Marathon Oil (MRO)

Item 12. Security Ownership of Certain Beneficial Owners and Management

        Information required by this item is incorporated by reference to the material appearing under the headings, "Security Ownership of Certain Beneficial Owners" and "Security Ownership of Directors and Executive Officers" in Marathon's Proxy Statement dated March 10, 2005, for the 2005 Annual Meeting of stockholders.

Equity Compensation Plan Information

        The following table provides information as of December 31, 2004, with respect to shares of Marathon's common stock that may be issued under Marathon's existing equity compensation plans:

•

2003 Incentive Compensation Plan



•

1990 Stock Plan – No additional awards will be granted under this plan.



•

Deferred Compensation Plan for Non-Employee Directors – No additional awards will be granted under this plan.



•

2001 Non-Officer Restricted Stock Plan – No additional awards will be granted under this plan.

⁽¹⁾

This number includes the following:

•

3,617,193 stock options and SARs outstanding under the 2003 Incentive Compensation Plan (the "Incentive Plan")

•

4,396,055 stock options outstanding under the 1990 Stock Plan.

•

476,000 performance shares granted to officers under the Incentive Plan but not yet earned as of December 31, 2004. The number of shares, if any, to be issued will be determined based on a formula that measures Marathon's total shareholder return over the applicable performance period relative to the total shareholder return of our industry peers.

•

23,267 phantom shares that have been credited to non-employee directors pursuant to the non-employee director deferred compensation program and the annual director stock award program established under the Incentive Plan. When a non-employee director leaves the Board, he or she will be issued actual shares of Marathon common stock in place of the phantom shares.

•

11,750 restricted stock phantom units granted to non-officers under the Incentive Plan.

The weighted-average exercise price shown in column (b) does not take the officer performance shares, the phantom shares or restricted stock unites into account since these awards have no exercise price.

⁽²⁾

This number reflects the shares available for issuance under the Incentive Plan. No more than 7,380,623 of these shares may be issued for awards other than stock options or stock appreciation rights. In addition, shares related to grants that are forfeited, terminated, cancelled, expire unexercised, or settled in such manner that all or some of the shares are not issued to a participant shall immediately become available for issuance.

⁽³⁾

This row reflects awards made under the Deferred Compensation Plan for Non-Employee Directors and the 2001 Non-Officer Restricted Stock Plan prior to April 30, 2003.

⁽⁴⁾

This number includes the following:

•

57,243 phantom shares that were awarded to non-employee directors under the Deferred Compensation Plan for Non-Employee Directors prior to April 30, 2003. When a non-employee director leaves the Board, he or she will be issued actual shares of Marathon common stock in place of the phantom shares.

•

32,955 unvested phantom restricted stock units granted under the 2001 Non-Officer Restricted Stock Plan prior to April 30, 2003.

57

        Non-Officer Restricted Stock Plan – The Non-Officer Restricted Stock Plan was approved by the Board effective January 1, 2001, to provide restricted stock and restricted stock unit awards to non-officer employees of Marathon and its affiliates. The purposes of the plan are to reward specific noteworthy achievements by non-officer employees and promote the retention of outstanding non-officer employees. All awards under this plan are subject to a four-year time-based vesting schedule, with 50 percent of the shares vesting two years from the date of grant and the remaining 50 percent of the shares vesting four years from the date of grant. If a recipient terminates employment other than by reason of death, any unvested portion of his or her award will be forfeited. Dividends are paid on all awards made under the plan prior to vesting. Marathon's authority to make grants under this plan was terminated effective as of April 30, 2003.

        Deferred Compensation Plan for Non-Employee Directors – Under the Deferred Compensation Plan for Non-Employee Directors, all non-employee directors of Marathon are required to defer half of their annual retainers in the form of common stock units. On the date the retainer would otherwise be payable to the non-employee director, Marathon credits an unfunded bookkeeping account for each non-employee director with a number of common stock units equal to half of his or her annual retainer divided by the fair market value of Marathon's common stock. The ongoing value of each common stock unit equals the market price of Marathon's common stock. When dividends are paid, Marathon credits each unfunded account with dividend equivalents on the number of units then in the individual's account in the form of additional common stock units. When the non-employee director leaves the Board, he or she is issued actual shares of common stock equal to the number of common stock units in his or her account at that time. Marathon's authority to make equity grants under this plan was terminated effective as of April 30, 2003.