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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
LOCKHEED MARTIN CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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[LOCKHEED MARTIN LOGO]
NOTICE OF 1997
ANNUAL MEETING OF
STOCKHOLDERS AND
PROXY STATEMENT
APRIL 24, 1997
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[LOCKHEED MARTIN LOGO]
March 21, 1997
Norman R. Augustine
Chairman of the Board
& Chief Executive Officer
Dear Fellow Stockholders:
I look forward to seeing you at Lockheed Martin's Annual Meeting of
Stockholders. At the meeting, we plan to report to you on our 1996 activities,
which resulted in a watershed year for our Corporation. Demonstrating the
benefits of the leadership position we have built in industry consolidation, we
won an exceptional amount of new business, improved profit margins, generated
almost $1 billion in free cash, and achieved a nearly flawless record of mission
success for our customers. These and other accomplishments have enabled Lockheed
Martin to create new opportunities and added value for you, our stockholders.
We were also pleased this past year to have been able to conclude our
transaction with Loral Corporation, and the transition of the former Loral
businesses into Lockheed Martin has now largely been accomplished. Much of the
credit for the latter goes to Mr. Bernard L. Schwartz, former Loral Chairman,
and Mr. Frank C. Lanza, former Loral President, both of whom have served on our
Board during the transition. Mr. Schwartz, Chairman and Chief Executive Officer
of Loral Space & Communications Ltd., has indicated that, given the success of
the transition, he would now prefer to be free of any constraints imposed by
serving on both company's Boards and to be able to pursue business opportunities
of mutual interest; therefore, he has chosen not to stand for reelection to our
Board of Directors. Lockheed Martin owns approximately 17 percent of Loral Space
and Communications Ltd.
As has previously been announced, Mr. Lanza will become Chairman and Chief
Executive Officer of a new corporation in which Lockheed Martin anticipates
having a 35 percent ownership share. Given his new role as Chairman and Chief
Executive Officer of the new corporation, Mr. Lanza will also not stand for
reelection to the Lockheed Martin Board.
We have been fortunate indeed to have had these executives on the Lockheed
Martin Board during this period of transition and look forward to continuing to
work with them on future business endeavors which will benefit each of these
organizations.
I hope you can attend our annual meeting in person, but, whether or not you
plan to attend, please make sure that your shares are represented by completing
and returning your proxy card or, if you are a stockholder of record, by placing
your vote by telephone.
Sincerely,
/s/ NORMAN R. AUGUSTINE
Norman R. Augustine
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[LOCKHEED MARTIN LOGO]
6801 Rockledge Drive
Bethesda, MD 20817
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 1997
To The Stockholders of Lockheed Martin Corporation:
The Annual Meeting of Stockholders of Lockheed Martin Corporation will be
held on Thursday, April 24, 1997, at 10:30 a.m., local time, at the Brown Palace
Hotel, Denver, Colorado. Attendance at the meeting will be limited to
stockholders of record at the close of business on March 10, 1997, or their
proxies, beneficial owners presenting satisfactory evidence of ownership on that
date, and invited guests of the Corporation.
At 10:00 a.m., you are invited to join the directors and management for
coffee and conversation. During the meeting, there will also be an opportunity
to discuss matters of interest to you as a stockholder of Lockheed Martin
Corporation.
The purposes of the meeting are:
(1) to elect directors to terms expiring in 1998;
(2) to ratify the appointment of independent auditors for the year
1997;
(3) to act upon the stockholder proposals set forth in the attached
Proxy Statement; and
(4) to transact such other business as may properly come before the
meeting.
It is important that your shares be represented at the meeting regardless
of the number of shares you hold. If you receive more than one proxy card
because your shares are registered in different names or addresses, please sign,
date and return each card in the enclosed envelope so that all of your shares
will be represented. If you are a stockholder of record, you may use the
toll-free telephone number on the proxy card to vote your shares.
By Order of the Board of Directors
/s/ LILLIAN M. TRIPPETT
Lillian M. Trippett
Vice President, Corporate Secretary
and Associate General Counsel
March 21, 1997
IMPORTANT
PLEASE NOTE THAT A TICKET IS REQUIRED FOR ADMISSION TO THE MEETING. IF
YOU PLAN TO ATTEND AND YOU ARE A STOCKHOLDER AS OF MARCH 10, 1997, PLEASE CHECK
THE APPROPRIATE BOX ON YOUR PROXY CARD (OR INDICATE WHEN PROMPTED IF VOTING BY
TELEPHONE), AND A TICKET WILL BE FORWARDED TO YOU. IF YOUR SHARES ARE HELD IN
THE NAME OF A BROKER OR OTHER NOMINEE, PLEASE BRING A PROXY OR A LETTER FROM
THAT FIRM CONFIRMING YOUR OWNERSHIP OF SHARES AS OF THE CLOSE OF BUSINESS ON THE
RECORD DATE (MARCH 10, 1997).
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CONTENTS
PAGE
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General Information............................................................ 1
Voting Securities and Record Date.............................................. 1
Election of Directors.......................................................... 2
Board of Directors............................................................. 5
Security Ownership of Certain Beneficial Owners................................ 9
Securities Owned by Directors, Nominees and Named Executive Officers........... 10
Compensation of Executive Officers............................................. 12
Stock Price Performance Graph.................................................. 25
Compliance with Section 16(a) of the Exchange Act.............................. 25
Ratification of Appointment of Independent Auditors............................ 26
Stockholder Proposals.......................................................... 26
Miscellaneous.................................................................. 28
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PROXY STATEMENT
GENERAL INFORMATION
The Annual Meeting of Stockholders ("Annual Meeting") of Lockheed Martin
Corporation, a Maryland corporation (the "Corporation"), will be held at 10:30
a.m. on Thursday, April 24, 1997, at the Brown Palace Hotel, Denver, Colorado,
for the purposes set forth in the Notice of Annual Meeting of Stockholders and
Proxy Statement. This statement is furnished in connection with the solicitation
by the Board of Directors of proxies to be used at such meeting and at any and
all adjournments of such meeting.
Stockholders of record may vote their proxy using the toll-free number
listed on the proxy card or they may sign, date and mail their proxies in the
postage paid envelope provided. Participants in the Corporation's employee
benefit plans may not use the telephone procedure to direct the voting of shares
attributable to their accounts and must return the enclosed instruction card.
The telephone voting procedure is designed to authenticate votes cast by
use of a Personal Identification Number. The procedure allows stockholders to
appoint a proxy to vote their shares and to confirm that their instructions have
been properly recorded. The Corporation has been advised by counsel that the
procedures which have been put in place are consistent with the requirements of
applicable law. Specific instructions to be followed by any stockholder of
record interested in voting by telephone are set forth on the enclosed proxy
card.
Any proxy given pursuant to this solicitation may be revoked at any time
before the proxy is voted by filing with the Secretary of the Corporation prior
to the meeting at the Corporation's principal office, or at the Annual Meeting,
an instrument revoking the proxy or a duly executed proxy bearing a later date.
You may also revoke your proxy by voting in person at the Annual Meeting.
Attendance at the Annual Meeting will not in and of itself constitute a
revocation of a proxy.
Voting your proxy by telephone or by mail will in no way limit your right
to vote at the Annual Meeting if you later decide to attend in person. If your
shares are held in the name of a broker, bank or other holder of record, you
must obtain a proxy, executed on your behalf, from the holder of record to be
able to vote at the Meeting.
The principal office of the Corporation is at 6801 Rockledge Drive,
Bethesda, Maryland 20817. This Proxy Statement, the Proxy Card, and the Notice
of Annual Meeting will be sent to stockholders commencing on or about March 21,
1997.
VOTING SECURITIES AND RECORD DATE
Stockholders of record at the close of business on March 10, 1997 are
entitled to notice of and to vote at the Annual Meeting. On January 31, 1997,
there were 192,888,667 shares outstanding of the Corporation's Common Stock
("Common Stock" or "Stock"), $1.00 par value per share . Each share is entitled
to one vote. Participants in the Corporation's Dividend Reinvestment and Stock
Purchase Plan ("Dividend Reinvestment Plan") and certain of the Corporation's
employee benefit plans are entitled to one vote for each share held for the
participant's account under those plans. Shares held in accounts under the
Dividend Reinvestment Plan are included in the proxy sent to the account owner.
Shares of Common Stock represented by a properly executed proxy, (either
signed and returned or voted through the toll-free telephone procedure described
above) will be considered as represented at the Annual Meeting for purposes of
determining a quorum. Votes at the Annual Meeting will be tabulated by two
independent judges of election from First Chicago Trust Company of New York, the
Corporation's transfer agent.
The affirmative vote of a majority of shares outstanding and entitled to
vote is required for election of directors and adoption of the proposals set
forth below. Abstentions will not be counted "for" or "against" proposals, but
will be counted for the purpose of determining the existence of a quorum.
Because the Corporation's By-Laws require the affirmative vote of a majority of
the votes entitled to be cast at a meeting to authorize action on any matter,
abstentions have the effect of a vote against the proposal. Brokers holding
shares for beneficial owners must vote those shares according to the specific
instructions they receive from the owners. If specific instructions are not
received, brokers
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may generally vote these shares in their discretion. However, the New York Stock
Exchange Rules preclude brokers from exercising their voting discretion on
certain proposals. In such cases, absent specific instructions from the
beneficial owner, the broker may not vote on those proposals. This results in
what is known as a "broker non-vote." A "broker non-vote" has the effect of a
negative vote when a majority of the shares outstanding and entitled to vote is
required for approval of the proposal. Votes "withheld" from director-nominees
have the effect of a negative vote since a majority of the shares outstanding
and entitled to vote is required for election of directors.
Each participant in certain Lockheed Martin savings and 401(k) plans will
receive an instruction card on which the participant may instruct the trustee as
to the voting of shares allocated to the participant's account. Any allocated
shares for which instructions are not received will be voted by the applicable
plan trustee in accordance with the terms of the respective plan document. In
addition, participants in the Lockheed Martin Salaried Savings Plan will receive
a separate voting instruction card on which the participant may separately
instruct the trustee as to the voting of a portion of unallocated shares held by
the plan's trust. Unallocated shares for which no instructions are received are
to be voted by the trustee in the same proportion as unallocated shares for
which instructions are received.
General Electric Company ("GE") is the owner of 20,000,000 shares of the
Corporation's Series A Preferred Stock, $1.00 par value per share, constituting
all of the issued and outstanding shares of such class. The Series A Preferred
Stock is convertible into Common Stock, has a liquidation preference of $50 per
share plus accrued and unpaid dividends, and is non-voting except in certain
circumstances. The Series A Preferred Stock has a conversion price of $34.5525
per share (subject to adjustment in certain circumstances) and is convertible
into 28,941,460 shares (subject to adjustment) or approximately 13 percent of
the outstanding shares of Common Stock after giving effect to such conversion
(based upon the number of shares of Common Stock outstanding on January 31,
1997). In the absence of a dividend declaration, dividends of $0.75 per share
per quarter accrue automatically on the Series A Preferred Stock. Further, any
dividends not paid during any given dividend period or series of dividend
periods accumulate and must be paid to the holder of the Series A Preferred
Stock before the holders of Common Stock may receive any dividend. Mr. Edward E.
Hood, Jr., retired Vice Chairman and a former director of GE, and Mr. Eugene F.
Murphy, President and Chief Executive Officer of GE Aircraft Engines, each of
whom are members of the Board of Directors of the Corporation, disclaim
beneficial ownership of these shares. GE's principal address is 3135 Easton
Turnpike, Fairfield, Connecticut 06341.
ELECTION OF DIRECTORS
The charter of the Corporation ("Charter") provides that the directors of
the Corporation shall be elected to an annual term. The Board of Directors of
the Corporation, pursuant to the Corporation's By-Laws, has determined that the
number of directors of the Corporation will be seventeen. In accordance with the
recommendation of its Nominating Committee, the Board of Directors has nominated
Norman R. Augustine, Marcus C. Bennett, Lynne V. Cheney, Vance D. Coffman,
Houston I. Flournoy, James F. Gibbons, Edward E. Hood, Jr., Caleb B. Hurtt,
Gwendolyn S. King, Vincent N. Marafino, Eugene F. Murphy, Allen E. Murray, Frank
Savage, Daniel M. Tellep, Carlisle A. H. Trost, James R. Ukropina and Douglas C.
Yearley for election to serve as directors of the Corporation until the Annual
Meeting of Stockholders of the Corporation in 1998 and until their successors
have been duly elected and qualify. Each nominee is currently serving as a
director. In the event any of these nominees becomes unavailable for election to
the Board of Directors, an event which is not anticipated, the persons appointed
as proxies or their substitutes, shall have full discretion and authority to
vote or refrain from voting for any other nominee in accordance with their
judgment.
Nominees for Election --
NORMAN R. AUGUSTINE (61)
Director since March, 1995. Chairman of the Executive Committee.
Chairman and Chief Executive Officer of Lockheed Martin since January 1997, Vice
Chairman and Chief Executive Officer from June 1996 to December 1996; Vice
Chairman, President and Chief Executive Officer from April 1996 to June 1996;
President and Chief Executive Officer from
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January 1996 to April 1996 and President from March 1995 to December 1995;
Chairman and Chief Executive Officer of Martin Marietta Corporation ("Martin
Marietta") from April 1988 to March 1995; director of Martin Marietta from 1986
to 1995, Vice Chairman between 1987 and 1988, President and Chief Operating
Officer from 1986 to 1987, Executive Vice President from 1985 to 1986, and
Senior Vice President in 1985; director of Phillips Petroleum Company and
Procter & Gamble Co.
MARCUS C. BENNETT (61)
Director since March, 1995.
Executive Vice President and Chief Financial Officer of Lockheed Martin since
July 1996, Senior Vice President and Chief Financial Officer from March 1995 to
July 1996; director of Martin Marietta from 1993 to 1995, Vice President and
Chief Financial Officer from 1988 to 1995; Chairman of Martin Marietta
Materials, Inc.; director of LMC Properties, Inc. and Orlando Central Park,
Inc., wholly owned subsidiaries of Lockheed Martin; director of Carpenter
Technology, Inc.; member of the Financial Executives Institute, MAPI Finance
Council and The Economic Club of Washington; director of the Private Sector
Council and a member of its CFO Task Force.
LYNNE V. CHENEY (55)
Director since March, 1995. Member of the Audit & Ethics and Nominating
Committees.
Senior Fellow at the American Enterprise Institute for Public Policy Research
since 1992; served as Chairman of the National Endowment for the Humanities from
1986 to 1992; director of Reader's Digest Association, Inc., IDS Mutual Fund
Group, FPL Group, Inc. and Union Pacific Group Resources, Inc.
VANCE D. COFFMAN (52)
Director since January, 1996.
President of Lockheed Martin since June 1996 and Chief Operating Officer since
January 1996, Executive Vice President from January to June 1996; President and
Chief Operating Officer of Lockheed Martin Space & Strategic Missiles Sector
from March 1995 to December 1995; appointed Executive Vice President of Lockheed
Corporation ("Lockheed") in 1992, and President of Lockheed Space Systems
Division in 1988.
HOUSTON I. FLOURNOY (67)
Director since March, 1995. Member of the Audit & Ethics and Nominating
Committees.
Special Assistant to the President for Governmental Affairs, University of
Southern California, Sacramento, California since August 1981; Professor of
Public Administration, University of Southern California, Sacramento, California
from 1981 to 1993; Vice President for Governmental Affairs, University of
Southern California, Los Angeles from 1978 to 1981; director of Lockheed from
1976 to 1995; director of Fremont General Corporation, Fremont Investment and
Loan Corporation and Tosco Corporation.
JAMES F. GIBBONS (65)
Director since March, 1995. Member of the Compensation and Nominating Committees
and Stock Option Subcommittee.
Special Counsel to the President for Industry Relations, Stanford University,
Stanford, California from 1996 to present, Dean of the School of Engineering,
Stanford University, from September 1984 to June 1996; Reid Weaver Dennis
Professor of Electrical Engineering, Stanford University, since 1964; director
of Lockheed from 1985 to 1995; director of Raychem Corporation, Centigram
Communications Corporation, Cisco Systems Incorporated, El Paso Natural Gas
Company and Amati Communications Corporation.
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EDWARD E. HOOD, JR. (66)
Director since March, 1995. Chairman of the Audit & Ethics Committee and Member
of the Compensation and Executive Committees and Stock Option Subcommittee.
Joined General Electric Company in 1957 after service in the U.S. Air Force;
elected as Vice President of GE in 1968 and Vice Chairman and Executive Officer
of GE in 1979; served as a director of GE from 1980 until his retirement in
1993; director of Martin Marietta from 1993 to 1995; director of The Lincoln
Electric Company and Gerber Scientific, Inc.; Chairman Emeritus of the Board of
Trustees of Rensselaer Polytechnic Institute; trustee of North Carolina State
University.
CALEB B. HURTT (65)
Director since March, 1995. Member of the Finance and Nominating Committees.
President and Chief Operating Officer of Martin Marietta from 1987 until his
retirement in January 1990, Executive Vice President in 1987 and Senior Vice
President from 1983 to 1987; director of Martin Marietta from 1987 to 1995; Vice
Chairman of the Board of Trustees of Stevens Institute of Technology; Chairman
of the Board of Governors of the Aerospace Industries Association in 1989 and
past Chairman of the NASA Advisory Council and of the Federal Reserve Bank,
Denver Branch; director of COMSAT Corporation.
GWENDOLYN S. KING (56)
Director since March, 1995. Member of the Audit & Ethics and Finance Committees.
Senior Vice President of Corporate and Public Affairs for PECO Energy Company
(formerly Philadelphia Electric Company) since October 1992; Commissioner of the
Social Security Administration from August 1989 to September 1992; director of
Martin Marietta from 1992 to 1995; director of Monsanto Company; member of the
Executive Committees of the Pennsylvania Electric Association, the Philadelphia
Convention and Visitors Bureau and the Central Philadelphia Development
Corporation.
VINCENT N. MARAFINO (66)
Director since March, 1995. Member of the Audit & Ethics, Executive and Finance
Committees.
Executive Vice President of Lockheed Martin from March 1995 until retirement on
December 31, 1995; director of Lockheed from 1980 to 1995; Vice Chairman of the
Board and Chief Financial and Administrative Officer of Lockheed from 1988 to
1995; Executive Vice President -- Chief Financial and Administrative Officer of
Lockheed from 1983 to 1988; executive officer of Lockheed from 1971 to 1995;
director of Rohr, Inc.
EUGENE F. MURPHY (61)
Director since March, 1995. Chairman of the Nominating Committee and Member of
the Compensation Committee.
President and Chief Executive Officer of GE Aircraft Engines since 1993;
President and Chief Executive Officer of GE Aerospace from 1992 to 1993; Senior
Vice President of GE Communications & Services from 1986 to 1992; director of
Martin Marietta from 1993 to 1995; member of President Reagan's National
Security Telecommunications Advisory Committee; former Chairman and permanent
member of the Board of Directors of the Armed Forces Communications and
Electronics Association; member of the Aerospace Industries Association Board of
Governors.
ALLEN E. MURRAY (68)
Director since March, 1995. Chairman of the Compensation Committee and the Stock
Option Subcommittee and Member of the Executive and Nominating Committees.
Chairman of the Board and Chief Executive Officer of Mobil Corporation from 1986
until his retirement on March 1, 1994; director of Martin Marietta from 1991 to
1995; director of Metropolitan Life Insurance Company, Minnesota Mining and
Manufacturing Company, Morgan Stanley Group Inc. and St. Francis Hospital;
member of the Board of Trustees of New York University; honorary director of the
American Petroleum Institute; member of The Business Council, The Council on
Foreign Relations and The Trilateral Commission.
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FRANK SAVAGE (58)
Director since March, 1995. Member of the Finance and Nominating Committees.
Chairman of Alliance Capital Management International, an investment management
company, since 1994; Chairman of the Board of Alliance Corporate Finance Group,
Inc. since 1993; Senior Vice President of The Equitable Life Assurance Society
of the United States from 1987 to 1996; Chairman of the Board of Equitable
Capital Management Corporation from 1992 to 1993; Vice Chairman of the Board of
Equitable Capital Management Corporation from 1986 to 1992; director of Alliance
Capital Management Corporation, ARCO Chemical Company, Qualcomm Inc., and
Essence Communications, Inc.; trustee of Johns Hopkins University and Howard
University; director of Lockheed from 1990 to 1995; director of the Council on
Foreign Relations and the New York Philharmonic; former U.S. Presidential
appointee to the Board of Directors of U.S. Synthetic Fuels Corporation.
DANIEL M. TELLEP (65)
Director since March, 1995. Member of the Audit & Ethics, Executive and Finance
Committees.
Chairman of the Board of Lockheed Martin from March 1995 until his retirement in
December 1996; Chief Executive Officer of Lockheed Martin from March 1995 to
December 1995; director of Lockheed from 1987 to 1995; Chairman of the Board and
Chief Executive Officer of Lockheed from January 1989 to March 1995; President
of Lockheed from August 1988 to December 1988; Group President -- Missiles and
Space Systems of Lockheed from 1986 to 1988, and President, Lockheed Missiles &
Space Company, Inc., a wholly owned subsidiary of Lockheed, from 1984 to 1988;
executive officer of Lockheed from 1983 to 1995; director of Wells Fargo Bank
and Edison International.
CARLISLE A. H. TROST (66)
Director since March, 1995. Member of the Audit & Ethics and Compensation
Committees and Stock Option Subcommittee.
Retired Admiral, U.S. Navy, 1990; Chief of Naval Operations, United States Navy
from 1986 to 1990; Commander in Chief, U.S. Atlantic Fleet, Commander U.S.
Seventh Fleet, and Deputy Commander in Chief of the U.S. Pacific Fleet; director
of Lockheed from 1990 to 1995; director of Louisiana Land and Exploration
Company, GPU Inc., GPU Nuclear Corp., General Dynamics Corporation, Precision
Components Corporation and Bird-Johnson Company; Trustee of the U.S. Naval
Academy Alumni Association, U. S. Naval Academy Foundation and Olmsted
Foundation.
JAMES R. UKROPINA (59)
Director since March, 1995. Chairman of the Finance Committee and Member of the
Audit & Ethics and Executive Committees.
Partner of O'Melveny & Myers since 1992; Chairman of the Board and Chief
Executive Officer of Pacific Enterprises from 1989 to 1991; director of Lockheed
from 1988 to 1995; director of Pacific Mutual Life Insurance Company; member of
the Board of Trustees of Stanford University.
DOUGLAS C. YEARLEY (61)
Director since March, 1995. Member of the Compensation, Executive and Finance
Committees and Stock Option Subcommittee.
Chairman of the Board and Chief Executive Officer of Phelps Dodge Corporation
since 1989 and President since 1991; Executive Vice President of Phelps Dodge
Corporation from 1987 to 1989; President of Phelps Dodge Industries, a division
of Phelps Dodge Corporation, from 1988 to 1990; Senior Vice President of Phelps
Dodge Corporation from 1982 to 1986; director of Lockheed from 1990 to 1995;
director of Phelps Dodge Corporation, J.P. Morgan & Co. Incorporated, Morgan
Guaranty Trust Company of New York, Southern Peru Copper Co. and USX
Corporation; member of The Business Roundtable, The Business Council and The
Conference Board.
BOARD OF DIRECTORS
The Board of Directors held ten meetings during 1996, of which eight were
regularly scheduled meetings. Non-employee directors of the Corporation receive
$35,000 annually for service on the
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Board of which $25,000 is paid in cash and $10,000 is paid in the form of the
award of units equivalent to shares of Common Stock under the Directors Deferred
Stock Plan, based on the value of the Corporation's Common Stock on June 1 of
the year for which the award is made. Non-employee directors receive $1,500 for
each meeting of the Board of Directors or a committee thereof attended. During
1996, the non-employee Chairman of the Board received an additional fee of
$40,000 per month. The Corporation's directors discharge their responsibilities
throughout the year not only at such Board of Directors and committee meetings,
but also through personal meetings and other communications, including
considerable telephone contact, with the Chairman and Chief Executive Officer,
the President and Chief Operating Officer and others regarding matters of
interest and concern to the Corporation. Directors are also reimbursed for
expenses in connection with attendance at Board and committee meetings.
Non-employee directors may defer up to 100 percent of the cash portion of
the fees (including committee fees) otherwise payable to the director. Subject
to certain limitations, a participating director's deferred fees will be
distributed (or distribution will commence) in January following the year in
which he or she ceases to be a director. Fees earned in 1996 could be deferred
until 1998 regardless of the director's continuing service on the Board of
Directors. Deferral elections are irrevocable during any calendar year and must
be made before the beginning of the calendar year in which fees are earned.
Earnings are accrued on deferred amounts. Depending on a director's investment
election, deferred amounts earn interest or a return that tracks the performance
of the published index for the Standard & Poor's 500 (with dividends
reinvested). It is anticipated that, effective May 1, 1997, a director may elect
to earn a rate of return that tracks the performance of the Corporation's Common
Stock. In addition, pursuant to the Directors Deferred Stock Plan, which was
approved by the Corporation's stockholders on March 15, 1995, $10,000 of the
annual retainer is deferred in the form of units equivalent to shares of Common
Stock on June 1 of each year. Upon retirement, termination of service, death or
disability, the plan provides that a director's account be distributed in whole
shares or, it is anticipated effective May 1, 1997, in cash; fractional shares
are payable in cash. At the election of the directors, such distributions may be
made in a lump sum or in installments.
The Board of Directors currently has five standing committees: Audit and
Ethics, Compensation, Nominating, Executive and Finance. In addition, there is
one standing subcommittee, the Stock Option Subcommittee. Non-employee directors
receive $5,000 annually for each committee on which they serve (there are no
additional fees for service on the Stock Option Subcommittee). In addition, a
non-employee director who serves as Chairman of a Committee receives $4,000
annually, except for the Nominating Committee Chairman who receives $2,000.
All non-employee directors are provided a $100,000 death benefit, which
remains available following retirement, except that the benefit is reduced by
the amount of life insurance coverage previously provided to a director of
Lockheed or Martin Marietta. The benefit will be increased to include the
applicable estimated annual amount of taxes associated with the benefit. In
addition, each non-employee director is provided travel accident insurance up to
$1,000,000 in the event that the director is involved in an accident while
traveling on business related to the Corporation.
A financial counseling program which provides reimbursement for tax and
financial planning and tax preparation services is available to directors and
officers. The Corporation pays a maximum of $6,000 per director and $10,000 per
officer.
The Directors Charitable Award Plan provides that upon the death of a
director, Lockheed Martin will make donations to tax-exempt organizations
previously recommended by the director up to an aggregate of $1 million.
Directors are vested under this plan if (a) they have served for at least five
years on the Lockheed Martin Board of Directors, including service on the former
Lockheed or Martin Marietta Boards of Directors, or (b) their service on the
Lockheed Martin Board of Directors is terminated due to death, disability or
retirement. Under the terms of the plan, if there is a change in control of the
Corporation, all participating directors in the plan shall immediately become
vested. Those directors who previously served on Martin Marietta's Board of
Directors are all vested in the plan as a result of the combination of the
businesses of Lockheed and Martin Marietta (the "Combination").
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Non-employee directors who leave the Board after serving five or more
years on the Board of Directors are entitled to receive an annual retirement
benefit equal to the amount of the annual retainer fee, including the portion
contributed to the Directors Deferred Stock Plan, in effect on the date of the
director's retirement. These amounts will be paid annually to the retired
director for a period equal to the number of years that the director served on
the Board of Directors. If a director who has completed at least five years of
service on the Board of Directors (or with the approval of the Nominating
Committee, less than five years) retires at the mandatory retirement age under
the Corporation's By-Laws, the payment will be made on an annual basis for the
director's life. Upon the death of an active director (whether or not he or she
served as a director for at least five years) or a retired director receiving
benefits, annual payments will be paid to the director's beneficiary for a
maximum period of twenty years. In determining eligibility for benefits and the
number of years for which a benefit is payable, service on the Board of
Directors includes service as an employee director as well as service on the
Lockheed and Martin Marietta Boards of Directors prior to the Combination.
However, the amount of any benefit payable under the Lockheed Martin Directors
Retirement Plan will be reduced on a dollar-for-dollar basis by the amount of
any benefit paid or payable under those companies' retirement plans for
directors.
During 1996, Mr. Marafino performed consulting services to the
Corporation with respect to providing representation in connection with the sale
or merger of certain properties, serving on the boards of directors of various
joint venture companies and/or subsidiaries of the Corporation, providing
administrative and other services as requested, and providing advice and counsel
to senior management of the Corporation. The agreement, which included an annual
retainer of $250,000, did not cover his services as a director of the
Corporation.
The Corporation as of the date of the printing of this Proxy Statement is
negotiating a Transaction Agreement pursuant to which the Corporation
anticipates repositioning certain non-core business units as a new independent
company. The transaction contemplates the creation of a company, referred to in
this Proxy Statement as Newco Corporation ("Newco"), which will be 50.1 percent
owned by Lehman Brothers Capital Partners III, L.P. or its affiliates, 34.9
percent by the Corporation and 15 percent by a management team led by Frank C.
Lanza who, in addition to his service as a director of the Corporation, serves
as one of its executive vice presidents. The Transaction Agreement is being
negotiated by the parties on an arm's length basis. It is contemplated that
Newco will pay the Corporation a total purchase price for the businesses
(subject to adjustment in certain circumstances as provided in the Transaction
Agreement) of $525 million, consisting of 6,980,000 shares of Newco Class A
Common Stock and $479.835 million in cash. Mr. Lanza will be issued 1,500,000
shares of Class B Common Stock, or 7.5 percent of the equity securities of
Newco, in return for cash consideration of $7.5 million. A second individual
constituting a member of the proposed management team will also be issued
1,500,000 shares of Newco Class B Common Stock in return for cash consideration
of $7.5 million. The transaction proposed is subject to a number of conditions
including execution of a definitive agreement and regulatory approvals.
The Audit and Ethics Committee is presently composed of Mses. Cheney and
King and Messrs. Hood, Flournoy, Marafino, Tellep, Trost and Ukropina. During
1996, the Audit and Ethics Committee met four times. The committee has general
powers relating to accounting and auditing matters. The committee recommends the
selection and monitors the independence of independent auditors for the
Corporation, reviews the scope and timing of their work, reviews with the
Corporation's management and independent auditors the financial accounting and
reporting principles used by the Corporation, the policies and procedures
concerning audits, accounting, financial controls, as well as any
recommendations to improve existing practices. The committee reviews the results
of the independent audit as well as the activities of the corporate internal
audit staff. The committee monitors compliance with the Corporation's Code of
Ethics and Business Conduct, reviews and resolves all matters presented to it
for resolution by the Corporate Ethics Office, and reviews and monitors the
adequacy of the Corporation's policies and procedures, as well as the
organizational structure for ensuring general compliance with laws and
regulations including environmental laws and regulations and the policies and
procedures relating thereto; it reviews with the Corporation's management
significant litigation and regulatory proceedings in which the Corporation is or
may become involved and reviews accounting and financial reporting issues,
including the adequacy of disclosure of environmental matters. At least four
times annually the committee meets separately and independently with the vice
president of internal audit and the Corporation's independent auditors.
7
13
The Compensation Committee is presently composed of Messrs. Murray,
Gibbons, Hood, Murphy, Schwartz, Trost and Yearley. During 1996, the committee
met six times. The committee recommends the compensation policy and standards of
compensation for the Corporation. The committee recommends compensation to be
paid to officers reporting to the Executive Office and approves the compensation
for all other elected officers. The committee has the power to approve employee
benefits provided by all bonus, supplemental and special compensation plans,
including pension, insurance and health plans, but excluding performance-based
executive compensation plans.
The Stock Option Subcommittee is presently composed of Messrs. Murray,
Gibbons, Hood, Trost and Yearley. During 1996, the subcommittee met three times.
The subcommittee administers all of the Corporation's stock option plans,
including its 1995 Omnibus Performance Award Plan and approves awards granted
thereunder.
The Nominating Committee is presently composed of Mrs. Cheney and Messrs.
Murphy, Flournoy, Gibbons, Hurtt, Murray and Savage. During 1996, the committee
met four times. The committee makes recommendations to the Board of Directors
concerning the composition and compensation of the Board of Directors, including
its size and qualifications for membership. It also recommends nominees to fill
vacancies or new positions on the Board of Directors and the Board's nominees
for election by the stockholders at an annual meeting of stockholders.
The Finance Committee is presently composed of Mrs. King and Messrs.
Ukropina, Hurtt, Marafino, Savage, Schwartz, Tellep and Yearley. During 1996,
the committee met six times. The committee has general powers relating to the
management of the financial affairs of the Corporation, including
responsibilities related to borrowing arrangements and the investment of the
Corporation's available cash resources. It reviews the financial condition of
the Corporation, the financial impact of all proposed changes in the capital
structure of the Corporation and reviews and makes recommendations regarding the
proposed capital expenditure and contributions budgets of the Corporation. The
committee also monitors the financial impact and implementation of all trusteed
benefit plans sponsored by the Corporation and reviews the performance of the
committees responsible for managing the assets and administration of the
Corporation's trusteed benefit plans.
The Executive Committee is presently composed of Messrs. Augustine, Hood,
Marafino, Murray, Tellep, Ukropina and Yearley. During 1996, the committee met
one time. The committee may exercise such powers in the management of the
business of the Corporation as may be authorized by the Board of Directors,
subject to applicable law.
Written suggestions submitted by stockholders concerning proposed
nominees for election to the Board of Directors will be presented to the
Nominating Committee for its consideration. Suggestions should include a brief
description of the proposed nominee's qualifications and all other relevant
biographical data as well as the written consent of the proposed nominee to act
as a director if nominated and elected. In accordance with the Corporation's
By-Laws, suggestions should be mailed to the Secretary of the Corporation.
In addition, the By-Laws of the Corporation require advance notice of any
proposal for the nomination for election as a director at an annual meeting of
stockholders that is not included in the Corporation's notice of meeting or made
by or at the direction of the Board of Directors. In general, nominations must
be delivered to the Secretary of the Corporation at its principal executive
office, 6801 Rockledge Drive, Bethesda, Maryland 20817, not less than 60 days
nor more than 90 days prior to the first anniversary of the preceding year's
annual meeting and must contain specific information concerning the nominee and
the stockholder proposing the nomination. Any stockholder desiring a copy of the
By-Laws of the Corporation will be furnished a copy without charge upon written
request to the Secretary of the Corporation.
During 1996, all incumbent directors attended at least 75 percent of
Board of Directors and committee meetings, except for Mr. Schwartz who attended
50 percent of all Board of Directors and committee meetings of which he was
eligible to attend. Average attendance at all Board of Directors and committee
meetings was 92.5 percent.
8
14
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information with respect to the shares of
the Corporation's Common Stock which are held by persons known to the
Corporation to be the "beneficial owners" of more than 5 percent of such stock.
For purposes of this Proxy Statement, beneficial ownership of securities is
defined in accordance with the rules of the Securities and Exchange Commission
and generally means the power to vote or dispose of securities regardless of any
economic interest therein. Except as otherwise noted, all information set forth
in the following table is as of December 31, 1996.
Beneficial Ownership
-------------------------
Number Percent
Name and Address of Stockholder Class of Stock of Shares of Class
- -------------------------------------------------------- --------------- ------------- --------
US Trust Company of California, N.A., New York, New Common 23,222,621(1) 12%
York, as trustee of the Lockheed Martin (ESOP Feature)
Trust established under the Lockheed Martin Salaried
Savings Plan, and the trustee of the Lockheed Martin
(Hourly ESOP) Trust established under the Lockheed
Martin Hourly Employee Savings Plan Plus and the
Lockheed Martin Space Operations
Company Hourly Investment Plan Plus
515 South Flower Street, Suite 2800
Los Angeles, California 90071
State Street Bank and Trust Company as trustee of the Common 14,101,455(2) 7.3%
Lockheed Martin Salaried Savings Plan II, the Lockheed
Martin Performance Sharing Plan, the Lockheed Martin
Performance Sharing Plan for Puerto Rico Employees, the
Lockheed Martin Savings and Investment Plan, and as
trustee for various trust and employee benefit plans not
associated with the Corporation
225 Franklin Street
Boston, Massachusetts 02110
FMR Corp. Common 11,916,647(3) 6.2%
82 Devonshire Street
Boston, Massachusetts 02109
General Electric Company Series A 20,000,000(4) 100%
3135 Easton Turnpike Preferred
Fairfield, Connecticut 06341
(1) As reported in an amended Schedule 13G dated February 6, 1997; stockholder
has sole dispositive power and shared voting power with respect to these
shares.
(2) As reported in an amended Schedule 13G dated February 20, 1997; State Street
Bank and Trust Company held 12,097,601 shares of Common Stock (approximately
6.3%) as trustee for the Lockheed Martin Savings Plan II, Lockheed Martin
Performance Sharing Plan, Lockheed Martin Performance Sharing Plan for
Puerto Rico Employees, and Lockheed Martin Savings and Investment Plan; the
stockholder has shared voting and dispositive power with respect to these
shares. State Street Bank and Trust Company has expressly disclaimed
beneficial ownership of said shares. In addition, State Street Bank and
Trust Company reported beneficial ownership of 2,003,854 shares of Common
Stock (approximately 1%) as trustee for various trust and employee benefit
plans not associated with the Corporation.
(3) This figure is based on Form 13G as filed by FMR Corp. Although not
disclosed in its Form 13G, it is the Corporation's belief that Fidelity
Management Trust Company, a wholly owned subsidiary of FMR Corp., also holds
1,482,290 shares of the Corporation's Common Stock as trustee for the
Lockheed Martin Aerospace Savings Plan, Lockheed Martin Tactical Defense
Systems Savings Plan, Lockheed Martin Tactical Systems Master Savings Plan,
Lockheed Martin Fairchild Corp. Savings Plan, Lockheed Martin IR Imaging
Systems, Inc. Savings Plan, Lockheed Martin Vought Systems Corporation
Capital Accumulation Plan, Lockheed Martin Librascope Retirement Savings
Plan, Sandia Corporation Savings and Income Plan, and Sandia Corporation
Savings and Security Plan.
(4) The Series A Preferred Stock held by GE is convertible into 28,941,460
shares (subject to adjustment) or approximately 13 percent of the
Corporation's Common Stock after giving effect to such conversion (based on
the number of shares of Common Stock outstanding on January 31, 1997). The
Series A Preferred Stock is non-voting except in certain circumstances. See
also, the description of the ownership position of GE under the caption
"Voting Securities and Record Date."
To the best of the Corporation's knowledge, no other person owned more
than 5 percent of any class of the Corporation's outstanding voting securities
at the close of business on March 10, 1997.
9
15
SECURITIES OWNED BY DIRECTORS, NOMINEES AND NAMED EXECUTIVE OFFICERS
The following table shows the number of shares of Common Stock
beneficially owned on January 31, 1997 by the directors and nominees, the
Chairman and Chief Executive Officer, and the four next most highly compensated
executive officers (during 1996) and by all directors and executive officers as
a group. The number of shares shown for each director and each of the named
executive officers represented less than 1 percent of the shares of Common Stock
outstanding. The number of shares shown for all executive officers and directors
as a group represented .92 percent of the Common Stock outstanding. Individuals
have sole voting and investment power over the Stock unless otherwise indicated
in the footnotes.
NAME OF INDIVIDUAL OR AMOUNT AND NATURE OF
IDENTITY OF GROUP BENEFICIAL OWNERSHIP
--------------------------------------------------- --------------------
Norman R. Augustine................................ 284,679(1)(2)
Marcus C. Bennett.................................. 44,009(2)(3)
Lynne V. Cheney.................................... 1,031(4)(5)(6)
Vance D. Coffman................................... 51,876(7)(8)(9)
Houston I. Flournoy................................ 1,898(4)(5)(6)
James F. Gibbons................................... 4,255(5)(6)
Edward E. Hood, Jr. ............................... 2,296(6)
Caleb B. Hurtt..................................... 3,132(6)
Gwendolyn S. King.................................. 535(4)(6)
Frank C. Lanza..................................... 1,168(8)
Vincent N. Marafino................................ 393,726(4)(6)(10)
Eugene F. Murphy................................... 496(6)
Allen E. Murray.................................... 3,296(6)
Frank Savage....................................... 2,770(5)(6)
Bernard L. Schwartz................................ 125,121(6)
Peter B. Teets..................................... 42,387(2)(8)(11)
Daniel M. Tellep................................... 335,153(4)(6)(12)
Carlisle A. H. Trost............................... 1,515(5)(6)
James R. Ukropina.................................. 2,174(5)(6)
Douglas C. Yearley................................. 2,174(5)(6)
All executive officers(13) and
directors as a group
(32 individuals including those named
above) 1,780,384(2)(7)(8)(13)
(1) Includes 176,600 shares not currently owned but which could be acquired
within 60 days following January 31, 1997 by Mr. Augustine through the
exercise of stock options.
(2) Where appropriate, the shares shown include an approximation of the number
of shares in the participant's account in the Lockheed Martin Corporation
Performance Sharing Plan and the Lockheed Martin Corporation Salaried
Savings Plan as of January 31, 1997. Executive officers do not have
investment power over shares contributed by the Corporation as matching
contributions after January 1, 1997 but do have investment power over shares
purchased with their own contributions or contributed by the Corporation
prior to January 1, 1997.
(3) Includes 16,500 shares not currently owned but which could be acquired
within 60 days following January 31, 1997 by Mr. Bennett through the
exercise of stock options.
(4) Shared voting and investment power.
(5) Includes shares held in trust under the former Lockheed Directors' Deferred
Compensation Plan, pursuant to which $5,000 was paid annually on behalf of
each non-employee director to a trust maintained for the purpose of
purchasing Lockheed common stock on the open market for the benefit of such
non-employee directors. Prior to 1993, directors could also direct a portion
of the annual cash payment and meeting fees to the trust for the purchase of
common stock. All shares in the trust were exchanged for Common Stock of the
Corporation after the Combination. Other cash amounts voluntarily deferred
by directors are credited with interest at the current rate of interest
specified and published by the Secretary of the Treasury pursuant to Public
Law 92-41, 85 Stat. 97. Deferred amounts are distributable after a
participant ceases to be a director. In the event a participant's status as
a director is involuntarily terminated other than by death, all deferred
cash remuneration (plus interest) and all Common Stock in the director's
trust account will be distributed within fifteen days of termination. As of
December 31, 1996, Mrs. Cheney and Messrs. Flournoy, Gibbons, Savage, Trost,
Ukropina, and Yearley have been credited with 246; 247; 2,329; 1,251; 1,219;
247; and 247 shares, respectively, pursuant to the plan. The directors do
not have or share voting or investment power for their respective shares
held in the trust except in the event of a tender offer.
(6) Includes stock units under the Lockheed Martin Directors' Deferred Stock
Plan. As of January 31, 1997, each of Mses. Cheney and King and Messrs.
Flournoy, Gibbons, Hood, Hurtt, Murphy, Murray, Savage, Trost, Ukropina, and
Yearley have been credited with 296 shares and Messrs. Marafino, Schwartz,
and Tellep have been credited with 121 shares. The directors do not have or
share voting or investment power for their respective plan shares.
10
16
(7) Where appropriate, the shares shown include an approximation of the number
of shares in the participant's account in the Lockheed Martin Corporation
Salaried Savings Plan. Executive officers do not have investment power over
shares credited to their accounts as part of the Corporation's matching
contributions but do have investment power of shares purchased with their
own contributions.
(8) In April 1996, the Corporation's stockholders approved the Lockheed Martin
Corporation Deferred Management Incentive Compensation Plan (the "Plan")
which provides certain key management employees of the Corporation and its
subsidiaries the opportunity to elect annually to defer receipt until
termination of service or beyond of all or a portion of incentive
compensation awards under the Lockheed Martin Management Incentive
Compensation Plan. The Plan provides that a participant may choose annually
between two accounts (the "Interest Investment Option" or the "Stock
Investment Option") pursuant to which earnings on deferred amounts will
accrue. Under the Stock Investment Option earnings on deferred amounts will
accrue at a rate that tracks the performance of the Corporation's Common
Stock (including reinvestment of dividends). Where appropriate, the shares
shown include an approximation of the number of stock units in the
participant's account as of January 23, 1997, the latest date for which
such information is available.
(9) Includes 37,500 shares not currently owned but which could be acquired
within 60 days following January 31, 1997 by Dr. Coffman through the
exercise of stock options.
(10) Includes 306,436 shares not currently owned but which could be acquired
within 60 days following January 31, 1997 by Mr. Marafino through the
exercise of stock options.
(11) Includes 15,000 shares not currently owned but which could be acquired
within 60 days following January 31, 1997 by Mr. Teets through the exercise
of stock options.
(12) Includes 295,600 shares not currently owned but which could be acquired
within 60 days following January 31, 1997 by Mr. Tellep through the
exercise of stock options.
(13) Includes 1,247,102 shares of Common Stock not presently held by members of
the group but which could be acquired within 60 days following January 31,
1997 through the exercise of stock options.
11
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COMPENSATION OF EXECUTIVE OFFICERS
The following tables show annual and long-term compensation awarded,
earned or paid for services in all capacities to the Corporation of the Chief
Executive Officer and the next four most highly compensated executive officers
for the fiscal year ended December 31, 1996. Other than as set forth below, no
annual or long-term compensation of any kind was paid to the Chief Executive
Officer or other named executive officers by the Corporation for the year ended
December 31, 1996. In addition, the information set forth in the tables
captioned "Option/SAR Grants in Last Fiscal Year" and "Aggregated Option/SAR
Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR Values," relate to
stock options and stock appreciation rights (SARs) with respect to the
Corporation.
SUMMARY COMPENSATION TABLE
Long Term Compensation
Awards
Annual Compensation -----------------------
---------------------------------------- Securities
Name and Other Annual Underlying LTIP All Other
Principal Position Year(1) Salary Bonus Compensation(4) Options/SARs Payouts Compensation(6)
- ------------------------ ------ ---------- ---------- ------------- ----------- --------- -------------
NORMAN R. AUGUSTINE 1996 $1,137,500 $1,600,000 $43,575 120,000 -- $5,249
Chairman & Chief 1995 983,846 1,300,000 29,815 100,000 2,746,950 5,504,499
Executive Officer 1994 930,000 900,000 35,577 100,000 -- 6,260
VANCE D. COFFMAN 1996 695,961 890,000 135,145 45,000 189,617(5) 33,406
President & Chief 1995 459,904 448,200 487,707 30,000 299,162(5) 244,229
Operating Officer 1994 411,250 350,000 -- 24,450 158,702(5) 19,763
FRANK C. LANZA 1996 716,950(2) 1,229,673(3) -- 45,000 -- 48,922,949
Executive Vice President 1995 -- -- -- -- -- --
1994 -- -- -- -- -- --
MARCUS C. BENNETT 1996 525,942 556,700 135,284 33,000 -- 5,250
Executive Vice President 1995 464,615 443,500 34,977 30,000 606,150 1,611,529
& Chief Financial 1994 410,000 300,000 9,839 28,000 -- 11,334
Officer
PETER B. TEETS 1996 488,750 416,500 15,006 30,000 -- 5,250
Vice President, Sector 1995 458,846 425,000 15,560 30,000 662,910 1,534,845
President -- Information 1994 424,231 300,000 11,333 30,000 -- 5,250
& Services
(1) The Corporation paid no compensation in 1994 to any of the named executive
officers or in 1995 to Mr. Lanza. Amounts included in the table for 1994
with respect to Messrs. Augustine, Bennett and Teets were paid by Martin
Marietta and are discussed in more detail in the Martin Marietta Annual
Report on Form 10-K for the fiscal year ended December 31, 1994. Amounts
included in the table for 1994 with respect to Dr. Coffman were paid by
Lockheed and are discussed in more detail in the Lockheed Annual Report on
Form 10-K for the fiscal year ended December 25, 1994.
(2) Mr. Lanza became employed by the Corporation in April 1996 when the
Corporation acquired Loral. Of the $716,950 earned by Mr. Lanza in 1996,
$541,546 was earned by him with respect to his service to the Corporation in
1996. The remaining $175,404 was earned by him in 1996 with respect to his
service in 1996 to Loral.
(3) The bonus shown has two components. The first is a bonus of $427,700 earned
by Mr. Lanza in 1996 by virtue of his service to the Corporation which began
in April of 1996. The second component, representing the balance of the
bonus or $801,973, is a pro rata portion (first quarter 1996) of a
$3,207,893 bonus earned by Mr. Lanza with respect to his service to Loral
during its 1996 fiscal year which ran from April 1, 1995 to March 31, 1996.
The remaining $2,405,920 of the $3,207,893 is included within the column
"All Other Compensation" for 1996. The prorationing was done so as to relate
the figure shown in the bonus column for Mr. Lanza in 1996 to the
Corporation's fiscal year.
(4) Amounts reported under the column generally represent amounts reimbursed for
the payment of taxes and financial counseling fees. Some executives of the
Corporation received certain perquisites from the Corporation. The cost of
the perquisites furnished to each executive officer with the exceptions of
Dr. Coffman and Mr. Bennett did not exceed the lesser of $50,000 or 10
percent of the total annual salary and bonus of that executive officer as
reported in the table above. The amount included for Dr. Coffman includes
payments of $74,336 for relocation expenses, consistent with the
Corporation's policies and procedures. On occasion, the Corporation
determines that it is in its best interest to pay membership fees, dues and
other expenses related to employee participation in professional and social
organizations. Determinations are made on a case-by-case basis rather than
pursuant to a formal program or plan. The amount reported for Mr. Bennett
includes a one-time membership fee of $37,575.
(5) Amount reported represents payouts of awards earned under the Long Term
Performance Plan of Lockheed and its Subsidiaries. Upon consummation of the
combination of Lockheed and Martin Marietta, this plan was terminated as an
active plan and no further awards will be made.
(6) Amounts include the Corporation's contribution under the Lockheed Martin
Salaried Savings Plan or the Lockheed Martin Salaried Savings Plan II for
Messrs. Augustine, Coffman, Bennett, and Teets of $5,249; $5,700; $5,250;
and $5,250, respectively, and the Corporation's contribution under the
Lockheed Martin Supplemental Savings Plan for Dr. Coffman of $27,706. The
amount reported for Mr. Lanza includes $4,952 representing the value to Mr.
Lanza of $951,546 related to a split dollar life insurance arrangement. If
the arrangement is terminated or Mr. Lanza terminates from the Corporation
for any reason other than retirement, death or disability, upon repayment of
the Corporation's priority interest in the life insurance arrangement
(defined as total required premiums plus $38,837), Mr. Lanza may retain any
excess cash value. The amount reported for Mr. Lanza also includes
$2,405,920 in bonus compensation (of a total of $3,207,893 paid, see Note 3
above) paid by the Corporation in 1996 with respect to Mr. Lanza's service
to Loral for Loral's fiscal year ending March 31, 1996; a $5,733,327
transaction bonus paid at the close of the Loral acquisition; and,
$40,778,750 representing the then current value of outstanding stock options
awarded by Loral and paid pursuant to change of control provisions in
Loral's stock option plans.
12
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OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)
Shown below is information on grants of stock options exercisable for
Common Stock awarded during 1996 pursuant to the Lockheed Martin 1995 Omnibus
Performance Award Plan ("Omnibus Plan")(2) to the named executives.
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation For
Individual Grants Option Term(3)
- -------------------------------------------------------------------------------------- -------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees Base Price Expiration
Name Granted in 1996 Per Share Date 5% 10%
- -------------------------- ------------ ------------ ----------- ---------- ---------- -----------
NORMAN R. AUGUSTINE 120,000 4.5% $74.125 1/24/06 $5,594,018 $14,176,399
VANCE D. COFFMAN 45,000 1.7% 74.125 1/24/06 2,097,757 5,316,127
FRANK C. LANZA 45,000 1.7% 78.250 4/24/06 2,214,495 5,611,966
MARCUS C. BENNETT 33,000 1.3% 74.125 1/24/06 1,538,355 3,898,493
PETER B. TEETS 30,000 1.1% 74.125 1/24/06 1,398,504 3,544,085
(1) No SARs were granted in 1996.
(2) Awards are granted at the discretion of the Stock Option Subcommittee, a
disinterested subcommittee of the Board of Directors made up of non-employee
directors, upon the recommendation of management. The Omnibus Plan requires
that awards be evidenced by an award agreement setting forth the number and
type of stock-based awards and the terms and conditions applicable to the
award as determined by the Stock Option Subcommittee. In 1996, the only type
of instrument awarded under the Omnibus Plan was stock options. Under the
1996 award agreements, options vest and become exercisable in two equal
installments on the first and second anniversary dates following the grant.
Options awarded in 1996 expire 186 days following termination of employment,
except in instances following death, disability, divestiture, layoff or
retirement. In the event of death, all outstanding options vest immediately
and will expire three years following the date of death, but in no event
more than ten years after the date of grant. In instances of disability, all
outstanding options vest immediately and expire on the normal expiration
date, ten years following the date of grant. In cases of layoff the award
agreement states that the terms of all outstanding options will be
unaffected. In cases of divestiture, outstanding options which are vested as
of the effective date of the divestiture will terminate one year from the
effective date or the option's normal expiration date, whichever occurs
first; options which are not vested as of the effective date of the
divestiture will be treated in accordance with the provisions of the award
pertaining to termination of employment. In cases of retirement on or after
the first vesting date, the award agreement states that the terms of all
outstanding options will be unaffected by such retirement. Generally
retirement before the first vesting date is treated as a termination. In the
event of a change in control, the options would vest to the extent not
already vested.
(3) The dollar amounts set forth in these columns are the result of calculations
assuming 5% and 10% annual return rates set by the Securities and Exchange
Commission and are not intended to forecast possible future appreciation, if
any, of the Corporation's Common Stock price.
13
19
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Shown below is information relating to the exercise of stock options and
stock appreciation rights (SARs) during the last completed fiscal year and the
fiscal year-end value of unexercised options of Common Stock and SARs for the
named executives.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Fiscal Options/SARs at Fiscal
Shares Year-End Year-End
Acquired Value ----------------------------- -----------------------------
Name on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------- ----------- ----------- ----------- ------------- ----------- -------------
NORMAN R. AUGUSTINE 386,800 $20,324,232 116,600 203,400 $4,711,475 $ 5,248,525
VANCE D. COFFMAN 99,281 5,128,091 15,000 60,000 481,875 1,263,750
FRANK C. LANZA 0 0 0 45,000 0 596,250
MARCUS C. BENNETT 51,600 1,910,588 0 57,400 0 1,493,525
PETER B. TEETS 25,000 731,250 0 55,000 0 1,469,375
(1) Includes value realized from the exercise of options and SARs.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview
GOAL. The Corporation's goal is to be recognized as the world's premier
systems engineering and technology enterprise, meeting the needs of its
customers with high-quality products and services. In so doing, the Corporation
believes that it can produce superior returns for its stockholders. To achieve
this goal, the Corporation must attract and retain the services of dedicated and
talented individuals. This requires a compensation program that is competitive
with that of other companies, provides incentives to meet and exceed the
Corporation's objectives and makes prudent use of the Corporation's resources.
COMPOSITION OF THE COMPENSATION COMMITTEE. The Board of Directors relies
upon an independent Compensation Committee consisting entirely of Board members
who are neither officers nor employees of the Corporation to oversee the
Corporation's compensation program. Among the duties of the Committee is that of
reviewing the Corporation's compensation policies and programs and recommending
the form and amount of compensation to be paid to the Corporation's executive
officers. The Board ratified the recommendations of the Compensation Committee
in 1996.
ROLE OF THE STOCK OPTION SUBCOMMITTEE. As discussed under the caption
"Executive Compensation -- Tax Deductibility," a goal of the Corporation is to
minimize the amount of compensation paid by the Corporation that may not be
deducted for federal income tax purposes. To allow employee stock options to fit
within certain exceptions to limitations on the deductibility of compensation,
options are awarded by the Stock Option Subcommittee, organized in compliance
with these exceptions. This report is submitted by both the Compensation
Committee and the Stock Option Subcommittee and references to the term
"Committee" include both.
PHILOSOPHY. The overall philosophy of the executive compensation program
is that each executive officer should receive compensation in a range
competitive with that offered executives with similar responsibilities at other
companies of comparable size, complexity and quality. Only in this way can the
Corporation effectively compete with such companies for the services of these
individuals. An executive's compensation package is structured, however, so that
the total compensation received by the executive is dependent on the performance
of that executive and the performance of the Corporation. The Committee believes
that this structure aligns the interests of the Corporation's executives with
those of its stockholders and provides executives additional incentives to
achieve and sustain superior performance. Further, in setting an executive's
total compensation, the Committee
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must balance the need to offer an attractive compensation package with its
obligation to make prudent use of the Corporation's resources.
COMPENSATION STRUCTURE. The Corporation's executive compensation
structure includes three elements. These are base salary and bonus, which
constitute an executive's annual compensation, and stock options which
constitute long-term compensation. As more fully described below, two of the
three elements (bonus and stock options) are at risk as their value is entirely
dependent upon performance.
METHODS. In determining levels of compensation, the Committee relies
upon survey data gathered by nationally recognized consulting firms specializing
in executive compensation as well as upon other nationally recognized survey
sources. Information is gathered both as to companies included within the Peer
Issuers Index (included on page 25 of this Proxy) and as to a broader group of
29 publicly held industrial companies of a size, complexity and quality similar
to that of the Corporation. None of the companies included in the larger survey
is included within the Peer Issuers Index. The process of determining executive
compensation is subjective and is entirely within the discretion of the
Committee.
Compensation In 1996
ANNUAL COMPENSATION -- BASE SALARY. In accordance with the Committee's
philosophy, the Committee seeks to set base salary levels at the 50th percentile
of the surveyed companies with flexibility to pay within a range around the 50th
percentile consistent with that executive's responsibilities, level of
experience, performance in past years and competence. Throughout this report,
comparisons to the 50th percentile refer to a figure that has been weighted to
reflect the size of the companies as measured by a regression analysis of sales
and refers to the larger, general industry survey.
Mr. Augustine was elected Chief Executive Officer of Lockheed Martin
effective January 1, 1996. He received two base salary increases during 1996, a
10 percent increase at the time he was elected CEO and a second base salary
increase of 13.6 percent at the normal merit review for a compounded increase in
base salary of 25 percent during 1996. His resulting base salary represents the
50th percentile when compared to other CEO's from the general industry survey.
The Committee's action increasing Mr. Augustine's base salary reflects the
continued leadership exhibited by Mr. Augustine in successfully guiding the
Corporation in this turbulent period for the defense industry. Mr. Augustine's
performance and that of the Corporation are discussed further under the caption
"Relationship of Awards to Corporate Performance". With respect to each named
executive, except Mr. Lanza, a portion of that executive's increase in base
salary is also attributable to the continued orderly transition between that
executive's previous salary level at the Corporation's predecessors, Lockheed or
Martin Marietta, and the level to be paid by the Corporation.
Mr. Lanza held the position of President and Chief Operating Officer of
Loral which during 1996 was acquired by Lockheed Martin. Mr. Lanza was elected
Executive Vice President of Lockheed Martin and awarded a 7.8 percent increase
in base salary at the time of the acquisition. Mr. Lanza's 1996 compensation is
reflective of his prior role as Loral's President and Chief Operating Officer
and his responsibilities for the transition of the Loral companies to Lockheed
Martin. In 1996, the base salary levels for the named executives, excluding Mr.
Augustine and Mr. Lanza, were approximately 8 percent above the 50th percentile.
ANNUAL COMPENSATION -- BONUS. The Corporation maintains a bonus plan
known as the Lockheed Martin Management Incentive Compensation Plan ("MICP").
The primary purpose of the MICP is to provide executives an opportunity to earn
additional compensation based on performance. The MICP provides an opportunity
for annual cash bonuses based upon an evaluation of the performance of the
Corporation or a specified operating subsidiary or group against certain pre-
established goals. This requires an appraisal of each executive's contribution
to this performance. These reviews are subjective and within the discretion of
the Committee. All of the executive officers of the Corporation participate in
the plan. Each participant in the MICP is assigned a targeted percentage of base
salary. That amount is then adjusted by consideration of individual and business
unit performance or overall corporate performance in the case of corporate
staff. Adjustments for performance are based upon consideration of the
achievement of targeted goals which include standard
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measures of financial performance such as orders, sales, earnings, earnings per
share, return on equity, cash generation, backlog as well as technical
achievement, product performance and quality, customer satisfaction and
adherence to ethical standards. These goals are established at the beginning of
each plan year and are based in part upon the Corporation's Long Range Plan.
Adjustments for the individual performance of the Chief Executive Officer
are determined by the Committee. Adjustments for business unit and corporate
performance are determined by the Corporation's executive office, subject to the
review and approval of the Committee. Under the MICP, if the maximum adjustments
for individual and business unit performance were made, the maximum amount that
the Chief Executive Officer could receive would be approximately 136 percent of
base salary. The exact amount of MICP awards may be further affected by the
amount of funds allocated for awards. If the amount allocated by the Board of
Directors is less than the aggregate of all proposed payments, payments will be
reduced on a pro rata basis.
The Committee retains complete discretion in performing these reviews and
in determining the amount of actual awards, if any. Consequently, no particular
analytical weighting of criteria is required or performed. Following review of
the achievements of the Corporation and its operating units as compared to
target goals established at the beginning of the plan year, a comparative review
of the individual contributions of each participant towards achieving these
goals is conducted. The Committee also considers qualitative measures of
performance such as adherence to and implementation of the Corporation's policy
on ethics and standards of conduct, customer satisfaction and product quality.
In performing these evaluations, except as to any award to be made to the Chief
Executive Officer, the Committee also considers the recommendations of the Chief
Executive Officer.
For purposes of determining awards under the MICP for Mr. Augustine and
the other four named executive officers, the Committee measured the
Corporation's and operating subsidiaries' performance against the various
financial, business development and operations goals discussed above. In
addition, the Committee considered other significant accomplishments such as the
completion of the acquisition of Loral and the continued successful execution of
the Corporation's consolidation plans including the integration of the Loral
businesses with those of the Corporation. Awards were made in January 1997 with
respect to the year ended December 31, 1996. Mr. Augustine's annual bonus of
$1,600,000 represented approximately 128 percent of his base salary or
approximately 56 percent of his total cash compensation. The reference to total
compensation here and elsewhere in this report refer to annual base salary, as
of year end 1996, and the bonus paid for 1996 performance. Compared to the
survey group, Mr. Augustine's bonus was approximately 6 percent above the 50th
percentile, while his total cash compensation was approximately 3 percent above
the 50th percentile. With respect to the remaining four named executive officers
as a group, on average, annual bonuses represented approximately 93 percent of
base salary or 48 percent of total cash compensation and were approximately 30
percent above the average annual bonus of the comparison group. This comparison
reflects annualized award values and considers only bonus awards paid under
Lockheed Martin's Management Incentive Compensation Plan. These levels are
consistent with the Committee's philosophy on executive compensation and reflect
the superior performance of the Corporation.
LONG-TERM COMPENSATION -- OMNIBUS PERFORMANCE AWARD PLAN. The Lockheed
Martin Corporation Omnibus Performance Award Plan ("Omnibus Plan") was approved
in 1995 by the stockholders of each of Lockheed and Martin Marietta, the
companies that combined to form the Corporation. The Omnibus Plan provides for
the granting of performance-related awards in various forms including stock
options, stock appreciation rights, restricted stock and other share-based
awards or cash-based incentive awards such as performance units. Since its
adoption, the only type of award made under the Omnibus Plan has been stock
options. Stock options awarded under the Omnibus Plan directly link the
compensation provided to executive officers and a group of approximately 1,630
key personnel with gains realized by the stockholders. The purpose of the option
program is to provide additional incentives to employees to strive to maximize
stockholder value. The vesting periods associated with stock options encourage
continued employment with the Corporation while also serving to confer upon
recipients an ownership interest in the Corporation. The Committee believes that
stock ownership by executives is extremely important and discusses the
Corporation's stock ownership guidelines under the caption "Stock Ownership
Guidelines". All options awarded have an exercise price equal to the closing
market price of the Corporation's Common Stock on the date of grant, and,
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therefore, have no value to the recipient unless the price of the Corporation's
Common Stock increases.
The number of options granted to an individual is based upon survey data
relating to the same corporations surveyed in conjunction with setting base
salaries and bonuses. Since long-term awards vest over time, the Corporation
grants new awards to provide continuing incentives for future performance
without regard to the number of options currently held by the recipient. As
previously noted, grants of options under the Omnibus Plan are made by the Stock
Option Subcommittee. The determination of the number of options awarded is
within the complete discretion of the Subcommittee. In exercising its
discretion, the Subcommittee generally follows the same procedures as are
followed in determining the amount of incentive compensation awards.
Consistent with the Corporation's compensation philosophy, the Subcommittee
strives to provide option awards, as a multiple of base salary, near the average
of awards made by firms in the Corporation's 29-firm comparison group. Mr.
Augustine received a grant of 120,000 options, the value of which was
approximately 32 percent below the 50th percentile. The remaining named
executives received on average awards that were approximately 21 percent below
the 50th percentile level of awards granted by the companies comprising the
comparison group.
SUMMARY. Mr. Augustine's total compensation for 1996, consisting of base
salary, cash bonus and long term compensation was approximately 17 percent below
the 50th percentile. The total compensation of the remaining named executives
for 1996 fell approximately 1 percent above the 50th percentile.
Relationship Of Awards To Corporate Performance
The Corporation had an outstanding year in 1996 and compensation awarded to
the Corporation's executive officers (including the named executives and the
Chief Executive Officer) reflects this. As can be seen from the Peer Issuers
Index (included on page 25 of this Proxy), the Corporation from March 1995
through year-end 1996 has outperformed both its peer issuers and the Standard &
Poor's 500. 1996 was also a successful year by other measures. For example, the
Corporation made concrete its stated goal of delivering high quality products
and services to its customers by achieving a 93 percent success rate on 307
measurable events, garnering average award fees of over 91 percent. The
Corporation exceeded both the earnings and cash generation estimates contained
in the Corporation's Long Range Plan. At the same time, the Corporation laid a
strong foundation for the future achieving an enviable win rate on programs and
winning a number of major competitions including the Joint Strike Fighter, Joint
Air-to-Surface Standoff Missile, Space Based Infrared System, VentureStar(TM)
and Evolved Expendable Launch Vehicle. The Corporation's consolidation efforts
also continued to proceed smoothly and on schedule. They are estimated, when
fully implemented, to yield continuing annual savings of $2.6 billion and to
further strengthen the Corporation's competitive position. The Corporation also
successfully completed the acquisition of Loral and major portfolio shaping
actions including the tax-free split off of its Martin Marietta Materials
business and the sale (completed in January 1997) to General Dynamics of its
Armament Systems and Defense Systems businesses.
The Committee believes that these and other achievements of the Corporation
reflect the hard work and dedication of each of the Corporation's employees and
the leadership of the Corporation's executive officers including the named
executives and Chief Executive Officer. In setting the compensation awarded to
these individuals, the Committee specifically considered the tangible results of
this leadership which have been instrumental in enhancing stockholder value.
Stock Ownership Guidelines
The Board of Directors believes that a close alignment of the interests of
the Corporation's executives and its stockholders is imperative. Reflecting this
belief, in 1995, the Board adopted stock ownership guidelines that apply to
employees of the Corporation who participate in the Lockheed Martin Corporation
Management Incentive Compensation Plan and who earn a base salary in excess of
$100,000 per year. Under the guidelines, the Chief Executive Officer is expected
to have an ownership interest in the Corporation's Common Stock of at least five
times his or her salary. Executive Vice Presidents, Sector Presidents and Senior
Vice Presidents, a grouping which includes all of the named executives, are
expected to have ownership interests of three times base salary. Other employees
subject to the guidelines are expected to have ownership interests of two times
base salary.
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Although there is no specific time period in which an employee subject to the
guidelines must meet these targets, continuous progress is expected and
employees must certify annually that they are making such progress. Ownership
represented by unexercised stock options is not considered for the purpose of
meeting the guidelines. The Corporation has recommended that employees who have
not reached their targets use specified percentages of any bonus they receive to
do so.
Executive Compensation -- Tax Deductibility
For income tax purposes, publicly held corporations are not permitted to
deduct compensation paid to any named executive in excess of $1 million. As
discussed under the caption "Role of Stock Option Subcommittee", the Stock
Option Subcommittee has been organized to award stock options in order to reduce
the amount of compensation subject to the limitation. The Committee believes
that the decrease in tax liability that would result from further action to
reduce exposure to the $1 million limitation is of insufficient magnitude to
warrant alteration to the present compensation system which is achieving the
compensation objectives of the Committee discussed above and which retains the
flexibility of the Committee to exercise subjective judgment in assessing an
executive's performance. The Committee has concluded that approximately $5.7
million of the compensation awarded in 1996 is not deductible on account of the
$1 million limitation. Of this amount, approximately $5 million is attributable
to a one-time transaction bonus paid to Mr. Lanza.
Submitted by the Compensation Committee and Stock Option Subcommittee,
/s/ Allen E. Murray
- ----------------------------------------------------
Allen E. Murray
Chairman -- Compensation Committee
Chairman -- Stock Option
Subcommittee
/s/ James F. Gibbons
- ----------------------------------------------------
James F. Gibbons
Compensation Committee
Stock Option Subcommittee
/s/ Edward E. Hood, Jr.
- ----------------------------------------------------
Edward E. Hood, Jr.
Compensation Committee
Stock Option Subcommittee
/s/ Eugene F. Murphy
- ----------------------------------------------------
Eugene F. Murphy
Compensation Committee
/s/ Bernard L. Schwartz
- ----------------------------------------------------
Bernard L. Schwartz
Compensation Committee
/s/ Carlisle A. H. Trost
- ----------------------------------------------------
Carlisle A. H. Trost
Compensation Committee
Stock Option Subcommittee
/s/ Douglas C. Yearley
- ----------------------------------------------------
Douglas C. Yearley
Compensation Committee
Stock Option Subcommittee
EXECUTIVE BENEFITS
The Lockheed Martin Corporation Post-Retirement Death Benefit Plan for
Elected Officers provides a death benefit for retired elected officers of the
Corporation at a level of 1.5 times the officer's base salary at the time of
retirement. The amount payable under the plan is reduced to the extent an
officer has not waived his or her benefits (if any) under the Martin Marietta
Post-Retirement Death Benefit Plan or the Lockheed Post Retirement Death Benefit
Plan. Officers of the Corporation are also provided personal liability insurance
coverage while employed as an officer of $5,000,000 and accidental death and
dismemberment coverage while employed as an officer of $1,000,000.
Certain former officers of Lockheed are eligible for awards under the Long
Term Performance Plan of Lockheed and its Subsidiaries. This plan is similar to
a predecessor plan sponsored by Lockheed which was terminated effective March
15, 1995. Awards are based on financial performance over 3-year performance
cycles, beginning in 1993 and 1994. Performance measurements for each cycle are
based on absolute percentage gain in total stockholder value as compared to an
absolute
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target and investment value relative to a peer group investment value. In April
1996, all participants received prorated awards under the plan for the 1993
cycle. Payments made under this plan for the 1993 and 1994 cycles will be
reduced by any payment made to a participant under corresponding cycles of the
predecessor plan. Payments are made in cash unless the participant elects to
defer the payment.
Key management employees may defer receipt of all or a portion of an
incentive compensation award under the Lockheed Martin Corporation Deferred
Management Incentive Compensation Plan. The amount with accrued earnings
generally will be paid in a lump sum or in up to fifteen annual installments as
elected by the employee at the time the employee makes a deferral election. A
participant may elect to receive earnings on amounts deferred by reference to
either (i) the published rate for computing the present value of future benefits
under Cost Accounting Standard No. 415; or (ii) the performance of the
Corporation's Common Stock (including reinvestment of dividends). All amounts
accumulated under the plan must be paid in a lump sum within fifteen days
following a change of control.
Prior to March 15, 1995, Lockheed had entered into severance agreements
(the "Termination Benefits Agreements") with officers of that corporation. Those
agreements generally provide for the payment of certain benefits described below
if, within three years after the occurrence of certain events with respect to
Lockheed, the covered officer either (a) is terminated by Lockheed (other than
on account of death, disability or retirement of the officer or for "cause"
defined in the Termination Benefits Agreements, or (b) terminates his or her
employment with Lockheed for "good reason" (as defined in the Termination
Benefits Agreements).
The Termination Benefits Agreements provide for a lump sum cash payment
equal to the sum of the following amounts: two times the officer's base annual
salary at the time of the triggering event or termination, two times an amount
determined by multiplying the officer's base salary by the average percentage of
awards under the Lockheed Management Incentive Compensation Plan to base salary
paid during the last two years, and the cash value of the officer's contingent
award established under the Lockheed Long Term Performance Plan for each
incomplete performance cycle as of the date of termination, calculated on the
basis that all performance goals were fully attained and such performance cycles
were completed in their entirety. The Termination Benefits Agreements also
provide for a payment equal to the value of certain health and dental insurance
plans and other fringe benefits as in effect prior to the change in control for
a two-year period following termination. Additional benefits provided by the
Termination Benefits Agreements include the vesting of all retirement benefits
and the addition of two years of credited service under Lockheed's salaried
retirement plans and the entitlement to two additional years of matching
contributions under Lockheed's savings plans. Benefits under the Termination
Benefits Agreement may be subject to an excise tax payable by the officer, and
may not be deductible by the Corporation, to the extent they exceed certain
statutory limitations.
Prior to March 15, 1995, Martin Marietta had entered into employment
agreements with certain of its officers ("Executive Agreements"). Under the
Executive Agreements, following certain events, the officer may, for "good
cause" (as that term is defined in the Executive Agreements) and within two
years of that event and within six months after the date on which circumstances
constituting good cause exist, give notice that he or she elects to terminate
employment under the agreement. Upon receipt of such notice, or upon involuntary
termination by Martin Marietta, the Executive Agreements require Martin Marietta
to pay the officer an amount equal to three times his or her average annual
taxable compensation for the preceding five years, less one dollar, as well as
any other compensation or benefits due and any amount necessary to compensate
the officer for any excise tax imposed with respect to payments made under the
Executive Agreement or any other agreement between the officer and Martin
Marietta.
The March 15, 1995 transaction between Lockheed and Martin Marietta
constituted events under both the Termination Benefits Agreements and the
Executive Agreements which would entitle the officers to the payment of benefits
under the applicable agreement if there is a termination of employment and the
termination satisfies the requirements of the applicable agreement within the
time frame contained in the agreement. Dr. Coffman has a Termination Benefits
Agreement. Messrs. Augustine, Bennett and Teets have Executive Agreements. Mr.
Augustine has voluntarily waived his rights under his Executive Agreement as it
relates to the combination of Lockheed and Martin Marietta.
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The Corporation has adopted the Termination Benefits Agreements and the
Executive Agreements and has assumed the rights and obligations of Lockheed and
Martin Marietta thereunder.
The Corporation has entered into an employment agreement with Mr. Lanza.
Under the agreement, during the three-year term of employment beginning on May
1, 1996, Mr. Lanza may, for good cause, give notice that he elects to terminate
employment under the agreement. Upon receipt of such notice, or upon termination
by the Corporation for other than substantial and serious cause, the agreement
requires Lockheed Martin to pay Mr. Lanza a lump sum payment equal to the base
salary and annual bonus that would have been paid during the remaining portion
of the three-year term of the agreement had he continued to be employed through
the full term. As of the date of the printing of this Proxy Statement, the
Corporation is negotiating with Mr. Lanza as to the effect of the proposed Newco
transaction under Mr. Lanza's employment agreement if that transaction closes.
DEFINED CONTRIBUTION PLANS
The Corporation sponsors a number of different defined contribution plans
which cover virtually all employees of the Corporation. The Lockheed Martin
Salaried Employees Savings Plan Plus ("Lockheed Savings Plan") covers most
salaried employees of the businesses of the former Lockheed and subsidiaries.
The Lockheed Martin Performance Sharing Plan ("Martin Savings Plan") covers most
salaried employees of the businesses of the former Martin Marietta and
subsidiaries. Effective January 1, 1997, the Lockheed Savings Plan and the
Martin Savings Plan were consolidated into the Lockheed Martin Salaried Savings
Program ("Salaried Savings Program").
Lockheed Savings Plan
For the year ended December 31, 1996, participants in the Lockheed Savings
Plan could save 2 percent to 12 percent of their base compensation on an
after-tax or pretax basis (the "Participant's Contribution"). The Corporation
matched 60 percent of up to the first 8 percent of compensation contributed on
behalf of the employee.
Participants in the Lockheed Savings Plan could direct the investment of
the participant's Contribution among four different investment options, of which
the Corporation's Common Stock was one option. One hundred percent of the
Corporation's matching contribution is invested in the Corporation Common Stock
Fund, which is in part funded by an employee stock ownership feature of the
plan.
Participants' accounts may be distributed upon termination of employment,
except that with regard to terminations prior to January 1, 1997, all or
portions of the Corporation's matching contribution were forfeited if the
participant terminated employment before having earned five years of service
with the Corporation, unless the termination was due to retirement, disability,
death, commencement of military service or layoff.
Because of the limitations on annual contributions to the Lockheed Savings
Plan contained in the Internal Revenue Code, certain employees are not allowed
to elect to contribute the maximum 12 percent of compensation otherwise
permitted by the Lockheed Savings Plan. A supplemental savings plan
("Supplemental Plan") has been established for Lockheed Savings Plan
participants affected by these limits. Additional matching contributions that
become payable under a Termination Benefits Agreement are also payable through
this plan. The supplemental plan provides for payment in a lump sum or up to
twenty annual installments upon termination of employment, subject to
restrictions similar to those contained in the Lockheed Savings Plan, of amounts
deferred by the employee in excess of the Internal Revenue Code's deferral
limit, the corresponding matching contribution (if applicable) and the income on
both. All amounts accumulated and unpaid under this supplemental plan must be
paid in a lump sum within fifteen calendar days following a change in control,
as defined in the plan document.
Martin Savings Plan
The Martin Savings Plan permits eligible employees to make regular savings
contributions on a pretax or after-tax basis. For the year ended December 31,
1996, participants could contribute up to 17 percent of their current base
salary subject to the limitations imposed by the Internal Revenue
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Code. In addition, the Corporation made a matching contribution to the
participant's account equal to 50 percent of up to the first 7 percent of
compensation contributed by the participant.
All contributions to the Martin Savings Plan are 100 percent vested. Full
distributions under the Martin Savings Plan are generally made upon the
termination, layoff, retirement, disability or death of the participant.
Participants in the Martin Savings Plan could direct the investment of
employee as well as matching contributions among ten different investment
options. One of the available options was the Common Stock of the Corporation.
During 1996, executive officers of the Corporation participating in the Martin
Savings Plan could not direct the investment of their account balances into the
Corporation Common Stock Fund.
Salaried Savings Program
Under the Salaried Savings Program, the Martin Savings Plan and Lockheed
Savings Plan were consolidated effective January 1, 1997. Participants in the
Salaried Savings Program may contribute up to 17 percent of their base pay
through pretax or after-tax contributions (maximum of 16 percent on a pretax
basis). Participants in the program can direct the investment of their
contributions in ten different investment options, including the Common Stock of
the Corporation.
The Corporation matches 50 percent of the first 8 percent of base pay
contributed to the Salaried Savings Program. Matching contributions are made in
Common Stock of the Corporation through an employee stock ownership feature.
Matching contributions are 100 percent vested.
The Supplemental Plan was also amended in January, 1997 to permit
participation by employees formerly covered by the Martin Savings Plan.
PENSION PLANS
The Corporation sponsors a number of pension plans for employees. Officers
who were employed previously by Lockheed participate in the Lockheed Retirement
Plan for Certain Salaried Employees ("Lockheed Retirement Plan"). Officers who
were employed previously by Martin Marietta participate in the Martin Marietta
Retirement Income Plan for Salaried Employees ("Martin Pension Plan"). Mr. Lanza
participated in the Lockheed Martin Tactical Systems, Inc. Pension Plan
("Tactical Systems Pension Plan") in 1996, and became a participant in the
Martin Pension Plan on January 13, 1997. All of these plans are
non-contributory.
Lockheed Retirement Plan
The calculation of retirement benefits under the Lockheed Retirement Plan
is determined by a formula which takes into account the participant's years of
credited service and average compensation for the highest five consecutive years
of the last ten years of employment with the Corporation preceding retirement.
Average pay includes an employee's normal rate of pay (without overtime) and
bonuses awarded under the Management Incentive Compensation Plan, amounts
awarded under the Lockheed Performance Incentive Plan and lump sum payments in
lieu of a salary increase. Normal retirement age under the Lockheed Retirement
Plan is 65; however, benefits are payable as early as age 55 at a reduced amount
or without reduction if the employee's age and years of credited service equal
or exceed 85.
The Lockheed Retirement Plan provides that, in the event of a change in
control of Lockheed (as defined in the plan document), (i) the Lockheed
Retirement Plan may not be terminated and the benefits payable thereunder may
not be adversely modified for a period of two years following such change in
control; (ii) the Lockheed Retirement Plan may not be merged or consolidated
with an underfunded plan during the five-year period following such change in
control; and (iii) if the Lockheed Retirement Plan is terminated within the
five-year period following such change in control, any surplus assets remaining
after satisfaction of all plan liabilities, taxes and other rightful claims of
the U.S. government shall be transferred to a trust and applied solely to the
payment of certain employee benefits otherwise payable to employees and retirees
(e.g., retiree medical benefits), the trust shall remain in existence at least
until the expiration of that five-year term. In addition, during the five-year
period following a change in control, the Lockheed Retirement Plan may not
invest in securities
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issued by Lockheed or any affiliate of Lockheed, any entity in which 10 percent
or more of the equity interests are held in the aggregate by officers, directors
or affiliates of Lockheed, or by 5 percent stockholders of Lockheed. The
combination constituted a change in control under the Lockheed Retirement Plan.
Supplemental retirement plans for the Lockheed Retirement Plan participants
who are subject to Internal Revenue Code limits on qualified plan benefits have
been authorized. The additional benefit payable under each of these supplemental
plans is calculated and payable in the same manner as the employee's benefit
under the Lockheed Retirement Plan, except that each supplemental retirement
plan provides that participants may elect a lump sum payment in lieu of annuity
payments and that any participant receiving annuity payment benefits under such
plans at the time of a change in control of Lockheed, as defined, will receive,
in lieu of the continuation of such annuity payments, the actuarial equivalent
of such benefits in a lump sum payable within thirty calendar days following the
change in control.
Martin Pension Plan
The calculation of retirement benefits under the Martin Pension Plan is
generally based upon the Participant's average compensation for the highest
three years of the ten years preceding retirement and the participant's number
of years of credited service. Compensation covered by the Martin Pension Plan
generally includes, but is not limited to, base salary, bonuses under the
Management Incentive Compensation Plan, lump sum payments in lieu of a salary
increase and overtime. The normal retirement age under the Plan is 65; however,
unreduced early retirement benefits are available at age 60. Reduced benefits
are available as early as age 55. Participants who retire early are also
eligible for supplements payable until age 62 based on years of credited
service.
When the Martin Pension Plan was amended to comply with the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), a modified version
of the existing benefit accrual formula was preserved for certain employees who
were participants in the Plan prior to October 1, 1975 ("Pre-ERISA Formula").
Employees who became participants after that date accrue benefits under a
different formula ("Post-ERISA Formula"). In January 1991, the Martin Pension
Plan was amended to provide that future accruals for all highly compensated
employees would be based on the Post-ERISA Formula. If as a result of the
amendment, an employee receives less from the Martin Pension Plan than would
have been otherwise received under the Pre-ERISA Formula, the Corporation
intends to make up the difference out of general corporate assets.
The Corporation also maintains supplemental retirement plans which provide
for the payment of benefits in excess of Internal Revenue Code limits on
qualified plan benefits and payment of amounts equalizing the differences in the
accrual method for those certain employees who were not participants in the
Martin Pension Plan prior to October 1, 1975.
Tactical Systems Pension Plan
The Tactical Systems Pension Plan provides an annual benefit for each year
of membership for the first fourteen years of Loral service, of 1.2 percent of
annual compensation up to the Social Security wage base and 1.45 percent of
annual compensation in excess of that base, and for each year in excess of
fourteen years of service, 1.5 percent of annual compensation up to the Social
Security wage base and 1.75 percent of annual compensation in excess of that
base, all subject to certain vesting and other requirements. The plan also
provides a minimum benefit to employees who began participation prior to 1978
and work until their normal retirement date; that minimum benefit is .75 percent
of compensation paid in the year preceding retirement multiplied by years of
service not exceeding twenty years. Compensation covered by the Tactical Systems
Pension Plan is the total in cash remuneration actually paid and generally
includes, but is not limited to, base salary, management incentive compensation
awards, bonuses and overtime.
From time to time the benefit formula under the Tactical Systems Pension
Plan is "updated" to reflect participants' current compensation. The plan was
last updated effective January 1, 1996 to provide a benefit equal to the greater
of the benefit accrued through that date or a benefit determined by assuming the
participant's annual compensation for each year of service through December 31,
1995 was equal to the average annual compensation paid for the five years ending
December 31, 1995.
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A supplemental plan also exists which generally makes up for certain
reductions in pension benefits caused by Internal Revenue Code limitations.
Remunerations covered by the plans primarily include salary and bonus.
Set forth below is a pension table which shows the estimated annual
benefits payable upon retirement for specified earnings and years of service
under the Lockheed Pension Plan.
MAXIMUM ANNUAL BENEFIT PAYABLE UPON NORMAL RETIREMENT
LOCKHEED PENSION PLAN (A)
Five Year
Average 15 years of 20 Years of 25 Years of 30 Years of 40 Years of
Compensation Service Service Service Service Service
==============================================================================================
$500,000 $111,906 $149,208 $186,510 $223,812 $298,611
$600,000 $134,406 $179,208 $224,010 $268,812 $358,606
$700,000 $156,902 $209,203 $261,504 $313,805 $418,601
$800,000 $179,041 $239,201 $299,001 $358,801 $478,597
$900,000 $201,899 $269,198 $336,498 $403,798 $538,592
$1,000,000 $224,397 $299,196 $373,995 $448,794 $598,587
$1,200,000 $269,393 $359,191 $448,989 $538,787 $718,582
$1,400,000 $314,392 $419,189 $523,986 $628,783 $838,573
$1,600,000 $359,388 $479,184 $598,980 $718,776 $958,563
$1,800,000 $404,384 $539,179 $673,974 $808,769 $1,078,553
$2,000,000 $449,381 $599,174 $748,968 $898,762 $1,198,544
$2,200,000 $494,377 $659,170 $823,962 $988,754 $1,318,534
$2,400,000 $539,374 $719,165 $898,956 $1,078,747 $1,438,525
$2,600,000 $584,370 $779,160 $973,950 $1,168,740 $1,558,515
$2,800,000 $629,366 $839,155 $1,048,944 $1,258,733 $1,678,505
$3,000,000 $674,363 $899,150 $1,123,938 $1,348,726 $1,798,496
$3,200,000 $719,359 $959,146 $1,198,932 $1,438,718 $1,918,486
$3,400,000 $764,356 $1,019,141 $1,273,926 $1,528,711 $2,038,477
$3,600,000 $809,354 $1,079,138 $1,348,923 $1,618,708 $2,158,471
(A) The benefits payable under the Lockheed Retirement Plan may be limited by
sections 401(a)(17) and 415(d) of the Internal Revenue Code. For 1996, the
maximum earnings amount which may be considered to compute a benefit in
accordance with Section 401(a)(17) of the Code is $150,000. The maximum
annual amount payable under the Plan as of December 31, 1996, in accordance
with Section 415(b) of the Code is $120,000.
The amounts listed on the tables for the Martin Pension Plan and the
Lockheed Retirement Plan are not subject to any deduction for Social Security
benefits or other offsets and are computed as single life annuities.
As of December 31, 1996, the estimated annual benefits payable upon
retirement at age 65 for the individuals named in the compensation table, based
on continued employment at current compensation, are as follows: Mr. Augustine
$1,364,658; Dr. Coffman $1,006,558; Mr. Lanza $925,415; Mr. Bennett $723,269 and
Mr. Teets $618,275. These amounts (as do the amounts shown on the tables)
include benefits payable under the supplemental plans. The years of credited
service as of December 31, 1996, for Messrs. Augustine, Coffman, Lanza, Bennett,
and Teets were 20 years, 29 years, 24 years, 38 years and 34 years,
respectively.
The compensation covered by the plans generally includes all items of
annual compensation listed in the compensation table. However, the compensation
used to calculate Mr. Lanza's benefit payable upon retirement at age 65 was
$1,147,700. This differs from his annual compensation indicated on the
compensation table because it represents his compensation as of November 22,
1996, his normal
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retirement date, and does not include deferred compensation included in the
"Salary" column of the table. Mr. Lanza's estimated annual benefit as of January
1, 1997 is $1,449,826, which is based on 1996 compensation of $9,865,511. This
compensation amount differs from the 1996 annual compensation amount reflected
on the compensation table because it includes bonus amounts paid in 1996 that
are reflected in the "All Other Compensation" column of the table and does not
include deferred compensation that is included in the "Salary" column of the
table.
Set forth below is a pension plan table which shows the estimated annual
benefits payable upon retirement for specified earnings and years of service
under the Martin Pension Plan.
MAXIMUM ANNUAL BENEFIT PAYABLE UPON NORMAL RETIREMENT
MARTIN PENSION PLAN (A)
Five Average 15 years of 20 Years of 25 Years of 30 Years of 40 Years of
Earnings Service (B) Service (B) Service (C) Service (C) Service (C)
==============================================================================================
$500,000 $113,120 $150,827 $244,770 $271,967 $299,580
$600,000 $135,620 $180,827 $294,270 $326,967 $360,080
$700,000 $158,120 $210,827 $343,770 $381,967 $420,580
$800,000 $180,620 $240,827 $393,270 $436,967 $481,080
$900,000 $203,120 $270,827 $442,770 $491,967 $541,580
$1,000,000 $225,620 $300,827 $492,270 $546,967 $602,080
$1,200,000 $270,620 $360,827 $591,270 $656,967 $723,080
$1,400,000 $315,620 $420,827 $690,270 $766,967 $844,080
$1,600,000 $360,620 $480,827 $789,270 $876,967 $965,080
$1,800,000 $405,620 $540,827 $888,270 $986,967 $1,086,080
$2,000,000 $450,620 $600,827 $987,270 $1,096,967 $1,207,080
$2,200,000 $495,620 $660,827 $1,086,270 $1,206,967 $1,328,080
$2,400,000 $540,620 $720,827 $1,185,270 $1,316,967 $1,449,080
$2,600,000 $585,620 $780,827 $1,284,270 $1,426,967 $1,570,080
$2,800,000 $630,620 $840,827 $1,383,270 $1,536,967 $1,691,080
$3,000,000 $675,620 $900,827 $1,482,270 $1,646,967 $1,812,080
$3,200,000 $720,620 $960,827 $1,581,270 $1,756,967 $1,933,080
$3,400,000 $765,620 $1,020,827 $1,680,270 $1,866,967 $2,054,080
$3,600,000 $810,620 $1,080,827 $1,779,270 $1,976,967 $2,175,080
(A) The benefits payable under the Martin Pension Plan may be limited by
sections 401(a)(17) and 415(d) of the Internal Revenue Code. For 1996, the
maximum earnings amount which may be considered to compute a benefit in
accordance with Section 401(a)(17) of the Code is $150,000. The maximum
annual amount payable under the Plan as of December 31, 1996, in accordance
with Section 415(b) of the Code is $120,000.
(B) Calculated under the Post-ERISA formula.
(C) Calculated under the Pre-ERISA formula.
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STOCK PRICE PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURN THROUGH 1996(1)
LOCKHEED MARTIN, S&P 500 AND PEER ISSUERS INDEX(2,3)
Measurement Period
(Fiscal Year Apr May Jun Jul Aug Sep Oct Nov Dec
Covered) 3/16/95 3/31/95 95 95 95 95 95 95 95 95 95
LOCKHEED MARTIN 100 102 112 116 123 123 119 132 133 144 156
S&P 500 100 101 104 108 111 114 115 120 119 124 127
PEER ISSUERS INDEX 100 102 108 115 119 124 123 131 132 141 148
Measurement Period
(Fiscal Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Covered) 96 96 96 96 96 96 96 96 96 96 96 96
LOCKHEED MARTIN 148 151 150 160 167 167 165 168 180 179 182 184
S&P 500 131 132 134 136 139 140 133 136 144 148 159 156
PEER ISSUERS INDEX 147 148 150 155 161 159 155 163 174 171 174 180
(1) Assumes that the investment in Lockheed Martin Common Stock ("LMT") and each
index was $100 on March 16, 1995 (the first day of trading in LMT) with
reinvestment of dividends.
(2) The Peer Issuers Index is a market weighted index comprised of: General
Dynamics Corporation, Litton Industries, Inc., Lockheed Martin, McDonnell
Douglas Corporation, Northrop Grumman Corporation and Raytheon Corporation.
(3) The Peer Issuers Index in Lockheed Martin's 1996 Proxy Statement included
Loral Corporation in addition to the corporations contained in this 1997
Index (see Note 2). The Index has been restated to omit Loral Corporation
since Lockheed Martin acquired all of the common stock of Loral Corporation
effective April 23, 1996, thus trading data as to Loral Corporation common
stock is no longer available.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Corporation's officers and directors and persons who own more than 10 percent of
a registered class of the Corporation's equity securities file reports of
ownership and changes in ownership with the Securities and Exchange Commission,
the New York Stock Exchange and the Corporation. Based solely on its review of
copies of the forms received by it, or written representations from reporting
persons that they were not required to file a Form 5, the Corporation believes
that, with respect to transactions required to have been reported in 1996 or in
1997 on a Form 5 for the year ended December 31, 1996, all filing requirements
were complied with on a timely basis, except for the following: Form 5s for
Messrs. Blackwell, Brashears, Coffman, Flournoy, Gibbons, Hancock, Henshaw,
Hood, Hurtt, Kreick, Marafino, McLellan, Murphy, Murray, Rulon, Savage,
Schwartz, Skowronski, Tellep, Trost, Ukropina and Yearley and Mses. Cheney and
King that were due on Friday, February 14, 1997 arrived via hand delivery at the
Securities Exchange Commission approximately four minutes after the filing desk
had closed on that day and delivery was refused. Immediately thereafter, the
forms were sent by express courier and were received by the Securities Exchange
Commission on the next business day. The form 5s reported the following number
of transactions: Blackwell (2), Brashears (1), Coffman (1), Flournoy (1),
Gibbons (1), Hancock (1), Henshaw (1), Hood (1), Hurtt (1), Kreick (1), Marafino
(1), McLellan (2), Murphy (1), Murray (1), Rulon (1), Savage (1), Schwartz (1),
Skowronski (1), Tellep (1), Trost (1), Ukropina (1), Yearley (1), Cheney (1) and
King (1). The Corporation is not aware of any known failure to file a required
report.
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31
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors recommends that the stockholders ratify the
appointment of Ernst & Young LLP, independent auditors, to audit the
consolidated financial statements of the Corporation for 1997. The ratification
of the appointment of Ernst & Young LLP is being submitted to the stockholders
because management believes this to be good corporate governance. Should the
stockholders fail to ratify this appointment, the Board of Directors will review
the matter. Representatives of Ernst & Young LLP are expected to attend the
Annual Meeting, will have the opportunity to make a statement if they so desire
and will be available to respond to appropriate questions.
The Board of Directors recommends a vote FOR the Ratification of
Appointment of Ernst & Young LLP as independent auditors for 1997.
STOCKHOLDER PROPOSALS
STOCKHOLDER PROPOSAL 1
William L. Buckel and Irmgard B. Buckel, 1641 Hess Blvd., Columbus, Ohio
43212-1415, the owners of 955 shares of Common Stock of the Corporation have
notified Lockheed Martin Corporation that they intend to present the following
proposal at this year's annual meeting:
"INTENT: The intent of this proposal is to: (a) improve intra-organizational
communication and cooperation by modifying the Corporation's "culture", (b)
increase the return on equity by improving organizational effectiveness, (c)
reduce the "external" side-effects caused by paying some employees much more
than others, (d) in the long term, increase the real income of many
corporation employees and shareholders, and (e) cause a ripple effect in
other U.S. companies who follow the Lockheed Martin example.
"WHEREAS: For large organizations to be productive, there must be a division
of labor where different people do different jobs. Currently within many
U.S. businesses, the division of labor has resulted in wage differentials
that are inconsistent with productivity differences. "Pay norms" are
frequently at odds with the wages actually being paid. (A pay norm is the
wage, or wage-difference, that is viewed by a cross-section of society to be
"normal" or reasonable.)
"Large wage differences also contribute to lower organizational productivity
because of the resulting lower morale and loyalty among lower-wage
employees. In this way, large pay differences reduce shareholder return on
equity.
"It is well know that most social problems (hunger, violence, dysfunctional
families, etc.) occur in poorer communities. Thus, on a national level,
extreme wage inequity causes a variety of social problems that stockholders
(as taxpayers) have to pay for in the form of more welfare programs, more
food subsidies, more rent subsidies, more public school programs to deal
with "at risk" students, more police, and more jails. Hopefully, smaller
wage differences at Lockheed Martin will cause a ripple effect that reduces
the "external" costs now paid by shareholders.
"THEREFORE BE IT RESOLVED:
"The Board of Directors is requested to implement a program to achieve,
within a 4-year period, a salary-administration schedule that limits the
highest paid persons in the organization to a total annual compensation of
no more than five (5) times the national median wage paid to full-time
employees.
"The Board of Directors is requested to report annually to the shareholders
on its progress and problems in this endeavor."
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
PROPOSAL FOR THE FOLLOWING REASONS:
The Proponents' supporting statement raises a number of serious legal
issues, social issues and other concerns that extend considerably beyond the
scope of the Proponent's proposal. In the opinion of the Board, the
Corporation's Proxy Statement and Annual Meeting are not the proper forum for
debate on these matters. As to the merits of the Proponents' specific proposal,
the Proponents offer a compensation philosophy that, in the Board's view, is
incompatible with the need to attract and retain experienced and highly
qualified executives. Lockheed Martin's goal is to be recognized as the world's
premier systems engineering and technology enterprise meeting the needs of its
customers with high-quality products and services. In order to achieve this
goal, the Corporation must attract and retain the services of dedicated and
talented employees, which requires a compensation program that is competitive
with that of other companies, provides strong incentives to meet the
Corporation's objectives and makes prudent use of the Corporation's resources.
In a separate section of this Proxy Statement (see pages 14 through 18),
the Compensation Committee, which is composed entirely of independent directors,
discusses the philosophy, structure and methodology behind the Corporation's
compensation program. The discussion includes a review of the compensation
actually paid in 1996 to the Corporation's senior executives as well as the
relationship between that compensation and corporate performance. In general,
fundamental to the Corporation's compensation philosophy is the alignment of
executives' interests with those of its stockholders. This identity of interest
is achieved by linking executive compensation to corporate performance such that
the executives and the stockholders share in the rewards of outstanding
performance. Since its inception, for example, the Corporation has outperformed
both its peers and the Standard & Poor's 500. (Other measures of performance are
noted on page 17 of the Proxy Statement). The Board is convinced that superior
returns to the stockholders are most likely to flow from the Corporation's
existing compensation philosophy rather than one that would place arbitrary caps
on compensation awards to its most senior and talented executives.
FOR THESE REASONS, THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE AGAINST THE PROPOSAL.
------------------------
STOCKHOLDER PROPOSAL 2
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue,
N.W., Suite 215, Washington, D.C., the owner of 224 shares of Common Stock of
the Corporation has notified Lockheed Martin Corporation that she intends to
present the following proposal at this year's annual meeting:
"RESOLVED: That the stockholders of Lockheed Martin recommend that the Board
take the necessary steps so that future outside directors shall not serve
for more than six years."
STOCKHOLDER'S SUPPORTING STATEMENT
"REASONS: The President of the U.S.A. has a term limit, so do Governors of
many states.
"Newer directors may bring in fresh outlooks and different approaches with
benefits to all shareholders.
"No director should be able to feel that his or her directorship is until
retirement.
"If you AGREE, please mark your proxy FOR this resolution."
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33
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
PROPOSAL FOR THE FOLLOWING REASONS:
Lockheed Martin's directors are elected annually by the Corporation's
stockholders, following formal nomination by the Board's independent Nominating
Committee. The Board of Directors view mandatory term limits as incompatible
with the rights currently accorded to the Corporation's stockholders to choose
the best qualified individuals to serve as members of their Board on an annual
basis without arbitrary limits on who may serve. Certainly, no director on this
Board believes that his or her directorship is promised until retirement as each
director is subject to reelection on an annual basis.
The Board disagrees with the notion implicit in the proposal that a
director has only a certain number of "good years" with which to serve the
Corporation. Certainly, there is a "learning curve" associated with any complex
undertaking. At a time when wisdom and experience are at a premium, mandatory
term limits for board membership is an idea contrary to the best interests of
stockholders and incompatible with the functioning of a company as large and
complex as Lockheed Martin Corporation.
FOR THESE REASONS, THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE AGAINST THE PROPOSAL.
------------------------
MISCELLANEOUS
Financial and other reports will be presented at the meeting and will be
made available for inspection by stockholders present at the meeting, but it is
not intended that any action will be taken in respect thereof.
The cost of soliciting proxies has been or will be paid by the
Corporation. In addition to solicitation by mail, arrangements will be made with
brokerage houses and other custodians, nominees and fiduciaries to send proxy
material to beneficial owners; and the Corporation will, upon request, reimburse
them for their reasonable expenses in so doing. The Corporation has retained
Morrow & Co., Inc. to aid in the solicitation of proxies and to verify certain
records related to the solicitation at a fee of $25,000 plus expenses. To the
extent necessary in order to ensure sufficient representation at the meeting,
the Corporation may request by telephone or otherwise the return of proxies. The
extent to which this will be necessary depends entirely upon how promptly
proxies are returned. Stockholders are urged to return their proxies without
delay.
At the time this Proxy Statement was filed with the Securities and
Exchange Commission, the Board of Directors was not aware that any matters not
referred to herein would be presented for action at the meeting. If any other
matters properly come before the meeting, it is intended that the shares
represented by proxies will be voted with respect thereto in accordance with the
judgment of the persons voting them. It is also intended that discretionary
authority will be exercised with respect to the vote on any matters incidental
to the conduct of the meeting.
PROPOSALS BY STOCKHOLDERS INTENDED TO BE PRESENTED AT THE 1998 ANNUAL
MEETING OF STOCKHOLDERS OF THE CORPORATION MUST BE RECEIVED BY THE SECRETARY OF
THE CORPORATION NO LATER THAN NOVEMBER 19, 1997 IN ORDER TO BE INCLUDED IN THE
PROXY STATEMENT AND ON THE PROXY CARD THAT WILL BE SOLICITED BY THE BOARD OF
DIRECTORS IN CONNECTION WITH THAT MEETING. The inclusion of any proposal will be
subject to applicable rules of the Securities and Exchange Commission. In
addition, the By-Laws of the Corporation establish an advance notice requirement
for any proposal of business to be considered at an annual meeting of
stockholders. Written notice must be delivered to the Secretary of the
Corporation at its principal executive office, 6801 Rockledge Drive, Bethesda,
Maryland 20817, not
28
34
less than 60 days nor more than 90 days prior to the first anniversary of the
preceding year's annual meeting and must contain specified information
concerning the matter to be brought before such meeting and concerning the
stockholder proposing such a matter. Any waiver by the Corporation of these
requirements with respect to the submission of a particular stockholder proposal
shall not constitute a waiver with respect to the submission of any other
stockholder proposal nor shall it obligate the Corporation to waive these
requirements with respect to future submissions of the stockholder proposal or
any other stockholder proposal. Any stockholder desiring a copy of the By-Laws
of the Corporation will be furnished one without charge upon written request to
the Secretary of the Corporation.
/s/ LILLIAN M. TRIPPETT
Lillian M. Trippett
Vice President, Corporate Secretary
and Associate General Counsel
March 21, 1997
Upon the written request of any record holder or beneficial owner of
Common Stock entitled to vote at the Annual Meeting of Stockholders of the
Corporation, the Corporation will provide without charge a copy of its Annual
Report on Form 10-K for the year ended December 31, 1996, filed with the
Securities and Exchange Commission. Requests should be mailed to James R. Ryan,
Investor Relations Vice President, Lockheed Martin Corporation, 6801 Rockledge
Drive, Bethesda, Maryland 20817, by calling Lockheed Martin Shareholder Direct
at 1-800-LMT-9758 or by accessing the Lockheed Martin Home Page on the Internet
using the Uniform Resource Locator: http://www.shareholder.com/lmt/.
29
35
[RECYCLE LOGO]
36
LOCKHEED MARTIN CORPORATION
PROXY SOLICITATION ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
P
The undersigned hereby appoints Messrs. James F. Gibbons, Caleb B.
R Hurtt and Vincent N. Marafino, each of them proxies of the undersigned,
with full power and substitution, to vote and act for the undersigned
O at the Annual Meeting of Stockholders of the Corporation to be held at
10:30 a.m. on April 24, 1997, at the Brown Palace Hotel, 321
X Seventeenth Street, Denver, Colorado, and at any adjournment thereof,
as indicated herein on those matters described in the Proxy Statement
Y and in accordance with their discretion on such other matters as may
properly come before the meeting. Stockholders are requested to mark,
date and sign this proxy on the reverse side and to return it promptly
in the enclosed envelope or, to vote this proxy by telephone, dial
1-800-OK2-VOTE (1-800-652-8683).
To vote in accordance with the Board of Directors' recommendations,
please sign and date the reverse side; no boxes need to be checked.
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
/\ DETACH HERE AND RETURN PROPERLY EXECUTED PROXY CARD IN ENCLOSED ENVELOPE /\
- --------------------------------------------------------------------------------
IMPORTANT
Please note that a ticket is required for admission to the meeting. If you
plan to attend and you are a stockholder as of the record date, please check the
appropriate box on your proxy card or indicate when prompted if voting by
telephone, and a ticket will be forwarded to you. If, however, your shares are
held in the name of a broker or other nominee, please bring a proxy or a letter
from that firm confirming your ownership of the shares as of the close of
business on the record date (March 10, 1997).
- --------------------------------------------------------------------------------
[LOCKHEED MARTIN LOGO]
37
[X] Please mark your
votes as in this
example.
This proxy when properly executed and returned will be voted in the manner
directed herein. If no direction is made, this proxy will be voted FOR
Proposals 1 and 2 and AGAINST Proposals 3 and 4.
- -----------------------------------------------------------------------------------------------------------------------------------
DIRECTORS RECOMMNED A VOTE FOR ALL NOMINEES AND FOR PROPOSAL 2.
- -----------------------------------------------------------------------------------------------------------------------------------
FOR ALL WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 1. Norman R. Augustine 10. Vincent N. Marafino [ ] [ ] [ ]
Directors 2. Marcus C. Bennett 11. Eugene F. Murphy 2. Appointment
3. Lynne V. Cheney 12. Allen E. Murray of Auditors
4. Vance D. Coffman 13. Frank Savage
(For, except vote withheld 5. Houston I. Flournoy 14. Daniel M. Tellep
from the following nominee(s)) 6. James F. Gibbons 15. Carlisle A.H. Trost
7. Edward E. Hood, Jr. 16. James R. Ukropina
8. Caleb B. Hurtt 17. Douglas C. Yearley
------------------------------- 9. Gwendolyn S. King
- -----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------
DIRECTORS RECOMMEND A VOTE AGAINST PROPOSALS 3 AND 4.
-----------------------------------------------------
FOR AGAINST ABSTAIN
3. Stockholder Proposal- [ ] [ ] [ ]
Wage Limits
4. Stockholder Proposal- [ ] [ ] [ ]
Directors Term Limits
-----------------------------------------------------
The signer hereby revokes all previous proxies given
by the signer to vote at said meeting or any
adjournments thereof.
SIGNATURE(S) DATE I will attend [ ]
--------------------------------------------- ---------------- the meeting
NOTE: Please date and sign exactly as your name appears
above and return this card in the enclosed
envelope.
- ------------------------------------------------------------------------------------------------------------------------------------
/\ DETACH HERE AND RETURN PROPERLY EXECUTED PROXY CARD IN ENCLOSED ENVELOPE /\
[LOCKHEED MARTIN LOGO]
ANNUAL MEETING
OF STOCKHOLDERS
THURSDAY, APRIL 24, 1997
10:30 A.M.
BROWN PALACE HOTEL
321 SEVENTEENTH STREET
DENVER, COLORADO 80202
You may vote the shares held in this account by telephone. Voting by telephone
will eliminate the need to mail voted proxy card(s) representing shares held in
this account. To vote by phone please follow the steps below:
1) HAVE YOUR PROXY CARD AND SOCIAL SECURITY NUMBER AVAILABLE.
2) USING A TOUCH-TONE TELEPHONE, DIAL 1-800-OK2-VOTE (1-800-652-8683)
MONDAY-FRIDAY, 8 A.M.-8:30 P.M. SATURDAYS 9 A.M.-3:30 P.M.
The telephone voting system preserves the confidentiality of your vote and will
confirm your voting instructions with you during the call. You may also change
your selections on any or all of the proposals to be voted.
YOUR VOTE IS IMPORTANT TO US. THANK YOU FOR VOTING.
38
LOCKHEED MARTIN CORPORATION
VOTING INSTRUCTION TO TRUSTEE
ANNUAL MEETING OF STOCKHOLDERS
The undersigned is a participant in one or more of the savings and 401(k) plans
sponsored by Lockheed Martin Corporation (the "Corporation") that holds shares
of the Corporation's Common Stock. The participant hereby instructs the
Trustee(s) of such plan(s) to vote the shares of Common Stock of the Corporation
allocated to the participant's account(s) in accordance with the instructions on
the reverse side of this card on those matters described in the Proxy Statement,
and to represent the undersigned at the Annual Meeting of Stockholders of the
Corporation to be held at 10:30 a.m. on April 24, 1997, at the Brown Palace
Hotel, 321 Seventeenth Street, Denver, Colorado 80202, and at any adjournment
thereof, and to act in its discretion on such other matters as may properly come
before the meeting. Participants are requested to mark, date and sign this
voting instruction card on the reverse side and to return it promptly in the
enclosed envelope.
Election of Directors, Nominees:
Norman R. Augustine James F. Gibbons Vincent N. Marafino Daniel M. Tellep
Marcus C. Bennett Edward E. Hood, Jr. Eugene F. Murphy Carlisle A.H. Trost
Lynne V. Cheney Caleb B. Hurtt Allen E. Murray James R. Ukropina
Vance D. Coffman Gwendolyn S. King Frank Savage Douglas C. Yearley
Houston I. Flournoy
Shares allocated to the participant's plan account(s) for which no card is
returned will be voted by the Trustee(s) in the manner described in the notice
to participants accompanying this card. To vote in accordance with the Board of
Directors' recommendations, sign and date the reverse side; no boxes need to be
checked.
SEE REVERSE
SIDE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/\ DETACH HERE AND RETURN PROPERLY EXECUTED CARD IN ENCLOSED ENVELOPE /\
- -------------------------------------------------------------------------------
IMPORTANT
Whether or not you plan to attend the annual meeting of stockholders,
please sign, date and return your card as soon as possible in the return
envelope provided.
Please note that a ticket is required for admission to the meeting. If you
plan to attend, please check the appropriate box on your card, and a ticket will
be forwarded to you.
- -------------------------------------------------------------------------------
[LOCKHEED MARTIN LOGO]
39
[X]PLEASE MARK YOUR
VOTE AS IN THIS
EXAMPLE.
THIS CARD WHEN PROPERLY EXECUTED AND RETURNED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. THE TRUSTEE(S) MAKE NO RECOMMENDATION AS TO YOUR DIRECTION. IF
THIS CARD IS RETURNED SIGNED AND DATED BUT NO DIRECTION IS MADE, IT WILL BE
VOTED FOR PROPOSALS 1 AND 2 AND AGAINST PROPOSALS 3 AND 4.
- ------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS RECOMMEND A VOTE FOR ALL NOMINEES AND FOR PROPOSAL 2. DIRECTORS RECOMMEND A VOTE AGAINST PROPOSALS 3 AND 4.
- ------------------------------------------------------------------------------------------------------------------------------------
FOR ALL WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Appointment [ ] [ ] [ ] 3. Wage Proposal [ ] [ ] [ ]
Directors of Auditors
(see reverse)
(For, except vote withheld from the following nominee(s)) 4. Director Term [ ] [ ] [ ]
Limit Proposal
- ----------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
The signer hereby revokes all previous instructions
given by the signer to vote with respect to
allocated shares at said meeting or any adjournments
thereof.
SIGNATURE(S) DATE I will attend [ ]
----------------------------------------------------- --------------- the meeting
NOTE: Please date and sign exactly as your name appears above and
return this card in the enclosed envelope.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/\ DETACH HERE AND RETURN PROPERLY EXECUTED CARD IN ENCLOSED ENVELOPE /\
[LOCKHEED MARTIN LOGO]
ANNUAL MEETING
OF STOCKHOLDERS
THURSDAY, APRIL 24, 1997
10:30 A.M.
BROWN PALACE HOTEL
321 SEVENTEENTH STREET
DENVER, COLORADO 80202
================================================================================
IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE MARK THE BOX ON THE CARD ABOVE.
================================================================================
40
UNALLOCATED SHARES
LOCKHEED MARTIN CORPORATION
VOTING INSTRUCTION TO TRUSTEE
ANNUAL MEETING OF STOCKHOLDERS
The undersigned Participant in The Lockheed Martin Salaried Employee Savings
Plan ("Plan") hereby instructs U.S. Trust Company of California, N.A., as
Trustee under the Plan ("Trustee"), to vote a proportionate number of shares of
Common Stock of the Corporation not yet allocated to Participants' accounts in
accordance with the instructions on the reverse side of this card on those
matters described in the Proxy Statement, and to represent the undersigned at
the Annual Meeting of Stockholders of the Corporation to be held at 10:30 a.m.
on April 24, 1997, at the Brown Palace Hotel, 321 Seventeenth Street, Denver,
Colorado 80202, and at any adjournment thereof, and to act in its discretion on
such other matters as may properly come before the meeting. Unallocated shares
for which no card is returned will be voted by the Trustee in the same
proportion as unallocated shares for which the Trustee receives voting
instructions, as provided by the Plan. Participants are requested to mark, date
and sign this card on the reverse side and to return it promptly in the enclosed
envelope.
Election of Directors, Nominees:
Norman R. Augustine James F. Gibbons Vincent N. Marafino Daniel M. Tellep
Marcus C. Bennett Edward E. Hood, Jr. Eugene F. Murphy Carlisle A.H. Trost
Lynne V. Cheney Caleb B. Hurtt Allen E. Murray James R. Ukropina
Vance D. Coffman Gwendolyn S. King Frank Savage Douglas C. Yearley
Houston I. Flournoy
Your portion of the unallocated shares will be voted according to your
instructions. If this card is not returned in a timely manner, any unallocated
shares you are entitled to vote will be voted in the same proportion as other
unallocated shares for which the Trustee receives voting instructions, as
provided by the Plan. To vote in accordance with the Board of Directors'
recommendations, sign and date the reverse side; no boxes need to be checked.
SEE REVERSE
SIDE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/\ DETACH HERE AND RETURN PROPERLY EXECUTED CARD IN ENCLOSED ENVELOPE /\
- -------------------------------------------------------------------------------
IMPORTANT
Whether or not you plan to attend the annual meeting of stockholders,
please sign, date and return your card as soon as possible in the return
envelope provided.
Please note that a ticket is required for admission to the meeting. If you
plan to attend, please check the appropriate box on your card, and a ticket will
be forwarded to you.
- -------------------------------------------------------------------------------
[LOCKHEED MARTIN LOGO]
41
[X] PLEASE MARK YOUR
VOTE AS IN THIS
EXAMPLE.
THIS CARD WHEN PROPERLY EXECUTED AND RETURNED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. THE TRUSTEE MAKES NO RECOMMENDATION AS TO YOUR DIRECTIONS. IF
THIS CARD IS RETURNED SIGNED AND DATED BUT NO DIRECTION IS MADE, IT WILL BE
VOTED FOR PROPOSALS 1 AND 2 AND AGAINST PROPOSALS 3 AND 4.
- ------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS RECOMMEND A VOTE FOR ALL NOMINEES AND FOR PROPOSAL 2. DIRECTORS RECOMMEND A VOTE AGAINST PROPOSALS 3 AND 4.
- ------------------------------------------------------------------------------------------------------------------------------------
FOR ALL WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Appointment [ ] [ ] [ ] 3. Wage Proposal [ ] [ ] [ ]
Directors of Auditors
(see reverse)
(For, except vote withheld from the following nominee(s)) 4. Director Term [ ] [ ] [ ]
Limit Proposal
- ----------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
The signer hereby revokes all previous instructions
given by the signer to vote with respect to
allocated shares at said meeting or any adjournments
thereof.
SIGNATURE(S) DATE I will attend [ ]
------------------------------------ --------------- the meeting
NOTE: Please date and sign exactly as your name
appears above and return this card in the
enclosed envelope.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/\ DETACH HERE AND RETURN PROPERLY EXECUTED CARD IN ENCLOSED ENVELOPE /\
[LOCKHEED MARTIN LOGO]
ANNUAL MEETING
OF STOCKHOLDERS
THURSDAY, APRIL 24, 1997
10:30 A.M.
BROWN PALACE HOTEL
321 SEVENTEENTH STREET
DENVER, COLORADO 80202
================================================================================
IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE MARK THE BOX ON THE CARD ABOVE.
================================================================================
42
LOCKHEED MARTIN CORPORATION
VOTING INSTRUCTION TO TRUSTEE
ANNUAL MEETING OF STOCKHOLDERS
The undersigned is a participant in one of the savings and 401(k) plans
sponsored by Lockheed Martin Corporation (the "Corporation") that holds shares
of the Corporation's Common Stock. The participant hereby instructs the Trustee
of such plan to vote the shares of Common Stock of the Corporation allocated to
the participant's account in accordance with the instructions on the reverse
side of this card on those matters described in the Proxy Statement, and to
represent the undersigned at the Annual Meeting of Stockholders of the
Corporation to be held at 10:30 a.m. on April 24, 1997, at the Brown Palace
Hotel, 321 Seventeenth Street, Denver, Colorado 80202, and at any adjournment
thereof, and to act in its discretion on such other matters as may properly come
before the meeting. Participants are requested to mark, date and sign this
voting instruction card on the reverse side and to return it promptly in the
enclosed envelope.
Election of Directors, Nominees:
Norman R. Augustine James F. Gibbons Vincent N. Marafino Daniel M. Tellep
Marcus C. Bennett Edward E. Hood, Jr. Eugene F. Murphy Carlisle A.H. Trost
Lynne V. Cheney Caleb B. Hurtt Allen E. Murray James R. Ukropina
Vance D. Coffman Gwendolyn S. King Frank Savage Douglas C. Yearley
Houston I. Flournoy
Shares allocated to the participant's plan account for which no card is
returned will be voted by the Trustee in the manner described in the notice
to participants accompanying this card. To vote in accordance with the Board of
Directors' recommendations, sign and date the reverse side; no boxes need to be
checked.
SEE REVERSE
SIDE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/\ DETACH HERE AND RETURN PROPERLY EXECUTED CARD IN ENCLOSED ENVELOPE /\
- -------------------------------------------------------------------------------
IMPORTANT
Whether or not you plan to attend the annual meeting of stockholders,
please sign, date and return your card as soon as possible in the return
envelope provided.
Please note that a ticket is required for admission to the meeting. If you
plan to attend, please check the appropriate box on your card, and a ticket will
be forwarded to you.
- -------------------------------------------------------------------------------
[LOCKHEED MARTIN LOGO]
43
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS CARD WHEN PROPERLY EXECUTED AND RETURNED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. THE TRUSTEE MAKES NO RECOMMENDATION AS TO YOUR DIRECTION. IF
THIS CARD IS RETURNED SIGNED AND DATED BUT NO DIRECTION IS MADE, IT WILL BE
VOTED FOR PROPOSALS 1 AND 2 AND AGAINST PROPOSALS 3 AND 4.
- ------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS RECOMMEND A VOTE FOR ALL NOMINEES AND FOR PROPOSAL 2. DIRECTORS RECOMMEND A VOTE AGAINST PROPOSALS 3 AND 4.
- ------------------------------------------------------------------------------------------------------------------------------------
FOR ALL WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Appointment [ ] [ ] [ ] 3. Wage Proposal [ ] [ ] [ ]
Directors of Auditors
(see reverse)
(For, except vote withheld from the following nominee(s)) 4. Director Term [ ] [ ] [ ]
Limit Proposal
- ----------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
The signer hereby revokes all previous instructions
given by the signer to vote with respect to
allocated shares at said meeting or any adjournments
thereof.
SIGNATURE(S) DATE I will attend [ ]
------------------------------------ --------------- the meeting
NOTE: Please date and sign exactly as your name
appears above and return this card in the
enclosed envelope.
- ------------------------------------------------------------------------------------------------------------------------------------
/\ DETACH HERE AND RETURN PROPERLY EXECUTED CARD IN ENCLOSED ENVELOPE /\
[LOCKHEED MARTIN LOGO]
ANNUAL MEETING
OF STOCKHOLDERS
THURSDAY, APRIL 24, 1997
10:30 A.M.
BROWN PALACE HOTEL
321 SEVENTEENTH STREET
DENVER, COLORADO 80202
================================================================================
IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE MARK THE BOX ON THE CARD ABOVE.
================================================================================
44
THE LOCKHEED MARTIN SPACE OPERATIONS COMPANY
HOURLY EMPLOYEE INVESTMENT PLAN PLUS
ALLOCATED SHARES
VOTING INSTRUCTIONS TO TRUSTEE
FOR THE ANNUAL MEETING OF STOCKHOLDERS OF LOCKHEED MARTIN CORPORATION - APRIL
24, 1997
The undersigned Participant in The Lockheed Martin Space Operations Company
Hourly Employee Investment Plan Plus (the "Plan") hereby instructs U.S. Trust
Company of California, N.A., as Trustee under the Plan ("Trustee"), to vote all
shares of common stock of Lockheed Martin Corporation allocated to the account
of the Participant in accordance with the instructions on the reverse side of
this form, and to represent the undersigned at the Annual Meeting of
Stockholders of Lockheed Martin to be held at the Brown Palace Hotel, 321
Seventeenth Street, Denver, Colorado on Thursday, April 24, 1997 at 10:30 a.m.,
local time, and at any adjournments or postponements thereof, and to act in its
discretion upon such other matters as may properly come before the meeting or
any adjournments or postponements thereof.
THIS FORM MUST BE PROPERLY COMPLETED, SIGNED, DATED AND RECEIVED BY THE TRUSTEE
BY THE CLOSE OF BUSINESS ON APRIL 21, 1997. IF YOUR VOTING INSTRUCTIONS ARE NOT
TIMELY RECEIVED, THE TRUSTEE WILL VOTE THE SHARES ALLOCATED TO YOUR ACCOUNT IN
ITS DISCRETION. IF THIS FORM IS RECEIVED AFTER THE CLOSE OF BUSINESS ON APRIL
21, 1997, THE TRUSTEE CANNOT ENSURE THAT YOUR VOTING INSTRUCTIONS WILL BE
FOLLOWED. YOUR VOTING INSTRUCTIONS TO THE TRUSTEE ARE CONFIDENTIAL AS EXPLAINED
IN THE ACCOMPANYING NOTICE TO PLAN PARTICIPANTS.
YOUR ALLOCATED SHARES:
Please specify your choice on each proposal, date and sign (on the reverse
hereof), fold and return in the enclosed envelope.
45
[X] Please mark your choice like this and sign and date below.
FOR YOUR INFORMATION, THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL
NOMINEES AND "FOR" ITEM 2. THE TRUSTEE MAKES NO RECOMMENDATIONS WITH RESPECT TO
YOUR VOTING DECISIONS.
1. ELECTION OF DIRECTORS
[ ] VOTE FOR ALL Nominees [ ] DO NOT VOTE FOR ANY Nominees
(The Trustee will abstain from voting
if this box is marked)
[ ] VOTE FOR ALL Nominees EXCEPT the Individuals Marked Below:
[ ] Norman R. Augustine [ ] James F. Gibbons [ ] Vincent N. Marafino [ ] Daniel M. Tellep
[ ] Marcus C. Bennett [ ] Edward E. Hood, Jr. [ ] Eugene F. Murphy [ ] Carlisle A. H. Trost
[ ] Lynne V. Cheney [ ] Caleb B. Hurtt [ ] Allen E. Murray [ ] James R. Ukropina
[ ] Vance D. Coffman [ ] Gwendolyn S. King [ ] Frank Savage [ ] Douglas C. Yearley
[ ] Houston I. Flournoy
2. Appointment of Auditors [ ] FOR [ ] AGAINST [ ] ABSTAIN
FOR YOUR INFORMATION, THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEMS 3
AND 4. THE TRUSTEE MAKES NO RECOMMENDATIONS WITH RESPECT TO YOUR VOTING
DECISIONS.
3. Wage Proposal [ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Director Term Limit Proposal [ ] FOR [ ] AGAINST [ ] ABSTAIN
As a Participant in the Plan I hereby acknowledge receipt of proxy solicitation
materials of the Lockheed Martin Board of Directors relating to the 1997 Annual
Meeting of Stockholders of Lockheed Martin, and I hereby instruct the Trustee to
vote all shares allocated to my account as I have indicated above. If I sign,
date and return this form but do not specifically instruct the Trustee how to
vote, the Trustee will vote my allocated shares in accordance with the
recommendations of the Lockheed Martin Board of Directors.
The submission of this voting instruction form, if properly signed and dated,
revokes ALL of my prior allocated share voting instructions received by the
Trustee.
- ---------------------------------- -----------------------------------
SIGNATURE DATE
PLEASE SIGN, DATE AND MAIL THIS VOTING INSTRUCTION FORM
PROMPTLY IN THE ENVELOPE PROVIDED
I PLAN TO ATTEND THE ANNUAL MEETING [ ] YES [ ] NO
46
THE LOCKHEED MARTIN HOURLY EMPLOYEE SAVINGS PLAN PLUS
ALLOCATED SHARES
VOTING INSTRUCTIONS TO TRUSTEE
FOR THE ANNUAL MEETING OF STOCKHOLDERS OF LOCKHEED MARTIN CORPORATION - APRIL
24, 1997
The undersigned Participant in The Lockheed Martin Hourly Employee Savings
Plan Plus (the "Plan") hereby instructs U.S. Trust Company of California, N.A.,
as Trustee under the Plan ("Trustee"), to vote all shares of common stock of
Lockheed Martin Corporation allocated to the account of the Participant in
accordance with the instructions on the reverse side of this form, and to
represent the undersigned at the Annual Meeting of Stockholders of Lockheed
Martin to be held at the Brown Palace Hotel, 321 Seventeenth Street, Denver,
Colorado on Thursday, April 24, 1997 at 10:30 a.m., local time, and at any
adjournments or postponements thereof, and to act in its discretion upon such
other matters as may properly come before the meeting or any adjournments or
postponements thereof.
THIS FORM MUST BE PROPERLY COMPLETED, SIGNED, DATED AND RECEIVED BY THE TRUSTEE
BY THE CLOSE OF BUSINESS ON APRIL 21, 1997. IF YOUR VOTING INSTRUCTIONS ARE NOT
TIMELY RECEIVED, THE TRUSTEE WILL VOTE THE SHARES ALLOCATED TO YOUR ACCOUNT IN
ITS DISCRETION. IF THIS FORM IS RECEIVED AFTER THE CLOSE OF BUSINESS ON APRIL
21, 1997, THE TRUSTEE CANNOT ENSURE THAT YOUR VOTING INSTRUCTIONS WILL BE
FOLLOWED. YOUR VOTING INSTRUCTIONS TO THE TRUSTEE ARE CONFIDENTIAL AS EXPLAINED
IN THE ACCOMPANYING NOTICE TO PLAN PARTICIPANTS.
YOUR ALLOCATED SHARES:
Please specify your choice on each proposal, date and sign (on the reverse
hereof), fold and return in the enclosed envelope.
47
[X] Please mark your choice like this and sign and date below.
FOR YOUR INFORMATION, THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL
NOMINEES AND "FOR" ITEM 2. THE TRUSTEE MAKES NO RECOMMENDATIONS WITH RESPECT TO
YOUR VOTING DECISIONS.
1. ELECTION OF DIRECTORS
[ ] VOTE FOR ALL Nominees [ ] DO NOT VOTE FOR ANY Nominees
(The Trustee will abstain from voting
if this box is marked)
[ ] VOTE FOR ALL Nominees EXCEPT the individuals Marked Below:
[ ] Norman R. Augustine [ ] James F. Gibbons [ ] Vincent N. Marafino [ ] Daniel M. Tellep
[ ] Marcus C. Bennett [ ] Edward E. Hood, Jr. [ ] Eugene F. Murphy [ ] Carlisle A. H. Trost
[ ] Lynne V. Cheney [ ] Caleb B. Hurtt [ ] Allen E. Murray [ ] James R. Ukropina
[ ] Vance D. Coffman [ ] Gwendolyn S. King [ ] Frank Savage [ ] Douglas C. Yearley
[ ] Houston I. Flournoy
2. Appointment of Auditors [ ] FOR [ ] AGAINST [ ] ABSTAIN
FOR YOUR INFORMATION, THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEMS 3
AND 4. THE TRUSTEE MAKES NO RECOMMENDATIONS WITH RESPECT TO YOUR VOTING
DECISIONS.
3. Wage Proposal [ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Director Term Limit Proposal [ ] FOR [ ] AGAINST [ ] ABSTAIN
As a Participant in the Plan I hereby acknowledge receipt of proxy solicitation
materials of the Lockheed Martin Board of Directors relating to the 1997 Annual
Meeting of Stockholders of Lockheed Martin, and I hereby instruct the Trustee to
vote all shares allocated to my account as I have indicated above. If I sign,
date and return this form but do not specifically instruct the Trustee how to
vote, the Trustee will vote my allocated shares in accordance with the
recommendations of the Lockheed Martin Board of Directors.
The submission of this voting instruction form, if properly signed and dated,
revokes ALL of my prior allocated share voting instructions received by the
Trustee.
- ---------------------------------- -----------------------------------
SIGNATURE DATE
PLEASE SIGN, DATE AND MAIL THIS VOTING INSTRUCTION FORM
PROMPTLY IN THE ENVELOPE PROVIDED
I PLAN TO ATTEND THE ANNUAL MEETING [ ] YES [ ] NO
48
CONFIDENTIAL VOTING INSTRUCTIONS TO TRUSTEE
FOR THE ANNUAL MEETING OF STOCKHOLDERS APRIL 24, 1997
THE TRUSTEE SOLICITS THESE VOTING INSTRUCTIONS FROM PARTICIPANTS IN
THE LOCKHEED HOURLY EMPLOYEE SAVINGS AND
STOCK INVESTMENT PLAN - FORT WORTH AND ABILENE DIVISIONS
The undersigned, a Participant in the plan named above, hereby instructs
Bankers Trust, as Trustee under the plan, to vote all equivalent shares of
common stock of Lockheed Martin allocated to the account of the undersigned
under the plan in accordance with the instructions on the reverse
side of this form, and to represent the undersigned at the Annual Meeting of
Stockholders of Lockheed Martin to be held at the Brown Palace Hotel, 321
Seventeenth Street, Denver, Colorado on Thursday, April 24, 1997 at 10:30 a.m.,
local time, and at any adjournments or postponements thereof, and to act in its
discretion upon such other matters as may properly come before the meeting or
any adjournments or postponements thereof.
The submission of this voting instruction form, if properly executed, revokes
all prior voting instructions.
TO ASSURE THAT YOUR VOTING INSTRUCTIONS ARE FOLLOWED, THIS FORM MUST BE
PROPERLY COMPLETED, SIGNED AND RECEIVED BY THE TRUSTEE BY THE CLOSE OF BUSINESS
ON APRIL 21, 1997. IF YOUR VOTING INSTRUCTIONS ARE NOT TIMELY RECEIVED, THE
TRUSTEE WILL VOTE THE EQUIVALENT SHARES ALLOCATED TO YOUR ACCOUNT IN ITS
DISCRETION. YOUR VOTING INSTRUCTIONS ARE CONFIDENTIAL.
EQUIVALENT SHARES:
Please specify your choice on each proposal, date and sign (on the reverse
hereof), fold and return in the enclosed envelope.
49
[X] Please mark your choice like this and sign and date below.
FOR YOUR INFORMATION, THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL
NOMINEES AND "FOR" ITEM 2. THE TRUSTEE MAKES NO RECOMMENDATIONS WITH RESPECT TO
YOUR VOTING DECISIONS.
1. ELECTION OF DIRECTORS
[ ] VOTE FOR ALL Nominees [ ] DO NOT VOTE FOR ANY Nominees
(The Trustee will abstain from voting
if this box is marked)
[ ] VOTE FOR ALL Nominees EXCEPT the Individuals Marked Below:
[ ] Norman R. Augustine [ ] James F. Gibbons [ ] Vincent N. Marafino [ ] Daniel M. Tellep
[ ] Marcus C. Bennett [ ] Edward E. Hood, Jr. [ ] Eugene F. Murphy [ ] Carlisle A. H. Trost
[ ] Lynne V. Cheney [ ] Caleb B. Hurtt [ ] Allen E. Murray [ ] James R. Ukropina
[ ] Vance D. Coffman [ ] Gwendolyn S. King [ ] Frank Savage [ ] Douglas C. Yearley
[ ] Houston I. Flournoy
2. Appointment of Auditors [ ] FOR [ ] AGAINST [ ] ABSTAIN
FOR YOUR INFORMATION, THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEMS 3
AND 4. THE TRUSTEE MAKES NO RECOMMENDATIONS WITH RESPECT TO YOUR VOTING
DECISIONS.
3. Wage Proposal [ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Director Term Limit Proposal [ ] FOR [ ] AGAINST [ ] ABSTAIN
As a Participant in the Plan I hereby acknowledge receipt of proxy solicitation
materials of the Lockheed Martin Board of Directors relating to the 1997 Annual
Meeting of Stockholders of Lockheed Martin and I hereby instruct the Trustee to
vote all equivalent shares allocated to my account as I have indicated above.
If this form is signed and received by the Trustee on time but I do not
indicate my voting preferences, my equivalent shares will be voted in
accordance with the Board of Directors' recommendations.
The submission of this voting instruction form, if properly signed and dated,
revokes ALL of my prior equivalent share voting instructions received by the
Trustee.
- ---------------------------------- -----------------------------------
SIGNATURE DATE
PLEASE SIGN, DATE AND MAIL THIS VOTING INSTRUCTION FORM
PROMPTLY IN THE ENVELOPE PROVIDED
I PLAN TO ATTEND THE ANNUAL MEETING [ ] YES [ ] NO
50
(STATE STREET LOGO) (U.S. TRUST LOGO)
NOTICE TO PARTICIPANTS
IN THE
LOCKHEED MARTIN CORPORATION
SALARIED SAVINGS PLAN AND
LOCKHEED MARTIN CORPORATION
SALARIED SAVINGS PLAN II
March 21, 1997
Dear Plan Participant:
The enclosed proxy materials have been prepared by the Board of Directors
of Lockheed Martin Corporation ("Lockheed Martin") in connection with its
solicitation of proxies for the Annual Meeting of Stockholders to be held on
April 24, 1997.
Also enclosed are two cards to be used for giving voting instructions to
the trustees of the plans. The plain white card is for allocated shares, and the
white card with a blue stripe is for unallocated shares. The recommendations of
the Board of Directors with respect to matters to be voted upon at the Annual
Meeting of Stockholders are printed on these cards. If you want to follow the
Board's recommendations on all matters, you can do so by signing, dating and
returning both cards in the enclosed postage-paid envelope without checking any
of the boxes on the cards. The trustees make no recommendation with respect to
your voting decisions.
All matters to be voted upon at this meeting are extremely important and
are described in the enclosed proxy materials. You should carefully read these
materials and the following explanation of the voting pass-through rules of the
Plans and how to complete and return the cards.
TO BE COUNTED, CARDS MUST BE RECEIVED NO LATER THAN THE CLOSE OF BUSINESS
ON APRIL 21, 1997.
TRUSTEE RESPONSIBILITIES
U.S. Trust has trustee responsibilities with respect to the Lockheed Martin
common stock ("Common Stock") held in the Lockheed Martin Corporation Salaried
Savings Plan ("Savings Plan"). State Street Bank has trustee responsibilities
with respect to Common Stock held under the Lockheed Martin Corporation Salaried
Savings Plan II ("Savings Plan II"). References to the "Trustee" in this notice
are to U.S. Trust with respect to Common Stock held under the Savings Plan and
to State Street Bank with respect to Common Stock held under the Savings Plan
II.
HOW TO COMPLETE YOUR CARDS
The Savings Plan and the Savings Plan II (collectively, the "Plans") hold
shares of Common Stock which have been allocated to individual participants'
accounts. The Savings Plan also holds shares of Common Stock which are not yet
allocated to any individual's account. These instructions explain how you may
give voting instructions to the Trustee with respect to both allocated and
unallocated shares of Common Stock.
Only the Trustee can vote the shares held by the Plans. However, under the
terms of the Plans, each participant is entitled to instruct the Trustee how to
vote (i) all shares allocated to his or her account, and (ii) a proportionate
number of unallocated shares based upon the number of ESOP Match Shares
currently allocated to your account. You may instruct the Trustee to vote for or
against any particular matter or to abstain from voting on that matter. If you
sign, date and return a card but do not check any boxes on the card, the Trustee
will vote the shares in accordance with the Board's recommendations on the card.
1145/7726
51
The following paragraphs explain how the Trustee will vote shares for which you
have not returned a card.
SHARES ALLOCATED TO YOUR ACCOUNT
The plain white card (the card without a blue stripe) represents your
voting instructions to the Trustee for the shares which have been allocated to
your account under the Plans and which will be voted in accordance with your
voting instructions. You should mark the boxes on the card to indicate your
voting instructions to the Trustee, sign and date the card and return it in the
envelope that is provided. If you do not sign, date, and return a card with
respect to shares allocated to your account, the Trustee will vote these shares
in its discretion.
UNALLOCATED SHARES
All participants who have ESOP Match Shares allocated to their accounts are
entitled to instruct the Trustee as to the voting of a proportionate number of
unallocated shares. The card with the blue stripe represents your voting
instructions to the Trustee for the unallocated shares. The unallocated shares
for which you are entitled to provide voting instructions will be approximately
.69 times the number of ESOP Match Shares shown on the card with the blue
stripe. You should mark the boxes on this card to indicate your voting
instructions to the Trustee with respect to unallocated shares, sign and date
the card and return it in the envelope provided.
If timely voting instructions for unallocated shares are not received from
all participants who have ESOP Match Shares allocated to their accounts, the
Trustee will vote the remaining unallocated shares in the same proportions as
those for which timely voting instructions have been received. Accordingly, the
exact number of unallocated shares which will be voted in accordance with your
voting instructions cannot be determined until the Trustee has received all
timely participant instructions.
VOTING DEADLINE
In order to be assured that your voting instructions to the Trustee will be
followed, you must complete, sign, date and return your cards in the enclosed
envelope, which must be received no later than the close of business on APRIL
21, 1997. Please remember to return your cards in the enclosed envelope, rather
than to Lockheed Martin or any other party. The envelope is addressed to First
Chicago, which will act as confidential vote tabulator for the Trustee.
CONFIDENTIALITY
Your voting instructions to the Trustee are strictly confidential. Under no
circumstances will the Trustee, or any of its agents, disclose to Lockheed
Martin or any other party how or if you voted. You should feel free to instruct
the Trustee to vote in the manner you think is best.
QUESTIONS
If you have any questions about your voting rights under the Plan, the
cards, or the confidentiality of your vote, please contact the Trustee between
the hours of 8:30 a.m. and 5:00 p.m. Pacific Time at 1-800-535-3093.
STATE STREET BANK & TRUST COMPANY
Trustee
U.S. TRUST COMPANY OF CALIFORNIA, N.A.
Trustee
52
82 DEVONSHIRE STREET
BOSTON, MASSACHUSETTS 02109
FIDELITY MANAGEMENT TRUST COMPANY
- --------------------------------------------------------------------------------
March 21, 1997
Dear Plan Participant:
Please find enclosed proxy materials related to the Annual Meeting of Lockheed
Martin Stockholders to be held on April 24, 1997. As a participant in one of the
following plans:
Lockheed Martin Aerospace Savings Plan
Lockheed Martin Fairchild Corporation Savings Plan
Lockheed Martin IR & Imaging Systems, Inc. Savings Plan
Lockheed Martin Librascope Retirement Savings Plan
Lockheed Martin Tactical Defense Systems Savings Plan
Lockheed Martin Tactical Systems Master Savings Plan
Lockheed Martin Vought Systems Corporation Capital Accumulation Plan
Sandia Corporation Savings and Income Plan
Sandia Corporation Savings and Security Plan
you are entitled to direct Fidelity Management Trust Company, the plan trustee,
as to the manner in which shares of Lockheed Martin common stock allocated to
your account should be voted. A proxy card is enclosed on which you may instruct
the trustee as to how to vote your allocated shares.
- - YOUR VOTING INSTRUCTIONS TO THE TRUSTEE ARE STRICTLY CONFIDENTIAL. First
Chicago has been engaged to act as confidential vote tabulator for the
trustee. Neither First Chicago nor the trustee will disclose to Lockheed
Martin, its subsidiaries or any other party how or if you voted.
- - All matters to be voted on at the Annual Meeting are extremely important.
You should read the enclosed proxy materials carefully.
- - YOUR INSTRUCTIONS TO THE TRUSTEE MUST BE RECEIVED NO LATER THAN CLOSE OF
BUSINESS ON APRIL 21, 1997. Please use the enclosed self addressed stamped
envelope to return your instructions. If your voting instructions are not
received by First Chicago by close of business on April 21, 1997 the
trustee will vote the equivalent shares allocated to your account in its
discretion.
994
53
(STATE STREET LOGO)
STATE STREET BANK AND TRUST COMPANY
Post Office Box 1389
Boston, Massachusetts 02104-1389
March 21, 1997
Dear Lockheed Martin Plan Participant:
Please find enclosed proxy materials related to the Annual Meeting of Lockheed
Martin Stockholders to be held on April 24, 1997. As a participant in one of the
following plans:
Lockheed Martin Capital Accumulation Plan
Lockheed Martin Corporation Performance Sharing Plan for Puerto Rico
Employees
Lockheed Martin Corporation Savings and Investment Plan for Hourly
Employees
Lockheed Martin Energy Systems Inc. 401(k) Savings Plan for Hourly
Employees
Lockheed Martin Performance Sharing Plan (Union)
Lockheed Martin Energy Systems Savings Plan for Salaried and Hourly
Employees
Lockheed Martin Energy Systems 401(k) Savings Plan for Salaried Employees
you are entitled to direct State Street Bank & Trust Company, the plan trustee,
as to the manner in which shares of Lockheed Martin common stock allocated to
your account should be voted. A proxy card is enclosed on which you may instruct
the trustee as to how to vote your allocated shares.
- - YOUR VOTING INSTRUCTIONS TO THE TRUSTEE ARE STRICTLY CONFIDENTIAL. First
Chicago has been engaged to act as confidential vote tabulator for the
trustee. Neither First Chicago nor the trustee will disclose to Lockheed
Martin or any other party how or if you voted.
- - All matters to be voted on at the Annual Meeting are extremely important.
You should read the enclosed proxy materials carefully.
- - YOUR INSTRUCTIONS TO THE TRUSTEE MUST BE RECEIVED NO LATER THAN CLOSE OF
BUSINESS ON APRIL 21, 1997. Please use the enclosed self addressed stamped
envelope to return your instructions. If your voting instructions are not
received by First Chicago by close of business on April 21, 1997, the
trustee will vote the equivalent shares allocated to your account in the
same manner and proportion as it votes the shares for which timely
instructions were received.
STATE STREET BANK AND TRUST COMPANY, TRUSTEE
7679
54
Post Office Box 7928 (U.S. BANK LOGO)
Boise, Idaho 83707-7928
208-383-7200
March 21, 1997
Dear Plan Participant:
Please find enclosed proxy materials related to the Annual Meeting of Lockheed
Martin Stockholders to be held on April 24 1997. As a participant in the Idaho
National Engineering Laboratory Employee Investment Plan, you are entitled to
direct U.S. Bank of Idaho, the plan trustee, as to the manner in which a portion
of the shares of Lockheed Martin common stock held in the Plan's Lockheed Martin
Stock Fund can be voted. Because no shares have actually been allocated to your
account, the portion to which you are entitled to direct the voting will be
based on the amount of your investment in the Lockheed Martin Stock Fund
relative to other participants in the Plan. A proxy card is enclosed on which
you may instruct the trustee as to how to vote your portion of the shares.
- - YOUR VOTING INSTRUCTIONS TO THE TRUSTEE ARE STRICTLY CONFIDENTIAL. First
Chicago has been engaged to act as confidential vote tabulator for the
trustee. Neither First Chicago nor the trustee will disclose to LMITCO,
Lockheed Martin or any other party how or if you voted.
- - All matters to be voted on at the Annual Meeting are extremely important.
You should read the enclosed proxy materials carefully.
- - YOUR INSTRUCTIONS TO THE TRUSTEE MUST BE RECEIVED NO LATER THAN CLOSE OF
BUSINESS ON APRIL 21, 1997. Please use the enclosed self addressed stamped
envelope to return your instructions. If your voting instructions are not
received by First Chicago by close of business on April 21, 1997, the
trustee will vote your portion in the same ratio as it votes shares for
which timely instructions were received.
Should you have any questions, please feel free to contact Jenni Hogaboom, (208)
383-7169.
U.S. Bank of Idaho, Trustee
7698
55
U.S. TRUST COMPANY
OF CALIFORNIA, N.A.
NOTICE TO PARTICIPANTS
IN THE
LOCKHEED MARTIN
HOURLY EMPLOYEE SAVINGS PLAN PLUS AND
U.S. TRUST LOCKHEED MARTIN SPACE OPERATIONS COMPANY
HOURLY EMPLOYEE INVESTMENT PLAN PLUS
March 21, 1997
Dear Plan Participant:
The enclosed proxy materials have been prepared by the Board of Directors
of Lockheed Martin Corporation ("Lockheed Martin") in connection with its
solicitation of proxies for the Annual Meeting of Stockholders to be held on
April 24, 1997.
Also enclosed is a card to be used for giving voting instructions to
the Trustee. The recommendations of the Board of Directors with respect to
matters to be voted upon at the Annual Meeting of Stockholders are printed on
the card. If you want to follow the Board's recommendations on all matters,
you can do so by signing, dating and returning the card in the enclosed
postage-paid envelope without checking any of the boxes on the card. The
trustees make no recommendation with respect to your voting decisions.
All matters to be voted upon at this meeting are extremely important and
are described in the enclosed proxy materials. You should carefully read these
materials and the following explanation of the voting pass-through rules of the
ESOP in which you participate and the explanation of how to complete and
return the card.
TO BE COUNTED, YOUR CARD MUST BE RECEIVED NO LATER THAN THE CLOSE OF
BUSINESS ON APRIL 21, 1997.
HOW TO COMPLETE YOUR CARD
The Lockheed Martin Hourly Employee Savings Plan Plus and Lockheed Martin
Space Operations Company Hourly Employee Investment Plan Plus (the "ESOPs")
hold shares of Lockheed Martin common stock. These instructions explain how
you may give voting instructions to the Trustee with respect to shares of
common stock allocated to your ESOP account.
YOUR ROLE AS A NAMED FIDUCIARY
Only the Trustee can vote the shares held by the ESOPs. However, under the
terms of each ESOP, each participant is designated as a "Named Fiduciary" for
voting purposes and thus you are entitled to instruct the Trustee how to vote
all shares allocated to your account. By signing, dating and returning a card
you are accepting your designation under the ESOP as a "Named Fiduciary", and
you should therefore exercise your voting rights prudently and in the interest
of all ESOP participants.
You may instruct the Trustee to vote for or against any particular matter
or to abstain from voting on that matter. If you sign, date and return the
card but do not check any boxes on the card, the Trustee will vote the shares
in accordance with the Board's recommendations on the card.
56
You should sign, date and return a card only if you wish to act as "Named
Fiduciary" for the shares allocated to your account. The ESOPs provide that if
you do not give any voting instructions with respect to shares allocated to
your account, the Trustee will vote these shares by exercising its own
judgment.
VOTING DEADLINE
In order to be assured that your voting instructions to the Trustee will be
followed, you must complete, sign, date and return your card in the enclosed
envelope to be received no later than the close of business on APRIL 21, 1997.
Please remember to return your card in the enclosed envelope, rather
than to Lockheed Martin or any other party.
CONFIDENTIALITY
Your voting instructions to the Trustee are strictly confidential. Under no
circumstances will the Trustee, or any of its agents, disclose to Lockheed
Martin or any other party how or if you voted. You should feel free to instruct
the Trustee to vote in the manner you think is best.
QUESTIONS
If you have any questions about your voting rights under the ESOP in which
you participate, the card, or the confidentiality of your vote, please contact
the Trustee between the hours of 8:30 a.m. and 5:00 p.m. Pacific Time at
1-800-535-3093.
U.S. TRUST COMPANY OF CALIFORNIA, N.A.
Trustee
57
[BANKERS TRUST COMPANY LETTERHEAD]
March 21, 1997
Dear Lockheed Martin Plan Participant:
Please find enclosed proxy materials related to the Annual Meeting of
Lockheed Martin Stockholders to be held on April 24 1997. As a participant
in the Lockheed Martin Hourly Employees Savings and Stock Investment Plan
- Forth Worth and Abilene Divisions, you are entitled to direct Bankers
Trust Company, the plan trustee, as to the manner in which shares of
Lockheed Martin common stock allocated to your account should be voted. A
proxy card is enclosed on which you may instruct the trustee as to how to
vote your allocated shares.
- - YOUR VOTING INSTRUCTIONS TO THE TRUSTEE ARE STRICTLY CONFIDENTIAL.
The trustee will not disclose to Lockheed Martin or any other party how
or if you voted.
- - All matters to be voted on at the Annual Meeting are extremely important.
You should read the enclosed proxy materials carefully.
- - YOUR INSTRUCTIONS TO THE TRUSTEE MUST BE RECEIVED NO LATER THAN CLOSE OF
BUSINESS ON APRIL 21, 1997. Please use the enclosed self addressed
stamped envelope to return your instructions. If your voting instructions
are not received by the trustee by close of business on April 21, 1997,
the trustee will vote the equivalent shares allocated to your account in
its discretion.
If you have any questions regarding the enclosed material, please contact
Nellie J. Myers at Bankers Trust Company at (615)835-3125.
Sincerely,
Bankers Trust Company, Trustee
