EXHIBIT 10.3

 

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

 

Non-Qualified Stock Option Grant

(1990 Stock Plan)

 

NOT TRANSFERABLE EXCEPT BY WILL OR BY THE LAWS

GOVERNING THE DESCENT AND DISTRIBUTION OF ESTATES

 

Non-Qualified Stock Option granted by Marathon Oil Corporation, a Delaware
Corporation, herein called the Corporation, to the undersigned employee of the
Corporation or one of its subsidiaries (the Optionee).

 

Name of Optionee:

   

Name of Employing Company

   

on Date Hereof:

   

Option Serial Number:

   

Class of Stock and

 

Marathon Oil Corporation Common Stock

Number of Shares Subject to Purchase:

   

Class of Stock and Number of Shares

 

Marathon Oil Corporation Common Stock

Subject to Stock Appreciation Rights:

   

Option Price of Each Share, $:

   

Date of This Stock Option:

   

 

By your signature and the signature of the Stock Option Officer below, you and
the Corporation agree that this option is granted under and governed by the
terms and conditions of Marathon Oil Corporation’s 1990 Stock Plan, as amended,
and the Grant Terms and Conditions contained herein; as well as such
administrative regulations as the Compensation and Organization Committee may
adopt from time to time.

 

Marathon Oil Corporation      Accepted as of the above date: By  

 

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  (L.S.)      By  

 

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  (L.S.)     Authorized Officer              Signature of Optionee    

TERMS AND CONDITIONS

 

1. The Corporation agrees that the Optionee has the right to purchase the number
of shares of common stock of the Corporation set forth in the Stock Option Grant
for the price stated therein. The purchase price shall be paid in cash or such
other form of consideration as the Compensation and Organization Committee may
approve, including shares of the common stock of the Corporation valued at the
fair market value of the stock on the date of exercise of the option.

 

2. The Optionee agrees to continue as an employee of an employing company for
one year from the date of the option, subject to the employing company’s right
to terminate the Optionee’s employment at any time, performing such duties
consistent with Optionee’s capabilities and receiving Optionee’s present
compensation or such adjusted compensation as the employing company shall from
time to time reasonably determine. If the terms of the Optionee’s employment are
changed in a manner materially adverse to the Optionee during such period, the
Optionee shall be relieved of any further obligation to remain employed.

 

3. The right to exercise the option may be surrendered in return for payment
equal to the amount by which the fair market value of a share of common stock to
which the option relates at the time of the exercise of the right exceeds the
option price multiplied by the number of shares of common stock with respect to
which stock appreciation rights are exercised.

 

4. The option or related stock appreciation right may be exercised in whole at
any time or in part from time to time during the option period; provided,
however, that the option or related stock appreciation right may not be
exercised in whole or in part prior to the expiration of one year from the date
of the option; and, if exercised in part, may not be exercised as to less than
100 shares at any one time, unless such exercise is as to the remaining portion
of the option. The option period shall begin on the date of the stock option and
shall end (a) ten years thereafter, (b) three years after the date upon which
the Optionee retires or (c) three years after the Optionee dies while employed,
whichever first occurs. Unless otherwise determined by the Compensation and
Organization Committee, the option period shall also terminate and all rights to
exercise the option or related stock appreciation right shall terminate in the
event the Optionee ceases to be an employee of any employing company for any
cause other than death or retirement. The Stock Option Officer may cancel the
option by written notice to the Optionee: (1) after the Optionee retires prior
to age 65, (2) after the Optionee retires at any age and the Stock Option
Officer deems such cancellation to be in the best interests of the Corporation,
and (3) when the Stock Option Officer determines that the Optionee has accepted,
or intends to accept, employment with a competitor of any business unit of the
Corporation. The Optionee agrees to return the option to the Corporation for
cancellation.

 

5. Notwithstanding anything to the contrary stated herein, if the Optionee’s
employment is terminated for any reason following a change in control of the
Corporation (as defined in the Appendix), the option shall continue as if the
Optionee had instead retired on the date of termination and all rights of the
Compensation and Organization Committee or Stock Option Officer to cancel the
option or related stock appreciation right shall be void.

 

6. During the Optionee’s lifetime, the option and stock appreciation right may
be exercised only by the Optionee or by the Optionee’s guardian or legal
representative. Upon the Optionee’s death, the option and the related stock
appreciation right may be transferred by will or by the laws governing the
descent and distribution of the Optionee’s estate. Otherwise, the option may not
be transferred, pledged or encumbered and, in the event of an attempt to
transfer, pledge or encumber it, the Compensation and Organization Committee may
cancel it.

 

7. In the event there is a change in the outstanding common stock of the
Corporation by reason of a stock split, stock dividend, stock combination or
reclassification or merger, or similar event, the Committee may adjust
appropriately the number of shares available and the option price, pursuant to
the option, and make such other revisions to the option as it deems are
equitably required. The Optionee shall be notified of such adjustment and such
adjustment shall be binding upon the Corporation and the Optionee.

 

8. Notwithstanding anything in the option to the contrary, the obligations of
the Corporation and the rights of the Optionee are subject to all applicable
laws, rules and regulations including, without limitation, the Securities
Exchange Act of 1934, as amended, the Securities Act of 1933, as amended, the
Internal Revenue Code of 1986, as amended, and any other applicable laws.

 

9. The option is not valid unless it is accepted by the Optionee and a duplicate
original thereof is received by the Stock Option Officer. In the event of the
exercise of the option or related stock appreciation right in whole, the option
shall be surrendered to the Stock Option Officer for cancellation. In the event
of the exercise of the option or related stock appreciation right in part or of
a change in the number of shares optioned, the option shall be delivered by the
Optionee to the Stock Option Officer for the purpose of making appropriate
notation thereon, or of otherwise reflecting in such manner as the Compensation
and Organization Committee shall determine, the change in the number of shares
optioned.

 

10. The option and related stock appreciation right shall be exercised in
accordance with such administrative regulations as the Compensation and
Organization Committee may from time to time adopt.

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Marathon Oil Corporation

5555 San Felipe Road

Houston, TX 77056

 

LOGO [g59531marathan.jpg]

 

Non-Qualified Stock Option Grant

(1990 Stock Plan)

    

 

[Date]

 

APPENDIX

 

For purposes of grants made under Marathon Oil Corporation’s 1990 Stock Plan, a
“change in control of the Corporation” 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:

 

A. 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
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 (i) the Corporation or
any of its subsidiaries, (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Corporation or any of its subsidiaries,
(iii) an underwriter temporarily holding securities pursuant to an offering of
such securities, or (iv) 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; or

 

B. 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
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

 

C. There is consummated a merger or consolidation of the Corporation or a
subsidiary thereof with any other corporation, other than a merger or
consolidation which would result in the holders of the voting securities of the
Corporation outstanding immediately prior thereto holding securities which
represent immediately after such merger or consolidation 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) or the
stockholders 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.

 

ENDORSEMENTS

 

Date of Exercise of

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  Number of Shares

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Balance

of Shares

on Option

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  Authorized Signature

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Endorsement

Date

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Option

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  Stock
Appreciation
Right

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  Exercised

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  Surrendered
in Exercise of
Stock
Appreciation
Right

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