Exhibit 10.35
Marathon Oil
Corporation
Executive Change in Control
Severance Benefits Plan
(Effective as of
December 31, 2008)
1. Purpose of the
Plan.
Marathon Oil Corporation and its
subsidiaries and affiliates recognize that the contributions of its
senior executives to the growth and success of the Corporation (as
defined below) are and will continue to be substantial, and the
Corporation desires to assure the continued employment of its
senior executives. In this connection, the Board of Directors of
the Corporation (the “Board”) recognizes that, as is
the case with many publicly-held corporations, the possibility of a
change in control may exist and that such possibility, and the
uncertainty and questions which it may raise among management, may
result in the departure or distraction of management personnel to
the detriment of the Corporation and its stockholders.
Accordingly, the Board has
determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of the
Corporation’s senior executives to their assigned duties
without distraction in the face of potentially disturbing
circumstances arising from the possibility of a change in control
of the Corporation.
In order to induce senior executives
to remain in the employ of the Corporation, the Corporation has
established this Marathon Oil Corporation Executive Change in
Control Severance Benefit Plan (the “Plan”) as set
forth herein.
In accordance with the Policy
Concerning Severance Agreements with Senior Executive Officers
adopted by the Corporation effective February 1, 2005, this
restatement of the Plan is consistent with the Corporation’s
change in control policy for senior executive officers adopted in
2001.
2. Definitions.
As used in the Plan, the following
terms shall have the following meanings (and the singular includes
the plural, unless the context clearly indicates
otherwise):
Administrator:
The Compensation Committee of the
Board, provided that the Administrator may delegate its authority
under this Plan pursuant to such conditions or limitations as the
Administrator may establish.
Applicable Event:
“Applicable Event” shall
mean a Change in Control or a Potential Change in
Control.
Cause: “Cause” shall mean a Separation from
Service of the Employee by the Corporation upon (i) the
willful and continued failure by the Employee to substantially
perform the Employee’s duties with the Corporation (other
than any such failure resulting from Separation from Service by the
Employee for Good Reason or any such failure resulting from the
Employee’s incapacity due to physical or mental illness),
after a demand for substantial performance is delivered to the
Employee that specifically identifies the manner in which the
Corporation believes that the Employee has not substantially
performed his or her duties, and the Employee has failed to resume
substantial performance of his or her duties on a continuous basis
within 14 days of receiving such demand, (ii) the willful
engaging by the Employee in conduct which is demonstrably and
materially injurious to the Corporation, monetarily or otherwise or
(iii) the Employee’s conviction of a felony or
conviction of a misdemeanor which impairs the Employee’s
ability substantially to perform his or her duties with the
Corporation. For purposes of Cause, no act, or failure to act, on
the Employee’s part shall be deemed “willful”
unless done, or omitted to be done, by the Employee not in good
faith and without reasonable belief that the action or omission was
in the best interest of the Corporation.
Change in Control of the
Corporation and Change
in Control: 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 such term is used
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
affiliates) 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
Plan 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 recommended;
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 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.
Corporation:
Marathon Oil Corporation and each
related company or business which is part of the same controlled
group under Code sections 414(b) or 414(c); provided that where
specified by Marathon Oil Corporation in accordance with Code
section 409A, in applying Code section 1563(a)(1) – (a)(3)
for purposes of determining a controlled group of corporations
under Code section 414(b) and in applying Treasury Regulation
section 1.414(c)-2 for purposes of determining whether trades or
businesses are under common control under Code section 414(c), the
phrase “at least 50 percent” is used instead of
“at least 80 percent.”
Disability
or Disabled: The
Employee’s incapacity due to physical or mental illness which
in the opinion of a licensed physician renders the Employee
incapable of performing his or her assigned duties with the
Corporation, and shall be deemed to occur on the earlier of
(i) the date that there is no reasonable expectation that the
Participant will return to service with the Corporation or
(ii) the date the Employee has been absent from the full-time
performance of his or her duties with the Corporation for six
consecutive months or more.
Employee: Senior executives of the Corporation who are
grade 19 or higher, provided that any senior executive who is party
to an individual agreement concerning the subject matter hereof
shall not be an Employee and shall not participate in the
Plan.
Good Reason:
Without the Employee’s express
written consent, the occurrence within two years after a Change in
Control of the Corporation, or within two years after and at the
request of or as a result of actions by a third party who has taken
steps reasonably calculated to effect a Change in Control or after
the first day of but during a Potential Change in Control Period,
of any one or more of the following:
(i) the assignment to the Employee
of duties inconsistent with his or her position immediately prior
to the Applicable Event or a reduction or alteration in the nature
of the Employee’s position, duties, status or
responsibilities from those in effect immediately prior to the
Applicable Event;
(ii) a reduction by the Corporation
in the Employee’s annualized and monthly or semi-monthly rate
of base salary (as increased to incorporate the Employee’s
foreign service premium, if any) (“Base Salary”) as in
effect immediately prior to the Applicable Event;
(iii) the Corporation’s
requiring the Employee to be based at a location in excess of fifty
miles from the location where the Employee was based immediately
prior to the Applicable Event;
(iv) the failure by the Corporation
(a) to continue, substantially as in effect immediately prior
to the Applicable Event, all of the Corporation’s employee
benefit, incentive compensation, bonus, stock option and stock
award plans, programs, policies, practices or arrangements in which
the Employee participates (or substantially equivalent successor
plans, programs, policies, practices or arrangements) or
(b) to continue the Employee’s participation therein on
substantially the same basis, both in terms of the amount of
benefits provided and the level of the Employee’s
participation relative to other participants, as existed
immediately prior to the Applicable Event;
(v) the failure of the Corporation
to obtain an agreement from any successor to the Corporation to
assume and agree to perform this Plan, as contemplated in
Section 6 hereof; and
(vi) any purported Separation from
Service by the Corporation of the Employee’s employment that
is not effected pursuant to, and satisfying the requirements of, a
Notice of Termination, and for purposes of this Plan, no such
purported Separation from Service shall be effective.
The Employee’s right to
Separate from Service for Good Reason shall not be affected by his
or her incapacity due to physical or mental illness. The
Employee’s continued employment shall not constitute consent
to, or a waiver of rights with respect to, any circumstance
constituting Good Reason hereunder. The Employee’s
determination of the existence of Good Reason shall be final and
conclusive unless such determination is not made in good faith and
is made without reasonable belief in the existence of Good
Reason.
Marathon: Marathon Oil Corporation, Marathon Oil Company
and their subsidiaries, other than MPC and SSA, and
successors.
MPC: Marathon Petroleum Company LLC and its
subsidiaries, other than SSA, and successors.
Notice of Termination:
A written notice which indicates the
specific reason(s) relied upon by the Corporation for Separation
from Service of an Employee and which sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for
the Employee’s Separation from Service. Any Separation from
Service by the Corporation for Cause or for Disability shall be
communicated by Notice of Termination to the Employee, and or any
Separation from Service by the Employee for Good Reason shall be
communicated by Notice of Termination to the
Corporation.
Plan: The change in control policy applicable to
senior executives of the Corporation, originally effective as of
July 31, 2001, which is hereby restated as the Marathon Oil
Corporation Executive Change in Control Severance Benefit Plan,
effective as of the close of business on December 31, 2008 and
as amended from time to time.
Potential Change in Control of
the Corporation and
Potential Change in Control: A Potential Change in Control
of the Corporation or Potential Change in Control shall be deemed
to have occurred, if:
(i) the Corporation enters into an
agreement, the consummation of which would result in the occurrence
of a Change in Control of the Corporation;
(ii) any Person (including the
Corporation) publicly announces an intention to take or to consider
taking actions which if consummated would constitute a Change in
Control of the Corporation;
(iii) any Person becomes the
beneficial owner, directly or indirectly, of securities of the
Corporation representing 15% or more of the combined voting power
of the Corporation’s then outstanding securities (not
including in the amount of the securities beneficially owned by
such Person any such securities acquired directly from the
Corporation or its affiliates); or
(iv) the Board adopts a resolution
to the effect that, for purposes of this Plan, a Potential Change
in Control of the Corporation has occurred.
Potential Change in Control
Period: The period
beginning on the date a Potential Change in Control occurs and
ending on the earlier of (i) date on which a Change in Control
occurs or (ii) the date the Board makes a good faith
determination that the risk of a Change in Control has
terminated.
Qualified Termination:
A Employee has a Qualified
Termination if he or she Separates from Service within two years
after the date of a Change in Control unless such Separation from
Service is (i) due to death or Disability, (ii) by the
Corporation for Cause, (iii) by the Employee other than for
Good Reason or (iv) on or after the date that the Employee
attains age 65. If an Employee Separates from Service prior to a
Change in Control and such Separation from Service is other than
(w) due to death or Disability, (x) by the Corporation
for Cause, (y) by the Employee other than for Good Reason or
(z) on or after the date that the Employee attains age 65, the
Employee will be deemed to have a Qualified Termination prior to a
Change in Control so long as the Employee reasonably demonstrates
that such Separation from Service (I) was at the request of or
as a result of actions by a third party who has taken steps
reasonably calculated to effect a Change in Control or (II) occurs
during a Potential Change in Control Period.
Separation Date:
The date that an Employee has a
Separation from Service.
Separation from
Service or Separate
from Service: Separation from Service shall have the same
meaning as set forth under Code section 409A with respect to the
the Corporation.
Severance Benefits:
The benefits specified in
Section 3.d hereof that are due to an Employee who has a
Qualified Termination.
SSA: Speedway SuperAmerica LLC and its subsidiaries
and successors.
3. Compensation Upon Separation
from Service or During Disability
a. Disability
During any period following an
Applicable Event during which an Employee fails to perform his or
her full-time duties with the Corporation as a result of incapacity
due to physical or mental illness, such Employee’s total
compensation, including Base Salary, bonus and any benefits, will
continue unaffected until either such Employee’s Separation
Date or such Employee returns to the full-time performance of his
or her duties. In the event the Employee returns to the full-time
performance of his or her duties prior to a Separation from
Service, such Employee shall continue to receive his or her full
Base Salary and bonus plus all other amounts to which such Employee
is entitled under any compensation or other employee benefit plan
of the Corporation without interruption. If an Employee is
determined to be Disabled, the Corporation shall promptly cause the
Employee to have a Separation from Service due to Disability. In
the event of an Employee’s Separation from Service due to
Disability, such Employee shall not be entitled to Severance
Benefits under this Plan and such Employee’s benefits shall
be determined in accordance with the Corporation’s
retirement, insurance and other applicable programs and plans then
in effect.
b. Separation from Service for Cause
or Voluntary Separation from Service for Other Than Good
Reason.
If an Employee has a Separation from
Service by the Corporation for Cause or by the Employee other than
for Good Reason, the Corporation shall pay such Employee his or her
full Base Salary through the Separation Date at the rate in effect
at the time Notice of Termination is given, plus all other amounts
to which such Employee is entitled under any compensation or
benefit plan of the Corporation at the time such payments are due,
and the Corporation shall have no further obligations to such
Employee under this Plan.
c. Death
If an Employee has a Separation from
Service by reason of his or her death, such Employee’s
benefits shall be determined in accordance with the
Corporation’s retirement, survivor’s benefits,
insurance and other applicable programs and plans then in effect,
and such Employee shall not be entitled to Severance Benefits
hereunder.
d. Qualified Termination
If an Employee has a Qualified
Termination, he or she shall be entitled to the following Severance
Benefits:
(i) Accrued Compensation and
Benefits. The Corporation
