Other definitive proxy statements – Form DEF 14A

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FROM OUR

Dear Fellow Shareholders,

On behalf of the entire Board, I thank you for your continued support and investment in Apache Corporation and its new parent company, APA Corporation. As your Board, we seek to achieve sustainable shareholder value by executing against a clear and focused strategy, using prudent risk management, sound corporate governance, aligned executive compensation programs, and environmental and social responsibility initiatives.

We would like to highlight a few areas of particular significance for the Board this past year:

Business & Strategy. While 2020 macroeconomic conditions were challenging, our strategic approach to creating shareholder value remains unchanged. We are prioritizing long-term returns over growth, focusing on cash flow generation, strengthening our balance sheet through debt reduction, and advancing a large-scale opportunity in Suriname. We are allocating capital to the best return opportunities across our diversified portfolio, while aggressively managing our cost structure. In response to the significant oil demand and price dislocation in early 2020, the following key actions were taken to manage cash flow and preserve liquidity:

•  Reduced 2020 upstream capital investment to approximately $1.0 billion, a roughly 58 percent decrease from 2019

•  Decreased the Company’s dividend by 90 percent beginning the first quarter of 2020

•  Implemented deeper cost cutting measures and more than doubled our estimated annual savings from $150 million to over $400 million

•  Initiated a debt buy-back program at prices below par and executed a successful bond offering, at rates below our weighted average coupon, that significantly increased near-term liquidity

•  Entered into protective near-term hedges

•  Initiated a methodical curtailment / shut-in program

Covid-19 Response. In addition to the decisive business and strategic actions, APA acted quickly to prioritize our employees’ health and safety, while also working to ensure business continuity. Key actions taken by the Company included:

•  Closing all U.S. corporate offices with minimal business disruption as the Company switched to a work-from-home environment

•  Implementing new operational protocols to ensure employee safety in the field, including increased cleaning measures

•  Helping our communities by donating PPE and critical medical equipment to hospitals and first responders

Engaging with Shareholders. We continue to place a high value on incorporating direct feedback from our shareholders into our corporate governance and executive compensation practices. Our efforts ensure that we remain focused on best practices in corporate governance, while maintaining a compensation program that continues to demonstrate pay for performance, ensures clear connections to our strategic goals, and reflects the views of our shareholders. This past year, our discussions also extended to include our response to the Covid-19 pandemic, human capital management with a focus on diversity and inclusion, and environmental risk oversight. I was pleased to meet and speak directly with many of our investors, while our management team engaged with many more. In all, we reached out to shareholders representing approximately 68 percent of our outstanding shares.

Environmental & Social Stewardship. We understand that the future success of our Company hinges upon our ability to help meet the world’s energy needs in ways that are innovative, safe, environmentally responsible, and profitable — for the long-term benefit of all our stakeholders. Protecting the environment is a key part of our mission to be the premier exploration and production company and is a core focus of our efforts. Our Board has an active role in the oversight of sustainability matters. In 2020, we linked environment, social, and governance (ESG) performance to compensation for employees, building on our previous action to tie health, safety, security, and environmental performance-related items to compensation incentives for senior managers and executives. For employees, 20 percent of annual incentive compensation is now tied to ESG goals. We are also focused on increasing transparency around our practices, and recently initiated alignment of our disclosures with Sustainability Accounting Standards Board (SASB) and Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

Diversity & Inclusion (D&I). Fostering a diverse and inclusive environment has long been a priority for APA. It is essential for our workforce to be representative of the global community in which we operate, and we believe that diversity is vital to our long-term success. Over the past five years, we have increased our U.S. ethnic minority population by 22 percent and our U.S. female science, technology, engineering, and mathematics (STEM) employee headcount by 26 percent.

This year has brought increased discussion of the issue of diversity and inclusion. While we are very proud of our efforts to date, we know we have more work to do and can do better. APA has shown its continued pledge to D&I by implementing a number of initiatives in 2020, such as:

•   Partnering with a prominent D&I consultant to advise on APA’s overall strategy

•   Evaluating recruiting, talent management, learning, and benefits processes to optimize D&I, including hiring a dedicated D&I lead

•   Offering diversity conscious inclusion and unconscious bias training

•   Partnering with U.S. business schools to provide business instruction and leadership training to rising diverse STEM leaders

As APA’s transformation progresses, our Board continues to value the feedback and support from our shareholders. Our Board looks forward to continuing the dialogue with you, and we value the trust you place in us through your investment in APA Corporation.

Sincerely,

John E. Lowe

Chairman of the Board

APA Corporation

April 13, 2021

FROM OUR

Dear Fellow Shareholders,

As the independent Management Development and Compensation Committee (MD&C Committee) of APA Corporation (the Company), our most important mandate is to structure our executive compensation programs to create close alignment with our shareholders’ interests, while continuing to attract and retain talented executives to execute the Company’s strategy and create long-term value.

Shareholder Feedback

Over the past few years, we have introduced significant improvements to our compensation practices based on shareholder feedback. These enhancements were received positively and led to our Say-on-Pay proposals receiving support from 95 percent and 92 percent of our shareholders who voted on the proposals at our 2019 and 2020 annual meetings, respectively.

We maintained our robust shareholder engagement program and, in the fall of 2020, reached out directly to shareholders representing approximately 68 percent of shares outstanding to discuss, amongst other topics, our compensation practices, particularly in light of the Covid-19 pandemic and the macro headwinds our industry has faced. Shareholders owning approximately 50 percent of shares outstanding either met with us in engagement meetings, attended our ESG event with our CEO and President, or told us no meeting was necessary this year. Our Board, including our Chairman, along with certain members of the management team were available for these discussions based on the preference of the particular shareholder.

Response to Covid-19

As the committee that oversees human capital matters, the health and safety of our personnel has been our top priority. In 2020, the Company moved quickly to implement a wide range of fit-for-purpose protocols to ensure a safe and productive work environment in both our onshore and offshore operations. Our Board has been fully engaged on our Covid-19 response plans and receives regular updates from management. Thankfully, we have experienced a relatively small number of Covid-19 cases and have incurred no material operational disruptions beyond our intentional production curtailments. We are prepared to be flexible with our work model for as long as necessary. Since the onset of the pandemic, we have been listening and responding to the specific needs of the communities in which we work and live, and the Company has donated PPE and critical medical equipment to hospitals and first responders as well as supporting food banks, long distance learning initiatives, and shelters for women and children. We continue to actively monitor Covid-19 in all of our operating areas, including areas with office locations, and we plan to implement a phased return-to-office approach for each area once the situation is deemed safe.

Annual Incentive Compensation Plan

For 2020, the MD&C Committee enacted enhancements to the annual incentive compensation plan, including:

•  Simplifying the plan by reducing the number of metrics by 50 percent

•  Placing greater emphasis on generating free cash flow (FCF) by introducing a FCF metric

•  Adding new ESG-focused goals, bringing the total weight of ESG-focused goals to 20 percent (up from 10 percent)

•  Eliminating the production growth target to better align incentives with shareholder return outcomes

The enhancements remained in effect for the full year.

In light of the ongoing Covid-19 pandemic and historic market volatility impacting the oil and gas industry, the MD&C Committee modified the annual incentive metrics and weightings, effective solely for the second half of 2020, to incentivize cost savings, increased liquidity, and adoption of our new operating model.

Long-Term Incentive Compensation Plan

Importantly, we continue to hold our executives accountable to the challenging targets previously set — no changes were made to the long-term incentive compensation plans as a result of the Covid-19 pandemic or market conditions.

In 2020, the MD&C Committee enacted certain enhancements, which remain in effect, including:

•  Increasing the weighting of performance shares for the CEO and President

•  Eliminating RSUs tied to Altus Midstream

•  Adding the S&P 500 Index as one of the TSR performance peers — This action was taken because the MD&C Committee believes that the Company should be measured against the broader market as well as its direct peers. The MD&C Committee also received shareholder feedback on this topic that confirmed its view and is increasing the weighting to 2 peers for 2021.

Other Compensation Program Changes

This year, in response to the current market and to more closely align pay to shareholder experience, the Committee reduced the target compensation for our CEO and President by 10 percent in 2020. This follows the increase in holding requirements from 6 times to 10 times base salary that was put in place in 2019.

The MD&C Committee is dedicated to ensuring that our compensation programs motivate long-term value creation. We believe the changes to our compensation programs help advance that prime objective. Taking into account shareholder feedback, we assess changes, and indeed all elements of the program, in the context of the Company’s strategic objectives to:

•  Operate in a safe and environmentally responsible manner

•  Deliver attractive risk-adjusted returns and improve FCF yield while maintaining capital discipline

•  Return value to shareholders in the form of dividend payments, share repurchases, and debt reduction

•  Maintain a balanced portfolio, including organic exploration

•  Employ leading technology strategies and progress sustainability initiatives

Our goal is to ensure that our compensation programs align with our shareholders’ interests. We understand that the future success of our Company hinges upon our ability to help meet the world’s energy needs in ways that are innovative, safe, environmentally responsible, and profitable — for the long-term benefit of all our stakeholders. To drive continuous improvement in environmental, health, and safety (EH&S) activities, we establish annual, companywide EH&S performance goals as a component of incentive compensation plans for all employees, from the field to the executive suite. As noted above, for our 2020 annual incentive compensation plan, we added new ESG-focused goals to bring the total weight to 20 percent. This included a goal relating to greenhouse gas emissions, freshwater use, natural gas flaring, the United Nations’ Sustainable Development Goals, and workforce training. This goal is in addition to a health and safety goal weighted at 10 percent, giving ESG-focused goals a combined weighting of 20 percent.

We look forward to your continuous feedback as we strive to position our Company as a recognized leader with respect to compensation practices.

Sincerely,

Members of the MD&C Committee

William C. Montgomery, Chair

Annell R. Bay

Juliet S. Ellis

Rene R. Joyce

H. Lamar McKay

April 13, 2021

Notice of

Annual Meeting of Shareholders

Thursday, May 27, 2021

10:00 a.m. (Central time)

Online Registration Required in Advance at www.proxydocs.com/APA

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 27, 2021:

This proxy statement and the Annual Report on Form 10-K of Apache Corporation (the Company’s predecessor registrant) for the fiscal year ended December 31, 2020 are available free of charge at: www.proxydocs.com/APA

The 2021 annual meeting of shareholders of APA Corporation, a Delaware corporation (the Company), will be held on Thursday, May 27, 2021, at 10:00 a.m. (Central time), via an online webcast, with registration required in advance at www.proxydocs.com/APA, for the following purposes:

1.  Election of the ten directors named in the attached proxy statement to serve until the Company’s annual meeting in 2022;

2.  Ratification of appointment of Ernst & Young LLP as the Company’s independent auditor for fiscal year 2021;

3.  Advisory vote to approve the compensation of the Company’s named executive officers;

4.  Approval of an amendment to the Amended and Restated Certificate of Incorporation of Apache Corporation (Apache), the Company’s wholly-owned subsidiary, to eliminate the recently-added pass-through voting provision that requires approval by both the Company and the Company’s shareholders prior to certain actions being taken by or at Apache; and

5.  Transaction of any other business that may properly come before the meeting or any adjournment thereof.

Holders of record of the Company’s common stock as of the close of business on March 29, 2021, are entitled to notice of, and to vote at, the annual meeting. As of March 1, 2021, the Company became the successor issuer to and parent holding company of Apache, pursuant to a holding company reorganization in which all of Apache’s outstanding shares were automatically converted into equivalent corresponding shares of the Company.

Due to the ongoing public health risks and safety concerns related to the Covid-19 pandemic, this annual meeting of shareholders will be held in a virtual-only format. Shareholders will not be able to attend the meeting in person. For details on accessing the virtual meeting, please refer to the section titled How to Register for and Access the Virtual Meeting beginning on page 59 of this proxy statement.

Your vote is important. Whether or not you plan to access the virtual meeting, we encourage you to vote as soon as possible. For specific instructions on how to vote your shares, please refer to the instructions on the Notice of Internet Availability of Proxy Materials you received in the mail, the section titled How to Vote beginning on page 60 of this proxy statement, or, if you requested to receive printed proxy materials, your enclosed proxy card.

By order of the Board of Directors,

Rajesh Sharma

Corporate Secretary

APA Corporation

Houston, Texas

April 13, 2021

Table of Contents

Proxy Statement

Proposals 1-10: election of directors;

Proposal 11: ratification of appointment of Ernst & Young LLP (EY) as the Company’s independent auditor;

Proposal 12: advisory vote to approve the compensation of the Company’s named executive officers (NEOs);

Proposal 13: approval of an amendment to the Amended and Restated Certificate of Incorporation of Apache, the Company’s wholly-owned subsidiary, to eliminate the recently-added pass-through voting provision that requires approval by both the Company and the Company’s shareholders prior to certain actions being taken by or at Apache (the Apache Charter Amendment); and

Transaction of any other business that properly comes before the meeting. As of the date of this proxy statement, the Company is not aware of any other business to come before the meeting.

 FOR

Proposals 1-10: election of directors

 FOR

Proposal 11: ratification of appointment of EY as the Company’s independent auditor

 FOR

Proposal 12: advisory vote to approve the compensation of the Company’s NEOs

 FOR

Proposal 13: approval of the Apache Charter Amendment

Director Nominees

CEO/Senior
Officer
Experience

Financial
Reporting
Experience

Industry

Experience

Global

Experience

Environmental/
Regulatory
Experience

Other Public
Company
Board
Experience

Annell R. Bay

●

●

●

●

●

John J. Christmann IV

●

●

●

●

●

Juliet S. Ellis

●

●

●

●

●

Chansoo Joung

●

●

●

●

John E. Lowe

●

●

●

●

●

●

H. Lamar McKay

●

●

●

●

●

●

William C. Montgomery

●

●

●

●

Amy H. Nelson

●

●

●

●

Daniel W. Rabun

●

●

●

●

●

●

Peter A. Ragauss

●

●

●

●

●

Percentage of Board

Independence

ANNELL R. BAY, 65, joined the Company’s Board of Directors in May 2014. She chairs the Corporate Governance and Nominating Committee and is a member of the Management Development and Compensation Committee.

From July 2011 to April 2014, Ms. Bay served as vice president, Global Exploration, of Marathon Oil Corporation, having previously held the position of senior vice president, Exploration, since June 2008.

Prior to joining Marathon, Ms. Bay served as vice president, Americas Exploration of Shell Exploration and Production Company from 2004 to 2008.

Prior to joining Shell, Ms. Bay was vice president, Worldwide Exploration, and vice president, North America Exploration, of Kerr-McGee Oil and Gas Corporation, having been with Oryx Energy prior to its merger with Kerr-McGee.

Ms. Bay serves as a director of Hunting PLC, a London-based energy service provider, and Verisk Analytics, Inc., a global data analytics provider. She also serves on the advisory boards for the Jackson School of Geosciences at the University of Texas at Austin and the Independent Petroleum Association of America Energy Education Center, and she is a Trustee at Trinity University in San Antonio, Texas.

With her extensive executive experience in the oil and gas industry, and as a result of her service on the advisory boards of educational and industry organizations, Ms. Bay brings to the Board a wealth of oil and gas exploration and operations, civic, and educational experience.

As a member of public company boards in two countries having significantly different governance regulatory regimes, Ms. Bay also brings unique governance skills and experience to the Board. She is a highly regarded speaker at major governance events on both sides of the Atlantic.

She has hosted individual and small group meetings with large and environmental, social, and governance (ESG) focused shareholders. As chair of the CG&N Committee, she has overseen the updating of the Company’s governance principles and the adoption of a committee calendar formalizing oversight of key ESG subjects.

JOHN J. CHRISTMANN IV, 54, was appointed the Company’s chief executive officer and president, and joined the Company’s Board of Directors effective January 20, 2015.

Mr. Christmann previously served as the Company’s executive vice president and chief operating officer, North America, since January 2014.

From January 2010 through December 2013, he served as region vice president, Permian Region. From January 2004 through December 2009, he served as vice president, Business Development, and from April through December 2003, he served as production manager for the Gulf Coast Region. Prior to that, Mr. Christmann held various positions of increasing responsibility in the business development area since joining the Company in 1997.

Previously, Mr. Christmann was employed by Vastar Resources/ARCO Oil and Gas Company in business development, crude oil marketing, and various production, operational, and reservoir engineering assignments.

Mr. Christmann received his bachelor’s degree in petroleum engineering from the Colorado School of Mines and Master of Business Administration from Southern Methodist University.

With over 32 years in the oil and gas industry, including over 23 years at the Company leading both operational and staff functions and most recently serving as chief executive officer, Mr. Christmann has the proficiency and depth to manage and operate a large-scale oil and gas exploration and production company.

Mr. Christmann’s extensive experience in the oil and gas industry has provided him with an in-depth understanding of successful execution and operational management in the field, an appreciation and talent for value-added merger and acquisition activity, and the expertise to oversee the strategic direction of a large, publicly traded company.

His experience, coupled with his thorough knowledge and understanding of the Company’s assets and unique operations, complement Mr. Christmann’s management strengths and enable him to lead the Company through the complexities of day-to-day operations as well as the macroeconomic impact of commodity prices.

JULIET S. ELLIS, 62, joined the Company’s Board of Directors in May 2019. She is a member of the Corporate Governance and Nominating Committee and the Management Development and Compensation Committee.

Ms. Ellis served as a managing director and senior portfolio manager for Invesco Ltd. (Invesco) and as the chief investment officer for Invesco’s US Growth Equities Investment Management Unit until her retirement in March 2019. Ms. Ellis was senior portfolio manager for Invesco’s Small Cap Growth Fund and Small Cap Equity Fund between 2004 and 2017. Ms. Ellis has over 32 years of experience in the institutional investment management industry and has been a Chartered Financial Analyst (CFA) since 1990.

Prior to joining Invesco in 2004, Ms. Ellis was employed by JPMorgan Chase & Co. (JPMorgan), including its predecessor, Fleming Asset Management, where she held increasingly senior positions, starting from an equity analyst position in 1987 to a senior portfolio manager in 1993 and a managing director in 2000, where she served as senior portfolio manager of JPMorgan’s small-cap equity and small-cap growth strategies. She began her investment career in 1981 with Merrill Lynch.

Ms. Ellis has been a member of the Board of Directors for Donnelley Financial Solutions, Inc. since 2018 and serves on its Compensation committee and its Governance committee. Ms. Ellis is a member of the Board of Directors for nonprofit Houston Methodist Hospital system and serves as the Chair of its Finance committee and serves on the Compensation committee. She is a member of Women Corporate Directors (WCD).

Ms. Ellis brings a variety of financial and executive experiences and perspectives to the Board. Her extensive experience in portfolio management, strategy, and risk oversight, along with her institutional-investor perspective, will enhance her contributions to the Board.

CHANSOO JOUNG, 61, joined the Company’s Board of Directors in February 2011. He chairs the Audit Committee and is a member of the Corporate Governance and Nominating Committee.

From 2005 to 2015, Mr. Joung was a partner and then senior advisor at Warburg Pincus LLC. He was responsible for making and monitoring investments in all sectors of the energy industry, including upstream, gas and gas liquids processing and transportation, and electric power. He was also responsible for global coordination of the firm’s renewables activities, including wind, solar, biofuels, and grid storage.

From 1987 to 2004, Mr. Joung was employed by Goldman Sachs where he held increasingly senior positions, culminating his 17-year career as head of the Americas Natural Resources Group in the investment banking division. His other leadership responsibilities in the investment banking division included stints as co-head of recruiting and co-head of women’s and diversity recruitment and development.

Mr. Joung has been a member of the board of directors of the general partner of Magellan Midstream Partners, L.P. since May 2019 and serves on its compensation committee and nominating and governance committee. He is also an advisory director on the advisory board of Pickering Energy Partners LP.

Prior to joining the Company’s Board, Mr. Joung served as a director on two other NYSE-listed company boards: Targa Resources Partners LP from 2007 to 2011, and Targa Resources Corporation from 2010 to 2011. He also served as a director on a number of private company boards during his tenure at Warburg Pincus.

Mr. Joung has spent almost his entire career in the finance industry working with energy companies. Through his experiences in private equity and as an investment banker, Mr. Joung gained significant experience with energy companies, the energy industry, and energy-related capital markets and mergers and acquisitions activity, which enhance his contributions to the Board. Those experiences have also given Mr. Joung the ability to identify, assess, and manage risk that can affect a large energy company like the Company.

JOHN E. LOWE, 62, joined the Company’s Board of Directors in July 2013 and became non-executive chairman as of May 2, 2015.

Mr. Lowe enjoyed a 30-year career with ConocoPhillips and Phillips Petroleum Company, serving in positions of increasing responsibility during that time. Most recently, he served as assistant to the chief executive officer of ConocoPhillips, a position he held from 2008 until Phillips 66 was spun off from ConocoPhillips in 2012.

Previously, Mr. Lowe held a series of executive positions in the exploration and production, commercial, and planning areas of ConocoPhillips, including executive vice president, exploration and production from 2007 to 2008; executive vice president, commercial from 2006 to 2007; and executive vice president, planning, strategy, and corporate affairs from 2002 to 2006, with his responsibilities including government relations, public affairs, and corporate technology.

Mr. Lowe is a member of the board of directors for Phillips 66, Houston, Texas, and TC Energy Corporation, Calgary, Alberta. He is a senior executive advisor to Tudor, Pickering, Holt & Co. He is a former board member of Agrium Inc., Chevron Phillips Chemical Co. LLC, DCP Midstream LLC, and DCP Midstream GP LLC, the general partner of DCP Midstream Partners LP.

With over 30 years of experience in the oil and gas industry, and as an executive of ConocoPhillips, a director of Phillips 66, a director of TC Energy, a senior executive advisor to Tudor, Pickering, Holt & Co., and a former director of Agrium, Chevron Phillips Chemical Co. LLC, DCP Midstream LLC, and DCP Midstream GP, Mr. Lowe brings valuable experience to the Board, including experience identifying, assessing, and minimizing risks faced by oil and gas companies.

H. LAMAR MCKAY, 62, joined the Company’s Board of Directors in February 2021. He is a member of the Management Development and Compensation Committee.

Mr. McKay served as the chief transition officer of BP p.l.c. (BP) from October 2019 until his retirement in December 2020. He previously served as BP’s deputy chief executive officer since February 2016. Prior to that role, from January 2013, Mr. McKay was the chief executive of BP’s worldwide upstream business. Mr. McKay was also chairman and president of BP America, Inc. and executive vice president of BP since January 2009. He began his career in 1980 with Amoco (now BP), and held leadership positions of increasing responsibility throughout his career, including as a general manager, business unit leader, head of strategy, group vice president, senior vice president, and executive vice president.

Mr. McKay is a member of the board of directors of CRH plc, Dublin, Ireland.

Mr. McKay spent his career at a major international oil and gas company. His extensive experience and global perspective will assist the Board in the assessment and management of risks faced by natural gas and oil companies.

WILLIAM C. MONTGOMERY, 59, joined the Company’s Board of Directors in September 2011. He chairs the Management Development and Compensation Committee.

From October 2002 to April 2011, Mr. Montgomery was a partner in the investment banking division of Goldman, Sachs & Co., where he headed the firm’s Americas Natural Resources Group as well as its Houston office and was a member of the Investment Banking Services Leadership Group. Over the span of 22 years as an investment banker, Mr. Montgomery focused globally on large-cap energy companies, primarily in the upstream, integrated, and oil service sectors.

Since July 2011, Mr. Montgomery has served as a partner of Quantum Energy Partners, a private equity firm that focuses on investments in the energy and power industries. He is a member of Quantum Energy’s executive and investment committees. In October 2015, Mr. Montgomery was elected a director of Enterprise Products Holdings LLC, the general partner of Enterprise Products Partners L.P., where he is the chair of its audit committee and serves on its conflicts committee.

Mr. Montgomery has been an active civic leader, chairing the boards of the Houston Museum of Natural Science and the St. Francis Episcopal Day School. He currently serves on the board of trustees of the Episcopal Health Foundation and the Board of Visitors of the MD Anderson Cancer Center.

Mr. Montgomery has spent almost his entire career working in the finance industry focusing on large-cap energy companies. Formerly as an investment banker and now in private equity, Mr. Montgomery has gained significant experience with the energy industry and energy-related capital markets. The company also benefits from the extensive relationships that Mr. Montgomery has formed throughout his career serving various global energy companies. Mr. Montgomery’s contributions to the Board are aided by the knowledge and experience he gained from his current and former roles, which have involved broad and deep exposure to key issues impacting the upstream, midstream, and oil services sectors.

AMY H. NELSON, 52, joined the Company’s Board of Directors in February 2014. She is a member of the Audit Committee and the Corporate Governance and Nominating Committee.

Ms. Nelson is the president of Greenridge Advisors, LLC, which she founded in 2007 as an energy services and equipment consulting firm focused on the development, execution, and financing of growth strategies. Ms. Nelson advises her clients on strategy development, capital allocation, acquisition evaluation, and infrastructure development. Her clients span a broad range of oilfield service, product, and geographic markets.

From 2000 to 2007, Ms. Nelson served as a vice president of SCF Partners, an oilfield service and equipment-focused private equity firm, where she concentrated on investment strategy, investment execution, and portfolio company management.

Ms. Nelson was elected a director of NexTier Oilfield Solutions Inc. effective July 2019 and Helix Energy Solutions Group, Inc. effective August 2019. She also served on several private company boards during her tenure at SCF Partners and Greenridge Advisors. Since 2018, Ms. Nelson has served on the NACD TriCities Chapter Board of Directors.

From 1992 to 1998, Ms. Nelson worked for Amoco Production Company in planning, project management, and engineering roles.

Ms. Nelson has devoted her career to serving companies in the oil and gas industry. Ms. Nelson’s experiences have provided her with valuable insight into corporate strategy, capital allocation, and the assessment and management of risks faced by oil and gas companies.

Over the past decade, Ms. Nelson has also developed substantial water-related expertise in unconventional field development water cycle, including treatment technologies, water delivery and take-away temporary and permanent infrastructure, frac-water sources, containment and salt water disposal, management of access rights to ground, surface, industrial, and municipal water sources, and management of regulatory and compliance issues. Ms. Nelson’s understanding of this important environmental subject enhances her contributions to the Board.

DANIEL W. RABUN, 66, joined the Company’s Board of Directors in May 2015. He is a member of the Audit Committee and the Corporate Governance and Nominating Committee.

From 2007 to his retirement in May 2015, Mr. Rabun served as the chairman of Ensco plc, an offshore drilling services company, based in London. He retired as president and chief executive officer of Ensco in June 2014, having held the office of chief executive officer for more than seven years and president for more than eight years.

From 1986 through 2005, prior to joining Ensco, Mr. Rabun was a partner with the international law firm of Baker & McKenzie LLP, where he provided legal advice to oil and gas companies.

Mr. Rabun is a non-executive director of Golar LNG Ltd. and the Chairman of the Board of ChampionX Corporation. During 2012, he served as chairman of the International Association of Drilling Contractors. Mr. Rabun has also been a Certified Public Accountant since 1976.

Mr. Rabun brings a variety of experiences to our Board, including service as chairman of the board, president, and chief executive officer of Ensco. During Mr. Rabun’s term at Ensco, Ensco drilled some of the most complex wells for super majors, national oil companies, and independent operators in nearly every strategic oil and gas area in the world, from the North Sea to the “golden triangle” of the Gulf of Mexico, Brazil, and West Africa, and from the Middle East and the Mediterranean to Asia and Australia. Mr. Rabun’s experience as non-executive director of Golar LNG Ltd. gives him invaluable insight into the global liquid natural gas business, which will be beneficial to the corporation in its efforts to market natural gas. In addition, Mr. Rabun’s experience as chairman of the board of ChampionX Corporation gives him good insight into new technologies used to drill and produce oil and gas.

Mr. Rabun’s international experience, global perspective, experience with strategic acquisitions, and financial acumen from having served as a public company’s chairman, president, and chief executive officer assist the Board in the assessment and management of risks faced by oil and gas companies.

PETER A. RAGAUSS, 63, joined the Company’s Board of Directors in December 2014. He is a member of the Audit Committee.

In November 2014, Mr. Ragauss retired from Baker Hughes after serving eight years as senior vice president and chief financial officer.

From 2003 to 2006, prior to joining Baker Hughes, Mr. Ragauss was controller, Refining and Marketing, for BP p.l.c. From 2000 to 2003, he was chief executive officer for Air BP. From 1998 to 2000, he was assistant to group chief executive for BP Amoco. He was vice president of Finance and Portfolio Management for Amoco Energy International when Amoco Corporation merged with BP.

From 1996 to 1998, Mr. Ragauss served as vice president of Finance for El Paso Energy International. He held positions of increasing responsibility at Tenneco Inc. from 1993 to 1996, and Kidder, Peabody & Co. Incorporated from 1987 to 1993.

Mr. Ragauss was elected a director of The Williams Companies, Inc. in September 2016.

Mr. Ragauss brings a wealth of accounting, financial, and executive experience to the Board, having held senior positions, including as chief executive officer, chief financial officer, controller, and vice president of finance. His wide and varied experiences in the oil and gas industry, including in the area of finance, have provided him with a unique understanding and insight concerning the risks faced by oil and gas companies.

Name

Board

Audit

CG&N

MD&C

Annell R. Bay

●

Chair

●

John J. Christmann IV, CEO & President

●

Juliet S. Ellis

●

●

●

Chansoo Joung

●

Chair

●

Rene R. Joyce⁽¹⁾

●

●

John E. Lowe, Non-Executive Chairman

Chair

H. Lamar McKay⁽²⁾

●

●

William C. Montgomery

●

Chair

Amy H. Nelson

●

●

●

Daniel W. Rabun

●

●

●

Peter A. Ragauss

●

●

Number of Meetings in 2020

On February 4, 2021, Mr. Joyce notified the Board of his intention not to stand for re-election at the 2021 annual meeting of shareholders.

On February 4, 2021, Mr. McKay was elected to the Board, and he therefore did not attend any Board or committee meetings during 2020.

Board and Committee Evaluations

Expertise and perspective needed to govern the business and strengthen and support senior management; for example: strong financial expertise, knowledge of international operations, or knowledge of the petroleum industry and/or related industries;

Sound business judgment and a sufficiently broad perspective to make meaningful contributions;

Interest and enthusiasm in the Company and a commitment to become involved in its future;

The time and energy to meet Board commitments;

Ability to constructively participate in discussions, with the capacity to quickly understand and evaluate complex and diverse issues;

Dedication to the highest ethical standards;

Dedication to the highest health, safety, and environmental standards;

Supportive of management, but independent, objective, and willing to question and challenge both openly and in private exchanges; and

An awareness of the dynamics of change and a willingness to anticipate and explore opportunities.

Name⁽¹⁾

(a)

Fees
Earned
or Paid
in Cash

($)

(b)

Stock
Awards⁽²⁾

($)

(c)

Option
Awards

($)

(d)

Non-Equity
Incentive  Plan
Compensation

($)

(e)

Change in Pension Value
and Nonqualified
Deferred  Compensation
Earnings⁽³⁾

($)

(f)

All Other
Compensation

($)

(g)

Total ($)

(h)

Annell R. Bay

115,000

199,971

—

—

—

—

314,971

Juliet S. Ellis

103,288

199,971

—

—

—

—

303,259

Chansoo Joung

120,000

199,971

—

—

—

—

319,971

Rene R. Joyce⁽⁴⁾

100,000

199,971

—

—

—

—

299,971

John E. Lowe

200,000

299,936

—

—

—

—

499,936

William C. Montgomery

120,000

199,971

—

—

—

—

319,971

Amy H. Nelson

105,000

199,971

—

—

—

—

304,971

Daniel W. Rabun

101,712

199,971

—

—

—

—

301,683

Peter A. Ragauss

105,000

199,971

—

—

—

—

304,971

Employee directors do not receive additional compensation for serving on the Board. John J. Christmann IV, the Company’s chief executive officer and president, is not included in this table as he was an employee of the Company during 2020. The compensation he received as an employee of the Company is shown in the Summary Compensation Table.

Grant date fair value, as computed in accordance with FASB ASC Topic 718, of RSUs granted during 2020 to each non-employee director based on the per share closing price of the Company’s common stock on the date of grant. None of the non-employee directors had unvested RSUs or restricted APA common stock at year-end 2020.

Earnings not included in column (f) of the Director Compensation Table as they are not above-market or preferential earnings.

On February 4, 2021, Mr. Joyce notified the Board of his intention not to stand for re-election at the 2021 annual meeting of shareholders.

Name of Beneficial Owner

Amount and Nature of
Beneficial Ownership
in APA⁽¹⁾

Percent
of
Class

Amount and Nature
of Beneficial
Ownership in Altus⁽¹⁾

Percent
of
Class

Annell R. Bay

52,535

⁽²⁾ 

*

—

Juliet S. Ellis

32,848

⁽²⁾ 

*

—

Chansoo Joung

98,454

⁽²⁾ 

*

1,250

*

Rene R. Joyce⁽⁸⁾

50,656

⁽²⁾ 

*

500

*

John E. Lowe

107,906

⁽²⁾ 

*

6,000

*

H. Lamar McKay

—

—

William C. Montgomery

73,316

⁽²⁾ 

*

1,000

*

Amy H. Nelson

55,503

⁽²⁾ 

*

500

*

Daniel W. Rabun

49,368

⁽²⁾ 

*

1,250

*

Peter A. Ragauss

50,924

⁽²⁾ 

*

1,250

*

John J. Christmann IV

1,378,274

^(3)(4)(5)(6) 

*

13,075

⁽⁷⁾ 

*

Stephen J. Riney

458,216

^(4)(5)(6) 

*

6,250

⁽⁷⁾ 

*

P. Anthony Lannie

416,559

⁽⁴⁾⁽⁶⁾ 

*

—

David A. Pursell

215,555

^(4)(5)(6) 

*

500

*

D. Clay Bretches

92,170

⁽⁶⁾ 

*

22,970

*

All directors, nominees, and executive officers as a group (including the above named persons)

54,545

⁽⁷⁾ 

Represents less than one percent of outstanding stock of common stock of the Company or Class A common stock of Altus, as applicable.

All ownership is sole and direct unless otherwise noted. Inclusion of any common stock not owned directly shall not be construed as an admission of beneficial ownership. Fractional stock have been rounded to the nearest whole share.

Includes the following common share equivalents related to retainer fees deferred under the Company’s Directors’ Compensation Plan and/or the Company’s Outside Directors’ Deferral Program: Ms. Bay – 52,535; Ms. Ellis - 29,348; Mr. Joung – 53,169; Mr. Joyce – 40,656; Mr. Lowe – 77,906; Mr. Montgomery – 53,169; Ms. Nelson – 53,003; Mr. Rabun – 49,368; and Mr. Ragauss – 50,924.

Includes the following common stock equivalents held through the Company’s Deferred Delivery Plan: Mr. Christmann – 60,901; and all executive officers as a group – 63,765.

Includes the following shares of common stock issuable upon the exercise of outstanding employee stock options, which are exercisable within 60 days: Mr. Christmann – 375,531; Mr. Riney – 111,732; Mr. Lannie – 144,427; Mr. Pursell – 21,241; and all executive officers as a group – 707,557.

Includes the following shares of common stock held by the trustee of Apache’s 401(k) Savings Plan and/or Non-Qualified Retirement/Savings Plan or the trustee of an individual retirement account: Mr. Christmann – 133,387; Mr. Riney – 43,445; Mr. Pursell – 27,737; and all executive officers as a group – 218,390.

Includes the following unvested RSUs granted under the Company’s 2011 Omnibus Equity Compensation Plan and the 2016 Omnibus Compensation Plan: Mr. Christmann – 381,872; Mr. Riney – 161,771; Mr. Lannie – 102,307; Mr. Pursell – 148,670; Mr. Bretches – 78,554; and all executive officers as a group – 931,525.

Includes the following shares of Altus common stock held by the trustee of Apache’s 401(k) Savings Plan and/or Non-Qualified Retirement/Savings Plan: Mr. Christmann – 11,825; Mr. Riney – 5,000; and all executive officers as a group – 16,825.

On February 4, 2021, Mr. Joyce notified the Board of his intention not to stand for re-election at the 2021 annual meeting of shareholders.

Name of Beneficial Owner

Address of Beneficial Owner

Amount and Nature of
Beneficial  Ownership

Percent
of
Class

Dodge & Cox

555 California Street, 40^th Floor

San Francisco, California 94104

52,194,876

⁽¹⁾ 

13.80

The Vanguard Group

100 Vanguard Blvd.

Malvern, Pennsylvania 19355

42,802,398

⁽²⁾ 

11.34

Hotchkiss and Wiley Capital Management, LLC

601 S. Figueroa Street, 39^th Floor

Los Angeles, California 90017

24,755,874

⁽³⁾ 

6.56

State Street Corporation

State Street Financial Center

One Lincoln Street

Boston, Massachusetts 02111

23,016,425

⁽⁴⁾ 

6.10

BlackRock, Inc.

55 East 52nd Street

New York, New York 10055

22,905,347

⁽⁵⁾ 

6.10

Per Schedule 13G/A filed by Dodge & Cox on February 11, 2021.

Per Schedule 13G/A filed by The Vanguard Group on February 10, 2021.

Per Schedule 13G filed by Hotchkiss and Wiley Capital Management, LLC on February 10, 2021.

Per Schedule 13G filed by State Street Corporation on February 5, 2021.

Per Schedule 13G/A filed by BlackRock, Inc. on January 29, 2021.

Plan Category

Number of Securities
to be Issued Upon
Exercise  of
Outstanding Options,
Warrants and Rights
(#)
(a)

Weighted-Average
Exercise Price  of
Outstanding
Options, Warrants
and Rights
($)
(b)

Number of Securities
Remaining Available for
Future  Issuance Under
Equity Compensation
Plans (Excluding Securities
Reflected in Column (a))
(#)
(c)

Equity compensation plans approved by security holders⁽¹⁾⁽⁵⁾

5,639,358

72.10

⁽³⁾ 

14,132,646

⁽⁴⁾ 

Equity compensation plans not approved by security holders⁽²⁾⁽⁵⁾

185,920

—

553,419

Total

5,825,278

72.10

⁽³⁾ 

14,686,065

Includes the Company’s 2007 Omnibus Equity Compensation Plan, 2011 Omnibus Equity Compensation Plan, and 2016 Omnibus Compensation Plan.

Includes the Directors’ Compensation Plan and Deferred Delivery Plan. The Company’s Deferred Delivery Plan allows officers and certain key employees to defer income from RSUs granted under the 2007 Omnibus Equity Compensation Plan, the 2011 Omnibus Equity Compensation Plan, and the 2016 Omnibus Compensation Plan in the form of deferred units. Each deferred unit is equivalent to one share of APA common stock. Distributions from the plan are made, at the election of the participant, beginning five years from deferral or upon termination of employment.

Weighted-average exercise price of outstanding stock options; excludes RSUs, performance-based stock units, and deferred stock units.

Available for grant under the 2016 Omnibus Compensation Plan, as of December 31, 2020.

See Note 14 of the Notes to Consolidated Financial Statements included in Apache’s Annual Report on Form 10-K for the year ended December 31, 2020, for the material features of the 2007 Omnibus Equity Compensation Plan, 2011 Omnibus Equity Compensation Plan, and 2016 Omnibus Compensation Plan.

Our Purpose

Our Vision

Our Strategy

To meet growing demand for energy and to do so in a cleaner, more sustainable way. We believe society can accomplish both, and at APA, we strive to meet those challenges while creating value for all our stakeholders.

Began to realize the benefits of the strategic exploration joint venture with Total S.A., allowing the joint venture to comprehensively assess and explore Suriname Block 58

The capital carry allows APA to proceed with appraisal and development without undue pressure on the balance sheet

Total as an operator brings a wealth of experience in large scale, deep water, FPSO based operations

Announced four consecutive oil discoveries in Block 58 offshore Suriname (inclusive of Keskesi announced January 14, 2021)

Repurchased $588 million of our bonds at a significant discount to par, which positively impacted our deleveraging efforts

Opportunistically refinanced $1.25 billion of our bonds at attractive interest rates and extended our maturity profile

Generated positive free cash flow during a year with depressed oil prices

Retired our remaining 2021 debt maturities

Successfully completed transformation to a centralized organizational structure

Reduced our 2020 capital budget from a midpoint of $1.75 billion to $1.1 billion

In the Permian Basin, we ceased all drilling activity, reduced our workover activity over 75 percent, shut in over 2,000 low margin producing wells, and reduced our average annual water production by approximately 20 percent or 248,000 barrels per day

Reduced our Egypt rig count by more than 50 percent

Reduced our dividend by 90 percent to preserve cash flow and limit the impact of the oil price on our balance sheet

As oil prices recovered and stabilized, we made the decision to contract two completion crews at very attractive prices to resume completions in the US late in the year

Named Executive Officer

Title

John J. Christmann IV

Chief Executive Officer and President

Stephen J. Riney

Executive Vice President and Chief Financial Officer

P. Anthony Lannie

Executive Vice President and General Counsel

David A. Pursell

Executive Vice President, Development

D. Clay Bretches

Executive Vice President, Operations; CEO, Altus Midstream Company

These enhancements were received positively and led to our Say-on-Pay proposals receiving support from 95 percent and 92 percent of our shareholders who voted on the proposals at our 2019 and 2020 Annual Meetings, respectively.

We maintained our robust shareholder engagement program and, in the fall of 2020, reached out directly to shareholders representing approximately 68 percent of shares outstanding to discuss, amongst other topics, our compensation practices, particularly in light of the Covid-19 pandemic and the macro headwinds our industry has faced. Shareholders owning approximately 50 percent of our shares either met with us in engagement meetings, attended our ESG event with our CEO and President, or told us no meeting was necessary this year.

92% Support

        2020 “Say-on-Pay”  Proposal        

Fixed/Variable

Component

Objective

Detail

Fixed

Base Salary

Provide market-competitive base pay, reflective of an executive officer’s role, responsibilities, and individual performance in order to attract and retain top talent

●   Reviewed annually based on market data, internal equity, job responsibilities, and individual performance

Variable /
At-Risk

Annual
Incentive
Compensation  

Motivate and reward our executive officers to achieve key business objectives that support APA’s long-term strategy

●   Achievement is measured against annual goals and objectives, as described on page 28

●   Establish aggressive targets for each metric at the beginning of the year¹ at or above our corporate plan for allocating capital (the plan) to support execution of our strategy in any commodity price environment

Long-Term
Incentive
Compensation

Align our executive officers’ awards to the long-term interests of our shareholders and APA’s long-term strategy

●   Awards are comprised of 60 percent performance shares and 40 percent restricted stock units

●   Vest half of the performance shares at the end of a three-year performance period, and the remaining half at the end of the fourth year

●   Incorporate relative and absolute metrics in the performance share program to provide a balanced assessment of long-term performance, including a negative TSR modifier and a three-year CROIC metric

In response to the Covid-19 pandemic and its effects on oil prices and demand and our business and operations, the MD&C Committee modified certain of the metrics for the second half of 2020 as discussed under Corporate Performance below.

Named Executive Officer

Change to Total Target Compensation

Reason

John J. Christmann IV

10% reduction

  To maintain alignment with current market  
reference pay levels

Stephen J. Riney

5% reduction

P. Anthony Lannie

7% reduction

David A. Pursell

11% increase

Due to assuming expanded roles with the
Company

D. Clay Bretches

39% increase

Named Executive Officer

January 1, 2020 Base Salary ($)

December 31, 2020 Base Salary ($)

John J. Christmann IV

1,300,000

No Change

Stephen J. Riney

795,000

No Change

P. Anthony Lannie

695,000

No Change

David A. Pursell

675,000

No Change

D. Clay Bretches

675,000

No Change

Metric

First-Half
Weighting

Second-
Half
Weighting

Full-Year
Weighted
Average

Quantitative Metrics

Environmental, Health, and Safety

10

10

10

Financial

●   Cash Return on Invested Capital (CROIC)²

20

0

10

●   Free Cash Flow

20

10

15

Increase Liquidity

0

20

10

Operational Cost Savings

●   Run Rate Cost Savings

10

0

5

●   FY20 Cost Savings

0

20

10

Reserve Replacement

10

0

5

Qualitative Metrics

Adopt and Embed New Operating Model

0

10

5

Differentiate through High-Impact Exploration

20

20

20