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EXHIBIT 4.9
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING
SECURITIES THAT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED
CONDITIONAL GRANT AGREEMENT
BETWEEN APACHE CORPORATION AND XXXXXX X. XXXXXXX
THIS CONDITIONAL GRANT AGREEMENT is made as of this 1st day of May, 1997
between APACHE CORPORATION, a Delaware corporation (together with its
Affiliated Corporations, except where the context otherwise requires, the
"Company"), and XXXXXX X. XXXXXXX (the "Consultant").
WITNESSETH: This Agreement evidences a Conditional Grant (as defined below) to
the Consultant under which entitlement to any payments shall vest only if one
or both of the Price Threshold Dates (as defined below) occurs, which payments
will be in increments in accordance with the provisions of this Agreement.
DEFINITIONS
"BOARD" means the Board of Directors of the Company or any authorized
committee thereof.
"CONDITIONAL GRANT" means the conditional entitlement, evidenced by this
Conditional Grant Agreement between the Company and the Consultant, to receive
all or a portion of an Initial Amount and Final Amount, subject to and in
accordance with the provisions of this Agreement.
"CONSULTING AGREEMENT" means that certain Consulting Agreement by and
between Xxxxxx X. Xxxxxxx and the Company dated August 7, 1996, as amended.
"FAIR MARKET VALUE" means the closing price of the Stock as reported on
The New York Stock Exchange, Inc. Composite Transactions Reporting System for a
particular date. If there are no Stock transactions on such date, the Fair
Market Value shall be determined as of the immediately preceding date on which
there were Stock transactions.
"FINAL AMOUNT" means 10,000 shares of Stock, payable if and when vested in
increments in the form of shares of Stock, pursuant to Section 3 of this
Agreement.
"FINAL PRICE THRESHOLD DATE" means the last of any 10 trading days (which
need not be consecutive) during any period of 30 consecutive trading days
occurring prior to January 1, 2000,
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but not thereafter, on each of which 10 days the closing price of the Stock as
reported on The New York Stock Exchange, Inc. Composite Transactions Reporting
System has equaled or exceeded $60 per share. If the above trading criteria
is met more than once, the first occurrence shall be deemed to be the Final
Price Threshold Date.
"INITIAL AMOUNT" means 8,000 shares of Stock, payable if and when vested
in increments in the form of shares of Stock, pursuant to Section 2 of this
Agreement.
"INITIAL PRICE THRESHOLD DATE" means the last of any 10 trading days
(which need not be consecutive) during any period of 30 consecutive trading
days occurring prior to January 1, 2000, but not thereafter, on each of which 10
days the closing price of the Stock as reported on The New York Stock Exchange,
Inc. Composite Transactions Reporting System has equaled or exceeded $50 per
share. If the above trading criteria is met more than once, the first
occurrence shall be deemed to be the Initial Price Threshold Date.
"PRICE THRESHOLD DATE" means either the Initial Price Threshold Date or
the Final Price Threshold Date, as the context may require.
"STOCK" means the $1.25 par value Common Stock of the Company.
AGREEMENT
1. CONDITIONAL GRANT. Subject to the terms and conditions of this
Agreement, the Company hereby conditionally grants to the Consultant the right
to a conditional issuance of Stock following the occurrence of one or both of
the Price Threshold Dates, as set forth below.
(a) If at any time prior to January 1, 2000, the Initial Price
Threshold Date occurs, the Consultant may become entitled to receive a portion
or all of the Initial Amount payable in accordance with the payment schedule
and as otherwise set out in Section 2 of this Agreement.
(b) If at any time prior to January 1, 2000, the Final Price Threshold
Date occurs, the Consultant may become entitled to receive a portion or all of
the Final Amount payable in accordance with the payment schedule and as
otherwise set out in Section 3 of this Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS AGREEMENT, THE
FOREGOING CONDITIONAL GRANT SHALL BE SUBJECT TO THE APPROVAL AND RATIFICATION
OF THE APACHE CORPORATION 1996 SHARE PRICE APPRECIATION PLAN (THE "PLAN") BY
THE SHAREHOLDERS OF THE COMPANY. THE FOREGOING CONDITIONAL GRANT SHALL ALSO BE
SUBJECT TO THE APPROVAL AND RATIFICATION BY THE BOARD. UPON THE APPROVALS SET
FORTH ABOVE, THE GRANT SHALL NO LONGER BE CONDITIONED UPON SUCH APPROVAL, BUT
SHALL REMAIN SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN. IN THE
EVENT THAT THE PLAN IS NOT APPROVED AS SET FORTH ABOVE,
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THE GRANT SHALL BE NULL AND VOID, THIS AGREEMENT SHALL TERMINATE WITHOUT
FURTHER LIABILITY OF THE COMPANY AND THE CONSULTANT SHALL HAVE NO FURTHER
RIGHTS HEREUNDER.
2. INITIAL AMOUNT PAYMENT. Subject to the provisions of Section 4 of this
Agreement, the Initial Amount shall be payable in increments strictly in
accordance with the following schedule:
(a) The entitlement to receive the first one-third (1/3) of the Initial
Amount shall vest on the Initial Price Threshold Date and shall be paid by the
Company to the Consultant within thirty (30) days of the Initial Price
Threshold Date in the manner set out in Section 2(c) below.
(b) The entitlement to receive the remainder of the Initial Amount
shall vest and become payable in equal parts on the dates occurring,
respectively, 18 months and 36 months from the Initial Price Threshold Date, as
set forth in Section 2(c) below. If any of the above dates is not a business
day during which the Company is open for business, the date shall be the first
business date occurring immediately thereafter.
(c) Each of the above payments shall be paid in the form of shares of
Stock to be issued to the Consultant. If either of the dates referenced in
2(b) above occurs on or after May 1, 2000, vesting and time of payment shall be
accelerated to as soon after May 1, 2000 as is administratively practicable.
(d) No entitlement shall be payable under this Section 2 if the Initial
Price Threshold Date has not occurred prior to January 1, 2000.
3. FINAL AMOUNT. Subject to the provisions of Section 4 of this
Agreement, the entitlement to receive the Final Amount shall be payable in
increments strictly in accordance with the following schedule:
(a) The entitlement to receive the first one-third (1/3) of the Final
Amount shall vest on the Final Price Threshold Date and shall be paid by the
Company to the Consultant within thirty (30) days of the Final Price Threshold
Date in the manner set out in Section 3(c) below.
(b) The entitlement to receive the remainder of the Final Amount shall
vest and become payable on the dates occurring, respectively, 18 months and 36
months from the Final Price Threshold Date, as set forth in Section 3(c) below.
If any of the aforementioned payment dates is not a business day during which
the Company is open for business, the payment date shall be the first business
date occurring immediately thereafter.
(c) Each of the above payments shall be paid in the form of shares of
Stock to be issued to the Consultant. If either of the dates referenced in
2(b) above occurs on or after
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May 1, 2000, vesting and time of payment shall be accelerated to as soon after
May 1, 2000 as is administratively practicable.
(d) No entitlement shall be payable under this Section 3 if the Final
Price Threshold Date has not occurred prior to January 1, 2000.
4. TERMINATION OF CONSULTING AGREEMENT. Except as set forth below, this
Conditional Grant and the right to receive any payment hereunder shall be
subject to the condition that the Consultant maintains that certain Consulting
Agreement effective August 7, 1996, between Consultant and Company in full
force and effect from the date of this Agreement until the applicable vesting
date as follows:
(a) IF THE CONSULTANT VOLUNTARILY TERMINATES THE CONSULTING AGREEMENT,
OR IF THE CONSULTING AGREEMENT IS TERMINATED BY THE COMPANY FOR CAUSE, WHICH IN
EITHER CASE MAY BE DONE ON 30 DAYS WRITTEN NOTICE, ANY PORTION OF ANY
CONDITIONAL GRANT NOT PREVIOUSLY VESTED IN ACCORDANCE WITH SECTIONS 2 AND 3
SHALL THEREAFTER BE VOID FOR ALL PURPOSES.
(b) IF CONSULTANT DIES, OR IF CONSULTANT BECOMES DISABLED SO THAT
CONSULTANT IS UNABLE TO PERFORM TO THE SATISFACTION OF THE COMPANY THE SERVICES
REQUIRED UNDER THE CONSULTING AGREEMENT, DURING THE TERM OF THE CONSULTING
AGREEMENT, PAYMENT IN STOCK IN ACCORDANCE WITH SECTIONS 2 AND 3, AS APPLICABLE,
SHALL BE MADE TO CONSULTANT OR TO THOSE ENTITLED UNDER CONSULTANT'S WILL OR BY
THE LAWS OF DESCENT AND DISTRIBUTION, PROVIDED THAT THE APPLICABLE PRICE
THRESHOLD DATE OCCURRED PRIOR TO THE EARLIER OF CONSULTANT'S DISABILITY OR
DEATH. IN ANY SUCH EVENT ALL ACCRUED BUT UNVESTED SHARES RELATING TO A
PREVIOUSLY ACHIEVED PRICE THRESHOLD DATE SHALL BE PAID. THERE SHALL BE NO
ENTITLEMENT TO ANY PAYMENT WHICH MAY ARISE DUE TO THE OCCURRENCE OF A PRICE
THRESHOLD DATE AFTER THE EARLIER OF CONSULTANT'S DISABILITY OR DEATH.
5. CERTAIN ADJUSTMENTS. If the Company shall at any time increase or
decrease the number of its outstanding shares of Stock or change in any way the
rights and privileges of such shares by means of 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 (hereinafter a "capital restructuring"), then for purposes
of determining the entitlement to payments under Sections 2 and 3 of this
Agreement, the Initial Amount and Final Amount shall be, in each case,
equitably and, if deemed appropriate, proportionally adjusted to take into
account any capital restructuring. Any adjustment under this Section shall be
made by the Company, whose determination with regard thereto shall be final and
binding upon all parties.
6. REORGANIZATION OR LIQUIDATION. In the event that the Company is merged
or consolidated with another corporation and the Company is not the surviving
corporation, or if all or substantially all of the assets or more than 20
percent of the outstanding Stock of the Company is acquired by any other
corporation, business entity or person, or in case of a reorganization
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(other than a reorganization under the United States Bankruptcy Code) or
liquidation of the Company, and if the provisions of Section 7 hereof do not
apply, the Company, or the board of directors of any corporation assuming the
obligations of the Company, shall, as to the outstanding Conditional Grants
either (i) make appropriate provision for the adoption and continuation of this
Agreement by the acquiring or successor corporation and for the protection of
any outstanding Conditional Grants by the substitution on an equitable basis of
appropriate stock of the Company or of the merged, consolidated or otherwise
reorganized corporation which will be issuable with respect to the Stock,
provided that no additional benefits shall be conferred upon the Consultant
holding this Conditional Grant as a result of such substitution, or (ii)
provided that a Price Threshold Date has occurred, upon written notice to the
Consultants, the Company may accelerate the vesting and payment dates of the
entitlement to Stock under outstanding Conditional Grants so that all such
existing entitlements are paid prior to any such event. In the latter event,
such acceleration shall only apply to entitlements to Stock payable as the
result of the occurrence of the most recent Price Threshold Date and shall not
by such acceleration, deem the occurrence of a Price Threshold Date that has
not occurred by the date of the notice.
7. CHANGE IN CONTROL.
(a) IN GENERAL. In the event of a change in control of the Company as
defined in Section 7(c) hereof, then the Board may, in its sole discretion,
without obtaining Stockholder approval, take any or all of the following
actions assuming the occurrence of a Price Threshold Date: (i) accelerate the
vesting and payment dates of the entitlement to receive Stock under any
outstanding Conditional Grant so that all existing entitlements become fully
payable, which acceleration may be conditional upon the occurrence of
subsequent events including, without limitation, a change in control, and may
be made irrevocable, either conditionally or unconditionally; (ii) pay cash to
Consultant in exchange for the cancellation of Consultant's outstanding
Conditional Grants in an amount equal to the Fair Market Value of the Stock to
which Consultant has a conditional entitlement under such Conditional Grants at
the date of the cancellation of the Conditional Grants; and (iii) make any
other adjustments or amendments to the outstanding Conditional Grants as the
Company deems appropriate.
(b) LIMITATION ON PAYMENTS. If the provisions of this Section 7 would
result in the receipt by any Consultant 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
Consultant would, in the opinion of independent tax counsel of recognized
standing selected by the Company, result in the payment by such Consultant 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
Company, in its sole discretion, may authorize the payment of all or any
portion of the amount of such reduction to the Consultant.
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(c) DEFINITION. For purposes of this Agreement, a "change in control"
shall mean any of the events specified in the Company's Income Continuance Plan
or any successor Plan which constitute a change in control within the meaning
of such Plan.
8. RIGHTS OF CONSULTANT.
(a) RETENTION OF CONSULTANT. Nothing contained in this Agreement shall
confer upon the Consultant any right with respect to the continuation of the
Consulting Agreement with the Company or any Affiliated Corporation, or
interfere in any way with the right of the Company or any Affiliated
Corporation, subject to the terms of the Consulting Agreement to the contrary,
at any time to terminate such Consulting Agreement or to increase or decrease
the level of the Consultant's compensation from the level in existence at the
date of this Agreement.
(b) NONTRANSFERABILITY. No right or interest of the Consultant in this
Conditional Grant shall be assignable by Consultant.
9. GENERAL RESTRICTIONS.
(a) INVESTMENT REPRESENTATIONS. The Company may require the
Consultant, as a condition of receiving shares of Stock issued under this
Conditional Grant, to give written assurances in substance and form
satisfactory to the Company and its counsel to the effect that such person is
acquiring the Stock subject to this Conditional Grant for his own account for
investment and not with any present intention of selling or otherwise
distributing the same, and to such other effects as the Company deems necessary
or appropriate in order to comply with federal and applicable state securities
laws.
(b) COMPLIANCE WITH SECURITIES LAWS. This Conditional Grant shall be
subject to the requirement that, if at any time counsel to the Company shall
determine that the listing, registration or qualification of the shares of
Stock subject to this Conditional Grant upon any securities exchange or under
any state or federal law, or the consent or approval of any governmental or
regulatory body, is necessary as a condition of, or in connection with, the
issuance of shares of Stock thereunder, this Conditional Grant may not be
payable in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained on conditions
acceptable to the Company. Nothing herein shall be deemed to require the
Company to apply for or to obtain such listing, registration, qualification,
consent or approval.
10. REQUIREMENTS OF LAW. The issuance of Stock pursuant to this
Conditional Grant shall be subject to all applicable laws, rules and
regulations. This Conditional Grant Agreement shall be construed in accordance
with and governed by the laws of the State of Texas.
11. EXPIRATION OF THIS AGREEMENT. This Agreement shall terminate and be
of no force or effect if the Initial Price Threshold Date does not occur prior
to January 1, 2000.
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12. MISCELLANEOUS.
(a) NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be given by first class, registered or
certified mail, postage prepaid, or by personal delivery to the appropriate
party, addressed:
(i) If to the Company, to Apache Corporation at its principal
place of business at 0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000-0000 (Attention: Office of the Secretary) or at such other address as
may have been furnished to the Consultant in writing by the Company; or
(ii) If to the Consultant, at the address indicated below the
Consultant's signature, or at such other address as may have been furnished to
the Company by the Consultant.
Any such notice shall be deemed to have been given as of the second day
after deposit in the United States Postal Service, postage prepaid, properly
addressed as set forth above, in the case of mailed notice, or as of the date
delivered in the case of personal delivery.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
APACHE CORPORATION
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Xxxxx X. Xxxxx
Vice President - International Exploration
and Production
CONSULTANT
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Xxxxxx X. Xxxxxxx
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Social Security Number
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Address
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City, State, Zip Code
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