Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 15, 2009, Raymond Plank retired as Chairman of the Board and an
employee of the Company and as a director of the Company. Mr. Plank founded the
Company in 1954 and had served as an officer of the Company since 1954
(President and/or Chief Executive Officer from 1954 to 2002 and Chairman of the
Board since 1979). He had been a director of the Company since 1954. G. Steven
Farris, Apache's president, chief executive officer and chief operating officer
since 2002, succeeds Mr. Plank as chairman.
Also on January 15, 2009, the Company and Mr. Plank entered into an amendment
and restatement (the "New Agreement") of his employment agreement dated
December 5, 1990, as previously amended (the "Old Agreement"). The material
terms and provisions of the New Agreement are as follows. As he had agreed to do
under the Old Agreement, Mr. Plank agreed to provide consulting services to the
Company for the remainder of his life. Under the New Agreement, the Company paid
Mr. Plank a one-time lump sum cash payment of $13,576,323, in lieu of its
obligation under the Old Agreement to pay him annual compensation for the
remainder of his life for such consulting services equal to 50% of his annual
rate of compensation at the time of his retirement as an officer. The Company
also paid Mr. Plank a cash payment of $6,285,819 in respect of his unvested
stock options, SAP grants and restricted stock units, which were cancelled, and
$5,400,000 as a founder's achievement and performance award for 54 years of
service to the Company, guiding it from its founding as a small domestic U.S.
company with initial capital of $250,000 to an international oil and gas company
with an enterprise value at year-end 2008 of approximately $27 billion and
significant assets and operations on five continents. The Company will award
Mr. Plank a cash bonus for 2008 to be determined and paid in February under the
incentive plan for senior officers, in accordance with the usual practices and
procedures of the Management Development & Compensation Committee and the Board
of Directors. In support of the consulting services he is to provide during the
initial two-year period, the Company will provide Mr. Plank with Houston office
space and secretarial support through December 31, 2010, plus continued use of a
Houston apartment and access to a Company car and driver through that date,
consistent with current arrangements. The Company will also provide him up to 60
hours per year of aircraft usage in 2009 and 2010. As provided in the Old
Agreement, the Company will pay $750,000 to Mr. Plank's designee or estate upon
his death and will provide him health, dental and vision benefits during the
remainder of his life. In addition, Mr. Plank agreed not to engage in or have a
financial interest in any business that is competitive to the business of the
Company for the remainder of his life, as provided in the Old Agreement, subject
to de minimis exceptions, and he executed a waiver and release of any potential
compensation or other claims he may have against the Company.
A copy of the agreement dated January 15, 2009 between the Company and
Mr. Plank is filed as an exhibit to this Form 8-K and incorporated herein by
reference.
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