MAPCO INC, DEF 14A, 1995-03-30

MAPCO INC
DEF 14A, 1995-03-30
PETROLEUM REFINING

Previous: MAPCO INC, 10-K/A, 1995-03-30

Next: MARSH & MCLENNAN COMPANIES INC, DEF 14A, 1995-03-30

<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:

/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

MAPCO INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of filing fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:

--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rules 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):

--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

--------------------------------------------------------------------------------
(5) Total fee paid:

--------------------------------------------------------------------------------

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

--------------------------------------------------------------------------------
(3) Filing Party:

--------------------------------------------------------------------------------
(4) Date Filed:

--------------------------------------------------------------------------------
<PAGE> 2
[MAPCO LOGO]

1800 South Baltimore Avenue
Tulsa, Oklahoma 74119

March 27, 1995

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders of
the Company which will be held at 9:00 a.m., Central Daylight Time, Friday, May
26, 1995 at the Four Seasons Resort and Club, 4150 North MacArthur Boulevard,
Irving, Texas.

The formal Notice of the Annual Meeting of Stockholders and Proxy Statement
accompanying this letter provide detailed information concerning matters to be
considered and acted upon at the meeting.

Whether or not you plan to attend the Annual Meeting, please execute and
return the enclosed proxy at your earliest convenience. Your shares will then be
represented at the meeting, and the Company will avoid the expense of further
solicitation to assure a quorum and a representative vote. If you later attend
the meeting and wish to vote in person, you may withdraw your proxy and so vote
at that time.

Very truly yours,

/s/ JAMES E. BARNES

James E. Barnes
Chairman of the Board
and Chief Executive Officer
<PAGE> 3

MAPCO INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO THE STOCKHOLDERS:

The Annual Meeting of Stockholders of MAPCO Inc., a Delaware corporation,
will be held on Friday, May 26, 1995 at 9:00 a.m., Central Daylight Time, at the
Four Seasons Resort and Club, 4150 North MacArthur Boulevard, Irving, Texas, for
the following purposes:

1. To elect four nominees for Directors to Class I Directorships;

2. To consider and act upon a proposal to approve the selection of
Deloitte & Touche LLP as independent auditors for the year ending December
31, 1995; and

3. To consider and act upon a proposal to approve the MAPCO Inc.
Incentive Compensation Plan; and

4. To transact any other business which may properly come before the
meeting or any adjournment thereof.

Stockholders of record at the close of business on March 27, 1995 will be
entitled to notice of and to vote at the Annual Meeting. The transfer books will
not be closed and will be maintained at Harris Trust Company of New York, 111
West Monroe, Chicago, IL 60690.

Mailing of this Notice, the Proxy Statement and the 1994 Annual Report to
Stockholders is expected to begin on March 31, 1995.

By Order of the Board of Directors

David W. Bowman
Senior Vice President, General
Counsel and Secretary

Tulsa, Oklahoma
March 27, 1995

You are cordially invited to attend the meeting. Whether or not you plan to
do so, please sign and date the accompanying proxy and mail it at once in the
enclosed envelope, which requires no postage if mailed in the United States.
<PAGE> 4
[MAPCO LOGO]

MAPCO INC.
1800 SOUTH BALTIMORE AVENUE
TULSA, OKLAHOMA 74119

PROXY STATEMENT

This statement is furnished in connection with the Annual Meeting of
Stockholders of MAPCO Inc. (the "Company") to be held at 9:00 a.m., Central
Daylight Time, May 26, 1995 at the Four Seasons Resort and Club, 4150 North
MacArthur Boulevard, Irving, Texas.

Stockholders of record at the close of business on March 27, 1995 will be
entitled to vote at the meeting.

SOLICITATION OF PROXIES

Execution and return of the enclosed proxy, which may be revoked at any
time prior to the meeting, is being solicited by and on behalf of the Board of
Directors of the Company for the purposes set forth in the foregoing notice of
meeting.

Solicitation other than by mail may be made personally, by telephone or by
telegraph, by regularly employed officers and employees of the Company who will
not be additionally compensated therefor. The Company will request persons, such
as brokers, nominees and fiduciaries, holding stock in their names for others,
or holding stock for others who have the right to give voting instructions, to
forward proxy material to their principals and request authority for the
execution of the proxy and will reimburse such persons for their expenses in so
doing. D. F. King & Co., Inc. has been retained to assist in the solicitation of
proxies at a cost not expected to exceed $15,000. The total cost of soliciting
proxies will be borne by the Company. All shares represented by valid proxies
will be voted, absent contrary instructions.

VOTING SECURITIES

Each Stockholder is entitled to one vote for each share of Common Stock,
$1.00 par value ("Common Stock"), registered in his name on the Company's books
at the close of business on March 27, 1995. The Company has no other voting
securities outstanding. Stockholders do not have cumulative voting rights in the
election of Directors. Other than the election of Directors, the approval of
each proposal that is being submitted to the Stockholders requires the
affirmative vote of a majority of the votes cast at the meeting. Directors are
elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
Directors. Although abstentions and broker non-votes will be included in the
calculation of the number of shares that are considered present at the Annual
Meeting, they will not be counted as votes cast. As of March 27, 1995, the
record date for voting, there were 29,894,968 shares of Common Stock of the
Company outstanding and entitled to vote.
<PAGE> 5

PRINCIPAL HOLDERS OF VOTING SECURITIES

According to information from Schedule 13G filings as of March 10, 1995,
the following table lists the Stockholders known to the Company to be beneficial
holders of more than five percent of the outstanding Common Stock of the
Company:

<TABLE>
<CAPTION>
AMOUNT & NATURE OF
BENEFICIAL PERCENT
NAME & ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
----------------------------------- ------------------ --------
<S> <C> <C>
Oppenheimer Group, Inc.(1) 2,990,980(2) 9.99%
Oppenheimer Tower
World Financial Center
New York, NY 10281
Bankers Trust New York Corporation, 371,742(4) 1.2%
and its wholly-owned subsidiary,
Bankers Trust Company, as Trustee
for various trusts and employee
benefit plans and as an
investment advisor(3)
280 Park Avenue
New York, NY 10017
Loomis, Sayles & Company, L. P. 2,406,708(5) 8.0%
One Financial Center
Boston, MA 02111
</TABLE>

---------------

(1) Schedule 13-G filed by Oppenheimer Group, Inc. as a parent holding company
pursuant to the provisions of Rule 13(d)-(1)(b) on behalf of Oppenheimer &
Co., L.P. and subsidiary companies and/or certain investment advisory
clients or discretionary accounts of such subsidiaries and relating to
their collective beneficial ownership.

(2) Beneficial ownership as of February 1, 1995; shared power to vote or to
direct the vote of 2,990,980 shares; and shared power to dispose of or to
direct the disposition of 2,990,980 shares. Includes shared power to vote
and shared power to dispose of 2,879,514 shares or 9.62% held by
Oppenheimer Capital.

(3) Schedule 13-G filed on behalf of Bankers Trust New York Corporation as
parent holding company pursuant to the provisions of Rule 13d-1(b)(ii)G and
on behalf of Bankers Trust Company as a Bank as defined in Section 3(a)(6)
of the Securities Exchange Act of 1934. Bankers Trust Company (the "Bank"),
as Trustee of the MAPCO Inc. and Subsidiaries Profit Sharing and Savings
Plan, was also record owner of 2,498,430 shares, or 8.35% of the Issuer's
outstanding common stock, with respect to which the Bank and Bankers Trust
New York Corporation disclaim beneficial ownership.

(4) Beneficial ownership as of December 31, 1994; sole power to vote or to
direct the vote of 107,602 shares and sole power to dispose of or to direct
the disposition of 371,012 shares; shared power to vote or to direct the
vote of 730 shares; and shared power to dispose of or to direct the
disposition of 730 shares.

(5) Beneficial ownership as of December 31, 1994; sole power to vote or to
direct the vote of 884,670 shares and no shared voting power; shared power
to dispose of or to direct the disposition of 2,406,708 shares and no sole
dispositive power.

ELECTION OF DIRECTORS

The Board of Directors is divided into three classes with the terms of
office of the Directors of each class ending in different years. After the
Annual Meeting of Stockholders for which this Proxy Statement has been prepared,
the Class I, II and III Directors are to serve until the Annual Meeting of
Stockholders in 1998, 1996 and 1997, respectively, or until their successors are
elected.

2
<PAGE> 6

Class I nominees for election as director were considered at the Nominating
Committee meeting held on January 24, 1995. It was unanimously approved that
Wayne K. Goettsche, Donald L. Mellish, Robert M. Howe and Robert L. Parker be
nominated for election as Class I Directors at this Annual Meeting of
Stockholders. All of the nominees are currently serving as Directors. Each of
the nominees has consented to nomination and will serve as a Director if
elected. If any of the nominees should be unable to serve, which is not
anticipated, proxies will either be voted for the election of a substitute
nominee or the number of Directors will be accordingly reduced by action of the
Board of Directors. During 1994, MAPCO Inc. did not add or lose any board
member. There are currently no vacancies on the Board of Directors.

COMMON STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

The following tabulation provides information as to each person nominated
for election as a Director and each of the other Directors whose term of office
will continue after the meeting. The table also shows information concerning
beneficial ownership of the Company's Common Stock by all Directors and nominees
and by the Company's Chief Executive Officer, each of the Company's four other
most highly compensated executive officers for 1994 (the "named Executive
Officers") and all Directors and Executive Officers as a group. At its September
1994 meeting, the Board reviewed the policy-making functions of the Company's
officers and redefined which officers would be included as Executive Officers
(those officers with reporting responsibilities under Section 16 of the
Securities and Exchange Act of 1934, as amended). As a result of this review,
the Board specifically designated the Chairman, the President, all Senior Vice
Presidents and the Vice President and Controller of the Company as Executive
Officers. The persons named below have sole voting and investment power with
respect to all shares of Common Stock owned by them, unless otherwise noted. In
addition, unless otherwise indicated, such persons have held their respective
principal occupations stated therein for more than five years.

Donald L. Mellish -- Age 67. I 23,100(4) (2)
Anchorage, Alaska. Director since June 1981.
Chairman of the Executive Committee and a
Director of National Bancorp of Alaska, Inc.
Presently a Director of Pacific Telecom Inc.
Board/Board Committee attendance(1) 93%.
</TABLE>

3
<PAGE> 7

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON STOCK
BENEFICIALLY
OWNED DIRECTLY
OR INDIRECTLY
DIRECTOR ON MARCH 27, PERCENT
DIRECTOR, NOMINEE OR NAMED EXECUTIVE OFFICER CLASS 1995 OF CLASS
------------------------------------------------- -------- -------------- --------
<S> <C> <C> <C>
Robert M. Howe -- Age 55. I 219,981(3) (2)
Tulsa, Oklahoma. Director of the Company since
March 1986; President and Chief Operating Officer
since December 1991. Executive Vice President and
Chief Operating Officer from March 1986 to
December 1991. Senior Vice President -- Petroleum
of the Company from December 1984 to March
1986. Employed in 1964 by Conoco, Inc., an
integrated energy company, in which he served in
various engineering and management positions
until his resignation in November 1984, when he
was responsible for strategic planning and
financial analysis for Conoco's world-wide
petroleum operations. Board/Board Committee
attendance(1) 100%.

Robert L. Parker -- Age 71. I 12,400(4) (2)
Tulsa, Oklahoma. Director since May 1986.
Chairman of the Board of Parker Drilling
Company, an international oil and gas drilling
company. Presently, a Director of Bank of
Oklahoma Financial Corporation, Clayton Williams
Energy, Inc. and Enterra Corporation. Board/Board
Committee attendance(1) 100%.

James E. Barnes -- Age 61. II 470,866(3) 1.6%
Tulsa, Oklahoma. Director, Chairman of the Board
and Chief Executive Officer of the Company
since December, 1991. Director, Chairman of the
Board, President and Chief Executive Officer of
the Company from May 1986 to December 1991.
Director, President and Chief Executive Officer
of the Company from February 1984 to May 1986.
Advisory, non-voting Director, Senior Executive
Vice President and Chief Operating Officer of the
Company from June 1983 to February 1984. Employed
in 1956 by Conoco, Inc., an integrated energy
company, in which he served in various
engineering and management positions until his
resignation in May 1983 when he was Executive
Vice President, Petroleum Products, North America
of Conoco, Inc., and a member of Conoco's Board
of Directors and Executive Committee with his
responsibilities then including all refining,
marketing, transportation, and natural gas and
gas products activities in North America.
Presently a Director of Bank of Oklahoma
Financial Corporation, SBC Communications Inc.
and Kansas City Southern Industries, Inc.
Board/Board Committee attendance(1) 100%.
</TABLE>

4
<PAGE> 8

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON STOCK
BENEFICIALLY
OWNED DIRECTLY
OR INDIRECTLY
DIRECTOR ON MARCH 27, PERCENT
DIRECTOR, NOMINEE OR NAMED EXECUTIVE OFFICER CLASS 1995 OF CLASS
------------------------------------------------- -------- -------------- --------
<S> <C> <C> <C>
Philip C. Lauinger, Jr. -- Age 59. II 15,800(4)(5) (2)
Tulsa, Oklahoma. Director since August 1973.
Presently Chairman and Chief Executive Officer
of Lauinger Publishing Company, which provides
investment and advisory services to the business
publishing industry; Formerly Director, Chairman
and Chief Executive Officer of PennWell
Publishing Company, an international business
magazine and information publishing company.
Presently a Director of Bank of Oklahoma
Financial Corporation. Board/Board Committee
attendance(1) 91%.

Harry A. Fischer, Jr. -- Age 68. II 12,000(4) (2)
Glenview, Illinois. Director since May 1986.
Chairman since January 1988, Chairman,
President and Chief Executive Officer from
November 1985 to January 1988, and President and
Chief Executive Officer from November 1980 to
November 1985 of Daubert Industries, Inc., a
manufacturer of chemically treated papers,
coatings, rust and corrosion prevention
chemicals, adhesives, sealants and masking tape
products. Formerly a Director of Lee Enterprises,
Incorporated. Board/Board Committee attendance(1)
100%.

Samuel F. Segnar -- Age 67. II 11,000(4) (2)
Houston, Texas. Director since September, 1989.
Retired Chairman and Chief Executive Officer of
ENRON Corporation; Formerly Chairman of the Board
of Collecting Bank, N.A., Houston and Vista
Chemical Co. (1986-1988). Presently a Director
of Textron, Inc., Seagull Energy Corporation,
Hartmarx Corporation, Gulf States Utilities
Company and Probank and serves on the Advisory
Board of Pilko & Associates and the National
Advisory Board of First Commercial Bank; Owner,
Sam F. Segnar Interests, a company involved in
construction, development, heavy equipment,
aviation and insurance businesses. Board/Board
Committee attendance(1) 86%.

Herman J. Schmidt -- Age 78. III 12,927(4) (2)
Greenwich, Connecticut. Director since May 1979.
Retired October 1978 as Vice Chairman of Mobil
Oil Corporation, an international oil company.
Presently a Director of H. J. Heinz Company,
Tri-Continental Corporation, Seligman Select
Municipal Fund, Inc., Seligman Quality Municipal
Fund, Inc., Seligman Mutual Funds and HON
Industries, Inc. Board/Board Committee
attendance(1) 100%.
</TABLE>

5
<PAGE> 9

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON STOCK
BENEFICIALLY
OWNED DIRECTLY
OR INDIRECTLY
DIRECTOR ON MARCH 27, PERCENT
DIRECTOR, NOMINEE OR NAMED EXECUTIVE OFFICER CLASS 1995 OF CLASS
------------------------------------------------- -------- -------------- --------
<S> <C> <C> <C>
Malcolm T. Hopkins -- Age 67. III 13,185(4) (2)
Asheville, North Carolina. Director since May
1986. Retired October 1984 as Vice Chairman and
Chief Financial Officer, St. Regis Corporation, a
diversified, multi-national forest products
company, that also had insurance, oil and gas and
chemical operations. Presently a private investor
and a Director of The Columbia Gas System, Inc.,
Metropolitan Series Fund, Inc., Metlife
Portfolios, Inc., EMCOR Group Inc., U.S. Home
Corporation and KinderCare Learning Centers, Inc.
Board/Board Committee attendance(1) 100%.

Donald Paul Hodel -- Age 59. III 8,100(4) (2)
Silverthorne, Colorado. Director since September,
1990. Presently Managing Director of Summit
Energy Group, Summit Group International, Ltd.,
an energy and natural resources consulting firm;
Director of Taylor Energy Company, a
privately-held independent oil and gas company;
Advisor to the President, Texon Corporation;
Director of Hart Publications Inc.; Member,
Advisory Council, Electric Power Research
Institute. From 1985 to 1989, Secretary, U.S.
Department of the Interior. Secretary, U.S.
Department of Energy 1982-1985. Under Secretary,
U.S. Department of the Interior 1981-1982.
Formerly Chairman, National Critical Materials
Council; Chairman Pro Tem, Member, Domestic
Policy Council, 1986-1989. Board/Board Committee
attendance(1) 82%.

W. Jeffrey Hart 135,723(3) (2)

Joseph W. Craft III 142,186(3) (2)

Frank S. Dickerson, III 75,388(3) (2)

All Directors and Executive Officers as a group 1,420,103(3) 4.7%
(20 persons)
</TABLE>

---------------

(1) Indicates for 1994 the percentage of meetings attended by each Director out
of the total number of meetings of the Board and Committees of the Board
described below on which such Director served.

(2) Does not exceed one percent.

(3) Includes options for the Company's Common Stock that may be exercised within
60 days by Messrs. Barnes (279,941), Howe (139,413), Hart (84,330), Craft
(79,232), Dickerson (49,336) and all Executive Officers and Directors as a
group (917,583). Also includes shares of the Company's Common Stock that are
allocated as of December 31, 1994, under the MAPCO Inc. & Subsidiaries
Profit Sharing and Savings Plan ("PSSP") (Mr. Barnes 1,681 shares, Mr. Howe
5,091 shares, Mr. Hart 1,856 shares, Mr. Craft 1,861 shares and Mr.
Dickerson 4,002 shares) and under the MAPCO Inc. & Subsidiaries Employee
Stock Ownership Plan ("PAYSOP") as of December 31, 1994 (Mr. Barnes 38
shares,

6
<PAGE> 10

Mr. Howe -0- shares, Mr. Hart 1,142 shares, Mr. Craft 103 shares and Mr.
Dickerson -0- shares). Includes 310 shares held by the spouse of one
Executive Officer, who is also an employee of the company, in the PSSP and
PAYSOP.

(4) Includes options for the Company's Common Stock that may be exercised within
60 days by all non-employee Directors under the 1989 Outside Directors Stock
Option Plan and includes shares held in the dividend reinvestment plan of
MAPCO Inc. Fractional shares held in the dividend reinvestment plan have
been rounded.

(5) Does not include 1,000 shares owned by Mrs. Philip C. Lauinger, Jr. with
respect to which Mr. Lauinger has disclaimed all beneficial ownership.

TRANSACTIONS WITH MANAGEMENT AND OTHERS

During 1994, Mr. Wayne K. Goettsche, an outside Director for the Company,
was employed through Quoin Financial Corporation as a consultant for the Company
to explore opportunities in mining and coal sales in foreign markets. For such
services, Mr. Goettsche was paid $140,546.00 for consulting services and
expenses through December 31, 1994. This arrangement is expected to continue in
1995, at the rate of $45,000 per month plus expenses.

MEETINGS, COMMITTEES AND COMPENSATION OF THE BOARD

During 1994, six meetings of the Board of Directors were held. The Board
has established four committees to assist it in the discharge of its
responsibilities. The principal functions of each committee are described in the
succeeding paragraphs.

EXECUTIVE COMMITTEE

The Executive Committee has and may exercise all the powers of the Board of
Directors except to (1) elect Directors, (2) alter, amend or repeal the
Company's By-laws, (3) declare any dividend or make any other distribution to
the Stockholders of the Company, (4) appoint any member of any Board Committee
or (5) authorize any merger or consolidation, or sale, lease or encumbrance of
all or substantially all the assets of the Company, or any acquisition by the
Company of all or substantially all of the business or assets of any other
corporation or entity. The Committee did not meet in 1994. The Committee members
are James E. Barnes (Chairman), Wayne K. Goettsche, Robert M. Howe, Robert L.
Parker and Herman J. Schmidt.

AUDIT COMMITTEE

The Audit Committee's functions are (1) to recommend to the Board of
Directors, subject to stockholder approval, the selection of the Company's
independent auditors (2) on behalf of the Board of Directors to oversee the
Company's financial reporting process, (3) to review and discuss with the
internal auditor and the independent auditors, the overall scope and specific
plans for their respective audits, (4) to review and discuss with the internal
auditor and independent auditors the results of their examinations, their
evaluations of the Company's internal controls, and their assessments of the
overall quality of the Company's financial reporting, and (5) such additional
duties as may be assigned by the Board of Directors. This Committee had five
meetings during 1994. The Committee members are Wayne K. Goettsche (Chairman),
Harry A. Fischer, Jr., Philip C. Lauinger, Jr. and Donald Paul Hodel.

COMPENSATION COMMITTEE

The Compensation Committee's functions are to (1) approve the salaries of
all Executive Officers (those officers with reporting obligations under Section
16 of the Securities and Exchange Act of 1934, as amended), (2) designate
participants, establish objectives, establish applicable performance measurement
criteria and make awards under all executive incentive compensation plans,
including stock-based plans, (3) review summary data of annual segment incentive
compensation plans, (4) establish the Company's overall

7
<PAGE> 11

compensation philosophy and annual merit budget guidelines and monitor the
appropriateness and consistency of the Company's compensation practices, goals,
policies and philosophies, (5) review from time to time data prepared by third
party consultants to gauge the appropriateness and competitiveness of
compensation and benefits for executive personnel, (6) review from time to time
the level and composition of all elements of compensation, benefits and
perquisites provided to non-employee members of the Board of Directors, (7)
amend and oversee the administration of health plans and qualified and
non-qualified benefit plans, including approving all contributions to profit
sharing plans, and delegate to the management of the Company limited authority
to amend benefit plans, (8) evaluate the performance of the Chief Executive
Officer ("CEO") and other Executive Officers and counsel the CEO in management
development and performance evaluation matters, (9) assure that effective
succession planning is conducted for the CEO and other Executive Officers, (10)
review and approve compensation and benefit information to be included in the
Company's annual proxy statement and prepare, over the names of the Committee
members, the "Compensation Committee Report on Executive Compensation" on an
annual basis for the Company's proxy statement; (11) recommend to the Board of
Directors for final approval: the adoption of health plans and qualified and
non-qualified benefit plans and the adoption and amendment of executive
incentive compensation and stock-based plans, the adoption and amendment of
compensation and benefit plans and programs for non-employee members of the
Board of Directors and employment continuation agreements or similar agreements
proposed to be entered into with any executive. This Committee had five meetings
during 1994. The Committee members are Samuel F. Segnar (Chairman), Malcolm T.
Hopkins, Donald L. Mellish, Robert L. Parker and Herman J. Schmidt.

During 1994, Mr. Schmidt resigned as Chairman of the Compensation Committee
after over fifteen (15) years of service to the Company in this position. Mr.
Segnar was named Chairman following Mr. Schmidt, who will continue to serve on
the Committee.

NOMINATING COMMITTEE

The Nominating Committee's functions are to recommend candidates for
membership on the Board of Directors and to recommend the duties and makeup of
the committees of the Board of Directors. To be considered for inclusion in the
slate of nominees proposed by the Board of Directors at the next annual meeting,
such recommendations, including the nominees' qualifications and consent, should
be sent to the Committee in care of the Secretary of the Company and received no
later than December 31, 1995. The Committee had three meetings in 1994. The
current Committee members are Donald L. Mellish (Chairman), Robert L. Parker,
Herman J. Schmidt and Samuel F. Segnar.

COMPENSATION OF THE BOARD

Employee directors are not compensated for services as a director.
Non-employee directors ("Outside Directors") receive an annual retainer of
$25,000 and, with the exception of director Donald L. Mellish, a fee of $1,000
for attendance at each Board or Committee meeting. Because Mr. Mellish routinely
travels to Board or Committee meetings from outside the contiguous 48 states, he
receives double the Board or Committee meeting attendance fee of $1,000;
provided, however, if the Board and Committee meetings are held jointly, only
his Board attendance fee is doubled. The Audit and Compensation Committee
Chairmen receive additional annual compensation of $4,000 and the Nominating
Committee Chairman receives annual compensation of $3,000 in addition to
Committee attendance fees. The Company also reimburses its Directors for travel,
lodging and related expenses incurred in attending Board and Committee meetings
and provides each Outside Director with $100,000 in life insurance benefits and
$250,000 in accidental death and dismemberment insurance benefits.

Outside Directors are eligible to participate in the 1986 Retirement Plan
for Non-Employee Directors (the "Director Retirement Plan"). Under the Director
Retirement Plan, an Outside Director who has completed at least five years of
service as a member of the Board of Directors and retires from the Board after
attaining age 70 will receive a benefit for life equal to the annual retainer
fee payable to Outside Directors at the time of his retirement. An Outside
Director who has not attained age 70 at the time he leaves the Board,

8
<PAGE> 12

but who has completed at least five years of service as a member of the Board,
will generally receive a benefit equal to the annual retainer fee then payable
to Outside Directors for the lesser of (i) the number of years during which the
Outside Director served as a member of the Board or (ii) ten years. Upon the
occurrence of a Change in Control (as defined in the Employment Continuation
Agreements for executive officers described below), all Outside Directors will
be entitled to receive a benefit under such plan, regardless of the length of
Board membership. Such benefit will be equal to the annual retainer fee then
payable to Outside Directors multiplied by the greater of (i) the number of
years during which the Outside Director served as a member of the Board or (ii)
ten years.

1989 OUTSIDE DIRECTOR STOCK OPTION PLAN

In 1989, the Company, with the approval of the Stockholders, adopted the
1989 Outside Director Stock Option Plan (the "Director Plan"). All Outside
Directors are eligible to participate in the Director Plan. There are currently
nine Outside Directors.

The maximum number of shares of the Company's Common Stock that may be
issued under the Director Plan is 200,000. In the event of a stock split or a
stock dividend or other relevant change affecting the Company's Common Stock,
appropriate adjustments may be made in the number of shares that could be issued
in the future and in the number of shares and price of all outstanding options
granted before such event. If an option is cancelled or expires without the
issuance of shares, the shares subject to such option will be available for
future grants under the Director Plan.

Annual Grants. In each calendar year during the term of the Director Plan,
each Outside Director will receive an immediately exercisable option having a
ten-year term to purchase 2,000 shares of the Company's Common Stock. Each such
annual award shall be made on the later of the first business day following the
annual meeting of the Company's Stockholders or June 1 and shall have an option
price equal to the fair market value of a share of the Company's Common Stock on
the date of grant.

Termination of Board Membership. In the event that an Outside Director's
board membership terminates by reason of retirement after attaining age 70,
long-term disability or death, such Director's options may thereafter be
exercised in full in the case of retirement for a period of three years and in
the case of death or disability for a period of one year, subject in each case
to the stated term of the option. In the event an Outside Director's Board
membership terminates for any other reason, such Director's options will expire.

Other Information. The Board may terminate or suspend the Director Plan at
any time but such termination or suspension shall not affect any options then
outstanding. Unless sooner terminated by action of the Board, the Director Plan
will terminate on March 29, 1999, but options outstanding on such date shall
continue to be outstanding until the expiration of their terms. The Board may
also amend the Director Plan as it deems advisable, but unless the Stockholders
approve, no such amendment may materially increase the benefits to Outside
Directors. In addition, no such amendment shall adversely affect any option
theretofore granted under the Director Plan without the holder's consent.

9
<PAGE> 13

EXECUTIVE COMPENSATION

The following table sets forth the total compensation paid or accrued by
the Company for services provided during the fiscal years ended December 31,
1994, 1993 and 1992 to the Chief Executive Officer and the four other most
highly compensated executive officers (the "named Executive Officers") whose
total cash compensation for the year ended December 31, 1994, exceeded $100,000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
ANNUAL COMPENSATION AWARDS
--------------------------------------- -------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND BONUS COMPENSATION UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) ($)(1) ($)(2) OPTIONS(#)(3) ($)(4)
----------------------------------- ---- --------- -------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
James E. Barnes.................... 1994 720,000 0 0 89,419 34,886
Chairman of the Board & CEO 1993 675,000 1,292,000 7,810 96,618 44,782
1992 665,833 0 5,308 141,471 46,040
Robert M. Howe..................... 1994 375,417 0 0 98,177 26,161
President & COO 1993 350,417 591,000 3,183 51,210 26,267
1992 340,000 0 2,766 98,733 26,317
W. Jeffrey Hart.................... 1994 264,833 0 0 42,742 19,365
Senior Vice President, 1993 253,000 449,000 4,657 75,085 20,825
Petroleum 1992 250,000 0 4,791 64,760 20,742
Joseph W. Craft III................ 1994 236,000 0 0 22,711 17,518
Senior Vice President, 1993 225,000 316,000 288 26,430 19,099
Coal 1992 224,000 0 294 61,264 19,078
Frank S. Dickerson, III............ 1994 235,000 0 0 35,690 17,398
Senior Vice President, Chief 1993 227,000 345,000 1,599 26,108 19,255
Financial Officer & Treasurer 1992 212,000 0 926 28,460 18,186
</TABLE>

---------------
(1) Senior level officers of the Company (10 in number) waived bonuses for 1992.

(2) Represents tax gross-up payments to an after-tax nonqualified defined
contribution plan in 1992 and 1993. Beginning in 1994, the Company no
longer offered this plan.

(3) Under the 1989 Stock Incentive Plan, MAPCO has a replacement option feature
providing for additional options to restore the potential future
appreciation of any outstanding shares actually used to exercise an option,
as well as shares forfeited for tax withholding ("Replacement Option").
Replacement Options are granted only in connection with stock-for-stock
exchanges where an optionee exercises vested stock options with already
owned stock of the Company. The Replacement Option which is received by the
optionee is equal to the number of shares used to exercise the original
options plus those shares forfeited for tax withholding. Replacement
Options have terms substantially similar to the original option, including
the same expiration date, except they have an exercise price per share
equal to the fair market value of a share of common stock on the date the
Replacement Option is granted. Replacement Options are not exercisable for
at least six months from the grant date for those granted prior to January
22, 1992 and 12 months for those granted on and after January 22, 1992. By
recapturing the potential for future appreciation through Replacement
Options, key management is provided with the incentive to acquire shares
rather than hold options until the end of the exercise period. Replacement
Options are granted only to the extent existing shares held by the employee
are exchanged to exercise options and accordingly the total number of
options granted never exceeds shareholder approved limits under stock
option plans. The CEO has set stock ownership targets for each key member
of management including the named Executive Officers. The Replacement
Option program has encouraged stock option exercises and helped to increase
stock ownership of key management. The Replacement Option feature is also
discussed below in the Compensation Committee Report on Executive
Compensation.

(4) All Other Compensation includes Company matching contributions to the MAPCO
Inc. & Subsidiaries Profit Sharing and Savings Plan ("PSSP") and
compensation paid to or on behalf of the named Executive Officers
participating in a nonqualified defined contribution plan. Company matching

10
<PAGE> 14

contributions to the PSSP for 1994 on behalf of Messrs. Barnes, Howe, Hart,
Craft and Dickerson were $12,836, $12,761, $12,567, $12,208 and $12,011
respectively. Compensation was paid to or on behalf of Messrs. Barnes,
Howe, Hart, Craft, and Dickerson of $22,050, $13,400, $6,798, $5,310 and
$5,387 respectively for participation in a nonqualified defined
contribution plan.

The following table contains information concerning the grant of stock
options during fiscal year 1994 to the named Executive Officers.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------
% OF
TOTAL
NUMBER OF OPTIONS GRANT DATE VALUE
SECURITIES GRANTED ----------------
UNDERLYING TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES PRICE EXPIRATION PRESENT VALUE
NAME GRANTED(#)(1) IN 1994 ($/SHARE) DATE(2) ($)(3)
--------------------------------------------- ------------- --------- --------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
JAMES E. BARNES.............................. 65,000 9.8% 63.1250 01/25/04 815,023
10,019 1.5% 60.750 01/30/00 50,272
14,400 2.2% 60.750 01/23/01 72,254
ROBERT M. HOWE............................... 35,000 5.3% 63.1250 01/25/04 438,858
7,720 1.2% 60.125 02/24/99 36,805
10,059 1.5% 60.125 01/30/00 47,957
14,286 2.1% 60.125 01/23/01 68,109
7,442 1.1% 64.500 02/24/99 42,777
4,714 0.7% 64.500 01/30/00 27,097
18,956 2.8% 64.500 01/22/02 108,961
W. JEFFREY HART.............................. 18,000 2.7% 63.1250 01/25/04 225,699
4,454 0.7% 60.625 02/24/99 22,032
6,037 0.9% 60.625 01/30/00 29,862
8,722 1.3% 60.625 01/23/01 43,143
5,529 0.8% 60.625 01/22/02 27,349
JOSEPH W. CRAFT III.......................... 16,000 2.5% 63.1250 01/25/04 200,620
2,963 0.5% 61.750 01/30/00 16,044
3,748 0.6% 61.750 01/23/01 20,294
FRANK S. DICKERSON, III...................... 15,000 2.3% 63.1250 01/25/04 188,083
7,595 1.1% 60.125 02/24/99 36,314
5,643 0.8% 60.125 01/30/00 26,981
7,452 1.1% 60.125 01/23/01 35,630
</TABLE>

---------------

(1) The first line of the Options Granted column for each named Executive
Officer denotes original grants made by the Compensation Committee which
become exercisable in one-third increments over years four, five and six of
the option. All other grants are automatic Replacement Options which become
exercisable 12 months from the grant date. All grants include the
Replacement Option feature. See footnote (3) of the Summary Compensation
Table for further explanation regarding the Replacement Option feature.

(2) Original grants made by the Compensation Committee expire ten (10) years
from the grant date. Replacement Options have the same expiration date as
the original options they have replaced.

(3) In accordance with Securities and Exchange Commission rules, the
Black-Scholes option pricing model was chosen to estimate the grant date
present value of the options set forth in this table. The Company's use of
this model should not be construed as an endorsement of its accuracy at
valuing options. All stock option valuation models, including the
Black-Scholes model, require a prediction about the future movement of the
stock price. The following assumptions were made for purposes of calculating
the Grant Date Present Value: for all grants the option term is assumed to
be six months after vesting, interest rates of 4.16% to 5.42%, volatility of
12.77% calculated by using daily stock prices for the calendar year 1994,
and a dividend yield of 1.58% per share. The real value of the options in
this table depends upon the actual performance of the Company's stock during
the applicable period.

11
<PAGE> 15

The following table contains information concerning aggregated stock option
exercises during 1994 by the named Executive Officers.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
NUMBER OF OPTIONS AT OPTIONS AT
SECURITIES FY-END(#) FY-END($)
UNDERLYING (3)
OPTIONS VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISED(#)(1) REALIZED($)(2) UNEXERCISABLE UNEXERCISABLE
--------------------------------------- --------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
James E. Barnes........................ 36,447 719,976 228,000/ 0/
185,085 209,038
Robert M. Howe......................... 69,076 740,376 67,395/ 154,454/
146,843 99,076
W. Jeffrey Hart........................ 27,400 329,319 55,806/ 0/
70,741 60,788
Joseph W. Craft III.................... 13,780 421,257 67,694/ 0/
47,377 19,666
Frank S. Dickerson, III................ 23,337 280,298 23,980/ 0/
60,022 53,201
</TABLE>

---------------

(1) Includes shares forfeited for the named Executive Officer's state and
federal tax withholding obligations and shares tendered in payment of the
option exercise prices.

(2) Includes value of shares forfeited by the named Executive Officer for state
and federal tax withholding obligations.

(3) The value of the unexercised in-the-money options was calculated using the
closing price on December 31, 1994 of $51.25.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors (the "Committee") is
comprised entirely of independent outside directors. The Committee is
responsible for establishing and administering the Company's executive
compensation programs.

COMPENSATION PHILOSOPHY

The Committee's compensation philosophy is designed to support the
Company's primary objective of creating value for shareholders. The Committee
believes that the following compensation strategies for the named Executive
Officers achieve this objective:

- Attract and retain talented employees -- The Company provides core
compensation in the form of base salary and benefit programs that are
comparable to those of peer companies (described below) and
similarly-sized domestic general industry companies. The base salary
target is generally established at the 50th percentile of peer company
and general industry survey results. For higher levels of responsibility,
the base salary component is a diminishing portion of the executive's
potential total compensation.

- Emphasize pay for performance -- The annual incentive compensation
program establishes a significant relationship between current Company
performance and incentive compensation, with substantial rewards possible
for exceptional results and no reward for poor results.

12
<PAGE> 16

- Encourage management stock ownership -- The Committee firmly believes
that long-term shareholder value will be significantly enhanced by
management stock ownership. As a result, the Company's stock option
program strongly encourages stock ownership by the named Executive
Officers.

Recent federal tax legislation imposes, for 1994 and future years, a
limitation on the deduction for certain named Executive Officers' compensation
unless certain requirements are met. The Committee has carefully considered the
impact of this new tax law and, at this time, intends to take such action as may
be required to preserve the Company's tax deduction with respect to any affected
compensation. The Company's new Incentive Compensation Plan is designed to
qualify future payments for tax deductibility. The Company's stock option
program currently qualifies for exemption from the deduction limit under the IRS
transition rules, and the Committee intends to take such action as is necessary
to maintain such exempt status.

The following are descriptions of the Company compensation programs for the
named Executive Officers including the CEO.

BASE SALARY

The Company generally establishes base salary ranges by considering peer
company and general industry information. The base salary targets are typically
set at the 50th percentile of this information.

Peer companies, for compensation purposes, have been identified by the
Company, with the assistance of outside consultants, as sixteen (16) companies
with fairly comparable size and business activities to that of the Company. Six
of these peer companies are also included in the S&P Energy Composite Index
which is used in the Five Year Total Return Graph shown below. The principal
reason the Company utilizes different companies for performance comparisons and
compensation comparisons is that the sample used in compensation comparisons
includes companies which are more comparable in size and business activities
than those used by the published indexes for performance comparisons. The base
salary of each named Executive Officer is reviewed periodically by his immediate
supervisor (or the Committee, in the case of the CEO) resulting in salary
actions typically every 12 to 15 months or longer. The named Executive Officer's
position and level of responsibility are the primary factors considered in
determining base salary. Individual performance, years with the Company, and
peer company and general industry information are also considered in determining
any appropriate salary adjustment. As compared to peer companies, the actual
1994 base salary of the CEO was slightly above the 50th percentile and the
actual 1994 base salaries of all other named Executive Officers were slightly
below the 50th percentile. The Committee reviews and approves all proposed
salary adjustments for the named Executive Officers as recommended by the CEO.

ANNUAL INCENTIVE AWARDS

Annual incentive awards are available to the named Executive Officers to
recognize and reward desired performance. Each year, the Compensation Committee
approves the participants, the performance measures and the specific financial
targets. The performance measure for 1994 was based on Funds Provided by
Operations and the financial target was determined by the Company's performance
in this area over the previous three-year period. A named Executive Officer's
target award level is determined primarily by the individual's position and
level of responsibility; however, an individual's ability to impact the
Company's financial success and peer company and general industry information
are also considered in determining target award levels. No annual incentive
awards are generated unless a minimum performance level is reached. Once the
minimum level is reached awards increase as performance increases up to a
maximum award level. Annual incentive awards for 1994 were directly related to
overall corporate and business unit performance. Because actual Company
performance failed to achieve minimum performance levels, no annual incentive
awards were paid to any named Executive Officers for 1994.

STOCK OPTION PROGRAM

The Company's current stock option program is designed to align management
interests with those of shareholders. In furtherance of this objective,
nonqualified stock options were granted in 1994, with the exercise price equal
to the market price on the date of grant.

13
<PAGE> 17

After a lengthy vesting period, stock options only have value if the price
of the Company's stock has appreciated in value from the date the stock options
were granted. Obviously, shareholders also benefit from such stock price
appreciation.

The Company's stock option program is designed to encourage early exercise
of options and retention of the issued stock, by including a reload option
feature ("replacement option") and by the CEO establishing a target level of
stock ownership for each named Executive Officer, in order to encourage a
long-term ownership perspective. The replacement option feature provides for a
new option for each share of Company stock tendered to satisfy an option
exercise price. The replacement option, granted at an exercise price equal to
the then current market price, is for the number of shares exchanged to exercise
the original options, plus shares withheld for taxes, and is exercisable for the
remainder of the original option term. As a result of this design, early
exercise and ownership is encouraged, but stock option recipients can never
obtain more shares of stock than represented by the original option grants.

The level of stock option grants for the named Executive Officers and other
employees is determined by the Committee each year in consultation with the CEO.
Awards for the CEO, other named Executive Officers and other groups of employees
are determined by giving equal consideration to their base salary, level of
responsibility, and peer company long-term compensation information. The
Company's 1994 awards were between the median and high end of option awards
granted by peer companies.

The Company is required to purchase shares in the open market equivalent to
the number of shares issued under the stock option program.

Since institution of the replacement option program and stock ownership
targets in 1990, current named Executive Officer stock ownership has increased
by 452% to a total of 395,386 shares.

CEO COMPENSATION

Mr. Barnes' compensation for 1994 consisted of the same three components
described above for the named Executive Officers: base salary, annual incentive
compensation and stock option awards (in addition to participation in the
benefit programs). Mr. Barnes received a base salary increase of 8.9% in 1994.
He had not received an increase in base salary during the previous 25 months.
His 1994 base salary range was determined by considering peer company and
general industry information. His actual base salary was established within the
salary range by reference to his performance and years of service, in addition
to peer company and general industry information. The Committee took into
account the fact that Mr. Barnes has been CEO of MAPCO since 1984 and, during
that time period, total shareholder return (stock price appreciation and
dividends) has averaged 20% per year.

Mr. Barnes' incentive award is determined in the same manner as described
above. Because actual Company performance failed to achieve minimum performance
levels, Mr. Barnes did not receive an incentive award for 1994.

Pursuant to the stock option program described above, Mr. Barnes was
granted 65,000 nonqualified stock options in 1994.

Samuel F. Segnar, Chairman
Malcolm T. Hopkins
Donald L. Mellish
Robert L. Parker
Herman J. Schmidt

14
<PAGE> 18

PERFORMANCE GRAPH

The following performance graph reflects yearly percentage changes in the
Company's cumulative total stockholder return on Common Stock for the five
fiscal years ended December 31, 1994, as compared with the cumulative total
return of the S&P 500 Stock Index and the S&P Energy Composite Index. The graph
assumes that $100 was invested on January 1, 1990 in the Company's Common Stock
and in each of the referenced indices and assumes reinvestment of dividends.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
MAPCO, S&P 500 AND S&P ENERGY COMPOSITE

[GRAPH]

<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P ENERGY
(FISCAL YEAR COVERED) MAPCO INC. S&P 500 COMPOSITE
<S> <C> <C> <C>
1989 100 100 100
1990 108 97 103
1991 159 126 111
1992 143 135 113
1993 165 149 131
1994 141 151 136
</TABLE>

For the narrative description of the performance graph, see Appendix I at
page 25.

15
<PAGE> 19

PENSION PLAN

The pension plan, in which all eligible employees, including Executive
Officers, participate, does not require or permit employees to make
contributions. Contributions to the pension plan in respect of any person are
not and cannot be separately or individually calculated.

PENSION TABLE -- ANNUAL BENEFIT PAYABLE AT NORMAL RETIREMENT AGE

<TABLE>
<CAPTION>
AVERAGE YEARS OF SERVICE
ANNUAL ------------------------------------------------------------------
COMPENSATION 10 15 20 25 30 35
--------------------------------- ------- ------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 100,000....................... 17,815 26,723 35,630 44,538 53,446 62,353
$ 250,000....................... 47,065 70,598 94,130 117,663 141,196 164,728
$ 500,000....................... 95,815 143,723 191,630 239,538 287,446 335,353
$1,000,000....................... 193,315 289,973 386,630 483,288 579,946 676,603
$1,250,000....................... 242,065 363,098 484,130 605,163 726,196 847,228
$1,500,000....................... 290,815 436,223 581,630 727,038 872,446 1,017,853
$1,750,000....................... 339,565 509,348 679,130 848,913 1,018,696 1,188,478
$2,000,000....................... 388,315 582,473 776,630 970,788 1,164,946 1,359,103
</TABLE>

The Pension Table above shows approximate total retirement benefits
(expressed as an annual straight-life annuity) based on employment with the
Company for an employee covered by the qualified and non-qualified retirement
plans. "Average annual compensation" is determined with reference to the base
salary and bonus compensation disclosed in the Summary Compensation Table,
except as described below for Messrs. Barnes and Howe. Average annual
compensation levels are the average base salary and bonus compensation for the
three highest consecutive years of the 10 years immediately before retirement
date. The normal retirement date is at age 65, 66 or 67, depending upon the
participant's birth year. The benefit amounts listed in the table are not
subject to reduction for Social Security benefits or on any other basis except
as noted below.

At December 31, 1994, Messrs. Barnes, Howe, Hart, Craft and Dickerson were
credited with 11.58, 10.08, 15.17, 14.33 and 7.65 years of service,
respectively.

In addition, Messrs. Barnes and Howe are, pursuant to separate retirement
agreements, credited with additional service equal to service earned with their
prior employer (26 and 20 years, respectively). Such service is applied with
reference to a modified base salary and bonus compensation at the Company which
reflects only 50% of their promotion pay increases and bonus compensation. This
additional retirement benefit is reduced by the retirement benefit earned by
Messrs. Barnes and Howe at their prior employer. On December 3, 1993, the Board
of Directors approved an amendment to the retirement agreement of Mr. Howe to
provide for vesting of benefits thereunder effective as of December 31, 1993.
Retirement benefits under the supplemental retirement agreement would have
vested on December 1, 1994; however, by accelerating vesting into the calendar
year 1993, both the Company and Mr. Howe avoided increased tax liability which
would have been incurred in 1994 under the Omnibus Budget Reconciliation Act of
1993.

EMPLOYMENT CONTINUATION AGREEMENTS

The Company has entered into Employment Continuation Agreements (the
"Agreements") with ten (10) of its Executive Officers (the "Officers"),
including Messrs. Barnes, Howe, Hart, Craft and Dickerson. The Agreements
replaced similar agreements which expired on December 31, 1989. The Agreements
were automatically extended on January 1, 1994, and will continue to
automatically extend each January 1 thereafter unless, not later than October 1
of the preceding year, the Company shall have given notice that it does not wish
to extend the Agreement and provided that if a Change in Control (as defined
below) occurs, the Agreements shall automatically continue for twenty-four
months beyond the month in which such Change in Control occurred. In September
of 1994, the Board determined that Agreements for 1995 and beyond would be
limited to the Senior Management Team (the Chairman, President and eight (8)
Senior Vice Presidents of the Company). Accordingly, all other Agreements with
employees of the Company were not

16
<PAGE> 20

extended. Under each Agreement, the Officer is obligated to remain in the
Company's employ for the earliest of (a) nine months following the occurrence of
a Potential Change in Control, (b) the date of a Change in Control, (c) the date
the Officer terminates his employment by reason of Death, Disability or
Retirement, or (d) the termination by the Company of the Officer's employment.

For purposes of the Agreements, a "Change in Control" shall be deemed to
have occurred if (i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, or any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportion as their ownership of stock of the Company), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities eligible to
vote; or (ii) during any period of two consecutive years (not including any
period prior to the execution of the Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (i), (ii) or (iv) of this
Paragraph) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds ( 2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved (hereinafter referred to as "Continuing Directors"), cease for any
reason to constitute at least a majority thereof; or (iii) the stockholders of
the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) in combination with the
ownership of any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, more than 75% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; provided, however, that a merger
or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove defined) acquires more
than 50% of the combined voting power of the Company's then outstanding
securities shall not constitute a Change in Control of the Company; or (iv) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets (or any transaction having a similar
effect).

For purposes of the Agreements, a "Potential Change in Control" shall be
deemed to have occurred if (i) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in Control;
(ii) any person (including the Company) publicly announces an intention to take
or to consider taking actions which if consummated would constitute a Change in
Control; or (iii) any person other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company (or a corporation
owned, directly or indirectly by the stockholders of the Company in
substantially the same proportion as their ownership of stock of the Company),
who is or becomes the beneficial owner, directly or indirectly, of securities of
the corporation representing 10% or more of the combined voting power of the
Company's then outstanding securities, increases such person's beneficial
ownership of such securities by 5% or more over the percentage so owned by such
person on the date hereof; or (iv) the Board of Directors of the Company adopts
a resolution to the effect that, for purposes of the Agreement, a Potential
Change in Control has occurred.

If, within two (2) years following a Change in Control, an Officer's
employment is terminated by the Company (other than for cause, as defined in the
Agreements, or on account of the Officer's Death, or Disability) or by the
Officer for other than Good Reason as defined in the Agreement, the Company will
pay the Officer the following amounts (the "Severance Payment"):

(a) A single sum payment equal to the product of three (3) times the
sum of (i) the Officer's then current annual salary, plus (ii) the highest
annual incentive compensation payment for the current calendar year or any
of the last three (3) years, plus (iii) awards paid under the Company's
Performance Bonus Plan or any successor thereto.

17
<PAGE> 21

(b) A single sum cash payment equal to the product of (x) and (y)
where (x) equals the difference between (1) the closing price per share of
the Company's Common Stock on the New York Stock Exchange Consolidated Tape
(the "NYSECT") on the day immediately prior to the Change in Control of the
Company and (2) the lowest closing price per share of the Company's common
stock on the NYSECT on any day during the 60-day calendar day period
immediately preceding the Change in Control of the Company and where (y)
equals three (3) times the highest number of shares of the Company's common
stock subject to any stock option granted to the Officer within 24 months
of the Change in Control of the Company.

(c) All reasonable and appropriate legal fees and expenses incurred by
the Officer as a result of such termination (including all such fees and
expenses, if any, reasonably incurred in contesting or disputing by
arbitration or otherwise, any such termination or in seeking to obtain or
enforce any right or benefit provided by the Agreement or in connection
with any tax audit or proceeding to the extent attributable to the
application of Section 4999 of the Internal Revenue Code of 1986, as
amended, (the "Code"), to any payment or benefit provided under the
Agreement); and

(d) For a thirty-six (36) month period after the Date of Termination,
the Company shall provide the Officer with benefits substantially similar
to those which the Officer was receiving or entitled to receive under the
Company's life, disability, accident and group health insurance plans or
any similar plans in which the Officer was participating immediately prior
to the Date of Termination at a cost to the Officer which is no greater
than that cost to the Officer in effect at the Date of Termination.

(e) In addition to the retirement benefits to which the Officer is
entitled under the Supplemental Executive Retirement Plan ("SERP") and the
Long-Term Incentive Plan ("LIP") or any successor plan thereto, the Company
shall pay a single sum amount, in cash, equal to the actuarial equivalent
of the excess of (x) over (y) where (x) is the amount of the retirement
pension (determined as a straight-life annuity commencing at Normal
Retirement Age as defined in the MAPCO Pension Plan) which the Officer
would have accrued under the terms of the SERP (without regard to any
amendment to the SERP made subsequent to a Change in Control and on or
prior to the Date of Termination, which amendment adversely affects in any
manner the computation of retirement benefits thereunder), determined as if
the Officer were fully vested thereunder and had accumulated (after the
Date of Termination) thirty-six (36) additional months of service credit
thereunder at the Officer's highest annual rate of compensation during the
twelve (12) months immediately preceding the Date of Termination, and where
(y) is the amount of any vested retirement pension (determined as a
straight-life annuity commencing at Normal Retirement Age) which the
Officer had then accrued pursuant to the provisions of the SERP.

(f) In addition to the retirement benefit the Officer is entitled to
under the MAPCO Inc. and Subsidiaries Profit Sharing and Savings Plan, the
Company shall pay the Officer a single sum amount, in cash, equal to
eighteen percent (18%) times the Officer's highest annual rate of
compensation during the twelve (12) months immediately preceding the
Officer's Date of Termination.

The Company has also agreed to pay the Officer an additional amount
("Gross-Up Payment") such that the net amount retained by the Officer upon the
payments provided under the Agreement, after deduction of federal, state and
local income tax and any tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as Amended (up to 20%), shall be equal to the Severance Payment.

On January 31, 1990, the Board of Directors of the Company approved
amendments to the Employment Continuation Agreements to provide that in the
event of termination following a Change in Control, the benefits under the
Company's SERP shall be determined as of the earliest possible retirement date
using actuarial equivalents as defined in the Amendments.

In addition to this change, Amendments to Employment Continuation
Agreements of Messrs. Barnes and Howe clarify that in the event of termination
following a Change in Control (1) retirement benefits, including that payable
under Supplemental Retirement Agreements ("SRA"), are calculated based upon the
earliest permitted retirement date and (2) SRA benefits are payable in a single
sum based upon actuarial

18
<PAGE> 22

equivalents, as defined in the Amendments. An additional amendment to the
Employment Continuation Agreements of Messrs. Barnes and Howe was entered into
in 1991 to coordinate changes made in supplemental retirement agreements as
discussed above.

APPROVAL OF SELECTION OF INDEPENDENT AUDITORS

Upon the recommendation of the Audit Committee, the Board of Directors has,
by resolution, selected Deloitte & Touche LLP independent auditors to audit the
books, records and accounts of the Company and its subsidiaries for the fiscal
year ending December 31, 1995. Accordingly, this selection is being presented to
the Stockholders for approval at this Annual Meeting.

The firm of Deloitte & Touche LLP has audited the Company's books annually
since 1969, has offices in or convenient to the localities where the Company or
its subsidiaries operate and is considered to be well qualified. If the
Stockholders do not approve the selection of Deloitte & Touche LLP, the
selection of independent auditors will be reconsidered by the Board of
Directors.

Audit services performed by Deloitte & Touche LLP during 1994 included
examinations of the Consolidated Financial Statements of the Company and its
subsidiaries, limited reviews of interim financial information, services related
to filings with the Securities and Exchange Commission, and consultations on
matters related to accounting, financial reporting, taxation and general
business advice.

Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting of Stockholders at which time they will have an opportunity to make a
statement and will be available to respond to any appropriate questions from the
floor.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF
DELOITTE & TOUCHE LLP TO AUDIT THE COMPANY'S BOOKS.

PROPOSAL TO APPROVE THE INCENTIVE COMPENSATION PLAN

In furtherance of its belief that the continued success of the Company
depends upon its ability to attract, retain and motivate employees, and in view
of recent tax legislation which imposes limits on the Company's ability to
deduct employee compensation, the Compensation Committee of the Board of
Directors (the "Committee") has determined that the Company's Annual Incentive
Compensation Plan should be replaced by a new MAPCO Inc. Incentive Compensation
Plan ("Plan"). Subject to the approval of the Company's shareholders, the Board
of Directors has approved the adoption of the Plan, effective as of January 1,
1995, and the Committee has determined the Participants and established
performance measures, targets and award levels for 1995.

In order for payment of certain incentive awards to be deductible by the
Company under the current Internal Revenue Code, the payments must be paid
pursuant to a "performance-based" plan approved by the shareholders. Adoption of
the Plan is expected to produce improved individual and Company performance
resulting in enhanced shareholder value.

SUMMARY OF THE INCENTIVE COMPENSATION PLAN

The full text of the Incentive Compensation Plan is set forth in Appendix A
to this proxy statement and should be referred to for a complete description of
its provisions. The following summary is qualified in its entirety by reference
to the text of the Plan.

PURPOSES

The primary purposes of the Plan are to motivate participants toward
achieving annual and long-term goals, and attract and retain highly qualified
employees.

19
<PAGE> 23

ADMINISTRATION

The Plan shall be administered by the Committee which is composed of
"outside directors" within the meaning of Section 162(m) of the Internal Revenue
Code of 1986, as amended, ("Section 162(m)"). No member of the Committee is
eligible to receive awards under the Plan. Subject to the limitations of the
Plan, the Committee has the authority to select the employees who will
participate in the Plan (the "Participants"); the authority to determine the
size and types of awards; the terms and conditions for earning awards; the right
to interpret the Plan; establish, amend, or waive rules and regulations for the
Plan's administration; and subject to certain limitations which require
shareholder approval, amend the terms and conditions of the Plan.

ELIGIBILITY AND PARTICIPATION

Full-time, salaried employees of the Company and its subsidiaries shall be
eligible to be selected to participate in the Plan. No person is automatically
entitled to participate in the Plan in any award period.

PERFORMANCE MEASURES, TARGETS AND AWARDS

The Committee shall select performance measures and shall establish targets
for each award period. The performance measures which may be used by the
Committee include the following: funds provided by operations, net cash from
operations, pretax investment yield, value added, EBITD margin (earnings before
interest, taxes and depreciation/total revenue), operating profit, earnings per
share, total shareholder return (assuming the reinvestment of dividends) or net
income. Such performance measures need not be the same for all Participants. For
the first award period, the Committee has determined that all Participants will
be measured based on the earnings per share performance of the Company.

With respect to each Participant, the Committee shall establish an award
level which will be paid if actual performance meets or exceeds predetermined
goals. Except as restricted by Section 162(m), the Committee shall have the
authority to exercise subjective discretion in the determination of final awards
with respect to any or all Participants. The Committee shall have the discretion
to decrease or eliminate the amount of the final award otherwise payable to any
Participant. The maximum amount that could be paid under the Plan to any Key
Executive in any year is $4 million. The actual amount of any award payment will
be based on the achievement of the performance goals.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF
THE INCENTIVE COMPENSATION PLAN.

PROPOSALS OF STOCKHOLDERS

Proposals of Stockholders intended to be presented at the Company's 1996
Annual Meeting of Stockholders, which is anticipated to be held on May 16, 1996,
must be received at the principal executive offices of the Company, 1800 South
Baltimore Avenue, Tulsa, Oklahoma 74119, on or before December 31, 1995 to be
considered for inclusion in the Company's Proxy Statement and form of proxy
relating to that meeting.

20
<PAGE> 24

OTHER BUSINESS

As of the time of preparation of this Proxy Statement, the Company has not
been informed of any business to be presented by or on behalf of the Company or
its management for action at the meeting other than those listed in the Notice
of Annual Meeting. If any other business properly comes before the meeting or
any adjournment thereof, it is intended that the proxies will be voted in
respect thereof in accordance with the best judgment of the person or persons
voting the proxies.

By Order of the Board of Directors

David W. Bowman
Senior Vice President, General
Counsel and Secretary

March 27, 1995
Tulsa, Oklahoma

A COPY OF THE COMPANY'S 1994 FORM 10-K REPORT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN
REQUEST TO: SENIOR VICE PRESIDENT -- CORPORATE AFFAIRS, MAPCO INC., P.0. BOX
645, TULSA, OKLAHOMA 74101-0645.

21
<PAGE> 25
APPENDIX I -- NARRATIVE DESCRIPTION OF PERFORMANCE GRAPH

The performance graph shows yearly percentage changes in the cumulative
total stockholder return on MAPCO Inc. Common Stock for the five (5) fiscal
years ended December 31, 1994, as compared to the S&P 500 Stock Index and the
S&P Energy Composite Index. With the exception of 1994, when the Company's
stock did not perform as well as the S&P 500, during each of the five (5) year
periods ended, the graph indicates that the Company's Common Stock has provided
stockholders with a higher cumulative total return. The graph is captioned
"Comparison of Five Year Cumulative Total Return," and it assumes that $100 was
invested on January 1, 1990 in the Company's Common Stock and in each of the
referenced indices and assumes reinvestment of dividends.

<PAGE> 26

APPENDIX A

MAPCO INC.

INCENTIVE COMPENSATION PLAN
(EFFECTIVE AS OF JANUARY 1, 1995)

1. Purpose. The purpose of the MAPCO Inc. Incentive Compensation Plan (the
"Plan") is to provide certain designated persons in key management positions
within MAPCO Inc. (the "Company") and its subsidiaries with incentive
compensation to encourage outstanding performance and to aid in attracting and
retaining highly-qualified employees.

2. Plan Administration.

(a) The Compensation Committee of the Board of Directors of the
Company ("Committee") shall have full power to administer and interpret the
Plan and to establish rules for its administration. The Committee, by
majority action thereof, is authorized to prescribe, amend, and rescind
rules and regulations relating to the Plan, to provide for conditions and
assurances deemed necessary or advisable to protect the interests of the
Company, and to make all other determinations necessary or advisable for
the administration and interpretation of the Plan in order to carry out its
provisions and purposes. Determinations, interpretations, or other actions
made or taken by the Committee pursuant to the provisions of the Plan shall
be final, binding, and conclusive for all purposes and upon all persons.
Awards under the Plan shall be based on one or more calendar years, as
determined by the Committee (hereinafter, an "Award Period").

(b) The Plan shall be governed by the laws of the State of Delaware
and applicable federal law.

3. Eligibility and Participation.

(a) Eligibility. Eligibility to participate in the Plan shall be
restricted to those executives and other key employees who, through their
position and performance, contribute substantially to the success of the
Company and its subsidiaries.

(b) Participation. On or before April 1 of the applicable Award Period
(or such other date as may be required or permitted under Internal Revenue
Code ("Code") Section 162(m)), the Committee shall, in its discretion,
determine the eligible employees who shall participate in the Plan
(collectively, the "Participants") during such Award Period. Except as
provided in Section 7 herein, the Committee may add additional Participants
to the Plan at any time during the Award Period, specifying the effective
date of such action. Participation in any given Award Period shall not
connote participation in any other Award Period. The Committee in its sole
discretion may remove any Participant from the Plan at any time, specifying
the effective date of such action for the purpose of prorating his eventual
award of incentive compensation, if any.

4. Awards.

(a) General. Beginning with 1995, the Committee may make awards with
respect to each calendar year. The Committee may also make additional
awards with respect to any Award Period based on the achievement of certain
long-term goals as discussed hereafter in Subsection (f). With respect to
each Award Period, the Committee shall (1) establish which Participants are
eligible for awards, (2) select one or more of the performance measures
listed in Section 4(c), (3) establish targets for such performance
measures, and (4) establish Award Levels (as defined in Section 4(b)) for
each Participant. Awards shall be determined by the Committee based on the
achievement during an Award Period of the target(s) established by the
Committee with respect to one or more of the performance measures selected
by the Committee. The Committee shall certify that the performance measure
targets have been satisfied before payment of any award.

A-1
<PAGE> 27

(b) Award Levels. An "Award Level" shall mean a percentage, determined
pursuant to this Subsection, of a Participant's annual base salary as of
January 1 of the applicable Award Period. With respect to a Participant who
is added to the Plan after such date, "Award Level" shall mean a percentage
of the Participant's base salary on the effective date of his
participation. The Committee shall establish an Award Level for each
Participant which shall represent the percentage of base salary to be paid
to the Participant if actual performance meets or exceeds predetermined
performance measure targets.

(c) Performance Measures and Targets. The Committee, as it deems
appropriate, shall select one or more of the following performance measures
and establish targets for each Award Period: Funds Provided by Operations,
Net Cash from Operations, PreTax Investment Yield, Value Added, EBITD
Margin (Earnings Before Interest, Taxes and Depreciation/Total Revenue),
Operating Profit, Earnings Per Share, Total Shareholder Return (assuming
the reinvestment of dividends), or Net Income.

(d) Revised Award Levels, Performance Measures or Targets. Subject to
Section 7 herein, the Committee may, at any time, establish revised Award
Levels, performance measures or targets for any Participant.

(e) Award Determinations. As soon as practicable after the financial
results of the Company's operations for an Award Period are known, the
Committee, after receiving the recommendation of the CEO (except in the
case of his own award), shall determine and certify the amount of each
Participant's award. The performance of the Company shall also be reviewed
to determine the extent, if any, that unforeseen circumstances may have
influenced results. Although adjustments shall be kept to a minimum, the
Committee, except as provided in Section 7 herein, may approve retroactive
adjustments to performance measures in order to avoid unwarranted penalties
or unearned windfalls. For a Participant added to the Plan during the Award
Period, the award shall be determined as though he had been a Participant
for the entire Award Period and then multiplied by a percentage which is
equal to the percentage of the Award Period during which he was a
Participant.

(f) Long-term Award. In addition to any other award payable under this
Plan, a long-term award may be made to Participants with respect to any
Award Period which is longer than one calendar year based upon the
attainment of one or more predetermined performance measure targets,
established by the Committee from the performance measures listed in
Section 4(c). With respect to each Award Period, the Committee shall (1)
establish which Participants are eligible for awards, (2) select one or
more of the performance measures listed in Section 4(c), (3) establish
targets for such performance measures, and (4) establish Award Levels (as
defined in Section 4(b)) for each Participant. No award shall be made if
there is a failure to meet or exceed the applicable performance measure
target(s).

(g) Negative Discretion. Notwithstanding anything else contained in
this Section 4 to the contrary, the Committee shall have the right, in its
absolute discretion, (1) to reduce or eliminate the amount otherwise
payable to any Participant under this Section 4 based on individual
performance or any other factors that the Committee, in its discretion,
shall deem appropriate and (2) to establish rules or procedures that have
the effect of limiting the amount payable to each Participant to an amount
that is less than the maximum amount otherwise authorized under the Plan.

5. Payment of Awards. Any award to be paid to a Participant for an Award
Period shall be paid as soon as practicable after the Award Period, but in no
event later than six months after the Award Period ("Payment Date"), provided,
however, the Committee in its sole discretion may accelerate or defer payment of
all or a portion of an award if such acceleration or deferral does not result in
loss of deductibility pursuant to Code Section 162(m). Awards shall be paid in
cash, unless otherwise elected by a Participant or the Company. Any Participant,
by written notice given to the Company prior to payment of an award, may elect
to take all or any part of his award in common stock of the Company, priced at
the closing sale price on the New York Stock Exchange on the last business day
preceding the day on which the Committee approves the awards. In addition, the
Committee may, in its sole discretion, with respect to any Award Period, cause
payment of all or any part of a Participant's award to be made in common stock
of the Company, priced at the closing sale price on the New York Stock Exchange
on the last business day preceding the day on which the Committee approves the
awards. No fractional shares shall be issued in payment of any award, but the
market value of

A-2
<PAGE> 28

such fractional shares, priced as provided above, shall be paid in cash. The
maximum number of shares that may be issued under the Plan in any one calendar
year shall not exceed one percent of the Company's total outstanding shares.

6. Termination of Employment. If a Participant's employment with the
Company (and any of its subsidiaries) is terminated prior to the end of an Award
Period by reason of retirement (in accordance with the retirement provisions of
any qualified retirement plan maintained by the Company or any of its
subsidiaries), total and permanent disability or death and if an award would
have been payable to, or in respect of, the Participant with respect to the
Award Period had he remained in employment throughout the Award Period, the
Participant shall be entitled to an award for the portion of the Award Period
that he was employed by the Company. His award shall be equal to the award he
would have received had he remained in employment through the end of the Award
Period multiplied by a percentage which is equal to the percentage of the Award
Period during which he was a Participant. His award shall be paid at the time it
would have been paid had he remained in employment through the Payment Date of
any award. In the case of the death of a Participant, his award shall be paid to
his estate unless by written notice to the Company he shall have named a
beneficiary or beneficiaries under the Plan, in which case the award shall be
paid to the beneficiary(ies). A Participant who otherwise is separated from the
Company and any of its subsidiaries prior to the Payment Date of any award shall
cease to be a Participant and shall forfeit any right to receive any award
pursuant to the Plan unless the Committee shall rule otherwise. Whether a
Participant is disabled or has retired, for purposes of this Plan, shall be
determined by the Committee, whose determination shall be conclusive and binding
on the Participant.

7. Key Executives.

(a) Applicability. The provisions of this Article 7 shall apply only
to those Participants who are "covered employees" within the meaning of
Code Section 162(m) with respect to the applicable year and whose
compensation for such year, taking into account the amounts to be paid
hereunder, but excluding any amounts otherwise excluded from consideration
under Code Section 162(m), would exceed Code Section 162(m) limitations
(hereinafter, "Key Executives"). In the event of any inconsistencies
between this Article 7 and any other Plan provision as it pertains to Key
Executives, the provisions of this Article 7 shall control.

(b) Award Levels. Except as provided in Subsection (e) herein, Award
Levels for Key Executives shall be established on or before April 1 of the
applicable Award Period (or such other date as may be required or permitted
under Code Section 162(m)) and shall be a function of each Key Executive's
annual base salary as of January 1 of the applicable Award Period. A Key
Executive who becomes a Participant after Award Levels have been
established shall not be eligible for an award with respect to such Award
Period. Except as provided in Subsection (e) herein, a Key Executive's
Award Levels may not be revised after April 1 of the applicable Award
Period (or such other date as may be required or permitted under Code
Section 162(m)).

(c) Performance Measures and Targets. Except as provided in Subsection
(e) herein, performance measures and targets relating to Key Executives
shall be established on or before April 1 of the applicable Award Period
(or such other date as may be required or permitted under Code Section
162(m)) and shall not be subject to revision after such date.

(d) Maximum Award. The maximum amount that may be paid under this Plan
(including amounts payable pursuant to the provisions of Section 4(f)) to
any Key Executive with respect to any one calendar year shall be four
million dollars.

(e) Possible Modifications. If, on the advice of the Company's legal
counsel, the Committee determines that Code Section 162(m) and the
regulations thereunder will not adversely affect the deductibility for
federal income tax purposes of any amount paid under the Plan by permitting
greater discretion and/or flexibility with respect to determining awards
made to Key Executives pursuant to this Section 7, then the Committee may,
in its sole discretion, apply such greater discretion and/or flexibility as
is consistent with the terms of the Plan, and without regard to the
restrictive provisions of this

A-3
<PAGE> 29

Section 7. In the event that any requirements relating to Code Section
162(m) or the regulations thereunder are modified to permit greater
flexibility under the Plan, the Committee may make such adjustments as it
deems appropriate.

8. Designation of Beneficiaries. A Participant may designate a beneficiary
or beneficiaries and may change such designation from time to time by filing a
written designation of beneficiaries with the Company on a form prescribed by
it, provided that no such designation shall be effective unless prior to the
date of the death of the Participant such designation is either received by the
Company or postmarked with sufficient postage affixed.

9. Modification or Termination of Plan. The Board may terminate the Plan at
any time to be effective at such date as the Board shall determine. The
Committee may amend the Plan from time to time as it deems appropriate; provided
however that no amendment shall result in an increase in any award to a Key
Executive with respect to an Award Period after the commencement of such Award
Period.

10. Shareholder Approval. The adoption and operation of the Plan is subject
to approval by the Company's shareholders in accordance with Code Section
162(m). Plan amendments are subject to shareholder approval only to the extent
required by Code Section 162(m).

11. Miscellaneous.

(a) Inalienability. No Participant shall have the right to anticipate,
alienate, sell, transfer, assign, pledge or encumber his right to receive
any award to be made under the Plan.

(b) Liens. No Participant shall have any lien on any of the assets of
the Company or any subsidiary thereof by reason of any award made under the
Plan.

(c) Absence of Liability. Neither the Company, nor any member of the
Board of the Company, nor any member of the Committee, nor any officer,
agent or employee of the Company shall have any liability to any
Participant by reason of any act or omission on his part in connection with
the administration of the Plan, except only for his or its willful and
intentional misconduct. All administrative decisions made hereunder shall
be binding and not subject to challenge in any form by a Participant, his
heirs or assigns.

(d) Right to Withhold Taxes. The Company and its subsidiaries shall
have the right to deduct from all amounts paid in cash any taxes required
by law to be withheld with respect to such cash payments.

(e) Expenses of Plan. All expenses incurred in connection with the
administration and operation of the Plan shall be paid by the Company, and
none shall be charged against the amount of an award which may be payable
under the Plan.

(f) No Employment Rights Conferred. The adoption of this Plan, or any
modification hereof, does not imply any commitment to continue or adopt the
same plan, or any modification thereof, or any other plan of incentive
compensation for any succeeding year. Neither the Plan nor any award made
hereunder shall create any employment contract or continuing relationship
between any Participant and the Company (or any of its subsidiaries).

(g) Other Compensation. Nothing in this Plan shall preclude the
Committee, as it shall deem necessary or appropriate, from authorizing the
payment to any Participant of compensation outside the parameters of the
Plan, including, without limitation, base salary, awards under any other
plan of the Company or any of its subsidiaries (whether or not approved by
shareholders), any other bonuses (whether or not based on the attainment of
performance measures) and retention or other special payments, provided
that, if the shareholders of the Company do not approve the Plan at the
first annual meeting of shareholders following the adoption of the Plan,
the Plan set forth herein shall not be implemented.

A-4
<PAGE> 30
[MAPCO INC. LOGO]

1800 South Baltimore Avenue
Tulsa, Oklahoma 74119
<PAGE> 31

MAPCO INC.

PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING, MAY 26, 1995

The undersigned hereby appoints James E. Barnes, David W. Bowman and James N.
Cundiff, and each of them, as Proxies, each with the power to appoint his
substitute, and hereby authorizes each of them to represent and to vote, as
designated on the reverse side, all the shares of Common Stock of MAPCO Inc.
held on record by the undersigned on March 27, 1995, at the Annual Meeting of
Stockholders to be held on May 26, 1995, or any adjournment thereof.

IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.

THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE
REVERSE SIDE, BUT IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR
ALL NOMINEES LISTED ON THE REVERSE SIDE AND FOR PROPOSALS 2 AND 3.

<PAGE> 32

MAPCO INC.

PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /

1. ELECTION OF DIRECTORS
Nominees: FOR WITHHELD
Wayne K. Goettsche Donald L. Mellish / / / /
Robert L. Parker Robert M. Howe

2. Approve the selection of Deloitte & Touche LLP as Independent Auditors

For Against Abstain
/ / / / / /

3. Aprove MAPCO Inc. Incentive Compensation Plan.

For Against Abstain
/ / / / / /

To withhold authority to vote for one or more individual nominees, write the
nominee name(s) on the line below.

________________________________________________________________________________

4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.

Dated: _______________________, 1995
Please Sign Here and Return Promptly

_______________________________________

_______________________________________
Please sign exactly as your name or
names appear above. For joint accounts,
each owner should sign. When signing as
executor, administrator, attorney,
trustee or guardian, etc., please give
your full title.