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MARTIN MARIETTA MATERIALS, INC.
AMENDED AND RESTATED
STOCK-BASED AWARD PLAN
ADOPTED: MAY 8, 1998
AS AMENDED MAY 1998
AND AUGUST 2000
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS
COVERING SECURITIES THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
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SECTION 1. ESTABLISHMENT AND PURPOSE
The Martin Marietta Materials, Inc. Amended and Restated Stock-Based
Award Plan (the "Plan") was adopted by the shareholders of the Corporation in a
manner that complies with Section 162(m) at the shareholders meeting held on May
8, 1998, and subsequently amended and restated by the Board of Directors at its
meeting on May 8, 1998 and again on August 17, 2000.
The purpose of this Plan is to benefit the Corporation's shareholders
by encouraging high levels of performance by individuals who are key to the
success of the Corporation and to enable the Corporation to attract, motivate,
and retain talented and experienced individuals essential to its continued
success. This is to be accomplished by providing such employees and directors an
opportunity to obtain or increase their proprietary interest in the
Corporation's performance and by providing such employees and directors with
additional incentives to remain with the Corporation.
SECTION 2. DEFINITIONS
The following terms, as used herein, shall have the meaning specified:
"Affiliate" of a person means any entity directly or indirectly
controlling, controlled by or under direct or indirect common control
with such person.
"Award" means an award granted pursuant to Section 4 hereof.
"Award Agreement" means an agreement described in Section 7 hereof
entered into between the Corporation and a Participant, setting forth
the terms and conditions applicable to the Award granted to the
Participant.
"Board of Directors" means the Board of Directors of the Corporation as
it may be comprised from time to time.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means a committee composed of members of, and designated
by, the Board of Directors and consisting solely of persons who are
both (i) "non-employee directors" within the meaning of Rule 16b-3, and
(ii) "outside directors" within the meaning of Section 162(m), as Rule
16b-3 and Section 162(m) may be amended from time to time, which
committee shall at all times comprise at least the minimum number of
such persons necessary to comply with both Rule 16b-3 and Section 162.
"Corporation" means Martin Marietta Materials, Inc.
"Covered Employee" means a covered employee within the meaning of
Section 162(m) or the Treasury Regulations promulgated thereunder.
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"Eligible Director" means each director of the Corporation who is not
an employee of the Corporation or any Subsidiary.
"Employee" means officers and other key employees of the Corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Fair Market Value" means the closing price of the relevant security as
reported on the composite tape of New York Stock Exchange issues (or
such other reporting system as shall be selected by the Committee) on
the relevant date, or if no sale of the security is reported for such
date, the next following day for which there is a reported sale. The
Committee shall determine the Fair Market Value of any security that is
not publicly traded, using such criteria as it shall determine, in its
sole direction, to be appropriate for such valuation.
"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.
"Insider" means any person who is subject to Section 16 of the Exchange
Act.
"Participant" means an Employee or Eligible Director who has been
granted and holds an unexercised or unpaid Award pursuant to this Plan.
"Rule 16b-3" means Rule 16b-3 promulgated by the Securities and
Exchange Commission under Section 16 or any successor rule or
regulation as amended from time to time.
"Section 16" means Section 16 of the Exchange Act or any successor
statute and the rules promulgated thereunder by the Securities and
Exchange Commission, as they may be amended from time to time.
"Section 162(m)" means Section 162(m) of the Code or any successor
statute and the Treasury Regulations promulgated thereunder, as they
may be amended from time to time.
"Section 422" means Section 422 of the Code or any successor statute
and the Treasury Regulations promulgated thereunder, as they may be
amended from time to time.
"Stock" means shares of Common Stock of the Corporation, par value $.01
per share.
"Subsidiary" means any entity directly or indirectly controlled by the
Corporation.
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SECTION 3. ELIGIBILITY
Awards may be granted (a) to exempt salaried Employees of the
Corporation or any Subsidiary who are designated from time to time by the
Committee or (b) to Eligible Directors.
No individual who beneficially owns Stock possessing five percent (5%)
or more of the combined voting power of all classes of stock of the Corporation
shall be eligible to participate in the Plan.
SECTION 4. AWARDS
The Committee may grant any of the following types of Awards, either
singly, in tandem or in combination with other Awards, as the Committee may in
its sole discretion determine:
(a) Non-Qualified Stock Options. A Non-Qualified Stock Option is a
right to purchase a specified number of shares of Stock during
such specified time as the Committee may determine at a price
not less than 100% of the Fair Market Value of the Stock on
the date the option is granted.
(i) The purchase price of the Stock subject to the option
may be paid in cash. At the discretion of the
Committee, the purchase price may also be paid by the
tender of Stock, or through a combination of Stock
and cash, or through such other means as the
Committee determines are consistent with the Plan's
purpose and applicable law. No fractional shares of
Stock will be issued or accepted.
(ii) Without limiting the foregoing, to the extent
permitted by law (including relevant state law), the
Committee may agree to accept, as full or partial
payment of the purchase price of Stock issued upon
exercise of options, (A) a promissory note of the
optionee evidencing the optionee's obligation to make
future cash payments to the Corporation, or (B) any
other form of payment deemed acceptable to the
Committee. Promissory notes referred to in clause (A)
above shall be payable as determined by the Committee
(but in no event later than five years after the date
thereof), shall be secured by a pledge of shares of
Stock purchased, and shall bear interest at a rate
established by the Committee.
(b) Incentive Stock Options. An Incentive Stock Option is an Award
in the form of an option to purchase Stock that complies with
the requirements of Code Section 422 or any successor section.
(i) To the extent that the aggregate Fair Market Value
(determined at the time of the grant of the Award) of
the shares subject to Incentive Stock Options which
are exercisable by one person for the first time
during a particular calendar year exceeds $100,000,
such excess shall be treated as Non-Qualified Stock
Options. For purposes of the preceding sentence, the
term
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"Incentive Stock Option" shall mean an option to
purchase Stock that is granted pursuant to this
Section 4(b) or pursuant to any other plan of the
Corporation, which option is intended to comply with
Section 422 of the Code.
(ii) No Incentive Stock Option may be granted under this
Plan after the tenth anniversary of the date this
Plan is adopted or the date this Plan is approved by
the shareholders, whichever is earlier, or be
exercisable more than ten years after the date the
Award is made.
(iii) The exercise price of any Incentive Stock Option
shall be no less than Fair Market Value of the Stock
subject to the option on the date the Award is made.
(iv) The Committee may provide that the option price under
an Incentive Stock Option may be paid by one or more
of the methods available for paying the option price
of a Non-Qualified Stock Option.
(c) Restricted Stock. Restricted Stock is Stock of the Corporation
that is issued to a Participant and is subject to restrictions
on transfer and/or such other restrictions or incidents of
ownership as the Committee may determine.
(d) Other Stock-Based Incentive Awards. The Committee may from
time to time grant Awards under this Plan that provide the
Participant with the right to purchase Stock of the
Corporation or provide incentive Awards that are valued by
reference to the Fair Market Value of Stock of the Corporation
(including, but not limited to phantom securities or dividend
equivalents). Such Awards shall be in a form determined by the
Committee (and may include terms contingent upon a change of
control of the Corporation), provided that such Awards shall
not be inconsistent with the terms and purposes of the Plan.
SECTION 5. SHARES OF STOCK AND OTHER STOCK-BASED AWARDS AVAILABLE UNDER PLAN
(a) Subject to the adjustment provisions of Section 10 hereof, (i)
the aggregate number of shares with respect to which Awards
payable in securities may be granted under the Plan shall be
no more than 5,000,000; (ii) the aggregate number of shares
with respect to which Awards subject to Restricted Stock under
the Plan shall be no more than 1,000,000; and (iii) the
aggregate number of shares with respect to which Non-Qualified
Stock Options or Incentive Stock Options may be granted to any
individual Participant shall be no more than 500,000 in any
one year. Awards that are canceled or repriced shall be
counted against the 500,000 share per year limit to the extent
required by Section 162(m) of the Code.
(b) Any unexercised or undistributed portion of any terminated or
forfeited Award (other than an Award terminated or forfeited
by reason of the exercise of any Award granted in tandem
therewith) shall be available for further Awards in addition
to those available under Section 5(a) hereof.
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(c) For the purposes of computing the aggregate number of shares
with respect to which awards payable in securities may be
granted under the Plan, the following rules shall apply:
(i) except as provided in (v) of this Section, each
option shall be deemed to be the equivalent of the
maximum number of shares that may be issued upon
exercise of the particular option;
(ii) except as provided in (v) of this Section, each other
stock-based Award shall be deemed to be equal to the
number of shares to which it relates;
(iii) except as provided in (v) of this Section, where the
number of shares available under the Award is
variable on the date it is granted, the number of
shares shall be deemed to be the maximum number of
shares that could be received under that particular
Award.
(iv) where one or more types of Awards (both of which are
payable in Stock or another security) are granted in
tandem with each other, such that the exercise of one
type of Award with respect to a number of shares
cancels an equal number of shares of the other, each
joint Award shall be deemed to be the equivalent of
the number of shares under the other; and
(v) each share awarded or deemed to be awarded under the
preceding subsections shall be treated as shares of
Stock, even if the Award is for a security other than
Stock.
Additional rules for determining the aggregate number of
shares with respect to which awards payable in securities may
be granted under the Plan may be made by the Committee, as it
deems necessary or appropriate.
(d) No Stock may be issued pursuant to an Award under the Plan
except to the extent that, prior to such issuance, the
Corporation shall have acquired shares from its shareholders
sufficient to fulfill the requirements of the Plan with
respect to such issuance.
SECTION 6. DIRECTORS' OPTIONS
(a) Annual Options. Each Eligible Director shall be granted a
Non-Qualified Stock Option to acquire 1,500 shares of Stock
annually at the same meeting that options are normally granted
to employees of the Corporation, or in such other amount or at
such other time as may be determined by the Board of
Directors.
(b) Terms and Conditions. Any Award granted under this Section 6
shall be subject to the following terms and conditions:
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(i) The exercise price of any Non-Qualified Stock Option
granted under Section 6 shall be 100% of the Fair
Market Value of the Stock on the date the Award is
made.
(ii) Unless otherwise provided by this Plan, a
Non-Qualified Stock Option granted under Section 6
shall become exercisable as provided in the Award
Agrement.
SECTION 7. AWARD AGREEMENTS
Each Award under this Plan shall be evidenced by an Award Agreement
setting forth the number of shares of Stock, or units subject to the Award and
such other terms and conditions applicable to the Award as determined by the
Committee.
(a) Award Agreements shall include the following terms:
(i) Termination of Employment or Service as Director: A
provision describing the treatment of an Award in the
event of the retirement, disability, death or other
termination of a Participant's employment with the
Corporation or Subsidiary or service as a Director,
including but not limited to terms relating to the
vesting, time for exercise, forfeiture or
cancellation of an Award in such circumstances.
(ii) Rights as Shareholder: A provision that a Participant
shall have no rights as a shareholder with respect to
any securities covered by an Award until the date the
Participant becomes the holder of record. Except as
provided in Section 10 hereof, no adjustment shall be
made for dividends or other rights, unless the Award
Agreement specifically requires such adjustment, in
which case, grants of dividend equivalents or similar
rights shall not be considered to be a grant of any
other shareholder right.
(iii) Withholding: A provision requiring the withholding of
applicable taxes required by law from all amounts
paid in satisfaction of an Award. In the case of an
Award paid in cash, the withholding obligation shall
be satisfied by withholding the applicable amount and
paying the net amount in cash to the Participant. In
the case of Awards paid in shares of Stock or other
securities of the Corporation, a Participant may
satisfy the withholding obligation by paying the
amount of any taxes in cash or, with the approval of
the Committee, shares of Stock may be deducted from
the payment to satisfy the obligation in full or in
part. The number of shares to be deducted shall be
determined by reference to the Fair Market Value of
such shares on the date the Award is exercised.
(iv) Execution: A provision stating that no Award is
enforceable until the Award Agreement or a receipt
has been signed by the Participant and the Chairman
or the Chief Executive Officer of the Corporation (or
his delegate). By executing the Award Agreement or
receipt, a Participant shall be deemed to
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have accepted and consented to any action taken under
the Plan by the Committee, the Board of Directors or
their delegates.
(v) Exercise and Payment: The permitted methods of
exercising and paying the exercise price with respect
to the Award.
(b) Award Agreements may include the following terms:
(i) Replacement, Substitution and Reloading: Any
provisions (A) permitting the surrender of
outstanding Awards or securities held by the
Participant in order to exercise or realize rights
under other Awards, or in exchange for the grant of
new Awards under similar or different terms
(including the grant of reload options), or, (B)
requiring holders of Awards to surrender outstanding
Awards as a condition precedent to the grant of new
Awards under the Plan.
(ii) Other Terms: Such other terms as are necessary and
appropriate to effect an Award to the Participant
including but not limited to the term of the Award,
vesting provisions, any requirements for continued
employment with the Corporation or any Subsidiary,
any other restrictions or conditions (including
performance requirements) on the Award and the method
by which restrictions or conditions lapse, the effect
on the Award of a change in control, the price and
the amount or value of Awards.
SECTION 8. AMENDMENT AND TERMINATION
The Board of Directors may at any time amend, suspend or discontinue
the Plan. The Committee may at any time alter or amend any or all Award
Agreements under the Plan to the extent permitted by law. However, no such
action may, without approval of the shareholders of the Corporation, be
effective if shareholder approval would be required to keep the Plan and the
Awards made thereunder in compliance with Sections 162(m) and 422.
SECTION 9. ADMINISTRATION
(a) The Plan and all Awards granted pursuant thereto shall be
administered by the Committee. 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.
(b) The Committee shall periodically determine the Participants in
the Plan, except with respect to Eligible Directors, and the
nature, amount, pricing, timing, and other terms of Awards to
be made to such individuals.
(c) The Committee shall have the power to interpret and administer
the Plan. All questions of interpretation with respect to the
Plan, the terms of any Award Agreements and, except with
respect to Eligible Directors, the number of shares of
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Stock, or units granted, shall be determined by the Committee
and its determination shall be final and conclusive upon all
parties in interest. In the event of any conflict between an
Award Agreement and this Plan, the terms of this Plan shall
govern.
(d) It is the intent of the Corporation that this Plan and Awards
hereunder satisfy and be interpreted in a manner, that, in the
case of Participants who are or may be Insiders, satisfies the
applicable requirements of Rule 16b-3, so that such persons
will be entitled to the benefits of Rule 16b-3 or other
exemptive rules under Section 16 and will not be subjected to
avoidable liability thereunder. If any provision of this Plan
or of any Award would otherwise frustrate or conflict with the
intent expressed in this Section 9(d), that provision to the
extent possible shall be interpreted and deemed amended so as
to avoid such conflict. To the extent of any remaining
irreconcilable conflict with such intent, the provision shall
be deemed void as applicable to Insiders to the extent
permitted by law and deemed advisable by the Committee.
(e) It is the intent of the Corporation that this Plan and Awards
hereunder satisfy and be interpreted in a manner, that, in the
case of Participants who are or may be Covered Employees,
satisfies the applicable requirements of Section 162(m), so
that the Corporation will be entitled, to the extent possible,
to deduct compensation paid under the Plan and otherwise to
such Covered Employees and will not be subjected to avoidable
loss of deductions thereunder. If any provision of this Plan
or of any Award would otherwise frustrate or conflict with the
intent expressed in this Section 9(e), that provision to the
extent possible shall be interpreted and deemed amended so as
to avoid such conflict. To the extent of any remaining
irreconcilable conflict with such intent, the provision shall
be deemed void as applicable to Covered Employees to the
extent permitted by law and deemed advisable by the Committee.
(f) The Committee may delegate to the officers or employees of the
Corporation the authority to execute and deliver such
instruments and documents, to do all such acts and things, and
to take all such other steps deemed necessary, advisable or
convenient for the effective administration of the Plan in
accordance with its terms and purpose, except that the
Committee may not delegate any discretionary authority with
respect to substantive decisions or functions regarding the
Plan or Awards thereunder as these relate to Insiders or
Covered Employees, including but not limited to decisions
regarding the timing, eligibility, pricing, amount or other
material term of such Awards.
SECTION 10. ADJUSTMENT PROVISIONS
(a) In the event of any change in the outstanding shares of Stock
by reason of a stock dividend or split, recapitalization,
merger or consolidation, reorganization, combination or
exchange of shares or other similar corporate change, the
number of shares of Stock (or other securities) then remaining
subject to this Plan, and the maximum number of shares that
may be issued to anyone pursuant to this Plan,
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including those that are then covered by outstanding Awards,
shall (i) in the event of an increase in the number of
outstanding shares, be proportionately increased and the price
for each share then covered by an outstanding Award shall be
proportionately reduced, and (ii) in the event of a reduction
in the number of outstanding shares, be proportionately
reduced and the price for each share then covered by an
outstanding Award, shall be proportionately increased.
(b) The Committee shall make any further adjustments as it deems
necessary to ensure equitable treatment of any holder of an
Award as the result of any transaction affecting the
securities subject to the Plan not described in (a), or as is
required or authorized under the terms of any applicable Award
Agreement.
SECTION 11. CHANGE IN CONTROL
(a) Subject to Sections 5, 8 and 10, in the event of a change in
control of the Corporation, in addition to any action required
or authorized by the terms of any Award Agreement, all time
periods for purposes of vesting in, or realizing gain from,
any and all outstanding Awards made pursuant to this Plan will
automatically accelerate.
(b) For the purposes of this Section, a "Change in Control" shall
mean on or after the effective date of the Plan,
(i) The acquisition 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 fully diluted shares of Stock,
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: (1) any
acquisition by the Corporation or any "affiliate" of
the Corporation, within the meaning of 17 C.F.R.ss.
230.405 (an "Affiliate"), (2) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Corporation or any Affiliate of the
Corporation, or (3) 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
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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 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, (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.
SECTION 12. UNFUNDED PLAN
The Plan shall be unfunded. Neither the Corporation nor the Board of
Directors shall be required to segregate any assets that may at any time be
represented by Awards made pursuant to the Plan. Neither the Corporation, the
Committee, nor the Board of Directors shall be deemed to be a trustee of any
amounts to be paid under the Plan.
SECTION 13. LIMITS OF LIABILITY
(a) Any liability of the Corporation to any Participant with
respect to an Award shall be based solely upon contractual
obligations created by the Plan and the Award Agreement.
(b) Neither the Corporation nor any member of the Board of
Directors or of the Committee, nor any other person
participating in any determination of any question under the
Plan, or in the interpretation, administration or application
of the Plan,
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