DEFERRED COMPENSATION AND ESTATE SUPPLEMENT PLAN
As Approved by the Board of Directors
August 23, 1979
(Amended April 28, 1983)
(Amended July 28, 1983)
(Amended April 26, 1984)
(Amended October 25, 1984)
(Amended July 24, 1986)
(Amended October 27, 1988)
(Amended January 26, 1989)
SECTION 1. ESTABLISHMENT AND PURPOSE
The Martin Marietta Corporation Deferred Compensation and
Estate Supplement Plan is established effective September 1, 1979,
for senior executive personnel. It is intended to provide a means
for attracting and retaining, until retirement, capable individuals
as executive employees of the Corporation. It is further intended
to encourage executives to voluntarily retire from key executive
positions no later than age 65 to enhance advancement opportunities
within the Corporation, and thereby make employment by the
Corporation more attractive.
SECTION 2. DEFINITIONS
The following terms, as used herein, shall have the following
meanings:
"Board of Directors" means the Board of Directors of Martin
Marietta Corporation as it may be comprised from time to time.
"Chief Executive Officer" means the Chief Executive Officer of
the Corporation.
"Corporation" means Martin Marietta Corporation including its
affiliates and subsidiaries.
"Employee" means a person employed by the Corporation on a
full-time basis.
"Participant" means an Employee who, as of the effective date
of this Plan, is employed in a position which is included in the
group listed in Addendum A to this Plan or an Employee who,
subsequent to the effective date of this Plan, is employed in a
position which is included in the group listed in Addendum A to
this Plan and who has been recommended by the Compensation
Committee and approved by the Board of Directors for participation
as provided in Section 3.
"Plan" means the Martin Marietta Corporation Deferred
Compensation and Estate Supplement Plan, as in effect at any time.
"Designated Benefit" means the amount shown on Addendum A for
the position held by the Participant.
"Voluntary Resignation" means severance from employment in
order to accept full-time employment in a comparable position with
another employer, whether or not the Participant applied for
immediate early retirement under the applicable employee pension
plan.
SECTION 3. ELIGIBILITY AND PARTICIPATION
3.1 Participation in the Plan shall be at the sole discretion
of the Board of Directors and shall be limited to Employees who are
employed in positions which are listed in Addendum A to the Plan,
which shall be part of the Plan. The initial Participants in the
Plan shall be those Employees who hold the positions listed in
Addendum A on the effective date of the Plan. Subsequent
Participants shall be those Employees who hold the positions listed
in Addendum A and who shall have been individually approved for
participation at the sole discretion of the Board of Directors.
3.2 From time to time, the Chief Executive Officer shall
recommend eligible Employees to the Compensation Committee of the
Board of Directors for their review, comments, and recommendations
as to participation in the Plan. Recommendations of the
Compensation Committee will be forwarded to the Board of Directors
for approval.
3.3 An employee who is assigned to a qualifying position and
approved as a Participant by the Board of Directors shall generally
be deemed to have been approved for participation as of the date
the employee was first assigned to a qualifying position, but not
earlier than September 1, 1979. Final determination of effective
dates shall be subject to approval by the Board of Directors.
3.4 Participants in the Plan as it was structured prior to
this amendment will be eligible for the benefit as provided for by
the provisions of the Plan prior to this amendment or as provided
for including this amendment dated October 27, 1988, whichever is
greater.
3.5 Eligibility for payment of benefits from the Plan shall
be determined in accordance with and subject to the terms hereof.
3.6 To be eligible to receive deferred income payments upon
retirement, a Participant, whose eligibility commences on or after
January 1, 1989, must have one full year of participation in this
Plan with a total of five years or more as a Martin Marietta
employee and retire no earlier than the first day of the month
coinciding with or next following attainment of age 56, and no
later than the first day of the month coinciding with or next
following attainment of age 65, unless a later retirement age is
specifically approved for a Participant by the Board of Directors.
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The five year Martin Marietta service and one year Participant
qualifying periods are waived in the case of a Participant who dies
prior to retirement and while still actively employed in a position
listed on Addendum A, or at the discretion of the Chairman of the
Board.
3.7 A Participant who retires prior to age 56, or is
discharged for cause, or continues employment beyond age 65, or who
separates from employment by reason of Voluntary Resignation, shall
cease to be a Participant under this Plan and no benefits shall be
payable from this Plan unless specifically authorized by the Board
of Directors.
SECTION 4. PAYMENT AND DURATION OF BENEFITS
4.1 In the event that a Participant shall simultaneously hold
more than one position listed in Addendum A, only the higher of the
Designated Benefit amounts, for which participation has been
approved shall be payable.
4.2 In the event a Participant shall be transferred to a
position listed in Addendum A with a higher Designated Benefit, the
Participant shall retain the Designated Benefit amount previously
approved by the Board unless participation at the higher level is
approved by the Board of Directors. Upon approval at the higher
level, participation shall be at the higher Designated Benefit
level. All prior years will be adjusted to that higher level after
the Participant has completed one full year at that level or at the
discretion of the Board of Directors.
4.3 Unless otherwise determined by the Board of Directors, if
a Participant is transferred to another covered position listed in
Addendum A with a lower Designated Benefit, the higher Designated
Benefit of the previous position may remain in effect while the
Participant is assigned to a covered position listed in Addendum A
with a lower Designated Benefit unless the Board of Directors
specifically effects the lower Designated Benefit, in which case,
the Participant shall retain the prior years of credit at the
higher level and the year of transition will be prorated in months
at the appropriate levels.
4.4 A Participant who retires during the period beginning
with the first day of the month coinciding with or next following
attainment of age 62, and ending on the first day of the month
coinciding with or next following attainment of age 65, unless a
later retirement date is specifically approved for the Participant
by the Board of Directors, and has a minimum of ten years as a
Participant in the Plan shall be eligible for a benefit payment
from this Plan as follows:
(a) The total benefit payable shall be the Designated
Benefit, provided (i) this is the highest level which has been
attained, (ii) participation at this level has been approved
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by the Board of Directors, and (iii) the Participant has
completed at least one full year of participation at this
level; or,
(b) Should a Participant be transferred to a position with a
higher Designated Benefit, such higher benefit level being
approved by the Board of Directors, and retire prior to
completion of one full year at the higher level, the benefit
payment will be prorated based on participation at various
Designated Benefit levels. To calculate the total benefit
payable under the Plan, a benefit amount shall be calculated
for each full year as a Participant at the lower level by
multiplying 10% times the Designated Benefit for the lower
level. In the year where the Designated Benefit was changed
to the higher level by the Board of Directors, the benefit
amount for that year will be prorated based on the number of
months in the Plan at each level. The maximum total benefit
payable shall be the sum of the highest full years as
calculated above limited to ten years; or
(c) Should a Participant be transferred to a position with a
lower Designated Benefit, such lower benefit level being
approved by the Board of Directors, the benefit payment will
be prorated based on participation at various Designated
Benefit levels. To calculate the total benefit payable under
the Plan, a benefit amount shall be calculated for each full
year as a Participant at the higher level by multiplying 10%
times the Designated Benefit for the higher level and for each
full year at the lower level by multiplying 10% times the
Designated Benefit for the lower level. In the year where the
Designated Benefit was changed to the lower level by the Board
of Directors, the benefit amount for that year will be
prorated based on the number of months in the Plan at each
level. The maximum total benefit payable shall be limited to
the sum of the highest full years as calculated above limited
to ten years.
4.5 A Participant age 56 or greater with a minimum of one
full year participation in the Plan and a total of five or more
years as a Martin Marietta employee, (unless such minimum
participation requirements are waived in accordance with the
provisions of Section 3.6), may elect to receive a reduced benefit
upon retirement provided however such retirement shall be on or
before the first day of the month coinciding with or next following
attainment of age 65, unless a later retirement date is
specifically approved for the Participant by the Board of
Directors. The total benefit payable shall be the amount
calculated as provided in Section 4.4 above, provided that a
Participant who falls into a category consistent with
Section 4.4(a) except as to age or years of service, shall first
multiply the Designated Benefit by a fraction, the numerator of
which is the number of full years completed as a Participant
(limited to a maximum of ten) and the denominator of which is ten
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years, multiplied times the percentage set forth in the table below
for the Participant's age at retirement.
Age When Employment
Ends and Benefit Percent of Total
Payment Begins: Benefit Payable:
55 years or less Zero
56 years 15%
57 years 30%
58 years 45%
59 years 60%
60 years 75%
61 years 90%
62 to 65 years 100%
65 years or more Zero*
* If employment continues beyond the first day of the month
following the attainment of age 65, and is specifically
approved by the Board of Directors, the applicable percentage
is 100%.
4.6 A Participant who is transferred to a position not listed
in Addendum A but continues in the employment of the Corporation
shall cease participation in this Plan as of the date of such
transfer, and the benefit payable, if any, upon his actual
retirement date (or date of death) shall be calculated as if he
retired early on the date of his transfer.
4.7 If a Participant dies prior to retirement and while still
actively employed by the Corporation in a position listed in
Addendum A, the full amount to which such Participant would be
entitled at age 65 with ten years as a Participant will be payable
to the Participant's beneficiary(ies). This benefit amount will be
payable under the same terms and conditions as the benefit payable
to a beneficiary upon death of the Participant after retirement as
provided in Section 5 below, and as if the Participant retired with
the full benefit on the first of the month coinciding with or next
following the date of his death.
4.8 The total benefit payable to a Participant shall be
determined on the basis of the Plan as in effect on the date of
commencement of benefits. The total benefit amount shall be
payable over a ten-year period following retirement in equal,
annual installments with one tenth (1/10th) of the total payable
each year. The first payment shall be on the first day of the
month coinciding with or next following the Participant's
retirement in accordance with Section 3.6. Subsequent installments
shall be payable on the anniversary date of the initial payment.
4.9 In the event of a Change in Control of the Corporation,
the Participant's Designated Benefit shall become immediately
payable. Notwithstanding the preceding sentence, the amount payable
shall be limited to the Safe Harbor Amount, less $1.00. For this
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purpose the Safe Harbor Amount shall be an amount equal to three
times the Participant's base amount, as defined by Section 28OG of
the Internal Revenue Code of 1986, as amended, less all other
amounts which are counted for purposes of calculating the Safe
Harbor Amount under Section 28OG by reason of the provisions of the
1979 and 1984 Stock Option Plans for Key Employees.
For purposes of this Section, a "Change in Control" shall mean
a change in control of the Corporation that shall be deemed to have
occurred, if and when, with or without the approval of its Board of
Directors incumbent prior to the occurrence,
(i) any "person" (as such term is used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended
("Exchange Act")) becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Corporation representing 30 percent or
more of the combined voting power of the Corporation's then
outstanding securities; or
(ii) during any calendar year, individuals who at the
beginning of such period were members of the Board of
Directors of the Corporation cease as the result of a tender
offer, merger, consolidation, sale of assets or contested
election, or any combination of such transactions, to
constitute at least 75% thereof.
The provisions of this Section may not be amended after the
occurrence of a Change in Control.
SECTION 5. COMMENCEMENT AND DURATION OF BENEFITS
5.1 A written designation of beneficiary(ies) and contingent
beneficiary(ies) may be made by the Participant with the
Compensation Committee of the Beard of Directors and changed from
time to time by written notice to the Corporate Secretary.
5.2 The benefit amount determined under Section 4 shall be
payable as determined in Section 4.8, in a level amount, in ten
equal, annual installments to the Participant during the
Participant's lifetime with the provision that if such Participant
shall die after retirement and before ten annual payments have been
made, such payments shall continue for the remainder of such ten-
year period to (i) the beneficiary(ies) of the Participant, or (ii)
if the beneficiary(ies) does not survive the Participant, or does
survive the Participant but does not survive the ten-year period
and there is no surviving contingent beneficiary(ies), any
remaining payments shall be made, unless the Participant provided
otherwise, to the estate(s) of the Participant.
5.3 In the event that a Participant has not named a
beneficiary under this Plan and shall die after retirement and
before ten annual payments have been made, the remaining payments
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shall be made to the beneficiary(ies) designated under the Group
Life Insurance Plan for Salaried Employees or if no
beneficiary(ies) has been designated under the latter Plan, or if
such beneficiary(ies) has predeceased the Participant any remaining
payments shall be made to the Participant's estate. In no event
shall payment of the benefit from this Plan extend beyond ten
annual payments.
5.4 Any amount required to be withheld under applicable
federal, state, or local income tax or other laws, shall be
withheld and any payment from this Plan shall be reduced by the
amount so withheld.
5.5 Any payments under this Plan shall be made from the
general funds of the Corporation. No assets of the Corporation
shall be segregated or earmarked to represent any liability for
benefits hereunder.
SECTION 6. AMENDMENT AND TERMINATION
The Compensation Committee may, from time to time, recommend
to the Board of Directors amendments to the Plan or to Addendum A
attached hereto, except that the Chairman of the Board is
authorized to modify Addendum A, from time to time, to reflect
changes in the organizational nomenclature and to include any other
Senior Executive position which may be created for a specified
period of time to reflect the Corporation's succession planning for
a Senior Executive position already included in Addendum A, and to
report periodically such changes to the Board of Directors. The
Board of Directors may terminate the Plan or amend the Plan or
Addendum A attached hereto, in any respect and at any time;
provided, however, that no such amendment or termination shall have
the effect of reducing benefits then being paid to or on behalf of,
or which may thereafter become payable to or on behalf of, any
retired Participant, or of reducing the calculation of the benefit
amount of any active Participant to a level lower than that which
would have been payable had such Participant retired early on the
day prior to the effective date of such amendment or termination.
Amendments to the Plan will not be applicable to Plan
Participants who have retired or otherwise ceased to be active
Participants prior to the effective date of such amendments.
SECTION 7. ADMINISTRATION AND CLAIM REVIEW PROCEDURE
7.1 This Plan shall be administered by the Compensation
Committee of the Board of Directors under the bylaws of the
Corporation.
7.2 Any Participant or beneficiary whose written claim for
benefits under the Plan is denied shall be furnished a written
notice of denial of claim by the Chairman of the Compensation
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Committee within a reasonable period of time after receipt of the
claim. Within sixty days after receipt of a notice of denial of
claim, a Participant or beneficiary may request a review of the
claim by the Compensation Committee as a whole upon written
application to the Secretary of the Corporation.
7.3 The Compensation Committee shall conduct a full and fair
review of a denial of claim when so requested and shall render a
decision as promptly as possible, but no later than one hundred and
twenty days after receipt of a request for review. Any decision by
the Compensation Committee concerning a review of a denial of claim
shall be furnished to the Participant in writing by the Secretary
of the Corporation.
7.4 A decision by the Board of Directors or any duly
constituted Committee to which the Board has delegated its
authority with respect to any matter pertaining to the Plan shall
be conclusive and binding on all interested parties.
SECTION 8. GENERAL PROVISIONS
8.1 Nothing in this Plan shall be deemed to give any person
the right to remain in the employ of the Corporation or to remain
in any of the positions listed in Addendum A or affect the right of
the Corporation to terminate any Participant's employment with or
without cause.
8.2 No right or interest of any person entitled to a benefit
under the Plan shall be subject to voluntary or involuntary
alienation, assignment, or transfer of any kind.
8.3 This Plan shall be construed and administered in
accordance with the laws of the State of Maryland.
SECTION 9. TERMINATION OF BENEFITS IN CERTAIN CASES
If, following the date on which a Participant shall be
qualified to receive benefits under the Plan, the Board of
Directors shall reasonably find that a Participant, without the
prior written consent of the Board of Directors, is engaged in the
operation or management of a business, whether as owner,
controlling stockholder, partner, director, officer, employee,
consultant, or otherwise, which at such time is in competition
with the Corporation or any of its subsidiaries or affiliates, or
has disclosed to unauthorized persons information relative to the
business of the Corporation or any of its subsidiaries or
affiliates which the Participant shall have had reason to believe
is confidential, or shall be found by the Board of Directors to
have committed an act during or after the term of the Participant's
employment which would have justified the Participant being
discharged for cause, all benefits to which such Participant shall
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otherwise be entitled under this Plan shall terminate. This section
shall be uniformly applied to Participants similarly situated.
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