Norman R. Augustine, chairman of Martin Marietta Corp., stands to receive about $2.7 million in special payments if the aerospace firm's planned merger with Lockheed Corp. goes through, a company spokesman said yesterday.
Mr. Augustine's payment would be part of some $31 million that would be paid to about 460 officers and managers at Martin Marietta, under provisions the company adopted in the 1980s to protect its senior talent against takeovers, the spokesman said.
By contrast, at Lockheed Corp., only about six executives would get payments, which would be made only because they would lose their jobs in the merger, a Lockheed spokesman said.
That is because Lockheed does not have a comparable merger-protection plan for its key employees, though a Martin Marietta spokesman described them as "a very common kind of provision" among U.S. industries.
The payments were first reported in yesterday's editions of the Wall Street Journal.
Martin and Lockheed will have to disclose details of the payments as part of the proxy statements they will send to stockholders when they seek approval of the proposed $10-billion merger. The firms have set February as their target date for completion of the merger into Lockheed Martin Corp., which would form the world's biggest private defense supplier.
Mr. Augustine's payment will go into a charitable foundation, which the Martin Marietta chairman has created specifically for that purpose, a company spokesman said.
The money will go to the foundation in order "to avoid the appearance of personal enrichment" from Mr. Augustine's role in negotiating the merger, the company spokesman said. The spokesman said he did not know what charitable purposes the foundation would support.
Mr. Augustine, one of the highest-paid executives in the defense industry, was slated to receive incentive payments totaling $2.2 million with out the merger, and the $2.7 million "change in control" payment would be in addition to that.
His total compensation in 1993 came to $3.6 million, including salary, bonus, stock awards and stock options exercised.
The $31 million in special payments to the 460 managers triggered by the merger would be in addition to $10.5 million that they were due to receive under the company's incentive pay provisions.
Of the $31 million, about $5.8 million would go to Martin Marietta's five top officers.
In addition to Mr. Augustine, they are A. Thomas Young, president and chief operating officer; Peter Teets, vice president; Marcus C. Bennett, chief financial officer; and Frank Menaker, general counsel.
The provision that calls for the payments was approved by Martin Marietta stockholders in the 1980s, a spokesman said.