2003 Committee Charter : MRO
MARATHON OIL CORPORATION
Compensation Committee Charter
(Effective January 1, 2003)
Statement of Purpose
The Compensation Committee is a standing committee of the Board of Directors. The
purpose of the Committee is to discharge the Board's responsibility related to
compensation of the Company's executive officers and such other employees as the
Committee may determine and related matters. The Committee shall also produce an
annual report of the Company's compensation practices for inclusion in the annual proxy
statement in accordance with applicable rules and regulations.
The Committee shall have the ultimate authority and responsibility to engage and
terminate any outside consultant to assist in determining appropriate compensation
levels for the Chief Executive Officer ("CEO") or other management and to approve the
terms of any such engagement and the fees of any such consultant. In discharging its
responsibilities, the Committee shall have full access to any relevant records of the
Company and may also request that any officer or other employee of the Company,
including the Company's senior compensation or human resources executives, the
Company's outside counsel or any other person meet with any members of, or
consultants to, the Committee.
The Compensation Committee shall be comprised of not less than three nor more than
ten members. Each member shall (i) be a member of the Board of Directors, (ii) be
independent and qualified under standards established by applicable law and stock
exchange listing standards, (iii) qualify as an "outside director" under Section 162(m) of
the Internal Revenue Code, as amended, and (iv) meet the requirements of a "nonemployee
director" for purposes of Section 16 of the Securities Exchange Act of 1934,
as amended. Except in any such member's capacity as a member of the Compensation
Committee, the Board of Directors, or any other board committee, no member shall
accept any consulting, advisory, or other compensatory fee from the Company, or be an
affiliated person of the Company or any subsidiary thereof.
The Compensation Committee will meet at least four times each year, with authority to
convene additional meetings as circumstances require. All Committee members are
expected to attend each meeting, in person or via teleconference. Meeting agendas will
be prepared and provided in advance to members, along with appropriate briefing
materials. Minutes of each meeting will be prepared. If requested by any member of the
Committee, time shall be allotted for an executive session of Committee members only
and any executives or outside advisors they might want to invite.
A majority of the total number of Committee members then in office shall constitute a
quorum for the transaction of business at any meeting. All matters shall be decided by
the affirmative vote of a majority of members present in person or by proxy at a meeting
duly called and held.
The following shall be the principal responsibilities of the Compensation Committee:
1. Policies and Procedures on Executive Compensation. The Committee shall
make recommendations to the Board and to the boards of subsidiaries on all
matters of policy and procedures relating to executive compensation.
2. Compensation of CEO. With guidance from the Board of Directors, the
Committee shall establish the CEO's compensation (including salary, annual
bonus and long-term incentives) level based on the Board's performance
evaluation of the CEO. The Committee chairperson shall communicate any
compensation adjustments to the CEO each year.
3. Compensation of Executive Officers. In addition to providing guidance to the
Board on the CEO's compensation, the Committee shall approve the
compensation of the other executive officers.
4. Succession Planning. The Committee and, as appropriate, the Board of
Directors shall periodically review the executive management structure of the
Company and the succession plan for the positions within that structure with the
Chairman of the Board and the Chief Executive Officer. The Committee shall
recommend the selection of individuals for such positions to the Board of
5. Post-Service Arrangements. The Committee shall evaluate the post-service
arrangements and benefits of the CEO and other officers and their
reasonableness in light of practices at comparable companies and any benefits
received by the Company in connection with such arrangements.
6. Incentive Compensation Plans. The Committee shall make recommendations to
the Board of Directors with respect to the establishment and terms of the
Company's incentive compensation plans and equity-based plans and shall
administer such plans, including the approval of grants of options, stock
appreciation rights, restricted stock and other incentives under those plans. If an
incentive compensation plan provides for the grant by the Committee of a pool of
options, stock appreciation rights, restricted stock or other incentives to be
followed by an allocation of awards by a committee consisting of one or more
officer-directors, this Committee may grant to one or more officer-directors the
authority to allocate such awards on an individual basis consistent with the terms
of any such plan.
7. Confirmation of Performance Levels. The Committee shall timely confirm as to
the meeting of applicable performance levels under the Company's incentive
8. Approval of Report for Proxy Statement. The Committee shall approve the
annual report on executive compensation for inclusion in the Company's annual
9. Benefit Plans. The Committee shall create, amend, and terminate, subject to
shareholder approval if required, officer plans and employee benefit plans,
except for the authorization to issue additional shares of the Company's common
stock which authority is reserved for the Board. The Committee shall have the
authority to appoint and terminate the named fiduciary or fiduciaries of such
plans and shall monitor their performance, unless such fiduciaries are specified
in the constituent plan documents.
10. Director Plans. The Committee shall have the authority to make administrative
amendments to any director plans, subject to any required shareholder approval.
11. Committee Performance Evaluation. The Committee shall evaluate its
performance on an annual basis and develop criteria for such evaluation
consistent with the responsibilities set forth in this charter.
12. Delegation. The Committee may delegate any of its responsibilities to a
subcommittee comprised of one or more members of the Committee. In addition,
the Committee may delegate to Company officers or the Salary and Benefits
Committee or a similar committee any of its responsibilities with respect to nonequity
based plans including, but not limited to, plans created pursuant to the
Employee Retirement Income Security Act of 1974 and employment practices
created consistent with the various state laws.
13. Other Delegated Responsibilities. The Committee shall also carry out such other
duties that may be delegated to it by the Board of Directors from time to time.
14. Review of Charter. The Committee shall reassess and report to the Board on the
adequacy of this charter on an annual basis.