Document:

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                                                                   EXHIBIT 10.18

                               SEVERANCE AGREEMENT

                  THIS SEVERANCE AGREEMENT dated as of March 12, 2003 (the
 "Agreement") is made between TROVER SOLUTIONS INC. (including all of its
subsidiaries, the "Company") and MARK J. BATES (the "Employee").

                              W I T N E S S E T H:

                  WHEREAS, the Employee is a key employee of the Company; and

                  WHEREAS, the Company desires to provide the Employee with
severance benefits under the conditions set forth in this Agreement;

                  NOW, THEREFORE, the Company and the Employee agree as follows:

                   1. Term of Agreement. The Employee's rights under this
Agreement shall commence as of the date hereof and shall terminate upon the
earlier of [i] the voluntary termination by the Employee of the Employee's
employment with the Com- pany or [ii] the date on which the Employee ceases to
be a member of the Management Group (the period during which this Agreement is
in effect being hereinafter referred to as the "Term"). Employee's membership in
the Management Group is subject to the approval of the Compensation Committee of
the Board of Directors.

                  2.    Severance Pay.

         2.1 Amount & Timing of Severance Pay. If there is a Termination, as
defined in Section 2.2, with regard to the Employee, [i] the Company will
continue the Employee's base salary in effect on the date of the Termination for
a period of one year following the day on which the Termination occurs (the
"Severance Pay ") and [ii] for a period of one year after the day on which the
Termination occurs, the Company shall continue to pay, or reimburse the Employee
for, the Company-paid portion of medical premiums under the Company's group
health plan that would apply to the Employee had he not terminated, provided
that the Employee makes a timely election of such con- tinuation coverage under
COBRA.; provided, however, that the Employee shall not be entitled to payment of
the Severance Pay upon a Termination if upon that Termination the Employee is
entitled to a Change-in-Control Payment, as defined in Section 9. The Severance
Pay shall: [x] be paid and delivered to the Employee on the same basis that the
Employee's regular base salary was paid and delivered immediately prior to
Termination; [y] be subject to reduction to the extent that during the one year
after the Termination the Employee receives compensation as an employee from an
entity other than the Company; and [z] not include any amounts of incentive
compensation.

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         2.2 Definition. "Termination" means a termination of the Employee's
employment, during the Term, other than for "Cause." "Cause" means the
occurrence of any of the following:

                  a. the Employee materially breaches the provisions of this
Agreement or any other employment-related agreement between the Employee and the
Company, and the Employee fails to cure such breach within ten days after the
Employee's receipt from the Company of written notice of such breach, which
notice shall describe in reasonable detail the Company's belief that the
Employee is in breach (notwithstanding the foregoing, no cure period shall be
applicable to breaches by the Employee of the provisions of Section 3, 4, 5, 6,
7 or 8 of this Agreement);

                  b. the Employee commits any other act in bad faith materially
detrimental to the business or reputation of the Company; or

                  c. the Employee intentionally engages in dishonest or illegal
activities or commits or is convicted of (or pleads nolo contendere to) any
crime involving fraud, deceit or moral turpitude.

         The Employee's death or disability shall be deemed a Termination. For
purposes of this Section, "disability" means that the Employee becomes mentally
or physically incapacitated or disabled so as to be unable to perform Employee's
duties. Without limiting the generality of the foregoing, Employee's inability
adequately to perform services for a period of 60 consecutive days will be
conclusive evidence of such mental or physical incapacity or disability, unless
such inability adequately to perform services under this Agreement is pursuant
to a mental or physical incapacity or disability covered by the Family Medical
Leave Act, in which case such 60-day period shall be extended to a 120-day
period.

                  3. Non-Disclosure of Proprietary Information. The Employee
recognizes and acknowledges that the Trade Secrets and Confidential Information
(as such terms are defined below) of the Company and all physical embodiments of
the same (as they may exist from time-to-time, collectively, the "Proprietary
Information") are valuable, special and unique assets of the Company's
businesses. The Employee further acknowledges that access to such Proprietary
Information is essential to the performance of the Employee's duties under this
Agreement. Therefore, in order to obtain access to such Proprietary Information,
the Employee agrees that the Employee shall hold in confidence all Proprietary
Information and will not reproduce, use, distribute, disclose, publish or
otherwise disseminate any Proprietary Information, in whole or in part, and will
take no action causing, or fail to take any action necessary to prevent causing,
any Proprietary Information to lose its character as Proprietary Information,
nor will the Employee make use of any such information for the Employee's own
purposes or for the benefit of any person, firm, corporation, association or
other entity (except the Company) under any circumstances.

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For purposes of this Agreement, the term "Trade Secrets" means the whole or any
portion of any scientific or technical or other information, design, process,
procedure, formula, computer software product, documentation or improvement
relating to the Company's or its affiliates' businesses which [i] derives
economic value, actual or potential, from not being generally known to other
persons who can obtain economic value from its disclosure or use; and [ii] is
the subject of efforts that are reasonable under the circumstances to maintain
its secrecy or confidentiality. The term "Confidential Information" means any
and all data and information relating to the Company's or its affiliates'
"Business," other than Trade Secrets, [a] which has value to the Company or its
affiliates; [b] is not generally known by its competitors or the public; and [c]
is treated as confidential by the Company or its affiliates. The term "Business"
means the provision of any of the business or services that the Company is
engaged in on the date that the Employee leaves employment by the Company,
including without limitation subrogation and related recovery services, provider
bill auditing, contract compliance review, identification of certain other
insurance-related payments and cost management consulting for healthcare payors
or property and casualty insurers of any kind The provisions of this Section 3
will apply during the Employee's employment by the Company and for a two-year
period thereafter with respect to Confidential Information, and during the
Employee's employment by the Company and at any and all times thereafter with
respect to Trade Secrets. These restrictions will not apply to any Proprietary
Information which is in the public domain provided that the Employee was not
responsible, directly or indirectly, for such Proprietary Information entering
the public domain without the Company's consent. This Section 3, together with
Sections 2, 4, 5, 6, 7, 8 and 9 of this Agreement, shall survive termination of
this Agreement.

                  4. Non-Competition and Related Covenants.

         4. 1 Non-Competition. During the Employee's employment by the Company
and for a period of two years following any termination of the Employee's
employment, the Employee will not, directly or indirectly, on the Employee's own
behalf or in the service of or on behalf of any other individual or entity,
compete with the Company within the Geographical Area (as defined). The term
"compete" means to engage in, have any equity or profit interest in, make any
loan to or for the benefit of, or render any services of any kind to, directly
or indirectly, on the Employee's own behalf or in the service of or on behalf of
any other individual or entity, either as a proprietor, employee, agent,
independent contractor, consultant, director, officer, partner or stockholder
(other than a stockholder of a corporation listed on a national securities
exchange or whose stock is regularly traded in the over-the-counter market,
provided that the Employee at no time owns, directly or indirectly, in excess of
one percent of the outstanding stock of any class of any such corporation) any
business which provides Business services. For purposes of this Agreement, the
term "Geographic Area" means the territory located within a 75 mile radius of
each facility for which the Employee has management responsibility during the
Employee's employment with the Company.

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         4.2 Non-Interference. During the Employee's employment by the Company
and for a period of two years following the termination of the Employee's
employment, the Employee will not, directly or indirectly, on the Employee's own
behalf or in the service of or on behalf of any other individual or entity,
interfere with, disrupt, or attempt to disrupt the past, present or prospective
relationships, contractual or otherwise, between the Company and any supplier,
consultant, or client of the Company with whom the Employee had material contact
during the Employee's employment by the Company. The term "prospective
relationship" is defined as any relationship where the Company has actively
sought an individual or entity as a prospective supplier, consultant, or client.

         4.3 Non-Solicitation of Clients Covenant. The Employee agrees that
during the Employee's employment by the Company and for a period of two years
following the termination of the Employee's employment, the Employee will not,
directly or indirectly, on the Employee's own behalf or in the service of or on
behalf of any other individual or entity, divert, solicit or attempt to solicit
or accept business from any individual or entity [i] who is a client of the
Company at any time during the six-month period prior to the Employee's
termination of employment with the Company ("Client"), or was actively sought by
the Company as a prospective client, or [ii] with whom the Employee had material
contact while employed by the Company to provide Business services to such
Clients or prospects, in either case to provide, directly or indirectly,
Business services.

                   The Employee further agrees that during the Employee's
employment by the Company and for a period of two years following the
termination of the Employee's employment, the Employee will not, directly or
indirectly, as an employee, independent contractor, agent or in any other
capacity, be employed by any Client to provide, directly or indirectly, Business
services.

         4.4 Construction. The parties agree that any judicial authority
construing all or any portion of this Section 4 or Section 5 will be empowered
to sever any portion of the Geographical Area, client base, prospective
relationship or prospect list or any prohibited business activity from the
coverage of such Section and to apply the provisions of such Section to the
remaining portion of the Geographical Area, the client base or the prospective
relationship or prospect list, or the remaining business activities not so
severed by such judicial authority. In addition, it is the intent of the parties
that the judicial authority replace each such severed provision with a provision
as similar in terms to such severed provision as may be possible and be legal,
valid and enforceable. It is the intent of the parties that Sections 4 and 5 be
enforced to the maximum extent permitted by law. If any provision of either such
Section is determined not to be specifically enforceable, the Company shall
nevertheless be entitled to bring an action to seek to recover monetary damages
as a result of the breach of such provision by the Employee.

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                  5. Non-Solicitation of Employees Covenant. The Employee agrees
and represents that during the Employee's employment by the Company and for a
period of two years following any termination of the Employee's employment, the
Employee will not, directly or indirectly, on the Employee's own behalf or in
the service of, or on behalf of any other individual or entity, divert, solicit
or hire away, or attempt to divert, solicit or hire away [i] any person employed
by the Company or [ii] any person who has left the employment of the Company
within the one-year period which follows the termination of such employee's
employment with the Company, in either case, whether or not such employee is or
was a full-time employee or temporary employee of the Company, whether or not
such employee is or was employed pursuant to a written agreement and whether or
not such employee is or was employed for a determined period or at will.

                  6. Existing Restrictive Covenants. The Employee represents and
warrants that the Employee's employment with the Company does not and will not
breach any agreement which the Employee has with any former employer to keep in
confidence confidential information or not to compete with any such former
employer. The Employee will not disclose to the Company or use on its behalf any
confidential information of any other party required to be kept confidential by
the Employee.

                   7. Return of Confidential Information. The Employee
acknowledges that as a result of the Employee's employment with the Company, the
Employee may come into the possession and control of Proprietary Information,
such as proprietary documents, drawings, specifications, manuals, notes,
computer programs, or other proprietary material. The Employee acknowledges,
warrants and agrees that the Employee will return to the Company all such items
and any copies or excerpts thereof, and any other properties, files or documents
obtained as a result of the Employee's employment with the Company, immediately
upon the termination of the Employee's employment with the Company.

                  8. Proprietary Rights. During the course of the Employee's
employment with the Company, the Employee may make, develop or conceive of
useful processes, machines, compositions of matter, computer software,
algorithms, works of authorship expressing any such algorithm, or any other
discovery, idea, concept, document or improvement which relates to or is useful
to the Company's Business (the "Inventions"), whether or not subject to
copyright or patent protection, and which may or may not be considered
Proprietary Information. The Employee acknowledges that all such Inventions will
be "works made for hire" under United States copyright law and will remain the
sole and exclusive property of the Company. The Employee assigns and agrees to
assign to the Company, in perpetuity, all right, title and interest the Employee
may have in and to such Inventions, including without limitations all
copyrights, and the right to apply for any form of patent, utility model,
industrial design or similar proprietary right recognized by any state, country
or jurisdiction. The Employee further agrees, at the Company's request and
expense, to do all things and sign all documents or

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instruments necessary, in the opinion of the Company, to eliminate any ambiguity
as to the ownership of, and rights of the Company to, such Inventions, including
filing copyright and patent registrations and defending and enforcing in
litigation or otherwise all such rights.

         The Employee will not be obligated to assign to the Company any
invention made by the Employee while in the Company's employ which does not
relate to any business or activity in which the Company is or may reasonably be
expected to become engaged, except that the Employee is so obligated if the same
relates to or is based on Proprietary Information to which the Employee will
have had access during and by virtue of the Employee's employment or which
arises out of work assigned to the Employee by the Company. The Employee will
not be obligated to assign any Invention which may be wholly conceived by the
Employee after the Employee leaves the employ of the Company, except that the
Employee is so obligated if such Invention involves the utilization of
Proprietary Information obtained while in the employ of the Company. The
Employee is not obligated to assign any Invention which relates to or would be
useful in any business or activities in which the Company is engaged if such
Invention was conceived and reduced to practice by the Employee prior to the
Employee's employment with the Company, and if such Invention is listed on the
attached Exhibit A.

                  9.       Change in Control

         9.1 Definition. A "Change in Control" means the occurrence of any of
the following:

                  a. the adoption of a plan of merger or consolidation of the
         Company with any other corporation or other entity as a result of which
         the holders of the outstanding voting stock of the Company as a group
         would receive less than 40% of the voting stock or ownership interest
         of the surviving or resulting entity or its parent entity;

                  b. the adoption of a plan of liquidation or the approval of
         the dissolution of the Company;

                  c. the sale or transfer of all or substantially all of the
         assets of the Company;

                  d. the following individuals cease for any reason to
         constitute a majority of the number of directors then serving:
         individuals who, on the date of this Agreement, constitute the Board
         and any new director (other than a director whose initial assumption of
         office is in connection with an actual or threatened election contest,
         including but not limited to a consent solicitation, relating to the
         election of directors of the Company) whose appointment or election by
         the

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         Board or nomination for election by the Company's stockholders was
         approved or recommended by a vote of at least two-thirds of the
         directors then still in office who either were directors on the date of
         this Agreement or whose appointment, election or nomination for
         election was previously so approved or recommended; or

                  e. any individual, entity, group (within the meaning of
         Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
         and the rules promulgated under such act), or other person acquires in
         a single transaction or a series of transactions more than 30% of the
         outstanding shares of the Company's common stock.

         9.2 Change in Control Payment. Following a Change in Control, the
Company will make a Change in Control Payment under Section 9.3 to the Employee
if within the 2-year following the Change in Control the Employee is terminated
or the Employee voluntarily terminates employment for Good Reason (as such term
is defined below), provided that the Employee is employed by the Company on the
date of the Change in Control and was a member of the Management Group (as such
term may be defined by the Board of Directors) prior to the execution of a
definitive agreement, if any, between the Company and any entity to be combined
with the Company in connection with a Change in Control.

         For purposes hereof, "Good Reason" means the occurrence of any of the
following without the prior express written consent of the Employee:

                  a. the assignment to the Employee of duties materially less
significant than those normally associated with the position held by the
Employee immediately prior to the Change in Control; or

                  b. a material reduction in the Employee's base salary or bonus
opportunity from the amount in effect immediately prior to the Change in
Control, or a material change in the employee benefits provided by the Company
to the Employee such that the package of benefits provided after the change is
in the aggregate materially less beneficial to the Employee than the package
provided immediately prior to the Change in Control; or

                  c. a mandated relocation of the Employee's site of employment
to a site more than 25 miles from 1400 Watterson Tower, Louisville, Kentucky.

         Notwithstanding the foregoing, no occurrence will constitute Good
Reason unless [i] at least 30 days before the termination of employment, the
Employee notifies the Company's Board of Directors of the conditions which the
Employee believes constitute Good Reason and states in the notice that unless
those conditions are cured the

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Employee will terminate his or her employment with the Company, but those
conditions are not cured prior to the termination of employment, and [ii] the
termination of employment occurs within 60 days after the Employee learns of the
conditions which constitute Good Reason.

         9.3 Amount and Timing of Change in Control Payment. The amount of the
Change in Control Payment will be: [i] if the Employee has been a member of the
Management Group for three years or less on the date of the Change in Control
Event, one year of salary and one year of benefits continuation; and [ii] if the
Employee has been a member of the Management Group for more than three years on
the date of the Change in Control Event, two years of salary and two years of
benefits continuation. The Change in Control Payment shall be paid as salary
continuation in accordance with the provisions applicable to Severance Pay under
Section 2.1. For purposes of calculating the Employee's tenure in Management
Group, all periods in which the Employee was in the Management Group prior to
the Change in Control Event shall be added together.

                  10.      General Provisions

                  10.1 If any provisions of this Agreement are determined to be
invalid, the remaining provisions will remain in full force and effect to the
fullest extent permitted by law.

                  10.2 This Agreement will be binding upon and inure to the
benefit of the Company and any successor of the Company, including any
corporation which acquires (by merger, consolidation or otherwise) all or
substantially all the assets of the Company (which successor, after it acquires
all or substantially all the assets of the Company, will be the "Company" for
the purposes of this Agreement).

                  10.3 This Agreement will be binding upon and inure to the
benefit of (and be enforceable by) the Employee and, after the Employee dies or
is determined not to be competent, the Employee's executors or other legal
representatives.

                  10.4 The Employee will be entitled to the payments specified
in Section 2 without regard to whether the Employee seeks or obtains other
employment after a Termination.

                  10.5 Any notices or other communications under or relating to
this Agreement must be in writing and will be deemed given on the day on which
it is delivered in person or by overnight courier service or sent by facsimile
transmission (with a confirmation from the sending facsimile machine indicating
receipt at the number to which sent), or on the third business day after the day
on which it is sent from within the United States of America by first class
mail, addressed (i) if to the Company or its Board of Directors, at the
principal offices of the Company, attention General Counsel

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and (ii) if to the Employee, to the Employee's office or to the Employee's home
address as shown on the personnel records of the Company, or at such other
address as is specified by the Employee to the Company after the date of this
Agreement in the manner provided in this Section.

                  10.6 This Agreement contains the entire agreement of the
parties with respect to the subject matter of this Agreement and supersedes all
prior severance agreements and other understandings with respect to that subject
matter, whether oral or written.

                  10.7 This Agreement may be amended only by a writing signed by
the Company, with the approval of its Board of Directors, and the Employee.

                  10.8 The Company may withhold from payments it is required to
make under this Agreement and from other payments of compensation to the
Employee all sums, including taxes, which the Company determines it is required
by law to withhold because of payments made under this Agreement, or debts owed
by the Employee to the Company.

                  10.9 The Company may withhold from payments it is required to
make under this Agreement and from other payments of compensation to the
Employee all sums, including taxes, which the Company determines it is required
by law to withhold because of payments made under this Agreement.

                  10.10 This Agreement will be governed by, and construed under,
the laws of the Commonwealth of Kentucky applicable to contracts made and to be
performed in that state.

                  10.11 The Employee hereby acknowledges that employment by the
Company is "at will," and that nothing in this Agreement shall be deemed to
alter the Employee's "at will" employment by the Company.

                  11. Remedies. The Employee agrees and acknowledges that the
violation of any of the covenants or agreements contained in Section 3, 4, 5, 6,
7 and 8 of this Agreement would cause irreparable injury to the Company, that
the remedy at law for any such violation or threatened violation thereof would
be inadequate, and that the Company will be entitled, in addition to any other
remedy, to temporary and permanent injunctive or other equitable relief without
the necessity of proving actual damages. The parties each acknowledge that
nothing herein shall limit the remedies for breach of this Agreement to the
amount or value of any Severance Pay.

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                  12. Excise Tax Limitation. Anything in this Agreement to the
contrary notwithstanding, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Employee (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise) (the "Total Payments") would be subject to the excise
tax imposed under Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), the payments due hereunder shall be reduced, prior to reduction of
Total Payments under any other agreement or program, such that the Employee
shall be entitled to receive Total Payments not to exceed 2.99 times the
Employee's applicable "base amount" under Section 280G of the Code.

                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year shown on the first page.

                                            TROVER SOLUTIONS, INC.

                                            By /s/ Patrick B. McGinnis
                                              -------------------------------
                                              Patrick B. McGinnis
                                              Chief Executive Officer

                                               /s/ Mark J. Bates
                                              -------------------------------
                                                       Mark J. Bates
                                                         "Employee"

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                                    EXHIBIT A
                                   INVENTIONS

                                      None

Employee:   /s/ MJB
            -----------
            Initials

                                       11exv10w05

 

EXHIBIT 10.05

SECOND AMENDED AND RESTATED

EMPLOYMENT PROTECTION AGREEMENT

      THIS Second Amended and Restated Employee Protection Agreement between
Martin Marietta Materials, Inc., a North Carolina corporation (the “Company”),
and              (the “Employee”), dated as of this 14th day of November, 2002
(the “Effective Date”)

W I T N E S S E T H :

      WHEREAS, Employee is a valuable member of management of the Company and
the Company desires to ensure the continuity of its senior management; and

      WHEREAS, it is the determination of the Company that management continuity
is most likely to occur if senior management is financially protected against
involuntary termination following a “Change of Control” (as defined below) of
the Company; and

      WHEREAS, the Company and the Employee entered into an Employment
Protection Agreement dated as of November 19, 1996, as amended and restated on
November 11, 1999 (as amended, the “Prior Agreement”) to provide the Employee
with payments and benefits upon certain terminations of the Employee’s
employment with the Company in connection with a Change of Control, in
consideration of the Employee’s continued service to the Company (which the
parties hereto agree constitutes adequate consideration to support to the
Company’s obligations under this Agreement); and

      WHEREAS, the Company and the employee desire to more clearly reflect their
intention with respect to certain provisions in the Prior Agreement, as set
forth in this Agreement;

      NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which are acknowledged, it is hereby agreed by and between
the Company and the Employee, each of whom intends to be legally bound, as
follows:

      1.     Definitions. For purposes of this Agreement,

      (a) “Annual Bonus” shall mean the Employee’s highest annual bonus paid
during the period beginning five years prior to a Change of Control and ending
on the date of termination of employment.

 

 

      (b)  “Base Salary” shall mean the highest annual rate of base salary that
Employee receives from the Company or its affiliates within the twelve-month
period ending on the date of a Change of Control.

      (c)  “Board” shall mean the Board of Directors of the Company.

      (d)  “Cause” shall mean the Employee’s having been convicted in a court of
competent jurisdiction of a felony or has been adjudged by a court of competent
jurisdiction to be liable for fraudulent or dishonest conduct, or gross abuse
of authority or discretion, with respect to the Company, and such conviction or
adjudication has become final and non-appealable. The Employee shall not be
deemed to have been terminated for Cause, unless the Company shall have given
the Employee (A) notice setting forth, in reasonable detail, the facts and
circumstances claimed to provide a basis for termination for Cause, (B) a
reasonable opportunity for the Employee, together with his counsel, to be heard
before the Board and (C) a notice of termination stating that, in the
reasonable judgment of the Board, the Employee was guilty of conduct
constituting Cause and specifying the particulars thereof in reasonable detail.

      (e)  “Change of Control” shall mean:

		
	 	     (i) The acquisition on or after October 18, 1996 by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) (an “Acquiring Person”)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 40% or more of either (A) the fully diluted shares of common
stock of the Company, as reflected on the Company’s financial statements (the
“Outstanding Company Common Stock”), or (B) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control: (X) any acquisition by
the Company or any “affiliate” of the Company, within the meaning of 17 C.F.R.
§ 230.405 (an “Affiliate”), (Y) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any Affiliate of
the Company or (Z) any acquisition by any entity pursuant to a transaction
which complies with clauses (A), (B) and (C) of subsection (iii) of this
definition; or

		
	 	     (ii) Individuals who constitute the Incumbent Board cease for any reason
to constitute at least a majority of the Board; or

		
	 	     (iii) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
“Business Combination”), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the

 

 

		
	 	Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, and (B) no Person (excluding any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
Affiliate of the Company, or such corporation resulting from such Business
Combination or any Affiliate of such corporation) beneficially owns, directly
or indirectly, 40% or more of, respectively, the fully diluted shares of common
stock of the corporation resulting from such Business Combination, as reflected
on such corporation’s financial statements, or the combined voting power of the
then outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination and (C) at least
a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or

		
	 	     (iv) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.

      (f)  “COBRA” shall mean 29 U.S.C. §§ 1161-1168, as amended from time to
time.

      (g)  “Disability” shall mean a medically determined physical or mental
impairment which qualifies the Employee for benefits under the Company’s
long-term disability program. An Employee shall not be deemed to have incurred
a Disability until such benefits actually become payable (i.e., after any
applicable waiting period). If the Company does not maintain a long-term
disability program, or if the Employee does not elect coverage under such
program, Disability shall mean the incapacity of the Employee such that he is
unable to perform his duties to the Company for a period of 150 out of 180
consecutive days, as determined in the reasonable judgment of the Committee.

      (h)  “Good Reason” shall mean (i) a good faith determination by the
Employee that the Company or any of its officers has (A) taken any action which
materially and adversely changes the Employee’s position (including titles),
authority or responsibilities with the Company or reduces the Employee’s
ability to carry out his duties and responsibilities with the Company or (B)
has failed to take any action where such failure results in material and
adverse changes in the Employee’s position (including titles), authority or
responsibilities with the Company or reduces the Employee’s ability to carry
out his duties and responsibilities with the Company; (ii) a reduction in the
Employee’s Base Salary or a restriction on the eligibility requirements for
other forms of monetary compensation that is inconsistent with the eligibility
requirements used prior to a Change of Control; or (iii) requiring the Employee
to be employed at any location more than 35 miles further from his principal
residence than the location at which the Employee was employed immediately
preceding the Change of Control, in any case of (i), (ii) or (iii) without the
Employee’s prior written consent.

      (i)  “Incumbent Board” shall mean a member of the Board of Directors of the
Corporation who is not an Acquiring Person, or an affiliate (as defined in Rule
12b-2 of the

 

 

Exchange Act) or an associate (as defined in Rule 12b-2 of the Exchange Act) of
an Acquiring Person, or a representative or nominee of an Acquiring Person.

      (j)  “IRS” shall mean the United States Internal Revenue Service.

      (k)  “Term” shall mean the term of this Agreement as set forth in Section
2.

      (l)  “Welfare Benefits” shall mean all benefits provided by the Company to
its employees pursuant to an “employee welfare benefit plan” as defined in
Section 3(1) of the Employee Retirement Income Security Act of 1974, as
amended.

      2.     Effective Date; Term. This Agreement shall be effective as of the
Effective Date, and shall remain in effect up to and including November 13,
2003, after which time this Agreement shall expire; provided, however, that on
November 14, 2003, and on each subsequent anniversary thereof (each an
“Anniversary Date”), the Term of this Agreement shall automatically be extended
for one additional year, unless at least sixty (60) days prior to such
Anniversary Date, either party to this Agreement gives written notice to the
other party of an intent to cancel such automatic extension, in which case this
Agreement shall expire upon the expiration of the then existing Term; further
provided, however, that, notwithstanding the above, (a) if a Change of Control
occurs prior to the termination of this Agreement, or (b) if prior to the
termination of this Agreement the Board becomes aware of any circumstances
which in the ordinary course result in a Change of Control (whether or not with
respect to the party first coming to the Board’s attention), then under no
circumstances will this Agreement terminate prior to the date that is 31 days
following the second anniversary of the Change of Control. Notwithstanding
this Section 2, the Company’s obligations under this Agreement shall survive
the termination of this Agreement if all events giving rise to such obligations
occurred prior to such termination.

      3.     Obligations of the Company upon Termination. If, during the two year
period following the effective date of a Change of Control, the Company
terminates the Employee’s employment other than for Cause or Disability, or the
Employee terminates his employment for Good Reason or if, during the thirty day
period following the two year anniversary of the effective date of a Change of
Control, the Employee terminates his employment for any reason:

      (a)  The Company shall pay to the Employee in a lump sum within 15 days
following Employee’s termination of employment:

		
	 	     (i) if not theretofore paid, an amount equal to any portion of the
Employee’s earned but unpaid Base Salary (including unused but accrued vacation
time) through the date of termination of employment; and
	 
	 	     (ii) a cash amount equal to three times the sum of:

		
	 	     (A) the Employee’s annual Base Salary and

 

 

		
	 	(B) the Employee’s Annual Bonus.

      (b)  The Company shall provide, for the period of three years following the
date of Employee’s termination of employment, all Welfare Benefits for the
Employee and his dependents and beneficiaries that are at least as favorable in
all material respects as the benefits provided to such person immediately
preceding the Change of Control and to employees employed by the Company or its
successor in positions following the Change of Control that are similar to the
position the Employee held immediately prior to the Change of Control
(“Similarly Situated Active Employees”); provided, however, that, with respect
to this Section 3(b), the Employee shall be required to pay the same share of
the cost of such Welfare Benefits as Similarly Situated Active Employees.

      (c)  The Company shall continue to be obligated to provide all the benefits
provided for under the Company’s defined benefit retirement plans and defined
contribution retirement plans, including the Company’s Supplemental Excess
Retirement Plan.

      (d)  The Company shall provide the Employee with the same retiree medical
benefits that were in effect for retirees of the Company immediately prior to
the Change in Control, based on the Employee’s years of service, including
service after the Change in Control; provided, however, that if Employee is
less than age 55 on the date of termination of employment, Employee shall be
treated for purposes of entitlement to such benefits as if he had attained age
55 prior to such termination.

      4.     Certain Additional Payments by the Company.

      (a)  Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the Company to
or for the benefit of the Employee, or any benefit provided by the Company to
the Employee (whether paid or payable or distributed or distributable provided
pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this Section 4) (a “Payment”)
would be subject to the excise tax imposed by Section 4999 of the Code (or any
successor provision) or any interest or penalties are incurred by the Employee
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the “Excise
Tax”), then the Employee shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by the Employee of all
taxes with respect to the Gross-Up Payment (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payment.

      (b)  Subject to the provisions of Section 4(c), all determinations required
to be made under this Section 4, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Ernst & Young or
such other nationally recognized accounting firm then auditing the accounts of
the Company (the “Accounting Firm”) which shall provide

 

 

 detailed supporting calculations both to the Company and the Employee
within 15 business days of the receipt of notice from the Employee that there
has been a Payment, or such earlier time as is requested by the Company. In
the event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, or is unwilling or
unable to perform its obligations pursuant to this Section 4, the Employee
shall appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment, determined
pursuant to this Section 4, shall be paid by the Company to the Employee within
five days of the receipt of the Accounting Firm’s determination. Any
determination by the Accounting Firm shall be binding upon the Company and the
Employee. As a result of the potential uncertainty in the application of
Section 4999 of the Code (or any successor provision) at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made (“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 4(c) and the Employee thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Employee.

      (c)  The Employee shall notify the Company in writing of any claim by the
IRS that, if successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given as soon as practicable but
no later than 20 business days after the Employee is informed in writing of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Employee shall not pay
such claim prior to the expiration of the 30-day period following the date on
which he gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies the Employee in writing prior to the expiration of such period
that it desires to contest such claim, the Employee shall:

		
	 	     (i) give the Company any information reasonably requested by the Company
relating to such claim,
	 
	 	     (ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim
by an attorney reasonably selected by the Company,
	 
	 	     (iii) cooperate with the Company in good faith in order effectively to
contest such claim, and
	 
	 	     (iv) permit the Company to participate in any proceedings relating to such
claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall

 

 

indemnify and hold the Employee harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limiting the
foregoing provisions of this Section 4(c), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Employee to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Employee agrees
to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs the Employee to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to the Employee, on an interest-free basis,
and shall indemnify and hold the Employee harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Employee with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Furthermore, the Company’s control
of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Employee shall be entitled to settle
or contest, as the case may be, any other issue raised by the IRS or any other
taxing authority.

      (d)  If, after the receipt by the Employee of an amount advanced by the
Company pursuant to Section 4(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall (subject to the Company’s
complying with the requirements of Section 4(c)) promptly pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section 4(c), a determination is
made that the Employee shall not be entitled to any refund with respect to such
claim and the Company does not notify the Employee in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

      5.     Other Compensation and Benefits. The amount payable under this
Agreement in accordance with Section 3(a) shall not be reduced on account of
any compensation received by the Employee from other employment. From and
after the date the Employee is employed by a third party which provides any of
the benefits described in Section 3(b), the Company shall not be obligated to
provide the benefits to the extent provided by such third party.

      6.     Legal Fees and Expenses. The Company shall promptly reimburse the
Employee for the reasonable legal fees and expenses incurred by the Employee in
connection with enforcing any right of the Employee pursuant to and afforded by
this Agreement; provided, however, that the Company only will reimburse the
Employee for such legal fees and expenses if, in connection with enforcing any
right of the Employee pursuant to and afforded by this Agreement, either (a) a
judgment has been rendered in favor of the Employee by a duly

 

 

authorized court of law, (b) a duly authorized court of law determines that the Employee’s claim
was not frivolous, or (c) the Company and the Employee have entered into a
settlement agreement providing for the payment to the Employee of any or all
amounts due hereunder.

      7.     Confidential Information. The Employee shall not disclose any secret
or confidential information, knowledge or data relating to the Company or any
of its affiliated companies, and their respective businesses, obtained by the
Employee during his employment by the Company or any of its affiliated
companies and which is not otherwise public knowledge. In no event shall an
asserted violation of the provisions of this Section 7 constitute a basis for
deferring or withholding any amounts or benefits otherwise payable to the
Employee under this Agreement.

      8.     Release from Other Severance Benefits; COBRA. The Employee hereby
waives and releases the Company from the obligation to pay any severance
benefits to the Employee on account of a termination of employment on or after
a Change of Control, under any termination or severance policy of the Company
other than this Agreement, so long as all payments are made, and benefits
provided, to the Employee pursuant to Sections 3(a) and (b) herein. To the
extent that the obligation of the Company to provide medical benefits pursuant
to Section 3(b) is fulfilled, the period in which such medical benefits are
provided shall be credited towards the continued health care coverage required
to be offered to the Employee by COBRA, to the extent allowable under COBRA and
the regulations promulgated thereunder. In the event that no payment or
benefits are required pursuant to Sections 3(a) and (b), the Employee rescinds
any such waiver and release. Except for payments provided pursuant to the
Company’s formal severance policy, if any, the benefits and payments to be
provided by this Agreement will not reduce or eliminate any benefits or
payments of any kind whatsoever that are to be provided to the Employee,
including but not limited to, under any vacation policy, defined benefit
retirement plan, defined contribution retirement plan, and the Company’s
Supplemental Excess Retirement Plan.

      9.     Successors.

      (a)  This Agreement is personal to the Employee and, without the prior
written consent of the Company, shall not be assignable by the Employee
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Employee’s legal
representatives.

      (b)  This Agreement shall inure to the benefit of and be binding upon the
Company and its successors. The Company shall cause any successor to its
business, in any transaction in which this Agreement would not be assumed by
such successor by operation of law, to assume this Agreement by contract.

      10.     Miscellaneous.

      (a) Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina, applied without
reference to principles of conflict of laws.

 

 

      (b)  Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, or overnight
delivery service requiring acknowledgement of receipt, addressed as follows:

	 	 	 	 	 
	 	 	
If   to the Employee:
	 	_____________________________

_____________________________

_____________________________

	 
	 	 	 	 	 
	 
	 	 	
If to the Company:
	 	Martin Marietta Materials, Inc.

2710 Wycliff Road

Raleigh, North Carolina  27607

Attention:  Vice President and General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.

      (c)  Tax Withholding. The Company may withhold from any amounts payable
under this Agreement such Federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.

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

	 	 	 
	 	 	
MARTIN MARIETTA MATERIALS, INC.
	 	 	 
	 	 	
By:_____________________________
	 	 	
      Stephen P. Zelnak, Jr.

      Chairman and Chief Executive Officer
	 	 	 
	 	 	
EMPLOYEE
	 	 	 
	 	 	
_____________________________

      Name

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