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o

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Marathon Oil Corporation

5555 San Felipe Street

Houston, TX 77056

Lee M. Tillman

President and

Chief Executive Officer

Table of Contents

Notice of Annual Meeting of Stockholders

4

Proxy Statement Summary

5

Proxy Statement

9

Questions and Answers

9

The Board of Directors and Governance Matters

12

Compensation of Directors

21

Proposals of the Board

Proposal No. 1

Election of Directors

23

Nominees for Director

24

Proposal No. 2

Ratification of Independent Auditor for 2014

29

Proposal No. 3

Say on Executive Pay

30

Proposals of Stockholders

Proposal No. 4

Lobbying Report

31

Proposal No. 5

Methane Emissions Report

34

Audit and Finance Committee Report

37

Information Regarding the Independent Registered Public Accounting
Firm’s Fees, Services and Independence

38

Security Ownership of Certain Beneficial Owners

39

Security Ownership of Directors and Executive Officers

40

Section 16(a) Beneficial Ownership Reporting Compliance

41

Compensation Committee Report

42

Compensation Discussion and Analysis

43

Executive Compensation Tables and Other Information

62

Certain Relationships and Related Person Transactions

76

Compensation Policies and Practices for Employees

78

Statement Regarding the Delivery of a Single Set of Proxy Materials
to Households with Multiple Marathon Oil Stockholders

78

Solicitation Statement

78

APPENDIX I – Audit and Finance Committee Charter

APPENDIX II – Audit and Finance Committee Policy For Pre-Approval of Audit,
Audit-Related, Tax and Permissible Non-Audit Services

Notice of Annual Meeting of Stockholders

on April 30, 2014

We will hold our 2014 annual meeting of stockholders in the Conference Center Auditorium of the Marathon Oil Tower, 5555 San Felipe Street, Houston, Texas 77056 on Wednesday, April 30, 2014 at 10:00 a.m. Central Time, in order to:

·  elect nine directors;

·  ratify the selection of PricewaterhouseCoopers LLP as our independent auditor for 2014;

·  consider a non-binding advisory vote to approve our named executive officer compensation;

·  consider a stockholder proposal seeking a report regarding the Company’s lobbying activities, policies and procedures;

·  consider a stockholder proposal seeking a report regarding the Company’s methane emissions; and

·  transact any other business that properly comes before the meeting.

You are entitled to vote at the meeting if you were an owner of record of Marathon Oil Corporation common stock at the close of business on March 3, 2014. If your ownership is through a broker or other intermediary, you will need to have proof of your stockholdings in order to be admitted to the meeting. A recent account statement, letter or proxy from your broker or other intermediary will suffice.

Marathon Oil is taking advantage of the Securities and Exchange Commission rules which allow issuers to furnish proxy materials to their stockholders over the Internet. We believe these rules allow us to conveniently provide our stockholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of our annual meeting.

If you received a printed copy of the materials, we have enclosed a copy of the Company’s 2013 Annual Report on Form 10-K to stockholders with this notice and proxy statement.

By order of the Board of Directors,

Sylvia J. Kerrigan
Secretary

Dated: March 7, 2014

Marathon Oil Corporation
5555 San Felipe Street
Houston, TX 77056

Proxy Statement Summary

This summary highlights information contained elsewhere in this proxy statement. You should read the entire proxy statement carefully before voting.

Annual Meeting of Stockholders

·                  Time and Date:

10:00 a.m. Central Time, April 30, 2014

·                  Place:

Marathon Oil Tower

Conference Center Auditorium

5555 San Felipe Street

Houston, Texas 77056

·                  Record Date:

March 3, 2014

·                  Voting:

Stockholders

Meeting Agenda

·                  Election of nine directors

·                  Ratification of the selection of PricewaterhouseCoopers LLP as independent auditor for 2014

·                  Non-binding advisory vote to approve our named executive officer compensation

·                  Stockholder proposal seeking a report regarding the Company’s lobbying activities, policies and procedures

·                  Stockholder proposal seeking a report regarding the Company's methane emissions

·                  Transact any other business that may properly come before the meeting

Voting Matters

Board Proposals

Board Vote
Recommendation

Page Reference

(for more detail)

Election of Directors

FOR EACH DIRECTOR

     NOMINEE

23

Ratification of the selection of PricewaterhouseCoopers LLP as independent auditor for 2014

FOR

29

Non-binding advisory vote to approve our named executive officer compensation

FOR

30

Stockholder Proposals

Stockholder proposal seeking a report regarding the Company’s lobbying activities, policies and procedures

AGAINST

31

Stockholder proposal seeking a report regarding the Company’s methane emissions

AGAINST

34

Board Nominees

The following table provides summary information about each director who is nominated for election. Each director nominee will serve a one-year term expiring at the 2015 annual meeting of stockholders.

Name

Age

Director
Since

Occupation

Experience/
Qualification

Independent

Committee
Assignments

Gregory H. Boyce

59

2008

Chairman and CEO of Peabody Energy Corporation

·                  Leadership

·                  Industry

·                  International

·                  Engineering

X

Audit; Compensationt; and HES&CR

Pierre Brondeau

56

2011

Chairman, President and CEO of FMC Corporation

·                  Technology

·                  Leadership

·                  Engineering

·                  International

X

Audit; Compensation; and Corp. Gov.t

Proxy Statement Summary (continued)

Name

Age

Director
Since

Occupation

Experience/
Qualification

Independent

Committee
Assignments

Linda Z. Cook

55

2011

Retired Executive Director of Royal Dutch Shell plc 

·            Leadership

·            Industry

·            International

·            Engineering

X

Audit; Compensation; and Corp. Gov.

Chadwick C. Deaton

61

2014

Retired Chairman of Baker Hughes, Inc. 

·            Leadership

·            Industry

·            International

·            Engineering

X

Compensation; Corp. Gov.; and HES&CR

Dr. Shirley Ann Jackson

67

2000

President of Rensselaer Polytechnic Institute

·            Education

·            Technology

·            Government

·            Leadership

X

Audit; Compensation; and HES&CR

Philip Lader

67

2002

Non-executive Chairman of WPP plc

·            Government

·            International

·            Leadership

·            Industry

X

Compensation; Corp. Gov.; and HES&CR♦

Michael E. J. Phelps

66

2009

Chairman and Founder of Dornoch Capital, Inc.

·            Finance

·            International

·            Leadership

·            Industry

X

Audit♦; Corp. Gov.; and HES&CR

Dennis H. Reilley

60

2002

Non-executive Chairman of Marathon Oil Corporation

·            Finance

·            International

·            Leadership

·            Industry

X

Lee M. Tillman

52

2013

President and CEO of Marathon Oil Corporation

·            Leadership

·            Industry

·            International

·            Engineering

Audit

Compensation

Corp. Gov.

HES&CR

♦

Attendance

Audit and Finance Committee

Compensation Committee

Corporate Governance and Nominating Committee

Health, Environmental, Safety and Corporate Responsibility Committee

Committee Chair

In 2013, the director nominees, all of whom are current directors, attendance averaged approximately 99% for the aggregate of the total number of the Board and committee meetings (excluding Mr. Deaton who was elected to the Board effective January 1, 2014).

Auditors

As a matter of good corporate governance, we are asking our stockholders to ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2014.

Executive Compensation Advisory Vote

In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as a matter of good corporate governance, we seek your advisory vote to approve the compensation of our named executive officers and ask that you support the compensation of our named executive officers with a FOR vote. The Board believes that our compensation policies and practices attract talented and experienced executives, motivate them by rewarding individual and collective contributions to our success and retain our executives so that they can directly impact our business.

Proxy Statement Summary (continued)

Stockholder Proposal Seeking Company Report on Lobbying Activities, Policies and Procedures

The New York State Common Retirement Fund (the “Fund”) has given notice that it intends to present a proposal seeking a report regarding the Company’s lobbying activities, policies and procedures at the annual meeting of stockholders. The Fund’s statement in support can be found on page 31. As we discuss more fully on page 33, we believe that the adoption of this proposal is unnecessary and should be evaluated in the context of our current disclosures regarding the Company’s lobbying policies, practices and procedures.

Stockholder Proposal Seeking Company Report on Methane Emissions

The Nathan Cummings Foundation and the Sisters of St. Francis of Philadelphia (the “Proponents”) have given notice that they intend to present a proposal seeking a report regarding the Company’s methane emissions at the annual meeting of stockholders. The Proponents’ statement in support can be found on page 34. As we discuss more fully on page 36, we do not believe a special report beyond our current voluntary and mandatory disclosures is either necessary or an efficient use of Company resources.

Executive Compensation Components

Type

Form

Terms

Long-Term Incentives

·                  Stock Options

·                  Generally vest pro-rata over three years

·                  Restricted Stock

·                  Generally vests at the end of three years

·                  Performance Units

·      Cash payment is based upon relative total stockholder return ranking at the end of a defined performance period, typically three years

Cash

·                  Base Salary

·                  Reviewed annually

·                  Annual Cash Bonus

·      Determined by the Compensation Committee based upon quantitative performance metrics,  organizational/strategic performance, and individual performance

Retirement

·                  Tax-qualified plans

·      Broad-based defined benefit and Code Section 401(k) plans to provide retirement benefits

·                  Nonqualified plans

·      Generally provide for benefits that officers do not receive due to Internal Revenue Code limits

Other

·                  Perquisites

·      Executive physical; reimbursement of tax and financial planning up to an annual maximum

Other Key Compensation Features

·                  Significant stock ownership requirements, including six times base salary for CEO

·                  Clawback of incentive compensation

·                  No severance or employment agreements with current officers

·                  No tax gross-up of perquisites

Proxy Statement Summary (continued)

2013 Compensation Decisions

For a complete description of our 2013 compensation decisions, please refer to the Compensation Discussion and Analysis beginning on page 43.

2015 Annual Meeting of Stockholders

Stockholder proposals submitted for inclusion in our 2015 Proxy Statement must be received in writing by our corporate Secretary no later than the close of business on November 17, 2014.

Proxy Statement

We have sent you this proxy statement because the Board of Directors (the “Board”) is asking you to give your proxy (that is, the authority to vote your shares) to our proxy committee so they may vote your shares on your behalf at our annual meeting of stockholders. The members of the proxy committee are Dennis H. Reilley, Lee M. Tillman, and John R. Sult.

We will hold the meeting on April 30, 2014 in the Conference Center Auditorium of the Marathon Oil Tower, 5555 San Felipe Street, Houston, Texas. The proxy statement contains information about the matters being voted on and other information that may be helpful to you.

We began the mailing of the Notice Regarding the Availability of Proxy Materials, the 2014 Proxy Statement, the proxy card, and the Letter to Stockholders and 2013 Annual Report on Form 10-K on or about March 17, 2014.

Questions and Answers

¢       Who may vote?

You may vote if you were a holder of Marathon Oil Corporation (“Marathon Oil” or the “Company”) common stock at the close of business on March 3, 2014, which is the record date of the meeting. Each share of common stock entitles its holder to one vote on each matter to be voted on at the meeting.

¢       What may I vote on?

You may vote on:

·  the election of nine nominees to serve as directors;

·  the ratification of the selection of PricewaterhouseCoopers LLP as our independent auditor for 2014;

·  a non-binding advisory vote to approve our named executive officer compensation;

·  a stockholder proposal seeking a report regarding the Company’s lobbying activities, policies and procedures; and

·  a stockholder proposal seeking a report regarding the Company’s methane emissions.

¢       How does the Board recommend I vote?

The Board recommends that you vote:

·  FOR each of the nominees for director;

·  FOR the ratification of the selection of PricewaterhouseCoopers LLP as our independent auditor for 2014;

·  FOR the non-binding advisory vote to approve our named executive officer compensation;

·   AGAINST the stockholder proposal seeking a report regarding the Company’s lobbying activities, policies and procedures; and

·  AGAINST the stockholder proposal seeking a report regarding the Company’s methane emissions.

¢       If I am a stockholder of record of Marathon Oil shares, how do I cast my vote?

If you are a holder of record of Marathon Oil common stock, you may vote in person at the annual meeting. We will give you a ballot at the meeting.

If you do not wish to vote in person or if you will not be attending the annual meeting, you may vote by proxy on the Internet, by using the proxy card mailed to you, or over the telephone. The procedures for voting by proxy are as follows:

·  To vote by proxy on the Internet, go to http://www.proxyvote.com to complete an electronic proxy card. You will need the 12-digit Control Number included on your Notice Regarding the Availability of Proxy Materials (the “Notice”) or on your proxy card;

·  To vote by proxy using the enclosed proxy card (if you received a printed copy of these proxy materials by mail), complete, sign and date your proxy card and return it promptly in the envelope provided; or

·         To vote by proxy over the telephone (if you received a printed copy of these proxy materials by mail), dial the toll-free phone number listed on your proxy card under the heading “Vote by Phone” using a touch-tone phone and follow the recorded instructions.

If you vote by proxy, your vote must be received by 11:59 p.m. Eastern Time on April 29, 2014 to be counted.

We provide Internet proxy voting to allow you to vote your shares on-line, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.

¢       If I am a beneficial owner of Marathon Oil shares, how do I vote?

If you are a beneficial owner of shares of Marathon Oil common stock held in street name and you received a printed copy of these proxy materials by mail, you should have received a voting instruction card with these proxy materials from the organization that is the record owner of your shares rather than from us. If you are a beneficial owner of shares held in street name and you received a Notice by mail, you should have received the Notice from the organization that is the record owner of your shares rather than from us. Beneficial owners that received a printed copy of these proxy materials by mail from the record owner may complete and mail that voting instruction card or may vote by telephone or over the Internet as instructed by that organization in the voting instruction card. Beneficial owners that received a Notice by mail from the record owner should follow the instructions included in the Notice to view the proxy statement and transmit their voting instructions. A beneficial owner planning to vote in person at the annual meeting must obtain a valid proxy from the record owner. To request the requisite proxy form, follow the instructions provided by your broker or contact your broker.

¢       Why did I receive a Notice in the mail regarding the Internet availability of proxy materials this year instead of a full set of proxy materials?

Pursuant to the rules adopted by the Securities and Exchange Commission, we have elected to provide access to our proxy materials over the Internet. Unless you previously requested to receive a printed copy of the proxy materials or reside in a location outside the United States, we are sending a Notice Regarding the Availability of Proxy Materials to our stockholders of record. All stockholders will have the ability to access the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found on the Notice. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis.

¢       May I change my vote?

If you are a holder of record of shares of Marathon Oil common stock, you may change your vote or revoke your proxy at any time before your shares are voted at the meeting by:

·         voting again by telephone or over the Internet;

·         sending us a proxy card dated later than your last vote;

·         notifying the Secretary of Marathon Oil in writing; or

·         voting at the meeting.

¢       How many outstanding shares are there?

At the close of business on March 3, 2014, which is the record date for the meeting, there were 691,804,745 shares of Marathon Oil common stock outstanding and entitled to vote.

¢       How big a vote do the proposals need in order to be approved?

Directors are elected by a majority of the votes cast. For a director to be elected, the number of shares voted “for” a director must exceed the number of votes cast “against” that director. Abstentions will not be taken into account in director elections. Each of the other proposals will be approved if it receives a majority of the

votes of the shares present in person at the meeting and those represented by proxy and entitled to vote. Although the advisory vote on Proposal 3 is non-binding, as provided by law, our board will review the results of the vote and, consistent with our record of stockholder engagement, will take it into account in making determinations concerning named executive officer compensation. Except as otherwise provided above, abstentions are counted as votes present and entitled to vote and have the same effect as votes against a proposal. Broker non-votes are not counted as either votes for or votes against a proposal. Both abstentions and broker non-votes are counted in determining that a quorum is present for the meeting.

¢       What are broker non-votes?

The New York Stock Exchange permits brokers to vote their customers’ shares on routine matters when the brokers have not received voting instructions from customers. The ratification of the independent auditor is an example of a routine matter on which brokers may vote in this way. Brokers may not vote their customers’ shares on non-routine matters such as the election of directors, the proposal related to executive compensation or the stockholder proposals, unless they have received voting instructions from their customers. Shares held by brokers on behalf of these customers which are not voted on non-routine matters are broker non-votes.

¢       What constitutes a quorum?

Under our by-laws, a quorum is one third of the voting power of the outstanding shares of stock entitled to vote.

¢       Will my vote be confidential?

Only the voting records of employee-stock-holders are kept confidential, except as necessary to meet legal requirements and in other limited circumstances such as proxy contests.

¢       How will voting be conducted on other matters raised at the meeting?

If any matters are presented at the meeting other than the proposals on the proxy card, the proxy committee will vote on them using their best judgment. Your signed proxy card, or your telephone or Internet vote, gives them the authority to do this. Under our by-laws, notice of any matter to be presented by a stockholder for a vote at the meeting must have been received by our corporate Secretary on or after November 13, 2013 and no later than December 13, 2013, and it must have been accompanied by certain information about the stockholder presenting it. We have not received notice of any matter to be presented other than those on the proxy card.

¢       When must stockholder proposals be submitted for the 2015 annual meeting?

Stockholder proposals submitted for inclusion in our 2015 proxy statement must be received in writing by our corporate Secretary no later than the close of business on November 17, 2014. Stockholder proposals submitted outside the process for inclusion in the proxy statement must be received from stockholders of record on or after November 17, 2014 and no later than December 17, 2014 and must be accompanied by certain information about the stockholder making the proposal, in accordance with our by-laws.

The Board of Directors and Governance Matters

Under our by-laws and the laws of Delaware, Marathon Oil’s state of incorporation, the business and affairs of Marathon Oil are managed under the direction of the Board which currently consists of nine directors.  The Board met ten times in 2013 and attendance for Board and committee meetings averaged 99 percent for the full year. Under our Corporate Governance Principles, directors are expected to attend the annual meeting of stockholders, and in 2013 all of our directors attended the meeting in person.

The chairman of the Board presides at all meetings of stockholders and the Board. In 2013, Clarence P. Cazalot, Jr. served as our chairman of the Board. Because Mr. Cazalot was not independent, we again elected a lead director to preside at executive sessions of non-employee directors. Among other things, the lead director is also responsible for reviewing with the chairman and CEO the proposed Board and committee meeting agendas. Following Mr. Cazalot’s retirement as executive chairman on January 1, 2014, Dennis H. Reilley, our lead director during 2013, was appointed by the Board as non-executive chairman.

Our Corporate Governance Principles require non-employee directors of the Company to meet at regularly scheduled executive sessions. To comply with this directive, an offer of an executive session is extended to non-employee directors at each regularly scheduled Board meeting. In 2013, non-employee directors of the Company held nine executive sessions.

In 2013, the Board had four principal committees, all the members of which were independent, non-employee directors. The table below shows the current committee memberships of each director and the number of meetings that each corresponding committee held in 2013.

Board Committee
Memberships

Director

Audit and
Finance
Committee

Compensation
Committee

Corporate
Governance and
Nominating
Committee

Health,
Environmental,
Safety and
Corporate
Responsibility
Committee

Gregory H. Boyce

X

  X*

X

Pierre Brondeau

X

X

  X*

Linda Z. Cook

X

X

X

Chadwick C. Deaton

X

X

X

Shirley Ann Jackson

X

X

X

Philip Lader

X

X

  X*

Michael E. J. Phelps

  X*

X

X

Dennis H. Reilley

Number of Meetings in 2013

8

6

4

3

* Chair (effective January 1, 2014)

Chadwick C. Deaton was elected to the Board effective January 1, 2014.  On January 29, 2014, he was appointed by the Board to serve on the Compensation Committee, the Corporate Governance and Nominating Committee and the Health, Environmental, Safety and Corporate Responsibility Committee.

Board and Committee Independence

Audit and Finance Committee

·

appointing, replacing, compensating and overseeing the work of the independent auditor;

·

reviewing the fees proposed by the independent auditor for the coming year and approving in advance all audit, audit-related, tax and permissible non-audit services to be performed by the independent auditor;

·

reviewing and approving annually the audit plans for both the independent auditor and internal auditor;

·

separately meeting with the independent auditor, the internal auditors and management with respect to the status and results of their activities annually reviewing and approving the audit plans;

·

reviewing, evaluating and assuring the rotation of the lead audit partner as required by law and considering whether rotation of the independent auditor firm is necessary;

·

reviewing with the chief executive officer, the chief financial officer, the general counsel, and the internal auditors, if appropriate, the Company’s disclosure controls and procedures and management’s conclusions about the efficacy of such disclosure controls and procedures;

·

reviewing, approving and discussing with management, the independent auditor and if appropriate the internal auditors, the annual and quarterly financial statements, reports of internal control over financial reporting, the annual report to stockholders, and the annual report on Form 10-K;

·

reviewing and discussing earnings press releases with management;

·

discussing with management guidelines and policies to govern the process by which risk assessment and management is undertaken by the Company;

·

reviewing and recommending dividends;

·

approving and recommending financings, including the recommendations of action to subsidiaries, partnerships and joint ventures;

·

reviewing and reporting on the Company’s compliance with financial covenants and other terms of loans and other agreements;

·

reviewing year-end hydrocarbon reserve estimates and tax contingency reserves;

·

reviewing legal and regulatory compliance regarding the Company’s financial statements, accounting or auditing matters or compliance with codes of conduct, corporate policies dealing with business conduct or whistleblowing procedures, and periodically reviewing any associated complaints or published reports;

·

reviewing, overseeing and discussing with management the processes and controls, including policies and guidelines, established to assess, monitor, manage and mitigate the Company’s risk; and

·

completing an annual performance evaluation of this committee.

Compensation Committee

·

making recommendations to the Board and to the boards of subsidiaries on all matters of policy and procedures relating to executive compensation;

·

reviewing and approving corporate goals and objectives relevant to the chief executive officer’s compensation, and determining and approving the chief executive officer’s compensation level based on the Board’s performance evaluation of the chief executive officer, including considering the most recent stockholder advisor vote on executive compensation required by Section 14A of the Exchange Act;

·

reviewing and approving the frequency with which to submit to stockholders an advisory vote to approve named executive officer compensation, taking into account any prior stockholder advisory vote regarding such frequency;

·

reviewing and considering the results of any stockholder advisory votes to approve named executive officer compensation;

·

determining and approving the compensation of the other executive officers, and reviewing the succession plan relating to positions held by the other executive officers;

·

recommending to the Board and administering the incentive compensation plans and equity-based plans of the Company;

·

reviewing funding policies and performance for the Company’s pension and other post-employment benefit plans;

·

confirming the achievement of performance levels under the Company’s incentive compensation plans;

·

reviewing, recommending, and discussing with management the Compensation Discussion and Analysis section included in the Company’s annual proxy statement; and

·

evaluating its performance on an annual basis.

Corporate Governance and Nominating Committee

·

reviewing and making recommendations to the Board concerning the appropriate size and composition of the Board, including candidates for election or re-election as directors, the criteria to be used for the selection of candidates for election as directors, the appropriate skills and characteristics required of Board members in the context of the current make-up of the Board, the composition and functions of the Board committees, and all matters relating to the development and effective functioning of the Board;

·

considering and recruiting candidates to fill positions on the Board;

·

considering nominees recommended by stockholders for election as directors;

·

considering and recommending non-employee director compensation;

·

reviewing and making recommendations to the Board of each Board committee’s membership and committee chairpersons including, without limitation, a determination of whether one or more Audit and Finance Committee members qualifies as an “audit committee financial expert” in accordance with applicable law;

·

assessing and recommending overall corporate governance practices, including reviewing and approving codes of conduct applicable to directors, officers and employees and policies of the Company;

·

establishing the process and overseeing the evaluation of the Board;

·

reviewing and, if appropriate, approving any related person transactions;

·

reviewing and approving codes of conduct applicable to directors, officers and employees;

·

reviewing the Company’s policy statement on stockholders’ rights plans and reporting any recommendations to the Board; and

·

evaluating its performance on an annual basis.

Health, Environmental, Safety, and Corporate Responsibility Committee

·

reviewing and recommending Company policies, programs, and practices concerning broad health, environmental, safety, social, public policy and political issues;

·

identifying, evaluating and monitoring the health, environmental, safety, social, public policy and potential trends, issues and concerns, which affect or could affect the Company’s business activities;

·

reviewing legislative and regulatory issues affecting the Company’s businesses and operations; and

·

reviewing the Company’s political, charitable and educational contributions.

Board’s Role in Risk Oversight

Corporate Governance Principles

Director Identification and Selection

Leadership Structure of the Board

Diversity

Communications from Interested Parties

Code of Business Conduct

Code of Ethics for Senior Financial Officers

·

act with honesty and integrity, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

·

provide full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission and in other public communications made by the Company;

·

comply with applicable governmental laws, rules and regulations; and

·

promote the prompt internal reporting of violations of this Code of Ethics to the chair of the Audit and Finance Committee and to the appropriate person or persons identified in the Company’s Code of Business Conduct.

Name(1)

Fees Earned
or Paid
in Cash(1)
($)

Stock
Awards(2)
($)

Option
Awards
($)

Non-Equity
Incentive
Plan
Compensation
($)

Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)

All Other
Compensation(3)
($)

Total
($)

Gregory H. Boyce(4)

165,000

175,000

0

0

0

0

340,000

Pierre Brondeau(4)

158,334

175,000

0

0

0

0

333,334

Linda Z. Cook(4)

150,000

175,000

0

0

0

10,000

335,000

Shirley Ann Jackson(4)

155,000

175,000

0

0

0

10,000

340,000

Philip Lader(4)

162,500

175,000

0

0

0

10,000

347,500

Michael E. J. Phelps(4)

160,000

175,000

0

0

0

0

335,000

Dennis H. Reilley(4)

174,167

175,000

0

0

0

0

349,167

In 2013, we paid our non-employee directors as follows:

Annual Cash Retainer

$150,000

Annual Common Stock Unit Award

$175,000

Committee Chair Retainer

$15,000 Audit and Finance Committee

$15,000 Compensation Committee

$12,500 All other committees

Lead Director Retainer

$20,000

Nominees for Director

Terms Expire 2015

Gregory H. Boyce

Director since 2008

Age 59

Chairman and Chief Executive Officer of Peabody Energy Corporation

Mr. Boyce received a bachelor of science degree from the University of Arizona in mining engineering and completed the Advance Management Program from the Graduate School of Business at Harvard University. Mr. Boyce is Chairman and Chief Executive Officer of Peabody Energy Corporation. He has been a director of Peabody Energy Corporation since March 2005, and was appointed Chairman on October 10, 2007. Mr. Boyce was named Chief Executive Officer Elect in March 2005, and assumed the position of Chief Executive Officer in January 2006. He also served as President from October 2003 until January 6, 2008 and was Chief Operating Officer from October 2003 to December 2005. From 2000 to 2003, Mr. Boyce served as Chief Executive Officer - Energy for Rio Tinto plc, an international natural resource company. He was President and Chief Executive Officer of Kennecott Energy Company from 1994 to 1999 and President of Kennecott Minerals Company from 1993 to 1994. Prior to serving as President of Kennecott Minerals, Mr. Boyce had extensive engineering and operating experience with Kennecott. He served as Executive Assistant to the Vice Chairman of Standard Oil from 1983 to 1984. Mr. Boyce also serves on the Board of Directors of Monsanto Company. He is past chairman of the National Mining Association and is a member of the Business Round Table and Business Council. Mr. Boyce is Chairman of the Coal Industry Advisory Board of the International Energy Agency and a member of the National Coal Council. He is also a member of the Board of Trustees of Washington University of St. Louis. Mr. Boyce is a member of Civic Progress in St. Louis and is a member of the Advisory Council of the University of Arizona’s Department of Mining and Geological Engineering and the School of Engineering and Applied Science National Council at Washington University.

As a chief executive officer, Mr. Boyce’s current position provides him with experience running a major corporation with international operations. This includes developing strategic insight and direction for his company. Global operations require a thorough understanding of different cultures and political regimes. His position as chief executive officer also exposes him to many of the same issues we face in our business, including markets, competitors, operational, regulatory, technology and financial.

Pierre Brondeau

Director since 2011

Age 56

Chairman, President and Chief Executive Officer of FMC Corporation

Mr. Brondeau earned both a bachelor of science degree and a Ph.D from Institut National des Sciences Appliquées of Toulouse in biochemical engineering and received a master’s degree from the University of Montpellier, France in food sciences. He joined FMC Corporation on January 1, 2010, as President and Chief Executive Officer and became Chairman of the Board on October 1, 2010. Mr. Brondeau served as President and Chief Executive Officer of Dow Advanced Materials Division of Dow Chemical Company until September 2009. He was President and Chief Operating Officer of Rohm and Haas Company from May 2008, which was acquired by Dow Chemical in April 2009. From 2006 through May 2008, Mr. Brondeau served as Executive Vice President of electronics and specialty materials of Rohm and Haas Company. He held numerous executive positions during his tenure at Rohm and Haas Company from 1989 through May 2008, in Europe and the United States with global responsibilities for marketing, sales, research and development, engineering, technology and operations. Mr. Brondeau also serves on the Board of Directors of TE Connectivity Ltd. He is Vice Chairman of the Board of the American Chemistry Council.

Mr. Brondeau’s years of senior executive experience and executive leadership at large multi-national companies and his knowledge of developing technology, finance, acquisitions and mergers, strategic planning and regulatory issues impacting publicly-traded companies provides a valuable resource for our Board. He also has leadership experience serving as chairman of the board and also as a member of the board of an electronics manufacturer with service on its audit committee.

Nominees for Director (continued)

Terms Expire 2015

Linda Z. Cook

Director since 2011

Age 55

Retired Executive Director of Royal Dutch Shell plc

Ms. Cook earned a bachelor of science degree from University of Kansas in petroleum engineering. She served as Executive Director of Royal Dutch Shell plc from August 2004 to December 2009 with responsibilities for global natural gas, trading and technology. Previously, Ms. Cook served as Director, President and Chief Executive Officer of Shell Canada Limited from August 2003 to August of 2004. From January 2000 to July of 2003, she served as Chief Executive Officer for Shell Gas & Power. Ms. Cook also serves on the Boards of Directors of The Boeing Company, KBR, Inc. and Cargill, Inc., a privately held company. She is a member of the Board of Trustees for the University of Kansas Endowment Association. Ms. Cook is a member of the Society of Petroleum Engineers. Within the past five years, she previously served on the Board of Directors of Royal Dutch Shell plc.

Ms. Cook has extensive knowledge and experience in the oil and gas industry gained through her position as executive director of Royal Dutch Shell plc and various other executive and management positions with Shell. As a result of these positions, she has valuable experience in the domestic and international oil and gas business. She also gained valuable experience in managing many of the major issues, such as strategic, operational, technology, compensation, management development, acquisitions, dispositions, capital allocation, government and stockholder relations, that we deal with today. Ms. Cook’s service on the boards of two other publicly-traded companies and one privately-held company has provided her exposure to different industries and approaches to governance and other key issues.

Chadwick C. Deaton

Director since 2014

Age 61

Retired Executive Chairman of Baker Hughes Incorporated

Mr. Deaton earned a Bachelor of Science in Geology from the University of Wyoming. Mr. Deaton was Executive Chairman of the Board of Baker Hughes Incorporated from January 2012 to April 2013 and its Chairman of the Board from October 2004 to January 2012. He served as Chief Executive Officer of Baker Hughes Incorporated from October 25, 2004 to December 31, 2011, and President of Baker Hughes Incorporated from February 1, 2008 to July 28, 2010. He retired from Baker Hughes on April 25, 2013. Before leading Baker Hughes, Mr. Deaton was President and Chief Executive Officer of Hanover Compressor Company from 2002 through October 2004. He was a Senior Advisor to Schlumberger Oilfield Services from 1999 to September 2001 and was an Executive Vice President from 1998 to 1999. Mr. Deaton serves on the Boards of Ariel Corporation, a privately held manufacturer of gas compressor equipment, Air Products and Chemicals, Inc., CARBO Ceramics Inc. and Transocean Ltd. Within the past five years, he previously served on the Board of Directors of Baker Hughes Incorporated. Mr. Deaton is a director of Junior Achievement of Southeast Texas, Houston Achievement Place and a member of the Society of Petroleum Engineers Industry Advisory Council. He also serves on the board of the University of Wyoming Foundation and the Wyoming Governor’s Engineering Task Force.

Mr. Deaton has over 32 years of executive and management experience in the energy business, including over 14 years of senior executive experience in the oilfield services industry.  As a former chairman, president and CEO of Baker Hughes and other executive level positions, Mr. Deaton has valuable knowledge, experience and management leadership regarding many of the same issues that we face as a publicly-traded company in the oil and gas industry.  Mr. Deaton’s service on the boards of three other publicly-traded companies and one privately-held company has provided him exposure to different industries and approaches to governance and other key issues.

Nominees for Director (continued)

Terms Expire 2015

Shirley Ann Jackson

Director since 2000

Age 67

President of Rensselaer Polytechnic Institute

Dr. Jackson received a bachelor of science degree in physics in 1968 and a doctorate in theoretical elementary particle physics in 1973 from the Massachusetts Institute of Technology. She was a research associate at the Fermi National Accelerator Laboratory, a visiting scientist at the European Center for Nuclear Research and, from 1976 to 1991, a theoretical physicist at the former AT&T Bell Laboratories. Dr. Jackson was a professor of theoretical physics at Rutgers University from 1991 to 1995. She was Chairman of the U.S. Nuclear Regulatory Commission from 1995 to 1999. Dr. Jackson was named President of Rensselaer Polytechnic Institute in 1999. Dr. Jackson holds 51 honorary degrees, was awarded the New Jersey Governor’s Award in Science in 1993, was inducted into the National Women’s Hall of Fame in 1998 and was named a fellow of the Association for Women in Science in 2004. In 2005, she chaired the American Association for the Advancement of Science, was President in 2004, and currently is a fellow. Dr. Jackson is a member of the National Academy of Engineering, and the American Philosophical Society, and is a fellow of the Royal Academy of Engineering (U.K.), the American Academy of Arts and Science and of the American Physical Society. In 2009 she was appointed to serve on the President’s Council of Advisors on Science and Technology (PCAST). In 2011, Dr. Jackson was appointed to the International Security Advisory Board (ISAB) at the U.S. Department of State, advising the Secretary of State and the Undersecretary for Arms Control and International Security. She serves on the Boards of Directors of FedEx Corporation, International Business Machines Corporation, Medtronic, Inc. and Public Service Enterprise Group Incorporated. She is former Chairman of NYSE Regulation, Inc. Within the past five years, Dr. Jackson also previously served as a director of NYSE Euronext. She is a member of the Board of the Council on Foreign Relations, the Board of Regents of the Smithsonian Institution, and a life member of the M.I.T. Corporation. Dr. Jackson previously served as the University Vice Chairman of the U.S. Council on Competitiveness, and co-chaired its Energy Security, Sustainability and Innovation initiative.

Through her current position as President of Rensselaer Polytechnic Institute, former position as Chairman of the U.S. Nuclear Regulatory Commission and other appointments and positions, Dr. Jackson has managed many of the major issues, such as financial, strategic, technology, regulatory, compensation, personnel development, capital allocation and public relations, that we deal with today. She has particular experience with energy policy, technology and management of large projects. Also, her previous and current board positions on other publicly-traded companies have provided over 30 years of audit committee experience, including as chair, compensation committee experience and governance and nominating committee experience, including as chair. This experience has given her exposure to different industries and approaches to governance and other key issues.

Philip Lader

Director since 2002

Age 67

Non-executive Chairman of WPP plc

Ambassador Lader received a bachelor’s degree from Duke University (Phi Beta Kappa), a master’s degree from the University of Michigan and a Juris Doctor degree from Harvard Law School, and completed graduate studies in law at Oxford University. Awarded honorary doctorates by 14 universities and colleges, he served as U.S. Ambassador to the Court of St. James’s from 1997 through 2001 and was Assistant to the President and White House Deputy Chief of Staff, Deputy Director of the Office of Management and Budget, and Administrator of the U.S. Small Business Administration. Formerly President of Sea Pines Company, Executive Vice President of Sir James Goldsmith’s U.S. holding company, and president of universities in Australia and South Carolina. He currently is non-executive Chairman of WPP plc, the global advertising/communications services company, which includes J. Walter Thompson, Ogilvy & Mather, Young & Rubicam, Hill & Knowlton, Grey Global and Burson-Marsteller, among other international marketing/media services companies. Ambassador Lader is a senior advisor to Morgan Stanley and a partner in the law firm of Nelson, Mullins, Riley & Scarborough. He also serves on the Boards of Directors of AES Corporation and United Company RusAl Plc. Ambassador Lader was Vice Chairman of RAND Corporation and is a member of the Boards of Trustees of the Smithsonian Museum of American History and The Atlantic Council, as well as a member of the Council on Foreign Relations. Within the past five years, Ambassador Lader served as a director for Songbird Estates plc (Canary Wharf) and Lloyd’s (of London).

Through his positions as chairman of the world’s largest marketing and media services company, senior-level U.S. government appointments, partner at a major law firm and other appointments and positions, Ambassador Lader has valuable experience and knowledge managing many of the major issues we face as a publicly-traded company. He has extensive experience with public policy matters, which uniquely qualify him to serve as Chairman of our Health, Environmental, Safety and Corporate Responsibility Committee. Ambassador Lader’s other board positions have given him exposure to different industries and approaches to governance and other key issues.

Nominees for Director (continued)

Terms Expire 2015

Michael E. J. Phelps

Director since 2009

Age 66

Chairman and Founder of Dornoch Capital, Inc.

Mr. Phelps received a bachelor’s degree from the University of Manitoba, Winnipeg, Canada, in 1967. He earned a bachelor’s degree in Law in 1970 from the University of Manitoba. In 1971, he attended the London School of Economics and Political Science in London and received a master’s of law degree. Mr. Phelps was awarded honorary doctorates by three universities. Mr. Phelps is chairman and founder of Dornoch Capital, Inc., a private investment company based in Vancouver, British Columbia. Prior to forming Dornoch in 2002, he worked for Westcoast Energy, Inc., a natural gas company with operations across North America and interests in international energy companies in Mexico, Indonesia, China and Australia. Mr. Phelps joined Westcoast in 1982 as a corporate development executive. In 1987, he was promoted to chief financial officer and 18 months later, was named president and CEO. In 1992, he was named chairman and CEO, a position he held until the company was sold to Duke Energy Corporation in 2002. Mr. Phelps serves as a director of Spectra Energy Corporation. Within the past five years, he served as a director of Canadian Pacific Railway Company and Prodigy Gold Incorporated (formerly Kodiak Exploration Ltd.). Mr. Phelps also serves as a director of Vancouver Hospital Foundation and previously served as Chair from 2010 to 2012. He is a member of the North American Advisory Board of the London School of Economics and is a Special Advisor to Nomura Canada, Inc.

Through his position as chairman and founder of a private investment company, chairman and CEO of a natural gas company with international operations, and other executive and management positions, Mr. Phelps has valuable experience dealing with operations in Canada and other international locations. This is extremely beneficial due to our Canadian oil sands and other international operations. His previous and current positions on the boards of six other publicly-traded companies have given him exposure to different industries and approaches to governance and other key issues.

Dennis H. Reilley

Director since 2002

Age 60

Non-executive Chairman of Marathon Oil Corporation

Mr. Reilley graduated from Oklahoma State University with a bachelor’s degree in finance in 1975. He began working at Conoco, Inc. in 1975 as a pipeline engineer and in 1979 was promoted to executive assistant to the Chairman. Mr. Reilley held many key positions at E. I. Du Pont de Nemours & Company, which purchased Conoco in 1981. He held senior management positions in DuPont’s Chemicals and Specialties business including vice president and general manager of Specialty Chemicals. In May 1999, he was appointed executive vice president and chief operating officer of DuPont with responsibility for pigments and chemicals, specialty polymers, nylon and polyester. Mr. Reilley became chairman, president and chief executive officer of Praxair, Inc. in 2000. From March 1, 2006 through December 2006, he held the positions of chairman and chief executive officer and through April 2007 served as chairman. He served as non-executive chairman of Covidien Ltd. from June 29, 2007 through September 30, 2008. Mr. Reilley became non-executive Chairman of the Board of Marathon Oil Corporation on January 1, 2014. He also serves on the Boards of Directors of Dow Chemical Company and Covidien Ltd. Within the past five years, Mr. Reilley also served as a director of H. J. Heinz Co. He is former Chairman of the American Chemistry Council.

Mr. Reilley has over 34 years of executive and management experience in the oil, petrochemical and chemical industries. As a result of his positions as chairman, president and CEO of Praxair and other executive and management positions, Mr. Reilley has valuable experience in managing many of the major issues that we face as a publicly-traded company in the oil and gas industry. His service on three other publicly-traded company boards has given him valuable insight and exposure to different industries and approaches to governance and other key issues. Mr. Reilley also has a valuable financial background from his education and work experiences.

Nominees for Director (continued)

Terms Expire 2015

Lee M. Tillman

Director since 2013

Age 52

President and Chief Executive Officer of Marathon Oil Corporation

Mr. Tillman received a Bachelor of Science degree in chemical engineering with honors from Texas A&M University and a Ph.D. in chemical engineering from Auburn University. On August 1, 2013 he became a director, President and Chief Executive Officer of Marathon Oil Corporation. Immediately prior to this, Mr. Tillman served as vice president of Engineering for ExxonMobil Development Company where he was responsible for all global engineering staff engaged in major project concept selection, frontend design and engineering. Between 2007 and 2010, he served as North Sea production manager and lead country manager for subsidiaries of ExxonMobil in Stavanger, Norway. From 2006 to 2007, he served as acting vice president, ExxonMobil Upstream Research Company. Mr. Tillman began his career in the oil and gas industry at Exxon Corporation in 1989 as a research engineer and has extensive operations management and leadership experience that has included assignments in Jakarta, Indonesia; Aberdeen, Scotland; Stavanger, Norway; Malabo, Equatorial Guinea; Dallas and New Orleans. He is a member of the University of Houston Energy Advisory Board, and a member of the Engineering Advisory Council and the Chemical Engineering Advisory Council of Texas A&M University. Mr. Tillman is a member of the Society of Petroleum Engineers.

As our President and Chief Executive Officer, Mr. Tillman sets the strategic direction of our Company under the guidance of the Board. He has extensive knowledge and experience in global operations, project execution and leading edge technology in the oil and gas industry gained through his executive and management positions with our Company and ExxonMobil. His knowledge and handling of the day-to-day issues affecting our business provides the Board with invaluable information necessary to direct the business and affairs of our Company.

2013  
(in 000’s)

2012  
(in 000’s)

Audit

$  7,608

$  6,990

Audit-Related

500

890

Tax

Tax Compliance

420

265

Other Tax

30

620

All Other

5

7

Total(1)

$   8,563

$  8,772

(1)          The Audit and Finance Committee adopted the Audit and Finance Committee Policy for Pre-Approval of Audit, Audit-Related, Tax and Permissible Non-Audit Services. This policy is attached as Appendix II to this proxy statement. The Audit and Finance Committee has pre-approved all the fees and services for 2013 and 2012. The Audit and Finance Committee did not utilize the de minimus exception in either year.

Name and Address
of
Beneficial Owner

Amount and Nature
of
Beneficial Ownership

Percent
of
Outstanding Shares

Blackrock, Inc.(1)
40 East 52nd Street
New York, NY 10022

70,571,996(1)

10.1%(1)

(1)          Based on the Schedule 13G/A dated January 8, 2014 (filed: January 10, 2014) which indicates that it was filed by Blackrock, Inc. According to such Schedule 13G/A, Blackrock, Inc., through itself and being the parent holding company or control person over each of the following subsidiaries: Blackrock (Luxembourg) S.A., Blackrock (Netherlands) B.V., Blackrock Advisors (UK) Limited, Blackrock Advisors, LLC, Blackrock Asset Management Canada Limited, Blackrock Asset Management Ireland Limited, Blackrock Capital Management, Blackrock Financial Management, Inc., Blackrock Fund Advisors, Blackrock Fund Management Ireland Limited, Blackrock Fund Managers Ltd, Blackrock Institutional Trust Company, N.A., Blackrock International Limited, Blackrock Investment Management (Australia) Limited, Blackrock Investment Management (UK) Limited,  Blackrock Investment Management, LLC, Blackrock Japan Co. Ltd. and Blackrock Life Limited, and each individually owning less than 5% is deemed to beneficially own 70,571,996 shares, and has sole voting power over 61,062,644 shares, shared voting power over no shares, sole dispositive power over 70,571,996 shares, and shared dispositive power over no shares.

Name

Shares

Restricted
Stock(5)

Stock Options
Exercisable Prior to
4/1/14(6)

Total
Shares(7)

% of Total
Outstanding(8)

Gregory H. Boyce

51,530

(3)

51,530

*

Pierre Brondeau

21,754

(3)

21,754

*

Clarence P. Cazalot, Jr.(1)

969,349

3,603,955

4,573,304

*

Linda Z. Cook

18,866

(3)

18,866

*

Chadwick C. Deaton

5,013

(3)

5,013

Shirley Ann Jackson

92,873

(3)(4)

92,873

*

Philip Lader

88,556

(3)(4)

88,556

*

Michael E.J. Phelps

37,789

(3)

37,789

*

Dennis H. Reilley

91,104

(3)(4)

91,104

*

Lee M. Tillman

25

110,072

110,097

Janet F. Clark(2)

199,370

42,838

729,387

971,595

*

Sylvia J. Kerrigan

25,169

(4)

32,398

217,273

274,840

*

T. Mitchell Little

1,047

35,755

42,311

79,113

*

Lance W. Robertson

6,795

(4)

47,884

20,435

75,114

*

John R. Sult

28,654

28,654

All Directors and Executive
Officers as a group (17 persons) (3)(4)(5)(6)

6,772,563

(6)

*

(1)

Clarence P. Cazalot, Jr. retired on January 1, 2014. Mr. Cazalot’s information is as of December 31, 2013.

(2)

Janet F. Clark retired on October 1, 2013. Ms. Clark’s information is as of September 30, 2013.

(3)

Includes deferrals of annual retainers into common stock units under the Deferred Compensation Plan for Non-Employee Directors and the 2003 Incentive Compensation Plan prior to January 1, 2006, and non-retainer annual director stock awards in common stock units, including the 2014 award of common stock units, under the 2007 Incentive Compensation Plan and the 2012 Incentive Compensation Plan, including their respective dividend equivalent rights allocated in common stock units, as follows:

Name

Annual Retainer
Deferred Into
Common Stock Units

Non-Retainer
Annual
Common Stock Units

Gregory H. Boyce

0

41,530

Pierre Brondeau

0

21,754

Linda Z. Cook

0

18,866

Chadwick C. Deaton

0

5,013

Shirley Ann Jackson

24,951

65,519

Philip Lader

17,913

65,519

Michael E.J. Phelps

0

37,789

Dennis H. Reilley

21,385

65,519

(4)

Includes shares held under the Marathon Oil Thrift Plan, the Dividend Reinvestment and Direct Stock Purchase Plan, and the Non-Employee Director Stock Plan.

(5)

Reflects shares of restricted stock granted under the 2007 Incentive Compensation Plan and the 2012 Incentive Compensation Plan, which are subject to limits on sale and transfer and can be forfeited under certain conditions.

(6)

Includes vested options exercisable within sixty days of January 31, 2014, including the following number of options that are not-in-the-money as of January 31, 2014 based on the fair market value (i.e., closing price) of Marathon Oil’s common stock on January 31, 2014: C. P. Cazalot, Jr.: 962,196; J. F. Clark: 156,912; S. J. Kerrigan: 73,467;T. M. Little: 34,864;L. W. Robertson: 17,594 and all other executive officers as a group: 67,552.

(7)

None of the shares are pledged as security.

*(8)

The percentage of shares beneficially owned by each director or nominee, or each executive officer does not exceed one percent of the common shares outstanding, and the percentage of shares beneficially owned by all directors and executive officers of the Company, as a group, does not exceed one percent of the common shares outstanding.

Name

Title

Mr. Lee M. Tillman

President and Chief Executive Officer

Mr. John R. Sult

Executive Vice President and Chief Financial Officer

Mr. Clarence P. Cazalot, Jr.

Former Executive Chairman (Former Chairman, President and Chief Executive Officer)

Ms. Sylvia J. Kerrigan

Executive Vice President, General Counsel and Secretary

Mr. Lance W. Robertson

Vice President, North America Production Operations

Mr. T. Mitchell Little

Vice President, International and Offshore Production Operations

Ms. Janet F. Clark

Former Executive Vice President and Chief Financial Officer