Exhibit 10.27
MARATHON OIL COMPANY
EXCESS BENEFIT PLAN
Amended and Restated As Of
January 1, 2006

 

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EXCESS BENEFIT PLAN
ARTICLE I

I.   Purpose       On February 5, 1976, the Board of Directors of the former
Marathon Oil Company (now named Marathon Oil Company) resolved, effective
January 1, 1976, to compensate employees for the loss of benefits under the
Retirement Plan of Marathon Oil Company (the “Retirement Plan”) and the loss of
Company contributions to the Marathon Oil Company Thrift Plan (the “Thrift
Plan”) that occur due to the limits placed by the Internal Revenue Code (IRC) on
benefits payable and contributions permitted under qualified plans. On the date
of that resolution, the only limits placed by the IRC were those contained in
IRC §415.       On May 6, 1982, the former Marathon Oil Company adopted a Plan
of Partial Liquidation. Pursuant to the Plan of Partial Liquidation and an
Agreement for Implementation of Plan of Partial Liquidation dated July 10, 1982,
Marathon Oil Company (formerly USS Holdings Company, Inc.) assumed all of the
obligations, terms, and conditions of the Retirement Plan, Thrift Plan, and this
Excess Benefit Plan. As a result, the term “Company” as referred to herein shall
include all members of the controlled group of corporations to which Marathon
Oil Company belongs.       On July 5, 1988, the Executive Committee of the Board
of Directors of Marathon Oil Company approved amendments to this Excess Benefit
Plan effective January 1, 1988, designed to compensate employees for the loss of
benefits under the Retirement Plan and the Thrift Plan due to certain additional
limitations on benefits payable under qualified plans and contributions
permitted under qualified plans which were added to the IRC by the Tax Reform
Act of 1986. These limitations include IRC §415, IRC §401(k), IRC §401(m), IRC
§402 (g), and IRC §401 (a)(17).       Effective January 1, 2006, this Excess
Benefit Plan is restated to incorporate prior amendments.       This Excess
Benefit Plan sets forth the terms and conditions under which benefits designed
to compensate employees for the aforementioned losses of benefits shall be
accrued and paid by the Company.

ARTICLE II

II.   Eligibility       The following individuals are eligible to accrue Excess
Benefit Plan benefits:

  A.   Every individual who qualifies for a benefit under the terms of the
Retirement

 

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      Plan and whose benefit as determined under Article V, Section A, or B and
C, of the Retirement Plan is reduced by any of the following limitations:

  1.   IRC §415; or     2.   The annual compensation limit as set forth under
IRC §401(a)(17).

  B.   Every individual who participates in the Thrift Plan and who (i) has
potential contributions to the Thrift Plan limited by IRC requirements to a
point which precludes the individual’s receipt of the maximum matching Company
Contributions provided under Article VI of the Thrift Plan; (ii) is limited by
IRC requirements to making contributions to the Plan at a percentage that is
less than their elected contribution percentage; and (iii) continues to make
After-Tax and MSP Contributions to the Thrift Plan at the maximum rate as
limited by IRC requirements.         As used in this Section B, the term “IRC
requirements” includes, and is limited to the following requirements:

  1.   IRC §415;     2.   IRC §401(k) (Actual Deferral Percentage test) and IRC
§401(m) (Actual Contribution Percentage test);     3.   The IRC §402(g) annual
dollar limitation on MSP Contributions; or     4.   The annual compensation
limit as set forth under IRC §401(a)(17).

  C.   Marathon Oil Company employees in Grade 19 and above who are limited to
contributing an amount to their MSP Account which is less than the maximum
potential amount of contributions that could be matched by Company Contributions
under the Thrift Plan (i) because of the results of the Actual Deferral
Percentage test, or (ii) because of the attainment of the annual dollar
limitation on MSP Contributions, and who:

  1.   continues to contribute their maximum permissible amount to the MSP
Account as determined under the Thrift Plan; and     2.   is not suspended from
making After-Tax Contributions under the terms of the Thrift Plan.

    Effective January 1, 2006, any Excess Thrift accruals for employees eligible
for the Marathon Oil Company Deferred Compensation Plan shall accrue under the
Deferred Compensation Plan rather than the MOC Excess Benefit Plan, regardless
of whether the eligible employee elects to participate in the Deferred
Compensation Plan.       Every individual who is eligible to receive benefits
under this Excess Benefit Plan by reason of their active employment with the
Company shall be known as a Participant. Every individual who becomes eligible
to receive benefits under this Excess Benefit Plan in the event of the death of
a Participant shall be known as a

 

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    Beneficiary. The Beneficiary of a Participant under this Excess Benefit Plan
shall be such Beneficiary as may be provided under Article VI, Section B of this
Plan.

ARTICLE III

III.   Excess Retirement and Thrift Benefits

  A.   Amount of Excess Retirement Benefit         The amount of Excess
Retirement Benefit which a Participant or Beneficiary is entitled to receive
shall be equal to the excess of (1) over (2) below:

  (1)   The amount of benefit which such Participant or Beneficiary would be
entitled to receive under the Retirement Plan if such benefit were computed
without giving effect to the limitations referenced under Article II, Section A
of this Plan and including elected deferred compensation contributions as
permitted under the Marathon Oil Company Deferred Compensation Plan; less    
(2)   The amount of benefit which such Participant or Beneficiary is entitled to
receive under the Retirement Plan.

      Employees in Grade 19 and above who are MRO Officers shall be entitled to
an additional Excess Retirement Benefit equal to the difference between (3) and
(4) below:

  (3)   An amount calculated under the Retirement Plan benefit formula, without
regard to any IRC-mandated limitations and including elected deferred
compensation contributions as permitted under the Marathon Oil Company Deferred
Compensation Plan, and substituting the following Final Average Pay
(FAP) definition for the definition of “Final Average Pay” contained in the
Retirement Plan:

Final Average Pay shall be the highest pay, excluding bonuses, of a member for
any consecutive 36-month period during the last ten years of employment plus the
highest three bonuses paid out of the last 10 years (not necessarily
consecutive), divided by 36.
The following applies to any employee of a participating employer who is not
eligible as of December 31 of a given calendar year, but who was an eligible
member during such calendar year:

  a.   The end-date for the ten-year period for identifying the three high (not
necessarily consecutive) bonuses is frozen as of the December 31 of the year
during which the employee lost eligibility under the Plan. (Hereinafter referred
to as “Supplemental Bonus Recognition Period”.) The bonus earned during the last
year of the Supplemental Bonus Recognition

 

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      Period but paid in the following calendar year will replace the last bonus
paid in the Supplemental Bonus Recognition Period provided it is greater than
the last bonus paid in the Supplemental Bonus Recognition Period.     b.   No
additional bonuses earned after the frozen end-date of the Supplemental Bonus
Recognition Period will be recognized for the purpose of the three highest
non-consecutive bonus recognition formula.     c.   On December 31 of each
calendar year following the frozen end-date of the Supplemental Bonus
Recognition Period, the Supplemental Bonus Recognition Period will be reduced by
one year until it reaches zero, thereby resulting in a total “wear-away” of the
employee’s Supplemental Bonus Recognition Period.

With respect to an employee who transfers to a participating employer from a
non-participating employer of the Marathon Oil Corporation Controlled Group and
who prior to their transfer had a Supplemental Bonus Recognition Period with a
frozen end-date under their previous employer’s Excess Benefit Plan, such
employee’s Supplemental Bonus Recognition Period, if applicable under the terms
of Marathon’s Excess Benefit Plan, will be the same length as established at the
time of the transfer and will continue to reduce under the terms of this Plan.

  (4)   An amount as normally determined under the Retirement Plan, plus any
retirement benefit otherwise payable under the Excess Benefit Plan (i.e.,
exclusive of any benefits attributable to the calculation in (3) above).

  B.   Amount of Excess Thrift Benefit         The amount of Excess Thrift
Benefit which a Participant or Beneficiary is entitled to receive shall be equal
to the sum of the excess of (1) over (2) below for each calendar year
accumulated with interest to date of payment at the “Cash with Interest” rate
provided under Article VIII of the Thrift Plan:

  (1)   The amount of Company Contributions under Article VI of the Thrift Plan
that would have been credited to the Participant’s Thrift Plan account if the
limitations referenced under Article II, Sections B and C of this Plan were not
given effect for such year; less     (2)   The amount of Company Contributions
actually credited to the Participant’s account in such year.

      If the “Cash with Interest” rate becomes unavailable for any reason, the
Company shall, at its sole discretion, substitute a similar interest rate which
will be applicable for time periods thereafter.

 

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  C.   Payment of Excess Benefits         Payment of Excess Benefits shall be
accomplished by means of unfunded payments directly from the Company.        
Participants and Beneficiaries must commence their Excess Retirement Benefits
following the participant’s separation from service (in accordance with the
distribution rules approved by the Plan Administrator) regardless of whether
they have commenced benefits under the qualified Retirement Plan. A Participant
must be vested under the Retirement Plan in order for an Excess Retirement
Benefit to be payable. The amount of any lump sum payment hereunder shall be
determined by using the same factors and assumptions which would be used by the
Retirement Plan for such Participant or Beneficiary at the time the form of
payment is calculated. In the event a participant has not made a distribution
election, their Excess Retirement Benefit will be distributed as a lump sum.    
    Excess Thrift Benefits shall be paid only to Participants who are fully
vested under the Thrift Plan or to their Beneficiaries. Payment of Excess Thrift
Benefits shall be made in a single sum payment upon the Participant’s
termination of employment from the Company or in such other manner as may be
approved by the Plan Administrator prior to the Participant’s termination of
employment. The balance of any Excess Thrift Benefit not paid at the
Participant’s retirement or termination of employment shall accrue interest at
the “Cash with Interest” rate provided under Article VIII of the Thrift Plan
until the entire balance has been paid. If the “Cash with Interest” rate becomes
unavailable for any reason, the Company shall, at its sole discretion,
substitute a similar interest rate which will be applicable for time periods
thereafter.

ARTICLE IV

IV.   Administration of Excess Benefit Plan       The Company has delegated its
administrative authority hereunder to the Plan Administrator of the Retirement
Plan or their successor. The Plan Administrator shall have authority to control
and manage the operation and administration of the Excess Benefit Plan,
including all rights and powers necessary or convenient to the carrying out of
its functions hereunder. The Plan Administrator has the authority to appoint
Assistant Plan Administrators as may be deemed necessary.

ARTICLE V

V.   Amendment or Termination

  A.   Amendments and Termination         The Company, in its sole discretion,
may amend or terminate this Excess

 

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      Benefit Plan at any time, but in no event shall such amendment or
termination adversely affect the benefits accrued to the Participants or
Beneficiaries hereunder prior to the effective date of such amendment or
termination.

  B.   Notice of Amendment or Termination         The Plan Administrator shall
notify Participants or Beneficiaries under the Excess Benefit Plan of any
amendment affecting their benefits under or terminating the Excess Benefit Plan
within a reasonable time after such action.

ARTICLE VI

VI.   Miscellaneous

  A.   No Guarantee of Employment, etc.         Neither the creation of the
Excess Benefit Plan nor anything contained herein shall be construed as giving
any Participant hereunder or other employees of the Company any right to remain
in the employ of the Company.     B.   Beneficiaries         If a member dies
prior to retirement or termination, the Retirement Excess Benefit will be paid
to the eligible surviving spouse or estate (if no eligible surviving spouse).
For retired or terminated members and subject to any designation guidelines
established by the Plan Administrator, each retired or terminated Participant
shall have the right at any time to designate, rescind or change the designation
of, a primary and a contingent Beneficiary to receive the Retirement Excess
Benefits payable in the event of the Participant’s death. Such designation,
rescission or change of designation shall be made in writing, shall be filed
with the Plan Administrator, and shall be controlling over any disposition by
will or otherwise.

  1.   Thrift Excess Benefits of the deceased’s members account will be paid to
the beneficiary or beneficiaries designated under the Thrift Plan.     2.   All
Members         In any event, if there is no valid beneficiary under the terms
of this Plan, the benefits under this Plan will be paid to the person or persons
comprising the first surviving class of the Eligible Classes as set forth below:

  a.   The Participant’s spouse.     b.   The Participant’s children.     c.  
The Participant’s surviving parents.     d.   The Participant’s surviving
brothers and sisters.

 

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  e.   The executor or administrator of the Participant’s estate.

  C.   Rights of Participants and Beneficiaries         Payment of benefits
hereunder to Participants or Beneficiaries shall be made only to them or their
legal representatives, and there shall be no interest in any benefit payments to
be made prospectively, or any part thereof, nor shall benefits hereunder or the
expectation of such benefits be assignable by operation of law or otherwise, or
be subject to any form of reduction for the debts or defaults of such
Participants or Beneficiaries whether to the Company or to others. However, this
Section C shall not apply to portions of benefits applied at the direction of
the person eligible to receive such benefits to the premiums on life or health
insurance provided under any Company program, or to the withholding of taxes.  
  D.   No Requirement to Fund         No provisions in the Excess Benefit Plan,
either directly or indirectly, shall be construed to require the Company to
reserve, or otherwise set aside, funds for the payment of benefits hereunder.  
      Any payments are to be made from the general assets of the Company. The
Company’s obligation to make payments is a general obligation which is outside
the provisions of its qualified plans and the trusts created thereunder.     E.
  Controlling Law         To the extent not preempted by the laws of the United
States of America, the laws of the State of Texas shall be the controlling state
law in all matters relating to the Excess Benefit Plan and shall apply.     F.  
Severability         If any provisions of the Excess Benefit Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts of the Excess Benefit Plan, but this Plan shall be
construed and enforced as if said illegal or invalid provision had never been
included herein.     G.   Affect on Other Benefit Plans         Any benefit
payable under the Retirement Plan or the Thrift Plan shall be paid solely in
accordance with the terms and provisions of those Plans, and nothing in the
Excess Benefit Plan shall operate or be construed in any way to modify, amend,
or affect the terms and provisions of the Retirement Plan or Thrift Plan.

 

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ARTICLE VII
In addition to the other methods of amending MOC’s employee benefit plans,
practices, and policies (hereinafter referred to as ‘MOC Employee Benefit
Plans’) which have been authorized, or may in the future be authorized, by the
Marathon Oil Company Board of Directors, the Company’s Vice President of Human
Resources may approve the following types of amendments to MOC Employee Benefit
Plans:

i.   With the opinion of counsel, technical amendments required by applicable
laws and regulations;   ii.   With the opinion of counsel, amendments that are
clarifications of plan provisions;   iii.   Amendments in connection with a
signed definitive agreement governing a merger, acquisition or divestiture such
that, for MOC Employee Benefit Plans, needed changes are specifically described
in the definitive agreement, or if not specifically described in the definitive
agreement, the needed changes are in keeping with the intent of the definitive
agreement;   iv.   Amendments in connection with changes that have a minimal
cost impact (as defined below) to the Company; and   v.   With the opinion of
counsel, amendments in connection with changes resulting from state or federal
legislative actions that have a minimal cost impact (as defined below) to the
Company.

For purposes of the above, “minimal cost impact” is defined as an annual cost
impact to the Company per MOC Employee Benefit Plan case that does not exceed
the greater of (i) an amount that is less than one-half of one percent of its
documented total cost (including administrative costs) for the previous calendar
year, or (ii) $100,000.

 

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     IN WITNESS WHEREOF, Marathon Oil Company has caused its name to be hereunto
subscribed by its Vice President, Marathon Oil Company, and its corporate seal
to be hereto affixed.

                 
 
              MARATHON OIL COMPANY
 
               
 
          By:      /s/ Kenneth L. Matheny
 
               
 
               
 
          Its:   Kenneth L. Matheny
 
              Vice President
 
               
 
          Attest:    
 
               
 
               
 
          Its:    
 
               
 
              (Corporate Seal)
 
               
STATE OF TEXAS )
               
 
  ) ss.            
COUNTY OF HARRIS)
               

     On this                    day of                                         ,
2006, before me, a notary public within and for the State of Texas, personally
appeared Kenneth L. Matheny and
                                                            , to me personally
known, who being by me first duly sworn, did depose and say that they are the
Assistant Treasurer, and the
                                                            , respectively, of
Marathon Oil Company, the Corporation named in and which executed the foregoing
instrument; that the seal affixed to the instrument (if any) is the seal of said
corporation, and that said instrument was signed and sealed on behalf of said
corporation by authority of its Board of Directors; and they acknowledged said
instrument to be the free act and deed of said corporation.

     
 
   
 
   
 
   
 
  Notary Public, State of Texas
 
   
(Notarial Seal)