UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 5, 2011
Marathon Petroleum Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 001-35054 | 27-1284632 | ||
|
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
|
539 South Main Street Findlay, Ohio |
45840-3229 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code:
(419) 422-2121
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
New Equity Awards
On June 30, 2011, the spin-off of Marathon Petroleum Corporation (“MPC,” “we” or “us”) from Marathon Oil Corporation (“MRO”) was completed through the distribution of shares of our common stock to holders of outstanding shares of MRO’s common stock (the “Spin-off”). In connection with the Spin-off, we entered into an Employee Matters Agreement with MRO. We filed a copy of the Employee Matters Agreement with the Securities and Exchange Commission (the “SEC”) on May 26, 2011 as an exhibit to a Registration Statement on Form 10 (the “Form 10”). The Employee Matters Agreement was amended on June 30, 2011 (as amended, the “EMA”), and we filed a copy of the Amendment to Employee Matters Agreement with the SEC on July 1, 2011 as an exhibit to a Current Report on Form 8-K.
At the time of the Spin-off, outstanding equity awards that had been previously granted pursuant to the MRO Stock Plans (as such term is defined within the EMA) to our directors and employees were adjusted and new MPC equity awards were granted pursuant to the terms of the EMA (the “Spin-off Adjusted Equity Awards”). As noted in the Form 10, the Spin-off Adjusted Equity Awards were intended to generally preserve the intrinsic value of the original MRO awards.
The methodology set forth within the EMA to calculate the Spin-off Adjusted Equity Awards relied on a ratio of the simple average of the high and low trading prices reported for a share of MRO common stock for June 30, 2011 and the simple averages of the high and low trading prices reported for a share of MRO and MPC common stock for July 1, 2011. However, on July 1, during a period of heightened volatility of approximately 30 seconds in duration, trades of MPC common stock occurred on other exchanges at prices well above the day’s trading range on the NYSE primary market. These trades had a significant adverse effect on the calculation of the Spin-off Adjusted Equity Awards. Consequently, on December 5, 2011, our Board approved new grants of approximately 13,000 MPC restricted stock units, approximately 9,700 shares of MPC restricted stock and options for approximately 363,000 shares of MPC common stock to a total of approximately 300 recipients, including six of the non-employee members of our Board and the five named executive officers set forth below.
The number of new MPC restricted stock units, shares of MPC restricted stock and MPC stock options granted to each recipient was determined through an assessment by our Board in consultation with its independent compensation consultant of the adverse effect of the aberrant trades on the Spin-off Adjusted Equity Awards. The exercise price for all of the new options is the closing stock price of MPC common stock on the grant date of December 5, 2011.
All of these new grants were made pursuant to the Marathon Petroleum Corporation Second Amended and Restated 2011 Incentive Compensation Plan (the “Plan”).
The new MPC equity awards described in this Current Report on Form 8-K include the following awards granted to the MPC named executive officers listed below:
|
Name |
Awards | |||||||||||
|
Richard D. Bedell |
503 | shares of MPC restricted stock and stock options for | 7,972 MPC shares | |||||||||
|
Gary R. Heminger |
3,230 | shares of MPC restricted stock and stock options for | 36,856 MPC shares | |||||||||
|
Anthony R. Kenney |
625 | shares of MPC restricted stock and stock options for | 7,131 MPC shares | |||||||||
|
Garry L. Peiffer |
690 | shares of MPC restricted stock and stock options for | 8,413 MPC shares | |||||||||
|
J. Michael Wilder |
535 | shares of MPC restricted stock and stock options for | 5,666 MPC shares | |||||||||
Each MPC restricted stock award and MPC stock option award granted to the MPC named executive officers will vest in three approximately equal amounts on each of the following dates: December 5, 2012, December 5, 2013, and December 5, 2014. The MPC stock option awards have an exercise price of $34.40 per share and a 10-year term. The MPC restricted stock awards and MPC stock option awards were made pursuant to the terms and conditions of the Plan and award agreements, the forms of which were approved and adopted by our Board on December 5, 2011 and are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and incorporated by reference herein.
Use of Company Aircraft
Pursuant to a policy adopted by our Board on May 25, 2011 that is substantially the same as the MRO corporate aircraft policy referenced in the Form 10 (the “Policy”), our named executive officers may use company aircraft for business purposes only, unless otherwise authorized by our President and CEO for named executive officers generally, or by the Chairman of our Board for our President and CEO.
To promote the safety, security and productivity of our President and CEO, on December 5, 2011, the Corporate Governance and Nominating Committee of our Board revised the Policy by authorizing the personal use of company aircraft by our President and CEO with the proviso that any such personal use shall be reported to our Board’s Compensation Committee on a periodic basis. Further, the value of such personal use will be taxable as income to our President and CEO with no income tax payment assistance provided by MPC.
Item 9.01 Financial Statements and Exhibits.
|
Exhibit Number |
Description |
|
| 10.1 | Form of Section 16 Officer Supplemental Restricted Stock Award Agreement | |
| 10.2 | Form of Section 16 Officer Supplemental Nonqualified Stock Option Award Agreement | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Marathon Petroleum Corporation | ||||
|
Date: December 7, 2011 |
By: | /s/ J. Michael Wilder | ||
|
|
||||
| Name: J. Michael Wilder | ||||
| Title: Vice President, General Counsel and Secretary | ||||
EXHIBIT INDEX
|
Exhibit Number |
Description |
|
| 10.1 | Form of Section 16 Officer Supplemental Restricted Stock Award Agreement | |
| 10.2 | Form of Section 16 Officer Supplemental Nonqualified Stock Option Award Agreement | |
Exhibit 10.1
MARATHON PETROLEUM CORPORATION
2011 INCENTIVE COMPENSATION PLAN
SUPPLEMENTAL
RESTRICTED STOCK AWARD AGREEMENT
SECTION 16 OFFICER
[GRANT DATE]
Pursuant to this Award Agreement and the Marathon Petroleum Corporation Second Amended and Restated 2011 Incentive Compensation Plan (the “Plan”), MARATHON PETROLEUM CORPORATION (the “Corporation”) hereby grants to [NAME] (the “Participant”), an employee of the Corporation or a Subsidiary, on [DATE] (the “Grant Date”), [NUMBER] restricted shares of Common Stock (“Restricted Shares”). The number of Restricted Shares awarded is subject to adjustment as provided in Section 14 of the Plan, and the Restricted Shares are subject to the following terms and conditions:
1. Relationship to the Plan.
This grant of Restricted Shares is subject to all of the terms, conditions and provisions of the Plan and administrative interpretations, if any, that have been adopted by the Committee. Except as defined in this Award Agreement (including in Paragraph 9 hereof), capitalized terms shall have the same meanings given to them under the Plan. To the extent that any provision of this Award Agreement conflicts with the express terms of the Plan, the terms of the Plan shall control and, if necessary, the applicable provisions of this Award Agreement shall be hereby deemed amended so as to carry out the purpose and intent of the Plan.
2. Vesting and Forfeiture of Restricted Shares.
The Restricted Shares shall vest in three cumulative annual installments, as follows:
(i) one-third of the Restricted Shares shall vest on the first anniversary of the Grant Date;
(ii) an additional one-third of the Restricted Shares shall vest on the second anniversary of the Grant Date; and
(iii) the remaining one-third of the Restricted Shares shall vest on the third anniversary of the Grant Date;
Provided, however, that the Participant must be in continuous Employment from the Grant Date through the vesting date in order for the Restricted Shares to vest. If the Employment of the Participant is terminated for any reason (including non-Mandatory Retirement) other than death or Mandatory Retirement, any Restricted Shares that have not vested as of the date of such termination of Employment shall be forfeited to the Corporation.
(b) The Restricted Shares shall immediately vest in full, irrespective of the limitations set forth in subparagraph (a) above, upon:
(i) termination of the Participant’s Employment due to death;
(ii) termination of the Participant’s Employment due to Mandatory Retirement; or
(iii) a Change in Control of the Corporation, provided that as of such Change in Control the Participant has been in continuous Employment since the Grant Date.
3. Issuance of Shares. Effective as of the Grant Date, the Committee or its designated representative shall cause a number of shares of Common Stock equal to the number of Restricted Shares to be issued and registered in the Participant’s name, subject to the conditions and restrictions set forth in this Award Agreement and the Plan. Such issuance and registration shall be evidenced by an entry on the registry books of the Corporation and, if the Committee so elects, evidenced by a certificate issued by the Corporation. Any book entries and certificates evidencing the Restricted Shares shall carry or be endorsed with a legend referring to the conditions and restrictions set forth in this Award Agreement and the Plan. In the event the Restricted Shares are evidenced by a certificate, such certificate shall be held in custody by the Corporation unless and until the corresponding Restricted Shares are vested. The Participant shall not be entitled to delivery of a certificate or release of the restrictions on the book entry evidencing such Restricted Shares for any portion of the Restricted Shares unless and until the related Restricted Shares have vested pursuant to Paragraph 2. In the event the Restricted Shares are forfeited in full or in part, the Participant hereby consents to the relinquishment of the forfeited Restricted Shares theretofore issued and registered in the Participant’s name to the Corporation at that time.
4. Forfeiture or Repayment Resulting from Forfeiture Event.
(a) If there is a Forfeiture Event either while the Participant is employed or within three years after termination of the Participant’s Employment, then the Committee may, but is not obligated to, cause all of the Participant’s Restricted Shares to be forfeited by the Participant and returned to the Corporation.
(b) If there is a Forfeiture Event either while the Participant is employed or within three years after termination of the Participant’s Employment, then the Committee may, but is not obligated to, require the Participant to pay to the Corporation in cash an amount (the “Forfeiture Amount”) up to (but not in excess of) the lesser of (i) the value of such Restricted Shares that have previously vested, determined as of the date such shares vested or (ii) the value of such Restricted Shares that have previously vested, determined as of the date on which the Committee makes a demand for payment of the Forfeiture Amount. Any Forfeiture Amount shall be paid by the Participant within sixty (60) days of receipt from the Corporation of written notice requiring payment of such Forfeiture Amount.
(c) This Paragraph 4 shall apply notwithstanding any provision of this Award Agreement to the contrary and is meant to provide the Corporation with rights in addition to any other remedy which may exist in law or in equity. This Paragraph 4 shall not apply to the Participant following the effective time of a Change in Control.
5. Taxes. Pursuant to Section 11 of the Plan, the Corporation or its designated representative shall have the right to withhold applicable taxes from the shares of Common Stock otherwise deliverable to the Participant due to the vesting of Restricted Shares pursuant to Paragraph 2, or from other compensation payable to the Participant, at the time of the vesting and delivery of such shares.
6. Shareholder Rights. Unless and until the Restricted Shares are forfeited, the Participant shall have the rights of a shareholder with respect to the Restricted Shares as of the Grant Date, including the right to vote the Restricted Shares and the right to receive dividends. The Participant hereby consents to receiving any dividends on the unvested Restricted Shares through the Corporation’s payroll and, accordingly, directs the Corporation’s transfer agent to pay such dividends to the Corporation on his or her behalf.
7. Nonassignability. Upon the Participant’s death, the Restricted Shares shall be transferred to the
Participant’s estate. Otherwise, the Participant may not sell, transfer, assign, pledge or otherwise encumber any portion of the Restricted Shares, and any attempt to sell, transfer, assign, pledge, or encumber any portion of the Restricted Shares shall have no effect.
8. No Employment Guaranteed. Nothing in this Award Agreement shall give the Participant any rights to (or impose any obligations for) continued Employment by the Corporation or any Subsidiary or successor, nor shall it give such entities any rights (or impose any obligations) with respect to continued performance of duties by the Participant.
9. Modification of Agreement. Any modification of this Award Agreement shall be binding only if evidenced in writing and signed by an authorized representative of the Corporation, provided that no modification may, without the consent of the Participant, adversely affect the rights of the Participant.
10. Definitions. For purposes of this Award Agreement:
“Change in Control,” unless otherwise defined by the Committee, means 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, 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 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 (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);
(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
(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 holders of 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 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.
Notwithstanding any other provision to the contrary, in no event shall the transfer of ownership interests in the Corporation in and of itself constitute a Change in Control under this Award Agreement.
“Employment” means employment with the Corporation or any of its Subsidiaries. For purposes of this Award Agreement, Employment shall also include any period of time during which the Participant is on Disability status.
“ Forfeiture Event ” means the occurrence of at least one of the following: (a) the Corporation is required, pursuant to a determination made by the Securities and Exchange Commission or by the Audit Committee of the Board, to prepare a material accounting restatement due to the noncompliance of the Corporation with any financial reporting requirement under applicable securities laws as a result of misconduct, and the Committee determines that: (1) the Participant knowingly engaged in the misconduct; (2) the Participant was grossly negligent with respect to such misconduct; or (3) the Participant knowingly or grossly negligently failed to prevent the misconduct; or (b) the Committee concludes that the Participant engaged in fraud, embezzlement or other similar misconduct materially detrimental to the Corporation.
“Mandatory Retirement” means termination of Employment as a result of the Corporation’s policy, if any, requiring the mandatory retirement of officers and/or other employees upon reaching a certain age or milestone.
Exhibit 10.2
MARATHON PETROLEUM CORPORATION
2011 INCENTIVE COMPENSATION PLAN
SUPPLEMENTAL
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
SECTION 16 OFFICER
[GRANT DATE]
Pursuant to this Award Agreement, MARATHON PETROLEUM CORPORATION (the “Corporation”) hereby grants to [NAME] (the “Optionee”), an employee of the Corporation or a Subsidiary, on [DATE] (the “Grant Date”), a right (the “Option”) to purchase from the Corporation [NUMBER] shares of Common Stock of the Corporation at a grant price of $[PRICE] per share (the “Grant Price”), pursuant to the Marathon Petroleum Corporation Second Amended and Restated 2011 Incentive Compensation Plan (the “Plan”), with such number of shares and such price per share being subject to adjustment as provided in Section 14 of the Plan, and further subject to the following terms and conditions:
1. Relationship to the Plan. This Option is subject to all of the terms, conditions and provisions of the Plan and administrative interpretations thereunder, if any, that have been adopted by the Committee. Except as defined herein (including in Paragraph 11 of this Award Agreement), capitalized terms shall have the same meanings ascribed to them under the Plan. To the extent that any provision of this Award Agreement conflicts with the express terms of the Plan, the terms of the Plan shall control and, if necessary, the applicable provisions of this Award Agreement shall be hereby deemed amended so as to carry out the purpose and intent of the Plan. References to the Optionee also include the heirs or other legal representatives of the Optionee.
2. Exercise and Vesting Schedule.
(a) This Option shall become exercisable in three cumulative annual installments, as follows:
(i) one-third of the Option Shares shall become exercisable on the first anniversary of the Grant Date;
(ii) an additional one-third of the Option Shares shall become exercisable on the second anniversary of the Grant Date; and
(iii) the remaining one-third of the Option Shares shall become exercisable on the third anniversary of the Grant Date;
provided, however, that the Optionee must be in continuous Employment from the Grant Date through the date of exercisability of each installment in order for the Option to become exercisable with respect to additional shares of Common Stock on such date. If the Employment of the Optionee is terminated for any reason other than death or Retirement, any Option Shares that are not exercisable as of the date of such termination of Employment shall be forfeited to the Corporation.
(b) This Option shall become fully exercisable, irrespective of the limitations set forth in subparagraph (a) above, upon:
(i) termination of the Optionee’s Employment due to death;
(ii) termination of the Optionee’s Employment due to Retirement; or
(ii) a Change in Control of the Corporation, provided that as of such Change in Control the Optionee had been in continuous Employment since the Grant Date.
3. Expiration of Option.
(a) Expiration of Option Period . The Option Period shall expire on the tenth anniversary of the Grant Date.
(b) Termination of Employment Due to Death or Retirement . If Employment of the Optionee is terminated due to death or Retirement, the Option shall expire upon the earlier of (i) five years following the date of termination of Employment or (ii) expiration of the Option Period. The death of the Optionee following Retirement but prior to the expiration of the Option shall have no effect on the expiration of the Option.
(c) Termination of Employment by the Corporation for Cause or Due to Resignation . If Employment of the Optionee is terminated by the Corporation or any of its Subsidiaries for Cause or due to voluntary resignation by the Optionee, the Option shall expire upon the termination of Employment.
(d) Termination of Employment by the Corporation Other Than For Cause . If Employment of the Optionee is terminated by the Corporation or any of its Affiliates for any reason other than Cause, the Option shall expire upon the earlier of (i) 90 days following the date of termination of Employment or (ii) expiration of the Option Period.
(e) Termination of Employment Following Change in Control . If Employment of the Optionee is terminated following a Change in Control and, as a result, the Optionee is eligible for severance benefits under a Change in Control Agreement, the Option shall remain exercisable throughout the Option Period.
4. Employment with a Competitor. Notwithstanding anything herein to the contrary, in the event the Committee, the Chief Executive Officer, or an authorized officer determines that the Optionee has accepted or intends to accept employment with a competitor of any business unit of the Corporation, the Committee, the Chief Executive Officer, or the authorized officer may cancel the Option by written notice to the Optionee.
5. Forfeiture or Repayment Resulting from Forfeiture Event.
(a) Forfeiture of Unexercised Option . If a Forfeiture Event occurs during the Optionee’s Employment or within three years following Optionee’s termination of Employment, the Committee may, but is not obligated to, cause all or any portion of the Option granted under this Award Agreement to be forfeited.
(b) Repayment of Spread on Exercised Option . If a Forfeiture Event occurs during the Optionee’s Employment or within three years following Optionee’s termination of Employment, the Committee may, but is not obligated to, require the Optionee to pay to the Corporation an amount in cash up to (but not in excess of) the difference between the Grant Price and market price of the Option on the date of exercise with respect to any shares for which the Option has been exercised (the “Forfeited Spread Amount”). Any Forfeited Spread Amount shall be paid by the Participant within sixty (60) days of receipt from the Corporation of written notice requiring payment of such Forfeited Spread Amount.
(c) Application of Forfeiture Provisions . This Paragraph 5 shall apply notwithstanding any provision of this Award Agreement to the contrary and is meant to provide the Corporation with rights in addition to any other remedy which
may exist in law or in equity. This Paragraph 5 shall not apply to the Optionee following the effective time of a Change in Control.
6. Exercise of Option. Subject to the limitations set forth herein and in the Plan, this Option may be exercised in whole or in part by providing notice to the Committee or its designated representative of the number of Option Shares to be exercised. Such notice shall be accompanied by payment of the Grant Price of such Option Shares in cash or, at the election of the Optionee, in shares of Common Stock or any combination thereof. For purposes of determining the amount, if any, of the purchase price satisfied by payment in Common Stock, such Common Stock shall be valued at its Fair Market Value on the date of exercise. Upon receipt of the purchase price, the Corporation or its designated representative shall issue or cause to be issued to the Optionee a number of shares of Common Stock equal to the number of Option Shares then exercised.
7. Taxes. The Corporation or its designated representative shall have the right to withhold applicable taxes from the shares of Common Stock otherwise payable to the Optionee upon exercise of the Option or from compensation otherwise payable to the Optionee at the time of exercise pursuant to Section 13 of the Plan.
8. Shareholder Rights. The Optionee shall have no rights of a shareholder with respect to the Option Shares unless and until such time as the Option has been exercised and shares of Common Stock have been issued to the Optionee in conjunction with the exercise of the Option.
9. Nonassignability. During the Optionee’s lifetime, the Option may be exercised only by the Optionee or by the Optionee’s guardian or legal representative. Upon the Optionee’s death, the Option shall be transferred to the Optionee’s estate. Otherwise, the Optionee may not sell, transfer, assign, pledge or otherwise encumber any portion of the Option, and any attempt to sell, transfer, assign, pledge, or encumber any portion of the Option shall have no effect.
10. No Employment Guaranteed. Nothing in this Award Agreement shall give the Optionee any rights to (or impose any obligations for) continued Employment by the Corporation or any Affiliate thereof or successor thereto, nor shall it give such entities any rights (or impose any obligations) with respect to continued performance of duties by the Optionee.
11. Modification of Agreement. Any modification of this Award Agreement shall be binding only if evidenced in writing and signed by an authorized representative of the Corporation, provided that no modification may, without the consent of the Optionee, adversely affect the rights of the Optionee hereunder.
12. Definitions. For purposes of this Award Agreement:
“Cause” means termination from Employment by the Corporation or its Subsidiaries due to unacceptable performance, gross misconduct, gross negligence, material dishonesty, material acts detrimental or destructive to the Corporation or its Subsidiaries, employees or property, or any material violation of the policies of the Corporation or its Subsidiaries.
“Change in Control,” unless otherwise defined by the Committee, means 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, 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 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 (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);
(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
(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 holders of 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 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.
Notwithstanding any other provision to the contrary, in no event shall the transfer of ownership interests in the Corporation in and of itself constitute a Change in Control under this Award Agreement.
“Change in Control Agreement” means any plan, program, agreement, or arrangement under which the Corporation or a Subsidiary agrees to provide benefits to the Optionee in the event he or she is terminated following a Change in Control, as applicable to the Optionee at the relevant time.
“Employment” means employment with the Corporation or any of its Affiliates. For purposes of this Option, Employment shall also include any period of time during which the Optionee is on Disability status.
“ Forfeiture Event ” means the occurrence of at least one of the following: (a) the Corporation is required, pursuant to a determination made by the Securities and Exchange Commission or by the Audit Committee of the Board, to prepare a material accounting restatement due to the noncompliance of the Corporation with any financial reporting requirement under applicable securities laws as a result of misconduct, and the Committee determines that: (1) the Optionee knowingly engaged in the misconduct, (2) the Optionee was grossly negligent with respect to such misconduct, or (3) the Optionee knowingly or
grossly negligently failed to prevent the misconduct; or (b) the Committee concludes that the Optionee engaged in fraud, embezzlement or other similar misconduct materially detrimental to the Corporation.
“Mandatory Retirement” means termination of Employment as a result of the Corporation’s policy, if any, requiring the mandatory retirement of officers and/or other employees upon reaching a certain age or milestone.
“Option Period” means the period commencing upon the Optionee’s receipt of this Award Agreement and ending on the date on which the Option expires pursuant to Paragraph 3(a).
“Option Shares” means the shares of Common Stock covered by this Option.
“Retirement” means (i) for an Employee participating in the Retirement Plans, termination on or after the time at which the Employee is eligible for retirement under the Retirement Plans, or (ii) Mandatory Retirement, or (iii) for an Employee not participating in the Retirement Plans, (a) for an Employee with ten or more years of Employment, termination on or after the Employee’s 50th birthday or (b) termination on or after the Employee’s 65th birthday
“Retirement Plans” means the Marathon Petroleum Corporation Retirement Plan, or a successor plan to either of such plans, as applicable.