1984 STOCK OPTION PLAN
FOR KEY EMPLOYEES
(With Stock Appreciation Rights)
Adopted: April 26, 1984
As Amended
October 23, 1986
January 22, 1987
April 23, 1987
July 23, 1987
April 25, 1991
[MARTIN MARIETTA LOGO]
THIS DOCUMENT CONSTITUTES PART OF
A PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933
APRIL 2, 1993
MARTIN MARIETTA CORPORATION
1984 STOCK OPTION PLAN FOR KEY EMPLOYEES
1. Purpose
The purpose of the Plan is to attract and retain the services
of key employees in positions which contribute materially to the
successful operation of the business of the Corporation and to
grant such employees an attractive opportunity to acquire a
proprietary interest in the business enterprise and thereby provide
them with an added incentive to increase the earnings of the
Corporation.
It is intended that this purpose will be effected through the
granting of stock options and stock appreciation rights, as
provided herein.
2. Definitions
As used in the Plan, "Corporation" means Martin Marietta
Corporation and its subsidiaries. "Subsidiary" means a corporation
of which Martin Marietta Corporation owns, directly or indirectly,
stock having at least 50% of the power to vote, under normal
circumstances, in the election of directors. "Board of Directors"
means the Board of Directors of Martin Marietta Corporation. The
"Committee" means the Stock Option Committee. "Employee" means
officers and other key employees of the Corporation but excludes
directors who are not also officers or employees of the
Corporation. An "option' means an option to purchase shares of
Martin Marietta Common Stock. A "right" means a stock appreciation
right. "Grant" means the award of both a stock option and a stock
appreciation right. The "grant value of the right" means the fair
market value of a share of stock on the date a right is granted, as
that value may be adjusted pursuant to Section 7(a)(v) of the Plan.
"Normal retirement" means retirement on or after the normal
retirement date, as defined in subparagraph (a), Paragraph 1 of
Article IV of the Martin Marietta Retirement Income Plan for
Salaried Employees. "Early retirement" shall have the meaning set
forth in Paragraph 2 of Article IV of the Martin Marietta
Retirement Income Plan for Salaried Employees.
3. Effective Date
The Plan shall become effective upon the approval by the
stockholders.
4. Eligible Employees
Options and rights may be granted only to exempt salaried
employees of the Corporation. However, not more than 10% of the
total number of shares available under the Plan shall be subject to
option to any one employee, and no individual who owns stock
possessing 5% or more of the combined voting power of all classes
of stock of the Corporation shall be eligible for a grant of
options and rights under the Plan.
5. Terms of Stock Options and Stock Appreciation Rights
The terms of each option and right granted under the Plan
shall be determined by the Board of Directors, consistent with the
provisions of the Plan, including the following:
(a) Each grant of options and rights may be exercised in
whole or in part subject to the provisions of the Plan,
provided that no option or right shall be exercisable prior to
one year or after ten years from the date of grant. Except as
provided in Section 6(c), each grant shall be divided into
three approximately equal installments of 100-share and 100-
right increments. The first installment shall be exercisable
one year after the date of grant and each succeeding
installment shall be exercisable one year from the date the
prior installment became exercisable. To the extent that the
installments are not equal in number, the larger installment
or installments shall be exercisable in the last or second and
last years. After the privilege to exercise an installment
accrues, the options and rights included in that installment
may, except as provided in Section 8, be exercised at any time
prior to the expiration of ten years from date of grant.
(b) Each optionee must remain in the employ of the
Corporation for at least one year from the date the option and
right are granted before any part of the grant can be
exercised.
(c) An option or right shall not be assignable or
transferable by the employee to whom granted otherwise than by
will or by the laws of descent and distribution and shall be
exercisable during the participant's lifetime only by the
participant or in the event of disability by the legal
guardian or representative.
(d) The grant will be evidenced by a certificate that will
specify the number of shares and rights to which it pertains.
6. Stock Options
(a) Shares of Stock Subject to the Plan
The shares that may be issued under the Plan shall not exceed
5,475,000 shares of the Common Stock, $1.00 par value, of the
Corporation except as provided in Paragraph (c) below. They
may consist in whole or in part of unissued or treasury
shares. Such treasury shares may be acquired to satisfy the
requirements of the Plan. If for any reason shares as to which
an option has been granted cease to be subject to purchase,
then such shares shall again be available for option under the
Plan.
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(b) Grant of Options
(i) The purchase price of the stock subject to option
shall not be less than 100% of the fair market value of the
stock on the date the option is granted, except as otherwise
provided in Section 6(c)(i) below.
(ii) Except as provided in Paragraph 10, the purchase
price of the stock subject to option shall be paid in cash or,
with the approval of the Board of Directors or the Committee,
may be paid in full or part by the tender of Martin Marietta
Corporation Common Stock owned by the optionee. Common Stock
delivered in payment of the purchase price shall be valued at
the fair market value and any portion of the purchase price
not satisfied by the tender of Common Stock shall be paid in
full in cash upon such exercise. No fractional shares shall
be is sued. As soon as possible following receipt of payment
to the Corporation, the optionee (or other person entitled to
exercise the option) shall receive a certificate or
certificates for such shares, subject to the provisions of
Section 6(d).
(iii) No person shall have the rights of a stockholder
with respect to shares subject to an option until the date the
option is exercised.
(c) Adjustment Upon Changes in Stock
(i) If there shall be any change affecting the stock
subject to the Plan or to any option granted thereunder
through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or combination,
or otherwise, the Board of Directors shall make appropriate
proportional adjustments in the aggregate number of shares
subject to the Plan and the number of shares and the price per
share subject to outstanding options and may assume old
options or substitute new options for old options, regardless
of whether the option price of any such option resulting from
the proportional adjustment is less than the then fair market
value of the subject shares.
(ii) In the event of a proposed dissolution or
liquidation of Martin Marietta Corporation, each option
granted under the Plan shall terminate as of a date, which in
no event shall be later than the expiration date specified in
the option, to be fixed by the Board of Directors, provided
that not less than 30 days' written notice of the date so
fixed shall be given to each optionee (or other person
entitled to exercise the option) and each optionee (or other
person entitled to exercise the option) shall have the right
(provided that by the date of exercise of the option the
optionee has remained in the employ of the Corporation for at
least one year from the date the option was granted) during
the period of 30 days preceding such termination to exercise
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the option as to all or any part of the shares covered
thereby, including shares as to which such option would not
otherwise then be exercisable.
(iii) In the event of a Change of Control, each optionee
(or other person entitled to exercise the option) shall have
the right (provided that by the date of exercise of the option
the optionee has remained in the employ of the Corporation for
at least six months from the date the option was granted)
during a period of 60 days following a Change of Control to
exercise the option as to all or any part of the shares
covered thereby, including shares as to which such option
would not otherwise then be exercisable or to have the
Corporation, upon request of the optionee (or other person
entitled to exercise the option), purchase all such options at
a cash purchase price equal to the excess of the fair market
value per share over the option price multiplied by the number
of all such option shares. For purposes of this Section and
Section 7(a)(ii) below, the term "fair market value" where a
Change of Control has occurred shall mean the greater of (a)
the highest price per share paid as a result of any offer
which is in effect during the period beginning on the
ninetieth day prior to the date on which such option is
exercised and ending on the date on which such option is
exercised or the fixed or formula price specified in a
transaction agreement if such price is determinable as of the
date of exercise of the option or, in the case of a 25%
acquisition, the highest price per share shown on the
Statement on Schedule 13D or any Amendment thereto filed by
the holder of 25% or more of the Corporation's voting
securities, and (b) the highest closing price per share of the
Corporation's Common Stock on the New York Stock Exchange
Composite Tape during the period beginning on the ninetieth
day prior to the date on which the option is exercised and
ending on the date on which such option is exercised. In the
event the price for Martin Marietta Common Stock in a
transaction that results in a Change of Control cannot be
determined in accordance with the provisions of this
Section 6(c)(iii), fair market value shall be determined by
the Board of Directors. The value thus determined shall be
subject to adjustments as provided in Section 6(c)(i) above.
For purposes of this paragraph, the term "Change of Control"
shall mean the following:
(A) A tender offer or exchange offer is made whereby the
effect of such offer is to take over and control the
affairs of the Corporation and such offer is consummated
for the ownership of securities of the Corporation
representing 25% or more of the combined voting powers of
the Corporation's then outstanding voting securities.
(B) The Corporation is merged or consolidated with
another corporation and, as a result of such merger or
consolidation, less than 75% of the outstanding voting
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securities of the surviving or resulting corporation
shall then be owned in the aggregate by the former
stockholders of the Corporation, other than affiliates
within the meaning of the Securities Exchange Act of 1934
(the "Exchange Act") or any party to such merger or
consolidation.
(C) The Corporation transfers substantially all of its
assets to another corporation or entity which is not a
wholly owned subsidiary of the Corporation.
(D) Any "person" (as such term is used in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act) is or
becomes the beneficial owner, directly or indirectly, of
securities of the Corporation representing 25% or more of
the combined voting power of the Corporation's then
outstanding securities, and the effect of such ownership
is to take over and control the affairs of the
Corporation.
(E) During any period of two consecutive years,
individuals who at the beginning of such period
constitute the Board of Directors of the Corporation
cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for
election by the Corporation's stockholders, of each new
director was approved by a vote of at least two thirds of
the directors then still in office who were directors at
the beginning of the period. For purposes of the Plan,
ownership of voting securities shall take into account
and include ownership as determined by applying the
provisions of Rule 13-3(d)(l)(i) of the Exchange Act (as
then in effect).
(d) Limitations on Transfer of Shares
The Corporation shall not be required, upon the exercise
of any option, to issue or deliver any shares of stock
prior to (a) the authorization of such shares for listing
on any stock exchange on which Martin Marietta
Corporation's Common Stock may then be listed and (b)
such registration or other qualification of such shares
under applicable securities laws as the Corporation shall
determine to be necessary or advisable. If shares
issuable on the exercise of options have not been
registered under the Securities Act of 1933 ("the Act")
or there is not available a current Prospectus meeting
the requirements of the Act with respect thereto,
optionees may be required to represent at the time of
each exercise of options that the shares purchased are
being acquired for investment and not with a view to
distribution; and the Corporation may place a legend on
the stock certificate to indicate that the stock may not
be sold or otherwise disposed of except in accordance
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with the Act, as amended, and the rules and regulations
promulgated thereunder.
7. Stock Appreciation Rights
(a) Grant of Rights
(i) Stock appreciation rights shall be granted only to
recipients of stock options and each right will relate to a
specific stock option granted under the Plan. The number of
rights granted shall equal the number of shares granted under
the stock option provisions of the Plan and shall be granted
concurrently with the grant of the related stock option.
(ii) For each right granted on or after July 23, 1987,
the amount of the cash payment to which an optionee shall be
entitled for each right shall be equal to a percent of the
excess, if any, of the fair market value of a share of Martin
Marietta Common Stock on the exercise date over the grant
value of the right. Such percentage shall be determined by
the Stock Option Committee or its delegatee in a manner which
shall be intended to approximate the tax obligation arising
from the exercise of such option and shall be adjusted
periodically pursuant to paragraph 7(a)(iii).
(iii) The percentage referred to in paragraph 7(a)(ii)
shall be increased or decreased from time to time by the
Committee or its delegatee to reflect significant changes in
income tax laws. At the time the Committee or its delegatee
determines that an increase or decrease is warranted, it shall
set a new percentage and shall set the effective date on which
such new percentage will apply in determining the amount of
the cash payment for each right which was granted on or after
July 23, 1987, and is exercised after the effective date of
such percentage change.
(iv) An optionee (or other person entitled to exercise
the option) who, in the event of a Change of Control, elects
either to exercise or to have the Corporation purchase his
options, shall receive a cash payment for the rights related
to such option equal to a percentage, determined in accordance
with paragraphs 7(a)(ii) and 7(a)(iii), of the excess of the
fair market value per share over the option price, such fair
market value to be determined in accordance with the
applicable provisions of Section 6(c)(iii), multiplied by the
number of option shares.
(v) Should there be a change affecting the stock subject
to the Plan as referred to in Section 6(c), the number of
rights shall be adjusted to equal the number of related stock
option shares upon completion of the adjustment required by
the change. The grant value of a right shall also be adjusted
to equal the option price of the related stock option
following the adjustment required by the change.
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(b) Exercise of Rights
(i) Subject to the limitations set forth herein, an
optionee shall be entitled to receive payment in cash for
rights granted under this Plan. The cash payment will be in
consideration of services performed for the Corporation or for
its benefit by the optionee.
(ii) Nothing contained herein shall be construed to
require the simultaneous exercise of options and the related
rights where such options or rights are exercised after May 1,
1991.
8. Death, Termination of Employment, or Retirement
(a) If an optionee dies while employed by the Corporation or
within three months after termination of employment, options
and rights may be exercised by the persons referred to in
Section 5(c) only within one year from the date of death. In
cases of normal retirement or of disability, options and
rights may be exercised within three years from the date of
such retirement or disability. In cases of termination of an
optionee's employment by the Corporation, with or without
cause, or early retirement (except as provided in
Section 8(b)), the options and rights may be exercised by the
optionee only within three months from the date of termination
of employment. Nothing contained in the Plan or in any option
or right granted hereunder shall confer upon any optionee any
right of continued employment by the Corporation nor limit in
any way the right of the Corporation to terminate the
participant's employment at any time.
(b) Except as otherwise provided in this paragraph, a grant
may be exercised pursuant to this Section 8 only to the extent
the optionee was entitled to exercise the options and rights
at the time of termination of employment or as provided in
Section 6(c) and, in any event, may not be exercised after the
expiration of ten years from the date of grant. In the event
an optionee ceases to be an employee, the options and rights
which are not exercisable at the time shall terminate. In
cases of death or disability while employed by the Corporation
or normal retirement where an optionee has applied for and is
receiving benefits pursuant to a retirement plan for Martin
Marietta salaried employees, all outstanding options and
rights shall become exercisable upon such death, disability,
or normal retirement and may be exercised pursuant to this
Section 8 or as provided in Section 6(c). In cases of early
retirement where an optionee has applied for and is receiving
benefits pursuant to a retirement plan for Martin Marietta
salaried employees, all outstanding options and rights shall
become exercisable upon such early retirement at the
discretion of the Board of Directors, the Committee, or the
Chief Executive Officer and, to the extent exercisable, may be
exercised within three years from the date of such early
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retirement or as provided in Section 6(c). Options and rights
may not be exercised less than six months or after the
expiration of ten years from the date of grant thereof.
9. Leave of Absence
For the purpose of the Plan, an employee on leave of absence
will be considered as still in the employ of the Corporation unless
otherwise provided in an agreement between the employee and the
Corporation.
10. Deferred Payments for Stock
To the extent permitted by applicable law, the Board of
Directors or the Committee may agree to accept as full or partial
payment of the purchase price of stock issued upon exercise of
options a promissory note of the optionee evidencing his obligation
to make future cash payment thereof. Promissory notes shall be
payable as determined by the Board of Directors or the Committee
(but in no event later than five years after the date thereof),
shall be secured by a pledge of the shares purchased, and shall
bear interest at a rate fixed by the Board of Directors or the
Committee.
11. Administration
(a) Stock Option Committee
(i) The Stock Option Committee shall consist of three or
more of those members of the Board of Directors who are not
eligible to receive options and rights under the Plan. The
members of the Committee shall be designated by the Board of
Directors. A majority of the members of the Committee shall
constitute a quorum. The vote of a majority of a quorum shall
constitute action by the Committee.
(ii) The Committee shall determine the employees who will
participate in the Plan, the number of shares and rights
subject to each grant, and shall have the authority to adopt
rules and regulations for administering the Plan.
(iii) As and to the extent authorized by the Board of
Directors or the By-Laws, the Committee may exercise the
powers and authority related to the Plan which are vested in
the Board of Directors. The Committee may delegate to the
officers or employees of the Corporation the authority to
execute and deliver documents and to take such other steps
deemed necessary or convenient for the efficient
administration of the Plan.
(b) Finality of Determinations
The Board of Directors shall have the power to interpret
the Plan. All interpretations, determinations, and
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actions by the Board of Directors or by the Committee, to
the extent authorized by the Plan, the Board of Directors
or the By-Laws shall be final, conclusive, and binding
upon all parties.
12. Amendment and Termination
The Board of Directors shall have the power, in its
discretion, to amend, suspend, or terminate the Plan or options and
rights granted under the Plan at any time. It shall not, however,
without further action by the stockholders, have the power to (a)
change the class of employees eligible to receive options under the
Plan, (b) provide for options or rights exercisable more than ten
years after the date granted, or (c) extend the expiration date of
the Plan; nor shall it have the power (except as otherwise provided
in the Plan) to (d) increase the number of shares subject to the
Plan or (e) reduce the option price below the fair market value of
the stock at the time the option was granted. No amendment,
suspension, or termination of the Plan or options and rights
granted under the Plan shall, except with the consent of the
optionee, adversely affect an option or right previously granted
except as set forth in paragraphs 7(a)(ii) and 7(a)(iii).
13. Duration
The Plan shall remain in effect until all options and rights
granted under the Plan have been exercised or terminated under the
terms of the Plan, provided that options and rights under the Plan
must be granted within ten years from the effective date of the
Plan.
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[MARTIN MARIETTA LOGO]
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