exv10w27



 






Exhibit 10.27




MARATHON OIL COMPANY




EXCESS BENEFIT PLAN




Amended and Restated As Of




January 1, 2006




 









 





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




 









 






	 	 	 	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




 









 






	 	 	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





 









 











	 	 	 	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.




 









 












	 	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




 









 






	 	 	 	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.




 









 






	 	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.




 









 











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.




 









 








     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)