FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT OF G. STEVEN FARRIS
The parties
enter into this first amendment to the Employment Agreement between
Apache Corporation (“Apache”) and G. Steven Farris
(“Farris”) that was entered into on June 6, 1988
(hereinafter, the “Agreement”), in order to satisfy the
requirements of §409A of the Internal Revenue Code of 1986, as
amended (hereinafter, the “Code”).
Notwithstanding
any provision in the Agreement to the contrary,
1. As required
by Code §409A, payments pursuant to section 10 of the
Agreement will begin automatically upon the first to occur of the
following events: (a) Farris has a separation from service as
determined by the Secretary of the Treasury, which occurs when
Farris’s level of service drops to 20% or less of his average
level of service during the preceding three years, as determined
pursuant to Code §409A(a)(2)(A)(i) and IRS guidance of general
applicability, including Treasury Regulation
§1.409A-1(h)(1)(ii); (b) Farris becomes disabled within
the meaning of Code §409A(a)(2)(C); or (c) Farris
dies.
2. The payments
pursuant to section 10 of the Agreement will be $0 for the first
six months after Farris’s separation from service, as
determined above. The payments that would have been made during
that six-month period, if not for the preceding sentence, will be
paid to Farris (or to his estate if he has died) within the first
ten days of the seventh month after his separation from
service.
IN WITNESS
HEREOF , the parties have
caused this amendment to be executed, effective as of January 1,
2005.
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FARRIS
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/s/ G. Steven
Farris
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Margery M.
Harris
Vice President, Human Resources
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G. Steven
Farris
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Cheri L.
Peper
Corporate Secretary
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Apache Corporation Employment
Agreement
This contract is
entered into on June 6, 1988, between Apache Corporation
(“Apache”), a Delaware corporation with principal
offices at 1900 One United Bank Center, 1700 Lincoln Street,
Denver, Colorado 80203-4519, and G. Steven Farris
(“Farris”), an individual with his principal residence
at 9004 S. Joplin, Tulsa, Oklahoma 74137.
Apache wishes to
employ Farris in the capacity described below on the terms and
conditions described below, and Farris wishes to accept employment
on those terms.
Consideration and Agreement
In consideration
of the payments and performance called for by this agreement, and
in consideration of the employment relation created between them,
Apache and Farris convenant and agree as follows:
1.
Office. Apache employs Farris as its Vice President,
effective as of the Commencement Date.
2.
Employment. Farris shall commence full-time employment with
Apache on the Commencement Date. While employed by Apache, Farris
shall devote all of his business and professional time to the
business of Apache, except for time spent managing personal
business and investments.
3.
Commencement Date. The “Commencement Date” shall
be a mutually agreeable date between June 27, 1988, and
July 18, 1988.
4. Base
Compensation. Apache shall pay Farris the sum of $14,166 per
month after the Commencement Date and during his employment,
payable in semi-monthly installments, and modifiable only by
Apache’s board of directors as provided below (“Base
Compensation”).
5.
Benefits. Farris shall participate in the following Apache
benefit plans as they may be supplemented, amended, replaced or
terminated by Apache from time to time:
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(a)
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The
Apache Incentive Compensation Plan, with participation potential of
fifty percent of Base Compensation;
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(b)
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The
Apache 1982 Employee Stock Option Plan, with a grant of a 10,000
share ISO option;
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(c)
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The
Apache Phantom Stock Appreciation Plan (a/k/a
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Long-Term
Incentive Compensation Plan), with a grant of 25,000 phantom
shares;
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(d)
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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.
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Apache shall
also pay for a Denver luncheon club membership and a covered garage
parking space for Farris.
6.
LTIP. Apache and Farris agree to work in good faith to
formulate an additional long-term incentive program for the benefit
of Farris (the “LTIP”). The LTIP will pay Farris a
percentage of the net gain after tax upon each year’s annual
drilling capital expenditures. Net gain will be determined on the
basis of a five-year production and reserve report developed by an
independent petroleum engineering consultant.
7.
Residence. Farris may tender possession of his principal
residence (including all related real property, appurtenances,
impro
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