1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
Commission File Number 1-12744
MARTIN MARIETTA MATERIALS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
North Carolina 56-1848578
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
2710 Wycliff Road, Raleigh, NC 27607-3033
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 919-781-4550
Former name: None
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changes since last report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Class Outstanding as of April 30, 1998
- --------------------------------------------------------------------------------
Common Stock, $.01 par value 46,474,007
Page 1 of 18
Exhibit Index is on Page 18
2
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
INDEX
Page
----
Part I. Financial Information:
Item 1. Financial Statements.
Condensed Consolidated Balance Sheets -
March 31, 1998 and December 31, 1997 3
Condensed Consolidated Statements of
Earnings - Three Months Ended March 31, 1998 and 1997 4
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 10
Part II. Other Information:
Item 1. Legal Proceedings. 15
Item 4. Submission of Matters to a Vote of Security Holders. 15
Item 5. Other Information. 15
Item 6. Exhibits and Reports on Form 8-K. 16
Signatures 17
Exhibit Index 18
Page 2 of 18
3
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1998 1997
----------- -----------
(Thousands of Dollars)
ASSETS
Current assets:
Cash and cash equivalents $ 4,030 $ 18,661
Accounts receivable, net 130,038 147,432
Inventories, net 148,425 132,583
Deferred income tax benefit 17,098 16,873
Other current assets 7,206 6,463
----------- -----------
Total Current Assets 306,797 322,012
----------- -----------
Property, plant and equipment 1,289,279 1,242,677
Allowances for depreciation, depletion and
amortization (669,668) (651,257)
----------- -----------
Net property, plant and equipment 619,611 591,420
Cost in excess of net assets acquired 147,939 148,481
Other intangibles 27,302 26,415
Other noncurrent assets 20,070 17,385
----------- -----------
Total Assets $ 1,121,719 $ 1,105,713
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 38,936 $ 49,599
Accrued salaries, benefits and payroll taxes 19,009 19,742
Accrued insurance and other taxes 19,064 16,440
Income taxes -- 4,691
Current maturities of long-term debt 1,538 1,431
Loans payable 30,000 --
Other current liabilities 14,570 16,332
----------- -----------
Total Current Liabilities 123,117 108,235
Long-term debt 311,342 310,675
Pension, postretirement, and postemployment benefits 64,527 63,070
Noncurrent deferred income taxes 50,707 50,008
Other noncurrent liabilities 12,922 11,889
----------- -----------
Total Liabilities 562,615 543,877
----------- -----------
Shareholders' equity:
Common stock, par value $.01 per share 462 462
Additional paid-in capital 335,944 335,766
Retained earnings 222,698 225,608
----------- -----------
Total Shareholders' Equity 559,104 561,836
----------- -----------
Total Liabilities and Shareholders' Equity $ 1,121,719 $ 1,105,713
=========== ===========
See accompanying notes to condensed consolidated financial statements.
Page 3 of 18
4
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended
March 31,
----------------------------------
1998 1997
------------ ------------
(Thousands of Dollars, Except Per Share Data)
Net sales $ 186,535 $ 158,163
Cost of sales 157,056 128,019
------------ ------------
Gross Profit 29,479 30,144
Selling, general and administrative expense 19,301 15,299
Research and development 746 492
------------ ------------
Earnings from Operations 9,432 14,353
Interest expense (5,310) (2,201)
Other income and expenses, net (82) 1,469
------------ ------------
Earnings before Taxes on Income 4,040 13,621
Taxes on income 1,404 4,714
------------
Net Earnings $ 2,636 $ 8,907
============ ============
Net earnings per share -Basic $ 0.06 $ 0.19
-Diluted $ 0.06 $ 0.19
Average number of common shares outstanding
-Basic 46,215,439 46,079,530
-Diluted 46,409,450 46,154,503
See accompanying notes to condensed consolidated financial statements.
Page 4 of 18
5
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
--------------------------
1998 1997
-------- --------
(Thousands of Dollars)
Operating activities:
Net earnings $ 2,636 $ 8,907
Adjustments to reconcile earnings to cash provided by operating activities:
Depreciation, depletion and amortization 22,644 16,334
Other items, net (211) 175
Changes in operating assets and liabilities:
Accounts receivable 17,394 916
Inventories (15,085) (3,376)
Accounts payable (10,662) (6,742)
Other assets and liabilities, net (3,830) 1,138
-------- --------
Net cash provided by operating activities 12,886 17,352
-------- --------
Investing activities:
Additions to property, plant and equipment (16,740) (14,849)
Acquisitions, net (37,715) (9,159)
Transactions with Lockheed Martin Corporation -- 23,768
Other investing activities, net 2,533 1,216
-------- --------
Net cash (used for) provided by investing activities (51,922) 976
-------- --------
Financing activities:
Repayments of long-term debt, net (227) (114)
Dividends (5,546) (5,530)
Loans payable 30,000 --
Issuance of Common Stock 178 --
-------- --------
Net cash provided by (used for) financing activities 24,405 (5,644)
-------- --------
Net (decrease) increase in cash (14,631) 12,684
Cash balance (book overdraft), beginning of period 18,661 (4,260)
-------- --------
Cash balance, end of period $ 4,030 $ 8,424
======== ========
See accompanying notes to condensed consolidated financial statements.
Page 5 of 18
6
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited condensed consolidated financial
statements of Martin Marietta Materials, Inc. (the "Corporation")
have been prepared in accordance with generally accepted
accounting principles for interim financial information and with
the instructions to the Quarterly Report on Form 10-Q and to
Article 10 of Regulation S-X. The Corporation has continued to
follow the accounting policies set forth in the audited
consolidated financial statements and related notes thereto
included in the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1997, filed with the Securities and
Exchange Commission on March 30, 1998. In the opinion of
management, the interim financial information provided herein
reflects all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of the results of
operations for the interim periods. The results of operations for
the three months ended March 31, 1998, are not necessarily
indicative of the results to be expected for the full year.
2. Acquisition of American Aggregates Corporation
On May 28, 1997, the Corporation purchased all of the outstanding
common stock of American Aggregates Corporation and subsidiary
("American Aggregates") along with certain other assets from
American Aggregates' former parent, CSR America, Inc. The
operating results of the acquired business have been included
with those of the Corporation since that date. This business
combination is being accounted for under the purchase method of
accounting.
The purchase price consisted of approximately $242 million in
cash plus certain assumed liabilities. As of March 31, 1998,
approximately $104 million in goodwill has been recognized by the
Corporation after recording approximately $3 million in other
intangibles (representing the estimated fair market value of
certain assets) and other purchase adjustments necessary to
allocate the purchase price to the value of the assets acquired
and liabilities assumed. Goodwill is being amortized over a
30-year period and other intangibles are being amortized over
periods not exceeding 14 years.
The presentation of certain pro forma financial information for
the three months ended March 31, 1998, is not required for this
business combination since the transaction is reflected in the
Corporation's balance sheet at March 31, 1998, and in its results
of operations for the three-month period then ended. However, for
comparative purposes, the following unaudited pro forma summary
financial information presents the historical results of
operations of the Corporation and the American Aggregates
business for the three months ended March 31, 1997, with pro
forma adjustments as if the acquisition had been consummated as
of the beginning of the period presented. The pro forma
information is based upon certain estimates and assumptions that
management of the Corporation believes are reasonable in the
circumstances. The unaudited pro forma information presented on
the following page is not necessarily indicative of what results
of operations actually would have been if the acquisition had
occurred on the date indicated. Moreover, they are not
necessarily indicative of future results.
Page 6 of 18
7
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
2. Acquisition of American Aggregates Corporation (continued)
Pro Forma Information (Unaudited)
Three Months Ended
March 31, 1997
---------------------------------
(Dollars in Thousands, Except Per Share Data)
Net sales $173,901
Net earnings $ 4,039
Net earnings per share $ 0.09
3. Inventories
March 31, December 31,
1998 1997
--------- ---------
(Dollars in Thousands)
Finished products $ 122,388 $ 108,707
Product in process and raw materials 10,332 7,886
Supplies and expendable parts 23,500 23,161
--------- ---------
156,220 139,754
Less allowances (7,795) (7,171)
--------- ---------
Total $ 148,425 $ 132,583
========= =========
4. Long-Term Debt
March 31, December 31,
1998 1997
-------- --------
(Dollars in Thousands)
6.9% Notes, due 2007 $124,949 $124,948
7% Debentures, due 2025 124,197 124,195
Commercial paper, interest rates
approximating 5.65% 60,000 60,000
Acquisition notes, interest rates
ranging from 5% to 10% 2,318 1,337
Other notes 1,416 1,626
-------- --------
312,880 312,106
Less current maturities 1,538 1,431
-------- --------
Total $311,342 $310,675
======== ========
Page 7 of 18
8
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
4. Long-Term Debt (continued)
No borrowings were outstanding under either of the Corporation's
revolving credit agreements at March 31, 1998. However, these
agreements support commercial paper borrowings of $90 million
outstanding at March 31, 1998, of which $60 million has been
classified as long-term debt in the Corporation's consolidated
balance sheet based on management's ability and intention to
maintain this debt outstanding for at least one year. At May 1,
1998, $110 million remained outstanding under the Corporation's
commercial borrowing obligations. See the "Liquidity and Capital
Resources" discussion contained in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" on
page 12 of this Form 10-Q.
The Corporation's interest payments were approximately $5.4
million in 1998 and $0.1 million in 1997 for the three months
ended March 31.
5. Income Taxes
The Corporation accounts for income taxes as prescribed in
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes." Deferred income tax assets and liabilities on
the consolidated balance sheet reflect the net of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used
for income tax purposes.
The Corporation's effective income tax rate for the first three
months was 34.8% in 1998 and 34.6% in 1997. The effective rate
for the first quarter of 1998 was slightly lower than the current
federal corporate income tax rate of 35% due to the effect of
several offsetting factors. The Corporation's effective tax rate
reflects the effect of state income taxes and the impact of
differences in book and tax accounting arising from the net
permanent benefits associated with the depletion allowances for
mineral reserves, amortization of certain goodwill balances,
foreign operating earnings, and earnings from nonconsolidated
investments.
The Corporation's income tax payments were approximately $5.9
million in 1998 and $7.6 million in 1997, for the three months
ended March 31.
6. Contingencies
In the opinion of management and counsel, it is unlikely that the
outcome of litigation and other proceedings, including those
pertaining to environmental matters, relating to the Corporation
and its subsidiaries, will have a material adverse effect on the
results of the Corporation's operations or its financial
position.
Page 8 of 18
9
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
7. Other Matters
As of January 1, 1998, the Corporation adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" (the "SFAS 130"). The SFAS 130 requires all non-owner
changes in equity that are excluded from net earnings under
existing Financial Accounting Standards Board standards be
included as comprehensive income. The Corporation presently does
not have any transactions that directly effect equity other than
those transactions with owners in their capacity as owners.
Therefore, the provisions of the SFAS 130 are not applicable.
The Corporation plans to adopt the provisions of the Statement of
Financial Accounting Standards No. 131, "Disclosure about
Segments of an Enterprise and Related Information" and the
Statement of Financial Accounting Standards No. 132, "Employers'
Disclosure about Pensions and Other Postretirement Benefits" in
its annual reporting on Form 10-K for the year ended December 31,
1998. The impact of the adoption of these accounting standards on
the Corporation's financial reporting and related disclosures is
not expected to be material.
In February 1994, the Corporation was authorized by its
shareholders and the Board of Directors to repurchase up to
2,000,000 shares of the Corporation's Common Stock for issuance
under the Corporation's Amended Omnibus Securities Award Plan. On
May 3, 1994, the Board of Directors authorized the repurchase of
an additional 500,000 shares for general corporate purposes. As
of the date of this quarterly report, there have been 68,200
shares of Common Stock repurchased by the Corporation under these
authorizations.
Page 9 of 18
10
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter Ended March 31, 1998 and 1997
OVERVIEW Martin Marietta Materials, Inc., (the "Corporation") operates in two
principal business segments: aggregates products and magnesia-based products.
The Corporation's sales and earnings are predominately derived from its
aggregates segment, which processes and sells granite, sandstone, limestone, and
other aggregates products from a network of more than 250 quarries and
distribution facilities in 20 states in the southeastern, midwestern and central
regions of the United States and in the Bahamas and Canada. The division's
products are used primarily by commercial customers principally in domestic
construction of highways and other infrastructure projects and for commercial
and residential buildings. The magnesia-based products segment produces
refractory materials and dolomitic lime used in domestic and foreign basic steel
production and produces chemicals products used in industrial, agricultural and
environmental applications. The magnesia-based products segment derives a major
portion of its sales and earnings from the products used in the steel industry.
RESULTS OF OPERATIONS Consolidated net sales for the quarter were $186.5
million, an 18% increase over 1997 first quarter sales of $158.2 million.
Consolidated earnings from operations were $9.4 million in the first three
months of 1998 compared with $14.4 million in the first three months of 1997.
Consolidated net earnings for the quarter were $2.6 million, or $0.06 per share
(diluted), a decrease of $6.3 million from 1997 first quarter net earnings of
$8.9 million, or $0.19 per share (diluted). The increase in net sales reflects
the impact of the nine acquisitions made during 1997, while earnings were
reduced by the seasonal weather patterns of the newly acquired operations in the
Midwestern and North Central regions of the United States.
Sales for the Aggregates division increased 22% to $151.7 million
for the first quarter of 1998, compared with the year-earlier period. This
increase reflects the inclusion of the nine acquisitions completed during 1997,
together with a 5.5% increase in the division's average net selling price at
heritage locations, when compared to the same period in 1997. The division's
operating profits were $5.8 million for the period compared to the prior year's
first quarter earnings from operations of $11.8 million. First quarter earnings
were negatively impacted by the higher level of exposure to cold weather
climates as a result of the second quarter 1997 acquisition of American
Aggregates, as well as several smaller acquisitions also completed during 1997.
These operations which are concentrated principally in the Midwest, generally
experience more severe winter weather conditions than the division's operations
in the Southeast. Consequently, these businesses typically operate at very low
levels in the first quarter, consistent with adverse weather patterns, and
accordingly incur losses in the first quarter. Generally they operate at a high
level for the remainder of the year with earnings skewed accordingly. Management
believes the construction industry's overall aggregates annual consumption level
and the Corporation's annual production and shipments, excluding acquisitions,
will experience moderate overall growth for the full year 1998, compared with
the prior year.
The Magnesia Specialties division had first quarter 1998 sales of
$34.8 million, an increase of approximately 2% over the first three months of
1997. During the quarter, increases in refractories and lime products were
offset by reductions in sales of periclase. The division's first quarter
earnings from operations increased 44% to $3.6 million from $2.5 million in the
first quarter of 1997. Results from Magnesia Specialties were positively
impacted by strong, cost-effective production during the first quarter of 1998,
compared with the first quarter of 1997, which was negatively impacted by
decreased production levels and higher costs principally related to
manufacturing downtime associated with scheduled repair and maintenance
activities.
(Continued)
Page 10 of 18
11
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
First Quarter Ended March 31, 1998 and 1997
The following table presents net sales, gross profit, selling,
general and administrative expense, and earnings from operations data for the
Corporation and each of its divisions for the three months ended March 31, 1998
and 1997. In each case, the data is stated as a percentage of net sales, of the
Corporation or the relevant division, as the case may be:
Three Months Ended
March 31,
-------------------------------------------------------
(Dollars in Thousands)
1998 1997
------------------------- ------------------------
% of % of
Amount Net Sales Amount Net Sales
------ --------- ------ ---------
Net sales:
Aggregates $151,722 100.0 $124,083 100.0
Magnesia Specialties 34,813 100.0 34,080 100.0
-------- ----- -------- -----
Total 186,535 100.0 158,163 100.0
Gross profit:
Aggregates 20,394 13.4 23,008 18.5
Magnesia Specialties 9,085 26.1 7,136 20.9
-------- ----- -------- -----
Total 29,479 15.8 30,144 19.1
Selling, general & administrative expense:
Aggregates 14,416 9.5 11,195 9.0
Magnesia Specialties 4,885 14.0 4,104 12.0
-------- ----- -------- -----
Total 19,301 10.4 15,299 9.7
Earnings from operations:
Aggregates 5,788 3.8 11,813 9.5
Magnesia Specialties 3,644 10.5 2,540 7.5
-------- ----- -------- -----
Total $ 9,432 5.1 $ 14,353 9.1
(Continued)
Page 11 of 18
12
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
First Quarter Ended March 31, 1998 and 1997
Other income and expenses, net for the quarter ended March 31,
were $0.1 million in expenses in 1998 compared with $1.5 million in income in
1997. Including several offsetting amounts, other income and expenses, net, is
comprised generally of interest income, gains and losses associated with the
selling of certain assets, gains and losses related to certain amounts
receivable, and net equity earnings from non-consolidated investments.
Interest expense was $5.3 million in the first quarter,
approximately $3.1 million above the first quarter of 1997. The increased
interest expense in 1998 resulted from the effect of additional indebtedness and
borrowings incurred by the Corporation associated primarily with its acquisition
of the American Aggregates business in May 1997.
The Corporation's estimated effective income tax rate for the
first three months was 34.8% in 1998 and 34.6% in 1997. See Note 5 of the Notes
to Condensed Consolidated Financial Statements.
LIQUIDITY AND CAPITAL RESOURCES Net cash flow provided by operating activities
during the first quarter of 1998 was $12.9 million compared with net cash
provided by operations of $17.4 million in the comparable period of 1997. The
cash flow for both 1998 and 1997 was principally from earnings, before deducting
depreciation, depletion and amortization, offset by working capital
requirements. Working capital increases during the first quarter of 1998 and
1997 were primarily the result of increases in inventory balances, as well as
decreases in trade accounts payable. The seasonal nature of the construction
aggregates business impacts quarterly net cash provided by operating activities
when compared with the year. Full year 1997 net cash provided by operating
activities was $195.6 million, compared with $17.4 million provided by
operations in the first quarter of 1997.
First quarter capital expenditures, exclusive of acquisitions,
were $16.7 million in 1998 and $14.8 million in 1997. Capital expenditures are
expected to be approximately $130 million for 1998, exclusive of acquisitions.
Comparable capital expenditures were $86.4 million in 1997.
The Corporation continues to rely upon internally generated funds
and access to capital markets, including funds obtained under its two revolving
credit agreements and a cash management facility, to meet its liquidity
requirements, finance its operations, and fund its capital requirements. With
respect to the Corporation's ability to access the public market, currently the
Corporation has an effective shelf registration on file with the Securities and
Exchange Commission (the "Commission") for the offering of up to $50 million of
debt securities, which may be issued from time to time. Presently, management
has the authority to file another shelf registration statement with the
Commission. It should be noted, however, that the Corporation has not determined
the timing when, or the amount for which, it may file such shelf registration.
(Continued)
Page 12 of 18
13
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
First Quarter Ended March 31, 1998 and 1997
In May 1997, the Corporation entered into a revolving credit
agreement with a group of domestic and foreign banks, which provides for
borrowings of up to $150 million for general corporate purposes through May 26,
1998. Borrowings under this agreement are unsecured and bear interest, at the
Corporation's option, at rates based upon: (i) the Euro-Dollar rate (as defined
on the basis of a LIBOR); (ii) a bank base rate (as defined on the basis of a
published prime rate or the Federal Funds Rate plus 1/2 of 1%); or (iii) a
competitively determined rate (as defined on the basis of a bidding process).
This short-term revolving credit agreement contains several covenants, including
specific financial covenants related to leverage, limitation on encumbrances,
and provisions that relate to certain changes of the Corporation's control. The
Corporation is required to pay a loan commitment fee to the bank group. It is
currently management's intent to extend this agreement.
The Corporation's ability to borrow or issue debt securities is
dependent, among other things, upon prevailing economic, financial and market
conditions.
Based on prior performance and current expectations, the
Corporation's management believes that cash flows from internally generated
funds and its access to capital markets are expected to continue to be
sufficient to provide the capital resources necessary to fund the operating
needs of its existing businesses, cover debt service requirements, and allow for
payment of dividends in 1998. The Corporation may be required to obtain
additional levels of financing in order to fund certain strategic acquisitions
if any such opportunities arise. Currently, the Corporation's senior unsecured
debt is rated "A" by Standard & Poor's and "A3" by Moody's. The Corporation's
commercial paper obligations are rated "A-1" by Standard & Poor's, "P-2" by
Moody's and "F-1" by Fitch Investors Service, L.P. While management believes its
credit ratings will remain at an investment-grade level, no assurance can be
given that these ratings will remain at the above-mentioned levels.
The Corporation may repurchase up to 2.5 million shares of its
common stock under authorizations from the Corporation's Board of Directors for
use in the Amended Omnibus Securities Award Plan and for general corporate
purposes. As of May 1, 1998, there have been 68,200 shares repurchased under
these authorizations.
ACCOUNTING CHANGES As of January 1, 1998, the Corporation adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (the
"SFAS 130"). The SFAS 130 requires all non-owner changes in equity that are
excluded from net earnings under existing Financial Accounting Standards Board
standards be included as comprehensive income. The Corporation presently does
not have any transactions that directly effect equity other than those
transactions with owners in their capacity as owners. Therefore, the provisions
of the SFAS 130 are not applicable.
(Continued)
Page 13 of 18
14
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
First Quarter Ended March 31, 1998 and 1997
The Corporation plans to adopt the provisions of the Statement of Financial
Accounting Standards No. 131, "Disclosure about Segments of an Enterprise and
Related Information" and the Statement of Financial Accounting Standards No.
132, "Employers' Disclosure about Pensions and Other Postretirement Benefits" in
its annual reporting on Form 10-K for the year ended December 31, 1998. The
impact of the adoption of these accounting standards on the Corporation's
financial reporting and related disclosures is not expected to be material.
OTHER MATTERS Investors are cautioned that statements in this Quarterly Report
on Form 10-Q that relate to the future are, by their nature, uncertain and
dependent upon numerous contingencies - including political, economic,
regulatory, climatic, competitive, and technological - any of which could cause
actual results and events to differ materially from those indicated in such
forward-looking statements. Additional information regarding these and other
risk factors and uncertainties may be found in the Corporation's other filings,
which are made from time, to time with the Securities and Exchange Commission.
Page 14 of 18
15
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Reference is made to Part I. Item 3. Legal Proceedings of the Martin Marietta
Materials, Inc. Annual Report on Form 10-K for the year ended December 31, 1997.
Item 4. Submission of Matters to a Vote of Security Holders.
At the Annual Meeting of Shareholders held on May 8, 1998, the shareholders of
Martin Marietta Materials, Inc.:
(a) Elected Richard G. Adamson, Marcus C. Bennett and Bobby F. Leonard to
the Board of Directors of the Corporation to terms expiring at the
Annual Meeting of Shareholders in the year 2001. The following table
sets forth the votes for each director.
Votes Cast For Withheld
-------------- --------
Richard G. Adamson 40,277,039 726,959
Marcus C. Bennett 40,275,570 728,428
Bobby F. Leonard 40,275,965 728,033
(b) Approved the Stock-Based Award Plan. The voting results were:
25,437,743 -- For; 11,744,670 -- Against; and 246,886 -- Abstained.
(c) Ratified the selection of Ernst & Young LLP, as independent auditors for
the year ending December 31, 1998. The voting results for this
ratification were 40,957,350 -- For; 24,751 -- Against; and 21,897 --
Abstained.
Item 5. Other Information.
On April 2, 1998 the Corporation announced it purchased Mid-State Construction &
Materials, Inc., which is headquartered in Hot Springs, Arkansas. Mid-State
operates two granite quarries, four ready mixed concrete plants, three asphalt
plants, and a small construction company. The transaction involved an exchange
of common stock plus cash consideration. Cash was transferred on March 31, 1998,
and 253,415 shares of Martin Marietta Materials common stock were issued on
April 1, 1998, the effective date of this transaction.
On May 11, 1998, the Corporation announced that the Board of Directors of Martin
Marietta Materials, Inc., declared a regular quarterly cash dividend on the
Corporation's Common Stock of $0.12 a share, payable June 30, 1998, to
shareholders of record at the close of business on June 1, 1998.
Page 15 of 18
16
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
PART II - OTHER INFORMATION
(Continued)
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
No. Document
--- --------
10.01 Martin Marietta Materials, Inc. Stock-Based Award Plan, as
amended
10.02 Martin Marietta Materials, Inc. Amended and Restated Omnibus
Securities Award Plan
10.03 Amended and Restated Martin Marietta Materials, Inc. Common
Stock Purchase Plan for Directors, as amended
11.01 Martin Marietta Materials, Inc. and Consolidated Subsidiaries
Computation of Earnings per Share for the Quarter ended March
31, 1998 and 1997
12.01 Martin Marietta Materials, Inc. and Consolidated Subsidiaries
Computation of Ratio of Earnings to Fixed Charges for the
Quarter ended March 31, 1998
27.01 Financial Data Schedule (for Securities and Exchange Commission
use only)
Page 16 of 18
17
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MARTIN MARIETTA MATERIALS, INC.
(Registrant)
Date: 5/15/98 By: /s/ JANICE K. HENRY
------------------------- ---------------------------------------
Janice K. Henry
Vice President, Chief Financial
Officer and Treasurer
Page 17 of 18
18
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For the Quarter Ended March 31, 1998
EXHIBIT INDEX
Exhibit
No. Document Page
--- -------- ----
10.01 Martin Marietta Materials, Inc. Amended and Restated --
Stock-Based Award Plan
10.02 Martin Marietta Materials, Inc. Amended and Restated Omnibus --
Securities Award Plan
11.01 Martin Marietta Materials, Inc. and Consolidated Subsidiaries --
Computation of Earnings per Share for the Quarter ended March
31, 1998 and 1997
12.01 Martin Marietta Materials, Inc. and Consolidated Subsidiaries --
Computation of Ratio of Earnings to Fixed Charges for the
Quarter ended March 31, 1998
27.01 Financial Data Schedule (for Securities and Exchange Commission
use only)
Page 18 of 18
1
EXHIBIT 10.01
MARTIN MARIETTA MATERIALS, INC.
AMENDED AND RESTATED
STOCK-BASED AWARD PLAN
ADOPTED: MAY 1998
2
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.
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.
2
3
"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.
"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.
3
4
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
4
5
calendar year exceeds $100,000, such excess shall be
treated as Non-Qualified Stock Options. For purposes
of the preceding sentence, the term "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.
5
6
(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.
(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
immediately after each annual meeting of the Corporation's
shareholders, beginning with the 1998 annual meeting of
shareholders.
(b) Terms and Conditions. Any Award granted under this Section 6
shall be subject to the following terms and conditions:
(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 in whole or in part one year
from the date the Award is made.
(iii) Each Award granted under this Plan shall become
exercisable by the Eligible Director only after the
completion of one year of Board service immediately
following the date the Award is made; provided,
however, that uninterrupted Board service by the
Eligible Director until the annual meeting of the
Corporation's shareholders next following the date
the Award is made shall be deemed completion of one
year of Board service.
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.
6
7
(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 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
7
8
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 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
8
9
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, 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
9
10
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")) (a "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,
10
11
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 Board on the
effective date of the Plan (the "Incumbent Board")
cease for any reason to constitute at least a
majority of the Board; provided, however, that any
individual becoming a director subsequent to such
effective date whose election, or nomination for
election by the Corporation's shareholders, was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall
be considered as though such individual were a member
of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption
of office occurs as a result of an actual or
threatened election contest with respect to the
election or removal of directors or other actual or
threatened solicitation of proxies or consents by or
on behalf of a Person other than 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
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
11
12
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, shall have any liability to any party for any
action taken or not taken, in good faith under the Plan.
SECTION 14. RIGHTS OF EMPLOYEES
(a) Status as an eligible Employee shall not be construed as a
commitment that any Award will be made under this Plan to such
eligible Employee or to eligible Employees generally.
(b) Nothing contained in this Plan (or in any other documents
related to this Plan or to any Award) shall confer upon any
Employee or Participant any right to continue in the employ or
other service of the Corporation or constitute any contract or
limit in any way the right of the Corporation to change such
person's compensation or other benefits or to terminate the
employment of such person with or without cause.
SECTION 15. DURATION
12
13
The Plan shall remain in effect until all Awards under the Plan have
been exercised or terminated under the terms of the Plan and applicable Award
Agreement, provided that Awards under the Plan may only be granted until
December 31, 2008.
SECTION 16. GOVERNING LAW
The Plan shall be governed by the laws of the State of North Carolina.
13
1
EXHIBIT 10.02
MARTIN MARIETTA MATERIALS, INC.
AMENDED OMNIBUS SECURITIES AWARD PLAN
ADOPTED: FEBRUARY 1994
AS AMENDED AND RESTATED MAY 1998
2
SECTION 1. ESTABLISHMENT AND PURPOSE
The Martin Marietta Materials, Inc. Amended Omnibus Securities Award
Plan (the "Plan") is an amendment and restatement of the Martin Marietta
Materials, Inc. Omnibus Securities Award Plan (the "1994 Plan"), which
effectiveness is subject to the adoption of the Plan by the shareholders of the
Corporation in a manner that complies with Section 162(m).
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 an opportunity
to obtain or increase their proprietary interest in the Corporation's
performance and by providing such employees 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 6 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.
2
3
"Employee" means officers and other key employees of the Corporation
but excludes directors who are not also officers or 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.
"Insider" means any person who is subject to Section 16 of the Exchange
Act.
"Participant" means an Employee 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.
"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.
3
4
SECTION 3. ELIGIBILITY
Awards may be granted only to exempt salaried Employees of the
Corporation or any Subsidiary who are designated from time to time by the
Committee.
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
4
5
calendar year exceeds $100,000, such excess shall be
treated as Non-qualified Stock Options. For purposes
of the preceding sentence, the term "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(b) 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) Stock Appreciation Rights. A Stock Appreciation Right ("SAR")
is a right to receive, upon exercise of the right, but without
payment by the Participant, an amount payable in cash. The
amount payable with respect to each right shall be equal in
value to a percent of the excess, if any, of the Fair Market
Value of a share of Stock on the exercise date over the Fair
Market Value of a share of Stock on the date the Award was
made (or, in the case of a right granted with respect to a
previously granted Award, the Fair Market Value of the shares
that are the subject of the previously granted Award on the
date such previous Award was granted). The applicable percent
shall be established by the Committee.
(d) 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.
(e) 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.
5
6
SECTION 5. SHARES OF STOCK AND OTHER STOCK-BASED AWARDS AVAILABLE UNDER PLAN
(a) Subject to the adjustment provisions of Section 9 hereof, the
aggregate number of shares with respect to which Awards
payable in securities may be granted under the Plan shall be
no more than 2,000,000 and the aggregate number of shares with
respect to which Non-qualified Stock Options, Incentive Stock
Options or SARs may be granted to any individual Participant
shall be no more than 200,000 in any one year. Awards that are
cancelled or repriced shall be counted against the 200,000
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.
(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
6
7
shareholders sufficient to fulfill the requirements of the
Plan with respect to such issuance.
SECTION 6. AWARD AGREEMENTS
Each Award under this Plan shall be evidenced by an Award Agreement
setting forth the number of shares of Stock, SARs, 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) Non-assignability: A provision that no Award shall be
assignable or transferable except by will or by the
laws of descent and distribution and that during the
lifetime of a Participant, the Award shall be
exercised only by such Participant or by his or her
guardian or legal representative.
(ii) Termination of Employment: 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, including but not limited to terms
relating to the vesting, time for exercise,
forfeiture or cancellation of an Award in such
circumstances.
(iii) 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 9 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.
(iv) 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 or other securities
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.
(v) 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
7
8
executing the Award Agreement or receipt, a
Participant shall be deemed to have accepted and
consented to any action taken under the Plan by the
Committee, the Board of Directors or their delegates.
(vi) Holding Period: In the case of an Award to an
Insider, (A) of an equity security, a provision
stating (or the effect of which is to require) that
such security must be held for at least six months
(or such longer period as the Committee in its
discretion specifies) from the date of acquisition;
or (B) of a derivative security with a fixed exercise
price within the meaning of Section 16, a provision
stating (or the effect of which is to require) that
at least six months (or such longer period as the
Committee in its discretion specifies) must elapse
from the date of acquisition of the derivative
security to the date of disposition of the derivative
security (other than upon exercise or conversion) or
its underlying equity security; or (C) of a
derivative security without a fixed exercise price
within the meaning of Section 16, a provision stating
(or the effect of which is to require) that at least
six months (or such longer period as the Committee in
its discretion specifies) must elapse from the date
upon which such price is fixed to the date of
disposition of the derivative security (other than by
exercise or conversion) or its underlying equity
security; provided, however, that this clause (vi)
shall not apply to any Award granted on or after
August 15, 1996.
(vii) 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.
8
9
SECTION 7. 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 Rule 16b-3 and Section 162(m).
SECTION 8. 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 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 number of shares of Stock, SARs, or units granted,
and the terms of any Award Agreements 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 8(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 8(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
9
10
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 9. 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, 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 10. CHANGE IN CONTROL
(a) Subject to Sections 5, 7 and 9, 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")) (a "Person") of beneficial
ownership (within
10
11
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 Board on the effective
date of the Plan (the "Incumbent Board") cease for
any reason to constitute at least a majority of the
Board; provided, however, that any individual
becoming a director subsequent to such effective date
whose election, or nomination for election by the
Corporation's shareholders, was approved by a vote of
at least a majority of the directors then comprising
the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result
of an actual or threatened election contest with
respect to the election or removal of directors or
other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than 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
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
11
12
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 11. 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 12. 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, shall have any liability to any party for any
action taken or not taken, in good faith under the Plan.
SECTION 13. RIGHTS OF EMPLOYEES
(a) Status as an eligible Employee shall not be construed as a
commitment that any Award will be made under this Plan to such
eligible Employee or to eligible Employees generally.
(b) Nothing contained in this Plan (or in any other documents
related to this Plan or to any Award) shall confer upon any
Employee or Participant any right to continue in the employ or
other service of the Corporation or constitute any contract or
limit in
12
13
any way the right of the Corporation to change such person's
compensation or other benefits or to terminate the employment
of such person with or without cause.
SECTION 14. DURATION
The Plan shall remain in effect until all Awards under the Plan have
been exercised or terminated under the terms of the Plan and applicable Award
Agreement, provided that Awards under the Plan may only be granted until
December 31, 2003.
SECTION 15. GOVERNING LAW
The Plan shall be governed by the laws of the State of North Carolina.
13
1
Exhibit 11.01
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
For the Three Months Ended March 31
(Dollars in Thousands, Except Per Share Data)
1998 1997
----------- -----------
Net earnings available for common shareholders $ 2,636 $ 8,907
Weighted average number of common shares outstanding -Basic 46,215,439 46,079,530
-Diluted 46,409,450 46,154,503
Net earnings per common share -Basic $ 0.06 $ 0.19
-Diluted $ 0.06 $ 0.19
1
Exhibit 12.01
MARTIN MARIETTA MATERIALS, INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
For the Three Months Ended March 31, 1998
(Dollars in Thousands)
EARNINGS:
Earnings before income taxes $ 4,040
(Earnings) losses of less than 50% owned associated companies, net (60)
Interest expense 5,310
Portions of rents representative of an interest factor 445
-------
Adjusted Earnings and Fixed Charges $ 9,735
=======
FIXED CHARGES:
Interest expense $ 5,310
Capitalized interest 68
Portion of rents representative of an interest factor 445
-------
Total Fixed Charges $ 5,823
=======
Ratio of Earnings to Fixed Charges 1.67
=======
Page __ of __
5
1,000
3-MOS
DEC-31-1998
JAN-01-1998
MAR-31-1998
4,030
0
134,540
4,502
148,425
306,797
1,289,279
669,668
1,121,719
123,117
311,342
0
0
462
558,642
1,121,719
186,535
186,535
157,056
177,103
57
25
5,310
4,040
1,404
2,636
0
0
0
2,636
.06
.06
