Document:

exv10w4

 

EXHIBIT 10.4

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”), effective as of April 15, 2008, is by and
between Assisted Living Concepts, Inc. a Nevada corporation with its principal place of business at
W140 N8981 Lilly Road, Menomonee Falls, WI 53051, (the “Company”) and Walter Levonowich (the
“Employee”).

WITNESSETH

     WHEREAS, the parties in July 2006 entered into an Employment Agreement (“2006 Agreement”);

     WHEREAS, the Company desires to continue to employ Employee as an employee of the Company or
its subsidiaries, and Employee desires to provide services to the Company or its subsidiaries, all
upon the terms and conditions hereinafter set forth; and

     WHEREAS, the parties wishing to change the terms and conditions of Employee’s employment with
the Company hereby agree to enter into this Agreement which shall supersede the 2006 Agreement
effective April 15, 2008.

     NOW, THEREFORE, in consideration of the promises and mutual agreements hereinafter set forth,
and intending to be legally bound hereby, as well as other good and valuable consideration
(including but not limited to continued employment and the receipt of the bonus identified herein),
the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Offer and Acceptance of Employment. The Company hereby agrees to continue to employ
Employee. Employee accepts such employment and agrees to perform the customary responsibilities of
position(s) with the Company and/or certain of its subsidiaries as may be reasonably assigned to
him/her from time to time by the Company in its discretion. Employee will perform such other duties
as may from time to time be reasonably assigned to him/her by the Company in its discretion.

2. Compensation and Benefits.

     (a) Base Salary. As long as Employee remains an employee of Company, Employee will be
paid a base salary, less applicable withholding, which shall continue at the rate currently in
effect, until adjusted by the Company. Any adjustment shall not reduce or limit any other
obligation of the Company hereunder. Employee’s annual base salary payable hereunder, as it may be
adjusted from time to time and without reduction for any amounts deferred as described below, is
referred to herein as “Base Salary”. Payment of Employee’s Base Salary, as in effect from time to
time, may be deferred to the extent Employee elects to defer such salary under the terms of any
deferred compensation plan or other employee benefit arrangement maintained or established by

 

 

the Company. The Company shall pay Employee the portion of his/her Base Salary not deferred
in accordance with its customary periodic payroll practices.

     (b) Incentive Compensation. On April 15, 2008, Employee shall receive a discretionary
bonus in the amount of $30,000, provided Employee signs this Agreement. Employee acknowledges that
this bonus is discretionary and that Employee is not entitled to it unless Employee signs this
Agreement. In addition, subject to approval of the Compensation/Nomination/Governance Committee of
the Board of Directors, Employee may be eligible to participate in stock option, incentive
compensation and other plans, which reward performance, at a level consistent with Employee’s then
assigned position(s) with the Company or certain of its subsidiaries and other affiliates and the
Company’s then current policies and practices. Any stock or options issued or purchased by Employee
pursuant to a Stockholder or Option Agreement between Employee and the Company prior to or after
the date of this Agreement shall be subject to the applicable Stockholder or Option Agreement.

     (c) Benefits and Expenses.

          (i) Benefits. Employee shall be eligible to participate in (1) each welfare benefit
plan sponsored or maintained by the Company, including, without limitation, each life, optional
life, hospitalization, medical, dental, vision, health, accident or disability insurance,
individual disability/long term care plan, or similar plan or program of the Company, and (2) each
deferred compensation (including Executive Retirement) or savings plan sponsored or maintained by
the Company, in each case, whether now existing or established hereafter, to the extent that
Employee is eligible to participate in any such plan under Company policies and practices and
consistent with the generally applicable provisions thereof. With respect to benefits payable to
Employee, Employee’s service credited for purposes of determining Employee’s benefits and vesting
shall be determined in accordance with the terms of the applicable plan or program. Nothing in this
Section 2(c), in and of itself, shall be construed to limit the ability of the Company to amend or
terminate any particular plan, program or arrangement.

          (ii) Vacation. Employee shall be entitled to the number of paid vacation days in each
anniversary year and paid holidays as determined by the Company’s policies in place from time to
time.

          (iii) Business Expenses. The Company shall pay or reimburse Employee for all
reasonable expenses incurred or paid by Employee in the performance of Employee’s duties hereunder,
upon presentation of expense statements or vouchers and such other information as the Company may
reasonably require and in accordance with the then generally applicable policies and practices of
the Company.

          (iv) Auto. The Company shall provide Employee with a monthly car allowance of $650
for the purpose of obtaining a car to use for company business and the purchase of required auto
insurance. Additionally, Employee will be reimbursed for miles driven on Company business at the
applicable reimbursement rate that is set from time to time by the Company.

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3. Employment Termination. Employee’s employment under this Agreement may be terminated as
follows:

     (a) Good Cause.  For purposes hereof, a termination by the Company for “Good Cause”
shall mean termination by action of the Company because of (i) Employee’s material and willful
theft or misuse of the Company’s property or time; materially and willfully falsifying any document
or making any false or misleading statements relating to Employee’s employment with the Company;
commission, conviction of or the entry of a plea of nolo contendere by Employee of any felony
(whether or not involving the Company or any of its subsidiaries), including, without limitation,
those involving dishonesty or moral turpitude; commission, conviction of or the entry of a plea of
nolo contendere by Employee of any misdemeanor (whether or not involving the Company or any of its
subsidiaries), involving dishonesty, moral turpitude, or affecting performance of the job; or
breach by Employee of his/her obligations under this Agreement, as reasonably determined by the
Board in its discretion, (ii) fraud, dishonesty, misconduct or embezzlement on the part of Employee
as reasonably determined by the Board in its discretion, (iii) refusal or continuing failure to
attempt, other than by reason of disability as defined below, to follow the lawful directions of
the senior officers or the Board of Directors of the Company as reasonably determined by the Board
in its discretion, (iv) willful violation of any material policy of the Company or material
agreement with the Company as reasonably determined by the Board in its discretion, (v) breach of,
negligence with respect to, or the failure or refusal by Employee to perform and discharge his/her
duties, responsibilities or obligations under this Agreement or as defined by the Company as
reasonably determined by the Board in its discretion, that is not corrected within 30 days
following written notice thereof to Employee by the Company as reasonably determined by the Board
in its discretion, (vi) discriminatory or harassing behavior, whether or not illegal under State,
federal or local law, which the Board in its discretion reasonably determines violates Company
policy, or (vii) other conduct that may be materially detrimental to the best interests of the
Company or any affiliate thereof  as reasonably determined by the Board in its discretion. 

     (b) Without Cause. Notwithstanding anything to the contrary contained in this
Agreement, the Company may, at any time, terminate Employee’s employment hereunder without Cause.

     (c) Death. If Employee dies, his/her employment shall terminate as of the date of
death.

     (d) Disability. In the event of the “permanent disability” (as defined below) of
Employee, the Company shall have the right in accordance with applicable law to terminate
Employee’s employment hereunder. For purposes of this Section, “permanent disability” means any
disability as defined under the Company’s applicable long-term disability insurance policy or, if
no such policy is available, the inability of Employee, due to a physical or mental impairment, for
ninety days (whether or not consecutive) during any period of three hundred sixty-five days to
perform the duties and functions of his/her job with or without reasonable accommodation. A
determination of disability

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shall be reasonably determined by the Company’s Board of Directors in its discretion and
Employee shall cooperate with the efforts to make such determination. Any such determination shall
be conclusive and binding on the parties. Any determination of “disability” under this provision is
not intended to alter any benefits Employee may be entitled to receive under any long-term
disability insurance policy carried by Employee, which shall be governed solely by the terms of any
such policy. In lieu of termination, the Company may transfer Employee to another position, and
elect to terminate this Agreement, even though Employee’s employment is not terminated. In that
case, Employee shall not be entitled to receive any severance as provided herein.

     (e) Upon Good Reason. Employee shall have “Good Reason” to terminate this Agreement:

          (i) if Employee is located in the corporate office and within 30 days of receiving written
notice from the Company that Employee’s work location is being shifted to a location more than 50
miles away from Employee’s current work location, Employee provides in writing an objection to such
relocation and of Employee’s intention to treat such requirement as “Good Reason” and the Company
does not within 30 days of such notice rescind such requirement, (This clause does not apply to
employees working out of satellite offices or a home. If Employee works out of a satellite offices
or a home his/her location may be changed and such change shall not be “Good Reason” under this
Agreement.); or

          (ii) if Employee provides in writing within 30 days of receiving written notice from the
Company that the Company intends to reduce his/her Base Salary then in effect so that following
such reduction his/her Base Salary is 95% or less of the highest Base Salary payable to Employee
hereunder, notice of Employee’s intention to treat such diminution as “Good Reason”, and the
Company does not within 30 days of such notice rescind such diminution.

     (f) Voluntary Termination. Employee may voluntarily resign upon providing the Company
with sixty (60) days notice of resignation. Upon receipt of such notice, the Company may inform
Employee that it is not requiring such notice.

     (g) Date of Termination. “Date of Termination” shall mean whichever of the following
is applicable:

          (i) if Employee’s employment is terminated under paragraph (c) of this Section 3, the date of
death;

          (ii) if Employee’s employment is terminated under paragraph (a) or (b) of this Section 3, the
date specified in the Notice of Termination;

          (iii) if Employee is terminated for the reasons specified in paragraph (d), the date Employee
is deemed by the Company to be disabled as defined herein;

          (iv) in the case of an event described in paragraph (e) of this Section 3, the end of the
30-day cure period, if the Company has not so cured; or

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          (v) in the event Employee voluntarily terminates employment as described in paragraph (f) of
this Section 3, Employee’s Date of Termination shall either be the date which is 60 days after the
date Employee provides notice to the Company of voluntary termination, or if such notice is not
required by the Company, the date the Company provides notice that the 60-day notice is not
required.

4. Payments upon Termination.

     (a) Termination Due to Death, Disability, or Voluntary Termination. Upon termination
of Employee under Section 3(c), 3(d), or (f), the Company shall pay to Employee or his/her estate
Employee’s salary and other accrued benefits earned up to the Date of Termination. Employee shall
also be entitled to all vested deferred compensation (including Executive Retirement) of any kind
at such times and in such amounts provided under the terms of applicable deferred compensation
arrangements. The Company shall have no further obligations to Employee under this Agreement.

     (b) Termination for Cause. If Employee’s employment shall be terminated under Section
3(a), Employee shall receive salary and benefits accrued through the Date of Termination. Employee
shall also be entitled to all vested deferred compensation (including Executive Retirement) of any
kind at such times and in such amounts provided under the terms of applicable deferred compensation
arrangements. The Company shall have no further obligations to Employee under this Agreement.

     (c) Termination Without Cause or for Good Reason.

     In the event Employee’s employment terminates pursuant to paragraph (b) or (e) of Section 3,
then:

          (i) the Company shall pay to employee any Base Salary owed to the Date of Termination which
has not yet been paid (less applicable deductions to include withholdings for taxes).

          (ii) the Company shall also pay to Employee (less applicable deductions, including
withholdings for taxes) the following subject to Section 6(d):

               (A) One (1) year of Base Salary at the rate in effect at the Date of Termination as defined
for Sections 3(g)(ii) or (iv) (whichever is applicable). The total amount shall be apportioned to
the 12 months following the Date of Termination. Thus, if Employee is entitled to $120,000 under
this subsection, $10,000 shall be paid to Employee each of the next twelve months.

               (B) An amount equal to 150% of the bonus payment which would have been payable to Employee if
Employee had remained employed in the year in which termination occurs on the assumption that 100%
of the bonus payment would have been achieved. The total amount shall be apportioned to the 12
months following the Date of Termination. Thus, if Employee is entitled to $48,000 under this
subsection, $4,000 shall be paid to Employee each of the next twelve months.

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               (C) If Employee is receiving a car allowance at the Date of Termination, the cash equivalent
of 12 months of the car allowance in the amount provided at the Date of Termination which shall be
apportioned to the twelve months following the Date of Termination. Thus, if Employee is entitled
to $4,800 under this subsection, $400 shall be paid to Employee each of the next twelve months.

               (D) The amount that the Company would have credited as Company contributions based upon
Employee’s level of participation at the Date of Termination over the twelve (12) month period of
time beginning immediately after the Date of Termination to any of the deferred compensation
(including Executive Retirement) plans in which Employee was a participant. The total amount shall
be apportioned to the 12 months following the Date of Termination. Thus, if Employee is entitled
to $48,000 under this subsection, $4,000 shall be paid to employee each of the next twelve months.

     Employee will begin to receive the payments referenced above on the first normal payroll date
beginning 15 calendar days after the Release he/she is required to sign as described under
paragraph (c)(v) of this Section 4 becomes effective and continuing thereafter on normal payroll
dates for twelve months following the Date of Termination.

          (iii) Employee shall also be entitled to all vested deferred compensation (including Executive
Retirement) of any kind at such times and in such amounts provided under the terms of applicable
deferred compensation plans.

          (iv) Beginning with the Date of Termination, Employee shall be entitled to receive medical
plan continuation coverage required under ERISA (“COBRA Benefits”) subject to payment of full COBRA
premiums by Employee. If Employee is eligible for and timely elects to receive COBRA Benefits, the
Company shall reimburse Employee for the cost of Employee’s COBRA Benefits for a period of twelve
(12) months; provided that the Company’s obligation to reimburse Employee’s COBRA premiums shall be
subject to Section 6(d) and will cease immediately in the event Employee becomes eligible for group
health insurance offered by another employer during the twelve (12) month period.

          (v) In order to receive the payments described in paragraphs (c)(ii) and (iv) of this Section
4, Employee must (no later than thirty (30) days following the Employee’s receipt of the release)
execute and not revoke a release (“the Release”) in such form and substance as shall be reasonably
requested by the Company, including but not limited to including a general release of claims, a
non-disparagement clause, a confidentiality provision, an acknowledgment regarding conduct on
behalf of the Company, and a no re-hire provision. In addition, payments pursuant to paragraphs
(c)(ii) and (iv) of this Section 4 shall only continue for so long as Employee has not violated any
terms of this Agreement, including but not limited to those contained in Section 6, and/or brought
any action regarding the enforceability of the Covenants contained in Section 6. However, in no
event, shall Employee receive less than $30,000 in the aggregate pursuant to Section 4(c)(ii) and
(iv) as consideration for the Release referenced in this paragraph (v).

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          (vi) It is intended that (A) each payment or installment of payments provided under this
Section 4 is a separate “payment” for purposes of Code Section 409A and (B) that the payments
satisfy, to the greatest extent possible, the exemptions from the application of Code Section 409A,
including those provided under Treasury Regulations 1.409A-1(b)(4) (regarding short-term
deferrals), 1.409A-1(b)(9)(iii) (regarding the two-times, two year exception), and
1.409A-1(b)(9)(v) (regarding reimbursements and other separation pay). Notwithstanding anything to
the contrary in this Agreement, if the Company determines that on the Date of Termination that
Employee is a “specified employee” (as such term is defined under Treasury Regulation
1.409A-1(i)(1)) of the Company and that any payments to be provided to Employee are or may become
subject to the additional tax under Code Section 409A(a)(1)(B) or any other taxes or penalties
imposed under Code Section 409A (“Section 409A Taxes”), then such payments shall be delayed until
the date that is six (6) months after the Date of Termination. Any delayed payments shall be made
in a lump sum on the first day of the seventh month following the Date of Termination, or such
earlier date that, as determined by the Company, is sufficient to avoid the imposition of any
Section 409A Taxes on Employee.

5. Section 280G Limitation on Compensation. In the event that the severance benefits
payable to Employee under this Agreement or any other payments or benefits received or to be
received by Employee from the Company (whether payable pursuant to the terms of this Agreement, any
other plan, agreement or arrangement with the Company) or any corporation (“Affiliate”) affiliated
with the Company within the meaning of Section 1504 of the Internal Revenue Code of 1986, as
amended (the “Code”), in the opinion of tax counsel from a nationally recognized public accounting
firm selected by the Company and reasonably acceptable to Employee, constitute “parachute
payments” within the meaning of Section 280G(b)(2) of the Code, and the present value of such
“parachute payments” equals or exceeds three times Employee’s “base amount” within the meaning of
Section 280G(b)(3) of the Code, such severance benefits shall be reduced to an amount the present
value of which (when combined with the present value of any other payments or benefits otherwise
received or to be received by Employee from the Company (or an Affiliate) that are deemed
“parachute payments”) is equal to 2.99 times the “base amount,” notwithstanding any other provision
to the contrary in this Agreement.

6. Employee’s Covenants.

     (a) Non-disclosure. Employee hereby acknowledges all Confidential Information (as
defined below) which Employee receives while employed by the Company shall be considered the
exclusive proprietary property of the Company. The Company will, as part of the employment of
Employee, make available Confidential Information as defined below, provided that Employee agrees
that during the course of his/her employment with the Company and for one (1) year after the
termination of employment, for whatever reason, he/she shall keep confidential and shall not,
except with Company’s express prior written consent, or except in the proper course of his/her
employment with Company, directly or indirectly, in whole or in part, for any reason or purpose
whatsoever, communicate, disclose, divulge, publish, or otherwise express, to any person or entity,
or use such information, for his/her own benefit or the benefit of any

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person or entity, any trade secrets or Confidential Information, no matter when or how
acquired concerning the conduct and details of Company’s business. As used herein, the term
“Confidential Information” refers to all information which derives independent economic value from
not being generally known outside the Company and belongs to, is used by or is in the possession of
the Company, including without limitation, names of customers and suppliers, marketing methods,
trade secrets, policies, prospects and financial condition, customer lists, customer needs and
preferences, costs and expenses, financing, supply sources, sales and marketing plans, and
strategic plans, as well as technical and scientific specifications, plans and formulas, which are
developed for use in Company’s business. Confidential Information shall not include any
information which is known by or readily available to the general public or which becomes known by
or readily available to the general public other than as a result of any improper act or omission
of Employee. The restrictions set forth in this paragraph are in addition to and not in lieu of
any obligations of Employee provided by law with respect to Company’s Confidential Information,
including any obligations Employee may owe under Wis. Stat. § 134.90, the Nevada Trade Secrets Act
(NRS 600A.010 et. seq.) or similar statutes.

     (b) Non-Competition. It is recognized that in order to protect the Company’s
Confidential Information, as defined above, and the Company’s valuable relationships with
customers, vendors, employees and others, that a limited covenant restricting competition within
the Company’s niche market following any termination of employment is necessary. Consequently, for
a period of one (1) year following termination of Employee’s employment with the Company for any
reason, Employee shall not, except with Company’s express prior written consent:

          (i) Solicit any employee, salesman, agent, or representative of the Company that Employee
supervised and/or had contact with on behalf of the Company or about whom Employee gained
confidential information, in the one year prior to termination of Employee’s employment with the
Company, in any manner which interferes or might interfere with such person’s relationship with
Company. This provision is not intended and shall not be construed to foreclose or burden the
employment of any such employee who pursues or accepts such employment without any solicitation
prohibited by this provision.

          (ii) Work for (or consult to) any competitor of the Company, including one in which the
Employee has an ownership interest, in any management capacity or in any other capacity in which
Employee’s knowledge of Company’s customer relationships and other Confidential Information would
be a value to the Employee in competing against the Company, and in which management capacity or
other such capacity the Employee has duties or responsibilities, including management oversight,
with respect to or involving any assisted living facility located in any portion of the Territory,
defined below. “Territory” shall mean anywhere that is within 20 miles of any assisted living
facility operated by the Company. Employee acknowledges that the Confidential Information which
Employee has had access to, and will continue to have access to, would be of value to Employee in
competing against or assisting a competitor in competing against any assisted living facility
operated by the Company. Employee acknowledges, therefore, that the geographic scope of this
restriction is reasonably

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necessary to protect the Company’s legitimate business interest in protecting against Employee
using the Company’s Confidential Information to compete against the Company or assist a
competitor in competing against the Company.  

     (c) Surrender of Property. Employee hereby agrees that upon termination of Employee’s
employment, for whatever reason and whether voluntary or involuntary, Employee will immediately
surrender to the Company all property and other things of value in Employee’s possession, or in the
possession of any person or entity under Employee’s control relating directly or indirectly to the
business of the Company.

     (d) Enforcement. Employee acknowledges that any breach by him/her of any of the
covenants and agreements of this Section 6 (“Covenants”) will result in irreparable injury to
Company for which money damages could not adequately compensate Company, and therefore, in the
event of any such breach, Company shall be entitled, in addition to all other rights and remedies
which Company may have at law or in equity, to have an injunction issued by any competent court
enjoining and restraining Employee and/or all other Persons involved therein from continuing such
breach. The existence of any claim or cause of action which Employee or any such other Person may
have against Company shall not constitute a defense or bar to the enforcement of any of the
Covenants. In addition, if Employee brings an action asserting the Covenants are unenforceable,
the Company may in its discretion immediately cease paying any amounts still owing under this
Agreement. In the event that it is found that the Covenants at issue are enforceable, or they are
modified so that they are enforceable, Employee shall receive within 45 days of a final decision to
that effect, including exhaustion of any available appeals, the amount which he/she would have
received hereunder if no action had been brought. If the Covenants at issue are found
unenforceable, Employee shall not be entitled to any amounts still owed under this Agreement as of
the date the Employee brought the action asserting the Covenants were unenforceable. Employee,
however, shall retain any amounts already paid under the Agreement as consideration for the Release
referenced in Section 4(c)(v) and, in the event that the total amount of money received prior to
commencement of the action is less than $30,000, the Company shall pay to Employee within 45 days
of a final decision that the Covenants are unenforceable, including exhaustion of any available
appeals, the difference between $30,000 and the amount already paid under the Agreement, less
applicable deductions to include withholdings for taxes, as consideration for the Release of claims
referenced in Section 4(c)(v).

     (e) Consideration. Employee expressly acknowledges that the Covenants are a material
part of the consideration bargained for by Company and, without the agreement of Employee to be
bound by the Covenants, Company would not have agreed to enter into this Agreement.

     (f) Scope. If any portion of any Covenant or its application is construed to be
invalid, illegal or unenforceable, then the other portions and their application shall not be
affected thereby and shall be enforceable without regard thereto. If any of the Covenants is
determined to be unenforceable because of its scope, duration, geographical area or similar factor,
then the court making such determination shall have the power to reduce

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or limit such scope, duration, area or other factor, and such Covenant shall then be
enforceable in its reduced or limited form.

7. No Obligation to Mitigate Damages; No Effect on Other Contractual Rights.

     (a) Except as provided in Section 4(c)(iv), Employee shall not be required to mitigate damages
or the amount of any payment provided for under this Agreement by seeking other employment or
otherwise, nor shall the amount of payment provided for under this Agreement be reduced by any
compensation earned by Employee as the result of employment by another employer after the Date of
Termination, or otherwise, except to the extent such employment violates Article 6(a) or 6(b) of
this Agreement.

     (b) The provisions of this Agreement, and any payment provided for hereunder, shall not reduce
any amounts otherwise payable, or in any way diminish Employee’s existing rights, or rights which
would accrue solely as a result of the passage of time, under any benefit plan, employment
agreement or other contract, plan or arrangement.

8. Withholding Taxes.

     Company may withhold from any amounts payable under this Agreement such federal, state, local
and foreign taxes as may be required to be withheld pursuant to any applicable law or regulation.

9. Miscellaneous.

     (a) Notices. All notices, requests, demands, consents or other communications
required or permitted to be given under this Agreement shall be in writing and shall be deemed to
have been duly given if and when (i) delivered personally, (ii) five (5) days after being mailed by
first class certified mail, return receipt requested, postage prepaid, or (iii) delivered by a
nationally recognized express courier service, postage or delivery changes prepaid, with receipt,
or (iv) delivered by telecopy (with receipt, and with original delivered in accordance with any of
(i), (ii) or (iii) above) to the parties at their respective addresses stated below or to such
other addresses of which the parties may give notice in accordance with this Section.

If to Company, to:

Assisted Living Concepts, Inc.

W140 N8981 Lilly Road

Menomonee Falls, WI 53051

Attention: President and Chief Executive Officer

Facsimile: (262) 251-7627

If to Employee, to:

Address contained in payroll records

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     (b) Entire Understanding. This Agreement sets forth the entire understanding between
the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous,
written, oral, expressed or implied, communications, agreements and understandings with respect to
the subject matter hereof, with the exception of existing deferred compensation (including
Executive Retirement) plans, benefits plans and incentive plans and Stockholder and Options
Agreements.

     (c) Modification. This Agreement shall not be amended, modified, supplemented or
terminated except in writing signed by both parties.

     (d) Termination of Prior Severance Agreements. All prior severance and/or employment
agreements between Employee and Company and/or any of its affiliates (and any of their
predecessors) are hereby terminated as of the date hereof as fully performed on both sides.

     (e) Assignability and Binding Effect. This Agreement shall inure to the benefit of and
shall be binding upon the Company and its successors and permitted assigns and upon Employee and
his/her heirs, executors, legal representatives, successors and permitted assigns. Employee may
not assign, transfer, pledge, encumber, hypothecate or otherwise dispose of this Agreement or any
of his or her rights hereunder without prior written consent of the Company, and any such attempted
assignment, transfer, pledge, encumbrance, hypothecation or other disposition without such consent
shall be null and void without effect.

     (f) Severability. If any provision of this Agreement is construed to be invalid,
illegal or unenforceable, then the remaining provisions hereof shall not be affected thereby and
shall be enforceable without regard thereto, except to the extent indicated herein.

     (g) Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original hereof, and it shall not be necessary
in making proof of this Agreement to produce or account for more than one counterpart hereof.

     (h) Section Headings. Section and subsection headings in this Agreement are inserted
for convenience of reference only, and shall neither constitute a part of this Agreement nor affect
its construction, interpretation, meaning or effect.

     (i) References. All words used in this Agreement shall be construed to be of such
number and gender as the context requires or permits.

     (j) Controlling Law. This Agreement is made under, and shall be governed by,
construed and enforced in accordance with, the substantive laws of the State of Nevada applicable
to agreements made and to be performed entirely therein.

     (k) Settlement of Disputes. The Company and Employee agree that, except as set forth
specifically in Section 6(d), any claim, dispute or controversy arising under or in

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connection with this Agreement, or otherwise in connection with Employee’s employment by the
Company (including, without limitation, any such claim, dispute or controversy arising under any
federal, state or local statute, regulation or ordinance or any of the Company’s employee benefit
plans, policies or programs) shall be resolved solely and exclusively by binding arbitration. The
arbitration shall be held in Milwaukee County, Wisconsin (or at such other location as shall be
mutually agreed by the parties). The arbitration shall be conducted in accordance with the
Expedited Employment Arbitration Rules (the “Rules”) of the American Arbitration Association (the
“AAA”) in effect at the time of the arbitration, except that the arbitrator shall be selected by
alternatively striking from a list of five arbitrators supplied by the AAA. All fees and expenses
of the arbitration, including a transcript if either requests, shall be borne equally by the
parties. Each party will pay for the fees and expenses of its own attorneys, experts, witnesses,
and preparation and presentation of proofs and post-hearing briefs (unless the party prevails on a
claim for which attorney’s fees are recoverable under the Rules). Any action to enforce or vacate
the arbitrator’s award shall be governed by the Federal Arbitration Act, if applicable, and
otherwise by applicable state law.

     (l) Indulgences, Etc. Neither the failure nor delay on the part of either party to
exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall the single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise of the same or any other right, remedy, power or privilege, nor shall
any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as
a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver
shall be effective unless it is in writing and is signed by the party asserted to have granted such
waiver.

     (m) 409A.

          (i) In order to facilitate compliance with Section 409A of the Internal Revenue Code, the
Company and Employee agree that they shall neither accelerate nor defer or otherwise change the
payment date for any payment subject to Section 409A, except as may otherwise be permitted under
Code Section 409A of the Internal Revenue Code and regulations thereunder as confirmed by written
opinion of counsel satisfactory to both parties.

          (ii) Whether and when a termination of employment has occurred will be determined in a manner
consistent with the requirements described in regulations under Internal Revenue Code Section 409A.
Termination of Employee’s employment by the Company on the one hand or by Employee on the other
hand (other than by death of Employee) shall be communicated by a written notice of termination to
the other. That notice shall indicate the specific termination provision in this agreement relied
upon and, to the extent applicable, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provisions so indicated and the
termination date.

- 12 -

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first
above mentioned, under seal, intending to be legally bound hereby.

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Attest:
	 	 	 	COMPANY:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

Executive Assistant
	 	 	 	Name:
	 	 

Laurie A. Bebo
	 	 
	 

	 	 	 	 	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Witness:
	 	 	 	EMPLOYEE:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

- 13 -Exhibit 4.1

 

Exhibit 4.1

MARTIN MARIETTA MATERIALS, INC.

as Issuer

and

BRANCH BANKING AND TRUST COMPANY,

as Trustee

 

THIRD SUPPLEMENTAL INDENTURE

Dated as of April 21, 2008

to

INDENTURE

Dated as of April 30, 2007

 

6.60% Senior Notes due 2018

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 1. DEFINITIONS
	 	 	1	 
	Section 1.1. Definition of Terms
	 	 	1	 
	ARTICLE 2. GENERAL TERMS AND CONDITIONS OF THE Senior Notes
	 	 	2	 
	Section 2.1. Designation and Principal Amount
	 	 	2	 
	Section 2.2. Maturity
	 	 	2	 
	Section 2.3. Further Issues
	 	 	2	 
	Section 2.4. Form and Payment
	 	 	2	 
	Section 2.5. Global Securities
	 	 	2	 
	Section 2.6. Interest
	 	 	2	 
	Section 2.7. Authorized Denominations
	 	 	3	 
	Section 2.8. Redemption
	 	 	3	 
	Section 2.9. Change of Control
	 	 	3	 
	Section 2.10. Appointment of Agents
	 	 	6	 
	ARTICLE 3. FORM OF NOTES
	 	 	6	 
	Section 3.1. Form of Senior Notes
	 	 	6	 
	ARTICLE 4. ORIGINAL ISSUE OF NOTES
	 	 	6	 
	Section 4.1. Original Issue of Senior Notes
	 	 	6	 
	ARTICLE 5. Defaults and Remedies
	 	 	6	 
	Section 5.1. Acceleration
	 	 	6	 
	ARTICLE 6. MISCELLANEOUS
	 	 	7	 
	Section 6.1. Ratification of Indenture
	 	 	7	 
	Section 6.2. Trustee Not Responsible for Recitals
	 	 	7	 
	Section 6.3. Governing Law
	 	 	7	 
	Section 6.4. Separability
	 	 	7	 
	Section 6.5. Counterparts
	 	 	7	 
	EXHIBIT A – Form Of Senior Notes
	 	 	A-1	 

ii

 

          THIRD SUPPLEMENTAL INDENTURE, dated as of April 21, 2008 (this “Supplemental
Indenture”), between Martin Marietta Materials, Inc., a corporation duly organized and existing
under the laws of the State of North Carolina, having its principal office at 2710 Wycliff Road,
Raleigh, North Carolina 27607-3033 (the “Corporation”), and Branch Banking and Trust Company, a
North Carolina state banking association, as trustee (the “Trustee”).

          WHEREAS, the Corporation executed and delivered the indenture, dated as of April 30, 2007, to
the Trustee (as heretofore supplemented, the “Indenture”), to provide for the issuance of the
Corporation’s debt securities (the “Securities”), to be issued in one or more series;

          WHEREAS, pursuant to the terms of the Indenture, the Corporation desires to provide for the
establishment of a new series of its notes under the Indenture to be known as its “6.60% Senior
Notes due 2018” (the “Senior Notes”), the form and substance and the terms, provisions and
conditions thereof to be set forth as provided in the Indenture and this Supplemental Indenture;

          WHEREAS, the Finance Committee of the Board of Directors of the Corporation pursuant to
resolutions duly adopted on April 14, 2008 and resolutions of the Chairman Finance Committee of the
Board of Directors of the Corporation duly adopted on April 16, 2008, have duly authorized the
issuance of the Senior Notes, and has authorized the proper officers of the Corporation to execute
any and all appropriate documents necessary or appropriate to effect each such issuance;

          WHEREAS, this Supplemental Indenture is being entered into pursuant to the provisions of
Section 9.1(4) of the Indenture;

          WHEREAS, the Corporation has requested that the Trustee execute and deliver this Supplemental
Indenture; and

          WHEREAS, all things necessary to make this Supplemental Indenture a valid agreement of the
Corporation, in accordance with its terms, and to make the Senior Notes, when executed by the
Corporation and authenticated and delivered by the Trustee, the valid obligations of the
Corporation, have been performed, and the execution and delivery of this Supplemental Indenture has
been duly authorized in all respects;

          NOW THEREFORE, in consideration of the premises and the purchase and acceptance of the Senior
Notes by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture,
the forms and terms of the Senior Notes, the Corporation covenants and agrees, with the Trustee, as
follows:

ARTICLE 1.

DEFINITIONS

          Section 1.1. Definition of Terms. Unless the context otherwise requires:

 

 

          (a) each term defined in the Indenture has the same meaning when used in this Supplemental
Indenture;

          (b) the singular includes the plural and vice versa; and

          (c) headings are for convenience of reference only and do not affect interpretation.

ARTICLE 2.

GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES

          Section 2.1. Designation and Principal Amount. There is hereby authorized and established a series of Securities under the Indenture,
designated as the “6.60% Senior Notes due 2018”, which is not limited in aggregate principal
amount. The aggregate principal amount of the Senior Notes to be issued shall be as set forth in
any Corporation order for the authentication and delivery of the Senior Notes, pursuant to Section
2.1 of the Indenture.

          Section 2.2. Maturity. The stated maturity of principal for the Senior Notes will be April 15, 2018.

          Section 2.3. Further Issues. The Corporation may from time to time, without the consent of the Holders of the Senior
Notes, issue additional notes of such series. Any such additional notes will have the same
ranking, interest rate, maturity date and other terms as the Senior Notes. Any such additional
notes, together with the Senior Notes herein provided for, will constitute a single series of
Securities under the Indenture.

          Section 2.4. Form and Payment. Principal of, premium, if any, and interest on the Senior Notes shall be payable in U.S.
dollars.

          Section 2.5. Global Securities. Upon the original issuance, the Senior Notes will be represented by one or more Global
Securities registered in the name of Cede & Co., the nominee of The Depository Trust Company
(“DTC”). The Corporation will issue the Senior Notes in denominations of $2,000 and integral
multiples of $1,000 in excess thereof and will deposit the Global Securities with DTC or its
custodian and register the Global Securities in the name of Cede & Co. The provisions of the
fourth paragraph of Section 2.7 of the Indenture shall also apply if an Event of Default or Default
which entitles the Holders of the Senior Notes to accelerate the Senior Notes’ maturity shall have
occurred and be continuing.

          Section 2.6. Interest. The Senior Notes will bear interest (computed on the basis of a 360-day year consisting of
twelve 30-day months) from April 21, 2008 at the rate of 6.60% per annum, payable semiannually in
arrears; interest payable on each interest payment date will include interest accrued from April
21, 2008, or from the most recent interest payment date to which interest has been paid or duly
provided for; the interest payment dates on which such interest shall be payable are April 15 and
October 15, commencing on October 15, 2008; and the record date for the interest payable on any
interest payment date is the close of business on April 1 or October 1, as the case may be, next
preceding the relevant Interest Payment Date.

2

 

          Section 2.7. Authorized Denominations. The Senior Notes shall be issuable in denominations of $2,000 and integral multiples of
$1,000 in excess thereof.

          Section 2.8. Redemption. The Senior Notes are subject to redemption at the option of the Corporation as set forth in
the form of Senior Note attached hereto as Exhibit A.

          Section 2.9. Change of Control.

          (a) Upon the occurrence of a Change of Control Repurchase Event, unless the Corporation has
exercised its right to redeem all Senior Notes in accordance with the redemption terms as set forth
in the Senior Notes, the Corporation shall make an irrevocable offer (“Change of Control Offer”) to
each Holder of Senior Notes to repurchase all or any part (in denominations of $2,000 and in
integral multiples of $1,000 in excess thereof) of such Holder’s Senior Notes at a repurchase price
in cash equal to 101% of the aggregate principal amount of Senior Notes repurchased plus any
accrued and unpaid interest on the Senior Notes repurchased to, but not including, the date of
repurchase (a “Change of Control Payment”).

          (b) Within 30 days following any Change of Control Repurchase Event or, at the Corporation’s
option, prior to any Change of Control, but in either case, after the public announcement of such
Change of Control, the Corporation shall mail to each Holder of Senior Notes, with a copy to the
Trustee, a notice:

          (i) describing the transaction or transactions that constitute or may constitute the
Change of Control Repurchase Event;

          (ii) offering to repurchase all Senior Notes tendered on the payment date specified in
such notice;

          (iii) setting forth the payment date for the repurchase of the Senior Notes, which date
will be no earlier than 30 days and no later than 60 days from the date such notice is
mailed (a “Change of Control Payment Date”); and

          (iv) if mailed prior to the date of consummation of the Change of Control, stating that
the offer to repurchase is conditioned on a Change of Control Repurchase Event occurring on
or prior to the payment date specified in such notice.

          (c) The Corporation shall comply with the requirements of Rule 14e-1 under the Exchange Act,
and any other securities laws and regulations thereunder to the extent those laws and regulations
are applicable in connection with the repurchase of the Senior Notes as a result of a Change of
Control Repurchase Event. To the extent that the provisions of any securities laws or regulations
conflict with the Change of Control Repurchase Event provisions of the Senior Notes, the
Corporation will comply with the applicable securities laws and regulations and will not be deemed
to have breached its obligations under this Section 2.9 by virtue of such conflict.

          (d) In order to accept the Change of Control Offer, the Holder must deliver to the Paying
Agent, at least five Business Days prior to the Change of Control Payment Date, the Senior Note
together with the form entitled “Election Form” (which form is annexed as Annex A

3

 

to the Form of
Senior Note set forth in Exhibit A hereto) duly completed, or a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange or the Financial Industry
Regulatory Authority or a commercial bank or trust company in the United States setting forth:

          (i) the name of the Holder of the Senior Note;

          (ii) the principal amount of the Senior Note;

          (iii) the principal amount of the Senior Note to be repurchased;

          (iv) the certificate number or a description of the tenor and terms of the Senior Note;

          (v) a statement that the Holder is accepting the Change of Control Offer; and

          (vi) a guarantee that the Senior Note, together with the form entitled “Election Form”
duly completed, will be received by the Paying Agent at least five Business Days prior to
the Change of Control Payment Date.

Any exercise by a Holder of its election to accept the Change of Control Offer shall be
irrevocable. The Change of Control Offer may be accepted for less than the entire principal amount
of the Senior Note, but in that event the principal amount of the Senior Note remaining outstanding
after repurchase must be equal to $2,000 and in integral multiples of $1,000 in excess thereof.

          (e) On the repurchase date following a Change of Control Repurchase Event, the Corporation
shall, to the extent lawful:

          (i) accept for payment all Senior Notes or portions thereof properly tendered pursuant
to such offer;

          (ii) deposit with the Paying Agent an amount equal to the aggregate purchase price in
respect of all Senior Notes or portions thereof properly tendered; and

          (iii) deliver or cause to be delivered to the Trustee the Senior Notes properly
accepted, together with an Officers’ Certificate of the Corporation stating the aggregate
principal amount of Senior Notes or portions thereof being repurchased by the Corporation.

          (f) The Paying Agent will promptly mail to each Holder of Senior Notes properly tendered, the
purchase price for such Senior Notes, and the Trustee, upon the execution and delivery by the
Corporation of such Senior Notes, will promptly authenticate and mail (or cause to be transferred
by book-entry) to each Holder a new Fixed Rate Senior Note equal in principal amount to any
unpurchased portion of any Senior Notes surrendered; provided that each new Fixed Rate Senior Note
will be in a principal amount of an integral multiple of $1,000.

4

 

          (g) The Corporation shall not be required to make an offer to repurchase the Senior Notes upon
a Change of Control Repurchase Event if a third party makes such an offer in the manner, at the
times and otherwise in compliance with the requirements for an offer made by the Corporation and
such third party purchases all Senior Notes properly tendered and not withdrawn under its offer.

          (h) Solely for purposes of this Section 2.9 in connection with the Senior Notes, the following
terms shall have the following meanings:

          “Below Investment Grade Rating Event” means the rating on the Senior Notes is lowered by at
least two of the three Rating Agencies and the Senior Notes are rated below an Investment Grade
Rating by at least two of the three Rating Agencies on any day during the period (which period
shall be extended so long as the rating of the Senior Notes is under publicly announced
consideration for a possible downgrade by any of the Rating Agencies) commencing 60 days prior to
the first public notice of the occurrence of a Change of Control or the Corporation’s intention to
effect a Change of Control and ending 60 days following consummation of such Change of Control.

          “Change of Control” means (i) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any person or group (as used
in Section 13(d)(3) of the Exchange Act), becomes the beneficial owner, directly or indirectly, of
more than 50% of the Corporation’s Voting Stock (as defined herein), measured by voting power
rather than number of shares, (ii) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all of the assets of the Corporation
and its Subsidiaries, taken as a whole, to any person or group of related persons for the purpose
of Section 13(d)(3) of the Exchange Act, together with any affiliates thereof (whether or not
otherwise in compliance with the provisions of the Indenture), (iii) the replacement of a majority
of the Board of Directors over a two-year period from the directors who constituted the Board of
Directors at the beginning of such period, when such replacement shall have not been approved by a
vote of at least a majority of the Board of Directors then still in office who either were members
of such Board of Directors at the beginning of such period or whose election as members of such
Board of Directors was previously so approved, or (iv) the adoption of a plan relating to the
liquidation or dissolution of the Corporation.

          “Change of Control Repurchase Event” means the occurrence of both a Change of Control and a
Below Investment Grade Ratings Event.

          “Fitch” means Fitch Inc. and its successors.

          “Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by
Moody’s, BBB-(or the equivalent) by S&P and BBB- (or the equivalent) by Fitch and the equivalent
investment grade credit rating from any replacement rating agency or rating agencies selected by
the Corporation.

          “Moody’s” means Moody’s Investors Service, Inc. and its successors.

5

 

          “Rating Agency” means (1) each of Moody’s, S&P and Fitch; and (2) if any of Moody’s, S&P or
Fitch ceases to rate the Senior Notes of this series or fails to make a rating of such Senior Notes
publicly available for reasons outside of the Corporation’s control, a “nationally recognized
statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange
Act selected by the Corporation (as certified by a resolution of the Corporation’s Board of
Directors) to act as a replacement agency for Moody’s, S&P or Fitch, or all of them, as the case
may be.

          “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.
and its successors.

          “Voting Stock” of any specified “person” (as that term is used in Section 13(d)(3) of the
Exchange Act) as of any date means the capital stock of such person that is at the time entitled to
vote generally in the election of the board of directors of such person.

          Section 2.10.
Appointment of Agents. The Trustee will initially be the Security Registrar and Paying Agent for the Senior Notes.

ARTICLE 3.

FORM OF NOTES

          Section 3.1.
Form of Senior Notes. The Senior Notes and the Trustee’s Certificate of Authentication to be endorsed thereon are to
be substantially in the form set forth in Exhibit A hereto.

ARTICLE 4.

ORIGINAL ISSUE OF NOTES

          Section 4.1. Original Issue of Senior Notes. The Senior Notes may, upon execution of this Supplemental Indenture, be executed by the
Corporation and delivered to the Trustee for authentication, and the Trustee shall, upon
Corporation order, authenticate and deliver such Senior Notes as in such Corporation order
provided.

ARTICLE 5.

DEFAULTS AND REMEDIES

     Section 5.1. Acceleration. For purposes of the Senior Notes, Section 6.2 of the Indenture shall be replaced with, and
superseded by, the following:

          If an Event of Default with respect to a series of Securities occurs and is
continuing, the Trustee, by notice to the Corporation, or the Holders of at least 25% in
principal amount of the Securities of that series by notice to the Corporation and the
Trustee, may declare the principal (or, in the case of Discounted Securities, such amount
of principal as may be provided for in such Securities) of and accrued interest on all the
Securities of that series to be due and payable immediately, and upon a declaration such

7

 

principal and interest shall be due and payable immediately; provided, however, that if an
Event of Default specified in Section 6.1(4) or Section 6.1(5) of the Indenture with
respect to the Corporation shall occur and be continuing, the principal of, premium, if
any, and accrued and unpaid interest on all the Securities of that series will become
immediately due and payable without any declaration or other act on the part of the Trustee
or any Holders. The Holders of a majority in principal amount of the Securities of any
series by notice to the Trustee may rescind an acceleration (and upon such rescission any
Event of Default caused by such acceleration shall be deemed cured) with respect to that
series and its consequences if all existing Events of Default with respect to the series
have been cured or waived, if the rescission would not conflict with any judgment or
decree, and if all payments due to the Trustee and any predecessor Trustee under
Section 7.7 of the Indenture have been made.

ARTICLE 6.

MISCELLANEOUS

          Section 6.1. Ratification of Indenture. The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified
and confirmed, and this Supplemental Indenture shall be deemed part of the Indenture in the manner
and to the extent herein and therein provided; provided, however, that the provisions of this
Supplemental Indenture (including, without limitation, Section 5.1 hereof) shall apply solely with
respect to the Senior Notes. Without limiting the foregoing, it is expressly affirmed that the
obligations of the Corporation set forth in Sections 4.3, 4.4 and 4.7 of the Indenture shall apply
with respect to the Notes.

          Section 6.2. Trustee Not Responsible for Recitals. The recitals herein contained are made by the Corporation and not by the Trustee, and the
Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation
as to the validity or sufficiency of this Supplemental Indenture.

          Section 6.3. Governing Law. This Supplemental Indenture, and each Senior Note shall be governed by and construed in
accordance with the laws of the State of New York.

          Section 6.4. Separability. In case any one or more of the provisions contained in the Indenture, this Supplemental
Indenture or the Senior Notes shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect any other
provisions of the Indenture, this Supplemental Indenture or of the Senior Notes, but the Indenture,
this Supplemental Indenture and the Senior Notes shall be construed as if such invalid or illegal
or unenforceable provision had never been contained herein or therein.

          Section 6.5. Counterparts. This Supplemental Indenture may be executed in any number of counterparts each of which
shall be an original; but such counterparts shall together constitute but one and the same
instrument.

7

 

          IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to
be duly executed, all as of the day and year first above written.

	 	 	 	 	 
	 	MARTIN MARIETTA MATERIALS, INC.

 	 
	 	By:  	/s/ Roselyn Bar
 	 
	 	 	Name:  	Roselyn B. Bar 	 
	 	 	Title:  	Senior Vice President, General
Counsel and Secretary 	 
	 
	 	BRANCH BANKING AND TRUST COMPANY, as Trustee

 	 
	 	By:  	/s/ Pamela McGee
 	 
	 	 	Name:  	Pamela B. McGee 	 
	 	 	Title:  	Vice President 	 

 

	 	 	 	 	 

	 	(A)	 	[Do not delete — this paragraph generates the automatic
page number]

EXHIBIT A

FORM OF SENIOR NOTES

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED
IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

			
	 
	No.
	 	$                                        

CUSIP No. 573284AK2

MARTIN MARIETTA MATERIALS, INC.

6.60% Senior Notes Due 2018

MARTIN MARIETTA MATERIALS, INC., a North Carolina corporation (the “Corporation”), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of
$                     Dollars on April 15, 2018.

Interest Payment Dates: April 15 and October 15

Record Dates: April 1 and October 1

Additional provisions of this Security are set forth on the other side hereof. References herein
to the “Securities” are to the Corporation’s 6.60% Senior Notes Due 2018, which constitute a series
of Securities issued under the indenture referred to on the other side thereof.

	 	 	 	 	 
	 
	 	 	 	 
	Attest: [SEAL]	 	MARTIN MARIETTA MATERIALS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	Secretary

	 	 	 	Chief Financial Officer

A-1

 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Dated:	 	 	 	 
	 
	 	 	 	 	 	 
	Authenticated:	 	 	 	 
	 
	 	 	 	 	 	 
	This in one of the Securities of the series designated
herein and referred to in
the within-named Indenture.	 	 
	 
	 	,	 
	as Trustee	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	
 

	,
	 

	 	Authorized Officer
	 	 	 	

A-2

 

MARTIN MARIETTA MATERIALS, INC.

6.60% Senior Notes Due 2018

     Interest. The Corporation promises to pay interest on the principal amount of this Security
at the rate per annum shown above. The Corporation will pay interest semi-annually on April 15 and
October 15 of each year, commencing on October 15, 2008. Interest on the Securities will accrue
from the most recent date to which interest has been paid, or if no interest has been paid, from
April 21, 2008. Unless otherwise specified, interest will be computed on the basis of a 360-day
year of twelve 30-day months.

     Method of Payment. Except as described above, the Corporation will pay interest on the
Securities (except defaulted interest, which shall be paid as set forth below) to the persons who
are registered holders of the Securities at the close of business on the record date for the next
interest payment date even though the Securities are cancelled after the record date and on or
before the interest payment date. Any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the Holder on such regular record date and may either be paid
to the Person in whose name this Security (or one or more predecessor Securities) is registered at
the close of business on a special record date for the payment of such defaulted interest to be
fixed by the Trustee for the Securities, notice whereof shall be given to the Holders of Securities
not less than 15 days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any Securities exchange on which this
Security may be listed, and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. Payment of the principal of (and premium, if any) and interest on this
Securities will be made at the office or agency of the Corporation maintained for that purpose in
the Borough of Manhattan, The City of New York, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Corporation payment of interest may be made by check
mailed to a registered Holder’s address. All payments of principal and interest with respect to
this Security will be made by the Corporation in immediately available funds. To the extent
lawful, the Corporation shall pay interest on overdue principal at the rate borne by the Securities
and it shall pay interest on overdue installments of interest at the same rate.

     Paying Agent and Registrar. Initially, Branch Banking and Trust Company (“Trustee”),
Corporate Trust Services, 223 West Nash Street, Wilson, North Carolina 27893, will act as Paying
Agent and Registrar. The Corporation may change any Paying Agent, Registrar or co-registrar
without notice. The Corporation or any of its Subsidiaries (as defined in the Indenture) may act
as Paying Agent, Registrar or co-registrar.

     Indenture. The Corporation issued the Securities under an Indenture dated as of April 30,
2007, between the Corporation and the Trustee, as supplemented by the Third Supplemental Indenture
dated as of April 21, 2008, between the Corporation and the Trustee (as supplemented, the
“Indenture”). The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code §§
77aaa-77bbbb) (“Act”). The Securities are subject to all such terms, and holders are referred to
the Indenture, all applicable supplemental indentures and the Act for a statement of those terms.
This Security is one of the series designated on the face hereof and will initially be offered in
the

A-3

 

principal amount of $300,000,000. The Corporation may, without the consent of the Holders,
issue additional Securities and thereby increase such principal amount in the future, on the same
terms and conditions and with the same CUSIP number as this Security.

     Redemption. The Securities will be redeemable at the option of the Corporation, in whole at
any time or in part from time to time, on at least 30 days but not more than 60 days prior written
notice mailed to the registered holders thereof, at a redemption price equal to the greater of (i)
100% of the principal amount of the Securities to be redeemed or (ii) the sum, as determined by the
Quotation Agent (as defined herein), of the present values of the principal amount of the
Securities to be redeemed and the remaining scheduled payments of interest thereon from the
redemption date to the maturity date of the Securities to be redeemed, exclusive of interest
accrued to the redemption date (the “Remaining Life”), discounted from their respective scheduled
payment dates to the redemption date on a semiannual basis (assuming a 360-day year consisting of
30-day months) at the Treasury Rate (as defined herein) plus 45 basis points plus accrued and
unpaid interest on the principal amount being redeemed to the date of redemption.

     If money sufficient to pay the redemption price of and accrued interest on all the Securities
(or portions thereof) to be redeemed on the redemption date is deposited with the Trustee or paying
agent on or before the redemption date and certain other conditions are satisfied, then on and
after such redemption date, interest will cease to accrue on such Securities (or such portion
thereof) called for redemption.

     “business day” means any day other than a Saturday, a Sunday or a day on which banking
institutions in The City of New York, New York are authorized or obligated by law, regulation,
executive order or governmental decree to close.

     “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the Remaining Life that would be utilized, at
the time of selection and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity with the Remaining Life.

     “Comparable Treasury Price” means, with respect to any redemption date, the average of two
Reference Treasury Dealer Quotations for such redemption date.

     “Quotation Agent” means the Reference Treasury Dealer appointed by the Corporation.

     “Reference Treasury Dealer” means each of (1) J.P. Morgan Securities Inc., (2) Banc of America
Securities LLC, and (3) one other primary U.S. Government securities dealer in New York City (a
“Primary Treasury Dealer”) selected by Wachovia Capital Markets, LLC, and their respective
successors; provided, however, that if the foregoing ceases to be a Primary Treasury Dealer, we
will substitute therefor another Primary Treasury Dealer.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City
time, on the third business day preceding such redemption date.

A-4

 

     “Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the
semiannual yield to maturity of the Comparable Treasury Issue, calculated on the third business day
preceding such redemption date using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for such redemption
date.

     Change of Control. Upon the occurrence of a Change of Control Repurchase Event, unless the
Corporation has exercised its right to redeem the Securities as described above, the Corporation
shall make an irrevocable offer (“Change of Control Offer”) to each Holder of the Securities to
repurchase all or any part (in denominations of $2,000 and in integral multiples of $1,000 in
excess thereof) of such Holder’s Securities at a repurchase price in cash equal to 101% of the
aggregate principal amount of Securities repurchased plus any accrued and unpaid interest on the
Securities repurchased to, but not including, the date of repurchase (a “Change of Control
Payment”). Within 30 days following any Change of Control Repurchase Event or, at the
Corporation’s option, prior to any Change of Control, but in either case, after the public
announcement of such Change of Control, the Corporation shall mail to each Holder of Securities,
with a copy to the Trustee, a notice describing the transaction or transactions that constitute or
may constitute the Change of Control Repurchase Event and offering to repurchase all Securities
tendered on the payment date specified in such notice, which date will be no earlier than 30 days
and no later than 60 days from the date such notice is mailed (a “Change of Control Payment Date”).

     To accept the Change of Control Offer, the Holder must deliver to the Paying Agent, at least
five Business Days prior to the Change of Control Payment Date, this Security together with the
form entitled “Election Form” (which form is annexed hereto as Annex A) duly completed, or a
telegram, telex, facsimile transmission or a letter from a member of a national securities exchange
or the Financial Industry Regulatory Authority, Inc. or a commercial bank or trust company in the
United States setting forth: (a) the name of the Holder of this Security; (b) the principal amount
of this Security; (c) the principal amount of this Security to be repurchased; (d) the certificate
number or a description of the tenor and terms of this Security; (e) a statement that the Holder is
accepting the Change of Control Offer; and (f) a guarantee that this Security, together with the
form entitled “Election Form” duly completed, will be received by the Paying Agent at least five
Business Days prior to the Change of Control Payment Date. Any exercise by a Holder of its election
to accept the Change of Control Offer shall be irrevocable. The Change of Control Offer may be
accepted for less than the entire principal amount of this Security, but in that event the
principal amount of this Security remaining outstanding after repurchase must be equal to $2,000
and in integral multiples of $1,000 in excess thereof.

     On the repurchase date following a Change of Control Repurchase Event, the Corporation shall,
to the extent lawful: (a) accept for payment all Securities or portions thereof properly tendered
pursuant to such offer; (b) deposit with the Paying Agent an amount equal to the aggregate purchase
price in respect of all Securities or portions thereof properly tendered; and (c) deliver or cause
to be delivered to the Trustee the Securities properly accepted, together with an Officers’
Certificate of the Corporation stating the aggregate principal amount of Securities or portions
thereof being repurchased by the Corporation.

A-5

 

     The Corporation shall not be required to make an offer to repurchase the Securities upon a
Change of Control Repurchase Event if a third party makes such an offer in the manner, at the times
and otherwise in compliance with the requirements for an offer made by the Corporation and such
third party purchases all Securities properly tendered and not withdrawn under its offer.

     For purposes of the Change of Control Offer provisions, the following terms are applicable:

     “Below Investment Grade Rating Event” means the rating on the Securities is lowered by at
least two of the three Rating Agencies and the Securities are rated below an Investment Grade
Rating by at least two of the three Rating Agencies on any day during the period (which period
shall be extended so long as the rating of the Securities is under publicly announced consideration
for a possible downgrade by any of the Rating Agencies) commencing 60 days prior to the first
public notice of the occurrence of a Change of Control or the Corporation’s intention to effect a
Change of Control and ending 60 days following consummation of such Change of Control.

     “Change of Control” means (i) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any person or group (as used
in Section 13(d)(3) of the Exchange Act), becomes the beneficial owner, directly or indirectly, of
more than 50% of the Corporation’s Voting Stock (as defined herein), measured by voting power
rather than number of shares, (ii) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all of the assets of the Corporation
and its Subsidiaries, taken as a whole, to any person or group of related persons for the purpose
of Section 13(d)(3) of the Exchange Act, together with any affiliates thereof (whether or not
otherwise in compliance with the provisions of the Indenture), (iii) the replacement of a majority
of the Board of Directors over a two-year period from the directors who constituted the Board of
Directors at the beginning of such period, when such replacement shall have not been approved by a
vote of at least a majority of the Board of Directors then still in office who either were members
of such Board of Directors at the beginning of such period or whose election as members of such
Board of Directors was previously so approved, or (iv) the adoption of a plan relating to the
liquidation or dissolution of the Corporation.

     “Change of Control Repurchase Event” means the occurrence of both a Change of Control and a
Below Investment Grade Ratings Event.

     “Fitch” means Fitch Inc. and its successors.

     “Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by
Moody’s, BBB-(or the equivalent) by S&P and BBB- (or the equivalent) by Fitch and the equivalent
investment grade credit rating from any replacement rating agency or rating agencies selected by
the Corporation.

     “Moody’s” means Moody’s Investors Service, Inc. and its successors.

     “Rating Agency” means (1) each of Moody’s, S&P and Fitch; and (2) if any of Moody’s, S&P or
Fitch ceases to rate the Securities or fails to make a rating of such Securities publicly

A-6

 

available for reasons outside of the Corporation’s control, a “nationally recognized
statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange
Act selected by the Corporation (as certified by a resolution of the Corporation’s Board of
Directors) to act as a replacement agency for Moody’s, S&P or Fitch, or all of them, as the case
may be.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.
and its successors.

     “Voting Stock” of any specified “person” (as that term is used in Section 13(d)(3) of the
Exchange Act) as of any date means the capital stock of such person that is at the time entitled to
vote generally in the election of the board of directors of such person.

     Denominations; Transfer; Exchange. The Securities are in registered form without coupons in
denominations of $2,000 and any multiple of $1,000 in excess thereafter. A holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require a holder, among
other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. Also, it need not transfer or exchange any
Securities for a period of 15 days before a selection of Securities to be redeemed or before an
interest payment date.

     Persons Deemed Owners. The registered holder of this Security may be treated as the owner of
it for all purposes, and neither the Corporation, the Trustee, nor any Registrar, Paying Agent or
co-registrar shall be affected by notice to the contrary.

     Unclaimed Money. If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent will pay the money back to the Corporation at its request.
After that, holders entitled to unclaimed money must look only to the Corporation and not the
Trustee for payment unless an abandoned property law designates another person.

     Defeasance. The Indenture contains provisions for defeasance at any time of the entire
principal of the Securities upon compliance by the Corporation with certain conditions set forth
therein.

     Amendment; Supplement; Waiver. Subject to certain exceptions as therein provided, the
Indenture or the Securities may be amended or supplemented with the consent of the Holders of not
less than a majority in principal amount of the Securities of each series affected, and, subject to
certain exceptions and limitations as provided in the Indenture, any past default or compliance
with any provision may be waived with the consent of the Holders of a majority in principal amount
of the Securities. Without the consent of any Holder, the Indenture or the Securities may be
amended or supplemented, for among other reasons, to cure any ambiguity, omission, defect or
inconsistency, to provide for uncertificated Securities in addition to or in place of certificated
Securities or to make any change that does not materially adversely affect the rights of any
Holder. Without the consent of any holder, the Trustee may waive compliance with any provision of
the Indenture or the Securities if the waiver does not materially adversely affect the rights of
any Holder of Securities.

     Restrictive Covenants. The Indenture does not limit unsecured debt of the Corporation or any
of its Subsidiaries. The Indenture does limit certain mortgages, liens and sale-leaseback

A-7

 

transactions. The limitations are subject to a number of important qualifications and
exceptions. The Corporation must, on an annual basis, report to the Trustee on compliance with the
limitations.

     Successors. When a successor entity assumes all the obligations of the Corporation or its
successors under, and in compliance with, the Securities and the Indenture, the predecessor
Corporation will be released from those obligations.

     Defaults and Remedies. An Event of Default is: default for 30 days in payment of any interest
on the Securities; default in payment of any principal on the Securities; failure by the
Corporation for 90 days after notice to it given in accordance with the terms of the Indenture to
comply with any of its other agreements in the Indenture or the Securities; and certain events of
bankruptcy or insolvency, all as more fully set forth in the Indenture. If an Event of Default
with respect to the Securities shall occur and be continuing, the principal of the Securities and
accrued interest thereon may be declared due and payable in the manner and with the effect provided
in the Indenture; provided, however, that if an Event of Default relating to certain events of
bankruptcy or insolvency with respect to the Corporation shall occur and be continuing, the
principal of, premium, if any, and accrued and unpaid interest on all the Securities will become
immediately due and payable without any declaration or other act on the part of the Trustee or any
Holders. Holders of Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it
receives indemnity satisfactory to it. Subject to certain limitations, holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from holders notice of any continuing default (except a default in payment
of principal or interest) if it determines in good faith that withholding notice is in the
interests of such holders.

     Trustee Dealings with the Corporation. Branch Banking and Trust Company, the Trustee under
the Indenture, in its individual or any other capacity is a lender under the Corporation’s credit
facility and a underwriter of the Securities and may make loans to, accept deposits from and
perform services for the Corporation or any of its affiliates, and may otherwise deal with the
Corporation or its affiliates as if it were not Trustee.

     No Recourse Against Others. A director, officer, employee or stockholder, as such, of the
Corporation shall not have any liability for any obligations of the Corporation under the
Securities or the Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation. Each holder by accepting a Security waives and releases all such
liability. This waiver and release are part of the consideration for the issue of the Securities.

     Authentication. This Security shall not be valid until the Trustee or other Authenticating
Agent manually signs the certificate of authentication on this Security.

     Miscellaneous. This Security shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.

     All terms used in this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

A-8

 

     The Corporation will furnish to any holder upon written request and without charge a copy of
the Indenture. Requests may be made to: Martin Marietta Materials, Inc., 2710 Wycliff Road,
Raleigh, North Carolina 27607-3033 Attention: Secretary.

A-9

 

ANNEX A

 

ELECTION FORM
TO
BE COMPLETED ONLY IF THE HOLDER

ELECTS
TO ACCEPT THE CHANGE OF CONTROL OFFER

 

     The undersigned hereby irrevocably requests and instructs the Corporation to repurchase the
within Security (or the portion thereof specified below), pursuant to its terms, on the Change of
Control Payment Date specified in the Change of Control Offer, for the Change of Control Payment
specified in the within Security, to the undersigned,
                                                            , at
                                                            
(please print or typewrite name and address of the
undersigned).

     For this election to accept the Change of Control Offer to be effective, the Corporation must
receive, at the address of the Paying Agent set forth below or at such other place or places of
which the Corporation shall from time to time notify the Holder of the within Security, either (i)
this Security with this “Election Form” form duly completed, or (ii) telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange or the Financial Industry
Regulatory Authority or a commercial bank or trust company in the United States setting forth (a)
the name of the Holder of the Security, (b) the principal amount of the Security, (c) the principal
amount of the Security to be repurchased, (d) the certificate number or description of the tenor
and terms of the Security, (e) a statement that the Holder is accepting the Change of Control
Offer, and (f) a guarantee stating that the Security to be repurchased, together with this
“Election Form” duly completed will be received by the Paying Agent at least five Business Days
prior to the Change of Control Payment Date. The address of the Paying Agent is Branch Banking and
Trust Company, Corporate Trust Services, 223 West Nash Street, Wilson, North Carolina 27893.

     If less than the entire principal amount of the within Security is to be repurchased, specify
the portion thereof (which principal amount must be $2,000 or an integral multiple of $1,000 in
excess thereof) which the Holder elects to have repurchased: $                    .

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