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MARTIN MARIETTA MATERIALS, INC.
SUPPLEMENTAL EXCESS RETIREMENT PLAN
SECTION 1. ESTABLISHMENT AND PURPOSE OF PLAN
The Martin Marietta Materials, Inc. Supplemental Excess Retirement Plan
("Plan") is hereby established by Martin Marietta Materials, Inc., a North
Carolina corporation (the "Corporation"). The purpose of this Plan is to provide
additional, supplemental benefits to employees of Martin Marietta Materials,
Inc. and certain of its subsidiaries or affiliates to replace vested retirement
and death benefits that would otherwise be payable under certain other
retirement plans of the Corporation and such subsidiaries or affiliates but for:
(1) the limitations of Sections 401(a)(17) and 415 of the Internal
Revenue Code of 1986, as amended ("Code"); and
(2) the incidental death benefit rule of Treas. Reg. ss.
1.401-1(b)(1)(i).
Lockheed Martin Corporation, as successor to Martin Marietta
Corporation, maintained the Martin Marietta Corporation Supplemental Excess
Retirement Plan (the "Martin Marietta Corporation Plan") effective September 28,
1978. This Plan is intended to supersede and replace the Martin Marietta
Corporation Plan with respect to Employees covered by this Plan.
This Plan is intended to be unfunded and is maintained primarily for
the purpose of providing deferred compensation for a select group of management
or highly compensated employees.
SECTION 2. DEFINITIONS
The following terms as used in this Plan shall have the following
meanings:
"Administrator" (within the meaning of Section 3(16)(A) of ERISA) means
Martin Marietta Materials, Inc. Martin Marietta Materials, Inc.'s
responsibilities as Administrator,
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under this Plan and under law, shall, except as otherwise provided in this Plan,
be carried out by or under the supervision of a Benefit Plan Committee appointed
by and serving at the pleasure of Martin Marietta Materials, Inc.
"Base Salary" means the highest annual rate of base salary that the
Employee receives from the Corporation or its affiliates within the twelve-month
period ending on the date of a Change of Control.
"Board" means the Board of Directors of the Corporation.
"Cause" means the Employee's having been convicted in a court of
competent jurisdiction of a felony or has been adjudged by a court of competent
jurisdiction to be liable for fraudulent or dishonest conduct, or gross abuse of
authority or discretion, with respect to the Company, and such conviction or
adjudication has become final and non-appealable. The Employee shall not be
deemed to have been terminated for Cause, unless the Corporation shall have
given the Employee (A) notice setting forth, in reasonable detail, the facts and
circumstances claimed to provide a basis for termination for Cause, (B) a
reasonable opportunity for the Employee, together with his counsel, to be heard
before the Board and (C) a notice of termination stating that, in the reasonable
judgment of the Board, the Employee was guilty of conduct set forth in clauses
(i), (ii), (iii) or (iv) above, and specifying the particulars thereof in
reasonable detail.
"Change of Control" means:
(i) The acquisition on or after October 18, 1996 by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) (an "Acquiring
Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 40% or more of either (A) the
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fully diluted shares of common stock of the Corporation, as reflected on the
Corporation's financial statements (the "Outstanding Corporation Common Stock"),
or (B) the combined voting power of the then outstanding voting securities of
the Corporation entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"); provided, however, that for
purposes of this subsection (i), the following acquisitions shall not constitute
a Change of Control: (X) any acquisition by the Corporation or any "affiliate"
of the Corporation, within the meaning of 17 C.F.R. ss. 230.405 (an
"Affiliate"), (Y) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any Affiliate of the
Corporation or (Z) any acquisition by any entity pursuant to a transaction which
complies with clauses (A), (B) and (C) of subsection (iii) of this definition;
or
(ii) Individuals who constitute the Incumbent Board cease for any
reason to constitute at least a majority of the Board; or
(iii) Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the
Corporation (a "Business Combination"), in each case, unless, following such
Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Corporation or all or substantially all of the Corporation's assets either
directly or through one or more subsidiaries) in
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substantially the same proportions as their ownership, immediately prior to such
Business Combination, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may be, and (B) no Person
(excluding any employee benefit plan (or related trust) sponsored or maintained
by the Corporation or any Affiliate of the Corporation, or such corporation
resulting from such Business Combination or any Affiliate of such corporation)
beneficially owns, directly or indirectly, 40% or more of, respectively, the
fully diluted shares of common stock of the corporation resulting from such
Business Combination, as reflected on such corporation's financial statements,
or the combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
(iv) Approval by the shareholders of the Corporation of a complete
liquidation or dissolution of the Corporation.
"Corporation" means Martin Marietta Materials, Inc.
"Disability" means a medically determined physical or mental impairment
that qualifies the Employee for benefits under the Company's long-term
disability program. An Employee shall not be deemed to have incurred a
Disability until such benefits actually become payable (i.e., after any
applicable waiting period). If the Corporation does not maintain a long-term
disability program, or if the Employee does not elect coverage under such
program, Disability shall mean the incapacity of the Employee such that he is
unable to perform his duties to the
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Corporation for a period of 150 out of 180 consecutive days, as determined in
the reasonable judgment of the Administrator.
"Employee" means a person employed by the Corporation or a subsidiary
or affiliate and who is a participant of a Retirement Plan of the Corporation.
"Good Reason" means (i) a good faith determination by the Employee that
the Corporation or any of its officers has (A) taken any action which materially
and adversely changes the Employee's position (including titles), authority or
responsibilities with the Corporation or reduces the Employee's ability to carry
out his duties and responsibilities with the Corporation or (B) has failed to
take any action where such failure results in material and adverse changes in
the Employee's position, (including titles), authority or responsibilities with
the Corporation or reduces the Employee's ability to carry out his duties and
responsibilities with the Corporation; (ii) a reduction in the Employee's Base
Salary or a restriction on the eligibility requirements for other forms of
monetary compensation that is inconsistent with the eligibility requirements
used prior to a Change of Control; or (iii) requiring the Employee to be
employed at any location more than 35 miles further from his principal residence
than the location at which the Employee was employed immediately preceding the
Change of Control, in any case of (i), (ii) or (iii) without the Employee's
prior written consent.
"Incumbent Board" means a member of the Board of Directors of the
Corporation who is not an Acquiring Person, or an affiliate (as defined in Rule
12b-2 of the Exchange Act) or an associate (as defined in Rule 12b-2 of the
Exchange Act) of an Acquiring Person, or a representative or nominee of an
Acquiring Person.
"Lump Sum Value" means the actuarial present value of a Participant's
benefits based upon the assumptions used to determine lump sum value under the
applicable provisions of the
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Retirement Plan for the purpose of determining whether the Retirement Plan
benefit shall be paid in a lump-sum settlement. The Corporation may amend the
foregoing definition of "Lump Sum Value" at any time, but such amendment shall
not be effective with respect to a Participant unless both adopted by the
Corporation and communicated to the Participant in writing by the Corporation at
least fifteen (15) months prior to the Participant's commencement of benefits
under this Plan.
"Participant" means an Employee to whom this Plan applies as provided
in Section 3 or, (except as otherwise prohibited by the context) upon and
following such Participant's death, his surviving spouse or beneficiary(ies), if
any, with respect to any death benefit payable to them under this Plan.
"Retirement Date" means the Participant's normal retirement date or
early retirement date, whichever is applicable, under the Retirement Plan.
"Retirement Plan" means the Martin Marietta Materials, Inc. Pension
Plan for Salaried Employees as in effect from time to time (including such plan
as it may be renamed and including any successor plan thereto for salaried
employees or the portion of a plan which portion is a separate benefit structure
for salaried employees and is a successor thereto).
SECTION 3. ELIGIBILITY
This Plan shall apply to any Employee who is a participant in the
Retirement Plan and whose benefits under the Retirement Plan are limited or
reduced by the limitations of Section 401(a)(17) or 415 of the Code, and, in the
case of death, whose death benefits under the Retirement Plan are limited or
reduced by the incidental death benefit rule of Treas. Reg. ss.
1.401-1(b)(1)(i).
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SECTION 4. RETIREMENT BENEFIT COMMENCEMENT DATE
4.1 Except as provided in Section 11, a Participant's retirement
benefit commencement date under this Plan shall be the same as his retirement
benefit commencement date under the Retirement Plan.
SECTION 5. AMOUNT OF BENEFITS
5.1 A Participant shall receive a retirement benefit (including,
without limitation, a deferred vested retirement benefit) from this Plan equal
to the excess, if any, of (1) the benefit (adjusted by Section 11 if applicable)
that would have been paid under the Retirement Plan (as the same may be in
effect from time to time) if the Retirement Plan did not include the limitations
imposed by Sections 401(a)(17) and 415 of the Code over (2) the benefit actually
payable under the Retirement Plan.
5.2 The designated Retirement Plan beneficiary of a Participant who is
entitled to receive a death benefit under Article VIII, Pre-Retirement Death
Benefit, of the Retirement Plan shall receive a lump sum pre-retirement death
benefit from this Plan equal to the excess, if any, of (1) the lump sum
pre-retirement death benefit which would have been paid to such designated
beneficiary pursuant to the Retirement Plan if such payment were not limited by
(i) Section 401(a)(17) of the Code and (ii) the incidental death benefit rule of
Treas. Reg. ss. 1.401-1(b)(1)(i) (as interpreted in Revenue Ruling 85-15) over
(2) the lump sum death benefit actually payable under Article VIII of the
Retirement Plan.
5.3 The surviving spouse of a Participant who is entitled to receive a
death benefit under Article VII, Pre-Retirement Surviving Spouse Benefit, of the
Retirement Plan shall receive
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a pre-retirement surviving spouse annuity from this Plan equal to the excess, if
any, of (1) the pre-retirement surviving spouse annuity benefit which would have
been paid to such surviving spouse pursuant to the Retirement Plan if such
payment were not limited by (i) Sections 401(a)(17) and 415 of the Code and (ii)
the incidental death benefit rule of Treas. Reg. ss. 1.401-1(b)(1)(i) (as
interpreted in Revenue Ruling 85-15) over (2) the pre-retirement surviving
spouse annuity benefit actually payable under Article VII of the Retirement
Plan.
5.4 In no event shall the computation of benefits under this Plan take
into account any service performed by a Participant after separation from
employment with the Corporation or its subsidiaries and affiliates. (This
limitation is not intended to prevent the addition of years of credited service
as provided in Section 11.)
5.5 Notwithstanding anything to the contrary herein, the Corporation in
its sole discretion may (but shall not be obligated to) make any payment under
this Plan before it would otherwise be made if, based on any of the following
events, it determines, in good faith based on consultation with counsel, that a
Participant or his beneficiary has or is likely to recognize income for federal
income tax purposes with respect to amounts payable under this Plan before such
amounts are otherwise to be paid if such income is attributable to:
(1) a change in the Code, or the Treasury Regulations thereunder,
or a binding or predominant judicial construction thereof;
(2) a published ruling or similar announcement issued by the
Internal Revenue Service;
(3) a decision by a court of competent jurisdiction involving a
Participant, a Participant's beneficiary, the Corporation, or
any entity involved in making payments under this Plan; or
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(4) a final determination of tax liability following a contested
dispute on audit (or a closing agreement made under Section
7121 of the Code) that involves a Participant, a Participant's
beneficiary(ies), the Corporation, or any entity involved in
making payments under this Plan.
5.6 Benefits shall be payable under this Plan only to Participants who
retire or otherwise terminate employment from the Corporation or any designated
subsidiary or affiliate after the effective date of this Plan or, with respect
to death benefits under Sections 5.2 and 5.3, who die after the effective date
of this Plan. (Any former Employee who was covered under the Martin Marietta
Corporation Plan and whose benefits commenced prior to such effective date under
the Martin Marietta Corporation Plan shall continue to receive from this Plan
the same benefits such former Employee was receiving under the Martin Marietta
Corporation Plan.) The benefit payable to or with respect to a Participant under
this Plan shall be determined based on the Participant's entire Retirement Plan
benefit without distinction as to what part of such benefit, if any, may have
accrued before and what part after the effective date of this Plan.
5.7 A Participant shall be entitled to receive vested retirement and
death benefits under this Plan if and only if the Participant's retirement
benefit under the Retirement Plan (including, without limitation, a deferred
vested retirement benefit) is vested. Except as provided in Section 11, the
benefits payable under this Plan to a Participant who terminates employment
before retirement shall be paid on a deferred vested basis if the Participant's
Retirement Plan benefits are paid on a deferred vested basis.
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SECTION 6. PAYMENTS OF BENEFITS
6.1 Except as provided in Section 6.4 and by Section 11, payment of
benefits (including, without limitation, benefits under Sections 5.1 and 5.3) to
any person under this Plan shall be made in a cash lump sum payment equal to the
Lump Sum Value of the benefits at the same time (including payment on a deferred
vested basis) as benefits commence to such person under the Retirement Plan (or
as soon thereafter as reasonably practicable). The determination of such Lump
Sum Value shall be made as soon as reasonably practicable and shall be made as
of the same date such a determination would be made under the Retirement Plan in
order to determine whether, at the time they actually commence and regardless of
their actual form of payment, such Retirement Plan benefits would be payable in
a lump-sum settlement.
6.2 Any amount required to be withheld under applicable Federal, state
and local income tax laws shall be withheld from any payments under this Plan
and the amount of the payments shall be reduced by the amount so withheld.
6.3 All payments under this Plan shall be made from the general funds
of the Corporation. The Corporation may, at its discretion, establish a trust to
hold assets from which benefits payments may be made. This Plan is intended in
all events to be unfunded within the meaning of ERISA and for all purposes under
the Code.
6.4
(a) The Participant may elect that the benefits payable to any person
under Sections 5.1 and 5.3 shall be paid at the same time, to the same person
and under the same form as benefits paid to such person under the Retirement
Plan and in accordance with all the terms and conditions applicable to payment
of such benefits under the Retirement Plan. In order to be effective, the
Participant's election under this Section 6.4(a) must be made in writing and
must
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be delivered to the Secretary of the Corporation no later than one year prior to
the date of the commencement of benefits. Any such election may be revoked in
writing by the Participant. In order to be effective, such written revocation
must be delivered to the Secretary of the Corporation no later than one year
prior to the date of the commencement of benefits. Notwithstanding the
foregoing, the Participant may designate a beneficiary to receive after the
Participant's death any benefit payments continuing after the Participant's
death, which beneficiary is different from the person who is receiving the
Retirement Plan benefits (however, if such death benefits hereunder are based on
a life of any individual, the benefits hereunder shall be based on the life of
the same individual as under the Retirement Plan even though paid to a different
person). Such beneficiary designation must be made in writing and received by
the Administrator prior to the Participant's death. In the absence of such a
designation, the benefits shall be paid to same person who is receiving the
Retirement Plan benefits.
(b) Notwithstanding Section 6.1 or Section 6.4(a), in the event that
the Lump Sum Value of the sum of the benefits payable to a Participant or
surviving spouse under this Plan is $20,000 or less, determined as of the date
of the Participant's termination of employment, then all such benefits will be
paid in a cash lump-sum settlement equal to the Lump Sum Value of such benefits
in full discharge of all liabilities with respect to such benefits. The
Corporation shall determine such Lump Sum Value and pay such lump-sum settlement
as soon as reasonably practicable following the date of the Participant's
termination of employment.
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SECTION 7. AMENDMENT AND TERMINATION
The Corporation may:
(1) terminate this Plan with respect to future Participants or
future benefit accruals for current Participants; and
(2) amend this Plan in any respect, at any time (except that the
definition of "Lump Sum Value" may be amended only as provided
in connection with such definition, above in Section 2).
However, without the agreement of the Participant, no such termination or
amendment may reduce the amount of any then accrued benefit of any Participant
or otherwise diminish the rights of any Participant with respect to such accrued
benefit (except as provided above in Section 7(2) and in Section 2 with respect
to amendment of the definition of "Lump Sum Value"), and any such purported
termination or amendment shall be void. The prohibition against reduction in the
accrued benefit shall not be interpreted in any manner that would result in a
Participant, beneficiary or surviving spouse actually receiving from the
Retirement Plan and this Plan, combined, a benefit greater than such person
would be entitled to receive under the Retirement Plan alone (except as a result
of Section 11) if the limitations of Sections 401(a)(17) and 415 of the Code and
the incidental death benefit rule of Treas. Reg. ss. 1.401-1(b)(1)(i) (as
interpreted in Revenue Ruling 85-15) did not apply.
SECTION 8. ADMINISTRATION
8.1 The Corporation is the plan sponsor under Section 3(16)(B) of
ERISA.
8.2 The Administrator is the named fiduciary of this Plan and as such
shall have the authority to control and manage the operation and administration
of this Plan except as otherwise
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expressly provided in this plan document. The named fiduciary may designate
persons other than the named fiduciary to carry out fiduciary responsibilities
under this Plan. Any such designation must be in writing and must be accepted in
writing by any such other person.
8.3 The Administrator has the authority (without limitation as to other
authority) to delegate its duties to agents and to make rules and regulations
that it believes are necessary or appropriate to carry out this Plan.
8.4 The Administrator has the discretion as a Plan fiduciary (i) to
interpret and construe the terms and provisions of this Plan (including any
rules or regulations adopted under this Plan), (ii) to determine eligibility to
participate in this Plan and (iii) to make factual determinations in connection
with any of the foregoing. A decision of the Administrator with respect to any
matter pertaining to this Plan including without limitation the Employees
determined to be Participants, the benefits payable, and the construction or
interpretation of any provision thereof, shall be conclusive and binding upon
all interested persons.
SECTION 9. CLAIMS PROCEDURE
9.1 A Participant with an interest in this Plan shall have the right to
file a claim for benefits under this Plan and to appeal any denial of a claim
for benefits. Any request for a Plan benefit or to clarify the Participant's
rights to future benefits under the terms of this Plan shall be considered to be
a claim.
9.2 A claim for benefits will be considered as having been made when
submitted in writing by the Participant (or by such claimant's authorized
representative) to the Administrator. No particular form is required for the
claim, but the written claim must identify the name of the
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claimant and describe generally the benefit to which the claimant believes he is
entitled. The claim may be delivered personally during normal business hours or
mailed to the Administrator.
9.3 The Administrator will determine whether, or to what extent, the
claim may be allowed or denied under the terms of this Plan. If the claim is
wholly or partially denied, the claimant shall be so informed by written notice
within 90 days after the day the claim is submitted unless special circumstances
require an extension of time for processing the claim. If such an extension of
time for processing is required, written notice of the extension shall be
furnished to the claimant prior to the termination of the initial 90-day period.
Such extension may not exceed an additional 90 days from the end of the initial
90-day period. The extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the Administrator expects
to render the final decision. If written notice of denial of a claim (in whole
or in part) is not furnished within the initial 90-day period after the claim is
sent to the Administrator (or, if applicable, the extended 90-day period), the
claimant shall consider that his claim has been denied just as if he had
received actual notice of denial.
9.4 The notice informing the claimant that his claim has been wholly or
partially denied shall be written in a manner calculated to be understood by the
claimant and shall include:
(1) The specific reason(s) for the denial.
(2) Specific reference to pertinent Plan provisions on which the
denial is based.
(3) A description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary.
(4) Appropriate information as to the steps to be taken if the
participant or beneficiary wishes to submit his claim for
review.
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9.5 If the claim is wholly or partially denied, the claimant (or his
authorized representative) may file an appeal of the denied claim with the
Administrator requesting that the claim be reviewed. The Administrator shall
conduct a full and fair review of each appealed claim and its denial. Unless the
Administrator notifies the claimant that due to the nature of the benefit and
other attendant circumstances he is entitled to a greater period of time within
which to submit his request for review of a denied claim, the claimant shall
have 60 days after he (or his authorized representative) receives written notice
of denial of his claim within which such request must be submitted to the
Administrator.
9.6 The request for review of a denied claim must be made in writing.
In connection with making such request, the claimant or his authorized
representative may:
(1) Review pertinent documents.
(2) Submit issues and comments in writing.
9.7 The decision of the Administrator regarding the appeal shall be
promptly given to the claimant in writing and shall normally be given no later
than 60 days following the receipt of the request for review. However, if
special circumstances (for example, if the Administrator decides to hold a
hearing on the appeal) require a further extension of time for processing, the
decision shall be rendered as soon as possible, but no later than 120 days after
receipt of the request for review. However, if the Administrator holds regularly
scheduled meetings at least quarterly, a decision on review shall be made by no
later than the date of the meeting which immediately follows the Administrator's
receipt of a request for review, unless the request is filed within 30 days
preceding the date of such meeting. In such case, a decision may be made by no
later than the date of the second meeting following the Administrator's receipt
of the request for review. If special circumstances (for example, if the
Administrator decides to hold a
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hearing on the appeal) require a further extension of time for processing, the
decision shall be rendered as soon as possible, but no later than the third
meeting following the Administrator's receipt of the request for review. If
special circumstances require that the decision will be made beyond the initial
time for furnishing the decision, written notice of the extension shall be
furnished to the claimant (or his authorized representative) prior to the
commencement of the extension. The decision on review shall be in writing and
shall be furnished to the claimant or to his authorized representative within
the appropriate time for the decision. If a written decision on review is not
furnished within the appropriate time, the claim shall be deemed to have been
denied on appeal.
9.8 The Administrator may, in its sole discretion, decide to hold a
hearing if it determines that a hearing is necessary or appropriate in order to
make a full and fair review of the appealed claim.
9.9 The decision on review shall include specific reasons for the
decision, written in a manner calculated to be understood by the claimant, as
well as specific references to the pertinent Plan provisions on which the
decision is based.
9.10 A Participant must exhaust his rights to file a claim and to
request a review of the denial of his claim before bringing any civil action to
recover benefits due to him under the terms of this Plan, to enforce his rights
under the terms of this Plan, or to clarify his rights to future benefits under
the terms of this Plan.
9.11 The Administrator shall exercise its responsibility and authority
under this claims procedure as a fiduciary and, in such capacity, shall have the
discretionary authority and responsibility (1) to interpret and construe this
Plan and any rules or regulations under this Plan, (2) to determine the
eligibility of Employees to participate in this Plan, and the rights of
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Participants to receive benefits under this Plan, and (3) to make factual
determinations in connection with any of the foregoing.
SECTION 10. GENERAL PROVISIONS
10.1 Nothing in this Plan shall be deemed to give any person the right
to remain in the employ of the Corporation, its subsidiaries or affiliates or
affect the right of the Corporation to terminate any Participant's employment
with or without cause.
10.2 No right or interest of any person entitled to a benefit under
this Plan shall be subject to voluntary or involuntary alienation, assignment,
or transfer of any kind.
10.3 This Plan shall be construed and administered in accordance with
the laws of the State of North Carolina to the extent that such laws are not
preempted by Federal law.
SECTION 11. CHANGE OF CONTROL
11.1 In the event of a Change of Control, the Participant's benefits
under this Plan shall be determined by taking into account the rules of Section
11.2 through 11.5 (including Appendix I); provided, that, at the time of or in
anticipation of the Change of Control, or after the Change of Control if the
Incumbent Board constitutes a majority of the Board of Directors of the
Corporation, the Incumbent Board by vote of a majority of such board may
determine that any or all of the actions described in Section 11.5 (and Section
11.2 to the extent it refers to Section 11.5) are not required or appropriate in
its honest, good faith judgment to achieve the fair and equitable treatment of
some or all of the Participants, including but not limited to making the
determination that the immediate lump sum payment described in Section 11.5 will
be equal to the actuarial present value of such benefit payments based on the
mortality table applicable under
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the Retirement Plan and an assumed interest rate no greater than the interest
rate then used under the Retirement Plan to determine the amount of a lump sum
payment.
11.2 If, during the two year period following the effective date of a
Change in Control, the Corporation terminates the Participant's employment other
than for Cause or Disability, or the Participant terminates his employment for
Good Reason or if, during the thirty day period following the two year
anniversary of the effective date of a Change of Control, the Participant
terminates his employment for any reason, then the Participant's benefits under
this Plan shall be determined and paid (i) as provided in Sections 11.3 through
11.5 if the Participant has an Employment Protection Agreement with the
Corporation and (ii) as provided in Section 11.5 if the Participant does not
have an Employment Protection Agreement with the Corporation. The application of
the provisions of Sections 11.3, 11.4 and 11.5 are illustrated by the examples
in Appendix I, which shall be deemed to be a part of this Plan. If for any
reason benefits are not payable under this Section 11, this Section 11 shall in
no way apply to or restrict the payment of benefits otherwise provided for under
this Plan. For example, if following a Change in Control the Corporation
terminates the Participant's employment for Cause, then notwithstanding that the
Participant shall not have his benefits determined and paid under this Section
11, the Participant shall continue to be entitled to his benefits as otherwise
provided under this Plan.
11.3 For the purpose of determining the benefit under Section 5.1, the
benefit that would have been paid under the Retirement Plan (but for the
limitations of Sections 401(a)(17) and 415 of the Code) shall be determined by
taking into account (i) the amount of the Employee's lump sum payment under
Section 3(a) of the Employee's Employment Protection Agreement with the
Corporation, as provided in Section 11.4, and (ii) additional years of credited
service equal to
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the number ("multiplier") that is multiplied by the Employee's annual base
salary and annual bonus (both as defined in the Employee's Employment Protection
Agreement) to determine the amount of the payment under Section 3(a) of such
Employment Protection Agreement. (Such additional years of credited service
shall not, however, be taken into account for vesting purposes.) In addition,
for Participants with Employment Protection Agreements there shall be no
reduction for benefit commencement prior to age 65 and as early as age 55 on
the net benefit (after reduction for the payment under the Retirement Plan)
payable under this Plan.
11.4 The lump sum payment shall be taken into account by dividing the
amount of the lump sum payment by the multiplier and by treating the Employee as
having additional pensionable earnings, for the purpose of determining the
Participant's final-average pensionable earnings, equal to such amount for a
number of additional calendar years equal to the multiplier. Moreover, such
additional calendar years shall extend the number of calendar years taken into
account in determining final-average pensionable earnings.
11.5 The Participant shall receive an immediate lump sum payment that
is the actuarial present value of the Participant's benefits commencing as of
the Participant's earliest retirement date (age 55 or current age if older)
under this Plan. The actuarial present value shall be based on the mortality
table applicable under the Retirement Plan determined as of the date of the
Participant's termination of employment and based on an interest rate of 0.0
percent. Such lump sum payment shall be paid to the Participant no later than 30
days after the Participant's termination of employment.
11.6 In the event of a Change of Control, then with respect to any
matter involving or relating to a disputed benefit under this Plan, all
administrative decisions, determinations, and interpretations, administrative
rules, claims decisions and the like shall be made on behalf of the
Administrator only by a majority of the Incumbent Board, provided that the
Incumbent Board
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then constitutes a majority of the Board. If the Incumbent Board does not then
constitute a majority of the Board, then any such decisions, determinations,
interpretations and rules shall be made on behalf of the Administrator only by
an arbitration panel. The arbitration shall be binding and shall be conducted
pursuant to the Federal Arbitration Act before an independent arbitration panel
mutually agreed upon by the Participant and the Administrator. In the event the
parties are unable to agree upon a suitable independent arbitration panel,
arbitration shall be before the American Arbitration Association. The
arbitration panel shall consist of three members, one selected by the
Administrator, one selected by the Participant, and the third selected by the
first two arbitrators. The decisions made by a majority of the panel shall be
final and binding on the parties and may be entered and enforced in any court of
competent jurisdiction.
SECTION 12. COMMUTATION OF BENEFITS
If as a result of a change in the tax laws or as a result of any other
event any benefit payment (or the value thereof) hereunder becomes taxable to a
person (the payment of whose benefits hereunder have commenced) prior to the
time the benefit payment is actually received by such person, the Corporation
shall commute all remaining benefit payments into a single lump sum payment
equal to the Lump Sum Value of such remaining benefit payments. The amount of
such lump sum payment shall be determined and paid to such person as soon as
reasonably practicable.
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This Plan shall be effective as of October 18, 1996, which date shall
be referred to as the effective date of this Plan. This plan document has been
executed on behalf of the Corporation this 21st day of March, 2000.
MARTIN MARIETTA MATERIALS, INC.
By: /s/ Stephen P. Zelnak, Jr.
------------------------------------
Name
Chairman and Chief Executive Officer
------------------------------------
Title
By: /s/ Jonathan T. Stewart
------------------------------------
Name
Vice President
------------------------------------
Title
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MARTIN MARIETTA MATERIALS, INC.
SUPPLEMENTAL EXCESS RETIREMENT PLAN
APPENDIX I
EXAMPLE ONE. The application of Sections 11.3 and 11.4 is illustrated
by the following example, which assumes that the Participant has an Employment
Protection Agreement with the Corporation. Assume: the Employee's lump sum
payment under Section 3(a) of the Employee's Employment Protection Agreement is
twice the Employee's annual base salary and annual bonus. The multiplier,
therefore, is two (2). Assume: the Employee's lump sum payment under Section
3(a) of the Employment Protection Agreement is $500,000. The Employee shall be
entitled to two (2) additional calendar years of pensionable earnings of
$250,000 each. Assume: the Retirement Plan provides that the Employee's
final-average pensionable earnings thereunder is the average of the annual
pensionable earnings for the five (5) consecutive calendar years selected from
the most recent ten (10) consecutive calendar years that would provide the
highest average. Assume: without regard to this Plan the Participant's
pensionable earnings under the Retirement Plan for the ten (10) most recent
consecutive calendar years are:
Year 1 = $190,000
Year 2 = $195,000
Year 3 = $200,000
Year 4 = $195,000
Year 5 = $210,000
Year 6 = $220,000
Year 7 = $220,000
Year 8 = $250,000
Year 9 = $250,000
Year 10 = $240,000
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Under the Retirement Plan, the Participant's final-average pensionable earnings
would be the average of his pensionable earnings for years 6 through 10, or
$236,000. For the purpose of determining the benefit under Section 5.1 of this
Plan, the benefit that would have been paid under the Retirement Plan (but for
the limitations of Sections 401(a)(17) and 415 of the Code) shall be determined
by taking into account pensionable earnings of $250,000 for each of two
additional years, Year 11 and Year 12, without dropping Year 1 and Year 2, with
the result that Participant's final-average pensionable earnings would be the
average of his pensionable earnings for Years 8 through 12, or $248,000 (the
highest 5 consecutive calendar years out of the most recent 12 years). Assume:
without regard to this Plan the Participant would have 19 years of credited
service under the Retirement Plan. For the purpose of determining the benefit
under Section 5.1 of this Plan, the benefit that would have been paid under the
Retirement Plan (but for the limitations of Sections 401(a)(17) and 415 of the
Code) shall be determined by treating the Participant as having 21 years of
credited service (19 years plus 2 years (from the multiplier)). Assume that the
annual retirement benefit provided under the Retirement Plan is 0.0175
multiplied by the Participant's final-average pensionable earnings multiplied by
the Participant's years of credited service. Under the Retirement Plan the
Participant's annual benefit disregarding Sections 401(a)(17) and 415 of the
Code would be: $236,000 X 19 X 0.0175 = $78,470. Assume: the Participant's
annual benefit under the Retirement Plan taking into account the limitations of
Sections 401(a)(17) and 415 of the Code would be: $195,000 X 19 X 0.0175 =
$64,837.50. Then, the Participant's annual benefit under this Plan would be:
($248,000 X 21 X 0.0175) or $91,140 minus $64,837.50 = $26,302.50 commencing as
of the Participant's earliest retirement date (age 55); note that no reduction
is applied on the net benefit ($26,302.50) for commencement as early as age 55.
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EXAMPLE TWO. The application of Section 11.5 is illustrated by the
following example. Assume that the Participant in Example One terminated
employment at age 49. Assume: under the mortality table then in effect under the
Retirement Plan, the actuarial present value factor at age 49 of annual benefits
commencing at age 55 is 26.5. The amount of the Participant's lump sum payment
at age 49 under this Plan would be 26.5 X $26,302.50 = $697,016.25 (unless the
Incumbent Board votes to use an interest rate higher than 0.0 percent to
determine the actuarial present value of such $26,302.50 benefit payments).
EXAMPLE THREE. The application of Section 11.5 is further illustrated
by the following example. Assume the same facts as in Example One and Example
Two, except that the Participant did not have an Employment Protection
Agreement. Under the Retirement Plan the Participant's annual benefit commencing
at age 65 and disregarding Sections 401(a)(17) and 415 of the Code would be
$236,000 x 19 x 0.0175 = $78,470.00. The annual benefit commencing at age 65
under the Retirement Plan taking into account the limitations of Sections
401(a)(17) and 415 of the Code would be $195,000 x 19 x 0.0175 = $64,837.50.
Assume that the reduction factor for benefits commencing at age 55 is 0.64. Then
the annual benefit commencing at age 55 under this Plan would be ($78,470.00 -
$64,837.50) x 0.64 = $8,724.80 and the amount of the Participant's lump sum
payment at age 49 under this Plan would be 26.5 x $8,724.80 = $231,207.20
(unless the Incumbent Board votes to use an interest rate higher than 0.0
percent to determine the actuarial present value of such $8,724.80 benefit
payments).
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