Document:

EX-10.05

EXHIBIT 10.05

MARTIN MARIETTA MATERIALS, INC.

AMENDED AND RESTATED EXECUTIVE INCENTIVE PLAN

	I.
	 
	PURPOSE

	 

	 
	 
	The purpose of the Martin Marietta Materials, Inc. Executive Incentive Plan (the “Plan”) is
to enhance profits and overall performance by providing for its key management an additional
inducement for achieving and exceeding Martin Marietta Materials, Inc. (“MMM” or the
“Corporation”) performance objectives. Additionally, the Plan will allow a level of
compensation that is appropriate when compared with compensation levels of other comparable
organizations.

	 

	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. It is a prerequisite before any award can be
considered that a participant will have acted in accordance with the Martin Marietta
Materials, Inc. Code of Ethics and Standards of Conduct 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 standards 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.
	 
	BASIC PROGRAM ELIGIBILITY

	 

	 
	 
	Subject to the discretion of the Chief Executive Officer of the
Corporation, an employee will be eligible to participate in the Plan
for any Plan year in which the employee is classified no later than
July 1 of that year as one of the following:

President

Vice President

General Manager

 

 

Director

Others recommended by a Corporate Officer

	 
	 
	A Corporate Officer is any elected officer of the Corporation.

	 

	V.
	 
	BASIS FOR AWARDS

	 

	 
	 
	Awards will be paid based on the actual base salary paid to each participant during each
Plan year, and will be determined based on the following criteria:

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	Responsibility
 	 
	Target Incentive Award

	A.
	 
	Level
	 
	(% of Annual Salary)

	 
	 
	 
	 
	Chief Operating Officer
	 
	 
	80-100	%

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	Division Presidents
	 
	 
	60%-80
	%

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	Designated VPs of major functions

reporting to the Corporation’s President

or Chief Executive Officer

(Corporate Unit Head)
	 
	 
	60%-80
	%

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	Vice President/General Manager

reporting to a Division President or

Corporate Unit Head
	 
	 
	40%-50
	%

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	Designated Directors/General Managers/

Vice Presidents
	 
	 
	30%-50
	%

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	Other Directors/Managers
	 
	 
	30%-35
	%

	 
	 
	The award percentages noted above may be adjusted up or down subject to the discretion of
the Chief Executive Officer of the Corporation.

	 
	B.
	 
	Available Award

	 

	 
	 
	 
	Total incentive awards will be based on a combination of the performance of MMM, the
Operating Unit (as defined below), the Corporate Unit (as defined below) and the
individual, depending on the position occupied by the participant and other factors
described below. An “Operating Unit” is an operating unit(s) of the Corporation for
which the individual is responsible (for example, one or more segments, divisions,
regions, districts, etc.) as designated by the Chief Executive Officer. A
“Corporate Unit” is a non-operating unit(s) of the Corporation for which the
individual is responsible (for example, one or more of finance, legal, marketing,
purchasing, etc.) as designated by the Chief Executive Officer. The portion of the
total award
determined by the performance of MMM, the Operating Unit, the Corporate Unit and the
individual is outlined below.

 

 

	 
	1.
	 
	Operating Units 

	 

	 
	 
	 
	For Division Presidents, participants reporting to Division Presidents, and
participants whose work is primarily related to an Operating Unit, the award
will be based on the following:

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	Operating Unit	 
	Division	 
	MMM	 
	Individual
	 
	 
	Performance	 
	Performance	 
	Performance	 
	Performance
	Divisions
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Line Management
	 
	 
	50	%	 
	 
	—	 
	 
	 
	25	%	 
	 
	25	%
	Staff
	 
	 
	37.5	%	 
	 
	—	 
	 
	 
	25	%	 
	 
	37.5	%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Areas, Districts &
Regions
	 
	 
	50	%	 
	 
	12.5	%	 
	 
	12.5	%	 
	 
	25	%
	Line Management
	 
	 
	37.5	%	 
	 
	12.5	%	 
	 
	12.5	%	 
	 
	37.5	%
	Staff
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	2.
	 
	Corporate Units

	 

	 
	 
	 
	For individuals reporting to the Chief Executive Officer who are responsible
for a Corporate Unit and are not in an Operating Unit (“Corporate Unit
head”), participants reporting to a Corporate Unit head, and participants
whose work is primarily related to the Corporation, the award will be based
on the following:

	 
	•
	 
	Fifty percent (50%) of the award will be based on MMM performance,
as defined in Paragraph V.C.1 below.

	 

	 
	•
	 
	Fifty percent (50%) of the award will be based on individual
performance, as defined in Paragraph V.C.2 above.

	 
	3.
	 
	Combined Responsibilities

	 

	 
	 
	 
	For individuals who have responsibilities described in both Paragraphs V.B.1
and V.B.2 above, the award will be based on the following:

	 
	•
	 
	Sixty-five percent (65%) of the award will be based on the
performance of MMM and the Operating Unit(s) which that individual is
responsible, as defined in Paragraph V.C.1 below.

	 

	 
	•
	 
	Thirty-five percent (35%) of the award will be based on individual
performance, as defined in Paragraph V.C.2 below.

 

 

	 
	C.
	 
	Performance Criteria

	 
	1.
	 
	MMM, Operating Units and Corporate Units 

	 

	 
	 
	 
	MMM, Operating Unit and Corporate Unit performance will be measured by
profit contribution, cash flow, sales and production metrics and/or other
appropriate financial performance, return, safety and other factors
reflecting the performance of the Corporation, Operating Unit and Corporate
Unit.

	 

	 
	 
	 
	The Management Development and Compensation Committee of the Board of
Directors will determine the percentage that was achieved by MMM and the
Chief Executive Officer of the Corporation will determine the percentage
that was achieved by the Operating Units and the Corporate Units, each based
on an assessment of the factors listed above and on a subjective evaluation
of the overall contribution to the Corporation and will apply that
percentage to the portion of the total award that is available for MMM, the
Operating Unit(s) and/or the Corporate Unit(s) as outlined in Paragraph V.B.
above.

	 

	 
	2.
	 
	Individual Performance

	 

	 
	 
	 
	The portion of the total award based on individual performance, if
applicable, will be based on an assessment of the actual achievement of the
individual relative to quantitative, measurable goals established for the
Plan year, conduct in accordance with the Corporation’s Code of Ethics and
Standards of Conduct and a subjective evaluation of the relative
significance of one’s efforts in respect to its bearing on the overall
Corporation, Operating Unit(s) and/or Corporate Unit(s).

	 

	 
	 
	 
	The Chief Executive Officer will determine the percentage that was achieved
by the individual based on an assessment of the factors listed above and on
a subjective evaluation of the overall contribution of the individual, and
will apply that percentage to the portion of the total award that is
available for the individual, as outlined in Paragraph V.B. above.

	 
	D.
	 
	Discretion of the Chief Executive Officer

	 

	 
	 
	 
	Subject to approval by the Management Development and Compensation Committee of the
Board of Directors, the Chief Executive Officer of the Corporation may modify the
percentage of available award for any or all of the MMM, Operating Unit, Corporate
Unit and/or individual awards, based on an assessment of organizational and/or
individual contribution. The participant’s individual performance may impact the
percent of available MMM, Operating Unit and/or
Corporate Unit award. The performance of MMM, the Operating Unit and/or Corporate
Unit may impact the percent of available individual award.

 

 

	 
	E.
	 
	Payment of Awards

	 

	 
	 
	 
	Awards under the Plan shall be payable in a lump sum, excluding the amounts, if any,
credited on an elective or non-elective basis to stock units pursuant to the Martin
Marietta Materials, Inc. Incentive Stock Plan, as soon as practicable following the
close of the Plan year, but in no event later than March 15th of the year
following the Plan year.

	 

	 
	F.
	 
	Changes in Participation

	 

	 
	 
	 
	An employee must be a full-time employee of the Corporation on December 31 of the
Plan Year to be eligible to participate in the Plan. It is recognized that during a
Plan year, individual changes in the eligibility group may occur as participants
change jobs or terminate through death, retirement or other reasons. As these
circumstances occur, the Chief Executive Officer of the Corporation may, in his
discretion, give consideration to recommend the grant of the award under the Plan
and/or to adjust the amount of incentive award paid.

	 

	 
	 
	 
	Persons in the eligibility group hired during a Plan year may be eligible for an
award under the Plan in that year at the discretion and approval of the Chief
Executive Officer.EX-10.06

EXHIBIT 10.06

MARTIN MARIETTA MATERIALS, INC.

INCENTIVE STOCK PLAN, AS AMENDED

I. OVERVIEW AND PURPOSES

          This Plan is intended to give key employees who participate in the Corporation’s Executive
Incentive Plan the opportunity to acquire the Corporation’s stock on a discounted, tax-deferred
basis by having part of their annual incentive awards converted to Stock Units. Those units become
fully vested and are distributed in the form of unrestricted common stock after three years of
additional employment with the Corporation. Participation in the Plan is elective, except that
officers of the Corporation are required to have a minimum percentage of their annual incentive
awards converted to Stock Units. The stock-based compensation provided under this Plan constitutes
part of the Martin Marietta Materials, Inc. Omnibus Securities Award Plan.

          The Plan is intended to assist the Corporation in attracting and retaining key employees, to
link a portion of the compensation of such employees to shareholder returns, and to foster stock
ownership in the Corporation among key employees.

II. DEFINITIONS

          2.01 Board means the Board of Directors of the Corporation.

          2.02 Committee means the Equity Related Awards Committee of the Board, as designated
under the Omnibus Plan.

          2.03 Common Share means a share of common stock of the Corporation with a par value
of $.01.

          2.04 Corporation means Martin Marietta Materials, Inc.

          2.05 Disability means any physical or mental impairment that would qualify a
Participant for disability benefits under the standards of the long-term disability plan maintained
by the Corporation or under the Federal social security system.

          2.06 Eligible Employee means the Chief Executive Officer of the Corporation, each
elected vice president of the Corporation, and each other employee of the Corporation whom the
Committee has designated as eligible to participate in this Plan.

 

 

          2.07 Employment means active employment with the Corporation or any of its
subsidiaries or affiliates. An employee shall be deemed to remain in Employment during any
authorized leave of absence, with or without pay.

          2.08 Executive Incentive Plan means the Executive Incentive Plan of the Corporation,
under which annual Incentive Awards are paid to Eligible Employees.

          2.09 Identified Employee means an Eligible Employee (a) who is the Chief Executive
Officer of the Corporation or an elected vice president of the Corporation, in each case unless the
Committee, in its sole discretion, determines not to designate such officer as an Identified
Employee, or (b) who is otherwise designated by the Committee as an Identified Employee for any
Plan Year.

          2.10 Incentive Award means the amount of an award to an Eligible Employee under the
Executive Incentive Plan, before taking account of any reduction for Stock Units that may be
credited to the Eligible Employee.

          2.11 Omnibus Plan means the Martin Marietta Materials, Inc. Omnibus Securities Award
Plan, as adopted in February of 1994, and as it may be amended from time to time.

          2.12 Participant means an Eligible Employee for whom Stock Units have been credited,
whether on an elective or nonelective basis.

          2.13 Plan means the Martin Marietta Materials, Inc. Incentive Stock Plan.

          2.14 Plan Year means the calendar year. Any reference to Incentive Awards or Stock
Units awarded or credited for a Plan Year shall refer to the Plan Year preceding the calendar year
in which the Incentive Award is actually paid or in which the Stock Units are actually credited to
the Eligible Employee.

          2.15 Retirement means termination of a Participant’s Employment at a time when the
Participant is eligible to commence receiving retirement benefits under the Martin Marietta
Corporation Pension Plan for Salaried Employees, or any successor plan, without actuarial
reduction. The Committee, in its sole discretion, may classify a Participant’s termination of
Employment as Retirement under other circumstances.

          2.16 Stock Unit means a bookkeeping unit credited to a Participant that corresponds
to one Common Share.

 

 

III. EFFECTIVE DATE

          The Plan shall be effective as of the date of Committee approval and shall be in effect for
the 1995 Plan Year and for all subsequent years that the Omnibus Plan remains in effect.

IV. CREDITING OF STOCK UNITS

          4.01 Elective Crediting of Stock Units: Any Eligible Employee may elect to apply up
to fifty percent (50%) of his or her Incentive Award for a Plan Year toward the crediting of Stock
Units. The election must be (i) made in writing on the participation form approved for use under
the Plan, (ii) signed by the Eligible Employee, and (iii) submitted to the Corporation no later
than June 30 of the Plan Year for which the Incentive Award is awarded; the election shall be
irrevocable after that date. If an Eligible Employee who has made an election under this Section
4.01 for a Plan Year retires or otherwise terminates Employment before the date that Incentive
Awards are awarded for that Plan Year, the election shall have no effect.

          4.02 Nonelective Crediting of Stock Units to Identified Employees: A minimum of
twenty percent (20%) of the Incentive Award awarded to each Identified Employee for a Plan Year
shall be applied to provide Stock Units. This nonelective crediting of Stock Units shall apply to
any Eligible Employee who is an Identified Employee on the date that Incentive Awards are awarded
for that Plan Year. If an Identified Employee (or Eligible Employee who becomes an Identified
Employee by the award date) has elected to have an equal or greater percentage of his or her
Incentive Award applied to provide Stock Units, no additional amount shall be applied to provide
Stock Units pursuant to this Section. In the case of the Chief Executive Officer of the
Corporation, this Section 4.02 shall be applied by substituting thirty-five percent (35%) for
twenty percent (20%).

          4.03 Crediting Ratio for Stock Units: The number of Stock Units credited to an
Eligible Employee for a Plan Year shall equal (i) the amount of the Incentive Award for that Plan
Year that has been applied under Section 4.01 or 4.02, divided by (ii) eighty percent (80%) of the
closing price of a Common Share published in the Wall Street Journal on the day on which Incentive
Awards are awarded to Eligible Employees; the quotient shall be rounded up to the nearest whole
number.

          4.04 Reduction of Incentive Award Payments: Any amount applied to provide Stock
Units under this Plan shall reduce the amount of the Incentive Award currently payable to the
Eligible Employee. This reduction shall be made without regard to whether the Board has awarded or
communicated to the Eligible Employee an Incentive Award amount that does not reflect the
reduction.

          4.05 Tax Withholding on Incentive Awards: Any taxes required to be withheld from an
Eligible Employee’s Incentive Award, including payroll or other taxes on the portion of
the Incentive Award applied to provide Stock Units, shall be withheld from the portion of the
Incentive Award that has not been applied to provide Stock Units.

 

 

V. ACCOUNTING FOR STOCK UNITS

          5.01 Maintenance of Accounts: The Corporation shall maintain accounts showing the
number of Stock Units credited to each Participant for each Plan Year and the amount of the
Participant’s Incentive Award for each Plan Year that was applied to provide such units. Stock
Units shall be credited to a Participant’s account as of the date on which the Incentive Awards are
awarded to Eligible Employees and shall cease to be credited as of the date on which the units are
converted to Common Shares and distributed or other payment is made for the units under Article VI.

          5.02 Payment of Dividend Equivalent Amounts: The Corporation shall make a cash
payment to each Participant equal to the dividend paid on a Common Share for each record date
during the Plan Year multiplied by the number of Stock Units credited to the Participant’s account
on each such record date. These dividend equivalent amounts shall be paid quarterly at the same
time as dividends are paid on Common Shares. The dividend equivalent amounts shall be paid from
the general assets of the Corporation and shall be treated and reported as additional compensation
for the year in which payment is made.

VI. VESTING AND DISTRIBUTION OF COMMON SHARES AND PAYMENT UPON TERMINATION OF EMPLOYMENT

          6.01 Full Vesting and Distribution of Common Shares after Three Additional Years of
Employment: Stock Units credited to a Participant for a Plan Year shall become fully vested on
December 1 of the third (3rd) succeeding Plan Year if the Participant remains continuously Employed
to that date. As soon as practicable thereafter but in no event later than March 15th
of the calendar year following the calendar year in which such Stock Units vest, such Stock Units
shall be converted to unrestricted Common Shares (as adjusted under Section 6.06) and distributed
to the Participant.

          6.02 Full Vesting and Distribution of Common Shares upon Retirement, Disability, or
Death: Upon a Participant’s Retirement, termination of Employment by reason of Disability, or
death while Employed, all Stock Units then credited to the Participant shall become fully vested
and as soon as practicable thereafter, but in no event later than March 15th of the
calendar year following the calendar year in which such Retirement, termination of Employment by
reason of Disability, or death occurs, shall be converted to unrestricted Common Shares (as
adjusted under Section 6.06) and distributed. The Participant may designate a beneficiary or
beneficiaries to receive the Common Shares distributable upon death and may change such beneficiary
designation at any time; if the Participant fails to designate a beneficiary, or if no designated
beneficiary survives the Participant, the Common Shares shall be distributed to the Participant’s
estate.

 

 

          6.03 Partial Vesting and Distribution upon Involuntary Termination: In the event
that a Participant’s Employment is involuntarily terminated other than for cause and other than as
described in Section 6.02, a pro rata share of the Stock Units credited for each
prior Plan Year shall be converted to unrestricted Common Shares (as adjusted under Section 6.06)
and distributed to the Participant as soon as practicable thereafter, but in no event later than
March 15th of the calendar year following the calendar year in which such termination of
Employment occurs; the remainder of the Stock Units credited to the Participant for each prior Plan
Year shall be subject to Section 6.04. The pro rata share for each Plan Year shall
be determined by multiplying the number of Stock Units credited to the Participant for such Plan
Year by a fraction, the numerator of which is the number of full or partial calendar months of the
Participant’s Employment after the end of the Plan Year for which the Stock Units were credited,
and the denominator of which is thirty-six (36); the product shall be rounded to the nearest whole
number of Common Shares. A Participant’s Employment shall be treated as involuntarily terminated
if the Participant is dismissed, resigns at the suggestion of the Board or any member thereof, or
resigns following a demotion or material reduction of his or her job responsibilities or base
compensation. A Participant’s Employment shall be treated as involuntarily terminated for cause if
the Participant is dismissed by reason of a determination that the Participant embezzled or
defrauded the Corporation, intentionally acted in a manner that could damage the property or
business of the Corporation, or refused to perform the duties assigned to the Participant.

          6.04 Payment for Nonvested Stock Units upon Termination of Employment: Except as
otherwise provided in Sections 6.01, 6.02, and 6.03, upon termination of a Participant’s
Employment, the Corporation shall make a cash payment to the Participant for all Stock Units then
credited to the Participant’s account. The payment for each Stock Unit shall equal the lesser of
(i) the amount of the Incentive Award that was originally applied to provide such Stock Unit
(determined on a per unit basis), or (ii) the closing price of a Common Share published in the Wall
Street Journal on the last day of the Participant’s Employment. Such payment shall be made within
forty-five (45) days of the date of the Participant’s termination of Employment.

          6.05 Form of Common Share Distributions: Upon the vesting of Common Shares pursuant
to Section 6.01, 6.02 or 6.03 hereof, the Corporation shall cause a stock certificate covering the
requisite number of Common Shares to be issued in the name of the Participant or, in the case of
vesting upon death, in the name of the Participant’s designated beneficiary or the Participant’s
estate if no beneficiary is designated.

          6.06 Tax Withholding on Distributions: The Corporation shall withhold from any
distribution to a Participant sufficient amounts to cover any taxes required to be withheld. If
cash is to be distributed concurrent with a distribution of Common Shares, the withholding shall be
satisfied out of the cash portion of the distribution to the extent thereof. If no cash would
otherwise be distributed, or if the cash portion of the distribution would not be sufficient to
satisfy the Corporation’s withholding obligations, the Corporation shall reduce the Common Share
portion of the distribution to the extent necessary to satisfy the withholding. For this purpose,
each Common Share shall be valued at the closing price of a Common Share, as published in the Wall
Street Journal, for the trading day preceding the day that the Corporation’s transfer agent is
instructed to issue Common Shares in the Participant’s name. If the value of the Common Shares not
distributed to the Participant exceeds the amount needed to satisfy the

 

 

withholding, the excess shall be distributed to the Participant in cash. A Participant whose
distribution of Common Shares is reduced to satisfy the withholding tax obligation may not request
tax to be withheld at greater than the minimum rate. A Participant who is paying the withholding
tax in cash may pay the withholding at greater than the minimum rate.

          6.07 Discretion to Postpone Distributions: In the event that the Committee
reasonably anticipates that a distribution of Common Shares to a Participant would prevent the
Corporation from claiming an income tax deduction under Section 162(m) of the Internal Revenue Code
of 1986, as amended (the “Code”), with respect to any portion of the distribution, the Committee,
in its sole discretion, may postpone the portion of the distribution that would not be tax
deductible until either: (i) the first calendar year in which the Committee anticipates (or should
reasonably anticipate) that the distribution if made during such calendar year would not be barred
by the application of Section 162(m) of the Code, or (ii) during the period beginning with the
Participant’s Separation from Service (as defined below) and ending on the later of the last day of
the taxable year of the Company in which the Participant’s Separation from Service occurs or the
15th day of the third month following the Participant’s Separation from Service;
provided, however, that a delay in the distribution of Common Shares to a Participant pursuant to
this Section 6.07 may occur only if all scheduled payments or benefits to such Participant from the
Company that could be delayed pursuant to this Section 6.07 are also delayed. In the event of such
a postponement, a number of Stock Units equal to the number of Common Shares not distributed to the
Participant shall continue to be credited to the Participant’s account and shall remain fully
vested until full distribution is made. This Section 6.07 is intended to comply with, and shall at
all times be construed as complying with, Treas. Reg. 1.409A-2(b)(7)(i).

          6.08 Compliance with Section 409A: If the termination giving rise to the payments
and distributions described in this Section 6 is not a “Separation from Service” within the meaning
of Treas. Reg. § 1.409A-1(h)(1) (or any successor provision), then the amounts otherwise payable
pursuant to this Section 6 will instead be deferred without interest and will not be paid until
Participant experiences a Separation from Service. In addition, to the extent compliance with the
requirements of Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the
application of an additional tax under Section 409A of the Code to payments or distributions due to
the Participant upon or following his or her Separation from Service, then notwithstanding any
other provision of this Plan, any such payments or distributions that are otherwise due within six
months following the Participant’s Separation from Service will be deferred without interest and
paid to the Participant in a lump sum on the first business day of the seventh month immediately
following such Separation from Service.

 

 

VII. NATURE OF PARTICIPANTS’ RIGHTS

          7.01 Unfunded Status of Plan: Prior to the receipt of any Common Share distribution
or other payment under the Plan, each Participant’s rights shall be those of a general, unsecured
creditor of the Corporation. The liability of the Corporation hereunder, including the liability
to make distributions of Common Shares, is a mere contractual promise to make distributions or
payments in the future. The Stock Units credited to a Participant shall not constitute stock of
the Corporation or otherwise constitute property transferred to the Participant and shall merely
constitute bookkeeping units used to measure a Participant’s right to receive distributions or
payments in the future. Prior to distribution or payment, no Participant shall have any claim
against or beneficial interest in any Common Shares or other property that may be acquired by the
Corporation in connection with the Plan. It is the Corporation’s intention that the Plan be
unfunded for Federal income tax purposes and within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.

          7.02 Nonalienability: A Participant’s rights to receive Common Share distributions
or payments under the Plan are not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the
Participant or the Participant’s designated beneficiary.

VIII. GENERAL PROVISIONS

          8.01 Amendment or Termination: The Committee may amend or terminate this Plan at any
time, provided, however, that (i) an amendment that requires shareholder approval in order for the
Plan to comply with Rule 16b-3 of the Exchange Act of 1934 or any other law, regulation or stock
exchange requirement shall not be effective unless approved by the shareholders and (ii) no such
action shall have the effect of impairing any Participant’s rights with respect to Stock Units that
have been credited to the Participant’s account before the effective date of the amendment or
termination, or that are credited pursuant to an irrevocable election under Section 4.01 made
before the effective date of the amendment or termination.

          8.02 Administration: This Plan shall be administered by the Committee, which shall
have full authority to interpret the Plan. Interpretations by the Committee shall be final and
binding on all parties. The officers of the Corporation shall have authority to execute and
deliver such instruments and documents and to perform all other acts deemed necessary or advisable
for the effective administration of the Plan, including the authority to delegate authority to
other employees of the Corporation, except that no officer or other employee may participate in any
discretionary decision specifically relating to his or her individual rights under the Plan.

          8.03 Expenses: All costs and expenses incurred in the operation and administration
of the Plan, including any transaction costs incurred in connection with the purchase or
distribution of Common Shares, shall be borne by the Corporation.

 

 

          8.04 Effect on Employment: The Corporation’s maintenance of this Plan shall not in
any way constitute an employment contract between the Corporation and any Eligible Employee,
obligate the Corporation to continue the Employment of any Eligible Employee, limit the right of
the Corporation to terminate the Employment of any Eligible Employee, or obligate the Corporation
to make Incentive Awards to any Eligible Employee or to continue the Executive Incentive Plan.

          8.05 Effect on Other Benefits: No amount that is credited, distributed, or paid to a
Participant under this Plan, whether in the form of Stock Units, Common Shares, or cash, shall be
treated as compensation for purposes of calculating the amount of a Participant’s benefits or
contributions under any pension, retirement, or other plan maintained by the Corporation, except as
provided in such other plan.

          8.06 Incompetence of Payee: If any person entitled to receive a distribution or
payment hereunder is a minor or person declared incompetent or incapable of handling the
disposition of property, the Committee may direct that such distribution or payment be made to the
guardian, legal representative, or other person having the care and custody of such minor,
incompetent, or incapable person. Any distribution or payment made in accordance with this Section
shall completely discharge the Corporation and the Committee from all liability with respect
thereto.

          8.07 Inspection of Plan Document: A copy of this Plan shall be available for
inspection by Participants and other persons entitled to distributions or payments under the Plan
at reasonable times at the offices of the Corporation.

          8.08 Representations by Participants: The Committee may require a Participant,
Eligible Employee, or beneficiary to make such representations, enter into such agreements and
undertakings, including but not limited to execution of stock powers, and furnish such information
and other documents as the Committee may consider appropriate and in compliance with applicable
law.

          8.09 Purchase and Distribution of Common Shares: The Corporation may acquire Common
Shares for the purpose of satisfying its obligations under this Plan to the extent authorized under
the Omnibus Plan or under other authority granted by the Board.

          8.10 Adjustment for Capital Changes: The number of Stock Units credited to a
Participant and the aggregate number of Common Shares that may be purchased and issued under this
Plan shall be proportionately adjusted to reflect any stock dividend, split, subdivision or
consolidation of shares, or other similar capital adjustment.

          8.11 Impossibility of Performance: In the event it should become impossible for the
Corporation or the Committee to carry out any provision of this Plan, the Corporation or the
Committee may take such action as it in good faith determines will most nearly carry out the intent
and purpose of this Plan.

 

 

          8.12 Severability: In the event that any term or provision of the Plan shall be
determined to be illegal, invalid or unenforceable, that determination shall not affect the
remaining provisions of the Plan (or affect the application of that term or provision in
circumstances where it would not be illegal, invalid, or unenforceable), and each remaining term
and provision of the Plan shall be valid and enforced to the fullest extent permitted by law.

          8.13 Binding Effect: The provisions of this Plan shall be binding upon the
Corporation and its successors, transferees, and assigns and shall inure to the benefit of the
Participants and their heirs, executors, administrators, and legal representatives.

          8.14 Applicable Law: Except as otherwise required by law, this Plan and all matters
arising hereunder shall be governed by the laws of the State of North Carolina.

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