As filed with the Securities and Exchange Commission on March 15, 1995.
Registration No. 33-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------
LOCKHEED MARTIN CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 52-1893632
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6801 Rockledge Drive
Bethesda, Maryland 20817
(Address of principal executive offices)
--------------------
Lockheed Salaried Employee Savings Plan Plus
Lockheed Hourly Employee Savings Plan Plus
Lockheed Space Operations Company
Hourly Employee Investment Plan Plus
(Full title of the plan)
--------------------
Stephen M. Piper, Esquire
Assistant General Counsel
Lockheed Martin Corporation
6801 Rockledge Drive
Bethesda, Maryland 20817
(301) 897-6000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------
Proposed Proposed
maximum maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered(*) per share(**) offering price(**) registration fee(**)
- ---------------------------------------------------------------------------------------------------
Common Stock, par
value $1.00 per share... 26,000,000 $26.52 $689,520,000 $237,767.19
- ---------------------------------------------------------------------------------------------------
(*) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of plan
interests to be offered or sold pursuant to the plan to which this
Registration Statement relates.
(**) At the time of the filing of this Registration Statement on Form S-8, there
is no market for the Registrant's securities to be offered. Accordingly,
the fee has been computed, pursuant to Rule 457(h)(1) and guidance provided
by the Office of Chief Counsel, based on the book value of the securities
to be offered as of December 31, 1994.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents filed by the Registrant, Martin Marietta
Corporation, Lockheed Corporation or the Plans with the Securities and Exchange
Commission (the "Commission") are incorporated by reference and made a part
hereof:
(a) The Registrant's Joint Proxy Statement/Prospectus filed pursuant
to Registration Statement No. 33-57645 on Form S-4 filed with the Commission on
February 9, 1995;
(b) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-B filed with the Commission
pursuant to Section 12 of the Securities Exchange Act of 1934 (the "Exchange
Act") (as amended on Form 8-B/A filed with the Commission on March 9, 1995), and
any amendment or report filed for the purpose of updating such description; and
(c) Martin Marietta Corporation's Current Report on Form 8-K filed
with the Commission on February 13, 1995;
(d) Martin Marietta Corporation's Current Report on Form 8-K filed
with the Commission on February 17, 1995;
(e) Lockheed Corporation's Current Report on Form 8-K filed with the
Commission on February 21, 1995;
(f) The Plans' Annual Reports on Form 11-K filed with the Commission
as Exhibits 99.1, 99.2 and 99.3, respectively, to Lockheed Corporation's Annual
Report on Form 10-K/A dated June 28, 1994; and
(g) The Registrant's Current Report on Form 8-K filed with the
Commission on March 15, 1995.
All documents subsequently filed by the Registrant, Martin Marietta
Corporation, Lockheed Corporation or the Plans pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of the filing of such documents.
Item 4. Description of Securities.
-------------------------
Not Applicable
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Item 5. Interests of Named Experts and Counsel.
--------------------------------------
The Opinion of Counsel as to the legality of the securities being issued
(constituting Exhibit 5) has been rendered by counsel who is a full-time
employee of the Registrant. Counsel rendering such opinion is not eligible to
participate in the Plans.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
The Maryland General Corporation Law authorizes Maryland corporations to
limit the liability of directors and officers to the corporation or its
stockholders for money damages, except (a) to the extent that it is proved that
the person actually received an improper benefit or profit in money, property or
services, for the amount of the benefit or profit in money, property or services
actually received, (b) to the extent that a judgment or other final adjudication
adverse to the person is entered in a proceeding based on a finding that the
person's action or failure to act was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated in the proceeding
or (c) in respect of certain other actions not applicable to the Registrant.
Under the Maryland General Corporation Law, unless limited by charter,
indemnification is mandatory if a director or an officer has been successful on
the merits or otherwise in the defense of any proceeding by reason of his or her
service as a director unless such indemnification is not otherwise permitted as
described in the following sentence. Indemnification is permissive unless it is
established that (a) the act or omission of the director was material to the
matter giving rise to the proceeding and was committed in bad faith or was the
result of active and deliberate dishonesty, (b) the director actually received
an improper personal benefit in money, property or services or (c) in the case
of any criminal proceeding, the director had reasonable cause to believe his or
her act or omission was unlawful. In addition to the foregoing, a court of
appropriate jurisdiction may under certain circumstances order indemnification
if it determines that the director or officer is fairly and reasonably entitled
to indemnification in view of all the relevant circumstances, whether or not the
director or officer has met the standards of conduct set forth in the preceding
sentence or has been adjudged liable on the basis that a personal benefit was
improperly received in a proceeding charging improper personal benefit to the
director or officer. If the proceeding was an action by or in the right of the
corporation or involved a determination that the director or officer received an
improper personal benefit, however, no indemnification may be made if the
individual is adjudged liable to the corporation, except to the extent of
expenses approved by a court of competent jurisdiction.
Article XI of the charter of the Registrant limits the liability of
directors and officers to the fullest extent permitted by the Maryland General
Corporation Law. Article XI of the charter of the Registrant also authorizes
the Registrant to adopt by-laws
-2-
or resolutions to provide for the indemnification of directors and officers.
Article VI of the By-laws of the Registrant provides for the indemnification of
the Registrant's directors and officers to the fullest extent permitted by the
Maryland General Corporation Law. In addition, the Registrant's directors and
officers are covered by certain insurance policies maintained by the Registrant.
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not Applicable
Item 8. Exhibits.
--------
4-A. Lockheed Salaried Employee Savings Plan Plus, as amended and restated
through March 1, 1995.
4-B. Lockheed Hourly Employee Savings Plan Plus, as amended and restated
through March 1, 1995.
4-C. Lockheed Space Operations Company Hourly Employee Investment Plan
Plus, as amended and restated through March 1, 1995.
4-D. Amended and Restated Trust Agreement dated October 1, 1983, between
Lockheed Corporation and Bankers Trust Company (included as an exhibit
to Registration Statement on Form S-8, No. 33-13205 and incorporated
hereby by reference).
4-E. Amendment No. 1, dated as of March 1, 1987, to Amended and Restated
Trust Agreement, between Lockheed Corporation and Bankers Trust
Company (included as an exhibit to Registration Statement on Form S-8,
No. 33-13205 and incorporated herein by reference).
4-F. Amended and Restated Trust Agreement dated as of January 1, 1984,
among Lockheed Corporation, Lockheed Shipbuilding and Construction
Company, Lockheed Space Operations Company and Bankers Trust Company
(included as an exhibit to Registration Statement on Form S-8, No. 33-
13205 and incorporated herein by reference).
4-G. Amendment No. 1, dated as of March 1, 1987, to Trust Agreement among
Lockheed Corporation, Lockheed Space Operations Company and Bankers
Trust Company (included as an exhibit to Registration Statement on
Form S-8, No. 33-13205 and incorporated herein by reference).
4-H. Amendment No. 2, dated as of August 1, 1987, to Amended and Restated
Trust Agreement, between Lockheed Corporation and Bankers Trust
Company (included as an exhibit to Post-Effective Amendment No. 1 to
Registration
-3-
Statement on Form S-8, No. 33-13205 and incorporated herein by
reference).
4-I. Amendment No. 3, dated as of December 5, 1988, to Amended and Restated
Trust Agreement, between Lockheed Corporation and Bankers Trust
Company (included as an exhibit to Post-Effective Amendment No. 1 to
Registration Statement on Form S-8, No. 33-13205 and incorporated
herein by reference).
4-J. Amendment No. 4, dated as of March 27, 1989, to Amended and Restated
Trust Agreement, between Lockheed Corporation and Bankers Trust
Company (included as an exhibit to Post-Effective Amendment No. 1 to
Registration Statement on Form S-8, No. 33-13205 and incorporated
herein by reference).
4-K. Lockheed (ESOP Feature) Trust Agreement effective March 27, 1989,
between Lockheed Corporation and U.S. Trust Company of California,
N.A. (included as an exhibit to Post-Effective Amendment No. 1 to
Registration Statement on Form S-8, No. 33-13205 and incorporated
herein by reference).
4-L. Amendment No. 2, dated as of December 5, 1988, to Amended and Restated
Trust Agreement, among Lockheed Corporation, Lockheed Space Operations
Company and Bankers Trust Company (included as an exhibit to
Registration Statement on Form S-8, No. 33-34758 and incorporated
herein by reference).
4-M. Amendment 1989-1, dated as of December 20, 1989, to Lockheed (ESOP
Feature) Trust Agreement, between Lockheed Corporation and U.S. Trust
Company of California, N.A. (included as an exhibit to Registration
Statement on Form S-8, No. 33-34758 and incorporated herein by
reference).
4-N. Lockheed (Hourly ESOP) Trust Agreement, dated May 9, 1990, among
Lockheed Corporation, Lockheed Space Operations Company and U.S. Trust
Company of California, N.A. (included as an exhibit to Registration
Statement on Form S-8, No. 33-34758 and incorporated herein by
reference).
4-O. Amendment No. 3, dated as of May 8, 1990, to Amended and Restated
Trust Agreement among Lockheed Corporation, Lockheed Space Operations
Company and Bankers Trust Company (included as an exhibit to
Registration Statement on Form S-8, No. 33-34758 and incorporated
herein by reference).
4-P. Second Amendment, dated as of February 25, 1991, to Lockheed (ESOP
Feature) Trust Agreement, between Lockheed
-4-
Corporation and U.S. Trust Company of California, N.A. (included as an
exhibit to Post-Effective Amendment No. 1 to Registration Statement on
Form S-8, No. 33-34758 and incorporated herein by reference).
4-Q. Lockheed (ESOP Feature) Trust Agreement - Amendment 1995-I.
5. Opinion of Stephen M. Piper, Esquire
23-A. Consent of Ernst & Young LLP (Washington, D.C.).
23-B. Consent of Ernst & Young LLP (Los Angeles, CA).
23-C. Consent of KPMG Peat Marwick LLP.
23-D. Consent of Arthur Andersen LLP.
23-E. Consent of Stephen M. Piper, Esquire (contained in Exhibit 5 hereof).
25. Powers of Attorney (included as an exhibit to Registration Statement
on Form S-8 relating to Lockheed Martin Corporation Directors Deferred
Stock Plan filed with the Commission on March 15, 1994 and
incorporated herein by reference).
The Registrant hereby undertakes that the Registrant will submit or has
submitted the Plans and any amendment thereto to the Internal Revenue Service
("IRS") in a timely manner and has made or will make all changes required by the
IRS in order to qualify the Plans.
Item 9. Undertakings.
------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the
-5-
registration statement or any material change to such information in the
registration statement;
Provided, however, that subparagraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
-6-
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the County of Montgomery, State of Maryland.
LOCKHEED MARTIN CORPORATION
Date: March 15, 1995 By: /s/ Frank H. Menaker, Jr.
---------------------
Frank H. Menaker, Jr.
Vice President and
General Counsel
Pursuant to the requirements of the Securities Act of 1933, the trustees
(or other persons who administer the Plans) have duly caused this registration
statement to be signed on their behalfs by the undersigned, thereunto duly
authorized, in the City of Calabasas, State of California.
Date: March 15, 1995 LOCKHEED SALARIED EMPLOYEE
SAVINGS PLAN PLUS
By: /s/ Walter E. Skowronski
--------------------
Walter E. Skowronski
Chairman, Savings Plan
Committee
Date: March 15, 1995 LOCKHEED HOURLY EMPLOYEE
SAVINGS PLAN PLUS
By: /s/ Walter E. Skowronski
--------------------
Walter E. Skowronski
Chairman, Savings Plan
Committee
Date: March 15, 1995 LOCKHEED SPACE OPERATIONS
COMPANY HOURLY EMPLOYEE
INVESTMENT PLAN PLUS
By: /s/ Walter E. Skowronski
--------------------
Walter E. Skowronski
Chairman, Savings
Plan Committee
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Daniel M. Tellep Chairman of the March 15, 1995
---------------- Board and Chief
Daniel M. Tellep* Executive Officer
and Director
/s/ Marcus C. Bennett Senior Vice March 15, 1995
----------------- President, Chief
Marcus C. Bennett* Financial Officer
and Director
/s/ Robert E. Rulon Controller and Chief March 15, 1995
--------------- Accounting Officer
Robert E. Rulon*
/s/ Norman R. Augustine Director March 15, 1995
-------------------
Norman R. Augustine*
/s/ Lynne V. Cheney Director March 15, 1995
---------------
Lynne V. Cheney*
/s/ Edwin I. Colodny Director March 15, 1995
----------------
Edwin I. Colodny*
/s/ Lodwrick M. Cook Director March 15, 1995
----------------
Lodwrick M. Cook*
/s/ James L. Everett, III Director March 15, 1995
---------------------
James L. Everett, III*
/s/ Houston I. Flournoy Director March 15, 1995
-------------------
Houston I. Flournoy*
Signature Title Date
--------- ----- ----
/s/ James F. Gibbons Director March 15, 1995
----------------
James F. Gibbons*
/s/ Edward E. Hood, Jr. Director March 15, 1995
-------------------
Edward E. Hood, Jr.*
/s/ Caleb B. Hurtt Director March 15, 1995
-----------------
Caleb B. Hurtt*
/s/ Gwendolyn S. King Director March 15, 1995
-----------------
Gwendolyn S. King*
/s/ Lawrence O. Kitchen Director March 15, 1995
-------------------
Lawrence O. Kitchen*
/s/ Gordon S. Macklin Director March 15, 1995
-----------------
Gordon S. Macklin*
/s/ Vincent N. Marafino Director March 15, 1995
-------------------
Vincent N. Marafino*
/s/ Eugene F. Murphy Director March 15, 1995
----------------
Eugene F. Murphy*
/s/ Allen E. Murray Director March 15, 1995
---------------
Allen E. Murray*
/s/ Frank Savage Director March 15, 1995
------------
Frank Savage*
/s/ Carlisle A.H. Trost Director March 15, 1995
-------------------
Carlisle A.H. Trost*
/s/ James R. Ukropina Director March 15, 1995
-----------------
James R. Ukropina*
*By: /s/ Stephen M. Piper March 15, 1995
--------------------
(Stephen M. Piper, Attorney-in-fact**)
- --------------------
**By authority of Powers of Attorney filed with this Registration Statement on
Form S-8
EXHIBIT INDEX
Exhibit Page
Number Description No.
------ ----------- ----
4-A. Lockheed Salaried Employee Savings Plan
Plus, as amended and restated through
March 1, 1995.
4-B. Lockheed Hourly Employee Savings Plan
Plus, as amended and restated through
March 1, 1995.
4-C. Lockheed Space Operations Company Hourly
Employee Investment Plan Plus, as amended
and restated through March 1, 1995.
4-D. Amended and Restated Trust Agreement
dated October 1, 1983, between Lockheed
Corporation and Bankers Trust Company
(included as an exhibit to Registration
Statement on Form S-8, No. 33-13205
and incorporated hereby by reference).
4-E. Amendment No. 1, dated as of March 1,
1987, to Amended and Restated Trust
Agreement, between Lockheed Corporation
and Bankers Trust Company (included
as an exhibit to Registration Statement
on Form S-8, No. 33-13205 and incorporated
herein by reference).
4-F. Amended and Restated Trust Agreement
dated as of January 1, 1984, among
Lockheed Corporation, Lockheed
Shipbuilding and Construction
Company, Lockheed Space Operations
Company and Bankers Trust Company
(included as an exhibit to Registration
Statement on Form S-8, No. 33-13205
and incorporated herein by reference).
4-G. Amendment No. 1, dated as of March 1,
1987, to Trust Agreement among Lockheed
Corporation, Lockheed Space Operations
Company and Bankers Trust Company (included
as an exhibit to Registration Statement
on Form S-8, No. 33-13205 and incorporated
herein by reference).
4-H. Amendment No. 2, dated as of August 1,
1987, to Amended and Restated Trust
Agreement, between Lockheed Corporation
and Bankers Trust Company (included as
an exhibit to Post-Effective Amendment
No. 1 to Registration Statement on
Form S-8, No. 33-13205 and incorporated
herein by reference).
4-I. Amendment No. 3, dated as of December 5,
1988, to Amended and Restated Trust
Agreement, between Lockheed Corporation
and Bankers Trust Company (included as
an exhibit to Post-Effective Amendment
No. 1 to Registration Statement on
Form S-8, No. 33-13205 and incorporated
herein by reference).
4-J. Amendment No. 4, dated as of March 27,
1989, to Amended and Restated Trust
Agreement, between Lockheed Corporation
and Bankers Trust Company (included as
an exhibit to Post-Effective Amendment
No. 1 to Registration Statement on
Form S-8, No. 33-13205 and incorporated
herein by reference).
4-K. Lockheed (ESOP Feature) Trust Agreement
effective March 27, 1989, between Lockheed
Corporation and U.S. Trust Company of
California, N.A. (included as an exhibit to
Post-Effective Amendment No. 1 to
Registration Statement on Form S-8,
No. 33-13205 and incorporated herein
by reference).
4-L. Amendment No. 2, dated as of December 5,
1988, to Amended and Restated Trust
Agreement, among Lockheed Corporation,
Lockheed Space Operations Company and
Bankers Trust Company (included as an
exhibit to Registration Statement on
Form S-8, No. 33-34758 and incorporated
herein by reference).
4-M. Amendment 1989-1, dated as of December 20,
1989, to Lockheed (ESOP Feature) Trust
Agreement, between Lockheed Corporation
and U.S. Trust Company of California,
N.A. (included as an exhibit to
Registration Statement on Form S-8,
No. 33-34758 and incorporated herein
by reference).
4-N. Lockheed (Hourly ESOP) Trust Agreement,
dated May 9, 1990, among Lockheed
Corporation, Lockheed Space Operations
Company and U.S. Trust Company of
California, N.A. (included as an exhibit
to Registration Statement on Form S-8,
No. 33-34758 and incorporated herein
by reference).
4-O. Amendment No. 3, dated as of May 8, 1990,
to Amended and Restated Trust Agreement
among Lockheed Corporation, Lockheed
Space Operations Company and Bankers
Trust Company (included as an exhibit
to Registration Statement on Form S-8,
No. 33-34758 and incorporated herein
by reference).
4-P. Second Amendment, dated as of February 25,
1991, to Lockheed (ESOP Feature) Trust
Agreement, between Lockheed Corporation
and U.S. Trust Company of California,
N.A. (included as an exhibit to
Post-Effective Amendment No. 1 to
Registration Statement on Form S-8,
No. 33-34758 and incorporated herein
by reference).
4-Q. Lockheed (ESOP Feature) Trust Agreement -
Amendment 1995-I.
5. Opinion of Stephen M. Piper, Esquire
23-A. Consent of Ernst & Young LLP (Washington,
D.C.).
23-B. Consent of Ernst & Young LLP (Los Angeles,
CA).
23-C. Consent of KPMG Peat Marwick LLP.
23-D. Consent of Arthur Andersen LLP.
23-E. Consent of Stephen M. Piper, Esquire
(contained in Exhibit 5 hereof).
25. Powers of Attorney (included as an exhibit to
Registration Statement on Form S-8 relating to
Lockheed Martin Corporation Directors Deferred
Stock Plan filed with the Commission on
March 15, 1994 and incorporated herein by
reference).
EXHIBIT 4-A
LOCKHEED SALARIED EMPLOYEE SAVINGS PLAN PLUS
(as Amended and Restated Effective March 1, 1995)
Table of Contents
-----------------
Section Title Page
- ------- ----- ----
1 DEFINITIONS 3
1.01 Acquisition Loan 3
1.02 After-Tax Contributions 3
1.03 Board of Directors 3
1.04 Bond Fund 3
1.05 Break in Service 3
1.06 Code 4
1.07 Committee 4
1.08 Corporation 5
1.08A Directable ESOP Contribution 5
1.09 Elective Deferral 5
1.10 Eligible Employee 5
1.11 Employee 5
1.12 ERISA 7
1.13 ESOP Allocation Period 7
1.14 ESOP Contributions 7
1.15 ESOP Feature 7
1.16 ESOP Fund 7
1.17 ESOP Match Stock 8
1.18 ESOP Trustee 8
1.19 Filing With The Committee 8
1.20 Hour of Service 8
1.21 Leveraged Shares 9
1.22 Loan Suspense Account 10
1.23 Lockheed Martin Stock Fund 10
1.24 Month 11
1.25 Participant 11
1.26 Plan 12
1.27 Plan Year 12
1.28 Profit Sharing Trustee 13
1.29 Quarter 13
1.30 Securities Fund 13
1.31 Service Time 13
1.32 Shares 14
1.33 STIF Fund 14
1.34 Stock 14
1.35 Termination of Employment and
Terminated Employment 15
1.36 Thrift Stock 15
1.37 Trustee 15
1.38 Valuation Date 16
1.39 Weekly Rate of Compensation 16
1.40 Year of Service 16
1.41 Sanders Associates, Inc. 17
i
Table of Contents
-----------------
Section Title Page
- ------- ----- ----
2 ELIGIBILITY FOR PARTICIPATION 18
2.01 Voluntary Participation 18
2.02 18
(a) - Eligibility Rule for New Employee 18
(b) - Eligibility Rule for Rehired Eligible
Employee or Participant 18
(c) - Eligibility Rule for Non-Eligible
Employees Rehired Before a Break in Service 18
(d) - General Eligibility Rule for Non-
Eligible Employees Rehired After a
Break in Service 19
(e) - Special Eligibility Rules for Non-
Eligible Employee Rehired After a
Break in Service 19
(f) - Eligibility Rule for Employees
of Sanders Associates, Inc. on
June 26, 1989 21
2.03 Elective Deferral not permitted if not an Employee 22
3 EMPLOYEE PARTICIPATION 23
3.01 How Employee becomes a Participant 23
3.02 Percentage 23
3.03 Revocation of Specification 24
3.04 Annual Specification Election 25
3.05 April Specification Change Period 26
3.06 Annual Reallocation 28
3.07 Discrimination Test 30
3.08 Reduction of Elective Deferral 31
3.09 Limitation on Deferral Percentage 32
3.10 Limitation upon Rehire during Plan Year 33
3.11 Suspension on Wage Attachment 33
3.12 Annual Deferral Limitation 34
ii
Table of Contents
-----------------
Section Title Page
- ------- ----- ----
4 CORPORATION MATCHING CONTRIBUTIONS 36
4.01 Corporation Matching Contribution 36
4.02 Investment of Corporation Matching
Contribution 38
4.03 Forfeiture of Company Matching
Contribution 39
4.04 Liability for Payment of Benefits 39
4.05 Money Purchase Component 40
4A ESOP PROVISIONS 41
4A.01 Investment of Corporation Matching
Contributions 41
4A.02 Acquisition Loans 42
4A.03 Release of Stock from Loan Suspense
Account 44
4A.04 Put Option 48
4A.05 Diversification Election 52
4A.06 Dividends on Allocated Shares 54
4A.07 Valuation of Stock 55
4A.08 Tender for Stock 55
4A.09 Voting of Stock 62
4A.10 Initial Qualification of ESOP Feature 65
4A.11 Termination of ESOP Feature 66
5 PARTICIPANT'S ACCOUNT 67
5.01 Separate Participant's Account 67
5.02 "Annual Addition" Limits 67
(a) - "Annual Addition" 67
(b) - "Maximum Permissible Amount" 68
(c) - "Earnings" 68
(d) - "Defined Contribution Plan Fraction" 71
5.03 Contribution 77
5.04 Transfer of Assets 77
6 VALUATION OF PARTICIPANT'S ACCOUNT 79
6.01 Unit Valuation 79
6.02 Share Allocation 80
iii
Table of Contents
-----------------
Section Title Page
- ------- ----- ----
7 TRUST FUND AND TRUSTEE 81
7.01 Description of Trust Fund 81
7.02 Trustee's Authority 81
7.03 Non-guarantee of Investment Value 82
7.04 Trustee Allocation of Contributions 82
7.05 Payment of Expenses 82
8 BENEFITS 83
8.01 Fully Vested Termination 83
8.02 Vesting Schedule 85
8.03 Refund of Elective Deferrals Between
Valuation Date and Termination Date 89
8.04 Rehire in the Same Plan Year 90
8.05 Installment Payment Election 92
8.06 Commencement of Distributions 94
8.07 Lockheed Martin Stock Fund Distribution 97
8.08 Required Distributions Prior to Termination 98
8.09 Annuity Payments 104
(a)(1) - Money Purchase Account Paid as Annuity 104
(2) - Election to Waiver Annuity Payments 105
(3) - Spousal Consent 106
(4) - Election Period 107
(5) - Notice of Election Rights 107
(b) - Effect of Waiver 107
9 PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS 109
9.01 Withdrawals other than Hardship 109
9.02 Proportion of Units and Shares Deducted Upon
Withdrawal 112
9.03 Hardship Withdrawal 113
9.04 Participant Account Loans 122
10 BENEFICIARY 130
10.01 Designation of Beneficiary 130
10.02 Death Benefit Beneficiary 130
(a) - Pre-retirement Survivor Annuity 130
(b) - Waiver of Pre-retirement Survivor Annuity 131
(c) - Election Period 132
(d) - Notice of Election Rights 132
(e) - Immediate Distribution of Money Purchase
Account to Spouse 132
10.03 Designation of Beneficiary 133
iv
Table of Contents
-----------------
Section Title Page
- ------- ----- ----
11 NAMED FIDUCIARIES AND ALLOCATION OF 135
RESPONSIBILITIES
11.01 Named Fiduciaries 135
(a) - The Trustee 135
(b) - Lockheed Corporation as Plan Sponsor 135
(c) - The Committee as Administrator of the Plan 135
(d) - The Participant 136
11.02 Allocation of Responsibilities 136
11.03 Shared Responsibility of Fiduciary 140
11.04 Fiduciary Assistance 141
11.05 Indemnification of the Committee 141
12 GENERAL PROVISIONS 142
12.01 Corporation's Rights 142
12.02 Assignment or Pledging of Plan Benefits 142
12.03 Payment of Benefits to a Minor 143
12.04 Responsibility for Current Address 143
12.05 Claim for Benefits 144
12.06 Merger or Consolidation of Plan 145
12.07 Forfeiture of Undeliverable Benefit 145
12.08 Qualified Domestic Relations Order 146
12.09 Rollover Contributions 149
13 AMENDMENT OR TERMINATION OF PLAN 150
13.01 Lockheed's Right to Amend Plan 150
13.02 Termination of Plan - Benefits 151
13.03 Partial Termination of the Plan 152
14 FLEXIBLE CREDIT CONTRIBUTIONS 153
14.01 Contribution by CADAM Employees of
"Flexible Credit Balance" 153
14.02 Investment Specification 153
14.03 Contributions not recoverable by
Corporation 154
14.04 Liability for Payment of Benefits 154
14.05 Employee of CADAM Becomes Participant 154
v
Table of Contents
-----------------
Section Title Page
- ------- ----- ----
15 TOP HEAVY RULES 156
15.01 Special Rules for Top Heavy Plan 156
16 SECTION 401(h) ARRANGEMENT 164
16.01 General 164
16.02 Relationship of this Plan to the Health
Care Plan 164
16.03 The Health Care Fund 166
16.04 Funding of Health Care Benefits 167
16.05 Designation of Purpose and Deduction of
Contributions 169
16.06 Forfeitures 170
16.07 Elimination or Reduction of Benefits 170
16.08 Termination of Health Care Plan or
Health Care Fund 171
16.09 Discrimination 172
16.10 Separate Accounts for Certain Employees 172
16.11 Amendment/Termination 173
16.12 Inconsistent Plan Provisions 174
16.13 Definitions 174
(a) - Health Care Fund 174
(b) - Health Care Plan 175
(c) - Health Care Plan Cost 175
(d) - Life Insurance Cost 175
(e) - Pension Cost 175
(f) - Retired Participant 175
(g) - Salary Board 176
17 EMPLOYEES OF LOCKHEED AEROMOD CENTER, INC. 177
17.01 Lockheed Aeromod Center, Inc. (LACI) 177
17.02 Eligibility for Participation 177
(a) - Employees of January 1, 1989 177
(b) - Eligibility Rule for New Employee 177
(c) - Eligibility Rule for Rehired Eligible
Employee or Participant 177
(d) - Eligibility Rule for Non-Eligible
Employee Rehired Before a Break in
Service 178
vi
Table of Contents
-----------------
Section Title Page
- ------- ----- ----
(e) - General Eligibility Rule for Non-Eligible
Employees Hired After a Break in Service 178
(f) - Special Eligibility Rules for Non-
Eligible Employees Rehired After a Break
in Service 179
(g) - "Ninety Days of Service" 180
17.03 Percentage 180
17.04 Corporation Matching Contributions 181
(a) - Basic Corporation Matching Contributions 181
(b) - Additional Corporation Matching
Contributions 181
17.05 Participant's Account 184
17.06 Ineligibility for ESOP Fund 186
18 EFFECTIVE DATE OF AMENDMENT AND
RESTATEMENT OF THE PLAN 187
18.01 Amendment and Restatement of Plan 187
vii
LOCKHEED SALARIED EMPLOYEE
SAVINGS PLAN PLUS
The Lockheed Salaried Employee Saving Plan Plus as amended and
restated effective March 1, 1995, consists of three components. The first
component is a profit sharing plan under Section 401(a) of the Code, which
includes a qualified cash or deferred arrangement as defined in Section 401(k)
of the Code. The second component is an ESOP Feature, which is both a stock
bonus plan and an employee stock ownership plan intended to qualify under
Sections 401(a) and 4975(e)(7) of the Code, and as such is designed to invest
primarily in Stock. The second component also includes a cash or deferred
arrangement as defined in Section 401(k) of the Code. The third component
effective as of December 31, 1990 is a combination money purchase pension plan
and employee stock ownership plan, designed to invest primarily in Stock and
intended to qualify under Section 401(a) and 4975(e)(7) of the Code. The money
purchase pension component contains an arrangement which is intended to qualify
under Code Section 401(h), and which is not part of an employee stock ownership
plan. All contributions by the Corporation to the Plan may be made without
regard to the current or accumulated profits of the Corporation or any of its
subsidiaries or affiliates.
1
Except as provided otherwise with respect to Employees of Lockheed
Aeromod Center, Inc. under Section 17, all Elective Deferrals and After-Tax
Contributions and earnings thereon that are invested in Stock shall be in the
stock bonus plan component; all such amounts not invested in Stock shall be
invested in the profit sharing plan component. All Corporation Matching
Contributions to the Plan on and after December 31, 1990 (except as provided
otherwise with respect to Employees of Lockheed Aeromod Center, Inc. under
Section 17) shall be made to the money purchase pension component as provided in
Section 4.05.
2
SECTION 1
---------
DEFINITIONS
-----------
SECTION 1.01 - "Acquisition Loan" shall mean a loan or other
------------ ----------------
extension of credit described in Code Section 4975(d)(3) which is used to
finance the purchase of Stock by the Trustee.
SECTION 1.02 - "After-Tax Contributions" shall mean any after-tax
------------ -----------------------
contributions a Participant makes to the Plan.
SECTION 1.03 - "Board of Directors" shall mean the Board of Directors
------------ ------------------
of Lockheed Corporation.
SECTION 1.04 - "Bond Fund" shall mean the fund which the Trustee shall
------------ ---------
invest exclusively in obligations, including notes, issued or fully guaranteed
by the United States of America and in savings bank deposits to the extent such
deposits are guaranteed by an agency of the United States.
SECTION 1.05 - "Break in Service" shall mean a Termination of
------------ ----------------
Employment followed by the failure to complete 500 Hours of Service. A Break in
Service shall be computed with reference to the twelve consecutive month period
beginning on the date (and anniversaries thereof) an Employee is first entitled
to be credited with an Hour of Service after his date of hire (or rehire after a
Break in Service) by the Corporation. If an Employee is absent from
3
DEFINITIONS
- -----------
work because of such individual's pregnancy, the birth of a child, placement of
an adopted child or caring for an adopted or natural child following birth or
placement, the individual shall not be treated as having incurred a Break in
Service in the Plan Year in which the absence begins, or in the Plan Year in
which the absence ends, if the individual would not otherwise have suffered a
Break in Service during that Plan Year. No such credit shall be given unless a
Participant submits a written request by Filing With The Committee which
establishes valid reasons for the absence, as determined by the Committee.
Except to the extent that a maternity or paternity absence constitutes an
authorized leave of absence from the Corporation under applicable personnel
policies, an Employee who is absent from work for reasons of maternity or
paternity shall be deemed to have terminated employment for all purposes of this
Plan other than the special rules in this Section.
SECTION 1.06 - "Code" shall mean the Internal Revenue Code of 1986, as
------------ ----
now in effect or as hereafter amended. All citations to sections of the Code
are to such sections as they may from time to time be amended or renumbered.
SECTION 1.07 - "Committee" shall mean the Committee referred to in
------------ ---------
Section 11.01.
4
DEFINITIONS
- -----------
SECTION 1.08 - "Corporation" shall mean Lockheed Corporation and any
------------ -----------
subsidiary or affiliate thereof, if, and to the extent that, the Board of
Directors shall by resolution so provide.
SECTION 1.08A - "Directable ESOP Contribution" shall mean an ESOP
------------- ----------------------------
Contribution which the Board of Directors designates as such and which is
subject to the investment decisions of Participants in accordance with Section
4.02.
SECTION 1.09 - "Elective Deferral" shall mean that amount specified
------------ -----------------
under Section 3.01(a)(1) to be contributed by the Corporation to the
Participant's Account in lieu of paying such amount to the Participant in cash,
and the amount specified under Section 14.01 to be contributed by the
Corporation to the Participant's Account in lieu of applying such amount to
benefits for the Participant under the Flexible Benefits Plan. The Elective
Deferral amount shall constitute contributions to the Plan by the Corporation.
SECTION 1.10 - "Eligible Employee" shall mean an Employee who is
------------ -----------------
eligible to participate in the Plan under Section 2.02 or Section 2.03 or
Section 17.02.
SECTION 1.11 - "Employee" shall mean any person employed by the
------------ --------
Corporation and paid on a salaried basis for employment in the United States, or
elsewhere if a citizen of the United States, provided that such person is a
member
5
DEFINITIONS
- -----------
of a group of employees to which the Plan is extended (1) by the Board of
Directors or, as to salaried employees of a wholly-owned subsidiary of Lockheed
Corporation, by the Board of Directors of such subsidiary, or (2) by a
collective bargaining agreement between the Corporation and a collective
bargaining agent which provides that the salaried employees covered by such
agreement shall be covered by the Plan. Effective June 26, 1989 and
notwithstanding the foregoing, all employees of Sanders Associates, Inc. not
covered by a collective bargaining agreement who are paid for employment in the
United States, or elsewhere if citizens of the Unites States, are employees. A
non-citizen of the United States, who on or after December 28, 1981 is a member
of a group to which the Plan is extended, shall be deemed to be an Employee
during any period of employment outside the United States, at the discretion of
the Committee. For purposes of calculating Breaks in Service, Hours of Service,
Service Time, Termination of Employment and Years of Service, "Employee" shall
mean any person employed by the Corporation or by a member of the controlled
group of corporations, group of trades or businesses under common control or
affiliated service group (within the meaning of Internal Revenue Code Section
414(b), (c) or (m)) of which the Corporation is also a member at that time. A
person rendering services to a
6
DEFINITIONS
- -----------
Corporation purportedly as an independent contractor shall not be treated as an
Employee before the Corporation has acknowledged that it must withhold federal
income taxes from his pay. To the extent required by Internal Revenue Code
Section 414(n) or 410(o), a 'leased' worker or other non-employee shall be
treated as an Employee but shall not be eligible to participate in this Plan.
SECTION 1.12 - "ERISA" shall mean the Employee Retirement Income
------------ -----
Security Act of 1974, as now in effect or as hereafter amended.
SECTION 1.13 - "ESOP Allocation Period" shall mean a fiscal accounting
------------ ----------------------
month of Lockheed Corporation, beginning with the July 1989 Month.
SECTION 1.14 - "ESOP Contributions" shall mean the contributions
------------ ------------------
described in Section 4A.01.
SECTION 1.15 - "ESOP Feature" shall mean that portion of the Plan
------------ ------------
consisting of an employee stock ownership plan as defined in Code Section
4975(e)(7). The ESOP Feature includes the stock bonus component of the Plan and
the money purchase pension component of the Plan, excluding the arrangement
described under Section 16, which is designed to meet the requirements of Code
Section 401(h).
SECTION 1.16 - "ESOP Fund" shall mean that portion of the Plan which
------------ ---------
consists of Stock, and any income thereon. The ESOP Fund shall include any
Stock in the Plan which was
7
DEFINITIONS
- -----------
held in the Lockheed Martin Stock Fund prior to July 1, 1989.
SECTION 1.17 - "ESOP Match Stock" shall mean all Stock in the Plan
------------ ----------------
attributable to Corporation contributions made under Section 4A.01.
SECTION 1.18 - "ESOP Trustee" shall mean the Trustee of the ESOP Fund.
------------ ------------
SECTION 1.19 - "Filing With The Committee" shall mean the delivery of
------------ -------------------------
the document in question in such form, in such manner, to such person, and
within such time limits as the Committee shall designate.
SECTION 1.20 - "Hour of Service" means all hours credited to an
------------ ---------------
Employee pursuant to the following subsections (a), (b) and (c):
(a) "Hour of Service" includes each hour for which an Employee is
paid, or entitled to payment, for the performance of duties for the
employer during the applicable computation period.
(b) "Hour of Service" also includes each hour for which an Employee is
paid, or entitled to payment, by the employer on account of a period of
time during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday, sick
leave, jury duty, military reserve training leave, or other paid time off,
8
DEFINITIONS
- -----------
provided that no more than 501 hours shall be credited under this
subsection (b) to an Employee on account of any single continuous period
during which the Employee performs no duties; and provided further that no
hours shall be credited under this subsection (b) on account of payments
made or due under a plan maintained solely to comply with applicable
worker's compensation, unemployment compensation or disability insurance
laws or on account of payments made solely to reimburse an Employee for
medical or medically related expenses.
(c) "Hour of Service" shall also include each hour for which back pay,
irrespective of mitigation of damages, is awarded or agreed to by the
employer, provided that no hour for which an Employee was given credit
pursuant to subsection (a) or (b) of this Section shall also be credited to
such Employee under the terms of this subsection (c).
All Hours of Service shall be calculated in a manner consistent with
the terms of 29 Code of Federal Regulations Section 2530-200b-2.
SECTION 1.21 - "Leveraged Shares" shall mean shares of Stock acquired
------------ ----------------
by the ESOP Trustee with the proceeds of an Acquisition Loan, pursuant to
Section 4A.02. Except as required by Code Section 409(h) and by Treasury
Regulation Sections 54.4975-7(b)(9), (10), or as otherwise
9
DEFINITIONS
- -----------
required by applicable law, no Leveraged Shares may be subject to a put, call or
other option, or buy-sell or similar arrangement while held by, and when
distributed from, the Plan, whether or not the Plan is an employee stock
ownership plan, within the meaning of Code Section 4975(e)(7), at that time.
SECTION 1.22 - "Loan Suspense Account" shall mean the account under
------------ ---------------------
which Leveraged Shares are held until released for allocation pursuant to
Section 4A.03.
SECTION 1.23 - "Lockheed Martin Stock Fund shall mean the fund which
------------ --------------------------
the Trustee shall invest exclusively in Stock, but excluding any special per
capita allocation of Stock to Participants' Accounts under Section 4A.01 and all
Stock held under the ESOP Feature after July 1, 1989:
(a) Stock of the Lockheed Martin Stock Fund will be purchased and sold
by the Trustee on the open market, with commission expenses charged to the
Lockheed Martin Stock Fund. The Trustee will purchase and retain such
Stock regardless of market fluctuations, and, in the normal course, shall
sell such stock only as necessary to meet administrative and distribution
requirements. Cash balances held in the Lockheed Martin Stock Fund shall
be limited to such administrative needs.
10
DEFINITIONS
- -----------
(b) A Participant shall have the right to direct the manner in which
the Trustee shall vote the Stock allocated to such Participant's Account
under the Lockheed Martin Stock Fund, and to direct the Trustee whether
such Stock shall be tendered in the event of a public offer for any Stock.
For such purposes, Stock allocations shall be based on the last Valuation
Date preceding a record date or tender offer. In the absence of voting
instructions with respect to any Stock held in the Lockheed Martin Stock
Fund, the Trustee shall vote the uninstructed Stock in its discretion. In
the absence of tender instructions with respect to any Stock held in the
Lockheed Martin Stock Fund, the Trustee shall determine, in its discretion,
whether such Stock should be tendered. Notwithstanding (a) above, during
the period of any public offer for Stock, the Trustee shall refrain from
making additional purchases of Stock for the Lockheed Martin Stock Fund.
SECTION 1.24 - "Month" shall mean Lockheed Corporation's fiscal
------------ -----
accounting month.
SECTION 1.25 - "Participant" shall mean an Employee who has become a
------------ -----------
Participant in the Plan in the manner described in Section 3.01, or an Employee
who was a Participant in the Plan on March 27, 1989.
11
DEFINITIONS
- -----------
SECTION 1.26 - "Plan" shall mean this Lockheed Salaried Employee
------------ ----
Savings Plan Plus which is a continuation of the Lockheed Salaried Employee
Savings Plan. Effective March 27, 1989, "Plan", shall mean the Lockheed
Salaried Employee Saving Plan Plus, which combines a profit sharing plan under
Section 401(a) of the Code and a stock bonus and employee stock ownership plan
under Sections 401(a) and 4975(e)(7) of the Code and which is intended to
qualify under such Sections and to constitute a single plan under Treasury
Regulation Section 1.414(l)-1(b)(1). Effective December 31, 1990, the Plan
shall combine a profit sharing plan under Section 401(a) of the Code, a stock
bonus and employee stock ownership plan under Sections 401(a) and 4975(e)(7) of
the Code, and a money purchase pension plan and employee stock ownership plan
under Sections 401(a) and 4975(e)(7) of the Code. Effective December 31, 1990,
the money purchase pension plan component of the Plan shall contain an
arrangement intended to qualify under Section 401(h) of the Code and which is
not a part of the employee stock ownership plan. The Plan is intended to
constitute a single plan under Treasury Regulation Section 1.414(1)-1(b)(1).
SECTION 1.27 - "Plan Year" shall mean Lockheed Corporation's fiscal
------------ ---------
accounting year.
12
DEFINITIONS
- -----------
SECTION 1.28 - "Profit Sharing Trustee" shall mean the Trustee of all
------------ ----------------------
assets under the Plan other than the ESOP Fund.
SECTION 1.29 - "Quarter" shall mean any consecutive full three fiscal
------------ -------
accounting month period commencing on the first day of Lockheed Corporation's
January, April, July or October Month.
SECTION 1.30 - "Securities Fund" shall mean the fund in which the
------------ ---------------
Trustee shall invest, stressing both possible appreciation of capital and
current income and income growth. The Securities Fund shall be invested in
common and preferred stocks, convertible securities and bonds (except stock and
securities, and bonds issued or guaranteed by the Corporation, or an affiliate,
subsidiary, or parent corporation of the Corporation), and other types of
investments.
SECTION 1.31 - "Service Time", for purposes of the Plan, shall mean
------------ ------------
that period which begins with an Employee's date of hire or rehire by the
Corporation and continues from such date of hire or rehire until broken by
Termination of Employment, except that such Termination of Employment shall not
break his Service Time (and the period of such Terminated Employment shall be
included in the computation of Service Time) when such period of Terminated
Employment is:
13
DEFINITIONS
- -----------
(a) for 30 calendar days or less; or
(b) for more than 30 calendar days when Service Time is reinstated or
restored in accordance with policies of the Corporation applied on a
nondiscriminatory basis or applicable collective bargaining agreements, if
any.
SECTION 1.32 - "Shares" shall mean shares of Stock.
------------ -------
SECTION 1.33 - "STIF Fund" shall mean the short term investment fund
------------ ---------
in which the Trustee shall invest, stressing preservation of capital, in high
quality money market instruments (excluding obligations issued or guaranteed by
the Corporation, or any affiliate, subsidiary or parent corporation of the
Corporation) including fixed income obligations of the United States of America,
financial, industrial or public utility corporations, bankers' acceptances,
notes, fully insured savings bank deposits, commercial paper and other similar
short term fixed income investments, foreign or domestic, and the Trustee's
commingled short term investment fund. Maturities of such instruments shall not
exceed thirteen (13) months.
SECTION 1.34 - "Stock" shall mean common stock of Lockheed
------------ -----
Corporation, or, on and after March 15, 1995, Lockheed Martin Corporation.
14
DEFINITIONS
- -----------
SECTION 1.35 - "Termination of Employment" and "Terminated Employment"
------------ ------------------------- ---------------------
shall mean the removal of an Employee from active and inactive payroll status of
the Corporation as evidenced by the processing of a severance notice, provided
that an Employee who transfers to employment by Lockheed Corporation or a
subsidiary or affiliate thereof shall not be considered as having Terminated his
Employment with the Corporation for purposes of the Plan. Notwithstanding the
above, "Termination of Employment" and "Terminated Employment" shall mean the
layoff of an employee of Sanders Associates, Inc. for a period of four
consecutive weeks, regardless of whether the employee is removed from active or
inactive payroll status and regardless of whether a severance notice is
processed for the employee.
SECTION 1.36 - "Thrift Stock" shall mean all Stock allocated to
------------ ------------
Participants' Accounts attributable to (i) Elective Deferral amounts made at any
time; (ii) After-Tax Contributions made at any time; (iii) Corporation Matching
Contributions made prior to the first payroll period in the July 1989 Month; and
(iv) Corporation Matching Contributions designated by the Board of Directors
under Section 4.01 as non-ESOP Contributions.
SECTION 1.37 - "Trustee" shall mean the Profit Sharing Trustee, the
------------ -------
ESOP Trustee and any other Trustee
15
DEFINITIONS
- -----------
referred to in Section 7.01; "Trust Fund" shall mean the Trust Fund or Trust
Funds referred to in Section 7.01.
SECTION 1.38 - "Valuation Date" shall mean the last day of the
------------ --------------
calendar month.
SECTION 1.39 - "Weekly Rate of Compensation" shall mean an Eligible
------------ ---------------------------
Employee's rate of compensation as recorded on the permanent payroll record for
his normal work week without the inclusion of any overtime compensation, shift,
field duty, or other bonus or premium payments, expense or living allowance,
assignment or relocation payments, incentive payments, royalties, severance pay,
lump-sum payment of accrued and prorated vacation at time of Termination of
Employment, or payments of like nature. An Eligible Employee's Weekly Rate of
Compensation shall specifically include the "Elective Deferral" amount referred
to in Section 3.01. Effective October 1, 1992, Weekly Rate of Compensation
shall include payments designated as lump-sum in lieu of salary increase, for
the pay week in which said lump-sums are paid.
SECTION 1.40 - "Year of Service" shall mean the completion of 1,000
------------ ---------------
Hours of Service over a twelve-month period. A Year of Service shall be
computed with reference to successive twelve month periods commencing with the
Employee's date of hire by the Corporation or his rehire by the Corporation
subsequent to a Break in Service. In no
16
DEFINITIONS
- -----------
event shall an Employee be credited with one Year of Service during any twelve-
month period prior to the expiration of twelve months after the commencement of
his employment by the Corporation or reemployment by the Corporation subsequent
to a Break in Service. For purposes of this Section 1.40:
(a) service time with the Metier Management Systems group of
associated companies ("Metier") at the time a Metier employee transfers to
the Corporation,
(b) service time with Mathematical Applications Group, Inc. ("MAGI")
for an employee of MAGI on September 12, 1985, who became an Employee of
CADAM, Inc. on September 13, 1985, and
(c) service time with Personal CAD Systems, Inc. ("PCAD") for an
employee of PCAD on March 17, 1989, the date PCAD was acquired by CADAM,
Inc.
shall be deemed to be Years of Service with the Corporation.
SECTION 1.41 - "Sanders Associates, Inc." includes Sanders
------------ ------------------------
Associates, Inc., CalComp, Inc., and Analytyx Electronic Systems, Inc.
17
SECTION 2
---------
ELIGIBILITY FOR PARTICIPATION
-----------------------------
SECTION 2.01 - Participation in the Plan on the part of an Employee is
------------
voluntary.
SECTION 2.02
------------
(a) Eligibility Rule for New Employee. An Employee who has not been
---------------------------------
previously employed by the Corporation is eligible to become a Participant
at the beginning of the payroll period coincident with or next following
the completion of one Year of Service. For purposes of the Plan "payroll
period" shall mean with respect to any Employee, the intervals at which
such Employee receives compensation from the Corporation for services
performed for the Corporation."
(b) Eligibility Rule for Rehired Eligible Employee or Participant. An
-------------------------------------------------------------
Employee who Terminates his Employment after completing one Year of Service
or becoming a Participant shall be eligible to participate in the Plan at
the beginning of the payroll period coincident with or next following his
date of rehire.
(c) Eligibility Rule for Non-Eligible Employees Rehired Before a Break
------------------------------------------------------------------
in Service. An Employee who Terminates his Employment before completing
----------
one Year of Service and who is reemployed by the Corporation before
incurring a Break in Service shall retain his prior
18
ELIGIBILITY FOR PARTICIPATION
- -----------------------------
Hours of Service and shall be eligible to become a Participant upon
completion of one Year of Service. Such an Employee's Year of Service and
Breaks in Service shall continue to be calculated with reference to
successive twelve-month periods commencing on the date the Employee is
first entitled to be credited with an Hour of Service following his
original date of employment.
(d) General Eligibility Rule for Non-Eligible Employees Rehired After
-----------------------------------------------------------------
a Break in Service. An Employee who Terminates his Employment before
------------------
completing one Year of Service and who incurs a Break in Service must
complete one Year of Service after reemployment with the Corporation as
though he had not previously been an Employee. Such an Employee's Year of
Service and Breaks in Service subsequent to his reemployment shall be
calculated with reference to successive twelve-month periods commencing on
the date the Employee is first entitled to be credited with an Hour of
Service following his reemployment.
(e) Special Eligibility Rules for Non-Eligible Employee Rehired After
-----------------------------------------------------------------
a Break in Service. Notwithstanding the provisions of subsection (d)
------------------
above, in determining whether a rehired Employee who Terminates his
Employment and incurs a Break in Service
19
ELIGIBILITY FOR PARTICIPATION
- -----------------------------
before completing one Year of Service is eligible to become a Participant
after his reemployment, the following special rules should be applied:
(1) An Employee who has been rehired by the Corporation
subsequent to a Break in Service and has his Service Time reinstated
or restored to a prior date of hire or rehire by the Corporation and
is credited with one year or more of unbroken Service Time as a result
of such reinstatement or restoration is eligible to become a
Participant at the beginning of the payroll period coincident with or
next following his date of rehire.
(2) An Employee who was not previously eligible to become a
Participant and has been rehired by the Corporation subsequent to a
Break in Service and has his Service Time reinstated or restored to a
prior date of hire or rehire by the Corporation is eligible to become
a Participant at the beginning of the payroll period coincident with
or next following the completion of one year of unbroken Service Time,
including credit for prior Service Time as a result of such
reinstatement or restoration, or upon the completion of one Year of
Service, whichever is the first to occur.
20
ELIGIBILITY FOR PARTICIPATION
- -----------------------------
(f) Eligibility Rule for Employees of Sanders Associates, Inc. on June
------------------------------------------------------------------
26, 1989. An employee of Sanders Associates, Inc. on June 26, 1989 who is
--------
eligible on that date to participate in the Sanders Associates, Inc. Thrift
Plan, as amended and restated February 28, 1989 ("Thrift Plan"), may become
a Participant in this Plan at the beginning of the payroll period
coincident with or next following June 26, 1989. An employee of Sanders
Associates, Inc. on June 26, 1989 not eligible to become a Participant
under the provisions of the preceding sentence shall be eligible to become
a Participant in this Plan at the beginning of the payroll period
coincident with or next following the date he would have become eligible to
participate in the Thrift Plan under the terms of the Thrift Plan.
Notwithstanding the foregoing, any Employee who meets the eligibility
requirements prescribed in this Section 2.02, shall become eligible to become a
Participant no later than the earlier of (i) the first day of the first Plan
Year beginning after the date on which such Employee satisfied such
requirements, or (ii) the date which is six months after the date on which such
Employee satisfied such requirements.
21
ELIGIBILITY FOR PARTICIPATION
- -----------------------------
SECTION 2.03 - A Participant may not make an Elective Deferral or
------------
After-Tax Contribution under the Plan for any week in which he is not an
Employee.
22
SECTION 3
---------
EMPLOYEE PARTICIPATION
----------------------
SECTION 3.01 - (a) An Eligible Employee may become a Participant in
------------
the Plan by Filing With The Committee documents which shall:
(1) specify as a percentage of his Weekly Rate of Compensation the
Elective Deferral amount and After-Tax Contribution to be deducted from his
wages and paid to the Trustee on his behalf;
(2) specify the portion of said weekly After-Tax Contribution and
Elective Deferral amount which is to be allocated to the Bond Fund, the
Securities Fund, the STIF Fund, the Lockheed Martin Stock Fund and/or the
ESOP Fund;
(3) designate a beneficiary or beneficiaries to receive any payment
which may be due under the Plan upon his death; and
(4) contain such other or additional information as in the opinion of
the Committee is desirable or necessary in the operation of the Plan.
(b) An Eligible Employee shall become a Participant by receiving an
allocation to his Account in accordance with the final paragraph of Section
4A.01.
SECTION 3.02 - The Elective Deferral amount and After-Tax Contribution
------------
shall be made by payroll deductions
23
EMPLOYEE PARTICIPATION
- ----------------------
from a Participant's Weekly Rate of Compensation and the amounts so deducted
shall be paid to the Trustee during the Month in which the deduction is made.
The percentage which is specified under Section 3.01(a)(1) and deducted under
this Section shall be either two percent (2%), or four percent (4%), or six
percent (6%), or eight percent (8%), or ten percent (10%), or twelve percent
(12%) of his Weekly Rate of Compensation, as specified by the Participant
subject to the provisions of Sections 3.08, 3.09 and 3.10. After-Tax
Contributions made pursuant to Section 3.12 shall be treated in the same manner
as Elective Deferrals for purposes of Section 3 of this Plan (excluding the
provisions of Sections 3.08, 3.09 and 3.10) and Sections 4 and 4A of this Plan
governing Corporation Matching Contributions, subject to the total of After-Tax
Contributions and Elective Deferrals being taken into account only to the extent
they would have been taken into account if they had been made wholly as Elective
Deferrals.
SECTION 3.03 - A Participant may revoke the specification made under
------------
Section 3.01(a)(1) by Filing With The Committee. A Participant who revokes such
specification to direct that no further Elective Deferral amounts shall be
deducted from his Weekly Rate of Compensation may not again make further
Elective Deferrals prior to the beginning of
24
EMPLOYEE PARTICIPATION
- ----------------------
the payroll period next following the end of the Plan Year in which he revoked
his specification.
SECTION 3.04 - Effective June 1, 1993, an Eligible Employee shall
------------
annually make the specifications required in Sections 3.01(a)(1) and 3.01(a)(2)
during the calendar month of October, or during other special enrollment periods
whenever directed by the Corporate Salary Board. An Employee who may become an
Eligible Employee under Section 2.02, 2.02(a), 17.02, or 17.02(b) in November or
December of a Plan Year shall also make the specifications required in Sections
3.01(a)(1) and 3.01(a)(2) only during the calendar month of October. A former
Employee rehired in November or December of a Plan Year who is eligible to
participate under Section 2.02(b) or (c), Section 17.02(c) or (d) or under
Section 2.03 shall make the specifications required in Section 3.01(a)(1) and
3.01(a)(2) upon becoming an Employee subject to the provisions of Section 3.09.
Such specifications required in Sections 3.01(a)(1) and 3.01(a)(2) made under
this Section shall become effective at the beginning of the payroll period next
following the end of the Plan Year in which such specifications are Filed With
The Committee. The Committee may also, from time to time, (i) designate special
periods during which Eligible Employees may make the specifications required
under
25
EMPLOYEE PARTICIPATION
- ----------------------
Sections 3.01(a)(1) and 3.01(a)(2) and (ii) establish special effective dates
for such specifications.
SECTION 3.05
------------
(a) In making the specification required in Section 3.01(a)(2) the
Eligible Employee shall specify that the weekly Elective Deferral amount
shall be invested by the Trustee either entirely in the Bond Fund, or
entirely in the Securities Fund, or entirely in the STIF Fund, or one-half
in one Fund and one-half in one of the other Funds, or one-half in one Fund
and one-fourth in each of the other funds, or three-fourths in one Fund and
one-fourth in one of the other Funds. Alternatively, the Eligible Employee
may specify that one-fourth of the weekly Elective Deferral amount shall be
invested in Stock in lieu of one of the other Funds. Such specification by
an Eligible Employee shall be deemed to be a continuing direction to the
Trustee unless and until changed under the following provisions of this
Section or Section 3.04. A Participant may change such specification under
this Section only once each Quarter and may do so by Filing With The
Committee a change in prior specification during the Quarter. A change in
prior specification pursuant to this Section 3.05 shall provide that,
commencing with the beginning of the payroll period next following the end
of the
26
EMPLOYEE PARTICIPATION
- ----------------------
Month in which the change is Filed With The Committee, the Participant's
weekly Elective Deferral amount shall be invested by the Trustee as
specified by the Participant. Any change made pursuant to this Section
3.05 shall not affect the investment of any contributions by such
Participant and by the Corporation prior to the beginning of such first pay
period following the end of the Month in which the change is Filed With The
Committee.
(b) A change in specification made pursuant to this Section 3.05 shall
supersede all other option specifications made pursuant to Section
3.01(a)(2), 3.04 or this Section 3.05.
(c) An Employee making loan repayments pursuant to Section 9.04(b) may
make a change in prior specification under this Section 3.05 even though
Elective Deferrals are not being deducted from his Weekly Rate of
Compensation at the time such change in specification is Filed With The
Committee.
(d) Notwithstanding any other provision of this Section 3.05 to the
contrary, a Participant may not file an election under this Section which
would have an effective date in the same Quarter as the effective date of a
previous election under this Section, unless such new election is made
pursuant to a special
27
EMPLOYEE PARTICIPATION
- ----------------------
election period established by the Committee pursuant to Section 3.05(e).
(e) The Committee may, from time to time, (i) designate special
election periods during which Participants may make the election under
Section 3.05(a), and (ii) establish special effective dates for any such
elections.
SECTION 3.06 -
------------
(a) Subject to Section 3.06(b), below, a Participant may elect, by
Filing With The Committee, to have the dollar value of all Units and Shares
(excluding Shares of ESOP Match Stock) credited to his Participant's
Account on the Valuation Date of the first month following the end of the
calendar month in which the election is filed, invested by the Trustee
either entirely in the Bond Fund, or entirely in the Securities Fund, or
entirely in the STIF Fund, or one-half in one Fund and one-half in one of
the other Funds, or one-half in one Fund and one-fourth in each of the
other Funds, or three-fourths in one Fund and one-fourth in one of the
other Funds. Alternatively, a Participant may elect to have one-fourth of
such dollar value invested in Stock in lieu of one of the other funds.
Alternatively, a Participant may elect to have such dollar value invested
in Stock in lieu of one of
28
EMPLOYEE PARTICIPATION
- ----------------------
the other funds. Once Filed With The Committee the election may not be
withdrawn. For the sole purpose of this Section 3.06 of the Plan, the
effective date of the election shall be the Valuation Date of the first
month following the calendar month in which the election is Filed With The
Committee. Notwithstanding the foregoing, a Participant shall not have the
right to direct the investment of any ESOP Match Stock allocated to his
Participant's Account, and any income thereon, except in the case of
Directable ESOP Contributions, or as otherwise provided in Section 4A.05.
(b) Notwithstanding any other provision of this Section 3.06 to the
contrary, a Participant may not file an election under this Section which
would have an effective date in the same calendar year as the effective
date of a previous election under this Section, unless such new election is
made pursuant to the special election period established by the Committee
pursuant to Section 3.06(c).
(c) The Committee may, from time to time, (i) designate special
election periods during which Participants may make the election under
Section 3.06(a), and (ii) establish special effective dates for any such
election.
29
EMPLOYEE PARTICIPATION
- ----------------------
SECTION 3.07 - Elective Deferrals under this Plan are intended to
------------
qualify as non-discriminatory under Section 401(a)(4) of the Code. To ensure
this, the procedures outlined in this Section shall be followed and the
Committee may take such further action as it deems appropriate. An Eligible
Employee, whether or not such Employee elects to contribute, making the
specifications in the calendar month of October of each Plan Year under Section
3.04 shall be placed in one of two groups. One group shall consist of those
Eligible Employees whose Weekly Rate of Compensation exceeds the Weekly Rate of
Compensation of two-thirds of all Eligible Employees; the second group shall
consist of all other remaining Eligible Employees.
The "Average Deferral Percentage" for the top one-third and for the
lower two-thirds for a Plan Year shall be the average of the ratios calculated
separately for each Eligible Employee, including Eligible Employees who have not
filed a specification under Section 3.04, in such top one-third or lower two-
thirds group of:
(a) The Elective Deferral amount specified under Section 3.04 by the
Eligible Employee for the next Plan Year, to
(b) the Weekly Rate of Compensation of such Eligible Employee for the
first payroll period in such Plan Year.
30
EMPLOYEE PARTICIPATION
- ----------------------
The Average Deferral Percentage for the top one-third group of all
Eligible Employees shall not exceed the greater of (a) or (b) below:
(a) 1.25 times the Average Deferral Percentage of all Eligible
Employees whose Weekly Rate of Compensation is among the lower two-thirds
of all Eligible Employees, or
(b) The lesser of the following two amounts:
(1) 2.0 times the Average Deferral Percentage of all Eligible
Employees whose Weekly Rate of Compensation is among the lower two-
thirds of all Eligible Employees, or
(2) the Average Deferral Percentage of the lower two-thirds of
all Eligible Employees plus two (2) percentage points.
SECTION 3.08 - The Committee shall determine prior to the effective
------------
date of the Elective Deferral whether there is a reasonable expectation that the
Average Deferral Percentage results projected for the next Plan Year will
satisfy either of the tests contained in Section 3.07. If, in the Committee's
determination, neither of the tests described in Section 3.07 will be satisfied,
the following procedure will be followed:
(a) A reduction in the percentage specified under Section 3.04 for
Eligible Employees whose Weekly Rate
31
EMPLOYEE PARTICIPATION
- ----------------------
of Compensation is among the top one-third of all Eligible Employees will
be made. Such reduction will be applied to the percentage of the Eligible
Employee in such group who (a) has the highest Weekly Rate of Compensation
in such group and (b) also has the highest percentage. The reduction shall
be applied by 1/10 of l percentage point reductions to the percentage of
such Eligible Employee included in the top one-third group and the tests
described in Section 3.07 will be re-run. This procedure will be repeated
until one of the tests specified in Section 3.07 is satisfied.
(b) If a reduction in the amount of the percentage is required as a
result of the application of Section 3.08(a), the reduction shall be paid
to the Eligible Employee as taxable earnings for the pay periods in the
Plan Year to which the reduction applies.
SECTION 3.09 - If an Employee is rehired by the Corporation under
------------
Section 2.02(b) or (c), Section 17.02(c) or (d), or under Section 2.03 during
the month of November or December of a Plan Year, and is also in the top one-
third group of Eligible Employees as determined under Section 3.07, the
percentage of such Employee, for purposes of Section 3.04, will be limited to
the Average Deferral Percentage as calculated under Section 3.08 for the top
one-
32
EMPLOYEE PARTICIPATION
- ----------------------
third group. Such Eligible Employees who are determined to be in the lower two-
thirds group shall be permitted to specify up to the maximum allowable
percentage as described in Section 3.02.
SECTION 3.10 - Notwithstanding any other provision of the Plan to the
------------
contrary, if an Employee becomes an Eligible Employee at any time during the
Plan Year and is also in the top one-third group of Eligible Employees as
determined under Section 3.07 for the Plan Year in which he becomes an Eligible
Employee, the percentage of such Eligible Employee will be limited to the
Average Deferral Percentage as calculated under Section 3.08 for the top one-
third group. Such percentage shall remain in effect for the balance of the Plan
Year in which he begins making an Elective Deferral. Such Eligible Employees
who are determined to be in the lower two-thirds group shall be permitted to
specify up to the maximum allowable Elective Deferral percentage as described in
Section 3.02 or 17.03. Such Eligible Employee must make the specifications
required under Sections 3.01(a)(1) and 3.01(a)(2) within thirty (30) days from
the date he becomes an Eligible Employee.
SECTION 3.11 - Notwithstanding any other provision of the Plan to the
------------
contrary, a Participant will be suspended from making an Elective Deferral under
the Plan for any week in which a garnishment, attachment, levy or other legal
33
EMPLOYEE PARTICIPATION
- ----------------------
process is imposed on a Participant's Weekly Rate of Compensation.
SECTION 3.12 - When a Participant is prevented by the annual deferral
------------
limitation of Internal Revenue Code Section 402(g) from making the maximum
Elective Deferral otherwise permitted by the Plan, there shall continue to be
deducted from the Participant's wages (effective for the payroll period in which
the Participant's Elective Deferral amount is first so limited) amounts equal to
the Elective Deferrals which would otherwise have been deducted, but such
amounts shall constitute After-Tax Contributions. If a Participant does not
want these After-Tax Contributions to be made, the Participant may elect that no
such contributions be made by Filing With The Committee. A Participant whose
Elective Deferrals are not in excess of the annual deferral limitation of
Internal Revenue Code Section 402(g) shall also be permitted to make After-Tax
Contributions to the Plan. Amounts contributed by a Participant pursuant to
this Section for a Plan Year, when added to the Participant's Elective Deferrals
for the Plan Year, may not exceed the maximum Elective Deferral amount permitted
under Sections 3.02 or 17.03 for the Plan Year. In addition, After-Tax
Contributions may be limited by the Committee in any other way it deems
appropriate. The Participant's After-Tax Contributions shall be accounted for
34
EMPLOYEE PARTICIPATION
- ----------------------
separately within the Participant's Account. A Participant may withdraw such
After-Tax Contributions made pursuant to this Section in the same manner and
subject to the same conditions as provided in Section 9.01 for contributions
made by Participants prior to December 26, 1983, but only after all
contributions made by such Participant prior to December 26, 1983 have been
withdrawn.
35
SECTION 4
---------
CORPORATION MATCHING CONTRIBUTIONS
----------------------------------
SECTION 4.01
------------
(a) For Elective Deferral amounts made before the first payroll period
in Lockheed Corporation's July 1989 Month, the Corporation will contribute
to the Trustee an amount equal to fifty percent (50%) of the Elective
Deferral amount specified by Participants during the Month immediately
preceding the date of such matching contribution by the Corporation. The
fifty percent (50%) "Corporation Matching Contribution" made under this
Section 4.01(a) shall be limited to Elective Deferral amounts up to eight
percent (8%) of the Participant's Weekly Rate of Compensation. Elective
Deferral amounts over eight percent (8%) of the Participant's Weekly Rate
of Compensation shall not be subject to the fifty percent (50%) Corporation
Matching Contributions.
(b) For Elective Deferral amounts made after the beginning of he first
payroll period in Lockheed Corporation's July 1989 Month, the Corporation
will make a Corporation Matching Contribution to the Trustee equal to sixty
percent (60%) of the Elective Deferral amounts specified by each
Participant during the Month immediately receding the date of such
contribution up
36
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
to eight percent (8%) of such Participant's Weekly Rate of Compensation.
For purposes of the preceding sentence, the value of Shares released from
the Loan Suspense Account in accordance with Section 4A.03(b) and allocated
to Participants' Accounts in accordance with Section 4A.03(f) shall be
treated as Corporation Matching Contributions and shall be considered ESOP
Contributions in accordance with Section 4A.01(a).
(c) The amount, if any, by which any Corporation Matching Contribution
to be made after the beginning of the first payroll period in Lockheed
Corporation's July 1989 Month exceeds the value of Shares released from the
Loan Suspense Account in accordance with Section 4A.03(b) and allocated to
Participants' Accounts in accordance with Section 4A.03(f), will be made to
the ESOP Trustee in cash, Shares or any other property acceptable to the
ESOP Trustee as an ESOP Contribution. For contributions made after the
beginning of the first payroll period in Lockheed Corporation's January
1991 Month, the Board of Directors may, in its discretion, designate prior
to or at the time of the contribution that such ESOP Contribution is a
Directable ESOP Contribution.
(d) If the amount of any Corporation Matching Contribution to be made
after the beginning of the
37
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
first payroll period in Lockheed Corporation's July 1989 Month is less than
the value of Shares released from the Loan Suspense Account in accordance
with Section 4A.03(b) and allocated to Participants' Accounts in accordance
with Section 4A.03(f), such excess value shall be allocated among
Participants' Accounts as provided under Section 4A.03(f) as an additional
Corporation Matching Contribution that is an ESOP Contribution.
SECTION 4.02 - Corporation Matching Contributions for each Month shall
------------
be allocated by the Trustee to the Bond Fund, the Lockheed Martin Stock Fund,
the Securities Fund, the STIF Fund and to the ESOP Fund, in the same proportion
as Elective Deferral amounts specified by Participants during such Month are
allocated to the Bond Fund, the Lockheed Martin Stock Fund, the Securities Fund,
the STIF Fund and to the ESOP Fund. Notwithstanding the foregoing, ESOP
Contributions shall be wholly invested in Stock, except to any extent designated
as Directable ESOP Contributions or as provided otherwise due to an election
under Section 4A.05. Directable ESOP Contributions for each Month shall be
allocated by the Trustee to the Bond Fund, the Securities Fund, the STIF Fund
and to the ESOP Fund, in the same proportion as Elective Deferral amounts
specified by Participants during such Month are allocated to such Funds.
38
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
SECTION 4.03 - No part of the Corporation Matching Contributions or
------------
ESOP Contributions other than Corporation Matching Contributions paid to the
Trustee shall be recoverable by the Corporation, except as otherwise provided in
Section 4A.10. However, with respect to a Participant whose benefits under the
Plan are forfeited under the provisions of Sections 8.02, 8.04 and 12.07, by
Termination of Employment, all amounts so forfeited shall be credited against,
and reduce to the extent of such credit, the amount of future Corporation
Matching Contributions otherwise to be made under Section 4.01 or Section 17.04
or contributions required under Sections 4A.03(a) or 4A.01(a).
SECTION 4.04 - Except in accordance with applicable federal and state
------------
law, no liability for the payment of benefits under the Plan shall be imposed
upon the Corporation, its officers, directors, employees, or shareholders or the
Committee or any of its members, nor shall they be subject to any suit or
litigation or to any legal liability for any cause, or reason, or thing
whatsoever in connection with the Plan or in connection with the operation of
the Trust Funds. This shall not affect any obligation of the Corporation to pay
any specific contribution to the Trustees which it has accrued and expressly
obligated itself to pay, nor shall it affect the right, if any, of a Participant
or beneficiary to seek
39
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
redress against the proper person or persons, corporation, firm or trustee who
violate his rights under the Plan.
SECTION 4.05 - On and after December 31, 1990, the Corporation
------------
Matching Contributions shall be made to the money purchase pension plan
component of the Plan. In accordance with Section 4A.03(b), the minimum
Corporation Matching Contribution shall equal the amount released from the Loan
Suspense Account. Any contributions made by the Corporation to the Plan which
exceed the greater of such minimum Corporation Matching Contribution or the
amounts provided for in Section 4.01(b), shall be made to the stock bonus
component or to the profit sharing component of the Plan, as designated by the
Board of Directors.
40
SECTION 4A
----------
ESOP PROVISIONS
---------------
SECTION 4A.01 - ESOP Contributions shall be wholly invested in Stock
-------------
(except as provided otherwise due to an election under Section 4A.05 and except
as designated as Directable ESOP Contributions pursuant to Section 4.01) and
shall include the amounts described in Sections 4A.01(a) and (b) below. The
Corporation may make all or a part of any such contributions out of its treasury
shares or authorized but unissued shares.
(a) Corporation Matching Contributions made after the beginning of
the first payroll period in Lockheed Corporation's July 1989 Month are ESOP
Contributions unless otherwise provided under Section 4.01.
(b) The Corporation, in the discretion of the Board of Directors, may
also, from time to time, make special per capita contributions and
allocations of Shares to the Accounts of Participants who have not
Terminated Employment.
Subject to the limitations of Section 5.02, the Corporation, in the
discretion of the Board of Directors, may make a contribution to the profit
sharing and/or stock bonus components of the Plan for any Month in addition to
its contribution to the money purchase pension component of the Plan under
Section 4.05. Any such additional
41
ESOP PROVISIONS
- ---------------
contribution, together with any Shares released from the Loan Suspense Account
under Section 4A.03(b) that may not be allocated to Participants' Accounts in
accordance with the provisions of Section 5.02 or Code Section 401(m), shall be
allocated among the Accounts of Eligible Employees who have not Terminated
Employment in the proportion that each such Eligible Employee's Weekly Rate of
Compensation bears to the Weekly Rate of Compensation of all such Eligible
Employees, excluding any Employee to the extent such allocation to the
Employee's Account would exceed the maximum permissible amount under Section
5.02.
SECTION 4A.02 - The Corporation may direct the ESOP Trustee to incur
-------------
Acquisition Loans from time to time to finance the acquisition of Leveraged
Shares or to repay a prior Acquisition Loan. Any Acquisition Loan shall be
primarily for the benefit of Participants and their beneficiaries. The proceeds
of any Acquisition Loan shall be used within a reasonable time only to finance
the acquisition of Leveraged Shares or to repay a prior Acquisition Loan. Any
Acquisition Loan shall be an obligation of the ESOP Feature of the Plan and
shall be for a specific term, shall bear a reasonable rate of interest, and
shall not be payable on demand except in the event of default. In the event of
default under an Acquisition Loan, the value of Trust assets transferred in
satisfaction of any
42
ESOP PROVISIONS
- ---------------
Acquisition Loan shall not exceed the amount of the default. Any Acquisition
Loan may be secured by collateral pledge of the Leveraged Shares so acquired.
No other Trust assets may be pledged as collateral for an Acquisition Loan, and
no lender shall have recourse against Trust assets other than any Leveraged
Shares remaining subject to pledge. Any pledge of Leveraged Shares must provide
for the release of shares so pledged on a pro rata basis as principal and
interest on the Acquisition Loan is repaid by the ESOP Trustee and such
Leveraged Shares are allocated to Participants' Accounts as provided under
Section 4A.03. Except upon termination of the Plan or the ESOP Feature of the
Plan, as provided in Section 4A.11, repayments of principal and interest on any
Acquisition Loan shall be made by the ESOP Trustee (as directed by the
Corporation) only from ESOP Contributions paid in cash to enable the ESOP
Trustee to repay such Acquisition Loan, from earnings attributable to such
contributions, from any collateral given for the Acquisition Loan, from any cash
dividends paid on Stock (whether or not allocated to the Participants' Accounts)
and from any interest on cash dividends paid on Stock that is not allocated to
any Participant's Account. In acquiring Leveraged Shares, the ESOP Trustee
shall pay no more than "adequate consideration" (as defined in Section 3(18) of
ERISA).
43
ESOP PROVISIONS
- ---------------
SECTION 4A.03 -
-------------
(a) Effective as of the first payroll period in the July 1989 Month,
for each ESOP Allocation Period during which there are Leveraged Shares in
the Loan Suspense Account, the Corporation shall make contributions in an
amount sufficient to enable the ESOP Trustee to pay any currently maturing
obligation under an Acquisition Loan, without regard to the accumulated
earnings and profits of the Corporation.
(b) Any Leveraged Shares shall initially be credited to the Loan
Suspense Account and shall be allocated to Participants' Accounts for each
ESOP Allocation Period only as payments of principal and interest on the
Acquisition Loan used to purchase such Leveraged Shares are made by the
ESOP Trustee. The number of Leveraged Shares to be released from the Loan
Suspense Account as soon as practicable following any amortization of an
Acquisition Loan shall equal the number of Leveraged Shares in the Loan
Suspense Account immediately before release multiplied by a fraction. The
numerator of the fraction shall be the amount of ESOP Contributions and any
dividends on Stock which are applied to the payment of principal and
interest on the Acquisition Loan during the ESOP Allocation Period(s). The
denominator of the fraction shall be the sum of the
44
ESOP PROVISIONS
- ---------------
numerator plus the principal and interest to be paid for all future periods
over the duration of the Acquisition Loan repayment period. For purposes
of computing the denominator of the fraction referred to above, if the
interest rate on the Acquisition Loan is variable, the interest to be paid
in subsequent ESOP Allocation Periods shall be calculated by assuming that
the interest rate in effect as of the date of amortization and release from
the Loan Suspense Account will be the interest rate in effect for the
remainder of the term of the Acquisition Loan. Notwithstanding the
foregoing, in the event such Acquisition Loan shall be repaid with the
proceeds of a subsequent Acquisition Loan ("Substitute Loan"), such
repayment shall not operate to release all such Shares from the Loan
Suspense Account, but, rather, such release shall be effected pursuant to
the foregoing provisions of this Section 4A.03(b) on the basis of payments
of principal and interest on such Substitute Loan.
(c) If permitted by the Board of Directors pursuant to a one-time
irrevocable designation (which shall be made, if at all, upon the making of
an Acquisition Loan) by the Board of Directors, then, in lieu of applying
the provisions of Section 4A.03(b) with respect to an Acquisition Loan,
Shares shall be
45
ESOP PROVISIONS
- ---------------
released from the Loan Suspense Account as the principal amount of such
Acquisition Loan is repaid (without regard to interest payments) provided
the following three conditions are satisfied:
(i) The Acquisition Loan shall provide for annual payments of
principal and interest at a cumulative rate that is not less rapid at
any time than level annual payments of such amounts for ten years;
(ii) The interest portion of any payment shall be disregarded only
to the extent it would be treated as interest under standard loan
amortization tables; and
(iii) If the Acquisition Loan is renewed, extended or refinanced,
the sum of the expired duration of the Acquisition Loan and the
renewal, extension or new Acquisition Loan shall not exceed ten years.
(d) If at any time there is more than one Acquisition Loan
outstanding, then separate accounts shall be established under the Loan
Suspense Account for each such Acquisition Loan. Each Acquisition Loan for
which a separate account is maintained shall be treated separately for
purposes of the provisions governing the release of Shares from the Loan
Suspense
46
ESOP PROVISIONS
- ---------------
Account under this Section 4A.03 (including for purposes of determining
whether Section 4A.03(b) or Section 4A.03(c) governs the release of Shares
from any particular Loan Suspense Account).
(e) As soon as practicable following the release of Leveraged Shares
from the Loan Suspense Account as a result of a loan amortization payment,
a portion of the total number of Shares so released shall be allocated to
Participants' Accounts based on the amounts of any dividends on Stock used
to make the loan amortization payment. The portion so released shall be
separately calculated with respect to (i) cash dividends on Stock held in
Participants' Accounts (the "Allocated Dividends") and (ii) dividends on
Stock held in the Loan Suspense Account (the "Unallocated Dividends"). The
number of released shares with respect to Allocated Dividends shall be
determined and allocated in accordance with the provisions of Section
4A.06. The number of released shares with respect to Unallocated Dividends
shall be allocated among Participants' Accounts pursuant to Subsection (f)
below.
(f) As soon as practicable following each ESOP Allocation Period, all
Leveraged Shares that have been released from the Loan Suspense Account as
a result of loan amortization payments made during such ESOP
47
ESOP PROVISIONS
- ---------------
Allocation Period that have not and will not be allocated pursuant to
Subsection (e) shall be allocated to Participants' Accounts pursuant to
this Subsection (f). For any ESOP Allocation Period such Leveraged Shares
shall be allocated to a Participant's Account in the same proportion that
the amount of such Participant's Elective Deferral amounts made during such
ESOP Allocation Period up to eight percent (8%) of such Participant's
Weekly Rate of Compensation for the ESOP Allocation Period bears to the
total amount of Elective Deferral amounts for the ESOP Allocation Period of
all Participants, counting only the Elective Deferral amounts of each such
Participant up to eight percent (8%) of each such Participant's Weekly Rate
of Compensation for the ESOP Allocation Period. Any such allocation shall
be considered "matching contributions" for purposes of Code Section 401(m).
SECTION 4A.04 - If at the time of distribution, Stock distributed from
-------------
the ESOP Fund is not readily tradeable on an established market within the
meaning of Section 409(h) of the Code and the Regulations, such Stock shall be
subject to a put option in the hands of a Qualified Holder by which such
Qualified Holder may sell all or any part of the Stock distributed to him by the
ESOP Fund to the ESOP Trustee. Should the ESOP Trustee decline to purchase
48
ESOP PROVISIONS
- ---------------
all or any part of the Stock put to it by the Qualified Holder, the Corporation
shall purchase the Stock that the ESOP Trustee declines to purchase. The put
option shall be subject to the following conditions:
(a) The term "Qualified Holder" shall mean the Participant or
beneficiary receiving the distribution of such Stock, any other party to
whom the Stock is transferred by gift or by reason of death, and also any
trustee of an individual retirement account (as defined under Code Section
408) to which all or any portion of the distributed Stock is transferred
pursuant to a tax-free "rollover" transaction satisfying the requirements
of Sections 402 and 408 of the Code.
(b) During the 60-day period following any distribution of such Stock,
a Qualified Holder shall have the right to require the Corporation to
purchase all or a portion of the distributed Stock held by the Qualified
Holder. The purchase price to be paid for any such Stock shall be their
fair market value determined (1) as of the Valuation Date coinciding with
or next preceding the exercise of the put option under this Section 4A.04
or, (2) in the case of a transaction between the Plan and a "disqualified
person" within the meaning of Section 4975(e)(2) of the Code or a "party
49
ESOP PROVISIONS
- ---------------
in interest" within the meaning of Section 3(14) of ERISA, as of the date
of the transaction.
(c) If a Qualified Holder shall fail to exercise his put option right
under Section 4A.04(b), the option right shall temporarily lapse upon the
expiration of the 60-day period. As soon as practicable following the last
day of the Plan Year in which the 60-day option period expires, the
Corporation shall notify the non-electing Qualified Holder (if he is then a
shareholder of record) of the valuation of the Stock as of that date.
During the 60-day period following receipt of such valuation notice, the
Qualified Holder shall again have the right to require the Corporation to
purchase all or any portion of the distributed Stock. The purchase price
to be paid therefor shall be fair market value determined (1) as of the
Valuation Date coinciding with or next preceding the exercise of the put
option under this Section 4A.04(c) or, (2) in the case of a transaction
between the Plan and a "disqualified person" within the meaning of Section
4975(e)(2) of the Code or a "party in interest" within the meaning of
Section 3(14) of ERISA, as of the date of the transaction.
(d) The foregoing put options under Section 4A.04(b) and (c) hereof
shall be effective solely
50
ESOP PROVISIONS
- ---------------
against the Corporation and shall not obligate the Plan or Trust in any
manner.
(e) In making the determination of fair market value, the Corporation
shall consider, to the extent permitted by law (and in conformity, where
applicable, with the provisions of Section 6), the same methodology used to
value the Stock at the time of its initial purchase by the ESOP Trustee and
shall, to the extent permitted by law, include as a valuation factor at
least the same proportionate share of enterprise value as was taken into
account at the time of such purchase of Stock.
(f) The period during which the put option is exercisable does not
include any time when a Qualified Holder is unable to exercise it because
the Corporation is prohibited from honoring it by applicable Federal or
State laws.
(g) Except as otherwise required or permitted by the Code, the put
options under this Section 4A.04 shall satisfy the requirements of Section
54.4975-7(b) of the Treasury Regulations to the extent, if any, that such
requirements apply to such put options.
(h) A Qualified Holder must exercise his put option in writing by
Filing with the Committee. If a Qualified Holder exercises his put option
under this
51
ESOP PROVISIONS
- ---------------
Section 4A.04, payment for the Stock repurchased shall be made, in the case
of a distribution of a Participant's Account within one taxable year, in
substantially equal annual payments over a period beginning not later than
30 days after the exercise of the put option and not exceeding five years
(provided that adequate security and reasonable interest are provided with
respect to unpaid amounts) or, in the case of other distributions, not
later than 30 days after such exercise.
SECTION 4A.05 -
-------------
(a) Notwithstanding any other provision of the Plan, any Participant
who has attained age 55 and completed at least ten (10) Years of Service
may elect to have up to 25% of the value in his Participant's Account
attributable to ESOP Contributions (other than any mounts attributable to
Directable ESOP Contributions) invested in the funds referred to in Section
4A.05(b). Any such Participant may make this election once during each
Plan Year of his Qualified Election Period. After the close of the sixth
Plan Year in the Participant's Qualified Election Period, the Participant
may so direct the investment of up to 50% of the value of amounts in his
Participant's Account attributable to ESOP Contributions (other than
52
ESOP PROVISIONS
- ---------------
any amounts attributable to Directable ESOP Contributions). For this
purpose, the term "Qualified Election Period" shall mean the period
beginning with the later of the Plan Year in which the Participant attains
age 55 or completes ten (10) Years of Service and ending upon the
Participant's Termination of Employment. The percentage of amounts in a
Participant's Account attributable to ESOP Contributions for which he may
make investment directions in a Plan Year shall be the "Allocable Portion"
of such Participant's Account at the time of the election under this
Section 4A.05.
(b) A Participant may elect by Filing With The Committee, to have the
dollar value of the Allocable Portion of his Participant's Account on the
Valuation Date of the first month following the end of the calendar month
in which the election is filed, invested by the Trustee either entirely in
the Bond Fund, or entirely in the Securities Fund, or entirely in the STIF
Fund, or one-half in one Fund and one-half in one of the other Funds, or
one-half in one Fund and one-fourth in each of the other Funds, or three-
fourths in one Fund and one-fourth in one of the other Funds. For the sole
purpose of this Section 4A.05(b), the effective date of the election shall
be the Valuation
53
ESOP PROVISIONS
- ---------------
Date of the first month following the calendar month in which the election
is Filed With The Committee. The election may not be withdrawn once Filed
With The Committee for ninety (90) days. Such election shall be in
accordance with any notice, rulings, or regulations or other guidance
issued by the Internal Revenue Service with respect to Code Section
401(a)(28)(B).
SECTION 4A.06 - Effective as of the beginning of the first payroll
-------------
period in the July 1989 Month, all cash dividends on Stock allocated to
Participants' Accounts may, as determined by the Corporation, be used in whole
or in part, consistent with Section 404(k) of the Code to make principal or
interest payments on an Acquisition Loan to the extent permitted by law, or may
be retained in the Participant's Account or paid out to the Participant. The
Corporation may determine how such dividends may be applied for any Plan Year up
to the time when such dividends are finally allocated to the Accounts of
Participants as of the last day of the Plan Year. Such dividends may not be
used for payment of an Acquisition Loan unless Stock released for the benefit of
Participants who would have otherwise been credited with the value of such
dividends has a fair market value not less than the amount of such dividends
which would have been otherwise allocated for the benefit of the Participant for
the Plan Year. The allocation under Section
54
ESOP PROVISIONS
- ---------------
4A.03 of the value of Stock released pursuant to this Section 4A.06 shall be
allocated to Participants in the same proportion that the value of dividends
used for payment of the Acquisition Loan would have been allocated for the
benefit of such Participants. All cash dividends on Leveraged Shares that are
not allocated to any Participant's Account shall be used to repay an Acquisition
Loan related to such shares and the Leverage Shares released from the Loan
Suspense Account due to such repayment shall be allocated as described under
Section 4A.03.
SECTION 4A.07 - Stock held in Participants' Accounts shall be valued
-------------
as of each Valuation Date, or at the discretion of the Committee, more
frequently. All valuations of Stock which is not readily tradeable on an
established securities market shall be made by an independent appraiser meeting
requirements similar to those contained in Treasury Regulations under Section
170(a)(1) of the Code.
SECTION 4A.08 - All tender or exchange decisions with respect to Stock
-------------
held by the ESOP Trustee shall be made only by Participants acting in their
capacity as Named Fiduciaries with respect to both allocated and (based on any
ESOP Match Stock allocated to their Participants' Accounts) unallocated Shares
in accordance with the following provisions of this Section 4A.08:
55
ESOP PROVISIONS
- ---------------
(a) In the event an offer shall be received by the ESOP Trustee
(including a tender offer for Shares subject to Section 14(d)(1) of the
Securities Exchange Act of 1934 or subject to Rule 13e-4 promulgated under
that Act, as those provisions may from time to time be amended) to purchase
or exchange any Shares held by the ESOP Trustee, the Trustee will advise
each Participant who has Shares credited to his Participant's Account in
writing of the terms of the offer as soon as practicable after its
commencement and will furnish each Participant with a form by which he may
instruct the Trustee confidentially whether or not to tender or exchange
Shares allocated to his Participant's Account and (based on any ESOP Match
Stock allocated to his Participant's Account) a proportionate share of any
unallocated Shares (including fractional shares to 1/1000th of a Share).
The materials furnished to the Participants shall include (i) a notice from
the ESOP Trustee that, except as provided in subsection (h) of this Section
4A.08, the ESOP Trustee will not tender or exchange any Shares (allocated
or unallocated) for which timely instructions are not received by the ESOP
Trustee and (ii) such related documents as are prepared by any person and
provided to the shareholders of the Corporation pursuant to the Securities
Exchange Act of
56
ESOP PROVISIONS
- ---------------
1934. The Committee and the ESOP Trustee may also provide Participants
with such other material concerning the tender or exchange offer as the
ESOP Trustee or the Committee in its discretion determine to be
appropriate, provided, however, that prior to any distribution of materials
by the Committee, the ESOP Trustee shall be furnished with complete copies
of all such materials. The Corporation and the Committee will cooperate
with the ESOP Trustee to ensure that Participants receive the requisite
information in a timely manner.
(b) The ESOP Trustee shall tender or not tender Shares or exchange
Shares allocated to any Participant's Account (including fractional Shares
to 1/1000th of a Share) only as and to the extent instructed by the
Participant as a Named Fiduciary. With respect to Shares allocated to the
Participant's Account of a deceased Participant, such Participant's
beneficiary, as a Named Fiduciary, shall be entitled to direct the Trustee
whether or not to tender or exchange such Shares as if such beneficiary
were the Participant. If tender or exchange instructions for Shares
allocated to any Participant's Account are not timely received by the ESOP
Trustee, the ESOP Trustee will treat non-receipt as a direction not to
tender or
57
ESOP PROVISIONS
- ---------------
exchange such Shares. The instructions received by the ESOP Trustee from
Participants or beneficiaries shall be held by the ESOP Trustee in strict
confidence and shall not be divulged or released to any person, including
directors, officers or employees of the Corporation or of any other
company, except as otherwise required by law.
(c) Each Participant who has ESOP Match Stock allocated to his
Participant's Account and who is entitled to direct the ESOP Trustee
whether or not to tender or exchange Shares allocated to his Participant's
Account shall separately direct the ESOP Trustee, as a Named Fiduciary,
with respect to the tender or exchange of a portion of the Shares that are
unallocated to any Participant's Account. Such direction (treating non-
receipt of directions as a direction not to tender or exchange) shall be
with respect to such number of unallocated Shares multiplied by a fraction,
the numerator of which is the number of Shares of ESOP Match Stock
allocated to the Participant's Account and the denominator of which is the
total number of Shares of ESOP Match Stock allocated to the Accounts of all
Participants. Fractional Shares shall be rounded to the nearest 1/1000th
of a Share.
58
ESOP PROVISIONS
- ---------------
(d) In the event, under the terms of a tender offer or otherwise, any
Shares tendered for sale, exchange or transfer pursuant to such offer may
be withdrawn from such offer, the ESOP Trustee shall follow such
instructions respecting the withdrawal of such securities from such offer
in the same manner and the same proportion as shall be timely received by
the ESOP Trustee from the Participants, as Named Fiduciaries, entitled
under this Section 4A.08 to give instructions as to the sale, exchange or
transfer of securities pursuant to such offer.
(e) In the event that an offer for fewer than all of the Shares held
by the ESOP Trustee shall be received by the ESOP Trustee, each Participant
who has been allocated any Shares subject to such offer shall be entitled
to direct the ESOP Trustee as to the acceptance or rejection of such offer
(as provided by subsections (a)-(d) of this Section 4A.08) with respect to
the largest portion of such Stock as may be possible given the total number
or amount of Shares the ESOP Trustee may sell, exchange or transfer
pursuant to the offer based upon the instructions received by the ESOP
Trustee from all other Participants who shall timely instruct the ESOP
Trustee pursuant to this Section 4A.08 to sell, exchange or transfer such
Shares
59
ESOP PROVISIONS
- ---------------
pursuant to such offer, each on a pro rata basis in accordance with the
--------
number or amount of such Shares allocated to the Participants' Accounts.
(f) In the event an offer shall be received by the ESOP Trustee and
instructions shall be solicited from Participants pursuant to subsections
(a)-(d) of this Section 4A.08 regarding such offer, and prior to
termination of such offer, another offer is received by the ESOP Trustee
for the securities subject to the first offer, the ESOP Trustee shall use
its best efforts under the circumstances to solicit instructions from the
Participants to the ESOP Trustee (i) with respect to securities tendered
for sale, exchange or transfer pursuant to the first offer, whether to
withdraw such tender, if possible, and, if withdrawn, whether to tender any
securities so withdrawn for sale, exchange or transfer pursuant to the
second offer and (ii) with respect to securities not tendered for sale,
exchange or transfer pursuant to the first offer, whether to tender or not
to tender such securities for sale, exchange or transfer pursuant to the
second offer. The ESOP Trustee shall follow all such instructions received
in a timely manner from Participants in the same manner and in the same
proportion as provided in subsections (a)-(d) of this
60
ESOP PROVISIONS
- ---------------
Section 4A.08. With respect to any further offer for any Stock received by
the ESOP Trustee and subject to any earlier offer (including successive
offers from one or more existing offerors), the ESOP Trustee shall act in
the same manner as described above.
(g) A Participant's instructions to the ESOP Trustee to tender or
exchange Shares will not be deemed a withdrawal or suspension from the Plan
or a forfeiture of any portion of the Participant's interest in the Plan.
Funds received in exchange for tendered Shares will be credited to the
Participant's Account of the Participant whose Shares were tendered or the
Loan Suspense Account from which such Shares were tendered and will be used
by the ESOP Trustee to purchase Stock, as soon as practicable. In the
interim, the ESOP Trustee will invest such funds in short-term investments
permitted under the ESOP Trust.
(h) In the event that a tender or exchange offer is received by the
Trustee before any Shares have been allocated to Participants' Accounts,
then Participants, as Named Fiduciaries, shall confidentially instruct the
ESOP Trustee whether or not to accept the offer. The ESOP Trustee shall
respond to the tender or exchange offer by following the instructions of
Participants on a one person - one vote basis in the same proportion
61
ESOP PROVISIONS
- ---------------
and in the same manner as provided in this Section 4A.08 pursuant to the
instructions timely received by the ESOP Trustee.
(i) The ESOP Trustee shall take all steps necessary, including
appointment of a corporate trustee and/or an outside independent
administrator to the extent such action, after consultation with the
Corporation and the Profit Sharing Trustee, is found necessary to maintain
confidentiality of Participant responses and/or to adequately discharge
their obligations as Named Fiduciary.
SECTION 4A.09 - All voting rights on Shares held by the ESOP Trustee
-------------
shall be exercised by the ESOP Trustee only as directed by the Participants
acting in their capacity as Named Fiduciaries with respect to both allocated and
(based on any ESOP Match Stock allocated to their Accounts) unallocated Shares
in accordance with the following provisions of this Section 4A.09:
(a) As soon as practicable before each annual or special shareholders'
meeting of the Corporation, the ESOP Trustee shall furnish to each
Participant a copy of the proxy solicitation material sent generally to
shareholders, together with a form requesting confidential instructions on
how the Shares allocated to such Participant's Account and (based on any
ESOP
62
ESOP PROVISIONS
- ---------------
Match Stock allocated to his Participant's Account) a proportionate Share
of any unallocated Shares (including fractional Shares to 1/1000th of a
Share) are to be voted. The Corporation and the Committee shall cooperate
with the Trustee to ensure that Participants receive the requisite
information in a timely manner. Except as provided in subsection (d) of
this Section 4A.09, the materials furnished to the Participants shall
include a notice from the ESOP Trustee that the ESOP Trustee will not vote
any allocated Shares for which timely instructions are not received by the
ESOP Trustee. Upon timely receipt of instructions, the ESOP Trustee (after
combining votes of fractional Shares to give effect to the greatest extent
to Participants' instructions) shall vote the Shares as instructed.
Allocated and unallocated Shares shall be voted or not voted in accordance
with the instructions received by the ESOP Trustee and the provisions of
Section 4A.09(b) and 4A.09(c). Voting instructions which are not timely
received by the ESOP Trustee will not be followed. The instructions
received by the ESOP Trustee from Participants or Beneficiaries shall be
held by the ESOP Trustee in strict confidence and shall not be divulged or
released to any person including directors, officers or employees of the
63
ESOP PROVISIONS
- ---------------
Corporation, or of any other company, except as otherwise required by law.
(b) With respect to all corporate matters submitted to shareholders,
all Shares allocated to Participants' Accounts shall be voted only in
accordance with the directions of such Participants as Named Fiduciaries as
given to the ESOP Trustee. Each Participant shall be entitled to direct
the voting of Shares (including fractional shares to 1/1000th of a share)
allocated to his Participant's Account. With respect to Shares allocated
to the Participant's Account of a deceased Participant, such Participant's
beneficiary, as Named Fiduciary, shall be entitled to direct the voting
with respect to such allocated Shares as if such beneficiary were the
Participant.
(c) Each Participant who has ESOP Match Stock allocated to his
Participant's Account and who is entitled to vote on any matter presented
for a vote by the stockholders shall separately direct the ESOP Trustee
with respect to the vote of a portion of the Shares that are unallocated to
any Participant's Account. Such direction shall be with respect to such
number of votes equal to the total number of votes attributable to Shares
not allocated to the Participants' Accounts multiplied by a fraction, the
numerator
64
ESOP PROVISIONS
- ---------------
of which is the number of votes attributable to ESOP Match Stock allocated
to the Participant's Account and the denominator of which is the total
number of votes attributable to the Participants' Accounts of all
Participants. Any unallocated Shares for which no instructions have been
received by the ESOP Trustee shall be voted by the ESOP Trustee in
proportion to the unallocated Shares as to which instructions have been
received. Fractional Shares shall be rounded to the nearest 1/1000th of a
Share.
(d) In the event that Shares must be voted before any Shares have been
allocated to Participants' Accounts, then Participants, as Named
Fiduciaries, shall confidentially instruct the ESOP Trustee as to their
voting preferences on all matters requiring a shareholders' vote. All
Shares that are unallocated to any Participant's Account shall thereafter
be voted by the ESOP Trustee on a one person - one vote basis in the same
proportion and in the same manner as provided in this Section 4A.09
pursuant to the instructions timely received by the ESOP Trustee.
SECTION 4A.10 - In no event shall any part of the Plan, including the
-------------
ESOP Feature, be used for, or diverted to, any purpose other than for the
exclusive benefit of Participants and their beneficiaries. Notwithstanding the
65
ESOP PROVISIONS
- ---------------
foregoing, in the event that an ESOP Contribution is conditioned upon initial
qualification of the ESOP Feature under Section 401(a) of the Code, and the ESOP
Feature does not so qualify, the contribution may, to the extent permitted by
law, be returned to the Corporation within one year after the denial of
qualification.
SECTION 4A.11 - Upon a complete termination of the Plan, or of the
-------------
ESOP Feature, any unallocated Leveraged Shares shall be sold to the Corporation
or on the open market. The proceeds of such sale shall be used to satisfy any
outstanding Acquisition Loan and the balance of any funds remaining shall be
allocated to each Participant's Account based on the proportion that the
Corporation Matching Contributions for the current Plan Year to such
Participant's Account bears to the total Corporation Matching Contributions for
the current Plan Year to all Participants' Accounts.
66
SECTION 5
---------
PARTICIPANT'S ACCOUNT
---------------------
SECTION 5.01 - There shall be maintained for each Participant a
------------
separate Participant's Account which shall show in dollars the Elective Deferral
amounts and After-Tax Contributions specified by the Participant and the
corresponding Corporation Matching Contributions made as provided in Sections
4.01 and 4A.01 (consisting of the Corporation's Matching Contributions, ESOP
Contributions and forfeitures) and, in terms of Units or Shares, shall show the
portion of such Participant's Account in the Bond Fund, the Securities Fund, the
STIF Fund, the Lockheed Martin Stock Fund and/or the ESOP Fund, as the case may
be. In addition, the Participant's Account shall show that portion of the
Participant's Account in the ESOP Fund that consists of Thrift Stock and the
portion that consists of ESOP Match Stock. As of July 1, 1989, Stock shall be
accounted for in Shares rather than Units.
SECTION 5.02 -
------------
(a) The annual addition to any Participant's Account for any Plan Year
shall not exceed the maximum permissible amount. For purposes of Section
415 of the Code, the "limitation year" shall be the Plan Year. Subsection
(c) defines the terms used in this Section.
67
(b) If a Participant's annual addition would exceed the maximum
permissible amount, any excess contribution inadvertently made shall be
refunded to the Corporation and, to the extent the excess contribution is
attributable to Elective Deferrals and After-Tax Contributions, returned to
the Participant in question.
(c) For purposes of this Section, terms used herein shall have the
following meanings:
(1) "Annual addition" shall mean the sum of After-Tax
Contributions, Corporation contributions (including Elective
Deferrals, Flexible Credit Contributions and ESOP Contributions) and
any forfeitures allocated to a Participant's account for a Plan Year
under this Plan and all other qualified defined contribution plans of
the Corporation.
"Annual addition" shall also include amounts derived from
Corporation contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable to post-
retirement medical benefits allocated to the separate account of a key
employee, as defined in Code Section 419A(d)(3), under a welfare
benefit fund, as defined in Code Section 419(e), which is maintained
by the Corporation, and amounts
68
PARTICIPANT'S ACCOUNT
- ---------------------
substantially similar to those just described which are contributed to
a defined benefit plan for a plan year of the defined benefit plan
beginning after March 31, 1984.
The amount of any contribution to the Plan made by the
Corporation during a Plan Year that is used to repay principal and
interest on an Acquisition Loan shall be considered an Annual Addition
for the Plan Year. Annual Additions shall not include any Leveraged
Shares that are allocated to Participants' Accounts for the Plan Year.
(2) "Maximum permissible amount" shall mean, with respect to a
Participant, the lesser of
a. twenty-five percent of the Participant's earnings for
the Plan Year, or
b. $30,000 (or such higher amount then in effect pursuant
to Section 415(d) of the Code for the calendar year in or with
which the Plan Year ends), except as otherwise provided under
Code Section 415(c)(6).
Moreover, if in any Plan Year no more than one-third of ESOP
Contributions are allocated to Participants who are highly compensated
employees within the meaning of Code Section 414(q), the
69
PARTICIPANT'S ACCOUNT
- ---------------------
above limitations shall not apply to ESOP Contributions which are used
to make interest payments under an Acquisition Loan or to reallocated
forfeitures of Stock acquired with the proceeds of an Acquisition
Loan.
(3) "Earnings" shall mean the total cash and non-cash
remuneration paid to a Participant during the Plan Year but excluding
Elective Deferrals under this Plan, and:
a. employer contributions for simplified employee pension,
b. deferred compensation (other than an amount included in
the Participant's gross income for the Plan Year which is
attributable to an unfunded, non-qualified plan),
c. amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by an
Employee becomes freely transferable or is no longer subject to a
substantial risk or forfeiture,
d. amounts realized from the sale, exchange or other
disposition of stock under a tax-benefitted stock option, and
70
PARTICIPANT'S ACCOUNT
- ---------------------
e. other amounts which receive special tax benefits.
(d) If a Participant in this Plan has at any time participated in
one or more qualified defined benefit plans maintained by the
Corporation, the sum of the Participant's "defined contribution plan
fraction" and "defined benefit plan fraction" shall not exceed 1.0.
(1) "Defined contribution Plan fraction" shall have the
----------------------------------
meaning set forth in Internal Revenue Code Section 415(e)(3).
If, based on reasonable projections, it is expected that a
Participant's defined contribution plan fraction in the future
will be materially less than his or her current defined
contribution plan fraction, the Committee may compute the defined
contribution plan fraction on a projected basis. Section
415(e)(3) defines the term "defined contribution plan fraction"
as a fraction
(i) the numerator of which is the sum of the annual
additions, as defined in subsection (c), to the
Participant's accounts in this Plan and all other
71
PARTICIPANT'S ACCOUNT
- ---------------------
qualified defined contribution and defined benefit plans
(whether or not terminated) of the Corporation for the
current and all prior Plan Years, and
(ii) the denominator of which is the sum of the annual
additions which would have been made for the Participant for
the current and all prior Plan Years (whether or not this
Plan or any other defined contribution or defined benefit
plan was then in existence) if, in each such Year, the
Participant's annual additions equaled the lesser of
a 125 percent of the dollar limitation in
-
effect under Internal Revenue Code Section
415(c)(1)(A), or
b thirty-five percent of the Participant's
-
earnings for the Year in question.
A Participant's defined contribution plan fraction as of the
end of the last Plan Year beginning prior to 1976 shall be
calculated in accordance with Treas. Reg. Sec. 1.415-7(d). If
the Participant was a
72
PARTICIPANT'S ACCOUNT
- ---------------------
participant in one or more qualified defined contribution plans
maintained by the Corporation which were in existence on July 1,
1982, the numerator of the Participant's defined contribution
plan fraction will be adjusted if the sum of this fraction and
the defined benefit plan fraction would otherwise exceed 1.0.
Under the adjustment, an amount equal to the product of (i) the
excess of the sum of both fractions over 1.0, times (ii) the
denominator of the defined contribution plan fraction will be
permanently subtracted from the numerator of the defined
contribution plan fraction. The adjustment shall be calculated
using the fractions as they would be computed as of the end of
the last Plan Year beginning before June 30, 1983. This
adjustment shall also be made if, at the end of the last Plan
Year beginning before January 1, 1984, the sum of both fractions
exceeds 1.0 because of accruals or additions that were made
before the limitations of this subsection became effective for
any plans of the Corporation in existence on July 1, 1982.
73
PARTICIPANT'S ACCOUNT
- ---------------------
The Committee may elect to compute the denominator of a
Participant's defined contribution plan fraction for Plan Years
ending on or before January 1, 1983 by multiplying the
Participant's denominator (as determined as of the end of the
Plan Year ending in 1982) by the "transition fraction." The
transition fraction shall have a numerator equal to the lesser of
$51,875 (or $41,500 if Internal Revenue Code Section 416(h)(4)
(relating to top heavy plans) is applicable for the first Plan
Year beginning after December 31, 1983) or thirty-five percent of
the Participant's earnings for the Plan Year ending during 1981,
and shall have a denominator equal to the lesser of $41,500 or
twenty-five percent of the Participant's earnings for the Plan
Year ending during 1981. This election shall be made in
accordance with procedures established under or in accordance
with Internal Revenue Code Section 415(e)(6).
(2) "Defined benefit plan fraction" shall have the meaning
-----------------------------
set forth in Internal Revenue Code Section 415(e)(2). This Code
74
PARTICIPANT'S ACCOUNT
- ---------------------
Section defines the term "defined benefit plan fraction" as a
fraction (i) the numerator of which is the sum of the
Participant's projected annual benefit under all defined benefit
plans (whether or not terminated) of the Corporation, and (ii)
the denominator of which is the lesser of
a 125 percent of the dollar limit in effect under
-
subsection (c)(2)b. for the Plan Year, or
b 140 percent of the Participant's earnings.
-
The projected annual benefit shall be the annual retirement
benefit attributable to Corporation contributions to which the
Participant would be entitled under the terms of the defined
benefit plans (adjusted to the actuarial equivalent of a straight
life annuity if the projected annual benefit is expressed in a
form other than a straight life annuity or qualified joint and
survivor annuity), assuming that the Participant will continue
employment until normal retirement age (or current age, if
later), and that the Participant's compensation for the current
75
PARTICIPANT'S ACCOUNT
- ---------------------
Plan Year and all other relevant factors used to determine
benefits under the plans will remain constant for all future Plan
Years. If the Participant was a participant in one or more
qualified defined benefit plans maintained by the Corporation
which were in existence on July 1, 1982, the denominator of the
Participant's defined benefit plan fraction will not be less than
125 percent of the sum of the annual benefits which the
Participant had accrued under such plans as of the end of the
last Plan Year beginning before June 30, 1983. The preceding
sentence shall apply only if the defined benefit plans
individually and in the aggregate satisfied the requirements of
Internal Revenue Code Section 415 as in effect at the end of the
1982 Plan Year.
(3) For any Plan Year in which the Plan is "top heavy," as
defined in Section 15.01(b) and the exception in Internal Revenue
Code Section 416(h)(2) does not apply, "100 percent" shall be
substituted for "125 percent" in determining the denominators
76
PARTICIPANT'S ACCOUNT
- ---------------------
of a key employee's defined contribution and defined benefit plan
fractions.
SECTION 5.03 - As of the Valuation Date of each Month each
------------
Participant's Account shall be credited for such Month with the number of Units
equivalent to the Unit value and/or Shares at a Share value (such Unit values
and Share values calculated as provided in Sections 6.01 and 6.02) of:
(1) the total dollar amount of weekly Elective Deferrals and After-Tax
Contributions specified by such Participant during such Month,
(2) the Corporation Matching Contributions with respect to such Month
as provided in Section 4.01, and
(3) the ESOP Contributions with respect to any such Month as provided
in Section 4A.01.
Such units shall be allocated to the Bond Fund, the Securities Fund,
the Lockheed Martin Stock Fund and/or the STIF Fund and such Shares shall be
allocated to the ESOP Fund pursuant to the provisions of Sections 3.01(a)(2),
3.05 and 4.02.
SECTION 5.04 -
------------
(a) A direct plan-to-plan (trust-to-trust) transfer of assets to this
Plan from another qualified defined contribution plan may be made only with
the consent of the Board. Such consent shall be granted only in regard to
groups of persons who become
77
PARTICIPANT'S ACCOUNT
- ---------------------
Employees due to acquisitions or in other special circumstances.
"Rollovers" or plan-to-plan transfers from individual retirement accounts
or other qualified plans by individual employees are not permitted.
(b) An account shall be maintained under the Plan for each person on
whose behalf assets are transferred to the Plan. If such person is not
otherwise a Participant, the individual shall be considered a participant
with respect to his transferred account, but for no other Plan purpose
until he becomes a Participant pursuant to Section 3 or 14.
78
SECTION 6
---------
VALUATION OF PARTICIPANT'S ACCOUNT
----------------------------------
SECTION 6.01 - The value of Units in each Participant's Account, as
------------
allocated to each Fund under the Plan shall be determined separately for each
Fund as of each Valuation Date. At the inception of the Bond Fund, STIF Fund,
Securities Fund and Lockheed Martin Stock Fund one Unit for each dollar
contributed by the Participant and for each dollar contributed by the
Corporation with respect to such Participant prior to the first Valuation Date
of such Fund was credited to each Participant's Account, allocated to each Fund
as specified pursuant to Sections 3.01(a)(2), 3.05, 3.06 and 4.02 as such
Sections were in effect on such Valuation Dates. On each succeeding Valuation
Date (a) the value of the Bond Fund, the Lockheed Martin Stock Fund, the
Securities Fund and the STIF Fund, respectively, shall be the fair market value,
as determined by the Trustee, as of such date, of the investments and cash held
in such Fund on such date, less liabilities and the expenses as provided in
Section 7.05 as accrued or paid as of such date; and (b) the value of a Unit in
each Fund shall be determined by dividing the value of each such Fund, as
determined above, by the total number of Units in all Participants' Accounts
allocated to each such Fund as of such date. Notwithstanding anything to the
contrary contained herein,
79
VALUATION OF PARTICIPANT'S ACCOUNT
- ----------------------------------
assets in the STIF Fund may be valued at cost or unpaid principal amount if
there is no readily ascertainable fair market value.
SECTION 6.02 - Effective as of July 1, 1989, Units maintained in the
------------
Lockheed Martin Stock Fund that are not held in the Accounts of Participants who
are employees of Lockheed Aeromod Center, Inc., shall be valued and converted to
Shares in the ESOP Fund. On each succeeding Valuation Date thereafter, the
value of the Participant's Account in the ESOP Fund shall be equal to the number
of Shares, including any fractional Share; credited to his Participant's Account
as of such date multiplied by the published composite closing price per Share on
such Valuation Date.
80
SECTION 7
---------
TRUST FUND AND TRUSTEE
----------------------
SECTION 7.01 - All contributions made to the Plan by a Participant or
------------
on his behalf shall be made to a Trust Fund or Trust Funds established by a
trust agreement or trust agreements with a Trustee or Trustees to carry out the
purposes of the Plan. Such Trust Fund or Trust Funds shall be composed of the
Bond Fund, the ESOP Fund, the Securities Fund, the STIF Fund and such other Fund
as may be established from time to time. The Committee shall select such
Trustee(s), and may change the Trustee(s) from time to time. Any Trustee(s)
designated hereunder shall be a bank or trust company qualified under the laws
of the United States or of any State to operate thereunder as a trustee.
Lockheed Corporation will determine the form and terms of any such trust
agreement. Lockheed Corporation may amend any such trust agreement from time to
time to accomplish the purposes of the Plan. The trust agreement or trust
agreements shall provide, among other things, that at no time shall any part of
the Trust Fund be used for, or diverted to, purposes other than for the
exclusive benefit of the Participants or their beneficiaries.
SECTION 7.02 - Each Trustee shall, unless otherwise directed by an
------------
Investment Manager (if such has been appointed), have exclusive authority and
discretion to
81
TRUST FUND AND TRUSTEE
- ----------------------
manage and invest the assets of the Trust Fund, as provided in its trust
agreement. Each Trustee shall further be responsible for the holding and
disbursement of all contributions and income received by it under the Plan, as
provided in its trust agreement, and shall have such other responsibilities as
are provided in such agreement.
SECTION 7.03 - Nothing in the Plan shall be construed as a guarantee
------------
by the Corporation or the Trustees of the value of any security or instrument in
which funds held by the Trustees are invested or as an indemnity against any
loss resulting from such investment.
SECTION 7.04 - The Trustee shall allocate contributions made to the
------------
Plan by a Participant or on his behalf in accordance with the specification as
determined under Sections 3.01(a)(2), 3.04, 3.05, 3.06, 3.07, 3.08, 3.09, 3.10,
4.02 and 4A.05.
SECTION 7.05 - Brokerage fees, commissions, taxes, and other charges
------------
and expenses incident to the purchase, sale and servicing of investments and
other taxes, if any, payable by the Trustees on the assets, or on income
thereof, at any time held in each Fund may be paid by such Fund to the extent
permitted by ERISA and the Code. All other expenses and charges incurred in the
administration of the Plan, including the Trustees' fees and/or investment
management fees, shall be paid by the Corporation.
82
SECTION 8
---------
BENEFITS
--------
SECTION 8.01 - A Participant shall be fully vested in the dollar value
------------
of the balance of the Units and Shares in his Participant's Account as
determined as provided in Sections 6.01 and 6.02 on the Valuation Date
coincident with or immediately following (prior to July 1, 1990, "preceding"
shall be substituted for "following") the date of Termination of Employment for
any of the following reasons:
(a) To receive early, normal, or disability retirement benefits for
which he is qualified under a Lockheed Retirement Plan; or
(b) Layoff for a period of four consecutive weeks; or
(c) Death; or
(d) Entry into the Armed Forces of the United States; or
(e) Because of permanent disability for a continuous period of six (6)
or more months. A Participant shall be deemed to be permanently disabled
when, on the basis of medical evidence satisfactory to the Committee, the
Committee finds that he is wholly and continuously disabled and prevented
from performing his regular occupation for wage or profit as the result of
bodily injury or disease, either occupational in
83
BENEFITS
- --------
cause or non-occupational in cause. A Participant shall not be deemed
permanently disabled if, on the basis of proof satisfactory to the
Committee, the Committee finds that his incapacity arises out of chronic
alcoholism, or addiction to narcotics (unless the disabling condition is
caused, in and of itself, by an organic disease or organic condition
resulting from such alcoholism or addiction), an injury self-inflicted or
incurred while he was engaged in a felonious enterprise, or resulted
therefrom, or resulted from service in the armed forces of any country
except those of the United States; or
(f) For any reason on or after attaining age sixty-five (65) ("Normal
Retirement Age"); or
(g) To receive a deferred monthly retirement benefit for which he is
qualified under a Lockheed Retirement Plan, providing either the date of
Termination of Employment occurs within the period of thirty (30) calendar
days immediately preceding such Participant reaching sixty-five (65) years
of age, or payment of the deferred monthly retirement benefit begins on the
first day of the calendar month following the month of Termination of
Employment.
Except as provided otherwise in Sections 8.09 or 10.02, a Participant
terminating for any of the reasons set forth in
84
BENEFITS
- --------
this Section 8.01 shall receive a single sum distribution of his Participant's
Account.
SECTION 8.02 -
------------
(a) Upon Termination of Employment for reasons other than those set
forth in Section 8.01, a Participant who does not have a least one Hour of
Service on or after January 1, 1990 shall be vested in the sum of the
following:
(1) The dollar value of the balance of Units and Shares in his
Participant's Account which were credited with respect to Elective
Deferral amounts and After-Tax Contributions made by such Participant,
determined as provided in Sections 6.01 and 6.02 on the Valuation Date
coincident with or immediately following (prior to July 1, 1990
"preceding" shall be substituted for "following") the date of such
Termination of Employment;
(2) Twenty-five percent (25%) of the dollar value of the balance
of the Units and Shares in his Participant's Account which were
credited with respect to Corporation Matching Contributions for the
fifth (5th) Quarter to and including the eighth (8th) Quarter
immediately preceding such Termination of Employment, such dollar
value being
85
BENEFITS
- --------
determined as provided in Sections 6.01 and 6.02 on the Valuation Date
coincident with or immediately following (prior to July 1, 1990
"preceding" shall be substituted for "following") the date of such
Termination of Employment;
(3) Fifty percent (50%) of the dollar value of the balance of the
Units and Shares in his Participant's Account which were credited with
respect to Corporation Matching Contributions for the ninth (9th) to
and including the twelfth (12th) Quarter immediately preceding such
Termination of Employment, such dollar value being determined as
provided in Sections 6.01 and 6.02 on the Valuation Date coincident
with or immediately following (prior to July 1, 1990 "preceding" shall
be substituted for "following") the date of such Termination of
Employment;
(4) Seventy-five percent (75%) of the dollar value of the balance
of the Units and Shares in his Participant's Account which were
credited with respect to Corporation Matching Contributions for the
thirteenth (13th) to and including the sixteenth (16th) Quarter
immediately preceding such Termination of Employment, such dollar
value being determined as provided in Sections 6.01 and
86
BENEFITS
- --------
6.02 on the Valuation Date coincident with or immediately following
(prior to July 1, 1990 "preceding" shall be substituted for
"following") the date of such Termination of Employment; and
(5) One hundred percent (100%) of the dollar value of the balance
of the Units and Shares in his Participant's Account which were
credited with respect to Corporation Matching Contributions for the
seventeenth (17th) Quarter and Quarters beyond, immediately preceding
such Termination of Employment, such dollar value being determined as
provided in Sections 6.01 and 6.02 on the Valuation Date coincident
with or immediately following (prior to July 1, 1990 "preceding" shall
be substituted for "following") the date of such Termination of
Employment.
The Corporation shall maintain separate subaccounts within a
Participant's Account if necessary to account for the Participant's
vested interest in the Units and Shares in his Participant's Account
which were credited with respect to Corporation Matching Contributions
for each Quarter. The provisions of this Section 8.02(a) shall not
apply to employees of Sanders Associates, Inc.
87
BENEFITS
- --------
(b) Upon Termination of Employment for reasons other than those set
forth in Section 8.01, a Participant with at least one Hour of Service on
or after January 1, 1990 shall be vested in the sum of the following:
(1) the dollar value of the balance of Units and Shares in his
Participant's Account which were credited with respect to Elective
Deferral amounts and After-Tax Contributions made by such Participant,
determined as provided in Sections 6.01 and 6.02 on the Valuation Date
coincident with or immediately following (prior to July 1, 1990
"preceding" shall be substituted for "following") the date of such
Termination of Employment; and
(2) the vested portion of the dollar value of the balance of the
Units and Shares in his Participant's Account which were credited with
respect to contributions made by the Corporation under the Plan as in
effect prior to December 26, 1983 and/or Corporation Matching
Contributions, such dollar value being determined as provided in
Sections 6.01 and 6.02 on the Valuation Date coincident with or
immediately following (prior to July 1, 1990 "preceding" shall be
substituted for
88
BENEFITS
- --------
"following") the date of such Termination of Employment. The vested
portion of the dollar value shall be determined in accordance with the
following:
Completed Years of Service Vested Percent
-------------------------- --------------
Less than 2 years 0%
2 years but less than 3 years 25%
3 years but less than 4 years 50%
4 years but less than 5 years 75%
5 years or more 100%
The provisions of this Section 8.02(b) shall apply to a Participant
who is an employee of Sanders Associates, Inc. regardless of whether such
Participant has one Hour of Service on or after January 1, 1990.
Except as provided otherwise in Sections 8.09 or 10.02, a Participant
entitled to a benefit under this Section 8.02 shall receive a single sum
distribution of his Participant's Account.
SECTION 8.03 - Prior to July 1, 1990, Participant, or his beneficiary,
------------
who receives payment of an amount pursuant to the provisions of Section 8.01 or
Section 8.02 shall have refunded to him any Elective Deferral amounts and After-
Tax Contributions specified by him (but not Corporation Matching Contributions)
between the Valuation Date as of which such payment under Section 8.01 or
Section 8.02 was computed and the date of Termination of Employment.
89
BENEFITS
- --------
SECTION 8.04 -
------------
(a) In the event that a Participant Terminates Employment for reasons
other than those set forth in Section 8.01 and is not reemployed by
Lockheed Corporation or a subsidiary or affiliate thereof during the Plan
Year in which the termination occurs, such Participant shall thereupon
forfeit all Units and Shares credited to such Participant's Account and the
amounts with respect thereto in the Trust Funds to which he is not entitled
as a benefit as determined under the provisions of Section 8.02, subject to
restoration under Subsection 8.04(b). A Participant will forfeit Stock in
his Participant's Account attributable to ESOP Contributions only after
other assets in the Participant's Account attributable to ESOP
Contributions have been forfeited. In the event that a Participant
Terminates Employment for reasons other than those set forth in Section
8.01 and is reemployed by Lockheed Corporation or a subsidiary or affiliate
thereof during the Plan Year in which the termination occurs, such
Participant shall retain all Units and Shares credited to such
Participant's Account and the amounts with respect thereto in the Trust
Funds which were not paid to him in the amount computed under the
provisions of Section 8.02, and such Participant
90
BENEFITS
- --------
shall vest and/or continue to vest in said sums at the rate described in
Section 8.02 without regard to the effect which said Termination of
Employment would otherwise have on vesting. Amounts so retained shall be
distributable to the extent vested at the time of distribution only
pursuant to the provisions of Sections 8.01 or 8.02 or 9.01.
(b) To the extent required by applicable statute or regulation, in the
event a Participant Terminates Employment and is reemployed by Lockheed
Corporation or a subsidiary or affiliate thereof without incurring a Break
in Service (five (5) consecutive one-year Breaks in Service in the case of
persons who had not completed a one-year Break in Service prior to December
30, 1985), such Participant shall have restored to his Participant's
Account any amounts previously forfeited pursuant to Subsection 8.04(a).
Such restoration shall be in compliance with applicable statute or
regulation, and in accordance with rules determined by the Committee and
uniformly applied to all Participants. Such Participant shall continue to
vest in said restored amounts from such date of reemployment at the rate
described in Section 8.02. In the case of a Participant who Terminated
Employment, received the vested portion of the balance of Units and Shares
in
91
BENEFITS
- --------
his Participant's Account and forfeited the Units and Shares credited to
his Participant's Account to which he is not entitled as a benefit under
Section 8.02, all rights to restoration of forfeited amounts for such
Participant shall lapse if this Plan is terminated before such Participant
is reemployed by the Corporation. To the extent any restoration of a
Participant's Accounts hereunder is accompanied by a repayment by the
Participant, the Participant's Accounts upon repayment and restoration
shall equal the amount of such repayment and restoration.
SECTION 8.05 - A Participant who becomes entitled to receive a payment
------------
under the provisions of Section 8.01(a) or under the provisions of Section
8.01(g) may, prior to Termination of Employment for such reason and subject to
the provisions hereinafter set forth, elect, in lieu of such payment, that the
total number of Units and Shares in his Account be paid to him in 60, 120, 180
or 240 equal monthly installments commencing as of the last day of the month
following the month in which the Participant's employment has been so terminated
provided he is then living and provided further that the dollar value of the
first such payment is not less than thirty dollars ($30). Any election in
accordance with the preceding sentence by a married Participant shall not be
effective with respect to such
92
BENEFITS
- --------
Participant's Money Purchase Account unless the spousal consent requirements of
Section 8.09(a)(3) have been satisfied. The dollar value of each such payment
shall be equal to the dollar value of such Units and Shares as are to be paid in
such installment, determined as provided in Sections 6.01 and 6.02 on the
Valuation Date immediately preceding the date such payment is due. In the event
that a Participant dies prior to the commencement date of his payments, the
Participant's election of such method of payment shall become inoperative and a
lump sum payment to his beneficiary shall be made. In the event that a
Participant dies on or after the commencement date of such payments but before
payment to him of all payments due him, the dollar value of the remaining
balance of the Units and Shares in the Participant's Account shall be paid in
one lump sum to the Participant's beneficiary as such dollar value is determined
as provided in Sections 6.01 and 6.02 on the Valuation Date immediately
following (prior to July 1, 1990 "preceding" shall be substituted for
"following") the date of the death of such Participant. Election of such method
of payment must be made in writing by Filing With The Committee prior to
Termination of Employment. In the event that a Participant chooses to revoke
his election of such method of payment after the commencement date of such
payments but before payment to him of all payments due him,
93
BENEFITS
- --------
he may elect, in writing, to revoke his previous election of such method of
payment by Filing With The Committee. In such event, the dollar value of the
remaining balance of the Units and Shares in the Participant's Account shall be
paid in one lump sum to the Participant as such dollar value is determined as
provided in Sections 6.01 and 6.02 on the Valuation Date coincident with or
immediately following (prior to July 1, 1990 "preceding" shall be substituted
for "following") the date of such election or revocation. Notwithstanding
anything to the contrary contained herein, such monthly installment payments
shall be suspended when a Participant is rehired by the Corporation and elects
to resume Elective Deferrals or After-Tax Contributions to the Plan. Upon
subsequent Termination of Employment such Participant may elect any optional
form of payment under the Plan for which he is eligible. Notwithstanding any
other provision of this Section to the contrary, the period of such installment
payments may not extend beyond the life expectancy of the Participant or the
joint life expectancies of the Participant and his spouse.
SECTION 8.06 -
------------
(a) All distributions from this Plan to a Participant (or to his
beneficiary following the Participant's death) shall be made in accordance
with the legal requirements set forth in Sections 401(a)(9),
94
BENEFITS
- --------
401(k), and related provisions of the Code and Treasury Regulations issued
pursuant to such provisions, notwithstanding any provision in this Plan to
the contrary.
(b) A Participant's Account shall be distributed within sixty (60)
days of such Participant's Termination of Employment if the Participant so
consents in writing at the time of his Termination of Employment. If a
Participant fails to give such written consent at such time, his
Participant's Account shall not be distributed before such Participant
attains age sixty-five (65). Subject to the foregoing, distribution shall
be made or commenced not later than the sixtieth (60th) day after the close
of the Plan Year in which the latest of the following events occurs:
(1) The Participant attains the earlier of age sixty-five (65) or
becomes eligible to receive normal retirement benefits under a
Lockheed Retirement Plan;
(2) There occurs the tenth (10th) anniversary of the year in
which the Participant commenced participation in the Plan; or
(3) The Participant has a Termination of Employment.
95
BENEFITS
- --------
(c) Notwithstanding any other provisions of this Plan, distribution of
a Participant's Account must commence by the Participant's "Required
Beginning Date", except as provided in Section 8.06(d), and shall be made
in accordance with the provisions of Section 8.08.
(1) A Participant's Required Beginning Date for purposes of this
Plan shall be the December 31 of the calendar year in which the
Participant attains age 70-1/2.
(2) Notwithstanding the provisions of paragraph (1), the Required
Beginning Date for a Participant who is not a "five percent owner"
within the meaning of Section 416(i) of the Code and who attains age
70-1/2 in calendar year 1988 or 1989 shall be April 1, 1990.
(3) Notwithstanding the provisions of paragraphs (1) and (2), the
Required Beginning Date for a Participant who is not a "five percent
owner" within the meaning of Section 416(i) of the Code and who
attained age 70-1/2 prior to January 1, 1988 shall be the April 1 next
following the Participant's Termination of Employment. However, a
Participant described in this Section 8.06(c)(3) may, by Filing With
the
96
BENEFITS
- --------
Committee within the one-time election period established by the
Committee, irrevocably elect April 1, 1990 as his Required Beginning
Date.
(d) If an amount payable under any provision of this Plan cannot be
clearly ascertained or the person to whom it is payable has not been
determined or located, distributions shall be made or commenced no later
than sixty days after such amount is ascertained or such person is located.
SECTION 8.07 - A Participant, or his beneficiary, who becomes entitled
------------
to receive a cash payment under the provisions of Sections 8.01, 8.02, 8.05,
8.06, 8.08 or 9.01 and whose Participant's Account is invested in part in the
Lockheed Martin Stock Fund or ESOP Fund, may elect, by Filing With The
Committee, to receive such part of his distribution either entirely in cash or
entirely in the form of Share certificates (with fractional Shares paid in
cash). Notwithstanding the foregoing, any amounts received in the form of an
annuity shall be payable in cash only. If the Stock acquired with the proceeds
of an Acquisition Loan consists of more than one class, a Participant shall
receive substantially the same proportion of each such class of Stock upon
distribution of his Participant's Account attributable to such Stock. The
number of Shares distributed shall be calculated by (a) dividing the dollar
97
BENEFITS
- --------
value of the Units in the Participant's Account allocated to the Lockheed Martin
Stock Fund as of the Valuation Date coincident with or immediately following
(prior to July 1, 1990 "preceding" shall be substituted for "following") the
date of Termination of Employment by the published composite closing price per
Share on said Valuation Date, and adding (b) the number of Shares allocated to
the Participant's Account as of the Valuation Date coincident with or
immediately following (prior to July 1, 1990 "preceding" shall be substituted
for "following") the date of Termination of Employment. Distribution of such
Shares will be made, at the direction of the Trustee(s), by the duly appointed
transfer agent of Lockheed Corporation. Notwithstanding the provisions of
Section 12.07, distributions effected by stock certificates cannot be reinvested
in the Plan. In the absence of any valid election under this Section, such
distribution will be made in cash.
Section 8.08 -
------------
(a) (1) A Participant who, pursuant to the provisions of Section
8.06(c)(1), is subject to a mandatory distribution from his Participant's
Account prior to his Termination of Employment shall receive five (5)
annual cash payments, calculated as provided in Section 8.08(g), commencing
as of the month in which
98
BENEFITS
- --------
his Required Beginning Date occurs, provided he is then living and provided
further that the dollar amount of the first such payment is not less than
$30.
(2) A Participant who becomes entitled to installment payments under
Section 8.08(a)(1) may, prior to his Required Beginning Date and subject to
the provisions hereinafter set forth, elect to receive in lieu of such five
(5) annual installment payments
(i) a lump sum cash payment equal to the dollar value of the
balance of Units and Shares in his Participant's Account as determined
as provided in Sections 6.01 and 6.02 on the Valuation Date occurring
in October of the year in which his Required Beginning Date occurs, or
(ii) ten (10) annual cash payments, calculated as provided in
Section 8.08(g), commencing as of the month in which his Required
Beginning Date occurs provided he is then living and provided further
that the dollar amount of the first such payment is not less than $30.
(b) (1) A Participant who, pursuant to the provisions of Section
8.06(c)(2), is subject to a mandatory distribution from his Participant's
Account prior to his Termination of Employment, or who has so elected such
a distribution pursuant to Section
99
BENEFITS
- --------
8.06(c)(3), shall receive five (5) annual cash payments calculated as
provided in Section 8.08(g), commencing as of the month preceding the month
in which his Required Beginning Date occurs provided he is then living and
provided further that the dollar amount of the first such payment is not
less than $30.
(2) A Participant who becomes entitled to installment payments under
Section 8.08(b)(1) may, prior to his Required Beginning Date and subject to
the provisions hereinafter set forth, elect to receive in lieu of such five
(5) annual installment payments
(i) a lump sum cash payment equal to the dollar value of the
balance of Units and Shares in his Participant's Account as determined
as provided in Sections 6.01 and 6.02 on the Valuation Date occurring
in January of the year in which his Required Beginning Date occurs, or
(ii) ten (10) annual cash payments, calculated as provided in
Section 8.08(g), commencing as of the month preceding the month in
which his Required Beginning Date occurs provided he is then living
and provided further that the dollar amount of the first such payment
is not less than $30.
100
BENEFITS
- --------
(c) Annual installment payments due to a Participant pursuant to the
provisions of Sections 8.08(a)(1), 8.08(b)(2)(ii), 8.08(b)(1), or
8.08(b)(2)(ii) (other than the initial payments described in Sections
8.08(b)(1) and 8.08(b)(2)(ii)) shall be paid to the Participant in December
of each applicable year. Following payment of the last such annual
installment, the Participant will be paid each December prior to his
Termination of Employment the cash amount equal to the dollar value of
Units and Shares in his Participant's Account as determined as provided in
Sections 6.01 and 6.02 on the Valuation Date occurring in October of the
year in which such distribution occurs. A Participant who elected to
receive a lump sum payment pursuant to Section 8.08(a)(2)(i) or
8.08(b)(2)(i) shall be paid each December subsequent to such lump sum
distribution and prior to his Termination of Employment a cash amount as
calculated in the preceding sentence.
(d) In the event that a Participant dies prior to the commencement of
installment payments pursuant to Section 8.08(a)(1), 8.08(a)(2)(ii),
8.08(b)(1), or 8.08(b)(2)(ii), the installment method of payment shall
become inoperative and a lump sum payment shall be made to his beneficiary.
In the event that a Participant
101
BENEFITS
- --------
dies on or after the commencement date of such payments, but before payment
to him of all payments due him, the dollar value of the remaining balance
of the Units and Shares in the Participant's Account shall be paid in one
lump sum to the Participant's beneficiary as such dollar value is
determined as provided in Sections 6.01 and 6.02 on the Valuation Date
immediately following (prior to July 1, 1990 "preceding" shall be
substituted for "following") the date of the death of such Participant.
(e) A Participant receiving installment payments under the provisions
of Sections 8.08(a)(1), 8.08(a)(2)(ii), 8.08(b)(1), or 8.08(b)(2)(ii) may
irrevocably elect to cancel his installment payments and receive, in lieu
of his next scheduled December installment payment, a lump sum cash payment
in an amount equal to the value of Units and Shares in his Participant's
Account as determined as provided in Sections 6.01 and 6.02 as of the
Valuation Date occurring in October of the year in which the lump sum
distribution is made. A Participant's election to so cancel his
installment payments will be valid only if it has been Filed With The
Committee for at least sixty (60) days prior to the December installment
distribution date.
102
BENEFITS
- --------
(f) A Participant receiving payments pursuant to this Section 8.08
may, upon Termination of Employment, elect any form of optional benefit
payment then available under the Plan, provided such form of payment meets
the requirements of Code Section 401(a)(9). The Committee may deny the
optional benefit form selected by the Participant or adjust it in any
manner necessary to arrive at a form of payment which meets the
requirements of the Code.
(g) Annual installment payments payable pursuant to the provisions of
Sections 8.08(a)(1), 8.08(a)(2)(ii), 8.08(b)(1), and 8.08(b)(2)(ii) shall
be calculated by dividing the balance of Units and Shares in the
Participant's Account on the last day of the calendar year prior to the
calendar year in which the distribution date occurs (as determined under
Sections 6.01 and 6.02 and less any distributions previously made to the
Participant in the same calendar year by reason of this Section 8.08) by
the number of installment payments not yet distributed and either
(i) valuing the resulting number of Units and Shares as provided
in Sections 6.01 and 6.02 as of the October Valuation Date
immediately preceding the December distribution date, or
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BENEFITS
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(ii) valuing the resulting number of Units and Shares as provided
in Sections 6.01 and 6.02 as of the January Valuation Date immediately
preceding the April distribution date, whichever is applicable.
SECTION 8.09 - Annuity Payments.
------------ ----------------
(a)(1) Money Purchase Account Paid as Annuity. Unless otherwise
--------------------------------------
elected as provided below, a Participant who is married on the "annuity
starting date" and who does not die before the "annuity starting date"
shall receive the vested portion of his Participant's Account that is a
part of the money purchase pension component of the Plan ("Money Purchase
Account") in the form of a joint and survivor annuity. The joint and
survivor annuity is the annuity that is purchased with the distributable
proceeds of the vested portion of the Participant's Money Purchase Account.
Any costs associated with the purchase of any annuity contract to provide
the joint and survivor annuity shall be charged against the distributable
proceeds of the Participant's Money Purchase Account. The joint and
survivor annuity shall commence within a reasonable time after the
Participant's annuity starting date, and shall be equal in value to a
single life annuity for the life of the Participant. Such joint and
survivor
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BENEFITS
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benefits shall be paid to the Participant for his life and following the
Participant's death shall continue to the spouse during the spouse's
lifetime at a rate equal to 50% of the rate at which such benefits were
payable to the Participant. An unmarried Participant shall receive his
Money Purchase Account in the form of a single life annuity commencing
within a reasonable time after the Participant's annuity starting date.
The single life annuity is the annuity purchased with the distributable
proceeds of the Participant's Money Purchase Account. Any costs associated
with the purchase of an annuity contract to provide the single life annuity
shall be charged against the distributable proceeds of the Participant's
Money Purchase Account.
(2) Election to Waive Annuity Payments. Any election to waive the
----------------------------------
joint and survivor annuity must be made by the Participant during the
election period in writing on a form prescribed by and Filed With The
Committee and be consented to by the Participant's spouse. Such an
election to designate a beneficiary or a form of benefits may not later be
changed without spousal consent. An unmarried Participant may elect in
writing during the election period on a form prescribed by and Filed With
The Committee, to waive the single life annuity. Any form of benefit or
beneficiary
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BENEFITS
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designation made under this Section 8.09(a)(2) must establish the same form
of benefit and beneficiary as is selected for the Participant's non-Money
Purchase Accounts. Any election made under this Section 8.09(a)(2) may be
revoked by the Participant in writing without the consent of the spouse at
any time during the election period. The number of revocations shall not
be limited. Any new election must comply with the requirements of this
paragraph.
(3) Spousal Consent. Spousal consent will be valid only if it is made
---------------
in writing on a form prescribed by and Filed With The Committee, the spouse
acknowledges the effect of the consent, and the acknowledgment is witnessed
by a Plan representative or a notary public. If the spouse is legally
incompetent to give consent, the spouse's legal guardian, even if such
guardian is the Participant, may give consent. Such spouse's consent shall
be irrevocable. A former spouse's consent shall not be binding on a new
spouse. Such consent shall not be required if it is established to the
satisfaction of the Committee that the required consent cannot be obtained
because there is no spouse, the spouse cannot be located, or other
circumstances that may be prescribed by Treasury Regulations. If the
existence of a surviving spouse is uncertain or if the
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BENEFITS
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validity of spousal consent is unclear, the Committee shall withhold
payment of benefits until such time as spousal existence or the validity of
spousal consent can be determined with certainty. The Committee in its
discretion may refuse to recognize a spousal consent if it believes for any
reason that the consent is invalid.
(4) Election Period. The election period to waive annuity payments
---------------
shall be the 90 day period ending on the "annuity starting date". For
purposes of this Section, the "annuity starting date" means the first day
of the first period for which an amount is paid as an annuity, or, in the
case of a benefit not payable in the form of an annuity, the first day on
which all events have occurred which entitle the Participant to such
benefit.
(5) Notice of Election Rights. With regard to the election, the
-------------------------
Committee shall provide to the Participant a written explanation which
meets the requirements of Code Section 417(a)(3)(A).
(b) Effect of Waiver. In the event a Participant elects pursuant to
----------------
paragraph (a)(2) above not to receive his Money Purchase Account in the
form an annuity, the Committee, pursuant to the election of the
Participant, shall direct the Trustee to distribute such amount in the same
manner and to the same
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BENEFITS
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beneficiary which the Participant has selected for his non-Money Purchase
Account.
108
SECTION 9
---------
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
-----------------------------------------
SECTION 9.01 - Notwithstanding other provisions of the Plan to the
------------
contrary, a Participant may withdraw a part or all of the dollar value of the
balance of Units and Shares of Thrift Stock in his Participant's Account
attributable to (i) his After-Tax Contributions, (ii) contributions made by the
Corporation under the Plan as in effect prior to December 26, 1983, and (iii)
Corporation Matching Contributions that are not ESOP Contributions to the extent
vested under the provisions of Sections 8.02(a)(3), (4) or (5) or 8.02(b),
subject to the following conditions and limitations:
(a) Such withdrawal will be permitted only once every twenty-six (26)
weeks;
(b) Such withdrawal may not be in an amount less than six hundred
dollars ($600), and any larger amount must be added in increments of fifty
dollars ($50). Effective as of the first payroll period in the July 1989
Month, if the entire amount subject to withdrawal under this Section 9.01
is less than six hundred dollars ($600), such amount may be withdrawn, but
only in its entirety;
(c) Corporation Matching Contributions may be withdrawn under this
Section 9.01 only to the extent
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PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
they are vested and were made prior to the twenty-four (24) month period
ending on the effective date of the withdrawal; and
(d) A Participant may not withdraw any part of the dollar value in his
Participant's Account attributable to ESOP Contributions.
A withdrawal under this Section 9.01 will first be deducted from the
dollar value of the balance of Units and Shares in his Participant's Account
which were credited with respect to After-Tax Contributions determined as
provided in Sections 6.01 and 6.02 on the Valuation Date of the month in which
the application for withdrawal is Filed With The Committee (prior to July 1,
1990 "coincident with or immediately preceding the date of such withdrawal"
shall be substituted for "of the month in which the application for withdrawal
is Filed With The Committee"). In the event the amount withdrawn, if any, is
less than or no more than equal to the total amount of actual After-Tax
Contributions (without earnings or capital appreciation), a Participant making
such withdrawal shall not be entitled to receive the Corporation Matching
Contributions described in Sections 4.01 or 17.04 for a period of thirteen (13)
weeks next following such withdrawal. In the event the amount withdrawn,
together with amounts previously withdrawn, if any, exceeds the total amount of
actual After-Tax
110
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
Contributions, and thereby includes all or part of the earnings or capital
appreciation on such Participant's After-Tax Contributions or includes all or
part of the contributions made by the Corporation prior to December 26, 1983 or
Corporation Matching Contributions available for withdrawal under this Section
9.01, a Participant making such withdrawal shall not be entitled to receive the
Corporation Matching Contributions described in Sections 4.01 or 17.04 for a
period of twenty-six (26) weeks next following such withdrawal.
A Participant who is also participating in the Sanders Associates,
Inc. Thrift Plan ("Thrift Plan") and who withdraws the net value of his account
under the Thrift Plan attributable to his "Supplementary After-Tax Allotments"
or his "Basic After-Tax Allotments" in accordance with Sections 7.2.1 or 7.2.2
of the Thrift Plan (but not earnings or capital appreciation on such amounts)
("Sanders After-Tax Contributions"), shall not be entitled to receive the
Corporation Matching Contributions described in Section 4.01 of this Plan for a
period of thirteen (13) weeks next following such withdrawal. If the amount
such Participant withdraws from the Thrift Plan exceeds his Sanders After-Tax
Contributions and thereby includes all or a part of the earnings or capital
appreciation of such Participant's Sanders After-Tax Contributions in the Thrift
Plan or
111
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
includes the vested portion of the Participant's account value under the Thrift
Plan attributable to "Employer contributions" in accordance with Section 7.2.3
of the Thrift Plan, the Participant shall not be entitled to receive the
Corporation Matching Contributions described in Section 4.01 of this Plan for a
period of twenty-six (26) weeks next following such withdrawal.
SECTION 9.02 - Upon withdrawal under Section 9.01 or 9.03, the number
------------
of Units or Shares equivalent to the Unit or Share value of dollars so withdrawn
on the Valuation Date of the month in which the application for withdrawal is
Filed With The Committee (prior to July 1, 1990 "coincident with or immediately
preceding the date of such withdrawal" shall be substituted for "of the month in
which the application for withdrawal is Filed With The Committee") shall be
deducted from the Units and Shares then in such Participant's Account. Such
deductions shall be based on the dollar value of Units and Shares credited to
the Bond Fund, Thrift Stock in the ESOP Fund, the Lockheed Martin Stock Fund,
the Securities Fund and/or the STIF Fund in the same proportion as the dollar
value of such Units and Shares in such Participant's Account are at such time
credited to each Fund.
112
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
SECTION 9.03
------------
(a) (1) A Participant who is not eligible to make a withdrawal under
Section 9.01 because of the provisions of Section 9.01(a), may withdraw
amounts otherwise available under Section 9.01 and Elective Deferral
amounts (but not earnings on Elective Deferral amounts) only as may be
required to relieve financial hardship. Notwithstanding the foregoing, a
Participant who is employed by Sanders Associates, Inc. may also withdraw
under this Section 9.01 earnings on Elective Deferral amounts to the extent
such earnings were credited to his Account on December 31, 1988.
(2) Effective after the beginning of the first payroll period in
Lockheed Corporation's July 1989 Month, a Participant with a financial
hardship may withdraw amounts available under Section 9.01 and Elective
Deferral amounts (but not earnings on Elective Deferral Amounts) to relieve
the hardship without first making a withdrawal under the provisions of
Section 9.01 which would result in suspension of Corporation Matching
Contributions.
(3) Elective Deferral amounts may be withdrawn only after the Plan
Account balances available under Section 9.01 have been totally withdrawn
under Section 9.01 or this Section 9.03. Effective April 1,
113
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
1989, an application for a withdrawal under this Section 9.03 shall be
considered by the Committee only if the Participant provides written
evidence that he has one or more of the immediate and heavy financial needs
described in subsection (b) and that the withdrawal is necessary to satisfy
the need as described in subsection (c). A hardship withdrawal will be
granted only if the Committee, after considering all relevant facts and
circumstances and applying the objective standards of this Section 9.03 in
a nondiscriminatory manner, determines the existence of an immediate and
heavy financial need and the amount necessary to meet the need.
(b) An immediate and heavy financial need exists only if the requested
withdrawal is to satisfy:
(1) non-reimbursed medical expenses described in Code Section
213(d) (generally, those for "medical care") incurred by the
Participant, his spouse or any of his dependents,
(2) the need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence,
(3) non-reimbursed expenses directly related to a fire,
explosion, flood, wind, rain,
114
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
lightning, snow, sleet, hail, ice, volcanic eruption, tidal wave,
earthquake, mudslide or other similar natural disaster,
(4) non-reimbursed expenses not described in subsection (1) above
which are directly related to the institutionalizing of the
Participant, his spouse or any of his dependents in a hospital,
facility for the care or education of the mentally or physically
handicapped, nursing home, skilled care facility, hospice, in-patient
substance abuse center, rehabilitation center, or institution of a
similar nature, but not including camps, detention centers, jails, or
prisons,
(5) non-reimbursed expenses directly related to the burial of the
Participant's spouse or any of his dependents (determined without
regard to the support and residency tests of Section 9.03(e)(1)(i) and
(ii), including travel expenses only if the burial costs have been
borne by the Participant, and excluding wages lost due to
administering an estate, preparing for a funeral, or attending a
funeral.
(6) non-reimbursed tuition, room and board, books, and fees for
the next semester or quarter of primary (grades 1 through 8),
secondary (grades
115
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
9 through 12), or post-secondary education for the Participant, his
spouse, or any of his dependents, excluding expenses related to
enrollment in child care or day care facilities and for instruction in
music, dance, athletics, and the like which is outside of the
student's basic education curriculum,
(7) the need to replace gross wages (net of disability benefits,
workers compensation insurance or any other payment received as a
result of prolonged absence) ordinarily paid by the Employer to the
Participant, but only if
a. the Participant has been on prolonged absence status for
a period of at least four consecutive weeks, and
b. the Participant makes a request for withdrawal by Filing
With The Committee while on prolonged absence status or within 30
days after returning to active payroll status or within 30 days
after prolonged absence status has otherwise been terminated, or
(8) down payment, closing costs and other non-reimbursed expenses
directly related to the purchase, construction, or major renovation of
the principal residence for the Participant, but not
116
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
including expenses related to repairs, remodeling, decorating,
landscaping, refinancing, mortgage payments, leasing, or real property
taxes or homeowners dues other than such taxes or dues payable as part
of closing costs. For purposes of this Section 9.03(b)(8), a
residence shall be treated as undergoing a major renovation only if
the expenditures materially extend the useful life of the residence
and significantly upgrade its usefulness through
a. gutting and extensive reconstruction of major structural
components,
b. cure of a substantial accumulation of major disrepairs,
limited to expenses necessary to bring major housing components
and systems into compliance with local building, health or safety
codes or otherwise make the dwelling habitable,
c. changing the floor plan by means of tearing down
existing interior walls and partitions and building new walls,
partitions, and doors,
d. enlarging the dwelling by increasing the total volume,
other than an
117
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
increase in interior floor space resulting from interior
remodeling, or
e. completion of construction of areas left unfinished in
the original construction of the dwelling.
(c) A withdrawal is necessary to satisfy an immediate and heavy
financial need only if
(1) the amount withdrawn does not exceed the amount of the need,
(2) the need cannot be relieved through reimbursement or
compensation by insurance, workers compensation, unemployment
insurance, disability payments, scholarships, grants, or otherwise,
(3) the need cannot be relieved by cessation of Elective
Deferrals and After-Tax Contributions under the Plan,
(4) the need cannot be relieved by other distributions or
nontaxable (at the time of the loan) loans currently available from
any plans maintained by the Corporation (including this Plan) or any
other employer,
(5) the need cannot be relieved by borrowing from commercial
sources on reasonable commercial terms, and
118
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
(6) the need cannot be relieved by reasonable liquidation of the
Participant's assets, to the extent such liquidation would not itself
cause an immediate and heavy financial need.
The provisions of paragraphs (4), (5) and (6) of this Section 9.03(c) shall
not apply to a withdrawal of amounts available under Section 9.01.
However, a Participant requesting a hardship withdrawal of amounts
available under Section 9.01 must establish that the amount requested is
not reasonably available from other sources.
(d) For purposes of Section 9.03(c)
(1) The Participant's resources shall be deemed to include those
assets of his spouse and minor children that are reasonably available
to the Participant, including assets held as community property, joint
tenants, tenants by the entirety, or tenants in common, but excluding
property held for the Participant's child under an irrevocable trust
or under the Uniform Gifts to Minors Act.
(2) Liquidation of the following assets will be considered an
"unreasonable liquidation" and
119
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
will not be required as a prerequisite to a withdrawal under Section
9.03:
(i) The Participant's aggregate interest in real property or
personal property that the Participant, his spouse or any of his
dependents uses as a principal residence, or in a cooperative
that owns property that the Participant, his spouse or any of his
dependents, uses as a principal residence.
(ii) The Participant's interest in motor vehicles, excluding
recreational vehicles, used by the Participant, his Spouse, or
any of his dependents for transportation to and from a school or
place of employment.
For purposes of this paragraph (d)(2) "Participant's interest"
includes the interests of the Participant's spouse and minor children
described in paragraph (d)(1) above.
(e) Except as expressly provided otherwise, for purposes of this
Section 9.03, "dependent" means
(1) the Participant's child (including an adopted child),
grandchild, stepchild, brother, sister, halfbrother, halfsister,
stepbrother, stepsister, parent, grandparent, stepparent, aunt,
120
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
uncle, niece, nephew, father-in-law, mother-in-law, son-in-law,
daughter-in-law, brother-in-law, sister-in-law, and any other
individual (including a cousin) whose principal place of abode is the
Participant's home and who is a member of the Participant's household
without being in violation of local law if
(i) the relative or other individual is a citizen, resident,
or national of the United States or a resident of Canada or
Mexico and
(ii) the Participant provides more than one-half of the
relative's or other individual's support, and
(2) any other individual who is the Participant's dependent
within the meaning of Code Section 152.
(f) The Committee shall be entitled to rely, without the need for
independent certification, on the authenticity of all documents submitted
by the Participant in support of his application under this Section 9.03
and on the truthfulness of the facts and representations set forth by the
Participant in such application.
121
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
SECTION 9.04 -
------------
(a) The Committee shall have the investment management discretion to
direct the Trustee to lend money to Participants. Each such loan shall be
treated as an investment of a portion of the Trust Funds representing the
borrowing Participant's Account. The Committee may, upon finding that such
actions are necessary or desirable, establish loan policies which permit
the waiver of defaults or which establish any loan procedures or
requirements which are not inconsistent with this Section.
(b) A Participant who wishes to borrow money from the Plan shall file
a written loan application with the Committee. The Committee, in its sole
fiduciary discretion, shall approve the loan unless it determines that such
investment of Trust Fund assets is not in the best interest of Plan
Participants and beneficiaries. The Committee shall exercise its
discretion in a uniform and nondiscriminatory manner. A loan shall be
granted only under the following requirements and conditions.
(1) Beginning October 1, 1989, no loan shall be made in an amount
which exceeds the combined value of the Participant's Elective
Deferral amount and After-Tax Contributions amount and no
122
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
loan shall be made in an amount which exceeds fifty percent (50%) of
the value of the vested portion of the Participant's Account. In
addition, no loan shall be made in an amount greater than $50,000
(reduced by the Participant's highest outstanding loan balance during
the preceding 12-month period under this or any other qualified
pension benefit plan of the Corporation).
(2) No loan shall be made to a Participant who has a loan
outstanding under this or any other qualified pension benefit plan of
the Corporation.
(3) The loan shall bear interest at an annual percentage rate
(rounded to the nearest one-half of one percentage point) equivalent
to the weekly average yield, adjusted for constant maturity, on five-
year Treasury notes. Such rate shall be established semi-annually as
of the last week of November for loans made in the first six-month
period of the following Plan Year; and as of the last week of May for
loans made in the last six months of the current Plan Year.
(4) The minimum loan amount shall be $500, except that the
minimum loan amount for a Residential Loan shall be $1,000. Any
additional
123
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
amounts must be in $100 increments. A Residential Loan is a loan made
to a Participant which is used to acquire any dwelling unit which is
to be used within a reasonable period of time, as the principal
residence of the Participant. An application for a residential loan
must contain such documentation as is satisfactory for the Committee
to verify the purpose of the loan.
(5) Interest and principal on a loan must be repaid through
authorized payroll deduction in equal installments of at least $10 per
week over one or more whole-year (52-week) periods. The maximum
repayment period shall be four years (208 weeks), except that the
maximum repayment period for a Residential Loan shall be 15 years (780
weeks). The maximum weekly repayment amount may not exceed twenty-
five percent (25%) of the Participant's Weekly Rate of Compensation.
One pick-up payment per week, for a maximum of thirteen consecutive
weeks, is required for a Participant whose repayments are in arrears
because of insufficient earnings. Repayments will be invested in the
Fund or Funds specified by the Participant for current Elective
Deferrals or After-Tax Contributions, or otherwise the most
124
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
recent Elective Deferral or After-Tax Contribution specification by
such Participant as shown on the records of the Trustee(s).
(6) The Loan shall be documented by such application forms,
notes, evidences of indebtedness and other instruments, executed by
the Participant, which the Committee in its discretion shall require.
A promissory note, executed by the Participant shall be Filed With The
Committee, and shall be accompanied by payment of a loan fee in the
amount which is the greater of $25 ($50 in the case of a Residential
Loan) or one-half of one percent of the amount of the loan. The
spouse of a married Participant must consent to the loan application.
(7) A Participant is not eligible to apply for a loan until 13
weeks have expired following the repayment in full of a previous loan.
This restriction is not applicable with respect to a loan for the
purpose of refinancing an existing loan.
(8) A Participant will not be permitted to refinance a loan
during the initial year of the loan, and may do so only once
thereafter. A refinancing loan shall be subject to the same
125
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
terms and conditions currently applicable to new loans, except the
term thereof cannot extend beyond five (5) years from the date the
loan was originally made, or, in the case of a Residential Loan, five
(5) years beyond the original maturity date thereof.
(9) A Participant will be permitted to prepay a loan:
a. At anytime after the loan has been in effect for 13
weeks; or
b. Within the 30-day period preceding the Participant's
Termination of Employment. Any prepayment must be in the amount
of the full outstanding loan balance.
(10) A Participant who is on an authorized leave of absence without
pay may elect to continue repayments during such period. Such
repayments may be made either weekly or monthly in the full amount due
at such time of repayment. Upon return to the active payroll, a
Participant who has not kept his repayments current may have the term
of his loan extended by the number of weeks such repayments were not
made, except that such extension will not be permitted if the term
would extend beyond five (5) years from the date the
126
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
loan was originally made, or in the case of a Residential Loan, five
(5) years beyond the original maturity date thereof.
(11) A Participant shall be in default of a loan if such
Participant:
a. is an active Employee who has insufficient earnings to
make a repayment for 13 consecutive weeks, or is otherwise 13
weeks or more in arrears in such weekly repayments; or
b. is an Employee returning from an authorized leave of
absence without pay whose loan term cannot be extended pursuant
to Subsection 9.04(b)(10) and who:
(i) does not pay all arrearages in a lump sum, or
(ii) is unable to pay up all arrearages through 13
consecutive pick-up payments, and fails to refinance the
loan; or
c. has filed for relief under the U.S. Bankruptcy Code.
(12) A Participant who is in default of a loan:
127
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
a. will be suspended from making Elective Deferrals and
After-Tax Contributions for a period commencing on the date of
default and ending on the later of:
(i) one year from such date, or
(ii) the date on which the outstanding loan balance is
repaid by a single lump sum payment; and
b. will be ineligible to apply for a new loan for a period
commencing on the date of default and ending on the later of
(i) one year from such date, or
(ii) thirteen (13) weeks following the repayment in
full of the loan.
(13) Loan proceeds shall be deducted from the borrowing
Participant's Account, based upon the Valuation Date of the month in
which the loan is approved by the Committee. However, prior to July
1, 1990, loan proceeds shall be deducted from the borrowing
Participant's Account based upon the Valuation Date coincident with or
immediately preceding the date on which the Participant Files With The
Committee the promissory note evidencing the loan debt. Loan proceeds
will be deducted based on the dollar value of the Units and Shares
128
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
credited to the Bond Fund, the Lockheed Martin Stock Fund, the
Securities Fund, the STIF Fund and/or the ESOP Fund in the same
proportion as the dollar value of such Units and Shares in such
Participant's Account are at such time credited to the Bond Fund, the
Lockheed Martin Stock Fund, the Securities Fund, the STIF Fund and/or
the ESOP Fund.
(14) Each loan from the Plan shall be secured by the borrowing
Participant's Account in the Plan. If a Participant has a Termination
of Employment before the loan is repaid, the loan shall become due
immediately and shall be repaid out of the Participant's Account,
which shall be reduced accordingly.
(15) All repayments, other than by authorized payroll deductions,
shall be made by certified check or money order payable to the order
of The Corporation, and delivered to a Plan Representative.
129
SECTION 10
----------
BENEFICIARY
-----------
SECTION 10.01 - In the event an unmarried Participant dies on or after
-------------
August 23, 1989, such Participant's Account under the Plan shall be paid in a
single sum to his designated beneficiary. In the event a married Participant
dies on or after August 23, 1984, such Participant's Account under the Plan
(other than amounts in the money purchase pension component of the Plan which
are subject to Section 10.02) will be paid in a single sum to his surviving
spouse. If there is a surviving spouse and the Participant and spouse wish that
benefits under the non-money purchase pension components of this Plan be paid to
a designated beneficiary, the participant may designate a beneficiary to receive
such benefits in lieu of the spouse but only with spousal consent of the person
who is the spouse at the time of the Participant's death. Spousal consent will
only be valid if it is made in accordance with Section 8.09(a)(3).
SECTION 10.02 -
-------------
(a) Pre-retirement Survivor Annuity. Unless otherwise elected as
-------------------------------
provided below, a Participant who dies before the annuity starting date and who
has a surviving spouse shall have the vested portion of his Money Purchase
Account paid to his surviving spouse in the form of a pre-
130
BENEFICIARY
- -----------
retirement survivor annuity. A pre-retirement survivor annuity is the annuity
for the life of the Participant's surviving spouse that is purchased with the
distributable proceeds of the vested portion of the Participant's Money Purchase
Account. Any costs associated with the purchase of any annuity contract to
provide the pre-retirement survivor annuity shall be charged against the
distributable proceeds of the Participant's Money Purchase Account. Unless the
spouse directs otherwise as permitted in Section 10.02(e) payment of the pre-
retirement survivor annuity will commence at the time the Participant would have
attained his Normal Retirement Age.
(b) Waiver of Pre-retirement Survivor Annuity. Any election to waive
-----------------------------------------
the pre-retirement survivor annuity before the Participant's death must be made
by the Participant during the election period in writing, on a form prescribed
by and Filed With The Committee, and shall require the spouse's irrevocable
consent in the same manner provided for in Section 8.09(a)(3). The spouse's
consent must acknowledge the specific nonspouse beneficiary or the alternative
form of death benefit to be paid in lieu of the pre-retirement survivor annuity.
If after any revocation of a waiver a new waiver is made by a Participant, the
spouse's consent as provided for in Section 8.09(a)(3) will be required for such
new waiver.
131
BENEFICIARY
- -----------
(c) Election Period. The election period to waive the pre-retirement
---------------
survivor annuity shall begin on the first day of the Plan Year in which the
Participant attains age 35 and end on the date of the Participant's death. An
earlier waiver (with spousal consent) may be made, but such waiver shall become
invalid at the beginning of the Plan Year in which the Participant attains age
35. In the event a Participant separates from service prior to the beginning of
the election period, the election period shall begin on the date of such
separation from service.
(d) Notice of Election Rights. With regard to the election, the
-------------------------
Committee shall provide Participants with a written explanation that meets the
requirements of Code Section 417(a)(3)(B).
(e) Immediate Distributions of Money Purchase Account to Spouse. If
-----------------------------------------------------------
the value of the vested portion of a Participant's Money Purchase Account is
less than $3,500, at his death the Committee shall direct the immediate
distribution of such amount in a single sum to the Participant's spouse. If
such value exceeds $3,500, the surviving spouse may elect on a form prescribed
by and Filed With The Committee (i) to commence receiving the pre-retirement
survivor annuity within a reasonable time following the later of the
Participant's death or the spouse's election or (ii) to receive a single sum
132
BENEFICIARY
- -----------
distribution of the vested portion of the Participant's Money Purchase Account,
provided such surviving spouse consents in writing to such distribution. Any
written consent required under this paragraph must be obtained not more than 90
days before commencement of the distribution and shall be made in a manner
consistent with Section 8.09(a)(3). If a surviving spouse's consent is not
received by the later of the time the Participant would have attained his Normal
Retirement Age or 90 days after the Participant's death, the pre-retirement
survivor annuity will commence to such spouse within a reasonable time after
such date.
Section 10.03 - Designation of Beneficiary. Subject to the
------------- --------------------------
provisions of Sections 10.01 and 10.02, a Participant may designate in writing a
beneficiary or beneficiaries. The terms "beneficiary" or "beneficiaries" shall
mean any person or persons so designated by a Participant to receive benefits to
which such Participant may be entitled under the Plan upon his death. If more
than one beneficiary is named, the Participant may specify the sequence and/or
proportion in which payments shall be made to each beneficiary. In the absence
of a specification of either sequence or proportion, payments shall be made in
equal shares to all named beneficiaries. All such designations shall be made by
Filing With The Committee. In the absence of such
133
BENEFICIARY
- -----------
designation which is effective, payments shall be made in accordance with
applicable law. When payment has been made in accordance with the foregoing
provisions, there shall be no further liability of the Corporation, the
Trustee(s), or any other person or legal entity to anyone in connection with
such deceased person under the Plan.
134
SECTION 11
----------
NAMED FIDUCIARIES
-----------------
AND
---
ALLOCATION OF RESPONSIBILITIES
------------------------------
SECTION 11.01 - The following persons shall be "Named Fiduciaries"
-------------
under the Plan and Trust Agreements, and shall be the only Named Fiduciaries
hereunder:
(a) The Trustee. Any Trustee designated hereunder shall be a bank or
-----------
trust company qualified under the laws of the United States or of any State
to operate thereunder as a trustee.
(b) Lockheed Corporation, as Plan Sponsor. Any authority assigned or
-------------------------------------
reserved to Lockheed Corporation under the Plan and Trust Agreement shall
be exercised by resolution of the Board of Directors or as otherwise
provided at Section 13.01 of this Plan. Such a resolution shall become
effective with respect to the Trustee upon receipt by the Trustee of a
certified copy of such Board of Directors' resolution.
(c) The Committee, as Administrator of the Plan. The Committee shall
-------------------------------------------
be appointed to serve as Administrator by resolution duly adopted by the
Board of Directors. Whenever a Committee is so appointed, the Trustees
shall be advised of the name or names of the person or persons so appointed
by providing to the
135
Trustees a certified copy of such Board of Directors' resolution, and the
Trustees may assume that such person or persons shall continue in office
until advised differently in the same manner. Whenever a Trustee must or
may act upon the direction or approval of the Committee, the Trustee may
act upon written communication signed by a majority of such Committee, or
an agent appointed in writing by a majority of such Committee to act on the
Committee's behalf, and the authority of any such agent shall be deemed to
continue until revoked in writing. In such case, the Trustee shall not be
responsible for failure to act without such a communication.
(d) The Participant, under Sections 4A.08 and 4A.09. A Participant
------------------------------------------------
shall be a "Named Fiduciary" solely for purposes of tender and voting of
Stock as provided in Sections 4A.08 and 4A.09.
SECTION 11.02 - Responsibilities shall be allocated among the Named
-------------
Fiduciaries as follows:
(a) Each Trustee shall, unless otherwise directed by an Investment
Manager (if such has been appointed), have exclusive authority and
discretion to manage and invest the assets of the Trust Fund, as provided
in its Trust Agreement. Shares in the ESOP Fund shall be tendered,
exchanged and voted as provided in Sections 4A.08 and 4A.09. Each Trustee
shall further be
136
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
responsible for the holding and disbursement of all contributions and
income received by it under the Plan, as provided in its Trust Agreement,
and shall have such other responsibilities as are provided in such
Agreement. To any extent that the ESOP Trust Agreement differs or
prescribes different rights or duties for the ESOP Trustee than those found
in this Plan, the provisions of such Trust Agreement shall govern.
(b) Lockheed Corporation shall have the authority and responsibility
for:
(1) the design of the Plan and Trust Agreements, including
amendment of the Plan and Trust Agreements;
(2) the qualification of the Plan under applicable law;
(3) the designation of members of the Committee; and
(4) funding the Plan in accordance with applicable law and
determinations of the Committee.
(c) The Committee shall have the responsibility, authority and
discretion necessary to control the operation and administration of the
Plan and Trust
137
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
Fund(s) in accordance with the terms of the Plan and Trust Agreement(s),
including, without limiting the generality of the foregoing:
(1) all functions assigned to the Committee under the terms of
the Trust Agreement;
(2) all functions assigned to the Committee under the terms of
the Plan;
(3) determination of benefit eligibility and amount and
certification thereof to Trustees;
(4) hiring of persons to provide necessary services to the Plan;
(5) issuance of directions to the Trustees to pay any fees,
taxes, charges or other costs incidental to the operation and
management of the Plan, as provided in Section 7.05;
(6) preparation and filing of all reports required to be filed by
the Plan with any agency of Government;
(7) compliance with all disclosure requirements imposed by state
or federal law;
(8) establishment of a funding policy within the meaning of
Section 402(b)(1) of ERISA;
(9) maintenance of all records of the Plan other than those
maintained by the Trustees;
138
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
(10) interpretation and construction of Plan provisions;
(11) establishment of procedures to be followed by Participants
and beneficiaries for Filing With The Committee;
(12) the determination of the amounts needed to fund the Plan, and
the payment of such amounts from corporate funds to the Trustee;
(13) the appointment, removal and replacement of the Trustees;
(14) the appointment, removal and replacement of one or more
Investment Managers (as defined in Section 3(38) of ERISA or any other
provision of ERISA or other statute of similar import) which shall be
responsible for the management of such of the assets of the Trust
Fund(s) as the Committee shall specify; and
(15) the exercise of all fiduciary functions provided in the Plan
or in the Trust Agreements or necessary to the operation of either
except such functions as are specifically assigned to other Named
Fiduciaries. The Committee may adopt such rules to govern its own
procedures as it may deem advisable, provided that such rules are not
inconsistent with the provisions and purposes of
139
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
the Plan or Trust Agreements. The Committee may designate other
persons, including the Trustee(s), to carry out its duties and
responsibilities, as it may deem appropriate or necessary. Effective
January 1, 1993, the Committee for Employee Benefit Plans shall make
annual reports to the Board of Directors on the operation and
administration of the plan and trust funds. The report shall be made
in the form and manner determined by the Board of Directors.
(d) Participants who have Shares credited to their Participants'
Accounts shall make tender or exchange decisions and voting decisions with
respect to Shares as provided in Sections 4A.08 and 4A.09 and the Trust
Agreement between the Corporation and the ESOP Trustee.
SECTION 11.03 - Each Named Fiduciary is allocated the individual
-------------
responsibility for the prudent execution of the functions assigned to him, and
none of such responsibilities or any other responsibility shall be shared by two
or more of such Named Fiduciaries unless such sharing shall be provided by a
specific provision of the Plan or a Trust Agreement. Whenever one Named
Fiduciary is required by the Plan or a Trust Agreement to follow the directions
of another Named Fiduciary, the two Named Fiduciaries shall not
140
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
be deemed to have been assigned a shared responsibility, but the responsibility
of the Named Fiduciary giving the directions shall be deemed his sole
responsibility, and the responsibility of the Named Fiduciary receiving those
directions shall be to follow them insofar as such instructions are on their
face proper under applicable law.
SECTION 11.04 - A Named Fiduciary may employ one or more persons to
-------------
render advice concerning any responsibility such Named Fiduciary has under the
Plan or Trust Agreement(s).
SECTION 11.05 - To the extent permitted by law, Lockheed Corporation
-------------
shall indemnify each member of the Committee and any employee of the Corporation
who acts as an agent of the Committee, or who advises the Committee, against any
and all expenses and/or liabilities arising out of his service or membership on
the Committee, or service for or advice to the Committee.
141
SECTION 12
----------
GENERAL PROVISIONS
------------------
SECTION 12.01 - The existence of this Plan or any action hereunder and
-------------
participation in the Plan shall in no way affect the Corporation's right to
discipline, discharge, or take any other action with respect to employees.
SECTION 12.02 - To the extent permitted by law: No right or benefit
-------------
provided for in this Plan shall be subject in any manner to anticipation,
commutation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and any attempt to anticipate, commute, alienate, sell, transfer,
assign, pledge, encumber or charge the same shall be void. No such right or
benefit shall be in any manner liable for or subject to the debts, contracts,
liabilities, or engagements of any person entitled to such right or benefit. No
such right or benefit shall be subject to garnishment, attachment, execution,
levy or any other similar adverse legal process, or to bankruptcy or insolvency
proceedings of any kind. If any person entitled to rights or benefits under the
provisions of this Plan shall attempt to anticipate, commute, alienate, sell,
transfer, assign, pledge, encumber or charge any such right or benefit, or if
any such right or benefit shall, notwithstanding the provisions of the preceding
sentence, be subject, in whole or in part, to garnishment, attachment,
142
GENERAL PROVISIONS
- ------------------
execution, levy or any other similar adverse legal process, or to bankruptcy or
insolvency proceedings of any kind, then in the sole discretion of the Committee
such right or benefit or part thereof, as the case may be, shall cease and
determine and in such event the Committee may hold or apply the same, in whole
or in part, to or for the benefit of his spouse, children, next of kin or
dependents, or any of them, in such manner and in such proportions as the
Committee may deem proper. Any right or benefit so held or applied shall be
deemed conclusively to have been held or applied, as the case may be, for the
benefit of such person entitled to such right or benefit under the provisions of
this Plan.
SECTION 12.03 - If the Committee determines that any person entitled
-------------
to payments under this Plan is a minor or incompetent by reason of physical or
mental disability, it may cause all payments then due or thereafter becoming due
to such person to be made or any legally authorized person for his benefit,
without responsibility to follow the application of amounts so paid. Payments
made pursuant to this Section shall completely discharge the Committee, the
Trustees, and the Corporation.
SECTION 12.04 - Each Participant shall be responsible for furnishing
-------------
the Committee with his current address and the name, current address, and social
security number, if any, of his beneficiary if he has designated a
143
GENERAL PROVISIONS
- ------------------
beneficiary. Any notices required or permitted to be given hereunder shall be
deemed given if directed to such address and mailed by regular United States
First-Class mail. The Committee, the Trustees, and the Corporation shall have
no obligation or duty to locate such Participant or his beneficiary. In the
event a Participant or his beneficiary becomes entitled to a payment under this
Plan and such payment cannot then be made because the current address referred
to above is incorrect, because such Participant or beneficiary fails to respond
to the notice sent to the current address referred to above, because of
conflicting claims to such payment, or for any other reason, the amount of such
payment, when and if made, shall be based on the dollar value of the Units and
Shares in such Participant's Account with respect to such payment, as such
dollar value is determined as provided in Sections 6.01 and 6.02 on the
Valuation Date immediately preceding the date such payment is actually made.
SECTION 12.05 - A claim for benefits shall be presented by Filing With
-------------
The Committee. Any denial by the Committee of a claim for benefits under the
Plan by a Participant or beneficiary shall be stated in writing by the Committee
and delivered or mailed to the Participant or beneficiary. Such notice shall
set forth the specific reasons for the denial and shall be written in a manner
144
GENERAL PROVISIONS
- ------------------
which may be understood without legal or actuarial counsel. Such notice shall
also include a description of any material or information necessary for the
Participant or beneficiary to perfect the claim, an explanation of why such
material or information is needed, and an explanation of the Plan's review
procedure. Within sixty days after the receipt of such notice, the Participant
or beneficiary may, by Filing With The Committee, request review by the
Committee of its initial denial of the claim. Such Participant or beneficiary
shall be afforded the opportunity to review pertinent documents relating to the
initial denial and submit issues and comments in writing to the Committee. The
Participant or beneficiary may, at his expense, be represented by legal counsel
during the review proceedings.
SECTION 12.06 - In the event of a merger or consolidation with, or
-------------
transfer of assets and liabilities to, any other plan, each Participant must, if
the Plan is then terminated, receive the benefit after the merger, consolidation
or transfer of assets and liabilities which is equal to or greater than the
benefit he would have been entitled to receive immediately before the merger,
consolidation or transfer of assets and liabilities if the Plan had then
terminated.
SECTION 12.07 - To the extent provided by law, if any benefit under
-------------
the Plan cannot be paid because, after due
145
GENERAL PROVISIONS
- ------------------
diligence, the proper recipient cannot be located during the three (3) year
period commencing on the date the benefit is first payable, the amount of the
benefit shall be returned to the appropriate Trust Fund as a credit to
Corporation Matching Contributions. If, however, a proper recipient
subsequently makes a valid claim for such benefit, the amount of such benefit
shall be restored to the Trust Fund by the Corporation and will be paid as
provided in Section 12.04.
SECTION 12.08 -
-------------
(a) This Plan will follow the terms of any qualified domestic
relations order issued with respect to a Participant. However, the Plan
will only follow orders which meet all of the requirements of subsection
(b).
(b) A "qualified domestic relations order" is any judgment, decree or
order, including the approval of a property settlement or agreement,
provided that
(1) the order relates to the provision of child support, alimony
or marital property rights and is made pursuant to state domestic
relations or community property laws;
(2) the order creates or recognizes the existence of an alternate
payee's right to receive all or a portion of a Participant's Account;
146
GENERAL PROVISIONS
- ------------------
(3) the order specifies the name and last known mailing address
of the Participant and each alternate payee covered by the order;
(4) the order specifies the amount or percentage of the
Participant's Account to be paid to each alternate payee or the manner
in which the amount of percentage is to be determined;
(5) the order specifies the number of payments or the period to
which the order applies;
(6) the order specifically names this Plan as the plan to which
the order applies;
(7) the order does not require this Plan to provide any type of
benefits or form of benefits not otherwise provided under this Plan;
(8) the order does not require the payment of benefits to an
alternate payee which are required to be paid to another alternate
payee under another order previously determined by the Committee to be
a qualified domestic relations order; and
(9) if the order requires that payments to the alternate payee
commence before they commence with respect to the Participant, the
order specifies that payments will not commence before
147
GENERAL PROVISIONS
- ------------------
the Participant attains or would have attained the earliest allowable
retirement age under the Plan.
A qualified domestic relations order may provide that a former spouse of
the Participant is to be treated as a surviving spouse for purposes of the
death benefit provisions of this Plan. Subsection (c) sets forth the
procedures under which the Committee shall determine whether a domestic
relations order properly qualifies.
(c) The Committee shall not treat any judgment, order or decree as a
"qualified domestic relations order" unless it meets all of the
requirements set forth in subsection (b). If the order meets these
requirements, the Committee shall follow the terms of the order whether or
not this Plan has been joined as a party to the legal proceeding out of
which the order arises. Upon receipt of a domestic relations order, the
Committee shall notify the Participant and alternate payee of (1) its
receipt of the order and (2) its need to determine the qualified status of
the order in accordance with subsection (b). The alternate payee may
designate a representative to receive copies of future notices with respect
to the qualified status of the order. To the extent an order calls for
benefits to be paid to an alternate payee before the qualified nature of
the order is determined, a separate
148
GENERAL PROVISIONS
- ------------------
account shall be established to hold the benefit payments affected by the
order. This account shall be administered in accordance with the rules set
forth in Section 206(d)(3)(H) of ERISA.
Section 12.09 - Rollover Contributions.
------------- ----------------------
(a) Effective July 1, 1993, an Eligible employee, regardless of
whether he has satisfied the eligibility requirements of Section 2 who has
received a distribution from a plan which meets the requirements of Section
401(a) of the Code my, with the approval of the Corporate Salary Board, transfer
the distribution received from the other plan to the Trustee; provided that the
distribution is eligible for rollover treatment and exclusion from the gross
income of the Employee in accordance with Section 402(c) of the Code.
(b) The Committee shall develop such procedures, and may require such
information from an Employee desiring to make such a transfer, as it deems
necessary or desirable. Upon approval by the Committee, the amount transferred
shall be deposited in the Trust Fund and shall be credited to an account which
shall be 100% vested and shall share in allocations of income, gain and loss as
provided in the Plan.
149
SECTION 13
----------
AMENDMENT OR TERMINATION OF THE PLAN
------------------------------------
SECTION 13.01 - Effective January 1, 1993, the Corporation reserves
-------------
the right to amend, modify, suspend or terminate the Plan by action of the Board
of Directors. In cases where amendments are necessary to implement changes not
affecting the overall functioning of the Plan, such as extending Plan provisions
to new companies, changing benefit levels for the employees at such companies,
or as required by collective bargaining agreements, federal law, government
customer requirements, federal law, government customer requirements and to
maintain competitive programs to attract and retain employees; and such changes
will not, in the judgment of the Lockheed Corporate Salary Board, substantially
alter the nature or expense of the affected plan, then the power to amend the
Plan shall also be delegated to the Corporate Salary Board under guidance from
counsel. Any modification or amendment of the Plan may be made retroactive to
the effective date, if necessary or appropriate, for the Plan to qualify and
continue to qualify under the Code as now in effect or hereafter enacted or
adopted, provided, however, that no modification or amendment shall be made
which shall make it possible for any part of the Trust Fund(s) to be used for,
or diverted to, purposes other than for the benefit of those entitled to
150
benefits hereunder. In accordance with Section 204(h) of ERISA, a Plan
amendment which, in the sole judgment of the Corporation, significantly reduces
the rate of future benefit accruals under the money purchase pension component
of the Plan shall become effective on the later of its effective date or fifteen
days after the Corporation provides written notice of the amendment to
Participants and to alternate payees under qualified domestic relations orders
which meet the requirement of Section 414(p) of the Code.
SECTION 13.02 - Although Lockheed Corporation hopes and expects to
-------------
continue the Plan indefinitely the Board of Directors may terminate the Plan for
any reason at any time, except as provided in any agreement with a collective
bargaining agent. If the Plan is terminated, each Participant or former
Participant shall fully vest and shall receive a payment equal to the value of
his Participant's Account at the date of distribution. Whenever reference is
made in this Section to termination of the Plan this shall mean formal
termination of the Plan by appropriate action of Lockheed Corporation or by
virtue of complete discontinuance by Lockheed Corporation of contributions
called for by the Plan as the term "complete discontinuance of contributions
under the plan" is used in Section 411(d)(3) of the Code and the regulations
promulgated thereunder.
151
AMENDMENT OR TERMINATION OF THE PLAN
- ------------------------------------
SECTION 13.03 - If the Committee determines in its sole discretion
-------------
that the Plan has been partially terminated, within the meaning of regulations
under Code Section 411, the Committee shall determine the date of such
termination and who has been affected by the termination. The Participant's
Account of all Participants affected by the termination who were Employees on
the date thereof shall become fully vested. Such Participant's Accounts, to the
extent vested, shall remain payable under the terms of the Plan.
152
SECTION 14
----------
FLEXIBLE CREDIT CONTRIBUTIONS
-----------------------------
SECTION 14.01 - An Employee of CADAM, Inc. may elect, by Filing With
-------------
The Committee, to have the Corporation contribute to the Trustee(s) an amount
equal to the Employee's "Flexible Credit Balance" under the Flexible Benefits
Plan as of the end of the Plan Year. Such Flexible Credit Contributions shall
be treated as Elective Deferrals under this Plan, except that they shall be
ignored for purposes of Sections 3.07, 3.08 and 9.03. Subject to the
limitations of Section 9.01(a) and (b), such Flexible Credit Contributions shall
be withdrawable after the close of the twenty-fourth (24th) month after the
close of the Plan Year with respect to which such Flexible Credit Contributions
were made. Notwithstanding anything to the contrary contained herein, such
Flexible Credit Contributions shall not be treated as made pursuant to Section
125 of the Code.
SECTION 14.02 - In making the election required in Section
-------------
14.01 the Employee shall specify that the Flexible Credit Contributions shall be
invested by the Trustee either entirely in the Bond Fund, or entirely in the
Securities Fund, or entirely in the STIF Fund, or one-half in one Fund and one-
half in one of the other Funds, or one-half in one Fund and one-fourth in each
of the other Funds, or three-fourths in one Fund and one-fourth in one of the
other
153
FLEXIBLE CREDIT CONTRIBUTIONS
- -----------------------------
Funds. Alternatively, the Eligible Employee may specify that one-fourth of the
Flexible Credit Contributions shall be invested in Stock in lieu of one of the
other Funds.
SECTION 14.03 - No part of the Flexible Credit Contributions paid to
-------------
the Trustee shall be recoverable by the Corporation.
SECTION 14.04 - Except in accordance with applicable federal and state
-------------
law, no liability for the payment of benefits under the Plan shall be imposed on
the Corporation, its officers, directors, employees, or shareholders or the
Committee of any of its members, nor shall they be subject to any suit or
litigation or to any legal liability for any cause, or reason, or thing
whatsoever in connection with the Plan or in connection with the operation of
the Trust Fund(s). This shall not affect any obligation of the Corporation to
pay any specific contribution to the Trustee which it has accrued and expressly
obligated itself to pay, nor shall it affect the right, if any, of a Participant
or beneficiary to seek redress against the proper person or persons,
corporation, firm or trustee who violate his rights under the Plan.
SECTION 14.05 - Notwithstanding any other provision of the Plan to the
-------------
contrary, an Employee of CADAM, Inc., shall be considered a Participant for all
purposes of the Plan except Section 3.01. Eligibility to participate
154
FLEXIBLE CREDIT CONTRIBUTIONS
- -----------------------------
under Section 3.01 shall be determined under the provisions of Sections 2.01,
2.02, 2.03 and 17.02.
155
SECTION 15
----------
TOP HEAVY RULES
---------------
SECTION 15.01 -
-------------
(a) If this Plan is or ever becomes "top heavy," as determined under
subsection (b), the following special rules shall apply and (for purposes
of this Section only, any person excluded from the Plan solely because of
the person's failure to make Elective Deferrals shall be considered a
Participant):
(1) For any Plan Year in which the Plan is top heavy, each
Eligible Employee who is an Employee on the last day of the Plan Year
shall receive an allocation of Corporation contributions (including
his Elective Deferrals) and forfeitures at least equal to three
percent of the Eligible Employee's earnings (as defined in Section
5.02(c)(3)) for the Plan Year. If the money purchase pension
component of the Plan receives a waiver of the minimum funding
standard under Code Section 412(d) for the Plan Year, the minimum
amount required to be allocated under the money purchase pension
component of the Plan to each Participant under this subsection (a)(1)
(without regard to the waiver) shall be credited to the Participant's
Account in the money purchase
156
TOP HEAVY RULES
- ---------------
pension component of the Plan. The balance of such Account shall be
adjusted to reflect the credit in accordance with Revenue Ruling 78-
223.
If an Eligible Employee under this Plan is also covered by another defined
contribution plan maintained by the Corporation for the same Plan Year,
this Plan and all such other defined contribution plans shall be aggregated
in determining whether the minimum benefit required under Internal Revenue
Code Section 416(c)(2) is provided for the Eligible Employee under this
Plan. If an Eligible Employee in this Plan is also covered by a defined
benefit plan maintained by the Corporation for the same Plan year and the
minimum benefit required under Internal Revenue Code Section 416(c)(1) is
being provided under such other plan for the Plan Year if it is not
provided under this Plan, minimum benefits under this paragraph need not be
provided for the Eligible Employee if the Committee so elects.
(2) For purposes of determining an Eligible Employee's allocation
of Corporation Matching Contributions and forfeitures under Section
4.01 and paragraph (1), Elective Deferrals with respect to earnings
(as defined in Section 5.02(c)(3)) in excess of $200,000 (or such
other amount prescribed under Code Section 416(d) shall be
157
TOP HEAVY RULES
- ---------------
ignored for any Plan Year for which the Plan is top heavy.
(3) All Corporation-provided benefits under this Plan accruing
through the end of the Plan's last top heavy year shall vest in
accordance with the following schedule:
Years of Service Vested Percentage
---------------- -----------------
(at least) 2 20%
3 40%
4 60%
5 80%
6 (or more) 100%
The unvested portion of the Corporation Matching Contributions Account of a
Participant who resigns or is discharged shall be forfeited on the last day
of the Participant's first Break in Service after such resignation or
discharge. If a Participant who resigns or is discharged again becomes an
Employee before he or she has a Break in Service, the unvested portion of
the Participant's Account shall not be forfeited. Thereafter, any
allocations for the individual's benefit of Corporation Matching
Contributions and forfeitures, and the gains and losses thereon, shall be
made to his or her existing Corporation Matching Contribution Account. A
former Employee's Vested percentage shall not be determined under this
paragraph
158
TOP HEAVY RULES
- ---------------
unless he again becomes an Employee before the unvested portion of his
Corporation Matching Contribution Account is permanently forfeited under
the terms of this Plan. If a Participant received a distribution from his
or her Corporation Matching Contribution Account before it was fully
vested, the Participant's vested interest in that Account shall not be
determined under Section 8.02 after his rehire. Instead, his vested
interest in that Account shall be the amount that would then be vested
under Section 8.02 if his Corporation Matching Contribution Account were
increased by the amount previously distributed, but with such vested amount
being reduced by the amount of the prior distribution. When the Plan
ceases to be top heavy, vesting in benefits accruing thereafter shall
continue to be determined in accordance with this special vesting provision
for a Participant who has five (5) or more Years of Service when the Plan
ceases to be top heavy. The Committee shall establish appropriate
procedures consistent with the other vesting provisions of this Plan for
administering this special vesting rule. However, no Participant's vested
interest in his Corporation Matching Contribution Account at the time the
Plan ceases to be top heavy
159
TOP HEAVY RULES
- ---------------
shall be reduced solely as a result of the Plan ceasing to be top heavy.
(b) This Plan is "top heavy" for a Plan Year commencing after December
31, 1983 if, as of the last day of the preceding Plan Year (the
"determination date"), the amount credited to the Accounts of key employees
(as defined in subsection (c)) exceeds sixty percent of the amount credited
to the Accounts of all Employees. The Account of (1) a former key
employee or (2) any current or former Employee who has not performed any
Service for the Corporation during the five-year period ending on the
determination date shall be excluded in determining whether the Plan is top
heavy. However, if a current or former Employee resumes performing Service
after the five-year period, his Account shall be included in determining
whether the Plan is top heavy. The amount credited to an Account shall be
determined as of the most recent Valuation Date within the Plan Year ending
on the determination date, and shall include contributions to the money
purchase pension component of the Plan not yet made but to be allocated as
of the determination date. In addition, if the money purchase pension
component of the Plan receives a waiver of the minimum funding standard
under Code Section 412(d) for a Plan
160
TOP HEAVY RULES
- ---------------
Year, the minimum amount required to be allocated under the money purchase
pension component of the Plan to each Participant under subsection (a)(1)
(without regard to the waiver) shall be credited to the Participant's
Account under the money purchase pension component of the Plan. The
balance of such Account shall be adjusted to reflect the credit in
accordance with Revenue Ruling 78-223. Notwithstanding the foregoing, if,
as of the determination date described above, this Plan is part of an
"aggregation group," this Plan shall be top heavy if the group is top heavy
and shall not be top heavy if the group is not top heavy. An "aggregation
group" shall include all plans of the Corporation in which a key employee
participates and each other plan of the Corporation which enables any such
plan to meet the requirements of Code Section 401(a)(4) or 410. The
Corporation may treat any plan not required to be included in an
aggregation group as part of that group if the inclusion of the plan would
not prevent the aggregation group from meeting the requirements of Code
Section 401(a) or 410. The rules set forth above for determining whether
this plan is top heavy shall be applied with respect to the sum of benefits
provided under all plans in the aggregation group to determine whether the
group is top heavy. For
161
TOP HEAVY RULES
- ---------------
purposes of determining whether this Plan is top heavy, the amount credited
to a Participant Account shall be determined as of the last valuation date
coincident with or preceding the determination date, and shall include the
aggregate distributions (without interest thereon) made under the Plan to a
Participant (other than a former key employee) during the five year period
ending on the determination date. Deductible (IRA-type) employee
contributions and rollovers (or similar transfers) shall be ignored in
determining whether this Plan is top heavy, except as otherwise provided in
applicable Treasury Regulations. Distributions made within the five Plan
Years ending on the determination date from a terminated plan shall be
included in the aggregation group if the terminated plan would have been
required to be included if the group had the plan not been terminated. For
purposes of determining whether the Plan is 'top heavy', the accrued
benefit under a defined benefit plan of an Employee, other than a key
employee, shall be determined (i) under the method which is used for
accrual purposes for all plans of the Corporation, or (ii) if there is no
method described in (i) above, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under Code Section 411(b)(1)(C).
162
TOP HEAVY RULES
- ---------------
(c) An Eligible Employee shall be a "key employee" if, during the Plan
Year in question or any of the four preceding Plan Years, he is or was
(1) an officer of the Corporation,
(2) one of the ten Employees owning (or considered as owning
within the meaning of Code Section 318) the largest interests in the
Corporation,
(3) a five percent owner of the Corporation, or
(4) a one percent or more owner of the Corporation having an
annual compensation (as defined in Treas. Section 1.415-2(d)) from the
Corporation of more than $150,000.
The number of officers of the Corporation treated as key employees under
paragraph (1) shall be limited to fifty. A beneficiary of a key employee
or a former key employee shall also be treated as a key employee or former
key employee, respectively. Determinations under this subsection shall be
made in accordance with Internal Revenue Code Section 416(i) and applicable
Treasury Regulations.
163
SECTION 16
----------
SECTION 401(h) ARRANGEMENT
--------------------------
SECTION 16.01 - The arrangement established by this Section funds
-------------
post-retirement medical benefits for persons who participate in the money
purchase pension component of the Plan (or who fail to participate solely
because they have not completed one Year of Service or do not make required
contributions to the Plan) who, subject to Section 16.07, currently or in the
future qualify or may qualify for post-retirement medical benefits under the
medical plans listed in the Exhibit to Section 16. These plans are collectively
referred to in Section 16 as the "Health Care Plan." Although there is more
than one Health Care Plan, this reference shall be interpreted as referring to a
specific Health Care Plan if appropriate in the context. The Health Care Plan,
as it may be amended in the future, is incorporated into Section 16 by this
reference. The capitalized terms used in Section 16 are defined in Section 1 and
Section 16.13 and shall be interpreted in accordance with those definitions for
all purposes of Section 16 even if defined differently elsewhere with respect to
the Health Care Plan.
SECTION 16.02 -
-------------
(a) Prior to the adoption of this Section, the funding levels for
each Health Care Plan were
164
SECTION 401(h) ARRANGEMENT
- --------------------------
considered separately. Benefits under the Health Care Plan were paid for
by the Corporation from its general assets and by retiree contributions.
Effective as of December 31, 1990, the segregated "Health Care Fund"
described in Section 16.03 is created as a part of the money purchase
pension plan component of the Plan in accordance with Code Section 401(h).
The Health Care Fund will only be used to fund and pay for the Corporation-
provided portion of Health Care Plan benefits of Participants in the money
purchase pension component of the Plan (including, solely for purposes of
this Section 16, persons who are not such Participants solely because they
have not completed one Year of Service or do not make contributions to the
Plan) who, subject to Section 16.07, currently or in the future qualify or
may qualify for such benefits and who retire after December 31, 1992, and
their spouses and dependents. Hence, to the extent Retired Participants or
their spouses or dependents make contributions to the Health Care Plan,
such contributions shall be made by them directly to the Corporation (or to
the entity it designates), which shall use such contributions to pay for
Health Care Plan benefits (other than by means of transferring such
contributions to the Health Care Fund).
165
SECTION 401(h) ARRANGEMENT
- --------------------------
(b) The Health Care Fund shall fund and pay for the Corporation-
provided portion of Health Care Plan benefits payable after
_________________ to persons described in Section 16.02(a) and no amounts
shall be withdrawn from the Health Care Fund for that purpose until on or
after such date
(c) Except as provided in Sections 16.07 and 16.12, the right of any
individual to Health Care Plan benefits and all conditions to which such
benefits are or may be subject shall be determined under the terms of the
Health Care Plan. The Health Care Plan shall be interpreted and applied in
a fashion consistent with Section 16 and is subject to amendment or
termination in accordance with the Health Care Plan's own terms.
SECTION 16.03 - The Health Care Fund shall be maintained as a
-------------
separate account on the accounting records of the Plan. At the option of
Lockheed Corporation (and as it expressly directs), separate Health Care Funds
may be maintained with respect to any Corporation or group of Corporations or
with respect to any separate Health Care Plan. All references to the "Health
Care Fund" in Section 16 shall be construed as referring to each separate Health
Care Fund (and the Corporation or Health Care Plan to which it relates) or to
all such Funds collectively, as the context may require. For all investment
purposes, the
166
SECTION 401(h) ARRANGEMENT
- --------------------------
assets attributable to the Health Care Fund may be commingled with other Plan
assets. Each Health Care Fund shall be credited with (1) future Corporation
contributions specifically designated as being made to it for the purpose of
funding Health Care Plan benefits under Section 16 and (2) the gains and losses
credited on those contributions. Health Care Plan benefits shall be paid from
the amounts credited to the Health Care Fund or Funds which have been
established with respect to the Health Care Plan and not out of any other assets
of the Plan. Administrative expenses attributable to the Health Care Plan shall
be paid out of the Health Care Fund (unless paid by the Corporation, which may
pay such expenses directly, but shall not be obligated to do so). Thus, the
assets of the Plan (other than those credited to the Health Care Fund) shall be
used solely for paying retirement benefits. Similarly, the assets of the Health
Care Fund shall be used solely for paying for the Corporation-provided portion
of Health Care Plan benefits of Retired Participants and their spouses and
dependents, and the administrative expenses incurred in connection with
providing such benefits.
SECTION 16.04 - Lockheed Corporation, acting through the Salary
-------------
Board, shall have the authority and responsibility for funding the Health Care
Fund in accordance with applicable law and shall determine the
167
SECTION 401(h) ARRANGEMENT
- --------------------------
amount, if any, to be contributed to the Health Care Fund for any period.
Amounts contributed to the Health Care Fund in the aggregate shall be reasonable
and ascertainable and shall not exceed the total cost of providing the Health
Care Plan benefits described in Section 16.02(b), determined in accordance with
a generally accepted actuarial cost method using reasonable actuarial
assumptions which include consideration of the terms and coverage of the Health
Care Plan, its funding and any forfeitures arising under Section 16.06.
Benefits paid for by the Health Care Fund are intended to be subordinate to the
Plan's retirement benefits. Accordingly, the maximum contributions to the Plan
made on or after December 31, 1990 for the purpose of providing Health Care Plan
benefits shall not exceed twenty-five percent (25%) of the sum of Pension Cost,
Health Care Plan Cost and Life Insurance Cost, reduced by Life Insurance Cost.
For purposes of applying this limit, death benefits under the Plan that are
provided without actuarial adjustment to retirement benefits and qualified pre-
retirement survivor annuity benefits (within the meaning of Code Section
417(c)(1) shall not be treated as life insurance protection. If any amounts are
inadvertently or negligently contributed to the Health Care Fund in excess of
the limitations imposed by this Section, such excess allocations shall have been
contributed to the Health Care Fund by
168
SECTION 401(h) ARRANGEMENT
- --------------------------
mistake of fact and in violation of this limit and shall be withdrawn from that
Fund promptly and returned to the Corporation or be applied to provide
retirement benefits otherwise payable under the Plan, as the Corporation
directs. Any such amounts shall not be taken into account in applying the
twenty-five percent limit imposed by this Section on contributions to provide
Health Care Plan benefits.
SECTION 16.05 - The Corporation shall designate which contributions
-------------
to the Plan are being made for Health Care Plan benefits at the time the
contributions are made and these contributions shall be credited to the Health
Care Fund. Such contributions shall be deductible in accordance with the rules
set forth in Treasury Regulation Section 1.404(a)-3(f) and other applicable
provisions of law. In determining how much may be contributed on a deductible
basis to the Plan to provide Health Care Plan benefits, the enrolled actuary
making the determination may take into account reasonably projected increases in
health care costs due to inflation and other factors. Lump sum contributions
may be made by the Corporation to satisfy past service costs or experience
losses of the Health Care Plan, without the need for amortization, with respect
to both Participants in the money purchase pension component of the Plan and
Retired Participants. Contributions to the Health Care Fund for a
169
SECTION 401(h) ARRANGEMENT
- --------------------------
fiscal year of the Corporation which are made before the due date, including
extensions, for its federal income tax return for that fiscal year (i.e., within
----
the Code Section 404(a)(6) period), and which are designated as having been made
for that fiscal year, shall be treated as contributed in that fiscal year for
all "economic performance" and other accrual rules and shall be deductible for
that fiscal year.
SECTION 16.06 - In determining the amount of Corporation
-------------
contributions necessary to fund Health Care Plan benefits for persons described
in Section 16.02(a), the enrolled actuary making the determination shall reduce
the contributions that would otherwise be required for any period by the full
amount (i.e., without amortization) then credited to the Health Care Fund which,
----
during the period in question, has become unneeded for paying such Health Care
Plan benefits on account of terminations of employment, deaths and such other
events, determined in a reasonable manner selected by the actuary.
SECTION 16.07 - Health Care Plan and Health Care Fund benefits shall
-------------
not constitute a portion of any person's "accrued benefit" and are not,
therefore, subject to the vesting requirements of Code Section 411, nor are they
subject to protection under Code Section 411(d)(6) from reduction or
elimination, nor are they protected by corresponding provisions of ERISA. The
Corporation expressly
170
SECTION 401(h) ARRANGEMENT
- --------------------------
reserves the right to change, reduce or eliminate the benefits provided under
the Health Care Plan or the Health Care Fund at any time and in any fashion,
and, therefore, no person may rely on the future continuation of Health Care
Plan or Health Care Fund benefits. Whether or not the Corporation formally
eliminates or reduces Health Care Plan or Health Care Fund benefits, such
benefits described in Section 16.02(b) shall be provided only to the extent they
can be paid from assets then credited to the Health Care Fund and participant
contributions, and the Corporation shall have no obligation before or after the
date in Section 16.02(b) to contribute amounts to fund such benefits or to pay
for such benefits directly, although it may, in its sole discretion and without
obligation, elect to fund such benefits or pay them directly in whole or in
part. The terms of this Section 16.07 supersede any inconsistent provisions of
the Plan, the Health Care Plan or any other existing document.
SECTION 16.08 - If the Health Care Fund in its entirety is ever
-------------
terminated (even though the Plan continues in existence) or if the Plan in its
entirety is ever terminated, after the payment of or provision for all medical
benefits promised under the Health Care Plan for expenses incurred by Retired
Participants and their spouses and dependents prior to such termination (for
which the
171
SECTION 401(h) ARRANGEMENT
- --------------------------
Health Care Fund is obligated under Section 16.02(b)), any surplus remaining in
the Health Care Fund shall be returned to Lockheed Corporation, as required by
Code Section 401(h).
SECTION 16.09 - Benefits under the Health Care Plan which are paid
-------------
for by the Health Care Fund shall not discriminate in favor of persons who are
highly compensated employees, determined under Section 414(q) of the Code, or
their spouses or dependents, and contributions shall not be made to the Health
Care Fund to pay for benefits which would discriminate in that fashion.
However, the Health Care Plan itself may provide discriminatory benefits so long
as such benefits are not paid for by the Health Care Fund (and, to the extent
(if any) necessary to preserve the qualified status of this Plan, any such
discriminatory benefits shall be treated as having been provided under a
separate plan which is not part of the Health Care Plan). Discrimination shall
be tested separately with respect to the retirement and health care benefits
provided under the Plan.
SECTION 16.10 - Separate Participant accounts normally shall not be
-------------
maintained within the Health Care Fund. However, one or more separate accounts
shall be maintained on the accounting records of the Health Care Fund to the
extent that separate health care accounts within the Health Care Fund must be
maintained with respect to Participants or Retired Participants pursuant to Code
172
SECTION 401(h) ARRANGEMENT
- --------------------------
Section 401(h) or other applicable provisions of law. Health Care Plan benefits
funded under the Plan with respect to the Participants or Retired Participants
(or their spouses or dependents) for whom such accounts are maintained shall
only be payable from such accounts. The Committee may withdraw funds from such
separate accounts for any other Health Care Plan purpose. Amounts credited to
such accounts shall be subject to the defined contribution plan annual addition
limits of Code Section 415 in accordance with Section 415(l). As of December
31, 1990, separate accounts are only required for "key employees" (within the
meaning of Code Section 416(i)). The provisions of this Section shall not
preclude the Corporation from directly paying for the Health Care Plan benefits
of Participants or Retired Participants for whom separate accounts are required
(or their spouses or dependents) in whole or in part (although the Corporation
shall have no obligation to do so), in which case the Health Care Fund shall not
pay for benefits which the Corporation pays for directly.
SECTION 16.11 - This Section 16 may only be amended in accordance
-------------
with the amendment provisions of the Plan, except that the Salary Board may
amend Section 16 to shift the Corporation's responsibility for paying for Health
Care Plan benefits and related administrative costs among the Corporation, the
Health Care Fund or any other entity,
173
SECTION 401(h) ARRANGEMENT
- --------------------------
such as a trust established under Code Section 501(c)(9), in any manner which it
may deem appropriate, and the Salary Board may amend this Section 16 and the
Exhibit hereto to reflect changes in the form, nature or identity of the Health
Care Plan or to revoke this Section 16 or to terminate the Health Care Fund.
SECTION 16.12 - Although the Health Care Plan and the Plan shall be
-------------
administered in accordance with their respective terms, Section 16 shall
supersede any previously adopted inconsistent provisions of the Health Care Plan
and the Plan with respect to the funding or provision of Health Care Plan
benefits. In addition, Section 16.07 shall apply to the Health Care Plan for
all purposes. Subject to the foregoing, all other provisions of the Health Care
Plan and the Plan shall continue to apply and shall also apply with respect to
Section 16.
SECTION 16.13 - Capitalized terms used in Section 16 which are not
-------------
defined in Section 1 shall have the meanings set forth below:
(a) Health Care Fund -- The fund established under Section 16.03 or,
----------------
if more than one Health Care Fund is established, each Health Care Fund or
all such Funds collectively, as may be appropriate in the context.
174
SECTION 401(h) ARRANGEMENT
- --------------------------
(b) Health Care Plan -- Any Plan listed in the Exhibit to Section 16
----------------
or all such Plans collectively, as may be appropriate in the context. Each
Health Care Plan has been incorporated into Section 16 by reference.
(c) Health Care Plan Cost -- The amount contributed to the Health Care
---------------------
Fund since its inception, December 31, 1990.
(d) Life Insurance Cost -- The amount applied under the Plan to
-------------------
provide life insurance protection since the inception of the Health Care
Fund, December 31, 1990. As of December 31, 1990, the Plan was not
providing any life insurance protection.
(e) Pension Cost -- The amount contributed to the money purchase
------------
pension component of the Plan since the inception of the Health Care Fund
December 31, 1990, including both contributions which are used to pay
interest or principal on an Acquisition Loan under Section 4A.03(a), and
any other contributions under Section 4.01(c).
(f) Retired Participant -- A Participant in the money purchase pension
-------------------
component of the Plan (or a person who was eligible but did not become such
a Participant solely because the individual did not make contributions
required by the Plan or did not meet the
175
SECTION 401(h) ARRANGEMENT
- --------------------------
one year eligibility requirement of the Plan) who has become eligible for
benefits under the Health Care Plan.
(g) Salary Board -- The Salary Board of Lockheed Corporation, or any
------------
successor to the Salary Board.
176
SECTION 17
----------
EMPLOYEES OF LOCKHEED AEROMOD CENTER, INC.
------------------------------------------
SECTION 17.01 - This Section 17 applies only to Employees of Lockheed
-------------
Aeromod Center, Inc. (LACI) and for purposes of this Section 17, "Corporation"
means LACI. This Section 17 applies notwithstanding any provisions of the Plan
to the contrary and any provision of the Plan not superseded or modified by this
Section 17 is fully applicable to Employees of LACI.
SECTION 17.02 - Eligibility for Participation.
------------- -----------------------------
(a) Employees on January 1, 1989. An employee with Ninety Days of
----------------------------
Service prior to January 1, 1989 is eligible to become a Participant at the
beginning of the payroll period coincident with or next following January
1, 1989.
(b) Eligibility Rule for New Employee. An employee not eligible to
---------------------------------
become a Participant pursuant to Section 17.02(a) is eligible to become a
Participant at the beginning of the payroll period coincident with or next
following the completion of Ninety Days of Service.
(c) Eligibility Rule for Rehired Eligible Employee or Participant. An
-------------------------------------------------------------
Employee who Terminates his Employment after completing Ninety Days of
Service or becoming a Participant shall be eligible to
177
EMPLOYEES OF LOCKHEED AEROMOD CENTER, INC.
- ------------------------------------------
participate in the Plan at the beginning of the payroll period coincident
with or next following his date of rehire.
(d) Eligibility Rule for Non-Eligible Employees Rehired Before a Break
------------------------------------------------------------------
in Service. An Employee who Terminates his Employment before completing
----------
Ninety Days of Service and who is reemployed by the Corporation before
incurring a Break in Service shall retain his prior Hours of Service and
shall be eligible to become a Participant upon completion of Ninety Days of
Service. Such an Employee's Ninety Days of Service and Breaks in Service
shall continue to be calculated with reference to successive ninety day
periods commencing on the date the Employee is first entitled to be
credited with an Hour of Service following his original date of employment.
(e) General Eligibility Rule for Non-Eligible Employees Hired After a
-----------------------------------------------------------------
Break in Service. An Employee who Terminates his Employment before
----------------
completing Ninety Days of Service and who incurs a Break in Service must
complete Ninety Days of Service after reemployment with the Corporation as
though he had not previously been an Employee. Such an Employee's Ninety
Days of Service and Breaks in Service subsequent to his reemployment shall
be calculated with reference to successive ninety
178
EMPLOYEES OF LOCKHEED AEROMOD CENTER, INC.
- ------------------------------------------
day periods commencing on the date the Employee is first entitled to be
credited with an Hour of Service following his reemployment.
(f) Special Eligibility Rules for Non-Eligible Employee Rehired After
-----------------------------------------------------------------
a Break in Service. Notwithstanding the provisions of subsection (e)
------------------
above, in determining whether a rehired Employee who Terminates his
Employment and incurs a Break in Service before completing Ninety Days of
Service is eligible to become a Participant after his reemployment, the
following special rules should be applied:
(1) An Employee who has been rehired by the Corporation
subsequent to a Break in Service and has his Service Time reinstated
or restored to a prior date of hire or rehire by the Corporation and
is credited with ninety days or more of unbroken Service Time as a
result of such reinstatement or restoration is eligible to become a
Participant at the beginning of the payroll period coincident with or
next following his date of rehire.
(2) An Employee who was not previously eligible to become a
Participant and has been rehired by the Corporation subsequent to a
Break in Service and has his Service Time reinstated or
179
EMPLOYEES OF LOCKHEED AEROMOD CENTER, INC.
- ------------------------------------------
restored to a prior date of hire or rehire by the Corporation is
eligible to become a Participant at the beginning of the payroll
period coincident with or next following the completion of ninety days
of unbroken Service Time, including credit for prior Service Time as a
result of such reinstatement or restoration, or upon the completion of
Ninety Days of Service, whichever is the first to occur.
(g) "Ninety Days of Service" shall mean the completion of 250 Hours of
----------------------
Service over a period of ninety consecutive days. Ninety Days of Service
shall be computed with reference to successive ninety day periods
commencing with the Employee's date of hire by the Corporation or his
rehire by the Corporation subsequent to a Break in Service. In no event
shall an Employee be credited with Ninety Days of Service during any period
of ninety consecutive days prior to the expiration of ninety days after the
commencement of his employment by the Corporation or reemployment by the
Corporation subsequent to a Break in Service.
SECTION 17.03 - Percentage. The weekly "percentage" which may be
------------- ----------
specified under Section 3.01(a)(1) and deducted under Section 3.02 shall be
either two percent (2%), or four percent (4%), or six percent (6%), or eight
180
EMPLOYEES OF LOCKHEED AEROMOD CENTER, INC.
- ------------------------------------------
percent (8%) of his Weekly Rate of Compensation, as specified by the Participant
subject to the provisions of Sections 3.08, 3.09 and 3.10.
SECTION 17.04 - Corporation Matching Contributions.
------------- ----------------------------------
(a) Basic Corporation Matching Contributions. At the time the
----------------------------------------
Participant's Elective Deferral amounts are paid to the Trustee, the
Corporation will contribute to the Trustee out of its current or
accumulated earnings and profits an amount equal to twenty-five percent
(25%) of the Elective Deferral amount specified by Participants during the
Month immediately preceding the date of such matching contribution by the
Corporation. The twenty-five percent (25%) "Basic Corporation Matching
Contribution" made under this Section 17.04(a) shall be limited to Elective
Deferral amounts up to four percent (4%) of the Participant's Weekly Rate
of Compensation. Elective Deferral amounts over four percent (4%) of the
Participant's Weekly Rate of Compensation shall not be subject to the
twenty-five percent (25%) Basic Corporation Matching Contributions.
(b) Additional Corporation Matching Contributions. On the final
---------------------------------------------
Thursday of the February following the end of the Plan Year, the
Corporation
181
EMPLOYEES OF LOCKHEED AEROMOD CENTER, INC.
- ------------------------------------------
will, by measuring Operating Income as a Percent of Sales for its prior
fiscal year, determine whether its productivity, cost reduction and
performance for the prior fiscal year have been sufficient to warrant an
"Additional Corporate Matching Contribution." If Operating Income as a
Percent of Sales for the prior fiscal year is determined to equal or exceed
2.00%, the Corporation will, on or before the last day of the First
Quarter, contribute to the Trustee out of its current or accumulated
earnings and profits an Additional Corporation Matching Contribution.
(1) If the Corporation's Operating Income as a Percent of Sales
is at least 2.00% but less than 5.00%, the Corporation shall make an
additional contribution in an amount equal to twenty-five percent
(25%) of the Elective Deferral amounts specified by Participants
during the prior Plan Year.
(2) If the Corporation's Operating Income as a Percent of Sales
is at least 5.00% but less than 8.00%, the Corporation shall make an
additional contribution in an amount equal to fifty percent (50%) of
the Elective Deferral amounts specified by Participants during the
prior Plan Year.
182
EMPLOYEES OF LOCKHEED AEROMOD CENTER, INC.
- ------------------------------------------
(3) If the Corporation's Operating Income as a Percent of Sales
is equal to or exceeds 8.00%, the Corporation shall make an additional
contribution in an amount equal to seventy-five percent (75%) of the
Elective Deferral amounts specified by Participants during the prior
Plan Year.
(4) The Additional Corporation Matching Contribution made under
this Section 17.04(b) shall be limited to Elective Deferral amounts up
to four percent (4%) of the Participant's Weekly Rate of Compensation.
Elective Deferral Amounts over four percent (4%) of the Participant's
Weekly Rate of Compensation shall not be subject to the Additional
Corporation Matching Contributions.
(5) An Additional Corporation Matching Contribution will be made
only in regard to an individual who was a Participant at any time
during the prior Plan Year and who
(i) is an Employee of the Corporation on the final Thursday
of the February following the end of such prior Plan Year or
(ii) has had a Termination of Employment for any of the
reasons specified in Section 8.01 prior to the final Thursday of
the
183
EMPLOYEES OF LOCKHEED AEROMOD CENTER, INC.
- ------------------------------------------
February following the end of such prior Plan Year.
(6) Operating Income as a Percent of Sales will be determined by
dividing the Corporation's Operating Income for the prior fiscal year
by the Corporation's Total Sales for the prior fiscal year. "Total
Sales" and "Operating Income" will be amounts reported by the
Corporation which are included as part of the consolidated financial
statements appearing in the Lockheed Corporation Annual Report,
recognizing that for such Annual Report the "Operating Income"
reported by the Corporation is retitled "Program Profit."
Notwithstanding that the consolidated Lockheed financial statements
are subject to independent audit, the calculation of the Corporation's
Operating Income as a Percent of Sales shall also be subject to review
by Lockheed Corporation internal auditors or by an independent
accounting firm.
SECTION 17.05 - Participant's Account.
------------- ---------------------
(a) There shall be maintained for each Participant a separate
Participant's Account which shall show in dollars the contributions made by
the Participant and a separate Participant's Account which
184
EMPLOYEES OF LOCKHEED AEROMOD CENTER, INC.
- ------------------------------------------
shall show in dollars the corresponding contribution made by the
Corporation under the Plan as in effect prior to December 26, 1983, and the
Elective Deferral amounts specified by the Participant and the
corresponding Corporation Matching Contributions made as provided in
Section 17.04 (consisting of the Corporation's Matching cash Contributions
and forfeitures utilized as provided in Section 4.03) and, in terms of
Units, shall show the portion of such Participant's Account in the Bond
Fund, the Lockheed Martin Stock Fund, the Securities Fund and/or the STIF
Fund, as the case may be.
(b) As of the Valuation Date of each Month each Participant's Account
shall be credited for such Month with the number of Units equivalent to the
Unit value (calculated as provided in Section 6.01) of:
(1) the total dollar amount of weekly Elective Deferrals
specified by such Participant during such Month, and
(2) The twenty-five percent (25%) Basic Corporation Matching
Contributions with respect to such Month as provided in Section
17.04(a). Such units shall be allocated to the Bond Fund, the Lockheed
Martin Stock Fund, the Securities
185
EMPLOYEES OF LOCKHEED AEROMOD CENTER, INC.
- ------------------------------------------
Fund and/or the STIF Fund pursuant to the provisions of Sections 3.05
and 4.02.
(c) On or before the last day of the First Quarter, the account of
each individual meeting the requirements of Section 17.04(b)(5) will be
credited with the number of Units equivalent to the Unit value (calculated
as provided in Sections 6.01) of the Additional Matching Contribution as
provided in Section 17.04(b). Such units shall be allocated to the Bond
Fund, the Lockheed Martin Stock Fund, the Securities Fund and/or the STIF
Fund pursuant to the provisions of Sections 3.01(a)(2), 3.05 and 4.02.
SECTION 17.06 - Notwithstanding any other provision of this Plan to
-------------
the contrary, the ESOP Feature (including Section 4A) shall not apply to any
Employee of LACI and no part of the Participant's Account of any Employee of
LACI shall be maintained in the ESOP Fund. Notwithstanding any other provision
of this Plan to the contrary, the money purchase pension component of this Plan
and Section 16 shall not apply to any Employee of LACI and no part of the
Participant's Account of any Employee of LACI shall be maintained in the money
purchase component of the Plan.
186
SECTION 18
----------
EFFECTIVE DATE OF AMENDMENT
---------------------------
AND
---
RESTATEMENT OF THE PLAN
-----------------------
SECTION 18.01 - This amendment and restatement of the Plan shall
-------------
become effective March 1, 1995 or at such other dates as otherwise provided
herein, subject to the receipt of a ruling satisfactory to the Board of
Directors that the Plan and Trust Agreements, as amended and restated, qualify
under applicable provisions of the United States Internal Revenue Code.
187
08/28/90
EXHIBIT
to
SECTION 16
The following medical plans collectively constitute the "Health Care
Plan" referred to in Section 16:
HMO Plan
Company/Location HMO Number ERM(1) Medicare Supp. (2)
- ---------------- --- ------ ------ ------------------
LMSC Kaiser, No. California 507 Yes Yes
Kitsap 522
Kaiser, Mid-Atlantic 528
Lifeguard 532
Takecare 530
Bay Pacific 531
Family Health Plan 510
Aetna Choice 536
Prucare of Austin 543
Virginia Mason 581
Prucare of Houston 556
PCA Health Plans of Texas 544
HMO CO., Denver 558
Group Health Cooperative 587
Maxicare 534
Health Net 533
Travelers, Austin 564
Kaiser, Denver 509
Kaiser, So. California 506
AvMed 585
Health Source 589
Columbia-Freestate H.P. Inc. 594
1
HMO Plan
Company/Location HMO Number ERM(1) Medicare Supp. (2)
- ---------------- --- ------ ------ ------------------
LASC-Burbank Kaiser, So. California 506 Yes Yes
Kaiser, No. California 507
Kaiser, Mid-Atlantic 528
Health Net 533
Maxicare, So. California 534
Maxicare, No. California 534
Lifeguard 532
The Health Plan of America 593
CORLAC Kaiser, So. California 506 Yes Yes
Kaiser, No. California 507
Kaiser, Mid-Atlantic 528
Health Net 533
Maxicare, So. California 534
Maxicare, No. California 534
Prucare of Houston 556
PCA Health Plans of Texas
Inc. 544
Takecare 530
Healthways 542
Ameriplan 547
Prucare of Atlanta 548
Health First 566
Partners H.P. of Georgia 584
Bay Pacific 531
Lifeguard 532
The Health Plan of America 593
2
HMO Plan
Company/Location HMO Number ERM(1) Medicare Supp. (2)
- ---------------- --- ------ ------ ------------------
LASC-Georgia Health First 566 Yes Yes
Kaiser of Georgia 576
Partners H.P. of Georgia 584
Prucare of Atlanta 548
Healthsource 589
LAUS N/A Yes Yes
LILT N/A Yes Yes
LAAL N/A Yes Yes
LESC Cigna Health Plan 552 Yes Yes
Group Health Association 570
Health Plan of Nevada 557
Health Plus 545
Kaiser, No. California 507
Kaiser, Mid-Atlantic 528
Maxicare, No. California 534
Prucare of Austin 543
Prucare of Texas 556
Sanus 538
Takecare 530
PCA Health Plans of Texas 544
Travelers Health Network 564
Kaiser, So. California 506
Aetna Choice 536
Sentara Health Plan 592
3
HMO Plan
Company/Location HMO Number ERM(1) Medicare Supp. (2)
- ---------------- --- ------ ------ ------------------
LFC Kaiser, So. California 506 Yes Yes
Health Net 533
Maxicare, So. California 534
LWEC Kaiser, So. California 506 Yes Yes
Health Net 533
Maxicare, So. California 534
Maxicare, No. California 534
Lifeguard 532
Kaiser, No. California 507
LAS Kaiser, So. CA (Ontario) 511 Yes Yes
Health Net 533
Maxicare 534
Partners 551
The Health Plan of America 593
LASI N/A Yes Yes
4
HMO Plan
Company/Location HMO Number ERM(1) Medicare Supp. (2)
- ---------------- --- ------ ------ ------------------
LIMSCO No No
SANDERS Health Source (3) (3)
Matthew Thornton
Harvard Community H.P.
LAT Hawaii Med. Svcs. Assoc. 519 Yes Yes
Blue Cross Plan 818
Prucare Plus 583
Guam Memorial Health Plan 586
MedBen 571
Physicians Health Plan 572
Share Health Plan 574
Takecare 530
Kaiser, Georgia 831
Kaiser, No. California 507
Kaiser, So. California 506
Kaiser, Hawaii 513
LAT-NY Empire Blue Cross Blue
Shield Healthnet HMO 580 Yes Yes
Healthshield 579
U.S. Healthcare 582
Blue Cross Blue Shield
Wraparound 561
LEC Rutgers 527 Yes Yes
Foundation Health Plan 529
U.S. Healthcare 559
AvMed 554
CoMed 535
5
HMO Plan
Company/Location HMO Number ERM(1) Medicare Supp. (2)
- ---------------- --- ------ ------ ------------------
Kaiser, Georgia 576
Healthways 542
LGIS N/A Yes Yes
LIGmbH N/A Yes Yes
LCISA N/A Yes Yes
LKAR N/A Yes Yes
LSOC N/A Yes Yes
LASS N/A Yes Yes
LTOC Bay Pacific 531 Yes Yes
HMO CO. - Colorado Springs 558
HMO CO. - Denver 558
Kaiser, No. California 507
Lifeguard 532
Maxicare, No. California 534
Takecare 530
Health Net 533
Peak Health Plan 595
LCHI N/A Yes Yes
MURDOCK Kaiser/Texas Health Plan 546 Yes Yes
Sanus Texas Health Plan 538
Cigna Health Network 537
6
HMO Plan
Company/Location HMO Number ERM(1) Medicare Supp. (2)
- ---------------- --- ------ ------ ------------------
Cigna Health Plan 552
Maxicare of No. Texas 555
AEROPARTS N/A Yes Yes
LCAN
(1) Lockheed Medical Benefit Plan - Early Retiree Plan (Plan 523)
(2) Lockheed Medical Benefit Plan - Retired Employees and Spouse Medicare
Supplement (Plan 523)
(3) (Sanders Indemnity Plan)
7
EXHIBIT 4-B
LOCKHEED HOURLY EMPLOYEE
SAVINGS PLAN PLUS
(As Amended and Restated Effective March 1, 1995)
Table of Contents
-----------------
Page
----
SECTION 1
DEFINITIONS.......................... 1
1.01 After-Tax Contributions......................................... 1
1.02 Board of Directors.............................................. 1
1.03 Bond Fund....................................................... 1
1.04 Break in Service................................................ 1
1.05 Code............................................................ 2
1.06 Committee....................................................... 2
1.07 Corporation..................................................... 2
1.08 Elective Deferral............................................... 2
1.09 Eligible Employee............................................... 2
1.10 Employee........................................................ 3
1.11 ERISA........................................................... 4
1.12 ESOP Contributions.............................................. 4
1.13 ESOP Ending Date................................................ 4
1.14 ESOP Feature.................................................... 4
1.15 ESOP Fund....................................................... 4
1.16 ESOP Match Stock................................................ 4
1.17 ESOP Starting Date.............................................. 4
1.18 ESOP Trustee.................................................... 5
1.19 Family Member................................................... 5
1.20 Filing With The Committee....................................... 5
1.21 Highly Compensated Employee..................................... 5
1.22 Hour of Service................................................. 7
1.23 Lockheed Martin Stock Fund...................................... 8
1.24 Month........................................................... 9
1.25 Participant..................................................... 9
1.26 Plan............................................................ 9
1.27 Plan Year....................................................... 10
1.28 Profit Sharing Trustee.......................................... 10
1.29 Quarter......................................................... 10
1.30 Securities Fund................................................. 10
1.31 Service Time.................................................... 10
1.32 Shares.......................................................... 11
1.33 STIF Fund....................................................... 11
1.34 Stock........................................................... 11
1.35 Termination of Employment....................................... 12
1.36 Thrift Stock.................................................... 12
1.37 Trustee......................................................... 12
1.38 Valuation Date.................................................. 12
1.39 Weekly Rate of Compensation..................................... 12
1.40 Year of Service................................................. 13
i
SECTION 2
ELIGIBILITY FOR PARTICIPATION................. 15
2.01 Participation in the Plan on the part of an
Employee is voluntary........................................... 15
2.02 ................................................................. 15
(a) Eligibility Rule for New Employee............................. 15
(b) Eligibility Rule for Rehired Eligible Employee or
Participant................................................... 15
(c) Eligibility Rule for Non-Eligible Employee Rehired
Before a Break in Service..................................... 15
(d) General Eligibility Rule for Non-Eligible Employee
Rehired After a Break in Service.............................. 16
(e) Special Eligibility Rules for Non-Eligible
Employee Rehired After a Break in Service..................... 16
2.03 A Participant may not make an Elective Deferral
Under the Plan for any week in which he is not an
Employee........................................................ 17
SECTION 3
EMPLOYEE PARTICIPATION.................... 18
3.01 ................................................................. 18
3.02 ................................................................. 18
3.03 ................................................................. 19
3.04 ................................................................. 19
3.05 ................................................................. 20
3.06 ................................................................. 22
3.07 ................................................................. 23
3.08 ................................................................. 25
3.09 ................................................................. 26
3.10 ................................................................. 27
SECTION 4
CORPORATION MATCHING CONTRIBUTIONS............... 29
4.01 ................................................................. 29
4.02 ................................................................. 30
4.03 ................................................................. 31
4.04 ................................................................. 31
4.05 ................................................................. 32
4.06 ................................................................. 37
SECTION 4A
ESOP PROVISIONS....................... 38
4A.01 ................................................................. 38
4A.02 ................................................................. 38
4A.03 ................................................................. 41
4A.04 ................................................................. 43
4A.05 ................................................................. 43
4A.06 ................................................................. 43
ii
4A.07 ................................................................ 48
4A.08 ................................................................ 50
4A.09 ................................................................ 50
SECTION 5
PARTICIPANT'S ACCOUNT..................... 51
5.01 ................................................................. 51
5.02 ................................................................. 51
5.03 ................................................................. 59
SECTION 6
VALUATION OF PARTICIPANT'S ACCOUNT.............. 60
6.01 ................................................................. 60
6.02 ................................................................. 61
SECTION 7
TRUST FUND AND TRUSTEE.................... 62
7.01 ................................................................. 62
7.02 ................................................................. 62
7.03 ................................................................. 63
7.04 ................................................................. 63
7.05 ................................................................. 63
SECTION 8
BENEFITS........................... 64
8.01 ................................................................. 64
8.02 ................................................................. 65
8.03 ................................................................. 69
8.04 ................................................................. 69
8.05 ................................................................. 71
8.06 ................................................................. 73
8.07 ................................................................. 75
8.08 ................................................................. 76
8.09 ................................................................. 81
SECTION 9
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS........... 84
9.01 ................................................................. 84
9.02 ................................................................. 86
9.03 ................................................................. 86
9.04 ................................................................. 94
SECTION 10
DEATH BENEFITS........................ 102
10.01 Spousal Consent................................................. 102
10.02 Designation of Beneficiary or Beneficiaries..................... 103
iii
SECTION 11
NAMED FIDUCIARIES
AND
ALLOCATION OF RESPONSIBILITIES................ 104
11.01 Named Fiduciaries............................................... 104
(a) The Trustee................................................... 104
(b) The Corporation, as Plan Sponsor.............................. 104
(c) The Committee, as Administrator of the Plan................... 104
(d) The Participant, under Sections 4A.06 and 4A.07............... 105
11.02 Allocation of Responsibilities.................................. 105
11.03 Shared Responsibility of Fiduciary.............................. 109
11.04 Fiduciary Assistance............................................ 109
11.05 Indemnification of the Committee................................ 109
SECTION 12
GENERAL PROVISIONS...................... 110
12.01 Corporation's Rights............................................ 110
12.02 Assignment or Pledging of Plan Benefits......................... 110
12.03 Payment of Benefits to a Minor.................................. 111
12.04 Responsibility for Current Address.............................. 112
12.05 Claim for Benefits.............................................. 113
12.06 Merger or Consolidation of Plan................................. 113
12.07 Forfeiture of Undeliverable Benefit............................. 114
12.08 Qualified Domestic Relations Order.............................. 114
12.09 Rollover Contributions.......................................... 117
SECTION 13
AMENDMENT OR TERMINATION OF THE PLAN............. 118
13.01 Right to Amend Plan............................................. 118
13.02 Termination of Plan - Benefits.................................. 119
13.03 Partial Termination of the Plan................................. 119
SECTION 14
TOP HEAVY RULES........................ 121
14.01 Special Rules for Top Heavy Plan................................ 121
SECTION 15
EFFECTIVE DATE OF AMENDMENT
AND
RESTATEMENT OF THE PLAN.................... 128
15.01 Effective Date of Restated Plan................................. 128
15.02 Applicable Parties.............................................. 128
iv
DESIGNATION OF PLAN
-------------------
The Lockheed Hourly Employee Savings Plan Plus is hereby amended and
restated, effective March 1, 1995, such amendment and restatement to be
applicable only with respect to those particular groups of Employees described
in Section 15.02(a). With respect to all other groups of employees included in
the Lockheed Hourly Employee Savings Plan Plus, the provisions of the Plan shall
continue unchanged and unaffected by this amendment and restatement.
The Lockheed Hourly Employee Savings Plan Plus as amended and restated
effective March 1, 1995 and operative as of the earliest ESOP Starting Date
specified in any Supplement hereto, consists of two portions. The first portion
is a profit sharing plan under Section 401(a) of the Code, which includes a
qualified cash or deferred arrangement as defined in Section 401(k) of the Code.
The second portion is an ESOP Feature, which is both a stock bonus plan and an
employee stock ownership plan intended to qualify under Sections 401(a) and
4975(e)(7) of the Code, and as such is designed to invest primarily in Stock.
All contributions by the Corporation to the Plan may be made without regard to
the current or accumulated profits of the Corporation or any of its subsidiaries
or affiliates.
SECTION 1
---------
DEFINITIONS
-----------
SECTION 1.01 - "After-Tax Contributions" shall mean any after-tax
------------ -----------------------
contributions a Participant made to the Plan prior to December 26, 1983.
SECTION 1.02 - "Board of Directors" shall mean the Board of Directors
------------ ------------------
of Lockheed Corporation.
SECTION 1.03 - "Bond Fund" shall mean the fund in which the Trustee
------------ ---------
shall invest exclusively in obligations, including notes, issued or fully
guaranteed by the United States of America and in savings bank deposits to the
extent such deposits are guaranteed by an agency of the United States.
SECTION 1.04 - "Break in Service" shall mean a Termination of
------------ ----------------
Employment followed by the failure to complete 500 Hours of Service. A Break in
Service shall be computed with reference to the twelve consecutive month period
beginning on the date (and anniversaries thereof) an Employee is first entitled
to be credited with an Hour of Service after his date of hire (or rehire after a
Break in Service) by the Corporation. If an Employee is absent from work
because of such individual's pregnancy, the birth of a child, placement of an
adopted child or caring for an adopted or natural child following birth or
placement, the individual shall not be treated as having incurred a Break in
Service in the Plan Year in which the absence begins, or in the Plan Year in
which the absence ends, if the individual
1
DEFINITIONS
- -----------
would not otherwise have suffered a Break in Service during that Plan Year. No
such credit shall be given unless a Participant submits a written request by
Filing With The Committee which establishes valid reasons for the absence, as
determined by the Committee. Except to the extent that a maternity or paternity
absence constitutes an authorized leave of absence from the Corporation under
applicable personnel policies, an Employee who is absent from work for reasons
of maternity or paternity shall be deemed to have terminated employment for all
purposes of this Plan other than the special rules in this Section.
SECTION 1.05 - "Code" shall mean the Internal Revenue Code of 1986, as
------------ ----
now in effect or as hereafter amended.
SECTION 1.06 - "Committee" shall mean the Committee referred to in
------------ ---------
Section 11.01.
SECTION 1.07 - "Corporation" shall mean Lockheed Corporation and any
------------ -----------
subsidiary or affiliate thereof, if, and to the extent that, the Board of
Directors shall by resolution so provide.
SECTION 1.08 - "Elective Deferral" shall mean that amount specified
------------ -----------------
under Section 3.01(a) to be contributed by the Corporation to the Participant's
Account in lieu of paying such amount to the Participant in cash. The Elective
Deferral amount shall constitute contributions to the Plan by the Corporation.
SECTION 1.09 - "Eligible Employee" shall mean an Employee who is
------------ -----------------
eligible to participate in the Plan under Section 2.02 or Section 2.03.
2
DEFINITIONS
- -----------
SECTION 1.10 - "Employee" shall mean any person employed by the
------------ --------
Corporation and paid on a hourly basis for employment in the United States, or
elsewhere if a citizen of the United States, provided that such person is a
member of a group of employees to which the Plan is extended (1) by the Board of
Directors or, as to hourly paid employees of a wholly-owned subsidiary of
Lockheed Corporation, by the Board of Directors of such subsidiary, by adding or
amending a Supplement hereto (as provided in Section 3.02) covering such
employees or (2) by a collective bargaining agreement between the Corporation
and a collective bargaining agent which provides that the hourly employees
covered by such agreement shall be covered by the Plan. For purposes of
calculating Breaks in Service, Hours of Service, Service Time, Termination of
Employment and Years of Service, "Employee" shall mean any person employed by
the Corporation or by a member of the controlled group of corporations, group of
trades or businesses under common control or affiliated service group (within
the meaning of Internal Revenue Code Section 414(b), (c) or (m)) of which the
Corporation is also a member at that time. A person rendering services to a
Corporation purportedly as an independent contractor shall not be treated as an
Employee before the Corporation has acknowledged that it must withhold federal
income taxes from his pay. To the extent required by Internal Revenue Code
Section 414(n) or 414(o), a "leased" worker or other non-employee shall be
treated as an Employee but shall not be eligible to participate in this Plan.
3
DEFINITIONS
- -----------
SECTION 1.11 - "ERISA" shall mean the Employee Retirement Income
------------ -----
Security Act of 1974, as now in effect or as hereafter amended.
SECTION 1.12 - "ESOP Contributions" shall mean the contributions
------------ ------------------
described in Section 4A.01.
SECTION 1.13 - "ESOP Ending Date" shall mean as to a particular group
------------ ----------------
of Employees described in a Supplement hereto, the beginning of the first
payroll period in the Month specified by such Supplement, provided however that
an ESOP Ending Date may occur only in Lockheed Corporation's January, April,
July, or October Month.
SECTION 1.14 - "ESOP Feature" shall mean that portion of the Plan
------------ ------------
consisting of an employee stock ownership plan as defined in Code Section
4975(e)(7).
SECTION 1.15 - "ESOP Fund" shall mean that portion of the Plan which
------------ ---------
consists of Stock, and any income thereon. The ESOP Fund shall include any
Stock in the Plan which was held in the Lockheed Martin Stock Fund prior to the
ESOP Starting Date.
SECTION 1.16 - "ESOP Match Stock" shall mean all Stock in the Plan
------------ ----------------
attributable to Corporation contributions made under Section 4A.01.
SECTION 1.17 - "ESOP Starting Date" shall mean as to a particular
------------ ------------------
group of Employees described in a Supplement hereto, the beginning of the first
payroll period in the Month specified by such Supplement, provided however that
an ESOP Starting Date
4
DEFINITIONS
- -----------
may occur only in Lockheed Corporation's January, April, July, or October Month.
SECTION 1.18 - "ESOP Trustee" shall mean the Trustee of the ESOP Fund.
------------ ------------
SECTION 1.19 - "Family Member" shall mean the spouse, lineal
------------ -------------
ascendants and descendants of the Employee or former Employee and the spouses of
such lineal ascendants and descendants. In determining whether an individual is
a Family Member with respect to an Employee or former Employee, legal adoptions
shall be taken into account."
SECTION 1.20 - "Filing With The Committee" shall mean the delivery of
------------ -------------------------
the document in question in such form, in such manner, to such person, and
within such time limits as the Committee shall designate.
SECTION 1.21 - "Highly Compensated Employee" shall mean:
------------- ---------------------------
(a) Any Employee who performs services for the Corporation during the
"determination year" and who, during the "look-back year" (1) was a 5% owner of
the Corporation; (2) received compensation from the Corporation in excess of
$75,000 (as adjusted pursuant to Section 415(d) of the Code); (3) received
compensation from the Corporation in excess of $50,000 (as adjusted pursuant to
Section 415(d) of the Code) and was a member of the "top-paid group" for such
year; or (4) was an officer of the Corporation and received compensation during
such
5
DEFINITIONS
- -----------
year that is greater than 50% of the dollar limitation in effect under Section
415(b)(1)(A) of the Code;
(b) Any Employee who performs services for the Corporation during the
determination year and who, with respect to the determination year, is either
described in (a)(1) above or is both one of the 100 Employees who received the
most compensation from the Corporation during the determination year and is
described in (a)(2), (a)(3) or (a)(4) where these paragraphs are modified to
substitute the determination year for the look-back year; or
(c) Any Employee who separated from service (or was deemed to have
separated) prior to the determination year, performs no services for the
Corporation during the determination year, and met the description in (a) or (b)
above for either the separation year or any determination year ending on or
after the Employee's 55th birthday.
(d) If an Employee is, during a determination year or look-back year,
a Family Member of either a 5% owner who is an Employee or of a Highly
Compensated Employee in the group consisting of the 10 most highly compensated
Employees ranked on the basis of compensation paid by the Corporation during the
determination year or the look-back year, then the Family Member and 5% owner or
top-ten Highly Compensated Employee shall be treated as a single Employee, and
their compensation and contributions or benefits under this Plan shall be
aggregated.
6
DEFINITIONS
- -----------
(e) The "determination year" shall be the Plan Year for which
compliance is being tested, and the "look-back year" shall be the 12-month
period immediately preceding the determination year.
(f) The top-paid group for a determination year or a look-back year
shall consist of the top 20% of Employees ranked on the basis of compensation
received during the year excluding Employees described in Section 414(q)(8) of
the Code and Treasury Regulations thereunder. The number of Employees treated
as officers shall be limited to 50 (or, if less, the greater of 3 Employees or
10% of the Employees). For purposes of this definition of "Highly Compensated
Employee," "compensation" means compensation within the meaning of Section
415(c)(3) of the Code, but includes elective or salary reduction contributions
to a cafeteria plan, cash or deferred arrangement or tax-sheltered annuity.
SECTION 1.22 - "Hour of Service" means all hours credited to an
------------ ---------------
Employee pursuant to the following subsections (a), (b), and (c):
(a) "Hour of Service" includes each hour for which an Employee is
paid, or entitled to payment, for the performance of duties for the
employer during the applicable computation period.
(b) "Hour of Service" also includes each hour for which an Employee is
paid, or entitled to payment, by the employer on account of a period of
time during which no
7
DEFINITIONS
- -----------
duties are performed (irrespective of whether the employment relationship
has terminated) due to vacation, holiday, sick leave, jury duty, military
reserve training leave, or other paid time off, provided that no more than
501 hours shall be credited under this subsection (b) to an Employee on
account of any single continuous period during which the Employee performs
no duties; and provided further that no hours shall be credited under this
subsection (b) on account of payments made or due under a plan maintained
solely to comply with applicable worker's compensation, unemployment
compensation or disability insurance laws or on account of payments made
solely to reimburse an Employee for medical or medically related expenses.
(c) "Hour of Service" shall also include each hour for which back pay,
irrespective of mitigation of damages, is awarded or agreed to by the
employer, provided that no hour for which an Employee was given credit
pursuant to subsection (a) or (b) of this section shall also be credited to
such Employee under the terms of this subsection (c).
All Hours of Service shall be calculated in a manner consistent with
the terms of 29 Code of Federal Regulations Section 2530-200b-2.
SECTION 1.23 - "Lockheed Martin Stock Fund" shall mean the fund which
------------ --------------------------
the Trustee shall invest exclusively in Stock, but excluding all Stock held
under the ESOP Feature after the ESOP Starting Date:
8
DEFINITIONS
- -----------
(a) Stock of the Lockheed Martin Stock Fund will be purchased and sold
by the Trustee on the open market, with commission expenses charged to the
Lockheed Martin Stock Fund. The Trustee will purchase and retain such
Stock regardless of market fluctuations, and, in the normal course, shall
sell such Stock only as necessary to meet administrative and distribution
requirements. Cash balances held in the Lockheed Martin Stock Fund shall
be limited to such administrative needs.
(b) The Trustee will have the right to vote the Stock held in the
Lockheed Martin Stock Fund, and the right to determine whether such Stock
shall be tendered in the event of a public offer for any Stock.
Notwithstanding (a) above, during the period of any public offer for Stock,
the Trustee shall refrain from making additional purchases of Stock for the
Lockheed Martin Stock Fund.
SECTION 1.24 - "Month" shall mean Lockheed Corporation's fiscal
------------ -----
accounting month.
SECTION 1.25 - "Participant" shall mean an Employee who has become a
------------ -----------
Participant in the Plan in the manner described in Section 3.01, or an Employee
who was a Participant in the Plan on December 26, 1983.
SECTION 1.26 - "Plan" shall mean this Lockheed Hourly Employee Savings
------------ ----
Plan Plus which is a continuation of the Lockheed Hourly Employee Savings Plan.
Effective with the earliest ESOP Starting Date specified in any Supplement
hereto,
9
DEFINITIONS
- -----------
"Plan" shall mean the Lockheed Hourly Employee Saving Plan Plus, which combines
a profit sharing plan under Section 401(a) of the Code and a stock bonus and
employee stock ownership plan under Sections 401(a) and 4975(e)(7) of the Code
and which is intended to qualify under such Sections and to constitute a single
plan under Treasury Regulation Section 1.414(l)-1(b)(1).
SECTION 1.27 - "Plan Year" shall mean Lockheed Corporation's fiscal
------------ ---------
accounting year.
SECTION 1.28 - "Profit Sharing Trustee" shall mean the Trustee of all
------------ ----------------------
assets under the Plan other than the ESOP Fund.
SECTION 1.29 - "Quarter" shall mean any consecutive full three fiscal
------------ -------
accounting month period commencing on the first day of Lockheed Corporation's
January, April, July or October Month.
SECTION 1.30 - "Securities Fund" shall mean the fund in which the
------------ ---------------
Trustee shall invest, stressing both possible appreciation of capital and
current income and income growth. The Securities Fund shall be invested in
common and preferred stocks, convertible securities and bonds (except stock and
securities, and bonds issued or guaranteed by the Corporation, or an affiliate,
subsidiary, or parent corporation of the Corporation), and other types of
investments.
SECTION 1.31 - "Service Time", for purposes of the Plan, shall mean
------------ ------------
that period which begins with an Employee's date of hire or rehire by the
Corporation and continues from such date of hire or rehire until broken by
Termination of Employment,
10
DEFINITIONS
- -----------
except that such Termination of Employment shall not break his Service Time (and
the period of such Terminated Employment shall be included in the computation of
Service Time) when such period of Terminated Employment is:
(a) for 30 calendar days or less; or
(b) for more than 30 calendar days when Service Time is reinstated or
restored in accordance with policies of the Corporation applied on a
nondiscriminatory basis or applicable collective bargaining agreements, if
any.
SECTION 1.32 - "Shares" shall mean shares of Stock.
------------ ------
SECTION 1.33 - "STIF Fund" shall mean the short term investment fund
------------ ---------
in which the Trustee shall invest, stressing preservation of capital, in high
quality money market instruments (excluding obligations issued or guaranteed by
the Corporation, or any affiliate, subsidiary or parent corporation of the
Corporation) including fixed income obligations of the United States of America,
financial, industrial or public utility corporations, bankers' acceptances,
notes, fully insured savings bank deposits, commercial paper and other similar
short term fixed income investments, foreign or domestic, and the Trustee's
commingled short term investment fund. Maturities of such instruments shall not
exceed thirteen (13) months.
SECTION 1.34 - "Stock" shall mean common stock of Lockheed
------------ -----
Corporation, or, on and after March 15, 1995, Lockheed Martin Corporation.
11
DEFINITIONS
- -----------
SECTION 1.35 - "Termination of Employment" and "Terminated Employment"
------------ -------------------------
shall mean the removal of an Employee from active and inactive payroll status of
the Corporation as evidenced by the processing of a severance notice, provided
that an Employee who transfers to employment by Lockheed Corporation or a
subsidiary or affiliate thereof shall not be considered as having Terminated his
Employment with the Corporation for purposes of the Plan.
SECTION 1.36 - "Thrift Stock" shall mean all Stock allocated to
------------ ------------
Participants' Accounts attributable to
(i) Elective Deferral amounts made at any time;
(ii) After-Tax Contributions made at any time; and
(iii) Corporation Matching Contributions made prior to the ESOP
Starting Date.
SECTION 1.37 - "Trustee" shall mean the Profit Sharing Trustee, the
------------ -------
ESOP Trustee and any other Trustee referred to in Section 7.01; "Trust Fund"
shall mean the Trust Fund or Trust Funds referred to in Section 7.01.
SECTION 1.38 - "Valuation Date" shall mean the last day of the
------------ --------------
calendar month.
SECTION 1.39 - "Weekly Rate of Compensation" shall mean an Eligible
------------ ---------------------------
Employee's hourly rate of pay multiplied by forty (40) hours as recorded on the
permanent payroll record for his normal work week without the inclusion of any
overtime compensation, shift, field duty, or other bonus or premium payments,
expense or living allowance, assignment or relocation
12
DEFINITIONS
- -----------
payments, incentive payments, royalties, severance pay, lump-sum payment of
accrued and prorated vacation at time of Termination of Employment, or payments
of like nature. An Eligible Employee's Weekly Rate of Compensation shall
specifically include the "Elective Deferral" amount referred to in Section 3.01.
Notwithstanding the foregoing, the maximum amount of a Participant's
compensation which shall be taken into account under the Plan for any Plan Year
("Maximum Compensation Limitation") shall be $200,000 adjusted at the same time
and in the same manner as under Section 415(d) of the Code. For purposes of the
Maximum Compensation Limitation, the compensation of any Participant who is
either a 5% owner (as defined in Section 416(i)(1) of the Code), or one of the
ten most highly paid Highly Compensated Employees during the Plan Year ("First
Participant") shall be aggregated with the compensation of any Participant who
has not attained age 19 and is a lineal descendant of the First Participant and
any Participant who is the spouse of the First Participant. In any case in
which such aggregation would produce compensation in excess of the Maximum
Compensation Limitation, the amount of the First Participant's compensation that
is considered under the Plan shall be reduced until the Maximum Compensation
Limitation is met.
SECTION 1.40 - "Year of Service" shall mean the completion of 1,000
------------ ---------------
Hours of Service over a twelve-month period. A Year of Service shall be
computed with reference to successive twelve month periods commencing with the
Employee's date of hire
13
DEFINITIONS
- -----------
by the Corporation or his rehire by the Corporation subsequent to a Break in
Service. In no event shall an Employee be credited with one Year of Service
during any twelve-month period prior to the expiration of twelve months after
the commencement of his employment by the Corporation or reemployment by the
Corporation subsequent to a Break in Service.
14
SECTION 2
---------
ELIGIBILITY FOR PARTICIPATION
-----------------------------
SECTION 2.01 - Participation in the Plan on the part of an Employee is
------------
voluntary.
SECTION 2.02
------------
(a) Eligibility Rule for New Employee. An Employee who has not been
---------------------------------
previously employed by the Corporation is eligible to become a Participant
at the beginning of the payroll period coincident with or next following
the completion of one Year of Service.
(b) Eligibility Rule for Rehired Eligible Employee or Participant. An
-------------------------------------------------------------
Employee who Terminates his Employment after completing one Year of Service
or becoming a Participant shall be eligible to participate in the Plan at
the beginning of the payroll period coincident with or next following his
date of rehire.
(c) Eligibility Rule for Non-Eligible Employee Rehired Before a Break
-----------------------------------------------------------------
in Service. An Employee who Terminates his Employment before completing
----------
one Year of Service and who is reemployed by the Corporation before
incurring a Break in Service shall retain his prior Hours of Service and
shall be eligible to become a Participant upon completion of one Year of
Service. Such an Employee's Year of Service and Breaks in Service shall
continue to be calculated with reference to successive twelve-month periods
commencing on the date the
15
ELIGIBILITY FOR PARTICIPATION
- -----------------------------
Employee is first entitled to be credited with an Hour of Service following
his original date of employment.
(d) General Eligibility Rule for Non-Eligible Employee Rehired After a
------------------------------------------------------------------
Break in Service. An Employee who Terminates his Employment before
----------------
completing one Year of Service and who incurs a Break in Service must
complete one Year of Service after reemployment with the Corporation as
though he had not previously been an Employee. Such an Employee's Year of
Service and Breaks in Service subsequent to his reemployment shall be
calculated with reference to successive twelve-month periods commencing on
the date the Employee is first entitled to be credited with an Hour of
Service following his reemployment.
(e) Special Eligibility Rules for Non-Eligible Employee Rehired After
-----------------------------------------------------------------
a Break in Service. Notwithstanding the provisions of subsection (d)
------------------
above, in determining whether a rehired Employee who Terminates his
Employment and incurs a Break in Service before completing one Year of
Service is eligible to become a Participant after his reemployment, the
following special rules should be applied:
(1) An Employee who has been rehired by the Corporation
subsequent to a Break in Service and has his Service Time reinstated
or restored to a prior date of hire or rehire by the Corporation and
is credited with one year or more of unbroken Service Time as a result
of such reinstatement or restoration is eligible
16
ELIGIBILITY FOR PARTICIPATION
- -----------------------------
to become a Participant at the beginning of the payroll period
coincident with or next following his date of rehire.
(2) An Employee who was not previously eligible to become a
Participant and has been rehired by the Corporation subsequent to a
Break in Service and has his Service Time reinstated or restored to a
prior date of hire or rehire by the Corporation is eligible to become
a Participant at the beginning of the payroll period coincident with
or next following the completion of one year of unbroken Service Time,
including credit for prior Service Time as a result of such
reinstatement or restoration, or upon whichever is the first to occur.
SECTION 2.03 - A Participant may not make an Elective Deferral under
------------
the Plan for any week in which he is not an Employee.
17
SECTION 3
---------
EMPLOYEE PARTICIPATION
----------------------
SECTION 3.01 - An Eligible Employee may become a Participant in the
------------
Plan by Filing With The Committee documents which shall:
(a) specify the weekly Elective Deferral amount to be deducted from
his wages and paid to the Trustee on his behalf;
(b) specify the portion of said weekly Elective Deferral amount which
is to be allocated to the Bond Fund, the Lockheed Martin Stock Fund, the
ESOP Fund, the Securities Fund and/or the STIF Fund;
(c) designate a beneficiary or beneficiaries to receive any payment
which may be due under the Plan upon his death; and
(d) contain such other or additional information as in the opinion of
the Committee is desirable or necessary in the operation of the Plan.
SECTION 3.02 - The weekly Elective Deferral amount shall be made by
------------
payroll deductions from a Participant's wages and the amounts so deducted shall
be paid to the Trustee during the Month in which the deduction is made. The
weekly Elective Deferral amount which may be specified under Section 3.01(a) and
deducted under this Section shall be the amount specified in the Supplement
hereto applicable to the particular group of Employees
18
EMPLOYEE PARTICIPATION
- ----------------------
described in each such Supplement subject to the provisions of Section 3.08.
SECTION 3.03 - A Participant may change the specification made under
------------
Section 3.01(a) by Filing With The Committee. A Participant who changes such
specification to direct that no further Elective Deferral amounts shall be
deducted from his Weekly Rate of Compensation may not again change such
specification to begin further Elective Deferrals sooner than the thirteenth
(13th) week after the first week for which no Elective Deferral is made by
Participant.
SECTION 3.04 - An Eligible Employee shall annually make the
------------
specifications required in Sections 3.01(a) and 3.01(b) during the calendar
month of October. An Employee who may become an Eligible Employee under Section
2.02 or 2.02(a) in November or December of a Plan Year shall also make the
specifications required in Sections 3.01(a) and 3.01(b) during the calendar
month of October. A former Employee rehired in November or December of a Plan
Year who is eligible to participate under Section 2.02(b) or (c) or under
Section 2.03 shall make the specifications required in Section 3.01(a) and
3.01(b) upon becoming an Employee. Such specifications required in Sections
3.01(a) and 3.01(b) made under this Section shall become effective at the
beginning of the payroll period next following the end of the Plan Year in which
such specifications are Filed With The Committee.
19
EMPLOYEE PARTICIPATION
- ----------------------
SECTION 3.05
------------
(a) In making the specification required in Section 3.01(b) the
Eligible Employee shall specify that the weekly Elective Deferral amount
shall be invested by the Trustee either entirely in the Bond Fund, or
entirely in the Securities Fund, or entirely in the STIF Fund, or one-half
in one Fund and one-half in one of the other Funds, or one-half in one Fund
and one-fourth in each of the other funds, or three-fourths in one Fund and
one-fourth in one of the other Funds. Alternatively, the Eligible Employee
may specify that one-fourth of the weekly Elective Deferral amount shall be
invested in Stock in lieu of one of the other Funds. Such specification by
an Eligible Employee shall be deemed to be a continuing direction to the
Trustee unless and until changed under the following provisions of this
Section or Section 3.04. A Participant may change such specification under
this Section only once each Quarter and may do so by Filing With The
Committee a change in prior specification during the Quarter. A change in
prior specification pursuant to this Section 3.05 shall provide that,
commencing with the beginning of the payroll period next following the end
of the Month in which the change is Filed With The Committee, the
Participant's weekly Elective Deferral amount shall be invested by the
Trustee as specified by the Participant. Any change made pursuant to this
Section 3.05 shall not affect the investment of any
20
EMPLOYEE PARTICIPATION
- ----------------------
contributions by such Participant and by the Corporation prior to the
beginning of such first pay period following the end of the Month in which
the change is Filed With The Committee.
(b) A change in specification made pursuant to this Section 3.05 shall
supersede all other option specifications made pursuant to Section 3.01(b),
3.04 or this Section 3.05.
(c) An Employee making loan repayments pursuant to Section 9.04(b) may
make a change in prior specification under this Section 3.05 even though
Elective Deferrals are not being deducted from his Weekly Rate of
Compensation at the time such change in specification is Filed With The
Committee.
(d) Notwithstanding any other provision of this Section 3.05 to the
contrary, a Participant may not file an election under this Section which
would have an effective date in the same Quarter as the effective date of a
previous election under this Section, unless such new election is made
pursuant to a special election period established by the Committee pursuant
to Section 3.05(e).
(e) The Committee may, from time to time, (i) designate special
election periods during which Participants may make the election under
Section 3.05(a), and (ii) establish special effective dates for any such
elections.
21
EMPLOYEE PARTICIPATION
- ----------------------
SECTION 3.06 -
------------
(a) Subject to Section 3.06(b), below, a Participant may elect, by
Filing With The Committee, to have the dollar value of all Units and Shares
(excluding Shares of ESOP Match Stock) credited to his Participant's
Account on the Valuation Date of the first month following the end of the
calendar month in which the election is filed, invested by the Trustee
either entirely in the Bond Fund, or entirely in the Securities Fund, or
entirely in the STIF Fund, or one-half in one Fund and one-half in one of
the other Funds, or one-half in one Fund and one-fourth in each of the
other Funds, or three-fourths in one Fund and one-fourth in one of the
other Funds. Alternatively, a Participant may elect to have one-fourth of
such dollar value invested in Stock in lieu of one of the other funds.
Once Filed With The Committee the election may not be withdrawn. For the
sole purpose of this Section 3.06 of the Plan, the effective date of the
election shall be the Valuation Date of the first month following the
calendar month in which the election is Filed With The Committee.
Notwithstanding the foregoing, a Participant shall not have the right to
direct the investment of any ESOP Match Stock allocated to his
Participant's Account, and any income thereon, except as otherwise provided
in Section 4A.03.
(b) Notwithstanding any other provision of this Section 3.06 to the
contrary, a Participant may not file an
22
EMPLOYEE PARTICIPATION
- ----------------------
election under this Section which would have an effective date in the same
calendar Quarter as the effective date of a previous election under this
Section, unless such new election is made pursuant to the special election
period established by the Committee pursuant to Section 3.06(c).
(c) The Committee may, from time to time, (i) designate special
election periods during which Participants may make the election under
Section 3.06(a), and (ii) establish special effective dates for any such
election.
SECTION 3.07 - (a) The Committee shall estimate, as soon as practical
------------
before the close of the Plan Year and at such other times as the Committee in
its discretion determines, the extent, if any, to which Elective Deferrals may
not be available to any Participant or class of Participants under Section
401(k) of the Code. In accordance with any such estimate, the Committee may set
initial or interim limits for Elective Deferrals relating to any Participant or
class of Participants. These rules may include provisions authorizing the
suspension or reduction of Elective Deferrals above a specified dollar amount or
percentage of Weekly Rate of Compensation.
(b)(1) For each Plan Year, the Committee shall calculate an actual
deferral ration (ADR) for each Participant. The ADR for each Participant shall
be equal to the ratio of the sum of the contributions described in paragraph
(b)(2) divided by the Participant's compensation during the Plan Year. For
23
EMPLOYEE PARTICIPATION
- ----------------------
purposes of this Section 3.07, "compensation" shall meet the requirements of
Section 414(s) of the Code and Treasury Regulations. A Participant's
compensation taken into account for this purpose shall be limited to
compensation received during the Plan Year while the Employee is a Participant.
(2) For purposes of calculating the ADR for each Participant, the
total amount of the Participant's Elective Deferrals for the Plan Year shall be
included; provided that any Elective Deferrals treated as Corporation Matching
Contributions pursuant to Section 4.05(b) shall not be included in the
calculation of the Participant's ADR. With respect to a Participant for whom no
contributions are includable in the calculation of the Participant's ADR
pursuant to this subsection (b)(2), the Participant's ADR shall be equal to
zero.
(3) In the case of a Participant who is a Highly Compensated Employee
and who is eligible to participant in a cash or deferred arrangement under
another plan(s) which may be aggregated with this Plan pursuant to Section
1.401(k)-1(b)(3)(ii) of the Treasury Regulations (except as provided by Section
1.401(k)-1(g)(1)(B)(3) of the Treasury Regulations), the employee contributions
and matching contributions from such other plan(s) shall be included for
purposes of calculating the Participant's ADR under this Plan.
(4) In the case of Family Members treated as a single Highly
Compensated Employee under paragraph (d) of the definition of Highly Compensated
Employee, in accordance with the family
24
EMPLOYEE PARTICIPATION
- ----------------------
aggregation rules of Section 414(q)(6) of the Code, the ADR of the Family Member
who is the Highly Compensated Employee shall be determined by combining the
contributions described in subsection (b)(2) and compensation of all eligible
Family Members. To the extent that the contributions and compensation of such
Family Members are taken into account in determining the ADR of the Family
Member who is the Highly Compensated Employee, such amounts shall be disregarded
for purposes of determining the ADR for the Family Members who are non-Highly
Compensated Employees.
(c) For each Plan Year, an actual deferral percentage (ADP) shall be
separately calculated for the group of Participants who are Highly Compensated
Employees ("High-ADP") and the group of Participants who are non-Highly
Compensated Employees ("Low-ADP"). The ADP for each such group of Participants
is the average of the individual ADR's for that group of Participants. The
High-ADP when compared with the Low-ADP must meet one of the following
requirements:
(1) The High-ADP is no greater than 1.25 times the Low-ADP; or
(2) The High-ADP is no greater than two times the Low-ADP, and the
High-ADP is no greater than the Low-ADP plus two percentage points."
SECTION 3.08 - The Committee shall determine prior to the effective
------------
date of the Elective Deferral that becomes effective in January of each Plan
Year and again during the month of June whether there is a reasonable
expectation that the
25
EMPLOYEE PARTICIPATION
- ----------------------
Average Deferral Percentage results projected for the Plan Year will satisfy
either of the tests contained in Section 3.07. If, in the Committee's
determination, neither of the tests described in Section 3.07 will be satisfied,
the following procedure will be followed:
(a) A reduction in the Elective Deferral amount specified under
Sections 3.03 or 3.04 for Eligible Employees who are Highly Compensated
Employees will be made. Such reduction will be applied to the Elective
Deferral amount of all Eligible Employees in such group. The reduction
shall be applied by $.01 (one cent) reductions to the Elective Deferral
amount of each Eligible Employee who is a Highly Compensated Employee and
the tests described in Section 3.07 will be re-run. This procedure will be
repeated until one of the tests specified in Section 3.07 is satisfied.
(b) If a reduction in the amount of the Elective Deferral amount is
required as a result of the application of Section 3.08(a), the reduction
shall be paid to the Eligible Employee as taxable earnings for the pay
periods in the Plan Year in which the reduction applies.
SECTION 3.09 - Notwithstanding any other provision of the Plan to the
------------
contrary, a Participant will be suspended from making an Elective Deferral under
the Plan for any week in which a garnishment, attachment, levy or other legal
process is imposed on a Participant's Weekly Rate of Compensation.
26
EMPLOYEE PARTICIPATION
- ----------------------
SECTION 3.10
------------
(a) Elective Deferrals made on behalf of any Participant under this
Plan and all other plans (which are described in subsection (c)) maintained by
the Corporation shall not exceed the limitation under Section 402(g)(1) of the
Code for the taxable year of the Participant, as adjusted annually under Section
402(g)(5) of the Code, and shall be effective as of January 1 of each calendar
year.
(b) In the event that the dollar limitation in subsection (a) is
exceeded, the Participant is deemed to have requested a distribution of such
"Excess Deferrals" by the first March 1 following the close of the Participant's
taxable year. The Committee shall distribute such Excess Deferrals (and any
income allocable thereto), to the Participant by April 15th. In determining the
Excess Deferrals distributable with respect to a Participant's taxable year,
excess Elective Deferrals previously distributed for the Plan Year beginning
with or within such taxable year shall reduce the Excess Deferrals otherwise
distributable under this subsection (b). The income allocable to the Excess
Deferrals shall be determined through the date of distribution in accordance
with Section 1.402(g)-(1)(e)(5) of the Treasury Regulations.
(c) In the event that a Participant is also a participant in (1)
another qualified cash or deferred arrangement as defined in Section 401(k) of
the Code, (2) a simplified employee pension, as defined in Section 408(k) of the
Code, or
27
EMPLOYEE PARTICIPATION
- ----------------------
(3) a salary reduction arrangement, within the meaning of Section 3121(a)(5)(D)
of the Code, and the elective deferrals, as defined in Section 402(g)(3) of the
Code, made under such other arrangement(s) and this Plan cumulatively exceed the
dollar limit under subsection (a) for such Participant's taxable year, the
Participant may, not later than March 1 following the close of his or her
taxable year, notify the Committee in writing of such excess and request that
the Elective Deferrals made on his or her behalf under this Plan be reduced by
an amount specified by the Participant. The Committee may then determine to
distribute such excess in the same manner as provided in subsection (b).
28
SECTION 4
---------
CORPORATION MATCHING CONTRIBUTIONS
----------------------------------
SECTION 4.01
------------
(a) For Elective Deferral amounts made before the ESOP Starting Date,
the Corporation will contribute to the Trustee an amount equal to fifty
percent (50%) of the Elective Deferral amount specified by Participants
during the Month immediately preceding the date of such matching
contribution by the Corporation. The fifty percent (50%) "Corporation
Matching Contribution" made under this Section 4.01(a) shall be limited to
Elective Deferral amounts up to the amount specified in the Supplement
hereto (as provided in Section 3.02) as subject to receive the Corporation
Matching Contribution. Elective Deferral amounts over the amount specified
in the Supplement hereto as eligible for matching shall not be subject to
the fifty percent (50%) Corporation Matching Contributions.
(b) For Elective Deferral amounts made after the beginning of the ESOP
Starting Date, the Corporation will make a Corporation Matching
Contribution to the Trustee equal to sixty percent (60%) of the Elective
Deferral amounts specified by each Participant during the Month immediately
preceding the date of such matching contribution by the Corporation. The
sixty percent (60%) Corporation Matching Contribution made under this
Section 4.01(b) shall be limited to Elective Deferral amounts up to the
amount
29
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
specified in the Supplement hereto (as provided in Section 3.02) as subject
to receive the Corporation Matching Contribution.
(c) Fifty percent (50%) of the Corporation Matching Contribution to be
made on behalf of any Employee who is a member of a particular group of
Employees described in a Supplement hereto on or after the applicable ESOP
Starting Date and prior to the applicable ESOP Ending Date will be made to
the ESOP Trustee in cash, Shares or any other property acceptable to the
ESOP Trustee as an ESOP Contribution, and fifty percent (50%) of any such
Corporation Matching Contribution shall be made to the Trustee in cash or
other property acceptable to the Trustee as a non-ESOP Contribution to be
allocated to the various Funds in accordance with Section 4.02.
Corporation Matching Contributions made after the ESOP Ending Date
specified in the applicable Supplement will be made to the Trustee in cash
or other property acceptable to the Trustee as a non-ESOP Contribution to
be allocated to the various Funds in accordance with Section 4.02.
SECTION 4.02 - Corporation Matching Contributions for each Month shall
------------
be allocated by the Trustee to the Bond Fund, the Lockheed Martin Stock Fund,
the Securities Fund, the STIF Fund and to the ESOP Fund, in the same proportion
as Elective Deferral amounts specified by Participants during such Month are
allocated to the Bond Fund, the Lockheed Martin Stock Fund, the
30
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
Securities Fund, the STIF Fund and to the ESOP Fund. Notwithstanding the
foregoing, ESOP Contributions shall be wholly invested in Stock, except as
provided otherwise due to an election under Section 4A.03 or to the extent loans
are made to Participants under Section 9.04.
SECTION 4.03 - No part of the Corporation Matching Contributions paid
------------
to the Trustee shall be recoverable by the Corporation. However, with respect
to a Participant whose benefits under the Plan are forfeited under the
provisions of Sections 8.02, 8.04 and 12.07, by Termination of Employment, all
amounts so forfeited shall be credited against, and reduce to the extent of such
credit, the amount of future Corporation Matching Contributions otherwise to be
made under Section 4.01.
SECTION 4.04 - Except in accordance with applicable federal and state
------------
law, no liability for the payment of benefits under the Plan shall be imposed
upon the Corporation, its officers, directors, employees, or shareholders or the
Committee or any of its members, nor shall they be subject to any suit or
litigation or to any legal liability for any cause, or reason, or thing
whatsoever in connection with the Plan or in connection with the operation of
the Trust Funds. This shall not affect any obligation of the Corporation to pay
any specific contribution to the Trustees which it has accrued and expressly
obligated itself to pay, nor shall it affect the right, if any, of a Participant
or beneficiary to seek redress against the proper person or
31
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
persons, corporation, firm or trustee who violate his rights under the Plan.
SECTION 4.05
------------
(a)(1) The Committee shall estimate, as soon as practical, before the
close of the Plan Year and at such other times as the Committee in its
discretion determines, the extent, if any, to which Corporation Matching
Contributions may not be available to any Participant or class of Participants
under Section 401(m) of the Code. In accordance with any such estimate, the
Committee may set initial or interim limits or percentages for Corporation
Matching Contributions relating to any Participant or class of Participants.
(2) Notwithstanding the foregoing, the provisions of this Section
4.05 shall not be applied with respect to any Employee covered by a collective
bargaining agreement between the Corporation and a collective bargaining agent.
(b)(1) For each Plan Year, after determining the amount of excess
Elective Deferrals, if any, under Section 3.07, the Committee shall calculate an
actual contribution ratio (ACR) for each Participant. The ACR for each
Participant shall be equal to the ratio of the sum of the contributions
described in paragraph (b)(2) divided by the Participant's compensation during
the Plan Year. For purposes of this Section 4.05, "compensation" shall meet the
requirements of Section 414(s) of the Code and Treasury Regulations. A
Participant's compensation taken into account for this purpose shall be limited
to compensation
32
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
received during the Plan Year while the Employee is a Participant.
(2) For purposes of calculating the ACR for each Participant, the
following contributions shall be included:
(A) the total amount of the Corporation Matching Contributions
allocated to the Participant's Account for the Plan Year; and
(B) all or any part of the Elective Deferrals that the
Corporation, in its sole discretion, elects to treat as Corporation
Matching Contributions; provided that the conditions described in
Section 1.401(m)-1(b)(5) of the Treasury Regulations, which are hereby
incorporated by reference, are satisfied.
(3) With respect to a Participant for whom no contributions are
includable in the calculation of the Participant's ACR pursuant to this
subsection (b)(2), the Participant's ACR shall be equal to zero.
(4) In the case of a Participant who is a Highly Compensated Employee
and who makes employee contributions to or is entitled to matching contributions
from another plan(s) which may be aggregated with this Plan pursuant to Section
1.401(m)-1(b)(3)(ii) of the Treasury Regulations (except as provided by Section
1.401(m)-1(f)(1)(ii)(B) of the Treasury Regulations), the employee contributions
and matching contributions from such other plan(s) shall be included for
purposes of calculating the Participant's ACR under this Plan.
33
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
(5) In the case of Family Members treated as a single Highly
Compensated Employee under paragraph (d) of the definition of "Highly
Compensated Employee," in accordance with the family aggregation rules of
Section 414(q)(6) of the Code, the ACR of the Family Member who is the Highly
Compensated Employee shall be determined by combining the contributions
described in subsection (b)(2) and compensation of all eligible Family Members.
To the extent that the contributions and compensation of such Family Members are
taken into account in determining the ACR of the Family Member who is the Highly
Compensated Employee, such amounts shall be disregarded for purposes of
determining the ACR for the Family Members who are non-Highly Compensated
Employees.
(c) For each Plan Year, an actual contribution percentage (ACP) shall
be separately calculated for the group of Participants who are Highly
Compensated Employees ("High-ACP") and the group of Participants who are non-
Highly Compensated Employees ("Low-ACP"). The ACP for each such group of
Participants is the average of the individual ACR's for that group of
Participants. The High-ACP when compared with the Low-ACP must meet one of the
following requirements:
(1) The High-ACP is no greater than 1.25 times the Low-ACP; or
(2) The High-ACP is no greater than two times the Low-ACP, and
the High-ACP is no greater than the Low-ACP plus two percentage
points.
34
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
(d) At the end of a Plan Year, the Committee shall determine the
"Excess Aggregate Contributions" for each Participant who is a Highly
Compensated Employee in the following manner. First, the Committee shall reduce
the ACR of the Highly Compensated Employee(s) with the highest ACR to the ACR of
the Highly Compensated Employee(s) with the next-highest ACR; provided, however,
that if a lesser reduction would enable the Plan to meet the limits in
subsection (c), the Committee shall make such lesser reduction in the ACR of the
Highly Compensated Employee(s). Second, the Committee shall repeat the process
in the preceding sentence until the Plan satisfies the limits in subsection (c).
Third, the Committee shall calculate the amount of Excess Aggregate
Contributions, which is equal to (1) the total contributions taken into account
in calculating the ACR of the Highly Compensated Employee pursuant to subsection
(b)(2), minus (2) the product of the ACR of the Highly Compensated Employee
determined in accordance with this subsection (d) and the compensation of the
Highly Compensated Employee. In the case of Family Members subject to the
family aggregation rules of Section 414(q)(6) of the Code, the Excess Aggregate
Contributions shall be allocated among Family Members in proportion to the total
contributions taken into account pursuant to subsection (b)(2) of each Family
Member that has been combined under subsection (b)(4). The income allocable to
the Excess Aggregate Contributions shall be determined through the date of
distribution in accordance with Section 1.401(m)-1(e)(3)(ii) of
35
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
the Treasury Regulations. The Committee will not be liable to any Participant
(or to the Participant's Beneficiary, if applicable) for any losses caused by
inaccurately estimating or calculating the amount of any Participant's Excess
Aggregate Contributions and income allocable thereto.
(e) If, at the end of a Plan Year, a Participant or a class of
Participants has Excess Aggregate Contributions, then the Committee or
Corporation may elect, at its discretion, to pursue any of the following courses
of action or any combination thereof:
(1) The Committee may cause a Participant to forfeit any or all
Corporation Matching Contributions (and any earnings allocable
thereto) that are not vested.
(2) The Committee may cause a Participant to forfeit any or all
Corporation Matching Contributions (and any income allocable thereto)
attributable to excess Elective Deferrals under Section 3.07. These
forfeitures are permissible, pursuant to Section 1.401(k)-1(f)(5)(iii)
of the Treasury Regulations, even if such Corporation Matching
Contributions would otherwise be vested pursuant to the terms of the
Plan.
(3) The Committee may distribute any or all Excess Aggregate
Contributions (and any income allocable thereto) to the Participant.
Such distribution shall be made within the 2-1/2 month
36
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
period following the close of the Plan Year to the extent feasible,
and in all events no later than 12 months after the close of the Plan
Year.
(4) The Corporation, in its discretion, may make a contribution
to the Plan, which shall be allocated as a fixed dollar amount to the
accounts of Participants who are non-Highly Compensated Employees;
provided that the conditions described in Section 1.401(m)-1(b)(5) of
the Treasury Regulations, which are hereby incorporated by reference,
are satisfied.
SECTION 4.06
------------
The tests of Section 3.07(c) and 4.05(c) shall be met in accordance
with the prohibition against the multiple use of the alternative limitation
under Section 401(m)(9) of the Code by satisfying the provisions of Section
1.401(m)-2(b) of the Treasury Regulations, which are hereby incorporated by
reference. To the extent that reductions are required by application of Section
1.401(m)-2(b) of the Treasury Regulations, such reduction shall be accomplished
by reducing the ADR's for all Highly Compensated Employees.
37
SECTION 4A
----------
ESOP PROVISIONS
---------------
SECTION 4A.01 - ESOP Contributions shall be wholly invested in Stock
-------------
(except as provided otherwise due to an election under Section 4A.03) and shall
include the amounts described in Sections 4A.01(a) below. The Corporation may
make all or a part of any such contributions out of its treasury shares or
authorized but unissued shares.
(a) Corporation Matching Contributions made on or after the ESOP
Starting Date and prior to the ESOP Ending Date are ESOP Contributions.
SECTION 4A.02 - If at the time of distribution, Stock distributed from
-------------
the ESOP Fund is not readily tradeable on an established market within the
meaning of Section 409(h) of the Code and the Regulations, such Stock shall be
subject to a put option in the hands of a Qualified Holder by which such
Qualified Holder may sell all or any part of the Stock distributed to him by the
ESOP Fund to the ESOP Trustee. Should the ESOP Trustee decline to purchase all
or any part of the Stock put to it by the Qualified Holder, the Corporation
shall purchase the Stock that the ESOP Trustee declines to purchase. The put
option shall be subject to the following conditions:
(a) The term "Qualified Holder" shall mean the Participant or
beneficiary receiving the distribution of such Stock, any other party to whom
the Stock is transferred by gift or by reason of death, and also any trustee of
an individual
38
ESOP PROVISIONS
- ---------------
retirement account (as defined under Code Section 408) to which all or any
portion of the distributed Stock is transferred pursuant to a tax-free
"rollover" transaction satisfying the requirements of Sections 402 and 408 of
the Code.
(b) During the 60-day period following any distribution of such Stock,
a Qualified Holder shall have the right to require the Corporation to
purchase all or a portion of the distributed Stock held by the Qualified
Holder. The purchase price to be paid for any such Stock shall be its fair
market value determined (1) as of the Valuation Date coinciding with or
next preceding the exercise of the put option under this Section 4A.02 or,
(2) in the case of a transaction between the Plan and a "disqualified
person" within the meaning of Section 4975(e)(2) of the Code or a "party in
interest" within the meaning of Section 3(14) of ERISA, as of the date of
the transaction.
(c) If a Qualified Holder shall fail to exercise his put option right
under Section 4A.02(b), the option right shall temporarily lapse upon the
expiration of the 60-day period. As soon as practicable following the last
day of the Plan Year in which the 60-day option period expires, the
Corporation shall notify the non-electing Qualified Holder (if he is then a
shareholder of record) of the valuation of the Stock as of that date.
During the 60-day period following receipt of such valuation notice, the
39
ESOP PROVISIONS
- ---------------
Qualified Holder shall again have the right to require the Corporation to
purchase all or any portion of the distributed Stock. The purchase price
to be paid therefore shall be fair market value determined (1) as of the
Valuation Date coinciding with or next preceding the exercise of the put
option under this Section 4A.02(c) or, (2) in the case of a transaction
between the Plan and a "disqualified person" within the meaning of Section
4975(e)(2) of the Code or a "party in interest" within the meaning of
Section 3(14) of ERISA, as of the date of the transaction.
(d) The foregoing put options under Section 4A.02(b) and (c) hereof
shall be effective solely against the Corporation and shall not obligate the
Plan or Trust in any manner.
(e) In making the determination of fair market value, the Corporation
shall consider, to the extent permitted by law (and in conformity, where
applicable, with the provisions of Section 6), the same methodology used to
value the Stock at the time of its initial purchase by the ESOP Trustee and
shall, to the extent permitted by law, include as a valuation factor at least
the same proportionate share of enterprise value as was taken into account at
the time of such purchase of Stock.
(f) The period during which the put option is exercisable does not
include any time when a Qualified Holder is unable to exercise it because the
Corporation is prohibited from honoring it by applicable Federal or State laws.
40
ESOP PROVISIONS
- ---------------
(g) Except as otherwise required or permitted by the Code, the put
options under this Section 4A.02 shall satisfy the requirements of Section
54.4975-7(b) of the Treasury Regulations to the extent, if any, that such
requirements apply to such put options.
(h) A Qualified Holder must exercise his put option in writing by
Filing with the Committee. If a Qualified Holder exercises his put option under
this Section 4A.02, payment for the Stock repurchased shall be made, in the case
of a distribution of a Participant's Account within one taxable year, in
substantially equal annual payments over a period beginning not later than 30
days after the exercise of the put option and not exceeding five years (provided
that adequate security and reasonable interest are provided with respect to
unpaid amounts) or, in the case of other distributions, not later than 30 days
after such exercise.
SECTION 4A.03 -
-------------
(a) Notwithstanding any other provision of the Plan, any Participant
who has attained age 55 and completed at least ten (10) Years of Service
may elect to have up to 25% of the value in his Participant's Account
attributable to ESOP Contributions invested in the funds referred to in
Section 4A.03(b). Any such Participant may make this election once during
each Plan Year of his Qualified Election Period. After the close of the
sixth Plan Year in the Participant's Qualified Election Period, the
Participant
41
ESOP PROVISIONS
- ---------------
may so direct the investment of up to 50% of the value of amounts in his
Participant's Account attributable to ESOP Contributions. For this
purpose, the term "Qualified Election Period" shall mean the period
beginning with the later of the Plan Year in which the Participant attains
age 55 or completes ten (10) Years of Service and ending upon the
Participant's Termination of Employment. The percentage of amounts in a
Participant's Account attributable to ESOP Contributions for which he may
make investment directions in a Plan Year shall be the "Allocable Portion"
of such Participant's Account at the time of the election under this
Section 4A.03.
(b) A Participant may elect by Filing With The Committee, to have the
dollar value of the Allocable Portion of his Participant's Account on the
Valuation Date of the first month following the end of the calendar month
in which the election is filed, invested by the Trustee either entirely in
the Bond Fund, or entirely in the Securities Fund, or entirely in the STIF
Fund or one-half in one Fund and one-half in one of the other Funds, or
one-half in one Fund and one-fourth in each of the other Funds, or three-
fourths in one Fund and one-fourth in one of the other Funds. For the sole
purpose of this Section 4A.03(b), the effective date of the election shall
be the Valuation Date of the first month following the calendar month in
which the election is Filed With The Committee. The election may not
42
ESOP PROVISIONS
- ---------------
be withdrawn once Filed With The Committee for ninety (90) days. Such
election shall be in accordance with any notice, rulings, or regulations or
other guidance issued by the Internal Revenue Service with respect to Code
Section 401(a)(28)(B).
SECTION 4A.04 - Effective as of the ESOP Starting Date, all cash
-------------
dividends on Stock allocated to Participant's Accounts shall be paid out to the
Participant in a manner consistent with Section 404(k) of the Code.
SECTION 4A.05 - Stock held in Participants' Accounts shall be valued
-------------
as of each Valuation Date, or at the discretion of the Committee, more
frequently. All valuations of Stock which is not readily tradeable on an
established securities market shall be made by an independent appraiser meeting
requirements similar to those contained in Treasury Regulations under Section
170(a)(1) of the Code.
SECTION 4A.06 - All tender or exchange decisions with respect to Stock
-------------
held by the ESOP Trustee shall be made only by Participants acting in their
capacity as Named Fiduciaries in accordance with the following provisions of
this Section 4A.06:
(a) In the event an offer shall be received by the ESOP Trustee
(including a tender offer for Shares subject to Section 14(d)(1) of the
Securities Exchange Act of 1934 or subject to Rule 13e-4 promulgated under
that Act, as those provisions may from time to time be amended) to purchase
or exchange any Shares held by the ESOP Trustee, the Trustee
43
ESOP PROVISIONS
- ---------------
will advise each Participant who has Shares credited to his Participant's
Account in writing of the terms of the offer as soon as practicable after
its commencement and will furnish each Participant with a form by which he
may instruct the Trustee confidentially whether or not to tender or
exchange Shares allocated to his Participant's Account (including
fractional shares to 1/1000th of a Share). The materials furnished to the
Participants shall include (i) a notice from the ESOP Trustee that the ESOP
Trustee will not tender or exchange any Shares for which timely
instructions are not received by the ESOP Trustee and (ii) such related
documents as are prepared by any person and provided to the shareholders of
the Corporation pursuant to the Securities Exchange Act of 1934. The
Committee and the ESOP Trustee may also provide Participants with such
other material concerning the tender or exchange offer as the ESOP Trustee
or the Committee in its discretion determine to be appropriate, provided,
however, that prior to any distribution of materials by the Committee, the
ESOP Trustee shall be furnished with complete copies of all such materials.
The Corporation and the Committee will cooperate with the ESOP Trustee to
ensure that Participants receive the requisite information in a timely
manner.
(b) The ESOP Trustee shall tender or not tender Shares or exchange
Shares allocated to any Participant's Account (including fractional Shares
to 1/1000th of a Share) only as
44
ESOP PROVISIONS
- ---------------
and to the extent instructed by the Participant as a Named Fiduciary. With
respect to Shares allocated to the Participant's Account of a deceased
Participant, such Participant's beneficiary, as a Named Fiduciary, shall be
entitled to direct the Trustee whether or not to tender or exchange such
Shares as if such beneficiary were the Participant. If tender or exchange
instructions for Shares allocated to any Participant's Account are not
timely received by the ESOP Trustee, the ESOP Trustee will treat non-
receipt as a direction not to tender or exchange such Shares. The
instructions received by the ESOP Trustee from Participants or
beneficiaries shall be held by the ESOP Trustee in strict confidence and
shall not be divulged or released to any person, including directors,
officers or employees of the Corporation or of any other company, except as
otherwise required by law.
(c) In the event, under the terms of a tender offer or otherwise, any
Shares tendered for sale, exchange or transfer pursuant to such offer may
be withdrawn from such offer, the ESOP Trustee shall follow such
instructions respecting the withdrawal of such securities from such offer
in the same manner and the same proportion as shall be timely received by
the ESOP Trustee from the Participants, as Named Fiduciaries, entitled
under this Section 4A.06 to give instructions as to the sale, exchange or
transfer of securities pursuant to such offer.
45
ESOP PROVISIONS
- ---------------
(d) In the event that an offer for fewer than all of the Shares held
by the ESOP Trustee shall be received by the ESOP Trustee, each Participant
who has been allocated any Shares subject to such offer shall be entitled
to direct the ESOP Trustee as to the acceptance or rejection of such offer
(as provided by subsections (a)-(c) of this Section 4A.06) with respect to
the largest portion of such Stock as may be possible given the total number
or amount of Shares the ESOP Trustee may sell, exchange or transfer
pursuant to the offer based upon the instructions received by the ESOP
Trustee from all other Participants who shall timely instruct the ESOP
Trustee pursuant to this Section 4A.06 to sell, exchange or transfer such
Shares pursuant to such offer, each on a pro rata basis in accordance with
--------
the number or amount of such Shares allocated to the Participants'
Accounts.
(e) In the event an offer shall be received by the ESOP Trustee and
instructions shall be solicited from Participants pursuant to subsections
(a)-(c) of this Section 4A.06 regarding such offer, and prior to
termination of such offer, another offer is received by the ESOP Trustee
for the securities subject to the first offer, the ESOP Trustee shall use
its best efforts under the circumstances to solicit instructions from the
Participants to the ESOP Trustee (i) with respect to securities tendered
for sale, exchange or transfer pursuant to the first offer, whether to
46
ESOP PROVISIONS
- ---------------
withdraw such tender, if possible, and, if withdrawn, whether to tender any
securities so withdrawn for sale, exchange or transfer pursuant to the
second offer and (ii) with respect to securities not tendered for sale,
exchange or transfer pursuant to the first offer, whether to tender or not
to tender such securities for sale, exchange or transfer pursuant to the
second offer. The ESOP Trustee shall follow all such instructions received
in a timely manner from Participants in the same manner and in the same
proportion as provided in subsections (a)-(c) of this Section 4A.06. With
respect to any further offer for any Stock received by the ESOP Trustee and
subject to any earlier offer (including successive offers from one or more
existing offerors), the ESOP Trustee shall act in the same manner as
described above.
(f) A Participant's instructions to the ESOP Trustee to tender or
exchange Shares will not be deemed a withdrawal or suspension from the Plan
or a forfeiture of any portion of the Participant's interest in the Plan.
Funds received in exchange for tendered Shares will be credited to the
Participant's Account of the Participant whose Shares were tendered and
will be used by the ESOP Trustee to purchase Stock, as soon as practicable.
In the interim, the ESOP Trustee will invest such funds in short-term
investments permitted under the ESOP Trust.
47
ESOP PROVISIONS
- ---------------
(g) The ESOP Trustee shall take all steps necessary, including
appointment of a corporate trustee and/or an outside independent
administrator to the extent such action, after consultation with the
Corporation and the Profit Sharing Trustee, is found necessary to maintain
confidentiality of Participant responses and/or to adequately discharge
their obligations as Named Fiduciary.
SECTION 4A.07 - All voting rights on Shares held by the ESOP Trustee
-------------
shall be exercised in accordance with the following provisions of this Section
4A.07:
(a) As soon as practicable before each annual or special shareholders'
meeting of the Corporation, the ESOP Trustee shall furnish to each
Participant a copy of the proxy solicitation material sent generally to
shareholders, together with forms requesting confidential instructions on
how the Shares allocated to such Participant's Account (including
fractional Shares to 1/1000th of a Share) are to be voted. The Corporation
and the Committee shall cooperate with the Trustee to ensure that
Participants receive the requisite information in a timely manner. Except
as provided in subsection (d) of this Section 4A.07, the materials
furnished to the Participants shall include a notice from the ESOP Trustee
that any allocated Shares for which timely instructions are not received by
the ESOP Trustee will be voted by the Trustee in its discretion. Upon
timely receipt of such instructions, the ESOP Trustee (after
48
ESOP PROVISIONS
- ---------------
combining votes of fractional Shares to give effect to the greatest extent
to Participants' instructions) shall vote the Shares as instructed. If
voting instructions for Shares allocated to any Participant's Account are
not timely received by the ESOP Trustee for a particular shareholder's
meeting, such Shares shall not be voted. The instructions received by the
ESOP Trustee from Participants or beneficiaries shall be held by the ESOP
Trustee in strict confidence and shall not be divulged or released to any
person including directors, officers or employees of the Corporation, or of
any other company, except as otherwise required by law.
(b) With respect to all corporate matters submitted to shareholders,
all Shares allocated to Participants' Accounts shall be voted in accordance
with the directions of such Participants as Named Fiduciaries as given to
the ESOP Trustee. Each Participant shall be entitled to direct the voting
of Shares (including fractional shares to 1/1000th of a share) allocated to
his Participant's Account. With respect to Shares allocated to the
Participant's Account of a deceased Participant, such Participant's
beneficiary, as Named Fiduciary, shall be entitled to direct the voting
with respect to such allocated Shares as if such beneficiary were the
Participant. If, however, voting instructions for Shares allocated to any
Participant's Account are not timely received by the ESOP Trustee for a
particular shareholder's
49
ESOP PROVISIONS
- ---------------
meeting, such Shares shall be voted by the ESOP Trustee in its discretion.
SECTION 4A.08 - In no event shall any part of the Plan, including the
-------------
ESOP Feature, be used for, or diverted to, any purpose other than for the
exclusive benefit of Participants and their beneficiaries.
SECTION 4A.09 - The provisions of this Section 4A (other than Section
-------------
4A.01(a) relating to the classification of Corporation Matching Contributions as
ESOP Contributions) shall remain in effect as to any Employee who has at any
time participated in the ESOP Feature of the Plan regardless of any ESOP Ending
Date specified in any Supplement hereto.
50
SECTION 5
---------
PARTICIPANT'S ACCOUNT
---------------------
SECTION 5.01 - There shall be maintained for each Participant a
------------
separate Participant's Account which shall show in dollars the Elective Deferral
amounts specified and After-Tax Contributions made by the Participant and the
fifty percent (50%) corresponding contribution made by the Corporation under the
Plan as in effect prior to December 26, 1983, and the corresponding Corporation
Matching Contributions made as provided in Sections 4.01 and 4A.01 (consisting
of the Corporation's Matching Contributions, ESOP Contributions and forfeitures)
and, in terms of Units or Shares, shall show the portion of such Participant's
Account in the Bond Fund, the Securities Fund, the STIF Fund, the Lockheed
Martin Stock Fund and/or the ESOP Fund, as the case may be. In addition, the
Participant's Account shall show that portion of the Participant's Account in
the ESOP Fund that consists of Thrift Stock and the portion that consists of
ESOP Match Stock. As of the ESOP Starting Date, Stock shall be accounted for in
Shares rather than Units and such accounting in Shares shall continue regardless
of any ESOP Ending Date specified in any Supplement hereto.
SECTION 5.02 -
------------
(a) The annual addition to any Participant's Account for any Plan Year
shall not exceed the maximum permissible amount. Subsection (c) defines
the terms used in this Section.
51
PARTICIPANT'S ACCOUNT
- ---------------------
(b) If a Participant's annual addition would exceed the maximum
permissible amount, any excess contribution inadvertently made shall be
refunded to the Corporation and, to the extent the excess contribution is
attributable to Elective Deferrals, returned to the Participant in
question.
(c) For purposes of this Section, terms used herein shall have the
following meanings:
(1) "Annual addition" shall mean the sum of Corporation
contributions (including Elective Deferrals and ESOP Contributions)
and any forfeitures allocated to a Participant's account for a Plan
Year under this Plan and all other qualified defined contribution
plans of the Corporation.
"Annual addition" shall also include amounts derived from
Corporation contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable to post-
retirement medical benefits allocated to the separate account of a key
employee, as defined in Code Section 419A(d)(3), under a welfare
benefit fund, as defined in Code Section 419(e), which is maintained
by the Corporation, and amounts substantially similar to those just
described which are contributed to a defined benefit plan for a plan
year of the defined benefit plan beginning after March 31, 1984.
52
PARTICIPANT'S ACCOUNT
- ---------------------
(2) "Maximum permissible amount" shall mean, with respect to a
Participant, the lesser of
a. twenty-five percent of the Participant's earnings for
the Plan Year, or
b. $30,000 (or, if greater, 1/4 of the defined benefit
dollar limitation in effect under Section 415(b)(1) of the Code
for the limitation year).
(3) "Earnings" shall mean the total cash and non-cash
remuneration paid to a Participant during the Plan Year but excluding
Elective Deferrals under this Plan, and:
a. employer contributions for simplified employee pension,
b. deferred compensation (other than an amount included in
the Participant's gross income for the Plan Year which is
attributable to an unfunded, non-qualified plan),
c. amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by an
Employee becomes freely transferable or is no longer subject to a
substantial risk or forfeiture,
d. amounts realized from the sale, exchange or other
disposition of stock under a tax-benefitted stock option, and
53
PARTICIPANT'S ACCOUNT
- ---------------------
e. other amounts which receive special tax benefits.
(d) If a Participant in this Plan has at any time participated in
one or more qualified defined benefit plans maintained by the
Corporation, the sum of the Participant's "defined contribution plan
fraction" and "defined benefit plan fraction" shall not exceed 1.0.
(1) "Defined contribution plan fraction" shall have the
meaning set forth in Internal Revenue Code Section 415(e)(3).
If, based on reasonable projections, it is expected that a
Participant's defined contribution plan fraction in the future
will be materially less than his or her current defined
contribution plan fraction, the Committee may compute the defined
contribution plan fraction on a projected basis. Section
415(e)(3) defines the term "defined contribution plan fraction"
as a fraction
(i) the numerator of which is the sum of the annual
additions, as defined in subsection (c), to the
Participant's accounts in this Plan and all other qualified
defined contribution and defined benefit plans (whether or
not terminated) of the Corporation for the current and all
prior Plan Years, and
54
PARTICIPANT'S ACCOUNT
- ---------------------
(ii) the denominator of which is the sum of the annual
additions which would have been made for the Participant for
the current and all prior Plan Years (whether or not this
Plan or any other defined contribution or defined benefit
plan was then in existence) if, in each such Year, the
Participant's annual additions equaled the lesser of
a. 125 percent of the dollar limitation in effect
under Internal Revenue Code Section 415(c)(1)(A), or
b. thirty-five percent of the Participant's
earnings for the Year in question.
A Participant's defined contribution plan fraction as of the
end of the last Plan Year beginning prior to 1976 shall be
calculated in accordance with Treas. Reg. Sec. 1.415-7(d). If
the Participant was a participant in one or more qualified
defined contribution plans maintained by the Corporation which
were in existence on July 1, 1982, the numerator of the
Participant's defined contribution plan fraction will be adjusted
if the sum of this fraction and the defined benefit plan fraction
would otherwise exceed 1.0. Under the adjustment, an amount
equal to the product of
55
PARTICIPANT'S ACCOUNT
- ---------------------
(i) the excess of the sum of both fractions over 1.0, times (ii)
the denominator of the defined contribution plan fraction will be
permanently subtracted from the numerator of the defined
contribution plan fraction. The adjustment shall be calculated
using the fractions as they would be computed as of the end of
the last Plan Year beginning before June 30, 1983. This
adjustment shall also be made if, at the end of the last Plan
Year beginning before January 1, 1984, the sum of both fractions
exceeds 1.0 because of accruals or additions that were made
before the limitations of this subsection became effective for
any plans of the Corporation in existence on July 1, 1982. The
Committee may elect to compute the denominator of a Participant's
defined contribution plan fraction for Plan Years ending on or
before January 1, 1983 by multiplying the Participant's
denominator (as determined as of the end of the Plan Year ending
in 1982) by the "transition fraction." The transition fraction
shall have a numerator equal to the lesser of $51,875 (or $41,500
if Internal Revenue Code Section 416(h)(4) (relating to top heavy
plans) is applicable for the first Plan Year beginning after
December 31, 1983) or thirty-five percent of the Participant's
earnings for the Plan
56
PARTICIPANT'S ACCOUNT
- ---------------------
Year ending during 1981, and shall have a denominator equal to
the lesser of $41,500 or twenty-five percent of the Participant's
earnings for the Plan Year ending during 1981. This election
shall be made in accordance with procedures established under or
in accordance with Internal Revenue Code Section 415(e)(6).
(2) "Defined benefit plan fraction" shall have the meaning
set forth in Internal Revenue Code Section 415(e)(2). This Code
Section defines the term "defined benefit plan fraction" as a
fraction (i) the numerator of which is the sum of the
Participant's projected annual benefit under all defined benefit
plans (whether or not terminated) of the Corporation, and (ii)
the denominator of which is the lesser of
a. 125 percent of the dollar limit in effect under
subsection (c)(2)b for the Plan Year, or
b. 140 percent of the Participant's earnings.
The projected annual benefit shall be the annual retirement
benefit attributable to Corporation contributions to which the
Participant would be entitled under the terms of the defined
benefit plans (adjusted to the actuarial equivalent of a
57
PARTICIPANT'S ACCOUNT
- ---------------------
straight life annuity if the projected annual benefit is
expressed in a form other than a straight life annuity or
qualified joint and survivor annuity), assuming that the
Participant will continue employment until normal retirement age
(or current age, if later), and that the Participant's
compensation for the current Plan Year and all other relevant
factors used to determine benefits under the plans will remain
constant for all future Plan Years. If the Participant was a
participant in one or more qualified defined benefit plans
maintained by the Corporation which were in existence on July 1,
1982, the denominator of the Participant's defined benefit plan
fraction will not be less than 125 percent of the sum of the
annual benefits which the Participant had accrued under such
plans as of the end of the last Plan Year beginning before June
30, 1983. The preceding sentence shall apply only if the defined
benefit plans individually and in the aggregate satisfied the
requirements of Internal Revenue Code Section 415 as in effect at
the end of the 1982 Plan Year.
(3) For any Plan Year in which the Plan is "top heavy," as
defined in Section 15.01(b) and the exception in Internal Revenue
Code Section
58
PARTICIPANT'S ACCOUNT
- ---------------------
416(h)(2) does not apply, "100 percent" shall be substituted for
"125 percent" in determining the denominators of a key employee's
defined contribution and defined benefit plan fractions.
SECTION 5.03 - As of the Valuation Date of each Month each
------------
Participant's Account shall be credited for such Month with the number of Units
equivalent to the Unit value and/or Shares at a Share value (calculated as
provided in Sections 6.01 and 6.02) of:
(1) the total dollar amount of weekly Elective Deferrals specified by
such Participant during such Month,
(2) the Corporation Matching Contributions with respect to such Month
as provided in Section 4.01, and
(3) the ESOP Contributions with respect to any such Month as provided
in Section 4A.01.
Such Units shall be allocated to the Bond Fund, the Securities Fund,
the Lockheed Martin Stock Fund and/or the STIF Fund and such Shares shall be
allocated to the ESOP Fund pursuant to the provisions of Sections 3.01(b), 3.05
and 4.02.
59
SECTION 6
---------
VALUATION OF PARTICIPANT'S ACCOUNT
----------------------------------
SECTION 6.01 - The value of Units in each Participant's Account, as
------------
allocated to each Fund under the Plan, shall be determined separately for each
Fund as of each Valuation Date. At the inception of the Bond Fund, STIF Fund,
Securities Fund and Lockheed Martin Stock Fund one Unit for each dollar
contributed by the Participant and for each dollar contributed by the
Corporation with respect to such Participant prior to the first Valuation Date
of such Fund was credited to each Participant's Account, allocated to each Fund
as specified pursuant to Sections 3.01(b), 3.05, 3.06, and 4.02 as such Sections
were in effect on such Valuation Dates. On each succeeding Valuation Date (a)
the value of the Bond Fund, the Lockheed Martin Stock Fund, the Securities Fund
and the STIF Fund, respectively, shall be the fair market value, as determined
by the Trustee, as of such date, of the investments and cash held in such Fund
on such date, less liabilities and the expenses as provided in Section 7.05 as
accrued or paid as of such date; and (b) the value of a Unit in each Fund shall
be determined by dividing the value of each such Fund, as determined above, by
the total number of Units in all Participants' Accounts allocated to each such
Fund as of such date. Notwithstanding anything to the contrary contained
herein, assets in the STIF Fund may be valued at cost or unpaid principal amount
if there is no readily ascertainable fair market value.
60
VALUATION OF PARTICIPANT'S ACCOUNT
- ----------------------------------
SECTION 6.02 - Effective as of the ESOP Starting Date, Units
------------
maintained in the Lockheed Martin Stock Fund shall be valued and converted to
Shares in the ESOP Fund and shall remain as part of the ESOP Fund regardless of
any ESOP Ending Date specified in any Supplement hereto. On each succeeding
Valuation Date thereafter, the value of the Participant's Account in the ESOP
Fund shall be equal to the number of Shares, including any fractional Share;
credited to his Participant's Account as of such date multiplied by the
published composite closing price per Share on such Valuation Date.
61
SECTION 7
---------
TRUST FUND AND TRUSTEE
----------------------
SECTION 7.01 - All contributions made to the Plan by a Participant or
------------
on his behalf shall be made to a Trust Fund or Trust Funds established by a
trust agreement or trust agreements with a Trustee or Trustees to carry out the
purposes of the Plan. Such Trust Fund or Trust Funds shall be composed of the
Bond Fund, the ESOP Fund, the Securities Fund, the STIF Fund and such other
Funds as may be established from time to time. The Committee shall select such
Trustees, and may change the Trustees from time to time. Any Trustee designated
hereunder shall be a bank or trust company qualified under the laws of the
United States or of any State to operate thereunder as a trustee. Lockheed
Corporation will determine the form and terms of any such trust agreement.
Lockheed Corporation may amend any such trust agreement from time to time to
accomplish the purposes of the Plan. The trust agreement or trust agreements
shall provide, among other things, that at no time shall any part of the Trust
Fund be used for, or diverted to, purposes other than for the exclusive benefit
of the Participants or their beneficiaries.
SECTION 7.02 - Each Trustee shall, unless otherwise directed by an
------------
Investment Manager (if such has been appointed), have exclusive authority and
discretion to manage and invest the assets of the Trust Fund, as provided in its
trust agreement. Each Trustee shall further be responsible for the holding and
disbursement of all contributions and income received by it under
62
TRUST FUND AND TRUSTEE
- ----------------------
the Plan, as provided in its trust agreement, and shall have such other
responsibilities as are provided in such agreement.
SECTION 7.03 - Nothing in the Plan shall be construed as a guarantee
------------
by the Corporation or the Trustees of the value of any security or instrument in
which funds held by the Trustees are invested or as an indemnity against any
loss resulting from such investment.
SECTION 7.04 - The Trustee shall allocate contributions made to the
------------
Plan by a Participant or on his behalf in accordance with the specification as
determined under Sections 3.01(b), 3.04, 3.05, 3.06, 3.07, 3.08, 4.02 and 4A.03.
SECTION 7.05 - Brokerage fees, commissions, taxes, and other charges
------------
and expenses incident to the purchase, sale and servicing of investments and
other taxes, if any, payable by the Trustees on the assets, or on income
thereof, at any time held in each Fund may be paid by such Fund to the extent
permitted by ERISA and the Code. All other expenses and charges incurred in the
administration of the Plan, including the Trustees' fees and/or investment
management fees, shall be paid by the Corporation.
63
SECTION 8
---------
BENEFITS
--------
SECTION 8.01 - A Participant shall receive a cash payment in an amount
------------
equal to the dollar value of the balance of the Units and Shares in his
Participant's Account as determined as provided in Sections 6.01 and 6.02 on the
Valuation Date coincident with or immediately following (prior to July 1, 1990,
"preceding" shall be substituted for "following") the date of Termination of
Employment for any of the following reasons:
(a) To receive early, normal, or disability retirement benefits for
which he is qualified under a Lockheed Retirement Plan; or
(b) Layoff for a period of four weeks; or
(c) Death; or
(d) Entry into the Armed Forces of the United States; or
(e) Because of permanent disability for a continuous period of six (6)
or more months. A Participant shall be deemed to be permanently disabled
when, on the basis of medical evidence satisfactory to the Committee, the
Committee finds that he is wholly and continuously disabled and prevented
from performing his regular occupation for wage or profit as the result of
bodily injury or disease, either occupational in cause or non-occupational
in cause. A Participant shall not be deemed permanently disabled if, on
the basis of proof satisfactory to the Committee, the
64
BENEFITS
- --------
Committee finds that his incapacity arises out of chronic alcoholism, or
addiction to narcotics (unless the disabling condition is caused, in and of
itself, by an organic disease or organic condition resulting from such
alcoholism or addiction), an injury self-inflicted or incurred while he was
engaged in a felonious enterprise, or resulted therefrom, or resulted from
service in the armed forces of any country except those of the United
States; or
(f) For any reason on or after attaining age sixty-five (65) ("Normal
Retirement Age"); or
(g) To receive a deferred monthly retirement benefit for which he is
qualified under a Lockheed Retirement Plan, providing either the date of
Termination of Employment occurs within the period of thirty (30) calendar
days immediately preceding such Participant reaching sixty-five (65) years
of age, or payment of the deferred monthly retirement benefit begins on the
first day of the calendar month following the month of Termination of
Employment.
SECTION 8.02 -
------------
(a) Upon Termination of Employment for reasons other than those set
forth in Section 8.01, a Participant who does not have at least one Hour of
Service on or after January 1, 1990 shall receive a cash payment in an
amount equal to the sum of the following:
(1) The dollar value of the balance of Units and Shares in his
Participant's Account which were credited
65
BENEFITS
- --------
with respect to Elective Deferral amounts and After-Tax Contributions
made by such Participant, determined as provided in Sections 6.01 and
6.02 on the Valuation Date coincident with or immediately following
(prior to July 1, 1990 "preceding" shall be substituted for
"following") the date of such Termination of Employment;
(2) Twenty-five percent (25%) of the dollar value of the balance
of the Units and Shares in his Participant's Account which were
credited with respect to Corporation Matching Contributions for the
fifth (5th) Quarter to and including the eighth (8th) Quarter
immediately preceding such Termination of Employment, such dollar
value being determined as provided in Sections 6.01 and 6.02 on the
Valuation Date coincident with or immediately following (prior to July
1, 1990 "preceding" shall be substituted for "following") the date of
such Termination of Employment;
(3) Fifty percent (50%) of the dollar value of the balance of the
Units and Shares in his Participant's Account which were credited with
respect to Corporation Matching Contributions for the ninth (9th) to
and including the twelfth (12th) Quarter immediately preceding such
Termination of Employment, such dollar value being determined as
provided in Sections 6.01 and 6.02 on the Valuation Date coincident
66
BENEFITS
- --------
with or immediately following (prior to July 1, 1990 "preceding" shall
be substituted for "following") the date of such Termination of
Employment;
(4) Seventy-five percent (75%) of the dollar value of the balance
of the Units and Shares in his Participant's Account which were
credited with respect to Corporation Matching Contributions for the
thirteenth (13th) to and including the sixteenth (16th) Quarter
immediately preceding such Termination of Employment, such dollar
value being determined as provided in Sections 6.01 and 6.02 on the
Valuation Date coincident with or immediately following (prior to July
1, 1990 "preceding" shall be substituted for "following") the date of
such Termination of Employment; and
(5) One hundred percent (100%) of the dollar value of the balance
of the Units and Shares in his Participant's Account which were
credited with respect to contributions made by the Corporation under
the Plan as in effect prior to December 26, 1983 and/or Corporation
Matching Contributions for the seventeenth (17th) Quarter and Quarters
beyond, immediately preceding such Termination of Employment, such
dollar value being determined as provided in Sections 6.01 and 6.02 on
the Valuation Date coincident with or immediately following (prior to
July 1, 1990
67
BENEFITS
- --------
"preceding" shall be substituted for "following") the date of such
Termination of Employment.
The Corporation shall maintain separate subaccounts within a
Participant's Account if necessary to account for the Participant's
vested interest in the Units and Shares in his Participant's Account
which were credited with respect to Corporation Matching Contributions
for each Quarter.
(b) Upon Termination of Employment for reasons other than those set
forth in Section 8.01, a Participant with at least one Hour of Service on
or after January 1, 1990 shall receive a cash payment in an amount equal to
the sum of the following:
(1) the dollar value of the balance of Units and Shares in his
Participant's Account which were credited with respect to Elective
Deferral amounts and After-Tax Contributions made by such Participant,
determined as provided in Sections 6.01 and 6.02 on the Valuation Date
coincident with or immediately following (prior to July 1, 1990
"preceding" shall be substituted for "following") the date of such
Termination of Employment; and
(2) the vested portion of the dollar value of the balance of the
Units and Shares in his Participant's Account which were credited with
respect to contributions made by the Corporation under the Plan as
68
BENEFITS
- --------
in effect prior to December 26, 1983 and/or Corporation Matching
Contributions, such dollar value being determined as provided in
Sections 6.01 and 6.02 on the Valuation Date coincident with or
immediately following (prior to July 1, 1990 "preceding" shall be
substituted for "following") the date of such Termination of
Employment. The vested portion of the dollar value shall be
determined in accordance with the following:
Completed Years of Service Vested Percent
Less than 2 Years 0%
2 Years but less than 3 Years 25%
3 Years but less than 4 Years 50%
4 Years but less than 5 Years 75%
5 Years or more 100%
SECTION 8.03 - Prior to July 1, 1990, a Participant, or his
------------
beneficiary, who receives payment of an amount pursuant to the provisions of
Section 8.01 or Section 8.02 shall have refunded to him any Elective Deferral
amounts specified by him (but not Corporation Matching Contributions) between
the Valuation Date as of which such payment under Section 8.01 or Section 8.02
was computed and the date of Termination of Employment.
SECTION 8.04 -
------------
(a) In the event that a Participant Terminates Employment for reasons
other than those set forth in Section 8.01 and is not reemployed by
Lockheed Corporation or a subsidiary or affiliate thereof during the Plan
Year in
69
BENEFITS
- --------
which the termination occurs, such Participant shall thereupon forfeit all
Units and Shares credited to such Participant's Account and the amounts
with respect thereto in the Trust Fund to which he is not entitled as a
benefit as determined under the provisions of Section 8.02, subject to
restoration under Subsection 8.04(b). In the event that a Participant
Terminates Employment for reasons other than those set forth in Section
8.01 and is reemployed by Lockheed Corporation or a subsidiary or affiliate
thereof during the Plan Year in which the termination occurs, such
Participant shall retain all Units and Shares credited to such
Participant's Account and the amounts with respect thereto in the Trust
Funds which were not paid to him in the amount computed under the
provisions of Section 8.02, and such Participant shall vest and/or continue
to vest in said sums at the rate described in Section 8.02 without regard
to the effect which said Termination of Employment would otherwise have on
vesting. Amounts so retained shall be distributable to the extent vested
at the time of distribution only pursuant to the provisions of Sections
8.01 or 8.02 or 9.01.
(b) To the extent required by applicable statute or regulation, in the
event a Participant Terminates Employment and is reemployed by Lockheed
Corporation or a subsidiary or affiliate thereof without incurring a Break
in Service (five (5) consecutive one-year Breaks in Service in the case of
70
BENEFITS
- --------
persons who had not completed a one-year Break in Service prior to December
30, 1985), such Participant shall have restored to his Participant's
Account any amounts previously forfeited pursuant to Subsection 8.04(a).
Such restoration shall be in compliance with applicable statute or
regulation, and in accordance with rules determined by the Committee and
uniformly applied to all Participants. Such Participant shall continue to
vest in said restored amounts from such date of reemployment at the rate
described in Section 8.02. All rights to restoration of forfeited amounts
shall lapse if this Plan is terminated as to affected persons who have not
been reemployed before Plan termination.
SECTION 8.05 - A Participant who becomes entitled to receive a cash
------------
payment under the provisions of Section 8.01(a) or under the provisions of
Section 8.01(g) may, prior to Termination of Employment for such reason and
subject to the provisions hereinafter set forth, elect, in lieu of such cash
payment, that the total number of Units and Shares in his Account be paid to him
in 60, 120, 180 or 240 equal monthly installments commencing as of the last day
of the month following the month in which the Participant's employment has been
so terminated provided he is then living and provided further that the dollar
value of the first such payment is not less than thirty dollars ($30). The
dollar amount of each such payment shall be equal to the dollar value of such
Units and Shares as are to be paid in such
71
BENEFITS
- --------
installment, determined as provided in Sections 6.01 and 6.02 on the Valuation
Date immediately preceding the date such payment is due. In the event that a
Participant dies prior to the commencement date of his payments, the
Participant's election of such method of payment shall become inoperative and a
lump sum payment to his beneficiary shall be made. In the event that a
Participant dies on or after the commencement date of such payments but before
payment to him of all payments due him, the dollar value of the remaining
balance of the Units and Shares in the Participant's Account shall be paid in
one lump sum to the Participant's beneficiary as such dollar value is determined
as provided in Sections 6.01 and 6.02 on the Valuation Date immediately
following (prior to July 1, 1990 "preceding" shall be substituted for
"following") the date of the death of such Participant. Election of such method
of payment must be made in writing by Filing With The Committee prior to
Termination of Employment. In the event that a Participant chooses to revoke
his election of such method of payment after the commencement date of such
payments but before payment to him of all payments due him, he may elect, in
writing, to revoke his previous election of such method of payment by Filing
With The Committee. In such event, the dollar value of the remaining balance of
the Units and Shares in the Participant's Account shall be paid in one lump sum
to the Participant as such dollar value is determined as provided in Sections
6.01 and 6.02 on the Valuation Date coincident with or immediately following
(prior to July 1,
72
BENEFITS
- --------
1990 "preceding" shall be substituted for "following") the date of such election
or revocation. Notwithstanding anything to the contrary contained herein, such
monthly installment payments shall be suspended when a Participant is rehired by
the Corporation and elects to resume Elective Deferrals to the Plan. Upon
subsequent Termination of Employment such Participant may elect any optional
form of payment under the Plan for which he is eligible. Notwithstanding any
other provision of this Section to the contrary, the period of such installment
payments may not extend beyond the life expectancy of the Participant or the
joint life expectancies of the Participant and his spouse.
SECTION 8.06 -
------------
(a) All distributions from this Plan to a Participant (or to his
beneficiary following the Participant's death) shall be made in accordance
with the legal requirements set forth in Sections 401(a)(9), 401(k), and
related provisions of the Code and Treasury Regulations issued pursuant to
such provisions, notwithstanding any provision in this Plan to the
contrary.
(b) A Participant's Account shall be distributed within sixty (60)
days of such Participant's Termination of Employment if the Participant so
consents in writing at the time of his Termination of Employment. If a
Participant fails to give such written consent at such time, his
Participant's Account shall not be distributed before such Participant
attains age sixty-five (65). Subject to the
73
BENEFITS
- --------
foregoing, distribution shall be made or commenced not later than the
sixtieth (60th) day after the close of the Plan Year in which the latest of
the following events occurs:
(1) The Participant attains the earlier of age sixty-five (65) or
becomes eligible to receive normal retirement benefits under a
Lockheed Retirement Plan;
(2) There occurs the tenth (10th) anniversary of the year in
which the Participant commenced participation in the Plan; or
(3) The Participant has a Termination of Employment.
(c) Notwithstanding any other provisions of this Plan, distribution of
a Participant's Account must commence by the Participant's "Required
Beginning Date", except as provided in Section 8.06(d), and shall be made
in accordance with the provisions of Section 8.08.
(1) A Participant's Required Beginning Date for purposes of this
Plan shall be the December 31 of the calendar year in which the
Participant attains age 70-1/2.
(2) Notwithstanding the provisions of paragraph (1), the Required
Beginning Date for a Participant who is not a "five percent owner"
within the meaning of Section 416(i) of the Code and who attains age
70-1/2 in calendar year 1988 or 1989 shall be April 1, 1990.
74
BENEFITS
- --------
(3) Notwithstanding the provisions of paragraphs (1) and (2), the
Required Beginning Date for a Participant who is not a "five percent
owner" within the meaning of Section 416(i) of the Code and who
attained age 70-1/2 prior to January 1, 1988 shall be the April 1 next
following the Participant's Termination of Employment. However, a
Participant described in this Section 8.06(c)(3) may, by Filing With
the Committee within the one-time election period established by the
Committee, irrevocably elect April 1, 1990 as his Required Beginning
Date.
(d) If an amount payable under any provision of this Plan cannot be
clearly ascertained or the person to whom it is payable has not been
determined or located, distributions shall be made or commenced no later
than sixty days after such amount is ascertained or such person is located.
SECTION 8.07 - A Participant, or his beneficiary, who becomes entitled
------------
to receive a cash payment under the provisions of Sections 8.01, 8.02, 8.05,
8.06, 8.08 or 9.01 and whose Participant's Account is invested in part in the
Lockheed Martin Stock Fund or ESOP Fund, may elect, by Filing With The
Committee, to receive such part of his distribution either entirely in cash or
entirely in the form of Share certificates (with fractional Shares paid in
cash). The number of Shares distributed shall be calculated by:
75
BENEFITS
- --------
(a) dividing the dollar value of the Units in the Participant's
Account allocated to the Lockheed Martin Stock Fund as of the Valuation
Date coincident with or immediately following (prior to July 1, 1990
"preceding" shall be substituted for "following") the date of Termination
of Employment by the published composite closing price per Share on said
Valuation Date, and adding
(b) the number of Shares allocated to the Participant's Account as
of the Valuation Date coincident with or immediately following (prior to
July 1, 1990 "preceding" shall be substituted for "following") the date of
Termination of Employment.
Distribution of such Shares will be made, at the direction of the
Trustee(s), by the duly appointed transfer agent of Lockheed Corporation.
Notwithstanding the provisions of Section 12.07, distributions effected by stock
certificates cannot be reinvested in the Plan. In the absence of any valid
election under this Section, such distribution will be made in cash.
Section 8.08 -
------------
(a) (1) A Participant who, pursuant to the provisions of Section
8.06(c)(1), is subject to a mandatory distribution from his Participant's
Account prior to his Termination of Employment shall receive five (5)
annual cash payments, calculated as provided in Section 8.08(g), commencing
as of the month in which his Required Beginning
76
BENEFITS
- --------
Date occurs, provided he is then living and provided further that the
dollar amount of the first such payment is not less than $30.
(2) A Participant who becomes entitled to installment payments under
Section 8.08(a)(1) may, prior to his Required Beginning Date and subject to
the provisions hereinafter set forth, elect to receive in lieu of such five
(5) annual installment payments
(i) a lump sum cash payment equal to the dollar value of the
balance of Units and Shares in his Participant's Account as determined
as provided in Sections 6.01 and 6.02 on the Valuation Date occurring
in October of the year in which his Required Beginning Date occurs, or
(ii) ten (10) annual cash payments, calculated as provided in
Section 8.08(g), commencing as of the month in which his Required
Beginning Date occurs provided he is then living and provided further
that the dollar amount of the first such payment is not less than $30.
(b) (1) A Participant who, pursuant to the provisions of Section
8.06(c)(2), is subject to a mandatory distribution from his Participant's
Account prior to his Termination of Employment, or who has so elected such
a distribution pursuant to Section 8.06(c)(3), shall receive five (5)
annual cash payments calculated as provided in Section 8.08(g), commencing
as of the month preceding the
77
BENEFITS
- --------
month in which his Required Beginning Date occurs provided he is then
living and provided further that the dollar amount of the first such
payment is not less than $30.
(2) A Participant who becomes entitled to installment payments under
Section 8.08(b)(1) may, prior to his Required Beginning Date and subject to
the provisions hereinafter set forth, elect to receive in lieu of such five
(5) annual installment payments
(i) a lump sum cash payment equal to the dollar value of the
balance of Units and Shares in his Participant's Account as determined
as provided in Sections 6.01 and 6.02 on the Valuation Date occurring
in January of the year in which his Required Beginning Date occurs, or
(ii) ten (10) annual cash payments, calculated as provided in
Section 8.08(g), commencing as of the month preceding the month in
which his Required Beginning Date occurs provided he is then living
and provided further that the dollar amount of the first such payment
is not less than $30.
(c) Annual installment payments due to a Participant pursuant to the
provisions of Sections 8.08(a)(1), 8.08(a)(2)(ii), 8.08(b)(1), or
8.08(b)(2)(ii) (other than the initial payments described in Sections
8.08(b)(1) and 8.08(b)(2)(ii)) shall be paid to the Participant in December
of each applicable year. Following payment of the last such
78
BENEFITS
- --------
annual installment, the Participant will be paid each December prior to his
Termination of Employment the cash amount equal to the dollar value of
Units and Shares in his Participant's Account as determined as provided in
Sections 6.01 and 6.02 on the Valuation Date occurring in October of the
year in which such distribution occurs. A Participant who elected to
receive a lump sum payment pursuant to Section 8.08(a)(2)(i) or
8.08(b)(2)(i) shall be paid each December subsequent to such lump sum
distribution and prior to his Termination of Employment a cash amount as
calculated in the preceding sentence.
(d) In the event that a Participant dies prior to the commencement of
installment payments pursuant to Section 8.08(a)(1), 8.08(a)(2)(ii),
8.08(b)(1), or 8.08(b)(2)(ii), the installment method of payment shall
become inoperative and a lump sum payment shall be made to his beneficiary.
In the event that a Participant dies on or after the commencement date of
such payments, but before payment to him of all payments due him, the
dollar value of the remaining balance of the Units and Shares in the
Participant's Account shall be paid in one lump sum to the Participant's
beneficiary as such dollar value is determined as provided in Sections 6.01
and 6.02 on the Valuation Date immediately following (prior to July 1, 1990
"preceding" shall be substituted for "following") the date of the death of
such Participant.
79
BENEFITS
- --------
(e) A Participant receiving installment payments under the provisions
of Sections 8.08(a)(1), 8.08(a)(2)(ii), 8.08(b)(1), or 8.08(b)(2)(ii) may
irrevocably elect to cancel his installment payments and receive, in lieu
of his next scheduled December installment payment, a lump sum cash payment
in an amount equal to the value of Units and Shares in his Participant's
Account as determined as provided in Sections 6.01 and 6.02 as of the
Valuation Date occurring in October of the year in which the lump sum
distribution is made. A Participant's election to so cancel his
installment payments will be valid only if it has been Filed With The
Committee for at least sixty (60) days prior to the December installment
distribution date.
(f) A Participant receiving payments pursuant to this Section 8.08
may, upon Termination of Employment, elect any form of optional benefit
payment then available under the Plan, provided such form of payment meets
the requirements of Code Section 401(a)(9). The Committee may deny the
optional benefit form selected by the Participant or adjust it in any
manner necessary to arrive at a form of payment which meets the
requirements of the Code.
(g) Annual installment payments payable pursuant to the provisions of
Sections 8.08(a)(1), 8.08(a)(2)(ii), 8.08(b)(1), and 8.08(b)(2)(ii) shall
be calculated by dividing the balance of Units and Shares in the
Participant's Account on the last day of the calendar year
80
BENEFITS
- --------
prior to the calendar year in which the distribution date occurs (as
determined under Sections 6.01 and 6.02 and less any distributions
previously made to the Participant in the same calendar year by reason of
this Section 8.08) by the number of installment payments not yet
distributed and either
(1) valuing the resulting number of Units and Shares as provided
in Sections 6.01 and 6.02 as of the October Valuation Date
immediately preceding the December distribution date, or
(2) valuing the resulting number of Units and Shares as provided
in Sections 6.01 and 6.02 as of the January Valuation Date immediately
preceding the April distribution date, whichever is applicable.
SECTION 8.09
------------
(a) This Section 8.09 applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a Distributee's election under this Section
8.09, a Distributee may elect, at the time and in the manner prescribed by
the Committee, to have any portion of an Eligible Rollover Distribution
paid directly to an Eligible Retirement Plan specified by the Distributee
in a Direct Rollover.
(b) For purposes of this Section 8.09, an "Eligible Rollover
Distribution" is any distribution of all or any
81
BENEFITS
- --------
portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include:
(1) any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint lives
(or joint life expectancies) of the Distributee and the Distributee's
designated beneficiary, or for a specified period of ten years or
more;
(2) any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code; and
(3) the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(c) For purposes of this Section 8.09, an "Eligible Retirement Plan"
is an individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section 408(b) of the
Code, an annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that accepts the
Distributee's Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to the surviving spouse, an Eligible
Retirement
82
BENEFITS
- --------
Plan is an individual retirement account or individual retirement annuity.
(d) For purposes of this Section 8.09, a "Distributee" includes an
Employee or former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or former Employee's spouse
or former spouse who is the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of the Code, are Distributees
with regard to the interest of the spouse or former spouse.
(e) For purposes of this Section 8.09, a "Direct Rollover" is a
payment by the Plan to the Eligible Retirement Plan specified by the
Distributee."
83
SECTION 9
---------
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
-----------------------------------------
SECTION 9.01 - Notwithstanding other provisions of the Plan to the
------------
contrary, a Participant may withdraw a part or all of the dollar value of the
balance of Units and Shares of Thrift Stock in his Participant's Account
attributable to (i) his After-Tax Contributions, (ii) contributions made by the
Corporation under the Plan as in effect prior to December 26, 1983, and (iii)
Corporation Matching Contributions that are not ESOP Contributions to the extent
vested under the provisions of Sections 8.02(a)(3), (4) or (5) or 8.02(b),
subject to the following conditions and limitations:
(a) Such withdrawal will be permitted only once every twenty-six (26)
weeks;
(b) Such withdrawal may not be in an amount less than three hundred
dollars ($300), and any larger amount must be added in increments of fifty
dollars ($50). If the entire amount subject to withdrawal under this
Section 9.01 is less than three hundred dollars ($300), such amount may be
withdrawn, but only in its entirety;
(c) Corporation Matching Contributions may be withdrawn under this
Section 9.01 only to the extent they are vested and were made prior to the
twenty-four (24) month period ending on the effective date of the
withdrawal; and
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WITHDRAWALS AND LOANS
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(d) A Participant may not withdraw any part of the dollar value in his
Participant's Account attributable to ESOP Contributions.
A withdrawal under this Section 9.01 will first be deducted from the
dollar value of the balance of Units and Shares in his Participant's Account
which were credited with respect to After-Tax Contributions determined as
provided in Sections 6.01 and 6.02 on the Valuation Date of the month in which
the application for withdrawal is Filed With The Committee (prior to July 1,
1990 "coincident with or immediately preceding the date of such withdrawal"
shall be substituted for "of the month in which the application for withdrawal
is Filed With The Committee"). In the event the amount withdrawn, if any, is
less than or no more than equal to the total amount of actual After-Tax
Contributions (without earnings or capital appreciation), a Participant making
such withdrawal shall not be entitled to receive the Corporation Matching
Contributions described in Section 4.01 for a period of thirteen (13) weeks next
following such withdrawal. In the event the amount withdrawn, together with
amounts previously withdrawn, if any, exceeds the total amount of actual After-
Tax Contributions, and thereby includes all or part of the earnings or capital
appreciation on such Participant's After-Tax Contributions or includes
all or part of the contributions made by the Corporation prior to December 26,
1983 or Corporation Matching Contributions available for withdrawal under this
Section 9.01, a Participant making such
85
WITHDRAWALS AND LOANS
- ---------------------
withdrawal shall not be entitled to receive the Corporation Matching
Contributions described in Sections 4.01 for a period of twenty-six (26) weeks
next following such withdrawal.
SECTION 9.02 - Upon withdrawal under Section 9.01 or 9.03, the number
------------
of Units or Shares equivalent to the Unit or Share value of dollars so withdrawn
on the Valuation Date of the month in which the application for withdrawal is
Filed With The Committee (prior to July 1, 1990 "coincident with or immediately
preceding the date of such withdrawal" shall be substituted for "of the month in
which the application for withdrawal is Filed With The Committee") shall be
deducted from the Units and Shares then in such Participant's Account. Such
deductions shall be based on the dollar value of Units and Shares credited to
the Bond Fund, Thrift Stock in the ESOP Fund, the Lockheed Martin Stock Fund,
the Securities Fund and/or the STIF Fund in the same proportion as the dollar
value of such Units and Shares in such Participant's Account are at such time
credited to each Fund.
SECTION 9.03
------------
(a) (1) A Participant who is not eligible to make a withdrawal under
Section 9.01 because of the provisions of Section 9.01(a), may withdraw
amounts otherwise available under Section 9.01 and Elective Deferral
amounts (but not earnings on Elective Deferral amounts) only as may be
required to relieve financial hardship.
(2) A Participant with a financial hardship may withdraw amounts
available under Section 9.01 and Elective
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WITHDRAWALS AND LOANS
- ---------------------
Deferral amounts (but not earnings on Elective Deferral Amounts) to relieve
the hardship without first making a withdrawal under the provisions of
Section 9.01 which would result in suspension of Corporation Matching
Contributions.
(3) Elective Deferral amounts may be withdrawn only after the Plan
Account balances available under Section 9.01 have been totally withdrawn
under Section 9.01 or this Section 9.03. Effective April 1, 1989, an
application for a withdrawal under this Section 9.03 shall be considered by
the Committee only if the Participant provides written evidence that he has
one or more of the immediate and heavy financial needs described in
subsection (b) and that the withdrawal is necessary to satisfy the need as
described in subsection (c). A hardship withdrawal will be granted only if
the Committee, after considering all relevant facts and circumstances and
applying the objective standards of this Section 9.03 in a
nondiscriminatory manner, determines the existence of an immediate and
heavy financial need and the amount necessary to meet the need.
(b) An immediate and heavy financial need exists only if the requested
withdrawal is to satisfy:
(1) non-reimbursed medical expenses described in Code Section
213(d) (generally, those for "medical care") incurred by the
Participant, his spouse or any of his dependents,
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WITHDRAWALS AND LOANS
- ---------------------
(2) the need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence,
(3) non-reimbursed expenses directly related to a fire,
explosion, flood, wind, rain, lightning, snow, sleet, hail, ice,
volcanic eruption, tidal wave, earthquake, mudslide or other similar
natural disaster,
(4) non-reimbursed expenses not described in subsection (1) above
which are directly related to the institutionalizing of the
Participant, his spouse or any of his dependents in a hospital,
facility for the care or education of the mentally or physically
handicapped, nursing home, skilled care facility, hospice, in-patient
substance abuse center, rehabilitation center, or institution of a
similar nature, but not including camps, detention centers, jails, or
prisons,
(5) non-reimbursed expenses directly related to the burial of the
Participant's spouse or any of his dependents (determined without
regard to the support and residency tests of Section 9.03(e)(1)(i) and
(ii)), including travel expenses only if the burial costs have been
borne by the Participant, and excluding wages lost due to
administering an estate, preparing for a funeral, or attending a
funeral.
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WITHDRAWALS AND LOANS
- ---------------------
(6) non-reimbursed tuition, room and board, books, and fees for
the next semester or quarter of primary (grades 1 through 8),
secondary (grades 9 through 12), or post-secondary education for the
Participant, his spouse, or any of his dependents, excluding expenses
related to enrollment in child care or day care facilities and for
instruction in music, dance, athletics, and the like which is outside
of the student's basic education curriculum,
(7) the need to replace gross wages (net of disability benefits,
workers compensation insurance or any other payment received as a
result of prolonged absence) ordinarily paid by the Employer to the
Participant, but only if
a. the Participant has been on prolonged absence status for
a period of at least four consecutive weeks, and
b. the Participant makes a request for withdrawal by Filing
With The Committee while on prolonged absence status or within 30
days after returning to active payroll status or within 30 days
after prolonged absence status has otherwise been terminated, or
(8) down payment, closing costs and other non-reimbursed expenses
directly related to the purchase, construction, or major renovation of
the principal
89
residence for the Participant, but not including expenses related to
repairs, remodeling, decorating, landscaping, refinancing, mortgage
payments, leasing, or real property taxes or homeowners dues other
than such taxes or dues payable as part of closing costs. For
purposes of this Section 9.03(b)(8), a residence shall be treated as
undergoing a major renovation only if the expenditures materially
extend the useful life of the residence and significantly upgrade its
usefulness through
a. gutting and extensive reconstruction of major structural
components,
b. cure of a substantial accumulation of major disrepairs,
limited to expenses necessary to bring major housing components
and systems into compliance with local building, health or safety
codes or otherwise make the dwelling habitable,
c. changing the floor plan by means of tearing down
existing interior walls and partitions and building new walls,
partitions, and doors,
d. enlarging the dwelling by increasing the total volume,
other than an increase in interior floor space resulting from
interior remodeling, or
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WITHDRAWALS AND LOANS
- ---------------------
e. completion of construction of areas left unfinished in
the original construction of the dwelling.
(c) A withdrawal is necessary to satisfy an immediate and heavy
financial need only if
(1) the amount withdrawn does not exceed the amount of the need,
(2) the need cannot be relieved through reimbursement or
compensation by insurance, workers compensation, unemployment
insurance, disability payments, scholarships, grants, or otherwise,
(3) the need cannot be relieved by cessation of Elective
Deferrals under the Plan,
(4) the need cannot be relieved by other distributions or
nontaxable (at the time of the loan) loans currently available from
any plans maintained by the Corporation (including this Plan) or any
other employer,
(5) the need cannot be relieved by borrowing from commercial
sources on reasonable commercial terms, and
(6) the need cannot be relieved by reasonable liquidation of the
Participant's assets, to the extent such liquidation would not itself
cause an immediate and heavy financial need.
The provisions of paragraphs (4), (5) and (6) of this Section 9.03(c) shall
not apply to a withdrawal of amounts
91
WITHDRAWALS AND LOANS
- ---------------------
available under Section 9.01. However, a Participant requesting a hardship
withdrawal of amounts available under Section 9.01 must establish that the
amount requested is not reasonably available from other sources.
(d) For purposes of Section 9.03(c)
(1) The Participant's resources shall be deemed to include those
assets of his spouse and minor children that are reasonably available
to the Participant, including assets held as community property, joint
tenants, tenants by the entirety, or tenants in common, but excluding
property held for the Participant's child under an irrevocable trust
or under the Uniform Gifts to Minors Act.
(2) Liquidation of the following assets will be considered an
"unreasonable liquidation" and will not be required as a prerequisite
to a withdrawal under Section 9.03:
(i) The Participant's aggregate interest in real property or
personal property that the Participant, his spouse or any of his
dependents uses as a principal residence, or in a cooperative
that owns property that the Participant, his spouse or any of his
dependents, uses as a principal residence.
(ii) The Participant's interest in motor vehicles, excluding
recreational vehicles, used by
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WITHDRAWALS AND LOANS
- ---------------------
the Participant, his Spouse, or any of his dependents for
transportation to and from a school or place of employment.
For purposes of this paragraph (d)(2) "Participant's interest"
includes the interests of the Participant's spouse and minor children
described in paragraph (d)(1) above.
(e) Except as expressly provided otherwise, for purposes of this
Section 9.03, "dependent" means
(1) the Participant's child (including an adopted child),
grandchild, stepchild, brother, sister, halfbrother, halfsister,
stepbrother, stepsister, parent, grandparent, stepparent, aunt, uncle,
niece, nephew, father-in-law, mother-in-law, son-in-law, daughter-in-
law, brother-in-law, sister-in-law, and any other individual
(including a cousin) whose principal place of abode is the
Participant's home and who is a member of the Participant's household
without being in violation of local law if
(i) the relative or other individual is a citizen, resident,
or national of the United States or a resident of Canada or
Mexico and
(ii) the Participant provides more than one-half of the
relative's or other individual's support, and
93
WITHDRAWALS AND LOANS
- ---------------------
(2) any other individual who is the Participant's dependent
within the meaning of Code Section 152.
(f) The Committee shall be entitled to rely, without the need for
independent certification, on the authenticity of all documents submitted
by the Participant in support of his application under this Section 9.03
and on the truthfulness of the facts and representations set forth by the
Participant in such application.
SECTION 9.04 -
------------
(a) The Committee shall have the investment management discretion to
direct the Trustee to lend money to Participants. Each such loan shall be
treated as an investment of a portion of the Trust Funds representing the
borrowing Participant's Account. The Committee may, upon a finding that
such actions are necessary or desirable, establish loan policies which
permit the waiver of defaults or which establish any loan procedures or
requirements which are not inconsistent with this Section.
(b) A Participant who wishes to borrow money from the Plan shall file
a written loan application with the Committee. The Committee, in its sole
fiduciary discretion, shall approve the loan unless it determines that such
investment of Trust Fund assets is not in the best interest of Plan
Participants and beneficiaries. The Committee shall exercise its
discretion in a uniform and nondiscriminatory
94
WITHDRAWALS AND LOANS
- ---------------------
manner. A loan shall be granted only under the following requirements and
conditions.
(1) Beginning October 1, 1989, no loan shall be made in an amount
which exceeds the combined value of the Participant's Elective
Deferral amount and After-Tax Contributions amount and no loan shall
be made in an amount which exceeds fifty percent (50%) of the value of
the vested portion of the Participant's Account. In addition, no loan
shall be made in an amount greater than $50,000 (reduced by the
Participant's highest outstanding loan balance during the preceding
12-month period under this or any other qualified pension benefit plan
of the Corporation).
(2) No loan shall be made to a Participant who has a loan
outstanding under this or any other qualified pension benefit plan of
the Corporation.
(3) The loan shall bear interest at an annual percentage rate
(rounded to the nearest one-half of one percentage point) equivalent
to the weekly average yield, adjusted for constant maturity, on five-
year Treasury notes. The rate shall be established semi-annually as
of the last week of November for loans made in the first six-month
period of the following Plan Year; and as of the last week of May for
loans made in the last six months of the current Plan Year.
95
WITHDRAWALS AND LOANS
- ---------------------
(4) The minimum loan amount shall be $500, except that the
minimum loan amount for a Residential Loan shall be $1,000. Any
additional amounts must be in $100 increments. A Residential Loan is
a loan made to a Participant which is used to acquire any dwelling
unit which is to be used within a reasonable period of time, as the
principal residence of the Participant. An application for a
residential loan must contain such documentation as is satisfactory
for the Committee to verify the purpose of the loan.
(5) Interest and principal on a loan must be repaid through
authorized payroll deduction in equal installments of at least $10 per
week over one or more whole-year (52-week) periods. The maximum
repayment period shall be four years (208 weeks), except that the
maximum repayment period for a Residential Loan shall be 15 years (780
weeks). The maximum weekly repayment amount may not exceed twenty-
five percent (25%) of the Participant's Weekly Rate of Compensation.
One pick-up payment per week, for a maximum of thirteen consecutive
weeks, is required for a Participant whose repayments are in arrears
because of insufficient earnings. Repayments will be invested in the
Fund or Funds specified by the Participant for current Elective
Deferrals, or otherwise the most recent Elective
96
WITHDRAWALS AND LOANS
- ---------------------
Deferral specification by such Participant, as shown on the records of
the Trustees.
(6) The Loan shall be documented by such application forms,
notes, evidences of indebtedness and other instruments, executed by
the Participant, which the Committee in its discretion shall require.
A loan fee in the amount which is the greater of $25 ($50 in the case
of a Residential Loan) or one-half of one percent of the amount of the
loan shall be added to the payments made on the loan in a manner
determined by the Committee. The spouse of a married Participant must
consent to the loan application.
(7) A Participant is not eligible to apply for a loan until 13
weeks have expired following the repayment in full of a previous loan.
This restriction is not applicable with respect to a loan for the
purpose of refinancing an existing loan.
(8) A Participant will not be permitted to refinance a loan
during the initial year of the loan, and may do so only once
thereafter. A refinancing loan shall be subject to the same terms and
conditions currently applicable to new loans, except the term thereof
cannot extend beyond five (5) years from the date the loan was
originally made, or, in the case of a Residential Loan, five (5) years
beyond the original maturity date thereof.
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WITHDRAWALS AND LOANS
- ---------------------
(9) A Participant will be permitted to prepay a loan:
a. At anytime after the loan has been in effect for 13
weeks; or
b. Within the 30-day period preceding the Participant's
Termination of Employment. Any prepayment must be in the amount
of the full outstanding loan balance.
(10) A Participant who is on an authorized leave of absence without
pay may elect to continue repayments during such period. Such
repayments may be made either weekly or monthly in the full amount due
at such time of repayment. Upon return to the active payroll, a
Participant who has not kept his repayments current may have the term
of his loan extended by the number of weeks such repayments were not
made, except that such extension will not be permitted if the term
would extend beyond five (5) years from the date the loan was
originally made, or in the case of a Residential Loan, five (5) years
beyond the original maturity date thereof.
(11) A Participant shall be in default of a loan if such
Participant:
a. is an active Employee who has insufficient earnings to
make a repayment for 13
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WITHDRAWALS AND LOANS
- ---------------------
consecutive weeks, or is otherwise 13 weeks or more in arrears in
such weekly repayments; or
b. is an Employee returning from an authorized leave of
absence without pay whose loan term cannot be extended pursuant
to Subsection 9.04(b)(10) and who:
(i) does not pay all arrearages in a lump sum, or
(ii) is unable to pay up all arrearages through 13
consecutive pick-up payments, and fails to refinance the
loan; or
c. has filed for relief under the U.S. Bankruptcy Code.
(12) A Participant who is in default of a loan:
a. will be suspended from making Elective Deferrals for a
period commencing on the date of default and ending on the later
of:
(i) one year from such date, or
(ii) the date on which the outstanding loan balance is
repaid by a single lump sum payment; and
b. will be ineligible to apply for a new loan for a period
commencing on the date of default and ending on the later of
(i) one year from such date, or
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WITHDRAWALS AND LOANS
- ---------------------
(ii) thirteen (13) weeks following the repayment in full
of the loan.
(13) Loan proceeds shall be deducted from the borrowing
Participant's Account, based upon the Valuation Date of the month in
which the loan is approved by the Committee. However, prior to July
1, 1990, loan proceeds shall be deducted from the borrowing
Participant's Account based upon the Valuation Date coincident with or
immediately preceding the date on which the Participant Files With The
Committee the promissory note evidencing the loan debt. Loan proceeds
will be deducted based on the dollar value of the Units and Shares
credited to the Bond Fund, the Lockheed Martin Stock Fund, the
Securities Fund, the STIF Fund and/or the ESOP Fund in the same
proportion as the dollar value of such Units and Shares in such
Participant's Account are at such time credited to the Bond Fund, the
Lockheed Martin Stock Fund, the Securities Fund, the STIF Fund and/or
the ESOP Fund.
(14) Each loan from the Plan shall be secured by the borrowing
Participant's Account in the Plan. If a Participant has a Termination
of Employment before the loan is repaid, the loan shall become due
immediately and shall be repaid out of the Participant's Account,
which shall be reduced accordingly.
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WITHDRAWALS AND LOANS
- ---------------------
(15) All repayments, other than by authorized payroll deductions,
shall be made by certified check or money order payable to the order
of The Corporation, and delivered to a Plan Representative.
101
SECTION 10
----------
DEATH BENEFITS
--------------
SECTION 10.01 Spousal Consent.
------------- ---------------
In the event a Participant dies on or after August 23, 1984, such
Participant's Account under the Plan will be paid to his or her surviving spouse
or to his or her designated beneficiary if there is no surviving spouse. If
there is a surviving spouse and the Participant and spouse wish that death
benefits under this Plan be paid to a designated beneficiary, the Participant
may designate a beneficiary to receive his or her Participant's Account in lieu
of the spouse but only with spousal consent of the person who is the spouse at
the time of the Participant's death. Spousal consent will only be valid if it
is made in writing on a form prescribed by the Committee, the spouse
acknowledges the effect of the consent and the acknowledgement is witnessed by a
Plan representative or a notary public. If the existence of a surviving spouse
is uncertain or if the validity of spousal consent is unclear, the Committee
shall withhold payment of death benefits until such time as spousal existence or
the validity of spousal consent can be determined with certainty. The Committee
in its discretion may refuse to recognize a spousal consent if it believes for
any reason that the consent is invalid.
102
DEATH BENEFITS
- --------------
SECTION 10.02 Designation of Beneficiary or
------------- -----------------------------
Beneficiaries.
-------------
Subject to the provisions of Section 10.01, a Participant may
designate in writing a beneficiary or beneficiaries. The terms "beneficiary" or
"beneficiaries" shall mean any person or persons so designated by a Participant
to receive benefits to which such Participant may be entitled under the Plan
upon his death. If more than one beneficiary is named, the Participant may
specify the sequence and/or proportion in which payments shall be made to each
beneficiary. In the absence of a specification of either sequence or
proportion, payments shall be made in equal shares to all named beneficiaries.
All such designations shall be made by Filing With The Committee. In the
absence of such designation which is effective, payments shall be made in
accordance with applicable law. When payment has been made in accordance with
the foregoing provisions, there shall be no further liability of the
Corporation, the Trustees, or any other person or legal entity to anyone in
connection with such deceased person under the Plan.
103
SECTION 11
----------
NAMED FIDUCIARIES
-----------------
AND
---
ALLOCATION OF RESPONSIBILITIES
------------------------------
SECTION 11.01 Named Fiduciaries.
------------- -----------------
The following persons shall be "Named Fiduciaries" under the Plan and
Trust Agreements, and shall be the only Named Fiduciaries hereunder:
(a) The Trustee. Any Trustee designated hereunder shall be a bank or
-----------
trust company qualified under the laws of the United States or of any State
to operate thereunder as a trustee.
(b) The Corporation, as Plan Sponsor. Any authority assigned or
--------------------------------
reserved to the Corporation under the Plan and Trust Agreement shall be
exercised by resolution of the Board of Directors or as otherwise provided
at Section 13.01 of this Plan. Such a resolution shall become effective
with respect to the Trustee upon receipt by the Trustee of a certified copy
of such Board of Directors' resolution.
(c) The Committee, as Administrator of the Plan. The Committee shall
-------------------------------------------
be appointed to serve as Administrator by resolution duly adopted by the
Board of Directors. Whenever a Committee is so appointed, the Trustees
shall be advised of the name or names of the person or persons so appointed
by providing to the Trustees a certified copy of such Board of Directors'
resolution, and the Trustees may assume that
104
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
such person or persons shall continue in office until advised differently
in the same manner. Whenever a Trustee must or may act upon the direction
or approval of the Committee, the Trustee may act upon written
communication signed by a majority of such Committee, or an agent appointed
in writing by a majority of such Committee to act on the Committee's
behalf, and the authority of any such agent shall be deemed to continue
until revoked in writing. In such case, the Trustee shall not be
responsible for failure to act without such a communication.
(d) The Participant, under Sections 4A.06 and 4A.07. A Participant
------------------------------------------------
shall be a "Named Fiduciary" solely for purposes of tender and voting of
Stock as provided in Sections 4A.06 and 4A.07.
SECTION 11.02 Allocation of Responsibilities.
------------- ------------------------------
Responsibilities shall be allocated among the Named Fiduciaries as
follows:
(a) Each Trustee shall, unless otherwise directed by an Investment
Manager (if such has been appointed), have exclusive authority and
discretion to manage and invest the assets of the Trust Fund, as provided
in its Trust Agreement. Shares in the ESOP Fund shall be tendered,
exchanged and voted as provided in Sections 4A.06 and 4A.07. Each Trustee
shall further be responsible for the holding and disbursement of all
contributions and income received by it under the Plan, as provided in its
Trust Agreement, and
105
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
shall have such other responsibilities as are provided in such Agreement.
(b) Lockheed Corporation shall have the authority and responsibility
for:
(1) the design of the Plan and Trust Agreements, including
amendment of the Plan and Trust Agreements;
(2) the qualification of the Plan under applicable law;
(3) the designation of members of the Committee; and
(4) funding the Plan in accordance with applicable law and
determinations of the Committee.
(c) The Committee shall have the responsibility, authority and
discretion necessary to control the operation and administration of the
Plan and Trust Fund(s) in accordance with the terms of the Plan and Trust
Agreement(s), including, without limiting the generality of the foregoing:
(1) all functions assigned to the Committee under the terms of
the Trust Agreements;
(2) all functions assigned to the Committee under the terms of
the Plan;
(3) determination of benefit eligibility and amount and
certification thereof to the Trustees;
(4) hiring of persons to provide necessary services to the Plan;
106
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
(5) issuance of directions to the Trustees to pay any fees,
taxes, charges or other costs incidental to the operation and
management of the Plan, as provided in Section 7.05;
(6) preparation and filing of all reports required to be filed by
the Plan with any agency of Government;
(7) compliance with all disclosure requirements imposed by state
or federal law;
(8) establishment of a funding policy within the meaning of
Section 402(b)(1) of ERISA;
(9) maintenance of all records of the Plan other than those
maintained by the Trustees;
(10) interpretation and construction of Plan provisions;
(11) establishment of procedures to be followed by Participants
and beneficiaries for Filing With The Committee;
(12) the determination of the amounts needed to fund the Plan,
and the payment of such amounts from corporate funds to the Trustees;
(13) the appointment, removal and replacement of the Trustees;
(14) the appointment, removal and replacement of one or more
Investment Managers (as defined in Section 3(38) of ERISA or any other
provision of ERISA
107
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
or other statute of similar import) which shall be responsible for the
management of such of the assets of the Trust Fund as the Committee
shall specify; and
(15) the exercise of all fiduciary functions provided in the Plan
or in the Trust Agreements or necessary to the operation of either
except such functions as are specifically assigned to other Named
Fiduciaries. The Committee may adopt such rules to govern its own
procedures as it may deem advisable, provided that such rules are not
inconsistent with the provisions and purposes of the Plan or Trust
Agreements. The Committee may designate other persons, including the
Trustee(s), to carry out its duties and responsibilities, as it may
deem appropriate or necessary. Effective January 1, 1993, the
Committee for Employee Benefit Plans shall make annual reports to the
Board of Directors on the operation and administration of the plan and
trust funds. The report shall be made in the form and manner
determined by the Board of Directors.
(d) Participants who have Shares credited to their Participants'
Accounts shall make tender or exchange decisions and voting decisions with
respect to Shares as provided in Sections 4A.06 and 4A.07.
108
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
SECTION 11.03 Shared Responsibility of Fiduciary.
------------- ----------------------------------
Each Named Fiduciary is allocated the individual responsibility for
the prudent execution of the functions assigned to him, and none of such
responsibilities or any other responsibility shall be shared by two or more of
such Named Fiduciaries unless such sharing shall be provided by a specific
provision of the Plan or a Trust Agreement. Whenever one Named Fiduciary is
required by the Plan or a Trust Agreement to follow the directions of another
Named Fiduciary, the two Named Fiduciaries shall not be deemed to have been
assigned a shared responsibility, but the responsibility of the Named Fiduciary
giving the directions shall be deemed his sole responsibility, and the
responsibility of the Named Fiduciary receiving those directions shall be to
follow them insofar as such instructions are on their face proper under
applicable law.
SECTION 11.04 Fiduciary Assistance.
------------- --------------------
A Named Fiduciary may employ one or more persons to render advice
concerning any responsibility such Named Fiduciary has under the Plan or Trust
Agreement.
SECTION 11.05 Indemnification of the Committee.
------------- --------------------------------
To the extent permitted by law, Lockheed Corporation shall indemnify
each member of the Committee and any employee of the Corporation who acts as an
agent of the Committee, or who advises the Committee, against any and all
expenses and/or liabilities arising out of his service or membership on the
Committee, or service for or advice to the Committee.
109
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
SECTION 12
----------
GENERAL PROVISIONS
------------------
SECTION 12.01 Corporation's Rights.
------------- --------------------
The existence of this Plan or any action hereunder and participation
in the Plan shall in no way affect the Corporation's right to discipline,
discharge, or take any other action with respect to employees.
SECTION 12.02 Assignment or Pledging of Plan
------------- ------------------------------
Benefits.
--------
To the extent permitted by law:
No right or benefit provided for in this Plan shall be
subject in any manner to anticipation, commutation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge, and
any attempt to anticipate, commute, alienate, sell, transfer,
assign, pledge, encumber or charge the same shall be void. No
such right or benefit shall be in any manner liable for or
subject to the debts, contracts, liabilities, or engagements of
any person entitled to such right or benefit. No such right or
benefit shall be subject to garnishment, attachment, execution,
levy or any other similar adverse legal process, or to bankruptcy
or insolvency proceedings of any kind. If any person entitled to
rights or benefits under the provisions of this Plan shall
attempt to
110
GENERAL PROVISIONS
- ------------------
anticipate, commute, alienate, sell, transfer, assign, pledge,
encumber or charge any such right or benefit, or if any such
right or benefit shall, notwithstanding the provisions of the
preceding sentence, be subject, in whole or in part, to
garnishment, attachment, execution, levy or any other similar
adverse legal process, or to bankruptcy or insolvency proceedings
of any kind, then in the sole discretion of the Committee such
right or benefit or part thereof, as the case may be, shall cease
and determine and in such event the Committee may hold or apply
the same, in whole or in part, to or for the benefit of his
spouse, children, next of kin or dependents, or any of them, in
such manner and in such proportions as the Committee may deem
proper. Any right or benefit so held or applied shall be deemed
conclusively to have been held or applied, as the case may be,
for the benefit of such person entitled to such right or benefit
under the provisions of this Plan.
SECTION 12.03 Payment of Benefits to a Minor.
------------- ------------------------------
If the Committee determines that any person entitled to payments under
this Plan is a minor or incompetent by reason of physical or mental disability,
it may cause all payments then due or thereafter becoming due to such person to
be made or any
111
GENERAL PROVISIONS
- ------------------
legally authorized person for his benefit, without responsibility to follow the
application of amounts so paid. Payments made pursuant to this Section shall
completely discharge the Committee, the Trustees, and the Corporation.
SECTION 12.04 Responsibility for Current Address.
------------- ----------------------------------
Each Participant shall be responsible for furnishing the Committee
with his current address and the name, current address, and social security
number, if any, of his beneficiary if he has designated a beneficiary. Any
notices required or permitted to be given hereunder shall be deemed given if
directed to such address and mailed by regular United States First-Class mail.
The Committee, the Trustees, and the Corporation shall have no obligation or
duty to locate such Participant or his beneficiary. In the event a Participant
or his beneficiary becomes entitled to a payment under this Plan and such
payment cannot then be made because the current address referred to above is
incorrect, because such Participant or beneficiary fails to respond to the
notice sent to the current address referred to above, because of conflicting
claims to such payment, or for any other reason, the amount of such payment,
when and if made, shall be the dollar value of the Units and Shares in such
Participant's Account with respect to such payment, as such dollar value is
determined as provided in Sections 6.01 and 6.02 on the Valuation Date
immediately preceding the date such payment is actually made.
112
GENERAL PROVISIONS
- ------------------
SECTION 12.05 Claim for Benefits.
------------- ------------------
A claim for benefits shall be presented by Filing With The Committee.
Any denial by the Committee of a claim for benefits under the Plan by a
Participant or beneficiary shall be stated in writing by the Committee and
delivered or mailed to the Participant or beneficiary. Such notice shall set
forth the specific reasons for the denial and shall be written in a manner which
may be understood without legal or actuarial counsel. Such notice shall also
include a description of any material or information necessary for the
Participant or beneficiary to perfect the claim, an explanation of why such
material or information is needed, and an explanation of the Plan's review
procedure. Within sixty days after the receipt of such notice, the Participant
or beneficiary may, by Filing With The Committee, request review by the
Committee of its initial denial of the claim. Such Participant or beneficiary
shall be afforded the opportunity to review pertinent documents relating to the
initial denial and submit issues and comments in writing to the Committee. The
Participant or beneficiary may, at his expense, be represented by legal counsel
during the review proceedings.
SECTION 12.06 Merger or Consolidation of Plan.
------------- -------------------------------
In the event of a merger or consolidation with, or transfer of assets
and liabilities to, any other plan, each Participant must, if the Plan is then
terminated, receive the benefit after the merger, consolidation or transfer of
assets and liabilities which is equal to or greater than the benefit he
113
GENERAL PROVISIONS
- ------------------
would have been entitled to receive immediately before the merger, consolidation
or transfer of assets and liabilities if the Plan had then terminated.
SECTION 12.07 Forfeiture of Undeliverable Benefit.
------------- -----------------------------------
To the extent provided by law, if any benefit under the Plan cannot be
paid because, after due diligence, the proper recipient cannot be located during
the three (3) year period commencing on the date the benefit is first payable,
the amount of the benefit shall be returned to the appropriate Trust Fund as a
credit to Corporation Matching Contributions. If, however, a proper recipient
subsequently makes a valid claim for such benefit, the amount of such benefit
shall be restored to the Trust Fund by the Corporation and will be paid as
provided in Section 12.04.
SECTION 12.08 Qualified Domestic Relations Order.
------------- ----------------------------------
(a) This Plan will follow the terms of any qualified domestic
relations order issued with respect to a Participant. However, the Plan
will only follow orders which meet all of the requirements of subsection
(b).
(b) A "qualified domestic relations order" is any judgment, decree or
order, including the approval of a property settlement or agreement,
provided that
(1) the order relates to the provision of child support, alimony
or marital property rights and is made pursuant to state domestic
relations or community property laws;
114
GENERAL PROVISIONS
- ------------------
(2) the order creates or recognizes the existence of an alternate
payee's right to receive all or a portion of a Participant's Account;
(3) the order specifies the name and last known mailing address
of the Participant and each alternate payee covered by the order;
(4) the order specifies the amount or percentage of the
Participant's Account to be paid to each alternate payee or the manner
in which the amount of percentage is to be determined;
(5) the order specifies the number of payments or the period to
which the order applies;
(6) the order specifically names this Plan as the plan to which
the order applies;
(7) the order does not require this Plan to provide any type of
benefits or form of benefits not otherwise provided under this Plan;
(8) the order does not require the payment of benefits to an
alternate payee which are required to be paid to another alternate
payee under another order previously determined by the Committee to be
a qualified domestic relations order; and
(9) if the order requires that payments to the alternate payee
commence before they commence with respect to the Participant, the
order specifies that payments will not commence before the Participant
115
GENERAL PROVISIONS
- ------------------
attains or would have attained the earliest allowable retirement age
under the Plan.
A qualified domestic relations order may provide that a former spouse of
the Participant is to be treated as a surviving spouse for purposes of the
death benefit provisions of this Plan. Subsection (c) sets forth the
procedures under which the Committee shall determine whether a domestic
relations order properly qualifies.
(c) The Committee shall not treat any judgment, order or decree as a
"qualified domestic relations order" unless it meets all of the
requirements set forth in subsection (b). If the order meets these
requirements, the Committee shall follow the terms of the order whether or
not this Plan has been joined as a party to the legal proceeding out of
which the order arises. Upon receipt of a domestic relations order, the
Committee shall notify the Participant and alternate payee of (1) its
receipt of the order and (2) its need to determine the qualified status of
the order in accordance with subsection (b). The alternate payee may
designate a representative to receive copies of future notices with respect
to the qualified status of the order. To the extent an order calls for
benefits to be paid to an alternate payee before the qualified nature of
the order is determined, a separate account shall be established to hold
the benefit payments affected by the order. This account
116
GENERAL PROVISIONS
- ------------------
shall be administered in accordance with the rules set forth in Section
206(d)(3)(H) of ERISA.
Section 12.09 Rollover Contributions.
------------- ----------------------
An Eligible Employee, regardless of whether he has satisfied the
eligibility requirements of Section 3 who has received a distribution from a
plan which meets the requirements of Section 401(a) of the Code may, with the
approval of and in accordance with procedures approved by the Committee,
transfer the distribution received from the other plan to the Trustee; provided
that the distribution is eligible for rollover treatment and exclusion from the
gross income of the Employee in accordance with applicable law.
117
SECTION 13
----------
AMENDMENT OR TERMINATION OF THE PLAN
------------------------------------
SECTION 13.01 Right to Amend Plan.
------------- -------------------
Effective January 1, 1993, the Corporation reserves the right to
amend, modify, suspend or terminate the Plan by action of the Board of
Directors. In cases where amendments are necessary to implement changes not
affecting the overall functioning of the Plan, such as extending Plan provisions
to new companies, changing benefit levels for the employees at such companies,
or as required to permit the plan and trust to meet the changes that are
sometimes required by collective bargaining agreements, federal law, government
customer requirements and to maintain competitive programs to attract and retain
employees; and such changes will not, in the judgment of the Lockheed
Corporation Senior Salary Board, substantially alter the nature or expense of
the affected plan, then the power to amend the Plan shall be delegated to the
Corporate Senior Salary Board under guidance from counsel. Any modification or
amendment of the Plan may be made retroactive to the effective date, if
necessary or appropriate, for the Plan to qualify and continue to qualify under
the Code, provided, however, that no modification or amendment shall be made
which shall make it possible for any part of the Trust Fund(s) to be used for,
or diverted to, purposes other than for the benefit of those entitled to
benefits hereunder.
118
AMENDMENT OR TERMINATION OF THE PLAN
- ------------------------------------
SECTION 13.02 Termination of Plan - Benefits.
------------- ------------------------------
Although the Corporation hopes and expects to continue the Plan
indefinitely the Board of Directors may terminate the Plan for any reason at any
time, except as provided in any agreement with a collective bargaining agent.
If the Plan is terminated, each Participant or former Participant shall fully
vest and shall receive a payment equal to the value of his Participant's Account
at the date of distribution. Whenever reference is made in this Section to
termination of the Plan this shall mean formal termination of the Plan by
appropriate action of the Corporation or by virtue of complete discontinuance by
the Corporation of contributions called for by the Plan as the term "complete
discontinuance of contributions under the plan" is used in Section 411(d)(3) of
the Code and the regulations promulgated thereunder. Cessation of Corporation
Matching Contributions to the ESOP Feature by reason of the application of any
ESOP Ending Date shall not be a complete discontinuance of contributions which
causes full vesting of Participants' Accounts, provided Corporation Matching
Contributions continue to be made under other provisions of the Plan.
SECTION 13.03 Partial Termination of the Plan.
------------- -------------------------------
If the Committee determines in its sole discretion that the Plan has
been partially terminated, within the meaning of regulations under Code Section
411, the Committee shall determine the date of such termination and who has been
affected by the termination. The Participant's Account of all Participants
119
AMENDMENT OR TERMINATION OF THE PLAN
- ------------------------------------
affected by the termination who were Employees on the date thereof shall become
fully vested and the unvested portion of the Participant's Account of all other
affected Participants shall be forfeited. Such Participant's Accounts, to the
extent vested, shall remain payable under the terms of the Plan.
120
SECTION 14
----------
TOP HEAVY RULES
---------------
SECTION 14.01 Special Rules for Top Heavy Plan.
------------- --------------------------------
(a) If this Plan is or ever becomes "top heavy," as determined under
subsection (b), the following special rules shall apply and (for purposes
of this Section only, any person excluded from the Plan solely because of
the person's failure to make Elective Deferrals shall be considered a
Participant):
(1) For any Plan Year in which the Plan is top heavy, each
Eligible Employee who is an Employee on the last day of the Plan Year
shall receive an allocation of Corporation contributions (including
his Elective Deferrals) and forfeitures at least equal to three
percent of the Eligible Employee's earnings (as defined in Section
5.02(c)(3)) for the Plan Year.
If an Eligible Employee under this Plan is also covered by another
defined contribution plan maintained by the Corporation for the same Plan
Year, this Plan and all such other defined contribution plans shall be
aggregated in determining whether the minimum benefit required under the
Plan is also covered by another defined contribution plan maintained by the
Corporation for the same Plan Year, this Plan and all such other defined
contribution plans shall be aggregated in determining whether the minimum
benefit required under Internal Revenue Code Section 416(c)(2) is
121
TOP HEAVY RULES
- ---------------
provided for the Eligible Employee under this Plan. If an Eligible
Employee in this Plan is also covered by a defined benefit plan maintained
by the Corporation for the same Plan Year and the minimum benefit required
under Internal Revenue Code Section 416(c)(1) is being provided under such
other plan for the Plan Year if it is not provided under this Plan, minimum
benefits under this paragraph need not be provided for the Eligible
Employee if the Committee so elects.
(2) For purposes of determining an Eligible Employee's allocation
of Corporation Matching Contributions and forfeitures under Section
4.01 and paragraph (1), Elective Deferrals with respect annual to
earnings (as defined in Section 5.02(c)(3)) in excess of $200,000 (or
such other amount prescribed under Code Section 416(d) shall be
ignored for any Plan Year in which the Plan is top heavy.
(3) All Corporation-provided benefits under this Plan accruing
through the end of the Plan's last top heavy year shall vest in
accordance with the following schedule:
Years of Service Vested Percentage
---------------- -----------------
(at least) 2 20%
3 40%
4 60%
5 80%
6 (or more) 100%
122
TOP HEAVY RULES
- ---------------
The unvested portion of the Corporation Matching Contributions
Account of a Participant who resigns or is discharged shall be
forfeited on the last day of the Participant's first Break in Service
after such resignation or discharge. If a Participant who resigns or
is discharged again becomes an Employee before he or she has a Break
in Service, the unvested portion of the Participant's Account shall
not be forfeited. Thereafter, any allocations for the individual's
benefit of Corporation Matching Contributions and forfeitures, and the
gains and losses thereon, shall be made to his or her existing
Corporation Matching Contribution Account. A former Employee's Vested
percentage shall not be determined under this paragraph unless he
again becomes an Employee before the unvested portion of his
Corporation Matching Contribution Account is permanently forfeited
under the terms of this Plan. If a Participant received a
distribution from his or her Corporation Matching Contribution Account
before it was fully vested, the Participant's vested interest in that
Account shall not be determined under Section 8.02 after his rehire.
Instead, his vested interest in that Account shall be the amount that
would then be vested under Section 8.02 if his Corporation Matching
Contribution Account were increased by the amount previously
distributed, but
123
TOP HEAVY RULES
- ---------------
with such vested amount being reduced by the amount of the prior
distribution. When the Plan ceases to be top heavy, vesting in
benefits accruing thereafter shall continue to be determined in
accordance with this special vesting provision for a Participant who
has five (5) or more Years of Service when the Plan ceases to be top
heavy. The Committee shall establish appropriate procedures
consistent with the other vesting provisions of this Plan for
administering this special vesting rule. However, no Participant's
vested interest in his Corporation Matching Contribution Account at
the time the Plan ceases to be top heavy shall be reduced solely as a
result of the Plan ceasing to be top heavy.
(4) Notwithstanding any provisions in the Plan to the contrary,
the account of a key employee must be distributed to the key employee
no later than in or commencing in the key employee's taxable year in
which he attains age 70-1/2.
(b) This Plan is "top heavy" for a Plan Year commencing after
December 31, 1983 if, as of the last day of the preceding Plan Year (the
"determination date"), the amount credited to the Accounts of key employees
(as defined in subsection (c)) exceeds sixty percent of the amount credited
to the Accounts of all Employees. The Account of (1) a former key employee
or (2) any current or former
124
TOP HEAVY RULES
- ---------------
Employee who has not performed any Service for the Corporation during
the five-year period ending on the determination date shall be
excluded in determining whether the Plan is top heavy. However, if a
current or former Employee resumes performing Services after the five-
year period, his Account shall be included in determining whether the
Plan is top heavy. Notwithstanding the foregoing, if, as of the
determination date described above, this Plan is part of an
"aggregation group," this Plan shall be top heavy if the group is top
heavy. An "aggregation group" shall include all plans of the
Corporation in which a key employee participates and each other plan
of the Corporation which enables any such plan to meet the
requirements of Code Section 401(a)(4) or 410. The Corporation may
treat any plan not required to be included in an aggregation group as
part of that group if the inclusion of the plan would not prevent the
aggregation group from meeting the requirements of Code Section 401(a)
or 410. The rules set forth above for determining whether this plan
is top heavy shall be applied with respect to the sum of benefits
provided under all plans in the aggregation group to determine whether
the group is top heavy. For purposes of determining whether this Plan
is top heavy, the amount credited to a Participant Account shall be
determined as of the last valuation date coincident with or preceding
the determination date, and shall include the aggregate distributions
(without interest
125
TOP HEAVY RULES
- ---------------
thereon) made under the Plan to a Participant (other than a former key
employee) during the five year period ending on the determination
date. Deductible (IRA-type) employee contributions and rollovers (or
similar transfers) shall be ignored in determining whether this Plan
is top heavy, except as otherwise provided in applicable Treasury
Regulations. Distributions made within the five Plan Years ending on
the determination date from a terminated plan shall be included in the
aggregation group if the terminated plan would have been required to
be included in the group had the plan not been terminated.
(c) An Eligible Employee shall be a "key employee" if, during the Plan
Year in question or any of the four preceding Plan Years, he is or was
(1) an officer of the Corporation,
(2) one of the ten Employees owning (or considered as owning
within the meaning of Code Section 318) the largest interests in the
Corporation,
(3) a five percent owner of the Corporation, or
(4) a one percent or more owner of the Corporation having an
annual compensation (as defined in Treas. Reg. Section 1.415-2(d))
from the Corporation of more than $150,000.
The number of officers of the Corporation treated as key employees under
paragraph (1) shall be limited to fifty. A beneficiary of a key employee
or a former key employee
126
TOP HEAVY RULES
- ---------------
shall also be treated as a key employee or former key employee,
respectively. Determinations under this subsection shall be made in
accordance with Internal Revenue Code Section 416(i) and applicable
Treasury Regulations.
127
SECTION 15
----------
EFFECTIVE DATE OF AMENDMENT
---------------------------
AND
---
RESTATEMENT OF THE PLAN
-----------------------
SECTION 15.01 Effective Date of Restated Plan.
------------- -------------------------------
This amendment and restatement of the Plan shall be effective March 1,
1995 or on such dates as otherwise provided herein, subject to the receipt of a
ruling satisfactory to the Board of Directors that the Plan and Trust
Agreements, as amended and restated, qualify under applicable provisions of the
United States Internal Revenue Code.
SECTION 15.02 Applicable Parties
------------- ------------------
(a) This amendment and restatement is applicable only to those
particular groups of Employees described below:
(1) Employees listed in Supplement A-3 hereto.
(b) With respect to all other groups of employees included in the
Plan, the provisions of the Plan shall continue unchanged and unaffected by
this amendment and restatement.
128
EXHIBIT 4-C
LOCKHEED SPACE OPERATIONS COMPANY
HOURLY EMPLOYEE INVESTMENT PLAN PLUS
(As Amended and Restated Effective March 1, 1995)
TABLE OF CONTENTS
Page
----
SECTION 1
DEFINITIONS............................. 3
1.01 Board of Directors................................................. 3
1.02 Bond Fund.......................................................... 3
1.03 Break in Service................................................... 3
1.04 Code............................................................... 4
1.05 Committee.......................................................... 4
1.06 Corporation........................................................ 4
1.07 Elective Deferral.................................................. 4
1.08 Eligible Employee.................................................. 4
1.09 Employee........................................................... 4
1.10 ERISA.............................................................. 6
1.11 ESOP Contributions................................................. 6
1.12 ESOP Ending Date................................................... 6
1.13 ESOP Feature....................................................... 6
1.14 ESOP Fund.......................................................... 6
1.15 ESOP Match Stock................................................... 6
1.16 ESOP Starting Date................................................. 6
1.17 ESOP Trustee....................................................... 7
1.18 Filing With The Committee.......................................... 7
1.19 Hour of Service.................................................... 7
1.20 Lockheed Martin Stock Fund......................................... 8
1.21 Month.............................................................. 9
1.22 Participant........................................................ 9
1.23 Plan............................................................... 9
1.24 Plan Year.......................................................... 10
1.25 Profit Sharing Trustee............................................. 10
1.26 Quarter............................................................ 10
1.27 Securities Fund.................................................... 10
1.28 Service Time....................................................... 10
1.29 Shares............................................................. 11
1.30 STIF Fund.......................................................... 11
1.31 Stock.............................................................. 11
1.32 Termination of Employment and Terminated Employment................ 11
1.33 Thrift Stock....................................................... 12
1.34 Trustee............................................................ 12
1.35 Valuation Date..................................................... 12
1.36 Weekly Rate of Compensation........................................ 12
1.37 Year of Service.................................................... 12
SECTION 2
ELIGIBILITY FOR PARTICIPATION..................... 14
2.01 Voluntary Participation............................................ 14
2.02 Employees of Predecessor Contractors............................... 14
2.03 Year of Service for Eligibility.................................... 15
(a) Eligibility Rule for New Employee............................. 15
i
Page
----
(b) Eligibility Rule for Rehired Eligible Employee
or Participant................................................ 15
(c) Eligibility Rule for Non-Eligible Employees
Rehired Before a Break in Service............................. 15
(d) General Eligibility Rule for Non-Eligible
Employees Rehired After a Break in Service.................... 16
(e) Special Eligibility Rules for Non-Eligible
Rehired After a Break in Service.............................. 16
2.04 Elective Deferral.................................................. 17
SECTION 3
EMPLOYEE PARTICIPATION......................... 18
3.01 Becoming a Participant............................................. 18
3.02 Elective Deferral Percentage....................................... 18
3.03 Revocation of Specification........................................ 19
3.04 Annual Specification Election...................................... 19
3.05 Specification Changes.............................................. 20
3.06 Annual Reallocation................................................ 22
3.07 Discrimination Test................................................ 23
3.08 Reduction of Elective Deferral..................................... 25
3.09 Limitation on Deferral Percentage.................................. 26
3.10 Limitation Upon Rehire............................................. 26
3.11 Suspension on Wage Attachment...................................... 28
SECTION 4
CORPORATION MATCHING CONTRIBUTIONS................... 29
4.01 Corporation Matching Contributions................................. 29
4.02 Investment of Corporation Matching Contribution.................... 30
4.03 Forfeiture of Company Matching Contribution........................ 31
4.04 Liability for Payment of Benefits.................................. 31
SECTION 4A
ESOP PROVISIONS............................ 33
4A.01 ESOP Contributions................................................. 33
4A.02 Put Option......................................................... 33
4A.03 Diversification Near Retirement.................................... 37
4A.04 Cash Dividends..................................................... 38
4A.05 Valuation of Stock................................................. 38
4A.06 Tender or Exchange Decisions....................................... 39
4A.07 Voting Rights...................................................... 43
4A.08 No Diversion of Plan Benefits...................................... 46
4A.09 Applicability of Provisions........................................ 46
ii
Page
----
SECTION 5
PARTICIPANT'S ACCOUNT........................ 47
5.01 Separate Participant's Account..................................... 47
5.02 Annual Addition" Limits............................................ 47
5.03 Contribution Credited Monthly...................................... 55
SECTION 6
VALUATION OF PARTICIPANT'S ACCOUNT................... 57
6.01 Unit Valuation..................................................... 57
6.02 Share Valuation.................................................... 58
SECTION 7
TRUST FUND AND TRUSTEE........................ 59
7.01 Description of Trust Fund.......................................... 59
7.02 Trustee's Authority................................................ 59
7.03 Non-Guarantee of Investment Value.................................. 60
7.04 Trustee Allocation of Contributions................................ 60
7.05 Payment of Plan Expenses........................................... 60
SECTION 8
BENEFITS............................... 61
8.01 Fully Vested Termination........................................... 61
8.02 Vesting Schedule................................................... 62
8.03 Refund of Elective Deferrals Between
Valuation Date and Termination Date................................ 66
8.04 Rehire............................................................. 66
8.05 Installment Payment Election....................................... 68
8.06 Commencement of Distributions...................................... 70
8.07 Stock Distributions................................................ 72
8.08 Mandatory Distributions............................................ 74
SECTION 9
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS............... 80
9.01 Withdrawals Other Than Hardship.................................... 80
9.02 Proportion of Units and Shares Deducted Upon
Withdrawal......................................................... 81
9.03 Hardship Withdrawal................................................ 81
9.04 Participant Account Loans.......................................... 89
SECTION 10
DEATH BENEFITS............................ 97
10.01 Spousal Consent.................................................... 97
10.02 Designation of Beneficiary or Beneficiaries........................ 98
iii
Page
----
SECTION 11
NAMED FIDUCIARIES
AND
ALLOCATION OF RESPONSIBILITIES..................... 99
11.01 Named Fiduciaries.................................................. 99
11.02 Allocation of Responsibilities..................................... 100
11.03 Shared Responsibility of Fiduciary................................. 104
11.04 Fiduciary Assistance............................................... 104
11.05 Indemnification of the Committee................................... 104
SECTION 12
GENERAL PROVISIONS.......................... 105
12.01 Corporation's Rights............................................... 105
12.02 Assignment or Pledging of Plan Benefits............................ 105
12.03 Payment of Benefits to a Minor..................................... 106
12.04 Responsibility for Current Address................................. 107
12.05 Claim for Benefits................................................. 108
12.06 Merger or Consolidation of Plan.................................... 108
12.07 Forfeiture of Undeliverable Benefit................................ 109
12.08 Qualified Domestic Relations Order................................. 109
12.09 Rollover Contributions............................................. 112
SECTION 13
AMENDMENT OR TERMINATION OF THE PLAN................. 113
13.02 Termination of Plan - Benefits..................................... 114
13.03 Partial Termination of the Plan.................................... 114
SECTION 14
TOP HEAVY RULES............................ 116
14.01 Special Rules for Top Heavy Plan................................... 116
SECTION 15
EFFECTIVE DATE OF AMENDMENT
AND RESTATEMENT OF THE PLAN..................... 122
15.01 Effective Date of Restated Plan.................................... 122
15.02 Applicable Parties................................................. 122
SUPPLEMENT A-2 TO SECTION 3.02
As of January 1, 1987......................... 1
iv
LOCKHEED SPACE OPERATIONS COMPANY
HOURLY EMPLOYEE
INVESTMENT PLAN PLUS
DESIGNATION OF PLAN
-------------------
The Lockheed Space Operations Company Hourly Employee Investment Plan
Plus is hereby amended and restated, effective March 1, 1995, such amendment
and restatement to be applicable only with respect to those particular groups of
Employees described in Section 15.02(a). With respect to all other groups of
employees included in the Lockheed Space Operations Company Hourly Employee
Investment Plan Plus, the provisions of the Plan shall continue unchanged and
unaffected by this amendment and restatement.
The Lockheed Space Operations Company Hourly Employee Investment Plan
Plus as amended and restated effective March 1, 1995 and operative as of the
earliest ESOP Starting Date specified in any Supplement hereto, consists of two
portions. The first portion is a profit sharing plan under Section 401(a) of
the Code, which includes a qualified cash or deferred arrangement as defined in
Section 401(k) of the Code. The second portion is an ESOP Feature, which is
both a stock bonus plan and an employee stock ownership plan intended to qualify
under Sections 401(a) and 4975(e)(7) of the Code, and as such is designed to
invest primarily in Stock. All contributions by the Corporation to the Plan may
be made without regard to the current
1
DESIGNATION OF PLAN
- -------------------
or accumulated profits of the Corporation or any of its subsidiaries or
affiliates.
2
SECTION 1
---------
DEFINITIONS
-----------
SECTION 1.01 - "Board of Directors" shall mean the Board of Directors
------------ ------------------
of Lockheed Space Operations Company.
SECTION 1.02 - "Bond Fund" shall mean the fund which the Trustee shall
------------ ---------
invest exclusively in obligations, including notes, issued or fully guaranteed
by the United States of America and in savings bank deposits to the extent such
deposits are guaranteed by an agency of the United States.
SECTION 1.03 - "Break in Service" shall mean a Termination of
------------ ----------------
Employment followed by the failure to complete 500 Hours of Service. A Break in
Service shall be computed with reference to the twelve consecutive month period
beginning on the date (and anniversaries thereof) an Employee is first entitled
to be credited with an Hour of Service after his date of hire (or rehire after a
Break in Service) by the Corporation. If an Employee is absent from work
because of such individual's pregnancy, the birth of a child, placement of an
adopted child or caring for an adopted or natural child following birth or
placement, the individual shall not be treated as having incurred a Break in
Service in the Plan Year in which the absence begins, or in the Plan Year in
which the absence ends, if the individual would not otherwise have suffered a
Break in Service during that Plan Year. No such credit shall be given unless a
Participant submits a written request by Filing With The Committee which
3
DEFINITIONS
- -----------
establishes valid reasons for the absence, as determined by the Committee.
Except to the extent that a maternity or paternity absence constitutes an
authorized leave of absence from the Corporation under applicable personnel
policies, an Employee who is absent from work for reasons of maternity or
paternity shall be deemed to have terminated employment for all purposes of this
Plan other than the special rules in this Section.
SECTION 1.04 - "Code" shall mean the Internal Revenue Code of 1986, as
------------ ----
now in effect or as hereafter amended.
SECTION 1.05 - "Committee" shall mean the Committee referred to in
------------ ---------
Section 11.01.
SECTION 1.06 - "Corporation" shall mean Lockheed Corporation and any
------------ -----------
subsidiary or affiliate thereof, if, and to the extent that, the Board of
Directors shall by resolution so provide.
SECTION 1.07 - "Elective Deferral" shall mean that amount specified
------------ -----------------
under Section 3.01(a) to be contributed by the Corporation to the Participant's
Account in lieu of paying such amount to the Participant in cash. The Elective
Deferral amount shall constitute contributions to the Plan by the Corporation.
SECTION 1.08 - "Eligible Employee" shall mean an Employee who is
------------ -----------------
eligible to participate in the Plan under Section 2.02 or Section 2.03.
SECTION 1.09 - "Employee" shall mean any person employed by the
------------ --------
Corporation and paid on a hourly basis for
4
DEFINITIONS
- -----------
employment in the United States, or elsewhere if a citizen of the United States,
provided that such person is a member of a group of employees to which the Plan
is extended (1) by the Board of Directors or, as to hourly paid employees of a
wholly-owned subsidiary of Lockheed Corporation, by the Board of Directors of
such subsidiary, by adding or amending a Supplement hereto (as provided in
Section 3.02) covering such employees or (2) by a collective bargaining
agreement between the Corporation and a collective bargaining agent which
provides that the hourly employees covered by such agreement shall be covered by
the Plan. For purposes of calculating Breaks in Service, Hours of Service,
Service Time, Termination of Employment and Years of Service, "Employee" shall
mean any person employed by the Corporation or by a member of the controlled
group of corporations, group of trades or businesses under common control or
affiliated service group (within the meaning of Internal Revenue Code Section
414(b), (c) or (m)) of which the Corporation is also a member at that time. A
person rendering services to a Corporation purportedly as an independent
contractor shall not be treated as an Employee before the Corporation has
acknowledged that it must withhold federal income taxes from his pay. To the
extent required by Internal Revenue Code Section 414(n) or 414(o), a 'leased'
worker or other non-employee shall be treated as an Employee but shall not be
eligible to participate in this Plan.
5
DEFINITIONS
- -----------
SECTION 1.10 - "ERISA" shall mean the Employee Retirement Income
------------ -----
Security Act of 1974, as now in effect or as hereafter amended.
SECTION 1.11 - "ESOP Contributions" shall mean the contributions
------------ ------------------
described in Section 4A.01.
SECTION 1.12 - "ESOP Ending Date" shall mean as to a particular group
------------ ----------------
of Employees described in a Supplement hereto, the beginning of the first
payroll period in the Month specified by such Supplement, provided however that
an ESOP Ending Date may occur only in Lockheed Corporation's January, April,
July, or October Month.
SECTION 1.13 - "ESOP Feature" shall mean that portion of the Plan
------------ -------------
consisting of an employee stock ownership plan as defined in Code Section
4975(e)(7).
SECTION 1.14 - "ESOP Fund" shall mean that portion of the Plan which
------------ ---------
consists of Stock, and any income thereon. The ESOP Fund shall include any
Stock in the Plan which was held in the Lockheed Martin Stock Fund prior to the
ESOP Starting Date.
SECTION 1.15 - "ESOP Match Stock" shall mean all Stock in the Plan
------------ ----------------
attributable to Corporation contributions made under Section 4A.01.
SECTION 1.16 - "ESOP Starting Date" shall mean as to a particular
------------ ------------------
group of Employees described in a Supplement hereto, the beginning of the first
payroll period in the Month specified by such Supplement, provided however that
an ESOP Starting Date
6
DEFINITIONS
- -----------
may occur only in Lockheed Corporation's January, April, July, or October Month.
SECTION 1.17 - "ESOP Trustee" shall mean the Trustee of the ESOP Fund.
------------ ------------
SECTION 1.18 - "Filing With The Committee" shall mean the delivery of
------------ -------------------------
the document in question in such form, in such manner, to such person, and
within such time limits as the Committee shall designate.
SECTION 1.19 - "Hour of Service" means all hours credited to an
------------ ---------------
Employee pursuant to the following subsections (a), (b) and (c):
(a) "Hour of Service" includes each hour for which an Employee is
paid, or entitled to payment, for the performance of duties for the
employer during the applicable computation period.
(b) "Hour of Service" also includes each hour for which an Employee is
paid, or entitled to payment, by the employer on account of a period of
time during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday, sick
leave, jury duty, military reserve training leave, or other paid time off,
provided that no more than 501 hours shall be credited under this
subsection (b) to an Employee on account of any single continuous period
during which the Employee performs no duties; and provided further that no
hours shall
7
DEFINITIONS
- -----------
be credited under this subsection (b) on account of payments made or due
under a plan maintained solely to comply with applicable worker's
compensation, unemployment compensation or disability insurance laws or on
account of payments made solely to reimburse an Employee for medical or
medically related expenses.
(c) "Hour of Service" shall also include each hour for which back pay,
irrespective of mitigation of damages, is awarded or agreed to by the
employer, provided that no hour for which an Employee was given credit
pursuant to subsection (a) or (b) of this Section shall also be credited to
such Employee under the terms of this subsection (c).
All Hours of Service shall be calculated in a manner consistent with
the terms of 29 Code of Federal Regulations Section 2530-200b-2.
SECTION 1.20 - "Lockheed Martin Stock Fund shall mean the fund which
------------ --------------------------
the Trustee shall invest exclusively in Stock, but excluding all Stock held
under the ESOP Feature after the ESOP Starting Date:
(a) Stock of the Lockheed Martin Stock Fund will be purchased and sold
by the Trustee on the open market, with commission expenses charged to the
Lockheed Martin Stock Fund. The Trustee will purchase and retain such
Stock regardless of market fluctuations, and, in the normal course, shall
sell such stock only as necessary to meet
8
DEFINITIONS
- -----------
administrative and distribution requirements. Cash balances held in the
Lockheed Martin Stock Fund shall be limited to such administrative needs.
(b) The Trustee will have the right to vote the Stock held in the
Lockheed Martin Stock Fund, and the right to determine whether such Stock
shall be tendered in the event of a public offer for any Stock.
Notwithstanding (a) above, during the period of any public offer for Stock,
the Trustee shall refrain from making additional purchases of Stock for the
Lockheed Martin Stock Fund.
SECTION 1.21 - "Month" shall mean the Corporation's fiscal accounting
------------ -----
month.
SECTION 1.22 - "Participant" shall mean an Employee who has become a
------------ -----------
Participant in the Plan in the manner described in Section 3.01.
SECTION 1.23 - "Plan" shall mean this Lockheed Space Operations
------------ ----
Company Hourly Employee Investment Plan Plus. Effective with the earliest ESOP
Starting Date specified in any Supplement hereto, "Plan", shall mean the
Lockheed Space Operations Company Investment Plan Plus, which combines a profit
sharing plan under Section 401(a) of the Code and a stock bonus and employee
stock ownership plan under Sections 401(a) and 4975(3)(7) of the Code and which
is intended to qualify under such Sections and to constitute a single plan under
Treasury Regulation Section 1.414(l)-1(b)(1).
9
DEFINITIONS
- -----------
SECTION 1.24 - "Plan Year" shall mean the Corporation's fiscal
------------ ---------
accounting year.
SECTION 1.25 - "Profit Sharing Trustee" shall mean the Trustee of all
------------ ----------------------
assets under the Plan other than the ESOP Fund.
SECTION 1.26 - "Quarter" shall mean any consecutive full three fiscal
------------ -------
accounting month period commencing on the first day of Lockheed Corporation's
January, April, July or October Month.
SECTION 1.27 - "Securities Fund" shall mean the fund in which the
------------ ---------------
Trustee shall invest, stressing both possible appreciation of capital and
current income and income growth. The Securities Fund shall be invested in
common and preferred stocks, convertible securities and bonds (except stock and
securities, and bonds issued or guaranteed by the Corporation, or an affiliate,
subsidiary, or parent corporation of the Corporation), and other types of
investments.
SECTION 1.28 - "Service Time", for purposes of the Plan, shall mean
------------ ------------
that period which begins with an Employee's date of hire or rehire by the
Corporation and continues from such date of hire or rehire until broken by
Termination of Employment, except that such Termination of Employment shall not
break his Service Time (and the period of such Terminated Employment shall be
included in the computation of Service Time) when such period of Terminated
Employment is:
(a) for 30 calendar days or less; or
10
DEFINITIONS
- -----------
(b) for more than 30 calendar days when Service Time is reinstated or
restored in accordance with policies of the Corporation applied on a
nondiscriminatory basis or applicable collective bargaining agreements, if
any.
SECTION 1.29 - "Shares" shall mean shares of Stock.
------------ -------
SECTION 1.30 - "STIF Fund" shall mean the short term investment fund
------------ ---------
in which the Trustee shall invest, stressing preservation of capital, in high
quality money market instruments (excluding obligations issued or guaranteed by
the Corporation, or any affiliate, subsidiary or parent corporation of the
Corporation) including fixed income obligations of the United States of America,
financial, industrial or public utility corporations, bankers' acceptances,
notes, fully insured savings bank deposits, commercial paper and other similar
short term fixed income investments, foreign or domestic, and the Trustee's
commingled short term investment fund. Maturities of such instruments shall not
exceed thirteen (13) months.
SECTION 1.31 - "Stock" shall mean common stock of Lockheed
------------ -----
Corporation, or, on and after March 15, 1995, Lockheed Martin Corporation.
SECTION 1.32 - "Termination of Employment" and "Terminated Employment"
------------ ------------------------- ---------------------
shall mean the removal of an Employee from active and inactive payroll status of
the Corporation as evidenced by the processing of a severance notice.
11
DEFINITIONS
- -----------
SECTION 1.33 - "Thrift Stock" shall mean all Stock allocated to
------------ ------------
Participants' Accounts attributable to
(a) Elective Deferral amounts made at any time;
(b) Corporation Matching Contributions made prior to the ESOP
Starting Date.
SECTION 1.34 - "Trustee" shall mean the Profit Sharing Trustee, the
------------ -------
ESOP Trustee and any other Trustee referred to in Section 7.01; "Trust Fund"
shall mean the Trust Fund or Trust Funds referred to in Section 7.01.
SECTION 1.35 - "Valuation Date" shall mean the last day of the
------------ --------------
calendar month.
SECTION 1.36 - "Weekly Rate of Compensation" shall mean an Eligible
------------ ---------------------------
Employee's hourly rate of pay multiplied by forty (40) hours as recorded on the
permanent payroll record for his normal work week without the inclusion of any
overtime compensation, shift, field duty, or other bonus or premium payments,
expense or living allowance, assignment or relocation payments, incentive
payments, royalties, severance pay, lump-sum payment of accrued and prorated
vacation at time of Termination of Employment, or payments of like nature. An
Eligible Employee's Weekly Rate of Compensation shall specifically include the
"Elective Deferral" amount referred to in Section 3.01.
SECTION 1.37 - "Year of Service" shall mean the completion of 1,000
------------ ---------------
Hours of Service over a twelve-month period. A Year of Service shall be
computed with reference to successive
12
DEFINITIONS
- -----------
twelve month periods commencing with the Employee's date of hire by the
Corporation or his rehire by the Corporation subsequent to a Break in Service.
In no event shall an Employee be credited with one Year of Service during any
twelve-month period prior to the expiration of twelve months after the
commencement of his employment by the Corporation or reemployment by the
Corporation subsequent to a Break in Service.
13
SECTION 2
---------
ELIGIBILITY FOR PARTICIPATION
-----------------------------
SECTION 2.01 - Voluntary Participation.
------------ -----------------------
Participation in the Plan on the part of an Employee is voluntary.
SECTION 2.02 - Employees of Predecessor Contractors.
------------ ------------------------------------
An employee hired by the Corporation prior to March 1, 1984 who, at
the time of such hire was on the active payroll of a Predecessor Contractor (as
hereinafter defined) and engaged at the Contract Site in the performance of work
taken over by the Corporation under NASA Contract No. NAS 10-10900, Shuttle
Processing Contract, is eligible to become a Participant at the beginning of the
payroll period coincident with or next following his date of hire, if at such
time, he had one or more years or Site seniority with such Predecessor
Contractor. If such employee had less than one year of Site seniority, he is
eligible to become a Participant at the beginning of the payroll period
coincident with or next following the date on which such period of Site
seniority, when added to his period of Employment with the Corporation equals
one year.
(a) For the purposes of this Section 2.02, the term Predecessor
Contractor shall mean any of the following: Boeing Services International;
Unified Services, Inc.; Pan American World Airways, Inc.; PRC Systems
Services Company; McGregor & Werner, Inc.; The Bionetics Corporation;
Computer
14
ELIGIBILITY FOR PARTICIPATION
- -----------------------------
Sciences Corporation; RCA Service Company; Rockwell International; Martin-
Marietta Corporation; United Space Boosters.
(b) For the purposes of this Section 2.02, the term Contract Site
shall mean Kennedy Space Center or Vandenerg Air Force Base.
SECTION 2.03 Year of Service for Eligibility.
------------ -------------------------------
(a) Eligibility Rule for New Employee. An Employee who has not been
---------------------------------
previously employed by the Corporation, and does not qualify under the
provisions of a Section 2.02, is eligible to become a Participant at the
beginning of the payroll period coincident with or text following the
completion of one Year of Service.
(b) Eligibility Rule for Rehired Eligible Employee or Participant. An
-------------------------------------------------------------
Employee who Terminates his Employment after completing one Year of Service
or becoming a Participant shall be eligible to participate in the Plan at
the beginning of the payroll period coincident with or next following his
date of rehire.
(c) Eligibility Rule for Non-Eligible Employees Rehired Before a Break
------------------------------------------------------------------
in Service. An Employee who Terminates his Employment before completing
----------
one Year of Service and who is reemployed by the Corporation before
incurring a Break in Service shall retain his prior Hours of Service and
shall be eligible to become a Participant upon
15
ELIGIBILITY FOR PARTICIPATION
- -----------------------------
completion of one Year of Service. Such an Employee's Year of Service and
Breaks in Service shall continue to be calculated with reference to
successive twelve-month periods commencing on the date the Employee is
first entitled to be credited with an Hour of Service following his
original date of employment.
(d) General Eligibility Rule for Non-Eligible Employees Rehired After
-----------------------------------------------------------------
a Break in Service. An Employee who Terminates his Employment before
------------------
completing one Year of Service and who incurs a Break in Service must
complete one Year of Service after reemployment with the Corporation as
though he had not previously been an Employee. Such an Employee's Year of
Service and Breaks in Service subsequent to his reemployment shall be
calculated with reference to successive twelve-month periods commencing on
the date the Employee is first entitled to be credited with an Hour of
Service following his reemployment.
(e) Special Eligibility Rules for Non-Eligible Employees Rehired After
------------------------------------------------------------------
a Break in Service. Notwithstanding the provisions of subsection (d)
------------------
above, in determining whether a rehired Employee who Terminates his
Employment and incurs a Break in Service before completing one Year of
Service is eligible to become a Participant after his reemployment, the
following special rules should be applied:
16
DESIGNATION OF PLAN
- -------------------
(1) An Employee who has been rehired by the Corporation
subsequent to a Break in Service and has his Service Time reinstated
or restored to a prior date of hire or rehire by the Corporation and
is credited with one year or more of unbroken Service Time as a result
of such reinstatement or restoration is eligible to become a
Participant at the beginning of the payroll period coincident with or
next following his date of rehire.
(2) An Employee who was not previously eligible to become a
Participant and has been rehired by the Corporation subsequent to a
Break in Service and has his Service Time reinstated or restored to a
prior date of hire or rehire by the Corporation is eligible to become
a Participant at the beginning of the payroll period coincident with
or next following the completion of one year of unbroken Service Time,
including credit for prior Service Time as a result of such
reinstatement or restoration, or upon whichever is the first to occur.
SECTION 2.04 Elective Deferral.
------------ -----------------
A Participant may not make an Elective Deferral under the Plan for any
week in which he is not an Employee.
17
SECTION 3
---------
EMPLOYEE PARTICIPATION
----------------------
SECTION 3.01 Becoming a Participant.
------------ ----------------------
An Eligible Employee may become a Participant in the Plan by Filing
With The Committee documents which shall:
(a) specify the weekly Elective Deferral amount to be deducted from
his wages and paid to the Trustee on his behalf;
(b) specify the portion of said weekly Elective Deferral amount which
is to be allocated to the Bond Fund, the Lockheed Martin Stock Fund the
ESOP Fund; the Securities Fund and/or the STIF Fund;
(c) designate a beneficiary or beneficiaries to receive any payment
which may be due under the Plan upon his death; and
(d) contain such other or additional information as in the opinion of
the Committee is desirable or necessary in the operation of the Plan.
SECTION 3.02 Elective Deferral Percentage.
------------ ----------------------------
The weekly Elective Deferral amount shall be made by payroll
deductions from a Participant's wages and the amounts so deducted shall be paid
to the Trustee during the Month in which the deduction is made. The weekly
Elective Deferral amount which may be specified under Section 3.01(a) and
deducted under this Section shall be the amount specified in the Supplement
hereto applicable to the particular group of Employees described in each
18
EMPLOYEE PARTICIPATION
- ----------------------
such Supplement subject to the provisions of Section 3.08, 3.09 and 3.10.
SECTION 3.03 Revocation of Specification.
------------ ---------------------------
A Participant may change the specification made under Section 3.01(a)
by Filing With The Committee. A Participant who changes such specification to
direct that no further Elective Deferral amounts shall be deducted from his
Weekly Rate of Compensation may not again make further Elective Deferrals prior
to the beginning of the payroll period next following the end of the Plan Year
in which he revoked his specification.
SECTION 3.04 Annual Specification Election.
------------ -----------------------------
An Eligible Employee shall annually make the specifications required
in Sections 3.01(a) and 3.01(b) only during the calendar month of October. An
Employee who may become an Eligible Employee under Section 2.03, 2.03(a), in
November or December of a Plan Year shall also make the specifications required
in Sections 3.01(a) and 3.01(b) during the calendar month of October. A former
Employee rehired in November or December of a Plan Year who is eligible to
participate under Section 2.03(b) or (c), or under 2.04 shall make the
specifications required in Section 3.01(a) and 3.01(b) upon becoming an Employee
subject to the provisions of Section 3.09. Such specifications required in
Sections 3.01(a) and 3.01(b) made under this Section shall become effective
at the beginning of the payroll period next following the end of the Plan Year
in which such specifications are Filed With The Committee. The
19
EMPLOYEE PARTICIPATION
- ----------------------
Committee may also, from time to time, (i) designate special periods during
which Eligible Employees may make the specifications required under Sections
3.01(a) and (b) and, (ii) establish special effective dates for such
specifications.
SECTION 3.05 Specification Changes
------------ ---------------------
(a) In making the specification required in Section 3.01(b) the
Eligible Employee shall specify that the weekly Elective Deferral amount
shall be invested by the Trustee either entirely in the Bond Fund, or
entirely in the Securities Fund, or entirely in the STIF Fund, or one-half
in one Fund and one-half in one of the other Funds, or one-half in one Fund
and one-fourth in each of the other funds, or three-fourths in one Fund and
one-fourth in one of the other Funds. Alternatively, the Eligible Employee
may specify that one-fourth of the weekly Elective Deferral amount shall be
invested in Stock in lieu of one of the other Funds. Such specification by
an Eligible Employee shall be deemed to be a continuing direction to the
Trustee unless and until changed under the following provisions of this
Section or Section 3.04. A Participant may change such specification under
this Section only once each Quarter and may do so by Filing With The
Committee a change in prior specification during the Quarter. A change in
prior specification pursuant to this Section 3.05 shall provide that,
commencing with the beginning of the payroll period next following the end
of the Month in which the change is
20
EMPLOYEE PARTICIPATION
- ----------------------
Filed With The Committee, the Participant's weekly Elective Deferral amount
shall be invested by the Trustee as specified by the Participant. Any
change made pursuant to this Section 3.05 shall not affect the investment
of any contributions by such Participant and by the Corporation prior to
the beginning of such first pay period following the end of the Month in
which the change is Filed With The Committee.
(b) A change in specification made pursuant to this Section 3.05 shall
supersede all other option specifications made pursuant to Section 3.01(b),
3.04 or this Section 3.05.
(c) An Employee making loan repayments pursuant to Section 9.04(b) may
make a change in prior specification under this Section 3.05 even though
Elective Deferrals are not being deducted from his Weekly Rate of
Compensation at the time such change in specification is Filed With The
Committee.
(d) Notwithstanding any other provision of this Section 3.05 to the
contrary, a Participant may not file an election under this Section which
would have an effective date in the same Quarter as the effective date of a
previous election under this Section, unless such new election is made
pursuant to a special election period established by the Committee pursuant
to Section 3.05(e).
(e) The Committee may, from time to time, (i) designate special
election periods during which Participants
21
EMPLOYEE PARTICIPATION
- ----------------------
may make the election under Section 3.05(a), and (ii) establish special
effective dates for any such elections.
SECTION 3.06 Annual Reallocation.
------------ -------------------
(a) Subject to Section 3.06(b), below, a Participant may elect, by
Filing With The Committee, to have the dollar value of all Units and Shares
(excluding Shares of ESOP Match Stock) credited to his Participant's
Account on the Valuation Date of the first month following the end of the
calendar month in which the election is filed, invested by the Trustee
either entirely in the Bond Fund, or entirely in the Securities Fund, or
entirely in the STIF Fund, or one-half in one Fund and one-half in one of
the other Funds, or one-half in one Fund and one-fourth in each of the
other Funds, or three-fourths in one Fund and one-fourth in one of the
other Funds. Alternatively, a Participant may elect to have one-fourth of
such dollar value invested in Stock in lieu of one of the other funds.
Once Filed With The Committee the election may not be withdrawn. For the
sole purpose of this Section 3.06 of the Plan, the effective date of the
election shall be the Valuation Date of the first month following the
calendar month in which the election is Filed With The Committee.
Notwithstanding the foregoing, a Participant shall not have the right to
direct the investment of any ESOP Match Stock allocated to his
Participant's Account, and any income thereon, except as otherwise provided
in Section 4A.03.
22
EMPLOYEE PARTICIPATION
- ----------------------
(b) Notwithstanding any other provision of this Section 3.06 to the
contrary, a Participant may not file an election under this Section which
would have an effective date in the same calendar year as the effective
date of a previous election under this Section, unless such new election is
made pursuant to the special election period established by the Committee
pursuant to Section 3.06(c).
(c) The Committee may, from time to time, (i) designate special
election periods during which Participants may make the election under
Section 3.06(a), and (ii) establish special effective dates for any such
election.
SECTION 3.07 Discrimination Test.
------------ -------------------
Elective Deferrals under this Plan are intended to qualify as non-
discriminatory under Section 401(a)(4) of the Internal Revenue Code of 1954. To
ensure this, the procedures outlined in this Section shall be followed and the
Committee may take such further action as it deems appropriate. An Eligible
Employee, whether or not such Employee elects to contribute, making the
specifications in the calendar month of October of each Plan Year under Section
3.04 shall be placed in one of two groups. One group shall consist of those
Eligible Employees whose Weekly Rate of Compensation exceeds the Weekly Rate of
Compensation of two-thirds of all Eligible Employees; the second group shall
consist of all other remaining Eligible Employees.
23
EMPLOYEE PARTICIPATION
- ----------------------
The "Average Deferral Percentage" for the top one-third and for the
lower two-thirds for a Plan Year shall be the average of the ratios calculated
separately for each Eligible Employee, including Eligible Employees who have not
filed a specification under Section 3.04, in such top one-third or lower two-
thirds group of:
(a) The Elective Deferral amount specified under Section 3.04 by the
Eligible Employee for the next Plan Year, to
(b) the Weekly Rate of Compensation of such Eligible Employee for the
first payroll period in such Plan Year.
The Average Deferral Percentage for the top one-third group of all
Eligible Employees shall not exceed the greater of (a) or (b) below:
(a) 1.25 times the Average Deferral Percentage of all Eligible
Employees whose Weekly Rate of Compensation is among the lower two-thirds
of all Eligible Employees, or
(b) The lesser of the following two amounts:
(1) 2.0 times the Average Deferral Percentage of all Eligible
Employees whose Weekly Rate of Compensation is among the lower two-
thirds of all Eligible Employees, or
(2) the Average Deferral Percentage of the lower two-thirds of
all Eligible Employees plus two (2) percentage points.
24
EMPLOYEE PARTICIPATION
- ----------------------
SECTION 3.08 Reduction of Elective Deferral.
------------ ------------------------------
The Committee shall determine prior to the effective date of the
Elective Deferral whether there is a reasonable expectation that the Average
Deferral Percentage results projected for the Plan Year will satisfy either of
the tests contained in Section 3.07. If, in the Committee's determination,
neither of the tests described in Section 3.07 will be satisfied, the following
procedure will be followed:
(a) A reduction in the Elective Deferral amount specified under
Sections 3.04 for Eligible Employees whose Weekly Rate of Compensation is
among the top one-third of all Eligible Employees will be made. Such
reduction will be applied to the Elective Deferral Percentage of the
Eligible Employees in such group who (a) has the highest Weekly Rate of
Compensation in such group and (b) also has the highest Elective Deferral
Percentage. The reduction shall be applied by 1/10 of 1 percentage point
reductions to the Elective Deferral Percentage of such Eligible Employee
included in the top one-third group and the tests described in Section 3.07
will be re-run. This procedure will be repeated until one of the tests
specified in Section 3.07 is satisfied.
(b) If a reduction in the amount of the Elective Deferral amount is
required as a result of the application of Section 3.08(a), the reduction
shall be paid to the
25
EMPLOYEE PARTICIPATION
- ----------------------
Eligible Employee as taxable earnings for the pay periods in the Plan Year
in which the reduction applies.
SECTION 3.09 Limitation on Deferral Percentage.
------------ ---------------------------------
If an Employee is rehired by the Corporation under Section 2.03(b) or
(c) or under Section 2.04 during the month of November or December of a Plan
Year, and is also in the top one-third group of Eligible Employees as determined
under Sections 3.07, the Election Deferral Percentage of such Employee, for
purposes of Section 3.04, will be limited to the Average Deferral Percentage as
calculated under Section 3.08 for the top one-third group. Such Eligible
Employees who are determined to be in the lower two-thirds group shall be
permitted to specify up to the maximum allowable Elective Deferral Percentage as
described in Section 3.02.
SECTION 3.10. Limitation Upon Rehire.
------------ ----------------------
Notwithstanding any other provision of the Plan to the contrary, if an
Employee becomes an Eligible Employee at any time during the Plan Year and is
also in the top one-third group of Eligible Employees as determined under
Section 3.07 for the Plan Year in which he becomes an Eligible Employee, the
Elective Deferral Percentage of such Eligible Employee will be limited to the
Average Deferral Percentage as calculated under Section 3.08 for the top one-
third group. The Elective Deferral Percentage shall remain in effect for the
balance of the Plan Year in which he begins making an Elective Deferral. Such
Eligible Employees who are determined to be in the lower two-thirds group shall
be
26
EMPLOYEE PARTICIPATION
- ----------------------
permitted to specify up to the maximum allowable Elective Deferral percentage as
described in Section 3.02. Such Eligible Employee must make the specifications
required under Sections 3.01(a) and 3.01(b) within thirty (30) days from the
date he becomes an Eligible Employee.
27
EMPLOYEE PARTICIPATION
- ----------------------
SECTION 3.11 Suspension on Wage Attachment.
------------ -----------------------------
Notwithstanding any other provision of the Plan to the contrary, a
Participant will be suspended from making an Elective Deferral under the Plan
for any week in which a garnishment, attachment, levy or other legal process is
imposed on a Participant's Weekly Rate of Compensation.
28
SECTION 4
---------
CORPORATION MATCHING CONTRIBUTIONS
----------------------------------
SECTION 4.01 Corporation Matching Contributions.
------------ ----------------------------------
(a) For Elective Deferral amounts made before the ESOP Starting Date,
the Corporation will contribute to the Trustee an amount equal to fifty
percent (50%) of the Elective Deferral amount specified by Participants
during the Month immediately preceding the date of such matching
contribution by the Corporation. The fifty percent (50%) "Corporation
Matching Contribution" made under this Section 4.01(a) shall be limited to
Elective Deferral amounts up to six percent (6%) of the Participant's
Weekly Rate of Compensation. Elective Deferral amounts over six percent
(6%) of the Participant's Weekly Rate of Compensation shall not be subject
to the fifty percent (50%) Corporation Matching Contributions.
(b) For Elective Deferral amounts made after the beginning of the ESOP
Starting Date, the Corporation will make a Corporation Matching
Contribution to the Trustee equal to sixty percent (60%) of the Elective
Deferral amounts specified by each Participant during the Month immediately
preceding the date of such contribution up to six percent (6%) of such
Participant's Weekly Rate of Compensation. Elective Deferral amounts over
six percent (6%) of the Participant's Weekly Rate of Compensation shall
29
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
not be subject to the sixty percent (60%) Corporation Matching
Contributions.
(c) Fifty percent (50%) of the Corporation Matching Contribution to be
made on behalf of any Employee who is a member of a particular group of
Employees described in a Supplement hereto on or after the applicable ESOP
Starting Date and prior to the applicable ESOP Ending Date will be made to
the ESOP Trustee in cash, Shares or any other property acceptable to the
ESOP Trustee as an ESOP Contribution, and fifty percent (50%) of any such
Corporation Matching Contribution shall be made to the Trustee in cash or
other property acceptable to the Trustee as a non-ESOP Contribution to be
allocated to the various Funds in accordance with Section 4.02.
Corporation Matching Contributions made after the ESOP Ending Date
specified in the applicable Supplement will be made to the Trustee in cash
or other property acceptable to the Trustee as a non-ESOP Contribution to
be allocated to the various Funds in accordance with Section 4.02.
SECTION 4.02 Investment of Corporation Matching Contribution.
------------ -----------------------------------------------
Corporation Matching Contributions for each Month shall be allocated
by the Trustee to the Bond Fund, the Lockheed Martin Stock Fund, the Securities
Fund, the STIF Fund and to the ESOP Fund, in the same proportion as Elective
Deferral amounts
30
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
specified by Participants during such Month are allocated to the Bond Fund, the
Lockheed Martin Stock Fund, the Securities Fund, the STIF Fund and to the ESOP
Fund. Notwithstanding the foregoing, ESOP Contributions shall be wholly
invested in Stock, except as provided otherwise due to an election under Section
4A.03 or to the extent loans are made to Participants under Section 9.04.
SECTION 4.03 Forfeiture of Company Matching Contribution.
------------ -------------------------------------------
No part of the Corporation Matching Contributions paid to the Trustee
shall be recoverable by the Corporation. However, with respect to a Participant
whose benefits under the Plan are forfeited under the provisions of Sections
8.02, 8.04 and 12.07, by Termination of Employment, all amounts so forfeited
shall be credited against, and reduce to the extent of such credit, the amount
of future Corporation Matching Contributions otherwise to be made under Section
4.01.
SECTION 4.04 Liability for Payment of Benefits.
------------ ---------------------------------
Except in accordance with applicable federal and state law, no
liability for the payment of benefits under the Plan shall be imposed upon the
Corporation, its officers, directors, employees, or shareholders or the
Committee or any of its members, nor shall they be subject to any suit or
litigation or to any legal liability for any cause, or reason, or thing
whatsoever in connection with the Plan or in connection with the
31
CORPORATION MATCHING CONTRIBUTIONS
- ----------------------------------
operation of the Trust Funds. This shall not affect any obligation of the
Corporation to pay any specific contribution to the Trustees which it has
accrued and expressly obligated itself to pay, nor shall it affect the right, if
any, of a Participant or beneficiary to seek redress against the proper person
or persons, corporation, firm or trustee who violate his rights under the Plan.
32
SECTION 4A
----------
ESOP PROVISIONS
---------------
SECTION 4A.01 ESOP Contributions.
------------- ------------------
ESOP Contributions shall be wholly invested in Stock (except as
provided otherwise due to an election under Section 4A.03) or to the extent
loans are made to Participants under Section 9.04) and shall include the amounts
described in Section 4A.01(a) below. All or a part of any such contributions
may be made from Lockheed Corporation treasury shares or authorized but unissued
shares.
(a) Corporation Matching Contributions made on or after the ESOP
Starting Date and prior to the ESOP Ending Date are ESOP Contributions.
SECTION 4A.02 Put Option.
------------- ----------
If at the time of distribution, Stock distributed from the ESOP Fund
is not readily tradeable on an established market within the meaning of Section
409(h) of the Code and the Regulations, such Stock shall be subject to a put
option in the hands of a Qualified Holder by which such Qualified Holder may
sell all or any part of the Stock distributed to him by the ESOP Fund to the
ESOP Trustee. Should the ESOP Trustee decline to purchase all or any part of
the Stock put to it by the Qualified Holder, the Corporation shall purchase the
Stock that the ESOP Trustee declines to purchase. The put option shall be
subject to the following conditions:
33
ESOP PROVISIONS
- ---------------
(a) The term "Qualified Holder" shall mean the Participant or
beneficiary receiving the distribution of such Stock, any other party to
whom the Stock is transferred by gift or by reason of death, and also any
trustee of an individual retirement account (as defined under Code Section
408) to which all or any portion of the distributed Stock is transferred
pursuant to a tax-free "rollover" transaction satisfying the requirements
of Sections 402 and 408 of the Code.
(b) During the 60-day period following any distribution of such
Stock, a Qualified Holder shall have the right to require the Corporation
to purchase all or a portion of the distributed Stock held by the Qualified
Holder. The purchase price to be paid for any such Stock shall be its fair
market value determined (1) as of the Valuation Date coinciding with or
next preceding the exercise of the put option under this Section 4A.02 or,
(2) in the case of a transaction between the Plan and a "disqualified
person" within the meaning of Section 4975(e)(2) of the Code or a "party in
interest" within the meaning of Section 3(14) of ERISA, as of the date of
the transaction.
(c) If a Qualified Holder shall fail to exercise his put option right
under Section 4A.02(b), the option right shall temporarily lapse upon the
expiration of the 60-day period. As soon as practicable following the
last
34
ESOP PROVISIONS
- ---------------
day of the Plan Year in which the 60-day option period expires, the
Corporation shall notify the non-electing Qualified Holder (if he is then a
shareholder of record) of the valuation of the Stock as of that date.
During the 60-day period following receipt of such valuation notice, the
Qualified Holder shall again have the right to require the Corporation to
purchase all or any portion of the distributed Stock. The purchase price
to be paid therefore shall be fair market value determined (1) as of the
Valuation Date coinciding with or next preceding the exercise of the put
option under this Section 4A.02(c) or, (2) in the case of a transaction
between the Plan and a "disqualified person" within the meaning of Section
4975(e)(2) of the Code or a "party in interest" within the meaning of
Section 3(14) of ERISA, as of the date of the transaction.
(d) The foregoing put options under Section 4A.02(b) and (c) hereof
shall be effective solely against the Corporation and shall not obligate
the Plan or Trust in any manner.
(e) In making the determination of fair market value, the Corporation
shall consider, to the extent permitted by law (and in conformity, where
applicable, with the provisions of Section 6), the same methodology used to
value the Stock at the time of its initial purchase by the ESOP Trustee and
shall, to the extent permitted by law, include
35
ESOP PROVISIONS
- ---------------
as a valuation factor at least the same proportionate share of enterprise
value as was taken into account at the time of such purchase of Stock.
(f) The period during which the put option is exercisable does not
include any time when a Qualified Holder is unable to exercise it because
the Corporation is prohibited from honoring it by applicable Federal or
State laws.
(g) Except as otherwise required or permitted by the Code, the put
options under this Section 4A.02 shall satisfy the requirements of Section
54.4975-7(b) of the Treasury Regulations to the extent, if any, that such
requirements apply to such put options.
(h) A Qualified Holder must exercise his put option in writing by
Filing with the Committee. If a Qualified Holder exercises his put option
under this Section 4A.02, payment for the Stock repurchased shall be made,
in the case of a distribution of a Participant's Account within one taxable
year, in substantially equal annual payments over a period beginning not
later than 30 days after the exercise of the put option and not exceeding
five (5) years (provided that adequate security and reasonable interest are
provided with respect to unpaid amounts) or, in the case of other
distributions, not later than 30 days after such exercise.
36
ESOP PROVISIONS
- ---------------
SECTION 4A.03 Diversification Near Retirement.
------------- -------------------------------
(a) Notwithstanding any other provision of the Plan, any Participant
who has attained age 55 and completed at least ten (10) Years of Service
may elect to have up to 25% of the value in his Participant's Account
attributable to ESOP Contributions invested in the funds referred to in
Section 4A.03(b). Any such Participant may make this election once during
each Plan Year of his Qualified Election Period. After the close of the
sixth Plan Year in the Participant's Qualified Election Period, the
Participant may so direct the investment of up to 50% of the value of
amounts in his Participant's Account attributable to ESOP Contributions.
For this purpose, the term "Qualified Election Period" shall mean the
period beginning with the later of the Plan Year in which the Participant
attains age 55 or completes ten (10) Years of Service and ending upon the
Participant's Termination of Employment. The percentage of amounts in a
Participant's Account attributable to ESOP Contributions for which he may
make investment directions in a Plan Year shall be the "Allocable Portion"
of such Participant's Account at the time of the election under this
Section 4A.03.
(b) A Participant may elect by Filing With The Committee, to have the
dollar value of the Allocable Portion of his Participant's Account on the
Valuation Date of the first month following the end of the calendar month
in which
37
ESOP PROVISIONS
- ---------------
the election is filed, invested by the Trustee either entirely in the Bond
Fund, or entirely in the Securities Fund, or entirely in the STIF Fund or
one-half in one Fund and one-half in one of the other Funds, or one-half in
one Fund and one-fourth in each of the other Funds, or three-fourths in one
Fund and one-fourth in one of the other Funds. For the sole purpose of
this Section 4A.03(b), the effective date of the election shall be the
Valuation Date of the first month following the calendar month in which the
election is Filed With The Committee. The election may not be withdrawn
once Filed With The Committee for ninety (90) days. Such election shall be
in accordance with any notice, rulings, or regulations or other guidance
issued by the Internal Revenue Service with respect to Code Section
401(a)(28)(B).
SECTION 4A.04 Cash Dividends.
------------- --------------
Effective as of the ESOP Starting Date, all cash dividends on Stock
allocated to Participant's Accounts shall be paid out to the Participant in a
manner consistent with Section 404(k) of the Code.
SECTION 4A.05 Valuation of Stock.
------------- ------------------
Stock held in Participants' Accounts shall be valued as of each
Valuation Date, or at the discretion of the Committee, more frequently. All
valuations of Stock which is not readily tradeable on an established securities
market shall be made by an independent appraiser meeting requirements similar to
those con-
38
ESOP PROVISIONS
- ---------------
tained in Treasury Regulations under Section 170(a)(1) of the Code.
SECTION 4A.06 Tender or Exchange Decisions.
------------- ----------------------------
All tender or exchange decisions with respect to Stock held by the
ESOP Trustee shall be made only by Participants acting in their capacity as
Named Fiduciaries in accordance with the following provisions of this Section
4A.06:
(a) In the event an offer shall be received by the ESOP Trustee
(including a tender offer for Shares subject to Section 14(d)(1) of the
Securities Exchange Act of 1934 or subject to Rule 13e-4 promulgated under
that Act, as those provisions may from time to time be amended) to purchase
or exchange any Shares held by the ESOP Trustee, the Trustee will advise
each Participant who has Shares credited to his Participant's Account in
writing of the terms of the offer as soon as practicable after its
commencement and will furnish each Participant with a form by which he may
instruct the Trustee confidentially whether or not to tender or exchange
Shares allocated to his Participant's Account (including fractional shares
to 1/1000th of a Share). The materials furnished to the Participants shall
include (i) a notice from the ESOP Trustee that the ESOP Trustee will not
tender or exchange any Shares for which timely instructions are not
received by the ESOP Trustee and (ii) such related documents as are
prepared by any person and provided to the shareholders of the Corporation
pursuant to the Securities
39
ESOP PROVISIONS
- ---------------
Exchange Act of 1934. The Committee and the ESOP Trustee may also provide
Participants with such other material concerning the tender or exchange
offer as the ESOP Trustee or the Committee in its discretion determine to
be appropriate, provided, however, that prior to any distribution of
materials by the Committee, the ESOP Trustee shall be furnished with
complete copies of all such materials. The Corporation and the Committee
will cooperate with the ESOP Trustee to ensure that Participants receive
the requisite information in a timely manner.
(b) The ESOP Trustee shall tender or not tender Shares or exchange
Shares allocated to any Participant's Account (including fractional Shares
to 1/1000th of a Share) only as and to the extent instructed by the
Participant as a Named Fiduciary. With respect to Shares allocated to the
Participant's Account of a deceased Participant, such Participant's
beneficiary, as a Named Fiduciary, shall be entitled to direct the Trustee
whether or not to tender or exchange such Shares as if such beneficiary
were the Participant. If tender or exchange instructions for Shares
allocated to any Participant's Account are not timely received by the ESOP
Trustee, the ESOP Trustee will treat non-receipt as a direction not to
tender or exchange such Shares. The instructions received by the ESOP
Trustee from Participants or beneficiaries shall be held by the ESOP
Trustee in strict confidence and shall not be divulged or
40
ESOP PROVISIONS
- ---------------
released to any person, including directors, officers or employees of the
Corporation or of any other company, except as otherwise required by law.
(c) In the event, under the terms of a tender offer or otherwise, any
Shares tendered for sale, exchange or transfer pursuant to such offer may
be withdrawn from such offer, the ESOP Trustee shall follow such
instructions respecting the withdrawal of such securities from such offer
in the same manner and the same proportion as shall be timely received by
the ESOP Trustee from the Participants, as Named Fiduciaries, entitled
under this Section 4A.06 to give instructions as to the sale, exchange or
transfer of securities pursuant to such offer.
(d) In the event that an offer for fewer than all of the Shares held
by the ESOP Trustee shall be received by the ESOP Trustee, each Participant
who has been allocated any Shares subject to such offer shall be entitled
to direct the ESOP Trustee as to the acceptance or rejection of such offer
(as provided by subsections (a) through (c) of this Section 4A.06) with
respect to the largest portion of such Stock as may be possible given the
total number or amount of Shares the ESOP Trustee may sell, exchange or
transfer pursuant to the offer based upon the instructions received by the
ESOP Trustee from all other Participants who shall timely instruct the ESOP
Trustee pursuant to this Section 4A.06 to sell, exchange or transfer such
Shares pursuant to such
41
ESOP PROVISIONS
- ---------------
offer, each on a pro rata basis in accordance with the number or amount of
such Shares allocated to the Participants' Accounts.
(e) In the event an offer shall be received by the ESOP Trustee and
instructions shall be solicited from Participants pursuant to subsections
(a) through (c) of this Section 4A.06 regarding such offer, and prior to
termination of such offer, another offer is received by the ESOP Trustee
for the securities subject to the first offer, the ESOP Trustee shall use
its best efforts under the circumstances to solicit instructions from the
Participants to the ESOP Trustee (i) with respect to securities tendered
for sale, exchange or transfer pursuant to the first offer, whether to
withdraw such tender, if possible, and, if withdrawn, whether to tender any
securities so withdrawn for sale, exchange or transfer pursuant to the
second offer and (ii) with respect to securities not tendered for sale,
exchange or transfer pursuant to the first offer, whether to tender or not
to tender such securities for sale, exchange or transfer pursuant to the
second offer. The ESOP Trustee shall follow all such instructions received
in a timely manner from Participants in the same manner and in the same
proportion as provided in subsections (a) through (c) of this Section
4A.06. With respect to any further offer for any Stock received by the
ESOP Trustee and subject to any earlier offer (including successive offers
from one or more
42
ESOP PROVISIONS
- ---------------
existing offerors), the ESOP Trustee shall act in the same manner as
described above.
(f) A Participant's instructions to the ESOP Trustee to tender or
exchange Shares will not be deemed a withdrawal or suspension from the Plan
or a forfeiture of any portion of the Participant's interest in the Plan.
Funds received in exchange for tendered Shares will be credited to the
Participant's Account of the Participant whose Shares were tendered and
will be used by the ESOP Trustee to purchase Stock, as soon as practicable.
In the interim, the ESOP Trustee will invest such funds in short-term
investments permitted under the ESOP Trust.
(g) The ESOP Trustee shall take all steps necessary, including
appointment of a corporate trustee and/or an outside independent
administrator to the extent such action, after consultation with the
Corporation and the Profit Sharing Trustee, is found necessary to maintain
confidentiality of Participant responses and/or to adequately discharge
their obligations as Named Fiduciary.
SECTION 4A.07 Voting Rights.
------------- -------------
All voting rights on Shares held by the ESOP Trustee shall be
exercised by the ESOP Trustee only as directed by the Participants acting in
their capacity as Named Fiduciaries in accordance with the following provisions
of this Section 4A.07:
(a) As soon as practicable before each annual or special shareholders'
meeting of the Corporation, the ESOP
43
ESOP PROVISIONS
- ---------------
Trustee shall furnish to each Participant a copy of the proxy solicitation
material sent generally to shareholders, together with a form requesting
confidential instructions on how the Shares allocated to such Participant's
Account (including fractional Shares to 1/1000th of a Share) are to be
voted. The Corporation and the Committee shall cooperate with the Trustee
to ensure that Participants receive the requisite information in a timely
manner. The materials furnished to the Participants shall include a notice
from the ESOP Trustee that the ESOP Trustee will not vote any Shares for
which timely instructions are not received by the ESOP Trustee. Upon
timely receipt of instructions, the ESOP Trustee (after combining votes of
fractional Shares to give effect to the greatest extent to Participants'
instructions) shall vote the Shares as instructed. If voting instructions
for Shares allocated to any Participant's Account are not timely received
by the ESOP Trustee for a particular shareholder's meeting, such Shares
shall not be voted. The instructions received by the ESOP Trustee from
Participants or beneficiaries shall be held by the ESOP Trustee in strict
confidence and shall not be divulged or released to any person including
directors, officers or employees of the Corporation, or of any other
company, except as otherwise required by law.
(b) With respect to all corporate matters submitted to shareholders,
all Shares allocated to Participants' Accounts
44
ESOP PROVISIONS
- ---------------
shall be voted only in accordance with the directions of such Participants
as Named Fiduciaries as given to the ESOP Trustee. Each Participant shall
be entitled to direct the voting of Shares (including fractional shares to
1/1000th of a share) allocated to his Participant's Account. With respect
to Shares allocated to the Participant's Account of a deceased Participant,
such Participant's beneficiary, as Named Fiduciary, shall be entitled to
direct the voting with respect to such allocated Shares as if such
beneficiary were the Participant.
45
ESOP PROVISIONS
- ---------------
SECTION 4A.08 No Diversion of Plan Benefits.
------------- -----------------------------
In no event shall any part of the Plan, including the ESOP Feature, be
used for, or diverted to, any purpose other than for the exclusive benefit of
Participants and their beneficiaries.
SECTION 4A.09 Applicability of Provisions.
------------- ---------------------------
The provisions of this Section 4A (other than Section 4A.01(a)
relating to the classification of Corporation Matching Contributions as ESOP
Contributions) shall remain in effect as to any Employee who has at any time
participated in the ESOP Feature of the Plan regardless of any ESOP Ending Date
specified in any Supplement hereto.
46
SECTION 5
---------
PARTICIPANT'S ACCOUNT
---------------------
SECTION 5.01 Separate Participant's Account.
------------ ------------------------------
There shall be maintained for each Participant a separate
Participant's Account which shall show in dollars the Elective Deferral amounts
specified by the Participant and the corresponding Corporation Matching
Contributions made as provided in Sections 4.01 and 4A.01 (consisting of the
Corporation's Matching Contributions, ESOP Contributions and forfeitures) and,
in terms of Units or Shares, shall show the portion of such Participant's
Account in the Bond Fund, the Securities Fund, the STIF Fund, the Lockheed
Martin Stock Fund and/or the ESOP Fund, as the case may be. In addition, the
Participant's Account shall show that portion of the Participant's Account in
the ESOP Fund that consists of Thrift Stock and the portion that consists of
ESOP Match Stock. As of the ESOP Starting Date, Stock shall be accounted for in
Shares rather than Units and such accounting in Shares shall continue regardless
of any ESOP Ending Date specified in any Supplement hereto.
SECTION 5.02 "Annual Addition" Limits.
------------ ------------------------
(a) The annual addition to any Participant's Account for any Plan Year
shall not exceed the maximum permissible amount. Subsection (c) defines
the terms used in this Section.
(b) If a Participant's annual addition would exceed the maximum
permissible amount, any excess contribution
47
PARTICIPANT'S ACCOUNT
- ---------------------
inadvertently made shall be refunded to the Employer and, to the extent the
excess contribution is attributable to Elective Deferrals, returned to the
Participant in question.
(c) For purposes of this Section, terms used herein shall have the
following meanings:
(1) "Annual addition" shall mean the sum of Corporation
---------------
contributions (including Elective Deferrals and ESOP Contributions)
and any forfeitures allocated to a Participant's account for a Plan
Year under this Plan and all other qualified defined contribution
plans of the Corporation.
"Annual addition" shall also include amounts derived from
Corporation contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable to post-
retirement medical benefits allocated to the separate account of a key
employee, as defined in Code Section 419A(d)(3), under a welfare
benefit fund, as defined in Code Section 419(e), which is maintained
by the Corporation, and amounts substantially similar to those just
described which are contributed to a defined benefit plan for a plan
year of the defined benefit plan beginning after March 31, 1984.
(2) "Maximum permissible amount" shall mean, with respect to a
--------------------------
Participant, the lesser of
48
PARTICIPANT'S ACCOUNT
- ---------------------
a. twenty-five percent of the Participant's earnings for the
Plan Year, or
b. $30,000 (or such higher amount then in effect pursuant
to Section 415(d) of the Code for the calendar year in or with
which the Plan Year ends), except as otherwise provided under
Code Section 415(c)(6).
(3) "Earnings" shall mean the total cash and
--------
non-cash remuneration paid to a Participant during the Plan Year but
excluding Elective Deferrals under this Plan, and:
a. employer contributions for simplified employee pension,
b. deferred compensation (other than an amount included in
the Participant's gross income for the Plan Year which is
attributable to an unfunded, non-qualified plan),
c. amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by an
Employee becomes freely transferable or is no longer subject to a
substantial risk or forfeiture,
d. amounts realized from the sale, exchange or other
disposition of stock under a tax-benefitted stock option, and
49
PARTICIPANT'S ACCOUNT
- ---------------------
e. other amounts which receive special tax benefits.
(d) If a Participant in this Plan has at any time participated in one
or more qualified defined benefit plans maintained by the Corporation, the
sum of the Participant's "defined contribution plan fraction" and "defined
benefit plan fraction" shall not exceed 1.0.
(1) "Defined contribution Plan fraction" shall have the meaning
----------------------------------
set forth in Internal Revenue Code Section 415(e)(3). If, based on
reasonable projections, it is expected that a Participant's defined
contribution plan fraction in the future will be materially less than
his or her current defined contribution plan fraction, the Committee
may compute the defined contribution plan fraction on a projected
basis. Section 415(e)(3) defines the term "defined contribution plan
fraction" as a fraction
(i) the numerator of which is the sum of the annual
additions, as defined in subsection (c), to the
Participant's accounts in this Plan and all other qualified
defined contribution and defined benefit plans (whether or
not terminated) of the Corporation for the current and all
prior Plan Years, and
50
PARTICIPANT'S ACCOUNT
- ---------------------
(ii) the denominator of which is the sum of the annual
additions which would have been made for the Participant for
the current and all prior Plan Years (whether or not this
Plan or any other defined contribution or defined benefit
plan was then in existence) if, in each such Year, the
Participant's annual additions equaled the lesser of
a 125 percent of the dollar limitation in
-
effect under Internal Revenue Code Section
415(c)(1)(A), or
b thirty-five percent of the Participant's
-
earnings for the Year in question.
A Participant's defined contribution plan fraction as of the
end of the last Plan Year beginning prior to 1976 shall be
calculated in accordance with Treas. Reg. Sec. 1.415-7(d).
If the Participant was a participant in one or more
qualified defined contribution plans maintained by the
Corporation which were in existence on July 1, 1982, the
numerator of the Participant's defined contribution plan
fraction will be adjusted if the sum of this fraction and
the defined
51
PARTICIPANT'S ACCOUNT
- ---------------------
benefit plan fraction would otherwise exceed 1.0. Under the
adjustment, an amount equal to the product of (i) the excess
of the sum of both fractions over 1.0, times (ii) the
denominator of the defined contribution plan fraction will
be permanently subtracted from the numerator of the defined
contribution plan fraction. The adjustment shall be
calculated using the fractions as they would be computed as
of the end of the last Plan Year beginning before June 30,
1983. This adjustment shall also be made if, at the end of
the last Plan Year beginning before January 1, 1984, the sum
of both fractions exceeds 1.0 because of accruals or
additions that were made before the limitations of this
subsection became effective for any plans of the Corporation
in existence on July 1, 1982. The Committee may elect to
compute the denominator of a Participant's defined
contribution plan fraction for Plan Years ending on or
before January 1, 1983 by multiplying the Participant's
denominator (as determined as of the end of the Plan Year
ending in 1982) by the "transition fraction."
52
PARTICIPANT'S ACCOUNT
- ---------------------
The transition fraction shall have a numerator equal to the
lesser of $51,875 (or $41,500 if Internal Revenue Code
Section 416(h)(4) (relating to top heavy plans) is
applicable for the first Plan Year beginning after
December 31, 1983) or thirty-five percent of the
Participant's earnings for the Plan Year ending during 1981,
and shall have a denominator equal to the lesser of $41,500
or twenty-five percent of the Participant's earnings for the
Plan Year ending during 1981. This election shall be made in
accordance with procedures established under or in
accordance with Internal Revenue Code Section 415(e)(6).
(2) "Defined benefit plan fraction" shall have the meaning set
-----------------------------
forth in Internal Revenue Code Section 415(e)(2). This Code Section
defines the term "defined benefit plan fraction" as a fraction
(i) the numerator of which is the sum of the
Participant's projected annual benefit under all defined
benefit plans (whether or not terminated) of the
Corporation, and
(ii) the denominator of which is the lesser of
53
PARTICIPANT'S ACCOUNT
- ---------------------
a 125 percent of the dollar limit in effect under
-
subsection (c)(2)b. for the Plan Year, or
b 140 percent of the Participant's earnings.
-
The projected annual benefit shall be the annual retirement benefit
attributable to Corporation contributions to which the Participant
would be entitled under the terms of the defined benefit plans
(adjusted to the actuarial equivalent of a straight life annuity if
the projected annual benefit is expressed in a form other than a
straight life annuity or qualified joint and survivor annuity),
assuming that the Participant will continue employment until normal
retirement age (or current age, if later), and that the Participant's
compensation for the current Plan Year and all other relevant factors
used to determine benefits under the plans will remain constant for
all future Plan Years. If the Participant was a participant in one or
more qualified defined benefit plans maintained by the Corporation
which were in existence on July 1, 1982, the denominator of the
Participant's defined benefit plan fraction will not be less than 125
percent of the sum of the annual benefits which the Participant had
accrued under such plans as
54
PARTICIPANT'S ACCOUNT
- ---------------------
of the end of the last Plan Year beginning before June 30, 1983. The
preceding sentence shall apply only if the defined benefit plans
individually and in the aggregate satisfied the requirements of
Internal Revenue Code Section 415 as in effect at the end of the 1982
Plan Year.
(3) For any Plan Year in which the Plan is "top heavy," as
defined in Section 15.01(b) and the exception in Internal Revenue Code
Section 416(h)(2) does not apply, "100 percent" shall be substituted
for "125 percent" in determining the denominators of a key employee's
defined contribution and defined benefit plan fractions.
SECTION 5.03 Contribution Credited Monthly.
------------ -----------------------------
As of the Valuation Date of each Month each Participant's Account
shall be credited for such Month with the number of Units equivalent to the Unit
value and/or Shares at a Share value (calculated as provided in Sections 6.01
and 6.02) of:
(1) the total dollar amount of weekly Elective Deferrals by such
Participant during such Month,
(2) the Corporation Matching Contributions with respect to such
Month as provided in Section 4.01, and
(3) the ESOP Contributions with respect to any such Month as
provided in Section 4A.01.
55
PARTICIPANT'S ACCOUNT
- ---------------------
Such units shall be allocated to the Bond Fund, the Securities Fund, the
Lockheed Martin Stock Fund and/or the STIF Fund and such Shares shall be
allocated to the ESOP Fund pursuant to the provisions of Sections 3.01(b), 3.05
and 4.02.
56
SECTION 6
---------
VALUATION OF PARTICIPANT'S ACCOUNT
----------------------------------
SECTION 6.01 Unit Valuation.
------------ --------------
The value of Units in each Participant's Account, as allocated to each
Fund under the Plan shall be determined separately for each Fund as of each
Valuation Date. At the inception of the Bond Fund, STIF Fund, Securities Fund
and Lockheed Martin Stock Fund one Unit for each dollar contributed by the
Participant and for each dollar contributed by the Corporation with respect to
such Participant prior to the first Valuation Date of such Fund was credited to
each Participant's Account, allocated to each Fund as specified pursuant to
Sections 3.01(b), 3.05, 3.06 and 4.02 as such Sections were in effect on such
Valuation Dates. On each succeeding Valuation Date (a) the value of the Bond
Fund, the Lockheed Martin Stock Fund, the Securities Fund and the STIF Fund,
respectively, shall be the fair market value, as determined by the Trustee, as
of such date, of the investments and cash held in such Fund on such date, less
liabilities and the expenses as provided in Section 7.05 as accrued or paid as
of such date; and (b) the value of a Unit in each Fund shall be determined by
dividing the value of each such Fund, as determined above, by the total number
of Units in all Participants' Accounts allocated to each such Fund as of such
date. Notwithstanding anything to the contrary contained herein, assets in the
STIF Fund may be valued at cost or unpaid principal amount if there is no
readily ascertainable fair market value.
57
VALUATION OF PARTICIPANT'S ACCOUNT
- ----------------------------------
SECTION 6.02 Share Valuation.
------------ ---------------
Effective as of the ESOP Starting Date, Units maintained in the
Lockheed Martin Stock Fund shall be valued and converted to Shares in the ESOP
Fund and shall remain as part of the ESOP Fund regardless of any ESOP Ending
Date specified in any Supplement hereto. On each succeeding Valuation Date
thereafter, the value of the Participant's Account in the ESOP Fund shall be
equal to the number of Shares, including any fractional Share; credited to his
Participant's Account as of such date multiplied by the published composite
closing price per Share on such Valuation Date.
58
SECTION 7
---------
TRUST FUND AND TRUSTEE
----------------------
SECTION 7.01 Description of Trust Fund.
------------ -------------------------
All contributions made to the Plan by a Participant or on his behalf
shall be made to a Trust Fund or Trust Funds established by a trust agreement or
trust agreements with a Trustee or Trustees to carry out the purposes of the
Plan. Such Trust Fund or Trust Funds shall be composed of the Bond Fund, the
ESOP Fund, the Securities Fund, the STIF Fund and such other Fund as may be
established from time to time. The Committee shall select such Trustee(s), and
may change the Trustee(s) from time to time. Any Trustee(s) designated
hereunder shall be a bank or trust company qualified under the laws of the
United States or of any State to operate thereunder as a trustee. The
Corporation will determine the form and terms of any such trust agreement. The
Corporation may amend any such trust agreement from time to time to accomplish
the purposes of the Plan. The trust agreement or trust agreements shall
provide, among other things, that at no time shall any part of the Trust Fund be
used for, or diverted to, purposes other than for the exclusive benefit of the
Participants or their beneficiaries.
SECTION 7.02 Trustee's Authority.
------------ -------------------
Each Trustee shall, unless otherwise directed by an Investment Manager
(if such has been appointed), have exclusive authority and discretion to manage
and invest the assets of the Trust Fund, as provided in its trust agreement.
Each Trustee
59
TRUST FUND AND TRUSTEE
- ----------------------
shall further be responsible for the holding and disbursement of all
contributions and income received by it under the Plan, as provided in its trust
agreement, and shall have such other responsibilities as are provided in such
agreement.
SECTION 7.03 Non-Guarantee of Investment Value.
------------ ---------------------------------
Nothing in the Plan shall be construed as a guarantee by the
Corporation or the Trustees of the value of any security or instrument in which
funds held by the Trustees are invested or as an indemnity against any loss
resulting from such investment.
SECTION 7.04 Trustee Allocation of Contributions.
------------ -----------------------------------
The Trustee shall allocate contributions made to the Plan by a
Participant or on his behalf in accordance with the specification as determined
under Sections 3.01(b), 3.04, 3.05, 3.06, 3.07, 3.08, 3.09, 3.10, 4.02 and
4A.03.
SECTION 7.05 Payment of Plan Expenses.
------------ ------------------------
Brokerage fees, commissions, taxes, and other charges and expenses
incident to the purchase, sale and servicing of investments and other taxes, if
any, payable by the Trustees on the assets, or on income thereof, at any time
held in each Fund may be paid by such Fund to the extent permitted by ERISA and
the Code. All other expenses and charges incurred in the administration of the
Plan, including the Trustees' fees and/or investment management fees, shall be
paid by the Corporation.
60
SECTION 8
---------
BENEFITS
--------
SECTION 8.01 Fully Vested Termination.
------------ ------------------------
A Participant shall receive a cash payment in an amount equal to the
dollar value of the balance of the Units and Shares in his Participant's Account
as determined as provided in Sections 6.01 and 6.02 on the Valuation Date
coincident with or immediately following (prior to July 1, 1990, "preceding"
shall be substituted for "following") the date of Termination of Employment for
any of the following reasons:
(a) To receive early, normal, or disability retirement benefits for
which he is qualified under a Lockheed Retirement Plan; or
(b) Layoff for a period of four weeks; or
(c) Death; or
(d) Entry into the Armed Forces of the United States; or
(e) Because of permanent disability for a continuous period of six (6)
or more months. A Participant shall be deemed to be permanently disabled
when, on the basis of medical evidence satisfactory to the Committee, the
Committee finds that he is wholly and continuously disabled and prevented
from performing his regular occupation for wage or profit as the result of
bodily injury or disease, either occupational in cause or non-occupational
in cause.
61
BENEFITS
- --------
A Participant shall not be deemed permanently disabled if, on the basis of
proof satisfactory to the Committee, the Committee finds that his
incapacity arises out of chronic alcoholism, or addiction to narcotics
(unless the disabling condition is caused, in and of itself, by an organic
disease or organic condition resulting from such alcoholism or addiction),
an injury self-inflicted or incurred while he was engaged in a felonious
enterprise, or resulted therefrom, or resulted from service in the armed
forces of any country except those of the United States; or
(f) For any reason on or after attaining age
sixty-five (65); or
(g) To receive a deferred monthly retirement benefit for which he is
qualified under a Lockheed Retirement Plan, providing either the date of
Termination of Employment occurs within the period of thirty (30) calendar
days immediately preceding such Participant reaching sixty-five (65) years
of age, or payment of the deferred monthly retirement benefit begins on the
first day of the calendar month following the month of Termination of
Employment.
SECTION 8.02 Vesting Schedule.
------------ ----------------
(a) Upon Termination of Employment for reasons other than those set
forth in Section 8.01, a Participant who does not have at least one Hour of
Service on or after January 1,
62
BENEFITS
- --------
1990 shall receive a cash payment in an amount equal to the sum of the
following:
(1) The dollar value of the balance of Units and Shares in his
Participant's Account which were credited with respect to Elective
Deferral amounts made by such Participant, determined as provided in
Sections 6.01 and 6.02 on the Valuation Date coincident with or
immediately following (prior to July 1, 1990 "preceding" shall be
substituted for "following") the date of such Termination of
Employment;
(2) Twenty-five percent (25%) of the dollar value of the balance
of the Units and Shares in his Participant's Account which were
credited with respect to Corporation Matching Contributions for the
second (2nd) year immediately preceding such Termination of
Employment, such dollar value being determined as provided in Sections
6.01 and 6.02 on the Valuation Date coincident with or immediately
following (prior to July 1, 1990 "preceding" shall be substituted for
"following") the date of such Termination of Employment;
(3) Fifty percent (50%) of the dollar value of the balance of the
Units and Shares in his Participant's Account which were credited with
respect to Corporation Matching Contributions for the third
63
BENEFITS
- --------
(3rd) year immediately preceding such Termination of Employment, such
dollar value being determined as provided in Sections 6.01 and 6.02 on
the Valuation Date coincident with or immediately following (prior to
July 1, 1990 "preceding" shall be substituted for "following") the
date of such Termination of Employment;
(4) Seventy-five percent (75%) of the dollar value of the balance
of the Units and Shares in his Participant's Account which were
credited with respect to Corporation Matching Contributions for the
fourth (4th) year immediately preceding such Termination of
Employment, such dollar value being determined as provided in Sections
6.01 and 6.02 on the Valuation Date coincident with or immediately
following (prior to July 1, 1990 "preceding" shall be substituted for
"following") the date of such Termination of Employment;
(5) One hundred percent (100%) of the dollar value of the balance
of the Units and Shares in his Participant's Account which were
credited with respect to Corporation Matching Contributions for the
fifth (5th) year and years beyond, immediately preceding such
Termination of Employment, such dollar value being determined as
provided in Sections 6.01 and 6.02 on the
64
BENEFITS
- --------
Valuation Date coincident with or immediately following (prior to July
1, 1990 "preceding" shall be substituted for "following") the date of
such Termination of Employment.
The Corporation shall maintain separate subaccounts within a
Participant's Account if necessary to account for the Participant's vested
interest in the Units and Shares in his Participant's Account which were
credited with respect to Corporation Matching Contributions for each
Quarter.
(b) Upon Termination of Employment for reasons other than those set
forth in Section 8.01, a Participant with at least one Hour of Service on
or after January 1, 1990 shall receive a cash payment in an amount equal to
the sum of the following:
(1) the dollar value of the balance of Units and Shares in his
Participant's Account which were credited with respect to Elective
Deferral amounts made by such Participant, determined as provided in
Sections 6.01 and 6.02 on the Valuation Date coincident with or
immediately following (prior to July 1, 1990 "preceding" shall be
substituted for "following") the date of such Termination of
Employment; and
(2) the vested portion of the dollar value of the balance of the
Units and Shares in his Participant's Account which were credited with
respect to Corporation
65
BENEFITS
- --------
Matching Contributions, such dollar value being determined as provided
in Sections 6.01 and 6.02 on the Valuation Date coincident with or
immediately following (prior to July 1, 1990 "preceding" shall be
substituted for "following") the date of such Termination of
Employment. The vested portion of the dollar value shall be
determined in accordance with the following:
Completed Years of Service Vested Percent
-------------------------- --------------
Less than 2 year 0%
2 years but less than 3 years 25%
3 years but less than 4 years 50%
4 years but less than 5 years 75%
5 years or more 100%
SECTION 8.03 Refund of Elective Deferrals Between
------------ ------------------------------------
Valuation Date and Termination Date.
-----------------------------------
Prior to July 1, 1990, Participant, or his beneficiary, who receives
payment of an amount pursuant to the provisions of Section 8.01 or Section 8.02
shall have refunded to him any Elective Deferral amounts specified by him (but
not Corporation Matching Contributions) between the Valuation Date as of which
such payment under Section 8.01 or Section 8.02 was computed and the date of
Termination of Employment.
SECTION 8.04 Rehire.
------------ ------
(a) In the event that a Participant Terminates Employment for reasons
other than those set forth in Section 8.01 and is not reemployed by
Lockheed Corporation or a subsidiary or affiliate thereof during the Plan
Year in
66
BENEFITS
- --------
which the termination occurs, such Participant shall thereupon forfeit all
Units and Shares credited to such Participant's Account and the amounts
with respect thereto in the Trust Fund to which he is not entitled as a
benefit as determined under the provisions of Section 8.02, subject to
restoration under Subsection 8.04(b). In the event that a Participant
Terminates Employment for reasons other than those set forth in Section
8.01 and is reemployed by Lockheed Corporation or a subsidiary or affiliate
thereof during the Plan Year in which the termination occurs, such
Participant shall retain all Units and Shares credited to such
Participant's Account and the amounts with respect thereto in the Trust
Funds which were not paid to him in the amount computed under the
provisions of Section 8.02, and such Participant shall vest and/or continue
to vest in said sums at the rate described in Section 8.02 without regard
to the effect which said Termination of Employment would otherwise have on
vesting. Amounts so retained shall be distributable to the extent vested
at the time of distribution only pursuant to the provisions of Sections
8.01 or 8.02 or 9.01.
(b) To the extent required by applicable statute or regulation, in the
event a Participant Terminates Employment and is reemployed by Lockheed
Corporation or a subsidiary or affiliate thereof without incurring a Break
in Service
67
BENEFITS
- --------
(five (5) consecutive one-year Breaks in Service in the case of persons who
had not completed a one-year Break in Service prior to December 30, 1985),
such Participant shall have restored to his Participant's Account any
amounts previously forfeited pursuant to Subsection 8.04(a). Such
restoration shall be in compliance with applicable statute or regulation,
and in accordance with rules determined by the Committee and uniformly
applied to all Participants. Such Participant shall continue to vest in
said restored amounts from such date of reemployment at the rate described
in Section 8.02. All rights to restoration of forfeited amounts shall
lapse if this Plan is terminated as to affected persons who have not been
reemployed before Plan termination.
SECTION 8.05 Installment Payment Election.
------------ ----------------------------
A Participant who becomes entitled to receive a cash payment under the
provisions of Section 8.01(a) or under the provisions of Section 8.01(g) may,
prior to Termination of Employment for such reason and subject to the provisions
hereinafter set forth, elect, in lieu of such cash payment, that the total
number of Units and Shares in his Account be paid to him in 60, 120, 180 or 240
equal monthly installments commencing as of the last day of the month following
the month in which the Participant's employment has been so terminated provided
he is then living and provided further that the dollar value of the
68
BENEFITS
- --------
first such payment is not less than thirty dollars ($30). The dollar value of
each such payment shall be equal to the dollar value of such Units and Shares as
are to be paid in such installment, determined as provided in Sections 6.01 and
6.02 on the Valuation Date immediately preceding the date such payment is due.
In the event that a Participant dies prior to the commencement date of his
payments, the Participant's election of such method of payment shall become
inoperative and a lump sum payment to his beneficiary shall be made. In the
event that a Participant dies on or after the commencement date of such payments
but before payment to him of all payments due him, the dollar value of the
remaining balance of the Units and Shares in the Participant's Account shall be
paid in one lump sum to the Participant's beneficiary as such dollar value is
determined as provided in Sections 6.01 and 6.02 on the Valuation Date
immediately following (prior to July 1, 1990 "preceding" shall be substituted
for "following") the date of the death of such Participant. Election of such
method of payment must be made in writing by Filing With The Committee prior to
Termination of Employment. In the event that a Participant chooses to revoke
his election of such method of payment after the commencement date of such
payments but before payment to him of all payments due him, he may elect, in
writing, to revoke his previous election of such method of payment by Filing
With The Committee. In such event, the dollar value of the remaining balance of
the
69
BENEFITS
- --------
Units and Shares in the Participant's Account shall be paid in one lump sum to
the Participant as such dollar value is determined as provided in Sections 6.01
and 6.02 on the Valuation Date coincident with or immediately following (prior
to July 1, 1990 "preceding" shall be substituted for "following") the date of
such election or revocation. Notwithstanding anything to the contrary contained
herein, such monthly installment payments shall be suspended when a Participant
is rehired by the Corporation and elects to resume Elective Deferrals to the
Plan. Upon subsequent Termination of Employment such Participant may elect any
optional form of payment under the Plan for which he is eligible.
Notwithstanding any other provision of this Section to the contrary, the period
of such installment payments may not extend beyond the life expectancy of the
Participant or the joint life expectancies of the Participant and his spouse.
SECTION 8.06 Commencement of Distributions.
------------ -----------------------------
(a) All distributions from this Plan to a Participant (or to his
beneficiary following the Participant's death) shall be made in accordance
with the legal requirements set forth in Sections 401(a)(9), 401(k), and
related provisions of the Code and Treasury Regulations issued pursuant to
such provisions, notwithstanding any provision in this Plan to the
contrary.
(b) A Participant's Account shall be distributed within sixty (60)
days of such Participant's Termination of
70
BENEFITS
- --------
Employment if the Participant so consents in writing at the time of his
Termination of Employment. If a Participant fails to give such written
consent at such time, his Participant's Account shall not be distributed
before such Participant attains age sixty-five (65). Subject to the
foregoing, distribution shall be made or commenced not later than the
sixtieth (60th) day after the close of the Plan Year in which the latest of
the following events occurs:
(1) The Participant attains the earlier of age sixty-five (65) or
becomes eligible to receive normal retirement benefits under a
Lockheed Retirement Plan;
(2) There occurs the tenth (10th) anniversary of the year in
which the Participant commenced participation in the Plan; or
(3) The Participant has a Termination of Employment.
(c) Notwithstanding any other provisions of this Plan, distribution of
a Participant's Account must commence by the Participant's "Required
Beginning Date", except as provided in Section 8.06(d), and shall be made
in accordance with the provisions of Section 8.08.
(1) A Participant's Required Beginning Date for purposes of this
Plan shall be the December 31 of the calendar year in which the
Participant attains age 70-1/2.
71
BENEFITS
- --------
(2) Notwithstanding the provisions of paragraph (1), the Required
Beginning Date for a Participant who is not a "five percent owner"
within the meaning of Section 416(i) of the Code and who attains age
70-1/2 in calendar year 1988 or 1989 shall be April 1, 1990.
(3) Notwithstanding the provisions of paragraphs (1) and (2), the
Required Beginning Date for a Participant who is not a "five percent
owner" within the meaning of Section 416(i) of the Code and who
attained age 70-1/2 prior to January 1, 1988 shall be the April 1 next
following the Participant's Termination of Employment. However, a
Participant described in this Section 8.06(c)(3) may, by Filing With
the Committee within the one-time election period established by the
Committee, irrevocably elect April 1, 1990 as his Required Beginning
Date.
(d) If an amount payable under any provision of this Plan cannot be
clearly ascertained or the person to whom it is payable has not been
determined or located, distributions shall be made or commenced no later
than sixty days after such amount is ascertained or such person is located.
SECTION 8.07 Stock Distributions.
------------ -------------------
A Participant, or his beneficiary, who becomes entitled to receive a
cash payment under the provisions of Sections 8.01, 8.02, 8.05, 8.06, 8.08 or
9.01 and whose
72
BENEFITS
- --------
Participant's Account is invested in part in the Lockheed Martin Stock Fund or
ESOP Fund, may elect, by Filing With The Committee, to receive such part of his
distribution either entirely in cash or entirely in the form of Share
certificates (with fractional Shares paid in cash). The number of Shares
distributed shall be calculated by:
(a) dividing the dollar value of the Units in the Participant's
Account allocated to the Lockheed Martin Stock Fund as of the Valuation
Date coincident with or immediately following (prior to July 1, 1990
"preceding" shall be substituted for "following") the date of Termination
of Employment by the published composite closing price per Share on said
Valuation Date, and adding
(b) the number of Shares allocated to the Participant's Account as of
the Valuation Date coincident with or immediately following (prior to July
1, 1990 "preceding" shall be substituted for "following") the date of
Termination of Employment.
Distribution of such Shares will be made, at the direction of the
Trustee(s), by the duly appointed transfer agent of Lockheed Corporation.
Notwithstanding the provisions of Section 12.07, distributions effected by
stock certificates cannot be reinvested in the Plan. In the absence of any
valid election under this Section, such distribution will be made in cash.
73
BENEFITS
- --------
Section 8.08 Mandatory Distributions.
------------ -----------------------
(a) (1) A Participant who, pursuant to the provisions of
Section 8.06(c)(1), is subject to a mandatory distribution from his
Participant's Account prior to his Termination of Employment shall
receive five (5) annual cash payments, calculated as provided in
Section 8.08(g), commencing as of the month in which his Required
Beginning Date occurs, provided he is then living and provided further
that the dollar amount of the first such payment is not less than $30.
(2) A Participant who becomes entitled to installment payments
under Section 8.08(a)(1) may, prior to his Required Beginning Date and
subject to the provisions hereinafter set forth, elect to receive in
lieu of such five (5) annual installment payments
(i) a lump sum cash payment equal to the dollar value of the
balance of Units and Shares in his Participant's Account as
determined as provided in Sections 6.01 and 6.02 on the Valuation
Date occurring in October of the year in which his Required
Beginning Date occurs, or
(ii) ten (10) annual cash payments, calculated as provided
in Section 8.08(g), commencing as of the month in which his
Required Beginning Date occurs provided he is then living
74
BENEFITS
- --------
and provided further that the dollar amount of the first such
payment is not less than $30.
(b) (1) A Participant who, pursuant to the provisions of Section
8.06(c)(2), is subject to a mandatory distribution from his Participant's
Account prior to his Termination of Employment, or who has so elected such
a distribution pursuant to Section 8.06(c)(3), shall receive five (5)
annual cash payments calculated as provided in Section 8.08(g), commencing
as of the month preceding the month in which his Required Beginning Date
occurs provided he is then living and provided further that the dollar
amount of the first such payment is not less than $30.
(2) A Participant who becomes entitled to installment payments
under Section 8.08(b)(1) may, prior to his Required Beginning Date and
subject to the provisions hereinafter set forth, elect to receive in
lieu of such five (5) annual installment payments
(i) a lump sum cash payment equal to the dollar value of the
balance of Units and Shares in his Participant's Account as
determined as provided in Sections 6.01 and 6.02 on the Valuation
Date occurring in January of the year in which his Required
Beginning Date occurs, or
(ii) ten (10) annual cash payments, calculated as provided
in Section 8.08(g),
75
BENEFITS
- --------
commencing as of the month preceding the month in which his
Required Beginning Date occurs provided he is then living and
provided further that the dollar amount of the first such payment
is not less than $30.
(c) Annual installment payments due to a Participant pursuant to the
provisions of Sections 8.08(a)(1), 8.08(b)(2)(ii), 8.08(b)(1), or
8.08(b)(2)(ii) (other than the initial payments described in Sections
8.08(b)(1) and 8.08(b)(2)(ii)) shall be paid to the Participant in December
of each applicable year. Following payment of the last such annual
installment, the Participant will be paid each December prior to his
Termination of Employment the cash amount equal to the dollar value of
Units and Shares in his Participant's Account as determined as provided in
Sections 6.01 and 6.02 on the Valuation Date occurring in October of the
year in which such distribution occurs. A Participant who elected to
receive a lump sum payment pursuant to Section 8.08(a)(2)(i) or
8.08(b)(2)(i) shall be paid each December subsequent to such lump sum
distribution and prior to his Termination of Employment a cash amount as
calculated in the preceding sentence.
(d) In the event that a Participant dies prior to the commencement of
installment payments pursuant to Section 8.08(a)(1), 8.08(a)(2)(ii),
8.08(b)(1), or
76
BENEFITS
- --------
8.08(b)(2)(ii), the installment method of payment shall become inoperative
and a lump sum payment shall be made to his beneficiary. In the event that
a Participant dies on or after the commencement date of such payments, but
before payment to him of all payments due him, the dollar value of the
remaining balance of the Units and Shares in the Participant's Account
shall be paid in one lump sum to the Participant's beneficiary as such
dollar value is determined as provided in Sections 6.01 and 6.02 on the
Valuation Date immediately following (prior to July 1, 1990 "preceding"
shall be substituted for "following") the date of the death of such
Participant.
(e) A Participant receiving installment payments under the provisions
of Sections 8.08(a)(1), 8.08(a)(2)(ii), 8.08(b)(1), or 8.08(b)(2)(ii) may
irrevocably elect to cancel his installment payments and receive, in lieu
of his next scheduled December installment payment, a lump sum cash payment
in an amount equal to the value of Units and Shares in his Participant's
Account as determined as provided in Sections 6.01 and 6.02 as of the
Valuation Date occurring in October of the year in which the lump sum
distribution is made. A Participant's election to so cancel his
installment payments will be valid only if it has been Filed With The
Committee for at least sixty (60) days prior to the December installment
distribution date.
77
BENEFITS
- --------
(f) A Participant receiving payments pursuant to this Section 8.08
may, upon Termination of Employment, elect any form of optional benefit
payment then available under the Plan, provided such form of payment meets
the requirements of Code Section 401(a)(9). The Committee may deny the
optional benefit form selected by the Participant or adjust it in any
manner necessary to arrive at a form of payment which meets the
requirements of the Code.
(g) Annual installment payments payable pursuant to the provisions of
Sections 8.08(a)(1), 8.08(a)(2)(ii), 8.08(b)(1), and 8.08(b)(2)(ii) shall
be calculated by dividing the balance of Units and Shares in the
Participant's Account on the last day of the calendar year prior to the
calendar year in which the distribution date occurs (as determined under
Sections 6.01 and 6.02 and less any distributions previously made to the
Participant in the same calendar year by reason of this Section 8.08) by
the number of installment payments not yet distributed and either
(1) valuing the resulting number of Units and Shares as provided
in Sections 6.01 and 6.02 as of the October Valuation Date
immediately preceding the December distribution date, or
(2) valuing the resulting number of Units and Shares as provided
in Sections 6.01 and 6.02 as of the
78
BENEFITS
- --------
January Valuation Date immediately preceding the April distribution
date, whichever is applicable.
79
SECTION 9
---------
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
-----------------------------------------
SECTION 9.01 Withdrawals Other Than Hardship.
------------ -------------------------------
Notwithstanding other provisions of the Plan to the contrary, a
Participant may withdraw a part or all of the dollar value of the balance of
Units and Shares of Thrift Stock in his Participant's Account attributable to
Corporation Matching Contributions that are not ESOP Contributions to the extent
vested under the provisions of Sections 8.02(a)(3), (4) or (5) or 8.02(b),
subject to the following conditions and limitations:
(a) Such withdrawal will be permitted only once every twenty-six (26)
weeks;
(b) Such withdrawal may not be in an amount less than three hundred
dollars ($300), and any larger amount must be added in increments of fifty
dollars ($50). If the entire amount subject to withdrawal under this
Section 9.01 is less than three hundred dollars ($300), such amount may be
withdrawn, but only in its entirety;
(c) Corporation Matching Contributions may be withdrawn under this
Section 9.01 only to the extent they are vested and were made prior to the
twenty-four (24) month period ending on the effective date of the
withdrawal; and
(d) A Participant may not withdraw any part of the dollar value in his
Participant's Account attributable to ESOP Contributions.
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PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
A Participant making such withdrawal shall not be entitled to receive the
Corporation Matching Contributions described in Section 4.01 for a period of
twenty-six (26) weeks next following such withdrawal.
SECTION 9.02 Proportion of Units and Shares
------------ ------------------------------
Deducted Upon Withdrawal.
------------------------
Upon withdrawal under Section 9.01 or 9.03, the number of Units or
Shares equivalent to the Unit or Share value of dollars so withdrawn on the
Valuation Date of the month in which the application for withdrawal is Filed
With The Committee (prior to July 1, 1990 "coincident with or immediately
preceding the date of such withdrawal" shall be substituted for "of the month in
which the application for withdrawal is Filed With The Committee") shall be
deducted from the Units and Shares then in such Participant's Account. Such
deductions shall be based on the dollar value of Units and Shares credited to
the Bond Fund, Thrift Stock in the ESOP Fund, the Lockheed Martin Stock Fund,
the Securities Fund and/or the STIF Fund in the same proportion as the dollar
value of such Units and Shares in such Participant's Account are at such time
credited to each Fund.
SECTION 9.03 Hardship Withdrawal.
------------ -------------------
(a) (1) A Participant who is not eligible to make a withdrawal under
Section 9.01 because of the provisions of Section 9.01(a), may
withdraw amounts otherwise available under Section 9.01 and Elective
Deferral
81
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
amounts (but not earnings on Elective Deferral amounts) only as may be
required to relieve financial hardship.
(2) A Participant with a financial hardship may withdraw amounts
available under Section 9.01 and Elective Deferral amounts (but not
earnings on Elective Deferral Amounts) to relieve the hardship without
first making a withdrawal under the provisions of Section 9.01 which
would result in suspension of Corporation Matching Contributions.
(3) Elective Deferral amounts may be withdrawn only after the
Plan Account balances available under Section 9.01 have been totally
withdrawn under Section 9.01 or this Section 9.03. Effective April 1,
1989, an application for a withdrawal under this Section 9.03 shall be
considered by the Committee only if the Participant provides written
evidence that he has one or more of the immediate and heavy financial
needs described in subsection (b) and that the withdrawal is necessary
to satisfy the need as described in subsection (c). A hardship
withdrawal will be granted only if the Committee, after considering
all relevant facts and circumstances and applying the objective
standards of this Section 9.03 in a nondiscriminatory manner,
determines the existence of an immediate and heavy financial need and
the amount necessary to meet the need.
82
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
(b) An immediate and heavy financial need exists only if the requested
withdrawal is to satisfy:
(1) non-reimbursed medical expenses described in Code Section
213(d) (generally, those for "medical care") incurred by the
Participant, his spouse or any of his dependents,
(2) the need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence,
(3) non-reimbursed expenses directly related to a fire,
explosion, flood, wind, rain, lightning, snow, sleet, hail, ice,
volcanic eruption, tidal wave, earthquake, mudslide or other similar
natural disaster,
(4) non-reimbursed expenses not described in subsection (1) above
which are directly related to the institutionalizing of the
Participant, his spouse or any of his dependents in a hospital,
facility for the care or education of the mentally or physically
handicapped, nursing home, skilled care facility, hospice, in-patient
substance abuse center, rehabilitation center, or institution of a
similar nature, but not including camps, detention centers, jails, or
prisons,
(5) non-reimbursed expenses directly related to the burial of the
Participant's spouse or any of his
83
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
dependents (determined without regard to the support and residency
tests of Section 9.03(e)(1)(i) and (ii), including travel expenses
only if the burial costs have been borne by the Participant, and
excluding wages lost due to administering an estate, preparing for a
funeral, or attending a funeral.
(6) non-reimbursed tuition, room and board, books, and fees for
the next semester or quarter of primary (grades 1 through 8),
secondary (grades 9 through 12), or post-secondary education for the
Participant, his spouse, or any of his dependents, excluding expenses
related to enrollment in child care or day care facilities and for
instruction in music, dance, athletics, and the like which is outside
of the student's basic education curriculum,
(7) the need to replace gross wages (net of disability benefits,
workers compensation insurance or any other payment received as a
result of prolonged absence) ordinarily paid by the Employer to the
Participant, but only if
a. the Participant has been on prolonged absence status for
a period of at least four consecutive weeks, and
b. the Participant makes a request for withdrawal by Filing
With The Committee while on prolonged absence status or within 30
days after
84
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
returning to active payroll status or within 30 days after
prolonged absence status has otherwise been terminated, or
(8) down payment, closing costs and other non-reimbursed expenses
directly related to the purchase, construction, or major renovation of
the principal residence for the Participant, but not including
expenses related to repairs, remodeling, decorating, landscaping,
refinancing, mortgage payments, leasing, or real property taxes or
homeowners dues other than such taxes or dues payable as part of
closing costs. For purposes of this Section 9.03(b)(8), a residence
shall be treated as undergoing a major renovation only if the
expenditures materially extend the useful life of the residence and
significantly upgrade its usefulness through
a. gutting and extensive reconstruction of major structural
components,
b. cure of a substantial accumulation of major disrepair,
limited to expenses necessary to bring major housing components
and systems into compliance with local building, health or safety
codes or otherwise make the dwelling habitable,
c. changing the floor plan by means of tearing down existing
interior walls and
85
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
partitions and building new walls, partitions, and doors,
d. enlarging the dwelling by increasing the total volume,
other than an increase in interior floor space resulting from
interior remodeling, or
e. completion of construction of areas left unfinished in
the original construction of the dwelling.
(c) A withdrawal is necessary to satisfy an immediate and heavy
financial need only if
(1) the amount withdrawn does not exceed the amount of the need,
(2) the need cannot be relieved through reimbursement or
compensation by insurance, workers compensation, unemployment
insurance, disability payments, scholarships, grants, or otherwise,
(3) the need cannot be relieved by cessation of Elective
Deferrals under the Plan,
(4) the need cannot be relieved by other distributions or
nontaxable (at the time of the loan) loans currently available from
any plans maintained by the Corporation (including this Plan) or any
other employer,
(5) the need cannot be relieved by borrowing from commercial
sources on reasonable commercial terms, and
86
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
(6) the need cannot be relieved by reasonable liquidation of the
Participant's assets, to the extent such liquidation would not itself
cause an immediate and heavy financial need. The provisions of
paragraphs (4), (5) and (6) of this Section 9.03(c) shall not apply to
a withdrawal of amounts available under Section 9.01. However, a
Participant requesting a hardship withdrawal of amounts available
under Section 9.01 must establish that the amount requested is not
reasonably available from other sources.
(d) For purposes of Section 9.03(c)
(1) The Participant's resources shall be deemed to include those
assets of his spouse and minor children that are reasonably available
to the Participant, including assets held as community property, joint
tenants, tenants by the entirety, or tenants in common, but excluding
property held for the Participant's child under an irrevocable trust
or under the Uniform Gifts to Minors Act.
(2) Liquidation of the following assets will be considered an
"unreasonable liquidation" and will not be required as a prerequisite
to a withdrawal under Section 9.03:
(i) The Participant's aggregate interest in real
property or personal property that the Participant, his
spouse or
87
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
any of his dependents uses as a principal residence, or in a
cooperative that owns property that the Participant, his
spouse or any of his dependents, uses as a principal
residence.
(ii) The Participant's interest in motor vehicles,
excluding recreational vehicles, used by the Participant,
his Spouse, or any of his dependents for transportation to
and from a school or place of employment.
For purposes of this paragraph (d)(2) "Participant's interest"
includes the interests of the Participant's spouse and minor children
described in paragraph (d)(1) above.
(e) Except as expressly provided otherwise, for purposes of this
Section 9.03, "dependent" means
(1) the Participant's child (including an adopted child),
grandchild, stepchild, brother, sister, halfbrother, halfsister,
stepbrother, stepsister, parent, grandparent, stepparent, aunt, uncle,
niece, nephew, father-in-law, mother-in-law, son-in-law, daughter-in-
law, brother-in-law, sister-in-law, and any other individual
(including a cousin) whose principal place of abode is the
Participant's home and who is a
88
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
member of the Participant's household without being in violation of
local law if
(i) the relative or other individual is a citizen,
resident, or national of the United States or a resident of
Canada or Mexico and
(ii) the Participant provides more than one-half of
the relative's or other individual's support, and
(2) any other individual who is the Participant's dependent
within the meaning of Code Section 152.
(f) The Committee shall be entitled to rely, without the need for
independent certification, on the authenticity of all documents submitted
by the Participant in support of his application under this Section 9.03
and on the truthfulness of the facts and representations set forth by the
Participant in such application.
SECTION 9.04 Participant Account Loans.
------------ -------------------------
(a) The Committee shall have the investment management discretion to
direct the Trustee to lend money to Participants. Each such loan shall be
treated as an investment of a portion of the Trust Funds representing the
borrowing Participant's Account. The Committee may, upon finding that such
actions are necessary or desirable, establish loan policies which permit
the waiver of defaults
89
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
or which establish any loan procedures or requirements which are not
inconsistent with this Section.
(b) A Participant who wishes to borrow money from the Plan shall file
a written loan application with the Committee. The Committee, in its sole
fiduciary discretion, shall approve the loan unless it determines that such
investment of Trust Fund assets is not in the best interest of Plan
Participants and beneficiaries. The Committee shall exercise its
discretion in a uniform and nondiscriminatory manner. A loan shall be
granted only under the following requirements and conditions.
(1) Beginning October 1, 1989, no loan shall be made in an amount
which exceeds the combined value of the Participant's Elective
Deferral amount and no loan shall be made in an amount which exceeds
fifty percent (50%) of the value of the vested portion of the
Participant's Account. In addition, no loan shall be made in an
amount greater than $50,000 (reduced by the Participant's highest
outstanding loan balance during the preceding 12-month period under
this or any other qualified pension benefit plan of the Corporation).
(2) No loan shall be made to a Participant who has a loan
outstanding under this or any other qualified pension benefit plan of
the Corporation.
(3) The loan shall bear interest at an annual percentage rate
(rounded to the nearest one-half of one
90
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
percentage point) equivalent to the weekly average yield, adjusted for
constant maturity, on five-year Treasury notes. The rate shall be
established semi-annually as of the last week of November for loans
made in the first six-month period of the following Plan Year; and as
of the last week of May for loans made in the last six months of the
current Plan Year.
(4) The minimum loan amount shall be $500, except that the
minimum loan amount for a Residential Loan shall be $1,000. Any
additional amounts must be in $100 increments. A Residential Loan is
a loan made to a Participant which is used to acquire any dwelling
unit which is to be used within a reasonable period of time, as the
principal residence of the Participant. An application for a
residential loan must contain such documentation as is satisfactory
for the Committee to verify the purpose of the loan.
(5) Interest and principal on a loan must be repaid through
authorized payroll deduction in equal installments of at least $10 per
week over one or more whole-year (52-week) periods. The maximum
repayment period shall be four years (208 weeks), except that the
maximum repayment period for a Residential Loan shall be 15 years (780
weeks). The maximum weekly repayment amount may not exceed twenty-
five percent (25%) of the Participant's Weekly Rate of Compensation.
One pick-up
91
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
payment per week, for a maximum of thirteen consecutive weeks, is
required for a Participant whose repayments are in arrears because of
insufficient earnings. Repayments will be invested in the Fund or
Funds specified by the Participant for current Elective Deferrals or
otherwise the most recent Elective Deferral specification by such
Participant as shown on the records of the Trustee(s).
(6) The Loan shall be documented by such application forms,
notes, evidences of indebtedness and other instruments, executed by
the Participant, which the Committee in its discretion shall require.
A loan fee in the amount which is the greater of $25 ($50 in the case
of a Residential Loan) or one-half of one percent of the amount of the
loan shall be added to the payments made on the loan in a manner
determined by the Committee. The spouse of a married Participant must
consent to the loan application.
(7) A Participant is not eligible to apply for a loan until 13
weeks have expired following the repayment in full of a previous loan.
This restriction is not applicable with respect to a loan for the
purpose of refinancing an existing loan.
(8) A Participant will not be permitted to refinance a loan
during the initial year of the loan, and may do so only once
thereafter. A refinancing loan
92
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
shall be subject to the same terms and conditions currently applicable
to new loans, except the term thereof cannot extend beyond five (5)
years from the date the loan was originally made, or, in the case of a
Residential Loan, five (5) years beyond the original maturity date
thereof.
(9) A Participant will be permitted to prepay a loan:
a. At anytime after the loan has been in effect for 13
weeks; or
b. Within the 30-day period preceding the Participant's
Termination of Employment. Any prepayment must be in the amount
of the full outstanding loan balance.
(10) A Participant who is on an authorized leave of absence
without pay may elect to continue repayments during such period. Such
repayments may be made either weekly or monthly in the full amount due
at such time of repayment. Upon return to the active payroll, a
Participant who has not kept his repayments current may have the term
of his loan extended by the number of weeks such repayments were not
made, except that such extension will not be permitted if the term
would extend beyond five (5) years from the date the loan was
originally made, or in the case of a Residential Loan,
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PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
five (5) years beyond the original maturity date thereof.
(11) A Participant shall be in default of a loan if such
Participant:
a. is an active Employee who has insufficient earnings to
make a repayment for 13 consecutive weeks, or is otherwise 13
weeks or more in arrears in such weekly repayments; or
b. is an Employee returning from an authorized leave of
absence without pay whose loan term cannot be extended pursuant
to Subsection (b)(10) and who:
(i) does not pay all arrearages in a lump sum, or
(ii) is unable to pay up all arrearages through 13
consecutive pick-up payments, and fails to refinance the
loan; or
c. has filed for relief under the U.S. Bankruptcy Code.
(12) A Participant who is in default of a loan:
a. will be suspended from making Elective Deferrals for a
period commencing on the date of default and ending on the later
of:
(i) one year from such date, or
94
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
(ii) the date on which the outstanding loan balance is
repaid by a single lump sum payment; and
b. will be ineligible to apply for a new loan for a period
commencing on the date of default and ending on the later of
(i) one year from such date, or
(ii) thirteen (13) weeks following the repayment in
full of the loan.
(13) Loan proceeds shall be deducted from the borrowing
Participant's Account, based upon the Valuation Date of the month in
which the loan is approved by the Committee. However, prior to July
1, 1990, loan proceeds shall be deducted from the borrowing
Participant's Account based upon the Valuation Date coincident with or
immediately preceding the date on which the Participant Files With The
Committee the promissory note evidencing the loan debt. Loan proceeds
will be deducted based on the dollar value of the Units and Shares
credited to the Bond Fund, the Lockheed Martin Stock Fund, the
Securities Fund, the STIF Fund and/or the ESOP Fund in the same
proportion as the dollar value of such Units and Shares in such
Participant's Account are at such time credited to the Bond Fund, the
Lockheed Martin Stock Fund, the Securities Fund, the STIF Fund and/or
the ESOP Fund.
95
PARTICIPANT ACCOUNT WITHDRAWALS AND LOANS
- -----------------------------------------
(14) Each loan from the Plan shall be secured by the borrowing
Participant's Account in the Plan. If a Participant has a Termination
of Employment before the loan is repaid, the loan shall become due
immediately and shall be repaid out of the Participant's Account,
which shall be reduced accordingly.
(15) All repayments, other than by authorized payroll deductions,
shall be made by certified check or money order payable to the order
of The Corporation, and delivered to a Plan Representative.
96
SECTION 10
----------
DEATH BENEFITS
--------------
SECTION 10.01 Spousal Consent.
------------- ---------------
In the event a Participant dies on or after August 23, 1984, such
Participant's Account under the Plan will be paid to his or her surviving spouse
or to his or her designated beneficiary if there is no surviving spouse. If
there is a surviving spouse and the Participant and spouse wish that death
benefits under this Plan be paid to a designated beneficiary, the Participant
may designate a beneficiary to receive his or her Participant's Account in lieu
of the spouse but only with spousal consent of the person who is the spouse at
the time of the Participant's death. Spousal consent will only be valid if it
is made in writing on a form prescribed by the Committee, the spouse
acknowledges the effect of the consent and the acknowledgement is witnessed by a
Plan representative or a notary public. If the existence of a surviving spouse
is uncertain or if the validity of spousal consent is unclear, the Committee
shall withhold payment of death benefits until such time as spousal existence or
the validity of spousal consent can be determined with certainty. The Committee
in its discretion may refuse to recognize a spousal consent if it believes for
any reason that the consent is invalid.
97
DEATH BENEFITS
- --------------
SECTION 10.02 Designation of Beneficiary or
------------- -----------------------------
Beneficiaries.
-------------
Subject to the provisions of Section 10.01, a Participant may
designate in writing a beneficiary or beneficiaries. The terms "beneficiary" or
"beneficiaries" shall mean any person or persons so designated by a Participant
to receive benefits to which such Participant may be entitled under the Plan
upon his death. If more than one beneficiary is named, the Participant may
specify the sequence and/or proportion in which payments shall be made to each
beneficiary. In the absence of a specification of either sequence or
proportion, payments shall be made in equal shares to all named beneficiaries.
All such designations shall be made by Filing With The Committee. In the
absence of such designation which is effective, payments shall be made in
accordance with applicable law. When payment has been made in accordance with
the foregoing provisions, there shall be no further liability of the
Corporation, the Trustees, or any other person or legal entity to anyone in
connection with such deceased person under the Plan.
98
SECTION 11
----------
NAMED FIDUCIARIES
-----------------
AND
---
ALLOCATION OF RESPONSIBILITIES
------------------------------
SECTION 11.01 Named Fiduciaries.
------------- -----------------
The following persons shall be "Named Fiduciaries" under the Plan and
Trust Agreements, and shall be the only Named Fiduciaries hereunder:
(a) The Trustee. Any Trustee designated hereunder shall be a bank or
-----------
trust company qualified under the laws of the United States or of any State
to operate thereunder as a trustee.
(b) The Corporation, as Plan Sponsor. Any authority assigned or
--------------------------------
reserved to the Corporation under the Plan and Trust Agreement shall be
exercised by resolution of the Board of Directors. Such a resolution shall
become effective with respect to the Trustee upon receipt by the Trustee of
a certified copy of such Board of Directors' resolution.
(c) The Committee, as Administrator of the Plan. The Committee shall
-------------------------------------------
be appointed to serve as Administrator by resolution duly adopted by the
Board of Directors. Whenever a Committee is so appointed, the Trustees
shall be advised of the name or names of the person or persons so appointed
by providing to the Trustees a certified copy of such Board of Directors'
resolution, and the Trustees may assume that
99
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
such person or persons shall continue in office until advised differently
in the same manner. Whenever a Trustee must or may act upon the direction
or approval of the Committee, the Trustee may act upon written
communication signed by a majority of such Committee, or an agent appointed
in writing by a majority of such Committee to act on the Committee's
behalf, and the authority of any such agent shall be deemed to continue
until revoked in writing. In such case, the Trustee shall not be
responsible for failure to act without such a communication.
(d) The Participant, under Sections 4A.06 and 4A.07. A Participant
------------------------------------------------
shall be a "Named Fiduciary" solely for purposes of tender and voting of
Stock as provided in Sections 4A.06 and 4A.07.
SECTION 11.02 Allocation of Responsibilities.
------------- ------------------------------
Responsibilities shall be allocated among the Named Fiduciaries as
follows:
(a) Each Trustee shall, unless otherwise directed by an Investment
Manager (if such has been appointed), have exclusive authority and
discretion to manage and invest the assets of the Trust Fund, as provided
in its Trust Agreement. Shares in the ESOP Fund shall be tendered,
exchanged and voted as provided in Sections 4A.06 and 4A.07. Each Trustee
shall further be responsible for the holding and disbursement of all
contributions and income received by it under the Plan, as provided in its
Trust Agreement, and
100
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
shall have such other responsibilities as are provided in such Agreement.
(b) Lockheed Corporation shall have the authority and responsibility
for:
(1) the design of the Plan and Trust Agreements, including
amendment of the Plan and Trust Agreements;
(2) the qualification of the Plan under applicable law;
(3) the designation of members of the Committee; and
(4) funding the Plan in accordance with applicable law and
determinations of the Committee.
(c) The Committee shall have the responsibility, authority and
discretion necessary to control the operation and administration of the
Plan and Trust Fund(s) in accordance with the terms of the Plan and Trust
Agreement(s), including, without limiting the generality of the foregoing:
(1) all functions assigned to the Committee under the terms of
the Trust Agreements;
(2) all functions assigned to the Committee under the terms of
the Plan;
(3) determination of benefit eligibility and amount and
certification thereof to the Trustees;
(4) hiring of persons to provide necessary services to the Plan;
101
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
(5) issuance of directions to the Trustees to pay any fees,
taxes, charges or other costs incidental to the operation and
management of the Plan, as provided in Section 7.05;
(6) preparation and filing of all reports required to be filed by
the Plan with any agency of Government;
(7) compliance with all disclosure requirements imposed by state
or federal law;
(8) establishment of a funding policy within the meaning of
Section 402(b)(1) of ERISA;
(9) maintenance of all records of the Plan other than those
maintained by the Trustees;
(10) interpretation and construction of Plan provisions;
(11) establishment of procedures to be followed by Participants
and beneficiaries for Filing With The Committee;
(12) the determination of the amounts needed to fund the Plan,
and the payment of such amounts from corporate funds to the Trustees;
(13) the appointment, removal and replacement of the Trustees;
(14) the appointment, removal and replacement of one or more
Investment Managers (as defined in Section 3(38) of ERISA or any other
provision of ERISA
102
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
or other statute of similar import) which shall be responsible for the
management of such of the assets of the Trust Fund as the Committee
shall specify; and
(15) the exercise of all fiduciary functions provided in the Plan
or in the Trust Agreements or necessary to the operation of either
except such functions as are specifically assigned to other Named
Fiduciaries. The Committee may adopt such rules to govern its own
procedures as it may deem advisable, provided that such rules are not
inconsistent with the provisions and purposes of the Plan or Trust
Agreements. The Committee may designate other persons, including the
Trustee(s), to carry out its duties and responsibilities, as it may
deem appropriate or necessary. The Committee shall, no less often
than twice a year, make a report to the Board of Directors of the
current status of the operation and administration of the Plan and
Trust Funds, which report shall be made in the form and manner
determined by the Board of Directors.
(d) Participants who have Shares credited to their Participants'
Accounts shall make tender or exchange decisions and voting decisions with
respect to Shares as provided in Sections 4A.06 and 4A.07.
103
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
- ----------------------------------------------------
SECTION 11.03 Shared Responsibility of Fiduciary.
------------- ----------------------------------
Each Named Fiduciary is allocated the individual responsibility for
the prudent execution of the functions assigned to him, and none of such
responsibilities or any other responsibility shall be shared by two or more of
such Named Fiduciaries unless such sharing shall be provided by a specific
provision of the Plan or a Trust Agreement. Whenever one Named Fiduciary is
required by the Plan or a Trust Agreement to follow the directions of another
Named Fiduciary, the two Named Fiduciaries shall not be deemed to have been
assigned a shared responsibility, but the responsibility of the Named Fiduciary
giving the directions shall be deemed his sole responsibility, and the
responsibility of the Named Fiduciary receiving those directions shall be to
follow them insofar as such instructions are on their face proper under
applicable law.
SECTION 11.04 Fiduciary Assistance.
------------- --------------------
A Named Fiduciary may employ one or more persons to render advice
concerning any responsibility such Named Fiduciary has under the Plan or Trust
Agreement.
SECTION 11.05 Indemnification of the Committee.
------------- --------------------------------
To the extent permitted by law, Lockheed Corporation shall indemnify
each member of the Committee and any employee of the Corporation who acts as an
agent of the Committee, or who advises the Committee, against any and all
expenses and/or liabilities arising out of his service or membership on the
Committee, or service for or advice to the Committee.
104
SECTION 12
----------
GENERAL PROVISIONS
------------------
SECTION 12.01 Corporation's Rights.
------------- --------------------
The existence of this Plan or any action hereunder and participation
in the Plan shall in no way affect the Corporation's right to discipline,
discharge, or take any other action with respect to employees.
SECTION 12.02 Assignment or Pledging of Plan
------------- ------------------------------
Benefits.
--------
To the extent permitted by law:
No right or benefit provided for in this Plan shall be
subject in any manner to anticipation, commutation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge, and
any attempt to anticipate, commute, alienate, sell, transfer,
assign, pledge, encumber or charge the same shall be void. No
such right or benefit shall be in any manner liable for or
subject to the debts, contracts, liabilities, or engagements of
any person entitled to such right or benefit. No such right or
benefit shall be subject to garnishment, attachment, execution,
levy or any other similar adverse legal process, or to bankruptcy
or insolvency proceedings of any kind. If any person entitled to
rights or benefits under the provisions of this Plan shall
attempt to
105
GENERAL PROVISIONS
- ------------------
anticipate, commute, alienate, sell, transfer, assign, pledge,
encumber or charge any such right or benefit, or if any such
right or benefit shall, notwithstanding the provisions of the
preceding sentence, be subject, in whole or in part, to
garnishment, attachment, execution, levy or any other similar
adverse legal process, or to bankruptcy or insolvency proceedings
of any kind, then in the sole discretion of the Committee such
right or benefit or part thereof, as the case may be, shall cease
and determine and in such event the Committee may hold or apply
the same, in whole or in part, to or for the benefit of his
spouse, children, next of kin or dependents, or any of them, in
such manner and in such proportions as the Committee may deem
proper. Any right or benefit so held or applied shall be deemed
conclusively to have been held or applied, as the case may be,
for the benefit of such person entitled to such right or benefit
under the provisions of this Plan.
SECTION 12.03 Payment of Benefits to a Minor.
------------- ------------------------------
If the Committee determines that any person entitled to payments under
this Plan is a minor or incompetent by reason of physical or mental disability,
it may cause all payments then due or thereafter becoming due to such person to
be made or any
106
GENERAL PROVISIONS
- ------------------
legally authorized person for his benefit, without responsibility to follow the
application of amounts so paid. Payments made pursuant to this Section shall
completely discharge the Committee, the Trustees, and the Corporation.
SECTION 12.04 Responsibility for Current Address.
------------- ----------------------------------
Each Participant shall be responsible for furnishing the Committee
with his current address and the name, current address, and social security
number, if any, of his beneficiary if he has designated a beneficiary. Any
notices required or permitted to be given hereunder shall be deemed given if
directed to such address and mailed by regular United States First-Class mail.
The Committee, the Trustees, and the Corporation shall have no obligation or
duty to locate such Participant or his beneficiary. In the event a Participant
or his beneficiary becomes entitled to a payment under this Plan and such
payment cannot then be made because the current address referred to above is
incorrect, because such Participant or beneficiary fails to respond to the
notice sent to the current address referred to above, because of conflicting
claims to such payment, or for any other reason, the amount of such payment,
when and if made, shall be the dollar value of the Units and Shares in such
Participant's Account with respect to such payment, as such dollar value is
determined as provided in Sections 6.01 and 6.02 on the Valuation Date
immediately preceding the date such payment is actually made.
107
GENERAL PROVISIONS
- ------------------
SECTION 12.05 Claim for Benefits.
------------- ------------------
A claim for benefits shall be presented by Filing With The Committee.
Any denial by the Committee of a claim for benefits under the Plan by a
Participant or beneficiary shall be stated in writing by the Committee and
delivered or mailed to the Participant or beneficiary. Such notice shall set
forth the specific reasons for the denial and shall be written in a manner which
may be understood without legal or actuarial counsel. Such notice shall also
include a description of any material or information necessary for the
Participant or beneficiary to perfect the claim, an explanation of why such
material or information is needed, and an explanation of the Plan's review
procedure. Within sixty days after the receipt of such notice, the Participant
or beneficiary may, by Filing With The Committee, request review by the
Committee of its initial denial of the claim. Such Participant or beneficiary
shall be afforded the opportunity to review pertinent documents relating to the
initial denial and submit issues and comments in writing to the Committee. The
Participant or beneficiary may, at his expense, be represented by legal counsel
during the review proceedings.
SECTION 12.06 Merger or Consolidation of Plan.
------------- -------------------------------
In the event of a merger or consolidation with, or transfer of assets
and liabilities to, any other plan, each Participant must, if the Plan is then
terminated, receive the benefit after the merger, consolidation or transfer of
assets and
108
GENERAL PROVISIONS
- ------------------
liabilities which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation or transfer of
assets and liabilities if the Plan had then terminated.
SECTION 12.07 Forfeiture of Undeliverable Benefit.
------------- -----------------------------------
To the extent provided by law, if any benefit under the Plan cannot be
paid because, after due diligence, the proper recipient cannot be located during
the three (3) year period commencing on the date the benefit is first payable,
the amount of the benefit shall be returned to the appropriate Trust Fund as a
credit to Corporation Matching Contributions. If, however, a proper recipient
subsequently makes a valid claim for such benefit, the amount of such benefit
shall be restored to the Trust Fund by the Corporation and will be paid as
provided in Section 12.04.
SECTION 12.08 Qualified Domestic Relations Order.
------------- ----------------------------------
(a) This Plan will follow the terms of any qualified domestic
relations order issued with respect to a Participant. However, the Plan will
only follow orders which meet all of the requirements of subsection (b).
(b) A "qualified domestic relations order" is any judgment, decree or
order, including the approval of a property settlement or agreement, provided
that
(1) the order relates to the provision of child support, alimony or
marital property rights and is made
109
GENERAL PROVISIONS
- ------------------
pursuant to state domestic relations or community property laws;
(2) the order creates or recognizes the existence of an alternate
payee's right to receive all or a portion of a Participant's Account;
(3) the order specifies the name and last known mailing address of the
Participant and each alternate payee covered by the order;
(4) the order specifies the amount or percentage of the Participant's
Account to be paid to each alternate payee or the manner in which the
amount of percentage is to be determined;
(5) the order specifies the number of payments or the period to which
the order applies;
(6) the order specifically names this Plan as the plan to which the
order applies;
(7) the order does not require this Plan to provide any type of
benefits or form of benefits not otherwise provided under this Plan;
(8) the order does not require the payment of benefits to an alternate
payee which are required to be paid to another alternate payee under
another order previously determined by the Committee to be a qualified
domestic relations order; and
110
GENERAL PROVISIONS
- ------------------
(9) if the order requires that payments to the alternate payee
commence before they commence with respect to the Participant, the order
specifies that payments will not commence before the Participant attains or
would have attained the earliest allowable retirement age under the Plan.
A qualified domestic relations order may provide that a former spouse of the
Participant is to be treated as a surviving spouse for purposes of the death
benefit provisions of this Plan. Subsection (c) sets forth the procedures under
which the Committee shall determine whether a domestic relations order properly
qualifies.
(c) The Committee shall not treat any judgment, order or decree as a
"qualified domestic relations order" unless it meets all of the requirements set
forth in subsection (b). If the order meets these requirements, the Committee
shall follow the terms of the order whether or not this Plan has been joined as
a party to the legal proceeding out of which the order arises. Upon receipt of
a domestic relations order, the Committee shall notify the Participant and
alternate payee of (1) its receipt of the order and (2) its need to determine
the qualified status of the order in accordance with subsection (b). The
alternate payee may designate a representative to receive copies of future
notices with respect to the qualified status of the order. To the extent an
order calls for benefits to be paid to an alternate
111
GENERAL PROVISIONS
- ------------------
payee before the qualified nature of the order is determined, a separate account
shall be established to hold the benefit payments affected by the order. This
account shall be administered in accordance with the rules set forth in Section
206(d)(3)(H) of ERISA.
Section 12.09 Rollover Contributions.
------------- ----------------------
An Eligible Employee, regardless of whether he has satisfied the
eligibility requirements of Section 3 who has received a distribution from a
plan which meets the requirements of Section 401(a) of the Code may, with the
approval of and in accordance with procedures approved by the Committee,
transfer the distribution received from the other plan to the Trustee; provided
that the distribution is eligible for rollover treatment and exclusion from the
gross income of the Employee in accordance with applicable law.
112
SECTION 13
----------
AMENDMENT OR TERMINATION OF THE PLAN
------------------------------------
SECTION 13.01 Right to Amend Plan.
------------- -------------------
The Corporation, through action of its Board of Directors, reserves
the right at any time and from time to time to modify or amend, in whole or in
part, any or all of the provisions of the Plan, except as provided in any
agreement with a collective bargaining agent. Any modification or amendment of
the Plan may be made retroactive to the effective date, if necessary or
appropriate, for the Plan to qualify and continue to qualify under the Code,
provided, however, that no modification or amendment shall be made which shall
make it possible for any part of the Trust Fund(s) to be used for, or diverted
to, purposes other than for the benefit of those entitled to benefits hereunder.
SECTION 13.02 Termination of Plan - Benefits.
------------- ------------------------------
Although the Corporation hopes and expects to continue the Plan
indefinitely the Board of Directors may terminate the Plan for any reason at any
time, except as provided in any agreement with a collective bargaining agent.
If the Plan is terminated, each Participant or former Participant shall fully
vest and shall receive a payment equal to the value of his Participant's Account
at the date of distribution. Whenever reference is made in this Section to
termination of the Plan this shall mean formal termination of the Plan by
appropriate action of the Corporation or by virtue of complete discontinuance by
the
113
AMENDMENT OR TERMINATION OF THE PLAN
- ------------------------------------
Corporation of contributions called for by the Plan as the term "complete
discontinuance of contributions under the plan" is used in Section 411(d)(3) of
the Code and the regulations promulgated thereunder. Cessation of Corporation
Matching Contributions to the ESOP Feature by reason of the application of any
ESOP Ending Date shall not be a complete discontinuance of contributions which
causes full vesting of Participants' Accounts, provided Corporation Matching
Contributions continue to be made under other provisions of the Plan.
SECTION 13.03 Partial Termination of the Plan.
------------- -------------------------------
If the Committee determines in its sole discretion that the Plan has
been partially terminated, within the meaning of regulations under Code Section
411, the Committee shall determine the date of such termination and who has been
affected by the termination. The Participant's Account of all Participants
114
AMENDMENT OR TERMINATION OF THE PLAN
- ------------------------------------
affected by the termination who were Employees on the date thereof shall become
fully vested and the unvested portion of the Participant's Account of all other
affected Participants shall be forfeited. Such Participant's Accounts, to the
extent vested, shall remain payable under the terms of the Plan.
115
SECTION 14
----------
TOP HEAVY RULES
---------------
SECTION 14.01 Special Rules for Top Heavy Plan.
------------- --------------------------------
(a) If this Plan is or ever becomes "top heavy," as determined under
subsection (b), the following special rules shall apply and (for purposes
of this Section only, any person excluded from the Plan solely because of
the person's failure to make Elective Deferrals shall be considered a
Participant):
(1) For any Plan Year in which the Plan is top heavy, each Eligible
Employee who is an Employee on the last day of the Plan Year shall receive
an allocation of Corporation contributions (including his Elective
Deferrals) and forfeitures at least equal to three percent of the Eligible
Employee's earnings (as defined in Section 5.02(c)(3)) for the Plan Year.
If an Eligible Employee under this Plan is also covered by another
defined contribution plan maintained by the Corporation for the same Plan
Year, this Plan and all such other defined contribution plans shall be
aggregated in determining whether the minimum benefit required under the
Plan is also covered by another defined contribution plan maintained by the
Corporation for the same Plan Year, this Plan and all such other defined
contribution plans shall be aggregated in determining whether the minimum
benefit required under Internal Revenue Code Section 416(c)(2) is provided
for the Eligible Employee under this Plan. If an
116
TOP HEAVY RULES
- ---------------
Eligible Employee in this Plan is also covered by a defined benefit plan
maintained by the Corporation for the same Plan Year and the minimum
benefit required under Internal Revenue Code Section 416(c)(1) is being
provided under such other plan for the Plan Year if it is not provided
under this Plan, minimum benefits under this paragraph need not be provided
for the Eligible Employee if the Committee so elects.
(2) For purposes of determining an Eligible Employee's allocation of
Corporation Matching Contributions and forfeitures under Section 4.01 and
paragraph (1), Elective Deferrals with respect annual to earnings (as
defined in Section 5.02(c)(3)) in excess of $200,000 (or such other amount
prescribed under Code Section 416(d) shall be ignored for any Plan Year in
which the Plan is top heavy.
(3) All Corporation-provided benefits under this Plan accruing through
the end of the Plan's last top heavy year shall vest in accordance with the
following schedule:
Years of Service Vested Percentage
---------------- -----------------
(at least) 2 20%
3 40%
4 60%
5 80%
6 (or more) 100%
The unvested portion of the Corporation Matching Contributions Account
of a Participant who resigns or is discharged shall be forfeited on the
last day of the Participant's first Break in Service after such resignation
or discharge. If a Participant who resigns or is discharged
117
TOP HEAVY RULES
- ---------------
again becomes an Employee before he or she has a Break in Service, the
unvested portion of the Participant's Account shall not be forfeited.
Thereafter, any allocations for the individual's benefit of Corporation
Matching Contributions and forfeitures, and the gains and losses thereon,
shall be made to his or her existing Corporation Matching Contribution
Account. A former Employee's Vested percentage shall not be determined
under this paragraph unless he again becomes an Employee before the
unvested portion of his Corporation Matching Contribution Account is
permanently forfeited under the terms of this Plan. If a Participant
received a distribution from his or her Corporation Matching Contribution
Account before it was fully vested, the Participant's vested interest in
that Account shall not be determined under Section 8.02 after his rehire.
Instead, his vested interest in that Account shall be the amount that would
then be vested under Section 8.02 if his Corporation Matching Contribution
Account were increased by the amount previously distributed, but with such
vested amount being reduced by the amount of the prior distribution. When
the Plan ceases to be top heavy, vesting in benefits accruing thereafter
shall continue to be determined in accordance with this special vesting
provision for a Participant who has five (5) or more Years of Service when
the Plan ceases to be top heavy. The Committee shall establish appropriate
118
TOP HEAVY RULES
- ---------------
procedures consistent with the other vesting provisions of this Plan for
administering this special vesting rule. However, no Participant's vested
interest in his Corporation Matching Contribution Account at the time the
Plan ceases to be top heavy shall be reduced solely as a result of the Plan
ceasing to be top heavy.
(4) Notwithstanding any provisions in the Plan to the contrary, the
account of a key employee must be distributed to the key employee no later
than in or commencing in the key employee's taxable year in which he
attains age 70-1/2.
(b) This Plan is "top heavy" for a Plan Year commencing after December
31, 1983 if, as of the last day of the preceding Plan Year (the "determination
date"), the amount credited to the Accounts of key employees (as defined in
subsection (c)) exceeds sixty percent of the amount credited to the Accounts of
all Employees. The Account of (1) a former key employee or (2) any current or
former Employee who has not performed any Service for the Corporation during the
five-year period ending on the determination date shall be excluded in
determining whether the Plan is top heavy. However, if a current or former
Employee resumes performing Services after the five-year period, his Account
shall be included in determining whether the Plan is top heavy. Notwithstanding
the foregoing, if, as of the determination date described above, this Plan is
part of an "aggregation group," this Plan shall be top heavy if the group is
119
TOP HEAVY RULES
- ---------------
top heavy. An "aggregation group" shall include all plans of the Corporation in
which a key employee participates and each other plan of the Corporation which
enables any such plan to meet the requirements of Code Section 401(a)(4) or 410.
The Corporation may treat any plan not required to be included in an aggregation
group as part of that group if the inclusion of the plan would not prevent the
aggregation group from meeting the requirements of Code Section 401(a) or 410.
The rules set forth above for determining whether this plan is top heavy shall
be applied with respect to the sum of benefits provided under all plans in the
aggregation group to determine whether the group is top heavy. For purposes of
determining whether this Plan is top heavy, the amount credited to a Participant
Account shall be determined as of the last valuation date coincident with or
preceding the determination date, and shall include the aggregate distributions
(without interest thereon) made under the Plan to a Participant (other than a
former key employee) during the five year period ending on the determination
date. Deductible (IRA-type) employee contributions and rollovers (or similar
transfers) shall be ignored in determining whether this Plan is top heavy,
except as otherwise provided in applicable Treasury Regulations. Distributions
made within the five Plan Years ending on the determination date from a
terminated plan shall be included in the aggregation group if the terminated
plan would have been
120
TOP HEAVY RULES
- ---------------
required to be included in the group had the plan not been terminated.
(c) An Eligible Employee shall be a "key employee" if, during the Plan
Year in question or any of the four preceding Plan Years, he is or was
(1) an officer of the Corporation,
(2) one of the ten Employees owning (or considered as owning within
the meaning of Code Section 318) the largest interests in the Corporation,
(3) a five percent owner of the Corporation, or
(4) a one percent or more owner of the Corporation having an annual
compensation (as defined in Treas. Reg. Section 1.415-2(d)) from the
Corporation of more than $150,000.
The number of officers of the Corporation treated as key employees under
paragraph (1) shall be limited to fifty. A beneficiary of a key employee or a
former key employee shall also be treated as a key employee or former key
employee, respectively. Determinations under this subsection shall be made in
accordance with Internal Revenue Code Section 416(i) and applicable Treasury
Regulations.
121
SECTION 15
----------
EFFECTIVE DATE OF AMENDMENT
---------------------------
AND RESTATEMENT OF THE PLAN
---------------------------
SECTION 15.01 Effective Date of Restated Plan.
------------- -------------------------------
This amendment and restatement of the Plan shall become effective
March 1, 1995 or on such dates as otherwise provided herein, subject to the
receipt of a ruling satisfactory to the Board of Directors that the Plan and
Trust Agreements, as amended and restated, qualify under applicable provisions
of the United States Internal Revenue Code.
SECTION 15.02 Applicable Parties.
------------- ------------------
(a) This amendment and restatement is applicable only to those
particular groups of Employees described below:
(1) Employees listed in Supplement A-3 hereto.
(b) With respect to all other groups of employees included in the
Plan, the provisions of the Plan shall continue unchanged and unaffected by this
amendment and restatement.
122
LOCKHEED SPACE OPERATIONS COMPANY
HOURLY EMPLOYEE INVESTMENT PLAN PLUS
SUPPLEMENT A-2 TO SECTION 3.02
------------------------------
As of January 1, 1987
This Supplement A applies to all eligible, non-represented Employees
paid on an hourly basis at all locations of Lockheed Space Operations Company,
and to the hourly Employees represented in the collective bargaining units
listed below as provided in collective bargaining agreements between Lockheed
Space Operations Company and the bargaining unit representative:
- --------------------------------------------------------------------------------
Applies to Employees based
at the following locations Bargaining
or at other locations re- Unit
porting to organizations
based at these locations
- --------------------------------------------------------------------------------
Titusville, FL IAM&AW 2061
Titusville, FL IBEW 2088
Titusville, FL POID/MEBA
Vandenberg AFB, CA IAM&AW 721
The Weekly Elective Deferral Amount which may be specified by the
Eligible Employee under Section 3.01(a) and deducted under this Section shall be
either two percent (2%) or four percent (4%) or six percent (6%) or eight
percent (8%) or ten percent (10%) of his Weekly Rate of Compensation. An
Employee of Lockheed Space Operations Company who is entitled to receive an
Annual Wage Supplement payment on June 24, 1988, and
1
SUPPLEMENT A-2 TO SECTION 3.02
- ------------------------------
who on such date is a Participant or Eligible Employee, may elect by Filing With
The Committee to have the Corporation contribute to the Trustee out of its
current or accumulated earnings and profits, as defined in Section 4.01, an
amount equal to such Employee's Annual Wage Supplement. Such Annual Wage
Supplement Contributions shall be treated as Elective Deferrals under this Plan,
except that they shall be ignored for purposes of Corporation Matching
Contributions under Section 4.01. Such Annual Wage Supplement Contributions
shall be invested by the Trustee, in accordance with the current allocation
specified by a Participant pursuant to Section 3.01(b), or as specified by an
Eligible Employee at the time of Filing With The Committee.
2
EXHIBIT 4-Q
LOCKHEED (ESOP FEATURE) TRUST AGREEMENT
Amendment 1995-I
Lockheed Corporation and U.S. Trust Company of California, N.A. hereby
amend the Lockheed (ESOP Feature) Trust Agreement ("Trust Agreement"), effective
March 15, 1995, as follows:
1. The seventh paragraph of the Recitals is amended to read as
follows:
"WHEREAS, it is a principal purpose of the ESOP Feature to invest
primarily in shares of common and/or convertible preferred stock of
Lockheed Corporation (or, on and after March 15, 1995, Lockheed Martin
Corporation) qualifying as "employer securities" within the meaning of
Section 409(l) of the Code and Section 407(d)(5) of ERISA ("Stock"); and"
2. The first sentence of Section 3.3 is amended to read as follows:
"The primary purpose of the ESOP Feature of the Plan is to acquire an
ownership interest in the Company (or, on and after March 15, 1995,
Lockheed Martin Corporation) either from the Company (or, Lockheed Martin
Corporation) or its shareholders and to provide deferred compensation
benefits
to Participants and Beneficiaries in the form of shares of Stock."
IN WITNESS WHEREOF, Lockheed Corporation and U.S. Trust Company of
California, N.A. have executed this Amendment 1995-I to the Lockheed (ESOP
Feature) Trust Agreement on this 8th day of March, 1995.
"Trustee"
LOCKHEED CORPORATION U.S. TRUST COMPANY OF
CALIFORNIA, N.A.
By: /s/ Carol R. Marshall By: /s/ Charles E. Wert
------------------------- ---------------------------
Title: Secretary Title: Executive Vice President
and Senior Trust Officer
2
EXHIBIT 5
[LETTERHEAD OF LOCKHEED MARTIN CORPORATION APPEARS HERE]
March 15, 1995
Lockheed Martin Corporation
6801 Rockledge Drive
Bethesda, Maryland 20817
Re: Lockheed Salaried Employee Savings Plan Plus,
Lockheed Hourly Employee Savings Plan Plus, and
Lockheed Space Operations Company Hourly Employee
Investment Plan Plus, (the "Plans")
Ladies and Gentlemen:
I submit this opinion to you in connection with the filing with the
Securities and Exchange Commission of a registration statement on Form S-8 (the
"Registration Statement") on the date hereof. The Registration Statement
registers shares of common stock ("Common Stock") of Lockheed Martin Corporation
(the "Corporation") for use in connection with the Plans. The Plans contemplate
that Common Stock may be treasury or authorized but unissued shares or may be
acquired in the open market. As Assistant General Counsel of the Corporation, I
have examined such corporate records, certificates and other documents and have
reviewed such questions of law as I deemed necessary or appropriate for the
purpose of this opinion.
Based upon that examination and review, I advise you that in my opinion:
(i) the Corporation has been duly incorporated and is validly existing
under the laws of the State of Maryland; and
(ii) to the extent that the operation of the Plan results in the issuance
of Common Stock, such shares of Common Stock have been duly and
validly authorized and, when issued in accordance with the terms set
forth in the Registration Statement, will be legally issued, fully
paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to my opinion in the Registration
Statement.
Very truly yours,
/s/ Stephen M. Piper
Stephen M. Piper
Assistant General Counsel
Lockheed Martin Corporation
EXHIBIT 23-A
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in Lockheed Martin
Corporation's Registration Statement (Form S-8) pertaining to the Lockheed
Salaried Employee Savings Plan Plus, Lockheed Hourly Employee Savings Plan Plus,
and Lockheed Space Operations Company Hourly Employee Investment Plan Plus of:
(a) our report dated January 20, 1995, with respect to the consolidated
financial statements of Martin Marietta Corporation and subsidiaries for the
year ended December 31, 1994, included in its Current Report (Form 8-K), dated
February 17, 1995, and (b) our report dated November 1, 1994, with respect to
the consolidated balance sheet of Lockheed Martin Corporation as of October 31,
1994, included in its Registration Statement (Form S-4 No. 33-57645), dated
February 9, 1995, both filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Washington, D.C.
March 13, 1995
EXHIBIT 23-B
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in Lockheed Martin
Corporation's Registration Statement (Form S-8) pertaining to the Lockheed
Salaried Employee Savings Plan Plus, Lockheed Hourly Employee Savings Plan
Plus, and Lockheed Space Operations Company Hourly Employee Investment Plan Plus
of: (a) our report dated January 31, 1995, with respect to the consolidated
financial statements of Lockheed Corporation for the year ended December 25,
1994, included in its Current Report (Form 8-K), dated February 21, 1995; (b)
our report dated June 10, 1994, with respect to the financial statements and
schedules of the Lockheed Salaried Employee Savings Plan Plus included in its
Annual Report (Form 11-K) for the year ended December 26, 1993; (c) our report
dated June 10, 1994, with respect to the financial statements and schedules of
the Lockheed Hourly Employee Savings Plan Plus included in its Annual Report
(Form 11-K) for the year ended December 26, 1993; and (d) our report dated June
10, 1994, with respect to the financial statements and schedules of the Lockheed
Space Operations Company Hourly Employee Investment Plan Plus included in its
Annual Report (Form 11-K) for the year ended December 26, 1993; all filed with
the Securities and Exchange Commission.
ERNST & YOUNG LLP
Los Angeles, California
March 13, 1995
EXHIBIT 23-C
CONSENT OF KPMG PEAT MARWICK LLP INDEPENDENT AUDITORS
The Board of Directors
General Electric Company:
The Board of Directors
Martin Marietta Corporation:
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of Lockheed Martin Corporation of our report, dated
February 3, 1993, relating to the consolidated financial statements of GE
Aerospace Businesses as of December 31, 1992 and 1991 and for each of the years
in the two-year period ended December 31, 1992, which report is incorporated by
reference in the December 31, 1993 annual report on Form 10-K of Martin Marietta
Corporation, which is incorporated herein by reference.
Harrisburg, Pennsylvania
March 13, 1995
EXHIBIT 23-D
CONSENT OF ARTHUR ANDERSEN LLP
INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of our report dated January
20, 1994 on our audits of the combined financial statements of the General
Dynamics Space Systems Group as of December 31, 1993 and 1992 and for each of
the three years in the period ended December 31, 1993 included in the Martin
Marietta Corporation's Form 8-K dated May 13, 1994, which is incorporated by
reference into the Lockheed Martin Corporation registration statement on Form
S-4 dated February 9, 1995.
ARTHUR ANDERSEN LLP
San Diego, California
March 13, 1995
