EXHIBIT 10.1
MARATHON OIL CORPORATION
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
(Amended and Restated as of January 1, 2002)
1. Purpose
The Marathon Oil Corporation Deferred Compensation Plan for
Non-Employee Directors is intended to enable the Corporation to attract and
retain non-employee Directors and to enhance the long-term mutuality of interest
between such Directors and shareholders of the Corporation.
2. Definitions
The following definitions apply to this Plan and to the Deferral
Election Forms:
(a) Beneficiary or Beneficiaries means a person or persons or
other entity designated on a Beneficiary Designation Form by a
Participant as allowed in subsection 8(c) of this Plan to
receive Deferred Benefit payments. If there is no valid
designation by the Participant, or if the designated
Beneficiary or Beneficiaries fail to survive the Participant
or otherwise fail to take the Benefit, the Participant's
Beneficiary is the Participant's surviving spouse or, if there
is no surviving spouse, the Participant's estate.
(b) Beneficiary Designation Form means a form acceptable to the
Committee or its designee and used by a Participant according
to this Plan to name his/her Beneficiary or Beneficiaries.
(c) Board means the board of directors of Marathon Oil
Corporation.
(d) Committee means the Compensation and Organization Committee of
the Board or such other committee of the Board as the Board
may designate to administer the Plan.
(e) Common Stock means the common stock of the Corporation.
(f) Common Stock Unit means a book-entry unit equal in value to a
share of Common Stock.
(g) Corporation means Marathon Oil Corporation, or any successor
thereto.
(h) Deferral Election Form means a document designated by the
Committee for the purpose of allowing a Participant to elect
to make a deferral under section 4 of this Plan, including the
portion that is the Distribution Election Form.
(i) Deferral Year means a calendar year for which a Participant
has a Deferred Benefit.
(j) Deferred Benefit means either a Deferred Cash Benefit or a
Deferred Stock Benefit under the Plan.
(k) Deferred Cash Account means that bookkeeping record
established for
each Participant who elects a Deferred Cash Benefit under this
Plan. A Deferred Cash Account is established only for purposes
of measuring a Deferred Cash Benefit and not to segregate
assets or to identify assets that may or must be used to
satisfy a Deferred Cash Benefit. A Deferred Cash Account will
be credited with that portion of the Participant's Retainer
Fee deferred as a Deferred Cash Benefit according to a
Deferral Election Form and according to section 6 of this
Plan. A Deferred Cash Account will be credited periodically
with amounts as provided under section 6(b) of this Plan.
(l) Deferred Cash Benefit means the Deferred Benefit elected by a
Participant under section 4 that results in payments governed
by sections 6 and 8.
(m) Deferred Stock Account means that bookkeeping record
established for each Participant to reflect the status of
his/her Deferred Stock Benefits under this Plan. A Deferred
Stock Account is established only for purposes of measuring a
Deferred Stock Benefit and not to segregate assets or to
identify assets that may or must be used to satisfy a Deferred
Stock Benefit. A Deferred Stock Account will be credited with
that portion of the Participant's Retainer Fee deferred as a
Deferred Stock Benefit according to section 3 of this Plan and
any dividend equivalent payments according to section 7 of
this Plan. A Deferred Stock Account will be credited
periodically with amounts determined by the Committee under
subsection 7(b) of this Plan.
(n) Deferred Stock Benefit means the Deferred Benefit that is
established in accordance with section 3 of this Plan and that
results in distributions governed by sections 7 and 8.
(o) Directors means those duly named members of the Board.
(p) Distribution Election Form means that part of a Deferral
Election
Form used by a Participant according to this Plan to establish
the post-Termination duration of deferral of a Deferred
Benefit and the frequency of payments of any Deferred Cash
Benefit. If a Deferred Benefit has no Distribution Election
Form that is operative according to section 4, distribution of
that Deferred Benefit is governed by section 8.
(q) Election Date means the date established by this Plan as the
date before which a Participant must submit a valid Deferral
Election Form to the Committee. For each Deferral Year, the
Election Date is December 31 of the preceding calendar year
or, in the case of an individual who becomes a Participant
during a Deferral Year, the date that he/she becomes a
Participant. Despite the two preceding sentences, the
Committee may set an earlier date as the Election Date for
any Deferral Year.
(r) Participant means a Director who is not simultaneously an
employee of the Corporation.
(s) Plan means the Marathon Oil Corporation Deferred Compensation
Plan for Non-Employee Directors.
(t) Retainer Fee means that portion of a Participant's
compensation that is fixed and paid without regard to his/her
attendance at meetings.
(u) Terminate, Terminating, or Termination, with respect to a
Participant,
means cessation of his/her relationship with the Corporation
as a Director whether by retirement, death, disability or
severance for any other reason.
3. Minimum Stock-Based Compensation
Each Person who becomes a Participant after October 29, 1996 shall
receive at least 50 percent of his/her annual Retainer Fee in the form of Common
Stock Units which are maintained as a Deferred Stock Benefit until termination
within each Participant's Deferred Stock Account.
4. Deferral Election
A deferral election is valid when a Deferral Election Form is
completed, signed by the Participant, and received by the Committee or its
designee. Deferral elections are governed by the provisions of this section.
(a) A Participant may elect a Deferred Benefit for any Deferral
Year if he/she is a Participant at the beginning of that
Deferral Year or becomes a Participant during the Deferral
Year.
(b) Before each Deferral Year's Election Date, each Participant
will be provided with a Deferral Election Form. Subject to
Section 3, a Participant may elect on or before the Election
Date to defer until after Termination the receipt of the
remaining portion of his/her Retainer Fee for the Deferral
Year in the form of a Deferred Cash Benefit.
(c) A Participant may not elect to convert a Deferred Cash
Benefit to a Deferred Stock Benefit or to convert a Deferred
Stock Benefit to a Deferred Cash Benefit.
(d) Each Distribution Election Form is part of the Deferral
Election Form on which it appears or to which it states that
it is related. The Committee may allow a Participant to file
one Distribution Election Form for all of his/her Deferred
Cash Benefits and one for all of his/her Deferred Stock
Benefits.
(e) If it does so before the last business day of the Deferral
Year, the Committee may reject any Deferral Election Form or
any Distribution Election Form or both, and the Committee is
not required to state a reason for any rejection. The
Committee may modify any Distribution Election Form at any
time to the extent necessary to comply with any laws or
regulations. However, the Committee's rejection of any
Deferral Election Form or any Distribution Election Form or
the Committee's modification of any Distribution Election
Form must be based upon action taken without regard to any
vote of the Participant whose Deferral Election Form or
Distribution Election Form is under consideration, and the
Committee's rejections must be made on a uniform basis with
respect to similarly situated Participants. If the Committee
rejects a Deferral Election Form, the Participant must be
paid the amounts he/she would then have been entitled to
receive if he/she had not submitted the rejected Deferral
Election Form.
(f) A Participant may not revoke a Deferral Election Form or a
Distribution Election Form after the Deferral Year begins.
Any revocation before the beginning of the Deferral Year is
the same as a failure to submit a Deferral Election Form or a
Distribution Election Form. Any writing signed by a
Participant expressing an intention to revoke his/her Deferral
Election Form or a related Distribution Election Form and
delivered to the Committee or its designee before the close
of business on the relevant Election Date is a revocation.
5. Effect of No Election
A Participant who has not submitted a valid Deferral Election Form to
the Committee or its designee on or before the relevant Election Date may not
defer any part of the cash portion of his/her Retainer Fee for the Deferral Year
under this Plan. In the case of a person who becomes a Participant after October
29, 1996 and who does not submit a valid Deferral Election Form on or before the
relevant Election Date, fifty percent of such Participant's Retainer Fee will
become a Deferred Stock Benefit pursuant to section 4 of this Plan. The Deferred
Benefit of a Participant who submits a valid Deferral Election Form but fails to
submit a valid Distribution Election Form for that Deferred Benefit before the
relevant Election Date or who otherwise has no valid Distribution Election Form
for that Deferred Benefit is governed by section 8.
6. Deferred Cash Benefits
(a) Deferred Cash Benefits will be set up in a Deferred Cash
Account for each Participant and credited with deemed
investment returns as provided in section 6(b). Deferred Cash
Benefits are credited to the applicable Participant's Deferred
Cash Account as of the day they would have been paid but for
the deferral.
(b) A Participant may select one or more investment options
approved by the Committee for his/her Deferred Cash Benefits.
Amounts will be credited to Deferred Cash Accounts to reflect
the deemed returns on such investment options at periods
determined by the Committee. A participant may change the
investment allocation of his/her Deferred Cash Account at
anytime.
7. Deferred Stock Benefits
(a) Deferred Stock Benefits will consist of Common Stock Units
and will be set up in a Deferred Stock Account for each
Participant. Each Common Stock Unit will increase or
decrease in value by the same amount and with the same
frequency as the fair market value of a share of Common
Stock. Each Deferred Stock Account will be credited as of
the date the annual retainer fee would otherwise have been
payable with a quantity of Common Stock Units determined in
accordance with this section based on the closing price of a
share of Common Stock on the NYSE on the date of such credit
to the Deferred Stock Account.
(b) Each Deferred Stock Account will be credited on or about each
Common Stock dividend payment date with additional Common
Stock Units, including fractional units, in a quantity equal
to the quotient of the dividends payable on the quantity of
shares in such account divided by the closing price of a share
of Common Stock on the NYSE on the date of that payment.
(c) In the event of a reorganization, recapitalization, stock
split, stock dividend, combination of shares, merger,
consolidation, rights offering or any other change in the
corporate structure, the number and kind of common stock units
credited to each Participant's account shall be adjusted
accordingly.
8. Distributions
(a) According to a Participant's Distribution Election Form, but
subject to section 4(d), a Deferred Cash Benefit must be
distributed in cash. Subject to section 4(d), a Deferred
Stock Benefit will be distributed in shares of Common Stock
corresponding to, and equal to the number of, the Common
Stock Units credited to the Participant's Deferred Stock
Account. However, cash must be paid in lieu of fractional
shares of the Common Stock otherwise distributable.
(b) Deferred Cash Benefits will be paid in a lump sum unless the
Participant's Distribution Election Form specifies payment of
a Deferred Cash Benefit in installment payments over ten
years. For a Deferred Cash Benefit payable in installments,
investment returns under section 6(b) will continue to accrue
on the unpaid balance of a Deferred Cash Account. Any
lump-sum cash payment will be paid or installment payments
will begin to be paid or delivery of Common Stock will be
made in the month following the Participant's Termination,
unless a later post-Termination distribution date is
specified in a Participant's Distribution Election Form.
(c) Deferred Benefits may not be assigned by a Participant or
Beneficiary. A Participant may use a Beneficiary Designation
Form to designate one or more Beneficiaries for all of his/her
Deferred Benefits; such designations are revocable. Each
Beneficiary will receive his/her portion of the Participant's
Deferred Cash Account and Deferred Stock Account on February
15 of the year following the Participant's death unless the
Beneficiary's request for a different distribution schedule is
received before distributions begin and is approved at the
Committee's sole discretion. The Committee may require that
multiple Beneficiaries agree upon a single distribution
method.
(d) Upon the occurrence of a Change in Control resulting in a
Participant's Termination, the Corporation shall pay such
Participant, in the month following such Termination, cash in
an aggregate amount equal to the value of such Participant's
Deferred Cash Account and Deferred Stock Account on the date
of the Change in Control, as determined using the closing
price of the Common Stock on the New York Stock Exchange on
such date or the highest per-share price actually paid in
connection with such Change in Control. For purposes of this
Plan, "Change in Control" shall mean a change in control of a
nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), whether or not the Corporation is then subject to such
reporting requirement; provided, that, without limitation,
such a change in control shall be deemed to have occurred if
(i) any person (as defined in Sections 13(d) and 14(d)
of the Exchange Act) (a "Person") is or becomes
the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly,
of securities of the Corporation (not including in
the amount of the securities beneficially owned
by such person any such securities acquired
directly from the Corporation or its affiliate
representing twenty percent (20%) or more of the
combined voting power of the Corporation's then
outstanding voting securities; provided, however,
that for purposes of this Agreement the term
"Person" shall not include (A) the Corporation or
any of its subsidiaries, (B) a trustee or other
fiduciary holding securities under an employee
benefit plan of the Corporation or any of its
subsidiaries, (C) an underwriter temporarily
holding securities pursuant to an offering of
such securities, or (D) a corporation owned,
directly or indirectly, by the stockholders of
the Corporation in substantially the same
proportions as their ownership of stock of the
Corporation; and provided, further, however, that
for purposes of this paragraph (i), there shall
be excluded any Person who becomes such a
beneficial owner in connection with an Excluded
Transaction (as defined in paragraph (iii) below)
: or
(ii) the following individuals cease for any reason
to constitute a majority of the number of
Directors then serving: individuals who, on the
date hereof, constitute the Board and any new
Director (other than a Director whose initial
assumption of office is in connection with an
actual or threatened election contest including
but not limited to a consent solicitation,
relating to the election of Directors of the
Corporation) whose appointment or election by the
Board or nomination for election by the
Corporation's stockholders was approved or
recommended by a vote of at least two-thirds
(2/3) of the directors then still in office who
either were Directors on the date hereof or whose
appointment, election or nomination for election
was previously so approved; or
(iii) there is consummated a merger or consolidation
of the Corporation or any direct or indirect
subsidiary thereof with any other corporation,
other than a merger or consolidation (an
"Excluded Transaction")which would result in the
holders of the voting securities of the
Corporation outstanding immediately prior thereto
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving corporation or any
parent thereof) at least 50% of the combined
voting power of the voting securities of the
entity surviving the merger or consolidation (or
the parent of such surviving entity) immediately
after such merger or consolidation, or the
shareholders of the Corporation approve a plan of
complete liquidation of the Corporation, or there
is consummated the sale or other disposition of
all or substantially all of the Corporation's
assets.
Notwithstanding any other provision to the
contrary, in no event shall the transfer of
ownership interests in the Corporation in
and of itself constitute a Change in Control
under this Plan.
9. Corporation's Obligation
(a) The Plan is unfunded. A Deferred Benefit is at all times
solely a contractual obligation of the Corporation. A
Participant and his/her Beneficiaries have no right, title or
interest in the Deferred Benefits or any claim against them.
Except according to section 9(b), the Corporation will not
segregate any funds or assets for Deferred Benefits nor issue
any notes or security for the payment of any Deferred Benefit.
(b) The Corporation may establish a grantor trust and transfer to
that trust shares of the Corporation's common stock or other
assets. The governing trust agreement must require a separate
account to be established for each electing Participant. The
governing trust agreement must also require that all
Corporation assets held in trust remain at all times subject
to the Corporation's judgment creditors.
10. Control by Participant
A Participant has no control over Deferred Benefits except according to
his/her Deferral Election Form, Distribution Election Form, and Beneficiary
Designation Form, and deemed investment allocation in section 6(b).
11. Claims Against Participant's Deferred Benefits
A Deferred Cash Account and Deferred Stock Account relating to a
Participant under this Plan are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any
attempt to do so is void. A Deferred Benefit is not subject to attachment or
legal process for a Participant's debts or other obligations. Nothing contained
in this Plan gives any Participant any interest, lien or claim against any
specific asset of the Company. A Participant or his/her beneficiary has no
rights other than as a general creditor.
12. Amendment or Termination
This Plan may be altered, amended, suspended, or terminated at any time
by the Committee.
13. Administration
The Committee shall have the full and exclusive power and authority to
administer this Plan and to take all actions that are specifically contemplated
hereby or are necessary or appropriate in connection with the administration
hereof. The Committee shall also have full and exclusive power to interpret this
Plan and to adopt such rules, regulations and guidelines for carrying out this
Plan as it may deem necessary or proper. The Committee may correct any defect or
supply an omission or reconcile any inconsistency in this Plan in the manner and
to the extent the Committee deems necessary or desirable to further the Plan
purposes. Any decision of the Committee in the interpretation and administration
of this Plan shall lie within its sole and absolute discretion and shall be
final, conclusive and binding on all parties concerned.
14. Notices
Notices and elections under this Plan must be in writing. A notice or
election is deemed delivered if it is delivered personally or if it is mailed by
registered or certified mail to the person at his/her last known business
address.
15. Waiver
The waiver of a breach of any provision in this Plan does not operate
as and may not be construed as a waiver of any later breach.
16. Construction
This Plan is created, adopted, maintained and governed according to the
laws of the state of Delaware. Headings and captions are only for convenience;
they do not have substantive meaning. If a provision of this Plan is not valid
or not enforceable, the validity or enforceability of any other provision is not
affected. Use of one gender includes all, and the singular and plural include
each other.
17. Effective Date
The effective date of the Plan is January 1, 2002.