Stock-Based Compensation Plans

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation Plans

19. Stock-Based Compensation Plans

Stock Option Awards

The following table presents a summary of stock option award activity for the nine months ended September 30, 2012:

	Number of Shares(a)			Weighted Average Exercise Price
Outstanding at December 31, 2011		9,372,370		$	33.08
Granted		766,543			42.04
Exercised		(2,391,967	)		24.58
Forfeited, canceled or expired		(113,543	)		38.93
Outstanding at September 30, 2012		7,633,403			36.55

^(a)  Includes an immaterial number of stock appreciation rights.

The grant date fair value of stock option awards granted was $14.43 per share for the nine months ended September 30, 2012. The fair value of stock options granted to our employees is estimated on the date of grant using the Black Scholes option-pricing model, which employs various assumptions. The assumption for expected volatility of our stock price was updated for the nine months ended September 30, 2012 to reflect a weighting of 25 percent of MPC’s common stock implied volatility and 75 percent of the historical volatility for a selected group of peer companies.

Restricted Stock Awards

The following table presents a summary of restricted stock award activity for the nine months ended September 30, 2012:

	Shares of Restricted Stock (“RS”)					Restricted Stock Units (“RSU”)
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Units			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2011		348,691		$	34.36		319,944		$	29.43
Granted		411,435			42.96		31,531			41.29
RS’s Vested/RSU’s Issued		(109,504	)		29.51		—			—
Forfeited		(10,946	)		39.28		(116	)		43.44
Outstanding at September 30, 2012		639,676			40.64		351,359			30.49

Performance Unit Awards

During the nine months ended September 30, 2012, we granted performance unit awards to certain officer employees. These awards will have a per unit payout determined based on the total shareholder return of MPC common stock compared to the total shareholder return of a selected combination of peer companies and index fund shareholder return over an average of four periods during the 36 month requisite service period. These performance units are designed to pay out 75 percent in cash and 25 percent in MPC common stock. The performance units paying out in cash are accounted for as liability awards and are recorded at fair value. The performance units settling in shares are accounted for as equity awards and have a grant date fair value of $1.09 per unit, as calculated using a Monte Carlo valuation model. The following table presents a summary of the activity for performance unit awards to be settled in shares for the nine months ended September 30, 2012:

	Number of Units
Outstanding at December 31, 2011		—
Granted		2,040,000
Settled		—
Canceled		—
Outstanding at September 30, 2012		2,040,000