1993
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993 Commission file number 1-11810
[MARTIN MARIETTA LOGO]
MARTIN MARIETTA CORPORATION
(Exact name of registrant as specified in its charter)
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Maryland 52-1801551
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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6801 Rockledge Drive, Bethesda, Maryland 20817-1877 (301/897-6000)
(Address and telephone number of principal executive offices)
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of Each Class on which registered
New York Stock Exchange, Inc.
Chicago Stock Exchange, Incorporated
Common Stock, $1 par value Pacific Stock Exchange, Incorporated
Philadelphia Stock Exchange, Inc.
7% Debentures due 2011 New York Stock Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes [x] No [ ]
Indicate by check mark if the disclosure of delinquent files pursuant to
Item 405 or Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [x]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. Approximately $4,281,000,000 as of January 31, 1994.
Indicate the number or shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date. Common Stock, $1 par value,
95,785,244 shares outstanding as of January 31, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Martin Marietta Corporation 1993 Annual Report to Shareowners
are incorporated by reference in Parts I, II and IV of this Form 10-K.
Portion of the Martin Marietta Corporation 1994 definitive Proxy Statement to
be filed are incorporated by reference in Part III of this Form 10-K.
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TABLE OF CONTENTS
Page
PART I
ITEM 1. BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . 1
General . . . . . . . . . . . . . . . . . . . . . . . . . 1
Business Segment Information . . . . . . . . . . . . . . . 2
Electronics Group . . . . . . . . . . . . . . . . . . . . 2
Space Group . . . . . . . . . . . . . . . . . . . . . . . 4
Information Group . . . . . . . . . . . . . . . . . . . . 6
Services Group . . . . . . . . . . . . . . . . . . . . . . 7
Materials Group . . . . . . . . . . . . . . . . . . . . . 9
Energy and Other Operations . . . . . . . . . . . . . . . 11
Competition, Contracts and Risk . . . . . . . . . . . . . 13
Backlog . . . . . . . . . . . . . . . . . . . . . . . . . 17
Environmental Regulation . . . . . . . . . . . . . . . . 18
Research and Development . . . . . . . . . . . . . . . . 21
Employees . . . . . . . . . . . . . . . . . . . . . . . . 22
Martin Marietta Technologies, Inc.
- Reporting Status . . . . . . . . . . . . . . . . . . . 23
ITEM 2. PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . 23
ITEM 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . 26
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . . 30
ITEM 4(a). EXECUTIVE OFFICERS OF THE REGISTRANT . . . . . . . . . . . 31
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS . . . . . . . . . . . . 35
ITEM 6. SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . 35
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . 35
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . 36
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . . . . . 36
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PART III
Page
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF
THE REGISTRANT . . . . . . . . . . . . . . . . . . . . . 37
ITEM 11. EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . 37
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT . . . . . . . . . . . . . . . . . . . . . 37
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . 38
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . 42
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS . . . . . . . . . . . . 51
CONSENT OF KPMG PEAT MARWICK, INDEPENDENT AUDITORS . . . . . . . . . . 52
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PART I
ITEM 1. BUSINESS
General
Martin Marietta Corporation is a diversified enterprise
principally engaged in the conception, design, manufacture and
integration of advanced technology products and services for the
United States Government and private industry. Martin Marietta
Corporation manages significant facilities for the Department of
Energy and also produces construction aggregates and specialty
chemical products.
In April 1993, Martin Marietta Corporation consummated a
transaction in which its businesses and the Aerospace businesses of
the General Electric Company (GE) were combined (Combination). As
a result of the Combination, which was approved by Martin Marietta
Corporation's stockholders on March 25, 1993, the then existing
Martin Marietta Corporation, which was formed in 1961 by the
consolidation of the Glenn L. Martin Company (founded in 1909) and
the American-Marietta Company (founded in 1913), was renamed Martin
Marietta Technologies, Inc. (Technologies). In the Combination,
Technologies became a wholly-owned subsidiary of a new corporation
which assumed the Martin Marietta Corporation name.
Martin Marietta Corporation and Technologies, although
separate Maryland corporations, are operated functionally as an
integrated organization and this Annual Report on Form 10-K treats
them in this fashion. Unless the context otherwise requires,
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references to "Martin Marietta" or the "Corporation" refer to
Martin Marietta Corporation, its consolidated subsidiaries
(including Technologies) and certain nonconsolidated associated
companies or joint ventures. See "Martin Marietta Technologies,
Inc. - Reporting Status" on page 23.
Business Segment Information
In 1993, Martin Marietta conducted business in six reportable
industry segments. These segments are: the Electronics Group, the
Space Group, the Information Group, the Services Group, the
Materials Group, and Energy and Other Operations.
Information concerning Martin Marietta's net sales, operating
profit, assets employed, and certain additional information
attributable to each reportable business segment for each year in
the three-year period ended December 31, 1993, is included in the
"Analysis of Financial Condition and Operating Results" on page 56
through page 61 of the Corporation's 1993 Annual Report to
Shareowners (1993 Annual Report) and in "Note R: Industry
Segments" of the "Notes to Financial Statements" on page 54 of the
1993 Annual Report.
Electronics Group
The Electronics Group carries out its operations through the
following organizations: Aero & Naval Systems, Armament Systems,
Defense Systems, Communications Systems, Control Systems,
Electronics & Missiles, Government Electronic Systems, and Ocean,
Radar & Sensor Systems. The Group's activities are diverse, but
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primarily relate to the design, development, engineering and
production of electronic systems for precision guidance,
navigation, detection and tracking of threats; missiles and missile
launching systems; armaments; aircraft controls and subsystems
(thrust reversers); and secure communications systems.
The Group is the prime contractor for the United States Navy's
AEGIS fleet air-defense system and produces the AEGIS Weapon System
including the AN/SPY-1 radar. AEGIS was the Group's largest
program in 1993 and is expected to be the largest in 1994.
The Group serves as prime contractor for the development of
the AN/BSY-2 Submarine Combat System for the Navy's new Seawolf
attack submarine. The Group produces the LANTIRN system, an
advanced night vision, navigation and targeting fire control system
for fixed-wing aircraft and the Target Acquisition Designation
Sight/Pilot Night Vision Sensor (TADS/PNVS) for the Army's AH-64
Apache Attack helicopter. The Group also produces the MK 41
Vertical Launching System (VLS) for the Navy's AEGIS-equipped
Ticonderoga-class cruisers and Spruance- and Arleigh Burke-class
destroyers. The VLS is a shipboard multi-missile launching system
for various types of naval missiles.
Sales by the Group represented approximately 41% of the
Corporation's total sales in 1993. Sales to the United States
Government represented approximately 89% of the Group's sales in
1993.
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Space Group
The Space Group's operations are carried out through three
organizations: Astronautics, Astro Space and Manned Space Systems.
The Group's activities include the design, development, engineering
and production of spacecraft, space launch vehicles and supporting
ground systems, electronics and instrumentation.
The Group serves as the prime integration, systems production
and launch contractor to the U.S. Air Force for the Titan series of
expendable space launch vehicles. These include the Titan II,
Titan III and Titan IV.
The design, development and fabrication of the Titan IV,
together with the provision of related payload integration and
launch services, was the Group's (and the Corporation's) largest
program in 1993, constituting approximately 45% of the Group's 1993
sales. The first Titan IV equipped with a newly developed Centaur
upper stage was successfully launched in February, 1994. The new
configuration allows the launching of significantly heavier
payloads to geosynchronous orbit. Titan IV is expected to continue
to be the Group's largest program over the next several years.
Affirming its commitment to remain a leading contractor in
the nation's civil and military space launch programs, on
December 22, 1993, the Corporation signed an agreement with General
Dynamics to purchase its Space Systems Division. The primary asset
of the Space Systems Division is business relating to the Atlas
series of space launch vehicles and the Centaur upper stages used
with Atlas and Titan IV launch vehicles. Acquisition of the Atlas
series of launch vehicles will allow the Corporation to enter the
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intermediate lift launch market. Consummation of the transaction
is subject to certain regulatory approvals and the satisfaction of
certain other conditions. Assuming satisfaction of these
conditions, the transaction is expected to close during the first
half of 1994. See "Note D: Proposed Transactions" of the "Notes
to Financial Statements" on page 46 of the 1993 Annual Report.
A second focus of the Group is the design, development,
assembly and testing of expendable external fuel tanks for the
National Aeronautics and Space Administration's (NASA) Space
Shuttle program. The external tank program is expected to remain
a significant program in future years.
A third area of operations is the design, development,
production and integration of military, civil and commercial
spacecraft and related subsystems. Spacecraft missions include
communications (e.g., INTELSAT VIII, AsiaSat, Echostar, Inmarsat
and the Defense Satellite Communications System), global
positioning (e.g., GPS Block II), weather monitoring (e.g., the
Television Infrared Observation Satellite program and the Defense
Meteorological Satellite program), environmental/earth observing
(e.g., Global Geospace Science Satellite, EOS AM, and Landsat
satellites), and planetary exploring (e.g., Magellan and Cassini).
Sales by the Group represented approximately 36% of the
Corporation's total sales in 1993. Sales to the United States
Government represented approximately 93% of the Group's sales in
1993.
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Information Group
The Information Group consists of four organizations:
Automation Systems, Information Systems, Internal Information
Systems and Management & Data Systems. The Group provides command
and control systems, information processing services, systems
engineering, integration, program management, software development,
computer-based simulations and training products, computer-based
test control, machinery control, and automated logistics systems to
civil, military and commercial customers.
The Group is the prime contractor for the Consolidated
Automated Support System (CASS). CASS is an automated, self
contained diagnostic unit for testing Navy electronic and avionic
systems.
The Group is the integration contractor for the Ballistic
Missile Defense organization National Test Facility (NTF) at Falcon
Air Force Base, Colorado. As part of the ballistic missile defense
initiative, the NTF tests and evaluates simulated strategic defense
concepts, architectures, battle-management plans and technologies
that would not otherwise be feasible to test.
In addition, the Group is providing systems engineering and
integration services to the U.S. Federal Aviation Administration
(FAA). These services assist the FAA in the implementation of the
FAA's Capital Investment Plan, a plan for modernizing the nation's
air traffic control system. Implementation of the FAA's plan
requires upgrading the FAA's computer, weather, navigation and
communication systems.
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The Group is in the third year of a 12-year contract with the
U.S. Department of Housing & Urban Development (HUD) to modernize
HUD's data processing systems. In 1993, development of a
communication system linking HUD's new computer center with its
disaster-recovery facility, headquarters and 81 regional and field
offices was completed.
Sales by the Group represented approximately 13% of the
Corporation's total sales in 1993. Sales to the United States
Government represented approximately 90% of the Group's sales in
1993.
Services Group
The Services Group consists of three organizations: Martin
Marietta Services, Inc., Martin Marietta Technical Services, Inc.
and KAPL, Inc. The Group provides management, engineering,
logistics, systems software and processing support, and other
technical services to military, civil government and international
customers as well as to other organizations within the Corporation.
The Department of Defense is the Group's largest customer.
The Group is responsible for the operation of the EPA's
National Computer Center in Raleigh, North Carolina, the Washington
Information Center in Washington, D.C., and the National
Environmental Supercomputer Center in Bay City, Michigan. In
addition, the Group provides information center support and various
consulting and design services to the EPA. Work for the EPA is
expected to remain one of the Group's major sources of revenue in
1994.
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The Group provides scientific, engineering, operations and
management services support to NASA's Johnson Space Flight Center
with respect to that organization's efforts in life sciences
experimentation. In this regard, the Group was recently selected
to provide such support on the ten upcoming Russian/American Life
Sciences Missions. The Group provides similar services supporting
NASA missions at Goddard Space Flight Center, AMES Research Center,
and the Dryden Flight Center.
The Group also provides quality control and engineering
services, training, installation and maintenance support of the
U.S. Navy's AEGIS fleet air-defense system for which the
Corporation's Electronics Group is prime contractor.
In addition, the Group presently provides operation and
maintenance support of 17 remote long-range radar sites throughout
the State of Alaska for the U.S. Air Force. The contract's period
of performance expires in September 1994 and currently the Group is
competing for a new five-year contract.
KAPL Inc., a component of the Group, provides high-level
engineering and management support to the Department of Energy's
Knolls Atomic Power Laboratory.
Sales by the Group represented approximately 4% of the
Corporation's total sales in 1993. Sales to the United States
Government represented essentially all of the Group's sales in
1993.
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Materials Group
Historically, the Corporation's construction aggregates and
specialty chemical products businesses had been conducted through
Martin Marietta Aggregates and Martin Marietta Magnesia Specialties
Inc. In November 1993, the aggregates business and the Common
Stock of Martin Marietta Magnesia Specialties Inc. were transferred
to a new company, Martin Marietta Materials, Inc. (Materials). On
February 24, 1994, an initial public offering of Material's common
stock was consummated and 8,797,500 shares of common stock
(representing approximately 19% of the shares outstanding) were
sold at an initial offering price of $23.00 per share. The
Corporation continues to own all of the remaining shares and
presently intends to maintain such ownership. Maintenance by the
Corporation of at least an 80% ownership position will enable the
Corporation to continue to include Materials in the Corporation's
consolidated group for federal income tax purposes. See "Note D:
Proposed Transactions" of the "Notes to Financial Statements" on
page 46 of the 1993 Annual Report.
Materials carries on its operations through two divisions,
Aggregates and Magnesia Specialties. The Aggregates division is
the United States' third largest producer of aggregates for the
construction of highways and other infrastructure projects and for
the commercial and residential construction industries. In 1993,
Materials shipped approximately 65 million tons of aggregates to
customers in 24 states, generating sales of $337.5 million. In
1993, approximately 94% of the aggregates shipped by Materials were
crushed stone, primarily granite and limestone, and approximately
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6% were sand and gravel. Materials has focussed on the production
of construction aggregates and has not integrated vertically into
other construction materials businesses.
As a result of dependence upon the construction industry, the
profitability of construction aggregates producers is sensitive to
regional economic conditions, particularly to cyclical swings in
construction spending and changes in the level of infrastructure
spending funded by the public sector. The aggregates business is
also highly seasonal, due primarily to the effect of weather
conditions on construction activity in the markets served.
Materials' aggregates business is concentrated principally in the
Southeast and the Midwest and is, therefore, primarily affected by
the weather and economies in these regions. Management believes
that raw material reserves are sufficient to permit production at
present operational levels for the foreseeable future.
Through its Magnesia Specialties Division, Materials
manufactures and markets magnesia-based products, including
refractory products for the steel industry and chemical products
for industrial and agricultural uses. In 1993, the Magnesia
Specialties Division generated net sales of $115.4 million.
Magnesia Specialties' refractory and dolomitic lime products are
sold primarily to the steel industry, and such sales may be
affected by developments in that industry.
Sales by the Group represented approximately 5% of the
Corporation's total sales in 1993.
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Energy and Other Operations
Energy Group - The Energy Group's operations are performed
through three organizations: Martin Marietta Energy Systems, Inc.,
Martin Marietta Utility Services, Inc. and Martin Marietta
Specialty Components, Inc. A primary function performed by Martin
Marietta Energy Systems, Inc. is managing the Department of
Energy's (DOE) facilities at Oak Ridge, Tennessee. The Oak Ridge
facilities include: (i) the K-25 site, which is host to a number
of environmental and other technical programs performed for the DOE
and other federal agencies, (ii) the Oak Ridge Y-12 Plant, a
manufacturing and developmental engineering facility engaged
primarily in programs vital to the national defense, and (iii) the
Oak Ridge National Laboratory, one of the nation's largest
multipurpose research centers. The Oak Ridge National Laboratory's
primary mission is the development of safe, economic and
environmentally acceptable technologies for the efficient
production and use of energy. An additional critical mission is
the transfer of technology to the private sector to enhance
national competitiveness.
In July 1993, the DOE's uranium enrichment operations were
transferred to the United States Enrichment Corporation, a
government corporation. These operations included the DOE's
Paducah and Portsmouth Gaseous Diffusion Plants which produce
enriched uranium for use as a fuel in nuclear power plants. The
Energy Group, which had managed these facilities for the DOE,
continues to perform this management role for the United States
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Enrichment Corporation through Martin Marietta Utility Services,
Inc.
Martin Marietta Specialty Components, Inc. manages the
Pinellas electronic components plant in Largo, Florida for the DOE.
The plant manufactures electronic and electromechanical components,
primarily for nuclear weapons.
Recent defense-related budget reductions have decreased
production at some of the Energy Group's facilities and the
Secretary of the DOE recently announced that nuclear weapons
components stockpile production will cease at both the Y-12 and the
Specialty Components plants.
Sandia Corporation - In 1993, the Corporation was selected to
succeed AT&T as the operating contractor for the DOE's Sandia
National Laboratories (Sandia). The Corporation, through Sandia
Corporation (a wholly-owned subsidiary, the common stock of which
was acquired from AT&T), assumed full management and operational
responsibility for Sandia in October 1993. Sandia is a federal
government research and development laboratory with significant
responsibilities for national security programs in defense and
energy. An additional critical mission is the transfer of
technology to the private sector to enhance national
competitiveness.
Martin Marietta Overseas Corporation - Martin Marietta
Overseas Corporation (MMOC), a wholly-owned subsidiary of Martin
Marietta, is generally responsible for contracts, joint ventures,
teaming and other agreements with international customers and
parties. In recent years, the amount of business conducted by the
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Corporation internationally (directly and through MMOC) has
increased and international business now constitutes approximately
13% of the Corporation's business. Included in this percentage are
Foreign Military Sales which, because such sales are made through
the U.S. Government, are also taken into account in calculating the
percentage of the Corporation's sales to the U.S. Government.
International business includes the production of commercial
communications satellites for customers such as AsiaSat, Japan
Broadcasting Corporation, Korea Telecom, the 52-nation Inmarsat
Consortium and the 124-nation INTELSAT consortium, and the sale of
airborne, ground and naval surveillance radars, the Patriot Missile
System, the LANTIRN system, and the TADS/PNVS system to various
allied nations.
Additional Activities - For information relating to activities
undertaken by the Corporation included within this reportable
business segment, including information pertaining to activities
not discussed above, see "Note R: Industry Segments" of the "Notes
to Financial Statements" on page 54 of the 1993 Annual Report.
Competition, Contracts and Risk
Martin Marietta competes with numerous other contractors on
the basis of price and technical capability. Its business involves
rapidly advancing technologies and is subject to many uncertainties
including, but not limited to, those resulting from changes in
federal budget priorities, particularly the size and scope of the
defense budget, and dependence on Congressional appropriations.
Within the context of the general market decline and resulting over
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capacity and increased competition within the defense and aerospace
industries, management views the operations of the Electronics and
Space Groups as stable areas and is taking steps to maintain sales
levels by these Groups. Management views the operations of the
Information Group, Services Group, Materials Group and Energy Group
as growth areas and is seeking to increase the business of these
Groups particularly to civil, commercial and international
customers. Due to the intense competition for available government
business, the maintenance and/or expansion of government business
increasingly requires the Corporation to invest in its working
capital and fixed asset base. In addition, management continues to
review opportunities to expand the Corporation's existing
businesses and to diversify into closely related businesses through
acquisitions.
Approximately 87% of the 1993 sales of the Corporation were
made to the United States Government, either as a prime contractor
or as a subcontractor, principally to the Department of Defense
(including Foreign Military Sales) and NASA and additionally to the
U.S. Department of Energy, the U.S. Department of Housing & Urban
Development, the U.S. Environmental Protection Agency, and the U.S.
Postal Service. Accordingly, sales and earnings are subject to the
size, schedule and funding of government programs and are subject
to periodic review in light of changes in government policies and
requirements, availability of funds and technical or schedule
progress.
Earnings may vary materially depending upon the types of long-
term government contracts undertaken, the costs incurred in their
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performance, the achievement of other performance objectives and
the stage of performance at which the right to receive fees,
particularly under incentive and award fee contracts, is finally
determined.
See "Note A: Accounting Policies" of the "Notes to Financial
Statements" on page 44 and page 45 of the 1993 Annual Report for
information concerning Martin Marietta's accounting policies
governing recognition of revenues and earnings.
All government contracts and, in general, subcontracts
thereunder are subject to termination in whole or in part at the
convenience of the United States Government as well as for default.
Long-term government contracts and related orders are subject to
cancellation if appropriations for subsequent performance periods
become unavailable. Martin Marietta generally would be entitled to
receive payment for work completed and allowable termination or
cancellation costs if any of its government contracts were to be
terminated for convenience. Upon termination for convenience of
cost-reimbursement-type contracts, the contractor is normally
entitled, to the extent of available funding, to reimbursement of
allowable costs plus a portion of the fee related to work
accomplished. Upon termination for convenience of fixed-price-type
contracts, the contractor is normally entitled, to the extent of
available funding, to receive the purchase price for delivered
items, reimbursement for allowable costs for work in process, and
an allowance for profit thereon or adjustment for loss if
completion of performance would have resulted in a loss.
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A portion of Martin Marietta's business includes classified
programs. Although these programs are not discussed herein, the
operating results relating to those programs are included in the
Corporation's consolidated financial results. The nature of and
business risks associated with classified programs do not differ
materially from those of the Corporation's other government
programs and products.
An increasing percentage of Martin Marietta's business is
conducted internationally. While this is one of the Corporation's
objectives, international business may involve additional risks,
such as exposure to currency fluctuations, offset obligations and
changes in foreign economic and political environments. In
addition, international transactions frequently involve increased
financial and legal risks arising from stringent contractual terms
and conditions and widely differing legal systems, customs and
mores in various foreign countries.
The Corporation owns numerous patents and patent applications
some of which, together with licenses under patents owned by
others, are utilized in its operations. While such patents and
licenses are, in the aggregate, important to the operation of the
Corporation's business, no existing patent, license or other
similar intellectual property right is of such importance that its
loss or termination would, in the opinion of management, materially
affect the Corporation's business.
Certain risks inherent in the current defense and aerospace
business environment are discussed in "Analysis of Financial
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Condition and Operating Results" on page 56 through page 61 of the
1993 Annual Report.
Backlog
Martin Marietta's backlog of orders at December 31, 1993, was
$16.7 billion compared with $8.9 billion at the end of 1992. The
1993 amount includes funded backlog of $9.3 billion compared with
$3.7 billion at the end of 1992. Martin Marietta's backlog and
funded backlog did not include $10.4 billion and $6.3 billion,
respectively, at December 31, 1992, attributable to the former GE
Aerospace businesses that was added on April 2, 1993, as a result
of the Combination. See Parent Corporation's Registration
Statement on Form S-4 (Registration No. 33-58494).
Typically, the United States Government funds its major
programs only to the dollar level appropriated annually by the
Congress despite total estimated program values being significantly
higher. Accordingly, the government funded backlog reflected in
the above amounts represents only the government's present
obligation and represents the amount from which Martin Marietta can
be reimbursed for work performed.
Backlog information and comparisons thereof as of different
dates may not be accurate indicators of future sales or the ratio
of Martin Marietta's future sales to the United States Government
versus its sales to other customers.
Of the Corporation's total 1993 year-end backlog,
approximately $10.4 billion, or 62%, is not expected to be filled
within one year.
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Environmental Regulation
Martin Marietta's operations are subject to and affected by a
variety of federal, state, and local environmental protection laws
and regulations, including those regulating air and water quality,
hazardous materials and solid wastes. Management believes that, on
an overall basis, all of the facilities, owned or leased by the
Corporation, are currently operated in substantial compliance with
applicable statutes and regulations. Some of these facilities are
currently subject to remedial actions for removing hazardous
contamination that exists from prior operations. The Corporation
is actively involved in environmental responses at certain of its
facilities and at certain waste disposal sites not currently owned
by the Corporation (third-party sites) where the Corporation, or
its former aluminum subsidiary, or one of the GE Aerospace
businesses acquired in the Combination has been designated a
"Potentially Responsible Party" (PRP) by the U.S. Environmental
Protection Agency (EPA). At such third-party sites, the EPA or a
state agency has identified the site as requiring removal or
remedial action under the federal "Superfund" and other related
federal or state laws governing the remediation of hazardous
materials. Generally, PRPs that are ultimately determined to be
"responsible parties" are strictly liable for site clean-ups and
usually agree among themselves to share, on an allocated basis, in
the costs and expenses for investigation and remediation of the
hazardous materials. Under existing environmental laws, however,
responsible parties are jointly and severally liable and,
therefore, the Corporation is potentially liable for the full cost
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of funding such remediation. In the unlikely event that the
Corporation were required to fund the entire cost of such
remediation, the statutory framework provides that the Corporation
may pursue rights of contribution from the other PRPs.
At third-party sites, the Corporation continues to pursue a
course of action designed to minimize and mitigate its potential
liability through assessing the legal basis for its involvement,
including an analysis of such factors as (i) the amount and nature
of materials disposed of by the Corporation, (ii) the allocation
process, if any, used to assign all costs to all involved parties,
and (iii) the scope of the response action that is or may
reasonably be required. The Corporation also continues to pursue
active participation in steering committees, consent orders and
other appropriate and available avenues. Management believes that
this approach should allow the Corporation to establish its minimum
percentage liability on an allocated or shared basis with other
PRPs.
Although the Corporation's involvement and extent of
responsibility varies at each site, management, after an assessment
of each site and consultation with environmental experts and
counsel, has concluded that the probability is remote that the
Corporation's actual or potential liability as a PRP in each or all
of these sites will have a material adverse effect on the
Corporation's financial position or results of operations. While
the possibility of insurance coverage is considered in the
Corporation's efforts to minimize and mitigate its potential
liability, this possibility is not taken into account in
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management's assessment of whether it is likely that its actual or
potential liability will have a material adverse effect on the
Corporation's financial position or results of operations.
As part of its established environmental management program,
the Corporation is currently engaged in waste-minimization projects
designed to reduce generation of hazardous waste and to reduce
future costs associated with waste disposal. Capital investments
for environmental control purposes generally afford minimal
financial return and result in increased operating costs. New and
revised requirements are being continually imposed which may
require further investment. Such requirements add to the costs of
operations in the industries in which Martin Marietta does
business, but the amount of such costs cannot reasonably be
estimated.
In addition, Martin Marietta manages various government-owned
facilities on behalf of the government. At such facilities,
environmental compliance and remediation costs have historically
been the responsibility of the government and the Corporation
relied (and continues to rely with respect to past practices) upon
government funding to pay such costs. While the government remains
responsible for capital costs associated with environmental
compliance, responsibility for fines and penalties associated with
environmental noncompliance is being shifted from the government to
the contractor in certain instances with such fines and penalties
no longer constituting allowable costs under the contracts pursuant
to which such facilities are managed.
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Management does not believe that adherence to presently
applicable environmental regulations at its own facilities or in
its contract management capacity at government-owned facilities
will have a material adverse effect on Martin Marietta's financial
position or results of operations. For additional details, see
"Legal Proceedings" on page 26 through page 30. See also "Note I:
Contingencies" of the "Notes to Financial Statements" on page 48
and "Analysis of Financial Condition and Operating Results" on
page 56 through page 61 of the 1993 Annual Report.
Research and Development
Martin Marietta conducts significant research and development
activities, both under contract funding and with Independent
Research and Development (IR&D) funds. A large portion of these
activities are carried out at the Corporation's Electronics Group,
Space Group and Information Group facilities. Research and
development projects at these facilities relate to such diverse
areas as sensor technologies, state-of-the-art software, expert
systems and computing technologies, space launch and space platform
technologies, and electronics. In addition, the Corporation's
Advanced Development & Technology Operations (ADTO), headquartered
in San Diego, California, is chartered to identify, develop and
demonstrate advanced technological concepts having broad
applications in space, defense, information and communications
systems, and commercial fields. An element of ADTO is Martin
Marietta Laboratories, a research and development facility near
Baltimore, Maryland. Martin Marietta Laboratories conduct basic
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scientific and engineering research projects in fields such as
advanced materials, photonics, micro-electronics and information
processing.
In addition, as a result of the Combination, the Corporation
now has an Electronics Laboratory in Syracuse, New York, which
conducts advanced research in solid-state microwave and millimeter-
wave technology, infrared sensor focal plane electronics and
specialized integrated microelectronic modules for radar, space,
communications and infrared sensor systems. The Combination also
brought to the Corporation the Advanced Technology Laboratory in
Moorestown, New Jersey, which conducts research and development in
advanced computing technologies. Finally, as a result of the
Combination, the Corporation is afforded access to the General
Electric Company's Corporate Research and Development Laboratories.
See "Note P: Research and Development Expenses" of the "Notes
to Financial Statements" on page 51 of the 1993 Annual Report.
Employees
As of January 31, 1994, Martin Marietta had approximately
92,000 employees, including approximately 22,000 persons employed
by the Energy Group, 9,000 persons employed by Sandia Corporation
and 3,000 employed by KAPL, Inc. Approximately 17,000 of Martin
Marietta's employees are covered by 68 separate collective
bargaining agreements with various international and local unions.
Of these agreements, 40, covering approximately 6,000 employees,
will expire during 1994. Management considers employee relations
generally to be good and believes that the probability is remote
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that renegotiating these contracts will have a material adverse
effect on its business.
Martin Marietta Technologies, Inc. - Reporting Status
Martin Marietta Corporation and Martin Marietta Technologies,
Inc. each have securities registered pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (1934 Act). The staff
of the Securities and Exchange Commission (SEC) has taken the
position that the companies need not file separate 1934 Act reports
if those reports filed by Martin Marietta Corporation are expanded
so as to include additional information concerning Martin Marietta
Technologies, Inc. Such additional information is included in this
Annual Report on Form 10-K and in "Note J: Martin Marietta
Technologies, Inc." of the "Notes to Financial Statements" on
page 48 of the 1993 Annual Report. In addition, certain documents
required to be filed as Exhibits to this Form 10-K or incorporated
by reference to previous filings with the SEC are incorporated
herein by reference to previous SEC filings by Technologies. At
the time of such filings, Technologies was known as Martin Marietta
Corporation and filed under Commission File Number 1-4552. See
"Note B: Business Combination with GE Aerospace" of the "Notes to
Financial Statements" on page 45 and page 46 of the 1993 Annual
Report.
ITEM 2. PROPERTIES
At December 31, 1993, excluding Martin Marietta Materials,
Inc., the Corporation operated in approximately 186 offices,
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facilities, plants and laboratories located throughout the United
States and internationally. Of these, Martin Marietta owned
approximately 18 locations, aggregating approximately 19 million
square feet, in fee simple and leased approximately 168 locations
aggregating just over 9 million square feet. In addition, Martin
Marietta manages various government-owned facilities, including the
NASA Michoud Assembly Facility at New Orleans, Louisiana, the
Department of Energy facilities at Oak Ridge, Tennessee, and Largo,
Florida, the United States Enrichment Corporation's facilities at
Paducah, Kentucky, and Piketon, Ohio, the Sandia National
Laboratories at Albuquerque, New Mexico and Livermore, California,
the Knolls Atomic Power Laboratory at Niskayuna, New York, and an
Army ordnance plant at Milan, Tennessee. Martin Marietta
personnel also occupy government-owned facilities at Cape Canaveral
Air Force Station and Kennedy Space Center in Florida, at Marshall
Space Flight Center in Alabama, at Vandenberg Air Force Base in
California and at Jericho, Vermont; Johnson City, New York; and
Pittsfield, Massachusetts. The United States Government also
furnishes certain equipment and property used by Martin Marietta.
Martin Marietta owns its headquarters office building located
in Bethesda, Maryland in fee simple. In addition, the Corporation
owns 200 acres of land and approximately 2.1 million square feet of
buildings at Middle River, Maryland, near Baltimore; a 1.8 million
square foot office building and manufacturing park located in
Syracuse, New York; approximately 3,200,000; 3,200,000; 675,000;
500,000 and 1,200,000 square feet of office and manufacturing
facilities located in Orlando, Florida; Waterton, Colorado; East
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Windsor, New Jersey; Utica, New York; and King of Prussia,
Pennsylvania, respectively; approximately 1,500,000 square feet of
office space in Littleton, Colorado; and approximately 700 acres of
land which could be developed in Orlando, Florida. The Syracuse
and Utica, New York facilities are occupied by the Electronics
Group while the Waterton, Colorado; East Windsor, New Jersey; and
King of Prussia, Pennsylvania facilities are occupied by the Space
Group.
In 1993, the Corporation announced a facilities consolidation
plan which is expected to reduce operating costs by $1.5 billion
over the next five years. Under this plan, approximately five
million square feet of capacity will be eliminated from the
Corporation's facilities in various locations. For additional
details, see "Analysis of Financial Condition and Operating
Results" on page 56 through page 61 of the 1993 Annual Report.
In 1993, Martin Marietta Materials, Inc. (Materials) shipped
aggregates from 140 quarries in 11 Southeastern and Midwestern
states; mining operations were conducted at 133 of these quarries,
of which 29 are located on land owned by Materials, 45 are on land
owned in part and leased in part, 54 are on leased land, and 5 are
on facilities leased on a temporary basis. Materials owns real
property with a total area of approximately 38,000 acres and leases
real property with a total area of approximately 46,000 acres.
Materials conducts its specialty chemical products operations at
facilities in Woodville, Ohio and Manistee, Michigan and at smaller
plants in Bridgeport, Connecticut and River Rouge, Michigan.
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Management believes that all of Martin Marietta's major
physical facilities are in good condition and are adequate for
their intended use.
ITEM 3. LEGAL PROCEEDINGS
Martin Marietta is primarily engaged in providing products and
services under contracts with the United States Government and, to
a lesser degree, under foreign government contracts, some of which
are funded by the United States Government. All such contracts are
subject to extensive legal and regulatory requirements and, from
time to time, agencies of the United States Government investigate
whether Martin Marietta's operations are being conducted in
accordance with these requirements. Such investigations could
result in administrative, civil or criminal liabilities including
reimbursements, fines or penalties being imposed upon Martin
Marietta or could lead to suspension or debarment from future
government contracting by Martin Marietta. Neither management nor
counsel is aware of any such investigation presently ongoing which
is likely to result in the suspension or debarment of the
Corporation or which is likely to result in the imposition of
reimbursements, fines or penalties which would have a material
adverse effect on the Corporation's financial position. Martin
Marietta is also involved in various other legal and environmental
proceedings.
Martin Marietta Energy Systems, Inc. (MMES), a wholly-owned
subsidiary of Technologies, manages certain facilities on behalf of
the Department of Energy (DOE) under contracts with the DOE. MMES
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is involved in proceedings arising out of work performed under
these contracts including the following:
- - On June 7, 1990, Boggs, et al. v. Divested Atomic Corporation,
et al., was filed against various defendants including MMES.
Plaintiffs' request for class certification was granted and
the case is pending in the United States District Court for
the Eastern District of Ohio. Plaintiffs seek monetary
damages of $600 million based upon allegations that the
defendants discharged hazardous substances into the
environment. In the event that any damages are awarded in
these proceedings, such damages will be allowable costs under
the contracts between MMES and the DOE.
- - On May 28, 1992, the Arkansas State Attorney General filed a
civil suit against MMES and the DOE relating to the shipment
of hazardous waste (which may have contained trace amounts of
radioactivity) from facilities managed for the DOE by MMES
into the State of Arkansas. The suit, which is in the United
States District Court for the Eastern District of Arkansas,
Western Division, seeks civil penalties to be set by the Court
plus an award to the State of Arkansas for the costs of its
investigation plus reasonable attorney's fees and costs. In
the event that any damages are awarded in these proceedings,
such damages will be allowable costs under the contracts
between MMES and the DOE.
- - On December 28, 1993, MMES received a subpoena issued by a
Federal Grand Jury in the Eastern District of Virginia
requiring the production of documents relating to subcontracts
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with two of MMES' suppliers. MMES has produced the documents
required. The prosecutor has informed MMES that MMES is not,
at this time, the target of the investigation.
On August 5, 1991, Technologies (then known as Martin Marietta
Corporation) was served with two subpoenas by the Department of
Defense Inspector General relating to documents pertaining to a
contract with the Navy for the full-scale development of the
Supersonic Low Altitude Target (SLAT) and documents associated with
six Independent Research and Development (IR&D) tasks, collectively
known as Navy Missile Systems. Technologies has complied with
these subpoenas. In addition, the Civil Division of the Justice
Department is conducting a civil fraud investigation dealing with
the same or similar allegations and has issued Civil Investigative
Demands for the testimony of several current and former employees.
The Inspector General of the Department of Defense has been
investigating alleged defective pricing and labor mischarging in
the Pershing II program since at least January 1987, when
Technologies (then known as Martin Marietta Corporation) was served
with an Inspector General's subpoena. Subsequently, Technologies
was served with additional Inspector General's subpoenas seeking
records relating to the Pershing II program. In addition, current
and former employees were subpoenaed to appear and have testified
before a Federal Grand Jury in Orlando, Florida. In January 1994,
the Corporation was informed that criminal prosecution had been
declined but that the Civil Division of the Justice Department
intends to pursue the matter.
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On January 6, 1994, the Corporation's Ordnance Systems
facility at Milan, Tennessee, received a Federal Grand Jury
subpoena issued in the Western District of Tennessee. The subpoena
requested the production of certain purchase order files. On
January 20, 1994, the Corporation received a second subpoena in
this matter. The Corporation has complied with the initial
subpoena and is in the process of responding to the second. The
Corporation has not been identified as a target of the
investigation and has not been informed of its purpose.
On January 20, 1994, the Corporation received two subpoenas
issued by the Defense Investigative Service relating to the LANTIRN
program. One of the subpoenas requests documents relating to
repairs to the navigation and targeting pods and relates to the
charging of repair work under the warranty provisions of the
LANTIRN contract. The other pertains to purchases from a
subcontractor and relates to the disclosure of pricing data
concerning these purchases. The Corporation is in the process of
responding. The Corporation has been identified as a potential
target in each of the investigations.
As a result of the Combination, subject to certain limitations
and subject to certain limited rights to indemnification all as
discussed in Parent Corporation's Registration Statement on
Form S-4 (Registration No. 33-58494), Martin Marietta assumed
liabilities relating to or arising out of legal and environmental
proceedings pertaining to the GE Aerospace businesses transferred
to Martin Marietta.
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In April 1992, GE voluntarily disclosed to the U.S. Department
of Defense a matter involving allegations concerning payments,
certifications, and acquisition of competitive information and
related claims in connection with contracts with the Arab Republic
of Egypt for the sale of radar units by one of the GE Aerospace
businesses which is now part of Martin Marietta. Martin Marietta
is cooperating, as did GE, with an ongoing Department of Defense
investigation of this matter.
Martin Marietta is involved in various other legal and
environmental litigation and proceedings arising in the ordinary
course of its business. In the opinion of management (which
opinion is based in part upon consideration of the opinion of
counsel) and in the opinion of counsel, the probability is remote
that the outcome of any litigation or proceedings, whether or not
specifically described above or otherwise referred to herein, will
have a material adverse effect on the results of Martin Marietta's
operations or its financial position.
See also "Note I: Contingencies" of the "Notes to Financial
Statements" on page 48 of the 1993 Annual Report and "Analysis of
Financial Condition and Operating Results" on page 56 through
page 61 of the 1993 Annual Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during
the fourth quarter of 1993.
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ITEM 4(a). EXECUTIVE OFFICERS OF THE REGISTRANT
The corporate officers of Martin Marietta Corporation are
listed below. The Corporation's Board of Directors has determined
that, as of February 24, 1994, the individuals whose names are
followed by an * are executive officers of Martin Marietta for the
purposes of Item 401(b) of Regulation S-K and officers for the
purposes of Rule 16a-1(f) under Section 16 of the Securities
Exchange Act of 1934. There are no family relationships among any
of the executive officers and directors of the Corporation. All
officers serve at the pleasure of the Board of Directors.
Principal
Positions and Occupation and
Offices Held Business
Name with Corporation** Experience**
(Age at 3/30/94) (Year Elected) (Past Five Years)
Norman R. Augustine*(58) Chairman of the Board
(1988), Chief
Executive Officer
(1987) and Director
(1986)
A. Thomas Young*(55) President and Chief Executive Vice
Operating Officer President, 1989
(1990) and Director
(1989)
Richard G. Adamson*(61) Corporate Vice Corporate Vice
President, Strategic President, Business
Development (1993) Development, 1988-1993
Joseph D. Antinucci*(53) Corporate Vice President, Martin
President (1993) and Marietta Aero & Naval
President, Electronics Systems, 1984-1993
and Missiles (1993)
Marcus C. Bennett*(58) Corporate Vice
President (1984),
Chief Financial
Officer (1988), and
Director (1993)
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Peter A. Bracken*(52) Corporate Vice President, Martin
President (1992) and Marietta Electronics,
President, Information Information & Missiles,
Group (1993) 1992-1993; Vice
President, Technical
Operations for
Information Systems,
1986-1992
Michael F. Camardo*(52) Corporate Vice President, GE
President (1993) and Government Services,
President, Services Inc., 1990-1993;
Group (1993) President, GE
Government Services,
1988-1990
Thomas A. Corcoran*(49) Corporate Vice Vice President and
President (1993) and General Manager,
President, Electronics General Electric
Group (1993) Company, 1990-1993;
General Manager, GE
Government
Communications, 1988-
1990
James B. Feller (56) Vice President, GE Aerospace,
Research and Engineering and
Development (1993) Research, 1989-1993
Clyde C. Hopkins*(64) Corporate Vice President, Martin
President (1991) and Marietta Energy
President, Energy Systems, Inc. since
Group (1993) 1988
Alexander L. Horvath*(52) Corporate Vice President, Martin
President (1993) Marietta Ocean, Radar
& Sensor Systems since
April 1993; Vice
President and General
Manager, GE Ocean,
Radar & Sensor Systems,
1992-1993; General
Manager, GE, 1989-1992
Bobby F. Leonard*(61) Corporate Vice
President, Human
Resources (1981)
William B. Lytton (45) Corporate Vice General Counsel, GE
President (1993) and Aerospace, 1989;
Associate General Partner, Kohn, Savett,
Counsel, Operations Klein & Graf, 1983-1989
and International
(1993)
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James W. McAnally*(57) President, Martin President, Martin
Marietta Astronautics Marietta Defense
(1993) Systems &
Communications, 1987-
1993
Janet L. McGregor*(40) Treasurer (1992) Deputy Treasurer, 1991-
1992; Assistant
Treasurer, 1984-1991
Frank H. Menaker, Jr.* Corporate Vice
(53) President (1982) and
General Counsel (1981)
Dan A. Peterson*(63) Corporate Vice President, Information
President (1986), and Systems, 1986-1989
Vice President,
Washington Operations
(1989)
Robert J. Polutchko*(56) Corporate Vice Vice President,
President (1991) and Technical Operations,
Vice President, Space 1991-1993; President,
Group Technical Information Systems
Operations (1993) Group, 1989-1991;
President, Martin
Marietta Communications
Systems, 1988-1989
Michael A. Smith*(50) Corporate Vice President, Martin
President (1993) Marietta Astro Space
since April 1993; Vice
President and General
Manager of General
Electric Company, 1989-
1993
Peter B. Teets*(52) Corporate Vice
President (1985) and
President, Space Group
(1993)
Robert H. Tieken (54) Corporate Vice Vice President, Finance
President (1993), and of GE Aerospace, 1988-
Vice President, 1993
Finance (1993)
Lillian M. Trippett (40) Corporate Secretary Counsel to the
1993 and Assistant Subcommittee on Space,
General Counsel (1993) Committee on Science,
Space and Technology,
U.S. House of
Representatives, 1986-
1989; Director
Washington, Operations,
1989-1993
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Stephen P. Zelnak, Jr.* Corporate Vice
(49) President (1989) and
President, Materials
Group (1993)***
** In April 1993, as a result of the Combination, all of the
Executive Officers of Technologies (then known as Martin Marietta
Corporation) assumed the same offices with the new Martin Marietta
Corporation. The above listing does not distinguish between their
service with the two corporations.
*** In November 1993, the Corporation's aggregates business and
the Common Stock of Martin Marietta Magnesia Specialties Inc. were
transferred to a subsidiary, Martin Marietta Materials, Inc. On
February 24, 1994, approximately 19% of the common stock of Martin
Marietta Materials, Inc. was sold to the public. See "Materials
Group" on page 9. Mr. Zelnak is the President, Chief Executive
Officer and a Director of Martin Marietta Materials, Inc.
Effective upon the completion of the offering, Mr. Zelnak resigned
his position as a corporate officer of Martin Marietta Corporation.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
There were approximately 32,644 holders of record of Martin
Marietta Corporation Common Stock, $1 par value, as of January 31,
1994. The exchanges on which the Corporation's Common Stock is
traded are listed on the cover of this Form 10-K. Information
concerning stock prices and dividends paid during the past two
years is included with "Quarterly Performance, (Unaudited)" under
the caption "Common Dividends Paid and Stock Prices" on page 62 of
the 1993 Annual Report, and that information is hereby incorporated
by reference in this Form 10-K.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item 6 is included under the
caption "Five Year Summary" on page 63 of the 1993 Annual Report,
and that information is hereby incorporated by reference in this
Form 10-K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information required by this Item 7 is included under the
caption "Analysis of Financial Condition and Operating Results" on
page 56 through page 61 of the 1993 Annual Report, and that
information is hereby incorporated by reference in this Form 10-K.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item 8 is included under the
captions "Statement of Earnings," "Balance Sheet," "Statement of
Cash Flows," "Statement of Shareowners' Equity," "Notes to
Financial Statements," "Analysis of Financial Condition and
Operating Results," and "Quarterly Performance (Unaudited)" on
pages 40, 41, 42, 43, 44-54, 56-61 and 62, respectively, of the
1993 Annual Report. This information is hereby incorporated by
reference in this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning directors required by this Item 10,
is included under the caption "Election of Directors" in the
Corporation's definitive Proxy Statement to be filed pursuant to
Regulation 14A no later than March 28, 1994 (1994 Proxy Statement),
and that information is hereby incorporated by reference in this
Form 10-K. Information concerning executive officers required by
this Item 10 is located under Part I, Item 4(a) of this Form 10-K
on page 31 through page 34.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is included in the
text and tables under the caption "Compensation of Executive
Officers" in the 1994 Proxy Statement and that information, except
for the information required by Item 402(k) and Item 402(l) of
Regulation S-K, is hereby incorporated by reference in this
Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by this Item 12 is included under the
captions "Securities Owned by Management" and "Voting Securities
and Record Date" in the 1994 Proxy Statement and that information
is hereby incorporated by reference in this Form 10-K.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to the terms of the Standstill Agreement entered into
by the Corporation and GE as part of the Combination, GE is
entitled to representation upon Martin Marietta's Board of
Directors. See "General" page 1 through page 2. Messrs. Edward E.
Hood, Jr., retired Vice Chairman and a former director of GE, and
Eugene F. Murphy, President and Chief Executive Officer of GE
Aircraft Engines, currently serve as GE's representatives on Martin
Marietta's Board of Directors. The Standstill Agreement resulted
from arm's-length negotiations between the Corporation and GE.
A portion of the consideration received by GE in the
Combination consisted of 20 million shares of Martin Marietta's
Series A Preferred Stock, par value $1.00 per share, which is
convertible into Martin Marietta Common Stock and which, if
converted, would represent approximately 23% of the shares of
Common Stock outstanding after giving effect to such conversion.
Further, there are existing business relationships between the
Corporation and GE. These relationships are the product of arm's-
length negotiations between the corporations.
During part of 1993, John J. Byrne, a director of Martin
Marietta since 1978, also served on the Board of Directors of
Lehman Brothers Inc. The Corporation retained Lehman Brothers Inc.
to render financial services to the Corporation in connection with
the Combination for which Lehman Brothers Inc. was paid an advisory
fee. Lehman Brothers Inc. rendered a fairness opinion to the
Corporation in connection with the Corporation's proposed
acquisition of General Dynamics Corporation's Space Systems
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Division for which Lehman Brothers Inc. received a fee. Finally,
Lehman Brothers Inc. served as one of the underwriters of an
initial public offering of approximately 19% of the common stock of
Martin Marietta Materials, Inc. for which Lehman Brothers Inc.
received underwriting fees. In addition, Mr. Byrne is the Chief
Executive Officer of Fund American Enterprises, Inc. (Fund
American). Hanover Advisors, Inc., formerly a wholly-owned
subsidiary of Fund American, serves as an investment manager for
the Corporation's Master Retirement Trust. Pursuant to the
arrangement, Hanover Advisors receives management fees from the
Corporation which aggregated approximately $342,000 in 1993. These
engagements resulted from arm's-length negotiations in which Mr.
Byrne played no part.
Messrs. Richard G. Adamson, Marcus C. Bennett, Bobby F.
Leonard and Frank H. Menaker, Jr., each of whom is an Executive
Officer of Martin Marietta, serve as Directors (Mr. Bennett as
Chairman) of Martin Marietta Materials, Inc. See "Materials Group"
on Page 9. A summary description of the relationship between
Martin Marietta and Martin Marietta Materials, Inc. is included
under the caption "Relationship with Martin Marietta" in the Martin
Marietta Materials, Inc. Registration Statement on Form S-1
(Registration Statement No. 33-72648) and such information is
incorporated herein by reference.
Messrs. Norman R. Augustine, Marcus C. Bennett, Peter B. Teets
and A. Thomas Young, each of whom is an Executive Officer of Martin
Marietta, borrowed $232,363, $68,447, $86,535 and $104,563,
respectively, from the Corporation in 1993. The loans were used to
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satisfy personal income tax obligations associated with the vesting
of restricted stock previously granted to these individuals by the
Corporation. The plan under which such restricted stock was
granted envisions that recipients may satisfy such tax obligations
by instructing the Corporation to withhold the appropriate number
of shares from the certificate delivered to the recipient when the
restricted stock vests. In this instance, as a result of possible
restrictions on sales by the Corporation's Executive Officers
imposed by Section 16 of the Securities Exchange Act of 1934 and
resulting from the Combination, counsel for the Corporation
recommended that its Executive Officers not utilize this tax
withholding feature. As the restrictions on sale resulted from the
Corporation's actions in effecting the Combination which was in the
best interest of the Corporation, the Corporation offered short-
term loans to such persons to enable them to satisfy their income
tax obligations. The loans and their terms were approved by
disinterested members of the Corporation's Board of Directors. No
interest was paid on the loans. All of the loans had been repaid
in full by January 31, 1994. See the caption "Compensation of
Executive Officers" in the 1994 Proxy Statement.
Mr. Alexander, a director of the Corporation, is counsel to
Baker, Worthington, Crossley, Stansbury & Woolf, a law firm that
provides legal services to the Corporation from time to time. Mr.
Colodny, a director of the Corporation, is Of Counsel to Paul,
Hastings, Janofsky & Walker, a law firm that provides legal
services to the Corporation from time to time.
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Allen E. Murray, a director of Martin Marietta since 1991,
also served on the Board of Directors of Morgan Stanley Group Inc.
Morgan Stanley International served as one of the underwriters of
an initial public offering of approximately 19% of the common stock
of Martin Marietta Materials, Inc. for which Morgan Stanley Group
Inc. received underwriting fees. This engagement resulted from
arm's-length negotiations in which Mr. Murray played no part.
- 41 -
<PAGE>
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a)(1) List of Financial Statements filed as part of the
Form 10-K.
The following financial statements of Martin Marietta
Corporation and consolidated subsidiaries, included in the
1993 Annual Report, are incorporated by reference into Item 8
on page 36 of this Annual Report on Form 10-K. Page numbers
refer to the 1993 Annual Report:
Page
Balance Sheet--
December 31, 1993 and 1992 41
Statement of Earnings--
Years ended December 31, 1993, 1992 and 1991 40
Statement of Shareowners' Equity--
Years ended December 31, 1993, 1992 and 1991 43
Statement of Cash Flows--
Years ended December 31, 1993, 1992 and 1991 42
Notes to Financial Statements--
Years ended December 31, 1993, 1992 and 1991 44-54
(2) List of Financial Statement Schedules filed as part
of this Form 10-K.
The following financial statement schedules of Martin Marietta
Corporation and consolidated subsidiaries are included in
Item 14(d). Page numbers refer to this Form 10-K:
Schedule II - Amounts receivable from related
parties and underwriters, promoters and employees
other than related parties 53
Schedule V - Property, plant and equipment 54-55
- 42 -
<PAGE>
<PAGE>
Page
Schedule VI - Accumulated depreciation,
depletion and amortization of property,
plant and equipment 56
Schedule IX - Short-term borrowings 57
Schedule X - Supplementary income
statement information 58
All other schedules have been omitted because
they are not applicable, not required, or the
information has been otherwise supplied in the
financial statements or notes to the
financial statements.
The report of Martin Marietta's independent
auditors with respect to the above-referenced
financial statements appears on page 55 of the
1993 Annual Report and that report is hereby
incorporated by reference in this Form 10-K.
The report on the financial statement schedules
and the consent of Martin Marietta's independent
auditors appear on page 51.
The report of the former GE Aerospace businesses'
independent auditors with respect to the GE Aerospace
businesses' financial statements as of December 31, 1992
and 1991, and for each of the years in the two year
period ended December 31, 1992, included in Parent
Corporation's Registration Statement on Form S-4
(Registration No. 33-58494), which report is hereby
incorporated by reference in this Form 10-K. The consent
of the former GE Aerospace businesses' independent
auditors appears on page 52.
(b) No reports on Form 8-K have been filed during the last
quarter of the period covered by this report.
(c) Exhibits
(3)(i) Articles of Incorporation.
(a) Articles of Restatement of Martin
Marietta Corporation (formerly Parent
Corporation) filed with the State
Department of Assessments and Taxation of
the State of Maryland on June 30, 1993.
- 43 -
<PAGE>
<PAGE>
(ii) Bylaws
(a) Copy of the Bylaws of Parent Corporation
(now Martin Marietta Corporation) as
amended on January 13, 1993, effective
April 2, 1993.
(4) (a) Indenture dated April 22, 1993, between
the Corporation, Technologies, and
Continental Bank, National Association as
Trustee (incorporated by reference to
Exhibit 4 of the Corporation's filing on
Form 8-K on April 15, 1993).
No other instruments defining the rights
of holders of long-term debt are filed
since the total amount of securities
authorized under any such instrument does
not exceed 10% of the total assets of the
Corporation on a consolidated basis. The
Corporation agrees to furnish a copy of
such instruments to the Securities and
Exchange Commission upon request.
(10)(iii) (a) Directors Deferred Compensation Plan, as
amended (incorporated by reference to
Exhibit 10(iii)(a) to Technologies' Form
10-K for the fiscal year ended
December 31, 1988).
(b) Post-Retirement Income Maintenance Plan
for Directors, as amended.
(c) Financial Counseling Program for
directors, officers, company presidents,
and other key employees as amended
(incorporated by reference to Exhibit
10(iii)(c) to Technologies' Form 10-K for
the fiscal year ended December 31, 1989).
(d) Executive Incentive Plan, as amended.
(e) Deferred Compensation and Estate
Supplement Plan, as amended.
(f) Post-Retirement Death Benefit Plan for
Senior Executives, as amended
(incorporated by reference to Exhibit
(10)(iii)(f) to Technologies' Form 10-K
for the fiscal year ended December 31,
1987).
(g) 1979 Stock Option Plan for Key Employees,
as amended.
- 44 -
<PAGE>
<PAGE>
(h) 1984 Stock Option Plan for Key Employees,
as amended.
(i) Martin Marietta Amended Omnibus
Securities Award Plan, as amended
March 25, 1993.
(j) Format of the agreements between
Technologies and its officers to provide
for continuity of management in the event
of a change in control of Technologies
(incorporated by reference to Exhibit
(10)(iii) to Technologies' Form 10-K for
the fiscal year ended December 31, 1987).
(k) Supplemental Excess Retirement Plan, as
amended (incorporated by reference to
Exhibit (10)(iii)(k) to Technologies'
Form 10-K for the fiscal year ended
December 31, 1990).
(l) Restricted Stock Award Plan (incorporated
by reference to Exhibit 10 to
Technologies' Form 10-Q for the quarter
ended June 30, 1989).
(m) Long Term Performance Incentive
Compensation Plan (incorporated by
reference to Exhibit (10)(iii)(m) to
Technologies' Form 10-K for the fiscal
year ended December 31, 1990).
(n) Amended and Restated Martin Marietta
Corporation Long Term Performance
Incentive Compensation Plan (incorporated
by reference to Exhibit 10(iii)(o) of
Technologies' Form 10-K for the fiscal
year ended December 31, 1992).
(o) Directors' Life Insurance Program.
(p) (1) Transaction Agreement dated November
22, 1992, among General Electric
Company, Technologies and the
Corporation (incorporated by
reference from Parent Corporation's
Registration Statement on Form S-4
(Registration No. 33-58494) filed
with the SEC on February 18, 1993).
(2) Form of Amendment Agreement, dated
as of February 17, 1993, among
General Electric Company,
Technologies and the Corporation
- 45 -
<PAGE>
<PAGE>
(incorporated by reference from
Parent Corporation's Registration
Statement on Form S-4 (Registration
No. 33-58494) filed with the SEC on
February 18, 1993).
(3) Form of Amendment Agreement, dated
as of March 28, 1993, among General
Electric Company, Technologies and
the Corporation (incorporated by
reference from Parent Corporation's
Registration Statement on Form S-4
(Registration No. 33-58494) filed
with the SEC on February 18, 1993).
.
(q) Martin Marietta Executive Special Early
Retirement Option and Plant Closing
Retirement Option Plan.
(r) Martin Marietta Supplementary Pension
Plan for Employees of Transferred GE
Operations.
(11) Computation of net earnings per common
share for the years ended December 31,
1993, 1992 and 1991.
(12) Computation of ratio of earnings to fixed
charges for the year ended December 31,
1993.
(13) Martin Marietta Corporation 1993 Annual
Report to Shareowners, portions of which
are incorporated by reference in this
Form 10-K. Those portions of the 1993
Annual Report to Shareowners which are
not incorporated by reference shall not
be deemed to be "filed" as part of this
report.
(21) List of Subsidiaries of Martin Marietta
Corporation.
(23) (a) Consent of Ernst & Young, Independent
Auditors for Martin Marietta Corporation
(included in this Form 10-K at page 51).
(b) Consent of KPMG Peat Marwick, Independent
Auditors for the former GE Aerospace
businesses (included in this Form 10-K at
page 52).
(24) Powers of Attorney.
- 46 -
<PAGE>
<PAGE>
(27) The Financial Statement Schedules appear
on page 53 through page 58 of this
Form 10-K.
(99) Other Exhibits
(a) Assumption Agreement among Martin
Marietta Materials, Inc. and
Technologies dated as of
November 12, 1993 (incorporated by
reference to Exhibit 10.01 to Martin
Marietta Materials, Inc.'s
Registration Statement on Form S-1
(Reg. No. 33-72648). Exhibit filed
with the SEC on December 8, 1993).
(b) Transfer and Capitalization
Agreement dated as of November 12,
1993, among Technologies, Martin
Marietta Investments, Inc., and
Martin Marietta Materials, Inc.
(incorporated by reference to
Exhibit 10.02 to Martin Marietta
Materials, Inc.'s Registration
Statement on Form S-1 (Reg.
No. 33-72648). Exhibit filed with
the SEC on December 8, 1993).
(c) Form of Intercompany Services
Agreement between Martin Marietta
Materials, Inc. and the Corporation
(incorporated by reference to
Exhibit 10.03 to Martin Marietta
Materials, Inc.'s Registration
Statement on Form S-1 (Reg. No. 33-
72648). Exhibit filed with the SEC
on February 2, 1994).
(d) Form of Tax-Sharing Agreement
between Martin Marietta Materials,
Inc. and the Corporation
(incorporated by reference to
Exhibit 10.04 to Martin Marietta
Materials, Inc.'s Registration
Statement on Form S-1 (Reg. No. 33-
72648). Exhibit filed with the SEC
on February 2, 1994).
- 47 -
<PAGE>
<PAGE>
(e) Form of Corporate Agreement between
Martin Marietta Materials, Inc. and
the Corporation (incorporated by
reference to Exhibit 10.05 to Martin
Marietta Materials, Inc.'s
Registration Statement on Form S-1
(Reg. No. 33-72648). Exhibit filed
with the SEC on February 2, 1994).
(f) Form of Cash Management Agreement
between Martin Marietta Materials,
Inc. and Technologies (incorporated
by reference to Exhibit 10.08 to
Martin Marietta Materials, Inc.'s
Registration Statement on Form S-1
(Reg. No. 33-72648). Exhibit filed
with the SEC on February 2, 1994).
Other material incorporated by reference:
Martin Marietta Corporation's definitive Proxy
Statement to be filed pursuant to Regulation 14A no
later than March 28, 1994, portions of which are
incorporated by reference in this Form 10-K. Those
portions of the definitive Proxy Statement which
are not incorporated by reference shall not be
deemed to be "filed" as part of this report.
- 48 -
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 CORPORATION
Date: February 25, 1994 By: /s/ FRANK H. MENAKER, JR.
Frank H. Menaker, Jr.
Vice President and
General Counsel
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the date
indicated.
Signature Title Date
/s/ Norman R. Augustine Chairman of the February 25, 1994
Norman R. Augustine* Board, Chief
Executive Officer
/s/ Marcus C. Bennett Director, Vice February 25, 1994
Marcus C. Bennett* President, Chief
Financial and
Chief Accounting
Officer
/s/ A. James Clark Director February 25, 1994
A. James Clark*
/s/ James L. Everett, III Director February 25, 1994
James L. Everett, III*
/s/ Edward L. Hennessy, Jr. Director February 25, 1994
Edward L. Hennessy, Jr.*
- 49 -
<PAGE>
<PAGE>
Signature Title Date
/s/ Edward E. Hood, Jr. Director February 25, 1994
Edward E. Hood, Jr.*
/s/ Caleb B. Hurtt Director February 25, 1994
Caleb B. Hurtt*
/s/ Gwendolyn S. King Director February 25, 1994
Gwendolyn S. King*
/s/ Melvin R. Laird Director February 25, 1994
Melvin R. Laird*
/s/ Gordon S. Macklin Director February 25, 1994
Gordon S. Macklin*
/s/ Eugene F. Murphy Director February 25, 1994
Eugene F. Murphy*
/s/ Allen E. Murray Director February 25, 1994
Allen E. Murray*
/s/ John W. Vessey, Jr. Director February 25, 1994
John W. Vessey, Jr.*
/s/ A. Thomas Young Director February 25, 1994
A. Thomas Young*
*By: /s/ STEPHEN M. PIPER February 25, 1994
(Stephen M. Piper, Attorney-in-fact**)
_____________________
**By authority of Powers of Attorney filed with this Annual
Report on Form 10-K.
- 50 -
<PAGE>
<PAGE>
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual
Report on Form 10-K of Martin Marietta Corporation of our report
dated January 21, 1994, included on page 55 of the Martin
Marietta Corporation 1993 Annual Report to Shareowners.
Our audits also included the financial statement schedules of
Martin Marietta Corporation listed in Item 14(a). These
schedules are the responsibility of the Corporation's management.
Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to
above, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material
respects the information set forth therein.
We also consent to the incorporation by reference of our report
dated January 21, 1994, with respect to the consolidated
financial statements incorporated herein by reference, and our
report included in the preceding paragraph with respect to the
financial statement schedules included in the Annual Report on
Form 10-K of Martin Marietta Corporation, in the following
Registration Statements:
(1) Pre-Effective Amendment No. 1, dated April 18, 1988, to
Registration Statement Number 33-20931 of Martin Marietta
Technologies, Inc. on Form S-3;
(2) Registration Statement Number 33-59466-01 of Martin Marietta
Corporation and Martin Marietta Technologies, Inc. on
Form S-3, dated March 12, 1993;
(3) Registration Statement Number 33-61210 of Martin Marietta
Corporation on Form S-3, dated April 16, 1993;
(4) Registration Statement Number 33-58494 of Parent Corporation
(now known as Martin Marietta Corporation) on Form S-4,
dated February 19, 1993;
(5) Registration Statement Number 33-60476 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(6) Registration Statement Number 33-60478 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(7) Registration Statement Number 33-60480 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(8) Registration Statement Number 33-60484 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(9) Registration Statement Number 33-60486 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993; and
(10) Registration Statement Number 33-60782 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993.
/s/ Ernst & Young
ERNST & YOUNG
Washington, D.C.
February 23, 1994
- 51 -
<PAGE>
<PAGE>
CONSENT OF KPMG PEAT MARWICK, INDEPENDENT AUDITORS
The Board of Directors
General Electric Company:
The Board of Directors
Martin Marietta Corporation:
We consent to the incorporation by reference of our report dated
February 3, 1993 relating to the consolidated financial statements
of GE Aerospace Businesses as of December 31, 1992 and 1991 and for
each of the years in the two-year period ended December 31, 1992,
which report is incorporated by reference in the December 31, 1993
annual report on Form 10-K of Martin Marietta Corporation, in the
following Registration Statements:
(1) Pre-Effective Amendment No.1, dated April 18, 1988, to
Registration Statement Number 33-20931 of Martin Marietta
Technologies, Inc. on Form S-3;
(2) Registration Statement Number 33-59466-01 of Martin Marietta
Corporation and Martin Marietta Technologies, Inc. on Form S-
3, dated March 12, 1993;
(3) Registration Statement Number 33-61210 of Martin Marietta
Corporation on Form S-3, dated April 16, 1993;
(4) Registration Statement Number 33-58494 of Parent Corporation
(now known as Martin Marietta Corporation) on Form S-4, dated
February 19, 1993;
(5) Registration Statement Number 33-60476 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(6) Registration Statement Number 33-60478 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(7) Registration Statement Number 33-60480 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(8) Registration Statement Number 33-60484 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993;
(9) Registration Statement Number 33-60486 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993; and
(10) Registration Statement Number 33-60782 of Martin Marietta
Corporation on Form S-8, dated April 2, 1993.
/s/ KPMG PEAT MARWICK
Philadelphia, PA
February 23, 1994
- 52 -
<PAGE>
<PAGE>
<TABLE>
SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
Deductions Balance at End of Period
Balance at (1) (2) (1) (2)
Beginning Amounts Amounts
Name of Debtor of Period Additions Collected Written Off Current Not Current
Interest Due
Rate Date
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Year ended December 31, 1993
Notes Receivable*
Norman R. Augustine 0% 1994 -0- $232,000 -0- -0- $232,000 -0-
A. Thomas Young 0% 1994 -0- $105,000 -0- -0- $105,000 -0-
Year ended December 31, 1992 - - -0- -0- -0- -0- -0- -0-
Year ended December 31, 1991 - - -0- -0- -0- -0- -0- -0-
<FN>
* The notes are in connection with the vesting
of restricted stock awards previously granted
to these individuals by the Corporation. No
interest was paid on the loans. Income was
imputed for personal income tax purposes at the
applicable federal rate.
- 53 -
</TABLE>
<PAGE>
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY, PLANT, AND EQUIPMENT
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
COL. A COL. B COL. C COL. D COL. E COL. F
Balance At Other Changes Balance At
Beginning Additions Add (Deduct) End
CLASSIFICATION of Period at Cost Retirements Describe of Period
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993
Land $ 77,062,000 $ 2,930,000 $ 1,827,000 $( 88,000) A $ 117,394,000
39,317,000 B
Land improvements 73,816,000 2,913,000 515,000 ( 1,000) A 78,004,000
1,791,000 B
Mineral deposits 35,343,000 3,320,000 88,000 - 38,575,000
Buildings and improvements 696,077,000 31,578,000 39,059,000 626,000 A 836,694,000
147,472,000 B
Machinery and equipment 2,148,520,000 196,627,000 120,880,000 ( 415,000) A 2,615,871,000
392,019,000 B
Construction in progress 113,425,000 (13,925,000) C 908,000 ( 3,237,000) A 117,796,000
22,441,000 B
$3,144,243,000 $223,443,000 D $163,277,000 $599,925,000 $3,804,334,000
Year ended December 31, 1992
Land $ 75,857,000 $ 2,141,000 $ 936,000 $ - $ 77,062,000
Land improvements 68,364,000 5,546,000 100,000 6,000 A 73,816,000
Mineral deposits 30,743,000 4,709,000 109,000 - 35,343,000
Buildings and improvements 671,434,000 28,923,000 4,121,000 ( 159,000) A 696,077,000
Machinery and equipment 2,052,025,000 179,080,000 85,928,000 3,343,000 A 2,148,520,000
Construction in progress 150,840,000 (38,875,000) C 140,000 1,600,000 A 113,425,000
$3,049,263,000 $181,524,000 D $ 91,334,000 $ 4,790,000 $3,144,243,000
Year ended December 31, 1991
Land $ 72,248,000 $ 3,980,000 $ 1,002,000 $ 269,000 A $ 75,857,000
362,000 F
Land improvements 64,907,000 4,078,000 1,925,000 ( 55,000) A 68,364,000
1,359,000 F
Mineral deposits 34,131,000 1,005,000 4,202,000 ( 191,000) A 30,743,000
Buildings and improvements 641,727,000 22,702,000 8,873,000 1,288,000 A 671,434,000
14,590,000 F
Machinery and equipment 1,875,362,000 192,484,000 80,551,000 ( 472,000) A 2,052,025,000
65,202,000 F
Construction in progress 154,707,000 ( 6,143,000) C 184,000 ( 791,000) A 150,840,000
3,251,000 F
$2,843,082,000 $ 218,106,000 D $ 96,737,000 E $84,812,000 $3,049,263,000
- 54 -
</TABLE>
<PAGE>
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY, PLANT, AND EQUIPMENT
For the Year Ended December 31, 1993
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Notes:
A Transfers, reclassifications, and adjustments.
B Property, plant and equipment of the aerospace and other businesses of General Electric Company
which were combined with the businesses of Martin Marietta Corporation on April 2, 1993.
C Additions of $108,570,000 in 1993, $142,008,000 in 1992, and $183,034,000 in 1991 were net of
transfers to other classifications.
D Property, plant, and equipment of other acquired businesses was $8,633,000 in 1993, $10,635,000
in 1992, and $5,780,000 in 1991.
E Retirements resulting from the sales of assets were $28,410,000 in 1991.
F Property, plant and equipment of International Light Metals which became wholly owned by Martin
Marietta Corporation on December 9, 1991.
See Note A to financial statements for methods used to compute depreciation, depletion, and
amortization.
Service lives for each class of property, plant, and equipment are deemed to be appropriate to allocate
the cost of the respective assets over their estimated useful lives. The range of service lives for certain
major classifications follows:
<CAPTION>
Years
<S> <C>
Land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 to 20
Buildings and improvements:
Electronics, Space, Information and Services facilities . . . . . . . . . . . . . . . . . . . . . 10 to 40
Materials facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 to 50
Machinery and equipment:
Electronics, Space, Information and Services facilities . . . . . . . . . . . . . . . . . . . . . 5 to 20
Materials facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 to 20
- 55 -
</TABLE>
<PAGE>
<PAGE>
<TABLE>
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION, AND AMORTIZATION
OF PROPERTY, PLANT, AND EQUIPMENT
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
COL. A COL. B COL. C COL. D COL. E COL. F
Balance At Additions Other Changes Balance At
Beginning Charged to Costs Add (Deduct) End
DESCRIPTION of Period and Expenses Retirements Describe of Period
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993
Land improvements $ 41,594,000 $ 4,428,000 $ 316,000 $ - $ 45,706,000
Mineral deposits 6,076,000 575,000 12,000 - 6,639,000
Buildings and improvements 321,277,000 57,608,000 7,500,000 5,773,000 A 377,158,000
Machinery and equipment 1,518,157,000 287,371,000 116,464,000 (6,986,000) A 1,682,078,000
$1,887,104,000 $349,982,000 $124,292,000 $ (1,213,000) $2,111,581,000
Year ended December 31, 1992
Land improvements $ 37,552,000 $ 4,564,000 $ 528,000 $ 6,000 A $ 41,594,000
Mineral deposits 5,678,000 442,000 14,000 (30,000) A 6,076,000
Buildings and improvements 292,909,000 31,047,000 2,571,000 (108,000) A 321,277,000
Machinery and equipment 1,397,652,000 190,094,000 69,885,000 296,000 A 1,518,157,000
$1,733,791,000 $226,147,000 $72,998,000 $ 164,000 $1,887,104,000
Year ended December 31, 1991
Land improvements $ 32,993,000 $ 4,354,000 $ 983,000 $ (18,000) A $ 37,552,000
1,206,000 C
Mineral deposits 5,563,000 591,000 476,000 - 5,678,000
Buildings and improvements 255,142,000 29,903,000 3,309,000 (53,000) A 292,909,000
11,226,000 C
Machinery and equipment 1,208,696,000 190,224,000 65,527,000 86,000 A 1,397,652,000
64,173,000 C
$1,502,394,000 $225,072,000 $70,295,000 B $ 76,620,000 $1,733,791,000
<FN>
A Transfers, reclassifications and adjustments.
B Retirements resulting from the sales of assets were $17,405,000 in 1991.
C Accumulated depreciation, depletion and amortization of International Light Metals which became wholly owned by
Martin Marietta Corporation on December 9, 1991.
- 56 -
</TABLE>
<PAGE>
<PAGE>
<TABLE>
SCHEDULE IX - SHORT-TERM BORROWINGS
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
COL. A COL. B COL. C COL. D COL. E COL. F
Maximum Average Weighted
Category of Amount Amount Average
Aggregate Balance Weighted Outstanding Outstanding Interest Rate
Short-term at End of Average During the During the During the
Borrowings Period Interest Rate Period Period Period
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993
Commercial Paper -0- - $695,000,000 $ 62,500,000 (B) 3.16% (C)
Revolving Credit Facility -0- - $500,000,000 $500,000,000 (B) 6.00% (C)
Year ended December 31, 1992
Money Market Loan Facilities (A) -0- - $198,000,000 $ 84,130,000 (B) 3.80% (C)
Year ended December 31, 1991
Money Market Loan Facilities (A) -0- - $150,000,000 $ 75,270,000 (B) 6.70% (C)
<FN>
(A) Money Market Loan Facilities represent unsecured borrowings from banks with maturities
generally seven days or less with no provision for extension of the maturity period.
(B) The average amount outstanding was computed on an average daily balance method over the
period for which borrowings were outstanding.
(C) The weighted average interest rate was computed on an annualized interest method.
- 57 -
</TABLE>
<PAGE>
<PAGE>
<TABLE>
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
<CAPTION>
COL. A COL. B
Item Charged to Costs and Expenses
Year Ended December 31,
1993 1992 1991
<S> <C> <C> <C>
Maintenance and repairs . . . . . . . . . . . . . . . . . . . . . . . . $128,728,000 $ 98,348,000 $104,119,000
- 58 -
</TABLE>
<PAGE>
<PAGE>
INDEX TO THE EXHIBITS
TO
THE ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 1993
(3)(i) Articles of Incorporation.
(a) Articles of Restatement of Martin Marietta
Corporation (formerly Parent Corporation) filed
with the State Department of Assessments and
Taxation of the State of Maryland on June 30,
1993.
(ii) Bylaws
(a) Copy of the Bylaws of Parent Corporation (now
Martin Marietta Corporation) as amended on
January 13, 1993, effective April 2, 1993.
(4) (a) Indenture dated April 22, 1993, between the
Corporation, Technologies, and Continental Bank,
National Association as Trustee (incorporated by
reference to Exhibit 4 of the Corporation's filing
on Form 8-K on April 15, 1993).
No other instruments defining the rights of
holders of long-term debt are filed since the
total amount of securities authorized under any
such instrument does not exceed 10% of the total
assets of the Corporation on a consolidated basis.
The Corporation agrees to furnish a copy of such
instruments to the Securities and Exchange
Commission upon request.
(10)(iii) (a) Directors Deferred Compensation Plan, as amended
(incorporated by reference to Exhibit 10(iii)(a)
to Technologies' Form 10-K for the fiscal year
ended December 31, 1988).
(b) Post-Retirement Income Maintenance Plan for
Directors, as amended.
(c) Financial Counseling Program for directors,
officers, company presidents, and other key
employees as amended (incorporated by reference to
Exhibit 10(iii)(c) to Technologies' Form 10-K for
the fiscal year ended December 31, 1989).
(d) Executive Incentive Plan, as amended.
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(e) Deferred Compensation and Estate Supplement Plan,
as amended.
(f) Post-Retirement Death Benefit Plan for Senior
Executives, as amended (incorporated by reference
to Exhibit (10)(iii)(f) to Technologies' Form 10-K
for the fiscal year ended December 31, 1987).
(g) 1979 Stock Option Plan for Key Employees, as
amended.
(h) 1984 Stock Option Plan for Key Employees, as
amended.
(i) Martin Marietta Amended Omnibus Securities Award
Plan, as amended March 25, 1993.
(j) Format of the agreements between Technologies and
its officers to provide for continuity of
management in the event of a change in control of
Technologies (incorporated by reference to
Exhibit (10)(iii) to Technologies' Form 10-K for
the fiscal year ended December 31, 1987).
(k) Supplemental Excess Retirement Plan, as amended
(incorporated by reference to Exhibit (10)(iii) to
Technologies' Form 10-K for the fiscal year ended
December 31, 1991).
(l) Restricted Stock Award Plan (incorporated by
reference to Exhibit 10 to Technologies' Form 10-Q
for the quarter ended June 30, 1989).
(m) Long Term Performance Incentive Compensation Plan
(incorporated by reference to Exhibit (10)(iii) to
Technologies' Form 10-K for the fiscal year ended
December 31, 1991).
(n) Amended and Restated Martin Marietta Corporation
Long Term Performance Incentive Compensation Plan
(incorporated by reference to Exhibit 10(iii)(o)
of Technologies' Form 10-K for the fiscal year
ended December 31, 1992).
(o) Directors' Life Insurance Program.
(p) (1) Transaction Agreement dated November 22,
1992, among General Electric Company,
Technologies and the Corporation
(incorporated by reference from Parent
Corporation's Registration Statement on
Form S-4 (Registration No. 33-58494) filed
with the SEC on February 18, 1993).
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(2) Form of Amendment Agreement, dated as of
February 17, 1993, among General Electric
Company, Technologies and the Corporation
(incorporated by reference from Parent
Corporation's Registration Statement on
Form S-4 (Registration No. 33-58494) filed
with the SEC on February 18, 1993).
(3) Form of Amendment Agreement, dated as of
March 28, 1993, among General Electric
Company, Technologies and the Corporation
(incorporated by reference from Parent
Corporation's Registration Statement on
Form S-4 (Registration No. 33-58494) filed
with the SEC on February 18, 1993).
(q) Martin Marietta Executive Special Early Retirement
Option and Plant Closing Retirement Option Plan.
(r) Martin Marietta Supplementary Pension Plan for
Employees of Transferred GE Operations.
(11) Computation of net earnings per common share for the years
ended December 31, 1993, 1992 and 1991.
(12) Computation of ratio of earnings to fixed charges for the
year ended December 31, 1993.
(13) Martin Marietta Corporation 1993 Annual Report to
Shareowners, portions of which are incorporated by reference
in this Form 10-K. Those portions of the 1993 Annual Report
to Shareowners which are not incorporated by reference shall
not be deemed to be "filed" as part of this report.
(21) List of Subsidiaries of Martin Marietta Corporation.
(23) (a) Consent of Ernst & Young, Independent Auditors for
Martin Marietta Corporation (included in this
Form 10-K at page 47).
(b) Consent of KPMG Peat Marwick, Independent Auditors
for the former GE Aerospace businesses (included
in this Form 10-K at page 48).
(24) Powers of Attorney.
(27) The Financial Statement Schedules appear on page 53 through
page 58 of this Form 10-K.
(99) Other Exhibits
(a) Assumption Agreement among Martin Marietta
Materials, Inc. and Technologies dated as of
November 12, 1993 (incorporated by reference to
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Exhibit 10.01 to Martin Marietta Materials, Inc.'s
Registration Statement on Form S-1 (Reg.
No. 33-72648) filed with the SEC on December 8,
1993).
(b) Transfer and Capitalization Agreement dated as of
November 12, 1993, among Technologies, Martin
Marietta Investments, Inc. and Martin Marietta
Materials, Inc. (incorporated by reference from
Martin Marietta Materials, Inc.'s Registration
Statement on Form S-1 (Reg. No. 33-72648) filed
with the SEC on December 8, 1993).
(c) Form of Intercompany Services Agreement between
Martin Marietta Materials, Inc. and the
Corporation (incorporated by reference from Martin
Marietta Materials, Inc.'s Registration Statement
on Form S-1 (Reg. No. 33-72648) filed with the SEC
on December 8, 1993).
(d) Form of Tax-Sharing Agreement between Martin
Marietta Materials, Inc. and the Corporation
(incorporated by reference from Martin Marietta
Materials, Inc.'s Registration Statement on
Form S-1 (Reg. No. 33-72648) filed with the SEC on
December 8, 1993).
(e) Form of Corporate Agreement between Martin
Marietta Materials, Inc. and the Corporation
(incorporated by reference from Martin Marietta
Materials, Inc.'s Registration Statement on
Form S-1 (Reg. No. 33-72648) filed with the SEC on
December 8, 1993).
(f) Form of Cash Management Agreement between Martin
Marietta Materials, Inc. and Technologies
(incorporated by reference from Martin Marietta
Materials, Inc.'s Registration Statement on
Form S-1 (Reg. No. 33-72648) filed with the SEC on
December 8, 1993).
Other material incorporated by reference:
Martin Marietta Corporation's definitive Proxy
Statement to be filed pursuant to Regulation 14A no
later than March 28, 1994, portions of which are
incorporated by reference in this Form 10-K. Those
portions of the definitive Proxy Statement which are
not incorporated by reference shall not be deemed to be
"filed" as part of this report.
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M A R T I N M A R I E T T A C O R P O R A T I O N
A R T I C L E S
O F
R E S T A T E M E N T
June 30, 1993
(Martin Marietta Logo)
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MARTIN MARIETTA CORPORATION
ARTICLES OF RESTATEMENT
THIS IS TO CERTIFY THAT:
FIRST: Martin Marietta Corporation, a Maryland corporation (the
"Corporation"), desires to restate its charter as currently in effect.
SECOND: The provisions attached hereto are all of the provisions of the
charter currently in effect.
THIRD: The restatement of the charter of the Corporation as attached
hereto has been approved by a majority of the entire Board of Directors of the
Corporation as required by law.
FOURTH: The charter of the Corporation is not amended by these Articles
of Restatement.
FIFTH: The current address of the principal office of the Corporation
is as set forth in Article IV of the attached restatement of the charter.
SIXTH: The name and address of the Corporation's current resident agent
is as set forth in Article IV of the attached restatement of the charter.
SEVENTH: The number of directors of the Corporation is seventeen (17),
which number may be increased or decreased from time to time pursuant to the
By-Laws of the Corporation. The names of those directors currently in office
are as follows:
Lamar Alexander James L. Everett, III Gordon S. Macklin
Norman R. Augustine Edward L. Hennessy, Jr. Eugene F. Murphy
Marcus C. Bennett Edward E. Hood, Jr. Allen E. Murray
John J. Byrne Caleb B. Hurtt John W. Vessey, Jr.
A. James Clark Gwendolyn S. King A. Thomas Young
Edwin I. Colodny Melvin R. Laird
EIGHTH: The undersigned President acknowledges these Articles of
Restatement to be the corporate act of the Corporation and, as to all matters
or facts required to be verified under oath, the undersigned President
acknowledges that, to the best of his knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalities for perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles to be
signed in its name and on its behalf by its President and attested to by its
Secretary on this 29th day of June, 1993.
ATTEST: MARTIN MARIETTA CORPORATION
Lillian M. Trippett By: A. Thomas Young
Lillian M. Trippett, A. Thomas Young, President and
Secretary Chief Operating Officer
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ARTICLE I
NAME
The name of the Corporation is Martin Marietta Corporation.
ARTICLE II
PERIOD OF DURATION
The period of duration of the Corporation is perpetual.
ARTICLE III
PURPOSE AND POWERS
The purpose for which the Corporation is formed is to engage in any
lawful business for which corporations may be organized under the Maryland
General Corporation Law. The Corporation shall have all the general powers
granted by law to Maryland corporations and all other powers not inconsistent
with law which are appropriate to promote and attain its purpose.
ARTICLE IV
PRINCIPAL OFFICE AND RESIDENT AGENT
The address of the principal office of the Corporation in the State of
Maryland is 6801 Rockledge Drive, Bethesda, Maryland 20817. The Resident
Agent of the Corporation is Jennifer E. Bashaw, whose address is c/o Martin
Marietta Corporation, 6801 Rockledge Drive, Bethesda, Maryland 20817. The
Resident Agent is a citizen of the State of Maryland and actually resides
therein.
ARTICLE V
DIRECTORS
SECTION 1. The number of Directors of the Corporation shall be fifteen
(15), which number may be increased or decreased from time to time pursuant to
the By-Laws of the Corporation, but which never shall be less than five (5).
The names of the current directors who shall act until their successors are
duly chosen and qualified, and the years in which their respective terms
expire, are:
Term Expires 1993 Term Expires 1994 Term Expires 1995
Lamar Alexander A. James Clark Caleb B. Hurtt
Norman R. Augustine Edwin I. Colodny Melvin R. Laird
Marcus C. Bennett James L. Everett, III Gordon S. Macklin
John J. Byrne Allen E. Murray John W. Vessey, Jr.
Edward L. Hennessy, Jr. A. Thomas Young
Gwendolyn S. King
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SECTION 2. Beginning with the Board of Directors elected in January
1993, directors were classified with respect to the time for which they were
severally elected to hold office by dividing them into three classes, as
nearly equal in number as possible. At each succeeding Annual Meeting of
Stockholders, beginning in 1993, the class of directors then being elected
will be elected to hold office for a term of office to expire at the third
succeeding Annual Meeting of Stockholders after their election. Each director
will hold office for the term for which elected and until his or her successor
will have been elected and qualified.
SECTION 3. Any director, any class of directors, or the entire Board of
Directors may be removed from office as a director at any time, but only for
cause, by the affirmative vote at a duly called meeting of stockholders of at
least 80% of the votes which all holders of the then outstanding shares of
capital stock of the Corporation would be entitled to cast at an annual
election of directors, voting together as a single class.
SECTION 4. Vacancies in the Board of Directors, including vacancies
resulting from an increase in the number of directors, shall be filled only by
a majority vote of the remaining directors then in office, even if less than a
quorum, except that vacancies resulting from removal from office by a vote of
the stockholders may be filled by the stockholders at the same meeting at
which such removal occurs. All directors elected to fill vacancies shall hold
office for a term expiring at the Annual Meeting of Stockholders at which the
term of the class to which they have been elected expires. No decrease in the
number of directors constituting the Board of Directors shall shorten the term
of any incumbent director.
SECTION 5. Except to the extent prohibited by law or limited by the
Charter, the Board of Directors shall have the power (which, to the extent
exercised, shall be exclusive) to fix the number of directors and to establish
the rules and procedures that govern the internal affairs of the Board of
Directors and nominations for director, including, without limitation, the
vote required for any action by the Board of Directors, and that from time to
time shall affect the directors' power to manage the business and affairs of
the Corporation, and no By-Law shall be adopted by stockholders which shall
modify the foregoing.
SECTION 6. Notwithstanding any other provisions of law or the Charter
or By-Laws of the Corporation, the affirmative vote of at least 80% of the
votes which all holders of the then outstanding shares of capital stock of the
Corporation would be entitled to cast an annual election of directors, voting
together as a single class, shall be required to amend, or repeal, or to adopt
any provision inconsistent with this Article V.
ARTICLE VI
AUTHORIZED SHARES OF STOCK
The total number of shares of stock of all classes which the Corporation
has authority to issue is 550,000,000 shares, divided into 20,000,000 shares
of Series A Preferred Stock, $1.00 par value per share, 30,000,000 shares of
Series Preferred Stock, $1.00 par value per share, and 500,000,000 shares of
Common Stock, $1.00 par value per share. The aggregate par value of all
shares of all classes is $550,000,000.
A description of each class with the preference, conversion and other
rights, voting powers, restrictions, limitations as to dividends and
qualifications of each class is as follows:
A. Series A Preferred Stock
SECTION 1. Designation, Amount and Rank. The class of Preferred Stock
shall be designated "Series A Preferred Stock" and the authorized number of
shares constituting such class shall be 20,000,000. The Series A Preferred
Stock shall rank on a parity as to dividends and as to distribution of assets
upon liquidation, dissolution or winding up with any other class of Preferred
Stock which the Corporation may in the future issue and which by its terms is
not stated to rank junior to the Series A Preferred Stock and the Series A
Preferred Stock shall rank senior, as to dividends and to distribution of
assets upon liquidation, dissolution or winding up to all other classes
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or series of stock of the Corporation which are currently outstanding or which
the Corporation may in the future issue.
SECTION 2. Dividends. (a) The holders of outstanding shares of Series
A Preferred Stock will be entitled to receive, subject to the rights of
holders of any class of Preferred Stock which the Corporation may in the
future issue which ranks on a parity with the Series A Preferred Stock in
respect of dividends, and when, as and if declared by the Board of Directors
out of funds legally available therefor, cumulative preferential cash
dividends at the per share rate of $.75 for each of the quarters ending on the
last day of March, June, September and December of each year and no more,
payable in arrears on each succeeding April 1, July 1, October 1 and January
1, respectively (each such date being hereinafter referred to as a "Preferred
Dividend Payment Date") commencing on that Preferred Dividend Payment Date
which next follows the issuance of such shares. Dividends shall (i) commence
to accrue (whether or not declared and whether or not funds are legally
available for payment) and shall be cumulative on the Series A Preferred Stock
from and after March 29, 1993, and (ii) shall compound quarterly, to the
extent they are unpaid, at the rate of 6% per annum computed on the basis of a
360-day year of twelve 30-day months. If any Preferred Dividend Payment Date
shall not be a Business Day, then the Preferred Dividend Payment Date shall be
on the next succeeding Business Day. Each such dividend will be payable to
holders of record as they appear on the stock books of the Corporation on such
record dates, not less than 10 nor more than 50 days preceding the payment
dates thereof, as shall be fixed by the Board of Directors. As used herein,
the term "Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close or a day which is or is declared
a national or New York State holiday.
(b) Holders of the shares of Series A Preferred Stock shall not be
entitled to any dividends on such shares, whether payable in cash, property or
stock, in excess of full cumulative dividends, as herein provided.
(c) (i) So long as any share of Series A Preferred Stock shall remain
outstanding, no dividend or distribution whatsoever shall be declared or paid
upon or set apart for any class of stock or series thereof ranking junior to
the Series A Preferred Stock in payment of dividends nor shall any shares of
any class of stock or series thereof ranking junior to or on a parity with the
Series A Preferred Stock in payment of dividends be redeemed or purchased by
the Corporation or any subsidiary thereof nor shall any moneys be paid to or
made available for a sinking fund for redemption or purchase of any shares of
any class of stock or series thereof ranking junior to or on a parity with the
Series A Preferred Stock in payment of dividends, unless, in each such
instance, full dividends on all outstanding shares of Series A Preferred Stock
for all past dividend periods shall have been paid at the rate fixed therefor,
the dividends on all outstanding shares of Series A Preferred Stock for the
then current quarterly dividend period shall have been paid or declared and
sufficient funds set aside for payment thereof and all redemption payments
with respect to the Series A Preferred Stock which the Corporation shall have
become obligated to make shall have been made. Notwithstanding the
immediately preceding sentence, the Corporation shall be permitted to purchase
or acquire any preferred or common stock purchase rights of the Corporation
("Rights") distributed pursuant to any rights agreement to which it may be a
party (the "Rights Agreement").
(ii) No dividend shall be paid upon or declared or set apart for any
share of Series A Preferred Stock for any dividend period unless at the same
time (a) a like proportionate dividend for the same dividend period shall be
paid upon or declared or set apart for all shares of Series A Preferred Stock
then outstanding and entitled to receive such dividend and (b) there shall
have been paid upon or declared or set aside for all shares of any other class
of stock or series thereof, if any, then outstanding and ranking on a parity
with the Series A Preferred Stock in payment of dividends, for the same
dividend period of the Series A Preferred Stock, dividends ratably in
proportion to the respective dividend rates fixed for the Series A Preferred
Stock and said parity stock.
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No dividend shall be paid upon or declared or set apart for any shares of any
other class of stock or series thereof, if any, then outstanding and ranking
on a parity with Series A Preferred Stock in payment of dividends for any
dividend period, unless there shall have been paid upon or declared or set
apart for all shares then outstanding of Series A Preferred Stock, for the
same dividend period, dividends ratably in proportion to the respective
dividend rates fixed for the Series A Preferred Stock and said parity stock.
SECTION 3. Redemption. (a) On or after the fifth anniversary of the
date of initial issuance of the Series A Preferred Stock (the "Initial
Issuance Date"), the Corporation, at its option, may redeem any or all shares
of Series A Preferred Stock, at a redemption price of $50 per share, plus an
amount equal to accrued and unpaid dividends thereon (whether or not declared
and whether or not funds are legally available for payment) to and including
the date of redemption (the "Redemption Price"), but only if the Average
Closing Price (as defined in Section 4(e)(vii) below) of the Common Stock
(calculated as of the record date fixed in accordance with Section 3(c) for
notifying holders of such redemption) equals or exceeds the applicable
percentage of the Conversion Price (as defined in Section 4(a)) set forth
below opposite the anniversary of the Initial Issuance Date that occurs on or
that immediately preceded such record date:
Anniversary of Initial Percentage of
Issuance Date Conversion Price
5 . . . . . . . . . . . . . . . . . 130%
6 . . . . . . . . . . . . . . . . . 122.5%
7 . . . . . . . . . . . . . . . . . 115.0%
8 . . . . . . . . . . . . . . . . . 107.5%
9 and thereafter. . . . . . . . . . 100%
Immediately prior to authorizing or making any such redemption with
respect to the Series A Preferred Stock, the Corporation, by resolution of its
Board of Directors, shall, to the extent of any funds legally available
therefore, declare a dividend on the Series A Preferred Stock payable on the
recemption date in an amount equal to any accrued and unpaid dividends on the
Series A Preferred Stock as of such date and, if the Corporation does not have
sufficient funds legally available therefor to declare and pay all dividends
accrued at the time of such redemption, then (i) the dividend shall be paid
pro rata as among the Series A Preferred Stock and any other Preferred Stock
ranking on a parity as to dividends with the Series A Preferred Stock in
accordance with Section 2(c)(ii), and (ii) an amount equal to any remaining
accrued and unpaid dividends shall be added to the redemption price of the
Series A Preferred Stock.
(b) If less than all the outstanding shares of Series A Preferred Stock
are to be redeemed, the shares to be redeemed shall be selected pro rata
(subject to rounding to avoid fractional shares) as nearly as practicable or
by lot, or by such other method as the Board of Directors may determine to be
equitable.
(c) Notice of any redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the date fixed
for redemption to the holders of record of the shares of Series A Preferred
Stock to be redeemed at their respective addresses appearing on the stock
books of the Corporation. The Board of Directors of the Corporation shall fix
a record date for determining holders of record who are entitled to receive
notice of any redemption, not more than 10 days prior to the mailing of such
notice. Notice so mailed shall be conclusively presumed to have been duly
given whether or not actually received. Such notice shall state: (i) the date
fixed for redemption; (ii) the Redemption Price; (iii) whether the Redemption
Price will be paid in cash or, pursuant to Section 3(d) below, in Common
Stock, (iv) that the holder has the right to convert such shares into Common
Stock until the close of business on the second Business Day immediately
preceding the related redemption date; the then-effective Conversion Price and
the place where certificates for such shares may be surrendered for
conversion; (v) the number of shares of Series A Preferred Stock to be
redeemed and if less than all the shares held by such holder are to be
redeemed, the number of such shares to be so redeemed from such holder; (vi)
the place where certificates for such shares are to be surrendered for payment
of the Redemption Price; and (vii) that after the close of business on such
date fixed for redemption the shares to be redeemed shall not accrue dividends
and (viii) if the Redemption Price will be paid in Common Stock, that the
holder has the right to cause a backstop registration of such Common Stock as
described below. Upon surrender in accordance with the aforesaid notice of
the certificate for any shares of Series A Preferred Stock so redeemed (duly
endorsed or accompanied by appropriate instruments of transfer, if so required
by the Corporation in such notice), the holders of record of such shares shall
be entitled to receive the Redemption Price, without interest. In case fewer
than all the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the
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holder thereof.
(d) At the option of the Corporation, if notice of redemption is mailed
as aforesaid, and if prior to the date fixed for redemption funds or shares of
Common Stock sufficient to pay in full the Redemption Price are deposited in
trust, for the account of the holders of the shares to be redeemed, with a
bank or trust company named in such notice doing business in the Borough of
Manhattan, The City of New York, State of New York and having capital surplus
and undivided profits of at least $500 million (which bank or trust company
also may be the transfer agent and/or paying agent for the Series A Preferred
Stock), notwithstanding the fact that any certificate(s) for shares called for
redemption shall not have been surrendered for cancellation, on and after such
date of deposit the shares represented thereby so called for redemption shall
be deemed to be no longer outstanding, and all rights of the holders of such
shares as stockholders of the Corporation shall cease, except the right of the
holders thereof to convert such shares in accordance with the provisions of
Section 4 at any time prior to the close of business on the second Business
Day immediately preceding the related redemption date and the right of the
holders thereof to receive out of the funds or shares of Common Stock so
deposited in trust the Redemption Price, without interest, upon surrender of
the certificate(s) representing such shares. Any funds or shares of Common
Stock so deposited with such bank or trust company in respect of shares of
Series A Preferred Stock converted before the close of business on the second
Business Day immediately preceding the related redemption date shall be
returned to the Corporation upon such conversion. Any funds or shares of
Common Stock so deposited with such bank or trust company which shall remain
unclaimed by the holders of shares called for redemption at the end of two
years after the related redemption date shall be repaid to the Corporation, on
demand, and thereafter the holder of any such shares shall look only to the
Corporation for the payment, without interest thereon, of the Redemption
Price.
(e)(i) In lieu of paying the Redemption Price in cash, the Corporation
may, at its sole option, pay such Redemption Price in shares of Common Stock.
(ii) The number of shares of Common Stock issuable in lieu of a cash
payment of the Redemption Price shall be the number of fully paid and
nonassessable shares (calculated to the nearest 1/100th of a share) of Common
Stock (which shares of Common Stock shall consist of authorized but unissued
shares) as shall have an aggregate Specified Value (as defined below) as of
the redemption date equal to the aggregate liquidation preference of the
shares of Series A Preferred Stock being redeemed. The shares to be redeemed
shall be selected pro rata from each holder; provided that, if the number of
shares of Series A Preferred Stock held by a holder which are subject to
redemption as aforesaid is not a whole number, the number of shares of Series
A Preferred Stock held by such holder to be redeemed as aforesaid shall be
rounded upward to the nearest whole number. The shares of Common Stock
issuable on any redemption to be paid in Common Stock will be delivered to the
Corporation for the account of such holders. By their acceptance of shares of
Series A Preferred Stock, each holder thereof shall be deemed (i) to have
accepted the appointment of the Corporation to act as such referred to below
and (ii) to have appointed the Corporation as its attorney-in-fact for
purposes of making any endorsements on certificates for shares of Common Stock
received by such holder upon redemption of shares of Series A Preferred Stock
to the extent any such endorsement is necessary or appropriate for purposes of
effecting the sale of such shares of Common Stock in a Backstop Registration,
as described below. No fractional shares of Common Stock will be issued upon
redemption. A holder of shares of Series A Preferred Stock who would
otherwise be entitled to receive such a fractional share shall, in lieu
thereof, receive cash in an amount equal to the same fraction of the Specified
Value.
(iii) For purposes hereof, "Specified Value" means the Average Closing
Price (as defined in Section 4(e)(vii)) per share of Common Stock as of the
applicable redemption date.
(iv) Before any holder of shares of Series A Preferred Stock shall
receive certificates for shares of Common Stock in respect of the redemption
of shares of Series A Preferred Stock (or cash representing fractional share
settlements in respect thereof) such holder shall surrender the certificate or
certificates of shares of Series A Preferred Stock duly endorsed if required
by the Corporation, at the office of the Corporation and, if certificates for
shares of Common Stock are to be received by such holder, shall state in
writing the name or names and the denominations in which such holder wishes
the certificate or certificates for the Common Stock to be issued. The
Corporation will,
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as soon as practicable after receipt thereof, issue and deliver to such
holder, or such holder's designee or designees, a certificate or certificates
for the number of shares of Common Stock to which such holder shall be
entitled as aforesaid, together with a certificate or certificates
representing any shares of Series A Preferred Stock which are not to be
redeemed, but which shall have constituted part of the shares of Series A
Preferred Stock represented by the certificate or certificates so surrendered.
(v) Each redemption of shares of Series A Preferred Stock paid in Common
Stock shall be deemed to have been made as of the close of business on the
applicable redemption date, so that the rights of the holder of such shares of
Series A Preferred Stock shall, to the extent of such redemption, cease at
such time and the person or person entitled to receive shares of the Common
Stock upon redemption of such shares (including the person or persons to whom
any shares of Common Stock shall have been sold pursuant to a Backstop
Registration (as defined in Section 3(f))) shall be treated for all purposes
as having become the record holder or holders of the Common Stock at such
time, provided, however, that in the event a dividend, distribution,
subdivision, combination, reclassification, merger or similar event is
declared or occurs with respect to the shares of Common Stock, and the record
date for any such action is on or after the close of business on the record
date for such redemption, but prior to the close of business on the date of
such redemption, then the person or persons entitled to receive shares of the
Common Stock upon redemption of shares of Series A Preferred Stock (including
the person or persons to whom any shares of Common Stock shall have been sold
pursuant to a Backstop Registration) shall be treated for purposes of such
action as having become the record holder or holders of the Common Stock at
the close of business on the Trading Day (as defined in Section 4(e)(vii))
next preceding the record date of such redemption. From and after the
redemption, dividends on the shares of Series A Preferred Stock redeemed with
shares of Common Stock as a result of such redemption shall cease to accrue,
and said shares of Series A Preferred Stock shall no longer be deemed to be
outstanding.
(vi) The Corporation will pay any and all taxes that may be payable in
respect of the issuance or delivery of shares of Common Stock upon redemption
of shares of Series A Preferred Stock pursuant hereto. The Corporation shall
not, however, be required to pay any tax which may be payable in respect of
any transfer involved in the delivery of shares of Common Stock pursuant to a
Backstop Registration registered in a name other than the name (x) in which
such shares of Series A Preferred Stock were formerly registered or (y) of any
underwriter participating in such Backstop Registration, and no such issue or
delivery shall be made unless and until the person requesting such issue or
delivery has paid to the Corporation the amount of any such tax, or has
established, to the satisfaction of the Corporation, that such tax has been
paid.
(f) (i) Within 15 days of its receipt of notice pursuant to Section 3(c)
above of a redemption payable in shares of Common Stock, each holder of Series
A Preferred Stock shall have the right to elect not to retain such Common
Stock and to request a backstop registration (a "Backstop Registration") of
the shares of Common Stock received in the redemption by delivering to the
Corporation a written request specifying the amount of Common Stock that the
holder proposes not to retain and to sell pursuant to the Backstop
Registration. A holder's failure to timely deliver such notice shall be
deemed to be an election by the holder thereof to retain such Common Stock.
(ii) The Corporation shall use its best efforts to cause such shares to
be registered under the Securities Act of 1933, as amended (the "Securities
Act") as soon as reasonably practicable so as to permit the sale thereof
promptly. In connection therewith, the Corporation shall prepare, and within
120 days of the receipt of the request, file, on Form S-3 if permitted or
otherwise on the appropriate form, a registration statement under the
Securities Act to effect such registration. Each holder requesting a Backstop
Registration shall thereby be deemed to agree to provide all such information
and materials and to take all such action as may be reasonably required in
order to permit the Corporation to comply with all applicable requirements of
the Securities Act and the Securities and Exchange Commission (the
"Commission") and to obtain any desired acceleration of the effective date of
such registration statement. If the offering to be registered is to be
underwritten, the managing underwriter shall be selected by the Corporation,
and the Corporation and each requesting holder shall enter into an
underwriting agreement containing customary terms and conditions. For
purposes hereof the Common Stock required to be registered is referred to
herein as the "Subject Stock." The Corporation shall not be required to
include Subject Stock
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of any requesting holder therein if the requesting holder does not agree to
offer its stock by or through the underwriters selected by the Corporation for
the registration of the shares of Subject Stock and execute an underwriting
agreement in customary form. If a requesting holder has been permitted to
participate in a proposed offering pursuant to this Section 3(f), the
Corporation thereafter may determine in its sole discretion either not to file
a registration statement, or otherwise not to consummate such offering, in
whole or in part, without any liability hereunder, except as provided herein.
(iii) In connection with any Backstop Registration of shares of Subject
Stock registered pursuant hereto, the Corporation shall (A) furnish to the
requesting holders such number of copies of any prospectus (including
preliminary and summary prospectuses) and conformed copies of the registration
statement (including amendments or supplements thereto and, in each case, all
exhibits) and such other documents as they may reasonably request, but only
while the Corporation shall cause the registration statement to remain
current; (B)(1) use its best efforts to register or qualify the Subject Stock
covered by such registration statement under such blue sky or other state
securities laws for offer and sale and (2) keep such registration or
qualification in effect for so long as the registration statement remains in
effect; (C) use its best efforts to cause all shares of Subject Stock covered
by such registration statement to be registered with or approved by such other
federal or state government agencies or authorities as may be necessary in the
opinion of counsel to the Corporation to enable the requesting holders to
consummate the disposition of such shares of Subject Stock; (D) notify the
requesting holders any time when a prospectus relating thereto is required to
be delivered under the Securities Act upon discovery that, or upon the
happening of any event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, in the
light of the circumstances under which they were made, and at the request of
the requesting holders promptly prepare and furnish to them a reasonable
number of copies of a supplement to or an amendment of such prospectus as may
be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, in the light of
the circumstances under which they were made; (E) otherwise use its best
efforts to comply with all applicable rules and regulations of the Commission;
(F) use its best efforts to list the Subject Stock covered by such
registration statement on the New York Stock Exchange or on any other
securities exchange on which Subject Stock is then listed; and (G) before
filing any registration statement or any amendment or supplement thereto, and
as far in advance as is reasonably practicable, furnish to the requesting
holders copies of such documents. In connection with any offering of Subject
Stock registered pursuant to this Section 3(f), the Corporation shall (x)
furnish to the underwriter unlegended certificates representing ownership of
the Common Stock being sold in such denominations as requested and (y)
instruct any transfer agent and registrar of the Subject Stock to release any
stop transfer orders with respect to such Subject Stock. Upon any
registration becoming effective pursuant to this Section 3(f), the Corporation
shall use its best efforts to keep such registration statement current for a
period of 60 days (or 90 days, if the Corporation is eligible to use a Form
S-3, or successor form) or such shorter period as shall be necessary to effect
the distribution of the Subject Stock.
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(iv) By requesting Backstop Registration, each requesting holder shall
be deemed to agree that upon receipt of any notice from the Corporation of the
happening of any event of the kind described in subdivision (iii)(D) of this
Section 3(f), it will forthwith discontinue its disposition of Subject Stock
pursuant to the registration statement relating to such Subject Stock until
its receipt of the copies of the supplemented or amended prospectus
contemplated by subdivision (iii)(D) of this Section 3(f) and, if so directed
by the Corporation, will deliver to the Corporation all copies then in its
possession of the prospectus relating to such Subject Stock current at the
time of receipt of such notice.
(v) The Corporation shall pay all agent fees and commissions and
underwriting discounts and commissions related to shares of Subject Stock
being sold by the requesting holders, the fees and disbursements of one
counsel for the requesting holders which shall be selected by a majority in
interest of the requesting holders and all other fees and expenses in
connection with any registration statement hereunder, including, without
limitation, all registration and filing fees, all printing costs, all fees and
expenses of complying with securities or blue sky laws and fees and
disbursements of the Corporation's counsel and accountants.
(vi) In the case of any offering registered pursuant hereto, the
Corporation agrees to indemnify and hold the requesting holders, each
underwriter of the Subject Stock under such registration and each person who
controls any of the foregoing within the meaning of Section 15 of the
Securities Act, and any officer, employee or partner of the foregoing,
harmless against any and all losses, claims, damages, or liabilities
(including reasonable legal fees and other reasonable expenses incurred in the
investigation and defense thereof) to which they or any of them may become
subject under the Securities Act or otherwise (collectively "Losses"), insofar
as any such Losses shall arise out of or shall be based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement relating to the sale of such Subject Stock (as amended
if the Corporation shall have filed with the Commission any amendment
thereof), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in the prospectus relating to the sale of such Subject
Stock (as amended or supplemented if the Corporation shall have filed with the
Commission any amendment thereof or supplement thereto), or the omission or
alleged omission to state therein a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, provided, however, that the indemnification contained in
this Section 3(f)(vi) shall not apply to such Losses which shall arise out of
or shall be based upon any such untrue statement or alleged untrue statement,
or any such omission of alleged omission, which shall have been made in
reliance upon and in conformity with information furnished in writing to the
Corporation by a requesting holder or any such underwriter, as the case may
be, specifically for use in connection with the preparation of the
registration statement or prospectus contained in the registration statement
or any such amendment thereof or supplement thereto.
In the case of each Backstop Registration pursuant to this Section 3(f),
each requesting holder and each underwriter participating therein shall agree,
substantially in the same manner and to the same extent as set forth in the
preceding paragraph, severally to indemnify and hold harmless the Corporation
and each person, if any, who controls the Corporation within the meaning of
Section 15 of the Securities Act, and the directors and officers of the
Corporation, with respect to any statement in or omission from such
registration statement or prospectus contained in such registration statement
(as amended or as supplemented, if amended or supplemented as aforesaid) if
such statement or omission shall have been made in reliance upon and in
conformity with information furnished in writing to the Corporation by a
requesting holder or such underwriter, as the case may be, specifically for
use in connection with the preparation of such registration statement or
prospectus contained in such registration statement or any such amendment
thereof or supplement thereto.
If the indemnification provided for in this Section 3(f) is unavailable
to an indemnified party or is insufficient to hold such indemnified party
harmless from any Losses in respect of which this Section 3(f) would otherwise
apply by its terms (other than by reason of exceptions provided herein), then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall have a joint and several obligation to contribute to the amount
paid or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate
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to reflect the relative benefits received by and fault of the indemnifying
party, on the one hand, and such indemnified party, on the other hand, in
connection with the offering to which such contribution relates as well as any
other relevant equitable considerations. The relative benefit shall be
determined by reference to, among other things, the amount of proceeds
received by each party from the offering to which such contribution relates.
The relative fault shall be determined by reference to, among other things,
each party's relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, and the opportunity to
correct and prevent any statement or omission. The amount paid or payable by
a party as a result of any Losses shall be deemed to include any legal or
other fees or expenses incurred by such party in connection with any
investigation or proceeding, to the extent such party would have been
indemnified for such expenses if the indemnification provided for in this
Section 3(f) was available to such party.
(g) When the offering contemplated by Section 3(f) above has been
completed, the net proceeds thereof shall be distributed to the requesting
holders pro rata in respect of their interests in the Subject Stock. Any such
offering not consummated within six months of delivery of the notice to the
Corporation pursuant to Section 3(f)(i) shall be deemed to have been
abandoned. To the extent the net proceeds per share to each requesting holder
from such offering (treating the net proceeds as zero if such offering has
been abandoned) are less than the sum of the Redemption Price and the Interest
Amount (as defined below) in respect of such requesting holder's shares of
Series A Preferred Stock redeemed pursuant to this Section, the Corporation
shall pay to each requesting holder an amount in cash equal to the applicable
difference. "Interest Amount" means, with respect to the Redemption Price
payable to any holder for such holder's shares of Series A Preferred Stock
redeemed pursuant to this Section, interest on such Redemption Price for each
day, from the applicable redemption date to and including the date of payment
pursuant to this Section 3(g) at a rate per annum equal to the rate per annum,
as published by the Board of Governors of the Federal Reserve System as
reported by the U.S. Department of Treasury, for such day on U.S. Treasury
Bonds maturing on the date that is the tenth anniversary of such redemption
date (or if no U.S. Treasury Bonds mature on such date, then on the date
nearest to such date for which such a maturity exists).
SECTION 4. Conversion Rights. The holders of shares of Series A
Preferred Stock shall have the right, at their option, to convert such shares
into shares of Common Stock on the following terms and conditions:
(a) Each share of Series A Preferred Stock shall be convertible,
at the option of the holder thereof, at any time after the date of
issuance of such share and prior to the close of business of the
Corporation on the second Business Day immediately preceding any date
set for the redemption thereof (provided that consideration sufficient
to redeem all shares to be redeemed on such date has been paid or made
available for payment on or prior to such date), at the office of the
Corporation or any transfer agent for the Series A Preferred Stock, into
such number of fully paid and nonassessable shares of Common Stock as is
determined by dividing $50 by the Conversion Price, determined as
hereinafter provided, in effect at the time of conversion. The price at
which shares of Common Stock shall be deliverable upon conversion (the
"Conversion Price") shall initially be $69.105 per share of Common
Stock. The Conversion Price shall be subject to adjustment from time to
time as hereinafter provided. No payment or adjustment shall be made on
account of any dividend on the shares of Common Stock issued upon
conversion of shares of Series A Preferred Stock if the record date for
such dividend occurs prior to the date of such conversion. If any
shares of Series A Preferred Stock shall be called for redemption, the
right to convert the shares designated for redemption shall terminate
after the close of business on the second Business Day immediately
preceding the date fixed for redemption unless default is made in the
payment of the Redemption Price. In the event of default in the payment
of the Redemption Price, the right to convert the shares designated for
redemption shall terminate at the close of business on the Business Day
immediately preceding the date that such default is cured.
(b) In order to convert shares of Series A Preferred Stock into
Common Stock, the holder thereof shall surrender the certificates
therefor, duly endorsed if the Corporation shall so require, or
accompanied by appropriate instruments of transfer satisfactory to the
Corporation, at the office of the transfer agent for the Series A
Preferred Stock, or at such other office as may be designated by the
Corporation, together with written notice that such holder irrevocably
elects to convert such shares of Series A Preferred Stock. Such
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notice shall also state the name and address in which such holder wishes
the certificate for the shares of Common Stock issuable upon conversion
to be issued. As soon as practicable after receipt of the certificates
representing the shares of Series A Preferred Stock to be converted and
the notice of election to convert the same, the Corporation shall issue
and deliver at said office a certificate for the number of whole shares
of Common Stock issuable upon conversion of the shares of Series A
Preferred Stock surrendered for conversion, together with a cash payment
in lieu of any fraction of a share, as hereinafter provided, to the
person entitled to receive the same. If more than one stock certificate
for Series A Preferred Stock shall be surrendered for conversion at one
time by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares represented by all the certificates so
surrendered. Shares of Series A Preferred Stock shall be deemed to have
been converted immediately prior to the close of business on the date
such shares are surrendered for conversion and notice of election to
convert the same is received by the Corporation in accordance with the
foregoing provision, and the person entitled to receive the Common Stock
issuable upon such conversion shall be deemed for all purposes as the
record holder of such Common Stock as of such date.
(c) Dividends shall cease to accrue on shares of Series A
Preferred Stock surrendered for conversion into Common Stock from and
after the date of conversion; provided, however, that any accrued but
unpaid dividends (whether or not declared and whether or not funds are
legally available for payment) upon such shares to and including the
conversion date shall be paid in cash upon such conversion or as soon
thereafter as permitted by law.
(d) No fractional shares of Common Stock shall be issued upon
conversion of any shares of Series A Preferred Stock. If more than one
share of Series A Preferred Stock is surrendered at one time by the same
holder, the number of full shares issuable upon conversion thereof shall
be computed on the basis of the aggregate number of shares so
surrendered. If the conversion of any shares of Series A Preferred
Stock results in a fractional share of Common Stock, the Corporation
shall pay cash in lieu thereof in an amount equal to such fraction
multiplied by the Average Closing Price, determined as provided in
subsection (vii) of Section 4(e) below, on the date on which the shares
of Series A Preferred Stock were duly surrendered for conversion, or if
such date is not a Trading Date, on the next succeeding Trading Date.
(e) The Conversion Price shall be adjusted from time to time as
follows:
(i) In case the Corporation shall pay or make a dividend or
other distribution on shares of Common Stock or any other class of
capital stock of the Corporation in Common Stock, the Conversion
Price in effect at the opening of business on the date following
the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction of which the
numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number
of shares and the total number of shares constituting such
dividend or other distribution, such reduction to become effective
immediately after the opening of business on the date following
the date fixed for such determination. For purposes of this
subsection, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Corporation. The Corporation will not pay any dividend or make
any distribution on shares of Common Stock held in the treasury of
the Corporation.
(ii) In case the Corporation shall issue shares of Common
Stock or rights or warrants or other securities convertible into
or exchangeable or exercisable for shares of Common Stock to any
person (other than pursuant to (A) a dividend reinvestment plan,
(B) the exercise of stock options granted with the approval of the
Corporation's Board of Directors where the exercise price is not
less than the Average Closing Price on the date the option was
granted, (C) a restricted stock plan where the issuance is
consistent with the past practices of the corporation or, prior to
the Initial
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Issuance Date, Martin Marietta Corporation as determined by the
Board of Directors, or (D) a stock option or other stock incentive
plan where the issuance is required in accordance with the
Corporation's obligation to provide benefits similar to those
provided under plans of General Electric Company in effect prior
to the Initial Issuance Date as determined by the Board of
Directors) entitling such person to subscribe for or purchase
shares of Common Stock at a price per share (or having a
conversion, exercise or exchange price per share) in any case,
less than the Average Closing Price per share (determined as
provided in subsection (vii) below) of the Common Stock on the
date of issuance (or in the case of any issuance of Common Stock,
rights, warrants or such other securities to all holders of Common
Stock, on the date fixed for the determination of the holders
entitled to receive such Common Stock, rights, warrants or other
securities), the Conversion Price in effect at the opening of
business on the day following the date of such issuance or the
date fixed for such determination, as the case may be, shall be
reduced by multiplying such Conversion Price by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date of such issuance
or the date fixed for such determination, as the case may be, plus
the number of shares of Common Stock which the aggregate
consideration receivable by the Corporation for the total number
of shares of Common Stock so offered for subscription or purchase
(or into or for which such rights, warrants or other securities
are convertible, exchangeable or exercisable) would purchase at
such Average Closing Price and the denominator shall be the number
of shares of Common Stock outstanding at the close of business on
the date of such issuance or the date fixed for such
determination, as the case may be, plus the number of shares of
Common Stock so offered for subscription or purchase (or into or
for which such rights, warrants or other securities are
convertible, exchangeable or exercisable), such reduction to
become effective immediately after the opening of business on the
date following the date of such issuance or the date fixed for
such determination, as the case may be. For the purposes of this
subsection (ii), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Corporation. The Corporation will not issue any rights, warrants
or other securities convertible into or exchangeable or
exercisable for shares of Common Stock held in the treasury of the
Corporation. If after the Distribution Date, as defined in the
Rights Agreement, holders converting shares of Series A Preferred
Stock are not entitled to receive the Rights which would otherwise
be attributable (but for the date of conversion) to the shares of
Common Stock received upon such conversion, then adjustment of the
Conversion Price shall be made under this subsection (ii) as if
the Rights were then being issued to holders of the Common Stock.
If such an adjustment is made and the Rights are later redeemed,
invalidated or terminated, then a corresponding reversing
adjustment shall be made to the Conversion Price, on an equitable
basis, to take account of such event. However, the Corporation
may elect to provide that each share of Common Stock issuable upon
conversion of the Series A Preferred Stock, whether or not issued
after the Distribution Date for such Rights, will be accompanied
by the Rights which would otherwise be attributable (but for the
date of conversion) to such shares of Common Stock, in which event
the preceding two sentences will not apply.
(iii) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective
shall be proportionately reduced, and, conversely, in case
outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day
upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the case
may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision
or combination becomes effective.
(iv) In case the Corporation shall, by dividend or
otherwise, distribute to all holders of its
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Common Stock or any other class of capital stock of the
Corporation evidences of its indebtedness or assets (including
securities, but excluding (x) any rights, warrants or other
securities referred to in subsection (ii) above, (y) any regular
quarterly dividend of the Corporation paid in cash out of the
consolidated earnings or consolidated retained earnings of the
Corporation in an amount not exceeding 125% of the average of the
four regular quarterly dividends paid by the Corporation for the
immediately preceding four quarters (including for this purpose
dividends paid by Martin Marietta Corporation prior to the Initial
Issuance Date), and (z) any dividend or distribution referred to
in subsection (i) above), the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of
business on the date fixed for the determination of stockholders
entitled to receive such distribution by a fraction of which the
numerator shall be the Average Closing Price (determined as
provided in subsection (vii) below) of the Common Stock on the
date fixed for such determination less the then fair market value
(as reasonably determined by the Board of Directors, whose
determination shall be conclusive and shall be described in a
statement filed with the transfer agent for the Series A Preferred
Stock) of the portion of the evidences of indebtedness or assets
so distributed applicable to one share of Common Stock and the
denominator shall be such Average Closing Price per share of the
Common Stock, such adjustment to become effective immediately
prior to the opening of business on the day following the date
fixed for the determination of stockholders entitled to receive
such distribution.
(v) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any
reclassification upon a consolidation or merger to which Section
4(g) below applies) shall be deemed to involve (A) a distribution
of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification
shall be deemed to be
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"the date fixed for the determination of stockholders entitled to
receive such distribution" and the "date fixed for such
determination" within the meaning of subsection (iv) above), and
(B) a subdivision or combination as the case may be, of the number
of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such
subdivision becomes effective" or "the day upon which such
combination becomes effective" as the case may be, and "the day
upon which such subdivision or combination becomes effective"
within the meaning of subsection (iii) above.
(vi) In case at any time the Corporation or any subsidiary
thereof shall repurchase, by self tender offer or otherwise, any
shares of Common Stock of the Corporation at a weighted average
purchase price in excess of the Average Closing Price (as defined
in subsection (vii) below) on the Business Day immediately prior
to the earliest of the date of such repurchase, the commencement
of an offer to repurchase or the public announcement of either
(such date being referred to as the "Determination Date"), the
Conversion Price in effect as of such Determination Date shall be
reduced by multiplying such Conversion Price by a fraction, the
numerator of which shall be (I) the product of (x) the number of
shares of Common Stock outstanding on such Determination Date and
(y) the Average Closing Price of the Common Stock on such
Determination Date minus (II) the aggregate purchase price of such
repurchase and the denominator of which shall be the product of
(x) the number of shares of Common Stock outstanding on such
Determination Date minus the number of shares of Common Stock
repurchased by the Company or any subsidiary thereof in such
repurchase and (y) the Average Closing Price of the Common Stock
on such Determination Date. An adjustment made pursuant to this
subsection (vi) shall become effective immediately after the
effective date of such repurchase.
(vii) For the purposes of any computation under these
provisions of the Corporation's Charter, the Average Closing Price
per share of Common Stock on any day shall be deemed to be the
average of the closing prices for the Common Stock for the 20
consecutive Trading Days commencing 30 Trading Days before the day
in question, with each day's closing sale price being the reported
last sale price regular way or, in case no such reported sale
takes place on such day, the average of the reported closing bid
and asked prices, in either case on the New York Stock Exchange
or, if the Common Stock is no longer listed or admitted to trading
on such Exchange, on the principal national securities exchange on
which the Common Stock is listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange,
on the National Association of Securities Dealers Automated
Quotations National Market System or, if the Common Stock is not
listed or admitted to trading on any national securities exchange
or quoted on such National Market System, the average of the
closing bid and asked prices in the over-the-counter market as
furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors for that purpose. As used
herein, the term "Trading Day" shall mean a date on which the New
York Stock Exchange (or any successor to such Exchange) is open
for the transaction of business.
(viii) No adjustment in the Conversion Price for the Series
A Preferred Stock shall be required unless such adjustment would
require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this
subsection (viii) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section shall be made to the nearest cent
or to the nearest one-hundredth of a share, as the case may be.
(f) Whenever the Conversion Price shall be adjusted as herein
provided (i) the Corporation shall forthwith make available at the
office of the transfer agent for the Series A Preferred Stock a
statement describing in reasonable detail the adjustment, the facts
requiring such adjustment and the method of calculation used; and (ii)
the Corporation shall cause to be mailed by first class mail, postage
prepaid, as soon as practicable to each holder of record of shares of
Series A Preferred Stock a notice stating that the Conversion Price has
been adjusted and setting forth the adjusted Conversion Price.
(g) In the event that the Corporation shall be a party to any
transaction constituting a recapitalization, reclassification,
consolidation, merger, share exchange, or a sale, lease or conveyance of
all or substantially all of its assets, the holder of each share of
Series A Preferred Stock shall have the right, after such consolidation,
merger, sale or exchange to convert such share into the number and kind
of shares of stock or other securities, and the amount of cash or other
property receivable upon such consolidation, merger, sale or exchange by
a holder of the number of shares of Common Stock issuable upon
conversion of such share of Series A Preferred Stock immediately prior
to such consolidation, merger, sale or exchange. No provision shall be
made for adjustments in the Conversion Price. The provisions of this
Section 4(g) shall similarly apply to any such successive event.
(h) The Corporation shall not be required to pay any taxes which
may be payable in respect of any transfer involved in the issuance of
shares of Common Stock in the name other than that in which the shares
of Series A Preferred Stock so converted are registered, and the
Corporation shall not be required to issue or deliver any such shares
unless and until the person requesting such issuance in another name
shall have paid to the Corporation the amount of any such taxes, or
shall have established to the satisfaction of the Corporation that such
taxes have been paid.
(i) The Corporation may make such reductions in the Conversion
Price, in addition to those required by subsections (i) through (vi) of
Section 4(e) above, as it considers to be advisable in order that any
event treated for federal income tax purposes as a dividend of stock or
stock rights shall not be taxable to the recipients.
(j) Except as provided in this Section 4, the Corporation will
not, by amendment of its Charter or
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through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in the carrying out of all the provisions
of this Section 4 and in the taking of all such action as may be
necessary or appropriate in order to protect the conversion rights of
the holders of the Series A Preferred Stock against impairment.
(k) The Corporation shall at all times reserve and keep available
out of its authorized but unissued Common Stock the full number of
shares of Common Stock issuable upon the conversion of all shares of
Series A Preferred Stock then outstanding.
(l) In the event that:
(i) the Corporation shall declare a dividend or any other
distribution on its Common Stock (other than any regular quarterly
dividend described in Section 4(e)(iv) above) payable otherwise
than in cash out of consolidated earnings or consolidated retained
earnings;
(ii) the Corporation shall authorize the granting to the
holders of its Common Stock of rights to subscribe for or purchase
any shares of capital stock of any class or of any other rights;
(iii) any capital reorganization of the Corporation,
reclassification of the capital stock of the Corporation,
consolidation or merger of the Corporation with or into another
corporation, or sale, lease or conveyance of all or substantially
all of the assets of the Corporation occurs;
(iv) the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation occurs; or
(v) any other event for which an adjustment would be
required pursuant to subsections (i) through (vi) of Section 4(e)
or pursuant to Section 4(g) occurs; the Corporation shall cause to
be mailed to the holders of record of Series A Preferred Stock at
least 20 days prior to the applicable date hereinafter specified a
notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or, if a
record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend,
distribution or rights are to be determined or (y) the date on
which such reorganization, reclassification, consolidation,
merger, sale, lease, conveyance, dissolution, liquidation or
winding up or other event specified in subsections (i) through (v)
of this Section 4(l) is expected to take place, and the date, if
any is to be fixed, as of which holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, lease, conveyance,
dissolution, liquidation or winding up or other such event.
Failure to give such notice, or any defect therein, shall not
affect the legality or validity of such dividend, distribution,
reorganization, reclassification, consolidation, merger, sale,
lease, conveyance, dissolution, liquidation or winding up or other
such event.
SECTION 5. Voting Rights. (a) Except as otherwise provided by
paragraphs (b), (c) and (e) of this Section 5 or as required by law, the
holders of shares of Series A Preferred Stock shall not be entitled to vote on
any matter on which the holders of any voting securities of the Corporation
shall be entitled to vote.
(b) Upon a default with respect to the Corporation's senior bank
facility or any successor thereto or replacement thereof (as amended from time
to time, the "Senior Bank Facility") that is not substantially cured within
six months from the declaration thereof pursuant to the Senior Bank Facility
(but without regard to any waivers granted by the lenders under such Senior
Bank Facility) (a "Bank Debt Default"), the holders of the Series A Preferred
Stock, voting as a separate class, shall be entitled to elect the smallest
number of directors of the
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Corporation's Board of Directors that shall constitute no less than 25% of the
authorized number of directors of the Corporation's Board of Directors until
such right is terminated as provided herein. The voting rights provided by
this Section 5(b) shall terminate immediately upon the initial holder of all
outstanding shares of Series A Preferred Stock being no longer entitled to
designate any director pursuant to Section 3.02 of the Standstill Agreement to
be entered into between the Corporation and General Electric Company (the
"Agreement") and the holders of the Series A Preferred Stock, following such
termination, shall have only the voting rights provided by Sections 5(c) and
(e) below or as otherwise required by law.
(c) In the event that dividends payable on the Series A Preferred Stock
shall be in arrears for six quarters (whether or not consecutive) (a
"Preferred Dividend Default") and the holders of the Series A Preferred Stock
are not then represented on the Corporation's Board of Directors by directors
elected as a result of a Bank Debt Default, a majority in interest of the
holders of Series A Preferred Stock, voting separately as a class with holders
of shares of any other class of Preferred Stock upon which like voting rights
have been conferred and are exercisable, shall be entitled to elect two
directors of the Corporation until such right is terminated as provided
herein.
(d)(i) Upon the occurrence of a Bank Debt Default or a Preferred
Dividend Default, the Board of Directors of the Company shall promptly call a
special meeting of the holders of shares of Series A Preferred Stock (and, in
the case of a Preferred Dividend Default, any holders of shares of any other
class of Preferred Stock who are then entitled to participate in the election
of such directors) for the purpose of electing the directors provided by the
foregoing provisions; provided that, in lieu of holding such meeting, the
holders of record of Series A Preferred Stock (and, in the case of a Preferred
Dividend Default, the holders of any such other Preferred Stock) may, by
action taken by written consent as permitted by law and the Charter and By-
Laws of the Corporation, elect such directors. At elections for such
directors, each holder of Series A Preferred Stock shall be entitled to one
vote for each share held. Upon the vesting of voting rights in the holders of
Series A Preferred Stock as a result of a Preferred Dividend Default or a Bank
Debt Default, the maximum authorized number of members of the Board of
Directors shall automatically be increased by two (or such greater number as
may be required in respect of a Bank Debt Default). The two vacancies (or
greater number) so created shall be filled by vote of the holders of Series A
Preferred Stock (and, in the case of a Preferred Dividend Default, the holders
of any such other Preferred Stock). The right of the holders of Series A
Preferred Stock, voting separately as a class (except as aforesaid), to elect
members of the Board of Directors of the Corporation in the manner described
above shall continue until such time as any Bank Debt Default shall have
ceased (other than as a result of any waiver, amendment or accommodation
granted by the lenders under such Senior Bank Facility), or all dividends
accumulated on Series A Preferred Stock shall have been paid in full, as the
case may be, at which time such right shall terminate, except as required by
law, subject to vesting in the event of each and every subsequent Bank Debt
Default and Preferred Dividend Default.
(ii) Upon any termination of the right of the holders of Series A
Preferred Stock (and, in the case of a Preferred Dividend Default, the holders
of shares of any other class of Preferred Stock who are then entitled to vote
on the election of directors) to vote as a class for directors as herein
provided, the term of office of all directors then in office elected by
holders of Series A Preferred Stock (or such other holders, as the case may
be) voting as a class (hereunder referred to as a "Preferred Stock Director")
shall terminate immediately. Any Preferred Stock Director may be removed by,
and shall not be removed otherwise than by, the vote of the holders of record
of Series A Preferred Stock (or, in the case of any Preferred Stock Director
elected as a result of a Preferred Dividend Default, the holders of Series A
Preferred together with holders of any other Preferred Stock that participated
in the election of such Preferred Stock Director) voting as a separate class,
at a meeting called for such purpose or by written consent as permitted by law
and the Charter and By-Laws of the Corporation. If the office of any
Preferred Stock Director becomes vacant by reason of death, resignation,
retirement, disqualification, removal from office, or otherwise, the remaining
Preferred Stock Director or Directors may choose a successor who shall hold
office for the unexpired term in respect of which such vacancy occurred or, if
none remains in office, by vote of the holders of record of Series A Preferred
Stock (or, in the case of any Preferred Stock Director elected as a result of
a Preferred Dividend Default, the holders of Series A Preferred together with
holders of any other Preferred Stock that participated in the election of such
Preferred Stock Director). Holders of Series A Preferred Stock shall not, as
such stockholders, be entitled to vote on the election or removal of directors
other than Preferred Stock Directors.
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Whenever the special voting powers vested in the holders of Series A Preferred
Stock as provided herein shall have expired, the number of directors shall
become such number as may be provided for in the By-Laws, irrespective of any
increase made pursuant to the provisions hereof.
(iii) So long as any shares of the Series A Preferred Stock remain
outstanding, the consent of the holders of at least 66 2/3% of the shares of
Series A Preferred Stock then outstanding (voting separately as a class) given
in person or by proxy, at any special or annual meeting called for such
purpose, or by written consent as permitted by law and the Charter and By-Laws
of the Corporation, shall be necessary to amend, alter or repeal any of the
provisions of the Charter of the Corporation which would adversely affect any
right, preference, privilege or voting power of Series A Preferred Stock or of
the holders thereof; provided, however, that any such amendment, alteration or
repeal, that would authorize, create or issue any additional shares of
Preferred Stock or any other shares of stock (whether or not already
authorized) ranking on a parity with or junior to the Series A Preferred Stock
as to dividends and on the distribution of assets upon liquidation,
dissolution or winding up, shall be deemed not to materially and adversely
affect such rights, preferences, privileges or voting powers.
(e) The holder of each share of Series A Preferred Stock shall be
entitled to vote together with the holders of shares of Common Stock and to
cast the number of votes equal to the number of shares of Common Stock into
which such shares of Series A Preferred Stock are then convertible in the
event of any merger, consolidation or business combination or share exchange
involving the Corporation or any sale, lease or conveyance of all or
substantially all of the assets of the Corporation upon which the holders of
Common Stock shall be entitled to vote, provided, however, that the holders of
the Series A Preferred Stock shall not be entitled to vote upon acquisitions
which, within any 12-month period, do not (i) involve greater than an
aggregate of Twenty-Five Million Dollars ($25,000,000) of transaction value
(including assumed liabilities, whether contingent or not) or (ii) adversely
affect the economic or legal position of the Series A Preferred Stock or its
rights, preferences, privileges or voting powers.
(f) The foregoing voting provisions shall not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of the Series A Preferred
Stock shall have been redeemed for cash or converted or Common Stock and
funds, if any, necessary for such redemption or conversion shall have been
deposited in trust to effect such redemption.
SECTION 6. Liquidation Rights. (a) Subject to the rights of holders of
any class of Preferred Stock which the Corporation may in the future issue
which ranks on a parity with the Series A Preferred Stock, upon any
dissolution, liquidation or winding up of the affairs of the Corporation,
whether voluntary or involuntary (collectively, a "Liquidation"), the holders
of shares of Series A Preferred Stock shall be entitled to receive out of the
assets of the Corporation available for distribution to stockholders, whether
from capital, surplus or earnings, before any distribution or payment is made
to holders of Common Stock of the Corporation or on any other class of stock
of the Corporation ranking junior as to assets distributable upon Liquidation
to the shares of Series A Preferred Stock upon a Liquidation, liquidating
distributions in the amount of $50 per share, plus an amount equal to all
dividends accrued and unpaid thereon (including dividends accumulated and
unpaid) to the date of Liquidation, and no more.
(b) Written notice of any Liquidation, stating the payment date or dates
when and the place or places where the amounts distributable in such
circumstances shall be payable, shall be given by first class mail, postage
prepaid, not less than 30 days prior to any payment date stated therein, to
the holders of record of the Series A Preferred Stock at their respective
addresses as the same shall appear on the books of the Corporation or any
transfer agent for the Series A Preferred Stock.
(c) Neither the merger or consolidation of the Corporation into or with
any other corporation, nor the merger or consolidation of any other
corporation into or with the Corporation, nor a sale, transfer or lease of all
or any part of the assets of the Corporation, shall, without further corporate
action, be deemed to be a liquidation, dissolution or winding up of the
affairs of the Corporation within the meaning of this Section 6.
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SECTION 7. Tax Provisions. (a) The Corporation will treat the Series A
Preferred Stock as equity (not debt) for all federal, state, local and other
tax purposes.
(b) The Corporation will use its reasonable best efforts to ensure that
it has adequate earnings and profits, within the meaning of Section 312 of the
Internal Revenue Code of 1986, as amended (the "Code"), or any successor
provision, to ensure that all dividend distributions on the Series A Preferred
Stock and all distributions in redemption of the Series A Preferred Stock that
are treated as distributions with respect to stock under Section 302(d) of the
Code (or any successor provision) will be treated as dividends within the
meaning of Section 316 of the Code (or any successor provision); provided that
such reasonable best efforts shall not require the Corporation to incur any
material out-of-pocket costs unless such costs are reimbursed by the initial
holder of the Series A Preferred Stock.
SECTION 8. Defined Terms. Terms used but not otherwise defined herein
shall have the meanings set forth in the Charter of the Corporation.
B. Series Preferred Stock
The Board of Directors of the Corporation shall have the power from time
to time (a) to classify or reclassify, in one or more series, any unissued
shares of Series Preferred Stock and (b) to reclassify any unissued shares of
any series of Series Preferred Stock, in the case of either (a) or (b) by
setting or changing the number of shares constituting such series and the
designation, preference, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption of such shares and, in such event, the Corporation
shall file for record with the State Department of Assessments and Taxation of
Maryland articles supplementary in substance and form as prescribed by the
Maryland General Corporation Law.
C. Common Stock
Subject to the rights of holders of shares of Series A Preferred Stock
and any series of Series Preferred Stock established pursuant to Section B of
this Article VI, each share of Common Stock shall entitle the holder to one
vote per share on all matters upon which stockholders are entitled to vote, to
receive dividends and other distributions authorized by Board of Directors in
accordance with the Maryland General Corporation Law and to all rights of a
stockholder pursuant to the Maryland General Corporation Law. The Common
Stock shall have no preferences or preemptive, conversion or exchange rights.
D. General
In determining whether a distribution (other than upon voluntary or
involuntary liquidation), by dividend, redemption or other acquisition of
shares or otherwise, is permitted under the Maryland General Corporation Law,
no effect shall be given to amounts that would be needed, if the Corporation
were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of stockholders whose preferential rights
upon dissolution are superior to those receiving the distribution.
ARTICLE VII
PROVISIONS DEFINING, LIMITING
AND REGULATING POWERS
The following provisions are hereby adopted for the purpose of defining,
limiting and regulating the powers of the Corporation and the Directors and
stockholders, subject, however, to any provisions, conditions and restrictions
hereafter authorized pursuant to Article VI hereof:
SECTION 1. The Board of Directors of the Corporation is empowered
to authorize the issuance
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from time to time of shares of its stock of any class, whether now or
hereafter authorized, and securities convertible into shares of its
stock of any class, whether now or hereafter authorized, for such
consideration as the Board of Directors may deem advisable, subject to
such limitations and restrictions, if any, as may be set forth in the
By-Laws of the Corporation.
SECTION 2. No holders of shares of stock of the Corporation of
any class shall have any preemptive or other right to subscribe for or
purchase any part of any new or additional issue of stock of any class
or of securities convertible into stock of any class, whether now or
hereafter authorized, and whether issued for money, for a consideration
other than money or by way of dividend.
SECTION 3. The Board of Directors shall have the power, from time
to time, to determine whether any, and if any, what part, of the surplus
of the Corporation shall be declared in dividends and paid to the
stockholders, and to direct and determine the use and disposition of any
such surplus. The Board of Directors may in its discretion use and
apply any of such surplus in purchasing or acquiring any of the shares
of the stock of the Corporation, or any of its bonds or other evidences
of indebtedness, to such extent and in such manner and upon such lawful
terms as the Board of Directors shall deem expedient.
SECTION 4. The Corporation reserves the right to make from time
to time any amendments of its Charter which may now or hereafter be
authorized by law, including but not restricted to, any amendments
changing the terms of any class of its stock by classification,
reclassification or otherwise.
SECTION 5. Notwithstanding any provision of law requiring any
action to be taken or authorized by the affirmative vote of the holders
of a designated proportion of the shares of stock of the Corporation, or
to be otherwise taken or authorized by vote of the stockholders, such
action shall be effective and valid, except as otherwise required by
provisions of the Charter, if taken or authorized by the affirmative
vote, at a meeting, of the holders of a majority of the total number of
shares outstanding and entitled to vote thereon.
ARTICLE VIII
BY-LAWS
The Board of Directors shall have the power, at any regular or special
meeting of the Board, to make and adopt By-Laws, or to amend, alter or repeal
any By-Laws of the Corporation. The By-Laws may contain any provision for the
regulation and management of the affairs of the Corporation not inconsistent
with law or the provisions of the Charter.
ARTICLE IX
INSPECTION OF RECORDS BY STOCKHOLDERS
The Board of Directors shall have power to determine from time to time
whether and to what extent and at what times and places and under what
conditions and regulations the books, records, accounts, and documents of the
Corporation, or any of them, shall be open to inspection by stockholders,
except as otherwise provided by law or by the By-Laws; and except as so
provided no stockholders shall have any rights to inspect any book, record,
account or document of the Corporation unless authorized to do so by
resolution of the Board of Directors.
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ARTICLE X
COMPENSATION
The Board of Directors in its discretion may allow, in and by the By-
Laws of the Corporation or by resolution, the payment of expenses, if any, to
directors for attendance at each regular or special meeting of the Board of
Directors or of any committee thereof, and the payment of reasonable
compensation to such directors for their services as members of the Board of
Directors, or any committee thereof, and shall fix the basis and conditions
upon which such expenses and compensation shall be paid. Any member of the
Board of Directors or of a committee thereof, also may serve the Corporation
in any other capacity and receive compensation therefor in any form.
ARTICLE XI
INDEMNIFICATION AND LIMITATION OF
LIABILITY OF DIRECTORS AND OFFICERS
SECTION 1. The Board of Directors shall have the power to adopt By-Laws
or resolutions for the indemnification of the Corporation's directors,
officers, employees, and agents, provided that any such By-Laws or resolutions
shall be consistent with applicable law.
SECTION 2. To the maximum extent that Maryland law in effect from time
to time permits limitation of the liability of directors and officers, no
director or officer of the Corporation shall be liable to the Corporation or
its stockholders for money damages. Neither the amendment nor repeal of this
Article, nor the adoption or amendment of any provision of the Charter or By-
Laws inconsistent with this Article, shall apply to or affect in any respect
the applicability of the preceding sentence with respect to any act or failure
to act which occurred prior to such amendment, repeal or adoption.
ARTICLE XII
INFORMAL ACTION BY BOARD OF DIRECTORS
Any action required or permitted to be taken at any meeting of the Board
of Directors, or of any committee thereof, may be taken without a meeting, if
a written consent to such action is signed by all members of the Board or of
such committee, as the case may be, and such written consent is filed with the
minutes of proceedings of the Board or committee.
ARTICLE XIII
BUSINESS COMBINATIONS
SECTION 1. The affirmative vote of the holders of not less than (i) 80%
of the outstanding shares of "Voting Stock" (as hereinafter defined) of the
Corporation and (ii) not less than 67% of the outstanding shares of Voting
Stock of the Corporation held by stockholders other than a "Related Person"
(as hereinafter defined) shall be required for the approval or authorization
of any "Business Combination" (as hereinafter defined) involving a Related
Person; provided, however, that the foregoing voting requirements shall not be
applicable and the provisions of the Charter related to the percentage of
stockholder approval required, if any, shall apply to any such Business
Combination if:
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Clause 1. The "Continuing Directors" of the Corporation (as
hereinafter defined) by a two-thirds vote have expressly approved the
Business Combination either in advance of or subsequent to the
acquisition of outstanding shares of Voting Stock of the Corporation
that caused the Related Person to become a Related Person; or
Clause 2. The following conditions are satisfied:
(a) The aggregate amount of the cash and fair market value
of the property, securities, or other consideration to be received
per share of Voting Stock of the Corporation in the Business
Combination by holders of Voting Stock of the Corporation, other
than the Related Person involved in the Business Combination, is
not less than the "Highest Per Share Price" or the "Highest
Equivalent Price" (as these terms are hereinafter defined) paid
after March 21, 1983, by the Related Person in acquiring any of
its holdings of the Corporation's Voting Stock; and
(b) A proxy statement complying with the requirements of the
Securities Exchange Act of 1934 shall have been mailed to all
stockholders of the Corporation for the purpose of soliciting
stockholder approval of the Business Combination. The proxy
statement shall contain at the front thereof, in a prominent
place, the position of the Continuing Directors as to the
advisability (or inadvisability) of the Business Combination and,
if deemed advisable by a majority of the Continuing Directors, the
opinion of an investment banking firm selected by the Continuing
Directors as to the fairness of the terms of the Business
Combination, from the point of view of the holders of the
outstanding shares of Voting Stock of the Corporation other than
any Related Person.
SECTION 2. For purposes of this Article XIII:
Clause 1. The term "Business Combination" shall mean:
(a) any merger, consolidation, or share exchange of the
Corporation or any of its subsidiaries into or with a Related
Person, in each case irrespective of which corporation or company
is the surviving entity in the merger or consolidation;
(b) any sale, lease, exchange, mortgage, pledge, transfer,
or other disposition to or with a Related Person (in a single
transaction or a series of related transactions) of all or a
Substantial Part (as hereinafter defined) of the assets of the
Corporation (including without limitation any securities of a
subsidiary) or a Substantial Part of the assets of any of its
subsidiaries;
(c) any sale, lease, exchange, mortgage, pledge, transfer,
or other disposition to or with the Corporation or to or with any
of its subsidiaries (in a single transaction or series of related
transactions) of all or a Substantial Part of the assets of a
Related Person;
(d) the issuance or transfer of any equity securities of the
Corporation or any of its subsidiaries by the Corporation or such
subsidiary (in a single transaction or a series of related
transactions) to a Related Person (other than an issuance or
transfer of securities which is effected on a pro rata basis to
all stockholders of the Corporation);
(e) the acquisition by the Corporation or any of its
subsidiaries of any equity securities of a Related Person;
(f) any reclassification of securities or recapitalization
that would have the effect of increasing the voting power of a
Related Person; or
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(g) any agreement, contract, or other arrangement providing
for any of the transactions described in this definition of
Business Combination.
Clause 2. The term "Related Person" shall mean any individual,
corporation, partnership, or other person or entity which, as of the
record date for the determination of stockholders entitled to notice of
and to vote on any Business Combination or, immediately prior to the
consummation of such transaction, together with their "Affiliates" and
"Associates" (as defined in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934 as in effect at
April 28, 1983, (collectively and as so in effect, the "Exchange Act")),
which after April 28, 1983, became and then are "Beneficial Owners" (as
defined in Rule 13d-3 of the Exchange Act) in the aggregate of 10% or
more of the outstanding shares of any class or series of Voting Stock of
the Corporation, and any Affiliate or Associate of any such individual,
corporation, partnership, or other person or entity.
Clause 3. The term "Substantial Part" shall mean more than 20% of
the fair market value, as determined by two-thirds of the Continuing
Directors, of the total consolidated assets of the Corporation and its
subsidiaries taken as a whole as of the end of its most recent fiscal
year ending prior to the time the determination is being made, subject
to adjustments made by the Continuing Directors to take into account
transactions made subsequent to year end.
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Clause 4. For the purposes of Clause 2(a) of Section 1 of this
Article XIII, the term "other consideration to be received" shall
include, without limitation, any shares of any class or series of
capital stock of the Corporation retained by stockholders of the
Corporation other than Related Persons or parties to such Business
Combination in the event of a Business Combination in which the
Corporation is the surviving corporation.
Clause 5. The term "Voting Stock" shall mean all outstanding
shares of capital stock of the Corporation or another corporation
entitled to vote generally in the election of directors, and each
reference to a proportion of shares of Voting Stock shall refer to such
proportion of the votes entitled to be cast by such shares.
Clause 6. The term "Continuing Director" shall mean a director
who either:
(a) was a member of the Board of Directors of the
Corporation immediately prior to the time that the Related Person
involved in a Business Combination became the Beneficial Owner of
10% of any class or series of Voting Stock of the Corporation; or
(b) was designated (before his or her initial election as
director) as a Continuing Director by a majority of the then
Continuing Directors.
Clause 7. A "Related Person" shall be deemed to have acquired a
share of the Voting Stock of the Corporation at the time when such
Related Person became the Beneficial Owner thereof. With respect to the
shares owned by Affiliates, Associates, or other persons whose ownership
is attributed to a Related Person under the foregoing definition of
Related Person, if the price paid by such Related Person for such shares
is not determinable by the Continuing Directors, the price so paid shall
be deemed to be the higher of:
(a) the price paid upon the acquisition thereof by the
Affiliate, Associate, or other person; or
(b) the market price of the shares in question at the time
when the Related Person became the Beneficial Owner thereof.
Clause 8. The terms "Highest Per Share Price" and "Highest
Equivalent Price" as used in this Article XIII shall mean the following.
If there is only one class of Voting Stock of the Corporation issued and
outstanding, the Highest Per Share Price shall mean the highest price
that can be determined to have been paid at any time after March 21,
1983, by the Related Person for any share or shares of that class of
Voting Stock. If there is more than one class of Voting Stock of the
Corporation issued and outstanding, the Highest Equivalent Price shall
mean, with respect to each class and series of Voting Stock of the
Corporation, the amount determined by two-thirds of the Continuing
Directors, on whatever basis they believe is appropriate, to be the
highest per share price equivalent to the highest price that can be
determined to have been paid at any time by the Related Person for any
share or shares of any class or series of Voting Stock of the
Corporation. In determining the Highest Per Share Price and Highest
Equivalent Price, all purchases after March 21, 1983, by the Related
Person shall be taken into account regardless of whether the shares were
purchased before or after the Related Person became a Related Person.
Also the Highest Per Share Price and the Highest Equivalent Price shall
include any brokerage commissions, transfer taxes, and soliciting
dealers' fees paid by the Related Person with respect to the shares of
Voting Stock of the Corporation acquired by the Related Person. In the
case of any Business Combination with a Related Person, the Highest
Equivalent Price for each class and series of the Voting Stock of the
Corporation shall be determined by the Continuing Directors.
SECTION 3. Any amendment, change, or repeal of this Article XIII, or
any other amendment of this
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Charter which will have the effect of modifying or permitting circumvention of
this Article XIII, shall require the favorable vote, at a meeting of the
stockholders of the Corporation, of the holders of at least (i) 80% of the
then outstanding shares of the Voting Stock of the Corporation and (ii) 67% of
the outstanding shares of Voting Stock of the Corporation held by stockholders
other than a Related Person; provided, however, that this Section 3 shall not
apply to and such vote shall not be required for any such amendment, change,
or repeal recommended to stockholders by the affirmative vote of not less than
two-thirds of the Continuing Directors and such amendment, change, or repeal
so recommended shall require only the vote, if any, required under the
applicable provision of the Charter. For the purposes of this Section 3 only,
if at the time when any such amendment, change, or repeal is under
consideration there is no proposed Business Combination (in which event, the
definition of Continuing Director in Clause 6 of Section 2 of this Article
XIII would be inapplicable), the "Continuing Directors" shall be deemed to be
those persons who are members of the Board of Directors of the Corporation at
April 28, 1983, plus those persons who are Continuing Directors under Clause
6(b) of Section 2 of this Article XIII.
ARTICLE XIV
REGULATION OF TRANSACTIONS INVOLVING
THE PURCHASE OF STOCK
AT A PREMIUM OVER MARKET
SECTION 1. Any purchase by the Corporation of shares of Voting Stock
(as hereinafter defined) from an Interested Stockholder (as hereinafter
defined) who has beneficially owned such securities for less than two years
prior to the date of such purchase or any agreement in respect thereof, other
than pursuant to an offer to the holders of all of the outstanding shares of
the same class as those so purchased, at a per share price in excess of the
Market Price (as hereinafter defined), at the time of such purchase, of the
shares so purchased, shall require the affirmative vote of the holders of a
majority of the voting power of the Voting Stock not beneficially owned by the
Interested Stockholder, voting together as a single class.
SECTION 2. In addition to any affirmative vote required by law or the
Charter:
Clause 1. Any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (i) any Interested Stockholder
or (ii) any other corporation (whether or not itself an Interested
Stockholder) which is, or after such merger or consolidation would be,
an Affiliate (as hereinafter defined) of an Interested Stockholder;
Clause 2. Any sale, lease, exchange, mortgage, pledge, transfer,
or other disposition (in one transaction or a series of transactions) to
or with any Interested Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any Subsidiary having an
aggregate Fair Market Value (as hereinafter defined) of $10,000,000 or
more;
Clause 3. The issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any
equity securities of the Corporation or any Subsidiary having an
aggregate Fair Market Value of $10,000,000 or more to any Interested
Stockholder or any affiliate of any Interested Stockholder in exchange
for cash, securities, or other property (or combination thereof).
Clause 4. The adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or on behalf
of an Interested Stockholder or any Affiliate of any Interested
Stockholder; or
Clause 5. Any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation, or any
merger or consolidation of the Corporation with any of its Subsidiaries,
or any other transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has
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the effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or convertible
securities of the Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder or any Affiliate of any
Interested Stockholder.
shall require the affirmative vote of the holders of a majority of the voting
power of the Voting Stock not beneficially owned by any Interested
Stockholder, voting together as a single class; provided, however, that no
such vote shall be required for (i) the purchase by the Corporation of shares
of Voting Stock from an Interested Stockholder unless such vote is required by
Section 1 of this Article XIV, (ii) any transaction approved by a majority of
the Disinterested Directors (as hereinafter defined), (iii) any transaction
with an Interested Stockholder who shall also be a Related Person as defined
under Article XIII and to which the provisions of Article XIII apply, or (iv)
any transaction with an Interested Stockholder who has beneficially owned his
shares of Voting Stock for two years or more.
SECTION 3.
Clause 1. In the event that there shall exist a Substantial Stockholder
(as hereinafter defined) of the Corporation and such existence shall be known
or made known to the Corporation in advance of a meeting of stockholders at
which directors will be elected, each holder of Voting Stock shall be
entitled, in connection with any vote taken for such election of directors, to
as many votes as shall equal the number of votes which (except for this
provision as to cumulative voting) such stockholder would be entitled to cast
for the election of directors with respect to such stockholder's shares of
Voting Stock multiplied by the number of directors to be elected, and such
stockholder may cast all of such votes for a single director or may distribute
them among the number of directors to be voted for, or for any two or more of
them as such stockholder may see fit.
Clause 2. In connection with any election of directors in which
stockholders are entitled to cumulative voting, one or more candidates may be
nominated by a majority of the Disinterested Directors or by any person who is
the beneficial owner of shares of Voting Stock having an aggregate Market
Price of $250,000 or more.
Clause 3. The Corporation's proxy statement and other communications
with respect to such an election shall contain on an equal basis and at the
expense of the Corporation, descriptions and other statements of or with
respect to all nominees for election which qualify under the procedures set
forth in this Section 3.
SECTION 4. For the purpose of this Article XIV:
Clause 1. A "person" shall mean any individual, firm, corporation,
partnership, or other entity.
Clause 2. "Voting Stock" shall mean all outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
directors and each reference to a proportion of shares of Voting Stock shall
refer to such proportion of the votes entitled to be cast by such shares.
Clause 3. "Interested Stockholder" shall mean any person (other than
the Corporation or any Subsidiary or any employee benefit plan maintained by
the Corporation or any Subsidiary) who or which:
(a) is the beneficial owner, directly or indirectly, of 5% or more
of the voting power of the outstanding Voting Stock;
(b) is an Affiliate of the Corporation and at any time within the
two-year period immediately prior to the date as of which a
determination is being made was the beneficial owner, directly or
indirectly, of 5% or more of the voting power of the then outstanding
Voting Stock; or
(c) is an assignee of or has otherwise succeeded to any shares of
Voting Stock which were at any time within the two-year period
immediately prior to the date as of which a determination is being made
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beneficially owned by any person described in Clauses 3(a) or 3(b) of this
Section 4 if such assignment or succession shall have occurred in the course
of a transaction or series of transactions not involving a public offering
within the meaning of the Securities Act of 1933, as amended.
Clause 4. The term "Substantial Stockholder" shall mean any person
(other than the Corporation or any Subsidiary or any employee benefit plan
maintained by the Corporation or any Subsidiary) who or which is the
beneficial owner of Voting Stock representing 40% or more of the votes
entitled to be cast by the holders of all the outstanding shares of Voting
Stock.
Clause 5. A person shall be a "beneficial owner" of any Voting Stock:
(a) which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly;
(b) which such person or any of its Affiliates or Associates has
(i) the right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement,
arrangement, or understanding, or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii) the
right to vote pursuant to any agreement, arrangement, or understanding;
or
(c) which are beneficially owned, directly or indirectly, by any
other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement, or understanding for the
purpose of acquiring, holding, voting, or disposing of any shares of
Voting Stock.
Clause 6. For the purposes of determining whether a person is an
Interested Stockholder pursuant to Clause 3 of this Section 4 or a Substantial
Stockholder pursuant to Clause 4 of this Section 4, the number of shares of
Voting Stock deemed to be outstanding shall include shares deemed owned
through application of Clause 5 of this Section 4, but shall not include any
other shares of Voting Stock which may be issuable pursuant to any agreement,
arrangement, or understanding, or upon exercise of conversion rights, warrants
or options, or otherwise.
Clause 7. "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on March
11, 1985.
Clause 8. "Subsidiary" shall mean any corporation of which a majority
of the voting stock thereof entitled to vote generally in the election of
directors is owned, directly or indirectly, by the Corporation.
Clause 9. "Market Price" shall mean: the last closing sale price
immediately preceding the time in question of a share of the stock in question
on the Composite Tape for New York Stock Exchange -- Listed Stocks, or if such
stock is not quoted on the Composite Tape, on the New York Stock Exchange,
Inc., or if such stock is not listed on such Exchange, on the principal United
States securities exchange registered under the Securities Exchange Act of
1934 on which such stock is listed, or if such stock is not listed on any such
exchange, the last closing bid quotation with respect to a share of such stock
immediately preceding the time in question on the National Association of
Securities Dealers, Inc. Automated Quotations System or any system then in
use (or any other system of reporting or ascertaining quotations then
available), or if such stock is not so quoted, the Fair Market Value at the
time in question of a share of such stock as determined by the Board of
Directors in good faith.
Clause 10. "Fair Market Value" shall mean:
(a) in the case of stock, the Market Price, and
(b) in the case of property other than cash or stock, the fair
market value of such property on the
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date in question as determined by the Board of Directors in good faith.
Clause 11. "Disinterested Director" shall mean any member of the Board
of Directors of the Corporation who is unaffiliated with an Interested
Stockholder and was a member of the Board of Directors prior to the time that
the Interested Stockholder became an Interested Stockholder, and any successor
of Disinterested Director who is unaffiliated with an Interested Stockholder
as is recommended to succeed a Disinterested Director by a majority of
Disinterested Directors then on the Board of Directors.
SECTION 5. A majority of the Disinterested Directors shall have the
power and duty to determine for the purposes of this Article XIV, on the basis
of information known to them after reasonable inquiry, whether (i) a person is
an Interested Stockholder, (ii) a person is a Substantial Stockholder, or
(iii) a transaction or series of transactions constitutes one of the
transactions described in Section 2 of this Article XIV.
SECTION 6. Notwithstanding any other provisions of the Charter (and
notwithstanding the fact that a lesser percentage may be specified by law, the
Charter, or the By-Laws of the Corporation), the affirmative vote of the
holders of at least 80% of the outstanding Voting Stock, voting together as a
single class, shall be required to amend, repeal, or adopt any provisions
inconsistent with this Article XIV.
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CERTIFICATE AS TO CHARTER
I, Secretary of MARTIN MARIETTA CORPORATION hereby
certify that the foregoing is a true, correct and complete copy of the Charter
of MARTIN MARIETTA CORPORATION and that such Charter is in full force and
effect as of the date of this certificate.
WITNESS my hand and the seal of MARTIN MARIETTA CORPORATION, this
day of , 19 .
___________________________________________
Secretary
CORPORATE SEAL
<PAGE>
P A R E N T C O R P O R A T I O N
B Y L A W S
(As Amended January 13, 1993)
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<PAGE>
BYLAWS
OF
PARENT CORPORATION
(Incorporated under the laws of Maryland, November 20, 1992, and
herein referred to as the "Corporation")
ARTICLE I
STOCKHOLDERS
Section 1.01. ANNUAL MEETINGS. The Corporation shall
hold an annual meeting of the stockholders for the election of
directors and the transaction of any business within the powers
of the Corporation on such date during the month of April in each
year as shall be determined by the Board of Directors. Subject
to Article I, Section 1.11 of these Bylaws, any business of the
Corporation may be transacted at such annual meeting. Failure to
hold an annual meeting at the designated time shall not, however,
invalidate the corporate existence or affect otherwise valid
corporate acts.
Section 1.02. SPECIAL MEETINGS. At any time in the
interval between annual meetings, special meetings of the
stockholders may be called by the Chairman, President, or by the
Board of Directors or by the Executive Committee by vote at a
meeting or in writing with or without a meeting. Special
meetings of stockholders shall also be called by the Secretary of
the Corporation on the written request of stockholders entitled
to cast at least 25 percent of all the votes entitled to be cast
at the meeting.
Section 1.03. PLACE OF MEETINGS. All meetings of
stockholders shall be held at such place within the United States
as may be designated in the Notice of Meeting.
Section 1.04. NOTICE OF MEETINGS. Not less than
thirty (30) days nor more than ninety (90) days before the date
of every stockholders' meeting, the Secretary shall give to each
stockholder entitled to vote at such meeting and each other
stockholder entitled to notice of the meeting, written or printed
notice stating the time and place of the meeting and, in the case
of a special meeting, the purpose or purposes for which the
meeting is called, either by mail or by presenting it to him or
her personally or by leaving it at his or her residence or usual<PAGE>
<PAGE>
place of business. If mailed, such notice shall be deemed to be
given when deposited in the United States mail addressed to the
stockholder at his or her post office address as it appears on
the records of the Corporation, with postage thereon prepaid.
Notwithstanding the foregoing provision for notice, a waiver of
notice in writing, signed by the person or persons entitled to
such notice and filed with the records of the meeting, whether
before or after the holding thereof, or actual attendance at the
meeting in person or by proxy, shall be deemed equivalent to the
giving of such notice to such persons. Any meeting of
stockholders, annual or special, may adjourn from time to time
without further notice to a date not more than 120 days after the
original record date at the same or some other place.
Section 1.05. PRESIDING OFFICER AND SECRETARY AT
MEETINGS. At each meeting of stockholders the Chairman of the
Board, or in his or her absence the President, or in their
absence the person designated in writing by the Chairman of the
Board, or if no person is so designated, then a person designated
by the Board of Directors, shall preside as chairman of the
meeting; if no person is so designated, then the meeting shall
choose a chairman by a majority of all votes cast at a meeting at
which a quorum is present. The Secretary or in the absence of
the Secretary a person designated by the chairman of the meeting
shall act as secretary of the meeting.
Section 1.06. QUORUM. At any meeting of stockholders,
the presence in person or by proxy of stockholders entitled to
cast a majority of the votes thereat shall constitute a quorum;
but this section shall not affect any requirement under statute
or under the charter of the Corporation for the vote necessary
for the adoption of any measure. In the absence of a quorum, the
stockholders present in person or by proxy, by majority vote and
without further notice, may adjourn the meeting from time to time
to a date not more than 120 days after the original record date
until a quorum shall attend. At any such adjourned meeting at
which a quorum shall be present, any business may be transacted
which might have been transacted at the meeting as originally
notified.
Section 1.07. VOTES REQUIRED. Unless applicable law
or the charter of the Corporation provides otherwise, at a
meeting of stockholders, a majority of the total number of shares
outstanding and entitled to vote at a meeting, duly called and at
which a quorum is present, shall be required to take or authorize
action upon any matter which may properly come before the
meeting. Unless the charter provides for a greater or lesser
number of votes per share or limits or denies voting rights, each
outstanding share of stock, regardless of class, shall be
entitled to one vote on each matter submitted to a vote at a
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meeting of stockholders; but no share shall be entitled to any
vote if any installment payable thereon is overdue and unpaid.
Section 1.08. PROXIES. A stockholder may vote the
shares owned of record by him or her either in person or by proxy
executed in writing by the stockholder or by his or her duly
authorized attorney-in-fact. No proxy shall be valid after
eleven (11) months from its date, unless otherwise provided in
the proxy. Every proxy shall be in writing, subscribed by the
stockholder or his or her duly authorized attorney, and dated,
but need not be sealed, witnessed or acknowledged.
Section 1.09. LIST OF STOCKHOLDERS. At each meeting
of stockholders, a true and complete list of all stockholders
entitled to vote at such meeting, stating the number and class of
shares held by each, shall be furnished by the Secretary.
Section 1.10. INSPECTORS OF ELECTION. In advance of
any meeting of stockholders, the Board of Directors may appoint
Inspectors of Election to act at such meeting or at any
adjournment or adjournments thereof. If such Inspectors are not
so appointed or fail or refuse to act, the chairman of any such
meeting, upon the demand of stockholders present in person or by
proxy entitled to cast 25% of all the votes entitled to be cast
at the meeting, shall make such appointments.
If there are three (3) or more Inspectors of Election,
the decision, act or certificate of a majority shall be effective
in all respects as the decision, act or certificate of all. The
Inspectors of Election shall determine the number of shares
outstanding, the voting power of each, the shares represented at
the meeting, the existence of a quorum, the authenticity,
validity and effect of proxies; shall receive votes, ballots,
assents or consents, hear and determine all challenges and
questions in any way arising in connection with the vote, count
and tabulate all votes, assents and consents, and determine the
result; and do such acts as may be proper to conduct the election
and the vote with fairness to all stockholders. On request, the
Inspectors shall make a report in writing of any challenge,
question or matter determined by them, and shall make and execute
a certificate of any fact found by them.
No such Inspector need be a stockholder of the
Corporation.
Section 1.11. DIRECTOR NOMINATIONS AND STOCKHOLDER
BUSINESS.
(a) Nominations and Stockholder Business at Annual
Meetings of Stockholders. Nominations of persons for election to
the Board of Directors of the Corporation and the proposal of
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business to be considered by the stockholders may be made at an
annual meeting of stockholders (i) pursuant to the Corporation's
notice of meeting, (ii) by or at the direction of the Board of
Directors or (iii) by any stockholder of the Corporation who was
a stockholder of record at the time of giving of notice provided
for in this Section 1.11(a), who is entitled to vote at the
meeting and who complied with the notice procedures set forth in
this Section 1.11(a).
For nominations or other business to be properly
brought before an annual meeting by a stockholder pursuant to
clause (iii) of paragraph (a) of this Section 1.11, the
stockholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a stockholder's
notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not less than 60 days nor
more than 90 days prior to the first anniversary of the preceding
year's annual meeting; provided, however, that in the event that
the date of the annual meeting is advanced by more than 30 days
or delayed by more than 60 days from such anniversary date,
notice by the stockholder to be timely must be so delivered not
earlier than the 90th day prior to such annual meeting and not
later than the close of business on the later of the 60th day
prior to such annual meeting or the tenth day following the day
on which public announcement of the date of such meeting is first
made. Such stockholder's notice shall set forth (i) as to each
person whom the stockholder proposes to nominate for election or
reelection as a director, all information relating to such person
that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended (the "Exchange Act") (including such person's
written consent to being named in the proxy statement as a
nominee and to serving as a director if elected); (ii) as to any
other business that the stockholder proposes to bring before the
meeting, a brief description of the business desired to be
brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such
business of such stockholder and the beneficial owner, if any, on
whose behalf the proposal is made; and (iii) as to the
stockholder giving the notice and the beneficial owner, if any,
on whose behalf the nomination or proposal is made, the name and
address of such stockholder, as they appear on the Corporation's
books, and of such beneficial owner and the class and number of
shares of stock of the Corporation which are owned beneficially
and of record by such stockholder and such beneficial owner.
Notwithstanding anything in this paragraph (a) of
this Section 1.11 to the contrary, in the event that Section 2.02
of these Bylaws is amended, altered or repealed so as to increase
or decrease the maximum or minimum number of directors and there
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is no public announcement of such action at least 70 days prior
to the first anniversary of the preceding year's annual meeting,
a stockholder's notice required by this Section 1.11(a) shall
also be considered timely, but only with respect to nominees for
director, if it shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the
close of business on the tenth day following the day on which
such public announcement is first made by the Corporation.
(b) Director Nominations and Stockholder Business at
Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been
brought before the meeting pursuant to the Corporation's notice
of meeting. Nominations of persons for election to the Board of
Directors may be made at a special meeting of stockholders at
which directors are to be elected pursuant to the Corporation's
notice of meeting (i) by or at the direction of the Board of
Directors or (ii) provided that the Board of Directors has
determined that directors shall be elected at such special
meeting, by any stockholder of the Corporation who is a
stockholder of record at the time of giving of notice provided
for in this Section 1.11, who is entitled to vote at the meeting
and who complied with the notice procedures set forth in this
Section 1.11. In the event the Corporation calls a special
meeting of stockholders for the purpose of electing one or more
directors to the Board, any such stockholder may nominate a
person or persons (as the case may be) for election to such
position(s) as specified in the Corporation's notice of meeting,
if the stockholder's notice required by paragraph (a) of this
Section 1.11 shall be delivered to the Secretary at the principal
executive offices of the Corporation not earlier than the 90th
day prior to such special meeting and not later than the close of
business on the later of the 60th day prior to such special
meeting or the tenth day following the day on which public
announcement is first made of the date of the special meeting and
of the nominees proposed by the Board of Directors to be elected
at such meeting.
(c) General. Only such persons who are nominated in
accordance with the procedures set forth in this Section 1.11
shall be eligible to serve as directors and only such business
shall be conducted at a meeting of stockholders as shall have
been brought before the meeting in accordance with the procedures
set forth in this Section 1.11. The presiding officer of the
meeting shall have the power and duty to determine whether a
nomination or any business proposed to be brought before the
meeting was made in accordance with the procedures set forth in
this Section 1.11 and, if any proposed nomination or business is
not in compliance with this Section 1.11, to declare that such
defective nomination or proposal be disregarded.
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For purposes of this Section 1.11, "public
announcement" shall mean disclosure in a press release reported
by the Dow Jones New Service, Associated Press or comparable news
service or in a document publicly filed by the Corporation with
the Securities and Exchange Commission pursuant to Sections 13,
14 or 15(d) of the Exchange Act.
Notwithstanding the foregoing provisions of this
Section 1.11, a stockholder shall also comply with all applicable
requirements of state law and of the Exchange Act and the rules
and regulations thereunder with respect to the matters set forth
in this Section 1.11. Nothing in this Section 1.11 shall be
deemed to affect any rights of stockholders to request inclusion
of proposals in the Corporation's proxy statement pursuant to
Rule 14a-8 under the Exchange Act.
ARTICLE II
BOARD OF DIRECTORS
Section 2.01. POWERS. The business and affairs of the
Corporation shall be managed under the direction of its Board of
Directors. The Board of Directors may exercise all the powers of
the Corporation, except such as are by statute or the charter or
the Bylaws conferred upon or reserved to the stockholders.
Section 2.02. NUMBER OF DIRECTORS. The number of
directors of the Corporation shall be not less than seven (7) nor
more than eighteen (18). By vote of a majority of the Board of
Directors, the number of directors may be increased or decreased,
from time to time, within the limits above specified, providing
however, the tenure of office of a director shall not be affected
by any decrease in the number of directors so made by the Board.
Section 2.03. CLASSIFICATION AND ELECTION OF
DIRECTORS. Beginning with the Board of Directors elected in
January, 1993, directors were classified with respect to the time
for which they were severally elected to hold office by dividing
them into three classes, as nearly equal in number as possible,
as follows:
Term Expires 1993 Term Expires 1994 Term Expires 1995
Lamar Alexander A. James Clark Caleb B. Hurtt
Norman R. Augustine Edwin I. Colodny Melvin R. Laird
John J. Byrne James L. Everett, III Gordon S. Macklin
Edward L. Hennessy, Jr. Allen E. Murray John W. Vessey, Jr.
Gwendolyn S. King A. Thomas Young
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At each succeeding Annual Meeting of Stockholders beginning in
1993, the class of directors then being elected will be elected
to hold office for a term of office to expire at the third
succeeding Annual Meeting of Stockholders after their election.
Each director will hold office for the term for which elected and
until his or her successor will have been elected and qualified.
No person shall be eligible to be elected as a director for a
term which expires after the first annual meeting of stockholders
after he or she reaches the age of 72 years.
Section 2.04. CHAIRMAN OF THE BOARD. The Board of
Directors shall designate from its membership a Chairman of the
Board, who shall have such powers and perform such duties as may
be prescribed by these Bylaws and assigned to him or her by the
Board of Directors pursuant to Section 4.02.
Section 2.05. REMOVAL. Any director, any class of
directors, or the Board of Directors may be removed from office
as a director at any time, but only for cause, by the affirmative
vote at a duly called meeting of stockholders of at least 80% of
the votes which all holders of the then outstanding shares of
capital stock of the Corporation would be entitled to cast at an
annual election of directors, voting together as a single class.
Section 2.06. VACANCIES. Vacancies in the Board of
Directors, except for vacancies resulting from an increase in the
number of directors, shall be filled only by a majority vote of
the remaining directors then in office, though less than a
quorum, except that vacancies resulting from removal from office
by a vote of the stockholders may be filled by the stockholders
at the same meeting at which such removal occurs. Vacancies
resulting from an increase in the number of directors shall be
filled only by a majority vote of the Board of Directors. All
directors elected by the Board of Directors to fill vacancies
shall, in accordance with Maryland law, stand for election at the
next Annual Meeting of Stockholders. No decrease in the number
of directors constituting the Board of Directors shall affect the
tenure of any incumbent director.
Section 2.07. REGULAR MEETINGS. After each meeting of
stockholders at which a Board of Directors, or any class thereof,
shall have been elected, the Board of Directors shall meet as
soon as practicable for the purpose of organization and the
transaction of other business, at such time and place within or
without the State of Maryland as may be designated by the Board
of Directors. Other regular meetings of the Board of Directors
shall be held on such dates and at such places within or without
the State of Maryland as may be designated from time to time by
the Board of Directors.
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Section 2.08. SPECIAL MEETINGS. Special meetings of
the Board of Directors may be called at any time, at any place,
and for any purpose by the Chairman of the Board, the President,
the Chairman of the Executive Committee, or by any officer of the
Corporation upon the request of a majority of the Board.
Section 2.09. NOTICE OF MEETINGS. Notice of the
place, day, and hour of every regular and special meeting of the
Board of Directors shall be given to each director twenty-four
(24) hours (or more) before the meeting, by telephoning the
notice to such director, or by delivering the notice to him or
her personally, or by sending the notice to him or her by
telegraph, or by facsimile, or by leaving the notice at his or
her residence or usual place of business, or, in the alternative,
by mailing such notice three (3) days (or more) before the
meeting, postage prepaid, and addressed to him or her at his or
her last known post office address, according to the records of
the Corporation. If mailed, such notice shall be deemed to be
given when deposited in the United States mail, properly
addressed, with postage thereon prepaid. If notice be given by
telegram or by facsimile, such notice shall be deemed to be given
when the telegram is delivered to the telegraph company or when
the facsimile is transmitted. If the notice be given by
telephone or by personal delivery, such notice shall be deemed to
be given at the time of the communication or delivery. Unless
required by these Bylaws or by resolution of the Board of
Directors, no notice of any meeting of the Board of Directors
need state the business to be transacted thereat. No notice of
any meeting of the Board of Directors need be given to any
director who attends or to any director who, in writing executed
and filed with the records of the meeting either before or after
the holding thereof, waives such notice. Any meeting of the
Board of Directors, regular or special, may adjourn from time to
time to reconvene at the same or some other place, and no further
notice need be given of any such adjourned meeting.
Section 2.10. PRESENCE AT MEETING. Members of the
Board, or of any committee thereof, may participate in a meeting
by means of conference telephone or similar communications
equipment by means of which all persons participating in the
meeting can hear each other at the same time. Participation in
this manner shall constitute presence in person at the meeting.
Section 2.11. PRESIDING OFFICER AND SECRETARY AT
MEETINGS. Each meeting of the Board of Directors shall be
presided over by the Chairman of the Board of Directors or in his
or her absence by the President or if neither is present by such
member of the Board of Directors as shall be chosen by the
meeting. The Secretary, or in his or her absence an Assistant
Secretary, shall act as secretary of the meeting, or if no such
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officer is present, a secretary of the meeting shall be
designated by the person presiding over the meeting.
Section 2.12. QUORUM. At all meetings of the Board of
Directors, one third (1/3) of the Board of Directors, but in no
case less than five (5) directors, shall constitute a quorum for
the transaction of business. Except in cases in which it is by
statute, by the charter, or by the Bylaws otherwise provided, the
vote of a majority of such quorum at a duly constituted meeting
shall be sufficient to pass any measure. In the absence of a
quorum, the directors present by majority vote and without notice
other than by announcement may adjourn the meeting from time to
time until a quorum shall be present. At any such adjourned
meeting at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as
originally notified.
Section 2.13. COMPENSATION. Directors shall not
receive any stated salary for their services as Directors but, by
resolution of the Board of Directors, fees and expenses of
attendance, if any, may be provided to Directors for attendance
at each annual, regular or special meeting of the Board of
Directors or of any committee thereof; but nothing contained
herein shall be construed to preclude any Director from serving
the Corporation in any other capacity and receiving compensation
therefor.
Section 2.14. VOTING OF SHARES BY CERTAIN HOLDERS.
Notwithstanding any other provision of the charter of the
Corporation or these Bylaws, Title 3, Subtitle 7 of the
Corporations and Associations Article of the Annotated Code of
Maryland (or any successor statute) shall not apply to any
acquisition by General Electric Company of shares of stock of the
Corporation.
ARTICLE III
COMMITTEES
Section 3.01. EXECUTIVE COMMITTEE. The Board of
Directors, by resolution adopted by a majority of the Board of
Directors, may provide for an Executive Committee of two (2) or
more Directors. If provision be made for an Executive Committee,
the members thereof shall be elected by the Board of Directors to
serve at the pleasure of the Board of Directors. Unless a
chairman shall have been selected by the Board of Directors, the
President shall act as chairman thereof. During the intervals
between the meetings of the Board of Directors, the Executive
Committee shall possess and may exercise such powers in the
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management of the business and affairs of the Corporation as may
be authorized by the Board of Directors, subject to applicable
law. All action by the Executive Committee shall be reported to
the Board of Directors at its meeting next succeeding such
action, and shall be subject to revision and alteration by the
Board of Directors. Vacancies in the Executive Committee shall
be filled by the Board of Directors.
Section 3.02. FINANCE COMMITTEE. The Board of
Directors by resolution adopted by a majority of the Board of
Directors may provide for a Finance Committee of three (3) or
more Directors. If provision is made for a Finance Committee,
the members of the Finance Committee shall be elected by the
Board of Directors to serve at the pleasure of the Board of
Directors. The Board of Directors shall designate from among the
membership of the Finance Committee a chairman. During the
intervals between the meetings of the Board of Directors, the
Finance Committee shall, except when such powers are by statute
or the charter or the Bylaws either reserved to the full Board of
Directors or delegated to another committee of the Board of
Directors, possess and may exercise all of the powers of the
Board of Directors in the management of the financial affairs of
the Corporation, including but not limited to establishing bank
lines of credit or other short-term borrowing arrangements and
investing excess working capital funds on a short-term basis.
The Finance Committee will review all proposed changes to the
capital structure of the Corporation, including the incurrence of
long-term indebtedness and the issuance of additional equity
securities, and will make suitable recommendations to the Board
of Directors. It will likewise review on an annual basis the
proposed capital expenditure and contributions budgets of the
Corporation and make recommendations to the Board of Directors
for their adoption. It will review the financial impact of the
implementation of all compensation and employee benefit plans and
of any amendments or modifications thereto, will approve the
actuarial assumptions and financial policies pertaining to the
investment of funds related to such plans, and it will further
review such plans to ensure that they are operated in accordance
with existing legal requirements and sound financial principles.
All action by the Finance Committee shall be reported to the
Board of Directors at its meeting next succeeding such action and
shall be subject to revision and alteration by the Board of
Directors. Vacancies in the Finance Committee shall be filled by
the Board of Directors.
Section 3.03. AUDIT AND ETHICS COMMITTEE. The Board
of Directors by resolution adopted by a majority of the Board of
Directors shall provide for an Audit and Ethics Committee of
three or more Directors who are not officers or employees of the
Corporation, and who are otherwise independent of management and
free from any relationship that, in the opinion of the Board of
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Directors, would interfere with the exercise of the independent
judgment of each member as a Committee member. The members of
the Audit and Ethics Committee shall be elected by the Board of
Directors to serve at the pleasure of the Board of Directors.
The Board of Directors shall designate from among the membership
of the Audit and Ethics Committee a chairman. The Audit and
Ethics Committee shall, except when such powers are by statute or
the charter or the Bylaws either reserved to the full Board of
Directors or delegated to another committee of the Board of
Directors, possess and may exercise the powers of the Board of
Directors relating to all accounting and auditing matters of this
Corporation. The Audit and Ethics Committee shall recommend to
the Board of Directors the selection of and monitor the
independence of the independent public accountants for this
Corporation and prior to the end of the Corporation's fiscal year
shall review the scope and timing of the work to be performed and
the compensation to be paid to the accountants selected by the
Board; review with the Corporation's management and the
independent public accountants the financial accounting and
reporting principles appropriate for the Corporation, the
policies and procedures concerning audits, accounting and
financial controls, and any recommendations to improve existing
practices, and the qualifications and work of the Corporation's
internal auditing staff; review with the Corporation's
independent public accountants the results of their audit and
their report including any changes in accounting principles and
any significant amendments; and shall meet with the Corporation's
internal audit department representative to review the plan and
scope of work of the internal auditing staff. The Committee
shall hold quarterly meetings, and shall separately meet in
executive session, with the Corporation's independent public
accountants and internal audit department representative to
review and resolve all matters of concern presented to the
Committee. The Committee shall monitor compliance with the Code
of Ethics and Standards of Conduct and shall review and resolve
all matters of concern presented to it by the Corporate Ethics
Committee or the Corporate Ethics Office. The Committee shall
review and monitor the adequacy of the Corporation's policies and
procedures, as well as the organizational structure, for ensuring
compliance with environmental laws and regulations; review, at
least annually, the Corporation's record of compliance with
environmental laws and regulations and the policies and
procedures relating thereto; review with the Corporation's
management significant environmental litigation and regulatory
proceedings in which the Corporation is or may become involved;
and review the accounting and financial reporting issues,
including the adequacy of disclosure, for all environmental
matters. The Committee shall have the power to investigate any
matter falling within its jurisdiction, and it shall also perform
such other functions and exercise such other powers as may be
delegated to it from time to time by the Board of Directors. All
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action by the Audit and Ethics Committee shall be reported to the
Board of Directors at its meeting next succeeding such action and
shall be subject to revision and alteration by the Board of
Directors. Vacancies in the Audit and Ethics Committee shall be
filled by the Board of Directors.
Section 3.04. COMPENSATION COMMITTEE. The Board of
Directors by resolution adopted by a majority of the Board of
Directors may provide for a Compensation Committee of three (3)
or more Directors who are not officers or employees of the
Corporation. If provision is made for a Compensation Committee,
the members of the Compensation Committee shall be elected by the
Board of Directors to serve at the pleasure of the Board of
Directors. The Board of Directors shall designate from among the
membership of the Compensation Committee a chairman. The
Compensation Committee shall recommend to the Board of Directors
the compensation to be paid for services of elected officers of
the Corporation. The Compensation Committee shall have the power
to fix the compensation of all employees, except elected
officers, whose compensation is at such rate as may be
established by resolution of the Board of Directors from time to
time and to approve the benefits provided by any bonus,
supplemental, and special compensation plans, including pension,
insurance, and health plans, except such powers as are by statute
or the charter or the Bylaws reserved to the full Board of
Directors. The Compensation Committee shall serve as the Stock
Option Committee of the Board, and it shall also perform such
other functions and exercise such other powers as may be
delegated to it from time to time by the Board of Directors. All
action by the Compensation Committee shall be reported to the
Board of Directors at its meeting next succeeding such action and
shall be subject to revision and alteration by the Board of
Directors. Vacancies in the Compensation Committee shall be
filled by the Board of Directors.
Section 3.05. NOMINATING COMMITTEE. The Board of
Directors by resolution adopted by a majority of the Board of
Directors may provide for a Nominating Committee of three (3) or
more Directors who are not officers or employees of the
Corporation. If provision is made for a Nominating Committee,
the members of the Nominating Committee shall be elected by the
Board of Directors to serve at the pleasure of the Board of
Directors. The Board of Directors shall designate from among the
membership of the Nominating Committee a committee chairman. The
Nominating Committee shall make recommendations to the Board of
Directors concerning the fees for the Board of Directors and
other compensation, the composition of the Board including its
size and the qualifications for membership, and the Nominating
Committee shall recommend to the Board of Directors nominees for
election to fill any vacancy occurring in the Board and to fill
new positions created by an increase in the authorized number of
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directors of the Corporation. Annually the Nominating Committee
shall recommend to the Board of Directors a slate of directors to
serve as management's nominees for election by the stockholders
at the annual meeting. Vacancies in the Nominating Committee
shall be filled by the Board of Directors.
Section 3.06. OTHER COMMITTEES. The Board of
Directors may by resolution provide for such other standing or
special committees, composed of two or more Directors, and
discontinue the same at its pleasure. Each such committee shall
have such powers and perform such duties, not inconsistent with
law, as may be assigned to it by the Board of Directors.
Section 3.07. MEETINGS OF COMMITTEES. Each committee
of the Board of Directors shall fix its own rules of procedure
consistent with the provisions of the Board of Directors
governing such committee, and shall meet as provided by such
rules or by resolution of the Board of Directors, and it shall
also meet at the call of its chairman or any two (2) members of
such committee. Unless otherwise provided by such rules or by
such resolution, the provisions of the article of these Bylaws
entitled the "Board of Directors" relating to the place of
holding and notice required of meetings of the Board of Directors
shall govern committees of the Board of Directors. A majority of
each committee shall constitute a quorum thereof; provided,
however, that in the absence of any member of such committee, the
members thereof present at any meeting, whether or not they
constitute a quorum, may appoint a member of the Board of
Directors to act in the place of such absent member. Except in
cases in which it is otherwise provided by the rules of such
committee or by resolution of the Board of Directors, the vote of
a majority of such quorum at a duly constituted meeting shall be
sufficient to pass any measure.
ARTICLE IV
OFFICERS
Section 4.01. EXECUTIVE OFFICERS -- ELECTION AND TERM
OF OFFICE. The Executive Officers of the Corporation shall be a
Chairman of the Board, a President, such number of Vice
Presidents as the Board of Directors may determine, a Secretary
and a Treasurer. The Chairman of the Board and the President
shall be chosen from among the Directors. The Executive Officers
shall be elected annually by the Board of Directors at its first
meeting following the Annual Meeting of Stockholders and each
such officer shall hold office until the corresponding meeting of
the Board of Directors in the next year and until his or her
successor shall have been duly chosen and qualified or until his
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or her death or until he or she shall have resigned, or shall
have been removed from office in the manner provided in this
Article. Any vacancy in any of the above offices may be filled
for the unexpired portion of the term by the Board of Directors
at any regular or special meeting.
Section 4.02. CHAIRMAN OF THE BOARD. The Chairman of
the Board shall be the Chief Executive Officer of the Corporation
and shall preside at all meetings of the stockholders and of the
Board of Directors. Subject to the authority of the Board of
Directors, he or she shall have general charge and supervision of
the business and affairs of the Corporation. He or she may sign
with the Secretary or an Assistant Secretary certificates of
stock of the Corporation. He or she shall have the authority to
sign and execute in the name of the Corporation all deeds,
mortgages, bonds, contracts or other instruments. He or she
shall have the authority to vote stock in other corporations, and
he or she shall perform such other duties of management as may be
prescribed by a resolution or resolutions or as otherwise may be
assigned to him or her by the Board of Directors. He or she
shall have the authority to delegate such authorization and power
as vested in him or her by these Bylaws to some other officer or
employee or agent of the Corporation as he or she shall deem
appropriate.
Section 4.03. PRESIDENT. The President shall be the
Chief Operating Officer of the Corporation. He or she shall have
general charge and supervision of the operations of the
Corporation and shall have such other powers and duties of
management as from time to time may be assigned to him or her by
the Board of Directors or the Chief Executive Officer.
Section 4.04. VICE PRESIDENTS. The Corporation shall
have one (1) or more Vice Presidents, including Senior Vice
Presidents as appropriate, as elected from time to time by the
Board of Directors. The Vice Presidents shall perform such
duties as from time to time may be assigned to them by the
President or the Chief Executive Officer.
Section 4.05. SECRETARY. The Secretary shall keep the
minutes of the meetings of the stockholders and of the Board of
Directors, in books provided for the purpose; shall see that all
notices of such meetings are duly given in accordance with the
provisions of the Bylaws of the Corporation, or as required by
law; may sign certificates of stock of the Corporation with the
Chairman of the Board; shall be custodian of the corporate seal;
shall see that the corporate seal is affixed to all documents,
the execution of which, on behalf of the Corporation, under its
seal, is duly authorized, and when so affixed may attest the
same; and in general, shall perform all duties incident to the
office of a secretary of a corporation, and such other duties as
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from time to time may be assigned to the Secretary by the
Chairman of the Board.
Section 4.06. TREASURER. The Treasurer shall have
charge of and be responsible for all funds, securities, receipts
and disbursements of the Corporation, and shall deposit, or cause
to be deposited, in the name of the Corporation, all monies or
other valuable effects in such banks, trust companies, or other
depositories as shall, from time to time, be selected by the
Board of Directors; and in general, shall perform all the duties
incident to the office of a treasurer of a corporation, and such
other duties as from time to time may be assigned to him or her
by the President.
Section 4.07. SUBORDINATE OFFICERS. The subordinate
officers shall consist of such assistant officers and agents as
may be deemed desirable and as may be appointed by the Chief
Executive Officer or the President. Each such subordinate
officer shall hold office for such period, have such authority
and perform such duties as the Chief Executive Officer or the
President may prescribe.
Section 4.08. WHEN DUTIES OF AN OFFICER MAY BE
DELEGATED. In the case of the absence or disability of an
officer of the Corporation or for any other reason that may seem
sufficient to the Board of Directors, the Board, or any officer
designated by it, may, for the time being, delegate such
officer's duties and powers to any other person.
Section 4.09. OFFICERS HOLDING TWO OR MORE OFFICES.
Any two (2) of the above mentioned offices, except those of
President and a Vice president, may be held by the same person,
but no officer shall execute, acknowledge or verify any
instrument in more than one capacity, if such instrument be
required by law, by the charter or by these Bylaws, to be
executed, acknowledged or verified by any two (2) or more
officers.
Section 4.10. COMPENSATION. The Board of Directors
shall have power to fix the compensation of all officers and
employees of the Corporation.
Section 4.11. RESIGNATIONS. Any officer may resign at
any time by giving written notice to the Board of Directors or to
the president or the Secretary of the Corporation. Any such
resignation shall take effect simultaneously with or at any time
subsequent to its delivery as shall be specified therein; and,
unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
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Section 4.12. REMOVAL. Any officer of the Corporation
may be removed, with or without cause, by the Board of Directors,
if such removal is determined in the judgment of the Board of
Directors to be in the best interests of the Corporation, and any
officer of the Corporation duly appointed by another officer may
be removed, with or without cause, by such officer.
ARTICLE V
STOCK
Section 5.01. CERTIFICATES. Each stockholder shall be
entitled to a certificate or certificates which shall represent
and certify the number and kind of shares of stock owned by him
or her in the Corporation. Such certificates shall be signed by
the Chairman of the Board and countersigned by the Secretary or
an Assistant Secretary, and sealed with the seal of the
Corporation or a facsimile of such seal. Stock certificates
shall be in such form, not inconsistent with law or with the
charter, as shall be approved by the Board of Directors. When
certificates for stock of any class are countersigned by a
transfer agent, other than the Corporation or its employee, or by
a registrar, other than the Corporation or its employee, any
other signature on such certificates may be a facsimile. In case
any officer of the Corporation who has signed any certificate
ceases to be an officer of the Corporation, whether because of
death, resignation or otherwise, before such certificate is
issued, the certificate may nevertheless be issued and delivered
by the Corporation as if the officer had not ceased to be such
officer as of the date of its issue.
Section 5.02. TRANSFER OF SHARES. Shares of stock
shall be transferable only on the books of the Corporation by the
holder thereof, in person or by duly authorized attorney, upon
the surrender of the certificate representing the shares to be
transferred, properly endorsed. The Board of Directors shall
have power and authority to make such other rules and regulations
concerning the issue, transfer and registration of certificates
of stock as it may deem expedient.
Section 5.03. TRANSFER AGENTS AND REGISTRARS. The
Corporation may have one (1) or more transfer agents and one (1)
or more registrars of its stock, whose respective duties the
Board of Directors may, from time to time, define. No
certificate of stock shall be valid until countersigned by a
transfer agent, if the Corporation has a transfer agent, or until
registered by a registrar, if the Corporation has a registrar.
The duties of transfer agent and registrar may be combined.
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Section 5.04. STOCK LEDGERS. Original or duplicate
stock ledgers, containing the names and addresses of the
stockholders of the Corporation and the number of shares of each
class held by them respectively, shall be kept at an office or
agency of the Corporation in such city or town as may be
designated by the Board of Directors. If no other place is so
designated such original or duplicate stock ledgers shall be kept
at an office or agency of the Corporation in New York, New York
or Baltimore, Maryland.
Section 5.05. RECORD DATES. The Board of Directors is
hereby empowered to fix, in advance, a date as the record date
for the purpose of determining stockholders entitled to notice
of, or to vote at, any meeting of stockholders, or stockholders
entitled to receive payment of any dividend or the allotment of
any rights, or in order to make a determination of stockholders
for any other proper purpose. Such date in any case shall be not
more than ninety (90) days and, in case of a meeting of
stockholders, not less than thirty (30) days, prior to the date
on which the particular action, requiring such determination of
stockholders, is to be taken. If a record date is not set and
the transfer books are not closed, the record date for the
purpose of making any proper determination with respect to
stockholders shall be fixed in accordance with applicable law.
Section 5.06. NEW CERTIFICATES. In case any
certificate of stock is lost, stolen, mutilated or destroyed, the
Board of Directors may authorize the issue of a new certificate
in place thereof upon such terms and conditions as it may deem
advisable; or the Board of Directors may delegate such power to
any officer or officers or agents of the Corporation; but the
Board of Directors or such officer or officers, in their
discretion, may refuse to issue such new certificate save upon
the order of some court having jurisdiction in the premises.
ARTICLE VI
INDEMNIFICATION
Section 6.01. INDEMNIFICATION OF DIRECTORS, OFFICERS,
AND EMPLOYEES. The Corporation shall indemnify and hold harmless
to the fullest extent permitted by, and under, applicable law as
it presently exists and as is further set forth in Section 6.02
below or as may hereafter be amended any person who is or was a
director, officer or employee of the Corporation or who is or was
serving at the request of the Corporation as a director, officer
or employee of another corporation or entity (including service
with employee benefit plans), who by reason of this status or
service in that capacity was, is, or is threatened to be made a
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party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative, or investigative. Such
indemnification shall be against all liability and loss suffered
and expenses (including, but not limited to, attorneys' fees,
judgments, fines, penalties, and amounts paid in settlement)
actually and reasonably incurred by the individual in connection
with such proceeding. Provided, however, that the Corporation
shall not be required to indemnify a person in connection with an
action, suit or proceeding initiated by such person unless the
action, suit or proceeding was authorized by the Board of
Directors of the Corporation.
Section 6.02. STANDARD. Maryland General Corporation
Law Section 2-418, on February 28, 1991, provided generally that
a corporation may indemnify any individual made a party to a
proceeding by reason of service on behalf of the corporation
unless it is established that:
(i) The act or omission of the
individual was material to the matter giving
rise to the proceeding; and
(1) Was committed in bad faith;
or
(2) Was the result of active and
deliberate dishonesty; or
(ii) The individual actually received
an improper personal benefit in money,
property, or services; or
(iii) In the case of any criminal
proceeding, the individual had reasonable
cause to believe that the act or omission was
unlawful.
Section 6.03. ADVANCE PAYMENT OF EXPENSES. The
Corporation shall pay or reimburse reasonable expenses in advance
of a final disposition of the proceeding and without requiring a
preliminary determination of the ultimate entitlement to
indemnification provided that the individual first provides the
Corporation with: (a) a written affirmation of the individual's
good faith belief that the individual meets the standard of
conduct necessary for indemnification under the laws of the State
of Maryland; and (b) a written undertaking by or on behalf of the
individual to repay the amount advanced if it shall ultimately be
determined that the applicable standard of conduct has not been
met.
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Section 6.04. GENERAL. The Board of Directors, by
resolution, may authorize the management of the Corporation to
act for and on behalf of the Corporation in all matters relating
to indemnification within any such limits as may be specified
from time to time by the Board of Directors, all consistent with
applicable law.
The rights conferred on any person by this Article VI
shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the
charter of the Corporation, these Bylaws, agreement, vote of the
stockholders or disinterested directors or otherwise.
Repeal or modification of this Article or the relevant
law shall not affect adversely any rights or obligations then
existing with respect to any facts then or theretofore existing
or any action, suit or proceeding theretofore or thereafter
brought or threatened based in whole or in part upon any such
facts.
ARTICLE VII
SUNDRY PROVISIONS
Section 7.01. SEAL. The corporate seal of the
Corporation shall bear the name of the Corporation and the words
"Incorporated 1992 Maryland" and "Corporate Seal."
Section 7.02. VOTING OF STOCK IN OTHER CORPORATIONS.
Any shares of stock in other corporations or associations, which
may from time to time be held by the Corporation, may be
represented and voted at any of the stockholders' meetings
thereof by the Chairman or President of the Corporation or by
proxy or proxies appointed by the Chairman or President of the
Corporation. The Board of Directors or Chairman, however, may by
resolution or delegation appoint some other person or persons to
vote such shares, in which case such person or persons shall be
entitled to vote such shares upon the production of a certified
copy of such resolution or delegation.
Section 7.03. AMENDMENTS. The Board of Directors
shall have the exclusive power, at any regular or special meeting
thereof, to make and adopt new Bylaws, or to amend, alter, or
repeal any Bylaws of the Corporation, provided such revisions are
not inconsistent with the charter or statute.
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C E R T I F I C A T E A S T O B Y L A W S
I, ________________________________________________,
_________________________ Secretary of PARENT CORPORATION hereby
certify that the foregoing is a true, correct and complete copy
of the Bylaws of PARENT CORPORATION and that such Bylaws are in
full force and effect as of the date of this certificate.
WITNESS my hand and the seal of PARENT CORPORATION,
this ___________ day of ____________________________, 19______.
_________________________________
Secretary
CORPORATE SEAL
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POST-RETIREMENT INCOME MAINTENANCE PLAN
FOR DIRECTORS
October 22, 1981
(Amended December 15, 1983)
(Amended December 5, 1985)
(Amended January 1, 1986)
(Amended June 24, 1988)
(Amended January 26, 1989)
(Amended June 25, 1993)
1. RESOLVED, That the unfunded Post-Retirement Income
Maintenance Plan ("the Plan") established by the Board of
Directors at its meeting held on October 22, 1981, as amended
December 15, 1983, December 5, 1985, January 1, 1986, June 24,
1988, and January 26, 1989 be and it hereby is amended
effective June 25, 1993, pursuant to which any member of the
Board of Directors who retires on or after December 15, 1983,
is eligible.
2. RESOLVED FURTHER, That pursuant to the amended Plan, a
director, who at the time of retirement from the Board shall
have served five continuous years and have attained mandatory
retirement age as defined in the Corporation's By-Laws,
Section 2.03, receives for life an annual fee equal to the
annual Board retainer in effect at the time of retirement,
such fee to be paid in annual installments commencing the
first October 30th following the Participants retirement and
shall continue to be made October 30th of each succeeding year
until full payment under the terms of this Plan has been paid.
3. RESOLVED FURTHER, That a director, who at the time of
retirement from the Board has attained mandatory retirement
age as defined in the Corporation's ByLaws, Section 2.03, but
has not served five continuous years, upon approval by the
Nominating Committee, shall receive for life an annual fee
equal to the annual Board retainer in effect at the time of
retirement, such fee to be paid in annual installments
commencing the first October 30th following the Participants
retirement and shall continue to be made October 30th of each
succeeding year until full payment under the terms of this
Plan has been paid.
4. RESOLVED FURTHER, That a director who retires early after
completing at least five continuous years of service is
entitled to receive an annual fee equal to the annual Board
retainer in effect at the time of retirement. Such retainer
shall be paid in equal annual installments for a period equal
to the number of full years the retired director served on the
Board.
5. RESOLVED FURTHER, That retired directors who have been
employees or officers of the Corporation are eligible to
participate in the Plan.
6. RESOLVED FURTHER, That a retired director who
participates in the Plan or a director who dies while serving
on the Board and would otherwise be eligible to receive
benefits had he retired immediately prior to death shall be a
"Plan Participant".
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7. RESOLVED FURTHER, That nothing in the Plan, nor any
action or acquiescence in the administration of the Plan,
shall be considered to create any benefit, cause of action,
right of sale, transfer, assignment, pledge, encumbrance, or
other such right in any heirs or assigns of a Plan Participant
or the estate of a Plan Participant, except that in the event
of death of any Plan Participant prior to receiving payments
equal to the number of full years of active service on the
Board, the surviving lawful spouse, if any, will be entitled
to the remainder of the Plan benefit payments for such service
period or ten years, whichever comes first. In no event will
the spouse be required to forfeit benefits by reason of that
portion of annual payments made in advance which would have
covered a period of time after the Participant's death.
8. RESOLVED FURTHER, That any former director who retired
prior to June 24, 1988, and such director or his spouse is
currently receiving retirement benefits, shall continue to
receive such benefits under the Plan in effect at the time of
the director's retirement, unless such director or his spouse
shall make an irrevocable election to consent to participation
in the Plan, as amended.
9. RESOLVED FURTHER, That any director who had attained
mandatory retirement age on December 1, 1992 as defined in the
Corporation's By-Laws, Section 2.03, and whose continuing
service on the Board was authorized pursuant to a Board
resolution adopted on December 3, 1992, shall qualify to
receive benefits under the Plan based on the mandatory
retirement age in effect pursuant to the Corporation's By-
Laws, Section 2.03, on December 1, 1992.
10. RESOLVED FURTHER, The event of a "Change in Control" a
Plan Participant shall be entitled to receive a lump sum
payment equal to the present value of his vested plan
benefits, determined as if he had retired from the Board on
the date of the Change in Control by using the lowest
applicable discount rate permitted by the Internal Revenue
Code. A "Change in Control" shall mean a change in control of
the Corporation that shall be deemed to have occurred, if and
when, with or without the approval of its board of directors
incumbent prior to the occurrence, (i) any "person" (as such
term is used in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended ("Exchange Act")) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Corporation representing 30 percent or more of the combined
voting power of the Corporation's then outstanding securities;
or (ii) during any calendar year, individuals who at the
beginning of such period were members of the board of
directors of the Corporation cease as the result of a tender
offer, merger, consolidation, sale of assets or contested
election, or any combination of such transactions, to
constitute at least 75% thereof. The Plan provisions
effectuating this resolution may not be amended after the
occurrence of a Change in Control.
11. RESOLVED FURTHER, That in the event of the death of any
active outside director whether or not such director has
served as a director for five years, his spouse or beneficiary
shall be entitled to receive a lump sum payment equal to the
amount such director would have received in Board and
Committee retainer fees had he continued to serve as a
director for the entire period that he could have served as a
director under the Corporation's By-Laws; and received the
same dollar amount of compensation being paid immediately
prior to death, provided however that no more than ten years
of such imputed additional service shall be taken into
account, such benefit shall not be included in the actuarial
computation which would be required in the event of a Change
in Control.
12. RESOLVED FURTHER, That the proper officers of this
Corporation be and they hereby are authorized to prepare the
Post-Retirement Income Maintenance Plan document to effectuate
the intent of the foregoing resolutions including any further
amendments and to execute such further documents and do all
such other acts and things and to take all such steps as they
shall deem necessary or advisable or proper in order to fully
carry out the intent of the foregoing resolutions.
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EXECUTIVE INCENTIVE PLAN
CORPORATE PLAN
September 1993
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EXECUTIVE INCENTIVE PLAN
MARTIN MARIETTA - CORPORATE
1. PURPOSE
The purpose of the Plan is to advance the interests of the
Corporation and its Shareholders by providing for its senior
management an additional inducement for achieving and
exceeding the Corporation's performance objectives.
Additionally, the Plan will allow a level of compensation that
is appropriate when compared with the compensation levels of
other comparable corporations. It is intended that this
purpose will be effected through the granting of Incentive
Awards on an annual basis.
II. STANDARD OF CONDUCT AND PERFORMANCE EXPECTATION
A It is expected that the business and individual goals and
objectives established for this Plan will be accomplished
in accordance with the Corporation's policy on ethical
conduct in business with the Government and all other
customers. It is a prerequisite before any award can be
considered that a participant will have acted in
accordance with the Martin Marietta Corporation Code of
Ethics and fostered an atmosphere to encourage all
employees acting under the participant's supervision to
perform their duties in accordance with the highest
ethical standards. Ethical behavior is imperative.
Thus, in achieving one's goals, the individual's
commitment and adherence to the Corporation's ethical
standard will be considered paramount in determining
awards under this Plan.
B. Plan participants whose individual performance is
determined to be less than acceptable are not eligible to
receive incentive awards.
III. EFFECTIVE DATE
The Plan will become effective each year commencing January 1.
IV. ELIGIBILITY
The Chief Executive Officer will designate annually those
elected Officers of the Corporation who will participate in
the Plan. The Chief Executive Officer and the President of the
Corporation are specifically excluded. Additionally, other
selected management personnel identified by the Officers, and
with concurrence of the Chief Executive Officer, as having a
potentially significant contribution to the success of the
Corporation will be eligible.
To quality for participation in this Plan, an employee must
not be eligible to participate in any other bonus plan in
effect with Martin Marietta Corporation.
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V. MAXIMUM AWARD
Awards will be based on the annual salary of the participant
during the first full pay period of each plan year. At the
first of each Plan year, the Chief Executive Officer will
establish a maximum Incentive Pool that will include the total
number of participants and the maximum dollars authorized. The
recommended amount is indicated below, but may be less than
that shown based on the Chief Executive Officer's assessment.
Responsibility Maximum Incentive Award
Level (% of Annual Salary)
Corporate Officers:
Secretary 50%
Other Officers 70%/60%
Designated Top Corporate
Positions, non-officers 50%
Vice Presidents not included above 40%*
President, Subsidiary Company 40%*
Vice President, Subsidiary Company 30%*
Designated Corporate Directors
reporting to top corporate
position 40%*
Directors not included above 30%*
Managers/Newly Assigned Directors* 20%/10%
* The maximum incentive award levels noted above may be
adjusted one level up or down for selected positions
subject to the approval of the Chief Executive Officer.
VI. PERFORMANCE CRITERIA AND AWARD ALLOCATION
A. Corporate Officers (except those who have Operating Unit
responsibilities and are generally, but not exclusively,
Group or Operating Unit Presidents)
The performance criteria for the designated, Corporate
Officer will be a percentage Return on Shareholders'
Equity (ROE) formula reflecting total Corporation
performance. Return on Shareholders' Equity (ROE) for
this purpose will mean the quotient of Return divided by
Shareholders' Equity, expressed as a percentage. The
term "Return" will mean the Corporation's Net Earnings
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reported for the year. The, term "Shareholders' Equity"
will be the average of Shareholders' Equity at the
beginning and at the end of the year.
The Return on Shareholders' Equity formula will be
established at the beginning of each year for the
following levels of Corporation performance:
Level of Corporate Percentage of Available Award
Performance
1A 95 - 100%
1B 90 - 94%
2 80 - 89%
3 40 - 79%
4 25 - 39%
5 0%
Year-end determination of individual incentive awards
will depend on the actual percent Return on Shareholders'
Equity (ROE) result compared with the formula established
for the year. The Chief Executive Officer will make an
assessment of the individual officer's performance as
well as other factors which may be pertinent and may
modify the award amount upward or downward as deemed
appropriate.
Example:
Participant Base Salary: $100,000
Maximum Incentive (60%) $60,000
Corporate Percentage of
Performance Available Maximum
Level Award Award ($)
1A 95 - 100% $60,000
1B 90 - 94% $56,400
2 80 - 89% $53,400
3 40 - 79% $47,400
4 25 - 39% $23,400
5 0% $0
B. Corporate Officers (Those who have Operating Unit
operational responsibilities and are generally, but not
exclusively, Group or Operating Unit Presidents)
The performance criteria for the designated Corporate
Officer will be based twenty-five (25) percent on the
percentage Return on Shareholders' Equity formula
reflecting total Corporation performance seventy-live
(75) percent on the performance of that Group or
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Operating Unit for which the Corporate Officer has
operational responsibility.
Performance goals, including areas such as orders, sales,
earnings, and Return on Investment (ROI), will be
established at the beginning of each year for each Group
or Operating Unit Performance against these goals will be
evaluated to determine the following levels of Group or
Operating Unit performance.
Level of Corporate Percentage of Available Award
Performance (Group or Operating Unit Portion)
1A 95 - 100%
1B 90 - 94%
2 80 - 89%
3 40 - 79%
4 25 - 39%
5 0%
Year-end determination of individual incentive awards
will depend on the actual percent Return on Shareholders'
Equity (ROE) for the Corporation and actual performance
for that Group or Operating Unit for which the Corporate
Officer has operational responsibility as compared with
the performance goals established for that Group or
Operating Unit. The Chief Executive Officer will make an
assessment of the individual officer's performance as
well as other factors which may be pertinent in
determining the final incentive amount.
Example:
Participant Base Salary: $100,000
Maximum Incentive (60%) $60,000
Group or
Operating
Corporate Unit Maximum
Organization Award for Maximum Award Group or
Performance ROE Corporate Percent for Operating Maximum
Level Perform Award* ROI Perform Unit Award* Total Award
1A 95 - 100% $15,000 95 - 100% $45,000 Sum of
1B 90 - 94% $14,100 90 - 94% $42,300 appropriate
2 80 - 89% $13,400 80 - 89% $40,100 Corporate
3 40 - 79% $11,900 40 - 79% $35,600 and
4 25 - 39% $ 5,900 25 - 39% $17,600 Operating
5 0% $0 0% $0 Units Awards
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*Rounded to the nearest $100. ($50 rounds up.)
It is the intent of the Plan to pay the participant that
portion of the award generated by the performance level
of the Corporation and/or the individual Group or
Operating Unit. For instance, if the performance of the
Corporation, as measured by ROE is "5", but the
performance of the Group or Operating Unit, "1A", the
participant could receive a total award of up to 545,000.
C. Corporate Headquarters (Staff)
The performance criteria for Corporate Headquarters
(Staff) participants will be based fifty (50) percent on
the performance of the Corporation as measured by a
percentage Return on Shareholders' Equity (ROE) formula
and fifty (50) percent on the individual performance of
each participant as determined by a subjective review by
the appropriate Corporate Officer.
Where possible, the participant's actual achievement
relative to quantitative, measurable goals established
for the year shall be taken into account. Based on this
appraised performance, each participant will be ranked
according to the following:
Individual
Performance Percentage of Available Award
1A 100%
1B 90%
2 75%
3 50%
4 25%
5 0%
The total incentive awarded will be the sum of the
Corporation performance and the individual performance.
Example:
Participant Base Salary: $50,000
Maximum Incentive (40%) $20,000
Corporate Maximum Maximum Individual Maximum
Performance Adjust. Corp Performance Adjust. Individual Total
Level Percent Award* Level Percent Award* Award
1A 95 - 100% $10,000 1A 100% $10,000 Sum of
1B 90 - 94% $9,400 1B 90% $9,000 appropriate
2 80 - 89% $8,900 2 75% $7,500 Corp. and
individual
awards
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3 40 - 79% $7,900 3 50% $5,000
4 25 - 39% $3,900 4 25% $2,500
5 0% $0 5 0% $0
*Rounded to the nearest $100. ($50 rounds up.)
D. In all cases, the Chief Executive Officer may modify
awards, as deemed appropriate, upward or downward, based
on the CEO's Assessment of organizational and/or
individual performance.
VII. INCENTIVE FUND AND MAXIMUM INCENTIVE FUND
A Each Plan year, an Incentive Fund will be determined by
the Board of Directors of the Corporation to cover
potential Awards to these Corporate Officers and staff.
However, a minimum Return on Shareholders' Equity for the
total Corporation, which will also be determined by the
Board of Directors each Plan year, must be met before
Incentives can be awarded, except for those officers
designated in paragraph VI.B who may receive that portion
of their award based on their Group or Operating Unit's
performance.
B. Incentive payments to individual participants may not
exceed seventy (70) percent of the participant's annual
base salary at the beginning of the Plan year
VIII. TIMING AND FORM OF PAYMENT
Incentive Awards will be paid in a lump sum as soon as
possible following the close of the Plan year.
IX. CHANGES IN PARTICIPATION
It is recognized that during a Plan year individual changes in
the eligibility group may occur as participants terminate
through death or retirement. As these circumstances occur,
consideration may be given to adjusting the amount of
incentive award. Anyone hired in the eligibility group alter
June 1st will not be eligible for an Incentive Award in that
year without prior written approval of the Chief Executive
Officer. Persons hired prior to June 1st in the eligibility
group may be eligible at the discretion of the appropriate
Corporate Officer and with the approval of the Chief Executive
Officer.
Awards for persons serving less than a lull year in a position
approved for incentive compensation will be prorated based on
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the number of months in the position times the calculated
award, divided by twelve, and rounded to the nearest 100.
7
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DEFERRED COMPENSATION AND ESTATE SUPPLEMENT PLAN
As Approved by the Board of Directors
August 23, 1979
(Amended April 28, 1983)
(Amended July 28, 1983)
(Amended April 26, 1984)
(Amended October 25, 1984)
(Amended July 24, 1986)
(Amended October 27, 1988)
(Amended January 26, 1989)
SECTION 1. ESTABLISHMENT AND PURPOSE
The Martin Marietta Corporation Deferred Compensation and
Estate Supplement Plan is established effective September 1, 1979,
for senior executive personnel. It is intended to provide a means
for attracting and retaining, until retirement, capable individuals
as executive employees of the Corporation. It is further intended
to encourage executives to voluntarily retire from key executive
positions no later than age 65 to enhance advancement opportunities
within the Corporation, and thereby make employment by the
Corporation more attractive.
SECTION 2. DEFINITIONS
The following terms, as used herein, shall have the following
meanings:
"Board of Directors" means the Board of Directors of Martin
Marietta Corporation as it may be comprised from time to time.
"Chief Executive Officer" means the Chief Executive Officer of
the Corporation.
"Corporation" means Martin Marietta Corporation including its
affiliates and subsidiaries.
"Employee" means a person employed by the Corporation on a
full-time basis.
"Participant" means an Employee who, as of the effective date
of this Plan, is employed in a position which is included in the
group listed in Addendum A to this Plan or an Employee who,
subsequent to the effective date of this Plan, is employed in a
position which is included in the group listed in Addendum A to
this Plan and who has been recommended by the Compensation
Committee and approved by the Board of Directors for participation
as provided in Section 3.
"Plan" means the Martin Marietta Corporation Deferred
Compensation and Estate Supplement Plan, as in effect at any time.
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"Designated Benefit" means the amount shown on Addendum A for
the position held by the Participant.
"Voluntary Resignation" means severance from employment in
order to accept full-time employment in a comparable position with
another employer, whether or not the Participant applied for
immediate early retirement under the applicable employee pension
plan.
SECTION 3. ELIGIBILITY AND PARTICIPATION
3.1 Participation in the Plan shall be at the sole discretion
of the Board of Directors and shall be limited to Employees who are
employed in positions which are listed in Addendum A to the Plan,
which shall be part of the Plan. The initial Participants in the
Plan shall be those Employees who hold the positions listed in
Addendum A on the effective date of the Plan. Subsequent
Participants shall be those Employees who hold the positions listed
in Addendum A and who shall have been individually approved for
participation at the sole discretion of the Board of Directors.
3.2 From time to time, the Chief Executive Officer shall
recommend eligible Employees to the Compensation Committee of the
Board of Directors for their review, comments, and recommendations
as to participation in the Plan. Recommendations of the
Compensation Committee will be forwarded to the Board of Directors
for approval.
3.3 An employee who is assigned to a qualifying position and
approved as a Participant by the Board of Directors shall generally
be deemed to have been approved for participation as of the date
the employee was first assigned to a qualifying position, but not
earlier than September 1, 1979. Final determination of effective
dates shall be subject to approval by the Board of Directors.
3.4 Participants in the Plan as it was structured prior to
this amendment will be eligible for the benefit as provided for by
the provisions of the Plan prior to this amendment or as provided
for including this amendment dated October 27, 1988, whichever is
greater.
3.5 Eligibility for payment of benefits from the Plan shall
be determined in accordance with and subject to the terms hereof.
3.6 To be eligible to receive deferred income payments upon
retirement, a Participant, whose eligibility commences on or after
January 1, 1989, must have one full year of participation in this
Plan with a total of five years or more as a Martin Marietta
employee and retire no earlier than the first day of the month
coinciding with or next following attainment of age 56, and no
later than the first day of the month coinciding with or next
following attainment of age 65, unless a later retirement age is
specifically approved for a Participant by the Board of Directors.
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The five year Martin Marietta service and one year Participant
qualifying periods are waived in the case of a Participant who dies
prior to retirement and while still actively employed in a position
listed on Addendum A, or at the discretion of the Chairman of the
Board.
3.7 A Participant who retires prior to age 56, or is
discharged for cause, or continues employment beyond age 65, or who
separates from employment by reason of Voluntary Resignation, shall
cease to be a Participant under this Plan and no benefits shall be
payable from this Plan unless specifically authorized by the Board
of Directors.
SECTION 4. PAYMENT AND DURATION OF BENEFITS
4.1 In the event that a Participant shall simultaneously hold
more than one position listed in Addendum A, only the higher of the
Designated Benefit amounts, for which participation has been
approved shall be payable.
4.2 In the event a Participant shall be transferred to a
position listed in Addendum A with a higher Designated Benefit, the
Participant shall retain the Designated Benefit amount previously
approved by the Board unless participation at the higher level is
approved by the Board of Directors. Upon approval at the higher
level, participation shall be at the higher Designated Benefit
level. All prior years will be adjusted to that higher level after
the Participant has completed one full year at that level or at the
discretion of the Board of Directors.
4.3 Unless otherwise determined by the Board of Directors, if
a Participant is transferred to another covered position listed in
Addendum A with a lower Designated Benefit, the higher Designated
Benefit of the previous position may remain in effect while the
Participant is assigned to a covered position listed in Addendum A
with a lower Designated Benefit unless the Board of Directors
specifically effects the lower Designated Benefit, in which case,
the Participant shall retain the prior years of credit at the
higher level and the year of transition will be prorated in months
at the appropriate levels.
4.4 A Participant who retires during the period beginning
with the first day of the month coinciding with or next following
attainment of age 62, and ending on the first day of the month
coinciding with or next following attainment of age 65, unless a
later retirement date is specifically approved for the Participant
by the Board of Directors, and has a minimum of ten years as a
Participant in the Plan shall be eligible for a benefit payment
from this Plan as follows:
(a) The total benefit payable shall be the Designated
Benefit, provided (i) this is the highest level which has been
attained, (ii) participation at this level has been approved
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by the Board of Directors, and (iii) the Participant has
completed at least one full year of participation at this
level; or,
(b) Should a Participant be transferred to a position with a
higher Designated Benefit, such higher benefit level being
approved by the Board of Directors, and retire prior to
completion of one full year at the higher level, the benefit
payment will be prorated based on participation at various
Designated Benefit levels. To calculate the total benefit
payable under the Plan, a benefit amount shall be calculated
for each full year as a Participant at the lower level by
multiplying 10% times the Designated Benefit for the lower
level. In the year where the Designated Benefit was changed
to the higher level by the Board of Directors, the benefit
amount for that year will be prorated based on the number of
months in the Plan at each level. The maximum total benefit
payable shall be the sum of the highest full years as
calculated above limited to ten years; or
(c) Should a Participant be transferred to a position with a
lower Designated Benefit, such lower benefit level being
approved by the Board of Directors, the benefit payment will
be prorated based on participation at various Designated
Benefit levels. To calculate the total benefit payable under
the Plan, a benefit amount shall be calculated for each full
year as a Participant at the higher level by multiplying 10%
times the Designated Benefit for the higher level and for each
full year at the lower level by multiplying 10% times the
Designated Benefit for the lower level. In the year where the
Designated Benefit was changed to the lower level by the Board
of Directors, the benefit amount for that year will be
prorated based on the number of months in the Plan at each
level. The maximum total benefit payable shall be limited to
the sum of the highest full years as calculated above limited
to ten years.
4.5 A Participant age 56 or greater with a minimum of one
full year participation in the Plan and a total of five or more
years as a Martin Marietta employee, (unless such minimum
participation requirements are waived in accordance with the
provisions of Section 3.6), may elect to receive a reduced benefit
upon retirement provided however such retirement shall be on or
before the first day of the month coinciding with or next following
attainment of age 65, unless a later retirement date is
specifically approved for the Participant by the Board of
Directors. The total benefit payable shall be the amount
calculated as provided in Section 4.4 above, provided that a
Participant who falls into a category consistent with
Section 4.4(a) except as to age or years of service, shall first
multiply the Designated Benefit by a fraction, the numerator of
which is the number of full years completed as a Participant
(limited to a maximum of ten) and the denominator of which is ten
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years, multiplied times the percentage set forth in the table below
for the Participant's age at retirement.
Age When Employment
Ends and Benefit Percent of Total
Payment Begins: Benefit Payable:
55 years or less Zero
56 years 15%
57 years 30%
58 years 45%
59 years 60%
60 years 75%
61 years 90%
62 to 65 years 100%
65 years or more Zero*
* If employment continues beyond the first day of the month
following the attainment of age 65, and is specifically
approved by the Board of Directors, the applicable percentage
is 100%.
4.6 A Participant who is transferred to a position not listed
in Addendum A but continues in the employment of the Corporation
shall cease participation in this Plan as of the date of such
transfer, and the benefit payable, if any, upon his actual
retirement date (or date of death) shall be calculated as if he
retired early on the date of his transfer.
4.7 If a Participant dies prior to retirement and while still
actively employed by the Corporation in a position listed in
Addendum A, the full amount to which such Participant would be
entitled at age 65 with ten years as a Participant will be payable
to the Participant's beneficiary(ies). This benefit amount will be
payable under the same terms and conditions as the benefit payable
to a beneficiary upon death of the Participant after retirement as
provided in Section 5 below, and as if the Participant retired with
the full benefit on the first of the month coinciding with or next
following the date of his death.
4.8 The total benefit payable to a Participant shall be
determined on the basis of the Plan as in effect on the date of
commencement of benefits. The total benefit amount shall be
payable over a ten-year period following retirement in equal,
annual installments with one tenth (1/10th) of the total payable
each year. The first payment shall be on the first day of the
month coinciding with or next following the Participant's
retirement in accordance with Section 3.6. Subsequent installments
shall be payable on the anniversary date of the initial payment.
4.9 In the event of a Change in Control of the Corporation,
the Participant's Designated Benefit shall become immediately
payable. Notwithstanding the preceding sentence, the amount payable
shall be limited to the Safe Harbor Amount, less $1.00. For this
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purpose the Safe Harbor Amount shall be an amount equal to three
times the Participant's base amount, as defined by Section 28OG of
the Internal Revenue Code of 1986, as amended, less all other
amounts which are counted for purposes of calculating the Safe
Harbor Amount under Section 28OG by reason of the provisions of the
1979 and 1984 Stock Option Plans for Key Employees.
For purposes of this Section, a "Change in Control" shall mean
a change in control of the Corporation that shall be deemed to have
occurred, if and when, with or without the approval of its Board of
Directors incumbent prior to the occurrence,
(i) any "person" (as such term is used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended
("Exchange Act")) becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Corporation representing 30 percent or
more of the combined voting power of the Corporation's then
outstanding securities; or
(ii) during any calendar year, individuals who at the
beginning of such period were members of the Board of
Directors of the Corporation cease as the result of a tender
offer, merger, consolidation, sale of assets or contested
election, or any combination of such transactions, to
constitute at least 75% thereof.
The provisions of this Section may not be amended after the
occurrence of a Change in Control.
SECTION 5. COMMENCEMENT AND DURATION OF BENEFITS
5.1 A written designation of beneficiary(ies) and contingent
beneficiary(ies) may be made by the Participant with the
Compensation Committee of the Beard of Directors and changed from
time to time by written notice to the Corporate Secretary.
5.2 The benefit amount determined under Section 4 shall be
payable as determined in Section 4.8, in a level amount, in ten
equal, annual installments to the Participant during the
Participant's lifetime with the provision that if such Participant
shall die after retirement and before ten annual payments have been
made, such payments shall continue for the remainder of such ten-
year period to (i) the beneficiary(ies) of the Participant, or (ii)
if the beneficiary(ies) does not survive the Participant, or does
survive the Participant but does not survive the ten-year period
and there is no surviving contingent beneficiary(ies), any
remaining payments shall be made, unless the Participant provided
otherwise, to the estate(s) of the Participant.
5.3 In the event that a Participant has not named a
beneficiary under this Plan and shall die after retirement and
before ten annual payments have been made, the remaining payments
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shall be made to the beneficiary(ies) designated under the Group
Life Insurance Plan for Salaried Employees or if no
beneficiary(ies) has been designated under the latter Plan, or if
such beneficiary(ies) has predeceased the Participant any remaining
payments shall be made to the Participant's estate. In no event
shall payment of the benefit from this Plan extend beyond ten
annual payments.
5.4 Any amount required to be withheld under applicable
federal, state, or local income tax or other laws, shall be
withheld and any payment from this Plan shall be reduced by the
amount so withheld.
5.5 Any payments under this Plan shall be made from the
general funds of the Corporation. No assets of the Corporation
shall be segregated or earmarked to represent any liability for
benefits hereunder.
SECTION 6. AMENDMENT AND TERMINATION
The Compensation Committee may, from time to time, recommend
to the Board of Directors amendments to the Plan or to Addendum A
attached hereto, except that the Chairman of the Board is
authorized to modify Addendum A, from time to time, to reflect
changes in the organizational nomenclature and to include any other
Senior Executive position which may be created for a specified
period of time to reflect the Corporation's succession planning for
a Senior Executive position already included in Addendum A, and to
report periodically such changes to the Board of Directors. The
Board of Directors may terminate the Plan or amend the Plan or
Addendum A attached hereto, in any respect and at any time;
provided, however, that no such amendment or termination shall have
the effect of reducing benefits then being paid to or on behalf of,
or which may thereafter become payable to or on behalf of, any
retired Participant, or of reducing the calculation of the benefit
amount of any active Participant to a level lower than that which
would have been payable had such Participant retired early on the
day prior to the effective date of such amendment or termination.
Amendments to the Plan will not be applicable to Plan
Participants who have retired or otherwise ceased to be active
Participants prior to the effective date of such amendments.
SECTION 7. ADMINISTRATION AND CLAIM REVIEW PROCEDURE
7.1 This Plan shall be administered by the Compensation
Committee of the Board of Directors under the bylaws of the
Corporation.
7.2 Any Participant or beneficiary whose written claim for
benefits under the Plan is denied shall be furnished a written
notice of denial of claim by the Chairman of the Compensation
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Committee within a reasonable period of time after receipt of the
claim. Within sixty days after receipt of a notice of denial of
claim, a Participant or beneficiary may request a review of the
claim by the Compensation Committee as a whole upon written
application to the Secretary of the Corporation.
7.3 The Compensation Committee shall conduct a full and fair
review of a denial of claim when so requested and shall render a
decision as promptly as possible, but no later than one hundred and
twenty days after receipt of a request for review. Any decision by
the Compensation Committee concerning a review of a denial of claim
shall be furnished to the Participant in writing by the Secretary
of the Corporation.
7.4 A decision by the Board of Directors or any duly
constituted Committee to which the Board has delegated its
authority with respect to any matter pertaining to the Plan shall
be conclusive and binding on all interested parties.
SECTION 8. GENERAL PROVISIONS
8.1 Nothing in this Plan shall be deemed to give any person
the right to remain in the employ of the Corporation or to remain
in any of the positions listed in Addendum A or affect the right of
the Corporation to terminate any Participant's employment with or
without cause.
8.2 No right or interest of any person entitled to a benefit
under the Plan shall be subject to voluntary or involuntary
alienation, assignment, or transfer of any kind.
8.3 This Plan shall be construed and administered in
accordance with the laws of the State of Maryland.
SECTION 9. TERMINATION OF BENEFITS IN CERTAIN CASES
If, following the date on which a Participant shall be
qualified to receive benefits under the Plan, the Board of
Directors shall reasonably find that a Participant, without the
prior written consent of the Board of Directors, is engaged in the
operation or management of a business, whether as owner,
controlling stockholder, partner, director, officer, employee,
consultant, or otherwise, which at such time is in competition
with the Corporation or any of its subsidiaries or affiliates, or
has disclosed to unauthorized persons information relative to the
business of the Corporation or any of its subsidiaries or
affiliates which the Participant shall have had reason to believe
is confidential, or shall be found by the Board of Directors to
have committed an act during or after the term of the Participant's
employment which would have justified the Participant being
discharged for cause, all benefits to which such Participant shall
- 8 -
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<PAGE>
otherwise be entitled under this Plan shall terminate. This section
shall be uniformly applied to Participants similarly situated.
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<PAGE>
<PAGE>
POST-RETIREMENT DEATH BENEFIT PLAN FOR SENIOR EXECUTIVES
As Approved by the Board of Directors
August 23, 1979
(Amended April 26, 1984)
(Amended July 24, 1986)
(Amended January 22, 1987)
SECTION 1. ESTABLISHMENT AND PURPOSE
The Martin Marietta Corporation Post-Retirement Death Benefit
Plan for Senior Executives is established effective September 1,
1979, for senior executive personnel. It is intended to provide a
means for attracting and retaining capable individuals as executive
employees of the Corporation. It is further intended to encourage
executives to voluntarily retire from key executive positions no
later than age 65 to enhance advancement opportunities within the
Corporation and thereby make employment by the Corporation more
attractive.
SECTION 2. DEFINITIONS
The following terms, as used herein, shall have the following
meanings:
2.1 "Board of Directors" means the Board of Directors of
Martin Marietta Corporation as it may be comprised from time to
time.
2.2 "Corporation" means Martin Marietta Corporation.
2.3 "Employee" means a person employed by the Corporation on
a full-time basis.
2.4 "Participant" means an Employee who has attained the age
of 55 and is employed in a position which is listed in Addendum A,
which forms a part hereof and is attached hereto.
2.5 "Plan" means the Martin Marietta Corporation Post-
Retirement Death Benefit Plan for Senior Executives, as in effect
at any time and from time to time.
2.6 "Retirement" means separation from service for any reason
other than to accept full time employment in a comparable position
with another employer, provided that such retirement occurs no
earlier than the first day of the month coinciding with or next
following attainment of age 55 and no later than the first day of
the month coinciding with or next following attainment of age 65
unless such continued employment has been specifically approved by
the Board of Directors.
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SECTION 3. ELIGIBLE GROUP
3.1 Participants employed in any of the positions listed in
Addendum A shall comprise the group eligible for participation
under the Plan.
3.2 In the event that a Participant shall simultaneously hold
more than one position listed in Addendum A to this Plan only one
benefit amount shall be payable. There shall be no duplication of
benefits.
3.3 Separation from employment with the Corporation in order
to accept employment with any of its subsidiaries or affiliates
shall not constitute retirement under the terms of the Plan and
shall not result in commencement of entitlement to any benefit.
3.4 Eligibility of a Participant for payment of a benefit
under the Plan shall be determined in accordance with and subject
to the terms hereof.
SECTION 4. ELIGIBILITY FOR BENEFIT
4.1 This Plan shall provide a benefit payable upon the death
of a Participant subsequent to Retirement, provided that at the
time of Retirement such Participant was then employed by the
Corporation in one of the positions listed in Addendum A.
4.2 The death benefit payable under this Plan shall be an
amount equal to a percentage of the Participant's annualized salary
for the pay period immediately prior to Retirement, determined in
accordance with the following schedule:
Death Benefit as
Age at Retirement Percent of Annual Salary
At least age 55 but less than 56 15%
At least age 56 but less than 57 30%
At least age 57 but less than 58 45%
At least age 58 but less than 59 60%
At least age 59 but less than 60 75%
At least age 60 but less than 61 90%
At least age 61 but less than 62 105%
At least age 62 but less than 63 120%
At least age 63 but less than 64 135%
<PAGE>
<PAGE>
At age 64 and over 150%
The amount of the Post-Retirement Death Benefit shall be rounded to
the next highest $5,000 increment but in no event shall be less
than $25,000. The amount so determined shall then be grossed up to
provide for income taxes due by the beneficiary using the following
formula:
Grossed up Benefit = (Death Benefit) - (1-Composite Tax Rate)
Where Composite Tax Rate = marginal Federal tax rate
applicable to the highest individual bracket plus an
adjustment for State taxes (if any) equal to (1-Federal tax
rate) x Highest Marginal individual state tax rate (if any) in
the employee's state of residence.
For example, in 1987 a death benefit of $100,000 would be
grossed up in the State of Maryland where the Federal rate =
38.5% and the Maryland State rate = 7.5%
Grossed up benefit equals:
$100,000 - [.385 + (1 - .385) (.075)].
No benefits shall be payable under the Plan if a
Participant continues employment with the Corporation beyond the
first day of the month coinciding with or next following the
attainment of age 65, unless such continued employment is pursuant
to the express approval of the Board of Directors, based on a
determination by the Board that sound business judgment requires
the continued service of such Participant for a specified period of
time and the agreement of such Participant to so serve. In the
case of such approved continuation of employment, a Participant who
thereafter retires upon completion of such continued employment
shall be entitled to a death benefit equal in amount to 150% of his
annualized salary for the pay period immediately prior to
retirement, rounded to the next highest $5,000 increment.
SECTION 5. TERM OF BENEFITS
5.1 The coverage provided under this Plan shall commence
immediately on termination of service for Retirement and continue
during the lifetime of a Participant unless sooner terminated by
reason of the circumstances described in the succeeding subsection.
5.2 If, following the date on which a Participant shall be
eligible to receive benefits under the Plan, the Board of Directors
shall reasonably find that a Participant, without the prior written
consent of the Board of Directors, is engaged in the operation or
management of a business, whether as owner, controlling
stockholder, partner, director, officer, employee, consultant, or
otherwise, which at such time is in competition with the
Corporation or any of its subsidiaries or affiliates, or has
disclosed to unauthorized persons information relative to the
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<PAGE>
business of the Corporation or any of its subsidiaries or
affiliates which the Participant shall have had reason to believe
is confidential, or shall be found by the Board of Directors to
have committed an act during or after the term of the Participant's
employment which would have justified the Participant being
discharged for cause, all benefits to which such Participant shall
otherwise be entitled under this Plan shall terminate. This
section shall be uniformly applied to Participants similarly
situated.
SECTION 6. MANNER OF PAYMENT
6.1 A written designation of beneficiary(ies) and contingent
beneficiary(ies) may be made by the Participant with the
Compensation Committee of the Board of Directors and changed from
time to time by written notice made by the Participant or, if
applicable, his assignee to the Compensation Committee.
6.2 The Post-Retirement Death Benefit shall be payable to the
designated beneficiary or beneficiaries. If, at the time of the
Participant's death, there is no designated beneficiary as to all
or any part of the benefit, or if the designated beneficiary does
not survive the Participant, the benefit will be paid at the option
of the Compensation Committee of the Board of Directors to any of
the following survivors of the Participant: wife, husband, mother,
father, child, or children; or to the executors or administrators
of the Participant.
6.3 Payments to any named beneficiary or beneficiaries as
designated in any insurance policy purchased hereunder by the
Corporation or pursuant to any applicable law or to any survivor or
survivors of the Participant or to the estate of a Participant or
pursuant to this Plan shall completely discharge all liabilities of
the Corporation with respect to the amounts so paid.
6.4 The Participant or beneficiary may arrange to have the
benefit paid in (a) lump sum, (b) monthly or annual installments
over a fixed period of years, or (c) such other arrangements as may
be agreed upon by the Participant or beneficiary and the
Compensation Committee of the Board of Directors.
6.5 The Post-Retirement Death Benefit shall be paid by the
Corporation from its general funds.
SECTION 7. AMENDMENT AND TERMINATION
The Compensation Committee may from time to time recommend
amendments to the Board of Directors for their review and approval.
The Board of Directors may terminate the Plan or amend the Plan in
any respect and at any time; provided, however, that no such
amendment or termination shall have the effect of reducing the
death benefit then being paid, or to be paid, on behalf of any
retired Participant and provided further that no such amendment or
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<PAGE>
termination shall reduce the calculation of the death benefit to be
paid on behalf of any active Participant below the amount which
would have been payable had such Participant retired on the day
prior to the effective date of such amendment or termination. Any
Participant may, however, at the Participant's election, by written
notice to the Compensation Committee of the Board of Directors
terminate participation in the Plan.
SECTION 8. ADMINISTRATION
This Plan shall be administered by the Compensation Committee
of the Board of Directors subject to the approval of the Board of
Directors. A decision of the Board of Directors with respect to
any matter pertaining to the Plan shall be conclusive and binding
on all interested parties.
SECTION 9. GENERAL PROVISIONS
9.1 Nothing in this Plan shall be deemed to give any person
the right to remain in the employ of the Corporation or to remain
in any of the positions designated in Addendum A or affect the
right of the Corporation to terminate any Participant's employment
with or without cause.
9.2 The Plan shall be construed and administered in
accordance with the laws of the State of Maryland.
January 1987
<PAGE>
<PAGE>
1979 STOCK OPTION PLAN
FOR KEY EMPLOYEES
(With Stock Appreciation Rights)
Adopted: April 26, 1979
As Amended
September 25, 1980
September 24, 1981
January 27, 1983, and
April 25, 1991
THIS DOCUMENT CONSTITUTES PART OF
A PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933
APRIL 2, 1993
<PAGE>
<PAGE>
MARTIN MARIETTA CORPORATION
1979 STOCK OPTION PLAN FOR KEY EMPLOYEES
1. Purpose
The purpose of the Plan is to attract and retain the services
of key employees in positions which contribute materially to the
successful operation of the business of the Corporation and to
grant such employees an attractive opportunity to acquire a
proprietary interest in the business enterprise and thereby provide
them with an added incentive to increase the earnings of the
Corporation.
It is intended that this purpose will be effected through the
granting of stock options and stock appreciation rights, as
provided herein.
2. Definitions
As used in the Plan, "Corporation" means Martin Marietta
Corporation and its subsidiaries. "Subsidiary" means a corporation
of which Martin Marietta Corporation owns, directly or indirectly,
stock having at least 50% of the power to vote, under normal
circumstances, in the election of directors. "Board of Directors"
means the Board of Directors of Martin Marietta Corporation. The
"Committee" means the Stock Option Committee. "Employee" means
officers and other key employees of the Corporation but excludes
directors who are not also officers or employees of the
Corporation. An "option" means an option to purchase shares of
Martin Marietta Common Stock. A "right" means a stock appreciation
right. "Grant" means the award of both a stock option and a stock
appreciation right. The "grant value of the right" means the fair
market value of a share of stock on the date a right is granted, as
that value may be adjusted pursuant to Section 7(a)(iii) of the
Plan.
3. Effective Date
The Plan shall become effective upon the approval by the
stockholders.
4. Eligible Employees
Options and rights may be granted only to exempt salaried
employees of the Corporation. However, not more than 10% of the
total number of shares available under the Plan shall be subject to
option to any one employee, and no individual who owns stock
possessing more than 5% of the combined voting power of all classes
of stock of the Corporation shall be eligible for a grant of
options and rights under the Plan.
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5. Terms of Stock Options and Stock Appreciation Rights
The term of each option and right granted under the Plan shall
be determined by the Board of Directors, consistent with the
provisions of the Plan, including the following:
(a) Each grant of options and rights may be exercised in
whole or in part subject to the provisions of the Plan,
provided that no option or right shall be exercisable prior to
one year or after ten years from the date of grant. Except
as provided in Section 6(c)(ii) each grant shall be divided
into three approximately equal installments of 100-share and
100-right increments. The first installment shall be
exercisable one year after the date of grant and each
succeeding installment shall be exercisable one year from the
date the prior installment became exercisable. To the extent
that the installments are not equal in number, the larger
installment or installments shall be exercisable in the last
or second and last years. After the privilege to exercise an
installment accrues, the options and rights included in that
installment may, except as provided in Section 8, be exercised
at any time prior to the expiration of ten years from date of
grant.
(b) Each optionee must remain in the employ of the
Corporation for at least one year from the date the option and
right are granted before any part of the grant can be
exercised.
(c) An option or right shall not be assignable or
transferable by the employee to whom granted otherwise than by
will or by the laws of descent and distribution and shall be
exercisable during the participant's lifetime only by the
participant or in the event of disability by the legal
guardian or representative.
(d) The grant will be evidenced by a certificate that
will specify the number of shares and rights to which it
pertains.
6. Stock Options
(a) Shares of Stock Subject to the Plan
The shares that may be issued under the Plan shall not exceed
750,000 shares of the Common Stock, $1.00 par value, of the
Corporation except as provided in Paragraph (c) below. They may
consist in whole or in part of unissued or treasury shares. Such
treasury shares may be acquired to satisfy the requirements of the
Plan. If for any reason shares as to which an option has been
granted cease to be subject to purchase, then such shares shall
again be available for option under the Plan.
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(b) Grant of Options
(i) The purchase price of the stock subject to option
shall not be less than 100% of the fair market value of the
stock on the date the option is granted, except as otherwise
provided in Section 6(c)(i) below.
(ii) The purchase price of the stock subject to option
shall be paid in cash or, with the approval of the Board of
Directors or the Committee, may be paid in full or part by the
tender of Martin MarIetta Corporation Common Stock owned by
the optionee. Common Stock delivered in payment of the
purchase price shall be valued at the fair market value and
any portion of the purchase price not satisfied by the tender
of Common Stock shall be paid in full in cash upon such
exercise. No fractional shares shall be issued. As soon as
possible following receipt of payment to the Corporation, the
optionee (or other person entitled to exercise the option)
shall receive a certificate or certificates for such shares,
subject to the provisions of Section 6(d).
(iii) No person shall have the right of a stockholder with
respect to shares subject to an option until the date the
option is exercised.
(c) Adjustment Upon Changes in Stock
(i) If there shall be any change affecting the stock
subject to the Plan or to any option granted thereunder
through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or combination,
or otherwise, the Board of Directors shall make appropriate
proportional adjustments in the aggregate number of shares
subject to the Plan and the number of shares and the price per
share subject to outstanding options and may assume old
options or substitute new options for old options, regardless
of whether the option price of any such option resulting from
the proportional adjustment is less than the then fair market
value of the subject shares.
(ii) In the event of a proposed dissolution or
liquidation of Martin Marietta Corporation, each option
granted under the Plan shall terminate as of a date, which in
no event shall be later than the expiration date specified in
the option, to be fixed by the Board of Directors, provided
that not less than 30 days' written notice of the date so
fixed shall be given to each optionee (or other person
entitled to exercise the option) and each optionee (or other
person entitled to exercise the option) shall have the right
(provided that by the date of exercise of the option the
optionee has remained in the employ of the Corporation for at
least one year from the date the option was granted), during
the period of 30 days preceding such termination to exercise
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the option as to all or any part of the shares covered
thereby, including shares as to which such option would not
otherwise then be exercisable.
(iii) In the event of a Change of Control, each optionee
(or other person entitled to exercise the option) shall have
the right (provided that by the date of exercise of the option
the optionee has remained in the employ of the Corporation for
at least six months from the date the option was granted),
during period of 60 days following a Change of Control to
exercise the option as to all or any pert of the shares
covered thereby, including shares as to which such option
would not otherwise then be exercisable. For purposes of this
paragraph, the term "Change of Control" shall mean the
following:
(A) a tender offer or exchange offer is made whereby the
effect of such offer is to take over and control the
affairs of the Corporation and such offer is consummated
for the ownership of securities of the Corporation
representing 25% or more of the combined voting powers of
the Corporation's then outstanding voting securities;
(B) The Corporation is merged or consolidated with
another corporation and as a result of such merger or
consolidation less than 75% of the outstanding voting
securities of the surviving or resulting corporation
shall then be owned in the aggregate by the former
stockholders of the Corporation, other than affiliates
within the meaning of the Securities Exchange Act of 1934
(the "Exchange Act") or any party to such merger or
consolidation;
(C) the Corporation transfers substantially all of its
assets to another corporation or entity which is not a
wholly owned subsidiary of the Corporation;
(D) any "person" (as such term is used in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act) is or
becomes the beneficial owner, directly or indirectly, of
securities of the Corporation representing 25% or more of
the combined voting power of the Corporation's then
outstanding securities and the effect of such ownership
is to take over and control the affairs of the
Corporation; or
(E) during any period of two consecutive years,
individuals who at the beginning of such period
constitute the Board of Directors of the Corporation
cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for
election by the Corporation's stockholders, of each new
director was approved by a vote of at least two-thirds of
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<PAGE>
the directors then still in office who were directors at
the beginning of the period. For purposes of the Plan,
ownership of voting securities shall take into account
and include ownership as determined by applying the
provisions of Rule 13d--3(d)(I)(i) of the exchange Act
(as then in effect).
(d) Limitations on Transfer of Shares
The Corporation shall not be required, upon the exercise of
any option, to issue or deliver any shares of stock prior to (a)
the authorization of such shares for listing on any stock exchange
on which Martin Marietta Corporation's Common Stock may then be
listed, and (b) such registration or other qualification of such
shares under applicable securities laws as the Corporation shall
determine to be necessary or advisable. If shares issuable on the
exercise of options have not been registered under the Securities
Act of 1933 ("the Act"') or theme is not available a current
Prospectus meeting the requirements of the Act with respect
thereto, optionees may be required to represent at the time of each
exercise of options that the shares purchased are being acquired
for investment and not with a view to distribution; and the
Corporation may place a legend on the stock certificate to indicate
that the stock may not be sold or otherwise disposed of except in
accordance with the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
7. Stock Appreciation Rights
(a) Grant of Rights
(i) Stock appreciation rights shall be granted only to
recipients of stock options and each right will relate to a
specific stock option granted under the Plan. The number of
rights granted shall equal the number of shares granted under
the stock option provisions of the Plan and shall be granted
concurrently with the grant of the related stock option.
(ii) A right shall entitle an optionee to receive without
payment to the Corporation cash equivalent to the excess, if
any, of the fair market value of a share of Martin Marietta
Common Stock on the exercise date over the grant value of the
right.
(iii) Should there be a change affecting the stock
subject to the Plan as referred to in Section 6(c), the number
of rights shall be adjusted to equal the number of related
stock option shares upon completion of the adjustment required
by the change. The grant value of a right shall also be
adjusted to equal the option price of the related stock option
following the adjustment required by the change.
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(b) Exercise of Rights
(i) Subject to the limitations set forth herein, an
optionee shall be entitled to receive payment in cash for
rights granted under this Plan. The cash payment will be in
consideration of services performed for the Corporation or for
its benefit by the optionee.
(ii) Nothing contained herein shall be construed to
require the simultaneous exercise of options and the related
rights where such options or rights are exercised after
May 1,1991.
(c) Limitation on Value of Rights
The cash payment for a right shall not exceed 100% of the
grant value of the right except in the event of a Change of Control
in which event the value shall be determined in accordance with
Section 7(a)(ii).
8. Death, Termination of Employment, or Retirement
(a) If an optionee dies while employed by the
Corporation or within three months after termination of
employment, options and rights may be exercised by the persons
referred to in Section 5(c) only within one year from the date
of death. In cases of retirement, either early or normal, or
of disability, options may be exercised within three years
from the date of such retirement or disability. In cases of
termination of an optionee's employment by the Corporation,
with or without cause, the options and rights may be exercised
by the optionee only within three months from the date of
termination of employment. Nothing contained in the Plan or
in any option or right granted hereunder shall confer upon any
optionee any right of continued employment by the Corporation
nor limit in any way the right of the Corporation to terminate
the participant's employment at any time.
(b) Except in cases of retirement or disability, a grant
may be exercised pursuant to this Section 8 only to the extent
the optionee was entitled to exercise the options and rights
at the time of termination of employment or death or as
provided in Section 6(c)(ii), and in any event, may not be
exercised after the expiration of ten years from the date of
grant. In the event an optionee ceases to be an employee, the
options and rights which are not exercisable at the time shall
terminate. In cases of retirement where an optionee has
applied for and is receiving benefits pursuant to a retirement
plan for Martin Marietta salaried employees, or disability,
all outstanding options and rights shall become exercisable
upon such retirement or disability and may be exercised
pursuant to this Section 8 or as provided in Section 6(c)(ii)
but in any event options and rights may not be exercised less
6
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than six months or after the expiration of ten years from the
date of grant thereof.
9. Leave of Absence
For the purpose of the Plan, an employee on leave of absence
will be considered as still in the employ of the Corporation unless
otherwise provided in an agreement between the employee and the
Corporation.
10. Administration
(a) Stock Option Committee
(i) The Stock Option Committee shall consist of three or
more of those members of the Board of Directors who are not
eligible to receive options and rights under the Plan. The
members of the Committee shall be designated by the Board of
Directors. A majority of the members of the Committee shall
constitute a quorum. The vote of a majority of a quorum shall
constitute action by the Committee.
(ii) The Committee shall determine the employees who will
participate in the Plan, the number of shares and rights
subject to each grant, and shall have the authority to adopt
rules and regulations for administering the Plan.
(iii) As and to the extent authorized by the Board of
Directors or the By-Laws, the Committee may exercise the
powers and authority related to the Plan which are vested in
the Board of Directors. The Committee may delegate to the
officers or employees of the Corporation the authority to
execute and deliver documents and to take such other steps
deemed necessary or convenient for the efficient
administration of the Plan.
(b) Finality of Determinations
The Board of Directors shall have the power to interpret the
Plan. All interpretations, determinations, and actions by the
Board of Directors or, to the extent authorized by the Plan, the
Board of Directors or the By-Laws, by the Committee, shall be
final, conclusive, and binding upon all parties.
11. Amendment and Termination
The Board of Directors shall have the power, in its
discretion, to amend, suspend, or terminate the Plan or options and
rights granted under the Plan at any time. It shall not, however,
without further action by the stockholders, have the power to (a)
change the class of employees eligible to receive options under the
Plan, (b) provide for options or rights exercisable more than ten
years after the date granted, or (c) extend the expiration date of
7
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<PAGE>
the Plan; nor shall it have the power (except as otherwise provided
in the Plan) to (d) increase the number of shares subject to the
Plan or (e) reduce the option price below the fair market value of
the stock at the time the option was granted. No amendment,
suspension, or termination of the Plan or options and rights
granted under the Plan shall, except with the consent of the
optionee, adversely affect an option or right previously granted.
12. Duration
The Plan shall remain in effect until all options and rights
granted under the Plan have been exercised or terminated under the
terms of the Plan, provided that options and rights under the Plan
must be granted within ten years from the effective date of the
Plan.
8
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<PAGE>
1984 STOCK OPTION PLAN
FOR KEY EMPLOYEES
(With Stock Appreciation Rights)
Adopted: April 26, 1984
As Amended
October 23, 1986
January 22, 1987
April 23, 1987
July 23, 1987
April 25, 1991
[MARTIN MARIETTA LOGO]
THIS DOCUMENT CONSTITUTES PART OF
A PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933
APRIL 2, 1993
<PAGE>
<PAGE>
MARTIN MARIETTA CORPORATION
1984 STOCK OPTION PLAN FOR KEY EMPLOYEES
1. Purpose
The purpose of the Plan is to attract and retain the services
of key employees in positions which contribute materially to the
successful operation of the business of the Corporation and to
grant such employees an attractive opportunity to acquire a
proprietary interest in the business enterprise and thereby provide
them with an added incentive to increase the earnings of the
Corporation.
It is intended that this purpose will be effected through the
granting of stock options and stock appreciation rights, as
provided herein.
2. Definitions
As used in the Plan, "Corporation" means Martin Marietta
Corporation and its subsidiaries. "Subsidiary" means a corporation
of which Martin Marietta Corporation owns, directly or indirectly,
stock having at least 50% of the power to vote, under normal
circumstances, in the election of directors. "Board of Directors"
means the Board of Directors of Martin Marietta Corporation. The
"Committee" means the Stock Option Committee. "Employee" means
officers and other key employees of the Corporation but excludes
directors who are not also officers or employees of the
Corporation. An "option' means an option to purchase shares of
Martin Marietta Common Stock. A "right" means a stock appreciation
right. "Grant" means the award of both a stock option and a stock
appreciation right. The "grant value of the right" means the fair
market value of a share of stock on the date a right is granted, as
that value may be adjusted pursuant to Section 7(a)(v) of the Plan.
"Normal retirement" means retirement on or after the normal
retirement date, as defined in subparagraph (a), Paragraph 1 of
Article IV of the Martin Marietta Retirement Income Plan for
Salaried Employees. "Early retirement" shall have the meaning set
forth in Paragraph 2 of Article IV of the Martin Marietta
Retirement Income Plan for Salaried Employees.
3. Effective Date
The Plan shall become effective upon the approval by the
stockholders.
4. Eligible Employees
Options and rights may be granted only to exempt salaried
employees of the Corporation. However, not more than 10% of the
total number of shares available under the Plan shall be subject to
option to any one employee, and no individual who owns stock
possessing 5% or more of the combined voting power of all classes
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of stock of the Corporation shall be eligible for a grant of
options and rights under the Plan.
5. Terms of Stock Options and Stock Appreciation Rights
The terms of each option and right granted under the Plan
shall be determined by the Board of Directors, consistent with the
provisions of the Plan, including the following:
(a) Each grant of options and rights may be exercised in
whole or in part subject to the provisions of the Plan,
provided that no option or right shall be exercisable prior to
one year or after ten years from the date of grant. Except as
provided in Section 6(c), each grant shall be divided into
three approximately equal installments of 100-share and 100-
right increments. The first installment shall be exercisable
one year after the date of grant and each succeeding
installment shall be exercisable one year from the date the
prior installment became exercisable. To the extent that the
installments are not equal in number, the larger installment
or installments shall be exercisable in the last or second and
last years. After the privilege to exercise an installment
accrues, the options and rights included in that installment
may, except as provided in Section 8, be exercised at any time
prior to the expiration of ten years from date of grant.
(b) Each optionee must remain in the employ of the
Corporation for at least one year from the date the option and
right are granted before any part of the grant can be
exercised.
(c) An option or right shall not be assignable or
transferable by the employee to whom granted otherwise than by
will or by the laws of descent and distribution and shall be
exercisable during the participant's lifetime only by the
participant or in the event of disability by the legal
guardian or representative.
(d) The grant will be evidenced by a certificate that will
specify the number of shares and rights to which it pertains.
6. Stock Options
(a) Shares of Stock Subject to the Plan
The shares that may be issued under the Plan shall not exceed
5,475,000 shares of the Common Stock, $1.00 par value, of the
Corporation except as provided in Paragraph (c) below. They
may consist in whole or in part of unissued or treasury
shares. Such treasury shares may be acquired to satisfy the
requirements of the Plan. If for any reason shares as to which
an option has been granted cease to be subject to purchase,
then such shares shall again be available for option under the
Plan.
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(b) Grant of Options
(i) The purchase price of the stock subject to option
shall not be less than 100% of the fair market value of the
stock on the date the option is granted, except as otherwise
provided in Section 6(c)(i) below.
(ii) Except as provided in Paragraph 10, the purchase
price of the stock subject to option shall be paid in cash or,
with the approval of the Board of Directors or the Committee,
may be paid in full or part by the tender of Martin Marietta
Corporation Common Stock owned by the optionee. Common Stock
delivered in payment of the purchase price shall be valued at
the fair market value and any portion of the purchase price
not satisfied by the tender of Common Stock shall be paid in
full in cash upon such exercise. No fractional shares shall
be is sued. As soon as possible following receipt of payment
to the Corporation, the optionee (or other person entitled to
exercise the option) shall receive a certificate or
certificates for such shares, subject to the provisions of
Section 6(d).
(iii) No person shall have the rights of a stockholder
with respect to shares subject to an option until the date the
option is exercised.
(c) Adjustment Upon Changes in Stock
(i) If there shall be any change affecting the stock
subject to the Plan or to any option granted thereunder
through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or combination,
or otherwise, the Board of Directors shall make appropriate
proportional adjustments in the aggregate number of shares
subject to the Plan and the number of shares and the price per
share subject to outstanding options and may assume old
options or substitute new options for old options, regardless
of whether the option price of any such option resulting from
the proportional adjustment is less than the then fair market
value of the subject shares.
(ii) In the event of a proposed dissolution or
liquidation of Martin Marietta Corporation, each option
granted under the Plan shall terminate as of a date, which in
no event shall be later than the expiration date specified in
the option, to be fixed by the Board of Directors, provided
that not less than 30 days' written notice of the date so
fixed shall be given to each optionee (or other person
entitled to exercise the option) and each optionee (or other
person entitled to exercise the option) shall have the right
(provided that by the date of exercise of the option the
optionee has remained in the employ of the Corporation for at
least one year from the date the option was granted) during
the period of 30 days preceding such termination to exercise
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the option as to all or any part of the shares covered
thereby, including shares as to which such option would not
otherwise then be exercisable.
(iii) In the event of a Change of Control, each optionee
(or other person entitled to exercise the option) shall have
the right (provided that by the date of exercise of the option
the optionee has remained in the employ of the Corporation for
at least six months from the date the option was granted)
during a period of 60 days following a Change of Control to
exercise the option as to all or any part of the shares
covered thereby, including shares as to which such option
would not otherwise then be exercisable or to have the
Corporation, upon request of the optionee (or other person
entitled to exercise the option), purchase all such options at
a cash purchase price equal to the excess of the fair market
value per share over the option price multiplied by the number
of all such option shares. For purposes of this Section and
Section 7(a)(ii) below, the term "fair market value" where a
Change of Control has occurred shall mean the greater of (a)
the highest price per share paid as a result of any offer
which is in effect during the period beginning on the
ninetieth day prior to the date on which such option is
exercised and ending on the date on which such option is
exercised or the fixed or formula price specified in a
transaction agreement if such price is determinable as of the
date of exercise of the option or, in the case of a 25%
acquisition, the highest price per share shown on the
Statement on Schedule 13D or any Amendment thereto filed by
the holder of 25% or more of the Corporation's voting
securities, and (b) the highest closing price per share of the
Corporation's Common Stock on the New York Stock Exchange
Composite Tape during the period beginning on the ninetieth
day prior to the date on which the option is exercised and
ending on the date on which such option is exercised. In the
event the price for Martin Marietta Common Stock in a
transaction that results in a Change of Control cannot be
determined in accordance with the provisions of this
Section 6(c)(iii), fair market value shall be determined by
the Board of Directors. The value thus determined shall be
subject to adjustments as provided in Section 6(c)(i) above.
For purposes of this paragraph, the term "Change of Control"
shall mean the following:
(A) A tender offer or exchange offer is made whereby the
effect of such offer is to take over and control the
affairs of the Corporation and such offer is consummated
for the ownership of securities of the Corporation
representing 25% or more of the combined voting powers of
the Corporation's then outstanding voting securities.
(B) The Corporation is merged or consolidated with
another corporation and, as a result of such merger or
consolidation, less than 75% of the outstanding voting
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securities of the surviving or resulting corporation
shall then be owned in the aggregate by the former
stockholders of the Corporation, other than affiliates
within the meaning of the Securities Exchange Act of 1934
(the "Exchange Act") or any party to such merger or
consolidation.
(C) The Corporation transfers substantially all of its
assets to another corporation or entity which is not a
wholly owned subsidiary of the Corporation.
(D) Any "person" (as such term is used in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act) is or
becomes the beneficial owner, directly or indirectly, of
securities of the Corporation representing 25% or more of
the combined voting power of the Corporation's then
outstanding securities, and the effect of such ownership
is to take over and control the affairs of the
Corporation.
(E) During any period of two consecutive years,
individuals who at the beginning of such period
constitute the Board of Directors of the Corporation
cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for
election by the Corporation's stockholders, of each new
director was approved by a vote of at least two thirds of
the directors then still in office who were directors at
the beginning of the period. For purposes of the Plan,
ownership of voting securities shall take into account
and include ownership as determined by applying the
provisions of Rule 13-3(d)(l)(i) of the Exchange Act (as
then in effect).
(d) Limitations on Transfer of Shares
The Corporation shall not be required, upon the exercise
of any option, to issue or deliver any shares of stock
prior to (a) the authorization of such shares for listing
on any stock exchange on which Martin Marietta
Corporation's Common Stock may then be listed and (b)
such registration or other qualification of such shares
under applicable securities laws as the Corporation shall
determine to be necessary or advisable. If shares
issuable on the exercise of options have not been
registered under the Securities Act of 1933 ("the Act")
or there is not available a current Prospectus meeting
the requirements of the Act with respect thereto,
optionees may be required to represent at the time of
each exercise of options that the shares purchased are
being acquired for investment and not with a view to
distribution; and the Corporation may place a legend on
the stock certificate to indicate that the stock may not
be sold or otherwise disposed of except in accordance
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with the Act, as amended, and the rules and regulations
promulgated thereunder.
7. Stock Appreciation Rights
(a) Grant of Rights
(i) Stock appreciation rights shall be granted only to
recipients of stock options and each right will relate to a
specific stock option granted under the Plan. The number of
rights granted shall equal the number of shares granted under
the stock option provisions of the Plan and shall be granted
concurrently with the grant of the related stock option.
(ii) For each right granted on or after July 23, 1987,
the amount of the cash payment to which an optionee shall be
entitled for each right shall be equal to a percent of the
excess, if any, of the fair market value of a share of Martin
Marietta Common Stock on the exercise date over the grant
value of the right. Such percentage shall be determined by
the Stock Option Committee or its delegatee in a manner which
shall be intended to approximate the tax obligation arising
from the exercise of such option and shall be adjusted
periodically pursuant to paragraph 7(a)(iii).
(iii) The percentage referred to in paragraph 7(a)(ii)
shall be increased or decreased from time to time by the
Committee or its delegatee to reflect significant changes in
income tax laws. At the time the Committee or its delegatee
determines that an increase or decrease is warranted, it shall
set a new percentage and shall set the effective date on which
such new percentage will apply in determining the amount of
the cash payment for each right which was granted on or after
July 23, 1987, and is exercised after the effective date of
such percentage change.
(iv) An optionee (or other person entitled to exercise
the option) who, in the event of a Change of Control, elects
either to exercise or to have the Corporation purchase his
options, shall receive a cash payment for the rights related
to such option equal to a percentage, determined in accordance
with paragraphs 7(a)(ii) and 7(a)(iii), of the excess of the
fair market value per share over the option price, such fair
market value to be determined in accordance with the
applicable provisions of Section 6(c)(iii), multiplied by the
number of option shares.
(v) Should there be a change affecting the stock subject
to the Plan as referred to in Section 6(c), the number of
rights shall be adjusted to equal the number of related stock
option shares upon completion of the adjustment required by
the change. The grant value of a right shall also be adjusted
to equal the option price of the related stock option
following the adjustment required by the change.
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(b) Exercise of Rights
(i) Subject to the limitations set forth herein, an
optionee shall be entitled to receive payment in cash for
rights granted under this Plan. The cash payment will be in
consideration of services performed for the Corporation or for
its benefit by the optionee.
(ii) Nothing contained herein shall be construed to
require the simultaneous exercise of options and the related
rights where such options or rights are exercised after May 1,
1991.
8. Death, Termination of Employment, or Retirement
(a) If an optionee dies while employed by the Corporation or
within three months after termination of employment, options
and rights may be exercised by the persons referred to in
Section 5(c) only within one year from the date of death. In
cases of normal retirement or of disability, options and
rights may be exercised within three years from the date of
such retirement or disability. In cases of termination of an
optionee's employment by the Corporation, with or without
cause, or early retirement (except as provided in
Section 8(b)), the options and rights may be exercised by the
optionee only within three months from the date of termination
of employment. Nothing contained in the Plan or in any option
or right granted hereunder shall confer upon any optionee any
right of continued employment by the Corporation nor limit in
any way the right of the Corporation to terminate the
participant's employment at any time.
(b) Except as otherwise provided in this paragraph, a grant
may be exercised pursuant to this Section 8 only to the extent
the optionee was entitled to exercise the options and rights
at the time of termination of employment or as provided in
Section 6(c) and, in any event, may not be exercised after the
expiration of ten years from the date of grant. In the event
an optionee ceases to be an employee, the options and rights
which are not exercisable at the time shall terminate. In
cases of death or disability while employed by the Corporation
or normal retirement where an optionee has applied for and is
receiving benefits pursuant to a retirement plan for Martin
Marietta salaried employees, all outstanding options and
rights shall become exercisable upon such death, disability,
or normal retirement and may be exercised pursuant to this
Section 8 or as provided in Section 6(c). In cases of early
retirement where an optionee has applied for and is receiving
benefits pursuant to a retirement plan for Martin Marietta
salaried employees, all outstanding options and rights shall
become exercisable upon such early retirement at the
discretion of the Board of Directors, the Committee, or the
Chief Executive Officer and, to the extent exercisable, may be
exercised within three years from the date of such early
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retirement or as provided in Section 6(c). Options and rights
may not be exercised less than six months or after the
expiration of ten years from the date of grant thereof.
9. Leave of Absence
For the purpose of the Plan, an employee on leave of absence
will be considered as still in the employ of the Corporation unless
otherwise provided in an agreement between the employee and the
Corporation.
10. Deferred Payments for Stock
To the extent permitted by applicable law, the Board of
Directors or the Committee may agree to accept as full or partial
payment of the purchase price of stock issued upon exercise of
options a promissory note of the optionee evidencing his obligation
to make future cash payment thereof. Promissory notes shall be
payable as determined by the Board of Directors or the Committee
(but in no event later than five years after the date thereof),
shall be secured by a pledge of the shares purchased, and shall
bear interest at a rate fixed by the Board of Directors or the
Committee.
11. Administration
(a) Stock Option Committee
(i) The Stock Option Committee shall consist of three or
more of those members of the Board of Directors who are not
eligible to receive options and rights under the Plan. The
members of the Committee shall be designated by the Board of
Directors. A majority of the members of the Committee shall
constitute a quorum. The vote of a majority of a quorum shall
constitute action by the Committee.
(ii) The Committee shall determine the employees who will
participate in the Plan, the number of shares and rights
subject to each grant, and shall have the authority to adopt
rules and regulations for administering the Plan.
(iii) As and to the extent authorized by the Board of
Directors or the By-Laws, the Committee may exercise the
powers and authority related to the Plan which are vested in
the Board of Directors. The Committee may delegate to the
officers or employees of the Corporation the authority to
execute and deliver documents and to take such other steps
deemed necessary or convenient for the efficient
administration of the Plan.
(b) Finality of Determinations
The Board of Directors shall have the power to interpret
the Plan. All interpretations, determinations, and
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actions by the Board of Directors or by the Committee, to
the extent authorized by the Plan, the Board of Directors
or the By-Laws shall be final, conclusive, and binding
upon all parties.
12. Amendment and Termination
The Board of Directors shall have the power, in its
discretion, to amend, suspend, or terminate the Plan or options and
rights granted under the Plan at any time. It shall not, however,
without further action by the stockholders, have the power to (a)
change the class of employees eligible to receive options under the
Plan, (b) provide for options or rights exercisable more than ten
years after the date granted, or (c) extend the expiration date of
the Plan; nor shall it have the power (except as otherwise provided
in the Plan) to (d) increase the number of shares subject to the
Plan or (e) reduce the option price below the fair market value of
the stock at the time the option was granted. No amendment,
suspension, or termination of the Plan or options and rights
granted under the Plan shall, except with the consent of the
optionee, adversely affect an option or right previously granted
except as set forth in paragraphs 7(a)(ii) and 7(a)(iii).
13. Duration
The Plan shall remain in effect until all options and rights
granted under the Plan have been exercised or terminated under the
terms of the Plan, provided that options and rights under the Plan
must be granted within ten years from the effective date of the
Plan.
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[MARTIN MARIETTA LOGO]
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MARTIN MARIETTA CORPORATION
AMENDED OMNIBUS SECURITIES AWARD PLAN
Adopted: April 23, 1992
As Amended
March 25, 1993
[MARTIN MARIETTA LOGO]
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS
COVERING SECURITIES THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
APRIL 2, 1993
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SECTION 1. Establishment and Purpose.
The Martin Marietta Corporation Amended Omnibus Securities
Award Plan (the "Plan") is an amendment and restatement of the
Martin Marietta Corporation Omnibus Securities Award Plan (the
"1992 Plan") which became effective upon its adoption by the
stockholders of Martin Marietta Corporation on April 23, 1992.
Subject to consummation of the transactions contemplated by the
Transaction Agreement dated November 22, 1992 among General
Electric Corporation, the Corporation and Parent Corporation (the
"Transaction Agreement"), the 1992 Plan, as amended and restated
herein, will be adopted by Parent Corporation which will assume all
of the obligations of the Corporation hereunder. At such time, the
name of the Corporation will be changed to Martin Marietta
Technologies, Inc. and the name of Parent Corporation will be
changed to Martin Marietta Corporation.
The purpose of this Plan is to benefit the Corporation's
stockholders 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" means any entity directly or indirectly
controlling, controlled by or under direct or indirect common
control with the Corporation.
"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 the Committee as defined
in Section 8.
"Corporation" means Martin Marietta Corporation including its
Affiliates.
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"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 an Award
pursuant to this Plan.
"Section 16" means Section 16 of the Exchange Act or any
successor regulation and the rules promulgated thereunder by
the Securities and Exchange Commission as they may be amended
from time to time.
"Stock" means shares of Common Stock of the Corporation, par
value $1.00, and upon consummation of the transactions
contemplated by the Transaction Agreement it will mean the
Common Stock, par value $1.00, of Parent Corporation, the name
of which will be changed to Martin Marietta Corporation.
SECTION 3. Eligibility.
Awards may be granted only to exempt salaried Employees of the
Corporation 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
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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 promissory note
of the optionee evidencing the optionee's
obligation to make future cash payments to the
Corporation. Promissory notes 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) The aggregate number of shares that may be subject
to Incentive Stock Options under this Plan shall
not exceed 867,000 shares of Stock, subject to
Sections 5 and 9.
(ii) The aggregate Fair Market Value (determined at the
time of the grant of the Award) of the shares
subject to Incentive Stock Options which are
exercisable by one person for the first time during
a particular calendar year shall not exceed
$100,000. For purses 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 that complies with
Section 422(b) of the Code.
(iii) 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 stockholders, whichever is earlier, or be
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exercisable more than ten years after the date the
Award is made.
(iv) 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.
(v) 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 surrender of the
right, but without payment, an amount payable in cash.
The amount payable with respect to each right shall be
dual 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 or other
securities of the Corporation that is issued to a
Participant and is subject to restrictions on transfer
and/or such other restrictions on 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,
or other securities of the Corporation or provide
incentive Awards that are valued by reference to the Fair
Market Value of Stock, or other securities 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 9 hereof,
the number of shares with respect to which Awards payable
in securities may be granted for 1992 will be 1.3% of the
shares of stock outstanding on December 31, 1991 and for
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each of 1993, 1994, 1995 and 1996 shall not exceed 1.7%
of the sum of (i) the number of shares of Stock
outstanding (subject to increase in certain
circumstances) and (ii) the number of shares of Stock
into which the outstanding Series A Preferred Stock, par
value $1.00, of Parent Corporation, is convertible, in
each case on December 31 of the prior year. In the event
that not all of the shares available in one year are used
for Awards in that year, the number of shares not used
for Awards that year shall be carried forward and shall
be available for Awards in succeeding calendar years in
addition to the aforesaid percentages of shares that
would otherwise be available in such years. In each of
1993, 1994 or 1995 an additional .5% of the aforesaid
sums may be granted if a corresponding decrease in the
percentage of shares of Stock available for Awards in the
immediately succeeding year is made. Any shares that
have not been awarded on or before December 31, 1996,
shall remain available for Awards for the duration of the
Plan. The number of SARs, units representing awards
payable solely in cash, or other rights payable solely in
cash that may be granted shall be equal to (and in
addition to) the number of shares of Stock available for
Awards payable in securities.
(b) Any unexercised or undistributed portion of any
terminated or forfeited Award shall be available for
further Awards in addition to those available under
Section 5(a) hereof.
(c) For the purpose of computing the total number of shares
of Stock granted under the Plan, the following rules
shall apply to Awards cable in Stock or other securities,
where appropriate:
(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 payable in some other
security shall be deemed to be equal to the number
of shares to which it relates;
(ii) 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;
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(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 number of shares of Stock
granted under the Plan may be made by the Committee, as it
deems n or appropriate.
(d) The Stock which may be delivered pursuant to an Award
under the Plan may be treasury or authorized but unissued
Stock or Stock may be acquired, subsequently or in
anticipation of the transaction, in the open market to
satisfy the requirements of the Plan.
SECTION 6. Award Agreements.
Each Award under this Plan shall be evidenced by an Award
Agreement setting forth the number of shares of Stock or other
security, 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,
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 Stockholder: A provision that a
Participant shall have no rights as a stockholder
with respect to any securities covered by an Award
until the date the Participant becomes the holder
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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 stockholder
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 Chief
Executive Officer of the Corporation (or his
delegate), or, in the case of an Award to an
Insider, by the Participant and by a member of the
Committee. 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.
(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
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<PAGE>
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.
(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, (0)
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, any other
restrictions or conditions (including performance
requirements) on the Award and the method by which
restrictions or conditions lapse, effect on the
Award of a change in control, the price, amount or
value of Awards.
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
stockholders of the Corporation, be effective if such approval is
required by Section 16(b) of the Exchange Act.
SECTION 8. Administration.
(a) The Plan and all Awards granted pursuant thereto shall be
administered by a Committee of the Board of Directors
constituted so as to permit the Plan to comply with the
administration requirement of Rule 16b-3(c)(2)(i). The
members of the Committee shall be designated by the Board
of Directors and as initially constituted, shall be the
Stock Option Committee as defined in the Corporation's
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By-Laws. 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
respect to the Plan, the number of shares of Stock or
other security, 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 required of Rule 16b-3
of the Exchange Act, 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.
(e) 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 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,
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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 of Control.
(a) In the event of a change of control of the Corporation,
in addition to any action required or authorized by the
terms of any Award Agreement, the Committee may, in its
discretion, recommend that the Board of Directors take
any of the following actions as a result of, or in
anticipation of, any such event to assure fair and
equitable treatment of Plan Participants:
(i) accelerate time periods for purposes of vesting in,
or realizing gain from, any outstanding Award made
pursuant to this Plan;
(ii) offer to purchase any outstanding Award made
pursuant to this Plan from the holder for Its
equivalent cash value, as determined by the
Committee, as of the date of the change of control;
or
(iii) make adjustments or modifications to outstanding
Awards as the Committee deems appropriate to
maintain and protect the rights and interests of
Plan Participants following such change of control.
Any such action approved by the Board of Directors
shall be conclusive and binding on the Corporation
and all Plan Participants.
(b) For the purposes of this Section, a change of control
shall include the following:
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(i) A tender offer or exchange offer is made whereby
the effect of such offer is to take over and
control the affairs of the Corporation and such
offer is consummated for the ownership of
securities of the Corporation representing 25% or
more of the combined voting powers of the
Corporation's then outstanding voting securities.
(ii) The Corporation is merged or consolidated with
another corporation and, as a result of such merger
or consolidation, less than 75% of the outstanding
voting securities of the surviving or resulting
corporation shall then be owned in the aggregate by
the former stockholders of the Corporation, other
than affiliates within the meaning of the Exchange
Act or any party to such merger or consolidation.
(iii) The Corporation transfers substantially all of its
assets to another corporation or entity which is
not a wholly owned subsidiary of the Corporation.
(iv) Any "person" (as such term is used in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act)
is or becomes the beneficial owner, directly or
indirectly, of securities of the Corporation
representing 25% or more of the combined voting
power of the Corporation's then outstanding
securities, and the effect of such ownership is to
take over and control the affairs of the
Corporation.
(v) As the result of a tender offer, merger,
consolidation, sale of assets, or contested
election, or any combination of such transactions,
the persons who were members of the Board of
Directors of the Corporation immediately before the
transactIon, cease to constitute at least a
majority thereof.
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 base solely upon contractual
obligations created by the Plan and the Award Agreement.
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(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 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
only be grants until April 23, 2302.
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DIRECTORS' LIFE INSURANCE PROGRAM
(Amended June 24, 1988)
RESOLVED, That the $100,000 life insurance program for
directors be amended to provide a permanent life insurance policy
to be owned by the director subject to availability of coverage for
each individual.
RESOLVED FURTHER, That the Corporation shall pay the premiums
and a director will be fully vested in the insurance program after
five years of service and, for full years of service less than
five, will receive a proportionally reduced amount of lifetime
insurance.
RESOLVED FURTHER, That each active director and currently
participating retired director shall have the opportunity to
participate or to decline to participate in the revised program
prior to November 1, 1988.
RESOLVED FURTHER, That in the event a director or currently
participating retired director shall decline to participate in the
revised program or such coverage is not available, he shall
continue to be covered or not covered in the current program, as
the case may be.
RESOLVED FURTHER, That the proper officers of the Corporation
be and are hereby authorized to execute and deliver such
instruments and documents, to do all such other acts and things and
to take all such further steps as they shall deem necessary or
advisable or convenient or proper, in order to carry out the intent
of the foregoing resolutions.
<PAGE>
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MARTIN MARIETTA
EXECUTIVE SPECIAL EARLY RETIREMENT OPTION
AND
PLANT CLOSING RETIREMENT OPTION PLAN
April 5, 1993
<PAGE>
<PAGE>
SECTION I.
Eligibility
Employees who: (1) are Highly Compensated Employees as defined
under Section 414(q) of the Internal Revenue Code of 1986, as
amended, (2) are eligible to receive either a Special Early
Retirement Option or a Plant Closing Pension Option under
Paragraphs V 5 or 6 of the Martin Marietta Pension Plan for
Employees of Transferred GE Operations and (3) have their Pension
benefits and other payment limited under Paragraphs V 5 or 6 of the
Martin Marietta Pension Plan for Employees of Transferred GE
Operations shall be eligible to receive a SERO or Plant Closing
Supplement under this Plan in accordance with Section II.
SECTION II.
SERO Supplement
The amount of the "SERO or Plant Closing Supplement" payable
under this Plan to an Employee, Surviving Spouse or beneficiary
shall be equal to the excess (if any) of:
a. the Pension, Survivor benefit or death benefit that the
Employee, Surviving Spouse or beneficiary would have
received under the Special Early Retirement option or
Plant Closing Pension Option (whichever is applicable)
under the Martin Marietta Pension Plan for Employees of
Transferred GE Operations but for the limitations on such
benefit imposed on Highly Compensated Employees by the
Martin Marietta Pension Plan for Employees of Transferred
GE Operations pursuant to Paragraphs V 5 or 6 thereof,
over
b. the Pension, Survivor benefit or death benefit that the
Employee, Surviving Spouse or beneficiary received under
the Special Early Retirement Option or Plant Closing
Pension Option under the Martin Marietta Pension Plan for
Employees of Transferred GE Operations.
SECTION III.
Payment of SERO or Plant Closing Supplement
1. All SERO or Plant Closing Supplements provided for
hereunder shall be paid in the same form and manner as the Special
Early Retirement Option or Plant Closing Pension Option benefit is
payable to such Employee, Surviving Spouse or beneficiary under the
Martin Marietta Pension Plan for Employees of Transferred GE
Operations.
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<PAGE>
2. If an Employee's Pension under the Martin Marietta
Pension Plan for Employees of Transferred GE Operations is
suspended for any month in accordance with the re-employment
provisions thereof, the Employee's SERO or Plant Closing Supplement
for that month shall likewise be suspended under this Plan.
SECTION IV.
Beneficiary
An Employee's beneficiary for the purposes of this Plan shall
be the beneficiary designated by him under the Martin Marietta
Pension Plan for Employees of Transferred GE Operations.
SECTION V.
Administration
1. This Plan shall be administered by the Administrative
Committee, which shall have authority to make, amend, interpret and
enforce all appropriate rules and regulations for the
administration of this Plan and decide or resolve any and all
questions which may arise in connection with this Plan.
2. In the administration of this Plan, the Administrative
Committee may, from time-to-time, employ agents and delegate to
them such administrative duties as it sees fit and may, from time-
to-time, consult with counsel, including counsel to the Company.
3. The decision or action of the Administrative Committee in
respect of any question arising out of or in connection with the
administration, interpretation and application of the Plan and the
rules and regulations thereunder shall be final and conclusive and
binding upon all persons having any interest in the Plan.
SECTION VI.
Amendment and Termination
The Company reserves the right, by action of the Martin
Marietta Board of Directors, to amend, modify or terminate, either
retroactively or prospectively, any or all of the provisions of
this Plan; provided, however, that no such action on its part shall
adversely affect the rights of Employee, Surviving Spouse or
beneficiaries without the consent of such Employee (or Surviving
Spouse or beneficiaries, if the Employee is deceased) with respect
to any SERO or Plant Closing Supplement that is actually being paid
under this Plan.
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<PAGE>
SECTION VII.
General Conditions
1. The Plan shall be unfunded, unsecured and nonassignable,
and shall not be a trust for the benefit of any Employee, Surviving
Spouse or beneficiary.
2. No Employee and no other person shall have any legal or
equitable rights or interest in this Plan that are not expressly
granted in this Plan. Participation in the Plan does not give any
person any right to be retained in the Service of his employer.
The right and power of the Company to dismiss or discharge any
Employee is expressly reserved.
3. Terms used in the Plan shall have the same meaning as
under the Martin Marietta Pension Plan for Employees of Transferred
GE Operations unless otherwise noted.
IN WITNESS WHEREOF, this Martin Marietta Executive Special
Early Retirement Option and Plant Closing Retirement Option Plan
was executed as of April 5, 1993.
MARTIN MARIETTA CORPORATION
_________________________ _______________________________
Witness Title:
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MARTIN MARIETTA
SUPPLEMENTARY PENSION PLAN
FOR EMPLOYEES OF TRANSFERRED GE OPERATIONS
(Effective April 5, 1993)
<PAGE>
<PAGE>
Section I.
Eligible Employees
Subject to the provisions of Section VIII and Section XIV(c)
hereof, each Transferred Employee who was participating in the GE
Supplementary Pension Plan on April 4, 1993, who has five or more
years of Pension Qualification Service and who is a participant in
the Martin Marietta Pension Plan for Employees of Transferred GE
Operations shall be eligible to participate, and shall participate,
in this Supplementary Pension Plan to the extent of the benefits
provided herein, provided that:
(i) the foregoing shall not apply to an employee of a
corporation other than Martin Marietta Corporation which has
not agreed to bear the cost of this Plan with respect to its
employees, and
(ii) except as provided in Section V, a Transferred
Employee who retires under the optional retirement provisions
of the Martin Marietta Pension Plan for Employees of
Transferred GE Operations before the first day of the month
following attainment of age 60 or an Employee who leaves the
Service of the Company before attainment of age 60, shall not
be eligible for a Supplementary Pension under this Plan.
A Transferred Employee who meets the other requirements
specified in this Section shall be eligible for the benefits
provided herein so long as his assigned position level or position
of equivalent responsibility throughout any consecutive three years
of the 15 year period ending on the last day of the month preceding
his termination of service is at least at the level of a director
(or other position equivalent to the Executive Career Band of the
General Electric Company) even though he is not employed at that
level on the date his Service terminates.
Section II.
Definitions
(a) Officers - Officers shall mean the Chairman of the Board,
the Vice Chairmen, the President, the Vice Presidents, Officer
Equivalents and such other Employees as the Committee referred to
in Section IX hereof may designate.
(b) Annual Retirement Income - For Transferring Employees who
retire on or after April 5, 1993, or who die in active Service on
or after such date, an Employee's Annual Retirement Income shall
mean the amount determined by multiplying l.75% of the Employee's
Average Annual Compensation by the number of years Combined Benefit
Service completed by the Employee at the date of his retirement or
death, whichever is earlier.
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(c) Annual Estimated Social Security Benefit - The Annual
Estimated Social Security Benefit shall mean the annual equivalent
of the maximum possible Primary Insurance Amount payable, after
reduction for early retirement, as an old-age benefit to an
employee who retired at age 62 on January 1st of the calendar year
in which occurred the Transferred Employee's actual date of
retirement or death, whichever is earlier. Such Annual Estimated
Social Security Benefit shall be determined by the Company in
accordance with the Federal Social Security Act in effect at the
end of the calendar year immediately preceding such January 1st.
If a Transferred Employee has less than 35 years of Combined
Benefit Service, the Annual Estimated Social Security Benefit shall
be the amount determined under the first paragraph hereof
multiplied by a factor, the numerator of which shall be the number
of years of the Transferred Employee's Combined Benefit Service to
his date of retirement or death, whichever is earlier, and the
denominator of which shall be 35.
The Annual Estimated Social Security Benefit as so determined
shall be adjusted to include any social security, severance or
similar benefit provided under foreign law or regulation as the
Administrative Committee may prescribe by rules and regulations
issued with respect to this Plan.
(d) Annual Pension Payable under the Martin Marietta Pension
Plan for Employees of Transferred GE Operations - The Annual
Pension Payable under the Martin Marietta Pension Plan for
Employees of Transferred GE Operations shall mean the sum of (1)
the total annual past service annuity, future service annuity and
Personal Pension Account Annuity deemed to be credited to the
Employee as of his date of retirement or death, whichever is
earlier, plus any additional annual amount required to provide the
minimum pension under the Martin Marietta Pension Plan for
Employees of Transferred GE Operations, and (2) any annual pension
(or the annual pension equivalent of other forms of payment)
payable under any other pension plan, policy, contract, or
government program attributable to periods for which Combined
Benefit Service is granted by the Chairman of the Board or the
Administrative Committee or is credited by the Martin Marietta
Pension Plan for Employees of Transferred GE Operations provided
the Administrative Committee determines such annual pension shall
be deductible from the benefit payable under this Plan. All such
amounts shall be determined before application of any reduction
factors for Optional or Disability Retirement, for election of any
optional form of Pension at retirement, a qualified domestic
relations order(s), if any, or in connection with any other
adjustment made pursuant to the Martin Marietta Pension Plan for
Employees of Transferred GE Operations or any other pension plan.
For the purposes of this paragraph, the Transferred Employee's
Pension shall include the Personal Pension Account Annuity payable
to the Transferred Employee or the Transferred Employee's spouse on
the date of the Transferred Employee's retirement or death, as the
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case may be, regardless of whether such annuity commenced on such
date.
(e) Pension Qualification Service - Pension Qualification
Service shall have the same meaning herein as in the Martin
Marietta Pension Plan for Employees of Transferred GE Operations
except that for periods before January 1, 1976 the term Credited
Service used in determining such Pension Qualification Service
shall mean only Service for which an Employee is credited with a
past service annuity or a future service annuity under the Martin
Marietta Pension Plan for Employees of Transferred GE Operations
(plus his first year of Service where such year is recognized as
additional Credited Service under that Plan), except as the
Administrative Committee may otherwise provide by rules and
regulations issued with respect to this Plan.
(f) Average Annual Compensation - Average Annual Compensation
means one-third of the Transferred Employee's Compensation for the
highest 36 consecutive months during the last 120 completed months
before his date of retirement or death, whichever is earlier. In
computing a Transferred Employee's Average Annual Compensation, his
normal straight-time earnings shall be substituted for his actual
Compensation for any month in which such normal straight-time
earnings are greater.
(g) Terms - All Terms used in this Plan which are defined in
the Martin Marietta Pension Plan for Employees of Transferred GE
Operations shall have the same meanings herein as therein, unless
otherwise expressly provided in this Plan.
(h) Combined Benefit Service - Pension Benefit Service shall
have the same meaning herein as in the Martin Marietta Pension Plan
for Employees of Transferred GE Operations except that for periods
before January 1, 1976 the term Credited Service as a full-time
Employee shall also include all Service credited under the Martin
Marietta Pension Plan for Employees of Transferred GE Operations to
such Employee for any period during which he was a full-time
Employee for purposes of such Martin Marietta Pension Plan for
Employees of Transferred GE Operations.
Combined Benefit Service shall also include:
(1) any period of Service with the Company or an
Affiliate as the Administrative Committee may otherwise
provide by rules and regulations issued with respect to
this Plan, and,
(2) any period of service with another employer as may be
approved from time to time by the Chairman of the Board
but only to the extent that any conditions specified in
such approval have been met.
(i) Compensation - "Compensation for the purposes of
this Plan" shall mean with respect to the period in question salary
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(including any deferred salary approved by the Administrative
Committee as compensation for purposes of this Plan) plus
(i) for persons then eligible for Incentive
Compensation, the total amount of any Incentive Compensation earned
except to the extent such Incentive Compensation is excluded by the
Board of Directors or a committee thereof;
(ii) for persons who would then have been eligible for
Incentive Compensation if they had not been participants in a Sales
Commission Plan or other variable compensation plan, the total
amount of sales commissions (or other variable compensation
earned);
(iii) for all other persons, the sales commissions and
other variable compensation earned by them but only to the extent
such earnings were then included under the Martin Marietta Pension
Plan for Employees of Transferred GE Operations, plus any amounts
(other than salary and those mentioned in clauses (i) through (iii)
above) which were then included as compensation under the Martin
Marietta Pension Plan for Employees of Transferred GE Operations
except any amounts which the Administrative Committee may exclude
from the computation of "Compensation" and subject to the powers of
the Committee under Section IX hereof.
(j) Transferred Employee - any individual who qualifies as a
Transferred Employee under Exhibit V to the Transaction Agreement
dated November 22, 1992 (as amended February 17, 1993 and March 28,
1993) among General Electric Company, Martin Marietta Corporation
and Parent Corporation.
The Administrative Committee shall specify the basis for
determining any Employee's Compensation for any portion of the 120
completed months used to compute the Employee's Average Annual
Compensation during which the Employee was not employed by an
Employer participating in this Plan.
Section III.
Amount of Supplementary Pension at or After Normal Retirement
(a) The annual Supplementary Pension payable to an eligible
Transferred Employee who retires on or after his normal retirement
date under the Martin Marietta Pension Plan for Employees of
Transferred GE Operations shall be equal to the excess, if any, of
the Employee's Annual Retirement Income, over the sum of:
(i) the Transferred Employee's Annual Pension Payable
under the Martin Marietta Pension Plan for Employees of
Transferred GE Operations,
(ii) 1/2 of the Transferred Employee's Annual
Estimated Social Security Benefit,
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<PAGE>
(iii) the Transferred Employee's annual excess benefit, if
any, payable under the GE Excess Benefit Plan, and
(iv) The Transferred Employee's annual benefit, if any,
payable under the GE Executive Special Early Retirement Option
and Plant Closing Retirement Option Plan.
Such Supplementary Pension shall be subject to the limitations
specified in Section IX.
(b) The Supplementary Pension of a Transferred Employee who
continues in the Service of the Company after his normal retirement
date, shall not commence before his actual retirement date.
Section IV.
Amount of Supplementary Pension at Optional or Disability
Retirement
(a) The annual Supplementary Pension payable to an eligible
Transferred Employee who, following attainment of age 60, retires
on an optional retirement date under the Martin Marietta Pension
Plan for Employees of Transferred GE Operations shall be computed
in the manner provided by Section III(a) (for an Employee retiring
on his normal retirement date) but taking into account only
Combined Benefit Service and Average Annual Compensation to the
actual date of optional retirement. Such Supplementary Pension
shall be subject to the limitations specified in Section IX.
(b) The annual Supplementary Pension payable to an eligible
Transferred Employee who retires on a Disability Pension under the
Martin Marietta Pension Plan for Employees of Transferred GE
Operations shall first be computed in the manner provided by
Section III(a) (for a Transferred Employee retiring on his normal
retirement date) taking into account only Pension Benefit Service
and Average Annual Compensation to the actual date of disability
retirement but in the case of an eligible Transferred Employee
whose date of retirement precedes the first day of the month
following his attainment of age 60 such Supplementary Pension shall
then be reduced by 12%. Such Supplementary Pension shall be
subject to the limitations specified in Section IX.
If the Disability Pension payable to the Transferred Employee
under the Martin Marietta Pension Plan for Employees of Transferred
GE Operations is discontinued by the Administrative Committee as a
result of the cessation of the Transferred Employee's disability
prior to the attainment of age 60, the Supplementary Pension
provided under this Section V shall also be discontinued.
Section V.
Special Benefit Protection for Certain Employees
(a) A former Transferred Employee whose Service with the
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Company is terminated on or after April 5, 1993 and after
completion of 25 or more years of Pension Qualification Service who
does not withdraw his contributions from the Martin Marietta
Pension Plan for Employees of Transferred GE Operations before
retirement and who meets one of the following conditions shall be
eligible for a Supplementary Pension under this Plan commencing
upon his retirement under the Martin Marietta Pension Plan for
Employees of Transferred GE Operations following attainment of age
60:
(i) The Transferred Employee's Service is terminated
because of a Plant Closing.
(ii) The Transferred Employee's Service is terminated for
transfer to a successor employer and the Employee does not
retire under the Martin Marietta Pension Plan for Employees of
Transferred GE Operations until the later of (1) his
termination of service with the successor employer and (2) the
first of the month following attainment of age 60.
(iii) The Transferred Employee's Service terminated after
one year on layoff with protected service.
(b) In determining the Supplementary Pension, if any, for
Employees who meet the conditions in paragraph (a), the Average
Annual Compensation shall be based on the last 120 completed months
before his Service termination date and the Annual Estimated Social
Security Benefit shall be determined as though the Transferred
Employee's retirement date was the date of termination.
Section VI.
Survivor Benefits
Subject to the provisions of paragraph (b) of Section VII; if
a survivor benefit applies with respect to the past and future
service annuity portion of a Transferred Employee's Annual Pension
payable under the Martin Marietta Pension Plan for Employees of
Transferred GE Operations, such survivor benefit shall
automatically apply to any Supplementary Pension for which he may
be eligible under this Plan. His Supplementary Pension shall be
adjusted and paid in the same manner as such pension payable under
the Martin Marietta Pension Plan for Employees of Transferred GE
Operations is adjusted and paid on account of such survivor
benefit.
Section VII.
Payments Upon Death
(a) If an eligible Transferred Employee dies in active
Service, or following retirement on a Supplementary Pension, and a
death benefit (other than a return of Employee contributions with
interest including an Employee's Personal and Voluntary Pension
-6-<PAGE>
<PAGE>
Account) is payable to the beneficiary or Surviving Spouse of such
Transferred Employee under the Martin Marietta Pension Plan for
Employees of Transferred GE Operations, a death benefit shall also
be payable to the beneficiary or Surviving Spouse under this
Supplementary Pension Plan. Any such death benefit payable under
this Plan shall be computed in the same manner as the death benefit
payable under the Martin Marietta Pension Plan for Employees of
Transferred GE Operations but shall be based on the Supplementary
Pension payable under this Plan.
(b) In lieu of the benefit otherwise payable to a beneficiary
or surviving spouse under Section VI or paragraph (a) of this
Section, a Transferred Employee may elect to have all or any
portion of such benefit (or the equivalent value of all or any
portion) paid to the beneficiary designated in the employee's
election in any of the following forms:
(i) An annuity for the remaining lifetime of the spouse.
If the beneficiary dies before the spouse, the remaining
benefit shall be paid as provided in the employee's election.
In the absence of any such provision, the equivalent value of
the remaining payments shall be paid to the beneficiary's
estate, if any, otherwise to the beneficiary's Personal
Representative.
(ii) An annuity for the remaining lifetime of the
beneficiary. If any annuity otherwise payable under this item
(ii) is less than $5000 annually, the equivalent value shall
be paid instead to the beneficiary in a lump sum.
(iii) A lump sum.
Any such election must be made in writing to the
Administrative Committee and becomes effective upon its receipt by
the Administrative Committee. For purposes of this election, a
Transferred Employee may designate as his beneficiary only his
estate, his former spouse, or a member of his immediate family.
For the purpose of determining the benefit conversions
required to provide the benefit payments referred to above, the
interest rate assumption shall be the interest rate used by the
Pension Benefit Guaranty Corporation, at the beginning of the year
in which the Transferred Employee's death occurs, in valuing
immediate annuities for terminating single employer trusteed plans,
and the mortality assumption shall be based on the UP-1984
Mortality Table.
Section VIII.
Limitation on Benefits
(a) Notwithstanding any provision of this Plan to the
contrary, if the sum of:
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<PAGE>
(i) the Supplementary Pension (before application of any
reduction factor for disability retirement or a survivor
benefit) otherwise payable to a Transferred Employee
hereunder;
(ii) the Employee's Annual Pension Payable under the
Martin Marietta Pension Plan for Employees of Transferred GE
Operations,
(iii) 100% of the Annual Estimated Social Security Benefit
but before any adjustment for less than 35 years of Pension
Benefit Service,
(iv) the Transferred Employee's annual excess benefit, if
any, payable under the Martin Marietta Supplemental Excess
Retirement Plan, and
(v) The Employee's annual benefit, if any, payable under
the GE Executive Special Early Retirement Option and Plant
Closing Retirement Option Plan exceeds 60% of his Annual
Average Compensation, such Supplementary Pension shall be
reduced by the amount of the excess.
(b) Notwithstanding any provision in the Plan to the
contrary, the amount of Supplementary Pension and any death benefit
payable to or on behalf of any Transferred Employee who is or was
an Officer of the Company on the date of his retirement or death,
whichever is earlier, shall be determined in accordance with such
general rules and regulations as may be adopted by a Committee
appointed by the Board of Directors for such purpose, subject to
the limitation that any such Supplementary Pension or death benefit
may not exceed the amount which would be payable hereunder in the
absence of such rules and regulations.
Section IX.
Payment of Benefits
(a) All Supplementary Pension Benefits provided for hereunder
shall normally be payable in monthly installments, each equal to
1/12th of the annual amount determined under the applicable
Section. In addition, the provisions of the Martin Marietta Pension
Plan for Employees of Transferred GE Operations with respect to the
following shall apply to amounts payable under this Plan:
(i) The dates of first and last payment of any Pension
or other amounts payable in installments.
(ii) The payment of quarterly or annual payments in lieu
of monthly installments.
(iii) Treatment of amounts payable to a missing person.
(b) If a Transferred Employee's Pension under the Martin
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<PAGE>
Marietta Pension Plan for Employees of Transferred GE Operations is
suspended for any month in accordance with the re-employment
provisions of that Plan, the Transferred Employee's Supplementary
Pension for that month shall be suspended under this Plan. In
addition, the re-employment provisions of the Martin Marietta
Pension Plan for Employees of Transferred GE Operations with
respect to the computation of benefits payable upon retirement at
the end of the period of re-employment shall apply to amounts
payable under this Plan.
(c) A Transferred Employee's beneficiary for the purposes of
this Plan shall be the beneficiary designated by him under the
Martin Marietta Pension Plan for Employees of Transferred GE
Operations, except in those instances where a separate beneficiary
designation is in effect under this Plan. The provisions of the
Martin Marietta Pension Plan for Employees of Transferred GE
Operations with respect to amounts payable to a Surviving Spouse or
beneficiary and the designation or selection of a beneficiary shall
apply to amounts payable under this Supplementary Pension Plan and
the designation or selection of a beneficiary under this Plan,
except that the requirement of the Spouse's Consent to the
designation of a beneficiary by the employee shall not apply.
Section X.
Administration
(a) Except as otherwise provided in Section VIII and XII,
this Plan shall be administered by the Administrative Committee,
which shall have authority to make, amend, interpret and enforce
all appropriate rules and regulations for the administration of
this Plan and decide or resolve any and all questions including
interpretations of this Plan, as may arise in connection with this
Plan.
(b) In the administration of this Plan, the Administrative
Committee may, from time to time, employ agents and delegate to
them such administrative duties as it sees fit and may from time to
time consult with counsel who may be counsel to the Company.
(c) The decision or action of the Administrative Committee in
respect of any question arising out of or in connection with the
administration, interpretation and application of the Plan and the
rules and regulations thereunder shall be final and conclusive and
binding upon all persons having any interest in the Plan.
Section XI.
Termination, Suspension or Amendment
The Board of Directors may, in its sole discretion, terminate,
suspend or amend this Plan at any time or from time to time, in
whole or in part. However, no such termination, suspension or
amendment shall adversely affect (1) the benefits of any
-9-<PAGE>
<PAGE>
Transferred Employee who retired under the Plan prior to the date
of such termination, suspension or amendment or (2) the right of
any then current Transferred Employee to receive upon retirement,
or of his or her Surviving Spouse or beneficiary to receive upon
such Transferred Employee's death, the amount as a Supplementary
Pension or death benefit, as the case may be, to which such person
would have been entitled under this Plan computed to the date of
such termination, suspension or amendment, taking into account the
Employee's Pension Benefit Service and Average Annual Compensation
calculated as of the date of such termination, suspension or
amendment.
Section XII. Adjustments in Supplementary Pension Following
Retirement
If the Pension payable under the Martin Marietta Pension Plan
for Employees of Transferred GE Operations to any Employee is
increased following his retirement as a result of a general
increase in the Pensions payable to retired employees under that
plan, which becomes effective after April 5, 1993, the amount of
the Supplementary Pension thereafter payable to such Transferred
Employee under this Supplementary Pension Plan shall be determined
by the Board of Directors.
Section XIII.
General Conditions
(a) No interest of a Transferred Employee, retired employee,
Surviving Spouse or beneficiary under this Plan and no benefit
payable hereunder shall be assigned as security for a loan, and any
such purported assignment shall be null, void and of no effect, nor
shall any such interest or any such benefit be subject in any
manner, either voluntarily or involuntarily, to anticipation, sale,
transfer, assignment or encumbrance by or through an Employee,
retired employee, Surviving Spouse or beneficiary. If any attempt
is made to alienate, pledge or charge any such interest or any such
benefit for any debt, liabilities in tort or contract, or
otherwise, of any Transferred Employee, retired employee, Surviving
Spouse, or beneficiary, contrary to the prohibitions of the
preceding sentence, then the Administrative Committee in its
discretion may suspend or forfeit the interests of such person and
during the period of such suspension, or in case of forfeiture, the
Administrative Committee shall hold such interest for the benefit
of, or shall make the benefit payments to which such person would
otherwise be entitled to the designated beneficiary or to some
member of such Transferred Employee's, retired employee's,
Surviving Spouse's or beneficiary's family to be selected in the
discretion of the Administrative Committee. Similarly, in cases of
misconduct, incapacity or disability, the Administrative Committee,
in its sole discretion, may make payments to some member of the
family of any of the foregoing to be selected by it or to
whomsoever it may determine is best fitted to receive or administer
-10-<PAGE>
<PAGE>
such payments.
(b) No Transferred Employee and no other person shall have
any legal or equitable rights or interest in this Plan that are not
expressly granted in this Plan. Participation in this Plan does not
give any person any right to be retained in the Service of his
employer. The right and power of the Company to dismiss or
discharge any Transferred Employee is expressly reserved.
(c) Notwithstanding the provisions of Section I, Transferred
Employees who are represented by a union (pursuant to a
certification by the National Labor Relations Board or otherwise in
accordance with the provisions of Section 9 of the National Labor
Relations Act) shall become eligible to participate in this Plan
(1) only after the Company and such union shall have entered into
a written agreement to the effect that the Plan shall be offered to
the Transferred Employees so represented, and (2) only in
accordance with any conditions or requirements contained in such
agreement; provided, however, that whenever Employees who are
eligible for the Plan choose a bargaining agent (pursuant to NLRB
certification), they shall continue to be eligible unless and until
the certified agent gives notice to the Company that it does not
wish such eligibility to continue.
(d) The law of the State of Maryland shall govern the
construction and administration of the plan.
(e) The rights under this Plan of a Transferred Employee who
retires or leaves the Service of the Company at any time and the
rights of anyone entitled to receive any payments under the Plan by
reason of the death of such Transferred Employee, shall be governed
by the provisions of the Plan in effect on the date such
Transferred Employee retires or leaves the Service of the Company,
except as otherwise specifically provided in this Plan.
(f) Notwithstanding anything to the contrary, no Transferred
Employee shall be entitled to receive duplicate credit for the same
period of service or to receive duplicate benefits with respect to
the same period of time as is credited under this Plan or any other
plan maintained by Martin Marietta Corporation, the General
Electric Company, or any other employer.
IN WITNESS WHEREOF, this Martin Marietta Supplementary Pension
Plan for Employees of Transferred GE Operations was executed as of
April 5, 1993.
MARTIN MARIETTA CORPORATION
__________________________ ___________________________
Witness Title:
-11-
<PAGE>
<PAGE>
<TABLE>
EXHIBIT 11
MARTIN MARIETTA CORPORATION AND CONSOLIDATION SUBSIDIARIES
FORM 10-K
For the Year Ended December 31, 1993
COMPUTATION OF NET EARNINGS (LOSS) PER COMMON SHARE
<CAPTION>
Year Ended December 31
1993 1992 1991
ASSUMING NO DILUTION:
<S> <C> <C> <C>
Average number of common shares
outstanding (1) 95,346,614 95,868,708 99,341,210
Earnings before cumulative effect of
accounting changes $ 450,289,000 $ 345,423,000 $ 313,149,000
Less: Preferred stock dividends 45,333,000 - -
Earnings before cumulative effect of
accounting changes applicable to common stock 404,956,000 345,423,000 313,149,000
Cumulative effect of accounting changes (429,432,000) - -
Net earnings (loss) applicable to common stock $( 24,476,000) $ 345,423,000 $ 313,149,000
Net earnings (loss) per common share:
Before cumulative effect of accounting
changes $ 4.25 $ 3.60 $ 3.15
Cumulative effect of accounting changes ( 4.51) - -
$( .26) $ 3.60 $ 3.15
<FN>
(1) Excludes common stock equivalents since
the dilutive effect on earnings per share
assuming no dilution is less than 3%.
/TABLE
<PAGE>
<PAGE>
<TABLE> EXHIBIT 11 - continued
MARTIN MARIETTA CORPORATION AND CONSOLIDATION SUBSIDIARIES
FORM 10-K
For the Year Ended December 31, 1993
COMPUTATION OF NET EARNINGS (LOSS) PER COMMON SHARE
<CAPTION>
Year Ended December 31
1993 1992 1991
ASSUMING FULL DILUTION:
<S> <C> <C> <C>
Average number of common shares
outstanding 95,346,614 95,868,708 99,341,210
Dilutive stock options-based on the
treasury stock method using the
December 31 market prices, if higher
than average market price 1,294,357 - -
Assumed conversion of the Convertible
Preferred Stock from the date of
issuance 21,706,100 - -
118,347,071 95,868,708 99,341,210
Earnings before cumulative effect of
accounting changes applicable to
common stock $ 404,956,000 $345,423,000 $313,149,000
Add: Preferred stock dividends 45,333,000 - -
Earnings before cumulative effect of
accounting changes 450,289,000 345,423,000 313,149,000
Cumulative effect of accounting changes (429,432,000) - -
Net earnings $ 20,857,000 $345,423,000 $313,149,000
Net earnings per common share:
Before cumulative effect of
accounting changes $ 3.80 $ 3.60 $ 3.15
Cumulative effect of accounting
changes * - -
$ * $ 3.60 $ 3.15
<FN> 3.60 $ 3.15
* Anti-dilutive
</TABLE>
<PAGE>
<TABLE>
EXHIBIT 12
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
FORM 10-K
For the Year Ended December 31, 1993
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In thousands, except ratio)
EARNINGS:
<S> <C>
Net earnings $ 20,857
Taxes on income 275,000
Cumulative Effect of Changes in Accounting Principles 429,432
Interest expense 113,428
Amortization of debt discount (premium) ( 3,255)
Portion of rents representative of an interest factor 23,368
Earnings of less than 50% owned associated companies (379)
Adjusted earnings before taxes and fixed charges $ 858,451
FIXED CHARGES:
Interest expense $ 113,428
Amortization of debt discount and expense ( 3,255)
Portion of rents representative of an interest factor 23,368
Capitalized interest 2,857
Total fixed charges $ 136,398
RATIO OF EARNINGS TO FIXED CHARGES 6.29
</TABLE>
<PAGE>
<PAGE>
EXHIBIT 21
LIST OF SUBSIDIARIES OF
MARTIN MARIETTA CORPORATION
State or Percentage
Country of of Securities
Name of Subsidiary Incorporation Owned
Martin Marietta Technologies, Inc. Maryland 100%
Martin Marietta Materials, Inc. North Carolina 80.9%
Martin Marietta Energy Systems, Inc. Delaware 100%
Martin Marietta Investments Inc. Delaware 100%
The subsidiaries contained in this listing are entities through
which the Corporation conducts major activities. None meets the
definition of a significant subsidiary under Rule 1-02(v) of
Regulation S-X, however, considered in certain instances in a group
of two or more entities or in the aggregate, as a single
subsidiary, the subsidiaries listed above would constitute a
significant subsidiary as defined in Regulation S-X.
Martin Marietta has a number of other subsidiaries, but all of
them, considered in the aggregate as a single subsidiary, would not
constitute a significant subsidiary. Accordingly, the names of the
particular subsidiaries are omitted.
<PAGE>
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, Norman R. Augustine, Chairman and Chief Executive Officer
of Martin Marietta Corporation (the "Corporation"), hereby
constitute and appoint Frank H. Menaker, Jr. and Stephen M. Piper,
and each of them, with power of substitution, my true and lawful
attorneys-in-fact, with full power to do any and all acts and
things for me and on my behalf as Chairman and Chief Executive
Officer of the Corporation in connection with the preparation and
filing with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 and to sign for me, in my name as
Chairman and Chief Executive Officer, the Corporation's Annual
Report on Form 10-K pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal year ended December
31, 1993 and any and all amendments thereto.
Signature Capacity
/s/NORMAN R. AUGUSTINE Chairman and Chief Executive
Norman R. Augustine Officer
February 24, 1994 Martin Marietta Corporation
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, Marcus C. Bennett, a Director and the Chief Financial
Officer and Chief Accounting Officer of Martin Marietta
Corporation (the "Corporation"), hereby constitute and appoint
Frank H. Menaker, Jr. and Stephen M. Piper, and each of them,
with power of substitution, my true and lawful attorneys-in-fact,
with full power to do any and all acts and things for me and on
my behalf as a Director and as the Chief Financial Officer and
Chief Accounting Officer of the Corporation in connection with
the preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director and as the Chief Financial
Officer and Chief Accounting Officer, the Corporation's Annual
Report on Form 10-K pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal year ended
December 31, 1993 and any and all amendments thereto.
Signature Capacity
/s/MARCUS C. BENNETT Chief Financial Officer,
Marcus C. Bennett Chief Accounting Officer and
February 24, 1994 Director
Martin Marietta Corporation
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, Lamar Alexander, a Director of Martin Marietta
Corporation (the "Corporation"), hereby constitute and appoint
Frank H. Menaker, Jr. and Stephen M. Piper, and each of them,
with power of substitution, my true and lawful attorneys-in-fact,
with full power to do any and all acts and things for me and on
my behalf as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/LAMAR ALEXANDER Director
Lamar Alexander Martin Marietta Corporation
February 24, 1994
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, John J. Byrne, a Director of Martin Marietta Corporation
(the "Corporation"), hereby constitute and appoint Frank H.
Menaker, Jr. and Stephen M. Piper, and each of them, with power
of substitution, my true and lawful attorneys-in-fact, with full
power to do any and all acts and things for me and on my behalf
as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/JOHN J. BYRNE Director
John J. Byrne Martin Marietta Corporation
February 24, 1994
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, A. James Clark, a Director of Martin Marietta Corporation
(the "Corporation"), hereby constitute and appoint Frank H.
Menaker, Jr. and Stephen M. Piper, and each of them, with power
of substitution, my true and lawful attorneys-in-fact, with full
power to do any and all acts and things for me and on my behalf
as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/A. JAMES CLARK Director
A. James Clark Martin Marietta Corporation
February 24, 1994
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, Edwin I. Colodny, a Director of Martin Marietta
Corporation (the "Corporation"), hereby constitute and appoint
Frank H. Menaker, Jr. and Stephen M. Piper, and each of them,
with power of substitution, my true and lawful attorneys-in-fact,
with full power to do any and all acts and things for me and on
my behalf as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/EDWIN I. COLODNY Director
Edwin I. Colodny Martin Marietta Corporation
February 24, 1994
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, James L. Everett, III, a Director of Martin Marietta
Corporation (the "Corporation"), hereby constitute and appoint
Frank H. Menaker, Jr. and Stephen M. Piper, and each of them,
with power of substitution, my true and lawful attorneys-in-fact,
with full power to do any and all acts and things for me and on
my behalf as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/JAMES L. EVERETT, III Director
James L. Everett, III Martin Marietta Corporation
February 24, 1994
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, Edward L. Hennessy, Jr., a Director of Martin Marietta
Corporation (the "Corporation"), hereby constitute and appoint
Frank H. Menaker, Jr. and Stephen M. Piper, and each of them,
with power of substitution, my true and lawful attorneys-in-fact,
with full power to do any and all acts and things for me and on
my behalf as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/EDWARD L. HENNESSY, JR. Director
Edward L. Hennessy, Jr. Martin Marietta Corporation
February 24, 1994
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, Caleb B. Hurtt, a Director of Martin Marietta Corporation
(the "Corporation"), hereby constitute and appoint Frank H.
Menaker, Jr. and Stephen M. Piper, and each of them, with power
of substitution, my true and lawful attorneys-in-fact, with full
power to do any and all acts and things for me and on my behalf
as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/CALEB B. HURTT Director
Caleb B. Hurtt Martin Marietta Corporation
February 24, 1994
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, Gwendolyn S. King, a Director of Martin Marietta
Corporation (the "Corporation"), hereby constitute and appoint
Frank H. Menaker, Jr. and Stephen M. Piper, and each of them,
with power of substitution, my true and lawful attorneys-in-fact,
with full power to do any and all acts and things for me and on
my behalf as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/GWENDOLYN S. KING Director
Gwendolyn S. King Martin Marietta Corporation
February 24, 1994
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, Melvin R. Laird, a Director of Martin Marietta
Corporation (the "Corporation"), hereby constitute and appoint
Frank H. Menaker, Jr. and Stephen M. Piper, and each of them,
with power of substitution, my true and lawful attorneys-in-fact,
with full power to do any and all acts and things for me and on
my behalf as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/MELVIN R. LAIRD Director
Melvin R. Laird Martin Marietta Corporation
February 24, 1994
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, Gordon S. Macklin, a Director of Martin Marietta
Corporation (the "Corporation"), hereby constitute and appoint
Frank H. Menaker, Jr. and Stephen M. Piper, and each of them,
with power of substitution, my true and lawful attorneys-in-fact,
with full power to do any and all acts and things for me and on
my behalf as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/GORDON S. MACKLIN Director
Gordon S. Macklin Martin Marietta Corporation
February 24, 1994
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, Allen E. Murray, a Director of Martin Marietta
Corporation (the "Corporation"), hereby constitute and appoint
Frank H. Menaker, Jr. and Stephen M. Piper, and each of them,
with power of substitution, my true and lawful attorneys-in-fact,
with full power to do any and all acts and things for me and on
my behalf as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/ALLEN E. MURRAY Director
Allen E. Murray Martin Marietta Corporation
February 24, 1994
<PAGE>
<PAGE>
POWER OF ATTORNEY
I, John W. Vessey, Jr., a Director of Martin Marietta
Corporation (the "Corporation"), hereby constitute and appoint
Frank H. Menaker, Jr. and Stephen M. Piper, and each of them,
with power of substitution, my true and lawful attorneys-in-fact,
with full power to do any and all acts and things for me and on
my behalf as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/JOHN W. VESSEY, JR. Director
John W. Vessey, Jr. Martin Marietta Corporation
February 24, 1994
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POWER OF ATTORNEY
I, A. Thomas Young, a Director of Martin Marietta
Corporation (the "Corporation"), hereby constitute and appoint
Frank H. Menaker, Jr. and Stephen M. Piper, and each of them,
with power of substitution, my true and lawful attorneys-in-fact,
with full power to do any and all acts and things for me and on
my behalf as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/A. THOMAS YOUNG Director
A. Thomas Young Martin Marietta Corporation
February 24, 1994
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POWER OF ATTORNEY
I, Edward E. Hood, Jr., a Director of Martin Marietta
Corporation (the "Corporation"), hereby constitute and appoint
Frank H. Menaker, Jr. and Stephen M. Piper, and each of them,
with power of substitution, my true and lawful attorneys-in-fact,
with full power to do any and all acts and things for me and on
my behalf as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/EDWARD E. HOOD, JR. Director
Edward E. Hood, Jr. Martin Marietta Corporation
February 24, 1994
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POWER OF ATTORNEY
I, Eugene F. Murphy, a Director of Martin Marietta
Corporation (the "Corporation"), hereby constitute and appoint
Frank H. Menaker, Jr. and Stephen M. Piper, and each of them,
with power of substitution, my true and lawful attorneys-in-fact,
with full power to do any and all acts and things for me and on
my behalf as a Director of the Corporation in connection with the
preparation and filing with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and to sign
for me, in my name as a Director, the Corporation's Annual Report
on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1993
and any and all amendments thereto.
Signature Capacity
/s/EUGENE F. MURPHY Director
Eugene F. Murphy Martin Marietta Corporation
February 24, 1994
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[LOGO OF MARTIN MARIETTA APPEARS HERE]
<PAGE>
<PAGE>
MARTIN MARIETTA CORPORATION 1993 ANNUAL REPORT
[ART APPEARS HERE]
<PAGE>
<PAGE>
Principal Elements
================================================================================
Martin Marietta Electronics Group
Bethesda, MD
Thomas A. Corcoran, President
Martin Marietta Aero & Naval Systems
Balitmore, MD
Dr. William F. Ballhaus, President
Martin Marietta Armament Systems
Burlington, VT
Kenneth J. Leenstra, General Manager
Martin Marietta
Communications Systems
Camden, NJ
Gregory B. Roberts, Vice President
Martin Marietta Control Systems
Binghamton, NY
James D. Scanlon, General Manager
Martin Marietta Defense Systems
Pittsfield, MA
Stephen Pavlosky, President
Martin Marietta Electronics & Missiles
Orlando, FL
Joseph D. Antinucci, President
Martin Marietta
Government Electronic Systems
Moorestown, NJ
Joseph T. Threston, Vice President
Martin Marietta
Ocean, Radar & Sensor Systems
Syracuse, NY
Dr. Alexander L. Horvath, President
================================================================================
Martin Marietta Information Group
Bethesda, MD
Peter A. Bracken, President
Martin Marietta Automation Systems
Daytona Beach, FL
John Hallal, General Manager
Martin Marietta Information Systems
Bethesda, Md
Gary P. Mann,
Vice President & General Manager
Martin Marietta
Internal Information Systems
Valley Forge, PA
Joseph R. Cleveland, General Manager
Martin Marietta
Management & Data Systems
Valley Forge, PA
Kenneth R. Swimm, President
================================================================================
Martin Marietta Space Group
Bethesda, MD
Peter B. Teets, President
Martin Marietta Astronautics
Denver, CO
James W. McAnally, President
Martin Marietta Astro Space
East Windsor, NJ
Michael A. Smith, President
Martin Marietta
Manned Space Systems
New Orleans, LA
Thomas C. Wirth, President
================================================================================
Martin Marietta Energy Group
Oak Ridge, TN
Clyde C. Hopkins, President
Martin Marietta Energy Systems
Oak Ridge, TN
Gordon G. Fee, President
Martin Marietta
Specialty Components, Inc.
Largo, FL
Dr. Charles A. Hall, President
Martin Marietta
Utility Services, Inc.
Oak Ridge, TN
Wendell E. Fields, Vice President
================================================================================
Martin Marietta Materials, Inc.
Raleigh, NC
Stephen P. Zelnak, Jr., President
Martin Marietta Aggregates
Raleigh, NC
Stephen P. Zelnak, Jr., President
Martin Marietta
Magnesia Specialties, Inc.
Raleigh, NC
Philip J. Sipling, President
================================================================================
Sandia Corporation
Albuquerque, NM
Dr. Albert Narath, President
================================================================================
Martin Marietta Services Group
Cherry Hill, NJ
Michael F. Camardo, President
KAPL, Inc.
Schenectady, NY
John J. Freeh, President
Martin Marietta Assembly Services
Americus, GA
Donald E. Richardson, Plant Manager
Martin Marietta
EPA National Computer Center
Research Triangle Park, NC
Thomas B. Shafer, Vice President
Martin Marietta Field Services
Littleton, CO
Fred Lyssy, Director
Martin Marietta
Fleet Combat System Service
Arlington, Va
Stanley J. Pryzby, Director
Martin Marietta Range Services
Colorado Springs, CO
Robert B. Alleger, Vice President
Martin Marietta Software Services
Baltimore, MD
Linda R. Renfro, Vice President
Martin Marietta
Space & Aeronautic Services
Landover, MD
David J. Posek, Vice President
Martin Marietta
Technical Support Services
Cherry Hill, NJ
Kenneth S. Morton, Vice President
================================================================================
Martin Marietta Technology
San Diego, CA
Robert J. Whalen, Vice President
Advanced Development Operations
San Diego, CA
Allan H. Wegner, Vice President
Martin Marietta Laboratories
Baltimore, MD
Ronald H. Schack, Vice President
<PAGE>
<PAGE>
Martin Marietta Corporation designs, manufactures,
integrates and operates systems and products in
leading edge technologies, including aerospace,
electronics, information management and energy,
and produces materials for construction and
industrial applicatiions.
Cover, clockwise from left:
F-16 equipped with LANTIRN low-
altitude navigation and targeting
system; Inmarsat 3 satelite, artist's
concept; Venus as seen by Magellan
spacecraft; AEGIS-cruiser USS
Antietam launching missile from
Vertical Launching System; aggregate
detail; spatial light modulator
research; fingerprint identification
detail; atomic energy symbol; (center)
ground antenna for Tracking and
Data Relay Satellite System.
<PAGE>
<PAGE>
MARTIN MARIETTA CORPORATION 1993 ANNUAL REPORT
CONTENTS
Financial Highlights 2
Letter to Shareowners 3
Operations Review 6
Space Group
Electronics Group
Energy Group
Information Group
Materials Group
Services Group
Sandia National Laboratories
Technology Operations
Financial Report 39
Directors and Officers 64
Stockholder Information 66
Principal Elements 67
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<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
<S> <C> <C>
dollars in millions, except per share 1993 1992
----------------------------------------------------------------------
Sales $9,435.7 $5,945.3
Earnings before cumulative effect
of accounting changes $450.3 $345.4
Net Earnings $20.9 $345.4
Earnings Per Share before accounting
changes, assuming full dilution $3.80 $3.60
Return (before accounting
changes) on average equity 19% 18%
Cash dividends per common share $.87 $.795*
Debt-to-capitalization ratio 39% 20%
Common shares outstanding
at year-end 95,697,411 94,458,146*
Number of stockholders 32,766 33,772
*Adjusted to reflect the 2-for-1 stock split in September 1993
----------------------------------------------------------------------
</TABLE>
[GRAPH APPEARS HERE]
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The year 1993 was momentous for Martin Marietta Corporation. As a result of
combining with GE Aerospace, the Corporation doubled in size, thereby
producing record sales which, along with a strong balance sheet, have
positioned Martin Marietta for continued success in a difficult defense
environment and for growth in commercial, civil government and international
markets.
Sales of $9.4 billion fueled earnings of $450 million, or fully diluted
earnings per share of $3.80, before the after-tax charge of $429 million for
the cumulative effect of changes in accounting for post-retirement and post-
employment benefits. The impact of these required accounting changes resulted
in net earnings of $21 million. Debt-to-capitalization, which increased to 44%
as a consequence of our consolidation with GE Aerospace, has been reduced to
39%, even after allowing for the accounting changes.
Backlog of firm orders reached an all-time high of $16.7 billion, not
including $3.7 billion in yet-unexercised contract options and approximately
$12 billion in equivalent sales under Department of Energy contracts. The
Corporation's financial health, including cash flow, remains sound and bodes
well for possible future acquisitions, investment in existing businesses, debt
reduction and other opportunities for increasing stockholder value.
1993 also marked the third year of the Corporation's "Peace Dividend"
strategy, designed to meet the challenges of today's aerospace and defense
markets and position Martin Marietta for the next century. This long-term
approach to Martin Marietta's diversified, high-technology businesses calls
for:
. growing our share of the defense market through cost competitiveness,
technology advances and by exploitation of opportunities for acquisition and
consolidation;
. continued expansion into closely related civil government and commercial
markets, especially in the areas of information systems and technical
services; and
. enhancing share value by maintaining a strong balance sheet and pursuing
avenues that promise good return and further reward for the Corporation's
stockholders.
The combination with GE Aerospace in April 1993 made Martin Marietta the
world's largest aerospace/electronics company and was a watershed event in the
history of the Corporation. That transaction was followed eight months later
by an agreement, now pending government approval, to purchase General
Dynamics' Space Systems Division, producer of the Atlas space launch vehicle
and the high-energy Centaur upper stage booster.
This acquisition, expected to be completed in the first half of 1994, will
position Martin Marietta to produce space launch vehicles in the intermediate-
size payload range, complementing the Corporation's long-established position in
the large payload market with the Titan family of heavy-lift vehicles.
Combining certain aspects of the Titan and Atlas programs also presents
opportunities for cost savings that are expected to benefit the national space
and defense programs.
We will continue to seek acquisition opportunities that further position
Martin Marietta for the future in its core markets. As in the past, however,
our interest will focus on acquisitions that promise a strategic fit with
Martin Marietta, enhance growth, are appropriately priced and assure long-term
value to the Corporation's stockholders.
In a notable expansion of the Corporation's commercial aerospace business,
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GE Aircraft Engines signed an agreement late in the year naming Martin
Marietta the sole-source supplier of thrust reversers for GE's CF6 family of
jet engines. This agreement will more than double the Corporation's annual
thrust reverser sales, making Martin Marietta one of the world's leading
suppliers in this billion-dollar annual market.
These strategic moves, as well as strong sales and backlog of orders, have
underpinned the 33% total return enjoyed by holders of Martin Marietta common
stock during the year. Since the day prior to our announcement of the GE
Aerospace transaction in late November 1992 to year-end 1993, total return to
stockholders exceeded 54%. During the year, the Corporation's annual common
stock dividend paid was increased for the 21st time since 1961.
In another move to enhance the value of the Corporation's stock, Martin
Marietta Materials Group was incorporated as a wholly owned subsidiary of the
Corporation and a registration statement was filed with the Securities and
Exchange Commission for an offering of its common stock. Martin Marietta
Materials is one of the nation's largest producers of crushed stone, sand and
gravel for construction markets as well as a major supplier of magnesia-based
products, and this offering should allow the subsidiary to achieve a market
value comparable to its standing in its industry. Martin Marietta Corporation
will retain slightly more than 80% of the new company's outstanding stock.
The major management challenge of 1993 was Martin Marietta's organizational
consolidation with GE Aerospace, which has proven to be remarkably successful,
primarily due to the exemplary teamwork of all our employees. Within a month
after the transaction closed, operating units from the two organizations were
consolidated into fully integrated, market-related groups. Management talent
from both organizations was chosen for key positions in the new organization.
The ongoing consolidation activities are guided by two simple formulas
describing what we believe to be the essential arithmetic for merging two
organizations: with regard to cost, 1+1= 1-1/2; with regard to market synergy,
1+1=3.
Facilities consolidations, announced in September 1993 and proceeding on
schedule toward implementation, will reduce capacity by approximately five
million square feet. The restructuring, together with other consolidation
activities, is expected to save the Corporation more than $1.5 billion in net
operating costs over the next five years alone.
With the GE Aerospace combination, we have created a new corporation with
extraordinary technological breadth, capable of winning business neither
organization might have considered alone. For example, the Services Group's
competitive cost structure was combined with Aero & Naval Systems' technical
experience to win the contract to continue maintenance of sonar arrays for the
Navy. The elements of our corporation already are sharing personnel, technical
information, capabilities and equipment for existing programs and developing
markets for new business. Expanded buying power is being exploited with pooled
purchasing agreements, and products are being adapted for new markets.
Fully one-third of the new company's sales is in civil government and
commercial sectors. Of this, work for international customers now accounts for
approximately 13% of sales. The addition of GE Aerospace also resulted in
Information Systems and Services Groups reaching the critical mass necessary
to compete effectively in growing global markets.
Aerospace and defense remain significant markets for Martin Marietta. We are
determined to expand our share of this business, as witnessed by our 1993
business contract activity. Although 1994 is expected to be another
challenging year for these markets, with defense
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share of this business, as witnessed by our 1993 business contract activity.
Although 1994 is expected to be another challenging year for these markets,
with defense programs still being cut and the civil space program basically
flat, we believe, as we have for nearly a decade, that the Department of
Defense budget will reach its low point by about 1997.
The Energy Group for some years has managed Department of Energy facilities in
Tennessee, Florida, Kentucky and Ohio. With the end of the Cold War, these
operations have assumed new responsibilities for transfering technology into
the private sector and for aggressively marketing nuclear fuel for utilities
throughout the world. Martin Marietta continues to seek opportunities for
growth in this core business, and in 1993 the Corporation was awarded a
contract to manage the Department of Energy's Sandia National Laboratories,
headquartered in Albuquerque, New Mexico. Also, as part of the combination
with GE Aerospace, Martin Marietta assumed responsibility for managing Knolls
Atomic Power Laboratory near Schenectady, New York, for the Navy and the
Department of Energy.
Martin Marietta's performance in development, production and support of
major defense, space and civil government programs as well as commercial
projects is reported in the Operations Review that follows. However, the year
was not without its disappointments. The Corporation's long and proud history
of Mission Success was interrupted by the failure of several important space
missions.
In response, the Corporation convened an independent review team comprising
Martin Marietta senior engineers and outside experts to focus on Mission
Success processes and controls. The team delivered its report in December, and
its recommendations are being implemented. Since mid-October, the company has
recorded seven consecutive successful space missions: the first Titan
IV/Centaur launch, which placed the Milstar communications satellite into
orbit; the fifth Titan II launch, which successfully deployed the Deep Space
Program Science Experiment spacecraft; a Defense Satellite Communications
Systems spacecraft; the Telstar 401 spacecraft; and three space shuttle
launches, which are fueled by the Martin Marietta-built external tank.
Martin Marietta Corporation continues its dedication to Mission Success and
to ethical conduct in all its businesses. We are enormously grateful to the
more than 92,000 Martin Marietta employees who practice these core values in
their day-to-day activities. These have been extraordinarily difficult times
for them. They have endured enormous change in their working lives and great
uncertainty in the marketplace, yet they have stayed the course with
dedication and determination.
We are also grateful for the wise counsel of Martin Marietta's Board of
Directors, an exceptional group of individuals whose guidance and leadership
have been essential in the successful execution of our corporate strategy.
Respectfully,
/s/ Norman R. Augustine
Norman R. Augustine
Chairman and Chief Executive Officer
/s/ A. Thomas Young
A. Thomas Young
President and Chief Operating Officer
February 8, 1994
5
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(Picture Appears Here)
6
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Martin Marietta Space Group is an industry leader in domestic and
international space programs, producing the Titan family of space launch
vehicles, the external tank for the Space Shuttle and satellites and
spacecraft systems for military, civil government and commercial customers.
The Group provides spacecraft payload integration services and ground-based
support for space systems. Headquartered in Bethesda, Maryland, operating
units and launch facilities are located in Colorado, Louisiana, New Jersey,
Florida, California and Pennsylvania.
With the combination of the Martin Marietta and GE Aerospace businesses, the
Corporation is capable of providing a full range of launch vehicle and
satellite manufacturing and operations for commercial and government
customers. Consolidations and cost-reduction initiatives within the Group,
together with key productivity investments and continued development of next-
generation satellite platforms, ideally position the Group within an extremely
competitive marketplace.
(Picture of Peter B. Tests
President Space Group
Appears Here)
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Astronautics
Titan IV, the largest expendable launch vehicle in the U.S. inventory,
achieved a number of major developmental milestones in 1993: The solid rocket
motor upgrade, which will provide increased reliability and 25% more lift
capability, completed final ground test firings. The new high-energy Centaur
upper stage also completed testing, providing Titan IV/Centaur the capability
to place twice as much payload in geosyncronous orbit than any other launch
vehicle. The first Titan IV/Centaur was launched successfully from Cape
Canaveral Air Force Station, Florida, in early February 1994, placing the
Milstar communications satellite into orbit.
The launch was the first Titan IV mission since a Titan IV failure in August
1993 due to a solid rocket motor burn-through. Also in 1993, Astronautics
finished production of its 27th Titan IV core vehicle as part of a 41-unit
contract.
Titan II's fifth space mission since 1986 -- the first U.S. flight to the
moon in more than two decades -- was launched in early 1994. Its payload, the
Deep Space Program Science Experiment spacecraft, also called "Clementine," is
a joint program of the Ballistic Missile Defense Organization and the National
Aeronautics and Space Administration (NASA). It also will perform a research
flyby of the asteroid Geographos.
In support of the U.S. Air Force, three Peacekeeper ICBMs were test-launched
from Vandenberg Air Force Base, California. Four more launches are planned for
1994. Work continued on the Multi-Service Launch System being developed by
Martin Marietta to provide the United States a flexible, smaller launch system
that can be used for a variety of purposes.
In September, Martin Marietta Astronautics' Transfer Orbit Stage (TOS)
boosted NASA's Advanced Communications Technology Satellite, produced by
Martin Marietta Astro Space,
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into orbit from Space Shuttle Discovery following its launch from Kennedy
Space Center, Florida. This was the second mission for the TOS and the first
time it has flown on a space shuttle.
Early in the year, NASA's Jet Propulsion Laboratory awarded Martin Marietta
a contract to build the propulsion module subsystem for the Cassini spacecraft
mission that will study Saturn, its moon Titan and the rest of the Saturnian
system. Scheduled for launch in October 1997 on a Martin Marietta Titan
IV/Centaur rocket, Cassini will execute two gravity-assisted flybys of Venus,
then one each of Earth and Jupiter before rendezvousing with Saturn in June
2004. The project is under joint development by NASA, the European Space
Agency and the Italian Space Agency.
In October, the Army awarded Martin Marietta Astronautics a contract to
develop Block II of the All Source Analysis System. Under the six-year
contract, Martin Marietta will act as the integrating contractor for this
Department of Defense command and control system that is expected to
significantly improve a battlefield commander's intelligence data and asset
deployment capabilities.
Under a contract from the Advanced Research Projects Agency, Martin Marietta
continued development of a robotic semiautonomous surrogate vehicle that will
navigate over difficult terrain while acquiring and recognizing potential
targets.
Work continued on upgrading the Air Force command complex inside Cheyenne
Mountain in Colorado. Under the Granite Sentry program, Martin Marietta is
applying state-of-the-art software and associated systems to improve efficiency
and reduce operating costs at the joint North American Aerospace Defense Command
and United States Space Command facility.
When complete, the upgraded facility will provide real-time integration and
display of missile, space and air defense data, supporting the assessment of air
and missile threats to the United States.
In the area of defense conversion, Martin Marietta is working with Rose Health
Care Systems of Denver, Colorado, to investigate the use of photonics for pre-
screening mammograms. The technology may enable the identification of tumors
invisible to the human eye.
Martin Marietta also is under contract to the federal Department of
Transportation to apply aerospace technologies such as those developed for
semiautonomous vehicles to the Intelligent Vehicle Highway System program.
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Astro Space
In December, Telstar 401, the first of three advanced communications
satellites for AT&T, was launched. Telstar 401 will be used extensively to
carry educational programming at reduced costs, with users including the
Satellite Educational Resources Consortium, the Public Broadcasting Service's
Ready to Learn and Adult Learning Service and the National Technological
University. Telstar 401 is the first Series 7000 spacecraft, the newest and
largest of Martin Marietta's family of communications satellites. Telstar 402
is planned for launch in 1994, and launch of Telstar 403 is under
consideration.
Series 7000 spacecraft include such advanced technical features as arcjet
thrusters that consume less fuel for station-keeping, thereby extending
spacecraft life, and variable-output solid-state power amplifiers offering
increased mission flexibility.
INTELSAT, the International Satellite Consortium, ordered three more INTELSAT
VIII satellites in 1993, bringing total orders for Series 7000 satellites to 10.
Two Defense Satellite Communications Systems III spacecraft were launched and
deployed successfully in July and late November, continuing a record of
communications support to the U.S. Armed Forces uninterrupted since 1982.
Martin Marietta's color video camera for the Space Shuttle made its first
flight during the Hubble repair mission. The Corporation has a contract to
deliver 40 cameras and 12 monitors for use on the Shuttle orbiters.
Launches scheduled for 1994 include two Global Geospace Science satellites
for NASA, the BS-3N television direct broadcast satellite for Japan and
NOAA-J, the latest in a series of more than 50 civil and military weather
satellites that began in 1960 and is expected to continue into the next
century. The first of four Inmarsat-3 spacecraft for the International
Maritime Satellite Consortium is scheduled for launch in 1995.
Astro Space's long involvement in building environmental satellites continues
with the Mission to Planet Earth EOS-AM, the first in NASA's Earth observing
system, due to be launched in 1998.
Martin Marietta is continuing to develop the A2100 spacecraft, which will
serve as a basic platform for the next generation of communications
satellites. The A2100 will offer increased capacity at lower weight, fewer
parts and reduced time between order and delivery, which means lower cost
without sacrificing
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orbit life. GE1, the first A2100, is due to be launched in 1996 for GE Americom.
Astro Space also continues to develop the remote sensing system Landsat 7 for
Earth observation.
The failures of the Mars Observer, NOAA-13 and Landsat 6 spacecraft in 1993
were the subject of analysis by a special Mission Success review team
organized by the Corporation. The team's recommendations to strengthen the
Mission Success program are being implemented.
Manned Space Systems
Martin Marietta Manned Space Systems celebrated its 20th year as prime
contractor on the Space Shuttle External Tank project at NASA's Michoud Assembly
Facility in Louisana. Over these years, the Corporation has produced 68 external
tanks, including four delivered ahead of schedule in 1993. Current production
plans call for an additional 51 tanks through the year 2000.
The 154-foot external tank is the largest element of the shuttle and has a
dual role during the first eight and one-half minutes of each launch. It feeds
cryogenic liquid propellants to the three main engines and serves as the
structural backbone of the vehicle, absorbing four million pounds of thrust.
After main engine cut-off, the tank separates from the shuttle and falls back
into the Earth's atmosphere, disintegrating harmlessly over the ocean.
Among major innovations under study by Manned Space Systems for NASA are a
new super-lightweight external tank and, through a Technology Reinvestment
Project, the development of hybrid propulsion technology that will use both
cast solid fuel and cryogenic liquid oxidizer in a single motor.
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(Picture Appears Here)
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Martin Marietta Electronics Group designs, develops and produces high-
performance defense and electronic systems for undersea, shipboard, land-based
and airborne applications. Major product lines include advanced-technology
missiles; night navigation and targeting systems for aircraft; submarine and
surface ship combat systems; airborne, ship- and land-based radar; control
systems and thrust reversers for aircraft; ordnance and armament systems; and
secure communication systems.
Largest and most diverse of Martin Marietta's groups, Electronics offers
opportunities for significant synergies within our traditional defense
marketplace, expansion in foreign markets and potential growth in adjacent
commercial markets.
In 1993, Electronics Group took a number of significant steps to enhance
operating efficiency, reduce costs and eliminate capacity in excess of future
needs, including a decision to close two regional manufacturing facilities and
combine similar product operations from several sites. These actions will
eliminate nearly three million square feet of facility space.
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Electronics & Missiles
The Hellfire II program transitioned from development to production in May with
an Army award to build 3,905 units. Hellfire II, a laser-guided missile,
features an improved dual warhead and greater resistance to countermeasures and
will be carried by the Army Apache and the Marine Corps Super Cobra helicopters.
International interest in Hellfire II for air, surface and naval launch
platforms also is growing.
Javelin, a joint venture with Texas Instruments, Inc., is a man-portable,
shoulder-launched, "fire-and-forget" weapon capable of defeating all current and
projected armor capabilities; it was awarded funding for an initial production
phase of up to 700 units. Work continued on Longbow, an integrated fire control
radar and "fire-and-forget" missile for the Apache and Comanche helicopters.
Longbow development is a joint venture with Westinghouse Electric Corporation.
Martin Marietta delivered its 5,000th Patriot missile in 1993. As principal
subcontractor to Raytheon Company, Martin Marietta is responsible for missile
bodies, electronic subassemblies and launchers. The Corporation will deliver
Patriot missiles and launchers to Saudi Arabia, Kuwait and the U.S. Army under
an agreement extending production into 1996.
Martin Marietta delivered 60 TADS/PNVS systems in 1993, for a total of 860
units since the program began. TADS/PNVS is a night navigation and targeting
system that enables Apache helicopter pilots to fly at very low altitudes in
total darkness and poor weather and locate and attack ground targets at
standoff distances. Electronics & Missiles has a firm backlog of 67 TADS/PNVS
systems, with additional follow-on orders pending for the Army and a number of
international customers.
A total of 261 LANTIRN low-altitude navigation and targeting systems for U.S.
Air Force F-15 and F-16 fighter planes was delivered. Orders for 139 systems
were received from Greece, Saudi Arabia and Bahrain.
In work for the Air Force and Advanced Research Projects Agency, Martin
Marietta is developing a combat system to automatically locate, identify and
provide attack information on surface-to-surface missiles while they are still
on the ground.
Martin Marietta Ordnance Systems manages the Milan, Tennessee, Army Ammunition
Plant, the service's largest facility of its kind. In 1993, the plant produced
12.4 million ordnance items for U.S. military services and government-approved
international customers.
(Picture of The Army's Apache
Helicopter Appears Here)
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Control Systems
Martin Marietta Control Systems is the leading supplier of fly-by-wire flight
controls and engine controls. It also produces integrated controls that combine
flight, engine and weapons functions in a single system.
Among new awards were two from Saab-Scania AB of Sweden. Martin Marietta is
providing an upgraded flight control computer for Saab's JAS 39 Gripen fighter.
The computer receives and processes data from the pilot and various sensors and
directs movement of the plane's control surfaces. It also provides autopilot,
autothrottle and airbrake functions. For the new Saab 2000 airliner, Martin
Marietta will provide rudder control and powered elevator control units. Over
the next 15 years, it is estimated that 400 Saab 2000s will be built.
In another international contract, Martin Marietta was selected by the
government of India's Aeronautical Development Establishment to supply the
Integrated Flight Control System for that nation's Light Combat Aircraft. The
system is expected to include a flight control computer, air data sensor, rate
and acceleration sensors and actuators.
For Air Force C-17 Globe-master aircraft, Martin Marietta supplies the
Electronic Flight Control System, consisting of 11 separate computing units.
And for the F/A-18 aircraft, during 1993 Martin Marietta delivered 57 sets of
flight control electronics and won the contract for engineering and
development of the flight control computer for the F/A-18E/F. Development
continued on flight control electronics for the V-22 tiltrotor aircraft.
Martin Marietta electronic systems also control GE commercial jet engines. The
GE 90, which will power the Boeing 777 jetliner, and the GE F414, destined for
the Navy's F/A-18E/F, are operated by the Full Authority Digital Electronic
Control, or FADEC, designed and produced by Martin Marietta. FADEC also is in
successful service on the Airbus A320, Boeing 747 and 767 and McDonnell Douglas
MD-11.
More than 10 million hours of service with a strong safety record have been
achieved by FADEC. Second-generation FADEC IIs are in place on the GE CFM56-5C
engines that power the Airbus A340 and the GE CF6-80E1, installed on the Airbus
A330, both of which entered service in 1993.
Moving into related markets, the Corporation received two new contracts from
GE Transportation Systems, one to provide the Logic Power Supply for GE's
electric locomotives and one for an auxiliary blower system for GE's off-high-
way vehicles.
Commercial opportunities also are being developed in the automotive sector,
where Martin Marietta is supplying power-steering systems for electric vehicles
being produced by Chrysler Corporation. Other products in development are
traction motor controls and auxiliary power converters.
In response to the need to reduce the use of ozone-depleting chemicals in the
electronics industry, Martin Marietta has developed a new, benchtop-size, low-
cost cleaning system -- JetClean(R)-- for circuit boards and other small
electronic components. Using low-cost alcohol instead of more costly ozone-
depleting chemicals, JetClean has been purchased by 46 electronics
manufacturers.
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Aero & Naval Systems
The first of four Vertical Launching Systems (VLS) capable of firing the
Seasparrow anti-air missile was delivered to the Federal Republic of Germany
and installed aboard the frigate Brandenburg. Vertical Launching Systems are
primary missile batteries for surface ships. The first of 10 additional
Seasparrow-capable launchers has been completed and awaits shipment to the
Australia-New Zealand (ANZAC) defense alliance. Launch systems also were
delivered to Japan for its second Kongo-class AEGIS destroyer, Kirishima. The
first two VLS-equipped Canadian Tribal-class destroyers, Algonquin and
Iroquois, successfully launched surface-to-air missiles during sea trials this
year. Contracts to supply the VLS for an additional five Arleigh Burke- and
Spruance-class destroyers and the first of Japan's new DD 2230-class
destroyers also were awarded.
Martin Marietta's technology in thrust reversers, the devices that help slow
jet aircraft upon landing, places the company at the fore-front of this $1-
billion-a-year global market.
Under terms of a contract modification, Martin Marietta will be the sole
source for thrust reversers for GE's CF6 jet engines, more than doubling sales
and extending production into the next century. The contract also expands
Martin Marietta's role in spares and product support.
The Corporation delivered four thrust reversers to Pratt & Whitney for its
PW4168 jet engine for Federal Aviation Administration flight certification
tests. This engine will power the new Airbus Industrie A330.
Continuing its leadership position in the development and production of sonar
arrays to detect ships and submarines, Martin Marietta received its first
production award for 10 TB-29 thin-line towed arrays and eight receivers and
associated support equipment, with options for additional equipment that would
extend the contract through 1995. The TB-29 is the primary towed sonar array for
the Navy's new Seawolf-class attack submarine and will be retrofitted on Los
Angeles-class attack submarines and Ohio-class ballistic missile submarines.
Martin Marietta delivered three Wide Aperture Array advanced tactical sonar
systems to the Navy. These listening devices are mounted on the hulls of Los
Angeles- and Seawolf-class attack submarines. Martin Marietta also successfully
tested the first two Light Weight Planar Arrays, incorporating composite
technologies that provide substantial weight savings for future attack
submarines.
Martin Marietta delivered seven tail cones and rudder fairings for Air Force
C-17 Globemaster transport aircraft and continued additional work on Navy
Trident II D-5 missiles.
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Communications Systems
Martin Marietta Communications Systems develops and produces communications
systems and support equipment for air, space, land, sea and undersea
applications and specializes in high-volume production of secure voice and data
communications equipment for government and commercial customers.
In 1993, Martin Marietta was awarded a follow-on contract for the Improved
Remotely Monitored Battlefield Sensor System, a lightweight version of the
proven REMBASS, which employs remotely monitored sensors placed along likely
approaches to detect and classify human or vehicular intruders, providing
tactical intelligence for special operations forces.
The Corporation has pioneered the development of advanced automated and
integrated communications systems for naval platforms. A follow-on contract was
awarded for the Integrated Radio Room, the automated external communications
suite for the Ohio-class ballistic missile submarine, providing reliable
communication with satellites, aircraft, shore facilities and other ships.
As a subcontractor to McDonnell Douglas, Martin Marietta is designing three
communications subsystems for the Space Station. These systems will control all
of the station's radio communications and external video.
The Corporation produces both product and systems solutions for data capture,
storage, transfer and uninterrupted communications and is currently developing
storage systems for the medical market.
Also, in early fall, the Stra-tegic/Tactical Optical Disk System, a high-
performance data storage and retrieval system being developed for the Air Force,
operated successfully during flight readiness tests.
Armament Systems
Martin Marietta Armament Systems' broad product base includes Gatling gun and
ammunition handling systems for air, land and sea. Turrets for helicopters,
including the Army Comanche, and other sea and air defense applications, round
out the production base of more than 30 domestic and international programs.
Martin Marietta also has begun development of the next generation high-rate-of-
fire gun.
After three years of development, the Corporation completed work on the
Blazer air defense turret for the Marine Corps' Light Armored Vehicle Air
Defense system. The Blazer turret fires both a 25mm Gatling gun and the
Stinger surface-to-air missile. Managed by an advanced fire control system
also developed by Armament Systems, the Blazer will protect rapid deployment
forces against a variety of close-in air and surface threats.
Martin Marietta is teamed with FMC to develop the Army's new Advanced Field
Artillery System and the Future Armored Resupply Vehicle. The Corporation leads
the industry in applying advanced technology to the automation of storage,
transport and uploading of ammunition for artillery systems.
The year also brought an important development in a potential adjacent market
when a consortium led by Armament Systems received a grant from the Technology
Reinvestment Project. The grant will fund further development of a mobile
electric generator, powered by the same rotary engine technology that Martin
Marietta is developing for use in unmanned aerial vehicles. Both products have
potential military and commercial applications.
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Ocean, Radar & Sensor Systems
Martin Marietta Ocean, Radar & Sensor Systems develops and manufactures
submarine and surface ship combat and torpedo defense systems as well as radar,
surveillance and avionic systems.
Full-scale development continued for the AN/BSY-2 Combat System for the
Seawolf-class attack submarine. BSY-2 is the Navy's first fully integrated
submarine combat system, featuring information processing, operator displays
and controls for weapons systems and seven major acoustic systems, including
the Wide Aperture Array. The team also won a contract to develop combat
systems concepts for the Navy's new attack submarine, the follow-on to the
Seawolf, positioning Martin Marietta as a leading contender for full system
development.
Martin Marietta is the sole-source supplier of the Navy's Surface Ship Torpedo
Defense program, developing a major combat system that will employ
cost-saving, off-the-shelf hardware. The group is leading an international
consortium competing for full-scale development of the joint U.S./United Kingdom
program.
Demonstrating its rapid response capability, Martin Marietta shipped a
ground-based radar system, the FPS-117, to Kuwait in September, within 90 days
of contract award. The FPS-117 is a solid-state, minimally attended, three-
dimensional radar that provides long-range surveillance for air defense and
air traffic control.
The Marine Corps expanded the scope of its AN/TPS-59 Upgrade Program,
beginning the modification of mobile ground-based radar to include tactical
ballistic missile defense. More than 100 Martin Marietta ground-based radar
systems are in production or operation for more than a dozen nations.
Martin Marietta won a Navy contract for initial development of the next
generation APS-series airborne early-warning radar while continuing airborne
early-warning radar projects for international customers including Egypt,
Israel, Japan, Singapore and Taiwan.
A joint technical team from Martin Marietta and the Republic of China's
(Taiwan) Aero Industry Development Center is cooperating on co-assembly of an
advanced airborne radar system, the multi-mode APG-67, for Taiwan's new
Indigenous Defensive Fighter. This compact, lightweight radar is a prime
candidate for upgrading the avionics on military aircraft worldwide;
derivative versions are being marketed in several other countries.
Martin Marietta is teamed with Sanders Associates, a Lockheed subsidiary, to
develop the electronic warfare system for the F-22 and successfully completed
preliminary design reviews in 1993.
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Government Electronic Systems
Martin Marietta is prime contractor to the Navy for AEGIS, the world's most
advanced surface ship combat system. AEGIS is capable of automatically and
simultaneously detecting, tracking and engaging hundreds of aircraft and
missiles.
In 1993, the final AEGIS cruiser combat system was installed aboard the Port
Royal, successfully completing the Ticonderoga-class cruiser program. At the
same time, the AEGIS destroyer program expanded, and Martin Marietta is now
under contract with the Navy to provide 29 combat systems for Arleigh Burke-
class destroyers through 1997.
The heart of the AEGIS system, the AN/SPY-1 phased- array radar, is produced
by Government Electronic Systems at Moorestown, New Jersey.
The AEGIS program won a fourth contract for a destroyer for the Japanese
Maritime Self-Defense Force. The first Japanese AEGIS destroyer, Kongo, was
commissioned in March. The Corporation is also upgrading ships already in
service, adding new features that include shipboard tactical ballistic missile
defense.
In September, Martin Marietta delivered the first-ever solid-state, active-
array antenna. This antenna is an element of the COBRA counter-battery radar
system, which is designed to locate hostile mortar, artillery and rocket
batteries rapidly and accurately under adverse battlefield conditions. COBRA
is being developed jointly by a multi-national, four-company consortium
comprising Martin Marietta; Siemens, Germany; Thorn-EMI,United Kingdom; and
Thomson-CSF, France.
Martin Marietta also won a contract from the Technology Reinvestment Project
to build and demonstrate an advanced phased-array radar for commercial
aviation. The technology will be applied to air traffic control and weather
surveillance operations.
Defense Systems
During 1993, the Army awarded Martin Marietta a contract to further develop
liquid propellant advanced technology for artillery. The Corporation
successfully tested the new artillery system, firing the liquid propellant gun
in a fully automated three-round burst. The event signaled a critical
achievement in the continuing development of a second-generation LP gun system.
In March 1993, the Army awarded Defense Systems a contract for Land Combat
Depot Support. In this initial entry into the land combat vehicle after-market
business, the Corporation will overhaul transmissions for the Army's Bradley
fighting vehicle.
The Corporation also won a Navy contract to produce 30 MK6 Inertial
Measurement Units for the Trident II missile and delivered the final Phalanx
Close-In Weapon System to the Navy eight months ahead of schedule.
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Martin Marietta Energy Group's command of technologies, information management
and materials places it at the leading edge of developments affecting the
production of energy, environmental clean-up, manufacturing technology and
laboratory research. Headquartered in Oak Ridge, Tennessee, the Group
comprises Martin Marietta Energy Systems, which manages three major Department
of Energy facilities in Oak Ridge; Martin Marietta Specialty Components,
manager of the Department of Energy's Pinellas Plant in Largo, Florida; and
Martin Marietta Utility Services, manager of the Department of Energy
enrichment plants in Kentucky and Ohio that are currently leased by the United
States Enrichment Corporation. Successful management of these diverse
facilities is leading to additional opportunities for increasing public-
private sector cooperation, technology transfer and product development.
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President Energy Group
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Energy Systems
Martin Marietta Energy Systems is managing contractor for Department of Energy
research and development, manufacturing technology and environmental
management operations in three states. A key national need is being addressed
at Oak Ridge, Tennessee, where conceptual design for the Advanced Neutron
Source (ANS) was completed in 1993. When the ANS enters operation early in the
21st century, thousands of researchers from universities, laboratories and
industries around the world will be able to use the facility to probe
materials to determine their atomic structure. This research could lead to
stronger metals, advanced plastics and breakthroughs in understanding
biological structures, including deoxyri-bonucleic acid (DNA), the basic
building block of living systems.
Energy Systems increased its emphasis on working with American industry by
providing access to nearly 50 years accumulated expertise in advanced materials
and ceramics, robotics, instrumentation and control technologies, environmental
protection and waste management and high-precision manufacturing.
An example of this program occurred in response to the Clinton
Administration's call for a "clean car." Oak Ridge experts in high-temperature,
lightweight materials and technologies involving alternative fuels are now
applying their knowledge to lowering the cost of the manufacturing process for
engines. The use of advanced ceramics for internal combustion engines should
improve the durability and efficiency of automobiles of the future.
The Oak Ridge Centers for Defense and Manufacturing Technology at Y-12 also
operate technology transfer programs to help small businesses solve technical
problems through use of the Centers' expertise in materials science, measurement
science and state-of-the-art manufacturing processes.
Energy Systems manages an extensive environmental restoration and waste
management program at five Department of Energy sites.
The new Oak Ridge Center for Environmental Technology is working with the
private sector, academia and government to accelerate the development,
demonstration
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and commercialization of environmental technologies -- the vital steps
necessary to reduce escalating costs incurred in cleanup of hazardous waste
sites, treatment and disposal of toxic waste and other forms of waste
management and environmental protection.
In 1993, the Oak Ridge technology transfer program helped establish 68
Cooperative Research and Development Agreements and granted 21 licenses to
industrial firms for use of technologies developed as part of the nation's
defense program.
Specialty Components
Since June 1992, Specialty Components has been the management and operating
contractor for the Department of Energy's Pinellas Plant in Largo, Florida,
which for 38 years has supplied electronic components for national defense
systems. With production at the plant scheduled to end in late 1994, Specialty
Components is taking steps to reposition the business and its employees for
commercial opportunities within the private sector.
The Pinellas facility also has entered into partnership with Energy Systems
at Oak Ridge, the state of Florida and the Department of Energy to create a
Cooperative Research and Development Agreement that opens the Pinellas Plant's
doors to Florida companies that wish to draw upon the facility's technology,
capabilities and expertise.
Utility Services
Martin Marietta Utility Services was organized to support the U. S. Enrichment
Corporation, a newly created government corporation that manages the enrichment
of uranium fuel for sale to nuclear power plants throughout the world. Martin
Marietta worked with the Department of Energy and the Enrichment Corporation to
assure a smooth transition of responsibilities and management from the
Department of Energy to the new company.
Uranium enrichment production continued at the Paducah, Kentucky, and
Portsmouth, Ohio, Gaseous Diffusion Plants, providing enrichment services to 61
electric utilities in 11 countries and generating $1.5 billion in revenues for
the U.S. Treasury.
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Martin Marietta Information Group designs, develops, integrates and operates
information systems and simulation and automated test systems for government and
commercial customers. The Group is headquartered in Bethesda, Maryland.
Information Group is a major participant in the global information technology
marketplace. Sales are increasing in Asia and the Middle East, and in domestic
markets, particularly to civil government where modernization of information
systems in such areas as law enforcement, health care and services is on the
rise. The Group also is expanding into related commercial markets, providing
products and consulting services.
In 1993, to reduce operating costs, the Group began collocating Automation
Systems and portions of Information Systems and Internal Information Systems in
Orlando. Internal Information Systems is consolidating processing centers and
upgrading voice communications across the Corporation, increasing productivity
and realizing significant savings.
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Management & Data Systems
Martin Marietta Management & Data Systems provides command and control systems
and information processing services to the Department of Defense, NASA, the
intelligence community, the Federal Aviation Administration and commercial
customers. By leveraging its strengths in systems engineering and integration,
program management and software development, the Corporation has successfully
pursued closely related markets requiring technically advanced, information
processing system solutions.
Martin Marietta is developing a worldwide distributed information management
system for the federal government for installation at 94 sites with over 800
users. The Corporation also was awarded a long-term contract to redesign a
satellite support system. Management & Data Systems, a leader in object-
oriented software design, has over 20 years experience with the system and is
developing a state-of-the-art distributed computer system to modernize the
entire network.
In 1993, Management & Data Systems, teamed with Services Group, won the
Federal Aviation Administration's (FAA) National Airspace System
implementation support contract to provide field support services to help
integrate new equipment into the existing air traffic control system. Under a
separate contract, Martin Marietta continues as the FAA's largest systems
integration contractor in its program to modernize the nation's airspace
management system. As part of this ongoing contract, the Corporation is
helping to integrate the efforts of more than 50 major contractors. Martin
Marietta continues to pursue work with other transportation systems such as
highway, rail, water and international airspace systems.
With significant contracts from the International Maritime Satellite
Organization, Motorola and the Public Broadcasting Service, Martin Marietta has
established itself as a commercial ground systems contractor for communications
satellites.
The Corporation also is building a turnkey satellite command and control
ground system in support of Orion Satellite Corporation's first communications
satellite, expected to be launched in 1994.
In a cooperative effort between Strategic Systems in Valley Forge,
Pennsylvania, and Astronautics in Denver, Martin Marietta won the Ballistic
Missile Defense Options Assessment contract that will demonstrate innovative
software development techniques for application to the Ballistic Missile
Defense system. The program aims to improve battle management command, control
and communications.
Also in the ground systems arena, and working with Martin Marietta Astro
Space, Management & Data Systems is designing, developing and integrating
software for flight operations and information processing for the Department
of Defense Landsat 7 program. The Corporation also pro-
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vides information technology products and services to commercial customers
worldwide, including training and software tools, design and development of
processing systems, systems integration services and re-engineering of
business processes and systems. Federal Express and GE Capital are among the
Corporation's customers.
Information Systems
Martin Marietta Information Systems provides information management products and
services for civil government, military and commercial customers. Its business
areas include development of computer-based simulation and training systems and
systems integration and modernization.
In 1993, Martin Marietta completed development of the new information system
for the federal Department of Housing and Urban Development, linking the HUD
computer center with its disaster-recovery facility, headquarters and all 81
regional and field offices, thereby facilitating the agency's customer
responsiveness. The Corporation is in the third year of this 12-year contract.
Information Systems added a number of new clients for its information
processing services, including ProSource Distribution Services, JP Foodservice
and INFONET.
Martin Marietta also began implementing the Accounting Database for the
Evaluation of Performance Trends for the Department of the Treasury. This
general ledger system permits the agency to generate financial statements
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similar to those in private industry.
Work continued for the Department of Justice and the Immigration and
Naturalization Service to expand the scope of the Systematic Alien Verification
of Entitlement program, which will give private industry on-line access for
verifying alien resident registration and entitlement status. Martin Marietta
will expand the pilot program in 1994.
The Department of Labor used the Corporation's professional services and data
processing support to expand its UI-Internet System, allowing each state access
to information on unemployment benefit claims. Martin Marietta also continues
its work for the Department of Agriculture, whose system collects and analyzes
agricultural information from the national headquarters and 45 state statistical
offices.
Martin Marietta is the prime contractor for the National Test Facility, a
complex supercomputing and simulation resource used to support strategic and
theater defense planning. Under direction of the Air Force, the Test Facility
was linked to the Martin Marietta-operated Theater Air Command and Control
Simulation Facility at Kirtland Air Force Base, New Mexico, providing support
for testing theater missile defense concepts. The Test Facility also was
connected to the Advanced Research Projects Agency's Distributed Simulation
Internet, bringing the simulation resource program nationwide.
Key to Martin Marietta's simulation success is its family of Compu-Scene(R)
technology products. Compu-Scene VI was purchased in 1993 by the Marine Corps
for use in helicopter pilot training. Other Martin Marietta image-generator
systems are being developed for Navy and Marine Corps fixed-wing, helicopter
and tilt-rotor aircraft training.
In 1993, Martin Marietta was awarded contracts to provide armor-training
systems in the Middle East and Europe, including crew gunnery trainers and
driver trainers for M-60, M-48 and Leopard tanks, and state-of-the-art M1A2
Platoon Gunnery Trainers and Tank Driver Trainers. Martin Marietta's Fort
Knox, Kentucky, Driver Training Facility features a unique network for
consolidating and tracking individual student performance. Platoon Gunnery
Trainers are fully networked individual crew stations that can be used for
tactical team training or as individual crew trainers.
Martin Marietta delivered 20 full-motion M1 tank training systems to the Army
and replicated the integrated commander/gunner display station for the M1A2 main
battle tank.
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Automation Systems
Martin Marietta Automation Systems provides computer-based automated test
control and automated logistics systems for civil government, military and
commercial clients.
In 1993, the Consolidated Automated Support System (CASS) successfully
completed operational evaluation by the Navy. Currently, Martin Marietta is
under contract to provide 200 CASS systems to the Navy.
The Corporation has developed a commercial variant of CASS for factory
application, the CASS Integrated Test Equipment, or CITE 2000. In 1993, six
CITE and one CASS systems were delivered to the Navy's principal contractor
for the Joint Stand Off Weapon.
Martin Marietta delivered the Equipment Management System to the Air Force.
This inventory management system is designed to track all Air Force equipment,
except weapons, consumables and fuel, in support of 3,000 logistics personnel
responsible for recording an inventory of approximately 250,000 items. The Air
Force system is the forerunner of a computer-based paperless inventory
management system for tri-service application.
Martin Marietta continues to operate the Air Force LANTIRN low-altitude
navigation and targeting system Automated Depot. This integrated software system
employs a distributed computer network that virtually eliminates depot
paperwork.
Automation Systems also provides automated machinery control systems for
military vessels around the world, encompassing seven ship classes for the
navies of nine countries. These systems use open-architecture, advanced
microprocessor technology for shipboard propulsion control and for remote
monitoring and control of key systems.
Martin Marietta also manufactures portable test units for Apache helicopters,
Army trucks, Bradley fighting vehicles, M1A1 tanks and HMMWV multi-purpose
vehicles. Use of Martin Marietta-built testing equipment has cut trouble-
shooting time by more than 25%.
In 1993, Automation Systems won a competitive procurement for 900 of the
portable test units, bringing the total under contract during the last 15 years
to more than 13,000 units.
During the year, Automation Systems also introduced an advanced technology
upgrade for gas turbine engine controllers. The first of these controllers will
be manufactured for the Navy's Arleigh Burke-class destroyers.
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Late in the year, Martin Marietta Materials, Inc., was established as a wholly
owned subsidiary of Martin Marietta Corporation. Martin Marietta Materials
comprises Martin Marietta Aggregates and Martin Marietta Magnesia Specialities,
Inc., all headquartered in Raleigh, North Carolina. In December, Martin Marietta
Materials filed a registration statement with the Securities and Exchange
Commission for an underwritten public offering of its common stock, to be
offered initially in the first quarter of 1994. Martin Marietta will retain
slightly more than 80% of the new company's outstanding stock.
Martin Marietta Aggregates, which produces crushed stone, sand and gravel for
the construction industry, is well-positioned to meet the increasing demand
generated by infrastructure rebuilding and the recovery in commercial
construction. Aggregates increased shipments by 15% as both infrastructure and
commercial construction improved in 1993. At 65 million tons, shipments of
crushed stone, sand and gravel reached a record level. Increased funding for
highways, along with a resurgence in residential construction, created a
significant increase in demand in many market areas.
Aggregates increased capacity by making three acquisitions during the year. A
sand and gravel operation near Omaha, Nebraska, was purchased, as were limestone
quarries near Frederick, Maryland and Pana, Illinois. The company completed a
major expansion at its underground mine near Indianapolis, Indiana, that nearly
doubled capacity. A new stone quarry was opened in the high-growth area north
of Indianapolis adjacent to the Aggregates' existing River Avenue sand and
gravel operation.
In the Southeast, Martin Marietta experienced strong growth in Georgia, where
Aggregates has built or acquired significant new capacity during the past five
years. Rail shipments into Florida from quarries near Macon and Columbus,
Georgia, increased sharply. Shipments improved in North Carolina as the major
metropolitan areas of Charlotte, Raleigh-Durham and Greensboro emerged from the
recession.
In the Midwest, heavy rains and the mid-year floods hampered construction
activity and quarry operations, but extensive repairs of flood damage created
heavy demand in the latter part of the year and is expected to continue well
into 1994.
In 1993, Martin Marietta Magnesia Specialties moved forward with its expansion
in the wastewater treatment market. A new facility was completed at the
Manistee, Michigan, plant to produce FloMag(R) slurry products used to
neutralize acid wastewater. This product will open new markets for treating
wastewater from food processing plants, municipalities, plating shops and
dyestuff operations. During the year, the Corporation also received a patent on
its granular FloMag product used to remove heavy metals from industrial process
effluent.
In the refractory area, Martin Marietta is a leading supplier of heat-
resistant products and services used to line furnaces in steel making. In
1993, the Corporation expanded into Mexico while continuing to develop new
products in the United States. Martin Marietta began importing natural
magnesite from China to reduce cost and to broaden its product line. The
combination of low-cost, lower-quality imported material with the
Corporation's high-quality magnesite is expected to provide a complete range
of products at a competitive cost.
Magnesia Specialties continues to focus on providing high-quality, value-added
products to its refractory and chemical customers.
In 1993, the Corporation's refractory products set nine heat-life records in
steel mills in the United States. Research and development programs continue
to provide new products that meet the special needs of customers.
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Martin Marietta Services Group provides technical and management services around
the globe for the Department of Defense, NASA and a growing number of civil
government agencies. Key to Services Group's success has been the ability to
leverage technology resident elsewhere in the Corporation with a more
competitive cost structure. Headquartered in Cherry Hill, New Jersey, the
Group operates at over 130 locations around the world. The Group also provides
management and engineering support to the Department of Energy's Knolls Atomic
Power Laboratory in Schenectady, New York.
In 1993, Martin Marietta won a nine-year follow-on contract to support NASA's
Life Sciences Directorate at the Johnson Space Center in Houston, Texas. The
scope of the program was recently increased to include support for mission
integration for nine dockings between the space shuttle and the Russian Mir
spacecraft. As a part of this contract, Martin Marietta Services Group
provided substantial support to the October 18, 1993, Space Shuttle mission
dedicated to understanding the effects of weightlessness on human health and
productivity. Services Group also designed, built and tested major systems for
the Spartan 201 science satellite that was launched in April.
During the year, Services Group continued to receive high marks from its
customers for its support of key Department of Defense facilities, especially
for operation of the Atlantic Fleet Weapons Training Facility for the Navy and
the Alaskan Radar Warning System for the Air Force. Services Group also helps
deploy threat simulators used for training Army units at Fort Bliss, Texas, and
other locations and supports Navy AEGIS combat systems in a number of locations.
In 1993, the Group won a contract to operate the Pacific Air Force Alaskan Range
used for combat training.
Services also is teamed with Management & Data Systems in a contract to
provide field support services to the Federal Aviation Administration in
implementation of the National Airspace System, which is designed to
significantly upgrade the government's air traffic control system.
The combination of GE Government Services with Martin Marietta Technical
Services broadened both capability and customer base and positioned the
Corporation to win a contract to support agency-wide modernization of
Department of Defense computer information systems.
Martin Marietta also supports the Social Security Administration in its 10-
year computer-modernization program. Software developed by the Corporation
helped the administration process more than 280,000 benefit claims from 850
field offices with an 18% increase in accuracy during 1993. The Corporation
earned a 97% award fee for the late-1993 rating period, its second consecutive
rated as "well above highly successful."
Operation of the Environmental Protection Agency's National Computer Center
in Raleigh, North Carolina, and Washington, D.C., began in 1992. In 1993,
responsibility was extended to include full operation of the National
Environmental Supercomputer Center in Bay City, Michigan.
Synergies from the Martin Marietta-GE Aerospace combination also have
resulted in opportunities for competitive pricing. Services Group won the
contract to continue maintenance of sonar arrays for the Navy. These arrays
are towed behind submarines and surface ships for detection of ships and
submarines. The Group's competitive cost structure, combined with Aero & Naval
Systems' technical experience, enabled Martin Marietta to retain the business,
thereby strengthening the Corporation's position as a provider of fleet combat
services.
International operations continue in Japan, Taiwan, Turkey, Egypt, Oman,
Germany, Puerto Rico and the Caribbean. Especially noteworthy was a contract won
in 1993 to provide a new aerostat radar for Kuwait, replacing a system lost in
the Gulf War.
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In October, Martin Marietta's Sandia Corporation began managing and operating
the Department of Energy's Sandia National Laboratories, with facilities in
Albuquerque, New Mexico; Livermore, California; Tonopah, Nevada; and Kauai,
Hawaii. Martin Marietta also formed Technology Ventures Corporation to assist
in the commercialization of technologies developed by federal laboratories and
universities in New Mexico.
With assets valued at more than $1 billion, Sandia National Laboratories'
specialized facilities are used for process development, environmental testing,
high-performance computing and research on radiation effects, combustion and
microelectronics.
Over the past 40 years, Sandia has expanded its missions from nuclear
weapons activities to include additional advanced military technologies, energy
and the environment, arms control techniques, advanced manufacturing processes,
information science and technology and electronics. With the downsizing of the
federal defense budget, Sandia has assumed responsibility for transferring
commercially viable technologies to the private sector.
As one of the national laboratories designated to maintain the U.S. nuclear
arsenal, Sandia ensures that these weapons will function as required should they
ever be needed. Sandia conducts quality assurance evaluations on nuclear weapons
to ensure their safety and reliability and, as a means of aiding dismantlement,
has developed special physical and robotic processes to minimize radiation
exposure to personnel.
Sandia also has developed environmental technologies for nuclear waste
management and waste minimization in weapons production, maintenance and
dismantlement. These efforts also include developing technologies for
detoxification of chemical waste in soil and groundwater and improving detection
devices and analytical techniques for monitoring contamination.
In its efforts to strengthen the nation's economic security by transferring
technology to the private sector, Sandia has entered into 140 Cooperative
Research and Development Agreements with companies including AT&T, General
Motors, Motorola and Sun Microsystems.
Work on new energy technologies continued in 1993, with particular focus on
renewable sources, oil and gas recovery and conservation. Much of this work
involves joint projects with private companies.
Sandia scientists and engineers are focused on helping entire industries
become more competitive. Examples include Cooperative Research and Development
Agreements with the National Center for Manufacturing Sciences, the Specialty
Metals Processing Consortium, the Edison Welding Institute, SEMATECH (the
consortium of U.S. semiconductor manufacturers) and the Department of
Defense. In April, Sandia and SEMATECH signed a multi-year working agreement
to develop technologies for the next generation of integrated circuits.
35
<PAGE>
<PAGE>
(Picture Appears Here)
36
<PAGE>
<PAGE>
Martin Marietta's Advanced Development Operations and Laboratories work with
operating units to formulate shared visions of new products that anticipate
future requirements in space, defense, information systems and commercial
markets. From research in electronics, materials and information processing,
Martin Marietta scientists and engineers focus on developing products and
technologies that meet these needs.
The research and development operations from Martin Marietta and former GE
Aerospace are consolidated under a single technology organization with
operating elements in California, Maryland, New Jersey and New York.
In San Diego, Advanced Development Operations demonstrated the ability of the
Low-Cost Anti-Armor Submunition, a millimeter-wave radar seeker that can be
launched from a variety of platforms against tanks and other ground targets,
to quickly acquire and discriminate target classes. Flight tests and drop
tests are expected to begin in early 1994. This new low-cost seeker technology
promises to be applicable to numerous future programs employing target
acquisition radar.
A major development program is under way to compete for the Army's Corps
Surface-to-Air Missile program. The Corporation's team includes Ocean, Radar &
Sensor Systems and the Laboratories in Syracuse, New York, working on sensor
radars; Electronics & Missiles, Orlando, Florida, developing the missile
airframe and propulsion system and integrating the seeker; and Advanced
Development Operations, which is preparing seekers and high-power amplifiers for
the radars.
Martin Marietta Laboratories in Baltimore is leading a multi-partner team
comprising aerospace firms, suppliers, universities and government laboratories
that received one of the first contracts to be awarded under the U.S.
Government's dual-use technology initiative. The program will develop low-cost,
broadband, active anti-vibration techniques, utilizing company expertise in
ceramics and shape memory alloys. Among a variety of potential applications,
this research in vibration isolation should help make airplane cabins more
comfortable and improve tooling for ultra-fine machining.
The Laboratories in Baltimore also has developed a prototype lightweight,
broadband, variable-depth sonar. The acoustic projection system was subjected to
Navy and independent testing and demonstrated an improved capability to help
detect submarines and mines in shallow waters.
Martin Marietta continued development of high-speed, real-time parallel signal
processors for underwater imaging and radar and produced units as small as
five-by-seven inches. Research on signal processing for automated target
recognition led to new capabilities in human speech
37
<PAGE>
<PAGE>
and fingerprint identification and in speech compression.
In a technical breakthrough in optical signal processing, Martin Marietta
developed new devices that provide a 1,000-fold improvement in performance over
current processors.
The Laboratories in Moorestown, New Jersey, teamed with other industry leaders
and research scientists to win an Army contract for Rapid Prototyping of
Application-Specific Signal Processors. This program is expected to result in a
significant decrease in the time needed to design and develop digital
processors, benefiting equipment manufacturers in both defense and commercial
markets.
Martin Marietta engineers in Syracuse successfully demonstrated 17
transmit/receive modules made from Microwave High-Density Interconnect
technology, replacing conventional wire bonds and reducing the size of the units
by at least one-half. Developed for the Air Force, these modules offer
performance, reliability and cost improvements for defense and civil radar
systems and communications antennas.
In a related technology bid, Martin Marietta is now teamed with GE and Texas
Instruments in a competition for a contract to develop high-density microwave
packaging for advanced radar systems.
Martin Marietta is a leader in the technology of phased arrays. These multi-
directional radars transmit without mechanical scanning, permitting lighter
weight and more reliable pointing and tracking systems. During the year, the
Corporation demonstrated for the Air Force a unique millimeter-wave phased-array
radar. Fiber-optic-controlled phased-array technology also is being developed
for the Army for future microwave radar systems and for advanced, low-cost
components for computers of the future.
38
<PAGE>
<PAGE>
MARTIN MARIETTA CORPORATION 1993 FINANCIAL REPORT
CONTENTS
Statement of Earnings 40
Balance Sheet 41
Statement of Cash Flows 42
Statement of Shareowners' Equity 43
Notes to Financial Statements 44
Report of Independent Auditors 55
Statement of Financial Responsibility 55
Analysis of Financial Condition and Operating Results 56
Quarterly Performance 62
Five Year Summary 63
1993
39
<PAGE>
<PAGE>
Statement of Earnings
for years ended December 31
<TABLE>
<CAPTION>
(add 000, except per share) 1993 1992 1991
<S> <C> <C> <C>
Net sales $9,435,689 $5,954,292 $6,075,415
Cost of sales, other costs and expenses 8,647,224 5,405,123 5,537,926
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings from Operations 788,465 549,169 537,489
Other income and expenses, net 46,997 21,144 (58,980)
- -----------------------------------------------------------------------------------------------------------------------------------
835,462 570,313 478,509
Interest expense on debt 110,173 57,890 57,660
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings before taxes on income and
cumulative effect of accounting changes 725,289 512,423 420,849
Taxes on income 275,000 167,000 107,700
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings before Cumulative Effect of Accounting Changes 450,289 345,423 313,149
Cumulative effect of changes in accounting for post-retirement
benefits other than pensions and for post-employment benefits (429,432) - -
- -----------------------------------------------------------------------------------------------------------------------------------
Net Earnings $ 20,857 $ 345,423 $ 313,149
===================================================================================================================================
Net Earnings (Loss) Per Common Share
Assuming no dilution:
Before cumulative effect of accounting changes $4.25 $3.60 $3.15
Cumulative effect of accounting changes (4.51) - -
- -----------------------------------------------------------------------------------------------------------------------------------
$(.26) $3.60 $3.15
- -----------------------------------------------------------------------------------------------------------------------------------
Assuming full dilution:
Before cumulative effect of accounting changes $3.80 $3.60 $3.15
Cumulative effect of accounting changes * - -
- -----------------------------------------------------------------------------------------------------------------------------------
* $3.60 $3.15
===================================================================================================================================
*Anti-dilutive
</TABLE>
40
<PAGE>
<PAGE>
Balance Sheet
at December 31
Assets
<TABLE>
<CAPTION>
(add 000) 1993 1992
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 373,095 $ 239,642
Receivables 1,435,515 790,283
Inventories 358,749 300,878
Current deferred income taxes 238,642 61,242
Other current assets 42,239 42,296
- -----------------------------------------------------------------------------------------------------------------------------------
Total Current Assets 2,448,240 1,434,341
- -----------------------------------------------------------------------------------------------------------------------------------
Other Noncurrent Assets 707,772 800,445
Noncurrent Deferred Income Taxes 206,119 -
Property, Plant and Equipment, net 1,692,753 1,257,139
Cost in Excess of Net Assets Acquired 1,914,894 26,224
Other Intangibles 775,113 81,456
- -----------------------------------------------------------------------------------------------------------------------------------
$7,744,891 $3,599,605
===================================================================================================================================
Liabilities and Shareowners' Equity
(add 000) 1993 1992
Current Liabilities:
Accounts payable $ 536,799 $ 247,825
Other current liabilities 572,343 125,069
Salaries, benefits and payroll taxes 333,602 177,847
Income taxes 48,847 31,681
Current maturities of long-term debt 318,525 3,814
- -----------------------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 1,810,116 586,236
- -----------------------------------------------------------------------------------------------------------------------------------
Long-term Debt 1,479,571 474,726
Post-retirement Benefits 740,630 101,978
Other Noncurrent Liabilities 838,222 194,195
Noncurrent Deferred Income Taxes - 297,254
Shareowners' Equity:
Series A preferred stock, liquidation preference $50 per share 1,000,000 -
Common stock, par value $1 a share, authorized 500,000,000 shares 95,697 47,229
Additional paid-in capital 123,999 85,992
Retained earnings 1,656,656 1,811,995
- -----------------------------------------------------------------------------------------------------------------------------------
2,876,352 1,945,216
- -----------------------------------------------------------------------------------------------------------------------------------
$7,744,891 $3,599,605
===================================================================================================================================
The notes on pages 44 to 54 are integral parts of these statements
</TABLE>
Martin Marietta Corporation
and Consolidated Subsidiaries
41
<PAGE>
<PAGE>
Statement of Cash Flow
for years ended December 31
<TABLE>
<CAPTION>
(add 000) 1993 1992 1991
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net earnings $ 20,857 $ 345,423 $ 313,149
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Cumulative effect of changes in accounting for
post-retirement benefits other than pensions
and for post-employment benefits 429,432 - -
Depreciation, depletion and amortization 349,982 226,147 225,072
Deferred income taxes 15,420 11,840 (327,180)
Net changes in receivables, inventories and payables (272,055) 220,230 (121,503)
Commercial Titan deferred revenue - (147,088) 37,339
Goodwill and intangible amortization 86,216 12,802 9,518
Other items 10,407 8,643 42,522
- -----------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 640,259 677,997 178,917
- -----------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Additions to properties, net of purchased operations (214,810) (170,889) (212,326)
Retirement of properties, net of sold facilities 35,139 13,710 15,404
Acquisition GE Aerospace (883,199) - -
Purchases of operations (15,989) (18,809) (21,309)
Reductions (additions) to investments 108,959 (19,317) -
Other (18,488) (73) 15,959
- -----------------------------------------------------------------------------------------------------------------------------------
Net Cash Used for Investing Activities (988,388) (195,378) (202,272)
- -----------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities and Dividends:
Debt transactions:
Decrease in short-term borrowings - - (25,000)
Increase in long-term debt 700,135 4,282 207,972
Repayments of long-term debt (107,213) (197,553) (6,447)
Equity transactions:
Issuances of common stock 17,023 20,856 40,614
Purchases of common stock - (165,067) (36,023)
Dividends:
Preferred stock (45,333) - -
Common stock (83,030) (76,050) (74,680)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by (Used for) Financing Activities and Dividends 481,582 (413,532) 106,436
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Cash and Cash Equivalents 133,453 69,087 83,081
Cash and Cash Equivalents at beginning of year 239,642 170,555 87,474
- -----------------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at end of year $ 373,095 $ 239,642 $ 170,555
===================================================================================================================================
Supplemental Schedule of Investing and Financing Activities
Non-cash consideration-Acquisition GE Aerospace:
Assumption of certain payment obligations $ 750,000 - -
Issuance of preferred stock 1,000,000 - -
- -----------------------------------------------------------------------------------------------------------------------------------
$1,750,000 - -
===================================================================================================================================
</TABLE>
42
<PAGE>
<PAGE>
Statement of Shareowners' Equity
for years ended December 31
<TABLE>
<CAPTION>
Additional Total
Preferred Common Paid-in Retained Shareowners'
(add 000) Stock Stock Capital Earnings Equity
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1991 $ - $48,866 $ 187,944 $1,304,153 $1,540,963
Net earnings for 1991 - - - 313,149 313,149
Cash dividends declared on
common stock ($.75 a share) - - - (74,680) (74,680)
Stock awards and options exercised,
net of stock tendered in payment - 1,032 43,291 - 44,323
Other common stock issued - 319 15,852 - 16,171
Common stock purchased - (687) (35,336) - (36,023)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1991 - 49,530 211,751 1,542,622 1,803,903
Net earnings for 1992 - - - 345,423 345,423
Cash dividends declared on
common stock ($.795 a share) - - - (76,050) (76,050)
Stock options exercised,
net of stock tendered in payment - 480 20,376 - 20,856
Other common stock issued - 310 15,841 - 16,151
Common stock purchased - (3,091) (161,976) - (165,067)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1992 - 47,229 85,992 1,811,995 1,945,216
Net earnings for 1993 - - - 20,857 20,857
Preferred stock issued 1,000,000 - - - 1,000,000
Cash dividends declared on
preferred stock ($2.25 a share) - - - (45,333) (45,333)
Cash dividends declared on
common stock ($.87 a share) - - - (83,030) (83,030)
Stock awards and options exercised,
net of stock tendered in payment - 407 22,412 - 22,819
Other common stock issued - 228 15,595 - 15,823
Issuance of shares to effect 2-for-1 stock split - 47,833 - (47,833) -
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1993 $1,000,000 $95,697 $ 123,999 $1,656,656 $2,876,352
===================================================================================================================================
</TABLE>
The notes on pages 44 to 54 are integral parts of these statements.
Martin Marietta Corporation
and Consolidated Subsidiaries
43
<PAGE>
<PAGE>
Notes to
Financial Statements
Martin Marietta Corporation
and Consolidated Subsidaries
Note A:
Accounting Policies
- ------------------------------------------------------------------------------
Consolidation Basis Consolidated financial statements include the accounts of
all significant majority-owned subsidiaries of the Corporation. All material
intercompany transactions have been eliminated in consolidation.
Certain amounts for the prior periods have been reclassified to conform with
the 1993 presentation.
Cash and Cash Equivalents Cash and cash equivalents generally comprise highly
liquid instruments with original maturities of three months or less from date of
purchase.
As of December 31, book cash balances amounted to net overdrafts of
$43,620,000 in 1993 and $26,390,000 in 1992 and are attributable to the float of
the Corporation's outstanding checks.
Investments Valuation Marketable investment securities
are carried at the lower of aggregate cost or market value. Specific costs are
used to compute realized gains or losses.
Investments in associated companies are accounted for by the equity method
wherever the Corporation is able to significantly influence operating and
financial matters. Other investments are carried at cost less valuation
allowances where appropriate.
Revenues Recognition Long-term, fixed-price contracts generally are accounted
for under percentage-of-completion methods, and sales include a proportion of
the earnings expected to be realized in the ratio that costs incurred bear to
estimated total costs. Sales are recorded on cost-type contracts as costs are
incurred. Under all other contracts, sales are recorded when deliveries are made
or as work is performed.
Contracts and programs in progress are reviewed quarterly, and sales and
earnings are adjusted in current accounting periods based on revisions in
contract value and estimated costs at completion. Performance incentives are
incorporated in certain contracts that provide increased or decreased earnings
based on performance to established targets. Incentives based upon cost
performance are recorded currently, and other incentives and awards are recorded
when the amounts reasonably can be estimated or are awarded. Provisions for
estimated losses on contracts and programs are recorded when identified.
Commercial Titan sales for the initial program, completed in 1992, were
recorded upon the delivery of launch services. Cost of sales attributable to
each launch was determined under the program-average cost method. Cost of sales
on any future Commercial Titan vehicles will be determined on a specific
contract identification basis.
Sales in the Materials segment are recorded upon shipment of products or
performance of services.
Inventories Valuation Inventories are stated at the lower of cost or market.
Costs on contracts and programs in progress represent recoverable costs incurred
for production, research and development and selling, general and
administration, less amounts attributed to cost of sales, generally under
percentage-of-completion accounting methods. Costs of other product and supply
inventories are principally determined by the first-in, first-out (FIFO) method.
44
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
Properties and Depreciation Property, plant and equipment, including capital
leases, are carried at cost, including interest cost capitalized during
construction on significant capital programs.
Depreciation and amortization of properties are computed over estimated
service lives generally using accelerated methods, except for Materials and
other businesses that utilize the straight-line method. Depletion of mineral
deposits is calculated over estimated recoverable quantities by the unit-of-
production method.
Intangible Assets Costs in excess of net assets acquired are amortized ratably
over appropriate periods ranging from 20 to 40 years. Other intangibles
represent amounts assigned principally to the value of programs acquired and are
amortized over periods not exceeding 15 years.
Income Taxes Current income tax provisions represent estimated amounts payable
or recoverable for each year after adjustments for permanent differences.
Deferred income tax provisions represent the tax effect of all significant
temporary differences between financial statements and income taxes.
Research and Development and Similar Costs Research and development and similar
costs are charged to operations as incurred unless reimbursable under specific
contractual arrangements. Independent research and development, systems studies,
other concept formulation studies and bid and proposal work relating to
government contracts represent a major portion of these expenses. Such amounts
are allocated when appropriate to government contracts through overhead under
government-mandated cost accounting procedures.
Preoperating costs are generally charged to operations as incurred, except
that such costs for significant new products or services and start-up costs of
certain facilities may be deferred for amortization over periods not to exceed
five years.
Earnings Per Common Share Earnings per share are based on the weighted
average number of common shares outstanding during the year.
Earnings per share, assuming no dilution, were computed in 1993 based on net
earnings less the dividend requirement of preferred stock. The weighted average
number of common shares outstanding assuming no dilution were 95,346,614 in
1993, 95,868,708 in 1992 and 99,341,210 in 1991.
Fully diluted earnings per share in 1993 asssumed that the average number of
common shares was increased by the conversion of preferred stock from the date
of issue and by dilutive stock options. The weighted average number of common
shares outstanding, assuming full dilution, were 118,347,041 in 1993, 95,868,
708 in 1992 and 99,341,210 in 1991.
On September 30, 1993, a 2-for-1 split of the Corporation's common stock
in the form of a 100% stock dividend became effective. All references in the
consolidated financial statements with regard to the number of shares and per
share data have been restated to reflect the split.
- --------------------------------------------------------------------------------
Note B:
Business Combination with GE Aerospace
- --------------------------------------------------------------------------------
On November 22, 1992, Martin Marietta Corporation entered into a Transaction
Agreement with General Electric Company (GE) to combine the aerospace and
certain other businesses of GE (collectively, the "GE Aerospace businesses")
with the businesses of Martin Marietta Corporation in the form of affiliated
corporations. The transaction (the "GE Transaction"), was consummated on April
2, 1993, and GE Aerospace operations have been included since that date.
The exchange consideration of approximately $3 billion for the GE
Transaction consisted of cash, preferred stock, retention by GE of certain
accounts receivable and the assumption of payment obligations related to certain
GE indebtedness. The GE Transaction has been accounted for under the purchase
method of accounting, wherein approximately $1.9 billion in goodwill was
recognized by the Corporation after recording approximately $700 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 assets acquired and liabilities assumed. Goodwill is being
amortized over a 40-year period, and the other intangibles are being amortized
over a 15-year period.
The Martin Marietta securities owned by GE are held under a Standstill
Agreement. Among other things, the Standstill Agreement provides for certain
limitations on either the increase or disposal of GE's interest in voting
securities of Martin Marietta, on GE's solicitation of proxies and shareowner
proposals, on GE's voting of its shares and on GE's ability to place or remove
members of Martin Marietta's Board of Directors. In addition, the Standstill
Agreement requires Martin Marietta to recommend to its shareowners the election
of persons designated by GE to serve as directors of Martin Marietta. Generally,
the Standstill Agreement provides that GE's designees will at all times
constitute at least 10% of Martin Marietta's Board of Directors.
In 1986, the Board of Directors adopted a Shareholder Rights Plan to
distribute, under certain circumstances, one Common Stock Purchase Right for
each outstanding share of the Corporation's common stock. The Rights Plan was
amended during 1990. Under the amended plan, the Rights became exercisable if a
person or group acquires, in a transaction not approved by the Board of
Directors, 15% or more of the Corporation's common stock or announces a tender
offer for 30% or more of the stock. The GE Transaction was approved by the Board
of Directors of the Corporation and therefore did not constitute a "Change of
Control" for purposes of the shareholder rights plan. The new Martin Marietta
Corporation has not adopted a shareholder rights plan.
The following unaudited pro forma information presents the results of
operations of the Corporation and the GE Aerospace businesses for the years
ended December 31, 1993 and 1992, with pro forma adjustments as if the GE
Transaction had been consummated as of the beginning of the periods presented.
This pro forma information does not purport to be indicative of what would have
occurred had the acquisition been made as of those dates or of results which may
occur in the future.
45
<PAGE>
<PAGE>
Note B: (continued)
Business Combination with GE Aerospace
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Pro Forma Information (Unaudited)
(millions, except per share) 1993 1992
<S> <C> <C>
Net Sales $ 10,459 $ 11,232
- --------------------------------------------------------------------------------
Earnings before cumulative
effect of accounting changes
attributable to common stock $ 401 $ 418
- --------------------------------------------------------------------------------
Net earnings (loss)
attributable to common stock $ (28) $ 418
- --------------------------------------------------------------------------------
Earnings (loss) per common share
assuming no dilution:
Before cumulative effect
of accounting changes $ 4.21 $ 4.36
Net earnings (loss)
per common share $ (.29) $ 4.36
- --------------------------------------------------------------------------------
</TABLE>
Note C:
Receivables
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(add 000) 1993 1992
<S> <C> <C>
Receivables under long-term contracts:
United States Government:
Amounts billed $ 331,816 $149,472
Unbilled costs and accrued profits 749,748 646,586
Amounts withheld, due upon
completion of contracts 42,999 22,112
- --------------------------------------------------------------------------------
1,124,563 818,170
Other customers:
Amounts billed 105,916 28,442
Unbilled costs and accrued profits 290,260 146,556
- --------------------------------------------------------------------------------
Total receivables under
long-term contracts 1,520,739 993,168
Less noncurrent amounts 197,931 295,138
- --------------------------------------------------------------------------------
1,322,808 698,030
Other Activities:
Commercial accounts receivable 85,209 82,226
Notes and other current receivables 43,525 15,847
- --------------------------------------------------------------------------------
1,451,542 796,103
Less allowances 16,027 5,820
- --------------------------------------------------------------------------------
Total $1,435,515 $790,283
================================================================================
</TABLE>
Unbilled costs and accrued profits will be billed on the basis of contract terms
and delivery schedules.
Amounts billable after one year are included in order noncurrent assets.
Note D:
Proposed Transactions
- --------------------------------------------------------------------------------
In December 1993, the Corporation signed an agreement to purchase the Space
Systems Division of General Dynamics Corporation for approximately $209 million
in cash. The transaction is subject to regulatory approval and the satisfaction
of certain other conditions and is expected to close during the first half of
1994. The purchase method of accounting will be used to record this transaction.
In December 1993, Martin Marietta Materials, Inc., a wholly owned subsidiary
of Martin Marietta Technologies, Inc., filed a registration statement with the
Securities and Exchange Commission for an underwritten public offering of its
common stock. The proposed offering will consist of 7,650,000 shares plus a 30-
day overallotment option for the underwriters to purchase up to 1,147,500
additional shares. The initial public offering by Martin Marietta Materials is
dependent upon market conditions, but is expected to close in February 1994,
after which the Corporation will own approximately 83% of the outstanding stock
of the company, or 81% if the overallotment is exercised.
Note E:
Inventories
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(add 000) 1993 1992
<S> <C> <C>
Costs on contracts and
programs in progress $1,284,534 $311,224
Less: progress payments 830,372 14,693
noncurrent amounts 168,999 67,348
- --------------------------------------------------------------------------------
285,163 229,183
Other Activities:
Finished products 50,029 45,967
Products in process and raw
materials 10,106 11,586
Expendable parts and supplies 13,451 14,142
- --------------------------------------------------------------------------------
Total $ 358,749 $300,878
</TABLE>
According to provisions of certain U.S. Government contracts, the customer has
title to, or a security interest in, inventories for contracts and programs
in progress of approximately $310,350,000 for 1993 and $3,700,000 for 1992.
Selling, general and administrative costs in connection with production
under long-term government contracts were charged to inventories as incurred in
the amounts of $377,470,000 in 1993 and $316,780,000 in 1992. The estimated
amounts remaining in inventories were $126,990,000 at December 31, 1993, and
$17,860,000 at December 31, 1992.
Costs on contracts and programs in progress at December 31, 1993 and 1992,
did not include any significant amounts of production costs or other deferred
costs or claims and similar items subject to uncertainty concerning their
realization.
46
<PAGE>
<PAGE>
Note F:
Property, Plant and Equipment, Net
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(add 000) 1993 1992
<S> <C> <C>
Land $ 195,398 $ 150,878
Mineral deposits 38,575 35,343
Buildings 836,694 696,077
Machinery and equipment 2,733,667 2,261,945
- --------------------------------------------------------------------------------
3,804,334 3,144,243
Less allowances for depreciation, depletion and
amortization 2,111,581 1,887,104
- --------------------------------------------------------------------------------
Total $1,692,753 $1,257,139
================================================================================
Note G:
Debt
- --------------------------------------------------------------------------------
(add 000) 1993 1992
Long-term debt:
Payment obligations assumed $ 622,162 $ -
9 1/2% Notes due 1995 125,000 125,000
8 1/2% Notes due 1996 100,000 100,000
9% Notes due 2003 100,000 100,000
6 1/2% Notes due 2003 400,000 -
7% Debentures due 2011 101,511 100,439
7 3/8% Debentures due 2013 150,000 -
7 3/4% Debentures due 2023 150,000 -
Other notes and obligations 49,423 53,101
- --------------------------------------------------------------------------------
Total 1,798,096 478,540
Less current maturities 318,525 3,814
- --------------------------------------------------------------------------------
Long-term debt $1,479,571 $ 474,726
</TABLE>
Payment obligations assumed as part of the exchange consideration for the GE
Transaction relate to certain GE indebtedness. Approximately $304 million of
these obligations at December 31, 1993, mature in 1994 and carry an effective
interest rate of 4.4%, and $318 million mature in 1996 and carry an effective
interest rate of 5.025%. In December 1993, $103 million of the debt obligations
were defeased in substance.
The 9 1/2% Notes, 8 1/2% Notes and 9% Notes are not redeemable prior to
maturity.
The 6 1/2% Notes were issued on April 22, 1993, and are not redeemable
prior to maturity.
The 7% Debentures were sold at 53.835% of their principal amount of
$175,000,000 in 1981. These debentures are carried net of original issue
discount, which is being amortized by the interest method over the life of the
issue. The effective interest rate is 13 1/4%. The debentures are redeemable
in whole or in part at the Corporation's option at any time at 100% of their
principal amount.
The 7 3/8% Debentures and 7 3/4% Debentures were issued on April 22, 1993.
The 7 3/8% Debentures are not redeemable prior to maturity. The 7 3/4%
Debentures may not be redeemed by the Corporation prior to April 15, 2003, but
on or after that date may be redeemed by the Corporation at specified
redemption prices.
Other notes and obligations include a $17-million, 8 5/8% Real Estate
Mortgage secured by property in Maryland having a net book value of
approximately the same amount at December 31, 1993.
Maturities of long-term debt during the five-year period ending December 31,
1998, are $318,525,000 in 1994, $129,600,000 in 1995, $421,976,000 in 1996,
$674,000 in 1997 and $681,000 in 1998.
At December 31, 1993, the independently determined market value of the 7%
Debentures exceeded book value by approximately $70 million. The independently
determined aggregate market value of the Corporation's other outstanding debt
approximated book value.
Interest payments were $96,840,000 in 1993, $61,020,000 in 1992 and
$55,320,000 in 1991. Interest expense on debt was net of capitalized interest
of $2,857,000 in 1993, $3,717,000 in 1992 and $5,757,000 in 1991 and included
commitment fees of approximately $2,210,000 in 1993 and $750,000 in 1992 and
1991.
As of December 31, 1993, the Corporation has issued letters of credit
totaling $347,560,000 relating to certain long-term contracts and other
contractual obligations.
In 1993, Martin Marietta Technologies, Inc., a wholly owned subsidiary (see
Note J, page 48), and Martin Marietta Corporation replaced a previous credit
facility with a 364-day revolving credit facility in the amount of $900 million
expiring on March 30, 1994, and a three-year revolving credit facility in the
amount of $1.3 billion that expires on March 31, 1996. Effective September 1,
1993, Martin Marietta Technologies, Inc., reduced the amounts committed under
the facilities. The $900-million facility was reduced to $500 million and the
$1.3-billion facility was reduced to $800 million. These borrowing facilities
may be used for general corporate purposes. Under these credit facilities, the
Corporation is subject to limitations on its financial leverage and a minimum
coverage ratio as defined by the agreements.
The financing agreements of Martin Marietta Corporation and its subsidiaries
contain certain restrictive covenants, including requirements for limitations on
encumbrances and on sale and lease-back transactions.
47
<PAGE>
<PAGE>
Note H:
Shareowners' Equity
- --------------------------------------------------------------------------------
The current authorized capital structure of Martin Marietta Corporation includes
20,000,000 shares of Series A Preferred Stock with par value of $1 a share
(liquidation preference $50 per share), which pays dividends at an annual rate
of $3.00 per share (6%) and are cumulative. In 1993, the Preferred Stock
dividends became effective from the date of closing of the GE Transaction. As
part of the consideration for the GE Transaction, the Corporation issued to GE
all of the authorized and outstanding shares of Series A Preferred Stock of
Martin Marietta, which shares are convertible into approximately 23% of the
shares of Martin Marietta common stock after giving effect to such conversion
(calculated as of December 31, 1993), and have an aggregate liquidation
preference of $1 billion. The Series A Preferred Stock is nonvoting stock
except in special circumstances, and GE and Martin Marietta have entered into a
Standstill Agreement that imposes certain limitations on GE's ability to, among
other things, acquire or dispose of Martin Marietta voting securities (see Note
B, page 45).
The Corporation's capital structure also includes 30,000,000 shares of
Preferred Stock with par value of $1 a share, none of which is currently issued.
In 1993, the Board of Directors authorized the repurchase of approximately
32.4 million of the Corporation's common shares for use in connection with the
Corporation's Amended Omnibus Securities Award Plan, Performance Sharing Plan
and for general corporate purposes. No share repurchases were made by the
Corporation during 1993.
The Corporation contributed 228,086 shares in 1993, 310,608 shares in 1992
and 318,663 shares in 1991 of its common stock to the Martin Marietta
Performance Sharing Plan for Salaried Employees in accordance with provisions
set forth in that plan.
Under Maryland General Corporation Law, shares of common stock reacquired by
a corporation constitute unissued shares. For financial reporting purposes,
reacquired shares are recorded as reductions to issued common stock and to
additional paid-in capital.
At December 31, 1993, retained earings were unrestricted.
Note I:
Contingencies
- --------------------------------------------------------------------------------
In the opinion of management and counsel, the probability is remote that the
outcome of litigation and other proceedings, including those pertaining to
environmental matters (see Analysis of Financial Condition and Operating
Results, page 58), relating to Martin Marietta and its subsidiaries, will have a
material adverse effect on the results of the Corporation's operations or its
financial position.
Note J:
Martin Marietta Technologies, Inc.
- --------------------------------------------------------------------------------
The GE Transaction resulted in a newly formed Maryland corporation, Martin
Marietta Corporation. The former Martin Marietta Corporation changed its name to
Martin Marietta Technologies, Inc.
Upon consummation of the GE Transaction, Martin Marietta had the same common
stockholders (holding the same number of shares) as Martin Marietta
Technologies, Inc., had immediately prior to the GE Transaction. GE's sole
equity interest in Martin Marietta following the consum-mation of the GE
Transaction is its ownership of all of the authorized and outstanding shares of
Series A Preferred Stock of Martin Marietta Corporation.
Summarized financial information for Martin Marietta Technologies, Inc., a
wholly owned subsidiary of the Corporation, follows:
<TABLE>
<CAPTION>
(millions) 1993) 1992
<S> <C> <C>
Current assets $1,585 $1,434
Noncurrent assets 3,163 2,166
Current liabilities 825 586
Long-term debt 1,161 475
Other noncurrent liabilities 886 594
Shareowners' equity 1,876 1,945
- -------------------------------------------------------------------------------
Net sales $5,628 $5,954
Earnings from operations 583 549
Earnings before cumulative effect
of accounting changes 358 345
Cumulative effect of
accounting changes (427) -
Net earnings (loss) (69) 345
- --------------------------------------------------------------------------------
</TABLE>
Martin Marietta Corporation has guaranteed the payment of certain debt and
other obligations of Martin Marietta Technologies, Inc. The total of such
guarantees was $1.2 billion at December 31, 1993. Exposure to credit risk in the
event of non-payment by the obligor is represented by the contractual amount of
the relative instruments. No loss is anticipated under these guarantees. As of
December 31, 1993, there were no restrictions on dividends or other
distributions between Martin Marietta Technologies, Inc., and the Corporation.
Note K:
Leases
- --------------------------------------------------------------------------------
Total rental expense for all operating leases was $145,200,000 in 1993,
$82,760,000 in 1992 and $97,280,000 in 1991.
Future minimum rental commitments for all noncancelable operating leases
are: $112,040,000 for 1994, $85,160,000 for 1995, $58,930,000 for 1996,
$41,630,000 for 1997, $33,330,000 for 1998 and $55,270,000 for later years.
48
<PAGE>
<PAGE>
Note L:
Stock Option and Award Plans
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Shares Option Price
- --------------------------------------------------------------------------------
Available Options Per Share Total
for Grant Outstanding Range (add 000)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
YEAR 1992:
January 1 3,224,900 3,681,750 $11.665-$29.25 $ 86,973
Additions 1,287,778 - - -
Options granted (1,189,800) 1,189,800 25.75 30,637
Exercised - (1,429,100) 11.665- 29.25 (30,936)
Deregistered (3,250,300) - - -
Canceled 31,400 (31,400) 19.750- 29.25 (759)
Expired (6,000) - - -
- --------------------------------------------------------------------------------
December 31 97,978 3,411,050 $11.665-$29.25 $ 85,915
- --------------------------------------------------------------------------------
Exercisable at December 31 1,208,050
YEAR 1993:
January 1 97,978 3,411,050 $11.665-$29.25 $ 85,915
Additions 2,095,300 - - -
Options granted (1,217,600) 1,217,600 40.375- 44.50 49,173
Awards granted (170,000) -
Exercised - (803,850) 11.665- 29.25 (19,347)
Canceled 8,800 (8,800) 19.938- 40.375 (259)
Expired - (3,600) - -
- --------------------------------------------------------------------------------
December 31 814,478 3,812,400 $19.750-$44.50 $115,482
- --------------------------------------------------------------------------------
Exercisable at December 31 1,490,800
- --------------------------------------------------------------------------------
</TABLE>
In 1992, the Corporation adopted an Omnibus Securities Award Plan, which was
subsequently amended in 1993. Under the Amended Omnibus Securities Award Plan
(Amended Omnibus Plan), employees of the Corporation may be granted stock-based
incentive awards, including options to purchase common stock, stock appreciation
rights, restricted stock or other stock-based incentive awards. These awards may
be granted either singly or in combination with other awards. Under the Amended
Omnibus Plan, the number of shares of stock available for awards in 1992 was
1.3% of the shares of common stock outstanding on December 31, 1991, and the
number of shares of stock available for awards for each year in the period 1993
through 1996 shall not exceed 1.7% of the shares of common stock outstanding on
December 31 of the previous year. The Amended Omnibus Plan further provides that
for the years 1993, 1994 and 1995, an additional 0.5% of the shares of common
stock outstanding on December 31 of the previous year may be granted if a
corresponding percentage decrease in shares available for award is made the
following year. Effective with the adoption of the Omnibus Securities Award Plan
in 1992, no further grants of options, stock appreciation rights or restricted
stock could be made under any of the Corporation's prior plans. However, all
outstanding grants and awards under those prior plans will remain in effect in
accordance with their terms.
Under the Amended Omnibus Plan, the Corporation grants options to purchase
its common stock at a price equal to the market value at the date of grant.
These options become exercisable in three equal annual installments beginning
one year after date of grant and expire 10 years from such date. The Amended
Omnibus Plan allows the Corporation to provide for financing of purchases,
subject to certain conditions, by interest-bearing notes payable to the
Corporation.
Prior stock option plans included the same grant pricing, vesting and
expiration terms as the Amended Omnibus Plan. The 1984 Plan allows the
Corporation to provide for financing of purchases, subject to certain
conditions, by interest-bearing notes payable to the Corporation.
The 1979 and 1984 Plans included stock appreciation rights granted
simultaneously in equal number with the grant of stock options. These rights
may be exercised independently of the options and entitle a grantee to receive
in cash an amount equal to a percentage of the increase in the market value of
the Corporation's common stock. The 1979 Plan limits these payments to 100% of
the option price.
The Amended Omnibus Plan provides for the award and issuance of common
stock at par value subject to certain restrictions for a specified period of
time. A total of 170,000 restricted shares was awarded under the Amended
Omnibus Plan during 1993; no awards were made during 1992. Under the awards
outstanding, participants are entitled to cash dividends and to vote their
respective shares, but they are prohibited from selling or transferring shares
during a restricted period. Upon adoption of the Omnibus Securities Award Plan
in 1992 (as amended in 1993), no further awards could be made under the
Restricted Stock Award Plan adopted in 1989, but the outstanding awards
(totaling 116,000 shares) under that plan remain in effect in accordance with
their terms.
49
<PAGE>
<PAGE>
Note M:
Post-Employment Benefit Plans
- --------------------------------------------------------------------------------
Martin Marietta and its consolidated subsidiaries sponsor a number of
retirement plans that cover substantially all employees. Defined benefit plans
for salaried and certain hourly employees provide benefits based on employees'
years of service and compensation, either on a final or career average basis.
Defined benefit plans for other hourly employees generally provide benefits of
stated amounts for specified periods of service.
The Corporation's defined benefit pension plans comply with three principal
standards: the Employee Retirement Income Security Act of 1974 as amended
(ERISA), which in conjunction with the Internal Revenue Code, determines legal
minimum and maximum deductible funding requirements; U.S. Government Cost
Accounting Standards (CAS), which in conjunction with Federal Acquisition
Regulations, establish rules for determining and measuring contractors'
pension costs; and Statement of Financial Accounting Standards No. 87,
"Employers' Accounting for Pensions" (FAS 87), which establishes rules for
financial reporting. FAS 87 requires the recognition of actuarial values on a
"termination" rather than an "ongoing" basis and specifies that certain key
actuarial assumptions be adjusted annually to reflect current, rather than
long-term, trends in the economy.
Consistent with the requirements of ERISA and CAS, it is the Corporation's
funding policy to stabilize annual contributions as a percentage of payroll by
utilizing the entry-age-normal actuarial cost method, with assumptions selected
on the basis of long-term trends.
On December 31, 1993, retirement plan assets, which are held in a master
trust, were invested principally in listed stocks and bonds and cash
equivalents.
Certain health care and life insurance benefits are provided to eligible
retirees by Martin Marietta or its consolidated subsidiaries. These benefit
plans are funded by the Corporation through several trusts. For recently retired
participants, the health benefits generally provide for cost sharing through
participant contributions and copayments. For salaried employees who retired
after 1992, there is an annual limit on the Corporation's contribution per
participant.
Prior to 1993, the Corporation recognized the costs of retiree health
benefits on a claims-paid basis. These costs were $33 million in 1992 and $27
million in 1991.
TheCorporation has adopted Statement of Financial Accounting Standards No.
106, "Employers' Accounting for Post-retirement Benefits Other Than Pensions"
(FAS 106),
- --------------------------------------------------------------------------------
The net pension cost of defined benefit plans included the following components
(add 000):
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Service cost-benefits earned during
the period $ 164,663 $ 116,142 $ 108,715
Interest cost 272,581 183,114 172,084
Net amortization and other components 112,472 (113,846) 1,789
Actual return on assets (402,644) (76,242) (180,715)
- --------------------------------------------------------------------------------
Net pension cost $ 147,072 $ 109,168 $ 101,873
================================================================================
Assumptions used as of December 31:
Plan discount rates 7.5% 6.3%-7.5% 6.5%-7.8%
Rates of increase in future
compensation levels 6.0% 6.0% 6.0%
Expected long-term rate of return on
assets 8.75% 8.0% 8.0%
The following table sets forth the defined benefit plans'
funded status and amounts recognized in the Corporation's
consolidated balance sheet as of December 31 (add 000): 1993 1992
Plan assets at fair value $4,048,738 $2,538,400
================================================================================
Actuarial present value of benefit
obligations:
Vested $3,376,739 $2,202,994
Non-vested 65,860 24,364
- --------------------------------------------------------------------------------
Accumulated Benefit Obligation (ABO) $3,442,599 $2,227,358
================================================================================
Projected Benefit Obligation (PBO) $4,240,711 $2,838,914
================================================================================
Reconciling Items:
Assets in excess of ABO $ 606,139 $ 311,042
Effect of estimated future pay increases (798,112) (611,556)
- --------------------------------------------------------------------------------
Assets less than PBO (191,973) (300,514)
Unrecognized prior-service cost 63,830 102,161
Unrecognized net assets (36,757) (40,602)
Unrecognized loss 216,770 285,038
- --------------------------------------------------------------------------------
Prepaid pension cost $ 51,870 $ 46,083
================================================================================
</TABLE>
50
<PAGE>
<PAGE>
effective January 1, 1993. FAS 106 requires that the cost of certain post-
retirement benefits be recognized under an accrual method of accounting
instead of the prior practice of expensing the cost of such benefits as paid.
The Corporation has elected to expense in the first quarter of 1993 the
liability accumulated through 1992 due to the change in accounting method.
This one-time transition obligation of $656 million resulted in an after-tax
charge to net income of $412 million in the first quarter of 1993.
The Corporation's policy is to fund amounts that are consistent with the
expense accrual under FAS 106, including an amortization payment for the
transition obligation.
Since 1988, the Corporation has made contributions to the irrevocable trusts
established to pay future health benefits to eligible retirees and dependents.
On December 31, 1993, plan assets were invested principally in listed stocks and
bonds and cash equivalents.
- --------------------------------------------------------------------------------
The net periodic post-retirement benefit cost for 1993 includes the following
components (add 000):
<TABLE>
<S> <C>
Service cost-benefits earned
during the period $ 23,153
Interest cost 69,133
Net amortization and other components 12,586
Actual return on assets (30,447)
- ---------------------------------------------------------
Net periodic cost $ 74,425
=========================================================
Assumptions used as of December 31:
Discount rate 7.5%
Expected long-term rate of return on assets 8.75%
- --------------------------------------------------------------------------------
</TABLE>
The trend rate for health care inflation is 8.5% for 1993 and 1994, trending
down to 4.5% by 2001. The assumptions also include the impact of Medicare cost-
sharing provisions which, when used in conjunction with the health care
inflation rate, yields an effective health care cost-trend rate of
approximately 12.5%.
- --------------------------------------------------------------------------------
The following table sets forth the post-retirement health care plans' funded
status and estimated amounts recognized in the Corporation's consolidated
balance sheet as of December 31, 1993 (add 000):
<TABLE>
<S> <C>
Plan assets at fair value $ 279,577
- ------------------------------------------------------------------------------
Actuarial present value of benefit obligations:
Active employees, eligible to retire $ 67,038
Active employees, not eligible to retire 314,218
Former employees 743,297
- ------------------------------------------------------------------------------
Accumulated Projected Benefit
Obligation (APBO) $1,124,553
- ------------------------------------------------------------------------------
Assets less than APBO 844,976
Unrecognized prior-service cost 7,189
Unrecognized gain (111,535)
- ------------------------------------------------------------------------------
Post-retirement benefit liability $ 740,630
==============================================================================
- ------------------------------------------------------------------------------
</TABLE>
A 1% increase in the health care cost trend rate would increase the APBO
by approximately 8.6%, and would increase the sum of the service cost and
interest cost by approximately 8.6%.
The Corporation has elected to adopt Statement of Financial Accounting
Standards No. 112, "Employers' Accounting for Post-employment Benefits" (FAS
112). FAS 112 mandates that the cost of certain post-employment benefits be
recognized under an accrual method of accounting instead of the current
practice of expensing the cost of such benefits as paid. The effect of this
change in accounting method resulted in a one-time, after-tax charge to net
income of $17 million.
Note N:
Other Income and Expenses
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
(add 000) 1993 1992 1991
Interest income $ 8,245 $ 6,035 $ 12,664
Restructuring charge - - (70,000)
Royalty income 32,094 9,729 14,007
Miscellaneous, net 6,658 5,380 (15,651)
- -------------------------------------------------------------------------------
Total $ 46,997 $ 21,144 $ (58,980)
</TABLE>
The restructuring charge in 1991 represents the estimated cost of closing and
selling related assets of the Corporation's International Light Metals operation
and resulted in an after-tax loss of $39 million, or 39 cents per share.
International Light Metals ceased operations in August 1992.
In 1991, miscellaneous includes the Corporation's equity in losses of
$17,470,000 from International Light Metals Corporation.
Note O:
Selling, General and Administrative Expenses
- --------------------------------------------------------------------------------
Selling, general and administrative expenses included in cost of sales, other
costs and expenses were $500,290,000 for 1993, $406,100,000 for 1992 and
$444,660,000 for 1991.
Note P:
Research and Development
- --------------------------------------------------------------------------------
Research and development expenses included in cost of sales, other costs and
expenses were $280,100,000 in 1993, $199,950,000 in 1992 and $183,580,000 in
1991 and included independent research and development, systems studies, other
concept formulation studies and bid and proposal work related to government
contract products and services.
51
<PAGE>
<PAGE>
Note Q:
Taxes on Income
- --------------------------------------------------------------------------------
Effective January 1, 1993, the Corporation adopted Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes" (FAS 109). The impact
of adopting the standard on the Corporation's earnings and financial position
was not material. Prior years' financial statements have not been restated to
apply the provisions of FAS 109. Income taxes for 1992 and 1991 are based on
pre-tax financial statement income in accordance with Accounting Principles
Board Opinion No. 11.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(add 000) 1993 1992 1991
<S> <C> <C> <C>
Federal income taxes:
Current $230,960 $135,340 $ 385,400
Deferred 11,900 9,800 (289,800)
- --------------------------------------------------------------------------------
Total federal income taxes 242,860 145,140 95,600
State income taxes:
Current 25,480 19,820 49,480
Deferred 3,520 2,040 (37,380)
- --------------------------------------------------------------------------------
Total state income taxes 29,000 21,860 12,100
Foreign income taxes 3,140 -- --
- --------------------------------------------------------------------------------
Total income taxes provided $275,000 $167,000 $ 107,700
================================================================================
<CAPTION>
The Corporation's effective income tax rate varied from
the statutory United States income tax rate because
of the following differences:
1993 1992 1991
<S> <C> <C> <C>
Statutory tax rate 35.0% 34.0% 34.0%
Increase (reduction) in tax rate from:
Deferred tax reversal -- (1.3) (11.0)
Research and development credit -- (.3) --
Nondeductible amortization 1.4 -- --
State income taxes 2.6 2.8 1.9
Other items (1.1) (2.6) .7
- --------------------------------------------------------------------------------
2.9 (1.4) (8.4)
- --------------------------------------------------------------------------------
Effective tax rate 37.9% 32.6% 25.6%
================================================================================
- --------------------------------------------------------------------------------
</TABLE>
52
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
The Corporation's effective income tax rate was reduced in 1991
principally as a result of the reversal of deferred taxes associated with long-
term contracts, previously provided at 46% or 40%, such rates being higher
than the reduced statutory rates in effect since 1988.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
The componenets of the provision for
deferred income taxes for the years
ended December 31, are as follows Liability Deferred Deferred
(add 000): Method Method Method
- --------------------------------------------------------------------------------
1993 1992 1991
<S> <C> <C> <C>
Deferral of profits on long-term
contracts $42,296 $ (1,660) $(312,860)
Tax depreciation and amortization 1,948 (9,230) (21,690)
Employee benefits (65,513) 8,280 30,530
Financial reserves 47,084 13,170 (24,370)
Other items (12,395) 1,280 1,210
- --------------------------------------------------------------------------------
$15,420 $11,840 $(327,180)
================================================================================
- --------------------------------------------------------------------------------
</TABLE>
Deferred federal and state tax provisions include the tax effects of
financial reserves in 1992 for the ATARS reconnaissance system and reversals
for the ADATS air defense system, International Light Metals and Commercial
Titan; and in 1991 for International Light Metals and reversals for ADATS and
Commercial Titan.
Deferred income taxes on the consolidated balance sheet reflect the net tax
effects 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 does not believe a valuation allowance is required.
The primary components of the Corporation's deferred tax assets and
liabilities at December 31, 1993, were as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Deferred Assets (Liabilities)
(add 000)
<S> <C>
Deferral of profits on long-term contracts $201,760
Property, plant and equipment
and intangible assets (287,228)
Employee benefits 330,226
Financial reserves 122,457
Other items 77,546
- --------------------------------------------------------------------------------
$444,761
================================================================================
- --------------------------------------------------------------------------------
</TABLE>
Profits on long-term contracts are reported on the completed contract
method for contracts entered into prior to March 1, 1986, and on the
percentage-of-completion capitalized cost method for contracts entered into
after February 28, 1986. The amounts also include the effect of the tax
deduction of certain costs in contracts-in-progress inventories.
Deferred income taxes relating to contracts are classified as current if
the related contract is expected to be completed within the following year;
otherwise, they are classified as noncurrent.
Income tax payments were $260,900,000 in 1993, $183,000,000 in 1992 and
$376,500,000 in 1991.
53
<PAGE>
<PAGE>
Note R:
Industry Segments (millions)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Depreciation
Assets Employed Property Additions Depletion, Amortization
- -----------------------------------------------------------------------------------------------------------------------------------
1993 1992 1991 1993 1992 1991 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Electronics $2,948.7 $1,008.1 $1,103.1 $ 65.6 $ 61.0 $ 68.3 $146.4 $ 81.7 $ 79.0
Space 1,597.6 832.0 1,069.0 64.8 41.7 33.8 85.4 43.3 42.5
Information 1,161.9 270.6 306.9 22.9 18.9 47.4 51.6 42.3 48.5
Services 218.3 32.3 26.8 2.0 .8 1.8 3.2 .6 .5
Materials 463.7 418.7 393.1 54.4 49.5 46.1 34.4 39.8 39.7
Energy and Other 299.4 198.3 240.8 13.6 9.3 19.9 27.9 12.9 9.0
- -----------------------------------------------------------------------------------------------------------------------------------
Total operating segments 6,689.6 2,760.0 3,139.7 223.3 181.2 217.3 348.9 220.6 219.2
Corporate 1,025.8 713.8 660.0 .1 .3 .8 1.1 5.5 5.9
Investments 29.5 125.8 108.3
- -----------------------------------------------------------------------------------------------------------------------------------
Total $7,744.9 $3,599.6 $3,908.0 $223.4 $181.5 $218.1 $350.0 $226.1 $225.1
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Description of Industry Segments The Corporation operates in the following
principal business segments:
Electronics Group is engaged in the design, development, engineering and
production of high-performance electronic systems for undersea, shipboard, land-
based and airborne applications. Major product lines include advanced technology
missiles, night navigation and targeting systems for aircraft; submarine and
surface ship combat systems; airborne, ship- and land-based radar; control
systems; ordnance; and aircraft component manufacturing and assembly.
Space Group is engaged in the design, development, engineering and production of
civil and military space launch vehicles, satellites, spacecraft and space- and
ground-based strategic systems; surface- and space-based information and
communications systems; and the Space Shuttle External Tank and associated
electronics and instrumentation.
Information Group is engaged in the design, development, integration and
operation of information systems, including simulation and automated test
systems and image processing, for government and commercial applications.
Services Group provides technical and management services, including
engineering, operation and maintenance of radar, telemetry communications and
instrumentation systems, training and manufacturing assembly-for government and
industry.
Materials Group comprises aggregates operations principally engaged in producing
and selling crushed stone, sand and gravel, primarily for highways and general
construction, and magnesia specialties operations, which produce and sell
refractory materials and other magnesia products used in steel production,
chemical processing purification and other industrial applications.
Energy and Other operations consist of the Corporation's activities associated
with the U.S. Department of Energy research, fabrication, assembly and
technology transfer operations; real estate subsidiaries in Florida and
Maryland; research laboratories; International Light Metals from December 9,
1991, until August 31, 1992, when this business ceased operations; and other
miscellaneous activities.
Corporate assets consist principally of cash and cash equivalents, deferred
tax assets and general corporate properties and, in 1992 and 1991, benefit plan
trusts.
The Corporation is the managing contractor for Department of Energy
facilities in Tennessee, Kentucky, Ohio, Florida, New Mexico, California and New
York. The contractual arrangements provide for the Corporation to be reimbursed
for the cost of operations and receive a fee for performing management services.
The Corporation reflects only the management fee in its sales and earnings for
these government-owned facilities. In addition, applicable employee benefit
plans are separate from the Corporation's.
Sales made directly or under subcontract to the U.S. Government amount to
approximately $3.55 billion in 1993, $1.75 billion in 1992 and $1.89 billion in
1991 for Electronics; $3.20 billion in 1993, $3.04 billion in 1992 and $3.09
billion in 1991 for Space; $1.08 billion in 1993, $.36 billion in 1992 and $.39
billion in 1991 for Information; and $341 million in 1993, $65 million in 1992
and $42 million in 1991 for Services.
Goodwill and intangible amortization in 1993 was $35.3 million for
Electronics, $19.3 million for Space, $19.9 million for Information, $3.7
million for Services and $2.5 million for Materials.
See page 61 of the Analysis of Financial Condition and Operating Results for
sales and operating profit data for each reportable segment.
54
<PAGE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareowners
Martin Marietta Corporation:
- --------------------------------------------------------------------------------
We have audited the accompanying balance sheet of Martin Marietta Corporation
and consolidated subsidiaries as of December 31, 1993 and 1992, and the related
statements of earnings, shareowners' equity and cash flows for each of the three
years in the period ended December 31, 1993. These financial statements are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Martin Marietta
Corporation and consolidated subsidiaries at December 31, 1993 and 1992, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993, in conformity with generally
accepted accounting principles.
As discussed in Note M and Note Q to the consolidated financial statements,
in 1993 the Corporation changed its method of accounting for post-retirement and
post-employment benefits and income taxes.
/s/ Ernst & Young
Washington, D.C.
January 21, 1994
STATEMENT OF FINANCIAL RESPONSIBILITY
Shareowners
Martin Marietta Corporation:
- --------------------------------------------------------------------------------
The management of Martin Marietta Corporation is responsible for the
consolidated financial statements and all related financial information
contained in this report. The financial statements, which include amounts based
on estimates and judgments, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis.
The Corporation maintains a system of internal accounting controls designed
and intended to provide reasonable assurance that assets are safeguarded, that
transactions are executed and recorded in accordance with management's
authorization and that accountability for assets is maintained. An environment
that establishes an appropriate level of control-consciousness is maintained and
monitored and includes examinations by an internal audit staff and by the
independent auditors in connection with their annual audit.
The Audit and Ethics Committee of the Board of Directors, which consists of
eight outside directors, meets periodically and, when appropriate, separately
withthe independent auditors, management and the internal auditors to review the
activities of each.
The financial statements have been audited by Ernst & Young, independent
auditors, whose report appears on this page.
/s/ Marcus C. Bennett
Marcus C. Bennett
Vice President and Chief Financial Officer
55
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ANALYSIS OF FINANCIAL CONDITION AND OPERATING RESULTS
Martin Marietta continued in excellent overall financial condition during 1993
and maintains adequate capital resources to operate, compete and grow in an
increasingly challenging and competitive marketplace.
Financial results for 1993, which include the aerospace businesses of GE
that were combined with Martin Marietta on April 2, 1993, produced earnings from
operations of $788 million-a 44% increase over 1992-on sales of $9.4 billion and
a year-end backlog of undelivered orders of $16.7 billion.
The Corporation's debt-to-capitalization ratio at December 31, 1993, was
39%, after absorbing a $1.4-billion increase in long-term debt associated with
the GE Transaction and a $429-million after-tax charge resulting from the
effects of certain changes in accounting adopted in 1993.
In July, the Board of Directors approved a two-for-one split of the
Corporation's common stock (in the form of a stock dividend) and increased the
dividend rate on common stock by 12 cents, or 7.1%, on a pre-split, annualized
basis. Both actions were effective in the third quarter of 1993.
The Corporation's 1993 after-tax earnings increased 30% from 1992, excluding
changes in accounting. Fully diluted earnings per share for the year, before the
effect of the accounting changes, were $3.80, up from the split-adjusted $3.60
reported for 1992. These increases in earnings and earnings per share were
achieved despite a significant increase in the Corporation's effective income
tax rate in 1993. The average number of shares also increased significantly in
1993, reflecting the effect of the convertible preferred stock issued in
connection with the GE Transaction. Martin Marietta's return on average
shareowners' equity for 1993 was 19%. At year-end, total shareowners' equity
reached a record $2.9 billion.
Conforming with the Corporation's acquisition strategy in aerospace and
defense-related businesses, the Corporation signed an agreement in December 1993
to purchase the Space Systems Division of General Dynamics Corporation. This
would allow the Corporation to enter the intermediate-lift space launch vehicle
market with the Atlas series of launch vehicles. The acquisition is subject to
certain regulatory approvals and the satisfaction of certain other conditions,
and is expected to close during the first half of 1994. It will be accounted for
under the purchase method of accounting. Operating results will be included with
those of the Corporation effective upon the closing date.
In December 1993, Martin Marietta Materials, Inc., a wholly owned subsidiary
of Martin Marietta Technologies, Inc., filed a registration statement with the
Securities and Exchange Commission for an underwritten public offering of Martin
Marietta Materials' common stock. The proposed offering will consist of
7,650,000 shares plus a 30-day over-allotment option for the underwriters to
purchase up to
56
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<PAGE>
1,147,500 additional shares. The initial public offering by Martin Marietta
Materials is dependent upon market conditions, but is expected in February 1994,
after which the Corporation will own approximately 83% of the outstanding stock
of the company, or 81% if the overallotment is exercised.
Business Environment
Martin Marietta's major business units principally serve government and
commercial customers in the aerospace and defense markets. These business units
also serve military and civil government customers as well as commercial
customers in the information, communications, construction aggregates and
specialty chemical businesses. Like many other businesses, Martin Marietta's
markets are increasingly affected by global and regional economic and political
cycles. In addition to these general marketplace conditions, the Corporation's
major business units also are affected by the unique characteristics of the
defense and aerospace industries.
The Corporation's defense and aerospace businesses are intensely competitive
and are subject to uncertainties, including those resulting from changes in
federal budget priorities, particularly the size and scope of the national
defense and space budgets. However, Martin Marietta's broadly diversified
programs and emphasis on high-priority programs and systems lessens somewhat the
Corporation's exposure to continued defense- and space-related spending
reductions. Defense budgets have been declining since the mid- to late-1980s,
and this general market decline and concomitant increased competition within the
defense and aerospace industries are expected to continue over the next few
years. Continued uncertainty exists over the size and scope of future defense
and space budgets and the resulting impact on specific programs. Consequently,
some of the Corporation's products and programs have been subject to stretch-
out, curtailment or termination. Additionally, since details of the fiscal year
1995 defense and space budgets are not known, ultimate spending reductions and
funding limitations could result in cancellations, deferments or delays in
existing or emerging programs.
Aerospace and defense businesses also have been adversely affected by
Department of Defense procurement methods over the past several years. In
addition to increased requirements for fixed-price development contracting,
defense contractors have been required to make greater investments in certain
new programs, the recoverability of which is sometimes dependent upon future
orders or the exercise of negotiated production options. As a result, the
Corporation's financial statements reflect an increased demand on working
capital. However, the Department of Defense recently reversed these policies,
and new contracts are beginning to reflect these changes. Changes in federal
income tax laws have also increased tax rates and accelerated cash payments for
taxes relating to long-term contracts. It should be noted that, recently,
contract progress payment rates have been decreased.
In September 1993, the Corporation announced a facilities consolidation plan
that is expected to reduce operating costs by $1.5 billion over the next five
years. Management believes the restructuring plan will enhance the Corporation's
ability to remain competitive and better serve its customers. Under the plan,
approximately five million square feet of capacity will be eliminated at
facilities in various locations. The consolidation plan, which focuses on
facilities, is concurrent with ongoing actions addressing employment levels. The
estimated cost of restructuring and integrating the former GE Aerospace
operations into the Corporation was recognized as part of the purchase price
allocation (see Business Combination with GE Aerospace on page 58). The $30-
million estimated cost of the Corporation's restructure plans that does not
relate to the assets acquired in the GE Transaction was charged to operating
earnings in 1993.
Certain of Martin Marietta's current U.S. Air Force launch vehicle contracts
contain mission success incentive provisions that could have a significant
effect on the future profitability of these programs. The provisions enable the
Corporation to earn significant fees for successful flights, but also
significantly reduce fee availability in the event of unsuccessful missions.
Additionally, the terms of certain of the Corporation's Department of Energy
contracts provide the opportunity to increase significantly the fee earned by
the Corporation based upon its performance and, at the same time, provide for
the Corporation's assumption of a significantly higher level of accountability
for its activities in managing Department of Energy facilities.
As a U.S. Government contractor, Martin Marietta's government contracts and
operations are subject to government investigations. The government may
investigate and make inquiries of the Corporation's business practices and
conduct audits of contract performance and cost classification. These
investigations may lead to claims which have been or may be asserted against the
Corporation. Under U.S. Government procurement regulations and practice, an
indictment of a government contractor could result in the contractor being
fined, suspended for a period of time from eligibility for bidding on, or for
award of, new government contracts; a conviction could result in debarment for a
specified term from government contracts. Although the outcome of such
investigations and inquiries cannot be predicted, in the opinion of management
there are no claims, audits or investigations pending against the Corporation
that are likely to have a material adverse effect on either the Corporation's
business or its consolidated financial position or results of operations.
Martin Marietta's expanding participation in civil and commercial markets is
affected in part by slow economic growth, as well as pressures to reduce public
sector spending levels. The Corporation's construction aggregates business is
sensitive to regional economic conditions and to cyclical swings in construction
spending and changes in levels of federal and state governments' infrastructure-
related spending. The Corporation's aggregates markets are concentrated
princi-
57
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<PAGE>
pally in the Southeast and Midwest and therefore are dependent upon the
economies of those regions. During 1993, those regions experienced economic
growth rates above the national average; however, there can be no assurance that
this trend will continue. Although shipments in the Midwest region were
adversely affected during the year by severe rains and flooding, the Corporation
anticipates that shipments will increase with the rebuilding of flood-damaged
areas. The Corporation continues to take advantage of strategic acquisition
opportunities that may arise in the construction aggregates industry.
The Corporation is involved in environmental clean-up matters, including
matters at various sites where it has been designated a Potentially Responsible
Party (PRP) by the U.S. Environmental Protection Agency. In the event the
Corporation is ultimately found to have liability at those sites where it has
been designated a PRP, while the Corporation is jointly and severally liable
with the other PRP's and, therefore, strictly liable for the entire cost of
remediation, it anticipates that the actual burden for the costs of remediation
will be shared with other PRPs. Additionally, the Corporation's insurers that
provided liability coverage for environmental matters during relevant periods
are participating in the Corporation's efforts under a reservation of rights.
The nature of these environmental matters makes it difficult to estimate the
timing and amount of any future costs that may be necessary for remedial
measures.
The Corporation currently is unable to predict the outcome of these matters,
inasmuch as the actual costs of remedial actions have not been determined and
the allocation of liabilities among parties that ultimately may be found liable
remains uncertain. The Corporation records appropriate financial statement
accruals for environmental issues in the period in which liability is
established and the amounts can reasonably be estimated. The Corporation's
accrued liability was approximately $50 million at December 31, 1993. Management
believes, however, that it is unlikely that any additional liability it may
incur for known environmental issues would have a material adverse effect on its
consolidated financial position or results of operations.
The consolidated financial statements and related information on pages 40
through 54 should be read in conjunction with the following review.
Business Combination With GE Aerospace
On November 22, 1992, Martin Marietta Corporation entered into a Transaction
Agreement with General Electric Company (GE) to combine the aerospace and
certain other businesses of GE (collectively the "GE Aerospace businesses") with
the businesses of Martin Marietta Corporation in the form of affiliated
corporations. The transaction (the "GE Transaction") was consummated on April 2,
1993.
The exchange consideration for the GE Transaction consisted of cash,
preferred stock, retention by GE of certain accounts receivable and the
assumption of payment obligations related to certain GE indebtedness. The GE
Transaction has been accounted for under the purchase method of accounting,
wherein approximately $1.9 billion in goodwill was recognized by the Corporation
after recording approximately $700 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 assets
acquired and liabilities assumed. Goodwill is being amortized over a 40-year
period, and the other intangibles are being amortized over a 15-year period.
Liquidity and Capital
At December 31, 1993, net working capital stood at $638 million and shareowners'
equity had increased to a record $2.9 billion, reflecting the issuance of $1
billion in preferred stock in connection with the GE Transaction and absorption
of a $429-million after-tax charge during the year from the changes in
accounting for post-retirement and post-employment benefits. In April 1993, the
Corporation assumed approximately $750 million of payment obligations (including
approximately $16 million of accrued interest) as part of the GE Transaction and
issued $700 million of long-term debt. Long-term debt was $1.8 billion at year-
end, and the ratio of long-term debt to total capitalization was 39% at December
31, 1993, compared with 20% a year earlier. The 39% debt-to-capitalization ratio
at year-end was down from the 44% ratio that reflected the consummation of the
GE Transaction.
Net cash flow provided by operating activities was $640 million in 1993,
$678 million in 1992 and $179 million in 1991. The 1993 cash flow was
principally from earnings before deducting non-cash charges for depreciation,
amortization and accounting changes, net of income tax payments of $261 million
made during the year. The cash flow from operating activities in 1992 was
principally from earnings, depreciation and decreases in receivables and
inventories, net of changes in Commercial Titan deferred revenue and $183
million in income tax payments made during the year. The 1991 cash flow was
principally from earnings and depreciation, net of increased demand for working
capital and income tax payments of $377 million.
Net capital expenditures were $215 million in 1993, $171 million in 1992 and
$212 million in 1991. In December 1993, the Board of Directors approved new
capital authorizations of $221 million.
Net cash consideration of $883 million was paid to GE in connection with the
GE Transaction. Cash flow of $109 million was generated primarily from the sale
of the majority of the Corporation's portfolio of marketable investment
securities. In December 1993, the Corporation defeased in-substance $103 million
of payment obligations assumed in connection with the GE Transaction.
Capital Structure and Resources
The GE Transaction had a significant impact on the capital structure and
resources of the Corporation in 1993. In addition to the issuance of $1 billion
of convertible preferred stock, the Corporation added $1.4 billion of long-term
debt and replaced its previous credit facility with two new facilities.
58
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Martin Marietta's internal cash flows and access to capital markets are
expected to continue to be sufficient to provide the capital resources necessary
to support operating needs and cover debt service requirements. The
Corporation's senior debt (which is issued through Martin Marietta Technologies,
Inc. and guaranteed by Martin Marietta Corporation) is rated A by Standard &
Poor's, A2 by Moody's and A by Duff & Phelps. Martin Marietta's commercial paper
is rated A-1 by Standard & Poor's, P-2 by Moody's and Duff-1 by Duff & Phelps.
Upon consummation of the GE Transaction, Martin Marietta Technologies, Inc.,
a wholly owned subsidiary, and Martin Marietta Corporation replaced a previous
credit facility with a $900-million, 364-day revolving credit facility expiring
on March 30, 1994, and a three-year revolving credit facility in the amount of
$1.3 billion expiring on March 31, 1996. These borrowing facilities may be used
for general corporate purposes. The Corporation borrowed $500 million under the
three-year credit facility to partially finance the GE Transaction at closing.
The $500 million was subsequently repaid and has been replaced by long-term
debt securities issued to the public in April 1993. Effective September 1, 1993,
Martin Marietta Technologies, Inc., permanently reduced the amounts committed
under the facilities. The $900-million credit facility was reduced to $500
million, and the $1.3-billion facility was reduced to $800 million. At December
31, 1993, no amounts were outstanding under either credit facility. Martin
Marietta Technologies has a shelf registration on file with the Securities and
Exchange Commission for offering up to $300 million of debt securities, which
may be issued from time to time. Such debt securities would be obligations of
Martin Marietta Technologies, Inc., that would be fully and unconditionally
guaranteed by Martin Marietta Corporation. The Corporation's ability to issue
such debt securities at any time is dependent, among other things, upon market
conditions.
Under a 1993 authorization from the Board of Directors, the Corporation may
repurchase approximately 32.4 million shares, on a post-split basis, for use in
connection with the Corporation's Amended Omnibus Securities Award Plan,
Performance Sharing Plan and for general corporate purposes. No shares were
repurchased by the Corporation during 1993.
[GRAPH APPEARS HERE]
Backlog
The Corporation's firm backlog of undelivered orders was $16.7 billion at
December 31, 1993, compared with $8.9 billion at December 31, 1992, and $11.0
billion at December 31, 1991. Approximately 38% of the undelivered orders at
December 31, 1993, are expected to be filled within one year.
Reported backlog at December 31, 1993, does not include approximately $3.7
billion of negotiated and priced, but unexercised, production options for
certain of the Corporation's major aerostructure and satellite contracts and for
various electronics, space, information and services programs. The exercise of
these options is at the discretion of the customer and, in the case of U.S.
Government contracts, dependent on future government funding.
Reported backlog also does not include approximately $12 billion in
equivalent sales under the Corporation's Department of Energy management and
operations contracts, since the management fee earned is the only item reflected
in the consolidated financial statements. The underlying incurred costs
associated with operating these Department of Energy facilities are not
reflected in any way in the Corporation's reported sales. Martin Marietta has
contracts to manage Department of Energy facilities in Tennessee, Kentucky,
Ohio, Florida, New Mexico, California and New York. Management fees earned with
respect to Department of Energy management and operations contracts are
reflected with the Corporation's "Energy and Other" activities for segment
reporting purposes.
New Accounting Standards
The Corporation adopted Statement of Financial Accounting Standards No. 106,
"Employers Accounting for Post-retirement Benefits Other Than Pensions" (FAS
106), effective January 1, 1993. FAS 106 requires that the cost of certain post-
retirement benefits be recognized under an accrual method of accounting instead
of the prior practice of expensing the cost of such benefits as paid. The
Corporation elected to expense the liability accumulated through 1992 due to the
change in accounting method. This one-time transition obligation of $656 million
resulted in an after-tax charge to net income of $412 million in the first
quarter of 1993.
The Corporation elected to adopt Statement of Financial Accounting Standards
No. 112, "Employers Accounting for Post-employment Benefits" (FAS 112). FAS 112
mandates that the cost of certain post-employment benefits be recognized under
an accrual method of accounting instead of the current practice of expensing the
cost of such benefits as paid. The effect of this change in accounting method
59
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resulted in a one-time, after-tax charge to net income of $17 million.
Effective January 1, 1993, the Corporation adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (FAS 109). The
impact of adopting the standard on the Corporation's earnings and financial
position was not material. Prior years' financial statements have not been
restated to apply the provisions
of FAS 109. Income taxes for 1992 and 1991 are based on pre-tax financial
statement income in accordance with Accounting Principles Board Opinion No. 11.
Results of Operations
Net sales were approximately $9.4 billion in 1993 and $6.0 billion in 1992. Net
sales increased $3.48 billion, or 58%, in 1993 and declined $121 million, or 2%,
in 1992. Net sales for 1993 include sales of the former GE Aerospace businesses
that were combined with Martin Marietta Corporation in April 1993.
The Electronics Group had 1993 sales of $3.9 billion, which were $2.0
billion, or 106%, higher than in 1992. Sales in 1992 were $235 million, or 11%
lower, than in the previous year. The 1993 gains reflect the performance of
Ocean, Radar & Sensor Systems, Government Electronic Systems and Defense
Systems. The sales performance of those units was reduced by sales declines from
Postal Systems and the Group's LANTIRN targeting and navigation system. In 1992,
sales gains from Postal Systems and Aero & Naval Systems were offset by a 20%
decline in Electronics & Missiles sales. This decline was principally due to a
decrease in LANTIRN sales.
The Space Group, with 1993 sales of $3.4 billion, had a sales increase of
$387 million, or 13%, in 1993, after a decline of $49 million, or 2%, in 1992.
The Air Force Titan IV program, which had a sales increase of 7% in 1993 after
declining 6% in 1992, was the principal contributor to the Group's total sales
and earnings in both years. The $11.3-billion Titan IV fixed-price-incentive
program is the Corpo-ration's largest and contributed 1993 sales of $1.55
billion. In 1993, sales from the Group's Astro Space unit more than offset
anticipated revenue declines on the External Tank program, the completed
Commercial Titan program and several other space launch programs.
[GRAPH APPEARS HERE]
[GRAPH APPEARS HERE]
The Information Group had 1993 sales of $1.4 billion, which were $775
million, or 126%, higher than in 1992. Sales in 1992 were $38 million, or 7%,
greater than in 1991. Sales from the Group's Management & Data Systems and
Automated Systems units were the principal reason for the sales gains in 1993;
the sales increase in 1992 was principally from the Information Systems unit.
Services Group sales increased $378 million in 1993 and $25 million in 1992.
The large increase in 1993 is primarily attributable to sales from Martin
Marietta Services, Inc., included in the Group's results from April 2, 1993.
Materials Group sales increased by 11% in 1993 and 10% in 1992, mainly from
sales of construction aggregates, which grew 16% in 1993 and 12% in 1992.
Aggregates' sales performance reflects improvements in construction markets and
increased production capacity resulting from acquisitions and new production
facilities.
Electronics Group operating profits increased 126% in 1993 and decreased 20%
in 1992. The gains in 1993 reflect principally the performance of Ocean, Radar &
Sensor Systems, Government Electronic Systems and Defense Systems. The decline
in 1992 is due to reduced LANTIRN program activities and to recognition of
estimated losses and program investments in Postal Systems that offset improved
Aero & Naval Systems earnings.
Operating profits for the Space Group decreased 18% in 1993 and increased 7%
in 1992. In 1993, lower Titan IV and External Tank program profits were
partially offset by Astro Space earnings. During 1993, Martin Marietta's Space
Group suffered the failure of three satellites and a Titan IV launch vehicle.
Following a Martin Marietta-sponsored investigation, the Space Group established
a formal Mission Assurance program. Through this program, the Space Group is
strengthening its systems engineering, establishing formal Mission Success
offices within all of its operating units, expanding its product integrity
engineering system and increasing employee training. The failures did not result
in a material adverse impact on the Corporation's financial position or results
of operations as of and for the year ended December 31, 1993. This Group's gains
in 1992 reflect a 25% growth in profits on the Air Force Titan IV program and
include recognition of mission success incentives on that program.
60
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Sales and Operating Profit
By Industry Segments
(millions)
Net Sales Operating Profit
- -------------------------------------------------------------------------------------------------------
1993 1992 1991 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Electronics $3,930.5 $1,906.0 $2,140.8 $333.5 $147.3 $183.8
Space 3,441.7 3,054.3 3,103.6 249.3 304.1 285.0
Information 1,391.6 617.0 579.2 127.1 34.0 43.7
Services 458.2 80.3 55.5 28.5 2.2 (2.1)
Materials 452.9 408.3 371.7 77.3 58.6 52.7
Energy and Other 117.4 121.5 76.9 42.6 45.0 33.3
- -------------------------------------------------------------------------------------------------------
9,792.3 6,187.4 6,327.7 858.3 591.2 596.4
Intersegment sales (356.6) (233.1) (252.3)
- ------------------------------------------------------------------------
Total operating segments $9,435.7 $5,954.3 $6,075.4
========================================================================
Corporate (31.3) (25.8) (34.2)
Investments 8.5 4.9 (83.7)
Interest expense (110.2) (57.9) (57.7)
- -------------------------------------------------------------------------------------------------------
Earnings before Taxes on Income
and Cumulative Effect of Accounting
Changes $ 725.3 $512.4 $420.8
========================================================================================================
</TABLE>
Information Group operating profits increased $93 million, or 274%, in 1993
after declining by $10 million in 1992. Earnings from Management & Data Systems
and Automated Systems were the primary reasons for the 1993 gains. Services
Group operating profits rose $26 million in 1993 and $4 million in 1992.
Materials Group operating profits increased 32% in 1993 and 11% in 1992,
principally due to its aggregates operations. Aggregates profits rose 50% in
1993 and 20% in 1992. These gains were due to improvements in construction
markets and increased output from acquisitions and new production facilities.
Other income and expenses, net (see page 40) increased $26 million in 1993
and $80 million in 1992. The increase in 1993 is principally attributable to
higher royalty income earned in 1993 versus 1992. In 1991, other income and
expenses included a $70-million pre-tax charge ($39 million after-tax, or 39
cents per share) in connection with restructuring the Corporation's
International Light Metals operation and $17 million of equity losses
representing the Corporation's share of losses incurred by that operation,
which is now closed.
Interest expense on debt rose $52 million, or 90%, in 1993, after remaining
essentially flat between 1992 and 1991. The increase in 1993 was due to the
$1.4-billion increase in long-term debt during the second quarter of 1993. The
Corporation issued $700 million in long-term debt in April 1993, and assumed
$750 million of GE payment obligations (including approximately $16 million of
accrued interest) in connection with the GE Transaction. In 1992, lower interest
expense on the Corporation's Adjustable Rate Note issue, which was partially
redeemed on May 1, 1992, was offset by the full-year interest on the $200
million of notes issued by the Corporation in March 1991.
The effective income tax rate for 1993 was 37.9%, compared with 32.6% in
1992 and 25.6% in 1991. On August 10, 1993, the Omnibus Budget Reconciliation
Act of 1993 increased the corporate federal income tax rate from 34% to 35%,
effective January 1, 1993; its impact was reflected in the Corporation's third
quarter results. The Corporation's effective income tax rate for 1993 is higher
than the current corporate federal income tax rate of 35% due to differences
between book and tax accounting arising from the amortization of goodwill
associated with the GE Transaction and state income taxes. The effective income
tax rates varied from the statutory rate in 1991 principally as a result of the
reversal of deferred taxes associated with long-term contracts previously
provided at rates higher than statutory rates in effect since 1988.
The sum of per-share earnings, assuming full dilution, by quarter does not
equal earnings per share for the year ended December 31, 1993, because the
average number of shares outstanding increased during the second quarter of 1993
as a result of the assumed conversion of the convertible Series A preferred
stock.
The sum of per-share earnings by quarter does not equal earnings per share
for the year ended December 31, 1992, due to the effect of share repurchases
during 1992.
The impact of inflation has become less significant with lower inflation
rates in recent years. When the Corporation incurs higher costs to replace
productive facilities, increased depreciation generally is countered by
increased productivity, increased selling prices and other offsetting factors.
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<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
(millions, except per share)
Earnings Earnings before Cumulative Effect
Quarter Net Sales from Operations of Accounting Changes Net Earnings (Loss)
- ------------------------------------------------------------------------------------------------------------------------
1993 1992 1993 1992 1993 1992 1993+ 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First $1,168.6 $1,371.5 $ 124.6 $ 120.9 $ 76.4 $ 74.6 $ (353.0) $ 74.6
Second 2,613.3 1,584.4 222.1 157.3 124.1 99.0 124.1 99.0
Third 2,466.1 1,548.8 223.6 147.1 131.1 96.1 131.1 96.1
Fourth 3,187.7 1,449.6 218.2 123.9 118.7 75.7 118.7 75.7
- ------------------------------------------------------------------------------------------------------------------------
Year $9,435.7 $5,954.3 $ 788.5 $ 549.2 $ 450.3 $ 345.4 $ 20.9 $ 345.4
========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Earnings Per Common Share Common Dividends Paid and Stock Prices
before Cumulative Effect of Accounting Market Price
Quarter Changes, Assuming Full Dilution Dividends Paid High Low High Low
- ----------------------------------------------------------------------------------------------------------------------
1993+ 1992 1993 1992 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First $ .81 $ .76 $ .21 $ .1875 $37.44 $32.00 $29.75 $25.00
Second .99 1.03 .21 .1875 39.94 35.81 27.44 24.94
Third 1.04 1.02 .225 .21 44.875 39.06 29.31 25.25
Fourth .94 .81 .225 .21 46.625 40.375 35.25 27.75
- ----------------------------------------------------------------------------------------------------------------------
Year $ 3.80* $ 3.60** $ 0.87 $ .795
===========================================================================
</TABLE>
+ First quarter 1993 earnings have been restated from the amounts originally
reported to reflect the Corporation's adoption in 1993 of Statement of
Financial Accounting Standards No. 112, "Employers Accounting for Post-
employment Benefits." The after-tax charge for the change in accounting
for post-employment benefits was $17.4 million or 18 cents per common share.
The loss per common share from the changes in accounting for post-
retirement benefits and post-employment benefits was $4.53 in the first
quarter of 1993 and $4.51 for the full year.
* The sum of per-share earnings by quarter does not equal earnings per share for
the year because the average number of shares outstanding increased
during the second quarter of 1993 as a result of the assumed conversion of the
convertible Series A preferred stock.
** The sum of per-share earnings by quarter does not equal earnings per share
for the year due to the effect of share repurchases.
- --------------------------------------------------------------------------------
62
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<PAGE>
Five Year Summary
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(add 000, except per share) 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Operating Results
Net sales $9,435,689 $5,954,292 $6,075,415 $6,125,939 $5,796,182
Cost of sales, other costs and expenses 8,647,224 5,405,123 5,537,926 5,683,462 5,331,544
- ----------------------------------------------------------------------------------------------------------------
Earnings from Operations 788,465 549,169 537,489 442,477 464,638
Other income and expenses, net 46,997 21,144 (58,980) 34,504 7,789
- ----------------------------------------------------------------------------------------------------------------
835,462 570,313 478,509 476,981 472,427
Interest expense on debt 110,173 57,890 57,660 41,790 43,084
- ----------------------------------------------------------------------------------------------------------------
Earnings before taxes on income and
cumulative effect of accounting changes 725,289 512,423 420,849 435,191 429,343
Taxes on income 275,000 167,000 107,700 107,600 122,400
- ----------------------------------------------------------------------------------------------------------------
Earnings before Cumulative Effect
of Accounting Changes 450,289 345,423 313,149 327,591 306,943
Cumulative effect of changes in accounting
for post-retirement benefits other than pen-
sions and for post-employment benefits (429,432) - - - -
- ----------------------------------------------------------------------------------------------------------------
Net Earnings $ 20,857 $ 345,423 $ 313,149 $ 327,591 $ 306,943
================================================================================================================
Per Common Share
Net earnings (loss)
Assuming no dilution:
Before cumulative effect of accounting changes $ 4.25 $ 3.60 $ 3.15 $ 3.26 $ 2.91
Cumulative effect of accounting changes (4.51) - - - -
- ----------------------------------------------------------------------------------------------------------------
$ (.26) $ 3.60 $ 3.15 $ 3.26 $ 2.91
================================================================================================================
Assuming full dilution:
Before cumulative effect of accounting changes $ 3.80 $ 3.60 $ 3.15 $ 3.26 $ 2.91
Cumulative effect of accounting changes * - - - -
- ----------------------------------------------------------------------------------------------------------------
* $ 3.60 $ 3.15 $ 3.26 $ 2.91
================================================================================================================
Cash Dividends $ 0.87 $ .795 $ 0.75 $ .69375 $ .6125
*Anti-dilutive
Condensed Balance Sheet Data
Current assets $2,448,240 $1,434,341 $1,627,649 $1,400,617 $1,440,605
Other noncurrent assets 707,772 800,445 847,418 760,441 663,150
Noncurrent deferred income taxes 206,119 - - - -
Property, plant and equipment, net 1,692,753 1,257,139 1,315,472 1,340,688 1,300,939
Cost in excess of net assets acquired 1,914,894 26,224 23,099 24,061 20,168
Other intangibles 775,113 81,456 94,394 84,722 80,517
- ----------------------------------------------------------------------------------------------------------------
Total $7,744,891 $3,599,605 $3,908,032 $3,610,529 $3,505,379
================================================================================================================
Current liabilities-other $1,491,591 $ 582,422 $ 884,240 $ 988,456 $ 922,148
Current maturities of long-term debt 318,525 3,814 74,908 5,191 4,179
Long-term debt 1,479,571 474,726 595,942 463,288 477,504
Post-retirement benefits 740,630 101,978 99,281 55,253 -
Other noncurrent liabilities 838,222 194,195 202,300 299,820 232,033
Noncurrent deferred income taxes - 297,254 247,458 257,558 514,555
Shareowners' equity 2,876,352 1,945,216 1,803,903 1,540,963 1,354,960
- ----------------------------------------------------------------------------------------------------------------
Total $7,744,891 $3,599,605 $3,908,032 $3,610,529 $3,505,379
================================================================================================================
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Martin Marietta Corporation
and Consolidated Subsidiaries
63
<PAGE>
<PAGE>
Board of Directors
- --------------------------------------------------------------------------------
Norman R. Augustine
Chairman and Chief Executive Officer,
Martin Marietta Corporation
Lamar Alexander
Baker, Worthington, Crossley, Stansberry & Woolf
(attorneys)
Marcus C. Bennett
Vice President and Chief Financial Officer,
Martin Marietta Corporation
John J. Byrne
Chairman and Chief Executive Officer,
Fund American Enterprises Holdings, Inc.
(property and casualty insurance)
A. James Clark
Chairman and President, Clark Enterprises, Inc.
(multi-unit construction company)
Edwin I. Colodny
Of Counsel, Paul, Hastings, Janofsky & Walker
(attorneys)
James L. Everett, III
Retired Chairman, Philadelphia Electric Company
(public utility)
Edward L. Hennessy, Jr.
Retired Chairman, AlliedSignal, Inc.
(diversified manufacturer)
Edward E. Hood, Jr.
Retired Vice Chairman, General Electric Company
(diversified manufacturer)
Caleb B. Hurtt
Retired President and Chief Operating Officer,
Martin Marietta Corporation
Gwendolyn S. King
Senior Vice President, Philadelphia Electric Company
(public utility)
Melvin R. Laird
Senior Counselor, The Reader's Digest Association, Inc.
(publishing)
Gordon S. Macklin
Retired Chairman, Hambrecht & Quist, Inc.
(investment banking)
Eugene F. Murphy
President and Chief Executive Officer,
GE Aircraft Engines
(diversified manufacturer)
Allen E. Murray
Chairman and Chief Executive Officer,
Mobil Corporation
(petroleum, petrochemical and plastic products)
John W. Vessey, Jr.
Retired Chairman of the Joint Chiefs of Staff
A. Thomas Young
President and Chief Operating Officer,
Martin Marietta Corporation
Audit and Ethics Committee
Mr. Macklin, Chairman.
Mrs. King, Messrs. Alexander, Everett, Hood,
Laird, Murray and Vessey.
Compensation Committee
Mr. Murray, Chairman.
Messrs. Alexander, Clark, Everett, Hennessy,
Hurtt and Murphy.
Executive Committee
Mr. Augustine, Chairman.
Messrs. Clark, Colodny, Hood, Hurtt, Laird,
Macklin, Vessey and Young.
Finance Committee
Mr. Byrne, Chairman.
Mrs. King, Messrs. Clark, Colodny, Hood, Hurtt, Macklin and Murphy.
Nominating Committee
Mr. Everett, Chairman.
Messrs. Byrne, Colodny, Hennessy,
Laird and Vessey.
64
<PAGE>
<PAGE>
Officers
- --------------------------------------------------------------------------------
Norman R. Augustine
Chairman and Chief Executive Officer
A. Thomas Young
President and Chief Operating Officer
Marcus C. Bennett
Vice President and Chief Financial Officer
Richard G. Adamson
Vice President
Joseph D. Antinucci
Vice President
Peter A. Bracken
Vice President
Michael F. Camardo
Vice President
Thomas A. Corcoran
Vice President
James B. Feller
Vice President
Clyde C. Hopkins
Vice President
Alexander L. Horvath
Vice President
Bobby F. Leonard
Vice President
William B. Lytton
Vice President
James W. McAnally
Vice President
Frank H. Menaker, Jr.
Vice President and General Counsel
Dan A. Peterson
Vice President
Robert J. Polutchko
Vice President
Michael A. Smith
Vice President
Peter B. Teets
Vice President
Robert W. Tieken
Vice President
Stephen P. Zelnak, Jr.
Vice President
Janet L. McGregor
Treasurer
Lillian M. Trippett
Secretary
65
<PAGE>
Martin Marietta Corporation
Stockholder Information
- --------------------------------------------------------------------------------
Notice of Proxy
A formal notice of the Annual Meeting of stockholders of the Corporation,
together with a proxy, will be mailed to each stockholder approximately four
weeks prior to the meeting. Proxies will be requested by the Board of Directors
at the meeting.
Form 10-K
The Corporation's Annual Report on Form 10-K, filed with the Securities and
Exchange Commission, is available upon written request to the Investor Relations
Office, 6801 Rockledge Drive, Bethesda, Maryland 20817.
Transfer Agent & Registrar
First Chicago Trust Company of New York
P.O. Box 2500
Jersey City, New Jersey 07303-2500
Telephone: (201)324-0137
Inquiries regarding your account records, issuance of stock certificates,
distribution of dividends and IRS Form 1099 should be directed to First Chicago
Trust Company of New York.
Dividend Reinvestment Plan
Martin Marietta's Dividend Reinvestment and Stock Purchase Plan offers
stockholders an opportunity to purchase additional shares through automatic
dividend reinvestment and/or voluntary cash investments. For more information,
contact our transfer agent, First Chicago Trust Company of New York.
Listings
Chicago Stock Exchange
New York Stock Exchange
Pacific Stock Exchange
Philadelphia Stock Exchange
Ticker Symbol: ML
Newspapers: MartM or MartMar
Independent Auditors
Ernst & Young
Executive Offices
6801 Rockledge Drive
Bethesda, Maryland 20817
Telephone: (301) 897-6000
Investor Relations
Telephone: (301) 897-6303
66
<PAGE>
<PAGE>
MARTIN MARIETTA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Annual Report on Form 10-K for the Year Ended December 31, 1993
Appendix - Description of Graphic and Image Material
(Pursuant to Rule 304(b)(2) of Regulation S-T)
Contained Within the 1993 Annual Report to Shareowners
I. "Financial Highlights" (page 2)
A. Net Sales (Bar Graph)
($ Billions)
1. 1993 - $9.4
2. 1992 - $6.0
3. 1991 - $6.1
4. 1990 - $6.1
5. 1989 - $5.8
B. Earnings Before Cumulative Effect of Accounting
Changes (Bar Graph)
($ Millions)
1. 1993 - $450.3
2. 1992 - $345.4
3. 1991 - $313.2
4. 1990 - $327.6
5. 1989 - $306.9
C. Book Value Per Common Share at Year End (Bar Graph)
($ Dollars)
1. 1993 - $19.61*
2. 1992 - $20.59
3. 1991 - $18.21
4. 1990 - $15.77
5. 1989 - $13.33
*Fully diluted book value per share of
$22.89 is based on total shareowners' equity
and assumes conversion of preferred stock and
exercise of stock options.
II. "Analysis of Financial Condition and Operating Results"
(page 56 through page 61)
A. Sales by Customer (Pie Charts)
1. 1993 - DoD 67%
- Commercial 20%
- Other Government/Civil 7%
- NASA 6%
2. 1992 - DoD 69%
- Commercial 14%
- Other Government/Civil 8%
- NASA 9%
<PAGE>
<PAGE>
B. Contribution to Sales (Pie Charts)
1. 1993 - Electronics 41%
- Space 36%
- Information 13%
- Materials 5%
- Services 4%
- Energy and Other 1%
2. 1992 - Electronics 32%
- Space 51%
- Information 7%
- Materials 7%
- Services 1%
- Energy and Other 2%
C. Contribution to Operating Profit (Pie Charts)
1. 1993 - Electronics 39%
- Space 29%
- Information 15%
- Material 9%
- Services 3%
- Energy and Other 5%
2. 1992 - Electronics 25%
- Space 51%
- Information 6%
- Materials 10%
- Services less than 1%
- Energy and Other 8%
<PAGE>
