8-KLeadership ChangesExhibits & Filings

Marathon Petroleum Corp 8-K Report, Executive Changes (Dec 7, 2011)

Filed December 7, 2011For Securities:MPC

Summary

Marathon Petroleum Corporation (MPC) filed an 8-K on December 6, 2011, primarily addressing adjustments to equity awards granted at the time of its June 30, 2011, spin-off from Marathon Oil Corporation. Due to aberrant trading activity on July 1, 2011, that significantly impacted the initial calculation methodology, MPC's Board approved new equity grants on December 5, 2011. These new grants, comprising restricted stock units, restricted stock, and stock options, were intended to rectify the adverse effects on the original awards for approximately 300 recipients, including non-employee directors and named executive officers. This filing provides transparency on compensation adjustments made to align executive interests and compensate for unexpected valuation discrepancies following the corporate separation.

Key Highlights

  • 1MPC Board approved new equity awards to correct initial calculations affected by aberrant trading on July 1, 2011.
  • 2New grants include approximately 13,000 restricted stock units, 9,700 shares of restricted stock, and options for 363,000 shares.
  • 3Approximately 300 recipients, including six non-employee directors and five named executive officers, received these new awards.
  • 4Awards granted to named executive officers are detailed, including restricted stock and stock options with specific quantities.
  • 5New restricted stock and stock options vest in three equal installments on December 5, 2012, 2013, and 2014.
  • 6Stock options have an exercise price of $34.40 per share and a 10-year term.
  • 7Policy on personal use of company aircraft by the President and CEO was revised, requiring reporting and taxation of personal use value.

Frequently Asked Questions

MPC issued new equity awards because the initial calculation of 'Spin-off Adjusted Equity Awards' granted at the time of the June 30, 2011 spin-off was adversely affected by a short period of highly volatile trading in MPC's stock on July 1, 2011. These new grants were intended to restore the intended value of the original awards to employees and directors.

The new equity awards were granted to approximately 300 recipients. This group includes six non-employee members of the Board of Directors and the five named executive officers of MPC. The specific breakdown for the named executive officers is provided in the filing.

The new stock options have an exercise price of $34.40 per share and a term of 10 years. They were granted under the Marathon Petroleum Corporation Second Amended and Restated 2011 Incentive Compensation Plan.

The policy regarding the use of company aircraft was revised to authorize personal use by the President and CEO. This personal use must be reported to the Compensation Committee, and its value will be considered taxable income to the President and CEO, with no tax assistance provided by MPC.