EXHIBIT 10.01

MARTIN MARIETTA MATERIALS, INC.

FORM OF PERFORMANCE SHARE UNIT AWARD AGREEMENT

 

THIS PERFORMANCE SHARE UNIT AWARD AGREEMENT, made as of [________] (the “Award
Agreement”), between Martin Marietta Materials, Inc., a North Carolina
corporation (the “Company”), _______________________ (the “Employee”).

 

1.

GRANT

 

Pursuant to the Martin Marietta Materials, Inc. Amended and Restated Stock-Based
Award Plan (the “Plan”), the Company hereby grants the Employee __________
Performance Share Units (the “Award”) as the target amount of a
performance-based stock unit award on the terms and conditions contained in this
Award Agreement, and subject to the terms and conditions of the Plan.  Depending
on the Company’s performance as set forth in Section 4 below, the participant
may earn zero percent (0%) to two hundred forty percent (240%) of the target
number of Performance Share Units awarded. The term “Performance Share Unit” or
“PSU(s)” as used in this Award Agreement refers only to the Performance Share
Units awarded to the Employee under this Award Agreement.

 

2.

GRANT DATE

 

The Grant Date is [___________].

 

3.

MEASUREMENT PERIOD  

 

Subject to the terms and conditions hereof and of the Plan, the measurement
period begins on [___________] and ends on [___________] (the “Measurement
Period”). Except as otherwise provided in this Award Agreement or the Plan, the
PSUs will become vested on December 31, [___________], at the end of the
Measurement Period (the “Vesting Date”), as described in Section 4 below and
subject to Section 7 below.

 

4.

PAYMENT OF PERFORMANCE SHARE UNITS

 

 

(a)

Vesting of Award. Unless forfeited or converted and paid earlier as provided in
Sections 7 and 9 below, the Performance Share Units granted hereunder will vest
(“Vest” or “Vesting”) based on the achievement of the performance goals
specified in Section 4(b) and, other than as provided in Sections 7 and 9 below,
provided that the Employee is employed by the Company or an Affiliate (as
defined in the Plan) on the Vesting Date.  

 

 

(b)

Performance Goals. The percentage of the Award that Vests and will be paid with
respect to the Measurement Period in connection with the PSUs (the “Final
Vesting Percentage”) is conditioned on the satisfaction of the performance goals
set forth in the table below and the other terms and conditions of this Section
4(b) during the Measurement Period, which have been established by the
Management Development and Compensation Committee of the Board of Directors of
the Company (the “Committee”). 

 

 

1)

The Final Vesting Percentage will be equal to the product of the Weighted
Achievement Percentage (as determined below) multiplied by the Relative TSR
Multiplier (as determined below), in each case as certified by the Committee.  

 

 

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2)

Following the end of the Measurement Period, the Company will perform two
calculations as set forth below:

 

i.

For each fiscal year of the Company during the Measurement Period, the Company
will determine the annual achievement (as a percentage) of each Measure (as set
forth in the table below) for such fiscal year against the Annual Goals set
forth in the table below, and then apply such achievement percentages to the
applicable Target Share Percentages set forth therein to determine the total
Target Share Percentage earned for such fiscal year; provided that performance
achievement above the “Target” level will be deemed to be Target level for such
fiscal year.  The “Annual Weighted Achievement Level” is the sum of total Target
Share Percentages for each of the three fiscal years during the Measurement
Period, which for the avoidance of doubt, may not exceed 100%.

 

 

ii.

After the end of the Measurement Period, the Company will determine (and the
Committee will certify) the cumulative achievement (as a percentage) of each
Measure for the entire Measurement Period against the Cumulative Goals set forth
in the table below, and then apply such achievement percentages to the
applicable Target Share Percentages set forth therein to determine the total
Target Share Percentage earned for the Measurement Period (such percentage, the
“Cumulative Weighted Achievement Level”), which for the avoidance of doubt, may
not exceed 200%.

 

 

3)

The “Weighted Achievement Percentage” will be deemed to be equal to the greater
of (i) the Annual Weighted Achievement Level or (ii) the Cumulative Weighted
Achievement Level.  

 

 

4)

After the end of the Measurement Period, the total units earned, if any, are
adjusted by applying a modifier based on the total shareholder return, or “TSR”
(as defined below) during the Measurement Period (“rTSR”) of the Company as
compared to the rTSR of the S&P 500 companies for the three-year period (the
“Relative TSR Multiplier”), as set forth in the table below.  If the Company’s
rTSR is at the 50th percentile of the S&P 500, the modifier will be 100%. If the
Company's rTSR is at or above the 75th percentile of S&P 500 companies, the
modifier will be 120%. If the Company's rTSR is below the 25th percentile, the
modifier will be 80%. If the rTSR is between the 25th and 75th percentiles, the
modifier will be determined by interpolation. For the avoidance of doubt, the
maximum amount of the award including the Relative TSR Multiplier may not exceed
240%.

 

[    ]

 

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Percentage of Target PSUs That Vest

50%

100%

200%

Measure

Weight

Threshold

Target

Maximum

[Measure 1]

[___]%

[______]

[______]

[______]

[Measure 2]

[___]%

[_______]

[______]

[______]

[Measure 3]

[__]%

[_______]

[______]

[______

 

 

  

 

 

 

(c)

Shares Payable.   On the Vesting Date, a number of PSUs equal to the target
number of PSUs awarded in this Award Agreement multiplied by the Final Vesting
Percentage will Vest and be converted into shares of Stock on a one-for-one
basis.  The resulting shares of Stock will be delivered to the Employee as soon
as practicable following the Vesting Date (but in no event later than 60 days
following the Vesting Date).

 

 

(d)

Payment Determination. The Committee may exercise its discretion to reduce the
Final Vesting Percentage (but not below 100%) if the Company’s TSR for the
Measurement Period is less than zero (0).

 

 

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(e)

Non-Recurring Events. The Committee shall have the sole authority to certify the
achievement level, Final Vesting Percentage and the number of PSUs earned at the
end of the Measurement Period, which shall include an adjustment to the actual
achievement of the performance goals by the Company to reflect the following,
but in each case only to the extent such adjustment would have a positive impact
on the determination of the level at which such performance measure was
achieved: (i) items relating to changes in accounting principles and changes in
law that affect reported results; (ii) items relating to financing activities,
refinancing or sale or repurchase of bank loans or debt securities; (iii) items
relating to expenses for restructuring, reorganizations, discontinued
operations, non-core businesses in continuing operations, acquisitions or
dispositions (whether or not completed during the Measurement Period); (iv)
other non-operating items; (v) items attributable to any stock dividend, stock
split, combination or exchange of stock occurring during the Measurement Period;
(vi) items relating to costs or accruals associated with discrete tax items or
changes in tax laws; (vii) items relating to partnership arrangements; (viii)
items relating to gains or losses for environmental or litigation reserve
adjustments, litigation, arbitration or claim judgments or settlements; (ix)
items relating to foreign exchange losses, currency fluctuations or changes to
the prices of raw materials; (x) items relating to amortization of intangible
assets, impairments of goodwill and other intangible assets, asset write downs,
non-cash interest expense, capital charges, or other financial and general and
administrative expenses; (xi) items relating to costs or accruals associated
with collective bargaining agreements, strike and/or strike preparation,
business interruption, curtailments, natural disasters or force majeure events;
(xii) items relating to mark to market gains or losses; (xiii) items relating to
accruals of any amounts for payments of bonuses or payments under the cash
incentive plan, performance stock unit agreement, restricted stock unit
agreement or any other compensation arrangement maintained by the Company; (xiv)
items

relating to an event not directly related to the operations of the Company,
subsidiary, division, business segment or business unit; (xv) items relating to
a change in the fiscal year of the Company; (xvi)  items relating to unbudgeted
capital expenditures; (xvii) items relating to the issuance or repurchase of
equity securities and other changes in the number of outstanding shares; and
(xviii) items relating to any other unusual or nonrecurring events.

 

5.

DIVIDEND EQUIVALENTS

 

On the date that the Awards Vest, dividend equivalents will be credited to the
Employee in an amount equal to the aggregate amount of dividends paid on a share
of Stock during the period commencing with the Grant Date and ending on the
Vesting Date multiplied by the number of PSUs that vest in accordance with this
Award Agreement.  The dividend equivalent amounts shall be paid in cash as soon
as practicable following the Vesting Date (but in no event later than 60 days
following the Vesting Date) from the general assets of the Corporation and shall
be treated and reported as additional compensation for the year in which payment
is made.  

 

6.

TRANSFERABLE ONLY UPON DEATH

 

This Performance Share Unit grant shall not be assignable or transferable by the
Employee except by will or the laws of descent and distribution.

 

7.

TERMINATION, RETIREMENT, DISABILITY OR DEATH

 

 

(a)

Termination.  If the Employee’s employment with the Company is terminated prior
to the Vesting Date for any reason other than on account of death, Disability or
Retirement (in each case, as defined below), whether by the Employee or by the
Company, and in the latter case whether with or without cause, then the
Performance Share Units will be forfeited upon such termination.

 

 

(b)

Retirement or Disability.  If the Employee’s employment with the Company is
terminated prior to the Vesting Date upon Retirement (as defined below) or as
the result of a disability under circumstances entitling the Employee to the
commencement of benefits under a long-term disability plan maintained by the
Company (“Disability”), then the terms of all outstanding PSUs will be
unaffected by such Retirement or Disability and the PSUs will be paid in
accordance with Section 4 above. “Retirement” is defined as termination of
employment with the Corporation after reaching age 62 under circumstances that
qualify for normal retirement in accordance with the Martin Marietta Materials,
Inc. Pension Plan; provided, that, the Committee may in its sole discretion
classify an Employee’s termination of employment as Retirement under other
circumstances.

 

 

(c)

Death.  If, prior to the Vesting Date, the Employee dies while employed by the
Company or after termination by reason of Retirement or Disability, then the
terms of all outstanding PSUs will be unaffected by such death and the PSUs will
be paid in accordance with Section 4 above to the Employee’s estate or
beneficiary.

 

 

(d)

Committee Negative Discretion.  Prior to the date on which the PSUs are
distributed hereunder, the Committee may in its sole discretion decide to reduce
or eliminate any

 

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amount otherwise payable with respect to an award under this Sections 7. The
Committee’s determinations shall be binding and conclusive on all parties.

 

8.

TAX WITHHOLDING    

 

At the time PSUs are converted into shares of Stock and delivered to the
Employee, the Employee will recognize ordinary income based on the value of the
Stock payable in accordance with Section 4.  The Company shall withhold
applicable taxes as required by law at the time of such Vesting by deducting
shares of Stock from the payment to satisfy the obligation prior to the delivery
of the certificates for shares of Stock.  Withholding will be at the minimum
rates prescribed by law; therefore, the Employee may owe additional taxes as a
result of the distribution.  If the Employee terminates employment on account of
Disability or Retirement and the PSUs are not forfeited, the Company may require
the Employee to pay to the Company or withhold from the Employee’s compensation,
by canceling PSUs or otherwise, an amount equal to satisfy the obligation to
withhold federal employment taxes as required by law.

 

9.

CHANGE IN CONTROL

 

In the event of a Change in Control, to the extent that the successor or
surviving company in the Change of Control event does not assume or substitute
for the PSUs (or in which the Company is the ultimate parent corporation and
does not continue the PSUs) on substantially similar terms or with substantially
equivalent economic benefits (as determined by the Committee prior to the Change
of Control) as Awards outstanding under the Plan immediately prior to the Change
of Control event, all outstanding PSUs will be deemed non-forfeitable and the
Vesting Percentage will be the greater of (1) the Vesting Percentage as
determined by the performance during the Measurement Period up to the day before
the effective date of the Change in Control, as determined by the Committee in
its sole discretion or (2) the target Vesting Percentage (100%).  The PSUs will
be distributed in shares of Stock or the consideration received in exchange for
shares of Stock in connection with such Change in Control no later than 15 days
following the date of such Change in Control.

 

10.

AMENDMENT AND TERMINATION OF PLAN OR AWARDS

 

As provided in Section 7 of the Plan, subject to certain limitations contained
within Section 7, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend all Award
Agreements under the Plan.  Notwithstanding Section 7 of the Plan, no such
amendment, suspension or discontinuance of the Plan or alteration or amendment
of this Award Agreement shall accelerate any distribution under the Plan or,
except with the Employee’s express written consent, adversely affect any PSU
granted under this Award Agreement; provided, however, that the Board of
Directors or the Committee may amend the Plan or this Award Agreement to the
extent it deems appropriate to cause this Award Agreement or the PSUs hereunder
to comply with Section 409A of the Code  (including the distribution
requirements thereunder) or be exempt from Section 409A of the Code or the tax
penalty under Section 409A(a)(1)(B) of the Code.  If the Plan and the Award
Agreement are terminated in a manner consistent with the requirements of Treas.
Reg. § 1.409A-3(j)(4)(ix), the Board of Directors may, in its sole discretion,
accelerate the conversion of PSUs to shares of Stock and immediately distribute
such shares of Stock to the Employee.

 

      

 

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11.

EXECUTION OF AWARD AGREEMENT

 

No PSU granted under this Award Agreement is distributable nor is this Award
Agreement enforceable until this Award Agreement has been fully executed by the
Company and the Employee.  By executing this Award Agreement, the Employee 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.

 

12.

MISCELLANEOUS

 

 

(a)

Nothing contained in the Award Agreement confers on the Employee the rights of a
shareholder with respect to this Performance Share Unit award prior to Vesting
and before the Employee becomes the holder of record of the shares of Stock
payable.  Except as provided in Section 9 of the Plan, no adjustment will be
made for dividends or other rights, and grants of dividend equivalents pursuant
to Section 5 will not be considered to be a grant of any other shareholder
right.

 

 

(b)

For purposes of this Award Agreement, the Employee will be considered to be in
the employ of the Company during an approved leave of absence unless otherwise
provided in an agreement between the Employee and the Company.

 

 

(c)

Nothing contained in this Award Agreement or in any Performance Share Unit
granted hereunder shall confer upon any Employee any right of continued
employment by the Company, expressed or implied, nor limit in any way the right
of the Company to terminate the Employee’s employment at any time.

 

 

(d)

Except as provided under Section 6 herein, neither these PSUs nor any of the
rights or obligations hereunder shall be assigned or delegated by either party
hereto.

 

 

(e)

Capitalized terms used but not defined in this Award Agreement shall have the
meanings assigned to such terms in the Plan.

 

 

(f)

To the extent there is a conflict between the terms of the Plan and this Award
Agreement, the terms of the Plan shall govern.

 

 

(g)

In lieu of receiving documents in paper format, Employee hereby agrees and
consents, to electronic delivery of all documents in connection with the PSUs
granted hereunder, including any documents the Corporation elects to or is
required to deliver (including, but not limited to, the Prospectus related to
Employee’s Award, any supplements to that Prospectus, and agreements, account
statements, monthly or annual reports, and all other forms or communications
required to be delivered to Employee pursuant to applicable securities laws).
Electronic delivery of a document to Employee may be via a location on an
intranet site or a third-party’s Internet site to which Employee has access. By
electronically accepting this Award, Participant acknowledges that he or she has
received and read, and agrees that this Award shall be subject to, the terms of
this Grant Notice, the Plan, the Standard Terms and Conditions, and the Long
Term Plan (including, but not limited to, the Committee’s discretionary
authority under the Long Term Plan to determine the number of Stock Units
payable with respect to the Award).  

 

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THE PARTICIPANT WILL BE DEEMED TO HAVE ACCEPTED THE AWARD AND THE STANDARD TERMS
AND CONDITIONS IF THE PARTICIPANT DOES NOT OBJECT IN WRITING WITHIN NINETY (90)
DAYS FOLLOWING DELIVERY OF THE GRANT NOTICE AND THESE STANDARD TERMS AND
CONDITIONS.

13.

NOTICES

 

Notices and all other communications provided for in this Award Agreement shall
be in writing and shall be deemed to have been duly given when personally
delivered or when mailed by overnight mail courier service, postage prepaid,
addressed as follows:

 

If to the Employee, to the most recent

address on file with the Company.

 

If to the Company, to:

 

Martin Marietta Materials, Inc.

2710 Wycliff Road

Raleigh, NC  27607

Fax:  (855) 783-4603

Attn:  Corporate Secretary

 

or to such other address or such other person as the Employee or the Company
shall designate in writing in accordance with this Section 13, except that
notices regarding changes in notices shall be effective only upon receipt.

 

14.

GOVERNING LAW

 

This Award Agreement shall be governed by the laws of the State of North
Carolina.

 

IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed
and the Employee has hereunto set his hand as of the day and year first above
written.

 

MARTIN MARIETTA MATERIALS, INC.

 

By:       Roselyn Bar_______________                          

Executive Vice President, General Counsel and Corporate Secretary

 

EMPLOYEE

 

 

By:____________________________

Employee’s Signature

 

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