This excerpt taken from the MRO DEF 14A filed Mar 10, 2005.
Stock Options/Stock-Settled Stock Appreciation Rights ("Stock SARs")
In May 2004, the Committee granted stock-settled stock appreciation rights ("Stock SARs"), which are similar to fixed price stock options. This change from options to Stock SARs was facilitated by Marathon's decision to expense stock options, as Stock SARs now have an equivalent accounting treatment to stock options. However, the Committee reserves the right to grant either fixed priced stock options or Stock SARs as a form of long-term incentive compensation.
All Stock SARs have an exercise price per share equal to the fair market value of the stock on the day of grant, and re-pricing is not permitted under the Incentive Plan. Stock SARs granted in 2004 have a three-year pro-rata vesting period and a maximum term of 10 years. Stock SAR recipients have no stockholder rights until the Stock SAR has been exercised.