company Stock held in the Plan, other than additional shares of Company Stock (any such securities are hereafter referred to as stock rights), the Trustee shall sell, convey, transfer, or exercise such stock rights pursuant to written instructions of Account Owners delivered to the Trustee in accordance with the following sections of this Article. |
14.4 | Tender Offers. |
(a) | Allocated Stock . In the event of any tender offer, each Account Owner shall have the right to instruct the Trustee to tender any or all shares of Company Stock, whether or not vested, that are allocated to his Accounts under the Plan on or before the filing date. The Trustee shall follow the instructions of the Account Owner. The Trustee shall not tender any Company Stock for which no instructions are received. | ||
(b) | Unallocated Stock . The Trustee shall tender all shares of Company Stock that are not allocated to Accounts in the same proportion as the Account Owners directed the tender of Company Stock allocated to their Accounts unless the Trustee determines that a pro rata tender would be inconsistent with its fiduciary duties under ERISA. If the Trustee makes such a determination, the Trustee shall tender or not tender the unallocated Company Stock as it determines to be consistent with its fiduciary duties under ERISA. | ||
(c) | Suspension of Share Purchases . In the event of a tender offer, the Trustee shall suspend all purchases of Company Stock pursuant to the Plan unless the Committee otherwise directs. Until the termination of such tender offer and pending such Committee direction, the Trustee shall invest available cash pursuant to the applicable provisions of the Plan and the Trust Agreement. | ||
(d) | Temporary Suspension of Certain Cash Distributions . Notwithstanding anything in the Plan to the contrary, no option to receive cash in lieu of Company Stock shall be honored during the pendency of a tender offer unless the Committee otherwise directs. |
14.5 | Stock Rights. |
(a) | General . If Apache makes a distribution of stock rights with respect to the Company Stock held in the Plan and if the stock rights become exercisable or transferable (the date on which the stock rights become exercisable or transferable shall be referred to as the exercise date), each Account Owner shall determine whether to exercise the stock rights, sell the stock rights, or hold the stock rights allocated to his Accounts. The provisions of this section shall apply to all stock rights received with respect to Company Stock held in Accounts, whether or not the Company Stock with respect to which the stock rights were issued are vested. | ||
(b) | Independent Fiduciary . The Independent Fiduciary provided for in this section 14.15 below shall act with respect to the stock rights. All Account Owner directions concerning the exercise or disposition of the stock rights shall be given to the Independent Fiduciary, who shall have the sole responsibility of assuring that the Account Owners directions are followed. | ||
(c) | Exercise of Stock Rights . If, on or after the exercise date, an Account Owner wishes to exercise all or a portion of the stock rights allocated to his Accounts, the Independent Fiduciary shall follow the Account Owners direction to the extent that there is cash or other liquid assets available in his Accounts to exercise the stock rights. Notwithstanding any other provision of the Plan, each Account Owner who has stock rights allocated to his Accounts shall have a period of five business days following the exercise date in which he may give instructions to the Committee to liquidate any of the |
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assets held in his Accounts (except shares of Company Stock or assets such as guaranteed investment contracts or similar investments), but only if he does not have sufficient cash or other liquid assets in his Accounts to exercise the stock rights. The liquidation of any necessary investments pursuant to an Account Owners direction shall be accomplished as soon as reasonably practicable, taking into account any timing restrictions with respect to the investment funds involved. The cash obtained shall be used to exercise the stock rights, as the Account Owner directs. Any cash that is not so used shall be invested in a cash equivalent until the next date on which the Account Owner may change his investment directions under the Plan. | |||
(d) | Sale of Stock Rights . On and after the exercise date, the Independent Fiduciary shall sell all or a portion of the stock rights allocated to Accounts, as the Account Owner shall direct. |
14.6 | Other Rights Appurtenant to the Company Stock. | |
If there are any rights appurtenant to the Company Stock, other than voting, tender, or stock rights, each Account Owner shall exercise or take other appropriate action concerning such rights with respect to the Company Stock, whether or not vested, that is allocated to their Accounts in the same manner as the other holders of the Company Stock, by giving written instructions to the Trustee. The Trustee shall follow all such instructions, but shall take no action with respect to allocated Company Stock for which no instructions are received. The Trustee shall exercise or take other appropriate action concerning any such rights appurtenant to unallocated Company Stock. | ||
14.7 | Information to Trustee. | |
Promptly after the filing date, the exercise date, or any other event that requires action with respect to the Company Stock, the Committee shall deliver or cause to be delivered to the Trustee or the Independent Fiduciary, as appropriate, a list of the names and addresses of Account Owners showing (i) the number of shares of Company Stock allocated to each Account Owners Accounts under the Plan, (ii) each Account Owners pro rata portion of any unallocated Company Stock, and (iii) each Account Owners share of any stock rights distributed by Apache. The Committee shall date and certify the accuracy of such information, and such information shall be updated periodically by the Committee to reflect changes in the shares of Company Stock and other assets allocated to Accounts. | ||
14.8 | Information to Account Owners. | |
The Trustee or the Independent Fiduciary, as appropriate, shall distribute and/or make available to each affected Account Owner the following materials: |
(a) | A copy of the description of the terms and conditions of any tender offer filed with the SEC on Schedule 14D-1, or any similar materials if such filing is not required, any material distributed to shareholders generally with respect to the stock rights, and any proxy statements and any other material distributed to shareholders generally with respect to any action to be taken with respect to the Company Stock. | ||
(b) | If requested by Apache, a statement from Apaches management setting forth its position with respect to a tender offer that is filed with the SEC on Schedule 14D-9 and/or a communication from Apache given pursuant to 17 C.F.R. 240.14d-9(e), or any similar materials if such filing or communications are not required. | ||
(c) | An instruction form prepared by Apache and approved by the Trustee or the Independent Fiduciary, to be used by an Account Owner who wishes to instruct the Trustee to tender Company Stock in response to the tender offer, to instruct the Independent Fiduciary to sell or exercise stock rights, or to instruct the Trustee or Independent Fiduciary with respect to any other action to be taken with respect to the Company Stock. The instruction form shall state that (i) if the Account Owner fails to return an instruction form to the Trustee by the indicated deadline, the Trustee will not tender any shares of Company Stock the Account Owner is otherwise entitled to tender, (ii) the Independent Fiduciary will not sell or exercise any right allocated to the Account except upon the written direction of the Account Owner, (iii) the Trustee or Independent Fiduciary will not take any other action that the Account Owner could have directed, and (iv) Apache acknowledges and agrees to honor the confidentiality of the Account Owners directions to the Trustee. |
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(d) | Such additional material or information as the Trustee or the Independent Fiduciary may consider necessary to assist the Account Owner in making an informed decision and in completing or delivering the instruction form (and any amendments thereto) to the Trustee or the Fiduciary on a timely basis. |
14.9 | Expenses. | |
The Trustee and the Independent Fiduciary shall have the right to require payment in advance by Apache and the party making the tender offer of all reasonably anticipated expenses of the Trustee and the Independent Fiduciary, respectively, in connection with the distribution of information to and the processing of instructions received from Account Owners. | ||
14.10 | Former Account Owners. | |
Apache shall furnish former Account Owners who have received distributions of Company Stock so recently as to not be shareholders of record with the information furnished pursuant to section 14.8. The Trustee and the Independent Fiduciary are hereby authorized to take action with respect to the Company Stock distributed to such former Account Owners in accordance with appropriate instructions from them. If the Trustee does not receive appropriate instructions, it shall take no action with respect to the distributed Company Stock. | ||
14.11 | No Recommendations. | |
Neither the Committee, the Committee Fiduciary, the Trustee, nor the Independent Fiduciary shall express any opinion or give any advice or recommendation to any Account Owner concerning voting the Company Stock, any tender offer, stock rights, or the exercise of any other rights appurtenant to the Company Stock, nor shall they have any authority or responsibility to do so. Neither the Trustee nor the Independent Fiduciary has any duty to monitor or police the party making a tender offer or Apache in promoting or resisting a tender offer; provided, however, that if the Trustee or the Independent Fiduciary becomes aware of activity that on its face reasonably appears to the Trustee or Independent Fiduciary to be materially false, misleading, or coercive, the Trustee or the Independent Fiduciary, as the case may be, shall promptly demand that the offending party take appropriate corrective action. If the offending party fails or refuses to take appropriate corrective action, the Trustee or the Independent Fiduciary, as the case may be, shall communicate with affected Account Owners in such manner as it deems advisable. | ||
14.12 | Trustee to Follow Instructions. |
(a) | So long as the Trustee and the Independent Fiduciary, as the case may be, have determined that the Plan is in compliance with ERISA §404(c), the Trustee or the Independent Fiduciary shall tender, deal with stock rights, and act with respect to any other rights appurtenant to the Company Stock, pursuant to the terms and conditions of the particular transaction or event, and in accordance with instructions received from Account Owners. Except for voting, the Trustee or the Independent Fiduciary shall take no action with respect to Company Stock, stock rights, or other appurtenant rights for which no instructions are received, and such Company Stock, stock rights, or other appurtenant rights shall be treated like all other Company Stock, stock rights, or other appurtenant rights for which no instructions are received. The Trustee, or if an Independent Fiduciary has been appointed, the Independent Fiduciary, shall vote the allocated Company Stock that an Account Owner does not vote as specified in section 14.1. | ||
(b) | If the Trustee or Independent Fiduciary determines that the Plan does not satisfy the requirements of ERISA §404(c), the Trustee or Independent Fiduciary shall follow the instructions of the Account Owner with respect to voting, tender, stock rights, or other rights appurtenant to the Company Stock unless the Trustee or Independent Fiduciary determines that to do so would be inconsistent with its fiduciary duties under ERISA. In such case, the Trustee or the Independent Fiduciary shall take such action as it determines to be consistent with its fiduciary duties under ERISA. |
14.13 | Confidentiality. |
(a) | The Committee shall designate one of its members (the Committee Fiduciary) to receive investment directions and to transmit such directions to the Trustee or Independent Fiduciary, as the case may be. The Committee Fiduciary shall also receive all Account Owner instructions concerning voting, tender, stock rights, and other rights appurtenant to the Company Stock. The Committee Fiduciary shall communicate the instructions to the Trustee or the Fiduciary, as appropriate. |
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(b) | Neither the Committee Fiduciary, the Trustee, nor the Independent Fiduciary shall reveal or release any instructions received from Account Owners concerning the Company Stock to Apache, an Affiliated Entity, or the officers, directors, employees, agents, or representatives of Apache and Affiliated Entities, except to the extent necessary to comply with Federal or state law not preempted by ERISA. If disclosure is required by Federal or state law, the information shall be disclosed to the extent possible in the aggregate rather than on an individual basis. | ||
(c) | The Committee Fiduciary shall be responsible for reviewing the confidentiality procedures from time to time to determine their adequacy. The Committee Fiduciary shall ensure that the confidentiality procedures are followed. The Committee Fiduciary shall also ensure that the Independent Fiduciary provided for in section 14.15 is appointed. | ||
(d) | Apache, with the Trustees cooperation, shall take such action as is necessary to maintain the confidentiality of Account records including, without limitation, establishment of security systems and procedures which restrict access to Account records and retention of an independent agent to maintain such records. If an independent recordkeeping agent is retained, such agent must agree, as a condition of its retention by Apache, not to disclose the composition of any Accounts to Apache, an Affiliated Entity or an officer, director, employee, or representative of Apache or an Affiliated Entity. | ||
(e) | Apache acknowledges and agrees to honor the confidentiality of the Account Owners instructions to the Committee Fiduciary, the Trustee, and the Independent Fiduciary. If Apache, by its own act or omission, breaches the confidentiality of Account Owner instructions, Apache agrees to indemnify and hold harmless the Committee Fiduciary, the Trustee, or the Independent Fiduciary, as the case may be, against and from all liabilities, claims and demands, damages, costs, and expenses, including reasonable attorneys fees, that the Committee Fiduciary, the Trustee, or the Independent Fiduciary may incur as a result thereof. |
14.14 | Investment of Proceeds. | |
If Company Stock or the rights are sold pursuant to the tender offer or the provisions of the rights, the proceeds of such sale shall be invested in accordance with the provisions of the Plan and the Trust Agreement. | ||
14.15 | Independent Fiduciary. | |
Apache shall appoint a fiduciary (the Independent Fiduciary) to act solely with respect to the Company Stock in situations which the Committee Fiduciary determines involve a potential for undue influence by Apache in connection with the Company Stock and the exercise of any rights appurtenant to the Company Stock. If the Committee Fiduciary so determines, it shall give written notice to the Independent Fiduciary, which shall have sole responsibility for assuring that Account Owners receive the information necessary to make informed decisions concerning the Company Stock, are free from undue influence or coercion, and that their instructions are followed to the extent proper under ERISA. The Independent Fiduciary shall act until it receives written notice to the contrary from the Committee Fiduciary. | ||
14.16 | Method of Communications. | |
Several provisions in this Article specify that various communications to or from an Account Owner must be in writing. The Committee, the Committee Fiduciary, the Independent Fiduciary, the Company, and the Trustee, as appropriate, shall each have full authority to treat other forms of communication, such as electronic mail or telephone voice-response, as satisfying any written requirement specified in this Article, but only to the extent permitted by the IRS, the Department of Labor, and the Securities Exchange Commission, as appropriate. |
15.1 | General. |
(a) | Scope . The Uniformed Services Employment and Reemployment Rights Act of 1994 (the USERRA), which is codified at 38 USCA §§4301-4318, confers certain rights on individuals who leave civilian employment to perform certain services in the Armed Forces, the National Guard, the |
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commissioned corps of the Public Health Service, or in any other category designated by the President of the United States in time of war or emergency (collectively, the Uniformed Services). An Employee who joins the Uniformed Services shall be referred to as a Serviceman in this Article. This Article shall be interpreted to provide such individuals with all the benefits required by the USERRA but no greater benefits than those required by the USERRA. This Article shall supersede any contrary provisions in the remainder of the Plan. | |||
(b) | Rights of Servicemen . When a Serviceman leaves the Uniformed Services, he may have reemployment rights with the Company or Affiliated Entities, depending on many factors, including the length of his stay in the Uniformed Services and the type of discharge he received. When this Article speaks of the date a Servicemans potential USERRA reemployment rights expire, it means the date on which the Serviceman fails to qualify for reemployment rights (if, for example, he is dishonorably discharged, or remains in the Uniformed Services for more than 5 years) or, if the Serviceman obtains reemployment rights, the date his reemployment rights lapse because the Serviceman failed to timely exercise those rights. |
15.2 | While a Serviceman. | |
In general, a Serviceman shall be treated as an Employee while he continues to receive wages from the Company or an Affiliated Entity, and once the Servicemans wages from the Company or Affiliated Entity cease, the Serviceman shall be treated as if he were on an approved, unpaid leave of absence. |
(a) | Participant Contributions . For purposes of making Participant Contributions under section 3.2, if the Serviceman was a Covered Employee when he became a Serviceman, he shall continue to be treated as a Covered Employee while he continues to receive wages from the Company. As a consequence, (i) if he was a Covered Employee who had satisfied the requirements of Article II when he became a Serviceman, he may continue to make Participant Contributions from his wages from the Company, and (ii) if he had not satisfied the requirements of section 2.1 when he became a Serviceman, his service in the Uniformed Services shall be treated as service with the Company in determining when he will be able to begin making Participant Contributions under section 2.1, and if his wages from the Company continue beyond that eligibility date, the Serviceman may begin to make Participant Contributions on such date. A Serviceman may change his rate of contributions in the same manner as an Employee. A Servicemans Participant Contributions shall cease when his wages from the Company cease. | ||
(b) | Company Contributions . Wages paid by the Company to a Serviceman shall be included in his Compensation as if the Serviceman were an Employee. A Servicemans Participant Contributions shall be matched according to the formula in paragraph 3.1(b)(i). If the Employee was a Covered Employee when he became a Serviceman and his wages continue through the last business day of a Plan Year, then (i) the Serviceman shall be treated as an eligible Participant under subsection 3.1(a) for that Plan Year (and shall therefore receive an allocation of any Company Discretionary Contribution); (ii) the Serviceman shall be treated as an eligible Participant under paragraph 3.1(b)(ii) for that Plan Year (and shall therefore receive an allocation of any additional match provided under such paragraph); (iii) if he was a Non-Highly Compensated Employee when he became a Serviceman, he shall be eligible to receive an allocation of any QNECs and QMACs provided under subsections 3.7(c) and 3.8(c); and (iv) he shall be treated as an Employee under subsection 12.4(a) (and, if he is a Non-Key Employee, he shall therefore receive any minimum required allocation if the Plan is top-heavy). | ||
(c) | Investments . If the Serviceman has an account balance in the Plan, he is an Account Owner and may therefore direct the investment of his Accounts pursuant to section 9.3 and Article XIV. | ||
(d) | Loans . For purposes of borrowing from the Plan under Article VII, a Serviceman shall be treated as an Employee until the day on which his potential USERRA reemployment rights expire. If a Serviceman with an outstanding loan continues to receive wages from the Company or an Affiliated Entity after joining the Uniformed Services, his loan payments shall continue to be deducted from those wages. Once the Servicemans wages cease, his loan payments shall be suspended until the earlier of (i) his reemployment with the Company or an Affiliated Entity or (ii) the day on which his potential USERRA reemployment rights expire. The Serviceman may repay all or part of his loan at any time |
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during the suspension. During the payment suspension, interest shall accrue on the unpaid balance of the loan. See subsections 15.3(b) and 15.4(c) for the resumption of loan payments for a reemployed Serviceman, and subsection 15.3(a) for the timing of the loans default if the Serviceman is not reemployed. | |||
(e) | Distributions and Withdrawals . For purposes of Article VI (relating to distributions and in-service withdrawals), the Serviceman shall be treated as an Employee until the day on which his potential USERRA reemployment rights expire. See section 15.3 once his potential USERRA rights expire. | ||
(f) | QDROs . QDROs shall be processed while the Participant is a Serviceman. The Committee has the discretion to establish special procedures under subsection 13.9(e) for Servicemen, by, for example, extending the usual deadlines to accommodate any practical difficulties encountered by the Serviceman that are attributable to his service in the Uniformed Services. | ||
(g) | Rollovers . If the Serviceman was a Covered Employee when he became a Serviceman, the Serviceman may make Rollover Contributions pursuant to subsection 3.2(d) until the day on which his potential USERRA reemployment rights expire. |
15.3 | Expiration of USERRA Reemployment Rights. |
(a) | Consequences . If a Serviceman is not reemployed before his potential USERRA reemployment rights expire, the Committee shall determine his Termination From Service Date by treating his service in the Uniformed Services as an approved leave of absence but treating the expiration of his potential USERRA reemployment rights as the failure to timely return from his leave of absence, with the consequence that his Termination From Service Date will generally be the date his potential USERRA rights expired. Once his Termination From Service Date has been determined, the Committee shall determine his vested percentage. For purposes of Article VI (relating to distributions), the day the Servicemans potential USERRA reemployment rights expired shall be treated as the day of his Termination from Service. For purposes of subsection 5.4(b) (relating to the timing of forfeitures), the Servicemans last day of employment shall be the day his potential USERRA reemployment rights expired. If the Serviceman has an outstanding loan from this Plan when his potential USERRA reemployment rights expire, his loan shall go into default on the last day of the calendar quarter after the calendar quarter in which his potential USERRA reemployment rights expired, unless, before the loan goes into default, he repays the loan or is rehired pursuant to subsection (b). | ||
(b) | Rehire after Expiration of Reemployment Rights . If the Company or an Affiliated Company hires a former Serviceman after his potential USERRA reemployment rights have expired, he shall be treated like any other former employee who is rehired. If he had an outstanding loan and is reemployed before the loan goes into default pursuant to subsection (a), his loan payments shall be recalculated and the Company or Affiliated Entity shall immediately resume withholding the revised loan payments from his pay. The term of the loan when payments resume shall be equal to the remaining term of the loan when payments were suspended. |
15.4 | Return From Uniformed Service. | |
This section applies solely to a Serviceman who returns to employment with the Company or an Affiliated Entity because he exercised his reemployment rights under the USERRA. |
(a) | Credit for Service . A Servicemans length of time in the Uniformed Services shall be treated as service with the Company for purposes of vesting and determining his eligibility to participate in the Plan upon reemployment. | ||
(b) | Participation . If the Serviceman satisfies the eligibility requirements of section 2.1 before his reemployment, and he is a Covered Employee upon his reemployment, he may participate in the Plan immediately upon his return. | ||
(c) | Loans . If the Servicemans loan payments were suspended under subsection 15.2(d) during his time in the Uniformed Services, his loan payments shall be recalculated and the Company or Affiliated Entity shall immediately resume withholding the revised loan payments from his pay. The term of the loan when payments resume shall be equal to the remaining term of the loan when payments were suspended. |
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(d) | Make-Up Participant Contributions . In addition to his regular Participant Contributions, a returning Serviceman shall be permitted to make additional contributions up to the amount of Participant Contributions he could have made if, instead of becoming a Serviceman, he had remained employed by the Company or Affiliated Entity and been paid his Deemed Compensation during that time. See subsection (h) for guidance on applying the various limits contained in the Code to the calculation of the maximum additional contribution the returning Serviceman may make. Such additional contributions may only be made within a period that begins on his reemployment date and whose duration is the lesser of five years or three times his length of time in the Uniformed Services. The additional contributions shall be withheld from his Compensation pursuant to the Servicemans election. The Committee shall establish administrative procedures for such elections. The additional contributions shall be allocated to Participant Contributions Accounts. | ||
(e) | Make-Up Match . For each additional contribution that the Serviceman contributes pursuant to subsection (d), the Company shall promptly contribute to his Accounts an additional matching contribution. The additional matching contribution shall be equal to the Company Matching Contribution (including forfeitures treated as Company Matching Contributions) that he would have received if (i) his additional contributions were Participant Contributions made during his time in the Uniformed Services, and (ii) he was paid his Deemed Compensation during his time in the Uniformed Services. The Servicemans additional contributions shall be spread over the pay periods in which they could have occurred in such a way as to maximize the additional matching contribution. See subsection (h) for guidance on applying the various limits contained in the Code to the calculation of the additional matching contribution. The additional matching contribution shall be allocated to the Participants Company Contributions Account unless the additional matching contribution would have been designated a QMAC, in which case it shall be allocated to his Participant Contributions Account. | ||
(f) | Make-Up Company Discretionary Contribution . The Company shall contribute an additional contribution to a Servicemans Accounts equal to the Company Discretionary Contribution (including any forfeitures treated as Company Discretionary Contributions) that would have been allocated to such Accounts if the Serviceman had remained employed during his time in the Uniformed Services, and had earned his Deemed Compensation during that time. See subsection (h) for guidance on applying the various limits contained in the Code to the calculation of the additional discretionary contribution. The additional discretionary contribution shall be allocated to the Participants Company Contributions Account unless the additional discretionary contribution would have been designated a QNEC, in which case it shall be allocated to his Participant Contributions Account. | ||
(g) | Make-Up Miscellaneous Contributions . The Company shall contribute to the Servicemans Accounts any QNECs and QMACs that the Serviceman would have received pursuant to subsection 3.7(c) or 3.8(c), and any top-heavy minimum contribution he would have received pursuant to section 12.4, (including any forfeitures treated as QNECs, QMACs, or top-heavy minimum contributions) if he had remained employed during his time in the Uniformed Services, and had earned Deemed Compensation during that time. See subsection (h) for guidance on applying the various limits contained in the Code to the calculation of the QNECs, QMACs, and top-heavy minimum contribution. These additional top-heavy minimum contributions shall be allocated to Company Contributions Accounts. The additional QNECs and QMACs shall be allocated to Participant Contributions Accounts. | ||
(h) | Application of Limitations . |
(i) | The make-up contributions under subsections (d), (e), (f), and (g) (the Make-Up Contributions) shall be ignored for purposes of determining the Companys maximum contribution under subsection 3.1(d), the limits on Participant Contributions under paragraphs 3.2(a)(ii) and 3.2(b)(ii), the limits on Annual Additions under section 3.4, the ADP test of section 3.5, the ACP test of section 3.6, the non-discrimination requirements of Code §401(a)(4), and (if the Serviceman is a Key Employee) calculating the minimum required top-heavy contribution under section 12.4. | ||
(ii) | In order to determine the maximum Make-Up Contributions, the following limitations shall apply. |
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(A) | The Servicemans Aggregate Compensation for each year shall be calculated. His Aggregate Compensation shall be equal to his actual Compensation, plus his Deemed Compensation that would have been paid during that year. Each type of Aggregate Compensation (for benefit purposes, deferral purposes, etc.) shall be determined separately. | ||
(B) | The Servicemans Aggregate Compensation each Plan Year shall be limited to the dollar limit in effect for that Plan Year under Code §401(a)(17), for the purposes and in the manner specified in subsection 1.14(f). | ||
(C) | The limits of subsection 3.1(d) (relating to the maximum contribution by the Company to the Plan) for each Plan Year shall be calculated by using the Servicemans Aggregate Compensation for that Plan Year, and by treating the Make-Up Contributions that are attributable to that Plan Years Deemed Compensation as having been made during that Plan Year. | ||
(D) | The limits of paragraph 3.2(a)(ii) (relating to the maximum 401(k) Contributions) and paragraph 3.2(b)(ii) (relating to the maximum Catch-Up Contributions) for each calendar year shall be calculated by treating as 401(k) and Catch-Up Contributions his additional contributions pursuant to subsection (d) that are attributable to that calendar years Deemed Compensation. | ||
(E) | The limits of section 3.4 (relating to the maximum Annual Additions to a Participants Accounts) shall be calculated for each Limitation Year by using the Servicemans Aggregate Compensation for that Limitation Year, and by treating as Annual Additions all the Make-Up Contributions that are attributable to that Limitation Years Deemed Compensation. | ||
(F) | The Servicemans maximum Make-Up Contributions shall not be limited by the results of the Plans ADP test or ACP test for any Plan Year in which the Serviceman has Deemed Compensation, even if the Serviceman is treated as a Highly Compensated Employee (using his Aggregate Compensation) for that Plan Year. |
(i) | Deemed Compensation . A Servicemans Deemed Compensation is the Compensation that he would have received (including raises) had he remained employed by the Company or Affiliated Entity during his time in the Uniformed Services, unless it is not reasonably certain what his Compensation would have been, in which case his Deemed Compensation shall be based on his average rate of compensation during the 12 months (or, if shorter, his period of employment with the Company and Affiliated Entities) immediately before he entered the Uniformed Services. A Servicemans Deemed Compensation shall be reduced by any Compensation actually paid to him during his time in the Uniformed Services (such as vacation pay). Deemed Compensation shall cease when the Servicemans potential USERRA reemployment rights expire. Each type of Deemed Compensation (for benefit purposes, deferral purposes, etc.) shall be determined separately. |
APACHE CORPORATION
|
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Date: 2/1/2008 | By: | /s/ Margery M. Harris | ||
Title: Vice President Human Resources | ||||
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Participation | Participation | |||
Business | Began As Of | Ended As Of | ||
Apache International, Inc.
|
September 22, 1987 | N/A | ||
|
||||
Apache Energy Resources
Corporation (Known as Hadson
Energy Resources Corporation
before January 1, 1995)
|
January 1, 1994 | December 31, 1995 | ||
|
||||
Apache Canada Ltd.
|
May 17, 1995 | N/A |
A-1
|
Prepared December 4, 2007 |
B-1
|
Prepared December 4, 2007 |
C-1
|
Prepared December 4, 2007 |
Former Employer | New Employees | |
Amoco Production Company (Amoco)
|
All individuals who became an Employee of the Company pursuant to the provisions of the Stock Purchase Agreement effective June 30, 1991, between Amoco Production Company, Apache, and others. | |
|
||
Hadson Energy Resources Corporation (HERC)
and Hadson Energy Limited (HEL)
|
All individuals employed by HERC or HEL on November 12, 1993. | |
|
||
Crystal Oil Company (Crystal)
|
All individuals hired from Crystal or related companies within a week of the closing date on an asset purchase that was originally scheduled to close on December 31, 1994. | |
|
||
Texaco Exploration & Production, Inc. (TEPI)
|
All individuals hired from TEPI or related companies in late February and early March 1995 in connection with an acquisition of assets from TEPI at that time. | |
|
||
DEKALB Energy Company (DEKALB)
|
All individuals who became an employee of Apache on or after May 17, 1995 their Period of Service shall include any periods of employment with DEKALB before May 17, 1995 | |
|
||
The Phoenix Resource Companies, Inc.
(Phoenix)
|
All individuals hired by Apache in 1996 who were Phoenix employees on May 20, 1996. | |
|
||
Crescendo Resources, L.P. (Crescendo)
|
All individuals hired from April 30, 2000 through June 1, 2000 from Crescendo and related companies in connection with an April 30, 2000 asset acquisition from Crescendo. | |
|
||
Collins & Ware (C&W) and Longhorn Disposal,
Inc. (Longhorn)
|
All individuals hired from C&W and Longhorn and related companies in connection with a May 23, 2000 asset acquisition from C&W and Longhorn. | |
|
||
Occidental Petroleum Corporation (Oxy)
|
All individuals hired from Oxy and related companies in connection with an August 2000 asset acquisition from an Oxy subsidiary. | |
|
||
Private company (Private)
|
All individuals hired in January 2003 from Private and related companies in connection with an asset acquisition of certain property in Louisiana effective as of December 1, 2002. |
C-2
|
Prepared December 4, 2007 |
(i) | For purposes of determining the limitation on Annual Additions under section 3.4, Compensation means the items specified in the safe-harbor definition in Treasury Regulation §1.415(c)-2(d)(2). |
D-1
|
Prepared December 4, 2007 |
1. | Effective as of January 1, 2009, section 6.7(c)(i) is replaced by the following. |
(i) | Participants, Spouses, and Alternate Payees . For a Participant, an Alternate Payee who is the Spouse or former Spouse of the Participant, or a surviving Spouse of a deceased Participant, an eligible retirement plan is an individual retirement account or annuity described in Code §408(a) or §408(b), a Roth IRA, an annuity plan described in Code §403(a), an annuity contract described in Code §403(b), an eligible plan under Code §457(b) that is maintained by an eligible employer described in Code §457(e)(1)(A) (which generally includes state and local governments), or the qualified trust of a defined contribution plan described in Code §401(a), that accepts eligible rollover distributions. |
2. | Effective as of January 1, 2002, section 12.2 is replaced by the following. |
12.2 | Determination of Top-Heavy Status. | ||
The Plan shall be considered top-heavy for a Plan Year if, as of the last day of the prior Plan Year, the aggregate of the Account balances (as calculated according to the regulations under Code §416) of Key Employees under this Plan (and under all other plans required or permitted to be aggregated with this Plan) exceeds 60% of the aggregate of the Account balances (as calculated according to the regulations under Code §416) in this Plan (and under all other plans required or permitted to be aggregated with this Plan) of all current Employees and all former Employees who had performed services for Apache or an Affiliated Entity within the one-year period ending on the last day of the prior Plan Year. This ratio shall be referred to as the top-heavy ratio. For purposes of determining the account balance of any Participant, (a) the balance shall be determined as of the last day of the prior Plan Year, (b) the balance shall also include any distributions to the Participant during the one-year period ending on the last day of the prior Plan Year, and (c) the balance shall also include, for distributions made for a reason other than severance of employment or death or disability, any distributions to the Participant during the five-year period ending on the last day of the prior Plan Year. This shall also apply to distributions under a terminated plan that, if it had not been terminated, would have been required to be included in an aggregation group. The Account balances of a Participant who had once been a Key Employee, but who is not a Key Employee during the Plan Year, shall not be taken into account. The following plans must be aggregated with this Plan for the top-heavy test: (a) a qualified plan maintained by the Company or an Affiliated Entity in which a Key Employee participated during this Plan Year or during the previous four Plan Years and (b) any other qualified plan maintained by the Company or an Affiliated Entity that enables this Plan or any plan described in clause (a) to meet the requirements of Code §401(a)(4) or §410. The following plans may be aggregated with this Plan for the top-heavy test: any qualified plan maintained by the Company or an Affiliated Entity that, in combination with the Plan or any plan required to be aggregated with this Plan when testing this Plan for top-heaviness, would satisfy the requirements of Code §401(a)(4) and §410. If one or more of the plans required or permitted to be aggregated with this Plan is a defined benefit plan, a Participants account balance shall equal the present value of the Participants accrued benefit. If the aggregation group includes more than one defined benefit plan, the same actuarial assumptions shall be used with respect to each such defined benefit plan. The foregoing top-heavy ratio shall be computed in accordance with the provisions of Code §416(g), together with the regulations and rulings thereunder. |
3. | Effective as of January 1, 2009, Article XV is replaced by the following. |
15.1 | General. |
(a) | Scope . The Uniformed Services Employment and Reemployment Rights Act of 1994 (the USERRA), which is codified at 38 USCA §§4301-4318, confers certain rights on individuals who leave civilian employment to perform certain services in the Armed Forces, the National Guard, the commissioned corps of the Public Health Service, or in any other category designated by the President of the United States in time of war or emergency (collectively, the Uniformed Services). An Employee who joins the Uniformed Services shall be referred to as a Serviceman in this Article. This Article shall be interpreted to provide such individuals with all the benefits required by the USERRA but no greater benefits than those required by the USERRA. This Article shall supersede any contrary provisions in the remainder of the Plan. | ||
(b) | Rights of Servicemen . When a Serviceman leaves the Uniformed Services, he may have reemployment rights with the Company or Affiliated Entities, depending on many factors, including the length of his stay in the Uniformed Services and the type of discharge he received. When this Article speaks of the date a Servicemans potential USERRA reemployment rights expire, it means the date on which the Serviceman fails to qualify for reemployment rights (if, for example, he is dishonorably discharged, or, in general, remains in the Uniformed Services for more than 5 years) or, if the Serviceman obtains reemployment rights, the date his reemployment rights lapse because the Serviceman failed to timely exercise those rights. |
15.2 | While a Serviceman. | ||
In general, a Serviceman shall be treated as an Employee while he continues to receive wages or Differential Pay from the Company or an Affiliated Entity, and once the Servicemans wages and Differential Pay from the Company or Affiliated Entity cease, the Serviceman shall be treated as if he were on an approved, unpaid leave of absence. For purposes of this Article, Differential Pay means the pay received by a Serviceman from Apache and Affiliated Entities, pursuant to their military leave policies, that is generally equal to the difference between his pay from the Armed Forces and his regular pay from Apache and Affiliated Entities before his military leave began. Differential Pay must also come within the meaning of differential wage payment in Code §3401(h)(2). The definition of Compensation in Article I shall include Differential Pay for all purposes. |
(a) | Participant Contributions . For purposes of making Participant Contributions under section 3.2, if the Serviceman was a Covered Employee when he became a Serviceman, he shall continue to be treated as a Covered Employee while he continues to receive wages or Differential Pay from the Company. As a consequence, (i) if he was a Covered Employee who had satisfied the requirements of Article II when he became a Serviceman, he may continue to make Participant Contributions from his wages and Differential Pay from the Company, and (ii) if he had not satisfied the requirements of section 2.1 when he became a Serviceman, his service in the Uniformed Services shall be treated as service with the Company in determining when he will be able to begin making Participant Contributions under section 2.1, and if his wages or Differential Pay from the Company continue beyond that eligibility date, the Serviceman may begin to make Participant Contributions on such date. A Serviceman may change his rate of contributions in the same manner as an Employee. A Servicemans Participant Contributions shall cease when his wages and Differential Pay from the Company cease. | ||
(b) | Company Contributions . Wages and Differential Pay paid by the Company to a Serviceman shall be included in his Compensation as if the Serviceman were an Employee. A Servicemans Participant Contributions shall be matched according to the formula in paragraph 3.1(b)(i). If the Employee was a Covered Employee when he became a Serviceman and his wages or Differential Pay continue through the last business day of a Plan Year, then (i) the Serviceman shall be treated as an eligible Participant under subsection 3.1(a) for that Plan Year (and shall therefore receive an allocation of any Company Discretionary Contribution); (ii) the Serviceman |
shall be treated as an eligible Participant under paragraph 3.1(b)(ii) for that Plan Year (and shall therefore receive an allocation of any additional match provided under such paragraph); (iii) if he was a Non-Highly Compensated Employee when he became a Serviceman, he shall be eligible to receive an allocation of any QNECs and QMACs provided under subsections 3.7(c) and 3.8(c); and (iv) he shall be treated as an Employee under subsection 12.4(a) (and, if he is a Non-Key Employee, he shall therefore receive any minimum required allocation if the Plan is top-heavy). | |||
(c) | Investments . If the Serviceman has an account balance in the Plan, he is an Account Owner and may therefore direct the investment of his Accounts pursuant to section 9.3 and Article XIV. | ||
(d) | Loans . For purposes of borrowing from the Plan under Article VII, a Serviceman shall be treated as an Employee until the day on which his potential USERRA reemployment rights expire. If a Serviceman with an outstanding loan continues to receive wages or Differential Pay from the Company or an Affiliated Entity after joining the Uniformed Services, his loan payments shall continue to be deducted from those wages and Differential Pay. Once the Servicemans wages and Differential Pay cease, his loan payments shall be suspended until the earlier of (i) his reemployment with the Company or an Affiliated Entity or (ii) the day on which his potential USERRA reemployment rights expire. The Serviceman may repay all or part of his loan at any time during the suspension. During the payment suspension, interest shall accrue on the unpaid balance of the loan. See subsections 15.3(b) and 15.4(c) for the resumption of loan payments for a reemployed Serviceman, and subsection 15.3(a) for the timing of the loans default if the Serviceman is not reemployed. | ||
(e) | Distributions and Withdrawals . For purposes of Article VI (relating to distributions and in-service withdrawals), the Serviceman shall be treated as an Employee until the day on which his potential USERRA reemployment rights expire, with one exception. The Serviceman shall be treated as having had a severance from employment on the date he became a Serviceman with respect to any benefits accrued from his Differential Pay; however, if the Serviceman takes such a distribution, his Participant Contributions [and any deemed Participant Contributions under subsection (h)] shall cease for six months from the date of the distribution.. See section 15.3 once his potential USERRA rights expire. | ||
(f) | QDROs . QDROs shall be processed while the Participant is a Serviceman. The Committee has the discretion to establish special procedures under subsection 13.9(e) for Servicemen, by, for example, extending the usual deadlines to accommodate any practical difficulties encountered by the Serviceman that are attributable to his service in the Uniformed Services. | ||
(g) | Rollovers . If the Serviceman was a Covered Employee when he became a Serviceman, the Serviceman may make Rollover Contributions pursuant to subsection 3.2(d) until the day on which his potential USERRA reemployment rights expire. | ||
(h) | Death or Disability . If a Serviceman dies or becomes disabled while he is a Serviceman, his Account shall be fully vested. In addition, the Serviceman will be treated as if he had returned to active employment and then died or became disabled, with the result that he will receive the make-up contributions under subsections 15.4(e), 15.4(f), and 15.4(g), and to the extent those are based on his Participant Contributions, he shall be also treated as if he had continued making Participant Contributions from his Deemed Compensation at the average rate he actually made Participant Contributions during the 12 months (or, if less his actual length of service with Apache and Affiliated Entities) immediately before he became a Serviceman. |
15.3 | Expiration of USERRA Reemployment Rights. |
(a) | Consequences . If a Serviceman is not reemployed before his potential USERRA reemployment rights expire, the Committee shall determine his Termination From Service Date by treating his service in the Uniformed Services as an approved leave of absence but treating the expiration of his potential USERRA reemployment rights as the failure to timely return from his leave of absence, with the consequence that his Termination From Service Date will generally be the date his potential USERRA rights expired. Once his Termination From Service Date has been determined, the Committee shall determine his vested percentage. For purposes of Article VI |
(relating to distributions), the day the Servicemans potential USERRA reemployment rights expired shall be treated as the day of his Termination from Service. For purposes of subsection 5.4(b) (relating to the timing of forfeitures), the Servicemans last day of employment shall be the day his potential USERRA reemployment rights expired. If the Serviceman has an outstanding loan from this Plan when his potential USERRA reemployment rights expire, his loan shall go into default on the last day of the calendar quarter after the calendar quarter in which his potential USERRA reemployment rights expired, unless, before the loan goes into default, he repays the loan or is rehired pursuant to subsection (b). | |||
(b) | Rehire after Expiration of Reemployment Rights . If the Company or an Affiliated Company hires a former Serviceman after his potential USERRA reemployment rights have expired, he shall be treated like any other former employee who is rehired. If he had an outstanding loan and is reemployed before the loan goes into default pursuant to subsection (a), his loan payments shall be recalculated and the Company or Affiliated Entity shall immediately resume withholding the revised loan payments from his pay. The term of the loan when payments resume shall be equal to the remaining term of the loan when payments were suspended. |
15.4 | Return From Uniformed Service. |
This section applies solely to a Serviceman who returns to employment with the Company or an Affiliated Entity because he exercised his reemployment rights under the USERRA. |
(a) | Credit for Service . A Servicemans length of time in the Uniformed Services shall be treated as service with the Company for purposes of vesting and determining his eligibility to participate in the Plan upon reemployment. | ||
(b) | Participation . If the Serviceman satisfies the eligibility requirements of section 2.1 before his reemployment, and he is a Covered Employee upon his reemployment, he may participate in the Plan immediately upon his return. | ||
(c) | Loans . If the Servicemans loan payments were suspended under subsection 15.2(d) during his time in the Uniformed Services, his loan payments shall be recalculated and the Company or Affiliated Entity shall immediately resume withholding the revised loan payments from his pay. The term of the loan when payments resume shall be equal to the remaining term of the loan when payments were suspended. | ||
(d) | Make-Up Participant Contributions . In addition to his regular Participant Contributions, a returning Serviceman shall be permitted to make additional contributions up to the amount of Participant Contributions he could have made if, instead of becoming a Serviceman, he had remained employed by the Company or Affiliated Entity and been paid his Deemed Compensation during that time. See subsection (h) for guidance on applying the various limits contained in the Code to the calculation of the maximum additional contribution the returning Serviceman may make. Such additional contributions may only be made within a period that begins on his reemployment date and whose duration is the lesser of five years or three times his length of time in the Uniformed Services. The additional contributions shall be withheld from his Compensation pursuant to the Servicemans election. The Committee shall establish administrative procedures for such elections. The additional contributions shall be allocated to Participant Contributions Accounts. | ||
(e) | Make-Up Match . For each additional contribution that the Serviceman contributes pursuant to subsection (d), the Company shall promptly contribute to his Accounts an additional matching contribution. The additional matching contribution shall be equal to the Company Matching Contribution (including forfeitures treated as Company Matching Contributions) that he would have received if (i) his additional contributions were Participant Contributions made during his time in the Uniformed Services, and (ii) he was paid his Deemed Compensation during his time in the Uniformed Services. The Servicemans additional contributions shall be spread over the pay periods in which they could have occurred in such a way as to maximize the additional matching contribution. See subsection (h) for guidance on applying the various limits contained in the Code to the calculation of the additional matching contribution. The additional matching contribution shall be allocated to the Participants Company Contributions Account unless the |
additional matching contribution would have been designated a QMAC, in which case it shall be allocated to his Participant Contributions Account. | |||
(f) | Make-Up Company Discretionary Contribution . The Company shall contribute an additional contribution to a Servicemans Accounts equal to the Company Discretionary Contribution (including any forfeitures treated as Company Discretionary Contributions) that would have been allocated to such Accounts if the Serviceman had remained employed during his time in the Uniformed Services, and had earned his Deemed Compensation during that time. See subsection (h) for guidance on applying the various limits contained in the Code to the calculation of the additional discretionary contribution. The additional discretionary contribution shall be allocated to the Participants Company Contributions Account unless the additional discretionary contribution would have been designated a QNEC, in which case it shall be allocated to his Participant Contributions Account. | ||
(g) | Make-Up Miscellaneous Contributions . The Company shall contribute to the Servicemans Accounts any QNECs and QMACs that the Serviceman would have received pursuant to subsection 3.7(c) or 3.8(c), and any top-heavy minimum contribution he would have received pursuant to section 12.4, (including any forfeitures treated as QNECs, QMACs, or top-heavy minimum contributions) if he had remained employed during his time in the Uniformed Services, and had earned Deemed Compensation during that time. See subsection (h) for guidance on applying the various limits contained in the Code to the calculation of the QNECs, QMACs, and top-heavy minimum contribution. These additional top-heavy minimum contributions shall be allocated to Company Contributions Accounts. The additional QNECs and QMACs shall be allocated to Participant Contributions Accounts. | ||
(h) | Application of Limitations . |
(i) | The make-up contributions under subsections (d), (e), (f), and (g) (the Make-Up Contributions) shall be ignored for purposes of determining the Companys maximum contribution under subsection 3.1(d), the limits on Participant Contributions under paragraphs 3.2(a)(ii) and 3.2(b)(ii), the limits on Annual Additions under section 3.4, the ADP test of section 3.5, the ACP test of section 3.6, the non-discrimination requirements of Code §401(a)(4), and (if the Serviceman is a Key Employee) calculating the minimum required top-heavy contribution under section 12.4. | ||
(ii) | In order to determine the maximum Make-Up Contributions, the following limitations shall apply. |
(A) | The Servicemans Aggregate Compensation for each year shall be calculated. His Aggregate Compensation shall be equal to his actual Compensation, plus his Deemed Compensation that would have been paid during that year. Each type of Aggregate Compensation (for benefit purposes, deferral purposes, etc.) shall be determined separately. | ||
(B) | The Servicemans Aggregate Compensation each Plan Year shall be limited to the dollar limit in effect for that Plan Year under Code §401(a)(17), for the purposes and in the manner specified in subsection 1.14(f). | ||
(C) | The limits of subsection 3.1(d) (relating to the maximum contribution by the Company to the Plan) for each Plan Year shall be calculated by using the Servicemans Aggregate Compensation for that Plan Year, and by treating the Make-Up Contributions that are attributable to that Plan Years Deemed Compensation as having been made during that Plan Year. | ||
(D) | The limits of paragraph 3.2(a)(ii) (relating to the maximum 401(k) Contributions) and paragraph 3.2(b)(ii) (relating to the maximum Catch-Up Contributions) for each calendar year shall be calculated by treating as 401(k) and Catch-Up Contributions his additional contributions pursuant to subsection (d) that are attributable to that calendar years Deemed Compensation. |
(E) | The limits of section 3.4 (relating to the maximum Annual Additions to a Participants Accounts) shall be calculated for each Limitation Year by using the Servicemans Aggregate Compensation for that Limitation Year, and by treating as Annual Additions all the Make-Up Contributions that are attributable to that Limitation Years Deemed Compensation. | ||
(F) | The Servicemans maximum Make-Up Contributions shall not be limited by the results of the Plans ADP test or ACP test for any Plan Year in which the Serviceman has Deemed Compensation, even if the Serviceman is treated as a Highly Compensated Employee (using his Aggregate Compensation) for that Plan Year. |
(i) | Deemed Compensation . A Servicemans Deemed Compensation is the Compensation that he would have received (including raises) had he remained employed by the Company or Affiliated Entity during his time in the Uniformed Services, unless it is not reasonably certain what his Compensation would have been, in which case his Deemed Compensation shall be based on his average rate of compensation during the 12 months (or, if shorter, his period of employment with the Company and Affiliated Entities) immediately before he entered the Uniformed Services. A Servicemans Deemed Compensation shall be reduced by any Compensation actually paid to him during his time in the Uniformed Services (such as vacation pay, wages, and Differential Pay). Deemed Compensation shall cease when the Servicemans potential USERRA reemployment rights expire. Each type of Deemed Compensation (for benefit purposes, deferral purposes, etc.) shall be determined separately. |
APACHE CORPORATION
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By: | /s/ Margery M. Harris | |||
Title: Vice President Human Resources | ||||
Effective January 1, 2008 | Document prepared December 4, 2007 |
ARTICLE I Definitions | 1 | |||||
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1.1
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Account | 1 | ||||
1.2
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Account Owner | 1 | ||||
1.3
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Affiliated Entity | 1 | ||||
1.4
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Alternate Payee | 1 | ||||
1.5
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Annual Addition | 1 | ||||
1.6
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Code | 2 | ||||
1.7
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Committee | 2 | ||||
1.8
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Company | 2 | ||||
1.9
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Company Contributions | 2 | ||||
1.10
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Company Mandatory Contributions | 2 | ||||
1.11
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Compensation | 2 | ||||
1.12
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Covered Employee | 4 | ||||
1.13
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Disability | 4 | ||||
1.14
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Domestic Relations Order | 4 | ||||
1.15
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Employee | 4 | ||||
1.16
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ERISA | 5 | ||||
1.17
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Five-Percent Owner | 5 | ||||
1.18
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Highly Compensated Employee | 5 | ||||
1.19
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Key Employee | 5 | ||||
1.20
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Lapse in Apache Employment | 5 | ||||
1.21
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Limitation Year | 5 | ||||
1.22
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Non-Highly Compensated Employee | 5 | ||||
1.23
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Non-Key Employee | 6 | ||||
1.24
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Normal Retirement Age | 6 | ||||
1.25
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Participant | 6 | ||||
1.26
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Period of Service | 6 | ||||
1.27
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Plan Year | 6 | ||||
1.28
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QDRO | 6 | ||||
1.29
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QJSA | 6 | ||||
1.30
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QOSA | 6 | ||||
1.31
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QPSA | 6 | ||||
1.32
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Required Beginning Date | 6 | ||||
1.33
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Spouse | 7 | ||||
1.34
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Termination from Service Date | 7 | ||||
1.35
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Valuation Date | 7 | ||||
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ARTICLE II Participation | 7 | |||||
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2.1
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Participation | 7 | ||||
2.2
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Enrollment Procedure | 7 | ||||
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ARTICLE III Contributions | 7 | |||||
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3.1
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Company Contributions | 7 | ||||
3.2
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Participant Contributions | 8 | ||||
3.3
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Return of Contributions | 8 | ||||
3.4
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Limitation on Annual Additions | 8 | ||||
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ARTICLE IV Interests in the Trust Fund | 9 | |||||
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4.1
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Participants Accounts | 9 | ||||
4.2
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Valuation of Trust Fund | 9 | ||||
4.3
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Allocation of Increase or Decrease in Net Worth | 10 | ||||
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ARTICLE V Amount of Benefits | 10 | |||||
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5.1
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Vesting Schedule. | 10 | ||||
5.2
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Vesting After a Lapse in Apache Employment | 11 | ||||
5.3
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Calculating Service | 11 | ||||
5.4
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Forfeitures | 12 | ||||
5.5
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Transfers Portability | 13 | ||||
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ARTICLE VI Distribution of Benefits | 13 | |||||
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6.1
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Beneficiaries | 13 | ||||
6.2
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Distributable Amount | 14 | ||||
6.3
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Manner of Distribution | 14 | ||||
6.5
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Direct Rollover Election | 17 | ||||
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ARTICLE VII Allocation of Responsibilities Named Fiduciaries | 18 | |||||
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7.1
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No Joint Fiduciary Responsibilities | 18 | ||||
7.2
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The Company | 19 | ||||
7.3
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The Trustee | 19 | ||||
7.4
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The Committee Plan Administrator | 19 | ||||
7.5
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Committee to Construe Plan | 19 | ||||
7.6
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Organization of Committee | 19 | ||||
7.7
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Agent for Process | 19 | ||||
7.8
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Indemnification of Committee Members | 20 | ||||
7.9
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Conclusiveness of Action | 20 | ||||
7.10
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Payment of Expenses | 20 | ||||
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ARTICLE VIII Trust Agreement Investments | 20 | |||||
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8.1
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Trust Agreement | 20 | ||||
8.2
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Plan Expenses | 20 | ||||
8.3
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Investments | 20 | ||||
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ARTICLE IX Termination and Amendment | 21 | |||||
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9.1
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Termination of Plan or Discontinuance of Contributions | 21 | ||||
9.2
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Allocations upon Termination | 21 | ||||
9.3
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Procedure Upon Termination of Plan | 21 | ||||
9.4
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Amendment by Apache | 22 | ||||
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ARTICLE X Plan Adoption by Affiliated Entities | 22 | |||||
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10.1
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Adoption of Plan | 22 | ||||
10.2
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Agent of Affiliated Entity | 22 | ||||
10.3
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Disaffiliation and Withdrawal from Plan | 22 | ||||
10.4
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Effect of Disaffiliation or Withdrawal | 22 | ||||
10.5
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Actions Upon Disaffiliation or Withdrawal | 23 |
i | Document prepared December 4, 2007 |
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ARTICLE XI Top-Heavy Provisions | 23 | |||||
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11.1
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Application of Top-Heavy Provisions | 23 | ||||
11.2
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Determination of Top-Heavy Status | 23 | ||||
11.3
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Special Vesting Rule | 24 | ||||
11.4
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Special Minimum Contribution | 24 | ||||
11.5
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Change in Top-Heavy Status | 24 | ||||
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ARTICLE XII Miscellaneous | 24 | |||||
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12.1
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Right to Dismiss Employees No Employment Contract | 24 | ||||
12.2
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Claims Procedure. | 24 | ||||
12.3
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Source of Benefits | 26 | ||||
12.4
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Exclusive Benefit of Employees | 26 | ||||
12.5
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Forms of Notices | 26 | ||||
12.6
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Failure of Any Other Entity to Qualify | 26 | ||||
12.7
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Notice of Adoption of the Plan | 26 | ||||
12.8
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Plan Merger. | 26 | ||||
12.9
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Inalienability of Benefits Domestic Relations Orders | 26 | ||||
12.10
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Payments Due Minors or Incapacitated Individuals | 29 | ||||
12.11
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Uniformity of Application | 29 | ||||
12.12
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Disposition of Unclaimed Payments | 29 | ||||
12.13
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Applicable Law | 30 | ||||
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ARTICLE XIII Uniformed Services Employment and Reemployment Rights Act of 1994 | 30 | |||||
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13.1
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General | 30 | ||||
13.2
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While a Serviceman | 30 | ||||
13.3
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Expiration of USERRA Reemployment Rights | 30 | ||||
13.4
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Return From Uniformed Service | 31 | ||||
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Appendix A Participating Companies | ||||||
Appendix B DEKALB Energy Company / Apache Canada Ltd. | ||||||
Appendix C Corporate Transactions |
ii | Document prepared December 4, 2007 |
1.1 | Account | |
Account means the account established pursuant to section 4.1. |
1.2 | Account Owner | |
Account Owner means a Participant who has an Account balance, an Alternate Payee who has an Account balance, or a beneficiary who has obtained an interest in the Account of the previous Account Owner because of the previous Account Owners death. |
1.3 | Affiliated Entity | |
Affiliated Entity means: |
(a) | For all purposes of the Plan except those listed in subsection (b), the term Affiliated Entity means any legal entity that is treated as a single employer with Apache pursuant to Code §414(b), §414(c), §414(m), or §414(o). | ||
(b) | For purposes of determining Annual Additions under section 1.5, limiting Annual Additions to a Participants Account under section 3.4, and construing the defined terms as they are used in sections 1.5 and 3.4 (such as Compensation and Employee), the term Affiliated Entity means any legal entity that is treated as a single employer with Apache pursuant to Code §414(m) or §414(o), and any legal entity that would be an Affiliated Entity pursuant to Code §414(b) or §414(c) if the phrase more than 50% were substituted for the phrase at least 80% each place it occurs in Code §1563(a)(1). |
1.4 | Alternate Payee | |
Alternate Payee means a Participants Spouse, former spouse, child, or other dependent who is recognized by a QDRO as having a right to receive all, or a portion of, the benefits payable under this Plan with respect to such Participant. |
1.5 | Annual Addition | |
Annual Addition means the allocations to a Participants Account for any Limitation Year, as described in detail below. |
(a) | Annual Additions shall include: (i) Company Contributions (except as provided in paragraphs (b)(iii) and (b)(v)) to this Plan and Company contributions to any other defined contribution plan maintained by the Company or any Affiliated Entity, (ii) after-tax contributions to any other defined contribution plan maintained by the Company or an Affiliated Entity; (iii) elective deferrals by the Participant, pursuant to Code §401(k), to any other defined contribution plan maintained by the Company or an |
Page 1 of 32 | Document prepared December 4, 2007 |
(b) | Annual Additions shall not include: (i) rollovers to any defined contribution plan maintained by the Company or an Affiliated Entity; (ii) repayments of loans made to a Participant from a qualified plan maintained by the Company or any Affiliated Entity; (iii) repayments of forfeitures for rehired Participants, as described in Code §411(a)(7)(B) and §411(a)(3)(D); (iv) direct transfers of funds from one qualified plan to any qualified plan maintained by the Company or any Affiliated Entity; (v) repayments of forfeitures of missing individuals pursuant to section 12.12; or (vi) salary deferrals within the meaning of Code §414(u)(2)(C) or §414(v)(6)(B). |
1.6 | Code | |
Code means the Internal Revenue Code of 1986, as amended from time to time, and the regulations and rulings in effect thereunder from time to time. |
1.7 | Committee | |
Committee means the administrative committee provided for in section 7.4. |
1.8 | Company | |
Company means Apache, any successor thereto, and any Affiliated Entity that adopts the Plan pursuant to Article X. Each Company is listed in Appendix A. |
1.9 | Company Contributions | |
Company Contributions means all contributions to the Plan made by the Company pursuant to section 3.1 for the Plan Year. |
1.10 | Company Mandatory Contributions | |
Company Mandatory Contributions means all contributions to the Plan made by the Company pursuant to subsection 3.1(a) for the Plan Year. |
1.11 | Compensation | |
Compensation means: |
(a) | Compensation for Annual Additions . |
(i) | Items Included . For purposes of determining the limitation on Annual Additions under section 3.4, Compensation means those amounts reported as wages, tips, other compensation on Form W-2 by Apache or an Affiliated Entity elective contributions that would have been reported as wages, tips, other compensation on Form W-2 by Apache or an Affiliated Entity but for an election under Code §125(a), §132(f)(4), §402(e)(3), §402(h)(1)(B), §402(k), or §457(b). The Plan shall ignore any rules that limit the remuneration included in wages, tips, other compensation based on the nature or location of the employment or the services performed. |
(ii) | Timing Restrictions . Compensation includes amounts that are paid or made available to the Participant during the Limitation Year. Compensation does not include amounts paid after a Participants termination of employment except that Compensation does include (A) amounts included in the final payment of his regular compensation for services provided before his termination (including regular pay, overtime, shift differential, commissions, bonuses, and similar payments), but only if the amounts are paid during the Limitation Year in which the termination occurred or, if later, within 2 1 / 2 months of his termination, (B) the cash-out of any paid time off that the former employee would have been able to use had his employment continued, but only if such amount is paid during the Limitation Year in which the termination occurs or, if later, within 2 1 / 2 months of his termination, and (C) payments from an unfunded nonqualified deferred compensation plan (1) that are includible in the Participants gross income |
Page 2 of 32 | Document prepared December 4, 2007 |
(b) | Compensation for Top-Heavy Minimum Contributions and Identifying Highly Compensated Employees and Key Employees . For purposes of determining the minimum contribution under section 11.4 when the Plan is top-heavy, and for identifying Highly Compensated Employees and Key Employees, Compensation means the amounts that would included as Compensation under subsection (a) if every occurrence of the phrase Limitation Year were replaced by the phrase Plan Year. | ||
(c) | Benefit Compensation . For purposes of determining and allocating Company Mandatory Contributions under paragraphs 3.1(a)(i) and 3.1(a)(ii), Compensation generally means regular compensation paid by the Company. |
(i) | Inclusions . Specifically, Compensation includes: |
(A) | Regular salary or wages, | ||
(B) | Overtime pay, | ||
(C) | The regular annual bonus (unless all or a portion is excluded by the Committee before the regular annual bonus is paid) and any other bonus designated by the Committee, | ||
(D) | Salary reductions pursuant to the Apache Corporation 401(k) Savings Plan, | ||
(E) | Salary reductions that are excludable from an Employees gross income pursuant to Code §125 or §132(f)(4), and | ||
(F) | Amounts contributed as salary deferrals to the Non-Qualified Retirement/Savings Plan of Apache Corporation. |
(ii) | Exclusions . Compensation excludes: |
(A) | Commissions, | ||
(B) | Severance pay, | ||
(C) | Moving expenses, | ||
(D) | Any gross-up of moving expenses to account for increased income or employment taxes, | ||
(E) | Foreign service premiums paid as an inducement to work outside of the United States, | ||
(F) | Credits or benefits under this Plan and credits or benefits under the Apache Corporation 401(k) Savings Plan (except as provided in subparagraph (i)(D)), | ||
(G) | Other contingent compensation, | ||
(H) | Any amount relating to the granting of a stock option by the Company or an Affiliated Entity, the exercise of such a stock option, or the sale or deemed sale of any shares thereby acquired, | ||
(I) | Contributions to any other fringe benefit plan (including, but not limited to, overriding royalty payments or any other exploration-related payments), | ||
(J) | Any bonus other than a bonus described in subparagraph 1.11(c)(i)(C), and | ||
(K) | Except as provided under subparagraph (i)(F), any benefit accrued under, or any payment from, any nonqualified plan of deferred compensation. |
(iii) | Timing Issues . Compensation includes amounts that are paid to the Employee during that portion of a Plan Year while the Employee is a Covered Employee. Compensation does not include amounts paid after an Employees termination of employment, except that Compensation does include (A) amounts included in the final payment of his regular compensation for services provided before his termination (including regular pay, overtime, shift differential, commissions, bonuses, and similar payments), but only if the amounts are paid |
Page 3 of 32 | Document prepared December 4, 2007 |
(d) | Limit on Compensation . For all purposes of subsection (a), for purposes of calculating the minimum contribution required in top-heavy years under subsection (b), and for all purposes of subsection (c), the Compensation taken into account for the Plan Year shall not exceed the dollar limit specified in Code §401(a)(17) in effect for the Plan Year or Limitation Year. |
1.12 | Covered Employee | |
Covered Employee means any Employee of the Company, with the following exceptions. |
(a) | Any individual directly employed by an entity other than the Company shall not be a Covered Employee, even if such individual is considered a common-law employee of the Company or is treated as an employee of the Company pursuant to Code §414(n). | ||
(b) | An Employee shall not be a Covered Employee unless he is either based in the U.S. or on the U.S. payroll. | ||
(c) | An Employee included in a unit of Employees covered by a collective bargaining agreement shall not be a Covered Employee unless the collective bargaining agreement specifically provides for such Employees participation in the Plan. | ||
(d) | An Employee whose job is classified as temporary shall be a Covered Employee only after he has worked for the Company and Affiliated Entities for six consecutive months. | ||
(e) | An Employee shall not be a Covered Employee while he is classified as an intern, a consultant, or an independent contractor. An Employee may be classified as an intern only if he is currently enrolled (or the Company expects him to be enrolled within the next 12 months) in a high school, college, or university. An Employee may be classified as an intern even if he does not receive academic course credit from his school for this employment with the Company. | ||
(f) | An individual who is employed pursuant to a written agreement with an agency or other third party for a specific job assignment or project shall not be a Covered Employee. |
1.13 | Disability | |
Disability means a physical or mental condition that qualifies the Employee for long-term disability payments under Apaches Long-Term Disability Plan. |
1.14 | Domestic Relations Order | |
Domestic Relations Order means any judgment, decree, or order (including approval of a property settlement agreement) issued by a court of competent jurisdiction that relates to the provisions of child support, alimony, or maintenance payments, or marital property rights to a Participants Spouse, former spouse, child, or other dependent and is made pursuant to a state domestic relations law (including a community property law). |
1.15 | Employee | |
Employee means each individual who performs services for the Company or an Affiliated Entity and whose wages are subject to withholding by the Company or an Affiliated Entity. The term Employee includes only individuals currently performing services for the Company or an Affiliated Entity, and excludes former Employees who are still being paid by the Company or an Affiliated Entity (whether through the payroll system, through overriding royalty payments, through exploration-related payments, severance, or otherwise). The term Employee also includes any individual who provides services to the Company or an Affiliated Entity pursuant to an agreement between the Company or an Affiliated Entity and a third party that employs the individual, but only if the individual has performed such services for the Company or an Affiliated Entity on a substantially full-time basis for at least one year and only if the services are performed under the primary direction or control by the Company or an Affiliated Entity; provided, however, that if the individuals included as Employees pursuant to the first part of this sentence constitute 20% or less of the |
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(a) | With respect to a corporation, any individual who owns (either directly or indirectly according to the rules of Code §318) more than 5% of the value of the outstanding stock of the corporation or stock processing more than 5% of the total combined voting power of all stock of the corporation. | ||
(b) | With respect to a non-corporate entity, any individual who owns (either directly or indirectly according to rules similar to those of Code §318) more than 5% of the capital or profits interest in the entity. | ||
(c) | An individual shall be a Five-Percent Owner for a particular year if such individual is a Five-Percent Owner at any time during such year. |
1.18 | Highly Compensated Employee | |
Highly Compensation Employee means, for each Plan Year, an Employee who (a) was in the top-paid group during the immediately preceding Plan Year and had Compensation of $80,000 (as adjusted by the Secretary of the Treasury) or more during the immediately preceding Plan Year, or (b) is a Five-Percent Owner during the current Plan Year, or (c) was a Five-Percent Owner during the immediately preceding Plan Year. The term top-paid group means the top 20% of Employees when ranked on the basis of Compensation paid during the year. In determining the number of Employees in the top-paid group, the Committee may elect to exclude Employees with less than six (or some smaller number of) months of service at the end of the year, Employees who normally work less than 17 1 / 2 (or some fewer number of) hours per week, Employees who normally work less than six (or some fewer number of) months during any year, Employees younger than 21 (or some younger age) on the last day of the year, and Employees who are nonresident aliens who receive no earned income (within the meaning of Code §911(d)(2)) from Apache or an Affiliated Entity that constitutes income from sources within the United States, within the meaning of Code §861(a)(3). Furthermore, an Employee who is a nonresident alien who receives no earned income (within the meaning of Code §911(d)(2)) from Apache or an Affiliated Entity that constitutes income from sources within the United States (within the meaning of Code §861(a)(3)) during the year shall not be in the top-paid group for that year. | ||
1.19 | Key Employee | |
Key Employee means an individual described in Code §416(i)(1) and the regulations promulgated thereunder. | ||
1.20 | Lapse in Apache Employment | |
Lapse in Apache Employment has the meaning described in subsection 5.3(c). | ||
1.21 | Limitation Year | |
Limitation Year means the calendar year. | ||
1.22 | Non-Highly Compensated Employee | |
Non-Highly Compensated Employee means an Employee who is not a Highly Compensated Employee. |
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1.23 | Non-Key Employee | |
Non-Key Employee means an Employee who is not a Key Employee. | ||
1.24 | Normal Retirement Age | |
Normal Retirement Age means age 65. | ||
1.25 | Participant | |
Participant means any individual with an account balance under the Plan except beneficiaries and Alternate Payees. The term Participant shall also include any individual who has accrued a benefit pursuant to subsection 3.1(a), but who does not yet have an Account balance. | ||
1.26 | Period of Service | |
Period of Service has the meaning described in subsection 5.3(a). | ||
1.27 | Plan Year | |
Plan Year means the 12-month period on which the records of the Plan are kept, which shall be the calendar year. | ||
1.28 | QDRO | |
QDRO, which is an acronym for qualified domestic relations order, means a Domestic Relations Order that creates or recognizes the existence of an Alternate Payees right to, or assigns to an Alternate Payee the right to, receive all or a portion of the benefits payable with respect to a Participant under the Plan and with respect to which the requirements of Code §414(p) and ERISA §206(d)(3) are met. | ||
1.29 | QJSA | |
QJSA, which is an acronym for qualified joint and survivor annuity, means: |
(a) | For a married Participant, a QJSA is an annuity that will provide equal monthly payments to the Participant for life, and if the Participant dies before his Spouse, the surviving Spouse shall receive monthly payments for her life, with each monthly payment equal to 50% of the monthly payment that the Participant received before his death. | ||
(b) | For an unmarried Participant, a QJSA is an annuity that will provide equal monthly payments to the Participant for life. |
(a) | Excepted as provided in subsections (b) and (c), Required Beginning Date means April 1 of the calendar year following the later of (i) the calendar year in which the Participant attains age 70 1 / 2 , or (ii) the calendar year in which the Participant terminates employment with Apache and all Affiliated Entities. | ||
(b) | For a Participant who is both an Employee and a Five-Percent Owner of Apache or an Affiliated Entity, the term Required Beginning Date means April 1 of the calendar year following the calendar year in which the Five-Percent Owner attains age 70 1 / 2 . If an Employee older than 70 1 / 2 becomes a |
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Five-Percent Owner, his Required Beginning Date shall be April 1 of the calendar year following the calendar year in which he becomes a Five-Percent Owner. | |||
(c) | If a Participant is rehired after his Required Beginning Date, and he is not a Five-Percent Owner, he shall be treated upon rehire as if he has not yet had a Required Beginning Date, with the result that his minimum required distributions under subsection 6.4(c) will be zero until his new Required Beginning Date. His new Required Beginning Date shall be determined pursuant to subsection (a). |
1.33 | Spouse | |
Spouse means the individual of the opposite sex to whom a Participant is lawfully married according to the laws of the state of the Participants domicile. | ||
1.34 | Termination from Service Date | |
Termination from Service Date has the meaning described in subsection 5.3(b). | ||
1.35 | Valuation Date | |
Valuation Date means the last day of each Plan Year and any other dates as specified in section 4.2 as of which the assets of the Trust Fund are valued at fair market value and as of which the increase or decrease in the net worth of the Trust Fund is allocated among the Participants Accounts. |
2.1 | Participation. | |
Each Covered Employee shall be eligible to participate in the Plan on the day he becomes a Covered Employee. A Covered Employee shall cease to accrue benefits in the Plan on the day he ceases to be a Covered Employee. | ||
2.2 | Enrollment Procedure. | |
Notwithstanding section 2.1, a Covered Employee shall not be eligible to participate in the Plan until after completing the enrollment procedures specified by the Committee. Such enrollment procedures may, for example, require the Covered Employee to complete and sign an enrollment form or to complete an on-line enrollment. The Covered Employee shall provide all information requested by the Committee, such as the initial investment direction, the address and date of birth of the Employee, and the name, address, and date of birth of each beneficiary of the Employee. The Committee may require that the enrollment procedure be completed a certain number of days prior to the date any Company Contribution is allocated to the Covered Employees Account. |
3.1 | Company Contributions. |
(a) | Company Mandatory Contributions . |
(i) | General . For each Plan Year, the Company shall contribute to the Trust Fund such amount of Company Mandatory Contributions as are necessary to fund the allocations described in this subsection. The Company may elect to treat any available forfeitures as Company Mandatory Contributions, pursuant to subsection 5.4(d). | ||
(ii) | Regular Allocation . Each eligible Participant shall receive an allocation of Company Mandatory Contributions equal to 6% of the eligible Participants Compensation. For purposes of this subsection, an eligible Participant is a Participant who received credit for one Hour of Service as a Covered Employee during the Plan Year and who is employed by the Company or an Affiliated Entity on the last day of the Plan Year. |
(b) | Miscellaneous Contributions . |
(i) | Forfeiture Restoration . The Company may make additional contributions to the Plan to restore amounts forfeited from the Accounts of certain rehired Participants, pursuant to section 5.4. |
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This additional contribution shall be required only when the available forfeitures are insufficient to restore such forfeited amounts, as described in subsection 5.4(d). | |||
(ii) | Top-Heavy Contribution . The Company may make additional contributions to the Plan to satisfy the minimum contribution required by section 11.4. The Company may elect to use any available forfeitures for this purpose, pursuant to subsection 5.4(d). | ||
(iii) | Missing Individuals . The Company may make additional contributions to the Plan to restore the forfeited benefit of any missing individual, pursuant to section 12.12. This additional contribution shall be required only when the available forfeitures are insufficient to restore such forfeited amounts, as described in subsection 5.4(d). | ||
(iv) | Returning Servicemen . The Company may make additional contributions to the Plan to provide make-up contributions for returning servicemen, pursuant to section 13.4. The Company may elect to use any available forfeitures for this purpose, pursuant to subsection 5.4(d). |
(c) | Contributions Contingent on Deductibility . The Company Contributions for a Plan Year (excluding forfeitures and contributions pursuant to paragraph 3.1(b)(iv)) shall not exceed the amount allowable as a deduction for Apaches taxable year ending with or within the Plan Year pursuant to Code §404. Company Contributions (excluding contributions pursuant to paragraph 3.1(b)(iv) and any special contributions described in any paragraph of subsection 3.1(a) after paragraph (ii)) shall be paid to the Trustee no later than the due date (including any extensions) for filing the Companys federal income tax return for such year. Company Contributions shall be made without regard to current or accumulated earnings and profits. The Company shall pay Company Contributions to the Trust Fund in the form of cash. |
3.2 | Participant Contributions. | |
Participants may not contribute to this Plan. The Plan does not accept rollovers or direct transfers. | ||
3.3 | Return of Contributions. |
(a) | Mistake of Fact . Upon the request of the Company, the Trustee shall return to the Company any Company Contribution made under a mistake of fact. The Trustee may not return any such contribution later than one year after the Trustee received the contribution. The amount returned shall not exceed the excess of the amount contributed (reduced to reflect any decrease in the net worth of the appropriate Accounts attributable thereto) over the amount that would have been contributed without the mistake of fact. Appropriate reductions shall be made in the Accounts of Participants to reflect the return of any contributions previously credited to such Accounts. | ||
(b) | Non-Deductible Contributions . Upon the request of the Company, the Trustee shall return to the Company any Company Contribution that is not deductible under Code §404. All contributions under the Plan are expressly conditioned upon their deductibility for federal income tax purposes. The amount that shall be returned shall be the excess of the amount contributed (reduced to reflect any decrease in the net worth of the appropriate Accounts attributable thereto) over the amount that would have been contributed if there had not been a mistake in determining the deduction. Appropriate reductions shall be made in the Accounts of Participants to reflect the return of any contributions previously credited to such Accounts. Any contribution conditioned on its deductibility shall be returned only if it is returned within one year after it is disallowed as a deduction. | ||
(c) | Effect of Correction . A contribution shall be returned under subsection (a) or (b) only to the extent that its return will not reduce the Account of a Participant to an amount less than the balance that would have been credited to the Participants Account had the contribution not been made. |
3.4 | Limitation on Annual Additions. |
(a) | Limit . The Annual Additions to a Participants Account(s) in this Plan and to his accounts in any other defined contribution plans maintained by the Company or an Affiliated Entity for any Limitation Year shall not exceed in the aggregate the lesser of (i) $40,000 (as adjusted by the Secretary of the Treasury), or (ii) 100% of the Participants Compensation. The limit in clause (ii) shall not apply to any contribution for medical benefits (within the meaning of Code §419A(f)(2)) after separation from service that is treated as an Annual Addition. |
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(b) | Corrective Mechanism . |
(i) | Reduction in Annual Additions . A Participants Annual Additions shall be reduced, to the extent necessary to satisfy the foregoing limits, if the Annual Additions arose as a result of a reasonable error in estimating Compensation, as a result of the allocation of forfeitures, or as a result of other facts and circumstances as provided in the regulations under Code §415. | ||
(ii) | Order of Reduction, Multiple Plans . Apache also maintains the Apache Corporation 401(k) Savings Plan, a profit sharing plan containing a cash or deferred arrangement. The Participants Annual Additions shall be reduced, to the extent necessary, in the following order. First, to the extent that the Annual Additions in a single plan exceed the limits of subsection (a), the Annual Additions in that plan shall be reduced, in the order specified in that plan, to the extent necessary to satisfy the limits of subsection (a). Then, if the Participant has Annual Additions in more than one plan and in the aggregate they exceed the limits of subsection (a), the Annual Additions will be reduced as follows. |
(A) | If the Participant was eligible to participate in the Non-Qualified Retirement/Savings Plan of Apache Corporation on the last day of the Plan Year in which the excess Annual Addition occurred, the Annual Additions to this Plan will be reduced before the Annual Additions to the Apache Corporation 401(k) Savings Plan are reduced, in the order specified in that plan. | ||
(B) | If the Participant was not eligible to participate in the Non-Qualified Retirement/Savings Plan of Apache Corporation on the last day of the Plan Year in which the excess Annual Addition occurred, the Annual Additions to the Apache Corporation 401(k) Savings Plan shall be reduced, in the order specified in that plan before the Annual Additions to this Plan are reduced. |
(iii) | Disposition of Excess Annual Additions . Any reduction of Company Contributions shall be placed in a suspense account in the Trust Fund and used to reduce future Company Contributions to the Plan. The following rules shall apply to such suspense account: (A) no further Company Contributions may be made if the allocation thereof would be precluded by Code §415; (B) any increase or decrease in the net value of the Trust Fund attributable to the suspense account shall not be allocated to the suspense account, but shall be allocated to the Accounts; and (C) all amounts held in the suspense account shall be allocated as of each succeeding allocation date on which forfeitures may be allocated pursuant to subsection 5.4(d) (and may be allocated more frequently if the Committee so directs), until the suspense account is exhausted. |
4.1 | Participants Accounts. | |
The Committee shall establish and maintain a separate Account in the name of each Participant, but the maintenance of such Accounts shall not require any segregation of assets of the Trust Fund. Each Account shall contain the Company Contributions allocated to the Participant and the increase or decrease in the net worth of the Trust Fund attributable to such contributions. | ||
4.2 | Valuation of Trust Fund. |
(a) | General . The Trustee shall value the assets of the Trust Fund at least annually as of the last day of the Plan Year, and as of any other dates determined by the Committee, at their current fair market value and determine the net worth of the Trust Fund. In addition, the Committee may direct the Trustee to have a special valuation of the assets of the Trust Fund when the Committee determines, in its sole discretion, that such valuation is necessary or appropriate or in the event of unusual market fluctuations of such assets. Such special valuation shall not include any contributions made by Participants since the preceding Valuation Date, any Company Contributions for the current Plan Year, or any unallocated forfeitures. The Trustee shall allocate the expenses of the Trust Fund occurring since the preceding Valuation Date, pursuant to section 8.2, and then determine the increase or decrease in the net worth of the Trust Fund that has occurred since the preceding Valuation Date. The Trustee shall |
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determine the share of the increase of decrease that is attributable to the non-separately accounted for portion of the Trust Fund and to any amount separately accounted for, as described in subsections (b) and (c). |
(b) | Mandatory Separate Accounting . The Trustee shall separately account for (i) any individually directed investments permitted under section 8.3, and (ii) amounts subject to a Domestic Relations Order. | ||
(c) | Permissible Separate Accounting . The Trustee may separately account for the following amounts to provide a more equitable allocation of any increase or decrease in the net worth of the Trust Fund: |
(i) | The distributable amount of a Participant, including any amount distributable to an Alternate Payee or to a beneficiary of a deceased Participant; and | ||
(ii) | Company Contributions made since the preceding Valuation Date; | ||
(iii) | Any other amounts for which separate accounting will provide a more equitable allocation of the increase or decrease in the net worth of the Trust Fund. |
4.3 | Allocation of Increase or Decrease in Net Worth. | |
The Committee shall, as of each Valuation Date, allocate the increase or decrease in the net worth of the Trust Fund that has occurred since the preceding Valuation Date between the non-separately accounted for portion of the Trust Fund and the amounts separately accounted for that are identified in subsections 4.2(b) and 4.2(c). The increase or decrease attributable to the non-separately accounted for portion of the Trust Fund shall be allocated among the appropriate Accounts in the ratio that the dollar value of each such Account bore to the aggregate dollar value of all such Accounts on the preceding Valuation Date after all allocations and credits made as of such date had been completed. The Committee shall then allocate any amounts separately accounted for (including the increase or decrease in the net worth of the Trust Fund attributable to such amounts) to the appropriate Account. |
5.1 | Vesting Schedule. |
(a) | General Rule . Unless subsection (b), (c), or (d) provide for faster vesting, a Participants interest in his Account shall become vested in accordance with the following schedule: |
Period of Service | Vesting Percentage | |||
Less than 1 year
|
0 | % | ||
At least 1 year, but less than 2 years
|
20 | % | ||
At least 2 year, but less than 3 years
|
40 | % | ||
At least 3 year, but less than 4 years
|
60 | % | ||
At least 4 year, but less than 5 years
|
80 | % | ||
5 or more years
|
100 | % |
(b) | Full Vesting in Certain Circumstances . A Participant shall have a fully vested and nonforfeitable interest in his Account (i) upon his Normal Retirement Age if he is an Employee on such date, (ii) upon his death while an Employee or while on an approved leave of absence from the Company or an Affiliated Entity, or (iii) upon his termination of employment with the Company or an Affiliated Entity because of a Disability. | ||
(c) | Change of Control . The Accounts of all Participants shall be fully vested as of the effective date of a change in control. For purposes of this subsection, a change of control shall mean the event occurring when a person, partnership, or corporation, together with all persons, partnerships, or corporations acting in concert with each person, partnership, or corporation, or any or all of them, acquires more than 20% of Apaches outstanding voting securities; provided that a change of control shall not occur if such persons, partnerships, or corporations acquiring more than 20% of Apaches voting securities is solicited to do so by Apaches board of directors, upon its own initiative, and such persons, partnerships, or corporations have not previously proposed to acquire more than 20% of Apaches voting securities in an unsolicited offer made either to Apaches board of directors or directly to the stockholders of Apache. |
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(d) | Plan Termination . A Company Contributions Account shall be fully vested as described in section 9.1, which discusses the full or partial termination of the Plan. |
5.2 | Vesting After a Lapse in Apache Employment. |
(a) | Separate Accounts . If a Participant is rehired before incurring a one-year Lapse in Apache Employment, he shall have only one Account, and its vested percentage shall be determined under section 5.1. If a Participant is rehired after incurring a one-year Lapse in Apache Employment, he shall have two Accounts, an old Account for the contributions from his earlier episode of employment, and a new Account for his later episode of employment. If both the old and new Accounts are fully vested, they shall be combined into a single Account. | ||
(b) | Vesting of New Account . This subsection is effective January 1, 2006. The vested percentage of the new Account shall be determined based on all the Participants Periods of Service. | ||
(c) | Vesting of Old Account . If the Participants Lapse in Apache Employment was for five years or longer, the vested percentage of the old Account shall be based solely on the Participants Period of Service from his first episode of employment. If the Participants Lapse in Apache Employment was for less than five years, the vested percentage of the old Account shall be determined by aggregating his Periods of Service from both episodes of employment. |
5.3 | Calculating Service. |
(a) | Period of Service . |
(i) | General . A Participants Period of Service prior to January 1, 2005 shall be determined according to the provisions of the Plan in effect when the service was rendered. A Participants Period of Service begins on the date he first begins to perform duties as an Employee for which he is entitled to payment, and ends on his Termination From Service Date. In addition, a Participants Period of Service also includes the period between his Termination From Service Date and the day he again begins to perform duties for the Company or an Affiliated Entity for which he is entitled to payment, but only if such period is less than one year in duration. | ||
(ii) | Additional Rules . The service-crediting provisions in this paragraph are more generous than required by the Code. |
(A) | Leased Employees . For vesting purposes only, the Plan shall treat an individual as an Employee if he satisfies all the requirements specified in Code §414(n)(2) for being a leased employee of Apaches or an Affiliated Entitys, except for the requirement of having performed such services for at least one year. | ||
(B) | Approved Leave . If the Employee is absent from the Company or Affiliated Entity for more than one year because of an approved leave of absence (either with or without pay) for any reason (including, but not limited to, jury duty) and the Employee returns to work at or prior to the expiration of his leave of absence, no Termination From Service Date will occur during the leave of absence. | ||
(C) | Servicemen . See Article XIII for special provisions that apply to Servicemen. | ||
(D) | Corporate Transactions . See Appendix C for instances in which a new Employees Period of Service includes his prior employment with another company. | ||
(E) | Contractors . If an eligible contractor becomes an Employee, his Period of Service shall include his previous continuous service as an eligible contractor, excluding any service provided before 2003. An eligible contractor is an individual who (A) performed services for Apache or an Affiliated Entity on a substantially full-time basis in the capacity of an independent contractor (for federal income tax purposes); (B) became an Employee within a month of ceasing to be an independent contractor working full-time for Apache or an Affiliated Entity; and (C) notified the Plan of his prior service as an independent contractor within two months of becoming an Employee (or, if later, by February 28, 2006 or such other deadline established by the Committee). |
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(b) | Termination From Service Date . |
(i) | Usual Rule . If the Employee quits, is discharged, retires, or dies, his Termination From Service Date occurs on the last day the Employee performs services for the Company or an Affiliated Entity, except for an Employee who incurs a Disability, in which case his Termination From Service Date does not occur, even if he quits, until the earlier of the one-year anniversary of the date his Disability or the date he recovers from his Disability. | ||
(ii) | Other Absences . If an Employee is absent from the Company and Affiliated Entities for any reason other than a quit, discharge, or retirement, his Termination From Service Date is the earlier of (A) the date he quits, is discharged, retires, or dies, or (B) one year from the date the Employee is absent from the Company or Affiliated Entity for any other reason (such as vacation, holiday, sickness, disability, leave of absence, or temporary lay-off), with the following exception. If the Employee is absent from the Company or Affiliated Entity because of parental leave (which includes only the pregnancy of the Employee, the birth of the Employees child, the placement of a child with the Employee in connection with adoption of such child by the Employee, or the caring for such child immediately following birth or placement) on the first anniversary of the day the Employee was first absent, his Termination From Service Date does not occur until the second anniversary of the day he was first absent (and the period between the first and second anniversaries of the day he was first absent shall not be counted in his Period of Service). |
(c) | Lapse in Apache Employment . A Lapse in Apache Employment means the period commencing on an individuals Termination from Service Date and ending on the date he again begins to perform services as an Employee. |
5.4 | Forfeitures. |
(a) | Exceptions to the Vesting Rules . The following rules supersede the vesting rules of section 5.1. |
(i) | Excess Annual Additions . Annual Additions to a Participants Accounts and any increase or decrease in the net worth of the Participants Accounts attributable to such Annual Additions may be reduced to satisfy the limits described in section 3.4. Any reduction shall be used as specified in section 3.4. | ||
(ii) | Missing Individuals . A missing individuals vested Accounts may be forfeited as of the last day of any Plan Year, as provided in section 13.12. Any such forfeiture shall be used as specified in subsection (d). |
(b) | Regular Forfeitures . A Participants non-vested interest in his Account shall be forfeited at the end of the Plan Year in which the Participant terminates employment. Any such forfeiture shall be used as specified in subsection (d). | ||
(c) | Restoration of Forfeitures . |
(i) | Missing Individuals . The forfeiture of a missing individuals Account(s), as described in section 13.12, shall be restored to such individual if the individual makes a claim for such amount. | ||
(ii) | Regular Forfeitures . |
(A) | Rehire Within 5 Years . If a Participant is rehired before incurring a five-year Lapse in Apache Employment, and the Participant has received a distribution of his entire vested interest in his Account (with the result that he forfeited his non-vested interest in such Account), then the exact amount of the forfeiture shall be restored to his Account. All the rights, benefits, and features available to the Participant when the forfeiture occurred shall be available with respect to the restored forfeiture. If such a Participant again terminates employment prior to becoming fully vested in his Account, the vested portion of his Account shall be determined by applying the vested percentage determined under section 5.1 to the sum of (x) and (y), then subtracting (y) from such sum, where: (x) is the value of his Account as of the Valuation Date immediately following his most recent |
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termination of employment; and (y) is the amount previously distributed to the Participant on account of the prior termination of employment. | |||
(B) | Rehire After 5 Years . If a Participant is rehired after incurring a five-year Lapse in Apache Employment, then no amount forfeited from his Account shall be restored to his Account. |
(iii) | Method of Forfeiture Restoration . Forfeitures that are restored shall be accomplished by an allocation of the forfeitures under subsection (d) or by a special Company Contribution pursuant to paragraph 3.1(b)(i). |
(d) | Use of Forfeitures . The Committee shall decide how forfeitures are used. Forfeitures may be used (i) to restore Accounts as described in subsection (c), (ii) to pay those expenses of the Plan that are properly payable from the Trust Fund and that are not paid by the Company or Account Owners or charged to Accounts, or (iii) as any Company Contribution. |
5.5 | Transfers Portability. | |
If any other employer adopts this or a similar money purchase pension plan and enters into a reciprocal agreement with the Company that provides that (a) the transfer of a Participant from such employer to the Company (or vice versa) shall not be deemed a termination of employment for purposes of the plans, and (b) service with either or both employers shall be credited for purposes of vesting under both plans, then the transferred Participants Account shall be unaffected by the transfer, except, if deemed advisable by the Committee, it may be transferred to the trustee of the other plan. |
6.1 | Beneficiaries. |
(a) | Designating Beneficiaries . Each Account Owner shall file with the Committee a designation of the beneficiaries and contingent beneficiaries to whom the distributable amount (determined pursuant to section 6.2) shall be paid in the event of the Account Owners death. In the absence of an effective beneficiary designation as to any portion of the distributable amount after a Participant dies, such amount shall be paid to the Participants surviving Spouse, or, if none, to his estate. In the absence of an effective beneficiary designation as to any portion of the distributable amount after any non-Participant Account Owner dies, such amount shall be paid to the Account Owners estate. The Account Owner may change a beneficiary designation at any time and without the consent of any previously designated beneficiary. | ||
(b) | Special Rule for Married Participants . If the Account Owner is a married Participant, his Spouse shall be the sole beneficiary unless the Spouse has consented to the designation of a different beneficiary. To be effective, the Spouses consent must be in writing, witnessed by a notary public, and filed with the Committee. The Spouse must also consent to waive the QPSA with respect to the benefits payable to another beneficiary, as described in subsection (c). The Spouse cannot revoke her consent to waive the QPSA. Any spousal consent shall be effective only as to the Spouse who signed the consent. | ||
(c) | Waiver of QPSA . |
(i) | General . In order for the QPSA to be waived, the Participant must be provided with an explanation of the QPSA and then elect to waive the QPSA (which the Participant may do by naming a beneficiary other than his Spouse) and the Spouse must consent to the Participants election. | ||
(ii) | Spouses Consent . The Spouses consent must be in writing. The Spouses signature must be witnessed by a Committee representative of by a notary public. The Spouse must acknowledge the effect of the consent. The Spouse may limit her consent to a specific beneficiary or may allow the Participant to thereafter designate a different beneficiary. The Spouse may limit her consent to a specific form of benefit. (The Spouses consent is not needed if the Spouse cannot be located or in certain other special circumstances identified in IRS guidance of general applicability.) |
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(iii) | Timing of Waiver . The Participant may waive the QPSA, or revoke the QPSA waiver, at any time; however, if the Participant elects to waive the QPSA, with the consent of his Spouse, before the first day of the Plan Year in which the Participant attains age 35, the waiver shall become invalid on the first day of the Plan Year in which the Participant attains age 35. | ||
(iv) | Explanation . The Committee shall provide the Participant with a written explanation that describes the terms and conditions of the QPSA, the Participants right to choose another beneficiary, the rights of the Participants Spouse to insist upon a QPSA, the Participants right to revoke his election, and such other information as may be required under IRS guidance of general applicability. The written explanation must be provided within the following time limits. If the Participant terminates employment prior to age 35, the explanation must be provided within the period beginning one year before and ending one year after the termination of employment. If the Participant terminates employment on or after age 35, the explanation must be provided within the one of the following periods (whichever period ends last): (i) the period beginning on the first day of the Plan Year in which the Participant attains age 32 and ending on the last day of the Plan Year in which the Participant attains age 34; (ii) the period beginning one year before, and ending one year after, the Participant first becomes eligible to participate in the Plan; and (iii) the period beginning one year before, and ending one year after, a married Participant is fully or partially vested in his Account (which will normally occur either when the Participant gets married or when the Participant completes a one-year Period of Service). |
(d) | Special Rule for Divorces . If an Account Owner has designated his spouse as a primary or contingent beneficiary, and the Account Owner and spouse later divorce (or their marriage is annulled), then the former spouse will be treated as having pre-deceased the Account Owner for purposes of interpreting a beneficiary designation form completed prior to the divorce or annulment. This subsection (d) will apply only if the Committee is informed of the divorce or annulment before payment to the former spouse is authorized. | ||
(e) | Disclaimers . Any individual or legal entity who is a beneficiary may disclaim all or any portion of his interest in the Plan, provided that the disclaimer satisfies the requirements of Code §2518(b) and applicable state law. The legal guardian of a minor or legally incompetent person may disclaim for such person. The personal representative (or the individual or legal entity acting in the capacity of the personal representative according to applicable state law) may disclaim on behalf of a beneficiary who has died. The amount disclaimed shall be distributed as if the disclaimant had predeceased the individual whose death caused the disclaimant to become a beneficiary. |
6.2 | Distributable Amount. | |
The distributable amount of a Participants Account is the vested portion of the Account, reduced by any amount that is payable to an Alternate Payee pursuant to section 12.9. Furthermore, the Committee may temporarily suspend or limit distributions (by reducing the distributable amount), as explained in subsections 12.9(e), 12.9(g), or 12.9(h), (a) when the Committee is informed that a QDRO affecting the Participants Accounts is in process or may be in process, (b) while the Committee believes that the Plan may have a cause of action against the Participant, or (c) when the Plan has notice of a lien or other claim against the Participants Accounts. |
6.3 | Manner of Distribution. |
(a) | Participants . This subsection shall apply to distributions to Participants. |
(i) | Form of Distribution . For an unmarried Participant, the distributable amount shall be paid in the form of a QJSA unless the Participant elects a single payment, except that a small account under subsection 6.4(d) shall be paid in the form of a single payment. For a married Participant, the distributable amount shall be paid in the form of a QJSA unless the Participant, with the consent of his Spouse, chooses a QOSA or a single payment, except that a distribution of a small account under subsection 6.4(d) shall be paid in the form of a single payment. | ||
(ii) | Consent of Participant and Spouse . |
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(A) | General . Except as provided in subparagraph (B), a distribution shall not be made unless the Participant consents to the timing of the distribution no more than 180 days before the distribution. If the Participant is married and chooses a single payment or QOSA, the Participants Spouse must consent to both the form of payment and the time of the payment no more than 180 days before the payment, except as provided in subparagraph (B). | ||
(B) | Exceptions to General Rule . The consent of the Participant is not required, nor is the consent of a married Participants Spouse required, for distributions of small amounts pursuant to subsection 6.4(d) or for the distribution of an annuity upon the Participants Required Beginning Date, as described in subsection 6.4(c). |
(iii) | Method of Spouses Consent . The consent of a Participants Spouse must be in writing. The consent is not valid unless the Committee has provided the written explanation described in paragraph (iv). The Spouse must acknowledge the affect of his consent. The Spouses consent must be witnessed by a Committee member or by a notary public. The Spouse may limit his consent to a specific beneficiary or may allow the Participant to thereafter designate a different beneficiary. The Spouse may limit his consent to a specific form of benefit. (The Spouses consent is not needed if the Spouse cannot be located or in certain other special circumstances identified in IRS guidance.) |
(iv) | Distribution Procedure . |
(A) | General . The Committee shall provide the Participant with a written explanation that contains the information required by the Code and Treasury Regulations, as explained in subparagraph (B). The timing of the explanation, the consent, and the distribution are discussed in subparagraph (C). The Participant may revoke his election at any time before the distribution is processed. | ||
(B) | Contents of Explanation . The information in the explanation for an unmarried Participant shall include, at a minimum, the terms and conditions of the QJSA, the Participants right to elect a single payment in lieu of a QJSA, the effect of the Participant electing a single payment in lieu of a QJSA, the Participants right to revoke his distribution election, and such other information as may be required under IRS guidance of general applicability. The information in the explanation for a married Participant shall include, at a minimum, the terms and conditions of the QJSA and the QOSA, the Participants right to elect a single payment or a QOSA in lieu of a QJSA, the effect of the Participant electing a single payment or QOSA in lieu of a QJSA, the right of the Participants Spouse to insist upon a QJSA, the Participants right to revoke his distribution election, and such other information as may be required under IRS guidance of general applicability. | ||
(C) | Timing . The explanation shall be provided no more than 180 days before the annuity starting date. The explanation shall be provided no fewer than 30 days before the annuity starting date, unless all the following conditions are satisfied (1) the Participant affirmatively elects a QOSA or a single sum distribution (and the Participants Spouse, if any, consents), (2) the explanation mentions that the Participant has a right to at least 30 days to consider whether to waive the QJSA and consent to a QOSA or a single sum, and (3) the Participant is permitted to revoke an affirmative distribution election until the annuity starting date (or, if later, the 8 th day after the Participant is provided with the explanation). | ||
(D) | Annuity Starting Date . The annuity starting date, for a single sum payment, is the date the payment is processed, which may be any business day. The annuity starting date for a QJSA or QOSA is the day as of which the annuity payments begin. The annuity starting date for an annuity must be the first day of a month, must occur on or after the Participants termination of employment or 62 nd birthday, must occur after the date the explanation is provided, but may precede the date the Participant provides any affirmative distribution election. In any event, the first payment from the annuity shall not precede the 8 th day after the explanation is provided. |
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(b) | Beneficiaries . The distributable amount that is left to a beneficiary shall be paid, at the election of the beneficiary, in the form of a single payment, installments (for non-Spouse beneficiaries), or an annuity (for Spouse beneficiaries), as described in subsection 6.4(e). | ||
(c) | Alternate Payees . If the Alternate Payee is not the Participants Spouse or former spouse, the amount assigned to the Alternate Payee shall be paid in the form of a single payment. If the Alternate Payee is the Participants Spouse or former spouse, then unless the next sentence applies, the amount assigned to an Alternate Payee shall be paid, at the election of the Alternate Payee or as specified in the QDRO, in the form of either a single payment or an annuity for the life of the Alternate Payee. If the amount assigned to the Alternate Payee is $5,000 or less (calculated in accordance with the applicable Treasury regulations), then the Alternate Payee shall receive a single sum distribution. | ||
(d) | Annuities . If the distribution is to be in the form of an annuity, the Plan shall purchase an annuity contract that satisfies the requirements specified in the Plan and in Code §401(a)(11) and §417, and shall distribute such contract to the distributee. The payments under an annuity shall begin as soon as administratively practicable after the annuity contract is distributed. The payments shall remain constant for the duration of the annuity, except where the Spouse outlives the Participant, in which case the monthly payments to the surviving Spouse drop to 50% (for a QJSA) or 75% (for a QOSA) of the monthly benefit before the Participants death.. |
6.4 | Time of Distribution. |
(a) | Earliest Date of Distribution . Unless an earlier distribution is permitted by subsection (b) or required by subsection (c), the earliest date that a Participant may elect to receive a distribution is as follows. |
(i) | Termination of Employment or Disability . A Participant may elect to receive a distribution as soon as practicable after he terminates employment or incurs a Disability. | ||
(ii) | During Employment . A Participant may obtain a distribution while an Employee only if he has attained age 62. After attaining age 62, and while an Employee, the Participant may withdraw all or any portion of his vested Account. The minimum withdrawal shall be $1,000 or, if less, the balance of the Account. Only two withdrawals are permitted each Plan Year under this paragraph. After an Employees Required Beginning Date, subsection (c) shall apply instead of this paragraph. |
(b) | Alternate Earliest Date of Distribution . Notwithstanding subsection (a), unless a Participant elects otherwise, his distribution shall commence no later than 60 days after the close of the latest of: (i) the Plan Year in which the Participant attains Normal Retirement Age; (ii) the Plan Year in which occurs the tenth anniversary of the year in which the Participant commenced participation in the Plan; and (iii) the Plan Year in which the Participant terminates employment with the Company and Affiliated Entities. If a Participant does not affirmatively elect a distribution, he shall be deemed to have elected to defer the distribution to a date later than that specified in the preceding sentence. | ||
(c) | Latest Date of Distribution . The entire distributable amount shall be distributed to a Participant (i) in a single payment no later than his Required Beginning Date, or (ii) in a QJSA or QOSA with payments beginning no later than his Required Beginning Date. The payment will be in the form of a QJSA unless the Participant elects a QOSA or a single payment and, if the Participant is married, his Spouse consents to the QOSA or the single payment. | ||
(d) | Small Amounts . |
(i) | $1000 or Less . If the value of the nonforfeitable portion of a Participants Account is $1,000 or less at any time after the Participants termination of employment, the Participant shall receive a single payment of the distributable amount as soon as administratively practicable, provided that the value is $1,000 or less when the distribution is processed. | ||
(ii) | $1000 to $5000 . If paragraph (i) does not apply and the value of the nonforfeitable portion of a Participants Account is $5,000 or less on any date after his termination of employment, then as soon as practicable the Plan shall pay the distributable amount to an individual retirement account or annuity within the meaning of Code §408(a) or §408(b) (collectively, an IRA) for the Participant, unless the Participant affirmatively elects to receive the distribution directly or |
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to have it paid in a direct rollover under section 6.5. The Committee shall select the trustee or custodian of the IRA as well as how the IRA shall be invested initially. The Plan shall notify the Participant (A) that the distribution has been made to an IRA and can be transferred to another IRA, (B) of the identity and contact information of the trustee or custodian of the IRA into which the distribution is made, and (C) of such other information as required to comply with Code §401(a)(31)(B)(i). |
(iii) | Date Account Valued . The Committee may elect to check the value of the Participants Account on an occasional (rather than a daily) basis, to determine whether to apply the provisions of this subsection. |
(e) | Distribution Upon Participants Death . |
(i) | Small Accounts . If the value of the nonforfeitable portion of a Participants Account is $5,000 or less at any time after the Participants death and before any beneficiary elects to receive a distribution under this subsection, then each beneficiary shall each receive a single payment of his share of the distributable amount as soon as administratively practicable, provided that the aggregate value is $5,000 or less when the distribution is processed. The Committee may elect to check the value of the Participants Accounts on an occasional (rather than a daily) basis to determine whether to apply the provisions of this subsection. | ||
(ii) | Larger Accounts . If paragraph (i) does not apply, then each beneficiary may elect to have his distributable amount distributed at any time after the Participants death, within the following guidelines. The forms of permitted distribution are a lump sum, annual installments, and, for Spouse beneficiaries only, a QPSA. No distribution shall be processed until the beneficiarys identity as a beneficiary is established. The entire distributable amount shall be distributed by the last day of the calendar year containing the fifth anniversary of the Participants death; if a Spouse beneficiary elects a QPSA, the annuity contract shall be distributed by the last day of the calendar year containing the fifth anniversary of the Participants death. A beneficiary who elects installments may elect to accelerate any or all remaining payments. In addition, if the Participant was a Five-Percent Owner who began to receive the minimum required distributions under subsection (c), the distribution to each beneficiary must be made at least as rapidly as required by the method used to calculate the minimum required distributions that was in effect when the Five-Percent Owner died. |
(f) | Alternate Payee . Distributions to Alternate Payees and their beneficiaries shall be made as specified in section 12.9. |
6.5 | Direct Rollover Election. |
The amendments to this section have an effective date of January 1, 2007. |
(a) | General Rule . A Participant, an Alternate Payee who is the Spouse or former Spouse of the Participant, any individual who is treated as a designated beneficiary of the Participant pursuant to Code §401(a)(9)(E), or any trust to the extent that any beneficiary of the trust is treated as a designated beneficiary of the Participant pursuant to Code §401(a)(9)(E), (collectively, the distributee) may direct the Trustee to pay all or any portion of his eligible rollover distribution to an eligible retirement plan in a direct rollover. This direct rollover option is not available to other Account Owners. Within a reasonable period of time before an eligible rollover distribution, the Committee shall inform the distributee of this direct rollover option, the appropriate withholding rules, other rollover options, the options regarding income taxation, and any other information required by Code §402(f). The distributee may waive the usual 30-day waiting period before receiving a distribution, and elect to receive his distribution as soon as administratively practicable after completing and filing his distribution election. | ||
(b) | Definition of Eligible Rollover Distribution . An eligible rollover distribution is any distribution or in-service withdrawal other than (i) distributions required under Code §401(a)(9), (ii) distributions of amounts that have already been subject to federal income tax (such as defaulted loans or after-tax voluntary contributions), other than a direct transfer to another retirement plan that meets the requirements of Code §401(a) or §403(a), or to an individual retirement account or annuity described |
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in Code §408(a) or §408(b), (iii) a distribution to satisfy the limits of Code §415, or (iv) any other actual or deemed distribution specified in IRS guidance of general applicability. |
(c) | Definition of Eligible Retirement Plan . |
(i) | Participants, Spouses, and Alternate Payees . For a Participant, an Alternate Payee who is the Spouse or former Spouse of the Participant, or a surviving Spouse of a deceased Participant, an eligible retirement plan is an individual retirement account or annuity described in Code §408(a) or §408(b), an annuity plan described in Code §403(a), an annuity contract described in Code §403(b), an eligible plan under Code §457(b) that is maintained by an eligible employer described in Code §457(e)(1)(A) (which generally includes state and local governments), or the qualified trust of a defined contribution plan described in Code §401(a), that accepts eligible rollover distributions. | ||
(ii) | Other Distributees . For an individual who is treated as a designated beneficiary of the Participant pursuant to Code §401(a)(9)(E), and for any trust to the extent that a beneficiary of the trust is treated as a designated beneficiary of the Participant pursuant to Code §401(a)(9)(E), an eligible retirement plan is an individual retirement account or annuity described in Code §408(a) or §408(b) that is in existence or is established for the purposes of receiving the distribution on behalf of the beneficiary, and that, with respect to the beneficiary, is treated as an inherited individual retirement account or annuity within the meaning of Code §408(d)(3)(C). The designated beneficiary has two choices for receiving distributions that are to be paid in a direct rollover to such inherited individual retirement account or annuity. |
(A) | The designated beneficiary may elect to receive a single payment or installments from the Plan, pursuant to paragraph 6.6(d)(ii), during the calendar year in which the Participant died or in the following calendar year (or by such later date allowed pursuant to IRS guidance of general applicability or a private letter ruling obtained by the designated beneficiary). Each annual installment from the Plan must satisfy the requirements of Code §401(a)(9)(B)(iii) (which essentially means that each annual installment must be equal to at least the account balance standing to the credit of the deceased Plan Participant at the end of the previous year, divided by the designated beneficiarys life expectancy). In this case, distributions from the inherited individual retirement account or annuity may be made over the life expectancy of the designated beneficiary. | ||
(B) | If the requirements of subparagraph (A) are not satisfied, the designated beneficiary must receive, pursuant to paragraph 6.6(d)(ii), a full distribution from the Plan by the end of the calendar year containing the fifth anniversary of the Participants death. In this case, distributions from the inherited individual retirement account or annuity must generally be completed by the end of the calendar year containing the fifth anniversary of the Participants death. |
(d) | Definition of Direct Rollover . A direct rollover is a payment by the Trustee to the eligible retirement plan specified by the distributee. |
7.1 | No Joint Fiduciary Responsibilities. |
Trustee(s) and the Committee shall be the named fiduciaries under the Plan and Trust agreement and shall be the only named fiduciaries thereunder. The fiduciaries shall have only the responsibilities specifically allocated to them herein or in the Trust agreement. Such allocations are intended to be mutually exclusive and there shall be no sharing of fiduciary responsibilities. Whenever one named fiduciary is required by the Plan or Trust agreement to follow the directions of another named fiduciary, the two named fiduciaries shall not be deemed to have been assigned a shared responsibility, but the responsibility of the named fiduciary giving the directions shall be deemed his sole responsibility, and the responsibility of the named fiduciary receiving those directions shall be to follow them insofar as the instructions are on their face proper under applicable law. |
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7.2 | The Company. |
The Company shall be responsible for: (a) making Company Contributions; (b) certifying to the Trustee the names and specimen signatures of the members of the Committee acting from time to time; (c) keeping accurate books and records with respect to its Employees and the appropriate components of each Employees Compensation and furnishing such data to the Committee; (d) selecting agents and fiduciaries to operate and administer the Plan and Trust; (e) appointing an investment manager if it determines that one should be appointed; and (f) reviewing periodically the performance of such agents, managers, and fiduciaries. |
7.3 | The Trustee. | |
The Trustee shall be responsible for: (a) the investment of the Trust Fund to the extent and in the manner provided in the Trust agreement; (b) the custody and preservation of Trust assets delivered to it; and (c) the payment of such amounts from the Trust Fund as the Committee shall direct. |
7.4 | The Committee Plan Administrator. | |
The board of directors of Apache shall appoint an administrative Committee consisting of no fewer than three individuals who may be, but need not be, Participants, officers, directors, or Employees of the Company. If the board of directors does not appoint a Committee, Apache shall act as the Committee under the Plan. The members of the Committee shall hold office at the pleasure of the board of directors and shall service without compensation. The Committee shall be the Plans administrator as defined in section 3(16)(A) of ERISA. It shall be responsible for establishing and implementing a funding policy consistent with the objectives of the Plan and with the requirements of ERISA. This responsibility shall include establishing (and revising as necessary) short-term and long-term goals and requirements pertaining to the financial condition of the Plan, communicating such goals and requirements to the persons responsible for the various aspects of the Plan operations, and monitoring periodically the implementation of such goals and requirements. The Committee shall publish and file or cause to be published and filed or disclosed all reports and disclosures required by federal or state laws. |
7.5 | Committee to Construe Plan. |
(a) | The Committee shall administer the Plan and shall have all discretion, power, and authority necessary for that purpose, including, but not by way of limitation, the full and absolute discretion and power to interpret the Plan, to determine the eligibility, status, and rights of all individuals under the Plan, and in general to decide any dispute and all questions arising in connection with the Plan. The Committee shall direct the Trustee concerning all distributions from the Trust Fund, including the purchase of annuity contracts, in accordance with the provisions of the Plan, and shall have such other powers in the administration of the Trust Fund as may be conferred upon it by the Trust agreement. The Committee shall maintain all Plan records except records of the Trust Fund. | ||
(b) | The Committee may adjust the Account of any Participant, in order to correct errors and rectify omissions, in such manner as the Committee believes will best result in the equitable and nondiscriminatory administration of the Plan. |
7.6 | Organization of Committee. | |
The Committee shall adopt such rules as it deems desirable for the conduct of its affairs and for the administration of the Plan. It may appoint agents (who need not be members of the Committee) to whom it may delegate such powers as it deems appropriate, except that the Committee shall determine any dispute. The Committee may make its determinations with or without meetings. It may authorize one or more of its members or agents to sign instructions, notices, and determinations on its behalf. If a Committee decision or action affects a small number of Participants including a Committee member, then such Committee member shall not participate in the Committee decision or action. The action of a majority of the disinterested Committee members shall constitute the action of the Committee. |
7.7 | Agent for Process. | |
Apaches Vice President, General Counsel, and Secretary shall be the agents of the Plan for service of all process. |
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7.8 | Indemnification of Committee Members. | |
The Company shall indemnify and hold the members of the Committee, and each of them, harmless from the effects and consequences of their acts, omissions, and conduct in their official capacities, except to the extent that the effects and consequences thereof shall result from their own willful misconduct, breach of good faith, or gross negligence in the performance of their duties. The foregoing right of indemnification shall not be exclusive of the rights to which each such member may be entitled as a matter of law. |
7.9 | Conclusiveness of Action. | |
Any action taken by the Committee on matters within the discretion of the Committee shall be conclusive, final and binding upon all participants in the Plan and upon all persons claiming any rights hereunder, including Alternate Payees and beneficiaries. |
7.10 | Payment of Expenses. | |
The members of the Committee shall serve without compensation but the Company shall pay their reasonable expenses. The compensation or fees of accountants, counsel, and other specialists and any other costs of administering the Plan or Trust Fund may be paid by the Company or Account Owners or may be charged to the Trust Fund, to the extent permissible under the provisions of ERISA. |
8.1 | Trust Agreement. | |
Apache has entered into a Trust agreement to provide for the holding, investment, and administration of the funds of the Plan. The Trust agreement shall be part of the Plan, and the rights and duties of any individual under the Plan shall be subject to all terms and provisions of the Trust agreement. |
8.2 | Plan Expenses. |
(a) | General . Except as provided in subsection (b), (i) all taxes upon or in respect of the Plan and Trust shall be paid out of Plan assets, and all expenses of administering the Plan and Trust shall be paid out of Plan assets, to the extent permitted by law and to the extent such taxes and expenses are not paid by the Company or an Account Owner, and (ii) the Committee shall have full discretion to determine how each tax or expense that is not paid by the Company shall be paid and the Committee shall have full discretion to determine how each tax or expense that is paid out of Plan assets shall be allocated. No fiduciary shall receive any compensation for services rendered to the Plan if the fiduciary is being compensated on a full time basis by the Company or an Affiliated Entity. | ||
(b) | Individual Expenses . To the extent not paid by the Company or an Account Owner, all expenses of individually directed transactions, including without limitation the Trustees transaction fee, brokerage commissions, transfer taxes, interest on insurance policy loans, and any taxes and penalties that may be imposed as a result of an individuals investment direction, shall be assessed against the Account of the Account Owner directing such transactions. |
8.3 | Investments. |
(a) | §404(c) Plan . The Plan is intended to be a plan described in ERISA §404(c). To the extent that an Account Owner exercises control over the investment of his Accounts, no person who is a fiduciary shall be liable for any loss, or by reason of any breach, that is the direct and necessary result of the Account Owners exercise of control. | ||
(b) | Directed Investments . Accounts shall be invested, upon the direction of each Account Owner made in a manner acceptable to the Committee, in any one or more of a series of investment funds designated by the Committee or to the extent permitted by the Committee in a brokerage arrangement. The funds available for investment and the principal features thereof, including a general description of the investment objectives, the risk and return characteristics, and the type and diversification of the investment portfolio of each fund, shall be communicated to the Account Owners in the Plan from time to time. Any changes in such funds shall be immediately communicated to all Account Owners. |
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(c) | Absence of Directions . To the extent that an Account Owner fails to affirmatively direct the investment of his Accounts, the Committee shall direct the Trustee in writing concerning the investment of such Accounts. The Committee shall act by majority vote. Any dissenting member of the Committee shall, having registered his dissent in writing, thereafter cooperate to the extent necessary to implement the decision of the Committee. | ||
(d) | Change in Investment Directions . Account Owners may change their investment directions, with respect to the investment of new contributions and with respect to the investment of existing amounts allocated to Accounts, on any business day, subject to any restrictions and limitations imposed by the Trustee, investment funds, or brokerage arrangement. The Committee shall establish procedures for giving investment directions, which shall be in writing and communicated to Account Owners. |
9.1 | Termination of Plan or Discontinuance of Contributions. | |
Apache expects to continue the Plan indefinitely, but the continuance of the Plan and the payment of contributions are not assumed as contractual obligations. Apache may terminate the Plan or discontinue contributions at any time. Upon the termination of the Plan, each Participants Account shall become fully vested. Upon the partial termination of the Plan, the Accounts of all affected Participants shall become fully vested. The only Participants who are affected by a partial termination are those whose employment with the Company or Affiliated Entity is terminated as a result of the corporate event causing the partial termination; Employees terminated for cause and those who leave voluntarily are not affected by a partial termination. |
9.2 | Allocations upon Termination. | |
Upon the termination or partial termination of the Plan, the Committee shall promptly notify the Trustee of such termination. The Trustee shall promptly determine, in the manner prescribed in section 4.2, the net worth of the Trust Fund. The Trustee shall advise the Committee of any increase or decrease in such net worth that has occurred since the preceding Valuation Date. The Committee shall allocate, in the manner described in section 4.3, among the remaining Plan Accounts, in the manner described in Articles III, IV, and V, any Company Contributions or forfeitures occurring since the preceding Valuation Date. |
9.3 | Procedure Upon Termination of Plan. | |
If the Plan has been terminated or partially terminated, then, after the allocations required under section 9.2 have been completed, the Trustee shall distribute or transfer the Accounts of affected Account Owners as follows. |
(a) | No Other Plan . If the Company and Affiliated Entities are not treated, pursuant to the Treasury Regulations under Code §401(k), as maintaining another alternative defined contribution plan, the Trustee shall distribute each Account Owners Account in a single payment, after complying with the requirements of section 6.5. For purposes of this section only, an alternative defined contribution plan means a defined contribution plan that is not an employee stock ownership plan within the meaning of Code §4975(e)(7) or §409(a)), a simplified employee pension within the meaning of Code §408(k), a SIMPLE IRA within the meaning of Code §408(p), a plan or contract that satisfies the requirements of Code §403(b), or a plan described in Code §457(b) or §457(f). | ||
(b) | Other Plan Maintained . If the Company and Affiliated Entities are treated, pursuant to the Treasury Regulations under Code §401(k), as maintaining another alternative defined contribution plan, the Trustee shall (i) distribute the Accounts of each non-Participant Account Owner in a single payment, after complying with the requirements of section 6.5, and (ii) transfer the Account of each Participant to an alternative defined contribution plan. All the rights, benefits, features, and distribution restrictions with respect to the transferred amounts shall continue to apply to the transferred amounts unless a change is permitted pursuant to applicable IRS guidance of general applicability. | ||
(c) | Form of Payment . A transfer made pursuant to this section may be in cash, in kind, or partly in cash and partly in kind. Any distribution made pursuant to this section shall be in cash. After all such distributions or transfers have been made, the Trustee shall be discharged from all obligation under the Trust; no Participant, Spouse, Alternate Payee, or beneficiary who has received any such distribution, |
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9.4 | Amendment by Apache. |
(a) | Amendment . Apache may at any time amend the Plan in any respect, without prior notice, subject to the following limitations. No amendment shall be made that would have the effect of vesting in the Company any part of the Trust Fund or of diverting any part of the Trust Fund to purposes other than for the exclusive benefit of Account Owners. The rights of any Account Owner with respect to contributions previously made shall not be adversely affected by any amendment. No amendment shall reduce or restrict, either directly or indirectly, the accrued benefit (within the meaning of Code §411(d)(6)) to any Account Owner before the amendment, except as permitted by the Code or IRS guidance of general applicability. | ||
(b) | Amendment to Vesting Schedule . If the vesting schedule is amended, each Participant with at least three Years of Service may elect, within the period specified in the following sentence after the adoption of the amendment, to have his nonforfeitable percentage computed under the Plan without regard to such amendment. The period during which the election may be made shall commence with the date the amendment is adopted and shall end on the latest of: (i) 60 days after the amendment is adopted; (ii) 60 days after the amendment becomes effective; or (iii) 60 days after the Participant is issued written notice of the amendment by the Company or Committee. Furthermore, no amendment shall decrease the nonforfeitable percentage, measured as of the later of the date the amendment is adopted or effective, of any Account Owners Account. | ||
(c) | Procedure . Each amendment shall be in writing. Each amendment shall be approved by Apaches board of directors or by an officer of Apache who has the authority to amend the Plan. Each amendment shall be executed by an officer of Apache who has the authority to execute the amendment. |
10.1 | Adoption of Plan. |
Apache may permit any Affiliated Entity to adopt the Plan and Trust for its Employees. Thereafter, such Affiliated Entity shall deliver to the Trustee a certified copy of the resolutions or other documents evidencing its adoption of the Plan and Trust. |
10.2 | Agent of Affiliated Entity. |
By becoming a party to the Plan, each Affiliated Entity appoints Apache as its agent with authority to act for the Affiliated Entity in all transactions in which Apache believes such agency will facilitate the administration of the Plan. Apache shall have the sole authority to amend and terminate the Plan. |
10.3 | Disaffiliation and Withdrawal from Plan. |
(a) | Disaffiliation . Any Affiliated Entity that has adopted the Plan and thereafter ceases for any reason to be an Affiliated Entity shall forthwith cease to be a party to the Plan. | ||
(b) | Withdrawal . Any Affiliated Entity may, by appropriate action and written notice thereof to Apache, provide for the discontinuance of its participation in the Plan. Such withdrawal from the Plan shall not be effective until the end of the Plan Year. |
10.4 | Effect of Disaffiliation or Withdrawal. |
If at the time of disaffiliation or withdrawal, the disaffiliating or withdrawing entity, by appropriate action, adopts a substantially identical plan that provides for direct transfers from this Plan, then, as to Account Owners associated with such entity, no plan termination shall have occurred; the new plan shall be deemed a continuation of this Plan for such Account Owners. In such case, the Trustee shall transfer to the trustee of the new plan all of the assets held for the benefit of Account Owners associated with the disaffiliating or withdrawing entity, and no forfeitures or acceleration of vesting shall occur solely by reason of such action. Such payment shall operate as a complete discharge of the Trustee, and of all organizations except the disaffiliating or withdrawing entity, of all obligations under this Plan to Account Owners associated with the |
Page 22 of 32 | Document prepared December 4, 2007 |
disaffiliating or withdrawing entity. A new plan shall not be deemed substantially identical to this Plan if it provides slower vesting than this Plan. Nothing in this section shall authorize the divesting of any vested portion of a Participants Account. |
10.5 | Actions Upon Disaffiliation or Withdrawal. |
(a) | Distribution or Transfer . If an entity disaffiliates from Apache or withdraws from the Plan and the provisions of section 10.4 are not followed, then the following rules apply to the Account of an Account Owner associated with the disaffiliating or withdrawing entity. The Account Owners Account shall remain in this Plan until a distribution is processed under the usual rules of Article VI, unless the disaffiliating or withdrawing entity maintains another qualified plan that accepts direct transfers from this Plan, in which case the Committee may transfer the Account Owners Account to the disaffiliating or withdrawing entitys plan without the consent of the Account Owner. | ||
(b) | Form of Payment . A transfer made pursuant to this section may be in cash, in kind, or partly in cash and partly in kind. Any distribution made pursuant to this section shall be in cash. After such distribution or transfer has been made, no Account Owner who has received any such distribution, or for whom any such transfer has been made, shall have any further right or claim under the Plan or Trust. |
11.1 | Application of Top-Heavy Provisions. |
The provisions of this Article XII shall be applicable only if the Plan becomes top-heavy as defined below for any Plan Year. If the Plan becomes top-heavy for a Plan Year, the provisions of this Article XII shall apply to the Plan effective as of the first day of such Plan Year and shall continue to apply to the Plan until the Plan ceases to be top-heavy or until the Plan is terminated or otherwise amended. |
11.2 | Determination of Top-Heavy Status. |
The Plan shall be considered top-heavy for a Plan Year if, as of the last day of the prior Plan Year, the aggregate of the Account balances (as calculated according to the regulations under Code §416) of Key Employees under this Plan (and under all other plans required or permitted to be aggregated with this Plan) exceeds 60% of the aggregate of the Account balances (as calculated according to the regulations under Code §416) in this Plan (and under all other plans required or permitted to be aggregated with this Plan) of all current Employees and all former Employees who terminated employment within one year of the last day of the prior Plan Year. This ratio shall be referred to as the top-heavy ratio. For purposes of determining the account balance of any Participant, (a) the balance shall be determined as of the last day of the prior Plan Year, (b) the balance shall also include any distributions to the Participant during the one-year period ending on the last day of the prior Plan Year, and (c) the balance shall also include, for distributions made for a reason other than separation from service or death or disability, any distributions to the Participant during the five-year period ending on the last day of the prior Plan Year. This shall also apply to distributions under a terminated plan that, if it had not been terminated, would have been required to be included in an aggregation group. The Account balances of a Participant who had once been a Key Employee, but who is not a Key Employee during the Plan Year, shall not be taken into account. The following plans must be aggregated with this Plan for the top-heavy test: (a) a qualified plan maintained by the Company or an Affiliated Entity in which a Key Employee participated during this Plan Year or during the previous four Plan Years and (b) any other qualified plan maintained by the Company or an Affiliated Entity that enables this Plan or any plan described in clause (a) to meet the requirements of Code §401(a)(4) or §410. The following plans may be aggregated with this Plan for the top-heavy test: any qualified plan maintained by the Company or an Affiliated Entity that, in combination with the Plan or any plan required to be aggregated with this Plan when testing this Plan for top-heaviness, would satisfy the requirements of Code §401(a)(4) and §410. If one or more of the plans required or permitted to be aggregated with this Plan is a defined benefit plan, a Participants account balance shall mean the present value of the Participants accrued benefit. If the aggregation group includes more than one defined benefit plan, the same actuarial assumptions shall be used with respect to each such defined benefit plan. The foregoing top-heavy ratio shall be computed in accordance with the provisions of Code §416(g), together with the regulations and rulings thereunder. |
Page 23 of 32 | Document prepared December 4, 2007 |
11.3 | Special Vesting Rule. | |
Unless section 5.1 provides for faster vesting, the Participants Account shall vest in accordance with the following schedule during any top-heavy Plan Year: |
Period of Service | Vesting Percentage | |||
Less than 2 years
|
0 | % | ||
At least 2 years, but less than 3 years
|
20 | % | ||
At least 3 years, but less than 4 years
|
40 | % | ||
At least 4 years, but less than 5 years
|
60 | % | ||
At least 5 years, but less than 6 years
|
80 | % | ||
6 or more years
|
100 | % |
11.4 | Special Minimum Contribution. | |
Notwithstanding the provisions of section 3.1, in every top-heavy Plan Year, a minimum allocation is required for each Non-Key Employee who both (a) performed one or more hours of service as a Covered Employee during the Plan Year, and (b) was an Employee on the last day of the Plan Year. The minimum allocation shall be a percentage of each Non-Key Employees Compensation. The percentage shall be the lesser of 3% or the largest percentage obtained for any Key Employee by dividing his Annual Additions (to this Plan and any other plan aggregated with this Plan) for the Plan Year by his Compensation for the Plan Year. If the Participant participates in both this Plan and the Apache Corporation 401(k) Savings Plan, then the Participants minimum allocation to this Plan shall be reduced by any allocation of company contributions (or forfeitures treated as company contributions) that he receives in that plan for the Plan Year. |
11.5 | Change in Top-Heavy Status. | |
If the Plan ceases to be a top-heavy plan as defined in this Article XII, and if any change in the benefit structure, vesting schedule, or other component of a Participants accrued benefit occurs as a result of such change in top-heavy status, the nonforfeitable portion of each Participants benefit attributable to Company Contributions shall not be decreased as a result of such change. In addition, each Participant with at least a three-year Period of Service on the date of such change may elect to have the nonforfeitable percentage computed under the Plan without regard to such change in status. The period during which the election may be made shall commence on the date the Plan ceases to be a top-heavy plan and shall end on the later of (a) 60 days after the change in status occurs, (b) 60 days after the change in status becomes effective, or (c) 60 days after the Participant is issued written notice of the change by the Company or the Committee. |
12.1 | Right to Dismiss Employees No Employment Contract. | |
The Company and Affiliated Entities may terminate the employment of any employee as freely and with the same effect as if this Plan were not in existence. Participation in this Plan by an employee shall not constitute an express or implied contract of employment between the Company or an Affiliated Entity and the employee. |
12.2 | Claims Procedure. |
(a) | General . Each claim for benefits shall be processed in accordance with the procedures that are established by the Committee. The procedures shall comply with the guidelines specified in this section. The Committee may delegate its duties under this section. |
(b) | Representatives . A claimant may appoint a representative to act on his behalf. The Plan shall only recognize a representative if the Plan has received a written authorization signed by the claimant and on a form prescribed by the Committee, with the following exceptions. The Plan shall recognize a claimants legal representative, once the Plan is provided with documentation of such representation. If the claimant is a minor child, the Plan shall recognize the claimants parent or guardian as the claimants representative. Once an authorized representative is appointed, the Plan shall direct all information and notification regarding the claim to the authorized representative and the claimant shall be copied on all notifications regarding decisions, unless the claimant provides specific written direction otherwise. |
Page 24 of 32 | Document prepared December 4, 2007 |
(c) | Extension of Deadlines . The claimant may agree to an extension of any deadline that is mentioned in this section that applies to the Plan. The Committee or the relevant decision-maker may agree to an extension of any deadline that is mentioned in this section that applies to the claimant. | ||
(d) | Fees . The Plan may not charge any fees to a claimant for utilizing the claims process described in this section. | ||
(e) | Filing a Claim . A claim is made when the claimant files a claim in accordance with the procedures specified by the Committee. Any communication regarding benefits that is not made in accordance with the Plans procedures will not be treated as a claim. | ||
(f) | Initial Claims Decision . The Plan shall decide a claim within a reasonable time up to 90 days after receiving the claim. The Plan shall have a 90-day extension, but only if the Plan is unable to decide within 90 days for reasons beyond its control, the Plan notifies the claimant of the special circumstances requiring the need for the extension by the 90th day after receiving the claim, and the Plan notifies the claimant of the date by which the Plan expects to make a decision. | ||
(g) | Notification of Initial Decision . The Plan shall provide the claimant with written notification of the Plans full or partial denial of a claim, reduction of a previously approved benefit, or termination of a benefit. The notification shall include a statement of the reason(s) for the decision; references to the plan provision(s) on which the decision was based; a description of any additional material or information necessary to perfect the claim and why such information is needed; a description of the procedures and deadlines for appeal; a description of the right to obtain information about the appeal procedures; and a statement of the claimants right to sue. | ||
(h) | Appeal . The claimant may appeal any adverse or partially adverse decision. To appeal, the claimant must follow the procedures specified by the Committee. The appeal must be filed within 60 days of the date the claimant received notice of the initial decision. If the appeal is not timely and properly filed, the initial decision shall be the final decision of the Plan. The claimant may submit documents, written comments, and other information in support of the appeal. The claimant shall be given reasonable access at no charge to, and copies of, all documents, records, and other relevant information. | ||
(i) | Appellate Decision . The Plan shall decide the appeal of a claim within a reasonable time of no more than 60 days from the date the Plan receives the claimants appeal. The 60-day deadline shall be extended by an additional 60 days, but only if the Committee determines that special circumstances require an extension, the Plan notifies the claimant of the special circumstances requiring the need for the extension by the 60th day after receiving the appeal, and the Plan notifies the claimant of the date by which the Plan expects to make a decision. If an appeal is missing any information from the claimant that is needed to decide the appeal, the Plan shall notify the claimant of the missing information and grant the claimant a reasonable period to provide the missing information. If the missing information is not timely provided, the Plan shall deny the claim. If the missing information is timely provided, the 60-day deadline (or 120-day deadline with the extension) for the Plan to make its decision shall be increased by the length of time between the date the Plan requested the missing information and the date the Plan received it. | ||
(j) | Notification of Decision . The Plan shall provide the claimant with written notification of the Plans appellate decision (positive or adverse). The notification of any adverse or partially adverse decision shall include a statement of the reason(s) for the decision; reference to the plan provision(s) on which the decision was based; a statement of the claimants right to sue; and a statement that the claimant is entitled to receive, free of charge and upon request, reasonable access to and copies of all documents, records, and other information relevant to the claim. | ||
(k) | Limitations on Bringing Actions in Court . Once an appellate decision that is adverse or partially adverse to the claimant has been made, the claimant may file suit in court only if he does so by the earlier of the following dates: (i) the one-year anniversary of the date of the appellate decision, or (ii) the date on which the statute of limitations for such claim expires. |
Page 25 of 32 | Document prepared December 4, 2007 |
(l) | Discretionary Authority . The Committee shall have total discretionary authority to determine eligibility, status, and the rights of all individuals under the Plan and to construe any and all terms of the Plan. |
12.3 | Source of Benefits. | |
All benefits payable under the Plan shall be paid solely from the Trust Fund, and the Company and Affiliated Entities assume no liability or responsibility therefor. | ||
12.4 | Exclusive Benefit of Employees. | |
It is the intention of the Company that no part of the Trust, other than as provided in sections 3.3, 8.2, and 12.9 hereof and the Trust Agreement, ever to be used for or diverted for purposes other than for the exclusive benefit of Participants, Alternate Payees, and their beneficiaries, and that this Plan shall be construed to follow the spirit and intent of the Code and ERISA. | ||
12.5 | Forms of Notices. | |
Wherever provision is made in the Plan for the filing of any notice, election, or designation by a Participant, Spouse, Alternate Payee, or beneficiary, the action of such individual may be evidenced by the execution of such form as the Committee may prescribe for the purpose. The Committee may also prescribe alternate methods for filing any notice, election, or designation (such as telephone voice-response or e-mail). | ||
12.6 | Failure of Any Other Entity to Qualify. | |
If any entity adopts this Plan but fails to obtain or retain the qualification of the Plan under the applicable provisions of the Code, such entity shall withdraw from this Plan upon a determination by the Internal Revenue Service that it has failed to obtain or retain such qualification. Within 30 days after the date of such determination, the assets of the Trust Fund held for the benefit of the Employees of such entity shall be separately accounted for and disposed of in accordance with the Plan and Trust. | ||
12.7 | Notice of Adoption of the Plan. | |
The Company shall provide each of its Employees with notice of the adoption of this Plan, notice of any amendments to the Plan, and notice of the salient provisions of the Plan prior to the end of the first Plan Year. A complete copy of the Plan shall also be made available for inspection by Employees and Account Owners. | ||
12.8 | Plan Merger. | |
If this Plan is merged or consolidated with, or its assets or liabilities are transferred to, any other qualified plan of deferred compensation, each Participant shall be entitled to receive a benefit immediately after the merger, consolidation, or transfer that is equal to or greater than the benefit the Participant would have been entitled to receive immediately before the merger, consolidation, or transfer if this Plan had then been terminated. | ||
12.9 | Inalienability of Benefits Domestic Relations Orders. |
(a) | General . Except as provided in subsection 6.1(e), relating to disclaimers, and subsections (b), (g), and (h) below, no Account Owner shall have any right to assign, alienate, transfer, or encumber his interest in any benefits under this Plan, nor shall such benefits be subject to any legal process to levy upon or attach the same for payment of any claim against any such Account Owner. | ||
(b) | QDRO Exception . Subsection (a) shall apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a Participant pursuant to a Domestic Relations Order unless such Domestic Relations Order is a QDRO, in which case the Plan shall make payment of benefits in accordance with the applicable requirements of any such QDRO. | ||
(c) | QDRO Requirements . In order to be a QDRO, the Domestic Relations Order must satisfy the requirements of Code §414(p) and ERISA §206(d)(3). In particular, the Domestic Relations Order: (i) must specify the name and the last known mailing address of the Participant; (ii) must specify the name and mailing address of each Alternate Payee covered by the order; (iii) must specify either the amount or percentage of the Participants benefits to be paid by the Plan to each such Alternate Payee, or the manner in which such amount or percentage is to be determined; (iv) must specify the number of payments or period to which such order applies; (v) must specify each plan to which such order |
Page 26 of 32 | Document prepared December 4, 2007 |
applies; (vi) may not require the Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan, subject to the provisions of subsection (f); (vii) may not require the Plan to provide increased benefits (determined on the basis of actuarial value); and (viii) may not require the payment of benefits to an Alternate Payee if such benefits have already been designated to be paid to another Alternate Payee under another order previously determined to be a QDRO. | |||
(d) | QDRO Payment Rules . In the case of any payment before an Employee has separated from service, a Domestic Relations Order shall not be treated as failing to meet the requirements of subsection (c) solely because such order requires that payment of benefits be made to an Alternate Payee (i) on or after the dates specified in subsection (f), (ii) as if the Employee had retired on the date on which such payment is to begin under such order (but taking into account only the Account balance on such date), and (iii) in any form in which such benefits may be paid under the Plan to the Employee. For purposes of this subsection, the Account balance as of the date specified in the QDRO shall be the vested portion of the Employees Account on such date. | ||
(e) | QDRO Review Procedures and Suspension of Benefits . The Committee shall establish reasonable procedures to determine the qualified status of Domestic Relations Orders and to administer distributions under QDROs. Such procedures shall be in writing and shall permit an Alternate Payee to designate a representative to receive copies of notices. The Committee may temporarily suspend distributions and withdrawals from the Participants Accounts, except to the extent necessary to make the required minimum distributions under Code §401(a)(9), when the Committee receives a Domestic Relations Order or a draft of such an order that affects the Participants Accounts or when one or the following individuals informs the Committee, orally or in writing, that a QDRO is in process or may be in process: the Participant, a prospective Alternate Payee, or counsel for the Participant or a prospective Alternate Payee. The Committee shall promulgate reasonable and non-discriminatory rules regarding such suspensions, including but not limited to how long such suspensions remain in effect. The procedures may allow the Participant to receive such distributions and withdrawals from the Plan, subject to the rules of Article VI, as are consented to in writing by all prospective Alternate Payees identified in the Domestic Relations Order or, in the absence of a Domestic Relations Order, as are consented to in writing by the prospective Alternate Payee(s) who informed the Committee that a QDRO was in process or may be in process. When the Committee receives a Domestic Relations Order it shall promptly notify the Participant and each Alternate Payee of such receipt and provide them with copies of the Plans procedures for determining the qualified status of the order. Within a reasonable period after receipt of a Domestic Relations Order, the Committee shall determine whether such order is a QDRO and notify the Participant and each Alternate Payee of such determination. During any period in which the issue of whether a Domestic Relations Order is a QDRO is being determined (by the Committee, by a court of competent jurisdiction, or otherwise), the Committee shall separately account for the amounts payable to the Alternate Payee if the order is determined to be a QDRO. If the order (or modification thereof) is determined to be a QDRO within 18 months after the date the first payment would have been required by such order, the Committee shall pay the amounts separately accounted for (plus any interest thereon) to the individual(s) entitled thereto. However, if the Committee determines that the order is not a QDRO, or if the issue as to whether such order is a QDRO has not been resolved within 18 months after the date of the first payment would have been required by such order, then the Committee shall pay the amounts separately accounted for (plus any interest thereon) to the individual(s) who would have been entitled to such amounts if there had been no order. Any determination that an order is a QDRO that is made after the close of the 18-month period shall be applied prospectively only. If the Plans fiduciaries act in accordance with fiduciary provision of ERISA in treating a Domestic Relations Order as being (or not being) a QDRO or in taking action in accordance with this subsection, then the Plans obligation to the Participant and each Alternate Payee shall be discharged to the extent of any payment made pursuant to the acts of such fiduciaries. | ||
(f) | Rights of Alternate Payee . The Alternate Payee shall have the following rights under the Plan: |
(i) | Small Accounts . If the value of the nonforfeitable portion of an Alternate Payees Account is $5,000 or less, the Alternate Payee shall receive a single payment of the distributable amount as soon as practicable, provided that the value is $5,000 or less when the distribution is processed. |
Page 27 of 32 | Document prepared December 4, 2007 |
The Committee may elect to check the value of the Alternate Payees Account on an occasional (rather than a daily) basis, to determine whether this paragraph applies. |
(ii) | Single Payment or Annuity . This paragraph applies only if paragraph (i) does not apply. The only form of payment available to an Alternate Payee who is not the Spouse or former Spouse of the Participant is a single payment of the distributable amount (measured at the time the payment is processed). An Alternate Payee who is the Spouse or former Spouse of the Participant may choose between a single payment of the distributable amount or an annuity. If the Alternate Payee is awarded more than the distributable amount, the Alternate Payee shall initially receive a distribution of the distributable amount, with additional distributions made as soon as administratively convenient after more of the amount awarded to the Alternate Payee becomes distributable. | ||
(iii) | Timing of Distribution . This paragraph applies only if paragraph (i) does not apply. Subject to the limits imposed by this paragraph, the Alternate Payee may choose (or the QDRO may specify) the date of the distribution. The distribution to the Alternate Payee may occur at any time after the Committee determines that the Domestic Relations Order is a QDRO and before the Participants Required Beginning Date (unless the order is determined to be a QDRO after the Participants Required Beginning Date, in which case the distribution to the Alternate Payee shall be made as soon as administratively practicable after the order is determined to be a QDRO). | ||
(iv) | Death of Alternate Payee . The Alternate Payee may designate one or more beneficiaries, as specified in section 6.1. When the Alternate Payee dies, the Alternate Payees beneficiary shall receive a complete distribution of the distributable amount in a single payment as soon as administratively convenient. | ||
(v) | Investing . An Alternate Payee may direct the investment of his Account pursuant to section 8.3. | ||
(vi) | Claims . The Alternate Payee may bring claims against the Plan pursuant to section 12.2. |
(g) | Exception for Misconduct towards the Plan . Subsection (a) shall not apply to any offset of a Participants benefits against an amount that the Participant is ordered or required to pay to the Plan if the following conditions are met. |
(i) | The order or requirement to pay must arise (A) under a judgment of conviction for a crime involving the Plan, (B) under a civil judgment (including a consent order or decree) entered by a court in an action brought in connection with a violation (or alleged violation) of part 4 of subtitle B of title I of ERISA, or (C) pursuant to a settlement agreement between the Secretary of Labor and the Participant, or a settlement agreement between the Pension Benefit Guaranty Corporation and the Participant, in connection with a violation (or alleged violation) of part 4 of subtitle B of title I of ERISA by a fiduciary or any other person. | ||
(ii) | The judgment, order, decree, or settlement agreement must expressly provide for the offset of all or part of the amount ordered or required to be paid to the Plan against the Participants benefits provided under the Plan. | ||
(iii) | If the Participant is married at the time at which the offset is to be made, (A) either the Participants Spouse must have already waived his right to a QPSA and QJSA or the Participants Spouse must consent in writing to such offset with such consent witnessed by a notary public or representative of the Plan (or it is established to the satisfaction of a Plan representative that such consent may not be obtained by reason of circumstances described in Code §417(a)(2)(B)), or (B) the Participants Spouse is ordered or required in such judgment, order, decree, or settlement to pay an amount to the Plan in connection with a violation of part 4 of subtitle B of title I of ERISA, or (C) in such judgment, order, decree, or settlement, the Participants Spouse retains the right to receive a survivor annuity under a qualified joint and survivor annuity pursuant to Code §401(a)(11)(A)(i) and under a qualified preretirement survivor annuity provided pursuant to Code §401(a)(11)(A)(ii). The value of the Spouses survivor annuity in subparagraph (C) shall be determined as if the Participant terminated employment on the date of the offset, there was no offset, the Plan permitted commencement of |
Page 28 of 32 | Document prepared December 4, 2007 |
benefits only on or after Normal Retirement Age, the Plan provided only the minimum-required qualified joint and survivor annuity, and the amount of the qualified preretirement survivor annuity under the Plan is equal to the amount of the survivor annuity payable under the minimum-required qualified joint and survivor annuity. For purposes of this paragraph only, the minimum-required qualified joint and survivor annuity is the qualified joint and survivor annuity which is the actuarial equivalent of the Participants accrued benefit (within the meaning of Code §411(a)(7)) and under which the survivor annuity is 50% of the amount of the annuity which is payable during the joint lives of the Participant and his Spouse. |
The Committee may temporarily suspend distributions and withdrawals from a Participants Account, except to the extent necessary to make the required minimum distributions under Code §401(a)(9), when the Committee has reason to believe that the Plan may be entitled to an offset of the Participants benefits described in this subsection. The Committee shall promulgate reasonable and non-discriminatory rules regarding such suspensions, including but not limited to how long such suspensions remain in effect. | |||
(h) | Exception for Federal Liens . Subsection (a) shall not apply to the enforcement of a federal tax levy made pursuant to Code §6331, the collection by the United States on a judgment resulting from an unpaid tax assessment, or any debt or obligation that is permitted to be collected from the Plan under federal law (such as the Federal Debt Collection Procedures Act of 1977). The Committee may temporarily suspend distributions and withdrawals from an Account, except to the extent necessary to make the required minimum distributions under Code §401(a)(9), when the Committee has reason to believe that such a federal tax levy or other obligation has or will be received. The Committee shall promulgate reasonable and non-discriminatory rules regarding such suspensions, including but not limited to how long such suspensions remain in effect. |
12.10 | Payments Due Minors or Incapacitated Individuals. | |
If any individual entitled to payment under the Plan is a minor, the Committee shall cause the payment to be made to the custodian or representative who, under the state law of the minors domicile, is authorized to receive funds on behalf of the minor. If any individual entitled to payment under this Plan has been legally adjudicated to be mentally incompetent or incapacitated, the Committee shall cause the payment to be made to the custodian or representative who, under the state law of the incapacitated individuals domicile, is authorized to receive funds on behalf of the incapacitated individual. Payments made pursuant to such power shall operate as a complete discharge of the Trust Fund, the Trustee, and the Committee. | ||
12.11 | Uniformity of Application. | |
The provisions of this Plan shall be applied in a uniform and non-discriminatory manner in accordance with rules adopted by the Committee, which rules shall be systematically followed and consistently applied so that all individuals similarly situated shall be treated alike. | ||
12.12 | Disposition of Unclaimed Payments. | |
Each Participant, Alternate Payee, or beneficiary with an Account balance in this Plan must file with the Committee from time to time in writing his address, the address of each beneficiary (if applicable), and each change of address. Any communication, statement, or notice addressed to such individual at the last address filed with the Committee (or if no address is filed with the Committee then at the last address as shown on the Companys records) will be binding on such individual for all purposes of the Plan. Neither the Committee nor the Trustee shall be required to search for or locate any missing individual. If the Committee notifies an individual that he is entitled to a distribution and also notifies him that a failure to respond may result in a forfeiture of benefits, and the individual fails to claim his benefits under the Plan or make his address known to the Committee within a reasonable period of time after the notification, then the benefits under the Plan of such individual shall be forfeited. Any amount forfeited pursuant to this section shall be allocated pursuant to subsection 5.4(d). If the individual should later make a claim for this forfeited amount, the Company shall, if the Plan is still in existence, make a special contribution to the Plan equal to the forfeiture, and such amount shall be distributed to the individual; if the Plan is not then in existence, the Company shall pay the amount of the forfeiture to the individual. |
Page 29 of 32 | Document prepared December 4, 2007 |
12.13 | Applicable Law. | |
This Plan shall be construed and regulated by ERISA, the Code, and, unless otherwise specified herein and to the extent applicable, the laws of the State of Texas, excluding any conflicts-of-law provisions. |
13.1 | General. |
(a) | Scope . The Uniformed Services Employment and Reemployment Rights Act of 1994 (the USERRA), which is codified at 38 USCA §§4301-4318, confers certain rights on individuals who leave civilian employment to perform certain services in the Armed Forces, the National Guard, the commissioned corps of the Public Health Service, or in any other category designated by the President of the United States in time of war or emergency (collectively, the Uniformed Services). An Employee who joins the Uniformed Services shall be referred to as a Serviceman in this Article. This Article shall be interpreted to provide such individuals with all the benefits required by the USERRA but no greater benefits than those required by the USERRA. This Article shall supersede any contrary provisions in the remainder of the Plan. | ||
(b) | Rights of Servicemen . When a Serviceman leaves the Uniformed Services, he may have reemployment rights with the Company or Affiliated Entities, depending on many factors, including the length of his stay in the Uniformed Services and the type of discharge he received. When this Article speaks of the date a Servicemans potential USERRA reemployment rights expire, it means the date on which the Serviceman fails to qualify for reemployment rights (if, for example, he is dishonorably discharged, or remains in the Uniformed Services for more than 5 years) or, if the Serviceman obtains reemployment rights, the date his reemployment rights lapse because the Serviceman failed to timely exercise those rights. |
13.2 | While a Serviceman. | |
In general, a Serviceman shall be treated as an Employee while he continues to receive wages from the Company or an Affiliated Entity, and once the Servicemans wages from the Company or Affiliated Entity cease, the Serviceman shall be treated as if he were on an approved, unpaid leave of absence. |
(a) | Company Contributions . Wages paid by the Company to a Serviceman shall be included in his Compensation as if the Serviceman were an Employee. If the Employee was a Covered Employee when he became a Serviceman and his wages continue through the last day of a Plan Year, then (i) the Serviceman shall be treated as an eligible Participant under subsection 3.1(a) for that Plan Year (and shall therefore receive an allocation of Company Mandatory Contributions); and (ii) he shall be treated as an Employee under subsection 11.4(a) (and, if he is a Non-Key Employee, he shall therefore receive any minimum required allocation if the Plan is top-heavy). | ||
(b) | Investments . If the Serviceman has an account balance in the Plan, he is an Account Owner and may therefore direct the investment of his Accounts pursuant to section 8.3. | ||
(c) | Distributions and Withdrawals . For purposes of Article VI (relating to distributions), the Serviceman shall be treated as an Employee until the day on which his potential USERRA reemployment rights expire. See section 13.3 once his potential USERRA rights expire. | ||
(d) | QDROs . QDROs shall be processed while the Participant is a Serviceman. The Committee has the discretion to establish special procedures under subsection 12.9(e) for Servicemen, by, for example, extending the usual deadlines to accommodate any practical difficulties encountered by the Serviceman that are attributable to his service in the Uniformed Services. |
13.3 | Expiration of USERRA Reemployment Rights. |
(a) | Consequences . If a Serviceman is not reemployed before his potential USERRA reemployment rights expire, the Committee shall determine his Termination from Service Date by treating his service in the Uniformed Services as an approved leave of absence but treating the expiration of his potential USERRA reemployment rights as the failure to timely return from his leave of absence, with the consequence that his Termination from Service Date will generally be the earlier of the date his |
Page 30 of 32 | Document prepared December 4, 2007 |
potential USERRA rights expired or one year after the date he joined the Uniformed Services. Once his Termination from Service Date has been determined, the Committee shall determine his vested percentage. For purposes of Article VI (relating to distributions), the day the Servicemans potential USERRA reemployment rights expired shall be treated as the day he terminated employment with the Company and Affiliated Entities. For purposes of subsection 5.2(c) (relating to the timing of forfeitures), the Servicemans last day of employment shall be the day his potential USERRA reemployment rights expired. | |||
(b) | Rehire after Expiration of Reemployment Rights . If the Company or an Affiliated Company hires a former Serviceman after his potential USERRA reemployment rights have expired, he shall be treated like any other former employee who is rehired. |
13.4 | Return From Uniformed Service. | |
This section applies solely to a Serviceman who returns to employment with the Company or an Affiliated Entity because he exercised his reemployment rights under the USERRA. |
(a) | Credit for Service . A Servicemans length of time in the Uniformed Services shall be treated as service with the Company for purposes of vesting and determining his eligibility to participate in the Plan upon reemployment. | ||
(b) | Participation . If the Serviceman satisfies the eligibility requirements of section 2.1 before his reemployment, and he is a Covered Employee upon his reemployment, he may participate in the Plan immediately upon his return. | ||
(c) | Make-Up Company Mandatory Contribution . The Company shall contribute an additional contribution to a Servicemans Account equal to the Company Mandatory Contribution (including any forfeitures treated as Company Mandatory Contributions) that would have been allocated to such Account if the Serviceman had remained employed during his time in the Uniformed Services, and had earned his Deemed Compensation during that time. See subsection (e) for guidance on applying the various limits contained in the Code to the calculation of the additional mandatory contribution. | ||
(d) | Make-Up Miscellaneous Contributions . The Company shall contribute to the Servicemans Accounts any top-heavy minimum contribution he would have received pursuant to section 11.4, (including any forfeitures treated as top-heavy minimum contributions) if he had remained employed during his time in the Uniformed Services, and had earned Deemed Compensation during that time. See subsection (e) for guidance on applying the various limits contained in the Code to the calculation of the top-heavy minimum contribution. | ||
(e) | Application of Limitations . |
(i) | The make-up contributions under subsections (c) and (d) (the Make-Up Contributions) shall be ignored for purposes of determining the Companys maximum contribution under subsection 3.1(c), the limits on Annual Additions under section 3.4, the non-discrimination requirements of Code §401(a)(4), and (if the Serviceman is a Key Employee) calculating the minimum required top-heavy contribution under section 11.4. | ||
(ii) | In order to determine the maximum Make-Up Contributions, the following limitations shall apply. |
(A) | The Servicemans Aggregate Compensation for each year shall be calculated. His Aggregate Compensation shall be equal to his actual Compensation, plus his Deemed Compensation that would have been paid during that year. Each type of Aggregate Compensation (for benefit purposes, for purposes of determining whether the Serviceman is a Highly Compensated Employee, etc.) shall be determined separately. | ||
(B) | The Servicemans Aggregate Compensation each Plan Year shall be limited to the dollar limit in effect for that Plan Year under Code §401(a)(17), for the purposes and in the manner specified in subsection 1.11(d). | ||
(C) | The limits of subsection 3.1(c) (relating to the maximum contribution by the Company to the Plan) for each Plan Year shall be calculated by using the Servicemans Aggregate |
Page 31 of 32 | Document prepared December 4, 2007 |
Compensation for that Plan Year, and by treating the Make-Up Contributions that are attributable to that Plan Years Deemed Compensation as having been made during that Plan Year. | |||
(D) | The limits of section 3.4 (relating to the maximum Annual Additions to a Participants Accounts) shall be calculated for each Limitation Year by using the Servicemans Aggregate Compensation for that Limitation Year, and by treating as Annual Additions all the Make-Up Contributions that are attributable to that Limitation Years Deemed Compensation. |
(f) | Deemed Compensation . A Servicemans Deemed Compensation is the Compensation that he would have received (including raises) had he remained employed by the Company or Affiliated Entity during his time in the Uniformed Services, unless it is not reasonably certain what his Compensation would have been, in which case his Deemed Compensation shall be based on his average rate of compensation during the 12 months (or, if shorter, his period of employment with the Company and Affiliated Entities) immediately before he entered the Uniformed Services. A Servicemans Deemed Compensation shall be reduced by any Compensation actually paid to him during his time in the Uniformed Services (such as vacation pay). Deemed Compensation shall cease when the Servicemans potential USERRA reemployment rights expire. Each type of Deemed Compensation (for benefit purposes, for purposes of determining if the Serviceman is a Highly Compensated Employee, etc.) shall be determined separately. |
APACHE CORPORATION
|
||||
Date: 2/1/2008 | By: | /s/ Margery M. Harris | ||
Title: Vice President Human Resources | ||||
Page 32 of 32 | Document prepared December 4, 2007 |
Participation | Participation | |||
Business | Began As Of | Ended As Of | ||
Apache International, Inc.
|
January 1, 1997 | N/A | ||
Apache Canada Ltd.
|
January 1, 1997 | N/A |
A-1 | Document prepared December 4, 2007 |
(i) | Items Included . For purposes of determining the limitation on Annual Additions under section 3.4, Compensation means the items specified in the safe-harbor definition in Treasury Regulation §1.415(c)-2(d)(2). |
B-1 | Document prepared December 4, 2007 |
Former Employer | New Employees | |
Crescendo Resources, L.P. (Crescendo)
|
All individuals hired from April 30, 2000 through June 1, 2000 from Crescendo and related companies in connection with an April 30, 2000 asset acquisition from Crescendo. | |
|
||
Collins & Ware (C&W) and Longhorn Disposal,
Inc. (Longhorn)
|
All individuals hired from C&W, Longhorn, and related companies in connection with a May 23, 2000 asset acquisition from C&W and Longhorn. | |
|
||
Occidental Petroleum Corporation (Oxy)
|
All individuals hired from Oxy and related companies in connection with an August 2000 asset acquisition from an Oxy subsidiary. | |
|
||
Private company (Private)
|
All individuals hired in January 2003 from Private and related companies in connection with an asset acquisition of certain property in Louisiana effective as of December 1, 2002. |
C-1 | Document prepared December 4, 2007 |
1. | Effective as of January 1, 2002, section 6.5(c)(i) is replaced by the following. |
(i) | Participants, Spouses, and Alternate Payees . For a Participant, an Alternate Payee who is the Spouse or former Spouse of the Participant, or a surviving Spouse of a deceased Participant, an eligible retirement plan is an individual retirement account or annuity described in Code §408(a) or §408(b), a Roth IRA, an annuity plan described in Code §403(a), an annuity contract described in Code §403(b), an eligible plan under Code §457(b) that is maintained by an eligible employer described in Code §457(e)(1)(A) (which generally includes state and local governments), or the qualified trust of a defined contribution plan described in Code §401(a), that accepts eligible rollover distributions. |
2. | Effective as of January 1, 2002, section 11.2 is replaced by the following. |
11.2 | Determination of Top-Heavy Status. | ||
The Plan shall be considered top-heavy for a Plan Year if, as of the last day of the prior Plan Year, the aggregate of the Account balances (as calculated according to the regulations under Code §416) of Key Employees under this Plan (and under all other plans required or permitted to be aggregated with this Plan) exceeds 60% of the aggregate of the Account balances (as calculated according to the regulations under Code §416) in this Plan (and under all other plans required or permitted to be aggregated with this Plan) of all current Employees and all former Employees who had performed services for Apache or an Affiliated Entity within the one-year period ending on the last day of the prior Plan Year. This ratio shall be referred to as the top-heavy ratio. For purposes of determining the account balance of any Participant, (a) the balance shall be determined as of the last day of the prior Plan Year, (b) the balance shall also include any distributions to the Participant during the one-year period ending on the last day of the prior Plan Year, and (c) the balance shall also include, for distributions made for a reason other than severance of employment or death or disability, any distributions to the Participant during the five-year period ending on the last day of the prior Plan Year. This shall also apply to distributions under a terminated plan that, if it had not been terminated, would have been required to be included in an aggregation group. The Account balances of a Participant who had once been a Key Employee, but who is not a Key Employee during the Plan Year, shall not be taken into account. The following plans must be aggregated with this Plan for the top-heavy test: (a) a qualified plan maintained by the Company or an Affiliated Entity in which a Key Employee participated during this Plan Year or during the previous four Plan Years and (b) any other qualified plan maintained by the Company or an Affiliated Entity that enables this Plan or any plan described in clause (a) to meet the requirements of Code §401(a)(4) or §410. The following plans may be aggregated with this Plan for the top-heavy test: any qualified plan maintained by the Company or an Affiliated Entity that, in combination with the Plan or any plan required to be aggregated with this Plan when testing this Plan for top-heaviness, would satisfy the requirements of Code §401(a)(4) and §410. If one or more of the plans required or permitted to be aggregated with this Plan is a defined benefit plan, a Participants account balance shall equal the present value of the Participants accrued benefit. If the aggregation group includes more than one defined benefit plan, the same actuarial assumptions shall be used with respect to each such defined benefit plan. The foregoing top-heavy ratio shall be computed in accordance with the provisions of Code §416(g), together with the regulations and rulings thereunder. |
3. | Effective as of January 1, 2009, Article XIII is replaced by the following. |
13.1 | General. |
(a) | Scope . The Uniformed Services Employment and Reemployment Rights Act of 1994 (the USERRA), which is codified at 38 USCA §§4301-4318, confers certain rights on individuals who leave civilian employment to perform certain services in the Armed Forces, the National Guard, the commissioned corps of the Public Health Service, or in any other category designated by the President of the United States in time of war or emergency (collectively, the Uniformed Services). An Employee who joins the Uniformed Services shall be referred to as a Serviceman in this Article. This Article shall be interpreted to provide such individuals with all the benefits required by the USERRA but no greater benefits than those required by the USERRA. This Article shall supersede any contrary provisions in the remainder of the Plan. | ||
(b) | Rights of Servicemen . When a Serviceman leaves the Uniformed Services, he may have reemployment rights with the Company or Affiliated Entities, depending on many factors, including the length of his stay in the Uniformed Services and the type of discharge he received. When this Article speaks of the date a Servicemans potential USERRA reemployment rights expire, it means the date on which the Serviceman fails to qualify for reemployment rights (if, for example, he is dishonorably discharged, or, in general, remains in the Uniformed Services for more than 5 years) or, if the Serviceman obtains reemployment rights, the date his reemployment rights lapse because the Serviceman failed to timely exercise those rights. |
13.2 | While a Serviceman. | ||
In general, a Serviceman shall be treated as an Employee while he continues to receive wages or Differential Pay from the Company or an Affiliated Entity, and once the Servicemans wages and Differential Pay from the Company or Affiliated Entity cease, the Serviceman shall be treated as if he were on an approved, unpaid leave of absence. For purposes of this Article, Differential Pay means the pay received by a Serviceman from Apache and Affiliated Entities, pursuant to their military leave policies, that is generally equal to the difference between his pay from the Armed Forces and his regular pay from Apache and Affiliated Entities before his military leave began. Differential Pay must also come within the meaning of differential wage payment in Code §3401(h)(2). The definition of Compensation in Article I shall include Differential Pay for all purposes. |
(a) | Company Contributions . Wages and Differential Pay paid by the Company to a Serviceman shall be included in his Compensation as if the Serviceman were an Employee. If the Employee was a Covered Employee when he became a Serviceman and his wages or Differential Pay continue through the last business day of a Plan Year, then (i) the Serviceman shall be treated as an eligible Participant under subsection 3.1(a) for that Plan Year (and shall therefore receive an allocation of Company Mandatory Contributions); and (ii) he shall be treated as an Employee under subsection 11.4(a) (and, if he is a Non-Key Employee, he shall therefore receive any minimum required allocation if the Plan is top-heavy). | ||
(b) | Investments . If the Serviceman has an account balance in the Plan, he is an Account Owner and may therefore direct the investment of his Accounts pursuant to section 8.3. | ||
(c) | Distributions and Withdrawals . For purposes of Article VI (relating to distributions and in-service withdrawals), the Serviceman shall be treated as an Employee until the day on which his potential USERRA reemployment rights expire. See section 15.3 once his potential USERRA rights expire. | ||
(d) | QDROs . QDROs shall be processed while the Participant is a Serviceman. The Committee has the discretion to establish special procedures under subsection 12.9(e) for Servicemen, by, for example, extending the usual deadlines to accommodate any practical difficulties encountered by the Serviceman that are attributable to his service in the Uniformed Services. |
(e) | Death or Disability . If a Serviceman dies or becomes disabled while he is a Serviceman, his Account shall be fully vested. In addition, the Serviceman will be treated as if he had returned to active employment and then died or became disabled, with the result that he will receive the make-up contributions under subsections 13.4(c) and 13.4(d). |
13.3 | Expiration of USERRA Reemployment Rights. |
(a) | Consequences . If a Serviceman is not reemployed before his potential USERRA reemployment rights expire, the Committee shall determine his Termination From Service Date by treating his service in the Uniformed Services as an approved leave of absence but treating the expiration of his potential USERRA reemployment rights as the failure to timely return from his leave of absence, with the consequence that his Termination From Service Date will generally be the date his potential USERRA rights expired. Once his Termination From Service Date has been determined, the Committee shall determine his vested percentage. For purposes of Article VI (relating to distributions), the day the Servicemans potential USERRA reemployment rights expired shall be treated as the day of his Termination from Service. For purposes of subsection 5.2(c) (relating to the timing of forfeitures), the Servicemans last day of employment shall be the day his potential USERRA reemployment rights expired. | ||
(b) | Rehire after Expiration of Reemployment Rights . If the Company or an Affiliated Company hires a former Serviceman after his potential USERRA reemployment rights have expired, he shall be treated like any other former employee who is rehired. |
13.4 | Return From Uniformed Service. | ||
This section applies solely to a Serviceman who returns to employment with the Company or an Affiliated Entity because he exercised his reemployment rights under the USERRA. |
(a) | Credit for Service . A Servicemans length of time in the Uniformed Services shall be treated as service with the Company for purposes of vesting and determining his eligibility to participate in the Plan upon reemployment. | ||
(b) | Participation . If the Serviceman satisfies the eligibility requirements of section 2.1 before his reemployment, and he is a Covered Employee upon his reemployment, he may participate in the Plan immediately upon his return. | ||
(c) | Make-Up Company Mandatory Contribution . The Company shall contribute an additional contribution to a Servicemans Accounts equal to the Company Mandatory Contribution (including any forfeitures treated as Company Mandatory Contributions) that would have been allocated to such Account if the Serviceman had remained employed during his time in the Uniformed Services, and had earned his Deemed Compensation during that time. See subsection (e) for guidance on applying the various limits contained in the Code to the calculation of the additional discretionary contribution. | ||
(d) | Make-Up Miscellaneous Contributions . The Company shall contribute to the Servicemans Accounts any top-heavy minimum contribution he would have received pursuant to section 11.4, (including any forfeitures treated as top-heavy minimum contributions) if he had remained employed during his time in the Uniformed Services, and had earned Deemed Compensation during that time. See subsection (e) for guidance on applying the various limits contained in the Code to the calculation of the top-heavy minimum contribution. | ||
(e) | Application of Limitations . |
(i) | The make-up contributions under subsections (c) and (d) (the Make-Up Contributions) shall be ignored for purposes of determining the Companys maximum contribution under subsection 3.1(c), the limits on Annual Additions under section 3.4, the non-discrimination requirements of Code §401(a)(4), and (if the Serviceman is a Key Employee) calculating the minimum required top-heavy contribution under section 11.4. | ||
(ii) | In order to determine the maximum Make-Up Contributions, the following limitations shall apply. |
(A) | The Servicemans Aggregate Compensation for each year shall be calculated. His Aggregate Compensation shall be equal to his actual Compensation, plus his Deemed Compensation that would have been paid during that year. Each type of Aggregate Compensation (for benefit purposes, for purposes of determining whether the Serviceman is a Highly Compensated Employee, etc.) shall be determined separately. | ||
(B) | The Servicemans Aggregate Compensation each Plan Year shall be limited to the dollar limit in effect for that Plan Year under Code §401(a)(17), for the purposes and in the manner specified in subsection 1.11(f). | ||
(C) | The limits of subsection 3.1(c) (relating to the maximum contribution by the Company to the Plan) for each Plan Year shall be calculated by using the Servicemans Aggregate Compensation for that Plan Year, and by treating the Make-Up Contributions that are attributable to that Plan Years Deemed Compensation as having been made during that Plan Year. | ||
(D) | The limits of section 3.4 (relating to the maximum Annual Additions to a Participants Accounts) shall be calculated for each Limitation Year by using the Servicemans Aggregate Compensation for that Limitation Year, and by treating as Annual Additions all the Make-Up Contributions that are attributable to that Limitation Years Deemed Compensation. |
(f) | Deemed Compensation . A Servicemans Deemed Compensation is the Compensation that he would have received (including raises) had he remained employed by the Company or Affiliated Entity during his time in the Uniformed Services, unless it is not reasonably certain what his Compensation would have been, in which case his Deemed Compensation shall be based on his average rate of compensation during the 12 months (or, if shorter, his period of employment with the Company and Affiliated Entities) immediately before he entered the Uniformed Services. A Servicemans Deemed Compensation shall be reduced by any Compensation actually paid to him during his time in the Uniformed Services (such as vacation pay, wages, and Differential Pay). Deemed Compensation shall cease when the Servicemans potential USERRA reemployment rights expire. Each type of Deemed Compensation (for benefit purposes, for purposes of determining if the Serviceman is a Highly Compensated Employee, etc.) shall be determined separately. |
APACHE CORPORATION
|
||||
By: | /s/ Margery M. Harris | |||
Title: Vice President Human Resources | ||||
ARTICLE I DEFINITIONS | 1 | |||||
|
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1.01
|
Account | 1 | ||||
1.02
|
Affiliated Entity | 1 | ||||
1.03
|
Apache | 1 | ||||
1.04
|
Beneficiary | 1 | ||||
1.05
|
Change of Control | 1 | ||||
1.06
|
Code | 1 | ||||
1.07
|
Committee | 1 | ||||
1.08
|
Company | 1 | ||||
1.09
|
Company Deferrals | 2 | ||||
1.10
|
Compensation | 2 | ||||
1.11
|
Employee | 3 | ||||
1.12
|
Enrollment Agreement | 3 | ||||
1.13
|
ERISA | 3 | ||||
1.14
|
Participant | 3 | ||||
1.15
|
Participant Deferrals | 3 | ||||
1.16
|
Payment Processing Date | 3 | ||||
1.17
|
Plan | 3 | ||||
1.18
|
Plan Year | 3 | ||||
1.19
|
Retirement Plan | 3 | ||||
1.20
|
Savings Plan | 3 | ||||
1.21
|
Separation from Service and Separate from Service | 3 | ||||
1.22
|
Spouse | 3 | ||||
1.23
|
Trust | 4 | ||||
1.24
|
Trust Agreement | 4 | ||||
1.25
|
Trustee | 4 | ||||
|
||||||
ARTICLE II ELIGIBILITY AND PARTICIPATION | 4 | |||||
|
||||||
2.01
|
Eligibility and Participation | 4 | ||||
2.02
|
Enrollment | 4 | ||||
2.03
|
Failure of Eligibility | 4 | ||||
|
||||||
ARTICLE III CONTRIBUTION DEFERRALS | 4 | |||||
|
||||||
3.01
|
Participant Deferrals | 4 | ||||
3.02
|
Company Deferrals | 6 | ||||
|
||||||
ARTICLE IV CREDITING OF ACCOUNTS | 7 | |||||
|
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4.01
|
Accounts | 7 | ||||
4.02
|
Investments | 7 | ||||
|
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ARTICLE V DISTRIBUTIONS | 7 | |||||
|
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5.01
|
Vesting and Forfeitures | 7 | ||||
5.02
|
Rehires | 8 | ||||
5.03
|
Distribution Overview | 9 | ||||
5.04
|
Distributions after Separation from Service and In-Service Withdrawals | 9 | ||||
5.05
|
Age-70-and-Older Distributions | 11 | ||||
5.06
|
Payments after a Participant Dies | 12 | ||||
5.07
|
Change of Control | 12 | ||||
5.08
|
Hardship Withdrawals | 13 | ||||
5.09
|
Divorce | 14 | ||||
5.10
|
Administrative Delays in Payments | 15 | ||||
5.11
|
Noncompliance with Code §409A | 15 | ||||
5.12
|
Cash Payment and Withholding | 15 | ||||
|
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ARTICLE VI ADMINISTRATION | 15 | |||||
|
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6.01
|
The Committee Plan Administrator | 15 | ||||
6.02
|
Committee Duties | 16 | ||||
6.03
|
Organization of Committee | 16 | ||||
6.04
|
Indemnification | 16 | ||||
6.05
|
Agent for Process | 16 | ||||
6.06
|
Determination of Committee Final | 16 | ||||
6.07
|
No Bonding | 16 | ||||
|
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ARTICLE VII TRUST | 17 | |||||
|
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7.01
|
Trust Agreement | 17 | ||||
7.02
|
Expenses of Trust | 17 | ||||
|
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ARTICLE VIII AMENDMENT AND TERMINATION | 17 | |||||
|
||||||
8.01
|
Termination of Plan | 17 | ||||
8.02
|
Amendment | 17 | ||||
|
||||||
ARTICLE IX MISCELLANEOUS | 17 | |||||
|
||||||
9.01
|
Funding of Benefits No Fiduciary Relationship | 17 | ||||
9.02
|
Right to Terminate Employment | 18 | ||||
9.03
|
Inalienability of Benefits | 18 | ||||
9.04
|
Claims Procedure | 18 | ||||
9.05
|
Disposition of Unclaimed Distributions | 19 | ||||
9.06
|
Distributions Due Infants or Incompetents | 19 | ||||
9.07
|
Use and Form of Words | 20 | ||||
9.08
|
Headings | 20 | ||||
9.09
|
Governing Law | 20 |
1.01 | Account | |
Account means the account maintained for each Participant to which is credited all Participant Deferrals made by a Participant, all Company Deferrals on behalf of a Participant, and all adjustments thereto. Each Account is divided into a variety of subaccounts, as detailed in Article V. | ||
1.02 | Affiliated Entity | |
Affiliated Entity means any legal entity that is treated as a single employer with Apache pursuant to Code §414(b), §414(c), §414(m), or §414(o). | ||
1.03 | Apache | |
Apache means Apache Corporation or any successor thereto. | ||
1.04 | Beneficiary | |
Beneficiary means a Participants beneficiary, as determined in section 5.06. | ||
1.05 | Change of Control | |
Change of Control means a change of control as defined in the Income Continuance Plan that is also described in Code §409A(a)(2)(A)(v). | ||
1.06 | Code | |
Code means the Internal Revenue Code of 1986, as amended. | ||
1.07 | Committee | |
Committee means the administrative committee provided for in section 6.01. | ||
1.08 | Company | |
Company means Apache and any Affiliated Entity that, with approval of the Board of Directors of Apache, has adopted the Plan. |
Page 1 of 20 | Prepared December 31, 2008 |
1.09 | Company Deferrals | |
Company Deferrals means the allocations to a Participants Account made pursuant to section 3.02. | ||
1.10 | Compensation | |
Compensation generally means regular compensation paid by the Company. |
(a) | Inclusions . Specifically, Compensation includes: |
(i) | regular salary or wages, | ||
(ii) | overtime pay, and | ||
(iii) | the regular annual bonus (i.e., incentive compensation), to the extent that it is payable in cash, and any other bonus designated by the Committee. |
(b) | Exclusions . Compensation excludes: |
(i) | commissions, | ||
(ii) | severance pay, | ||
(iii) | moving expenses, | ||
(iv) | any gross-up of moving expenses to account for increased income taxes, | ||
(v) | foreign service premiums paid as an inducement to work outside of the United States, | ||
(vi) | Company contributions under the Retirement Plan | ||
(vii) | Company contributions under the Savings Plan, | ||
(viii) | other contingent compensation, | ||
(ix) | contributions to any other fringe benefit plan (including, but not limited to, overriding royalty payments or any other exploration-related payments), | ||
(x) | any amounts relating to the granting of a stock option by the Company or an Affiliated Entity, the exercise of such a stock option, or the sale or deemed sale of any shares thereby acquired, | ||
(xi) | any bonus other than a bonus described in paragraph (a)(iii), | ||
(xii) | payments from any benefit plan, such as any stock appreciation right or payments from a Share Appreciation Plan, any payment from the Deferred Delivery Plan or the Executive Restricted Stock Plan, and payments pursuant to grants made under the Omnibus Equity Compensation Plan of 2007, and | ||
(xiii) | any benefit accrued under, or any payment from, any nonqualified plan of deferred compensation. |
(c) | Timing Rules . Compensation includes only those amounts paid after the Employee has made both his initial payout election under section 5.04 and his Enrollment Agreement under section 3.01. Compensation does not include any amounts paid after the Participant ceased to be eligible to participate in the Plan. Effective January 1, 2007, a Participant who begins participating in the middle of a Plan Year cannot make Participant Deferrals from a bonus under paragraph (a)(iii) that is attributable to the Participants services during the Plan Year in which his participation begins. However, the Company Deferrals for a Participant who begins participating in the middle of a Plan Year are calculated by including a bonus under paragraph (a)(iii) that is attributable to the Participants services during the Plan Year in which his participation began. For example, a Participant hired in September 2007 cannot make Participant Deferrals from the incentive compensation paid in February |
Page 2 of 20 | Prepared December 31, 2008 |
1.11 | Employee | |
Employee means any common-law employee of Apache or any Affiliated Entity. An Employee ceases to be an Employee on the date he Separates from Service. | ||
1.12 | Enrollment Agreement | |
Enrollment Agreement means an agreement made by an eligible employee whereby he elects the amounts to be withheld from his Compensation pursuant to section 3.01. | ||
1.13 | ERISA | |
ERISA means the Employee Retirement Income Security Act of 1974, as amended. | ||
1.14 | Participant | |
Participant means any eligible employee who has begun to participate in this Plan. | ||
1.15 | Participant Deferrals | |
Participant Deferrals means the amounts of a Participants Compensation that he elects to defer and have allocated to his Account pursuant to section 3.01. | ||
1.16 | Payment Processing Date | |
Payment Processing Date means the date selected by the Committee on which payments from this Plan will be processed. Except in extraordinary circumstances, there will be at least one Payment Processing Date each calendar month. | ||
1.17 | Plan | |
Plan means the plan set forth in this document, as amended. | ||
1.18 | Plan Year | |
Plan Year means the period during which the Plan records are kept. The Plan Year is the calendar year. | ||
1.19 | Retirement Plan | |
Retirement Plan means the Apache Corporation Money Purchase Retirement Plan, as amended. | ||
1.20 | Savings Plan | |
Savings Plan means Apache Corporation 401(k) Savings Plan, as amended. | ||
1.21 | Separation from Service and Separate from Service | |
Separation from Service has the same meaning as the term separation from service in Code §409A(a)(2)(A)(i), determined using the default rules in the regulations and other guidance of general applicability issued pursuant to Code §409A, except that a Separation from Service occurs only if both the Company and the Participant expect the Participants level of services to permanently drop by more than half. A Participant who has a Separation from Service Separates from Service. | ||
1.22 | Spouse | |
Spouse means the individual of the opposite sex to whom a Participant is lawfully married according to the laws of the state of the Participants domicile. |
Page 3 of 20 | Prepared December 31, 2008 |
1.23 | Trust | |
Trust means the trust or trusts, if any, created by the Company to provide funding for the distribution of benefits in accordance with the provisions of the Plan. The assets of any such Trust remain subject to the claims of the Companys general creditors in the event of the Companys insolvency. | ||
1.24 | Trust Agreement | |
Trust Agreement means the written instrument pursuant to which each separate Trust is created. | ||
1.25 | Trustee | |
Trustee means one or more banks, trust companies, or insurance companies designated by the Company to hold and invest the Trust Fund and to pay benefits and expenses as authorized by the Committee in accordance with the terms and provisions of the Trust Agreement. |
2.01 | Eligibility and Participation | |
The Committee shall from time to time in its sole discretion select those Employees who are eligible to participate in the Plan from those Employees who are among a select group of management or highly compensated employees. | ||
2.02 | Enrollment | |
Employees who have been selected by the Committee to participate in the Plan shall complete the enrollment procedure specified by the Committee. The enrollment procedure may include written or electronic form(s) for the employee to designate his beneficiary or beneficiaries, provide instructions regarding the investment of his Account, make Participant Deferrals by entering into one or more Enrollment Agreements with the Company, select one or more payment options for the eventual distribution of his benefits, and provide such other information as the Committee may reasonably require. | ||
2.03 | Failure of Eligibility | |
The Committee has the authority to determine that a Participant is no longer eligible to participate in the Plan. No Company Deferrals will be accrued, nor any Participant Deferrals made after the Participant ceases to be eligible to participate in the Plan. The determination of the Committee with respect to the termination of participation in the Plan will be final and binding on all parties affected thereby. Any benefits accrued under the Plan at the time the Participant becomes ineligible to continue participation will be distributed in accordance with the provisions of Article V. |
3.01 | Participant Deferrals |
(a) | General . A Participant may elect to defer a portion of his Compensation by submitting a completed Enrollment Agreement. Each Enrollment Agreement must specify the amount the Participant elects to defer. Participant Deferrals are deducted through payroll withholding from the Participants cash Compensation payable by the Company. | ||
(b) | Maximum and Minimum Deferrals . A Participant may elect to defer up to 50% of his Compensation (other than a bonus described in section 1.10(a)(iii)) and up to 75% of a bonus described in section 1.10(a)(iii). The minimum deferral that a Participant may elect, for both this Plan and the Savings Plan combined, is 6% of his Compensation. If the Participant does not elect the minimum deferral from a |
Page 4 of 20 | Prepared December 31, 2008 |
(c) | Deadlines for Enrollment Agreements . |
(i) | Enrollment Period . In order to make Participant Deferrals, a Participant must submit an Enrollment Agreement during the enrollment period established by the Committee. The enrollment period must precede the Plan Year in which the services giving rise to the Compensation are performed, except in the following situations. |
(A) | Performance-Based Compensation . If the Compensation is performance-based compensation based on services performed over a period of at least 12 months (within the meaning of Code §409A(a)(4)(B)(iii)), the enrollment period must end at least six months before the end of the performance period. | ||
(B) | New Participant . The enrollment period for a new Participant must end no later than 30 days after he became eligible to participate in the Plan; the new Participants initial Enrollment Agreement may only apply to Compensation for which he has not yet performed any services. |
(ii) | Duration . The Enrollment Agreement shall apply to Compensation, or to a specific form of Compensation, paid during one entire Plan Year unless it is earlier canceled or revised by the Committee pursuant to subsection (f), cancelled because the Participant ceases to be eligible to participate in the Plan, or cancelled pursuant to subsection (e) (relating to hardship withdrawals). |
(d) | Procedures for Making Elections . The Committee has complete discretion to establish procedures for the completion of Enrollment Agreements, including the acceptable forms and formats of the deferral election (for example, written or electronic, as a whole percentage of Compensation or specific dollar amount, and the manner in which the Enrollment Agreement coordinates with the Savings Plan). The Committee has complete discretion to establish the enrollment periods during which Participants may make Enrollment Agreements, within the bounds described in subsections (a) and (c). The Committee may establish different enrollment periods for different types of Compensation or different groups of Participants. The Committee may specify any default choices that will apply unless the Participant affirmatively elects otherwise. For example, the Committee could decide that the failure to complete a new Enrollment Agreement means that (i) the prior Plan Years Enrollment Agreement will be continued for another year, or (ii) no Participant Deferrals will be made, or (iii) the Participant will defer 6% of his Compensation. | ||
(e) | Cancellation or Modification of Enrollment Agreements Following a Hardship Withdrawal . |
(i) | Hardship Withdrawal from this Plan . If a Participant receives a hardship withdrawal from this Plan pursuant to section 5.08, all his outstanding Enrollment Agreements shall be modified to require future Participant Deferrals of 6% of his future Compensation. The Participant may subsequently enter into new Enrollment Agreements at the usual times specified in subsection (c). | ||
(ii) | Hardship Withdrawal from the Savings Plan . If the Participant receives a hardship withdrawal from the Savings Plan, all outstanding Enrollment Agreements that apply or might apply to Compensation paid in the six months after the hardship withdrawal shall be cancelled. The Participant may subsequently enter into new Enrollment Agreements at the usual times under subsection (c), but the new Enrollment Agreements cannot apply to any Compensation paid within the six-month period following the hardship withdrawal from the Savings Plan. |
(f) | Committee-Initiated Changes in Enrollment Agreement . The Committee may adjust any Participants Enrollment Agreement for the remainder of any Plan Year by reducing the amount of the Participants future Participant Deferrals, provided that the Committee believes that such reduction will assist either |
Page 5 of 20 | Prepared December 31, 2008 |
3.02 | Company Deferrals | |
The Company shall credit to a Participants Account a matching contribution for the Plan Year and a retirement-6 contribution for the Plan Year. Company Deferrals begin to share in the investment earnings (or losses) at the time specified in section 4.01. The Company may credit matching contributions to a Participants Account during the Plan Year on a contingent basis; if the Participant does not satisfy the requirements to receive a matching contribution for the Plan Year, or if the matching contribution credited to the Participants Account for the Plan Year is incorrect, the Participant will forfeit any excess matching contribution (adjusted to reflect investment earnings or losses thereon) credited to his Account. |
(a) | Matching Contribution . |
(i) | Basic Match . The total match for the Plan Year is equal to the Participants total deferrals for the Plan Year, up to a maximum total match for the Plan Year of 6% of the Participants Compensation for the Plan Year, except that the match in this Plan is $0 if the Participant has not made the maximum contributions to the Savings Plan that are excludable from his gross income pursuant to Code §402(g). | ||
(ii) | Definitions . | ||
The total match for a Plan Year is equal to the matching contribution to the Participants Account in this Plan for the Plan Year plus the Company Matching Contribution allocated to the Participants account in the Savings Plan for the Plan Year. | |||
The total deferrals for a Plan Year are equal to the Participant Deferrals for the Plan Year plus the Before-Tax Contributions to the Savings Plan for the Plan Year. | |||
(iii) | Additional Match . If a Participants match in the Savings Plan is reduced to comply with any requirement of federal law (such as the ACP test of Code §401(m) or the limits imposed by Code §415 or §401(a)(17)) after the match for this Plan has been calculated, then the Participants match for this Plan will be increased by the amount of the reduction in the match in the Savings Plan. |
(b) | Retirement-6 . In order to receive an allocation of the retirement-6 contribution, an employee must be eligible to participate in the Plan on the last business day of the Plan Year. The retirement-6 contribution is calculated each Plan Year after the Company Mandatory Contribution is calculated in the Retirement Plan for the Plan Year. The sum of the Participants retirement-6 contribution in this Plan and his Company Mandatory Contribution in the Retirement Plan are equal to 6% of the Participants Compensation for the Plan Year. If a Participants Company Mandatory Contribution in the Retirement Plan is reduced to comply with any requirement of federal law after the retirement-6 contribution for this Plan has been calculated, then the Participants retirement-6 contribution for this Plan will be increased by the amount of the reduction in the Company Mandatory Contribution in the Retirement Plan. | ||
(c) | Additional Contribution . A Company may make an additional Company Deferral to any Participants Account at any time, provided that the Company advises the Committee in writing of the contribution. |
Page 6 of 20 | Prepared December 31, 2008 |
4.01 | Accounts |
(a) | Establishment of Accounts . The Committee shall establish one Account for each Participant, which will be subdivided into various subaccounts. The Accounts and subaccounts are merely for recordkeeping purposes, and do not represent any actual property that has been set aside for Participants. Nothing contained in this Article may be construed to require the Company or the Committee to fund any Participants Account. | ||
(b) | Crediting of Contributions . Participant Deferrals are credited to a Participants Account as of the date that the Participant Deferral would have been paid to the Participant had there been no Enrollment Agreement. Company Deferrals are credited to a Participants Account as of the date that the Company Deferral was earned by the Participant. | ||
(c) | Crediting of Earnings . Each Account is credited with investment earnings or losses calculated in accordance with section 4.02. Participant Deferrals and Company Deferrals start to be credited with investment earnings or losses as soon as administratively convenient after such amounts are credited to Accounts, except that the retirement-6 contribution under section 3.02(b) is not credited with investment earnings or losses until the corresponding Company Mandatory Contribution to the Retirement Plan is actually paid to the Retirement Plan (usually in late February). |
4.02 | Investments |
(a) | Investment Options . All amounts credited to a Participants Account are credited with investment earnings or losses as if the Participants Account was invested in one or more investments. The Committee shall designate the default investment as well as any alternatives, and may change the available alternatives or the default investment from time to time. One or more of the investment alternatives may consist, in whole or in part, of Apache common stock. At such times and under such procedures as the Committee may designate, a Participant may determine the portion of his Account that is to be deemed invested in each alternative. The Participant may make prospective changes for his investment selection as often as the Committee permits and subject to the procedures established by the Committee. A Participant may never make any retroactive changes to his investment selections. | ||
(b) | No Ownership Rights . A Participant has no ownership rights with respect to any investment of his Account. Nothing contained in this Article may be construed to give any Participant any power or control to make investment directions or otherwise influence in any manner the investment and reinvestment of assets contained within any investment alternative, such control being at all times retained in the full discretion of the Committee. As a consequence, for example, if a Participant has elected to invest a portion of his Account in Apache stock, the Participant has no voting rights with respect to that stock. |
5.01 | Vesting and Forfeitures |
(a) | Participant Deferrals . A Participant is fully vested in the portion of his Account that is attributable to his Participant Deferrals. | ||
(b) | Company Deferrals, General Rule . A Participants years of completed service in this Plan are identical to his Period of Service in the Savings Plan. A Participant will vest in the portion of his Plan Account that is attributable to Company Deferrals according to the following schedule, unless subsection (c) provides for faster vesting: |
Page 7 of 20 | Prepared December 31, 2008 |
Years of Completed Service | Vested Portion | |||
|
||||
Less than 1
|
0 | % | ||
1
|
20 | % | ||
2
|
40 | % | ||
3
|
60 | % | ||
4
|
80 | % | ||
5 or more
|
100 | % |
(c) | Company Deferrals, Accelerated Vesting . A Participant is fully vested in the portion of his Plan Account that is attributable to Company Deferrals in the following circumstances. |
(i) | The Participant is fully vested if he attains age 65 while he is an Employee. | ||
(ii) | The Participant is fully vested if he becomes an Employee after attaining age 65. | ||
(iii) | The Participant is fully vested if, while he is an Employee, he incurs a disability that qualifies the Employee for long-term disability payments under Apaches Long-Term Disability Plan. | ||
(iv) | The Participant is fully vested if he dies while he is an Employee. | ||
(v) | All Participants are fully vested if a change of control, as defined in the Income Continuance Plan, occurs. |
(d) | Forfeiture Timing . The portion of a Participants Account that is not vested is forfeited immediately upon his Separation from Service. |
5.02 | Rehires |
(a) | Distributions . If a Participant Separated from Service and subsequently becomes eligible to participate in the Plan again, the benefits from his earlier episode of participation will be paid out as originally scheduled; the new participation will not affect the timing of any benefit payments from his earlier episode of participation. | ||
(b) | Vesting . If a Participant becomes eligible to again make Participant Deferrals more than five years after Separating from Service, (i) the Plan will establish a new Account for the benefits he accrues during his second episode of participation; (ii) his years of completed service for his new Account will include only his service from his second episode; and (iii) his new service will not increase the vesting of any benefits from his first episode of participation. If a Participant becomes eligible to again make Participant Deferrals less than five years after Separating from Service, the Participants years of completed service for his benefits from his second episode of participation will include his service from both episodes of employment. | ||
(c) | Restoration of Forfeiture . If a Participant begins to participate in the Plan again within five years after his Separation from Service, the exact amount of any forfeiture upon his earlier Separation from Service will be restored to his Account, and will be credited to a separate subaccount. The restoration will occur on the 31 st day after the Participant again begins participating in the Plan, but only if the Participant is still eligible to participate in the Plan on that date. The restored subaccount vests based on his service from both episodes of employment (and thus will almost always be partially vested immediately when the Participant again starts to participate). The vested portion of the restored subaccount will be paid to the Participant as the Participant elects in section 5.04(b) for the payment of his new Account attributable to Company Deferrals, unless section 5.06 or 5.07 require faster payment following the Participants death or a Change of Control or the Participant takes a hardship withdrawal under section 5.08. |
Page 8 of 20 | Prepared December 31, 2008 |
5.03 | Distribution Overview |
(a) | General . In general, a single payment will occur, or a stream of installment payments will commence, on the Payment Processing Date following the earliest of the following dates, or as soon thereafter as is administratively convenient: |
(i) | Six months after the Participant Separates from Service. See section 5.04. | ||
(ii) | For unmatched Participant Deferrals only, at the time(s) selected by the Participant. See sections 5.04(c)(ii) and 5.04(c)(iii). | ||
(iii) | The date the Participant dies. See section 5.06. | ||
(iv) | The date of a Change of Control. See section 5.07. |
(b) | Special Rule for Distributions after Age 70 . Payments that began before December 31, 2004 because the Participant had attained age 70 will continue to be made pursuant to section 5.05. | ||
(c) | Hardships . A Participant may take a withdrawal under section 5.08 if he has a financial hardship. | ||
(d) | Divorce . Some or all of a Participants benefits in this Plan may be allocated to, and distributed to, his former Spouse, pursuant to section 5.09. |
5.04 | Distributions after Separation from Service and In-Service Withdrawals |
(a) | General . A Participant who Separated from Service before January 1, 2009 will be paid according to the payout provisions in the Plan (and any payout elections that had been made) that were effective when he Separated from Service, except that (i) sections 5.06 or 5.07 will apply to such Participants (and accelerate any remaining payments) if there is a Change of Control or the Participant dies, (ii) section 5.08 will apply if the Participant has a financial hardship, and (iii) section 5.09 will apply if the Participant becomes divorced. This remainder of this section contains the rules for distributions following a Separation from Service that occurs on or after January 1, 2009. | ||
(b) | Distribution of Company Deferrals. |
(i) | Initial Election . Upon becoming a Participant, an Employee shall make a payout election to have his vested Account attributable to Company Deferrals paid out in a single payment or in two to ten annual installments. To be effective, the Participants payout election must be provided to the Plan within 30 days after the date the Participant became a Participant or by such earlier date established by the Committee. The single payment or the first installment payment will be paid on the first Payment Processing Date that occurs six months or more after the Participants Separation from Service. Subsequent installments will be paid each 12 months thereafter. | ||
(ii) | Special 2007 Payout Election . The Committee extended to certain Participants the opportunity a new payout election in 2007 to have his vested Account attributable to Company Deferrals paid out in a single payment or in two to ten annual installments. To be effective, the Participants payout election must have been provided to the Plan by December 31, 2007 or by such earlier deadline established by the Committee, and the Participant must have been an Employee on the last business day of 2007. The single payment or the first installment payment will be paid on the first Payment Processing Date that occurs six months or more after the Participants Separation from Service; subsequent installments will be paid each 12 months thereafter. | ||
(iii) | Minimum Account Balance for Installments . See section 5.04(d) for the situations when a Participant will be paid a lump sum in spite of having elected installments. |
Page 9 of 20 | Prepared December 31, 2008 |
(c) | Distribution of Participant Deferrals. |
(i) | Matched and Unmatched Participant Deferrals . Because different payout alternatives are available for matched and unmatched Participant Deferrals, the Plan will separately account for matched and unmatched Participant Deferrals. Each Plan Years unmatched Participant Deferrals, if any, are equal to the amount by which the sum of the Participant Deferrals to this Plan for the Plan Year and the Before-Tax Contributions to the Savings Plan for the Plan Year are greater than 6% of the Participants Compensation for the Plan Year. The Committee has full discretion in determining an appropriate and administratively feasible method for differentiating between matched and unmatched Participant Deferrals. The Committee may wait until the end of the Plan Year to make this determination, and may attribute the investment earnings or losses on the Participant Deferrals to the matched Participant Deferrals, to the unmatched Participant Deferrals, or partly to each. | ||
(ii) | Matched Participant Deferrals . A Participants matched Participant Deferrals will be paid out in the same fashion as the balance of his Account attributable to Company Deferrals under subsection (b). | ||
(iii) | Payout Elections for Unmatched Participant Deferrals . A Participant shall make a separate payout election for the next years unmatched Participant Deferrals. Beginning with Enrollment Agreements entered into in 2009, the payout election must be made no later than June 30 (or such earlier date established by the Committee) of the year preceding the year in which the unmatched Participant Deferral occurs. The payout elections for 2007, 2008, and 2009 unmatched Participant Deferrals must be made by the end of the year preceding the year in which the unmatched Participant Deferral occurs or such earlier date established by the Committee. Newly eligible Participants must complete a payout election at the same time as their initial Enrollment Agreement. The Participant may choose from among the following payout alternatives for the subaccount containing that Plan Years unmatched Participant Deferrals. |
(A) | No In-Service Withdrawal . The subaccount will be paid out in a single payment or in two to ten annual installments. The single payment or the first installment payment will be paid on the first Payment Processing Date that occurs six months or more after the Participants Separation from Service; subsequent installments will be paid each 12 months thereafter. Each installment will be equal to the balance in the subaccount measured as short a period of time before the installment is paid as is administratively convenient, divided by the number of remaining annual installments. | ||
(B) | In-Service Withdrawal, Single Payment . The subaccount will be paid in a single payment on the first Payment Processing Date that occurs during the month and year selected by the Participant. The Participant cannot choose to receive the single payment until the second year following the year in which the Participant Deferral occurred. For example, unmatched Participant Deferrals made in 2008 cannot be withdrawn pursuant to this paragraph until January 2010. If the Participant Separates from Service before receiving the single payment, (1) if the single payment is scheduled to be paid during the six months after the Separation from Service, it will be paid as scheduled, and (2) if the single payment is scheduled to be paid more than six months after the Separation from Service, it will instead be paid on the first Payment Processing Date that occurs six months or more after the Separation from Service. | ||
(C) | In-Service Withdrawal, Installments . The subaccount will be paid in a two to ten annual installments, with the first installment paid on the first Payment Processing Date that occurs during the month and year selected by the Participant, and subsequent installments paid each 12 months thereafter. The Participant cannot choose to receive his first installment until the second year following the year in which the Participant Deferral |
Page 10 of 20 | Prepared December 31, 2008 |
occurred. Each installment will be equal to the balance in the subaccount measured as short a period of time before the installment is paid as is administratively convenient, divided by the number of remaining annual installments. If the Participant Separates from Service before receiving all installments, (1) any installment scheduled to be paid during the six months after the Separation from Service will be paid as scheduled, and (2) the remaining subaccount balance will be paid on the first Payment Processing Date that occurs six months or more after the Separation from Service. |
(d) | Calculating Installment Payments . | ||
If the value of the Participants Account is less than $50,000 six months after the Participants Separation from Service, the Participant will be paid a lump sum of his Account on the first Payment Processing Date that occurs six months or more after his Separation from Service. If the preceding sentence does not apply, each installment, other than installments of unmatched Participant Deferrals under section 5.03(c)(iii) above, will be equal to the vested Account balance (ignoring the subaccount(s) containing unmatched Participant Deferrals) measured as short a period of time before the installment is paid as is administratively convenient, divided by the number of remaining annual installments. | |||
(e) | Additional Rules for Payout Elections . The Committee has complete discretion to establish procedures for the completion of payout elections, including the acceptable forms and formats of the payout election. The Committee has complete discretion to establish deadlines for the completion of payout elections, within the bounds described in this section. The Committee may establish default choices in the absence of an affirmative Participant election. | ||
(f) | Coordination with Other Distribution Sections . |
(i) | Change of Control . Section 5.07 will apply to determine the timing and amount of [certain] payments made on or after a Change of Control. | ||
(ii) | Death . Section 5.06 will apply to determine the timing and amount of all payments made after the Participant dies. | ||
(iii) | Age 70 . Section 5.05 will apply, instead of this section, to payments made to an Employee who attained age 70 before December 31, 2004. | ||
(iv) | Hardships . A Participant may take a withdrawal under section 5.08 if he has a financial hardship. | ||
(v) | Divorce . Some or all of a Participants benefits in this Plan may be allocated to, and distributed to, his former Spouse, pursuant to section 5.09. |
5.05 | Age-70-and-Older Distributions. |
(a) | General . This section applies only to a Participant who, while an Employee, attained age 70 before December 31, 2004. Such a Participant will receive annual payments from the Plan. Payments will be made as soon as administratively convenient after the Company Deferrals under section 3.02 for the prior Plan Year have been determined (which usually does not occur until late February at the earliest). Each payment will be equal to the Participants Account balance as of the end of the prior Plan Year, including all amounts credited to the Participants Account as of any date in the prior Plan Year, and adjusted pursuant to Article IV to reflect investment experience until the date the payment is processed. A payment will not include any amount credited to the Participants Account as of any date within the current Plan Year. | ||
(b) | Coordination with Other Distribution Sections. |
(i) | Death . Any payment after the Participants death will be determined under section 5.06. |
Page 11 of 20 | Prepared December 31, 2008 |
(ii) | Separation from Service . When a Participant who has received one or more payments pursuant to subsection (a) Separates from Service, (A) any payments pursuant to subsection (a) that are scheduled to occur within six months after the Separation from Service will occur as scheduled, and (B) his remaining Account balance will be paid on the first Payment Processing Date that occurs six months or more after his Separation from Service. | ||
(iii) | Change of Control . Section 5.07 will apply to determine the timing and amount of certain payments made on or after a Change of Control. | ||
(iv) | Hardships . A Participant may take a withdrawal under section 5.08 if he has a financial hardship. | ||
(v) | Divorce . Some or all of a Participants benefits in this Plan may be allocated to, and distributed to, his former Spouse, pursuant to section 5.09. |
5.06 | Payments after a Participant Dies |
(a) | Payout . When a Participant dies, his remaining vested Account balance will be distributed to each of his Beneficiaries on the Payment Processing Date in the fourth month following the Participants death, provided that the Beneficiary has completed the tax-withholding forms and supplied such other information as the Committee may reasonably require. For example, if the Participant dies in November, the Beneficiary will be paid in March. This four-month delay should give the Beneficiary adequate time to decide whether to disclaim all or any part of his interest under subsection (d)). Each Beneficiary will receive a single payment. | ||
(b) | Beneficiary Designation . Each Participant shall designate one or more persons, trusts, or other entities as his Beneficiary to receive any amounts distributable hereunder at the time of the Participants death. In the absence of an effective beneficiary designation as to part or all of a Participants interest in the Plan, such amount will be distributed to the Participants surviving Spouse, if any, otherwise to the personal representative of the Participants estate. | ||
(c) | Special Rules for Spouses . A beneficiary designation may be changed by the Participant at any time and without the consent of any previously designated Beneficiary. However, if the Participant is married, his Spouse will be his Beneficiary unless such Spouse has consented to the designation of a different Beneficiary. To be effective, the Spouses consent must be in writing, witnessed by a notary public, and filed with the Committee. If the Participant has designated his Spouse as a primary or contingent Beneficiary, and the Participant and Spouse later divorce (or their marriage is annulled), then the former Spouse will be treated as having pre-deceased the Participant for purposes of interpreting a beneficiary designation that was completed prior to the divorce or annulment; this provision will apply only if the Committee is informed of the divorce or annulment before payment to the former Spouse is authorized. | ||
(d) | Disclaiming . Any individual or legal entity who is a beneficiary may disclaim all or any portion of his interest in the Plan, provided that the disclaimer satisfies the requirements of Code §2518(b) and applicable state law. The legal guardian of a minor or legally incompetent person may disclaim for such person. The personal representative (or the individual or legal entity acting in the capacity of the personal representative according to applicable state law) may disclaim on behalf of a beneficiary who has died. The amount disclaimed will be distributed as if the disclaimant had predeceased the individual whose death caused the disclaimant to become a beneficiary. |
5.07 | Change of Control |
(a) | Former Employees . |
(i) | Separated More than Six Months . Each Participant who Separated from Service more than six months before the date of a Change of Control, including those already receiving installment |
Page 12 of 20 | Prepared December 31, 2008 |
payments, will be paid a single payment of his entire remaining vested Account balance on the date of a Change of Control or as soon thereafter as is administratively practicable. | |||
(ii) | Recent Separations . Each Participant who Separated from Service within six months before the date of the Change of Control will be paid a single payment of his entire Account balance six months after his Separation from Service, or as soon thereafter as is administratively practicable. |
(b) | Current Employees . Each Participant who is an Employee on the date of a Change of Control, and who Separates from Service before the first anniversary of the Change of Control, will be paid a single payment of his entire vested Account balance as soon as administratively practicable after the Separation from Service, unless the Participant is a specified employee, in which case the single payment will be paid as soon as administratively practicable six months after the Separation from Service. As used in this section, the term specified employee has the same meaning as in Code §409A(a)(2)(B)(i); in determining the identity of specified employees, the default rules contained in Treasury Regulation §1.409A-1(i) will be applied, except that the primary document evidencing the Change of Control (such as a Purchase and Sale Agreement or Merger Agreement or Stock Acquisition Agreement) may contain different rules for determining the identity of specified employees after the Change of Control. Each Participant who does not Separate from Service within one year of a Change of Control will be paid his benefits pursuant to section 5.04, 5.05, 5.06, 5.08, or 5.09. |
5.08 | Hardship Withdrawals |
A Participant may withdraw all or part of the vested portion of his Account if he has a financial hardship, subject to the following rules. A Participant may take a hardship withdrawal while he is an Employee and also after he has Separated from Service. Payment shall be made as soon as practicable after the Committee has approved the withdrawal, except that payment for a financial hardship that occurs less than six months after the Participants Separation from Service shall be made as soon as practicable after the Participant has been Separated from Service for six months. |
(a) | Request for Hardship Withdrawal . The Participant must file a request for withdrawal with the Committee, along with such information and documentation as the Committee may request for this purpose. The Committee shall review the information filed as soon as practicable after it is received and shall promptly inform the Participant of the results of the Committees determination. | ||
(b) | Unforeseeable Emergency . A hardship withdrawal may be made only for the purpose of meeting an unforeseeable emergency, which is a severe financial hardship to the Participant resulting from (i) a sudden and unexpected illness or accident of the Participant, the Participants Spouse, the Participants dependent (within the meaning of Code §152(a) without regard to Code §152(b)(1), §152(b)(2), or §152(d)(1)(B)), or the Participants Beneficiary; (ii) loss of the Participants property due to casualty; (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, such as the imminent foreclosure of or eviction from the Participants primary residence or the payment of medical expenses, or (iv) the funeral expenses of the Participants Spouse, Beneficiary, or dependent (within the meaning of Code §152(a) without regard to Code §152(b)(1), §152(b)(2), or §152(d)(1)(B)). The Committee shall determine whether an unforeseeable emergency exists based on all relevant facts and circumstances, all documentation provided by the Participant, and any guidance provided by the IRS. | ||
(c) | Amount of Withdrawal . The amount withdrawn with respect to an unforeseeable emergency may not exceed the amount necessary to satisfy the emergency plus amounts necessary to pay taxes reasonably anticipated to be incurred because of the withdrawal. The withdrawal will be reduced to take into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participants assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). |
Page 13 of 20 | Prepared December 31, 2008 |
(d) | Coordination with Savings Plan . If the Participants circumstances are such that he can take a hardship withdrawal from both the Savings Plan and from this Plan, the withdrawal will first be taken from this Plan and, if the Participant exhausts his vested Account in this Plan, the Participant may elect to satisfy any remaining hardship by taking a hardship withdrawal from the Savings Plan. | ||
(e) | Cancellation or Modification of Participant Deferrals . See section 3.01(e) for the cancellation or modification of Enrollment Agreements after a hardship withdrawal from this Plan or the Savings Plan. | ||
(f) | Source of Funds . A Participants hardship withdrawal will be taken first from the subaccounts containing unmatched Participant Deferrals, with the earliest-made unmatched Participant Deferrals withdrawn first. Then, if necessary, amounts will be withdrawn from the subaccount(s) containing matched Participant Deferrals. And finally, if necessary, vested amounts will be withdrawn from the subaccount(s) containing Company Deferrals. |
5.09 | Divorce |
(a) | General . If a Participant has divorced his Spouse, all or a portion of his Account may be allocated to his former Spouse at any time after December 31, 2007. The Participant may be a former or current employee of the Company. | ||
(b) | Contents of Order . The allocation will occur as soon as practicable after the Plan receives a judgment, decree, or order (collectively, an order) that (i) is made pursuant to a state domestic relations law or community property law, (ii) relates to the marital property rights of the former Spouse, (iii) unambiguously specifies the amount or percentage of the Participants Account that is to be allocated to the former Spouse, or unambiguously specifies the manner in which the amount or percentage is to be calculated, (iv) does not allocate any benefits that have already been allocated to a different former Spouse, (v) contains the name and last known mailing address of the Participant and the former Spouse, (vi) the name of the Plan, (vii) does not contain any provision that violates subsections (c), (d), or (e), and (viii) contains the former Spouses Social Security number (or other similar taxpayer identification number) unless such number has been provided by the former Spouse to the Plan in a manner acceptable to the Committee. | ||
(c) | Payout Provisions . The vested portion of the amount allocated to the former Spouse will be paid to the former Spouse in a single payment on the first Payment Processing Date that is administratively practicable after (i) the Plan has determined that the order meets the requirements of subsection (b), (ii) the Plan has communicated its interpretation of the order to the Participant and former Spouse, and given them a reasonable amount of time (such as 30 days) to object to the Plans interpretation, (and if there is a timely objection, the parties must submit a revised order or withdraw their objections), and (iii) the parties agree to the Plans interpretation of the order. | ||
(d) | Not Fully Vested . If the former Spouse is allocated any unvested amounts, the Plan will establish a separate account for the former Spouse and she may direct the Plan as to how those amounts will be deemed to be invested, in the same manner as a Participant directs the Plan in Article IV. Unvested amounts are forfeited at the same time as the Participants unvested amounts are forfeited. If an amount allocated to the former Spouse subsequently become vested, the newly-vested amount will be paid to the former Spouse in a single payment on the first Payment Processing Date that is administratively practicable following the additional vesting. If the former Spouse dies before award is fully vested, she shall forfeit her remaining Account balance, and that exact amount shall be returned to the Participants subaccount containing Company Deferrals. | ||
(e) | Source of Funds . If a Participant is not fully vested in his Account when the allocation to the former Spouse occurs, the amount allocated to the former Spouse will be taken on a pro-rata basis from each of the Participants subaccounts. |
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5.10 | Administrative Delays in Payments |
The Committee may delay any payment from this Plan for as short a period as is administratively necessary. For example, a delay may be imposed upon all payments when there is a change of recordkeeper or trustee, and a delay may be imposed on payments to any recipient until the recipient has provided (a) the information needed to determine the appropriate tax withholding and tax reporting and (b)any other information reasonably requested by the Committee. |
5.11 | Noncompliance with Code §409A |
To the extent that the Company or the Committee takes any action that causes a violation of Code §409A or fails to take any reasonable action required to comply with Code §409A, Apache shall pay an additional amount (the gross-up) to the individual(s) who are subject to the penalty tax under Code §409A(a)(1); the gross-up will be sufficient to put the individual in the same after-tax position he would have been in had there been no violation of Code §409A. The Company shall not pay a gross-up if the cause of the violation of Code §409A is the due to the recipients action or due to the recipients failure to take reasonable actions (such as failing to timely provide the information required for tax withholding or failing to timely provide other information reasonably requested by the Committee with the result that the delay in payment violates Code §409A). Any gross-up will be paid as soon as administratively convenient after the Committee determines the gross-up is owed, and no later than the end of the calendar year immediately following the calendar year in which the additional taxes are remitted. However, if the gross-up is due to a tax audit or litigation addressing the existence or amount of a tax liability, the gross-up will be paid as soon as administratively convenient after the litigation or audit is completed, and no later than the end of the calendar year following the calendar year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation. |
5.12 | Cash Payment and Withholding |
All payments from the Plan will be made in cash. The Plan will withhold any taxes or other amounts that it is required to withhold pursuant to any applicable law. The Committee may direct the Plan to withhold additional amounts from any payment, either because the Participant so requested or to repay the Participants debt or obligation to Apache and Affiliated Entities. |
6.01 | The Committee Plan Administrator |
(a) | Current . As of January 1, 2009, the Committee is comprised of the members of the Retirement Plan Advisory Committee. | ||
(b) | Before a Change of Control . Before a change of control, as defined in the Income Continuance Plan, the board of directors of Apache shall appoint an administrative Committee consisting of no fewer than three individuals who may be, but need not be, Participants, officers, directors, or employees of the Company. Apaches board of directors may remove Committee members at will. If the absence of any Committee members, Apache shall become the sole Committee member. | ||
(c) | After a Change of Control . This subsection applies on and after the date of a change of control, as defined in the Income Continuance Plan. The only individuals who are able to serve on the Committee after the date of the Change of Control are those who are not then employed by Apache, its successor, or any related legal entities. No Committee members may be added on or after the day of the Change of Control, except that, if the Committee is comprised solely of individuals, (i) the Committee may appoint a legal entity as a Committee member, and (ii) if the number of Committee members drops below three, the remaining member(s) may not resign until having appointed a legal entity or another individual as a Committee member. If all Committee members leave the Committee (if, for example, all Committee members die before the last one appoints a new Committee member or if the sole |
Page 15 of 20 | Prepared December 31, 2008 |
Committee member is a legal entity that goes out of business), the Committee shall automatically consist of the three Participants with the largest Accounts who are not then employed by Apache, its successor, or any related legal entities. | |||
(d) | Plan Administrator . The Committee is the Plans administrator within the meaning of ERISA §3(16)(A). The sole named fiduciaries of the Plan are the Committee and any Trustees. |
6.02 | Committee Duties |
The Committee shall administer the Plan and shall have all discretion and powers necessary for that purpose, including, but not by way of limitation, full discretion and power to interpret the Plan, to determine the eligibility, status, and rights of all persons under the Plan and, in general, to decide any dispute and all questions arising in connection with the Plan. The Committee shall direct the Company, the Trustee, or both, as the case may be, concerning distributions in accordance with the provisions of the Plan. The Committee shall maintain all Plan records except records of any Trust. The Committee shall publish, file, or disclose or cause to be published, filed, or disclosed all reports and disclosures required by federal or state laws. The Committee may authorize one or more of its members or agents to sign instructions, notices, and determinations on its behalf. |
6.03 | Organization of Committee |
The Committee shall adopt such rules as it deems desirable for the conduct of its affairs and for the administration of the Plan. It may appoint agents (who need not be members of the Committee) to whom it may delegate such powers as it deems appropriate, except that any dispute shall be determined by the Committee. The Committee may make its determinations with or without meetings. It may authorize one or more of its members or agents to sign instructions, notices, and determinations on its behalf. If a Committee decision or action affects a relatively small percentage of Plan Participants including a Committee member, such Committee member will not participate in the Committee decision or action. The action of a majority of the disinterested Committee members constitutes the action of the Committee. |
6.04 | Indemnification |
The Committee and all of the agents and representatives of the Committee shall be indemnified and saved harmless by the Company against any claims, and the expenses of defending against such claims, resulting from any action or conduct relating to the administration of the Plan, except claims judicially determined to be attributable to gross negligence or willful misconduct. |
6.05 | Agent for Process |
Apaches Vice President, General Counsel, and Secretary shall be the agents of the Plan for service of all process on the Plan. |
6.06 | Determination of Committee Final |
The decisions made by the Committee are final and conclusive on all persons. |
6.07 | No Bonding |
Neither the Committee nor any committee member is required to give any bond or other security in any jurisdiction in connection with the administration of the Plan, unless Apache determines otherwise or any applicable federal or state law so requires. |
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7.01 | Trust Agreement |
The Company may, but is not required to, adopt one or more Trust Agreements for the holding, investment, and administration of funds for Plan benefits. The Trustee may maintain and allocate assets to a separate account for each Participant under the Plan. The assets of any Trust remain subject to the claims of the Companys general creditors in the event of the Companys insolvency. |
7.02 | Expenses of Trust |
The parties expect that any Trust created pursuant to section 7.01 will be treated as a grantor trust for federal and state income tax purposes and that, as a consequence, the Company will recognize taxable income from the Trust assets, but the Trust itself will not separately be subject to income tax with respect to its income. However, if the Trust should be separately taxable, the Trustee will pay all such taxes out of the Trust. All expenses of administering any Trust, if not paid by the Company, will be a charge against and will be paid from the assets of the Trust. |
8.01 | Termination of Plan |
Apache expects to continue the Plan indefinitely, but each Company may terminate its participation in the Plan at any time with Apaches permission, and Apache may terminate the entire Plan at any time. |
8.02 | Amendment |
(a) | Before a Change of Control . Before a change of control, as defined in the Income Continuance Plan, Apache may amend the Plan at any time and from time to time, retroactively or otherwise, on behalf of all Companies, but no amendment may reduce any vested benefit that has accrued on the later of (a) the effective date of the amendment, or (b) the date the amendment is adopted. | ||
(b) | After a Change of Control . The Plan may be amended after a change of control, as defined in the Income Continuance Plan, (i) at any time but only to the extent necessary to alleviate a material adverse tax consequence to one or more Participants, former Spouses, or Beneficiaries, and (ii) at any time after the second anniversary of such change of control, but only with respect to Participants who are then employed by Apache, its successor, or any related entity. | ||
(c) | Procedure . Each amendment must be in writing. Each amendment must be approved by the board of directors of Apache or its successor, or by an officer of Apache or its successor who is authorized by its board of directors to amend the Plan. Each amendment must be executed by an officer of Apache or its successor who is authorized to execute the amendment. |
9.01 | Funding of Benefits No Fiduciary Relationship |
All benefits payable under the Plan will be paid either from the Trust or by the Company out of its general assets. Nothing contained in the Plan may be deemed to create any fiduciary relationship between the Company and the Participants. Notwithstanding anything herein to the contrary, to the extent that any person acquires a right to receive benefits under the Plan, such right will be no greater than the right of any unsecured general creditor of the Company, except to the extent provided in the Trust Agreement, if any. |
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9.02 | Right to Terminate Employment |
The Company may terminate the employment of any Participant as freely and with the same effect as if the Plan were not in existence. |
9.03 | Inalienability of Benefits |
Except for disclaimers under section 5.06(d), payments to a former Spouse pursuant to section 5.09, and amounts paid to the Company under section 5.12, no Participant or Beneficiary has the right to assign, alienate, pledge, transfer, hypothecate, encumber, or anticipate his interest in any benefits under the Plan, nor are the benefits subject to garnishment by any creditor, nor may the benefits under the Plan be levied upon or attached. The preceding sentence does not apply to the enforcement of a federal tax levy made pursuant to Code §6331, the collection by the United States on a judgment resulting from an unpaid tax assessment, or any debt or obligation that is permitted to be collected from the Plan under federal law (such as the Federal Debt Collection Procedures Act of 1977). |
9.04 | Claims Procedure |
(a) | General . Each claim for benefits will be processed in accordance with the procedures established by the Committee. The procedures will comply with the guidelines specified in this section. The Committee may delegate its duties under this section. | ||
(b) | Representatives . A claimant may appoint a representative to act on his behalf. The Plan will only recognize a representative if the Plan has received a written authorization signed by the claimant and on a form prescribed by the Committee, with the following exceptions. The Plan will recognize a claimants legal representative, once the Plan is provided with documentation of such representation. If the claimant is a minor child, the Plan will recognize the claimants parent or guardian as the claimants representative. Once an authorized representative is appointed, the Plan will direct all information and notification regarding the claim to the authorized representative and the claimant will be copied on all notifications regarding decisions, unless the claimant provides specific written direction otherwise. | ||
(c) | Extension of Deadlines . The claimant may agree to an extension of any deadline that is mentioned in this section that applies to the Plan. The Committee or the relevant decision-maker may agree to an extension of any deadline that is mentioned in this section that applies to the claimant. | ||
(d) | Fees . The Plan may not charge any fees to a claimant for utilizing the claims process described in this section. | ||
(e) | Filing a Claim . A claim is made when the claimant files a claim in accordance with the procedures specified by the Committee. Any communication regarding benefits that is not made in accordance with the Plans procedures will not be treated as a claim. | ||
(f) | Initial Claims Decision . The Plan will decide a claim within a reasonable time up to 90 days after receiving the claim. The Plan will have a 90-day extension, but only if the Plan is unable to decide within 90 days for reasons beyond its control, the Plan notifies the claimant of the special circumstances requiring the need for the extension by the 90th day after receiving the claim, and the Plan notifies the claimant of the date by which the Plan expects to make a decision. | ||
(g) | Notification of Initial Decision . The Plan will provide the claimant with written notification of the Plans full or partial denial of a claim, reduction of a previously approved benefit, or termination of a benefit. The notification will include a statement of the reason(s) for the decision; references to the plan provision(s) on which the decision was based; a description of any additional material or information necessary to perfect the claim and why such information is needed; a description of the procedures and deadlines for appeal; a description of the right to obtain information about the appeal procedures; and a statement of the claimants right to sue. |
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(h) | Appeal . The claimant may appeal any adverse or partially adverse decision. To appeal, the claimant must follow the procedures specified by the Committee. The appeal must be filed within 60 days of the date the claimant received notice of the initial decision. If the appeal is not timely and properly filed, the initial decision will be the final decision of the Plan. The claimant may submit documents, written comments, and other information in support of the appeal. The claimant will be given reasonable access at no charge to, and copies of, all documents, records, and other relevant information. | ||
(i) | Appellate Decision . The Plan will decide the appeal of a claim within a reasonable time of no more than 60 days from the date the Plan receives the claimants appeal. The 60-day deadline will be extended by an additional 60 days, but only if the Committee determines that special circumstances require an extension, the Plan notifies the claimant of the special circumstances requiring the need for the extension by the 60 th day after receiving the appeal, and the Plan notifies the claimant of the date by which the Plan expects to make a decision. If an appeal is missing any information from the claimant that is needed to decide the appeal, the Plan will notify the claimant of the missing information and grant the claimant a reasonable period to provide the missing information. If the missing information is not timely provided, the Plan will deny the claim. If the missing information is timely provided, the 60-day deadline (or 120-day deadline with the extension) for the Plan to make its decision will be increased by the length of time between the date the Plan requested the missing information and the date the Plan received it. | ||
(j) | Notification of Decision . The Plan will provide the claimant with written notification of the Plans appellate decision (positive or adverse). The notification of any adverse or partially adverse decision must include a statement of the reason(s) for the decision; reference to the plan provision(s) on which the decision was based; a description of the procedures and deadlines for a second appeal, if any; a description of the right to obtain information about the second-appeal procedures; a statement of the claimants right to sue; and a statement that the claimant is entitled to receive, free of charge and upon request, reasonable access to and copies of all documents, records, and other information relevant to the claim. | ||
(k) | Limitations on Bringing Actions in Court . Once an appellate decision that is adverse or partially adverse to the claimant has been made, the claimant may file suit in court only if he does so by the earlier of the following dates: (i) the one-year anniversary of the date of an appellate decision made on or before a Change of Control or the three-year anniversary of the date of an appellate decision made after a Change of Control, or (ii) the date on which the statute of limitations for such claim expires. |
9.05 | Disposition of Unclaimed Distributions |
It is the affirmative duty of each Participant to inform the Plan of, and to keep on file with the Plan, his current mailing address and the mailing address of any beneficiaries. If a Participant fails to inform the Plan of these current mailing addresses, neither the Plan nor the Company is responsible for any late payment of benefits or loss of benefits. The Plan, the Committee, and the Company have no duty to search for a missing individual until the date of a Change of Control, at which point the Company has the duty to undertake reasonable measures to search for the proper recipient of any payment under the Plan that is scheduled to be paid on or after the date of the Change of Control. If the missing individual is not found within a year after a payment should have been made to him, all his benefits will be forfeited. If the missing individual later is found, the exact amount forfeited will be restored to his Account as soon as administratively convenient, without any adjustment for forgone investment earnings or losses. |
9.06 | Distributions due Infants or Incompetents |
If any person entitled to a distribution under the Plan is an infant, or if the Committee determines that any such person is incompetent by reason of physical or mental disability, whether or not legally adjudicated an incompetent, the Committee has the power to cause the distributions becoming due to such person to be made to another for his benefit, without responsibility of the Committee to see to the application of such |
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distributions. Distributions made pursuant to such power will operate as a complete discharge of the Company, the Trustee, the Plan, and the Committee. |
9.07 | Use and Form of Words |
When any words are used herein in the masculine gender, they are to be construed as though they were also used in the feminine gender in all cases where they would so apply, and vice versa. Whenever any words are used herein in the singular form, they are to be construed as though they were also used in the plural form in all cases where they would so apply, and vice versa. |
9.08 | Headings |
Headings of Articles and sections are inserted solely for convenience and reference, and constitute no part of the Plan. |
9.09 | Governing Law |
The Plan shall be construed in accordance with ERISA, the Code, and, to the extent applicable, the laws of the State of Texas excluding any conflicts-of-law provisions. |
APACHE CORPORATION
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/s/ Margery M. Harris | ||||
Margery M. Harris
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Vice President, Human Resources
December 31, 2008 |
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(a) | Grant Awards; | ||
(b) | Select the Eligible Persons and the time or times at which Awards shall be granted; | ||
(c) | Determine the type and number of Awards to be granted, the number of shares of Stock to which an Award may relate and the terms, conditions, restrictions, and Performance Goals relating to any Award; | ||
(d) | Determine whether, to what extent, and under what circumstances an Award may be settled, canceled, forfeited, exchanged, or surrendered; | ||
(e) | Construe and interpret the Plan and any Award; | ||
(f) | Prescribe, amend, and rescind rules and procedures relating to the Plan; | ||
(g) | Determine the terms and provisions of agreements; | ||
(h) | Appoint designees or agents (who need not be members of the Committee or employees of the Company) to assist the Committee with the administration of the Plan; and | ||
(i) | Make all other determinations deemed necessary or advisable for the administration of the Plan. |
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(a) | The Participant shall not be entitled to delivery of the Stock certificate until the Restriction Period shall have expired. | ||
(b) | The Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of the Stock during the Restriction Period. | ||
(c) | A breach of the terms and conditions established by the Committee with respect to the Restricted Stock shall cause a forfeiture of the Restricted Stock and any dividends withheld thereon. | ||
(d) | Dividends and Splits. As a condition to the grant of an Award of Restricted Stock, the Committee may specify whether any cash dividends paid on a share of Restricted Stock be automatically reinvested in additional shares of Restricted Stock or applied to the purchase of additional Awards under this |
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Plan. Unless otherwise determined by the Committee, Stock distributed in connection with a Stock split or Stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed. |
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APACHE CORPORATION | ||||||||
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ATTEST:
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/s/ Cheri L. Peper
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By: | /s/ Margery M. Harris | ||||||
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Cheri L. Peper
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Margery M. Harris | |||||||
Corporate Secretary
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Vice President, Human Resources |
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ATTEST:
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APACHE CORPORATION | |||||
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/s/ Cheri L. Peper
Corporate Secretary |
By: |
/s/ Margery M. Harris
Vice President |
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1.01 | Definitions | |
Defined terms used in this Plan shall have the meanings set forth below: |
(a) | Account means the memorandum account maintained for each Participant that is credited with all Participant Deferrals and any contributions by the Company. Each Participants Account is divided into subaccounts, as determined by the Committee, and in general each award or deferral will be allocated to its own subaccount. | ||
(b) | Apache means Apache Corporation or any successor thereto. | ||
(c) | Affiliated Entity means any legal entity that is treated as a single employer with Apache pursuant to Code §414(b), §414(c), §414(m), or §414(o). | ||
(d) | Beneficiary means a Participants beneficiary, as determined in section 5.04. | ||
(e) | Change of Control means a change of control as defined in the Income Continuance Plan that is also described in Code §409A(a)(2)(A)(v). | ||
(f) | Code means the Internal Revenue Code of 1986, as amended. | ||
(g) | Committee means the Stock Option Plan Committee of Apaches Board of Directors. 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). | ||
(h) | Company means Apache and any Affiliated Entity that, with approval of the Board of Directors of Apache, has adopted the Plan. | ||
(i) | Company Deferrals means the allocations to a Participants Account made pursuant to section 3.02. | ||
(j) | Compensation means amounts deferrable under this Plan, as determined by the Committee. Election Agreement means an agreement made by an eligible employee whereby he elects the amount(s) to be withheld from his Compensation pursuant to section 3.01. | ||
(k) | ERISA means the Employee Retirement Income Security Act of 1974, as amended | ||
(l) | Fair Market Value means the per share closing price of the Stock as reported on The New York Stock Exchange, Inc. Composite Transactions Reporting System for a particular date or, if the Stock is not so listed on such date, as reported on NASDAQ or on such other exchange or electronic trading system which, on the date in question, reports the largest number of traded shares of Stock, provided , however , that if on the date Fair Market Value is to be determined there are no transactions in the Stock, Fair Market Value shall be determined as of the immediately preceding date on which there were transactions in the Stock; provided further , however , that if the foregoing provisions are not applicable, the fair market value of a share of the Stock as determined by the Committee by the |
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reasonable application of such reasonable valuation method, consistently applied, as the Committee deems appropriate. |
(m) | Participant means any eligible employee selected to participate in the Plan. | ||
(n) | Participant Deferrals means the amounts of a Participants Compensation that elects to defer and have allocated to his Account pursuant to section 3.01. | ||
(o) | Plan means the plan set forth in this document, as amended. | ||
(p) | Plan Year means the calendar year. | ||
(q) | Separation from Service has the same meaning as the term separation from service in Code §409A(a)(2)(A)(i), determined using the default rules in the regulations and other guidance of general applicability issued pursuant to Code §409A, except that a Separation from Service occurs only if both the Company and the Participant expect the Participants level of services to permanently drop by more than half. A Participant who has a Separation from Service Separates from Service. | ||
(r) | Spouse means the individual of the opposite sex to whom a Participant is lawfully married according to the laws of the state of the Participants domicile. | ||
(s) | Stock means the $0.625 par value common stock of Apache. | ||
(t) | Stock Units mean investment units and any related units from dividend amounts. Each Stock Unit is equivalent to one share of Stock. | ||
(u) | Trust means the trust or trusts, if any, created by the Company to provide funding for the distribution of benefits in accordance with the provisions of the Plan. The assets of any such Trust remain subject to the claims of the Companys general creditors in the event of the Companys insolvency. | ||
(v) | Trust Agreement means the written instrument pursuant to which each separate Trust is created. | ||
(w) | Trustee means one or more banks, trust companies, or insurance companies designated by the Company to hold and invest the Trust fund and to pay benefits and expenses as authorized by the Committee in accordance with the terms and provisions of the Trust Agreement. |
1.02 | 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. |
2.01 | Eligibility and Participation | |
The Committee shall from time to time in its sole discretion select those employees of the Company who are eligible to participate in the Plan from among a select group of management or highly compensated employees. | ||
2.02 | Election | |
Participants shall complete the election procedures specified by the Committee. The election procedures may include form(s) for the Participant to designate a Beneficiary, elect Participant Deferrals by entering into an Election Agreement with the Company, select a payment option for the eventual distribution of his Account or any subaccount, and provide such other information as the Committee may reasonably require. | ||
2.03 | Failure of Eligibility | |
The Committee shall have the authority to determine that a Participant is no longer eligible to participate in the Plan. When a Participant becomes ineligible, all outstanding Election Agreements shall be cancelled. The determination of the Committee with respect to the termination of participation in the Plan shall be final |
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and binding on all parties affected thereby. Any benefits vested hereunder at the time the Participant becomes ineligible to continue participation shall be distributed in accordance with the provisions of Article V. |
3.01 | Participant Deferrals |
(a) | General . A Participant may elect to defer a portion of his Compensation by filing the appropriate Election Agreement with the Committees designee. The Committee has complete discretion to establish procedures for the completion of Election Agreements, including the acceptable forms and formats of the deferral election. The Committee has complete discretion to establish the election periods during which Participants may make Election Agreements, within the bounds described in subsection (b). The Committee may establish different election periods for different types of Compensation, different grants of Compensation, or different groups of Participants. | ||
(b) | Deadlines for Election Agreements . |
(i) | Election Period . In order to make Participant Deferrals, a Participant must submit an Election Agreement during the election period established by the Committee. The election period must precede the Plan Year in which the services giving rise to the Compensation are performed, except in the following situations. |
(A) | Performance-Based Compensation . If the Compensation is performance-based compensation based on services performed over a period of at least 12 months (within the meaning of Code §409A(a)(4)(B)(iii)), the election period must end at least six months before the end of the performance period. | ||
(B) | New Participant . The election period for a new Participant must end no later than 30 days after he became eligible to participate in the Plan; the new Participants initial Election Agreement may only apply to Compensation for which he has not yet performed any services. However, a Participant who has a lapse in eligibility to participate in the Plan can only use this special 30-day election when he again becomes eligible to accrue benefits (other than investment earnings), (1) on the date of his new eligibility if he has received a complete payout of his benefits from his prior episode of participation, or (2) if his lapse in eligibility was at least 24 months in duration. | ||
(C) | Unvested Deferrals . The election period for any Compensation that is subject to the condition that the Participant continue to provide services for Apache and Affiliated Entities for at least 12 months, such as many grants of restricted stock units, must end within 30 days of the date the Compensation is awarded, provided that (1) the award does not vest for 12 months following the end of the election period, (2) no event other than the Participants death or disability (within the meaning of Code §409A(2)(C)), or a Change of Control can cause vesting within the 12 months following the end of the election period, and (3) if the Participants death or disability, or the Change of Control occurs before the first anniversary of the end of the election period, the Election Agreement shall be cancelled. |
(ii) | Duration of and Cancellation of Election Agreements . The Committee has full discretion to determine which Compensation is subject to each Election Agreement. The Election Agreement becomes irrevocable by the Participant at the end of the election period. The Committee shall determine, at the time the Election Agreement is made, the circumstances in which the Election Agreement shall be cancelled, such as upon the Participants disability or upon a Change of Control. An Election Agreement is not affected by a hardship withdrawal from the Non-Qualified Retirement/Savings Plan of Apache Corporation. However, if the Participant takes a hardship withdrawal from the Apache Corporation 401(k) Savings Plan, all outstanding Election Agreements that apply to Compensation that would have been paid to the Participant within six months after the hardship withdrawal (if the Election Agreements had not |
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been in effect) shall be cancelled and no further Participant Deferrals made pursuant to such Election Agreements. |
3.02 | Company Deferrals | |
Upon prior approval of the Committee, the Company may credit any amount to a Participants Account at any time. |
5.01 | Vesting |
(a) | General . Each award of Compensation to a Participant shall vest in accordance with the terms of the award, which are determined by the Committee. Upon the death of a Participant, the award shall specify whether no vesting occurs, whether the next tranche or some other portion of the award vests, or whether the entire award vests. | ||
(b) | Termination for Cause . If the employment of the Participant is terminated for cause as determined by the Company, the Participants entire Account balance, whether vested or not, shall be forfeited immediately. For this purpose, cause shall mean a gross violation, as determined by the Company, of the Companys established policies and procedures. | ||
(c) | Earnings . Stock Units attributable to dividend amounts credited to a Participants Account shall vest as the Stock Units on which the dividend amounts are calculated vest. | ||
(d) | Change of Control . If a change of control, within the meaning of Apaches Income Continuance Plan or any successor plan, of Apache occurs, all unvested Stock Units credited to Participants Accounts shall become automatically vested, without further action by the Committee or Apaches board of directors. |
5.02 | Payouts of Company Deferrals . |
(a) | Timing of Payout . The Committee may specify the timing of the distribution of any grant of Company Deferrals, or the Committee may allow a Participant to make a payout election for his Company Deferrals. If the Participant is given the opportunity to make a payout election, the deadline for the election is 30 days after the grant of a Company Deferral. | ||
(b) | Payout Alternatives . A Participant shall receive a lump sum distribution of the subaccount(s) containing Company Deferrals six months after he Separates from Service, unless the Committee permits him to elect five installments and he so elects, in which case the first installment will be paid six months after his Separation from Service, or as soon as convenient after that date, and subsequent installments will be paid on the anniversary of the first installment, or as near to that date as is administratively convenient. If the Participant is given the opportunity to make a payout election, the |
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deadline for the election is 30 days after the grant of a Company Deferral, or if later, December 31, 2008. |
(c) | Death or Change of Control . If there is a Change of Control or the Participant dies before receiving all installments, the remaining vested benefits shall be paid as specified in section 5.04 or 5.05, rather than as provided for in this section. | ||
(d) | Small Accounts . See section 5.03(d) for payouts of small accounts. |
5.03 | Payouts of Participant Deferrals |
(a) | Election . Each subaccount containing Participant Deferrals shall be paid in a lump sum six months after the Participants Separation from Service unless the Committee, in its sole discretion, allows a Participant to elect, and the Participant does elect, to have the Participant Deferrals under an Election Agreement paid to him in one of the following manners. Any payout election that the Participant is permitted make with respect to deferrals pursuant to an Election Agreement must be made by the end of the election period for that Election Agreement. The Committee has the discretion to reduce the possible payout alternatives from the three identified below. |
(i) | In-Service Withdrawal, Single Payment . The subaccount for Participant Deferrals from an Election Agreement will be paid in a lump sum five years after the Stock Units vest, or as near to that date as is administratively convenient. For example, if the Stock Units under a particular Election Agreement vest over four years, the Participant will receive four annual lump sums. If the Participant Separates from Service before receiving all lump sums with respect to an Election Agreement, (A), if a lump sum is scheduled to be paid during the six months after the Separation from Service, it will be paid as scheduled, and (B) if any lump sum is scheduled to be paid more than six months after the Separation from Service, it will instead be paid 6 months after his Separation from Service, or as soon thereafter as is administratively convenient. | ||
(ii) | In-Service Withdrawal, Limited Installments . This payout alternative is available only if all Stock Units relating to an Election Agreement either are vested at the time of the Election Agreement or are scheduled to vest on a single date; thus, for example, this alternative is not available for a restricted stock unit award where vesting is scheduled to occur over four years. The benefits will be paid in five annual installments, with the first installment paid five years after the Stock Units vest (or, if vested when granted, five years after the date of the grant), or as near to that date as is administratively convenient. Subsequent installments are paid on the anniversary of the first installment or as near to that date as is administratively convenient. The amount of each installment is equal to the number of remaining Stock Units associated the Election Agreement, divided by the number of remaining installments, rounded down to the nearest whole Stock Unit, except that the last installment is equal to the number of remaining vested Stock Units, with any fractional share paid in cash. If the Participant Separates from Service before receiving all installments with respect to an Election Agreement, (A), any installment payment scheduled to be paid during the six months after the Separation from Service will be paid as scheduled, and (B) any remaining installment(s) will instead be paid in a lump sum 6 months after his Separation from Service, or as soon thereafter as is administratively convenient. |
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(iii) | No In-Service Withdrawal . The subaccount for the Participant Deferrals from each Election Agreement will be paid out in a single payment or in five annual installments. The single payment or the first installment payment will be paid six months after the Participants Separation from Service or as soon thereafter as is administratively convenient; subsequent installments will be paid on each anniversary of the first installment, or as near thereto as administratively convenient. Each installment will be equal to the balance in the subaccount measured as short a period of time before the installment is paid as is administratively convenient, divided by the number of remaining annual installments, rounded down to the nearest whole Stock Unit, except that the last installment shall be equal to the number of remaining Stock Units, with any fractional share paid in cash. |
(b) | Existing Elections . If a Participant made an Election Agreement before 2009 for an award that vested over more than one year, such as the restricted stock unit grants made on September 11, 2007 that vest over four years, and the Participant elected to defer such amounts for five years after vesting occurred with each amount paid in five installments, the payments scheduled to be made on or after January 1, 2009 will, in spite of the Participants previous election, be paid a lump sum on the fifth anniversary of date of the date such Stock Units vested, or, if later, in January of 2009. If the Participant Separates from Service before receiving all lump sums with respect to an Election Agreement, (i) if a lump sum is scheduled to be paid during the six months after the Separation from Service, it will be paid as scheduled, and (ii) if any lump sum is scheduled to be paid more than six months after the Separation from Service, it will instead be paid in January 2009 or if later six months after his Separation from Service, or as soon thereafter as is administratively convenient. | ||
(c) | Death or Change of Control . If there is a Change of Control or the Participant dies before receiving all vested Stock Units, the remaining vested Stock Units shall be paid as specified in section 5.04 or 5.05, rather than as originally scheduled. | ||
(d) | Small Accounts . If the Fair Market Value of a Participants vested Account six months after he Separates from Service is less than $100,000, he shall receive a lump sum payment of the vested Account balance six months after the Separation from Service or as soon thereafter as is administratively convenient. |
5.04 | Distributions After Participants Death | |
This section applies once a Participant dies. |
(a) | Immediate Payment . When a Participant dies, his remaining vested Account balance shall be paid to each beneficiary in one lump sum four months after the Participants death, which should give each beneficiary adequate time to decide whether to disclaim. However, no payment may be made before the Committees designee has been furnished with proof of death and such other information as it may reasonably require, including information needed for tax reporting purposes. Such distribution shall be paid in whole shares of Stock, with any fractional shares paid in cash. | ||
(b) | Designating Beneficiaries . Each Participant shall designate one or more persons, trusts, or other entities as his Beneficiary to receive any amounts distributable hereunder after the Participants death, by furnishing the Committee with a beneficiary designation form. In the absence of an effective Beneficiary designation as to part or all of a Participants interest in the Plan, such amount will be distributed to the Participants surviving Spouse, if any, otherwise to the Participants estate. Unless the Participants beneficiary designation form specifies otherwise, if a Beneficiary dies after the Participant but before being paid by the Plan, the Plan shall pay the Beneficiarys estate. | ||
(c) | Changing Beneficiaries . A beneficiary designation may be changed by the Participant at any time and without the consent of any previously designated Beneficiary. However, if the Participant is married, his Spouse shall be his Beneficiary unless such Spouse has consented to the designation of a different Beneficiary. To be effective, the Spouses consent must be in writing, witnessed by a notary public, and filed with the Committees designee. If a Participant has designated his Spouse as a Beneficiary or as a contingent Beneficiary, and the Participant and that Spouse subsequently divorce, then the former Spouse will be treated as having pre-deceased the Participant for purposes of interpreting a beneficiary |
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designation form completed prior to the divorce; this sentence shall apply only if the Committees designee is informed of the divorce before payment to the former Spouse is authorized. |
(d) | Disclaimers . Any individual or legal entity who is a Beneficiary may disclaim all or any portion of his interest in the Plan, provided that the disclaimer satisfies the requirements of applicable state law and Code §2518(b). The legal guardian of a minor or legally incompetent person may disclaim for such person. The personal representative (or the individual or legal entity acting in the capacity of the personal representative according to applicable state law) may disclaim on behalf of a Beneficiary who has died. The amount disclaimed shall be distributed as if the disclaimant had predeceased the Participant. |
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5.05 | Change of Control |
(a) | Former Employees . |
(i) | Separated More than Six Months . Each Participant who is not a specified employee (defined below) and each Participant who Separated from Service more than six months before the date of a Change of Control, including those who are already receiving installment payments, will be paid a single payment of his entire remaining vested Account balance on the date of the Change of Control or as soon thereafter as is administratively practicable. | ||
(ii) | Recent Separations . Each Participant who is a specified employee and who Separated from Service less than six months before the Change of Control occurred will be paid a single payment of his entire Account balance six months after his Separation from Service, or as soon thereafter as is administratively practicable. | ||
(iii) | Specified Employee . The term specified employee has the same meaning as the term specified employee in Code §409A(a)(2)(B)(i), and is determined using the default rules in the regulations and other guidance of general applicability issued pursuant to Code §409A. |
(b) | Current Employees . Each Participant who is an employee on the date of a Change of Control will be paid a lump sum of his entire vested Account balance on the date of the Change of Control or as soon thereafter as is administratively practicable. |
5.06 | Rehires . If a Participant Separated from Service and then becomes eligible to again accrue benefits, the payment of his benefits from his first episode of participation will not be affected by his subsequent participation. He will be treated as a new Participant for making payout elections for benefits accruing during his second episode of participation, except as otherwise provided in section 3.01. | |
5.07 | Form of Distribution . Subject to section 5.08, each payment shall be made in whole shares of Stock, with each Stock Unit being converted into one share of Stock. Any fractional Stock Units will be converted into cash based on the Fair Market Value of a share of Stock on the day preceding the day the payment is processed. Upon a change of control as defined in the Income Continuance Plan or its successor, the payment for each Stock Unit shall be one share of Stock unless the material characteristics of the Stock were affected by the Change of Control, in which case the payment for each Stock Unit shall be in the form of cash equal to the fair market value, determined as of the date of the Change of Control, of the property an Apache shareholder receives upon the change of control in exchange for one of his Shares. | |
5.08 | Withholding | |
At the time of vesting or payment, as applicable, either the recipient shall pay the Plan cash sufficient to cover the required withholding or the Plan shall withhold from such payment any taxes or other amounts that are required to be withheld pursuant to any applicable law; any Stock Units withheld shall be converted into cash based on the Fair Market Value of a share of Stock (a) on the day preceding the day the payment is processed or (b) on the day the vesting occurs. The Committee may direct the Company to withhold additional amounts from any payment to repay the Participants debt or obligation to the Company or at the request of the Participant. | ||
5.09 | Divorce |
(a) | General . If a Participant has divorced his Spouse, all or a portion of his Account may be allocated to his former Spouse. The Participant may be a former or current employee of the Company. | ||
(b) | Contents of Order . The allocation will occur as soon as practicable after the Plan receives a judgment, decree, or order (collectively, an order) that (i) is made pursuant to a state domestic relations law or community property law, (ii) relates to the marital property rights of the former Spouse, (iii) unambiguously specifies the amount or percentage of the Participants Account that is to be allocated to the former Spouse, or unambiguously specifies the manner in which the amount or percentage is to be calculated, (iv) does not allocate any benefits that have already been allocated to a different former Spouse, (v) contains the name and last known mailing address of the Participant and eh former Spouse, (vi) the name of the Plan, (vii) does not contain any provision that violates subsections (c), |
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(d), or (e), and (viii) contains the former Spouses Social Security number (or other similar taxpayer identification number) unless such number has been provided by the former Spouse to the Plan in a manner acceptable to the Committee. |
(c) | Payout Provisions . The vested portion of the amount allocated to the former Spouse will be paid to the former Spouse in a single payment as soon as administratively practicable after (i) the Plan has determined that the order meets the requirements of subsection (b), (ii) the Plan has communicated its interpretation of the order to the Participant and former Spouse, and given them a reasonable amount of time (such as 30 days) to object to the Plans interpretation, (and if there is a timely objection, the parties must submit a revised order or withdraw their objections), and (iii) the parties agree to the Plans interpretation of the order. | ||
(d) | Not Fully Vested . If the former Spouse is allocated any unvested amounts, the Plan will establish a separate account for the former Spouse. Unvested amounts are forfeited at the same time as the Participants unvested amounts are forfeited. If an amount allocated to the former Spouse subsequently become vested, the newly-vested amount will be paid to the former Spouse in a single payment as soon as administratively practicable following the additional vesting. If the former Spouse dies before award is fully vested, the unvested amounts shall be returned to the Participants Account. | ||
(e) | Source of Funds . The order may specify which subaccounts the former Spouses benefits shall be taken from; if the order is silent on this matter, the amount awarded to the former Spouse shall be taken from the Participants subaccounts in the order determined by the Committee and shall be taken on a pro rata basis from the vested portion of the Account and the unvested portion. |
5.10 | Administrative Delays in Payments | |
The Committee may delay any payment from this Plan for as short a period as is administratively necessary. For example, a delay may be imposed upon all payments when there is a change of recordkeeper or trustee, and a delay may be imposed on payments to any recipient until the recipient has provided (a) the information needed to determine the appropriate tax withholding and tax reporting and (b) any other information reasonably requested by the Committee. | ||
5.11 | Noncompliance with Code §409A | |
To the extent that the Company or the Committee takes any action that causes a violation of Code §409A or fails to take any reasonable action required to comply with Code §409A, Apache shall pay an additional amount (the gross-up) to the individual(s) who are subject to the penalty tax under Code §409A(a)(1); the gross-up will be sufficient to put the individual in the same after-tax position he would have been in had there been no violation of Code §409A. The Company shall not pay a gross-up if the cause of the violation of Code §409A is the due to the recipients action or due to the recipients failure to take reasonable actions (such as failing to timely provide the information required for tax withholding or failing to timely provide other information reasonably requested by the Committee with the result that the delay in payment violates Code §409A). Any gross-up will be paid as soon as administratively convenient after the Committee determines the gross-up is owed, and no later than the end of the calendar year immediately following the calendar year in which the additional taxes are remitted. However, if the gross-up is due to a tax audit or litigation addressing the existence or amount of a tax liability, the gross-up will be paid as soon as administratively convenient after the litigation or audit is completed, and no later than the end of the calendar year following the calendar year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation. |
6.01 | Committee to Administer and Interpret Plan | |
The Plan shall be administered by the Committee. The Committee shall have all discretion and powers necessary for administering the Plan, including, but not by way of limitation, full discretion and power to interpret the Plan, to determine the eligibility, status and rights of all persons under the Plan and, in general, to decide any dispute. The Committee shall direct the Company, the Trustee, or both, as the case may be, |
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concerning distributions in accordance with the provisions of the Plan. The Committees designee shall maintain all Plan records except records of any Trust. The Committee may delegate any of its administrative duties to a designee. |
6.02 | Organization of Committee | |
The Committee shall adopt such rules as it deems desirable for the conduct of its affairs and for the administration of the Plan. The Committee may appoint a designee and/or agent (who need not be a member of the Committee or an employee of the Company) to assist the Committee in administration of the Plan and to whom it may delegate such powers as the Committee deems appropriate, except that the Committee shall determine any dispute. The Committee may make its determinations with or without meetings. The Committee may authorize one or more of its members, designees or agents to sign instructions, notices and determinations on its behalf. The action of a majority of the Committees members shall constitute the action of the Committee. | ||
6.03 | Agent for Process | |
Apaches General Counsel and Apaches Corporate Secretary shall each be an agent of the Plan for service of all process. |
6.04 | Determination of Committee Final | |
The decisions made by the Committee shall be final and conclusive on all persons. |
7.01 | Trust Agreement | |
The Company may, but shall not be required to, adopt a separate Trust Agreement for the holding and administration of the funds contributed to Accounts under the Plan. The Trustee shall maintain and allocate assets to a separate account for each Participant under the Plan. The assets of any such Trust shall remain subject to the claims of the Companys general creditors in the event of the Companys insolvency. | ||
7.02 | Expenses of Trust | |
The parties expect that any Trust created pursuant to section 7.01 will be treated as a grantor trust for federal and state income tax purposes and that, as a consequence, such Trust will not be subject to income tax with respect to its income. However, if the Trust is separately taxable, the Trustee shall pay all such taxes out of the Trust. All expenses of administering any such Trust shall be a charge against and shall be paid from the assets of such Trust. |
8.01 | Amendment | |
The Plan may be amended at any time and from time to time, retroactively or otherwise; however, no amendment shall reduce any vested benefit that has accrued on the effective date of such amendment. Each Plan amendment shall be in writing and shall be approved by the Committee and/or Apaches Board of Directors. An officer of Apache to whom the Committee and/or Apaches Board of Directors has delegated the authority to execute Plan amendments shall execute each such amendment or the Plan document restated to include all such Plan amendment(s). | ||
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. In only certain limited circumstances, as described in the Treasury Regulations and other guidance of general applicability issued pursuant to Code §409A, may the termination of a plan affect the timing of the payment of Plan benefits. |
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8.02 | Successors and Assigns; Termination of Plan | |
The Plan is binding upon Apache and its successors and assigns. The Plan shall continue in effect from year to year unless and until terminated by Apaches Board of Directors. Any such termination shall operate only prospectively and shall not reduce any vested benefit that has accrued on the effective date of such termination. |
9.01 | Number of Shares | |
Subject to Section 4.01 and to adjustment pursuant to Section 9.03 hereof, 350,000 shares of Stock (adjusted to 735,000 shares for (i) the Companys five-percent stock dividend, record date March 12, 2003, paid April 2, 2003, and (ii) the Companys 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 Apache if, in the opinion of counsel for the Company, such stockholder approval is required. Shares of Stock distributed under the terms of the Plan and shares of Stock equal to the number of Stock Units credited to Participants Accounts maintained under the Plan shall be applied to reduce the maximum number of shares of Stock remaining available for use under the Plan. However, shares of Stock represented by any Stock Units related to the deferral of income from any plan for which shares of Stock have been authorized for issuance, such as the 2007 Omnibus Equity Compensation Plan, shall retain their authorization under such plan, and shall not be applied to reduce the number of shares of Stock remaining available for use under the Plan. Apache, at all times during the existence of the Plan and while any Stock Units are credited to Participants Accounts maintained under the Plan, shall retain as Stock in Apaches treasury at least the number of shares from time to time required under the provisions of the Plan, or otherwise assure itself of its ability to perform its obligations hereunder. | ||
9.02 | Other Shares of Stock | |
The shares of Stock represented by any Stock Units from dividend amounts that are forfeited, and any shares of Stock that for any other reason are not issued to a Participant or are forfeited, shall again become available for use under the Plan. | ||
9.03 | Adjustments for Stock Split, Stock Dividend, Etc. | |
If Apache shall at any time increase or decrease the number of its outstanding shares of Stock or change in any way the rights and privileges of such shares by means of the payment of a Stock dividend or any other distribution upon such shares payable in Stock, or through a Stock split, subdivision, consolidation, combination, reclassification or recapitalization involving the Stock, then in relation to the Stock that is affected by one or more of the above events, the numbers, rights and privileges of the following shall be increased, decreased or changed in like manner as if they had been issued and outstanding, fully paid and nonassessable at the time of such occurrence: (a) the shares of Stock remaining available for use under the Plan; and (b) the shares of Stock then represented by Stock Units credited to Participants Accounts maintained under the Plan. | ||
9.04 | Dividend Payable in Stock of Another Corporation, Etc. | |
If Apache shall at any time pay or make any dividend or other distribution upon the Stock payable in securities or other property (except cash or Stock), a proportionate part of such securities or other property shall be set aside for Stock Units credited to Participants Accounts maintained under the Plan and delivered to any Participant upon distribution pursuant to the terms of the Plan. Prior to the time that any such securities or other property are delivered to a Participant in accordance with the foregoing, Apache shall be the owner of such securities or other property and shall have the right to vote the securities, receive any dividends payable on such securities, and in all other respects shall be treated as the owner. If securities or other property which have been set aside by Apache in accordance with this Section are not delivered to a Participant because all or part of his Stock Units are forfeited pursuant to the terms of the Plan, then the |
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applicable portion of such securities or other property shall remain the property of Apache and shall be dealt with by Apache as it shall determine in its sole discretion. |
9.05 | Other Changes in Stock | |
In the event there shall be any change, other than as specified in Sections 9.03 and 9.04 hereof, in the number or kind of outstanding shares of Stock or of any stock or other securities into which the Stock shall be changed or for which it shall have been exchanged, and if the Committee shall in its discretion determine that such change equitably requires an adjustment in the number or kind of shares (a) remaining available for use under the Plan and/or (b) represented by Stock Units credited to Participants Accounts maintained under the Plan, then such adjustments shall be made by the Committee and shall be effective for all purposes of the Plan. | ||
9.06 | Rights to Subscribe | |
If Apache shall at any time grant to the holders of its Stock rights to subscribe pro rata for additional shares thereof or for any other securities of Apache or of any other corporation, there shall be reserved with respect to the Stock Units credited to Participants Accounts maintained under the Plan the Stock or other securities which the Participant would have been entitled to subscribe for if immediately prior to such grant the shares of Stock represented by such Stock Units had been issued and outstanding. If, at the time of distribution under the terms of the Plan, the Participant subscribes for the additional shares or other securities, the price that is payable by the Participant for such additional shares or other securities shall be withheld from such distribution pursuant to Section 5.08 hereof. | ||
9.07 | General Adjustment Rules | |
No adjustment or substitution provided for in this Article IX shall require Apache to sell or otherwise issue a fractional share of Stock. All benefits payable under the Plan shall be distributed in whole shares of Stock, with any fractional shares paid in cash. | ||
9.08 | Determination by the Committee, Etc. | |
Adjustments under this Article IX shall be made by the Committee, whose determinations with regard thereto shall be final and binding upon all parties thereto. |
11.01 | Funding of Benefits No Fiduciary Relationship | |
Benefits shall be paid either out of the Trust or, if no Trust is in existence or if the assets in the Trust are insufficient to provide fully for such benefits, then such benefits shall be distributed by the Company out of |
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its general assets. Nothing contained in the Plan shall be deemed to create any fiduciary relationship between the Company and the Participants. Notwithstanding anything herein to the contrary, to the extent that any person acquires a right to receive benefits under the Plan, such right shall be no greater than the right of any unsecured general creditor of the Company, except to the extent provided in the Trust Agreement, if any. |
11.02 | Right to Terminate Employment | |
The Company may terminate the employment of any Participant as freely and with the same effect as if the Plan were not in existence. | ||
11.03 | Inalienability of Benefits | |
Except for disclaimers under section 5.04(d), payments to a former Spouse pursuant to section 5.09, and amounts paid to the Company under section 5.08, no Participant or Beneficiary has the right to assign, alienate, pledge, transfer, hypothecate, encumber, or anticipate his interest in any benefits under the Plan, nor are the benefits subject to garnishment by any creditor, nor may the benefits under the Plan be levied upon or attached. The preceding sentence does not apply to the enforcement of a federal tax levy made pursuant to Code §6331, the collection by the United States on a judgment resulting from an unpaid tax assessment, or any debt or obligation that is permitted to be collected from the Plan under federal law (such as the Federal Debt Collection Procedures Act of 1977). | ||
11.04 | Claims Procedure |
(a) | General . Each claim for benefits shall be processed in accordance with the procedures that may be established by the Committee. The procedures shall comply with the guidelines specified in this section. The Committee may delegate its duties under this section. | ||
(b) | Representatives . A claimant may appoint a representative to act on his behalf. The Plan shall only recognize a representative if the Plan has received a written authorization signed by the claimant and on a form prescribed by the Committee, with the following exceptions. The Plan shall recognize a claimants legal representative, once the Plan is provided with documentation of such representation. If the claimant is a minor child, the Plan shall recognize the claimants parent or guardian as the claimants representative. Once an authorized representative is appointed, the Plan shall direct all information and notification regarding the claim to the authorized representative and the claimant shall be copied on all notifications regarding decisions, unless the claimant provides specific written direction otherwise. | ||
(c) | Extension of Deadlines . The claimant may agree to an extension of any deadline that is mentioned in this section that applies to the Plan. The Committee or the relevant decision-maker may agree to an extension of any deadline that is mentioned in this section that applies to the claimant. | ||
(d) | Fees . The Plan may not charge any fees to a claimant for utilizing the claims process described in this section. | ||
(e) | Filing a Claim . A claim is made when the claimant files a claim in accordance with the procedures specified by the Committee. Any communication regarding benefits that is not made in accordance with the Plans procedures will not be treated as a claim. | ||
(f) | Initial Claims Decision . The Plan shall decide a claim within a reasonable time up to 90 days after receiving the claim. The Plan shall have a 90-day extension, but only if the Plan is unable to decide within 90 days for reasons beyond its control, the Plan notifies the claimant of the special circumstances requiring the need for the extension by the 90th day after receiving the claim, and the Plan notifies the claimant of the date by which the Plan expects to make a decision. | ||
(g) | Notification of Initial Decision . The Plan shall provide the claimant with written notification of the Plans full or partial denial of a claim, reduction of a previously approved benefit, or termination of a benefit. The notification shall include a statement of the reason(s) for the decision; references to the plan provision(s) on which the decision was based; a description of any additional material or information necessary to perfect the claim and why such information is needed; a description of the procedures and deadlines for appeal; a description of the right to obtain information about the appeal procedures; and a statement of the claimants right to sue. |
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(h) | Appeal . The claimant may appeal any adverse or partially adverse decision. To appeal, the claimant must follow the procedures specified by the Committee. The appeal must be filed within 60 days of the date the claimant received notice of the initial decision. If the appeal is not timely and properly filed, the initial decision shall be the final decision of the Plan. The claimant may submit documents, written comments, and other information in support of the appeal. The claimant shall be given reasonable access at no charge to, and copies of, all documents, records, and other relevant information. | ||
(i) | Appellate Decision . The Plan shall decide the appeal of a claim within a reasonable time of no more than 60 days from the date the Plan receives the claimants appeal. The 60-day deadline shall be extended by an additional 60 days, but only if the Committee determines that special circumstances require an extension, the Plan notifies the claimant of the special circumstances requiring the need for the extension by the 60th day after receiving the appeal, and the Plan notifies the claimant of the date by which the Plan expects to make a decision. If an appeal is missing any information from the claimant that is needed to decide the appeal, the Plan shall notify the claimant of the missing information and grant the claimant a reasonable period to provide the missing information. If the missing information is not timely provided, the Plan shall deny the claim. If the missing information is timely provided, the 60-day deadline (or 120-day deadline with the extension) for the Plan to make its decision shall be increased by the length of time between the date the Plan requested the missing information and the date the Plan received it. | ||
(j) | Notification of Decision . The Plan shall provide the claimant with written notification of the Plans appellate decision (positive or adverse). The notification of any adverse or partially adverse decision shall include a statement of the reason(s) for the decision; reference to the plan provision(s) on which the decision was based; a description of the procedures and deadlines for a second appeal, if any; a description of the right to obtain information about the second-appeal procedures; a statement of the claimants right to sue; and a statement that the claimant is entitled to receive, free of charge and upon request, reasonable access to and copies of all documents, records, and other information relevant to the claim. | ||
(k) | Limitations on Bringing Actions in Court . Once an appellate decision that is adverse or partially adverse to the claimant has been made, the claimant may file suit in court only if he does so by the earlier of the following dates: (i) the one-year anniversary of the date of an appellate decision made on or before a Change of Control or the three-year anniversary of the date of an appellate decision made after a Change of Control, or (ii) the date on which the statute of limitations for such claim expires. |
11.05 | Disposition of Unclaimed Distributions | |
It is the affirmative duty of each Participant to inform the Plan of, and to keep on file with the Plan, his current mailing address and the mailing address of his Spouse and any Beneficiaries. If a Participant fails to inform the Plan of these current mailing addresses, neither the Plan nor the Company is responsible for any late payment of benefits or loss of benefits. The Plan, the Committee, and the Company have no duty to search for a missing individual until the date of a Change of Control, at which point the Company has the duty to undertake reasonable measures to search for the proper recipient of any payment under the Plan that is scheduled to be paid on or after the date of the Change of Control. If the missing individual is not found within a year after a payment should have been made to him, all his benefits will be forfeited. If the missing individual later is found, the exact number of Stock Units forfeited will be restored to the Account as soon as administratively convenient, without any adjustment for dividends paid in the interim. | ||
11.06 | Distributions due Infants or Incompetents | |
If any person entitled to a distribution under the Plan is an infant, or if the Committee determines that any such person is incompetent by reason of physical or mental disability, whether or not legally adjudicated an incompetent, the Committee shall have the power to cause the distributions becoming due to such person to be made to another for his benefit, without responsibility of the Committee to see to the application of such distributions. Distributions made pursuant to such power shall operate as a complete discharge of the Company, the Trustee, if any, and the Committee. |
14
11.07 | Addresses | |
Any notice, form, or election required or permitted to be given under the Plan shall be in writing and shall be given by first class mail, by Federal Express, UPS, or other carrier, by fax or other electronic means, or by personal delivery to the appropriate party, addressed: |
(a) | If to the Company, to Apache Corporation at its principal place of business at 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400 (Attention: Corporate Secretary) or at such other address as may have been furnished in writing by the Company to a Participant; or | ||
(b) | If to a Participant, at the address the Participant has furnished to the Company in writing. | ||
(c) | If to a Beneficiary or former Spouse, at the address the Participant has furnished to the Company in writing, or at the address the Beneficiary or former Spouse subsequently provided in writing. |
ATTEST:
|
APACHE CORPORATION | |||||
|
||||||
/s/ Cheri L. Peper
|
/s/ Margery M. Harris | |||||
|
||||||
Cheri L. Peper
|
Margery M. Harris | |||||
Corporate Secretary
|
Vice President, Human Resources |
15
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), established the Apache Corporation Executive Restricted Stock Plan (formerly known as the Pilot Executive Restricted Plan), effective as of May 2, 2002 (the Plan). | ||
1.2 | Purposes. | |
The primary purpose of the Plan is to focus the energies of the Companys executive and regional officers on significantly increasing shareholder wealth by increasing such officers ownership of the Companys equity. Additional purposes of the Plan include the retention of existing key employees and as an additional inducement in the recruitment of talented personnel in a competitive environment. |
2.1 | Definitions . |
(a) | Affiliated Corporation means any corporation or other entity (including but not limited to a partnership) that 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. | ||
(b) | Board means the Board of Directors of the Company. | ||
(c) | 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). | ||
(d) | Deferred Delivery Plan means the Companys Deferred Delivery Plan, as it has been or may be amended from time to time, or any successor plan. | ||
(e) | Eligible Employees means executive and regional officers of the Company. | ||
(f) | 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 |
1
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. |
(g) | Grant has the meaning set forth in Section 6 hereof. | ||
(h) | Grant Agreement has the meaning set forth in Section 6 hereof. | ||
(i) | Grant Date means for any Grant the date specified in the applicable resolutions of the Committee. | ||
(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 Grants of Plan Units under the Plan. | ||
(l) | Plan Units means investment units, each of which is equivalent in value to one share of Stock. | ||
(m) | Stock means the $0.625 par value common stock of the Company. | ||
(n) | Stock Units means investment units under the Deferred Delivery Plan, each of which is equivalent in value 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. |
2
4.1 | Number of Shares. | |
Subject to Sections 4.3 and 6.1 hereof, up to 450,000 shares of Stock (adjusted to 945,000 shares for (i) the Companys five-percent stock dividend, record date March 12, 2003, paid April 2, 2003, and (ii) the Companys two-for-one stock split, record date December 31, 2003, distributed January 14, 2004) are authorized for issuance under the Plan upon conversion of any Plan Units in accordance with the Plans terms and subject to such restrictions or other provisions as the Committee may from time to time deem necessary. Shares of Stock issued pursuant to the conversion of any Plan Units or related Stock 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 or related Stock Units are outstanding retain as authorized and unissued Stock and/or Stock in the Companys 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 or related Deferred Restricted Unit that 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 dividend or any other distribution upon such shares payable in Stock, or through a split, subdivision, consolidation, combination, reclassification, or recapitalization involving the Stock or a subscription for shares of Stock that has the effect of diluting the Companys capital (hereinafter a capital restructuring), then for purposes of determining the entitlement to payments under Section 6, the number of shares of Stock authorized for issuance under this Section 4 shall be 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. |
3
6.1 | Grants. | |
From time to time each Participant may be awarded one or more grants (each, a Grant) of Plan Units under this Plan by the Committee. Each Grant shall be composed of a number of Plan Units as may be determined by the Committee in its sole discretion. 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 this Section 6 (which may be modified in any manner as the Committee shall determine in its sole discretion), 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 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, 2005 . Each Grant Agreement made during 2005 even those made before December 14, 2005 (the date this Plan was retroactively amended) shall evidence the Grant of Plan Units and conditionally entitle the Participant to receive the indicated Plan Units which shall vest, subject to Section 6.2.3 below, based on the following schedule: |
June 1, 2006
|
25 | % | ||
May 4, 2007
|
25 | % | ||
May 4, 2008
|
25 | % | ||
May 4, 2009
|
25 | % |
6.2.2 | Grant Terms, 2006 and After . Each Grant Agreement made after December 31, 2005 shall evidence the Grant of Plan Units and conditionally entitle the Participant to receive the indicated Plan Units which shall vest, subject to Section 6.2.3 below, based on the following schedule: |
The first day of the month immediately following the month that
includes the deadline for making a deferral election of such Plan
Units to the Deferred Delivery Plan
|
25 | % | ||
The second anniversary of the Grant Date
|
25 | % |
4
The third anniversary of the Grant Date
|
25 | % | ||
The fourth anniversary of the Grant Date
|
25 | % |
6.2.3 | Deferral of Vested Units . A Participant may make an election during the month in which the Grant is made to defer all or a portion of the Grant to the Deferred Delivery Plan, subject to the rules and procedures described in the Deferred Delivery Plan. If a Participant elects such a deferral, on the date the deferred Plan Units vest, the Participants Account in the Deferred Delivery Plan shall be credited with Stock Units that are equal in value to the deferred Plan Units that vested less any taxes imposed and withheld when vesting occurred. At the time the Participant makes the deferral election, he or she shall also make a payout election with respect to the deferred Plan Units, from among the choices provided in the Deferred Delivery Plan; the payout election shall be made pursuant to the procedures and rules specified in the Deferred Delivery Plan and by the deadline prescribed therein. Plan Units that are not deferred into the Deferred Delivery Plan shall be converted into Stock, and the Participant shall be issued the requisite number of shares, as soon as administratively convenient after the deferral election period ends, and in no event later than 60 days after vesting occurs. |
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 shares of Stock or Stock Units, thereunder upon vesting 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 employment of the Participant is terminated by the Company for cause, all Plan Units, vested and unvested, shall thereafter be void and forfeited for all purposes. | ||
(b) | If the Participant voluntarily leaves the employment of the Company, or if the employment of the Participant is terminated by the Company other than for cause, the Participant shall be entitled to receive the shares of Stock issuable in accordance with Section 5 or 6.2.3. Such Participant shall not be entitled to any shares of Stock issuable on account of Plan Units that were not vested prior to the effective date of such Participants leaving the employment of the Company. If the Participant dies before receiving all of the Stock to which he or she is entitled under this Section 6.3(b), such Stock shall be issued to those entitled under the Participants will or by the laws of descent and distribution. | ||
(c) | If the Participant becomes disabled (as determined pursuant to the Companys Long-Term Disability Plan or any successor plan), while still employed by the Company, the Participant shall be entitled to receive the shares of Stock issuable on account of vested Plan Units in accordance with Section 5 or 6.2.3. Such Participant shall not be entitled to any shares of Stock issuable on account of Plan Units that were not vested prior to the date such Participants became disabled. If the Participant dies before receiving all of the Stock to which he or she is entitled under this Section 6.3(c), such |
5
Stock shall be issued to those entitled under the Participants will or by the laws of descent and distribution. |
(d) | If a Participant dies while still employed by the Company, all unvested Plan Units shall automatically vest and convert into the right to receive Stock, without conversion into Stock Units and deferral into the Deferred Delivery Plan, and the shares of Stock issuable for vested Plan Units (including those vested pursuant to this Section 6.3(d)) will be issued in accordance with Section 5 or 6.2.3 and shall be made to those entitled under the Participants will or by the laws of descent and distribution. |
6.4 | Tax Withholding. | |
Each Grant Agreement shall provide that, when the benefits under this Plan become subject to tax, either (a) the Participant shall make appropriate arrangements with the Company to provide for the tax withholding required under foreign, federal, state, local, and any other applicable tax laws, or (b) the Company shall withhold a sufficient number of shares of Stock to satisfy such tax withholding. | ||
6.5 | 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. |
7.1 | In General. | |
In the event of a change of control of the Company, as defined in Section 7.3 hereof, all unvested Plan Units shall automatically vest. The newly vested Plan Units shall be converted to Stock and the Participant shall be issued the requisite number of shares, after any withholding under Section 6.4, as soon as administratively practicable after the change of control occurs, regardless of whether the Participant had elected to defer such Plan Units to the Deferred Delivery Plan pursuant to Section 6.2.3. | ||
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. |
6
7.3 | Definition. | |
For purposes of the Plan, a change of control shall mean any event specified in the Companys Income Continuance Plan or any successor plan that constitutes a change of control within the meaning of such plan. |
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 Participants 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 Participants death, a Participants 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 Participants 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 persons guardian, conservator or other legal personal representative upon furnishing the Committee with evidence satisfactory to the Committee of such status. |
7
11.1 | Requirements of Law. | |
The issuance of shares of Stock 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 that 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. |
ATTEST:
|
APACHE CORPORATION | |||||||
|
||||||||
/s/ Cheri L. Peper
|
By: | /s/ Margery M. Harris | ||||||
|
||||||||
Cheri L. Peper
|
Margery M. Harris | |||||||
Corporate Secretary
|
Vice President |
8
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2
3
4
5
6
ATTEST: | APACHE CORPORATION | |||||||
|
||||||||
|
||||||||
/s/ Cheri L. Peper
|
By: | /s/ Margery M. Harris | ||||||
|
||||||||
Cheri L. Peper
Corporate Secretary |
Margery M. Harris
Vice President, Human Resources |
7
2
3
4
5
6
7
ATTEST: | APACHE CORPORATION | |||||||||
|
||||||||||
By:
|
/s/ Cheri L. Peper
Corporate Secretary |
By: |
/s/ Margery M. Harris
Vice President, Human Resources |
8
APACHE CORPORATION
|
FARRIS | |||||
|
||||||
/s/ Margery M. Harris
|
/s/ G. Steven Farris | |||||
|
||||||
Margery M. Harris
Vice President, Human Resources |
G. Steven Farris | |||||
|
||||||
ATTEST:
|
||||||
|
||||||
/s/ Cheri L. Peper
|
||||||
|
||||||
Cheri L. Peper
Corporate Secretary |
(a) | The Apache Incentive Compensation Plan, with participation potential of fifty percent of Base Compensation; | ||
(b) | The Apache 1982 Employee Stock Option Plan, with a grant of a 10,000 share ISO option; | ||
(c) | The Apache Phantom Stock Appreciation Plan (a/k/a |
(d) | All other Apache benefit plans customarily extended to executives entering the employ of Apache in 1988 or thereafter, including but not limited to the Apache Retirement Plan, the Apache Income Continuation Plan, and the various Apache medical, dental, life insurance, and disability insurance plans. |
-2-
(a) | continue to pay Farris an amount equal to his Base Compensation as it existed 60 days prior to termination; | ||
(b) | on each March first during the thirty-six months, pay Farris 50 percent of the maximum amount for which he was qualified under the Apache Incentive Compensation Plan (calculated on his base compensation as of 60 days prior to termination); | ||
(c) | continue to pay all amounts, if any, uncond- tionally accrued and payable under the LTIP; and | ||
(d) | continue to provide individual and dependent insurance benefits equivalent to those provided 60 days prior to termination, subject to customary co-payment or contribution by Farris; |
(e) | Farris willful failure to perform his duties after a demand for performance is delivered to him by the Apache board of directors which specifi-ally states the manner in which the board believes Farris has not performed his duties; | ||
(f) | Farris willful gross misconduct materially injurious to Apache; | ||
(g) | Farris violation of a direct order of the board of directors, the executive committee of the board, or the chairman of the board; or | ||
(h) | Farris disability invoking Apaches disability insurance. |
(i) | in bad faith; or |
-3-
(j) | without reasonable belief that the act or omission was in the interests of the company. |
(a) | directly or indirectly compete with Apache; | ||
(b) | appropriate or usurp business opportunities available to Apache; or | ||
(c) | reveal any trade secret or confidence of Apache; |
(d) | as permitted in writing by Apaches board of directors; and | ||
(e) | that Farris shall be permitted to compete with Apache if Apache terminates his employment without Cause. |
(f) | to terminate Farris for Cause if he is still employed by Apache; or | ||
(g) | to cease paying Severance Payments if Apache is paying Severance Payments; | ||
(h) | to seek damages if Farris is not employed by Apache and Apache is not paying Severance Payments. |
-4-
Apache Corporation
|
||||
/s/ C. Eugene Daniels | ||||
By C. Eugene Daniels | ||||
Vice President of Human Resources | ||||
/s/ G. Steven Farris | ||||
G. Steven Farris | ||||
-5-
(1) | The Company did not receive a tax benefit for $5 million of transaction costs written off to interest expense when the Company retired its preferred interests of subsidiaries in September 2003. Given the non-deductibility of the charge, $9 million of pre-tax income was required to cover the $5 million write-off. Accordingly, interest expense has been grossed up by $4 million. | |
(2) | Represents the portion of rental expense assumed to be attributable to interest factors of related rental obligations determined at interest rates appropriate for the period during which the rental obligations were incurred. Approximately 32 to 34 percent of rental payments applies for all periods presented. | |
(3) | The Company did not receive a tax benefit for a portion of its preferred interests of consolidated subsidiaries. This amount represents the pre-tax earnings that would be required to cover preferred interests requirements of consolidated subsidiaries. In September 2003, the Company retired its preferred interests of subsidiaries. | |
(4) | The Company does not receive a tax benefit for its preferred stock dividends. This amount represents the pre-tax earnings that would be required to cover its preferred stock dividends. | |
(5) | Interest expense on our FIN 48 liability is a component of income tax expense and it is not included in the calculation of earnings to fixed charges. |
Exact Name of Subsidiary and Name | Jurisdiction of | ||
under which Subsidiary does Business | Incorporation or Organization | ||
Apache Corporation (New Jersey)
|
New Jersey | ||
Apache Crude Oil Marketing, Inc.
|
Delaware | ||
Apache Delaware Investment LLC
|
Delaware | ||
Apache Delaware V LLC
|
Delaware | ||
Apache Dory Corporation LDC
|
Cayman Islands | ||
Apache East Ras Budran Corporation LDC
|
Cayman Islands | ||
Apache Energy Limited
|
Western Australia | ||
Apache Australia Offshore Holdings Pty Ltd
|
Western Australia | ||
Apache PVG Pty Ltd
|
Western Australia | ||
Apache Coniston Novara Holdings Pty Ltd
|
Western Australia | ||
Apache Coniston Novara Pty Ltd
|
Western Australia | ||
Apache DCDP Holdings Pty Ltd
|
Western Australia | ||
Apache DCDP Pty Ltd
|
Western Australia | ||
Apache East Spar Pty Limited
|
Western Australia | ||
Apache Halyard Holdings Pty Ltd
|
Western Australia | ||
Apache Halyard Pty Ltd
|
Western Australia | ||
Apache Hurricane Holdings Pty Ltd
|
Western Australia | ||
Apache Hurricane Pty Ltd
|
Western Australia | ||
Apache Julimar Holdings Pty Ltd
|
Western Australia | ||
Apache Julimar Pty Ltd
|
Western Australia | ||
Apache Kersail Pty Ltd
|
Victoria, Australia | ||
Apache Macedon Holdings Pty Ltd
|
Western Australia | ||
Apache Macedon Pty Ltd
|
Western Australia | ||
Apache Maitland Holdings Pty Ltd
|
Western Australia | ||
Apache Maitland Pty Ltd
|
Western Australia | ||
Apache Northwest Pty Ltd.
|
Western Australia | ||
Apache Oil Australia Pty Limited
|
New South Wales, Australia | ||
Apache Permits Pty Ltd
|
Western Australia | ||
Apache Reindeer Holdings Pty Ltd
|
Western Australia | ||
Apache Reindeer Pty Ltd
|
Western Australia | ||
Apache Finance Louisiana Corporation
|
Delaware | ||
Apache Foundation
|
Minnesota | ||
Apache Gathering Company
|
Delaware | ||
Apache GOM Pipeline, Inc.
|
Delaware | ||
Apache Holdings, Inc.
|
Delaware | ||
Apache International LLC (formerly Apache International, Inc.)
|
Delaware | ||
Apache North America, Inc.
|
Delaware | ||
Apache Egypt Midstream Holdings I LDC
|
Cayman Islands | ||
Apache Egypt Midstream Holdings II LDC
|
Cayman Islands | ||
Apache Egypt Midstream Holdings III LDC
|
Cayman Islands | ||
Apache Egypt Midstream Holdings IV LDC
|
Cayman Islands | ||
Apache Elver Corporation LDC
|
Cayman Islands | ||
Apache Finance Australia Pty Limited
|
Australian Capital Territory | ||
Apache Finance Pty Limited
|
Australian Capital Territory | ||
Apache Australia Management Pty Limited
|
Victoria, Australia | ||
Apache Australia Holdings Pty Limited
|
Western Australia | ||
Apache Khalda Corporation LDC
|
Cayman Islands | ||
Apache Madfish Corporation LDC
|
Cayman Islands | ||
Apache Qarun Corporation LDC
|
Cayman Islands | ||
Apache Qarun Exploration Company LDC
|
Cayman Islands | ||
Apache Louisiana Holdings, LLC
|
Delaware |
Exact Name of Subsidiary and Name | Jurisdiction of | ||
under which Subsidiary does Business | Incorporation or Organization | ||
Apache Louisiana Minerals LLC (formerly Apache Louisiana Minerals, Inc.)
|
Delaware | ||
Apache Marketing, Inc.
|
Delaware | ||
Apache Midstream Enterprises, Inc.
|
Delaware | ||
Apache Oil Corporation
|
Texas | ||
Apache Overseas, Inc.
|
Delaware | ||
Apache Abu Gharadig Corporation LDC
|
Cayman Islands | ||
Apache Argentina Corporation LDC
|
Cayman Islands | ||
Apache Asyout Corporation LDC
|
Cayman Islands | ||
Apache China Management LDC
|
Cayman Islands | ||
Apache China Holdings LDC
|
Cayman Islands | ||
Apache Darag Corporation LDC
|
Cayman Islands | ||
Apache East Bahariya Corporation LDC
|
Cayman Islands | ||
Apache El Diyur Corporation LDC
|
Cayman Islands | ||
Apache Enterprises LDC
|
Cayman Islands | ||
Apache Faiyum Corporation LDC
|
Cayman Islands | ||
Apache FC Petrolera Argentina S.A. (formerly Apache FC Argentina Company LDC)
|
Argentina | ||
Apache Madera Corporation LDC
|
Cayman Islands | ||
Apache Matruh Corporation LDC
|
Cayman Islands | ||
Apache Mediterranean Corporation LDC
|
Cayman Islands | ||
Apache Luxembourg Holdings I S.a.r.l
|
Luxembourg | ||
Apache Luxembourg Holdings II S.a.r.l.
|
Luxembourg | ||
Apache Luxembourg Holdings III LDC
|
Cayman Islands | ||
Apache North Bahariya Corporation LDC
|
Cayman Islands | ||
Apache North El Diyur Corporation LDC
|
Cayman Islands | ||
Apache North Sea Holdings LDC
|
Cayman Islands | ||
Apache North Sea Management LDC
|
Cayman Islands | ||
Apache International Holdings LLC
|
Delaware | ||
Apache International Finance S.à r.l.
|
Luxembourg | ||
Apache International Holdings II LLC
|
Delaware | ||
Apache North Sea Investment
|
England and Wales | ||
Apache North Sea Limited
|
England and Wales | ||
Apache North Tarek Corporation LDC
|
Cayman Islands | ||
Apache Petrolera Argentina S.A.
|
Argentina | ||
Apache Shushan Corporation LDC
|
Cayman Islands | ||
Apache South Umbarka Corporation LDC
|
Cayman Islands | ||
Apache Umbarka Corporation LDC
|
Cayman Islands | ||
Apache West Kalabsha Corporation LDC
|
Cayman Islands | ||
Apache West Kanayis Corporation LDC
|
Cayman Islands | ||
Apache Permian Basin Investment Corporation
|
Delaware | ||
Apache Permian Basin Corporation
|
Delaware | ||
LeaCo New Mexico Exploration and Production LLC
|
Delaware | ||
Permian Basin Joint Venture LLC
|
Delaware | ||
Apache Ravensworth Corporation LDC
|
Cayman Islands | ||
Apache Shady Lane Ranch Inc.
|
Delaware | ||
Apache Stoneaxe Corporation LDC
|
Cayman Islands | ||
Apache Transfer Company
|
Delaware | ||
Apache Transmission Corporation Texas
|
Texas | ||
Apache UK Limited
|
England and Wales | ||
Apache Lowendal Pty Limited
|
Victoria, Australia | ||
Apache West Texas Acquisition Corporation
|
Delaware | ||
Texas and New Mexico Exploration LLC
|
Delaware |
Exact Name of Subsidiary and Name | Jurisdiction of | ||
under which Subsidiary does Business | Incorporation or Organization | ||
Apache West Texas Holdings, Inc.
|
Delaware | ||
Apache West Texas Investment LLC
|
Delaware | ||
CV Energy Corporation
|
Delaware | ||
Clear Creek Hunting Preserve, Inc.
|
Wyoming | ||
Cottonwood Aviation, Inc.
|
Delaware | ||
DEK Energy Company
|
Delaware | ||
Apache Finance Canada Corporation
|
Nova Scotia, Canada | ||
Apache Canada Management Ltd
|
Alberta, Canada | ||
Apache Canada Holdings Ltd
|
Alberta, Canada | ||
Apache Canada Management II Ltd
|
Alberta, Canada | ||
Apache Finance Canada II Corporation
|
Nova Scotia, Canada | ||
Apache Canada Ltd.
|
Alberta, Canada | ||
Apache Canada Argentina Holdings ULC
|
Alberta, Canada | ||
Apache Austria Investment LDC
|
Cayman Islands | ||
Apache Canada Argentina Investment ULC
|
Alberta, Canada | ||
Apache Natural Resources Petrolera
|
|||
Argentina S.R.L.
|
Argentina | ||
*TDF Oil and Gas Company LDC
|
Cayman Islands | ||
Petrolera TDF Company S.R.L.
|
Argentina | ||
*TDF O&G Company LDC
|
Cayman Islands | ||
*LF Oil and Gas Company LDC
|
Cayman Islands | ||
Petrolera LF Company S.R.L.
|
Argentina | ||
*LF O&G Company LDC
|
Cayman Islands | ||
*Neuquen Oil and Gas Company LDC
|
Cayman Islands | ||
Apache Energía Argentina S.R.L.
|
Argentina | ||
*Neuquen O&G Company LDC
|
Cayman Islands | ||
*
Apache Austria Finance GmbH
|
Austria | ||
*
Apache Austria Holding GmbH
|
Austria | ||
Apache Canada Chile Holdings ULC
|
Alberta, Canada | ||
Apache Chile Energìa SPA
|
Chile | ||
Apache Canada Chile Investment ULC
|
Alberta, Canada | ||
Apache Canada GP Ltd
|
Alberta, Canada | ||
Apache Canada Properties Ltd.
|
Alberta, Canada | ||
Apache Canada Zama Pipeline Ltd.
|
Federal - Canada | ||
Apache FC Capital Canada Inc.
|
Alberta, Canada | ||
Apache FC Canada Enterprises Inc.
|
Alberta, Canada | ||
Apache Lenga Holdings LDC
|
Cayman Islands | ||
Apache Lenga Investment LLC
|
Delaware | ||
Apache Rusfin Investment LLC
|
Delaware | ||
GOM Operating Company
|
Delaware | ||
GOM Shelf, LLC
|
Delaware | ||
Nile Weavers, Inc.
|
Delaware | ||
Phoenix Exploration Resources, Ltd.
|
Delaware | ||
TEI Arctic Petroleum (1984) Ltd.
|
Alberta, Canada | ||
Texas International Company
|
Delaware | ||
Wheelco Energy LLC
|
Delaware |
* | In liquidation |
(1) | Registration Statements (Form S-3 Nos. 333-57785, 333-75633, 333-32580, 333-105536 and 333-155884) of Apache Corporation and in the related Prospectuses, | ||
(2) | Registration Statement (Form S-4 No. 333-107934) of Apache Corporation and in the related Prospectus, and | ||
(3) | Registration Statements (Form S-8 Nos. 33-31407, 33-37402, 33-53442, 33-59721, 33-59723, 33-63817, 333-04059, 333-25201, 333-26255, 333-32557, 333-36131, 333-53961, 333-31092, 333-48758, 333-97403, 333-102330, 333-103758, 333-105871, 333-106213, 333-125232, 333-125233, 333-135044 and 333-143115) of Apache Corporation; |
1. | I have reviewed this annual report on Form 10-K of Apache Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ G. Steven Farris
|
||
G. Steven Farris
|
||
Chairman and Chief Executive Officer
|
1. | I have reviewed this annual report on Form 10-K of Apache Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ Roger B. Plank
|
||
Roger B. Plank
|
||
President (principal financial officer)
|
/s/ G. Steven Farris | ||||
By: G. Steven Farris | ||||
Title: | Chairman and Chief Executive Officer (principal executive officer) | |||
/s/ Roger B. Plank | ||||
By: Roger B. Plank | ||||
Title: | President (principal financial officer) | |||