Marathon Oil (MRO)

2004 Annual Bonus Awards

        The Compensation Committee (the "Committee") of our Board of Directors approved the following cash bonus payments for the named executive officers for 2004 in accordance with the performance-based bonus program established during the first quarter of 2004 under our stockholder-approved Incentive Compensation Plan:

2005 Base Salaries (effective April 1, 2005)

        The Committee approved base salaries for the named executive officers, effective April 1, 2005, as follows:

Annual Bonus Awards

The Committee approves annual bonus awards under the stockholder-approved Incentive Plan. Marathon's annual bonus target opportunities for officers are designed to provide awards that are competitive with annual bonus target opportunities for similar positions at peer companies. However, since actual bonus payouts are closely tied to performance, exceptional bonuses are awarded for superior performance and reduced or no bonuses are given for performance below our objectives.

During the first quarter, the Committee authorized a bonus pool for 2004 based upon the Company's income from operations. After the pool was certified, the Committee awarded individual bonuses from the pool based upon pre-established performance measures specifically related to the success of the Company and the business unit segments, as well as individual performance.

The performance measures used for consideration of the 2004 bonus payments are listed below. Each officer's bonus payment was tied to the performance measures (among those listed) that correspond to the success of his or her respective business unit segment.

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Marathon Oil Corporation Return on Capital Employed Competitive Comparison

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Safety Performance

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Environmental Impact Measures

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Upstream Adjusted Net Income per Barrel of Oil Equivalent Competitive Comparison

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Downstream Adjusted Operating Income per Barrel of Crude Oil Throughput Competitive Comparison

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Net Proved Reserve Additions

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Refining Mechanical Availability

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Individual Performance, including Living the Marathon Values

As required under the Incentive Plan, the Committee confirmed the performance achievements prior to the payment of awards. The Committee reserves the right to adjust or eliminate an annual bonus award that would otherwise be payable under the Incentive Plan based on its assessment of overall performance.