401(k) Savings Plan – Apache Corp.

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
Owner153s 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 Participant153s 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 Participant153s 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 Participant153s 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 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 Participant153s 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 Participant153s 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).

1.6

Catch-Up Contributions

“Catch-Up Contributions” means those contributions made to the Plan by the
Company, at the election of the Participant pursuant to subsection 3.2(b) that
meet the requirements of Code §414(v).

1.7

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.

1.8

Committee

“Committee” means the administrative committee provided for in section 8.4.

1.9

Company

“Company” means Apache, any successor thereto, and any Affiliated Entity that
adopts the Plan pursuant to Article XI. Each Company is listed in Appendix A.

1.10

Company Contributions

“Company Contributions” means all contributions to the Plan made by the
Company pursuant to section 3.1 for the Plan Year.

1.11

Company Discretionary Contributions

“Company Discretionary Contributions” means all contributions to the Plan
made by the Company pursuant to subsection 3.1(a) for the Plan Year.

1.12

Company Matching Contributions

“Company Matching Contributions” means all contributions to the Plan made by
the Company pursuant to subsection 3.1(b) for the Plan Year.

1.13

Company Stock

“Company Stock” means shares of the $0.625 par value common stock of Apache.

1.14

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 Participant153s 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 2¹/2 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 2¹/2 months of his termination, and (C) payments from
an unfunded nonqualified deferred compensation plan (1) that are includible in
the Participant153s gross income (2) that are paid during the Limitation Year in
which the termination occurred or, if later, within 2¹/2 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 Employee153s 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,

(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 Employee153s
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
2¹/2 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 2¹/2 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. An individual is not an Eligible Employee even if
he is on the U.S. payroll if (i) he is neither a U.S. citizen nor U.S. resident,
and (ii) he performs no services for Apache or any Affiliated Entity in the U.S.
(in other words, third country nationals are not Eligible Employees).

(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 Employee153s 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.

1.16

Disability

“Disability” means a physical or mental condition that qualifies the Employee
for long-term disability payments under Apache153s Long-Term Disability Plan.

1.17

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 Participant153s Spouse,
former spouse, child, or other dependent and is made pursuant to a state
domestic relations law (including a community property law).

1.18

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 Non-Highly Compensated Employees of the Company and Affiliated Entities,
then any such individuals who are covered by a qualified plan that is a money
purchase pension plan that provides a nonintegrated employer contribution rate
for each participant of at least 10% of compensation, that provides for full and
immediate vesting, and that provides immediate participation for each employee
of the third party (other than those who perform substantially all of their
services for the third party and other than those whose compensation from the
third party during each of the four preceding plan years was less than $1000)
shall not be considered an Employee.

1.19

ERISA

“ERISA” means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and rulings in effect thereunder from time to time.

1.20

Five-Percent Owner

“Five-Percent Owner” means:

(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 Participant153s gross income under Code §401(k) and
§402(e)(3).

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
17¹/2 (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.

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 Payee153s 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 70¹/2, 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 70¹/2. If an Employee older than 70¹/2 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 Participant153s
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).

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 Participants153 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 Participant153s 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
Participant153s 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

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 Participant153s 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 Apache153s
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

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 Company153s
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 Participant153s
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 Participant153s 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 Participant153s Account
attributable thereto. The Committee may use any reasonable method to allocate
this adjustment.

(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
Participant153s 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 Participant153s 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 Participant153s 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. An individual who has become, or who is expected to shortly
become, a Covered Employee may make an affirmative election to make have amounts
withheld from his Compensation and to have such Participant Contributions
contributed to this Plan; such Participant Contributions shall begin as soon as
administratively practicable after the Participant has satisfied the waiting
period described in subsection 2.1(a). In addition, an individual who becomes a
Covered Employee shall be automatically enrolled in the Plan, and will make
Participant Contributions at 6% of his Compensation, unless he affirmatively
elects otherwise; the Participant shall be provided with a reasonable
opportunity of at least 30 days to select a different rate of Participant
Contribution; the Participant shall be notified in a sufficiently accurate and
comprehensive manner that apprises the Participant of his rights and
obligations, written in a manner calculated to be understood by the Participant,
that explains his right to elect a contribution percentage rate that is not 6%
of Compensation (and that may be 0%), that explains when such automatic
contributions will begin (unless he makes an affirmative election

otherwise), and that explains how such automatic Participant Contributions
and the associated match will be invested. 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 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 Committee153s 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 Participant153s
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 Committee153s procedures may also automatically
increase a Participant153s 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 Employee153s 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

Company153s 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.

(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 Participant153s Account(s) had the contribution not been
made.

3.4

Limitation on Annual Additions.

The Annual Additions to a Participant153s 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 (a) $40,000 (as adjusted for inflation pursuant to Code §415(d)), or
(b) 100% of the Participant153s Compensation. The limit in clause (b) 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.

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 Year153s 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 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 end of the Plan Year for which
the correction is being made.

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 Year153s 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
Year153s 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 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 end of the
Plan Year for which the correction is being made.

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 Employee153s 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. Under Treasury Regulation
§1.401(k)-2(a)(6)(iv) or §1.401(m)-2(a)(5)(ii), the maximum QNEC allocation, for
this Plan, is generally 5% of the Non-Highly Compensated Employee153s
Compensation.

(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 Employee153s 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 (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. Under Treasury Regulation
§1.401(k)-2(a)(6)(iv) or §1.401(m)-2(a)(5)(ii), the maximum QMAC allocation, for
this Plan, is generally 5% of the Non-Highly Compensated Employee153s
Compensation.

(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

Participants153 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).

(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 Participant153s 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, partnerships, or corporations acting in concert with each person,
partnership, or corporation, or any or all of them, acquires more than 20% of
Apache153s outstanding voting securities; provided that a change of control shall
not occur if such persons, partnerships, or corporations acquiring more than 20%
of Apache153s voting securities is solicited to do so by Apache153s board of
directors, upon its own initiative, and such persons, partnerships, or
corporations have not previously proposed to acquire more than 20% of Apache153s
voting securities in an unsolicited offer made either to Apache153s 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 Participant153s Periods of Service.

(c)

Vesting of Old Account. If the Participant153s 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 Participant153s Period
of Service from his first episode of employment. If the Participant153s 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 Participant153s 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 Participant153s 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
Participant153s 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 Apache153s or an Affiliated Entity153s,
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.

(D)

Corporate Transactions. See Appendix C for instances in which a new
Employee153s 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 Employee153s 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 individual153s 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 Participant153s Accounts
and any increase or decrease in the net worth of the Participant153s 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 individual153s 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 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 Participant153s 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 individual153s
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
Participant153s 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 Participant153s
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 Participant153s 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 Owner153s 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 Participant153s 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
Owner153s 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 Spouse153s 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
Participant153s or beneficiary153s 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 Owner153s 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 amount), as
explained in subsection 13.9, when the Committee is informed that a Domestic
Relations Order affecting the Participant153s 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
70¹/2 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
59¹/2 or Older. An Employee who has
attained age 59¹/2 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 Employee153s 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 Employee153s Spouse. the Employee153s
children, the Employee153s dependents (within the meaning of Code §152, without
regard to Code §152(b)(1), §152(b)(2), and §152(d)(1)(B)), or the Employee153s
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 Employee153s
principal residence from being foreclosed; (F) payment of burial or funeral
expenses for the Employee153s 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 Employee153s 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 Employee153s financial need if (A) the Employee has obtained all withdrawals
and all non-taxable loans available from the Company153s and any Affiliated
Entities153 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 59¹/2.

(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 70¹/2 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 Participant153s 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 Employee153s 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 Participant153s 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
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 Participant153s 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 Participant153s 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
Participant153s Accounts on an occasional (rather than a daily) basis, to
determine whether to apply the provisions of this subsection.

(d)

Distribution Upon Participant153s Death.

(i)

Small Accounts. If the aggregate cash value of the nonforfeitable
portion of a Participant153s Accounts is $5,000 or less at any time after the
Participant153s 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 Participant153s
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 Participant153s death,
within the following guidelines. No distribution shall be processed until the
beneficiary153s 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 Participant153s 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 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), 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.

(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
beneficiary153s 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 Participant153s 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 Participant153s
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

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
Participant153s 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 Borrower153s 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 Borrower153s 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
Borrower153s 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 Participant153s 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.

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 Borrower153s Plan accounts toward payment of the loan; however, the Trustee
may not exercise such right of set-off with respect to the Borrower153s
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.

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 Employee153s
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 Plan153s “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.

Apache153s Vice President, General Counsel, and Secretary shall be the agents
of the Plan for service of all process.

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 Trustee153s 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 individual153s 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 Owner153s 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 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 Participant153s 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 Owner153s 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).

(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 Owner153s Accounts.

(c)

Procedure. Each amendment shall be in writing. Each amendment shall be
approved by Apache153s 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.

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 Participant153s 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 Owner153s
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 Owner153s Accounts to the
disaffiliating or withdrawing entity153s 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 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 Participant153s “account balance” shall equal the
present value of the Participant153s 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
Participant153s 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 Employee153s 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 Participant153s 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 Employee153s
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 Participant153s accrued benefit occurs as a result of such change in
top-heavy status, the nonforfeitable portion of each Participant153s 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.

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 claimant153s
legal representative, once the Plan is provided with documentation of such
representation. If the claimant is a minor child, the Plan shall recognize the
claimant153s parent or guardian as the claimant153s 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 Plan153s 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 Plan153s 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 claimant153s 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
claimant153s 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 Plan153s 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 claimant153s 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.

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 Participant153s 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 Employee153s 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 Participant153s 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 Participant153s 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 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 Plan153s 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 Plan153s 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 Plan153s 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
Payee153s Account (ignoring any portion of the Participant153s 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 Payee153s 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 Participant153s Required Beginning Date (unless the order is
determined to be a QDRO after the Participant153s 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 Payee153s 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 Participant153s 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
(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 Participant153s 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 Participant153s Spouse must have already waived his right to a qualified
preretirement survivor annuity and a qualified joint and survivor annuity or the
Participant153s 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
Participant153s 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 Participant153s 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 Spouse153s 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 Participant153s
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 Participant153s 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 minor153s 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 individual153s 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.

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 Company153s 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
Owner153s 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.

(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 Apache153s 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 Owners153 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 Owner153s
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 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
Owner153s 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 Owner153s Accounts
under the Plan, (ii) each Account Owner153s pro rata portion of any unallocated
Company Stock, and (iii) each Account Owner153s 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 Apache153s 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 Owner153s directions to the Trustee.

(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.

(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.