EXECUTIVE INCENTIVE PLAN
CORPORATE PLAN
September 1993
EXECUTIVE INCENTIVE PLAN
MARTIN MARIETTA - CORPORATE
1. PURPOSE
The purpose of the Plan is to advance the interests of the
Corporation and its Shareholders by providing for its senior
management an additional inducement for achieving and
exceeding the Corporation's performance objectives.
Additionally, the Plan will allow a level of compensation that
is appropriate when compared with the compensation levels of
other comparable corporations. It is intended that this
purpose will be effected through the granting of Incentive
Awards on an annual basis.
II. STANDARD OF CONDUCT AND PERFORMANCE EXPECTATION
A It is expected that the business and individual goals and
objectives established for this Plan will be accomplished
in accordance with the Corporation's policy on ethical
conduct in business with the Government and all other
customers. It is a prerequisite before any award can be
considered that a participant will have acted in
accordance with the Martin Marietta Corporation Code of
Ethics and fostered an atmosphere to encourage all
employees acting under the participant's supervision to
perform their duties in accordance with the highest
ethical standards. Ethical behavior is imperative.
Thus, in achieving one's goals, the individual's
commitment and adherence to the Corporation's ethical
standard will be considered paramount in determining
awards under this Plan.
B. Plan participants whose individual performance is
determined to be less than acceptable are not eligible to
receive incentive awards.
III. EFFECTIVE DATE
The Plan will become effective each year commencing January 1.
IV. ELIGIBILITY
The Chief Executive Officer will designate annually those
elected Officers of the Corporation who will participate in
the Plan. The Chief Executive Officer and the President of the
Corporation are specifically excluded. Additionally, other
selected management personnel identified by the Officers, and
with concurrence of the Chief Executive Officer, as having a
potentially significant contribution to the success of the
Corporation will be eligible.
To quality for participation in this Plan, an employee must
not be eligible to participate in any other bonus plan in
effect with Martin Marietta Corporation.
V. MAXIMUM AWARD
Awards will be based on the annual salary of the participant
during the first full pay period of each plan year. At the
first of each Plan year, the Chief Executive Officer will
establish a maximum Incentive Pool that will include the total
number of participants and the maximum dollars authorized. The
recommended amount is indicated below, but may be less than
that shown based on the Chief Executive Officer's assessment.
Responsibility Maximum Incentive Award
Level (% of Annual Salary)
Corporate Officers:
Secretary 50%
Other Officers 70%/60%
Designated Top Corporate
Positions, non-officers 50%
Vice Presidents not included above 40%*
President, Subsidiary Company 40%*
Vice President, Subsidiary Company 30%*
Designated Corporate Directors
reporting to top corporate
position 40%*
Directors not included above 30%*
Managers/Newly Assigned Directors* 20%/10%
* The maximum incentive award levels noted above may be
adjusted one level up or down for selected positions
subject to the approval of the Chief Executive Officer.
VI. PERFORMANCE CRITERIA AND AWARD ALLOCATION
A. Corporate Officers (except those who have Operating Unit
responsibilities and are generally, but not exclusively,
Group or Operating Unit Presidents)
The performance criteria for the designated, Corporate
Officer will be a percentage Return on Shareholders'
Equity (ROE) formula reflecting total Corporation
performance. Return on Shareholders' Equity (ROE) for
this purpose will mean the quotient of Return divided by
Shareholders' Equity, expressed as a percentage. The
term "Return" will mean the Corporation's Net Earnings
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reported for the year. The, term "Shareholders' Equity"
will be the average of Shareholders' Equity at the
beginning and at the end of the year.
The Return on Shareholders' Equity formula will be
established at the beginning of each year for the
following levels of Corporation performance:
Level of Corporate Percentage of Available Award
Performance
1A 95 - 100%
1B 90 - 94%
2 80 - 89%
3 40 - 79%
4 25 - 39%
5 0%
Year-end determination of individual incentive awards
will depend on the actual percent Return on Shareholders'
Equity (ROE) result compared with the formula established
for the year. The Chief Executive Officer will make an
assessment of the individual officer's performance as
well as other factors which may be pertinent and may
modify the award amount upward or downward as deemed
appropriate.
Example:
Participant Base Salary: $100,000
Maximum Incentive (60%) $60,000
Corporate Percentage of
Performance Available Maximum
Level Award Award ($)
1A 95 - 100% $60,000
1B 90 - 94% $56,400
2 80 - 89% $53,400
3 40 - 79% $47,400
4 25 - 39% $23,400
5 0% $0
B. Corporate Officers (Those who have Operating Unit
operational responsibilities and are generally, but not
exclusively, Group or Operating Unit Presidents)
The performance criteria for the designated Corporate
Officer will be based twenty-five (25) percent on the
percentage Return on Shareholders' Equity formula
reflecting total Corporation performance seventy-live
(75) percent on the performance of that Group or
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Operating Unit for which the Corporate Officer has
operational responsibility.
Performance goals, including areas such as orders, sales,
earnings, and Return on Investment (ROI), will be
established at the beginning of each year for each Group
or Operating Unit Performance against these goals will be
evaluated to determine the following levels of Group or
Operating Unit performance.
Level of Corporate Percentage of Available Award
Performance (Group or Operating Unit Portion)
1A 95 - 100%
1B 90 - 94%
2 80 - 89%
3 40 - 79%
4 25 - 39%
5 0%
Year-end determination of individual incentive awards
will depend on the actual percent Return on Shareholders'
Equity (ROE) for the Corporation and actual performance
for that Group or Operating Unit for which the Corporate
Officer has operational responsibility as compared with
the performance goals established for that Group or
Operating Unit. The Chief Executive Officer will make an
assessment of the individual officer's performance as
well as other factors which may be pertinent in
determining the final incentive amount.
Example:
Participant Base Salary: $100,000
Maximum Incentive (60%) $60,000
Group or
Operating
Corporate Unit Maximum
Organization Award for Maximum Award Group or
Performance ROE Corporate Percent for Operating Maximum
Level Perform Award* ROI Perform Unit Award* Total Award
1A 95 - 100% $15,000 95 - 100% $45,000 Sum of
1B 90 - 94% $14,100 90 - 94% $42,300 appropriate
2 80 - 89% $13,400 80 - 89% $40,100 Corporate
3 40 - 79% $11,900 40 - 79% $35,600 and
4 25 - 39% $ 5,900 25 - 39% $17,600 Operating
5 0% $0 0% $0 Units Awards
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*Rounded to the nearest $100. ($50 rounds up.)
It is the intent of the Plan to pay the participant that
portion of the award generated by the performance level
of the Corporation and/or the individual Group or
Operating Unit. For instance, if the performance of the
Corporation, as measured by ROE is "5", but the
performance of the Group or Operating Unit, "1A", the
participant could receive a total award of up to 545,000.
C. Corporate Headquarters (Staff)
The performance criteria for Corporate Headquarters
(Staff) participants will be based fifty (50) percent on
the performance of the Corporation as measured by a
percentage Return on Shareholders' Equity (ROE) formula
and fifty (50) percent on the individual performance of
each participant as determined by a subjective review by
the appropriate Corporate Officer.
Where possible, the participant's actual achievement
relative to quantitative, measurable goals established
for the year shall be taken into account. Based on this
appraised performance, each participant will be ranked
according to the following:
Individual
Performance Percentage of Available Award
1A 100%
1B 90%
2 75%
3 50%
4 25%
5 0%
The total incentive awarded will be the sum of the
Corporation performance and the individual performance.
Example:
Participant Base Salary: $50,000
Maximum Incentive (40%) $20,000
Corporate Maximum Maximum Individual Maximum
Performance Adjust. Corp Performance Adjust. Individual Total
Level Percent Award* Level Percent Award* Award
1A 95 - 100% $10,000 1A 100% $10,000 Sum of
1B 90 - 94% $9,400 1B 90% $9,000 appropriate
2 80 - 89% $8,900 2 75% $7,500 Corp. and
individual
awards
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3 40 - 79% $7,900 3 50% $5,000
4 25 - 39% $3,900 4 25% $2,500
5 0% $0 5 0% $0
*Rounded to the nearest $100. ($50 rounds up.)
D. In all cases, the Chief Executive Officer may modify
awards, as deemed appropriate, upward or downward, based
on the CEO's Assessment of organizational and/or
individual performance.
VII. INCENTIVE FUND AND MAXIMUM INCENTIVE FUND
A Each Plan year, an Incentive Fund will be determined by
the Board of Directors of the Corporation to cover
potential Awards to these Corporate Officers and staff.
However, a minimum Return on Shareholders' Equity for the
total Corporation, which will also be determined by the
Board of Directors each Plan year, must be met before
Incentives can be awarded, except for those officers
designated in paragraph VI.B who may receive that portion
of their award based on their Group or Operating Unit's
performance.
B. Incentive payments to individual participants may not
exceed seventy (70) percent of the participant's annual
base salary at the beginning of the Plan year
VIII. TIMING AND FORM OF PAYMENT
Incentive Awards will be paid in a lump sum as soon as
possible following the close of the Plan year.
IX. CHANGES IN PARTICIPATION
It is recognized that during a Plan year individual changes in
the eligibility group may occur as participants terminate
through death or retirement. As these circumstances occur,
consideration may be given to adjusting the amount of
incentive award. Anyone hired in the eligibility group alter
June 1st will not be eligible for an Incentive Award in that
year without prior written approval of the Chief Executive
Officer. Persons hired prior to June 1st in the eligibility
group may be eligible at the discretion of the appropriate
Corporate Officer and with the approval of the Chief Executive
Officer.
Awards for persons serving less than a lull year in a position
approved for incentive compensation will be prorated based on
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the number of months in the position times the calculated
award, divided by twelve, and rounded to the nearest 100.
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