Page 60 - Proxy Statement - 2020

Compensation Discussion and Analysis / Potential Payments upon Termination or Change of Control

Additional information regarding these benefits is under the change of control transactions that may ultimately lead to
heading Pension Benefits Table on page 63 and the termination of their employment but would otherwise be in the
accompanying narrative. best interests of our shareholders. The Employment Protection
Agreements are described on pages 64 and 65 of this Proxy
Potential Payments upon Statement.
Termination or Change of Control
Tax and Accounting Implications
We do not have written employment agreements with
In administering the compensation program for NEOs, for
executives. Instead, each of our NEOs has a change of control
awards made in 2019 the Committee considered tax
severance agreement (an Employment Protection Agreement)
consequences, including the limit on deductibility on
that provides for retention and continuity in order to minimize
compensation in excess of $1 million to certain executive officers
disruptions during a pending or anticipated change of control.
under Section 162(m) of the Internal Revenue Code and the
The agreements are triggered only by a qualifying termination of
consequences under financial accounting standards.
employment in connection with a change of control. Martin
Marietta’s equity-based award plans and retirement plans also
While the Committee considers the tax deductibility as one
provide for certain post-termination payments and benefits, as
factor in determining executive compensation, the Committee
well as, for equity awards granted prior to 2019, the
also looks at other factors in making its decisions, as noted
acceleration of time periods for purposes of vesting in, or
above, and retains the flexibility to award compensation that it
realizing gain from, such equity award in the event of a change
determines to be consistent with the goals of our executive
of control. The Committee believes these payments and benefits
compensation program to attract talent, promote retention, or
are also important to align the interests of the executive officers
recognize and reward desired performance even if the awards
with the interests of the shareholders because the agreements
are not deductible for income tax purposes.
will reduce or eliminate the reluctance to pursue potential

56 2020 PROXY STATEMENT